Scudder Global Small Company Fund
Semiannual Report
April 30, 1995
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
* For investors seeking above-average capital appreciation over the long term
by investing primarily in the equity securities of small companies located
throughout the world.
* A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
<PAGE>
SCUDDER GLOBAL SMALL COMPANY FUND
CONTENTS
2 In Brief
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
11 Investment Portfolio
20 Financial Statements
23 Financial Highlights
24 Notes to Financial Statements
30 Report of Independent Accountants
33 Officers and Directors
34 Investment Products and Services
35 How to Contact Scudder
IN BRIEF
* Scudder Global Small Company Fund generated a -5.40% total return for the
six months ended April 30, 1995, reflecting generally difficult investment
conditions in Japan and emerging markets around the globe.
<TABLE>
(bar chart title)
How the Markets Performed
(bar chart data)
Local currency U.S. Dollar
-------------- -----------
<S> <C> <C>
U.S. 10.46 10.46
Japan -14.48 -1.32
Germany -1.76 6.63
Mexico -20.67 -53.89
Hong Kong -13.5 -13.63
Indonesia -21.45 -20.71
Source: Standard & Poor's, Morgan Stanley
</TABLE>
* The chart above illustrates the varying performance of global markets during
the six months. Markets where the local currencies strengthened versus the
U.S. dollar saw a boost in performance when converted to dollar terms. But
U.S. investors were penalized in those markets where the local currencies
weakened relative to the dollar.
* German software manufacturer SAP, the top Fund holding at the beginning of
the period, continued to demonstrate explosive growth in earnings and stock
price appreciation.
* Your Fund added investments during the period from two countries new to the
portfolio -- Peru and Poland, based on encouraging economic development
there.
* As part of an overall investment strategy, the Fund continued to blend
small-company stocks from the world's developed stock markets with select
holdings from emerging markets.
2
<PAGE>
LETTER FROM THE FUND'S CHAIRMAN
SCUDDER INTERNATIONAL FUND
Dear Shareholders,
Distinct patterns emerged in global stock markets during the past six
months. Tensions emanating from the Mexican peso's devaluation in December
spread throughout the world's emerging markets, causing stock prices to fall.
Japanese stocks also sustained losses, as the stubbornly strong yen continued to
undermine Japan's struggling economic recovery. Amidst these difficulties,
investors showed a preference for the stocks of stable, developed markets --
specifically, stocks of large, well-established companies. These sentiments were
reflected in the positive 4.56% dollar-based total return of the unmanaged
Morgan Stanley Capital International World Index for the six months. In
contrast, Scudder Global Small Company Fund, which invests primarily in
small-company stocks from both developed and emerging markets worldwide,
generated a six-month return of -5.40%.
Despite these challenging market conditions, the continued strong
performance of many of the Fund's top holdings underscored the investment merit
of locating promising small companies around the world. Admittedly, global
small-company stock investing involves greater risk than investing in
large-company stocks, domestic or otherwise. But with the support of
comprehensive investment research, we believe our global, small-company stock
selection approach offers significant and diverse investment opportunities
unavailable to investors in only large-company or domestic stocks.
If you have questions about your Fund or your investments, please call a
Scudder Investor Relations representative at 1-800-225-2470. Page 35 provides
more information on how to contact Scudder. Thank you for choosing Scudder
Global Small Company Fund to help meet your investment needs.
Sincerely,
/s/Edmond D. Villani
Edmond D. Villani
Chairman,
Scudder Global Small Company Fund
3
<PAGE>
Scudder Global Small Company Fund
Performance Update as of April 30, 1995
- ------------------------------------------------------------------
Growth of a $10,000 Investment
- ------------------------------------------------------------------
Scudder Global Small Company Fund
- ----------------------------------------
Total Return
Period Growth -------------
Ended of Average
4/30/95 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $ 9,699 -3.01% -3.01%
Life of
Fund* $13,308 33.08% 8.17%
MSCI World Index
- --------------------------------------
Total Return
Period Growth -------------
Ended of Average
4/30/95 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $10,974 9.74% 9.74%
Life of
Fund* $13,763 37.63% 9.34%
* The Fund commenced operations on
September 10, 1991. Index comparisons
begin September 30, 1991.
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
Scudder Global Small Company Fund
Year Amount
- --------------------
9/91* 10000
10/91 9770
4/92 10107
10/92 9894
4/93 11558
10/93 13459
4/94 13496
10/94 13837
4/95 13090
MSCI World Index
Year Amount
- --------------------
9/91* 10000
10/91 10159
4/92 9696
10/92 9628
4/93 11213
10/93 12228
4/94 12542
10/94 13163
4/95 13763
The Morgan Stanley Capital International (MSCI) World
Index is an unmanaged capitalization-weighted measure
of global stock markets including the U.S., Canada,
Europe, Australia, and the Far East. Index returns assume
dividends reinvested net of withholding tax and, unlike
Fund returns, do not reflect any fees or expenses.
- -------------------------------------------------------------------
Returns and Per Share Information
- -------------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
Yearly Periods ended April 30
- ----------------------------------
<TABLE>
<S> <C> <C> <C> <C>
1992* 1993 1994 1995
------------------------------
Net Asset Value.... $12.31 $13.86 $15.87 $15.31
Income Dividends... $ .02 .07 .18 --
Capital Gains
Distributions...... $ -- .12 .15 .08
Fund Total
Return (%)......... 2.76 14.35 16.77 -3.01
Index Total
Return (%)......... -3.04 15.66 11.86 9.74
</TABLE>
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. If the Adviser had not
maintained the Funds expenses, the average annual total return for the one
year and life of Fund periods would have been lower.
4
<PAGE>
Portfolio Summary as of April 30, 1995
- ---------------------------------------------------------------------------
Geographical (Excludes 8% Cash Equivalents)
- ---------------------------------------------------------------------------
Europe 35% Japanese holdings were scaled back during
U.S. & Canada 34% the period in favor of investments in Europe,
Japan 13% where we believe improving economic
Pacific Basin 13% conditions will foster better stock
Latin America 5% performance.
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Sectors (Excludes 8% Cash Equivalents)
- --------------------------------------------------------------------------
Technology 17%
Consumer Discretionary 10% Technology retained its prominence in
Service Industries 9% the portfolio while the Fund increased
Financial 9% its exposure to the health and energy
Health 9% sectors.
Durables 9%
Manufacturing 8%
Consumer Staples 7%
Energy 6%
Other 16%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Ten Largest Equity Holdings
- --------------------------------------------------------------------------
1. Atmel Corp.
U.S. developer and manufacturer of integrated circuits
2. SAP AG
German computer software manufacturer
3. Thomas Nelson, Inc.
U.S. publisher
4. Tibbett and Britten Group PLC
British transportation services for manufacturing and retail
industries
5. Bank of Ireland PLC
Bank
6. Autoliv AB
Swedish manufacturer of safety airbags for automobiles
7. Nichiei Co., Ltd.
Japanese finance company for small and medium-size firms
8. Sterling Software Inc.
Computer software products in the U.S.
