This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder
Emerging Markets
Income Fund
Semiannual Report
April 30, 1995
o For investors seeking high current income and, secondarily, long-term capital
appreciation through investment primarily in high-yielding debt securities
issued in emerging markets.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
<PAGE>
SCUDDER EMERGING MARKETS INCOME FUND
CONTENTS
2 In Brief
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
10 Investment Portfolio
13 Financial Statements
16 Financial Highlights
17 Notes to Financial Statements
23 Report of Independent Accountants
25 Officers and Directors
26 Investment Products and Services
27 How to Contact Scudder
IN BRIEF
* Mexico's decision in December to devalue its currency provoked a sharp
sell-off in emerging market debt securities, with prices declining through
February 1995.
* The markets for developing country debt rebounded sharply in mid-March, and
the Fund recouped a significant portion of the recent market losses by the
end of April. Investor confidence was bolstered by the commitment of various
economic leaders, with the financial backing of the international community,
to impose further austerity measures and deepen structural reform in order
to ensure the servicing of external debt.
* Reflecting these developments, Scudder Emerging Markets Income Fund posted a
total return of -8.17 for the six months ended April 30, 1995, compared with
-7.08 for the unmanaged J.P. Morgan Composite Emerging Markets Bond/Latin
Eurobond Index.
* While the bulk of the Fund's investments are in Latin America, your
portfolio management team has worked to diversify holdings in other regions
such as eastern Europe and Africa. On April 30, a total of 14 countries were
represented in the portfolio.
2
<PAGE>
LETTER FROM THE FUND'S CHAIRMAN
Dear Shareholders,
The semiannual period covered by this report has been a volatile one
for emerging market bond investors. The investment landscape, especially in
Mexico, has changed significantly since that country's economic and political
troubles late last year. As you are probably aware, political and economic
problems led to a devaluation of the peso, which seriously eroded the value of
Mexican equity and debt securities in late 1994 and early 1995. Investor
confidence regarding Mexico's future depends in large part on the success of new
and necessarily severe economic austerity programs.
Early in 1995, on the heels of the Mexican situation, global investors
retreated from other emerging markets, fearing similar economic crises. The good
news is that, to date, no such crises have materialized, and many of these
markets have rallied. Indeed, the pace of reform has been accelerated. For
example, countries such as Argentina and Brazil, though beset by many economic
challenges, remain committed to economic restructuring and fiscal austerity
programs that should make them attractive to investors over the long term. We
believe Latin America will continue to be an important source of emerging market
income opportunities.
In addition, we believe significant opportunities exist in other
emerging markets, including Eastern Europe, Africa, and Asia. Our intensive
research and credit analysis aim to locate these opportunities and select
appropriate investments so that Scudder Emerging Markets Income Fund can offer
as attractive a combination of yield and capital appreciation as possible. Based
on the great number of new investors who have joined the Fund in recent months,
we believe many of you share our excitement over the long-term potential of this
new debt marketplace.
Please call Scudder Investor Relations at 1-800-225-2470 if you have
questions about your Fund or other Scudder investments. Page 27 contains more
information about how to contact Scudder. Thank you for choosing Scudder
Emerging Markets Income Fund to help meet your investment needs.
Sincerely,
/s/Edmond D. Villani
Edmond D. Villani
Chairman,
Scudder Emerging Markets Income Fund
3
<PAGE>
Scudder Emerging Markets Income Fund
Performance Update as of April 30, 1995
- -----------------------------------------------------------------
Growth of a $10,000 Investment
- ------------------------------------------------------------------
Scudder Emerging Markets Income Fund
- ----------------------------------------
Total Return
Period Growth -------------
Ended of Average
4/30/95 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $ 9,883 -1.17% -1.17%
Life of
Fund* $ 8,858 -11.42% -8.73%
JP Morgan Composite Emerging Markets
Bond/Latin Eurobond Index
- --------------------------------------
Total Return
Period Growth -------------
Ended of Average
4/30/95 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $ 9,802 -1.98% -1.98%
Life of
Fund* $ 8,149 -18.51% -14.33%
*The Fund commenced operations on December 31, 1993.
