This prospectus sets forth concisely the information about Scudder Global Bond
Fund, a series of Scudder Global Fund, Inc., an open-end management investment
company, that a prospective investor should know before investing. Please retain
it for future reference.
If you require more detailed information, a Statement of Additional Information
dated March 1, 1995, as revised December 27, 1995, may be obtained without
charge by writing Scudder Investor Services, Inc., Two International Place,
Boston, MA 02110-4103 or calling 1-800-225-2470. The Statement, which is
incorporated by reference into this prospectus, has been filed with the
Securities and Exchange Commission.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Contents--see page 4.
Scudder
Global Bond
Fund
Prospectus
March 1, 1995
As Revised
December 27, 1995
A pure no-load(TM) (no sales charges) mutual fund series which seeks total
return with an emphasis on current income by investing principally in high-grade
bonds denominated in foreign currencies and the U.S. dollar. Capital
appreciation is a secondary objective.
<PAGE>
<TABLE>
<CAPTION>
Expense information
How to compare a Scudder pure no-load(TM) fund
This information is designed to help you understand the various costs and expenses of investing in Scudder Global
Bond Fund (the "Fund"). By reviewing this table and those in other mutual funds' prospectuses, you can compare the
Fund's fees and expenses with those of other funds. With Scudder's pure no-load(TM) funds, you pay no commissions to
purchase or redeem shares, or to exchange from one fund to another. As a result, all of your investment goes to work
for you.
1) Shareholder transaction expenses: Expenses charged directly to your individual account in the Fund for various
transactions.
<S> <C>
Sales commissions to purchase shares (sales load) NONE
Commissions to reinvest dividends NONE
Redemption fees NONE*
Fees to exchange shares NONE
2) Annual Fund operating expenses: Expenses paid by the Fund before it distributed its net investment income,
expressed as a percentage of the Fund's average daily net assets for the fiscal year ended October 31, 1994.
Investment management fee (after waiver) 0.60%**
12b-1 fees NONE
Other expenses 0.40%
----
Total Fund operating expenses 1.00%**
====
Example
Based on the level of total Fund operating expenses listed above, the total expenses relating to a $1,000 investment,
assuming a 5% annual return and redemption at the end of each period, are listed below. Investors do not pay these
expenses directly; they are paid by the Fund before it distributes its net investment income to shareholders. (As
noted above, the Fund has no redemption fees of any kind.)
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$10 $32 $55 $122
See "Fund organization--Investment adviser" for further information about the investment management fee. This example
assumes reinvestment of all dividends and distributions and that the percentage amounts listed under "Annual Fund
operating expenses" remain the same each year. This example should not be considered a representation of past or
future expenses or return. Actual Fund expenses and return vary from year to year and may be higher or lower than
those shown.
* You may redeem by writing or calling the Fund. If you wish to receive your redemption proceeds via wire, there is
a $5 wire service fee. For additional information, please refer to "Transaction Information--Redeeming Shares."
** Until February 29, 1996, the Adviser has agreed to waive a portion of its fee to the extent necessary so that the
total annualized expenses of the Fund do not exceed 1.00% of average daily net assets. If the Adviser had not
done so, Fund expenses would have been: investment management fee 0.75%, other expenses 0.40%, and total
operating expenses 1.15% for the fiscal year ended October 31, 1994. To the extent that expenses fall below 1.00%
during the fiscal year, the Adviser reserves the right to recoup, during the fiscal year incurred, amounts waived
during the period, but only to the extent that the Fund's expenses do not exceed 1.00%.
On December 27, 1995, the Fund adopted its present name and objectives. Prior to that date, the Fund was known as
Scudder Short Term Global Income Fund and its objective was high current income. Expense information for the
period ended October 31, 1994 should not be considered representative of the present Fund under its current
objectives.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Financial highlights
The following table includes selected data for a share outstanding throughout each period and other performance
information derived from the audited financial statements.
If you would like more detailed information concerning the Fund's performance, a complete portfolio listing and
audited financial statements are available in the Fund's Annual Report dated October 31, 1994 and may be obtained
without charge by writing or calling Scudder Investor Services, Inc.