9. Hornbach Holding AG
German super-market chain specializing in building materials and
gardening products
10. Aran Energy PLC
Oil and natural gas exploration in Ireland
The strong performance delivered by many of your Fund's top holdings
helped to offset declines in Japanese and emerging market positions.
For more complete details about the Fund's Investment Portfolio,
see page 11. A monthly Investment Portfolio Summary is available
upon request.
5
<PAGE>
SCUDDER GLOBAL SMALL COMPANY FUND
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
April 30, 1995, ended an eventful six months for global financial markets.
Based on broad market measures, U.S. stocks outperformed foreign stocks --
especially those of emerging markets--while larger-company stocks worldwide
posted better performance than their smaller-company counterparts. Market
conditions were particularly hard on the types of securities in which your Fund
invests -- small, high-growth companies from around the globe. Scudder Global
Small Company Fund generated a six-month total return of -5.40%, reflecting the
reinvestment of an $0.08 per share long-term capital gain distribution and a
$0.96 decline in share price to $15.31 on April 30. Although the unmanaged
Morgan Stanley Capital International (MSCI) World Index returned a positive
4.56% for the same period, it is important to note that the MSCI is comprised
primarily of large-company stocks from developed countries rather than
small-company stocks.
Against this backdrop, the Fund's Japanese holdings declined, as Japanese
small-company stocks lagged significantly behind large-company stocks. However,
the yen's strength helped to limit declines for U.S. investors during the six
months.
Many of the markets in which the Fund invests were temporarily set back by
December's steep devaluation of the Mexican peso. Mexico has long been viewed as
a model for other emerging markets, so its currency crisis and associated
economic problems reverberated through emerging markets as distant as Indonesia.
Investors retreated from these higher-risk markets in anticipation of "another
Mexico." Poor performance in emerging markets was compounded by weak local
currencies relative to the dollar. Fortunately, emerging markets have weathered
the volatility, and thus far observers have searched for another economic crisis
in vain.
In early 1995, the swift collapse of venerable British merchant bank
Barings PLC due to the actions of a single trader in Hong Kong, and a disastrous
earthquake in the Japanese city of Kobe, sent further shock waves through an
already apprehensive financial community. The Pacific Basin markets, including
Japan, were particularly hard hit. The U.S. dollar continued to falter against
the yen, which rose significantly as the Japanese pulled out of non-Japanese
investments and focused on reconstruction in Kobe.
6
<PAGE>
Small-company stocks traditionally have been sensitive to uncertain market
conditions. In a difficult environment, investors typically turn to the
seasoned, more liquid stocks of larger companies. Many institutional investors,
in fact, traded in both large- and small-company foreign investments in favor of
U.S. companies, where earnings have been strong. The outflow of U.S. money from
international markets placed additional pressure on foreign stock prices.
On the positive side, the vast majority of the Fund's top ten holdings,
which represent roughly 25% of the portfolio, turned in very strong performance
for the six-month period, underscoring the quality of these stock selections.
Scudder Global Small Company Fund Top Ten Holdings
(Total Return for Six Months Ended April 30, 1995)
<TABLE>
Total Return
Security Country in U.S. dollars
- -------------------------------------------------------------------------------
<S> <C> <C>
1. Atmel Corp. United States 19.3%
2. SAP AG-- Preferred Germany 71.9%
3. Thomas Nelson, Inc. United States 22.2%
4. Tibbett & Britten Group PLC United Kingdom -7.9%
5. Bank of Ireland PLC Ireland 18.9%
6. Autoliv AB Sweden 29.7%
7. Nichiei Co. Ltd. Japan -0.4%
8. Sterling Software Inc. United States 8.8%
9. Hornbach Holding AG Germany 13.2%
10. Aran Energy PLC Ireland 11.7%
</TABLE>
Shifts In the Portfolio's Geographic Structure
The unsettled global climate prompted a number of strategic changes in your
Fund's geographic profile over the six-month period. Currently, U. S.
investments constitute the largest portion of the portfolio, consistent with the
recent strength of domestic stock prices. During the period, the Fund's exposure
to the United States increased to 30.8% of the portfolio, from 23.8% on October
31. However, the Fund's basic structure remains widely diversified to reflect
the increasingly globalized nature of the world economy and the varying economic
7
<PAGE>
timetables of different countries. Last summer, we began a process of gradually
scaling back Japanese holdings, sensing that the tentative nature of Japan's
economic recovery would persist. This strategy worked to your Fund's advantage,
as we cut the Fund's Japanese position nearly in half, to 13% of the Fund's
equity holdings from 21%. Notably, we sold Shohkoh Fund (which had been among
the Fund's top holdings), Amano, Takuma, and Shimamura. In our view, the
government's policy response to the overvalued yen thus far has been inadequate,
putting Japanese industry at a competitive disadvantage.
We believe the sketchy economic outlook in Japan will continue to delay a
full financial market recovery in the near future. Thus, we are maintaining a
cautious approach toward Japanese investments despite Japan's formidable
influence on the world economy. On the positive side, the Fund's currency
management strategy helped boost its Japanese returns in the final months of the
semiannual period. Convinced that the yen would continue to strengthen against
the dollar, we removed most of the yen hedges originally set in place to protect
against yen weakening. Toward the end of the period, we once again began to
reduce our yen exposure because we believe the dollar now is exceedingly
undervalued relative to the yen.
As for other geographic shifts, we significantly increased the Fund's
exposure to Europe, specifically France, Italy, Spain, and Sweden, to take
advantage of improving economic conditions and opportunities in select
industries. Meanwhile, the volatility pervading emerging markets prompted us to
trim the Fund's investments in those markets. But we do not intend to abandon
emerging market stocks altogether. The Fund continues to hold fundamentally
sound companies that we believe are capable of weathering temporary instability.
We increased the Fund's exposure to Eastern Europe, adding to existing holdings
in the Czech Republic, and initiated our first position in Poland. All told,
investments in emerging markets accounted for approximately 10% of the portfolio
on April 30.
8
<PAGE>
Emphasis on Healthcare, Technology, and Energy Sectors
Technology remains the largest single sector component of your portfolio,
at 17%. Technological advances have been the undisputed driver of productivity
during the 1990s and are expected to continue to lead the markets into the next
century. Stocks today are far more reasonably priced than in the 1980s, and the
United States leads the world in innovation. Among the technology stocks we
favored during the period were SAP, the German software leader; and Atmel, the
U.S. developer and manufacturer of integrated circuits. Both stocks have turned
out to be rewarding investments. As prices rose, we took some profits by
gradually selling shares of SAP, for example, which has had a spectacular
appreciation in price since purchase. Recently, we have redirected a portion of
the Fund's technology holdings toward communications-related stocks.