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 Emerging Markets Income Fund
Year Amount
- --------------------------------------
12/31/93* 10000
1/94 10058
4/94 8962
7/94 9067
10/94 9646
1/95 8756
4/95 8858
JP Morgan Composite Emerging
Markets Bond/Latin Eurobond Index
Year Amount
- ----------------------------------------
12/31/93* 10000
1/94 10041
4/94 8314
7/94 8397
10/94 8771
1/95 7914
4/95 8149
The unmanaged JP Morgan Composite Emerging Markets Bond/Latin
Eurobond Index (EMBI/LEI) tracks the performance of U.S.
dollar-denominated sovereign restructured bonds (mostly
Brady bonds) and Latin-issued Eurobonds. The composite includes
debt issues from five countries in Latin America, plus Bulgaria,
Nigeria, the Philippines and Poland. Index returns assume reinvested
dividends 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>
1994* 1995
---------------------
Net Asset Value... $ 10.67 $ 9.66
Income Dividends.. $ .09 $ .92
Fund Total
Return (%)........ -10.38 -1.17
Index Total
Return (%)........ -16.86 -1.98
</TABLE>
Performance is historical and assumes reinvestment of all dividends
and capital gains and is not indicative of future results. Total 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 Fund's expenses, the total return for the one year and
life of Fund periods would have been lower.
4
<PAGE>
Emerging Markets Income Fund
Portfolio Summary as of April 30, 1995
- ---------------------------------------------------------------------------
Diversification
- ---------------------------------------------------------------------------
Debt Obligations 78% We sold securities into the March
Cash Equivalents 22% and April rally, ending the semiannual
---- period with a strong cash position in
100% the event of a correction.
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Market Exposure (Excludes 22% Cash Equivalents)
- --------------------------------------------------------------------------
Geographical Currency
- ----------------- -----------------------------------------
Brazil 25% United States 94%
Argentina 23% Chile 3%
Poland 14% Poland 3%
Morocco 10% ----
Bulgaria 9% 100%
Panama 6% ====
Venezuela 5%
Other 8%
----
100%
====
We continued to diversify the Fund's
investments beyond Latin American debt
markets to attempt to enhance total returns
and decrease price volatility.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Average Life (Excludes 22% Cash Equivalents)
- --------------------------------------------------------------------------
0 less than 3 years 14% To capitalize on the improving bond
3 less than 5 years 10% prices and declining yields in March
5 less than 10 years 32% and April, we increased our exposure
Greater than 10 years 44% to longer-duration bonds.
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
For more complete details about the Fund's Investment Portfolio,
see page 10.
A monthly Investment Portfolio Summary is available upon request.
5
<PAGE>
SCUDDER EMERGING MARKETS INCOME FUND
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
The six months ended April 30, 1995, marked a difficult period for
emerging-country debt markets. The favorable momentum previously established in
Latin American and other developing countries was abruptly halted in late
December, when Mexico devalued and subsequently floated the peso. Mexico's
decision sparked a sell-off that quickly spilled over into other
emerging-country debt and equity markets. Investors became concerned that the
Mexican crisis might lead to currency devaluations in other developing
countries, particularly those most reliant on foreign investment flows. Initial
delays by Mexican authorities in developing an effective economic program, and
by others in assembling a U.S.-led financial support package for Mexico, placed
additional pressure on financial markets and capital flows to key emerging
countries in early 1995. Selling pressures by mutual funds invested in emerging
markets exacerbated market weakness.
The markets rebounded in mid-March. Mexico announced a credible
economic program to deal with its crisis, and Argentina organized an
international support program to bolster its banking system and foreign exchange
reserves. Decisive action by economic leaders in Argentina and Mexico to impose
austerity measures and deepen structural reforms bolstered investor confidence,
helping to fuel a strong rally in emerging market debt that continued through
April. By the end of April, the market had recouped a significant portion of the
losses incurred since the end of October. Emerging Markets Income Fund, for
example, returned 7.31% in April.
Fund Performance and Strategy
Reflecting difficult market conditions for much of the period, Scudder
Emerging Markets Income Fund provided a total return of -8.17% during the six
months ended April 30, 1995. During this time, the unmanaged J.P. Morgan
Composite Emerging Markets Bond/Latin Eurobond Index returned -7.08%. The Fund's
total return reflects a decline in net asset value to $9.66 at the end of April,
from $11.05 on October 31, 1994, and income distributions of $0.50 per share.
The Fund's 30-day net annualized SEC yield on April 30 was 12.81%, up
substantially from 9.13% at the end of October. During the period, the Fund's
performance lagged the J.P. Morgan Composite Emerging Markets Bond/Latin
Eurobond Index somewhat. As the market rebounded strongly in March, we sold some
6
<PAGE>
securities and raised cash for protection in the event of a market correction.
