October 11, 1995
Dear Investor,
The prospectus supplement on the reverse side contains important
information regarding Scudder Short Term Global Income Fund. In an effort to
provide investors with more opportunity in a changing global investment
environment, Scudder Short Term Global Income Fund's Board of Directors voted to
make certain changes, subject to shareholder approval, to the Fund's investment
objective and policies, including eliminating the Fund's maturity
restrictions--in essence, allowing the Fund to invest in longer-term securities.
These changes would enable the Fund to take advantage of a market environment
which is no longer as favorable for short-term global fixed-income investing as
was previously the case. In addition, if the proposed changes are approved by
shareholders in a Special Meeting to be held on December 6, 1995, the Fund will
be renamed Scudder Global Bond Fund.
While a longer-term global bond portfolio offers greater opportunity for
attractive yields and price appreciation, it also entails a greater degree of
price risk than a short-term global bond portfolio because it is generally more
sensitive to changes in foreign currencies and interest rates. We encourage you
to evaluate the risk-reward potential of a longer-term global bond fund, and
consider whether it is appropriate for your needs. Such a fund would not be
advisable as a parking place for short-term cash needs, for example, and would
be more appropriate for individuals with longer-term investment time frames.
If you have any questions about the Fund or these changes, please call us
at 1-800-225-2470, between 8 a.m. and 8 p.m., eastern time, Monday through
Friday.
Sincerely,
/s/David S. Lee
David S. Lee
President, Scudder Investor Services, Inc.
This letter is for explanatory purposes and is not part of the prospectus
supplement on the reverse side.
(over please)
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Scudder Short Term Global Income Fund
Supplement to Prospectus
Dated March 1, 1995
On October 11, 1995, Scudder Short Term Global Income Fund's Board of
Directors voted to change the Fund's investment objective and certain policies,
including eliminating the restrictions regarding maturity of securities
purchased by the Fund. These changes, which are subject to shareholder approval,
would allow the Fund to be managed as a global bond fund without short-term
maturity limitations.
If the proposed changes are approved by the shareholders of the Fund at a
Special Meeting on December 6, 1995, the Board of Directors intends to change
the name of the Fund to Scudder Global Bond Fund to reflect a new investment
objective and certain revised policies. These changes are proposed to address
changes in the climate for global fixed-income investing.
The Fund commenced operations on March 1, 1991, during an investment
climate which was highly favorable to limited maturity foreign bond and money
market investments. Since 1991, however, the investment environment for this
type of mutual fund has changed considerably. The Fund's Board of Directors and
its investment adviser, Scudder, Stevens & Clark, Inc. (the "Adviser"), believe
that the proposed changes in the Fund's investment objective and policies are in
the best long-term interests of the shareholders.
Scudder Global Bond Fund will be designed to be appropriate for long-term
investors who can accept the various risks associated with investing in global
bonds. The Adviser will attempt to manage exchange rate, interest rate and
credit risks through active portfolio management. The Adviser's techniques will
include management of currency, bond market and maturity exposure, and security
selection which will vary based on available yields, as well as the Adviser's
outlook for the interest rate cycle in various countries and changes in foreign
currency exchange rates. There is no guarantee, however, that the Adviser will
be successful in managing the risks associated with this type of fund. In
addition to higher exchange rate and interest rate risk, if the proposal is
approved, Scudder Global Bond Fund will be able to invest a slightly greater
proportion (up to five percent more) of its net assets in below investment-grade
securities.
In the markets in which Scudder Global Bond Fund would invest, longer
maturity bonds tend to fluctuate more in price than shorter-term instruments as
interest rates change--providing both opportunity and risk. Because of Scudder
Global Bond Fund's long-term investment perspective, it would not be an
appropriate investment for short-term cash needs or as a vehicle for playing
short-term swings in the global bond and foreign exchange markets.
If the proposed changes are approved, the Fund will continue to be managed
pursuant to its existing Investment Management Agreement and fee, and the
Adviser will continue to maintain the total annualized expenses of the Fund at
not more than 1.00% of average daily net assets until at least February 29,
1996.
It is expected that the changes to the Fund's investment objectives,
investment policies and name will be effective, if approved, on or about
December 29, 1995.
October 11, 1995