We significantly increased healthcare issues during the six months. New
additions included companies that are relatively immune to the ups and downs of
the business cycle -- for example, Fresenius, the German-based manufacturer of
high-quality dialysis products; and Fresenius USA, its publicly held
manufacturer and distributor. We added several French positions too, such as
Essilor, the leading producer worldwide of special lenses for eyeglasses. In
addition, we purchased shares of Vivra, a U.S.-based operator of kidney dialysis
centers.
The Fund's energy component also expanded, in part due to gains among
existing holdings. Benton Oil and Gas, a company with interests spanning from
Louisiana to Siberia, was the period's star holding, registering a dramatic
corporate earnings increase of 54%. This jump was the result of a production
surge in the company's Venezuelan and Russian properties, as well as increased
natural gas production overall. We also added new stocks -- Enron Global Power
and Pipeline, a U.S. participant in the booming power facilities management
business; and Gas Natural of Spain, a company benefiting from a promising
long-term government energy policy.
9
<PAGE>
Looking Ahead
We continue to approach global markets cautiously, maintaining the Fund's
cash reserves at about an 8% level. However, if the so-called soft landing of
the U.S. economy does not materialize, the extraordinary strength of U.S. stocks
will likely wane, which could enhance the appeal of foreign stocks. As always,
we strive to add value by focusing on companies with solid balance sheets and
the potential for above-average earnings growth over time. We continue to
believe this quality-oriented approach toward global small-company stock
investing will reward shareholders over the long term.
Sincerely,
Your Portfolio Management Team
/s/Gerald J. Moran /s/Elizabeth J. Allan
Gerald J. Moran Elizabeth J. Allan
/s/Carol L. Franklin /s/Joan R. Gregory
Carol L. Franklin Joan R. Gregory
10
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO as of April 30, 1995
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Market
Portfolio Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------
7.8% REPURCHASE AGREEMENT
------------------------------------------------------------------------------
17,511,000 Repurchase Agreement with Salomon
Brothers dated 4/28/95 at 5.92%,
to be repurchased at $17,519,639 on 5/1/95,
collateralized by a $17,740,000 U.S. Treasury
Note, 3.875%, 10/31/95 (Cost $17,511,000)......... 17,511,000
----------
------------------------------------------------------------------------------
0.7% CONVERTIBLE BONDS
------------------------------------------------------------------------------
HONG KONG 1,500,000 Henderson Land Development Co., Ltd., 4%,
10/27/96 (Property developer)
(Cost $1,511,250)................................. 1,470,000
----------
------------------------------------------------------------------------------
7.7% PREFERRED STOCKS
------------------------------------------------------------------------------
Shares
------------------------------------------------------------------------------
GERMANY 3,700 Fresenius AG (Developer, manufacturer
and distributor of pharmaceutical and medical
systems products)................................. 2,335,774
3,360 Hornbach Holding AG (Super-market chain
specializing in building materials and
gardening products)............................... 4,026,521
3,080 Marschollek Lautenschlaeger und Partner AG
(Leading independent life insurance company)...... 1,799,935
9,220 SAP AG (Computer software manufacturer)............ 9,113,235
----------
TOTAL PREFERRED STOCKS (COST $6,625,507)........... 17,275,465
----------
------------------------------------------------------------------------------
83.8% COMMON STOCKS
------------------------------------------------------------------------------
ARGENTINA 1.4% 585,035 Central Costanera "B" (Electric utility)........... 1,696,517
776,200 Dalmine Siderca (Steel producer)................... 463,368
51,800 Quilmes Industrial S.A. (Leading beer distributor). 984,200
----------
3,144,085
----------
AUSTRALIA 1.6% 673,807 Ampol Exploration Ltd. (Oil and gas
exploration company).............................. 1,945,671
571,291 BRL Hardy Ltd. (Wine and spirits manufacturer)..... 556,808
91,833 BRL Hardy Ltd.**................................... 22,710
1,313,600 E.R.G. Australia Ltd. (Producer and installer of
electronic ticketing equipment, and
manufacturer of radio communication
equipment)........................................ 1,156,091
----------
3,681,280
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<TABLE>
SCUDDER GLOBAL SMALL COMPANY FUND
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value ($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AUSTRIA 0.7% 20,100 Mayr Melnhof Karton AG* (Leading carton
producer)..................................... 1,162,431
3,700 VAE Eisenbahnsysteme AG (Manufacturer of
electronic control systems for use in rail
transportation technology).................... 332,731
-----------
1,495,162
-----------
BRAZIL 1.0% 162,700 Rhodia-Ster* (GDS) (Manufacturer of PET
resin, polyester and acrylic fibers).......... 2,155,775
-----------
CANADA 0.8% 179,000 Petromet Resources Ltd.* (Exploration,
development and production of natural
gas in Alberta)............................... 546,414
132,100 Reko International Group Inc.* (Designer and
manufacturer of injection molds and other
auto parts)................................... 631,593
30,000 Renaissance Energy Ltd.* (Leading oil and
gas producer)................................. 678,558
-----------
1,856,565
-----------
CHILE 0.9% 59,900 Banco Orsono y La Union (ADR) (Commercial bank
providing a variety of banking services)...... 718,800
76,400 Cristalerias de Chile (ADR) (Glassworks)....... 1,413,400
-----------
2,132,200
-----------
CHINA 0.2% 1,143,000 Tsingtao Brewery "H" (Leading brewery)......... 406,052
-----------
CZECH REPUBLIC 1.0% 171,100 Central European Media Enterprises
Ltd. "A" * (Owner and operator of national
and regional private commercial television
stations in central Europe and Germany)...... 2,095,975
-----------
FRANCE 1.7% 14,100 Essilor International (Manufacturer of
various types of lenses, eyeglasses, contact
lenses and optical measuring instruments)..... 2,520,158
14,550 Sligos SA (Electrical payment and computing
engineering services company)................. 1,255,966
-----------
3,776,124
-----------
GERMANY 0.3% 1,260 Hornbach Baumarkt AG (Do-it-yourself home
improvement retailer)......................... 796,335
-----------
GREECE 0.1% 57,070 Athens Medical Center (Health services)........ 300,600
-----------
HONG KONG 2.0% 6,436,000 Hong Kong Toy Centre International, Ltd.
(Major toy manufacturer)...................... 311,781
4,794,000 Innovative International Holdings, Ltd.
