SCUDDER
INVESTMENTS(SM)
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BOND/TAX FREE
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Scudder New York Tax
Free Money Fund
Fund #088
Scudder New York Tax
Free Fund
Fund #042
Semiannual Report
September 30, 1999
Scudder New York Tax Free Money Fund seeks
income that is exempt from New York state
and New York City personal income taxes and
regular federal income taxes and is
consistent with maintaining a stable $1.00
share price.
Scudder New York Tax Free Fund seeks income
that is exempt from New York state and New
York City personal income taxes and regular
federal income taxes.
No-load funds with no commissions to buy,
sell, or exchange shares.
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Contents
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6 Letter from the Funds' President
New York Tax Free Money Fund
11 Portfolio Management Discussion
18 Investment Portfolio
21 Financial Statements
24 Financial Highlights
New York Tax Free Fund
8 Performance Update
10 Portfolio Summary
13 Portfolio Management Discussion
25 Investment Portfolio
31 Financial Statements
34 Financial Highlights
17 Glossary of Investment Terms
35 Notes to Financial Statements
39 Officers and Trustees
40 Investment Products and Services
42 Scudder Solutions
3
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Scudder New York Tax Free Money Fund
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ticker symbol SCNXX fund number 088
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Date of Inception: o Scudder New York Tax Free Money Fund offered a
5/28/87 seven-day yield of 2.96% on September 30, 1999,
equivalent to a 5.26% taxable yield for investors in
the top federal and state income tax brackets.
Total Net Assets as
of 9/30/99:
$77.4 million
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Seven-Day Yield on September 30, 1999
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THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
Scudder Taxable Yield
New York Needed to Equal
Tax Free the Fund's Yield
Money Fund
2.96% 5.26%
4 | Scudder New York Tax Free Money Fund
<PAGE>
Scudder New York Tax Free Fund
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ticker symbol SCYTX fund number 042
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Date of o Scudder New York Tax Free Fund provided a 4.43% 30-day
Inception: net annualized SEC yield on September 30, 1999. For
7/22/83 shareholders subject to the 43.74% maximum combined
federal and state income tax rate, the fund's yield was
equal to a taxable yield of 7.87%. In terms of total
return, the fund placed in the top quartile for the
Total Net reporting period of similar funds as tracked by Lipper
Assets as of Analytical Services.* Please see page 13 for additional
9/30/99: information concerning the fund's rankings.
$192.1 million
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30-Day Yield on September 30, 1999
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THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
Scudder Taxable Yield
New York Needed to Equal
Tax Free Fund the Fund's Yield
4.43% 7.87%
* Lipper Analytical Services, Inc., is an independent analyst of investment
performance. Performance includes reinvestment of dividends and capital gains.
Scudder New York Tax Free Fund | 5
<PAGE>
Letter from the Funds' President
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Dear Shareholders,
Recent months have witnessed a nearly continuous rise in Treasury and municipal
bond rates across all maturity levels. A year ago, financial markets were in the
grip of a "flight to quality": Nervous investors poured their assets into
Treasury bonds to escape financial uncertainty in Asia, Latin America, and
Russia, driving 30-year Treasury bond rates below 5% for the first time in
recent memory. Following the U.S. Federal Reserve's three interest rates cuts
during the last quarter of 1998, however, the Fed, and some investors, worried
that too much liquidity may have been injected into the financial system, and
that inflation might once again pose a threat. Thus, investors, and the Fed,
have combined to gradually push rates up this year.
Despite a difficult environment for bonds, municipal bonds have held up well
compared to other high-quality fixed-income securities. Municipals have
benefited from significantly lower supply (20% less overall for the 12 months
ended September 30, and over 45% less for New York bonds over the same period)
and the relative attractiveness of municipal yields compared with Treasuries.
And though it posted a negative return of -2.63% for the six months ended
September 30, 1999, Scudder New York Tax Free Fund ranked in the top quartile of
similar funds for total return over the six-month period, as well as for one-,
three-, five-, and ten-year periods as tracked by Lipper Analytical Services. In
addition, as of September 30, 1999, Scudder New York Tax Free
6
<PAGE>
Money Fund posted a 5.26% tax equivalent yield based on maximum state and
federal tax rates. For more information about fund performance as well as the
market environment, strategy, and outlook for both funds, please read the
Portfolio Management Discussions that begin on pages 11 and 13.
It should be noted that Daniel Pierce retired in June of this year as President
of Scudder New York Tax Free Fund and Scudder New York Tax Free Money Fund, at
which time I assumed those roles and their responsibilities. We are fortunate
that Dan's long-standing affiliation with Scudder is ongoing, and that we will
continue to benefit from his counsel going forward. I am pleased to join both
funds' teams in this capacity, and look forward to serving your interests.
If you have any questions regarding Scudder New York Tax Free Fund or Scudder
New York Tax Free Money Fund, please call Investor Relations at 1-800-SCUDDER.
Or visit Scudder's Web site at www.scudder.com.
Sincerely,
/s/Lynn S. Birdsong
Lynn S. Birdsong
President,
New York Tax Free Money Fund
New York Tax Free Fund
7
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Performance Update
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September 30, 1999
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Growth of a $10,000 Investment
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THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
Scudder New York Tax Free Fund Lehman Brothers Municipal Bond Index*
'89 10000 10000
'90 10372 10681
'91 11917 12089
'92 13336 13355
'93 15296 15056
'94 14548 14688
'95 16137 16332
'96 16999 17317
'97 18616 18883
'98 20258 20528
'99 19812 20384
Yearly periods ended September 30
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Fund Index Comparison
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Total Return
Growth of Average
Period ended 9/30/1999 $10,000 Cumulative Annual
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Scudder New York Tax Free Fund
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1 year $ 9,780 -2.20% -2.20%
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5 year $ 13,619 36.19% 6.37%
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10 year $ 19,812 98.12% 7.08%
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Lehman Brothers Municipal Bond Index*
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1 year $ 9,930 -.70% -.70%
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5 year $ 13,878 38.78% 6.77%
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10 year $ 20,384 103.84% 7.38%
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* The unmanaged Lehman Brothers Municipal Bond Index is a market
value-weighted measure of municipal bonds issued across the United
States. Index issues have a credit rating of at least Baa and a
maturity of at least two years. Index returns assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees or
expenses.
All performance is historical, assumes reinvestment of all dividends
and capital gains, and is not indicative of future results. Investment
return and principal value will fluctuate, so an investor's shares,
when redeemed, may be worth more or less than when purchased.
8 | Scudder New York Tax Free Fund
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Returns and Per Share Information
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Yearly periods ended September 30
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
ILLUSTRATING THE SCUDDER NEW YORK TAX FREE FUND TOTAL
RETURN (%) AND LEHMAN BROTHERS MUNICIPAL BOND INDEX
TOTAL RETURN (%)
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Total
Return (%) 3.72 14.90 11.91 14.69 -4.89 10.92 5.34 9.52 8.82 -2.20
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Index
Total
Return (%) 6.80 13.19 10.45 12.74 -2.44 11.18 6.04 9.04 8.72 -.70
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Net Asset
Value ($) 10.36 11.06 11.36 11.60 10.10 10.65 10.68 11.14 11.57 10.82
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Income
Dividends
($) .68 .66 .64 .58 .53 .52 .53 .52 .51 .50
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Capital
Gains
Distributions
($) .09 .13 .32 .75 .44 -- -- .01 .02 --
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</TABLE>
Scudder New York Tax Free Fund | 9
<PAGE>
Portfolio Summary
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September 30, 1999
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Diversification
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A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
State General Obligation/ The fund invests in a
Lease 20% broad selection of
Core Cities/Lease 20% New York municipal bonds.
County General Obligation/
Lease 9%
Higher Education 8%
Port/Airport Revenue 6%
Hospital/Health Revenue 6%
Other General Obligation/
Lease 5%
Sales/Special Tax 5%
Project Revenue/Resource
Recovery 4%
Miscellaneous Municipal 17%
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100%
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Quality
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A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
AAA 57% Overall portfolio
AA 6% quality remains high,
A 20% with over 80% of
BBB 7% portfolio securities
SKI* 10% rated A or better as of
- ------------------------------------ September 30.
100%
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Weighted Average Quality: AA
* Scudder Kemper Investments (SKI)
has determined these securities to
be of comparable quality to rated
eligible securities.
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Effective Maturity
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A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Less than 1 year 5% In an environment of
1-5 years 4% rising interest rates,
5-10 years 34% our strategy was to
10-15 years 48% maintain a shorter
15 years or greater 9% effective maturity
- ------------------------------------ compared to most other
100% New York municipal bond
- ------------------------------------ funds.