For the Period
March 1, 1991
(commencement
Years Ended October 31, of operations)
-------------------------------- to October 31,
1994 1993 1992 1991
-------------------------------- ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.68 $11.84 $12.01 $12.00
------ ------ ------ ------
Income from investment operations:
Net investment income (a) .87 .95 1.08 .76
Net realized and unrealized gain (loss) on investment
transactions (.90) (.14) (.17) .01
----- ----- ----- ------
Total from investment operations (.03) .81 .91 .77
------ ------ ------ ------
Less distributions from:
Net investment income (.02) (.95) (1.08) (.76)
Net realized gains on investments -- (.02) -- --
Tax return of capital (.85) -- -- --
------ ------ ------ ------
Total distributions (.87) (.97) (1.08) (.76)
----- ----- ----- -----
Net asset value, end of period $10.78 $11.68 $11.84 $12.01
====== ====== ====== ======
Total Return (%) (.25) 7.14 7.83 6.65**
Ratios and Supplemental Data
Net assets, end of period ($ millions) 560 1,041 1,369 205
Ratio of operating expenses, net to average daily
net assets (%) (a) 1.00 1.00 1.00 1.00*
Ratio of net investment income to average daily
net assets (%) 7.76 8.10 8.94 9.97*
Portfolio turnover rate (%) 272.4 259.8 274.2 26.1*
(a) Reflects a per share amount of management fee not
imposed by the Adviser $ .02 $ .01 $ .03 $ .06
Operating expense ratio including management fee and
other expenses not imposed (%) 1.15 1.11 1.23 1.89*
* Annualized
** Not annualized
On December 27, 1995, the Fund adopted its present name and objectives. Prior to that date, the Fund was known as
Scudder Short Term Global Income Fund and its objective was high current income. Expense information for the period
ended October 31, 1994 should not be considered representative of the present Fund under its current objectives.
</TABLE>
3
<PAGE>
A message from Scudder's chairman
Scudder, Stevens & Clark, Inc., investment adviser to the Scudder Family of
Funds, was founded in 1919. We offered America's first no-load mutual fund in
1928. Today, we manage in excess of $90 billion for many private accounts and
over 50 mutual fund portfolios. We manage the mutual funds in a special program
for the American Association of Retired Persons, as well as the fund options
available through Scudder Horizon Plan, a tax-advantaged variable annuity. We
also advise The Japan Fund and nine closed-end funds that invest in countries
around the world.
The Scudder Family of Funds is designed to make investing easy and less costly.
It includes money market, tax free, income and growth funds as well as IRAs,
401(k)s, Keoghs and other retirement plans.
Services available to all shareholders include toll-free access to the
professional service representatives of Scudder Investor Relations, easy
exchange among funds, shareholder reports, informative newsletters and the
walk-in convenience of Scudder Funds Centers.
All Scudder mutual funds are pure no-load(TM). This means you pay no commissions
to purchase or redeem your shares or to exchange from one fund to another. There
are no "12b-1" fees either, which many other funds now charge to support their
marketing efforts. All of your investment goes to work for you. We look forward
to welcoming you as a shareholder.
/s/Daniel Pierce
Scudder Global Bond Fund
Investment objectives
* total return, with an emphasis on current income by investing principally
in high-grade bonds denominated in foreign currencies and the U.S. dollar
* capital appreciation is a secondary objective
Investment characteristics
* easy access to worldwide interest rate and currency cycles through a
portfolio of debt securities denominated in foreign currencies and the U.S.
dollar
Contents
Investment objectives and policies 5
Investments 5
Global bond investing 6
Why invest in the Fund? 6
International investment experience 7
Special risk considerations 7
Additional information about policies
and investments 8
Purchases 12
Exchanges and redemptions 13
Distribution and performance information 15
Fund organization 16
Transaction information 17
Shareholder benefits 20
Directors and Officers 22
Investment products and services 23
How to contact Scudder Back cover
4
<PAGE>
Investment objectives and
policies
Scudder Global Bond Fund (the "Fund"), a non-diversified series of Scudder
Global Fund, Inc., provides investors with a convenient way to invest in a
managed portfolio of debt securities denominated in foreign currencies and the
U.S. dollar. The Fund's objective is to provide total return with an emphasis on
current income by investing primarily in high-grade bonds denominated in foreign
currencies and the U.S. dollar. As a secondary objective, the Fund will seek
capital appreciation.
Except as otherwise indicated, the Fund's investment objectives and policies are
not fundamental and may be changed without a vote of shareholders. Shareholders
will receive written notice of any changes in the Fund's objectives. If there is
a change in investment objectives, shareholders should consider whether the Fund
remains an appropriate investment in light of their then current financial
position and needs. There can be no assurance that the Fund's objectives will be
met.
Investments
To achieve its objectives, the Fund will invest principally in a managed
portfolio of high-grade intermediate- and long-term bonds denominated in the
U.S. dollar and foreign currencies, including bonds denominated in the European
Currency Unit (ECU). (Intermediate-term bonds generally have maturities between
three and eight years, and long-term bonds generally have maturities of greater
than eight years.) Portfolio investments will be selected on the basis of, among
other things, yields, credit quality, and the fundamental outlooks for currency
and interest rate trends in different parts of the globe, taking into account
the ability to hedge a degree of currency or local bond price risk.
At least 65% of the Fund's investments will consist of high-grade debt
securities, which are those rated in one of the three highest rating categories
of one of the major U.S. rating services or, if unrated, considered to be of
equivalent quality in local currency terms as determined by the Fund's
investment adviser, Scudder, Stevens & Clark, Inc. (the "Adviser"). These
securities are rated AAA, AA or A by Standard & Poor's ("S&P") or Aaa, Aa, or A
by Moody's Investors Service, Inc. ("Moody's").