(Manufacturer and marketer of automobile
parts and accessories)........................ 904,178
1,068,600 Jinhui Holdings Ltd.* (Operator of dry bulk
cargo ships in southern China)................ 1,341,093
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value ($)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
357,000 Johnson Electric Holdings Ltd. (Designer
and manufacturer of micrometers for domestic
and commercial uses)................................... 777,090
700,000 Sime Darby Hong Kong (Vehicle distributor).............. 768,635
1,809,501 Yips Hang Cheung (Manufacturer of mixed
solvents and paints)................................... 444,135
---------
4,546,912
---------
INDIA 0.8% 86,300 Arvind Mills Ltd. (GDR) (Cotton textile
manufacturer).......................................... 323,625
95,700 Indian Rayon & Industries Ltd. (GDR)
(Manufacturer and marketer of rayon yarn
and textiles).......................................... 1,435,979
---------
1,759,604
---------
INDONESIA 3.2% 61,000 Indonesia Satellite Corp.* (ADR) (International
telecommunication services)............................ 2,203,625
310,000 Kabelmetal Indonesia (Cable manufacturer)............... 485,893
702,640 Kalbe Farma (Foreign registered)
(Pharmaceutical producer and distributor).............. 2,352,098
116,500 Medco Energi Corp.* (Foreign registered) (Oil and
gas exploration and production, drilling
services).............................................. 233,470
100,000 Merck-Indonesia (Foreign registered)
(Pharmaceutical company) (b)........................... 403,045
195,000 Modern Photo Film Co. (Photographic film
distributor)........................................... 816,502
440 Surya Toto Indonesia (Foreign registered)
(Manufacturer of bathroom fixtures).................... 808
51,743 Unilever-Indonesia (Foreign registered)
(Consumer products manufacturer)....................... 671,987
---------
7,167,428
---------
IRELAND 3.7% 5,511,000 Aran Energy PLC* (Oil and natural gas
exploration)........................................... 3,935,664
820,932 Bank of Ireland PLC (Bank).............................. 4,435,522
---------
8,371,186
---------
ITALY 1.0% 32,300 Luxottica Group SpA* (ADR) (Manufacturer
and marketer of eyeglasses)............................ 1,122,425
306,000 Merloni Elettrodomestici SpA (Manufacturer
of a variety of household, mainly kitchen,
appliances, sold throughout western Europe)............ 1,024,896
---------
2,147,321
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
<TABLE>
SCUDDER GLOBAL SMALL COMPANY FUND
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
JAPAN 11.7% 47,000 Cox Co., Ltd. (Men's and women's wear chain
store operator).......................................... 615,147
17,000 Eyeful Home Technology Inc. (Homebuilding
franchise operator)...................................... 315,545
52,800 Genki Sushi Co., Ltd. (North Kanto-based
fast-food sushi chain)................................... 1,287,881
148,000 Hitachi Construction Machinery Co., Ltd. (Leading
maker of hydraulic shovels).............................. 1,634,172
25,000 Horipro Inc. (Growing entertainment production
company)................................................. 475,936
66,000 Hosoda Corp. (Tokyo-based construction firm).............. 840,264
146,000 JAMCO Corp. (Leading manufacturer of galleys
and lavatories for commercial aircraft).................. 1,266,393
43,000 Kyokuto Kaihatsu Kogyo Co., Ltd. (Leading
maker of dump trucks and other specialty
vehicles)................................................ 1,002,796
125,000 Maeda Road Construction Co., Ltd. (Major road
paver)................................................... 2,573,026
86,900 Ministop Co., Ltd. (Growing convenience store
chain)................................................... 1,912,844
63,800 Nichiei Co., Ltd. (Finance company for small and
medium-sized firms)...................................... 4,114,415
39,540 Nissen Co., Ltd. (Mail-order women's apparel
distributor)............................................. 1,251,430
72,000 Rock Field Co., Ltd. (Major delicatessen food
processor)............................................... 1,130,823
94,800 Royal Ltd. (Wholesaler and retailer of
automobile equipment and parts).......................... 3,271,105
9,000 Sankyo Co., Ltd. (Leading manufacturer of
pachinko game equipment)................................. 521,506
114,000 ShinMaywa Industries, Ltd. (Leading maker of
dump trucks and other specialty vehicles)................ 1,059,361
35,000 Simree Co., Ltd. (Clothing mail#order sales firm)......... 191,980
90,000 Ten Allied Co., Ltd. (Tavern chain operator).............. 1,552,740
19,200 Tsutsumi Jewelry Co., Ltd. (Manufacturer,
wholesaler and retailer of jewelry)...................... 1,167,375
----------
26,184,739
----------
KOREA 0.6% 180 units Korea 1990 Trust IDR* (Investment
company) (c)............................................. 855,000
16,000 Ottogi Foods* (Manufacturer of various food
products)................................................ 503,706
----------
1,358,706
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MALAYSIA 1.6% 175,000 Aokam Perdana Bhd. (Forest products
company)............................................ 785,960
500 Matsushita Electric Malaysia (Consumer electronics
manufacturer)....................................... 3,844
609,000 Technology Resources Industries* (Mobile telephone
operator)........................................... 1,552,377
279,000 Westmont Bhd. (Conglomerate: construction and
repair of ships and offshore oil platforms,
power transmission, garment manufacturing,
and marketing services)............................. 1,207,890
---------
3,550,071
---------
MEXICO 0.2% 36,200 Grupo Casa Autrey SA (ADR) (Consumer specialty
manufacturer)....................................... 556,575
---------
NETHERLANDS 2.5% 40,000 IHC Caland N.V.* (Dredging and offshore
services)........................................... 1,092,567
9,000 Telegraaf Holdings CVA* (Newspaper publisher)........ 1,095,788
40,708 Wolters Kluwer CVA (Publisher)....................... 3,312,116
---------
5,500,471
---------
NORWAY 0.9% 127,800 Unitor A/S (Provider of broad range of ship
services, leading supplier of marine chemicals)..... 1,958,307
---------
PERU 1.1% 1,500,000 Compania Peruana de Telefonos S.A. "B"*
(Public and cellular telephone services)............ 2,513,929
---------
PHILIPPINES 0.1% 568,658 Keppel Philippines Shipyard "B"* (Shipbuilding
and repair) (b)..................................... 305,613
6,300 Kepphil Shipyard Inc.* (Shipbuilding and repair)..... 527
---------
306,140
---------
POLAND 0.6% 3 Pioneer Poland Fund* (Closed-end investment
company) (b) (d).................................... 1,450,715
---------
PORTUGAL 2.2% 59,460 Jeronimo Martins (Food producer and retailer) (b).... 3,023,825
126,000 Uniao Cervejaria, S.A. (Brewery)..................... 1,943,477
---------
4,976,302
---------
SINGAPORE 0.4% 400,000 GP Batteries International (Developer, manfacturer
and distributor of batteries and battery related
products)........................................... 960,000
---------
SPAIN 1.2% 14,500 Gas Natural SDG, S.A. (Distributor of natural and
manufactured gas)................................... 1,448,472
124,000 Uralita, SA* (Processor of concrete pipes and cenent
for the construction industry)...................... 1,354,506
---------
2,802,978
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<TABLE>
SCUDDER GLOBAL SMALL COMPANY FUND
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SWEDEN 2.9% 63,400 Arjo AB (Producer of healthcare equipment
for elderly and disabled patients).................... 985,000
91,600 Autoliv AB (Free) (Manufacturer of safety airbags
for automobiles)...................................... 4,143,430
20,500 Hennes & Mauritz AB (Clothing and cosmetics
retailer throughout Europe)........................... 1,383,898
----------
6,512,328
----------
SWITZERLAND 0.5% 3,000 Phoenix Mecano AG (Bearer) (Manufacturer
of housings and components for computers)............. 1,105,780
----------
THAILAND 0.4% 28,200 American Standard Sanitaryware (Foreign
registered) (Manufacturer of bathroom fixtures)....... 447,164
132,599 Bangkok Dusit Medical Services Co., Ltd.