Weighted Effective Maturity:
9.2 years
For more complete details about the Fund's investment portfolio, see page 25. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
10 | Scudder New York Tax Free Fund
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Portfolio Management Discussion
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September 30, 1999
Scudder New York Tax Free Money Fund
Dear Shareholders,
Scudder New York Tax Free Money Fund maintained a conservative portfolio
strategy during the fund's most recent semiannual period ended September 30,
1999. The fund's seven-day yield as of September 30 was 2.96%. For investors in
the highest combined state and federal income tax bracket, the fund's yield was
equivalent to a 5.26% compounded yield, higher than the 4.74% average for
taxable money funds, according to IBC Financial Data, Inc., an independent firm
that tracks money fund performance.
During the period, the short-term yield curve returned to a positive slope,
indicating that the Federal Reserve has switched from an accommodative to a
restrictive monetary policy. Over the summer, it raised the Federal funds rate
two times to 5.25% as a preemptive strike against signs of modest inflationary
pressures. Our strategy over the period was to maintain a conservative stance
now in order to be able to take advantage of higher yields that we anticipate
will be available from securities maturing after year end.
The fund's average maturity was 22 days as of September 30, 1999, compared with
27 days six months earlier. The fund continues to invest in variable rate demand
notes -- which provide flexibility in the present low interest rate environment
- -- and tax-free commercial paper and tax-free notes -- both of which provide
some stability in yield. The fund also continues to emphasize high-quality
issuers and guarantors.
Over the coming months, we will pursue a two-part strategy: First, we will seek
to take advantage of the yield premiums available from select longer-maturity
securities while maintaining a conservative average maturity. Second, by
maintaining a relatively short maturity, we will help to ensure that we can meet
the liquidity needs of our investors at year end and beyond.
Scudder New York Tax Free Money Fund | 11
<PAGE>
Our continuing goal is to provide Scudder New York Tax Free Money Fund
shareholders with a competitive double-tax-free yield by searching for
high-quality, short-term municipal securities while actively managing the fund's
average maturity. We appreciate your investment with us.
Sincerely,
Your Portfolio Management Team
/s/Frank J. Rachwalski, Jr. /s/Jerri Cohen
Frank J. Rachwalski, Jr. Jerri I. Cohen
/s/Elizabeth Meyer
Elizabeth Meyer
12 | Scudder New York Tax Free Money Fund
<PAGE>
Portfolio Management Discussion
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September 30, 1999
Scudder New York Tax Free Fund
Dear Shareholders,
During a difficult period for most fixed-income securities, Scudder New York Tax
Free Fund posted a negative return but displayed strong competitive performance.
The fund's total return for its most recent semiannual period ended September
30, 1999, was -2.63%, outpacing the -3.83% average return of 93 similar funds as
tracked by Lipper Analytical Services, Inc. The fund's 30-day net annualized SEC
yield as of September 30 was 4.43%, equivalent to a 7.87% taxable yield for New
York investors subject to the 43.74% combined federal and state income tax rate.
The fund's total returns over one-, three-, five-, and ten-year periods ended
September 30, 1999, placed it in the top 25% of similar New York tax-free funds
according to Lipper. Please see the accompanying table for additional
information concerning the fund's returns.
New York Update
The State of New York passed its 2000 fiscal year budget on August 4, the
State's fifteenth consecutive late budget. Despite the delay, the State's
finances have improved, benefiting from the strength of the local and national
economies. The major obstacles to this year's budget agreement were determining
the actual size of the
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Scudder New York Tax Free Fund:
Consistent Top Quartile Performance
(Average annual returns for periods ended September 30, 1999)
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<TABLE>
<CAPTION>
Scudder
New York
Tax Free Fund Lipper Number of Percentile
Period Return Average Rank Funds Tracked Rank
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<S> <C> <C> <C> <C> <C>
1 Year -2.20% -3.22% 14 of 91 Top 16%
3 Years 5.24% 4.39% 11 of 80 Top 14%
5 Years 6.37% 5.65% 11 of 63 Top 18%
10 Years 7.08% 6.58% 7 of 30 Top 23%
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</TABLE>
Past performance does not guarantee future results.
Scudder New York Tax Free Fund | 13
<PAGE>
State's budget surplus, and allocating the surplus. The State's fiscal year 2000
budget projects General Fund expenditures to total $37.4 billion, a 2.4%
increase over the State's 1999 fiscal year. The State's ability to limit
expenditure growth to less than the inflation rate has helped to rein in its
projected budget gaps.
New York State's economy continues to grow at a modest rate. The State's
unemployment rate was 5.6% in 1998, compared to the national average of 4.5%. In
addition, Governor Pataki has proposed a debt reduction plan that focuses on
increased pay-as-you-go financing in order to reduce the State's annual debt
issuance. The governor's proposal -- along with the State's scheduled debt
retirement plan -- would offset new debt issuance, leaving the State's
outstanding debt relatively level for the next five years. Due to the size of
the State's budget and the State's high wealth levels, its debt burden is
manageable. A decrease in the growth rate of the State's debt would be a
positive credit factor going forward.
A Cautious Strategy
During the fund's most recent semiannual period, fixed income investors reacted
negatively to news of tightening U.S. labor markets, the worldwide economic
revival, a weakening dollar, and economic statistics that some worried could
presage a revival of inflation. Yields on 10-year Treasury bonds rose just over
one half of a percentage point and their prices declined 4.6% over the six-month
period, while municipal bond yields rose nearly the same amount as Treasury
yields, and their prices declined 4.5%. Our strategy in light of these market
conditions was to maintain a shorter portfolio duration compared to most other
New York municipal bond funds. Over the period, the fund's average effective
maturity declined from 9.8 years to 9.2 years.
During the six-month period, we maintained three key elements of our longer-term
strategy: First, we focused on premium "cushion" bonds -- high coupon bonds
trading at a premium to face value that can be redeemed prior to
14 | Scudder New York Tax Free Fund
<PAGE>
maturity. We believe that the extra yield provided by cushion bonds adequately
compensates the fund for the call feature in the current environment. Second, we
continued the fund's strong emphasis on call protection. (Generally a bond is
called in by its issuer so that it can be refinanced at a lower prevailing
rate.) Our call-protection strategy provides a more reliable income stream for
the fund than would exist if the portfolio held a significant proportion of
bonds that could be called in before their stated maturities. Third, our
emphasis on purchasing premium bonds rather than par bonds (which can more
easily decline to a discount) helped the fund by avoiding "market discount," a
provision that subjects municipal bonds sold at a discount to taxation.
Overall portfolio quality remains high, with over 80% of portfolio securities
rated A or better at the close of the period. We continue to invest in a broad
selection of New York tax-exempt issues, including general obligation, core
cities/lease, and higher education bonds.
Outlook
Because some worry that excess financial liquidity, high-flying consumer
spending, and worker shortages could spell renewed inflation, the Federal
Reserve, with the help of many bond market participants, is striving to cool the
burgeoning U.S. economy. The Fed has raised interest rates twice in recent
months, and warned of further increases in the near future. Meanwhile, market
rates, such as those for mortgages and corporate bonds, have risen even faster
than the Fed funds rate. Such rate increases, along with a volatile stock
market, could slow the U.S. economy in 2000.
In a slightly weaker economy, municipal bonds should look attractive. Though
they would be negatively affected by further interest rate increases in the
short run, municipals should benefit from steady demand from individual
purchasers. Three other factors favor municipal bonds: First, municipals
currently yield more than 80% of similar maturity Treasuries. Second, strong
state and city
Scudder New York Tax Free Fund | 15
<PAGE>
finances across the country (including New York) have boosted the
creditworthiness of tax-exempt bonds, and third, the reduced supply of municipal
bonds lends important support to their prices. We believe Scudder New York Tax
Free Fund remains an attractive investment option for investors seeking a high
level of income free from federal and state income taxes.
Sincerely,
Your Portfolio Management Team
/s/Ashton P. Goodfield /s/Eleanor R. Brennan
Ashton P. Goodfield Eleanor R. Brennan
16 | Scudder New York Tax Free Fund
<PAGE>
Glossary of Investment Terms
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Bond An interest-bearing security issued by the federal, state,
or local government or a corporation that obligates the
issuer to pay the bondholder a specified amount of interest
for a stated period -- usually a number of years -- and to
repay the face amount of the bond at its maturity date.
General Obligation A municipal bond backed by the "full faith and credit"
Bond (including the taxing and further borrowing power) of the
city, state, or agency that issues the bond. A general
obligation bond is repaid with the issuer's general revenue
and borrowings.