The Fund may also invest up to 15% of its net assets in debt securities rated
BBB or BB by S&P or Baa or Ba by Moody's and unrated securities considered to be
of equivalent quality by the Adviser. The Fund will not invest in any securities
rated B or lower. (See "Risk Factors.")
The Fund's investments may include:
* Debt securities issued or guaranteed by the U.S. government, its agencies
or instrumentalities
* Debt securities issued or guaranteed by a foreign national government, its
agencies, instrumentalities or political subdivisions
* Debt securities issued or guaranteed by supranational organizations (e.g.,
European Investment Bank, Inter-American Development Bank or the World
Bank)
* Corporate debt securities
* Bank or bank holding company debt securities
* Other debt securities, including those convertible into common stock
The Fund may invest in zero coupon securities, mortgage and asset-backed
securities and may engage in strategic transactions. The Fund may purchase
securities which are not publicly offered. If such securities are purchased,
they may be subject to restrictions which may make them illiquid. Please see
"Additional information about policies and investments--Investment
restrictions."
The Fund intends to select its investments from a number of country and market
sectors. It may
5
<PAGE>
Investments (cont'd)
invest substantially in the issuers of one or more countries and will have
investments in debt securities of issuers from a minimum of three different
countries.
Under normal conditions, the Fund will invest at least 15% of its total assets
in U.S. dollar-denominated securities, issued domestically or abroad. For
temporary defensive or emergency purposes, however, the Fund may invest without
limit in U.S. debt securities, including short-term money market securities. It
is impossible to predict for how long such alternative strategies will be
utilized.
Global bond investing
Opening of foreign markets
In recent years, opportunities for investment in global bond markets have become
more significant. Foreign currency-denominated bond markets have grown faster
than the U.S. dollar-denominated bond market in terms of U.S. dollar market
value and now represent more than half of the value of the world's developed
bond markets. Participants in these markets have grown in number thereby
providing better liquidity. Finally, a number of global bond markets have
reduced barriers to entry to foreign investors by deregulation and by reducing
their withholding taxes.
Globalization of capital flows
Simultaneous with the opening of foreign markets, barriers to global capital
flows have been reduced or eliminated, freeing investment funds to seek the
highest expected returns. Thus, market conditions in one economy influence
market conditions elsewhere, through the channel of global capital flows. The
Fund provides a convenient vehicle to participate in global bond markets, some
of which may outperform U.S. dollar-denominated bond markets in U.S. dollar
terms during certain periods of time.
Global participation
Although the Fund is non-diversified under the Investment Company Act of 1940
(the "1940 Act"), investing in the Fund can provide global diversity to an
investor's existing portfolio of U.S. dollar-denominated bonds ("U.S. bonds"),
thereby potentially reducing volatility or risk over time. Historically, returns
of global bond markets have often diverged from returns generated by U.S. bond
markets. These divergences stem not only from fluctuating exchange rates, but
also from foreign interest rates not always moving in the same direction or
having the same magnitude as interest rates in the U.S. Investment in the Fund
may provide the global bond portion of an investor's diversification program.
Investment opportunity
A global income portfolio composed of both international and U.S. bonds is able
to take advantage of a far wider range of investment opportunities than one that
is restricted to U.S. dollar securities and may, at times, provide higher
investment returns. For example, global bonds may provide higher current income
than U.S. bonds and/or the local price of global bonds can appreciate more than
U.S. bonds. Fluctuations in foreign currencies relative to the U.S. dollar can
potentially benefit investment returns. Of course, in each case, at any time the
opposite may also be true.
Why invest in the Fund?
Scudder Global Bond Fund is designed for investors seeking total return with an
emphasis on current income from a portfolio of high-grade bonds denominated in
foreign currencies and the U.S. dollar. The Fund is appropriate for investors
who can accept the various risks associated with investing in global bonds.
6
<PAGE>
The Fund provides an easy, efficient and relatively low cost way of investing in
global bonds. Direct investment in global securities is usually impractical for
most individual and smaller institutional investors. Investors often find it
difficult to purchase and sell global bonds, to obtain current information about
foreign entities, to hold securities in safekeeping and to convert the value of
their investment from foreign currencies into U.S. dollars. The Fund manages
these concerns for the investor. With a single investment in the Fund, a
shareholder can benefit from the potential income and capital protection and
appreciation associated with a professionally managed portfolio of high-grade
global bonds. The Adviser has extensive experience investing in global markets
and handling trading, custody and currency transactions around the world.
In addition, the Fund offers all the benefits of the Scudder Family of Funds.
Scudder, Stevens & Clark, Inc. manages a diverse family of pure no-load(TM)
funds and provides a wide range of services to help investors meet their
investment needs. Please refer to "Investment products and services" for
additional information.