(Health services)..................................... 372,000
----------
819,164
----------
UNITED KINGDOM 5.7% 180,300 Brake Brothers PLC (Specialist supplier of frozen
foods to the catering industry)....................... 1,588,065
283,000 David Lloyd Leisure PLC (Operator of sports
centers and leisure facilities)....................... 1,119,979
903,300 Hambros Insurance Services Group PLC
(Insurance company)................................... 1,162,546
37,100 Hardy Oil & Gas PLC (Oil and gas exploration
and development)...................................... 102,956
703,700 Serco Group PLC (Facilities management
company).............................................. 2,784,909
574,100 Tibbett and Britten Group PLC
(Transportation services for manufacturing
and retail industries)................................ 6,169,533
----------
12,927,988
----------
UNITED STATES 30.8% 39,900 A.O. Smith Corp. (Manufacturer of equipment
for automobiles, trucks and farms).................... 952,612
105,100 American Classic Voyager Co. (North
American operator of steamboat cruises)............... 1,077,275
14,000 Ascend Communications, Inc.* (Developer and
producer of a variety of high-speed wide
area network access products)......................... 1,078,000
222,600 Atmel Corp.* (Developer and manufacturer of
integrated circuits).................................. 9,794,400
45,500 Automotive Industries Holdings Inc.*
(Manufacturer of auto and van interior trim
systems).............................................. 1,217,125
266,500 BE Aerospace* (Airline audio/video control
systems).............................................. 1,898,813
200,000 Benton Oil & Gas Co.* (Oil and gas exploration,
development and production)........................... 2,462,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
- ------------------------------------------------------------------------------------------------------
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
14,700 Cascade Communications Corp.* (Designer
and developer of multi-service wide area
network switches).................................. 1,058,400
16,900 Ceridian Corp.* (Information services and
defense electronics)............................... 583,050
29,600 Cerner Corp.* (Developer of patient-focused
clinical information systems)...................... 1,572,500
12,500 CliniCom, Inc.* (Developer and installer of
computer-based clinical information systems
for hospitals)..................................... 246,875
75,900 Enron Global Power & Pipelines L.L.C.
(Owner and manager of power plants and
a natural gas pipeline system)..................... 1,821,600
118,200 First Colony Corp. (Holding company which
sells individual life insurance and annuity
products throughout the U.S.)...................... 2,629,950
120,775 Fiserv Inc.* (Data processing services).............. 3,200,538
118,000 Fresenius USA, Inc.* (Manufacturer and
distributor of medical products for treatment of
kidney failure).................................... 1,209,500
260,400 IGEN Inc.* (Producer of medical supplies)............ 1,367,100
45,000 KLA Instruments Corp.* (Developer,
manufacturer and marketer of automated
image processing systems)........................... 2,790,000
96,300 M.S. Carriers Inc.* (Truckload carrier of general
freight)............................................ 2,335,275
24,500 MapInfo Corporation* (Developer and supporter
of desktop mapping software and applications,
and geographic and demographic information
products)........................................... 731,937
40,600 Maxim Integrated Products Inc.* (Manufacturer
and marketer of integrated circuits)................ 1,471,750
47,450 Microchip Technology Inc.* (Manufacturer of
high performance, field programmable
microcontrollers and specialty memory
products)........................................... 1,340,463
116,500 Millicom International Cellular SA* (Developer
and operator of cellular telephone networks)........ 2,897,938
17,900 Nordson Corp.* (Industrial application equipment).... 993,450
91,500 Nu-Kote Holdings Inc. "A" (Manufacturer of
office and home printing products).................. 2,516,250
70,350 PhyCor Inc.* (Operator of specialty medical clinics). 2,233,612
22,300 R.P. Scherer Corp.* (Manufacturer of drug
delivery system).................................... 1,064,825
</TABLE>
The accompanying notes are in integral part of the financial statements.
17
<PAGE>
<TABLE>
SCUDDER GLOBAL SMALL COMPANY FUND
- -------------------------------------------------------------------------------------------------------
<CAPTION>
Market
Shares Value ($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
5,000 Shiva Corp.* (Developer and manufacturer of
hardware and software products that enable
remote connectivity to enterprise networks)........... 187,500
86,300 Silicon Valley Group Inc.* (Manufacturer of
equipment for semiconductor industry)................. 2,502,700
119,700 Sterling Software Inc.* (Computer software
products)............................................. 4,069,800
351,062 Thomas Nelson, Inc. (Publisher)........................ 6,670,178
8,500 Trimedyne Inc. Warrants* (expire 12/9/96) (b).......... 5,483
14,500 U.S. Robotics Corp.* (Designer and manufacturer
of high performance data communication
products and systems)................................. 1,149,125
42,400 Vivra, Inc.* (Provider of dialysis services)........... 1,362,100
86,200 Wandel & Goltermann Technologies, Inc.*
(Manufacturer of test, measurement,
diagnostic and monitoring products for
local and wide area networks)......................... 1,228,350
41,600 Zilog Inc.* (Manufacturer and marketer of
integrated circuits).................................. 1,461,200
-----------
69,182,174
-----------
TOTAL COMMON STOCKS (Cost $183,760,348)............... 188,498,971
-----------
=======================================================================================================
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $209,408,105) (a)............................... 224,755,436
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
* Non-income producing security.
** Market value and cost reflect partial payment. An additional payment
equal to the U.S. dollar equivalent of Aus. $91,833 is payable, at
the applicable exchange rate, on June 28, 1995.
(a) The cost for federal income tax purposes was $211,537,451. At April 30,
1995, net unrealized appreciation for all securities based on tax cost was
$13,217,985. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $37,794,540 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$24,576,555.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors. The cost of these securities at April 30, 1995 aggregated
$3,458,220. See Note A of the Notes to Financial Statements.
(c) 1,000 shares = 1 IDR unit for Korea 1990 Trust.
(d) Market value and cost reflect full payment. The remaining installments
which total $1,108,125 will be payable upon thirty days prior notice from
Pioneering Management Limited.
Sector breakdown of the Fund's equity securities is noted on page 5.