Inflation An overall increase in the prices of goods and services, as
happens when business and consumer spending increases
relative to the supply of goods available in the marketplace
-- in other words, when too much money is chasing too few
goods. High inflation has a negative impact on the prices of
fixed-income securities.
Municipal Bond An interest-bearing debt security issued by a state or local
government entity.
Net Asset Value The price per share of a mutual fund based on the sum of the
(NAV) market value of all the securities owned by the fund divided
by the number of outstanding shares.
Taxable Equivalent The level of yield a fully taxable instrument would have to
Yield provide to equal that of a tax-free municipal bond on an
after-tax basis.
30-Day SEC Yield The standard yield reference for bond funds, based on a
formula prescribed by the SEC. This annualized yield
calculation reflects the 30-day average of the income
earnings of every holding in a given fund's portfolio, net
of expenses, assuming each is held to maturity.
Total Return The most common yardstick to measure the performance of a
fund. Total return -- annualized or compound -- is based on
a combination of share price changes plus income and capital
gain distributions, if any, expressed as a percentage gain
or loss in value.
(Source: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
17
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio as of September 30, 1999 (Unaudited)
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Principal Market
Amount ($) Value ($)
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Municipal Investments 100.0%
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<S> <C> <C>
New York
Albany, New York, Industrial Development Authority, Davies
Office Refurbishing, AMT, Series 1997, Weekly Demand
Note, 3.8%, 2/1/2017* .................................... 1,700,000 1,700,000
Babylon, NY, Industrial Development Agency, Resource
Recovery Bond, Weekly Demand Note, 3.6%,
1/1/2019* ................................................ 1,000,000 1,000,000
Erie County, NY, Water Authority, Waterworks Revenue,
Weekly Demand Note, 3.6%, 12/1/2016* ..................... 2,000,000 2,000,000
Hempstead, NY, Industrial Development Agency,
Trigen-Nassau Energy Corporation, Series 1998, Weekly
Demand Note, AMT, 3.7%, 9/15/2015* ....................... 1,000,000 1,000,000
Long Island Power Authority, NY, Electric Systems Revenue:
Tax Exempt Commercial Paper, 3.6%, 11/16/1999 ............ 3,000,000 3,000,000
Tax Exempt Commercial Paper, 3.45%, 11/10/1999 ........... 1,000,000 1,000,000
Weekly Demand Note, 3.65%, 5/1/2033* ..................... 1,000,000 1,000,000
Monroe County, NY, Industrial Development Agency, Office
Building Associates, Series 1992, Weekly Demand Note,
3.7%, 10/1/2000* ......................................... 1,674,000 1,674,000
Nassau County, NY, Tax Anticipation Note, Series 1998 C,
3.5%, 12/22/1999 ......................................... 1,000,000 1,000,869
New York City Health and Hospital Corporation Revenue,
Series 1997 A, Weekly Demand Note, 3.7%,
2/15/2026* ............................................... 1,980,000 1,980,000
New York City, Housing Development Corporation,
Residential Revenue Bonds, Montefiore Medical Center,
Weekly Demand Note, 3.6%, 5/1/2030* ...................... 1,000,000 1,000,000
New York City, Industrial Development Agency, Korean
Airlines, Series 1997 A, Weekly Demand Note, AMT,
3.75%, 11/1/2024* ........................................ 2,000,000 2,000,000
New York City Municipal Water Finance Authority:
Tax Exempt Commercial Paper:
3.35%, 10/1/1999 ......................................... 1,500,000 1,500,000
3.45%, 10/1/1999 ......................................... 2,000,000 2,000,000
3.4%, 12/23/1999 ......................................... 500,000 500,000
New York City, NY, General Obligation, Series J3, 3.65%,
Weekly Demand Note, 2/15/2016* ........................... 2,500,000 2,500,000
New York Metropolitan Transportation Authority, Tax Exempt
Commercial Paper:
3.25%, 10/12/1999 ........................................ 2,300,000 2,300,000
3.2%, 10/20/1999 ......................................... 2,000,000 2,000,000
3.55%, 2/16/2000 ......................................... 2,000,000 2,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 | Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------
<S> <C> <C>
New York State, General Obligation, Tax Exempt
Commercial Paper:
3.3%, 10/19/1999 ......................................... 1,000,000 1,000,000
3.35%, 10/19/1999 ........................................ 1,000,000 1,000,000
3.55%, 10/25/1999 ........................................ 1,000,000 1,000,000
3.55%, 11/12/1999 ........................................ 2,000,000 2,000,000
New York State Dormitory Authority, Columbia University,
Tax Exempt Commercial Paper:
3.3%, 10/19/1999 ......................................... 1,500,000 1,500,000
3.55%, 11/5/1999 ......................................... 1,500,000 1,500,000
3.55%, 11/12/1999 ........................................ 2,000,000 2,000,000
New York State Power Authority, Tax Exempt
Commercial Paper:
3.35%, 10/18/1999 ........................................ 2,000,000 2,000,000
3.4%, 10/21/1999 ......................................... 1,000,000 1,000,000
3.35%, 10/27/1999 ........................................ 1,000,000 1,000,000
3.35%, 11/8/1999 ......................................... 2,000,000 2,000,000
3.35%, 11/9/1999 ......................................... 2,000,000 2,000,000
New York State, Environmental Quality, General Obligation,
Tax Exempt Commercial Paper:
3.3%, 10/13/1999 ......................................... 1,500,000 1,500,000
3.2%, 10/14/1999 ......................................... 1,000,000 1,000,000
3.55%, 11/10/1999 ........................................ 1,500,000 1,500,000
3.55%, 2/9/2000* ......................................... 1,000,000 1,000,000
New York State Energy Research and Development
Authority:
Gas Facilities Revenue Bonds, Brooklyn Gas Co. Project,
Weekly Demand Note, 3.7%, 12/1/2020* ..................... 1,000,000 1,000,000
Long Island Lighting, AMT, Series 1997A, Weekly
Demand Note, 3.7%, 12/1/2027* ............................ 4,000,000 4,000,000
Niagara Mohawk Power, Daily Demand Note, 3.9%,
12/1/2025* ............................................... 800,000 800,000
Orange & Rockland Utilities Project, Weekly Demand
Notes, Series 1994, 3.6%, 10/1/2014* ..................... 2,100,000 2,100,000
New York State Housing Finance Agency:
Hospital for Special Surgery, Weekly Demand Note,
3.75%, 11/1/2010* ........................................ 2,005,000 2,005,000
Normandie Court 1 Housing Revenue, Weekly Demand
Note, 3.75%, 5/15/2015* .................................. 3,900,000 3,900,000
Tribeca Landing Housing, AMT, Series 1997A, Weekly
Demand Note, 3.65%, 11/1/2030* ........................... 2,000,000 2,000,000
New York State Local Government Assistance Corporation,
Series 1993 A, Weekly Demand Note, 3.65%,
4/1/2022* ................................................ 1,000,000 1,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
Scudder New York Tax Free Money Fund | 19
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------
<S> <C> <C>
Niagara County, NY, Industrial Development Agency, Solid
Waste Disposal Revenue, Weekly Demand Note, AMT,
Series 1994 A, 3.85%, 11/15/2024* ...................... 2,995,000 2,995,000
Onondaga County, NY, Industrial Development Agency,
Southern Container Corp., Weekly Demand Note, AMT,
Series 1997, 3.8%, 8/1/2007* ........................... 1,400,000 1,400,000
Schenectady County, NY, Industrial Development Revenue,
Scotia Industrial Park Project, Weekly Demand Note,
Series 1993 A, 3.8%, 6/1/2009* ......................... 1,770,000 1,770,000
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Total Investment Portfolio -- 100% (Cost $77,124,869) 77,124,869
- ------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $77,124,869.
* Floating rate and monthly, weekly, or daily demand notes are securities
whose yields vary with a designated market index or market rate, such as
the coupon-equivalent of the Treasury bill rate. Variable rate demand notes
are securities whose yields are periodically reset at levels that are
generally comparable to tax-exempt commercial paper. These securities are
payable on demand within seven calendar days and normally incorporate an
irrevocable letter of credit from a major bank. These notes are carried,
for purposes of calculating average weighted maturity, at the longer of the
period remaining until the next rate change or to the extent of the demand
period.
AMT: Subject to alternative minimum tax
The accompanying notes are an integral part of the financial statements.