International investment experience
The Adviser has been a leader in international investment management and trading
for over 40 years. Its investment company clients include Scudder International
Fund, Inc., which was incorporated in Canada in 1953 as the first foreign
investment company registered with the United States Securities and Exchange
Commission, Scudder International Bond Fund, which invests internationally,
Scudder Global Fund and Scudder Global Small Company Fund, which invest
worldwide, The Japan Fund, Inc., which invests in Japanese issuers, Scudder
Latin America Fund, which invests in Latin American issuers, Scudder Pacific
Opportunities Fund, which invests in Pacific Basin issuers, Scudder Emerging
Markets Income Fund, which invests in debt securities issued in emerging markets
and Scudder Greater Europe Growth Fund, which invests in equity securities of
European companies. The Adviser also manages the assets of eight closed-end
investment companies investing in foreign securities: The Argentina Fund, Inc.,
The Brazil Fund, Inc., The First Iberian Fund, Inc., The Korea Fund, Inc., The
Latin America Dollar Income Fund, Inc., Scudder New Asia Fund, Inc., Scudder New
Europe Fund, Inc. and Scudder World Income Opportunities Fund, Inc.
Special risk considerations
The Fund is intended for long-term investors who can accept the risks associated
with investing in global bonds. Because of the Fund's long-term investment
objectives, investors should not rely on an investment in the Fund for their
short-term financial needs and should not view the Fund as a vehicle for playing
short-term swings in the global bond and foreign exchange markets. Shares of the
Fund alone should not be regarded as a complete investment program. Also,
investors should be aware that investing in global bonds may involve a higher
degree of risk than investing only in U.S. bonds.
Investments in foreign securities involve special considerations due to more
limited information, higher transaction costs, different accounting standards,
thinner trading markets and the likely impact of foreign taxes on the yield from
debt securities. They may also entail certain risks, such as the possibility of
one or more of the following: imposition of dividend or interest withholding or
confiscatory taxes, currency blockages or transfer restrictions, expropriation,
nationalization or other adverse political or economic developments, less
government supervision and regulation of securities exchanges, brokers and
listed companies, and the
7
<PAGE>
Special risk considerations
(cont'd)
difficulty of enforcing obligations in other countries. Purchases of foreign
securities are usually made in foreign currencies and, as a result, the Fund
will incur currency conversion costs and may be affected favorably or
unfavorably by changes in the value of foreign currencies against the U.S.
dollar. Further, it may be more difficult for the Fund's agents to keep
currently informed about corporate actions which may affect the prices of
portfolio securities. Communications between the U.S. and foreign countries may
be less reliable than within the U.S., thus increasing the risk of delayed
settlements of portfolio transactions or loss of certificates for portfolio
securities. The Fund's ability and decisions to purchase and sell portfolio
securities may be affected by laws or regulations relating to the convertibility
and repatriation of assets.
Since the Fund's investments are primarily denominated in foreign currencies,
exchange rates are likely to have a significant impact on total Fund
performance. For example, a fall in the U.S. dollar's value relative to the
Japanese yen will increase the U.S. dollar value of a Japanese bond held in the
portfolio, even though the price of that bond in yen terms remains unchanged.
Conversely, if the U.S. dollar rises in value relative to the yen, the U.S.
dollar value of a Japanese bond will fall. Investors should be aware that
exchange rate movements can be significant and endure for long periods of time.
The Adviser attempts to manage exchange rate and interest rate risks through
active portfolio management. The Adviser's techniques include management of
currency, bond market and maturity exposure and security selection which will
vary based on available yields and the Adviser's outlook for the interest rate
cycle in various countries and changes in foreign currency exchange rates. In
any of the markets in which the Fund invests, longer maturity bonds tend to
fluctuate more in price as interest rates change than shorter-term
instruments--again providing both opportunity and risk.
Total return from investment in the Fund will consist of income after expenses,
bond price gains (or losses) in terms of the local currency and currency gains
(or losses). For tax purposes, realized gains and losses on currency are
regarded as ordinary income and loss and could, under certain circumstances,
have an impact on distributions. The value of the Fund's portfolio will
fluctuate in response to various economic factors, the most important of which
are fluctuations in foreign currency exchange rates and interest rates. Please
see "Additional information about policies and investments--Risk factors."
Additional information about policies and investments
Investment restrictions
The Fund has adopted certain fundamental policies which may not be changed
without a vote of shareholders and which are designed to reduce the Fund's
investment risk.
The Fund may not borrow money except as a temporary measure for extraordinary or
emergency purposes or except in connection with reverse repurchase agreements
and may not make loans except through the lending of portfolio securities, the
purchase of debt securities or through repurchase agreements.
In addition, as a matter of nonfundamental policy, the Fund may not invest more
than 10% of its net assets in securities which are not readily marketable, in
restricted securities or in repurchase agreements maturing in more than seven
days. The Fund may not invest more than 10% of its total assets in restricted
securities.
A complete description of these and other policies and restrictions is contained
under "The Fund's Investment Objectives and Policies" in the Fund's Statement of
Additional Information.