Transactions in written call options on currencies during the six months
ended April 30, 1995 were:
<TABLE>
Premiums
Principal Amount Received ($)
----------------------------------------
<S> <C> <C>
Outstanding at
October 31, 1994 ........... Yen 923,000,000 448,218
Contracts closed ........... Yen 923,000,000 448,218
-------------------------------------
Outstanding at
April 30, 1995 ............. -- --
=============== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
SCUDDER GLOBAL SMALL COMPANY FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
APRIL 30, 1995
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $209,408,105)
(Note A)................................................. $ 224,755,436
Cash............................................................. 465
Foreign currency holdings, at market
(identified cost $39,237) (Note A)....................... .39,304
Forward foreign currency exchange contracts to buy,
at market (contract cost $131,495) (Notes A and D)....... 131,167
Receivable on forward foreign currency exchange
contracts to sell (Notes A and D)........................ 13,069,147
Other receivables:
Investments sold......................................... 3,968,464
Fund shares sold......................................... 261,824
Dividends and interest................................... 523,220
Foreign taxes recoverable................................ 34,085
Deferred organization expenses (Note A).......................... 14,075
-----------
Total assets..................................... 242,797,187
LIABILITIES
Payables:
Investments purchased.................................... $ 5,830,350
Fund shares redeemed..................................... 176,804
Accrued management fee (Note C).......................... 197,462
Other accrued expenses (Note C).......................... 250,998
Payable on closed forward foreign currency
exchange contracts (Note A)...................... 1,949,907
Forward foreign currency exchange contracts to
buy (Notes A and D).............................. 131,495
Forward foreign currency exchange contracts to
sell, at market (contract cost $13,069,147)
(Notes A and D).................................. 13,014,172
----------
Total liabilities................................ 21,551,188
-------------
Net assets, at market value...................................... $ 221,245,999
=============
NET ASSETS
Net assets consist of:
Accumulated distributions in excess of net
investment income $ (2,141,672)
Unrealized appreciation on:
Investments...................................... 15,347,331
Foreign currency related transactions............ 60,333
Accumulated net realized gain............................ 26,564
Capital stock............................................ 144,522
Additional paid#in capital............................... 207,808,921
-------------
Net assets, at market value...................................... $ 221,245,999
NET ASSET VALUE, offering and redemption price per =============
share ($221,245,999 Divided by 14,452,205 shares
of capital stock outstanding, $.01 par value,
100,000,000 shares authorized)........................... $15.31
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED APRIL 30, 1995
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends (net of foreign taxes withheld of $107,960)...... $ 954,637
Interest................................................... 648,563
------------
........................................................... 1,603,200
Expenses:
Management fee (Note C).................................... $ 1,246,845
Services to shareholders (Note C).......................... 353,365
Directors' fees and expenses (Note C)...................... 16,967
Custodian fees............................................. 176,563
Reports to shareholders.................................... 92,223
Auditing................................................... 39,100
Legal...................................................... 15,426
Amortization of organization expense (Note A).............. 5,197
Other...................................................... 22,562 1,968,248
----------------------------
Net investment loss........................................ (365,048)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT TRANSACTIONS
Net realized gain (loss) from:
Investments........................................ 2,060,502
Options............................................ 243,429
Foreign currency related transactions.............. (2,056,941) 246,990
------------
Net unrealized appreciation (depreciation)
during the period on:
Investments........................................ (16,694,588)
Options............................................ (88,248)
Foreign currency related transactions.............. 2,335,920 (14,446,916)
----------------------------
Net loss on investment transactions........................ (14,199,926)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $(14,564,974)
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
<TABLE>
SCUDDER GLOBAL SMALL COMPANY FUND
- -------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 1995 1994
- ---------------------------------- ---------- -----------
<S> <C> <C>
Operations:
Net investment loss...................................... $ (365,048) $ (668,612)
Net realized gain from investment
transactions..................................... 246,990 1,326,728
Net unrealized appreciation (depreciation)
on investment transactions during the period..... (14,446,916) 3,962,657
------------ -------------
Net increase (decrease) in net assets
resulting from operations........................ (14,564,974) 4,620,773
------------ -------------
Distributions to shareholders:
In excess of net investment income ($.18
per share)....................................... - (2,271,808)
From net realized gains ($.08 and $.15
per share, respectively)......................... (1,236,433) (1,947,264)
------------ -------------
Fund share transactions:
Proceeds from shares sold................................ 25,837,042 167,361,242
Net asset value of shares issued to
shareholders in reinvestment of
distributions.................................... 1,187,647 3,818,846
Cost of shares redeemed.................................. (45,971,393) (113,105,251)
------------ -------------
Net increase (decrease) in net assets from
Fund share transactions.......................... (18,946,704) 58,074,837
------------ -------------
Increase (decrease) in net assets........................ (34,748,111) 58,476,538
Net assets at beginning of period........................ 255,994,110 197,517,572
------------ -------------
Net assets at end of period (including
accumulated distributions in excess of
net investment income of $2,141,672
and $1,776,624, respectively).................... $221,245,999 $ 255,994,110
============ =============
OTHER INFORMATION
Increase (decrease) in Fund shares.......................
Shares outstanding at beginning of period................ 15,734,564 12,238,526
------------ -------------
Shares sold.............................................. 1,718,851 10,300,657
Shares issued to shareholders in
reinvestment of distributions.................... 79,071 232,856
Shares redeemed.......................................... (3,080,281) (7,037,475)
------------ -------------
Net increase (decrease) in Fund shares................... (1,282,359) 3,496,038
------------ -------------
Shares outstanding at end of period...................... 14,452,205 15,734,564
============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD AND OTHER PERFORMANCE INFORMATION
DERIVED FROM THE FINANCIAL STATEMENTS.
<CAPTION>
FOR THE PERIOD
SEPTEMBER 10, 1991
SIX MONTHS (COMMENCEMENT
ENDED YEARS ENDED OCTOBER 31, OF OPERATIONS)
APRIL 30, --------------------------- TO OCTOBER 31,
1995 1994 1993 1992 1991
---------- --------------------------- ------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............................ $16.27 $16.14 $12.05 $11.92 $12.00
------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss) (a).............................. (.04) (.02) .04 .07 .01
Net realized and unrealized gain (loss) on investment
transactions.............................................. (.84) .48 4.24 .08 (.09)
------ ------ ------ ------ ------
Total from investment operations................................ (.88) .46 4.28 .15 (.08)
------ ------ ------ ------ ------
Less distributions:
From net investment income.................................... - - (.07) (.02) -
In excess of net investment income............................ - (.18) - - -
From net realized gains on investment transactions............ (.08) (.15) (.12) - -
------ ------ ------ ------ ------
Total distributions............................................. (.08) (.33) (.19) (.02) -
------ ------ ------ ------ ------
Net asset value, end of period.................................. $15.31 $16.27 $16.14 $12.05 $11.92
====== ====== ====== ====== ======
Total Return (%)................................................ (5.40)* 2.80 36.04 1.26 (.67)*
Ratios and Supplemental Data
Net assets, end of period ($ millions).......................... 221 256 198 55 9
Ratio of operating expenses net, to average daily
net assets (%) (a)............................................ 1.75** 1.70 1.50 1.50 1.50**
Ratio of net investment income (loss) to average daily
net assets (%)................................................ (.32)** (.28) .53 .78 2.47**
Portfolio turnover rate (%)..................................... 48.2** 45.8 54.6 23.4 -
<FN>
(a) Reflects a per share amount of expenses, exclusive of
management fees, reimbursed by the Adviser of............. $ - $ - $ - $ - $ .06
Reflects a per share amount of management fee not
imposed by the Adviser of................................. $ - $ .01 $ .04 $ .09 $ .01
Operating expense ratio including expenses
reimbursed, management fee and other expenses
not imposed (%)........................................... - 1.76 2.01 2.53 15.34**
* Not annualized
** Annualized
</FN>
</TABLE>
23
<PAGE>
SCUDDER GLOBAL SMALL COMPANY FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
Scudder Global Small Company Fund (the "Fund") is a diversified series of
Scudder Global Fund, Inc., a Maryland corporation registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The policies described below are followed consistently by the Fund in
the preparation of its financial statements in conformity with generally
accepted accounting principles.