The rally continued, however, underpinned by the strong U.S. Treasury market.
Our cash position restrained performance in the latter half of March and in
April.
Our strategy has been to maintain a regionally diversified portfolio of
the highest-quality and most-liquid securities available in the emerging
markets. The vast majority of the portfolio is invested in government or
sovereign obligations (90% as of April 30). The sovereign Brady bonds are often
backed by U.S. Treasury bonds and, given their large issue size, are the most
liquid in the emerging debt market. In addition, sovereign obligations tend to
be of higher credit quality than emerging market corporate debt. This preference
for sovereign debt is of particular importance, as the austerity measures
currently undertaken by such countries as Argentina and Mexico historically have
resulted in economic slowdowns, which in turn put pressure on the banking and
corporate sectors.
During the period, we also maintained a strategy of avoiding
significant exposure to local currencies. As we have seen in the case of Mexico,
local currencies in emerging countries can be susceptible to dramatic
devaluations when there is a loss of confidence in domestic policies. On April
30, approximately 94% of the portfolio's investments was in U.S.
dollar-denominated securities. As a defensive measure in declining markets, we
also used cash during the period to protect the portfolio's performance and to
allow us to purchase securities when we considered prices attractive.
As panic selling eased in mid-March, and the market began to
differentiate among emerging market issuers on the basis of fundamentals, we
swapped some sovereign instruments backed by U.S. Treasury bonds (which were
attractive to investors in declining markets) for non-guaranteed sovereign
obligations. Non-guaranteed bonds tend to outperform collateralized instruments
as economic conditions in developing countries improve. The strategy worked
well: Non-guaranteed sovereign obligations have been some of the best-performing
emerging market instruments since the market turnaround began in March.
Regionally Diversified Portfolio
Our core Latin American holdings during the period have been in
Argentina and Brazil (18.3% and 19.9% of portfolio assets, respectively, as of
April 30). The Argentine government has been effective and decisive in dealing
7
<PAGE>
with the spillover effects of the Mexican crisis. In the face of significant
pressure on the Argentine peso and strong outflows of capital from the country,
the government cut spending further, maintained a tight monetary policy, and
sought international financial assistance to shore up its banking system and
ensure sufficient foreign exchange with which to service external debt. In
Brazil, significant challenges remain, particularly with regard to controlling
inflation and dealing with an appreciating currency. However, the Cardoso
administration has embarked upon an ambitious program of structural reforms,
including opening state monopolies to competition, and certain sectors of the
economy to foreign investment. Progress toward implementing this structural
reform program has picked up momentum recently and should have a positive effect
on prices for Brazilian debt.
The Fund had relatively little exposure to Mexico and Venezuela during
the period. In Mexico, yields on debt securities seemed unattractive relative to
those offered in other emerging markets. The limited exposure benefited the
portfolio during the first three months of the period, as Mexican debt prices
were particularly hard hit in the aftermath of the peso devaluation. By the end
of the period, the Fund's small Mexican position (4.2% of portfolio assets in
November) had been sold entirely. We were concerned that the potentially severe
impact of the Mexican economic program on the banking and corporate sectors --
in the near term -- would give rise to negative market sentiment on Mexican debt
generally.
The Fund's holdings in Venezuelan debt remained small during the
period. Although there has been little progress to address Venezuela's economic
problems (which include a large fiscal deficit, inflation, and exchange
controls), strong oil prices have buttressed the external debt service capacity
of this petroleum-producing country.
During the period, we continued to diversify the Fund's investments
beyond Latin America. The objective of this strategy is to enhance total return
while decreasing price volatility. In all, Latin American securities were
reduced to roughly 50% of portfolio assets as of April 30, 1995, from 63% on
October 31. In place of Latin American securities, we increased the portfolio's
Eastern European exposure from 5.0% to 17.7% of portfolio assets. In Poland, for
8
<PAGE>
example, economic fundamentals are evolving positively, and a return to the
international capital markets is planned. Our holdings in Eastern Europe have
benefited the portfolio, as the Polish and Bulgarian debt markets were among the
best performers during the period. Bulgaria and Poland posted returns of 0.9%
and 1.3%, respectively, from November 30, 1994 (the first date their returns
were tracked by the JPM composite EMB/LEI) through April 30, 1995.