20 | Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Statement of Assets and Liabilities as of September 30, 1999 (Unaudited)
- ----------------------------------------------------------------------------------------------
Assets
- ----------------------------------------------------------------------------------------------
<S> <C>
Investments, at market (identified cost $77,124,869) .......................... $ 77,124,869
Interest receivable ........................................................... 254,372
Receivable for investments sold ............................................... 50,000
Other assets .................................................................. 19,650
------------
Total assets .................................................................. 77,448,891
Liabilities
- ----------------------------------------------------------------------------------------------
Due to custodian bank ......................................................... 14,762
Dividends payable ............................................................. 15,817
Other payables and accrued expenses ........................................... 28,031
------------
Total liabilities ............................................................. 58,610
Net assets, at market value ................................................... $ 77,390,281
Net Assets
- ----------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated net investment gain (loss) ........................................ (52,888)
Paid-in capital ............................................................... 77,443,169
- --------------------------------------------------------------------------------
Net assets, at market value $ 77,390,281
- --------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($77,390,281 /
77,393,989 outstanding shares of beneficial interest, $.01 par value, unlimited
number of shares authorized) ................................................ $ 1.00
</TABLE>
The accompanying notes are an integral part of the financial statements.
Scudder New York Tax Free Money Fund | 21
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Statement of Operations for the six months ended September 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income (Loss)
- ------------------------------------------------------------------------------------
<S> <C>
Income:
Interest ...................................................... $ 1,271,072
-----------
Expenses:
Management fee ................................................ 202,479
Services to shareholders ...................................... 38,223
Custodian and accounting fees ................................. 29,043
Trustees' fees and expenses ................................... 11,456
Auditing ...................................................... 13,515
Reports to shareholders ....................................... 6,065
Legal ......................................................... 2,900
Registration fees ............................................. 26,499
Other ......................................................... 4,432
-----------
Total expenses before reductions .............................. 334,612
Expense reductions ............................................ (91,637)
-----------
Expenses, net ................................................. 242,975
- --------------------------------------------------------------------------------
Net investment income (loss) 1,028,097
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 1,028,097
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
22 | Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
Six Months
Ended
September 30,
1999 Year Ended
Increase (Decrease) in Net Assets (Unaudited) March 31, 1999
- ------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ........................... $ 1,028,097 $ 2,284,454
Net realized gain (loss) from investment
transactions .................................. -- (388)
------------ -------------
Net increase (decrease) in net assets resulting
from operations ............................... 1,028,097 2,284,066
------------ -------------
Distributions to shareholders from net investment
income ........................................ (1,028,097) (2,284,454)
------------ -------------
Fund share transactions at net asset value of
$1.00 per share:
Shares sold ..................................... 47,763,059 197,943,189
Net asset value of shares issued to shareholders
in reinvestment of distributions .............. 927,396 2,006,593
Shares redeemed ................................. (51,721,008) (212,042,600)
------------ -------------
Net increase (decrease) in net assets from Fund
share transactions ............................ (3,030,553) (12,092,818)
------------ -------------
Increase (decrease) in net assets ............... (3,030,553) (12,093,206)
Net assets at beginning of period ............... 80,420,834 92,514,040
Net assets at end of period ..................... $ 77,390,281 $ 80,420,834
</TABLE>
The accompanying notes are an integral part of the financial statements.
Scudder New York Tax Free Money Fund | 23
<PAGE>
Financial Highlights
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Years Ended March 31, 1999(a) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
----------------------------------------------------
- ------------------------------------------------------------------------------------
Net investment income .013 .027 .030 .028 .031 .025
- ------------------------------------------------------------------------------------
Distributions from net
investment income (.013) (.027) (.030) (.028) (.031) (.025)
- ------------------------------------------------------------------------------------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
----------------------------------------------------
- ------------------------------------------------------------------------------------
Total Return (%) (b) 1.28** 2.71 3.06 2.85 3.18 2.57
- ------------------------------------------------------------------------------------
Ratios and Supplemental Data
- ------------------------------------------------------------------------------------
Net assets, end of period
($ millions) 77 80 93 60 58 55
- ------------------------------------------------------------------------------------
Ratio of operating expenses,
net to average daily net
assets (%) .60* .60 .60 .60 .60 .60
- ------------------------------------------------------------------------------------
Ratio of operating expenses
before expense reductions, to
average daily net assets (%) .83* .73 .78 .85 .86 .89
- ------------------------------------------------------------------------------------
Ratio of net investment income
to average daily net assets (%) 2.55* 2.68 3.00 2.81 3.13 2.56
- ------------------------------------------------------------------------------------
</TABLE>
(a) For the six months ended September 30, 1999 (Unaudited).
(b) Total returns would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
24 | Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio as of September 30, 1999 (Unaudited)
- ------------------------------------------------------------------------------------
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Short-Term Municipal Investments 3.4%
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
New York
Long Island Power Authority, Electric Systems Revenue,
Series 5, Daily Demand Note, 3.75%, 5/1/2033* ........... 800,000 800,000
New York City, NY, General Obligation, Daily Demand Note,
3.75%, 8/15/2005 (b)* ................................... 3,600,000 3,600,000
New York State Energy Research and Development
Authority, Niagara Mohawk Power Co., Daily Demand
Note, 4.25%, 7/1/2027* .................................. 2,100,000 2,100,000
- ------------------------------------------------------------------------------------
Total Short-Term Municipal Investments (Cost $6,500,000) 6,500,000
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Long-Term Municipal Investments 96.6%
- ------------------------------------------------------------------------------------
New York
34th Street Partnership Inc., NY, Capital Improvement,
5.5%, 1/1/2014 .......................................... 1,900,000 1,881,342
Albany County Airport Revenue:
Series 1997, 5.375%, 12/15/2017 (b) ..................... 1,000,000 942,841
Series 1997, 5.5%, 12/15/2019 (b) ....................... 1,000,000 963,320
Albany, NY, General Obligation, 7%, 1/15/2008 (b) ....... 485,000 499,118
Bablyon, NY, General Obligation:
Series 1998 A, Zero Coupon, 8/1/2007 (b) ................ 735,000 499,903
Series 1998 A, Zero Coupon, 8/1/2006 (b) ................ 1,045,000 751,574
Canandaigua, NY, School District, General Obligation:
Series 1991, 6.4%, 6/1/2008 (b) ......................... 500,000 550,340
Series 1991, 6.5%, 6/1/2011 (b) ......................... 550,000 613,960
Chautauqua County, NY:
7.3%, 4/1/2008 (b) ...................................... 575,000 666,902
7.3%, 4/1/2009 (b) ...................................... 575,000 671,790
Series 1990, 7.3%, 4/1/2007 (b) ......................... 465,000 535,341
Series 1990, 6.4%, 9/15/2008 (b) ........................ 520,000 575,203
Dutchess County, NY, Resource Agency Recovery, Solid
Waste Management, Series 1990 A, Prerefunded
1/1/2000, 7.5%, 1/1/2009 (c) ............................ 1,000,000 1,029,370
Erie County, New York, Public Improvement General
Obligation Unlimited, Series 1992, 6.125%,
1/15/2012 (b) ........................................... 590,000 635,159
Glen Cove Housing Authority, Senior Living Facility,
The Mayfair at Glen Cove, AMT, Series 1996, 8.25%,
10/1/2026 ............................................... 1,500,000 1,634,565
</TABLE>
The accompanying notes are an integral part of the financial statements.
