[Image] Scudder Massachusetts Limited Term Tax Free Fund Profile
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The fund profile, a supplement to the full prospectus, is designed as
an easy-to-read summary of fund risks, fees, and objectives. You can
click on any question to link to the Fund's prospectus and get more
information on that topic. Or, if you wish, you can proceed directly
to the Fund's prospectus. Once you have read the prospectus and
considered your investment goals, you can proceed to a Scudder Funds
application.
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Fund Profile
February 1, 1998
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1. What Is The Fund's Objective?
Scudder Massachusetts Limited Term Tax Free Fund seeks to provide
Massachusetts taxpayers with as high a level of income exempt from
both Massachusetts personal income tax and regular federal income tax
as is consistent with a high degree of price stability.
2. What Does The Fund Invest In?
Under normal market conditions, the Fund invests at least 80% of net
assets in investment-grade municipal securities including municipal
bonds, variable rate demand instruments and municipal notes, of
issuers located in Massachusetts and other qualifying issuers
(including Puerto Rico, the U.S. Virgin Islands and Guam). The
dollar-weighted average effective maturity of the Fund's portfolio
will range between one and five years. The Fund may not purchase
individual securities with effective maturities greater than 10 years
at the time of purchase or issuance, whichever is later.
The Fund seeks a higher and more stable level of income than normally
provided by tax-free money market investments, yet more price
stability than investments in intermediate- and long-term municipal
bonds. The Fund purchases securities that it believes are attractive
and competitive values in terms of quality, yield and the relationship
of current price to maturity value.
Normally, at least 75% of the municipal securities purchased by the
Fund will be investment-grade: rated Aaa, Aa, A or Baa by Moody'
Investors Service, Inc. or AAA, AA, A or BBB by Standard & Poor's or
Fitch Investors Service, Inc., or if unrated, judged by the Fund's
investment adviser, Scudder Kemper Investments, Inc., to be of
equivalent quality. The Fund may invest up to 25 % of its total assets
in fixed-income securities rated as low as B by Moody's, S&P or Fitch,
or their equivalents (i.e., "junk bonds"). Normally, at least 50% of
the Fund's total assets will be invested in fixed income securities
rated A or better by Moody's, S&P or Fitch, or if unrated, judged by
the adviser to be of equivalent quality at the time of purchase.
The Fund may invest more than 20% of its net assets in taxable
securities during periods which require a defensive position. The Fund
may also invest up to 20% of its total assets in securities subject to
the alternative minimum tax.
3. What Are The Risks Of Investing In The Fund?
The Fund is more susceptible to factors adversely affecting issuers of
Massachusetts municipal securities than a comparable municipal bond
fund that does not emphasize these issuers to this degree. Political
events, changes in the perceived creditworthiness of issuers and
changes in interest rates will affect the Fund's yield and share
price, which is likely to vary from day to day.
While the Fund invests primarily in investment-grade bonds, the Fund
is still exposed to market risk and changes in interest rates. There
is also a possibility the rating of a security held by the Fund may be
downgraded after it is purchased. This decrease in rating may be the
result of the inability of the state of Massachusetts or any of its
local government entities to meet its financial obligations. You incur
principal risk when you invest because your shares, when sold, may be
worth more or less than you paid for them.
Because it is non-diversified, the Fund may invest in a smaller number
of issuers, which will subject it to greater market and credit risks
than a diversified fund. Furthermore, the Fund's holdings in unrated
securities and securities rated below investment-grade (i.e, "junk
bonds") carry a greater risk of default and more price volatility than
securities rated investment-grade.
4. For Whom Is This Fund Appropriate?
You may wish to consider this Fund if you are seeking double tax-free
income -- exempt both from Massachusetts personal income tax and
regular federal income tax. Depending on your tax bracket and
individual situation, you may earn a substantially higher after-tax
return from the Fund than from comparable investments that pay income
subject to both Massachusetts state personal income tax and regular
federal income tax. Before investing, you should compare the Fund's
yield to the after-tax yield you would receive from a comparable
investment paying taxable income.
5. What Are The Fund's Expenses And Fees?
There are two kinds of expenses that a shareholder may incur, directly
or indirectly, by investing in a mutual fund. These types of expenses,
as they relate to Scudder Massachusetts Limited Term Tax Free Fund
are:
Shareholder transaction expenses --
Expenses charged directly to your account for various transactions.
Please note that there is a $5 service fee if you request redemption
proceeds via wire.