Outlook
We are encouraged by the actions of leaders in countries such as
Argentina and Mexico, who have shown a commitment to safeguard the gains
achieved in recent years toward restoring their countries' creditworthiness and
access to the international capital markets. Their efforts have bolstered
investor confidence, helping to stabilize financial markets and ease pressures
on capital flows. While the effects of such austerity measures in certain
countries will be reflected in declining growth rates and difficult domestic
conditions in the near term, in many cases these measures are already enhancing
economic fundamentals. Eventually, these gains should be reflected in improving
prices for emerging market debt. Recent declines in U.S. interest rates should
further brighten the outlook for emerging-country debt markets as investors seek
out the higher yields these markets offer.
In the coming months, we will continue to position the Fund to benefit
from improvements in credit quality in various countries. In keeping with
Scudder Emerging Markets Income Fund's objectives, we will also continue to look
for opportunities to provide high current income and long-term capital
appreciation for our shareholders.
Sincerely,
Your Portfolio Management Team
/s/M. Isabel Saltzman /s/Susan E. Gray
M. Isabel Saltzman Susan E. Gray
/s/Lincoln Y. Rathnam
Lincoln Y. Rathnam
9
<PAGE>
<PAGE>
<TABLE>
SCUDDER EMERGING MARKETS INCOME FUND
INVESTMENT PORTFOLIO as of April 30, 1995
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Market
Portfolio Amount ($)(b) Value ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
21.6% COMMERCIAL PAPER
-------------------------------------------------------------------------------------
3,900,000 Associates Corp. of North America, 5.873%, 5/1/95..... 3,900,000
3,900,000 American Express Credit Corp., 5.803%, 5/1/95......... 3,900,000
3,900,000 Chevron Oil Finance Co., 5.753%, 5/1/95............... 3,900,000
1,213,000 CIT Group Holdings Inc., 5.753%, 5/1/95............... 1,213,000
4,200,000 Exxon Funding Corp., 5.803%, 5/1/95................... 4,200,000
3,900,000 Ford Motor Credit Co., 5.813%, 5/1/95................. 3,900,000
3,900,000 Household Finance Corp., 5.873%, 5/1/95............... 3,900,000
4,200,000 New Center Asset Trust, 5.703%, 5/1/95................ 4,200,000
----------
TOTAL COMMERCIAL PAPER (Cost $29,113,000)............. 29,113,000
----------
-------------------------------------------------------------------------------------
78.3% DEBT OBLIGATIONS
-------------------------------------------------------------------------------------
ARGENTINA 18.2% 4,350,000 Bonos del Tesoro, Conea II, Floating Rate
Bond, LIBOR (6.1875%), 9/1/97........................ 3,848,105
2,000,000 Cedulas Hipotecarias, Floating Rate Bond,
7.9%, 9/1/00......................................... 1,500,243
20,850,000 Republic of Argentina, Collateralized Par Bond,
Series L, Step-up Coupon, 5%, 3/31/23................ 9,095,812
16,800,000 Republic of Argentina, Floating Rate Bond,
Series L, LIBOR plus .8125% (7.3125%),
3/31/05.............................................. 10,017,000
----------
24,461,160
----------
BRAZIL 19.9% 500,000 Companhia Energetica de Minas Gerais,
Series A, 7.875%, 2/10/99........................... 357,500
3,550,000 Companhia Energetica de Minas Gerais,
Series B, 8.25%, 2/10/00............................ 2,396,250
3,381,300 Federative Republic of Brazil C Bond,
4%, with 4% Interest Capitalization, 4/15/14........ 1,453,959
1,000,000 Federative Republic of Brazil, Collateralized
Par Bond, YL3, Step-up-Coupon, 4.25%,
4/15/24............................................. 397,500
15,500,000 Federative Republic of Brazil, Collateralized
Par Bond, YL4, Step-up-Coupon, 4.25%,
4/15/24............................................. 6,161,250
7,000,000 Federative Republic of Brazil, Debt Conversion
Bond, Series L, LIBOR plus .875% (7.3125%),
4/15/12............................................. 3,500,000
8,750,000 Federative Republic of Brazil, Eligible Interest
Bond, LIBOR plus .8125% (7.25%), 4/15/06........... 4,976,563
2,000,000 Federative Republic of Brazil, Collateralized
Discount Bond, LIBOR plus .8125% (7.25%),
4/15/24............................................. 1,085,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Market
Portfolio Amount ($)(b) Value ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1,455,000 Federative Republic of Brazil, IDU Bond,