Scudder New York Tax Free Fund | 25
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------
<S> <C> <C>
Inverse Variable Rate Certificate Trust, Metropolitan Transit
Authority, Series 1993 B, 5.81%, 6/30/2002 (b)** ............ 8,000,000 8,410,000
Islip, NY, New York Community Development Agency,
New York Institute of Technology, Series 1996, 7.5%,
3/1/2026 .................................................... 4,000,000 4,241,840
Jamestown, New York, General Obligation:
Series 1991 A, 7%, 3/15/2007 (b) ............................ 725,000 821,077
Series 1991 A, 7%, 3/15/2008 (b) ............................ 600,000 683,706
Monroe County, NY, General Obligation Unlimited:
6%, 6/1/2006 ................................................ 500,000 536,810
Series 1996, 6%, 3/1/2013 ................................... 1,050,000 1,118,849
Series 1996, 6%, 3/1/2014 ................................... 1,040,000 1,104,054
Series 1996, 6%, 3/1/2017 ................................... 1,410,000 1,483,419
Nassau County, NY, General Obligation, Series 1997 A,
6%, 7/1/2011 (b) ............................................ 1,000,000 1,065,070
Nassau County, NY, General Obligation Refunding,
Combined Sewer Districts, Series 1993 G, 5.4%,
1/15/2010 (b) ............................................... 1,655,000 1,684,956
Series 1997 A, 6%, 7/1/2011 (b) ............................. 780,000 830,755
New York City, NY, General Obligation:
NC Series 1996 A, 6.25%, 8/1/2009 ........................... 5,175,000 5,526,124
Series 1991 B, 7.5%, 2/1/2005 ............................... 1,935,000 2,083,124
Series 1996 A, 7%, 8/1/2005 ................................. 5,000,000 5,537,600
Series 1996 A, 7%, 8/1/2006 ................................. 5,000,000 5,578,700
Series 1997 I, 6%, 4/15/2009 ................................ 2,000,000 2,107,180
Series B, 8.25%, 6/1/2006 ................................... 2,750,000 3,250,445
Series B, 7.25%, 8/15/2007 .................................. 2,250,000 2,561,130
Series B, Prerefunded 2/1/2002, 7.5%, 2/1/2005 (c) .......... 425,000 461,155
Series B1, Prerefunded 8/15/2004, 7.3%, 8/15/2010 (c) ....... 45,000 50,858
Series E, 8%, 8/1/2005 (b) .................................. 330,000 383,892
New York City, NY, Industrial Development Agency:
Civil Facilities Revenue, USTA National Tennis Center:
6.1%, 11/15/2004 (b) ........................................ 1,215,000 1,303,136
6.25%, 11/15/2006 (b) ....................................... 3,000,000 3,256,710
Civil Facility Revenue, YMCA Geater New York Project:
Series 1997, 6%, 8/1/2006 ................................... 580,000 598,287
Series 1997, 5.85%, 8/1/2008 ................................ 600,000 609,870
Series 1997, 5.8%, 8/1/2016 ................................. 1,000,000 977,860
Japan Air Lines, Series 1996, AMT, 6%, 11/1/2015 (b) ........ 965,000 988,691
</TABLE>
The accompanying notes are an integral part of the financial statements.
26 | Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------
<S> <C> <C>
New York Enviromental Facilities Corporation, Clean Water
and Drinking Revolving Funds Series 1998 F, 5.25%,
6/15/2013 ............................................... 2,500,000 2,451,950
New York State Dormatory Authority:
City University System Series 1995 A, 5.625%,
7/1/2016 (b) ............................................ 1,100,000 1,117,237
College and University Pooled Capital Program, 7.8%,
12/1/2005 (b) ........................................... 675,000 689,094
Columbia University, NY, Revenue, 6%, 7/1/2010 .......... 1,000,000 1,035,670
Jewish Medical Center, Series 1998, 5.25%,
7/1/2011 (b) ............................................ 2,000,000 1,991,160
Lease Revenue Municipal Health Facilities:
Series 1998, 4.75%, 1/15/2029 (b) ....................... 2,000,000 1,666,480
Series 1998 A, 5.375%, 5/15/2009 (b) .................... 440,000 448,752
Series 1998 A, 5.375%, 5/15/2010 (b) .................... 465,000 471,171
Lease Revenue, Office Facilities, Audit & Control,
5.25%, 4/1/2013 (b) ..................................... 720,000 701,662
Mental Health Facilities, Series 1998 D, 5.25%,
8/15/2013 (b) ........................................... 2,400,000 2,337,600
Mental Health Services, Facilities Improvement, 5.25%,
8/15/2011 (b) ........................................... 1,750,000 1,742,248
Nyack Hospital NC Series 1996, 6%, 7/1/2006 ............. 1,000,000 1,022,020
Nyack Hospital, Series 1996, 6.25%, 7/1/2013 ............ 500,000 501,240
Pace University, Series 1997, 6.5%, 7/1/2008 (b) ........ 1,360,000 1,507,125
Pace University, Series 1997, 6.5%, 7/1/2009 (b) ........ 555,000 617,227
Revenue Bond, Mental Health Services Facilities,
Series B, 5.5%, 7/1/2028 (b) ............................ 1,375,000 1,334,960
State University Series 1993 A, 5.875%, 5/15/2011 (b) ... 380,000 401,801
New York State Dormitory Authority Revenue:
5.75%, 7/1/2009 (b) ..................................... 1,000,000 1,052,510
Columbia University, 5%, 7/1/2015 ....................... 2,500,000 2,349,125
Mental Health Services Facilities Improvement:
Series 1996 B, 6.5%, 2/15/2010 .......................... 1,500,000 1,628,400
Series 1996 B, 6.5%, 2/15/2011 .......................... 1,000,000 1,084,530
Series 1996 B, 6%, 2/15/2012 ............................ 2,500,000 2,597,275
Series 1997 B, 5.625%, 2/15/2021 (b) .................... 500,000 491,120
Montefiore Medical Center:
Series 1996, 6%, 8/1/2008 (b) ........................... 2,000,000 2,138,340
Series 1996, 6%, 2/1/2009 (b) ........................... 2,000,000 2,129,160
Mt. Sinai School of Medicine, Series B, 5.7%,
7/1/2011 (b) ............................................ 1,825,000 1,910,866
</TABLE>
The accompanying notes are an integral part of the financial statements.
Scudder New York Tax Free Fund | 27
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------
<S> <C> <C>
State Universtiy Educational Facility, Series A, 5.875%,
5/15/2011 ............................................... 2,250,000 2,361,060
Upstate Community College, 5.8%, 7/1/2006 ............... 1,075,000 1,125,557
New York State Environmental Facilities Corporation:
Special Obligation Revenue, Riverbank State Park:
Series 1996, 6.25%, 4/1/2007 (b) ........................ 2,055,000 2,232,799
Series 1996, 6.25%, 4/1/2008 (b) ........................ 2,185,000 2,380,186
State Water Revolving Fund, Series D, 6.9%,
5/15/2015 ............................................... 1,200,000 1,329,132
New York State Health Facilities Authority, 6.375%,
11/1/2004 ............................................... 1,500,000 1,607,865
New York State Housing Finance Agency, Service Contract,
Series A, 5.875%, 9/15/2014 ............................. 6,000,000 6,096,180
New York State Local Government Assistance Corporation,
Series 1993 E, 5.25%, 4/1/2016 (b) ...................... 1,185,000 1,146,902
New York State Mortgage Agency Revenue AMT
Series 1994, 6.8%, 10/1/2005 ............................ 1,000,000 1,038,200
New York State Thruway Authority General Revenue,
Capital Appreciation Special Obligation, Series 1991 A,
Zero Coupon, 1/1/2006 ................................... 2,905,000 2,121,551
New York State Thruway Authority, Local Bridge & Building
Authority, Series C, 5.25%, 4/1/2012 (b) ................ 4,000,000 3,981,880
New York State Urban Development Corp.:
Series 1996 A, 6.25%, 4/1/2005 (b) ...................... 1,375,000 1,477,286
State Facilities Series 1995, 5.7%, 4/1/2009 (b) ........ 4,250,000 4,446,690
New York State Urban Development Corp. Revenue
Correctional Capital Facilities:
NC Series 1995, 5.375%, 1/1/2015 (b) .................... 2,000,000 1,948,060
Series 1994 A, 5.5%, 1/1/2014 (b) ....................... 2,000,000 2,013,580
New York State, General Obligation, Series 1998 F, 5.25%,
9/15/2013 ............................................... 1,000,000 980,600
New York Triborough Bridge and Tunnel Authority,
Series 1998 A, 5.25%, 1/1/2013 (b) ...................... 1,500,000 1,474,590
New York, NY, Certificate of Participation, City
Transportation Authority, Triborough Bridge, Series A,
5.625%, 1/1/2010 (b) .................................... 1,000,000 1,037,380
New York, NY, Transitional Finance Authority, Revenue
Bond, Series A, 5.25%, 11/15/2011 ....................... 1,250,000 1,251,000
Niagara County, NY, General Obligation, 7.1%,
2/15/2011 (b) ........................................... 500,000 581,655
Niagra Falls, NY, Water Treatment Plant, AMT:
7%, 11/1/2003 (b) ....................................... 2,260,000 2,465,976
8.5%, 11/1/2005 (b) ..................................... 2,140,000 2,550,987
8.5%, 11/1/2006 (b) ..................................... 1,240,000 1,502,806
</TABLE>
The accompanying notes are an integral part of the financial statements.