Sales Commission None
Commissions to Reinvest Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund operating expenses (after expense maintenance) --
Expenses paid by the Fund before it distributes its net investment
income, expressed as a percentage of the Fund's average daily net
assets. Figures below are for the fiscal year ended October 31,
1996, during which Scudder maintained the total annualized expenses
of the Fund at 0.50% from August 1, 1995 to February 29, 1996 and
0.75% of average daily net assets from March 1, 1996 to October 31,
1996. Had Scudder not done so, expenses would have amounted to
0.90%, including 0.60% for management fees. Scudder will continue
this expense maintenance until February 28, 1998.
Investment management fee 0.45%
12b-1 fees None
Other expenses 0.30%
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Total Fund operating expenses 0.75%
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Example:
Assuming a 5% annual return and redemption at the end of each
period, the total expenses relating to a $1,000 investment would be:
1 Year 3 Years 5 Years 10 Years
$8 $24 $42 $93
This example assumes reinvestment of all dividends and distributions
and that the total Fund operating expenses listed above remain the
same each year. This example should not be considered a representation
of past or future expenses or return. Actual Fund expenses and return
vary from year to year and may be higher or lower than those shown.
6. How Has The Fund Performed Historically?
This chart shows how the Fund has performed since it commenced
operations on February 15, 1994, assuming reinvestment of all
distributions. Performance is historical and may not be indicative of
future results. Total return and principal value will fluctuate. The
Fund's 30-day net annualized SEC yield on December 31, 1997 was 3.79%.
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE.
BAR CHART TITLE: Total returns for years ended December 31:
BAR CHART DATA: 1995 9.48%
1996 3.36%
1997 5.71%
The Fund's Average Annual Total Return
for the period ended December 31, 1997
One Year 5.71%
Life of Fund 4.80%
If the adviser had not maintained the Fund's expenses, average annual
total return for the one year and life of fund periods would have been
lower.
7. Who Manages The Fund?
The Fund's investment adviser is Scudder Kemper Investments, Inc., one
of the nation's most experienced investment management firms. The Fund
is managed by a team of Scudder Kemper investment professionals who
each play an important role in the Fund's management process.
Philip G. Condon, Lead Portfolio Manager, joined Scudder in 1983 and
has 17 years of experience in municipal investing and portfolio
management. Mr. Condon has had responsibility for the Fund since its
inception in 1994.
8. How Can I Invest?
To make it easy for you to open an account, you may invest by mail,
phone, fax, or in person. The minimum initial investment is $2,500,
except that shareholders may open an account with at least $1,000 if
an automatic investment plan of $100/month is established. Scudder
retirement plans and certain other accounts have similar or lower
minimum share balance requirements. A shareholder who maintains a
nonfiduciary account balance of less than $2,500 without establishing
an automatic investment plan, will be assessed an annual fee of
$10.00, payable to the Fund. Retirement accounts and certain other
accounts will not be assessed the $10.00 charge. You may also exchange
Fund shares free of charge within the Scudder Family of Funds.
9. How Can I Redeem Shares?
You may redeem shares at the current share price on any business day
by check, telephone, fax, or mail.
10. When Are Distributions Made?
Dividends are declared daily and distributed monthly. Capital gains
distributions, if any, will be made in November or December. You may
elect to receive distributions in cash or have them reinvested in
additional shares of the Fund.
Distributions derived from interest on Massachusetts municipal
securities are not subject to regular federal income taxes, except for
the possible applicability of the federal alternative minimum tax. For
federal income tax purposes, a portion of the Funds' income may be
taxable to shareholders as ordinary income. Long-term capital gains
distributions, if any, are taxable as long-term capital gains for
federal income tax purposes, regardless of the length of time
shareholders have owned their shares. Short-term capital gains and any
other taxable income distributions are taxable as ordinary income.
Distributions of tax-exempt income are taken into consideration in
computing the portion, if any, of Social Security and railroad
retirement benefits subject to federal and, in some cases, state
taxes.
11. What Services Does Scudder Provide?
As a shareholder, you'll enjoy:
o professional service from representatives who can answer your
questions and execute your transactions
o automated toll-free touchtone access to account information,
share prices and yields, and to perform transactions
o Scudder's quarterly shareholder newsletter, Scudder Perspectives
o regular, informative reports about the performance of your Fund
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[Image]Scudder Kemper wants you to make informed investment decisions.
This Fund Profile contains key information about the Fund. If you
would like more information before you invest, please consult the
Fund's accompanying prospectus. For details about the Fund's holdings
or recent investment strategies, please review the Fund's most recent
annual or semiannual report. The reports are free and may be ordered
by calling 1-800-225-2470.
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