Floating Rate Bond, LIBOR plus .8125%
(7.8125%), 1/1/01................................... 1,105,800
3,214,286 Federative Republic of Brazil, New Money
Bond, LIBOR plus .8125% (7.25%), 10/15/99........... 2,748,214
5,000,000 Federative Republic of Brazil, New Money
Bond, LIBOR plus .875% (7.3125%), 4/15/09........... 2,568,750
----------
26,750,786
----------
BULGARIA 6.7% 15,500,000 Republic of Bulgaria, Collateralized Discount
Bond, Tranche A, LIBOR plus .8125%
(7.5625%), 7/28/24.................................. 7,246,250
4,500,000 Republic of Bulgaria, Past Due Interest Bond,
LIBOR plus .8125% (7.5625%), 7/28/11................ 1,771,875
----------
9,018,125
----------
CHILE 2.2% CLP 1,180,200,000 Citibank time deposit, 10.5%, 5/11/95................. 3,035,884
----------
COLOMBIA 0.3% 500,000 Banco de Colombia, 7.5%, 10/21/98..................... 440,000
----------
COSTA RICA 0.1% 200,000 Banco Central de Costa Rica, Principal B,
6.25%, 5/21/15...................................... 86,000
----------
ECUADOR 0.5% 2,500,000 Republic of Ecuador, Collateralized Global
Par Bond, Step-up-Coupon, 3%, 2/28/25............... 721,875
----------
INDONESIA 1.3% 500,000 Indah Kiat Pulp and Paper Corp.,
8.875%, 11/1/00..................................... 437,500
1,250,000 Tjiwi Kimia International Finance Co. BV,
13.25%, 8/1/01...................................... 1,287,500
----------
1,725,000
----------
JAMAICA 0.7% 1,500,000 Government of Jamaica Refinancing Agreement,
Tranche B, LIBOR plus .8125%
(7.125%), 11/15/04 (c).............................. 967,500
----------
MOROCCO 7.8% 17,250,000 Kingdom of Morocco, Tranche A, Restructuring
and Consolidation Agreement, LIBOR plus
.8125% (7.375%), 1/1/09 (c)......................... 10,544,063
----------
PANAMA 4.5% 8,250,000 Republic of Panama, Floating Rate Bond,
LIBOR plus 1% (7.125%), 5/10/02..................... 6,022,500
----------
POLAND 11.0% PLZ 5,933,750 Morgan Guaranty Trust Company time deposit,
26.6%, 6/14/95...................................... 2,507,750
PLZ 2,354,500 Morgan Guaranty Trust Company time deposit,
25.75%, 7/20/95..................................... 993,300
17,250,000 Republic of Poland, Past Due Interest Bond,
Step-up Coupon, 3.25%, 10/27/14..................... 8,150,625
4,500,000 Republic of Poland, Collateralized Discount
Bond, LIBOR plus .8125% (7.125%), 10/27/24.......... 3,093,750
----------
14,745,425
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<PAGE>
<TABLE>
SCUDDER EMERGING MARKETS INCOME FUND
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Market
Portfolio Amount ($)(b) Value ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UNITED STATES 1.4% 500,000 Comcast Corp., 9.5%, 1/15/08.......................... 482,500
500,000 Payless Cashways Inc., 9.125%, 4/15/03................ 426,250
500,000 Penn Traffic Co., 9.625%, 4/15/05..................... 470,000
500,000 Westpoint Stevens Inc., 9.375%, 12/15/05.............. 477,500
-----------
1,856,250
-----------
VENEZUELA 3.7% 10,750,000 Republic of Venezuela, Debt Conversion
Bond, Series DL, LIBOR plus .875%
(7.6875%), 12/18/07................................. 4,971,875
-----------
TOTAL DEBT OBLIGATIONS (Cost $105,876,648)............ 105,346,443
-----------
--------------------------------------------------------------------------------------
0.1% PREFERRED STOCKS
-------------------------------------------------------------------------------------
Shares
--------------------------------------------------------------------------------------
ARGENTINA 13,400 Nortel Inversora "A" (ADR)
(Telecommunication services)
(Cost $129,980)..................................... 119,930
-----------
===================================================================================================================
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $135,119,628)(a).............................. 134,579,373
===========
<FN>
(a) The cost for federal income tax purposes was $135,119,628. At April 30,
1995, net unrealized depreciation for all securities based on tax cost was
$540,255. This consisted of aggregate gross unrealized appreciation for all
securities in which there was an excess of market value over tax cost of
$4,468,371 and aggregate gross unrealized depreciation for all securities in
which there was an excess of tax cost over market value of $5,008,626.