28 | Scudder New York Tax Free Fund
<PAGE>
Principal Market
Amount ($) Value ($)
- --------------------------------------------------------------------------------
Oneida-Herkimer, NY, Solid Waste Managment Authority:
Series 1998, 5.5%, 4/1/2013 (b) ....................... 500,000 502,365
Series 1998, 5.5%, 4/1/2014 (b) ....................... 1,000,000 999,010
Onondaga County, NY, Industrial Development Agency,
Solid Waste Disposal Facility, Solvay Paperboard LLC,
Series 1998, AMT, 7%, 11/1/2030 ....................... 3,000,000 3,040,110
Orange County, NY, Industrial Development Agency, The
Glen Arden Project:
5.2%, 1/1/2005 ........................................ 200,000 195,914
5.3%, 1/1/2006 ........................................ 200,000 194,778
5.35%, 1/1/2007 ....................................... 200,000 193,542
5.4%, 1/1/2008 ........................................ 100,000 95,997
5.625%, 1/1/2018 ...................................... 1,000,000 921,180
5.7%, 1/1/2028 ........................................ 1,250,000 1,125,713
Oswego County, NY, General Obligation Series 1991,
6.7%, 6/15/2012 ....................................... 1,100,000 1,240,118
Port Authority of New York & New Jersey, Special
Obligation Revenue:
JFK International Air Terminal, AMT:
6.25%, 12/1/2010 (b) .................................. 2,500,000 2,715,650
6.25%, 12/1/2011 (b) .................................. 2,500,000 2,710,800
Series 1996, 7%, 10/1/2007 ............................ 3,500,000 3,734,045
Shenendehowa Central School District, NY, Clifton Park:
6.85%, 6/15/2008 (b) .................................. 350,000 398,514
6.85%, 6/15/2009 (b) .................................. 350,000 399,056
Suffolk County, NY, General Obligation:
Series 1998, 5.25%, 8/1/2010 (b) ...................... 1,285,000 1,297,606
Series 1998, 5.25%, 4/1/2010 (b) ...................... 1,590,000 1,605,344
Suffolk County, NY, Industrial Development Agency,
Southwest Sewer Symstem, 6%, 2/1/2007 (b) ............. 500,000 533,830
Troy, New York, Municipal Assistance Corporation:
Series B, Zero Coupon, 1/15/2007 (b) .................. 650,000 453,447
Series B, Zero Coupon, 7/15/2007 (b) .................. 650,000 442,384
Series B, Zero Coupon, 1/15/2008 (b) .................. 750,000 493,980
Series B, Zero Coupon, 1/15/2009 (b) .................. 650,000 405,249
Series B, Zero Coupon, 7/15/2009 (b) .................. 350,000 212,734
Series B, Zero Coupon, 7/15/2010 (b) .................. 600,000 342,984
Ulster County, NY, General Obligation:
Series 1998 B, 5%, 10/15/2011 (b) ..................... 275,000 269,877
Series 1998 B, 5%, 10/15/2012 (b) ..................... 195,000 189,536
Series 1998 B, 5%, 10/15/2013 (b) ..................... 130,000 125,295
The accompanying notes are an integral part of the financial statements.
Scudder New York Tax Free Fund | 29
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Valley Central School District, Montgomery, NY, 7.15%,
6/15/2008 (b) ............................................... 625,000 720,494
Virgin Islands
Virgin Islands, General Obligation, Public Finance Authority,
Mortgage Fund Loan Notes, Series 1992 A, ETM, 7%,
10/1/2002*** ................................................ 500,000 542,265
Virgin Islands, Public Finance Authority, Subordinate Lien,
Series 1998 D, 6%, 10/1/2007 ................................ 3,000,000 3,068,790
Virgin Islands, Special Tax Bonds, Hugo Bonds, 7.75%,
10/1/2006 ................................................... 1,090,000 1,161,777
- ---------------------------------------------------------------------------------------
Total Long-Term Municipal Investments (Cost $178,320,288) 182,609,055
- ---------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $184,820,288) 189,109,055
- ---------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $184,820,288. At September 30,
1999, net unrealized appreciation for all securities based on tax cost was
$4,288,767. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $6,171,591 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$1,882,824.
(b) Bond is insured by one of these companies: AMBAC, Capital Guaranty, FGIC,
FSA, FHA or MBIA/BIG.
(c) Prerefunded: Bonds which are prerefunded are collateralized by U.S.
Treasury securities which are held in escrow and are used to pay principal
and interest on tax-exempt issues and to retire the bonds in full at the
earliest refunding date.
* Floating rate and monthly, weekly, or daily demand notes are securities
whose yields vary with a designated market index or market rate, such as
the coupon-equivalent of the Treasury bill rate. Variable rate demand notes
are securities whose yields are periodically reset at levels that are
generally comparable to tax-exempt commercial paper. These securities are
payable on demand within seven calendar days and normally incorporate an
irrevocable letter of credit from a major bank. These notes are carried,
for purposes of calculating average weighted maturity, at the longer of the
period remaining until the next rate change or to the extent of the demand
period.
** Inverse floating rate notes are instruments whose yields have an inverse
relationship to benchmark interest rates. These securities are shown at
their rate as of September 30, 1999.
*** ETM: Bonds bearing the description ETM (escrowed to maturity) are
collateralized by U.S. Treasury securities which are held in escrow by a
trustee and used to pay principal and interest on bonds so designated.
AMT: Subject to alternative minimum tax
The accompanying notes are an integral part of the financial statements.
30 | Scudder New York Tax Free Fund
<PAGE>
Financial Statements
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Statement of Assets and Liabilities as of September 30, 1999 (Unaudited)
- -----------------------------------------------------------------------------------------------
Assets
- -----------------------------------------------------------------------------------------------
<S> <C>
Investments, at market (identified cost $184,820,288) ......................... $ 189,109,055
Cash .......................................................................... 4,666
Receivable for investments sold ............................................... 150,000
Interest receivable ........................................................... 3,019,906
Receivable for Fund shares sold ............................................... 371,527
Other assets .................................................................. 3,755
-------------
Total assets .................................................................. 192,658,909
Liabilities
- -----------------------------------------------------------------------------------------------
Dividends payable ............................................................. 219,032
Payable for Fund shares redeemed .............................................. 188,377
Accrued management fee ........................................................ 101,821
Other payables and accrued expenses ........................................... 67,191
-------------
Total liabilities ............................................................. 576,421
- -----------------------------------------------------------------------------------------------
Net assets, at market value $ 192,082,488
- -----------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------
Net assets consist of:
Unrealized appreciation (depreciation) on investments ......................... 4,288,767
Accumulated net investment gain (loss) ........................................ (5,482,979)
Paid-in capital ............................................................... 193,276,700
- -----------------------------------------------------------------------------------------------
Net assets, at market value $ 192,082,488
- -----------------------------------------------------------------------------------------------
Net Asset Value
- -----------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($192,082,488 /
17,750,882 outstanding shares of beneficial interest, $.01 par value, unlimited
number of shares authorized) .................................................. $ 10.82
</TABLE>
The accompanying notes are an integral part of the financial statements.