SECURITY VALUATION. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the National Association of
Securities Dealers Automatic Quotation ("NASDAQ") System, for which there have
been sales, are valued at the most recent sale price reported on such system. If
there are no such sales, the value is the high or "inside" bid quotation.
Securities which are not quoted on the NASDAQ System but are traded in another
over-the-counter market are valued at the most recent sale price on such market.
If no sale occurred, the security is then valued at the calculated mean between
the most recent bid and asked quotations. If there are no such bid and asked
quotations, the most recent bid quotation shall be used.
Portfolio debt securities with remaining maturities greater than sixty days are
valued by pricing agents approved by the officers of the Fund, which 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.
Short-term investments having a 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 Directors. Securities valued in good
faith by the Valuation Committee of the Board of Directors at fair value
amounted to $5,197,681 (2.35% of net assets) and have been noted in the
investment portfolio as of April 30, 1995.
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
OPTIONS. The Fund may write (sell) exchange-listed and over-the-counter call and
put options on securities and other financial instruments. When the Fund writes
a call, it gives the purchaser of the call option the right to buy the
underlying security at the price specified in the option (the "exercise price")
at any time during the option period, generally ranging up to nine months. When
the Fund writes a put option, it gives the purchaser of the put option the right
to sell the underlying security to the Fund at the exercise price at any time
during the option period, generally ranging up to nine months.
If the option expires unexercised, the Fund will realize income, in the form of
a capital gain, to the extent of the amount received for the option (the
"premium"). If the option is exercised, a decision over which the Fund has no
control, the Fund must sell the underlying security to the option holder or
purchase the underlying security from the option holder at the exercise price.
Certain options, including options on indices will require cash settlement by
the Fund if the option is exercised. By writing a call option, the Fund
foregoes, in exchange for the premium less the commission ("net premium"), the
opportunity to profit during the option period from an increase in the market
value of the underlying security above the exercise price. By writing a put
option, the Fund, in exchange for the net premium received, accepts the risk of
a decline in the market value of the underlying security below the exercise
price.
The liability representing the Fund's obligation under an exchange traded
written call or put option is valued at the last sale price or, in the absence
of a sale, the mean between the closing bid and asked quotations or at the most
recent asked quotation if no bid and asked quotations are available.
Over-the-counter written options are valued at the most recent asked quotation.
In addition, the Fund may purchase, singly and in combination, call and put
options on securities and other financial instruments. Exchange traded purchased
options are valued at the last sales price or, in the absence of a sale, the
mean between the closing bid and asked quotations or at the most recent bid
quotation if no bid and asked quotations are available. Over-the-counter
purchased options are valued at the most recent bid quotation.
25
<PAGE>
SCUDDER GLOBAL SMALL COMPANY FUND
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement, is equal to at least 100.5% of the resale price.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. In connection with portfolio
purchases and sales of securities denominated in a foreign currency, the Fund
may enter into forward foreign currency exchange contracts ("contracts").
Additionally, the Fund may enter into contracts to hedge certain other foreign
currency denominated assets. Contracts are recorded at market value. Certain
risks may arise upon entering into these contracts from the potential inability
of counterparties to meet the terms of their contracts. Realized and unrealized
gains and losses arising from such transactions are included in net realized and
unrealized gain (loss) from foreign currency related transactions. Purchases and
sales of forward foreign currency exchange contracts having the same settlement
date and broker are offset and any realized gain (loss) is recognized on the
date of offset, otherwise gain (loss) is recognized on the settlement date.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency transactions are translated into U.S. dollars
on the following basis:
(i) market value of investment securities, other assets and liabilities
at the daily rates of exchange, and
(ii) purchases and sales of investment securities, dividend and interest
income and certain expenses at the rates of exchange prevailing on
the respective dates of such transactions.
The Fund does not isolate that portion of gains and losses on investments which
is due to changes in foreign exchange rates from that which is due to changes in
market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments.
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Net realized and unrealized gain (loss) from foreign currency related
transactions includes gains and losses between trade and settlement dates on
securities transactions, gains and losses arising from the sales of foreign
currency, and gains and losses between the ex and payment dates on dividends,
interest, and foreign withholding taxes.
FEDERAL INCOME TAXES. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. Accordingly,
the Fund paid no federal income taxes and no federal income tax provision was
required.
DISTRIBUTION OF INCOME AND GAINS. Distributions of net investment income are
made annually. During any particular year 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 annually. An additional distribution may be made to the extent
necessary to avoid the payment of a four percent federal excise tax.
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. These
differences primarily relate to investments in forward contracts, passive
foreign investment companies, and certain securities sold at a loss. 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.
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
ORGANIZATION COSTS. Costs incurred by the Fund in connection with its
organization and initial registration of shares have been deferred and are being
amortized on a straight-line basis over a five-year period.
OTHER. Investment security transactions are accounted for on a trade-date basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis.
27
<PAGE>
SCUDDER GLOBAL SMALL COMPANY FUND
- --------------------------------------------------------------------------------
B. PURCHASES AND SALES OF SECURITIES
- --------------------------------------------------------------------------------
For the six months ended April 30, 1995, purchases and sales of investment
securities (excluding short-term investments) aggregated $50,878,564 and
$65,974,639, respectively.
C. RELATED PARTIES
- --------------------------------------------------------------------------------
Under the Fund's Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund has agreed to pay to the Adviser
a fee equal to an annual rate of 1.10% of the Fund's average daily net assets,
computed and accrued daily and payable monthly. As manager of the assets of the
Fund, the Adviser directs the investments of the Fund in accordance with 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 Fund. In addition to portfolio management
services, the Adviser provides certain administrative services in accordance
with the Agreement. The Agreement provides that if the Fund's expenses,
exclusive of taxes, interest, and extraordinary expenses, exceed specified
limits, such excess, up to the amount of the management fee, will be paid by the
Adviser. For the six months ended April 30, 1995, the fee pursuant to the
Agreement amounted to $1,246,845.
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of the Adviser,
is the transfer, dividend paying and shareholder service agent for the Fund. For
the six months ended April 30, 1995, the amount charged by SSC aggregated
$304,434, of which $49,439 is unpaid at April 30, 1995.