8
<PAGE>
Repurchase agreements
As a means of earning income for periods as short as overnight, the Fund may
enter into repurchase agreements with selected banks and broker/dealers. Under a
repurchase agreement, the Fund acquires securities, subject to the seller's
agreement to repurchase at a specified time and price. The Fund may also enter
into repurchase commitments for investment purposes for periods of 30 days or
more. Such commitments involve investment risk similar to that of debt
securities in which the Fund invests.
When-issued securities
The Fund may purchase securities on a when-issued or forward delivery basis, for
payment and delivery at a later date. The price and yield are generally fixed on
the date of commitment to purchase. During the period between purchase and
settlement, 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.
Short-term investments
To protect against adverse movements of interest rates and for liquidity, the
Fund may also purchase short-term obligations denominated in U.S. and foreign
currencies such as, but not limited to, bank deposits, bankers' acceptances,
certificates of deposit, commercial paper, short-term government, government
agency, supranational agency and corporate obligations, and repurchase
agreements.
Indexed securities
The Fund may invest in indexed securities, the value of which is linked to
currencies, interest rates, commodities, indices or other financial indicators
("reference instruments"). The interest rate or (unlike most fixed-income
securities) the principal amount payable at maturity of an indexed security may
be increased or decreased, depending on changes in the value of the reference
instrument. Indexed securities may be positively or negatively indexed, so that
appreciation of the reference instrument may produce an increase or a decrease
in the interest rate or value at maturity of the security. In addition, the
change in the interest rate or value at maturity of the security may be some
multiple of the change in the value of the reference instrument. Thus, in
addition to the credit risk of the security's issuer, the Fund will bear the
market risk of the reference instrument.
Dollar roll transactions
The Fund may enter into dollar roll transactions with selected banks and
broker/dealers. Dollar roll transactions are treated as reverse repurchase
agreements for purposes of the Fund's borrowing restrictions and consist of the
sale by the Fund of mortgage-backed securities, together with a commitment to
purchase similar, but not identical, securities at a future date, at the same
price. In addition, the Fund is paid a fee as consideration for entering into
the commitment to purchase. Dollar rolls may be renewed after cash settlement
and initially may involve only a firm commitment agreement by the Fund to buy a
security.
Convertible securities
The Fund may invest in convertible securities which may offer higher income than
the common stocks into which they are convertible. The convertible securities in
which the Fund may invest consists of bonds, notes, debentures and preferred
stocks which may be converted or exchanged at a stated or determinable exchange
ratio into underlying shares of common stock. Prior to their conversion,
convertible securities may have characteristics similar to nonconvertible
securities.
Portfolio turnover
Economic and market conditions may necessitate more active trading, resulting in
a higher portfolio turnover rate for the Fund. A higher rate involves greater
transaction costs to the Fund and may result in the realization of net capital
gains, which would be taxable to shareholders when distributed. Under normal
investment
9
<PAGE>
Additional information about policies and investments (cont'd)
conditions, the Fund's portfolio turnover rate is expected to exceed 200%.
Mortgage and other asset-backed securities
The Fund may invest in mortgage-backed securities, which are securities
representing interests in pools of mortgage loans. These securities provide
shareholders with payments consisting of both interest and principal as the
mortgages in the underlying mortgage pools are paid off.
The timely payment of principal and interest on mortgage-backed securities
issued or guaranteed by the Government National Mortgage Association ("GNMA") is
backed by GNMA and the full faith and credit of the U.S. Government. These
guarantees, however, do not apply to the market value or yield of
mortgage-backed securities or to the value of Fund shares. Also, GNMA and other
mortgage-backed securities may be purchased at a premium over the maturity value
of the underlying mortgages. This premium is not guaranteed and will be lost if
prepayment occurs. In addition, the Fund may invest in mortgage-backed
securities issued by other issuers, such as the Federal National Mortgage
Association (FNMA), which are not guaranteed by the U.S. Government. Moreover,
the Fund may invest in debt securities which are secured with collateral
consisting of mortgage-backed securities and in other types of mortgage-related
securities.
The Fund may also invest in securities representing interests in pools of
certain other consumer loans, such as automobile loans or credit card
receivables. In some cases, principal and interest payments are partially
guaranteed by a letter of credit from a financial institution.
Strategic Transactions and derivatives
The Fund may, but is not required to, utilize various other investment
strategies as described below to hedge various market risks (such as interest
rates, currency exchange rates, and broad or specific equity or fixed-income
market movements), to manage the effective maturity or duration of the Fund's
portfolio or to enhance potential gain. These strategies may be executed through
the use of derivative contracts. Such strategies are generally accepted as a
part of modern portfolio management and are regularly utilized by many mutual
funds and other institutional investors. Techniques and instruments may change
over time as new instruments and strategies are developed or regulatory changes
occur.