Scudder New York Tax Free Fund | 31
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Statement of Operations for the six months ended September 30, 1999 (Unaudited)
- ------------------------------------------------------------------------------------------
Investment Income (Loss)
- ------------------------------------------------------------------------------------------
<S> <C>
Income:
Interest ................................................................... $ 5,398,863
-----------
Expenses:
Management fee ............................................................. 628,922
Services to shareholders ................................................... 76,922
Custodian and accounting fees .............................................. 46,490
Trustees' fees and expenses ................................................ 14,823
Auditing ................................................................... 20,258
Reports to shareholders .................................................... 6,963
Legal ...................................................................... 3,660
Registration fees .......................................................... 3,294
Other ...................................................................... 5,604
-----------
806,936
- ------------------------------------------------------------------------------------------
Net investment income (loss) 4,591,927
- ------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------
Net realized gain (loss) from investments................................... (1,060,987)
Net unrealized appreciation (depreciation) during the period on investments. (8,864,854)
Net
gain (loss) on investment transactions...................................... (9,925,841)
- ------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $(5,333,914)
- ------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
32 | Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Six Months
Ended
September 30,
1999 Year Ended
Increase (Decrease) in Net Assets (Unaudited) March 31, 1999
- ----------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ........................... $ 4,591,927 $ 9,163,100
Net realized gain (loss) from investment
transactions .................................. (1,060,987) 2,068,469
Net unrealized appreciation (depreciation) on
investment transactions ....................... (8,864,854) (343,581)
------------- -------------
Net increase (decrease) in net assets resulting
from operations ............................... (5,333,914) 10,887,988
------------- -------------
Distributions to shareholders from net investment
income ........................................ (4,591,927) (9,163,100)
------------- -------------
Fund share transactions:
Proceeds from shares sold ....................... 13,000,590 56,426,831
Net asset value of shares issued to shareholders
in reinvestment of distributions .............. 3,197,746 6,158,807
Cost of shares redeemed ......................... (25,904,154) (48,327,775)
------------- -------------
Net increase (decrease) in net assets from Fund
share transactions ............................ (9,705,818) 14,257,863
------------- -------------
Increase (decrease) in net assets ............... (19,631,659) 15,982,751
Net assets at beginning of period ............... 211,714,147 195,731,396
------------- -------------
Net assets at end of period ..................... $ 192,082,488 $ 211,714,147
------------- -------------
Other Information
- ----------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ....... 18,624,470 17,368,966
------------- -------------
Shares sold ..................................... 1,175,004 4,958,346
Shares issued to shareholders in reinvestment of
distributions ................................. 289,758 540,309
Shares redeemed ................................. (2,338,350) (4,243,151)
------------- -------------
Net increase (decrease) in Fund shares .......... (873,588) 1,255,504
------------- -------------
Shares outstanding at end of period ............. 17,750,882 18,624,470
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Scudder New York Tax Free Fund | 33
<PAGE>
Financial Highlights
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Years Ended March 31, 1999(a) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $11.37 $11.27 $10.63 $10.67 $10.38 $10.32
----------------------------------------------------
- ------------------------------------------------------------------------------------
Income from investment
operations:
- ------------------------------------------------------------------------------------
Net investment income .25 .51 .51 .53 .53 .52
- ------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investment
transactions (.55) .10 .66 (.03) .29 .11
----------------------------------------------------
- ------------------------------------------------------------------------------------
Total from investment
operations (.30) .61 1.17 .50 .82 .63
- ------------------------------------------------------------------------------------
Less distributions:
From net investment income (.25) (.51) (.51) (.53) (.53) (.52)
- ------------------------------------------------------------------------------------
From net realized gains -- -- (.02) (.01) -- (.05)
----------------------------------------------------
- ------------------------------------------------------------------------------------
Total distributions (.25) (.51) (.53) (.54) (.53) (.57)
- ------------------------------------------------------------------------------------
Net asset value, end of period $10.82 $11.37 $11.27 $10.63 $10.67 $10.38
----------------------------------------------------
- ------------------------------------------------------------------------------------
Total Return (%) (2.63)** 5.46 11.20 4.76 7.95 6.39
- ------------------------------------------------------------------------------------
Ratios and Supplemental Data
- ------------------------------------------------------------------------------------
Net assets, end of period
($ millions) 192 212 196 181 192 194
- ------------------------------------------------------------------------------------
Ratio of operating expenses to
average daily net assets (%) .80* .82 .83 .83 .82 .82
- ------------------------------------------------------------------------------------
Ratio of net investment income
to average daily net assets (%) 4.56* 4.45 4.65 4.95 4.91 5.13
- ------------------------------------------------------------------------------------
Portfolio turnover rate (%) 7.0* 44.5 28.8 71.0 80.5 83.8
- ------------------------------------------------------------------------------------
</TABLE>
(a) For the six months ended September 30, 1999 (Unaudited).
* Annualized
** Not annualized
34 | Scudder New York Tax Free Fund
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
September 30, 1999 (Unaudited)
A. Significant Accounting Policies
Scudder New York Tax Free Money Fund ("Tax Free Money Fund") and Scudder New
York Tax Free Fund ("Tax Free Fund"), each a non-diversified fund, are series of
Scudder State Tax Free Trust (the "Trust") which is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company organized as a Massachusetts business trust.
The Funds' financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Funds in the
preparation of their financial statements.
Security Valuation. Tax Free Money Fund values all portfolio securities
utilizing the amortized cost method permitted in accordance with Rule 2a-7 under
the 1940 Act and pursuant to which Tax Free Money Fund must adhere to certain
conditions. Under this method, which does not take into account unrealized gains
or losses on securities, an instrument is initially valued at its cost and
thereafter assumes a constant accretion/amortization to maturity of any
discount/premium.
Tax Free Fund's portfolio debt securities purchased with an original maturity
greater than sixty days are valued by pricing agents approved by the officers of
the Fund, whose quotations reflect broker/dealer-supplied valuations and
electronic data processing techniques. If the pricing agents are unable to
provide such quotations, the most recent bid quotation supplied by a bona fide
market maker shall be used. Money market instruments purchased with an original
maturity of sixty days or less are valued at amortized cost. All other
securities are valued at their fair value as determined in good faith by the
Valuation Committee of the Board of Trustees.
Amortization and Accretion. All premiums and original issue discounts are
amortized/accreted for both tax and financial reporting purposes.
Federal Income Taxes. The Funds' policy is to comply with the requirements of
the Internal Revenue Code, as amended, which are applicable to regulated
investment companies and to distribute all of its taxable and tax-exempt income
to its shareholders. Accordingly, the Funds paid no federal income taxes and no
federal income tax provision was required.
As of March 31, 1999, the Tax Free Money Fund had a net tax basis capital loss
carryforward of approximately $52,900, which may be applied against
35
<PAGE>
any realized net taxable capital gains of each succeeding year until fully
utilized or March 31, 2000 ($800), March 31, 2001 ($17,000), March 31, 2002
($3,500), March 31, 2003 ($43,200), March 31, 2004 ($33,000) and March 31, 2007
($400), the respective expiration dates, whichever occurs first.
As of March 31, 1999, the Tax Free Fund had a net tax basis capital loss
carryforward of approximately $3,508,000, which may be applied against any
realized net taxable capital gains of each succeeding year until fully utilized
or until March 31, 2003 ($1,128,000) and March 31, 2004 ($2,380,000), the
respective expiration dates, whichever occurs first.
Distribution of Income and Gains. All of the net investment income of the Funds
is declared as a daily dividend and is distributed to shareholders monthly. Net
realized gains from investment transactions, in excess of available capital loss
carryforwards, would be taxable to the Fund if not distributed, and, therefore,
will be distributed to shareholders at least annually.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. As a result, net
investment income (loss) and net realized gain (loss) on investment transactions
for a reporting period may differ significantly from distributions during such
period. Accordingly, the Fund may periodically make reclassifications among
certain of its capital accounts without impacting the net asset value of the
Fund.
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis.
B. Purchases and Sales of Securities
For the six months ended September 30, 1999, purchases and sales of long-term
municipal securities aggregated $6,831,493 and $20,820,095, respectively, for
Tax Free Fund.
C. Related Parties
Under the Investment Management Agreements (each an "Agreement" and collectively
the "Agreements") with Scudder Kemper Investments, Inc. (the "Adviser"), the
Adviser directs the investments of the Fund in accordance with
36
<PAGE>
its investment objectives, policies, and restrictions. The Adviser determines
the securities, instruments, and other contracts relating to investments to be
purchased, sold or entered into by the Funds. In addition to portfolio
management services, the Adviser provides certain administrative services in
accordance with the Agreements. The management fee payable under the Agreements
is equal to an annual rate of 0.50% of the average daily net assets of Tax Free
Money Fund, and 0.625% of the first $200,000,000 of the average daily net assets
and 0.60% of such net assets in excess of $200,000,000 for Tax Free Fund,
computed and accrued daily and payable monthly. With respect to Tax Free Money
Fund, the Adviser has agreed not to impose all or a portion of its management
fee until July 31, 2000 and during such period to maintain the annualized
expenses of the Tax Free Money Fund at not more than 0.60% of average daily net
assets. For the six months ended September 30, 1999, the Adviser did not impose
a portion of its fee amounting to $91,637 and the portion imposed amounted to
$110,842, none of which is unpaid at September 30, 1999.
For the six months ended September 30, 1999, the fee for the Tax Free Fund
pursuant to these Agreements amounted to $628,922, of which $101,821 is unpaid
at September 30, 1999. This was equivalent to an annual effective rate of 0.61%
of the Fund's average daily net assets.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend-paying and shareholder service agent for the Funds. For the
six months ended September 30, 1999, the amount charged to the Funds by SSC
aggregated $26,457 for the Tax Free Money Fund and $56,463 for the Tax Free
Fund, of which $0 and $9,213, respectively, are unpaid at September 30, 1999.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records for the Funds. For the six months
ended September 30, 1999, the amount charged to the Funds by SFAC aggregated
$15,000 for the Tax Free Money Fund and $26,354 for the Tax Free Fund, of which
$0 and $2,360, respectively, are unpaid at September 30, 1999.
Each Fund pays each Trustee not affiliated with the Adviser an annual retainer,
allocated between the Funds, plus specified amounts for attended board and
committee meetings. For the six months ended September 30, 1999, Trustees' fees
and expenses aggregated $11,456 for the Tax Free Money Fund and $14,823 for the
Tax Free Fund.