(b) Principal amount is stated in U.S. dollars unless otherwise noted.
(c) These securities represent loan participations which are arranged through
private negotiations between the Fund and a lender. Due to the nature of
these securities they are typically purchased on a forward delivery basis
(Note A), some of which remain unsettled, in whole or in part, at April 30,
1995.
</FN>
</TABLE>
At April 30, 1995 outstanding written options were as follows (Note A):
<TABLE>
<CAPTION>
Principal Expiration Market
Call Options Amount U.S.$ Date Strike Price Value ($)
- ------------------------------------------------------- -------------------------------------------------------
<S> <C> <C> <C> <C>
Republic of Argentina Floating Rate
Bond, 3/31/05......................................... 4,500,000 5/11/95 U.S.$ 57.25 141,300
Republic of Argentina Floating Rate
Bond, 3/31/05......................................... 1,000,000 5/12/95 U.S.$ 58.625 23,300
-------
Total outstanding written options (Premiums received $91,500)......................................... 164,600
=======
</TABLE>
CURRENCY ABBREVIATIONS
CLP Chilean Peso
PLZ Polish Zloty
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------------------------
<CAPTION>
APRIL 30, 1995
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $135,119,628)
(Note A)................................................... $ 134,579,373
Cash........................................................... 52,463
Receivable on foreign currency exchange contracts
to sell (Notes A and E).................................... 2,535,227
Other receivables:
Investments sold........................................... 1,861,997
Loan participations sold................................... 548,111
Interest................................................... 2,226,878
Fund shares sold........................................... 753,018
Deferred organization expenses (Note A)........................ 56,334
-------------
Total assets............................................... 142,613,401
LIABILITIES
Payables:
Investments purchased...................................... $6,570,395
Loan participations purchased.............................. 2,988,984
Fund shares redeemed....................................... 3,340,034
Written options, at market (premium received $91,500)
(Note A)................................................ 164,600
Forward foreign currency exchange contracts to
sell, at market (contract cost $2,535,227)
(Notes A and E)......................................... 2,517,560
Accrued management fee (Note C)............................ 93,212
Other accrued expenses (Note C)............................ 148,846
----------
Total liabilities.......................................... 15,823,631
-------------
Net assets, at market value.................................... $ 126,789,770
=============
NET ASSETS
Net assets consist of:
Undistributed net investment income........................ $ 1,196,227
Unrealized appreciation (depreciation) on:
Investments............................................. (540,255)
Options................................................. (73,100)
Foreign currency related transactions................... 8,946
Accumulated net realized loss.............................. (15,401,221)
Capital stock.............................................. 131,193
Additional paid-in capital................................. 141,467,980
-------------
Net assets, at market value.................................... $ 126,789,770
=============
NET ASSET VALUE, offering and redemption per price
($126,789,770 / 13,119,291 shares of capital
stock outstanding, $.01 par value, 100,000,000
shares authorized)......................................... $9.66
=====
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
<PAGE>
<TABLE>
SCUDDER EMERGING MARKETS INCOME FUND
- ------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED APRIL 30, 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest (net of foreign taxes withheld of $7,436)...... $ 6,459,803
Expenses:
Management fee (Note C)................................. $ 306,202
Services to shareholders (Note C)....................... 155,687
Directors' fees and expenses (Note C)................... 20,847
Custodian fees.......................................... 106,625
Auditing................................................ 21,500
Reports to shareholders................................. 34,408
Federal registration.................................... 15,027
State registration...................................... 30,081
Legal................................................... 9,261
Amortization of organization expense (Note A)........... 7,593
Other................................................... 4,789 712,020
-----------------------------
Net investment income................................... 5,747,783
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT TRANSACTIONS
Net realized loss from:
Investments..................................... (12,319,114)
Foreign currency related transactions........... (383,501) (12,702,615)
-----------
Net unrealized appreciation (depreciation)
during the period on:
Investments..................................... 909,329
Written options................................. (73,100)
Foreign currency related transactions........... 32,523 868,752
-----------------------------
Net loss on investment transactions..................... (11,833,863)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS.... $ (6,086,080)
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------
<CAPTION>
FOR THE PERIOD
DECEMBER 31, 1993
SIX MONTHS (COMMENCEMENT OF
ENDED OPERATIONS) TO
APRIL 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 1995 1994
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income................................. $ 5,747,783 $ 4,571,406
Net realized loss on investment transactions.......... (12,702,615) (2,784,125)
Net unrealized appreciation (depreciation)