In the course of pursuing these investment strategies, the Fund may purchase and
sell exchange-listed and over-the-counter put and call options on securities,
equity and fixed-income indices and other financial instruments, purchase and
sell financial futures contracts and options thereon, enter into various
interest rate transactions such as swaps, caps, floors or collars, and enter
into various currency transactions such as currency forward contracts, currency
futures contracts, currency swaps or options on currencies or currency futures
(collectively, all the above are called "Strategic Transactions").
Strategic Transactions may be used without limit to attempt to protect against
possible changes in the market value of securities held in or to be purchased
for the Fund's portfolio resulting from securities markets or currency exchange
rate fluctuations, to protect the Fund's unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes, to manage the effective maturity or duration of the Fund's portfolio,
or to establish a position in the derivatives markets as a temporary substitute
for purchasing or selling particular securities. Some Strategic Transactions may
also be used to enhance potential gain although no more than 5% of the Fund's
assets will be committed to Strategic Transactions entered into for non-hedging
purposes. Any or all of these investment techniques may be used at
10
<PAGE>
any time and in any combination, and there is no particular strategy that
dictates the use of one technique rather than another, as use of any Strategic
Transaction is a function of numerous variables including market conditions. The
ability of the Fund to utilize these Strategic Transactions successfully will
depend on the Adviser's ability to predict pertinent market movements, which
cannot be assured. The Fund will comply with applicable regulatory requirements
when implementing these strategies, techniques and instruments. Strategic
Transactions involving financial futures and options thereon will be purchased,
sold or entered into only for bona fide hedging, risk management or portfolio
management purposes and not for speculative purposes. Please refer to "Risk
factors--Strategic Transactions and derivatives" for more information.
Risk factors
The Fund's risks are determined by the nature of the securities held and the
portfolio management strategies used by the Adviser. The following are
descriptions of certain risks related to the investments and techniques that the
Fund may use from time to time.
Bonds. The Fund will invest no more than 15% of its net assets in debt
securities rated below investment-grade or in unrated securities of equivalent
quality as determined by the Adviser. The Fund will not invest in debt
securities rated B or lower. Securities rated below investment-grade are
commonly referred to as "junk bonds" and involve greater price volatility and
higher degrees of speculation with respect to the payment of principal and
interest than higher quality fixed-income securities. The market prices of such
lower-rated debt securities may decline significantly in periods of general
economic difficulty. In addition, the trading market for those securities is
generally less liquid than for higher-rated securities and the Fund may have
difficulty disposing of these securities at the time it wishes to do so. The
lack of a liquid secondary market for certain securities may also make it more
difficult for a Fund to obtain accurate market quotations for purposes of
valuing its portfolio and calculating its net asset value.
Non-diversified investment company. As a "non-diversified" investment company,
the Fund may invest a greater proportion of its assets in the securities of a
smaller number of issuers and therefore may be subject to greater market and
credit risk than a more broadly diversified portfolio.
Repurchase agreements. If the seller under a repurchase agreement becomes
insolvent, the Fund's right to dispose of the securities may be restricted, or
the value of the securities may decline before the Fund is able to dispose of
them. In the event of the commencement of bankruptcy or insolvency proceedings
with respect to the seller of the securities under a repurchase agreement, the
Fund may encounter delay and incur costs, including a decline in the value of
the securities, before being able to sell the securities. Also, if the seller
defaults, the value of such securities may decline before the Fund is able to
dispose of them.
Zero coupon securities. Zero coupon securities are subject to greater market
value fluctuations from changing interest rates than debt obligations of
comparable maturities which make current cash distributions of interest.
Illiquid investments. The absence of a trading market can make it difficult to
ascertain a market value for illiquid investments. Disposing of illiquid
investments may involve time-consuming negotiation and legal expenses, and it
may be difficult or impossible for the Fund to sell them promptly at an
acceptable price.
Dollar roll transactions. If the broker/dealer to whom the Fund sells the
securities becomes insolvent, the Fund's right to purchase or repurchase the
securities may be restricted; the value of the securities may change adversely
over the term of the dollar roll; the securities that the
(Continued on page 14)
11
<PAGE>
<TABLE>
<CAPTION>
Purchases
<C> <C>
Opening Minimum initial investment: $1,000; IRAs $500
an account Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums. See appropriate
plan literature.
Make checks o By Mail Send your completed and signed application and check
payable to "The
Scudder Funds."
by regular mail to: or by express, registered,
or certified mail to:
The Scudder Funds Scudder Shareholder Services
P.O. Box 2291 Center
Boston, MA 42 Longwater Drive
02107-2291 Norwell, MA
02061-1612
o By Wire Please see Transaction information--Purchasing shares--
By wire following these tables for details, including the ABA wire
transfer number. Then call 1-800-225-5163 for instructions.
o In Person Visit one of our Funds Centers to complete your application with the help
of a Scudder representative. Funds Center locations are listed under
Shareholder benefits.
-----------------------------------------------------------------------------------------------------------------------
Purchasing Minimum additional investment: $100; IRAs $50
additional shares Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums. See appropriate
plan literature.