37
<PAGE>
D. Lines of Credit
The Funds and several Scudder Funds (the "Participants") share in a $850 million
revolving credit facility for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated pro rata among each of the Participants. Interest is
calculated based on the market rates at the time of the borrowing. The Funds may
borrow up to a maximum of 33 percent of their net assets under the agreement.
38
<PAGE>
Officers and Trustees
- --------------------------------------------------------------------------------
Lynn S. Birdsong* Eleanor R. Brennan*
o President and Trustee o Vice President
Henry P. Becton, Jr. Philip G. Condon*
o Trustee; President and General o Vice President
Manager, WGBH Educational
Foundation Ashton P. Goodfield*
o Vice President
Dawn-Marie Driscoll
o Trustee; President, Driscoll Ann M. McCreary*
Associates; Executive Fellow, o Vice President
Bentley College
Frank J. Rachwalski, Jr.*
Peter B. Freeman o Vice President
o Trustee; Corporate Director and
Trustee Rebecca L. Wilson*
o Vice President
George M. Lovejoy, Jr.
o Trustee; President and Director, John Millette*
Fifty Associates o Vice President and Secretary
Wesley W. Marple, Jr. John R. Hebble*
o Trustee; Professor of Business o Treasurer
Administration, Northeastern
University, College of Business Caroline Pearson*
Administration o Assistant Secretary
Kathryn L. Quirk*
o Trustee, Vice President and *Scudder Kemper Investments, Inc.
Assistant Secretary
Jean C. Tempel
o Trustee; Venture Partner,
Internet Capital Group
39
<PAGE>
Investment Products and Services
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
<S> <C>
Money Market U.S. Growth and Income
Scudder U.S. Treasury Money Fund Scudder Balanced Fund
Scudder Cash Investment Trust Scudder Dividend & Growth Fund
Scudder Money Market Series -- Scudder Growth and Income Fund
Prime Reserve Shares* Scudder Select 500 Fund
Premium Shares* Scudder S&P 500 Index Fund
Managed Shares* Scudder Real Estate Investment Fund
Scudder Government Money Market
Series -- Managed Shares* U.S. Growth
Value
Tax Free Money Market+ Scudder Large Company Value Fund
Scudder Tax Free Money Fund Scudder Value Fund***
Scudder Tax Free Money Market Scudder Small Company Value Fund
Series -- Managed Shares* Scudder Micro Cap Fund
Scudder California Tax Free Money Fund** Growth
Scudder New York Tax Free Money Fund** Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Tax Free+ Scudder Select 1000 Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Medium Term Tax Free Fund Scudder 21st Century Growth Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund Global Equity
Scudder California Tax Free Fund** Worldwide
Scudder Massachusetts Limited Term Scudder Global Fund
Tax Free Fund** Scudder International Value Fund
Scudder Massachusetts Tax Free Fund** Scudder International Growth and
Scudder New York Tax Free Fund** Income Fund
Scudder Ohio Tax Free Fund** Scudder International Fund++
Scudder International Growth Fund
U.S. Income Scudder Global Discovery Fund***
Scudder Short Term Bond Fund Scudder Emerging Markets Growth Fund
Scudder GNMA Fund Scudder Gold Fund
Scudder Income Fund Regional
Scudder Corporate Bond Fund Scudder Greater Europe Growth Fund
Scudder High Yield Bond Fund Scudder Pacific Opportunities Fund
Scudder Latin America Fund
Global Income The Japan Fund, Inc.
Scudder Global Bond Fund
Scudder International Bond Fund Industry Sector Funds
Scudder Emerging Markets Income Fund Choice Series
Scudder Financial Services Fund
Asset Allocation Scudder Heath Care Fund
Scudder Pathway Conservative Portfolio Scudder Technology Fund
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio Preferred Series
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small Company Fund
</TABLE>
40
<PAGE>
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
- --------------------------------------------------------------------------------
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs Education Accounts
Traditional IRA Education IRA
Roth IRA UGMA/UTMA
SEP-IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Closed-End Funds#
- -----------------------------------------------------------------------------------------
<S> <C>
The Argentina Fund, Inc. Scudder Global High Income Fund, Inc.
The Brazil Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Montgomery Street Income Securities, Inc.
</TABLE>
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money.
+++ Funds within categories are listed in order from expected least
risk to most risk. Certain Scudder funds or classes thereof may
not be available for purchase or exchange.
+ A portion of the income from the tax-free funds may be subject to
federal, state, and local taxes.
* A class of shares of the fund.
** Not available in all states.
*** Only the Scudder Shares of the fund are part of the Scudder Family
of Funds.
++ Only the International Shares of the fund are part of the Scudder
Family of Funds.
+++ +++ A no-load variable annuity contract provided by Charter National
Life Insurance Company and its affiliate, offered by Scudder's
insurance agencies, 1-800-225-2470.
+++ +++ +++ A no-load variable annuity contract issued by Glenbrook Life and
Annuity Company and underwritten by Allstate Financial Services,
Inc., sold by Scudder's insurance agencies, 1-800-225-2470.
# These funds, advised by Scudder Kemper Investments, Inc., are
traded on the New York Stock Exchange and, in some cases, on
various other stock exchanges.
41
<PAGE>
Scudder Solutions
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Convenient Automatic Investment Plan
ways to invest,
quickly and A convenient investment program in which money is
reliably electronically debited from your bank account monthly to
regularly purchase fund shares and "dollar cost average" --
buy more shares when the fund's price is lower and fewer
when it's higher, which can reduce your average purchase
price over time.*
Automatic Dividend Transfer
The most timely, reliable, and convenient way to purchase
shares -- use distributions from one Scudder fund to
purchase shares in another, automatically (accounts with
identical registrations or the same social security or tax
identification number).
QuickBuy
Lets you purchase Scudder fund shares electronically,
avoiding potential mailing delays; money for each of your
transactions is electronically debited from a previously
designated bank account.
Payroll Deduction and Direct Deposit
Have all or part of your paycheck -- even government checks
-- invested in up to four Scudder funds at one time.
* Dollar cost averaging involves continuous investment in
securities regardless of price fluctuations and does not
assure a profit or protect against loss in declining
markets. Investors should consider their ability to
continue such a plan through periods of low price
levels.
Around-the- Scudder Automated Information Line: SAIL(TM) --
clock electronic 1-800-343-2890
account
service and Personalized account information, the ability to exchange
information, or redeem shares, and information on other Scudder funds
including some and services via touchtone telephone.
transactions
Scudder's Web Site -- www.scudder.com
Personal Investment Organizer: Offering account information
and transactions, interactive worksheets, prospectuses and
applications for all Scudder funds, plus your current asset
allocation, whenever your need them. Scudder's site also
provides news about Scudder funds, retirement planning
information, and more.
42
<PAGE>
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Retirees and Automatic Withdrawal Plan
those who depend
on investment You designate the bank account, determine the schedule (as
proceeds for frequently as once a month) and amount of the redemptions,
living expenses and Scudder does the rest.
can enjoy these
convenient, Distributions Direct
timely, and
reliable Automatically deposits your fund distributions into the
automated bank account you designate within three business days after
withdrawal each distribution is paid.
programs
QuickSell
Provides speedy access to your money by electronically
crediting your redemption proceeds to the bank account you
previously designated.
For more Call a Scudder representative at
information about 1-800-SCUDDER
these services
Or visit our Web site at
www.scudder.com
Please address The Scudder Funds
all written PO Box 2291
correspondence Boston, Massachusetts
to 02107-2291
43
<PAGE>
About the Fund's Adviser
SCUDDER
INVESTMENT(SM)
[LOGO]
PO Box 2291
Boston, MA 02107-2291
1-800-SCUDDER
www.scudder.com
A member of the [LOGO] Zurich Financial Services Group
Scudder Kemper Investments, Inc. is one of the largest and most experienced
investment management organizations worldwide, managing more than $280 billion
in assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 80
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Financial Services Group. As a result, Zurich's subsidiary, Zurich
Kemper Investments, Inc., with 50 years of mutual fund and investment management
experience, was combined with Scudder. Headquartered in New York, Scudder Kemper
Investments offers a full range of investment counsel and asset management
capabilities, based on a combination of proprietary research and disciplined,
long-term investment strategies. With its global investment resources and
perspective, the firm seeks opportunities in markets throughout the world to
meet the needs of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Financial Services Group. The Zurich Financial Services Group is
an internationally recognized leader in financial services, including
property/casualty and life insurance, reinsurance, and asset management.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