on investment transactions during the
period............................................. 868,752 (1,473,161)
------------- -------------
Net increase (decrease) in net assets
resulting from operations.......................... (6,086,080) 314,120
------------- -------------
Distributions to shareholders from
net investment income ($.50 and $.51
per share, respectively)........................... (5,295,146) (3,742,297)
------------- -------------
Fund share transactions:
Proceeds from shares sold............................. 68,704,990 126,227,847
Net asset value of shares issued to
shareholders in reinvestment of distributions...... 4,440,667 3,183,825
Cost of shares redeemed............................... (29,726,607) (31,232,749)
------------- -------------
Net increase in net assets from Fund share
transactions....................................... 43,419,050 98,178,923
------------- -------------
INCREASE IN NET ASSETS................................ 32,037,824 94,750,746
Net assets at beginning of period..................... 94,751,946 1,200
------------- -------------
Net assets at end of period (including
undistributed net investment income of
$1,196,227 and $743,590, respectively)............. $ 126,789,770 $ 94,751,946
============= =============
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period............. 8,577,789 100
------------- -------------
Shares sold........................................... 7,068,668 11,083,394
Shares issued to shareholders in
reinvestment of distributions...................... 448,709 294,323
Shares redeemed....................................... (2,975,875) (2,800,028)
------------- -------------
Net increase in Fund shares........................... 4,541,502 8,577,689
------------- -------------
Shares outstanding at end of period................... 13,119,291 8,577,789
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<PAGE>
<TABLE>
SCUDDER EMERGING MARKETS INCOME FUND
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
SIX MONTHS DECEMBER 31, 1993
ENDED (COMMENCEMENT
APRIL 30, OF OPERATIONS) TO
1995 OCTOBER 31, 1994
---------- -----------------
<S> <C> <C>
Net asset value, beginning of period............................ $ 11.05 $ 12.00
------- -------
Income from investment operations:
Net investment income (a)..................................... .50 0.60
Net realized and unrealized loss on investments............... (1.39) (1.04)
------- -------
Total from investment operations................................ (.89) (.44)
------- -------
Less distributions from net investment income................... (.50) (.51)
------- -------
Net asset value, end of period.................................. $ 9.66 $ 11.05
======= =======
TOTAL RETURN (%)................................................ (8.17)** (3.54)**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions).......................... 127 95
Ratio of operating expenses, net to average daily net assets (%) (a) 1.50* 1.50*
Ratio of net investment income to average daily net assets (%).. 12.11* 9.17*
Portfolio turnover rate (%)..................................... 280.3* 180.6*
<FN>
(a) Reflects a per share amount of management fee not imposed
by the Adviser............................................. $ .02 $ .05
Operating expense ratio including management fee
not imposed (%)............................................ 1.86* 2.23*
</FN>
</TABLE>
* Annualized
** Not annualized
16
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
Scudder Emerging Markets Income Fund (the "Fund") is a non-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 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.
OPTIONS. The Fund may write (sell) exchange-listed and over-the-counter call and
put options on securities, currencies 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 or currency 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 or currency 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 or currency to the option
holder or purchase the underlying security or currency 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 or currency above the exercise price. By
writing a put option,
17
<PAGE>
SCUDDER EMERGING MARKETS INCOME FUND
- --------------------------------------------------------------------------------
the Fund, in exchange for the net premium received, accepts the risk of a
decline in the market value of the underlying security or currency below the
exercise price.
The liability representing the Fund's obligation under an exchange traded
written 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, currencies 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.
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.
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, interest income and certain
expenses at the daily rates of exchange prevailing on the respective dates
of such transactions.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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.
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 accrual and payment dates on interest
and foreign withholding taxes.
WHEN-ISSUED AND FORWARD DELIVERY SECURITIES. The Fund may purchase securities on
a when-issued or forward delivery basis, for payment and delivery at a later
date. The price of such securities, which may be expressed in yield terms, is
fixed at the time the commitment to purchase is made, but delivery and payment
take place at a later time. At the time the Fund makes the commitment to
purchase a security on a when-issued basis or forward delivery basis, it will
record the transaction and reflect the value of the security in determining its
net asset value. During the period between purchase and settlement, no payment
is made by the Fund to the issuer and no interest accrues to the Fund. At the
time of settlement, the market value of the security may be more or less than
the purchase price.