Make checks o By Mail Send a check with a Scudder investment slip, or with a letter of
payable to "The instruction including your account number and the complete Fund name, to
Scudder Funds." the appropriate address listed above.
o By Wire Please see Transaction information--Purchasing shares--
By wire following these tables for details, including the ABA wire
transfer number.
o In Person Visit one of our Funds Centers to make an additional investment in your
Scudder fund account. Funds Center locations are listed under Shareholder
benefits.
o By Automatic You may arrange to make investments on a regular basis through automatic
Investment Plan deductions from your bank checking account. Please call 1-800-225-5163
($50 minimum) for more information and an enrollment form.
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Exchanges and redemptions
<C> <C>
Exchanging shares Minimum investments: $1,000 to establish a new account; $100 to exchange among existing accounts
o By Telephone To speak with a service representative, call 1-800-225-5163 from
8 a.m. to 8 p.m. eastern time or to access SAIL(TM), Scudder's Automated
Information Line, call 1-800-343-2890 (24 hours a day).
o By Mail Print or type your instructions and include:
or Fax - the name of the Fund and the account number you are exchanging from;
- your name(s) and address as they appear on your account;
- the dollar amount or number of shares you wish to exchange;
- the name of the Fund you are exchanging into; and
- your signature(s) as it appears on your account and a daytime telephone
number.
Send your instructions
by regular mail to: or by express, registered, or by fax to:
or certified mail to:
The Scudder Funds Scudder Shareholder Services 1-800-821-6234
P.O. Box 2291 Center
Boston, MA 02107-2291 42 Longwater Drive
Norwell, MA
02061-1612
-----------------------------------------------------------------------------------------------------------------------
Redeeming shares o By Telephone To speak with a service representative, call 1-800-225-5163 from
8 a.m. to 8 p.m. eastern time or to access SAIL(TM), Scudder's Automated
Information Line, call 1-800-343-2890 (24 hours a day). You may have redemption
proceeds sent to your predesignated bank account, or redemption proceeds of up
to $50,000 sent to your address of record.
o By Mail Send your instructions for redemption to the appropriate address or fax number
or Fax above and include:
- the name of the Fund and account number you are redeeming from;
- your name(s) and address as they appear on your account;
- the dollar amount or number of shares you wish to redeem; and
- your signature(s) as it appears on your account and a daytime telephone
number.
A signature guarantee is required for redemptions over $50,000. See Transaction
information--Redeeming shares following these tables.
o By Automatic You may arrange to receive automatic cash payments periodically. Call
Withdrawal Plan 1-800-225-5163 for more information and an enrollment form.
</TABLE>
13
<PAGE>
Additional information about policies and investments (cont'd)
(Continued from page 11)
Fund is required to repurchase may be worth less than the securities that the
Fund originally held, and the return earned by the Fund with the proceeds of a
dollar roll may not exceed transaction costs.
Convertible securities. While convertible securities generally offer lower
yields than nonconvertible debt securities of similar quality, their prices may
reflect changes in the value of the underlying common stock. Convertible
securities entail less credit risk than the issuer's common stock.
Mortgage and other asset-backed securities. Unscheduled or early payments on the
underlying mortgages may shorten the securities' effective maturities and lessen
their growth potential. The Fund may agree to purchase or sell these securities
with payment and delivery taking place at a future date. A decline in interest
rates may lead to a faster rate of repayment of the underlying mortgages, and
expose the Fund to a lower rate of return upon reinvestment. To the extent that
such mortgage-backed securities are held by the Fund, the prepayment right of
mortgagors may limit the increase in net asset value of the Fund because the
value of the mortgage-backed securities held by the Fund may not appreciate as
rapidly as the price of non-callable debt securities. Asset-backed securities
are subject to the risk of prepayment and the risk that the underlying loans
will not be repaid.
Strategic Transactions and derivatives. Strategic Transactions, including
derivative contracts, have risks associated with them including possible default
by the other party to the transaction, illiquidity and, to the extent the
Adviser's view as to certain market movements is incorrect, the risk that the
use of such Strategic Transactions could result in losses greater than if they
had not been used. Use of put and call options may result in losses to the Fund,
force the sale or purchase of portfolio securities at inopportune times or for
prices higher than (in the case of put options) or lower than (in the case of
call options) current market values, limit the amount of appreciation the Fund
can realize on its investments or cause the Fund to hold a security it might
otherwise sell. The use of currency transactions can result in the Fund
incurring losses as a result of a number of factors including the imposition of
exchange controls, suspension of settlements or the inability to deliver or
receive a specified currency. The use of options and futures transactions
entails certain other risks. In particular, the variable degree of correlation
between price movements of futures contracts and price movements in the related
portfolio position of the Fund creates the possibility that losses on the
hedging instrument may be greater than gains in the value of the Fund's
position. In addition, futures and options markets may not be liquid in all
circumstances and certain over-the-counter options may have no markets. As a
result, in certain markets, the Fund might not be able to close out a
transaction without incurring substantial losses, if at all. Although the use of
futures contracts and options transactions for hedging should tend to minimize
the risk of loss due to a decline in the value of the hedged position, at the
same time they tend to limit any potential gain which might result from an
increase in value of such position. Finally, the daily variation margin
requirements for futures contracts would create a greater ongoing potential
financial risk than would purchases of options, where the exposure is limited to
the cost of the initial premium. Losses resulting from the use of Strategic
Transactions would reduce net asset value, and possibly income, and such losses
can be greater than if the Strategic Transactions had not been utilized. The
Strategic Transactions that the Fund may use and some of their risks are
described more fully in the Fund's Statement of Additional Information.