The Fund pays each Director not affiliated with the Adviser $4,000 annually,
plus specified amounts for attended board and committee meetings. For the six
months ended April 30, 1995, Directors' fees and expenses aggregated $16,967.
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
D. COMMITMENTS
- --------------------------------------------------------------------------------
As of April 30, 1995, the Fund had entered into the following forward foreign
currency exchange contracts resulting in net unrealized appreciation of $54,647.
<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION
SETTLEMENT (DEPRECIATION)
CONTRACTS TO DELIVER IN EXCHANGE FOR DATE (U.S.$)
- --------------------------------- ------------------------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
U.S. Dollars 29,036 Australian Dollars 39,858 5/5/95 (46)
U.S. Dollars 102,459 British Pounds 63,513 5/11/95 (283)
Hong Kong Dollars 233,696 U.S. Dollars 30,205 5/1/95 16
Japanese Yen 4,615,461 U.S. Dollars 55,355 5/1/95 438
Japanese Yen 1,855,774 U.S. Dollars 22,172 5/2/95 91
Hong Kong Dollars 390,025 U.S. Dollars 50,397 5/3/95 13
Japanese Yen 925,959 U.S. Dollars 11,018 5/8/95 1
Japanese Yen 1,056,058,500 U.S. Dollars 12,900,000 10/16/95 54,417
------
54,647
======
</TABLE>
29
<PAGE>
SCUDDER GLOBAL SMALL COMPANY FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS OF SCUDDER GLOBAL FUND, INC. AND TO THE SHAREHOLDERS
OF SCUDDER GLOBAL SMALL COMPANY FUND:
We have audited the accompanying statement of assets and liabilities of Scudder
Global Small Company Fund including the investment portfolio, as of April 30,
1995, and the related statement of operations for the six months then ended, the
statements of changes in net assets for the six months then ended and for the
year ended October 31, 1994, and the financial highlights for the six months
ended April 30, 1995, for each of the three years in the period ended October
31, 1994, and for the period September 10, 1991 (commencement of operations) to
October 31, 1991. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Global Small Company Fund as of April 30, 1995, the results of its
operations for the six months then ended, the changes in net assets for the six
months then ended and for the year ended October 31, 1994 and the financial
highlights for the six months ended April 30, 1995, for each of the three years
in the period ended October 31, 1994, and for the period September 10, 1991
(commencement of operations) to October 31, 1991 in conformity with generally
accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 2, 1995
30
<PAGE>
(This page intentionally left blank.)
31
<PAGE>
(This page intentionally left blank.)
32
<PAGE>
OFFICERS AND DIRECTORS
Edmond D. Villani*
Chairman of the Board and Director
Nicholas Bratt*
President and Director
Paul Bancroft III
Director; Venture Capitalist and Consultant
Thomas J. Devine
Director; Consultant
William H. Gleysteen, Jr.
Director; President, The Japan Society, Inc.
William H. Luers
Director; President, The Metropolitan Museum of Art
Daniel Pierce*
Director and Vice President
Robert G. Stone, Jr.
Director; Chairman of the Board and Director, Kirby Corporation
Robert W. Lear
Honorary Director; Executive-in-Residence, Columbia University Graduate
School of Business
Carol L. Franklin*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
David S. Lee*
Vice President and Assistant Treasurer
Douglas M. Loudon*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Gerald J. Moran*
Vice President
Edward J. O'Connell*
Vice President and Assistant Treasurer
Juris Padegs*
Vice President and Assistant Secretary
Kathryn L. Quirk*
Vice President and Assistant Secretary
Cornelia Small*
Vice President
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
33
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
<TABLE>
The Scudder Family of Funds
<CAPTION>
<C> <C>
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder GNMA Fund
Tax Free Money Market+ Scudder Income Fund
Scudder Tax Free Money Fund Scudder International Bond Fund
Scudder California Tax Free Money Fund* Scudder Short Term Bond Fund
Scudder New York Tax Free Money Fund* Scudder Short Term Global Income Fund
Tax Free+ Scudder Zero Coupon 2000 Fund
Scudder California Tax Free Fund* Growth
Scudder High Yield Tax Free Fund Scudder Capital Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Managed Municipal Bonds Scudder Global Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Global Small Company Fund
Scudder Massachusetts Tax Free Fund* Scudder Gold Fund
Scudder Medium Term Tax Free Fund Scudder Greater Europe Growth Fund
Scudder New York Tax Free Fund* Scudder International Fund
Scudder Ohio Tax Free Fund* Scudder Latin America Fund
Scudder Pennsylvania Tax Free Fund* Scudder Pacific Opportunities Fund
Growth and Income Scudder Quality Growth Fund
Scudder Balanced Fund Scudder Value Fund
Scudder Growth and Income Fund The Japan Fund
Retirement Plans and Tax-Advantaged Investments
IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
Scudder Institutional Fund, Inc.
Scudder Fund, Inc.
Scudder Treasurers Trust(TM)++
<FN>
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. +A portion of the income from the
tax-free funds may be subject to federal, state, and local taxes. *Not available in all states. +++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. #These funds, advised by Scudder, Stevens & Clark, Inc. are traded on
various stock exchanges. ++For information on Scudder Treasurers Trust,(TM) an institutional cash management
service that utilizes certain portfolios of Scudder Fund, Inc. ($100,000 minimum), call 1-800-541-7703.
</FN>
</TABLE>
34
<PAGE>
HOW TO CONTACT SCUDDER
<TABLE>
<S> <C>
Account Service and Information
For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For account updates, prices, yields,
exchanges, and redemptions SCUDDER
AUTOMATED INFORMATION LINE (SAIL)
1-800-343-2890
Investment Information
To receive information about the
Scudder funds, for additional
applications and prospectuses, or for
investment questions SCUDDER INVESTOR
RELATIONS 1-800-225-2470
For establishing 401(k) and 403(b) plans
SCUDDER DEFINED CONTRIBUTION SERVICES
1-800-323-6105
Please address all correspondence to
THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Or stop by a Scudder Funds Center
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they can
be found in the following cities:
Boca Raton New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
For information on Scudder For information on Scudder
Treasurers Trust,(TM) an institutional Institutional Funds,* funds
cash management service for designed to meet the broad
corporations, non-profit investment management and
organizations and trusts that uses service needs of banks and
certain portfolios of Scudder Fund, other institutions, call
Inc.* ($100,000 minimum), call 1-800-854-8525.
1-800-541-7703.
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
<FN>
* Contact Scudder Investor Services, Inc., Distributor, to receive a
prospectus with more complete information, including management fees and
expenses. Please read it carefully before you invest or send money.
</FN>
</TABLE>
35
<PAGE>
Celebrating 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven
Clark, Scudder, Stevens & Clark was the first independent investment counsel
firm in the United States. Since its birth, Scudder's pioneering spirit and
commitment to professional long-term investment management have helped shape the
investment industry. In 1928, we introduced the nation's first no-load mutual
fund. Today we offer 36 pure no load(TM) funds, including the first
international mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