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.
At October 31, 1994, the Fund had a net tax basis capital loss carryforward of
approximately $1,611,000, which may be applied against any net realized capital
gains of each succeeding year until fully utilized or until October 31, 2002.
19
<PAGE>
SCUDDER EMERGING MARKETS INCOME FUND
- --------------------------------------------------------------------------------
DISTRIBUTION OF INCOME AND GAINS. Distributions of net investment income are
made quarterly. 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. 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 relate primarily to foreign denominated investments 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 specific 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.
Distributions of net realized gains to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. All
discounts are amortized/accreted for both tax and financial reporting purposes.
B. PURCHASES AND SALES OF SECURITIES
- ----------------------------------------------------------------------------
For the six months ended April 30, 1995, purchases and sales (including
maturities) of investment securities (excluding short-term investments)
aggregated $143,943,422 and $112,149,550, respectively.
In addition, the Fund wrote options during the period, principal amount U.S.$
5,500,000 on Republic of Argentina Floating Rate Bonds, 3/31/05 (premium
received $91,500).
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
C. RELATED PARTIES
- --------------------------------------------------------------------------------
Under the Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), 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 management fee
payable under the Agreement is equal to an annual rate of 1.00% of the Fund's
average daily nets assets, computed and accrued daily and payable monthly. The
Agreement also provides that if the Fund's expenses exceed specified limits,
such excess, up to the amount of the management fee, will be paid by the
Adviser. In addition, the Adviser agreed not to impose all or a portion of its
management fee until February 29, 1996, and during such period to maintain the
annualized expenses of the Fund at not more than 1.50% of average daily net
assets. For the six months ended April 30, 1995, the Adviser did not impose a
portion of its fee amounting to $173,185, and the portion imposed amounted to
$306,202.
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
$125,430, of which $25,560 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 aggregated $20,847.
D. INVESTING IN EMERGING MARKETS
- --------------------------------------------------------------------------------
Investing in emerging markets may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currencies and future adverse political and economic
developments. Moreover, securities issued in these markets may be less liquid
and their prices more volatile than those of comparable securities in the United
States.
21
<PAGE>
SCUDDER EMERGING MARKETS INCOME FUND
- --------------------------------------------------------------------------------
E. Commitments
- --------------------------------------------------------------------------------
As of April 30, 1995, the Fund has entered into the following forward foreign
currency exchange contracts resulting in net unrealized appreciation of $17,667.
<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION
SETTLEMENT (DEPRECIATION)
CONTRACTS TO DELIVER IN EXCHANGE FOR DATE (U.S.$)
- ---------------------------------- ------------------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
French Francs 3,600,000 U.S. Dollars 744,802 7/10/95 17,088
German Deutsche Marks 1,784,112 U.S. Dollars 1,275,824 6/16/95 (11,507)
German Deutsche Marks 695,380 U.S. Dollars 514,601 7/20/95 12,086
-------
17,667
=======
</TABLE>
22
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS OF SCUDDER GLOBAL FUND, INC. AND TO THE SHAREHOLDERS
OF SCUDDER EMERGING MARKETS INCOME FUND:
We have audited the accompanying statement of assets and liabilities of Scudder
Emerging Markets Income Fund, including the investment portfolio, as of April
30, 1995, and the related statement of operations for the six months then ended,
the statement of changes in net assets and the financial highlights for the six
months ended April 30, 1995 and for the period December 31, 1993 (commencement
of operations) to October 31, 1994. 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 Emerging Markets Income Fund as of April 30, 1995, the results of its
operations for the six months then ended, the changes in net assets and the
financial highlights for the six months ended April 30, 1995 and for the period
December 31, 1993 (commencement of operations) to October 31, 1994 in conformity
with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 2, 1995
23
<PAGE>
(This page intentionally left blank.)
24
<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
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.
25
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
<TABLE>
<CAPTION>
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<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>
26
<PAGE>
HOW TO CONTACT SCUDDER
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 Funds,* funds
institutional cash management designed to meet the broad
service for corporations, investment management and
non-profit organizations service needs of banks and
and trusts that uses certain other institutions, call
portfolios of Scudder Fund, 1-800-854-8525.
Inc.* ($100,000 minimum), call
1-800-541-7703.
-------------------------------------------------------------------------------
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
* 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.
27
<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.