14
<PAGE>
Distribution and performance information
Dividends and capital gains distributions
The Fund's dividends from net investment income are declared daily and
distributed monthly. The Fund intends to distribute net realized capital gains
after utilization of capital loss carryforwards and net currency gains, if any,
in December to prevent application of a federal excise tax. Any dividends or
capital gains distributions declared in October, November or December with a
record date in such a month and paid during the following January will be
treated by shareholders for federal income tax purposes as if received on
December 31 of the calendar year declared. According to preference, shareholders
may receive distributions in cash or have them reinvested in additional shares
of the Fund. If an investment is in the form of a retirement plan, all dividends
and capital gains distributions must be reinvested into the shareholder's
account.
Generally, dividends from net investment income are taxable to investors as
ordinary income. Certain realized gains or losses on the sale or retirement of
international bonds held by the Fund, to the extent attributable to fluctuations
in currency exchange rates, as well as certain other gains or losses
attributable to exchange rate fluctuations, must be treated as ordinary income
or loss. Such income or loss may increase or decrease (or possibly eliminate)
the Fund's income available for distribution to shareholders. If, under the
rules governing the tax treatment of foreign currency gains and losses, the
Fund's income available for distribution is decreased or eliminated, all or a
portion of the dividends declared by the Fund may be treated for federal income
tax purposes as a non-taxable return of capital distribution. Generally, a
shareholder's tax basis in Fund shares will be reduced to the extent that an
amount distributed to the shareholder is treated as a return of capital. The
Fund may reduce its daily dividend to lessen the effect of these rules. If the
Fund's income is increased under the foreign currency taxation rules, the Fund
intends to declare additional distributions of such income in December.
Long-term capital gains distributions, if any, are taxable as long-term capital
gains regardless of the length of time shareholders have owned their shares.
Short-term capital gains and any other taxable income distributions are taxable
as ordinary income. Shareholders may be able to claim a credit or deduction on
their income tax returns for their pro rata portions of qualified taxes paid by
the Fund to foreign countries.
The Fund sends detailed tax information to shareholders about the amount and
type of its distributions by January 31 of each year.
Performance information
From time to time, quotations of the Fund's performance may be included in
advertisements, sales literature, or shareholder reports. All performance
figures are historical, show the performance of a hypothetical investment and
are not intended to indicate future performance. The "yield" of the Fund refers
to income of an investment in the Fund over a specified 30-day (one month)
period. Yield is expressed as an annualized percentage. "Total return" is the
change in value of an investment in the Fund for a specified period. The
"average annual total return" of the Fund is the average annual compound rate of
return of an investment in the Fund assuming the investment has been held for
one year and the life of the Fund as of a stated ending date. "Cumulative total
return" represents cumulative change in value of an investment in the Fund for
various periods. Total return calculations assume that all dividends and capital
gains distributions during the period were reinvested in shares of the Fund.
"Capital change" measures return from capital, including reinvestment of any
capital gains distributions but does not include reinvestment of dividends.
Performance will vary based upon, among other things, changes in market
conditions and the level of the Fund's expenses.
15
<PAGE>
Fund organization
The Fund is a non-diversified series of Scudder Global Fund, Inc. (the
"Corporation"), an open-end, management investment company registered under the
1940 Act. The Corporation was organized as a Maryland corporation in May 1986.
The Fund changed its objective and its name, from Scudder Short Term Global
Income Fund, on December 27, 1995.
The Fund's activities are supervised by the Corporation's Board of Directors.
Shareholders have one vote for each share held on matters on which they are
entitled to vote. The Corporation is not required to hold and has no current
intention of holding annual shareholder meetings, although special meetings may
be called for purposes such as electing or removing Directors, changing
fundamental investment policies or approving an investment advisory contract.
Shareholders will be assisted in communicating with other shareholders in
connection with removing a Director as if Section 16(c) of the 1940 Act were
applicable.
Investment adviser
The Fund retains the investment management firm of Scudder, Stevens & Clark,
Inc., a Delaware corporation, to manage the Fund's daily investment and business
affairs subject to the policies established by the Board of Directors. The
Directors have overall responsibility for the management of the Fund under
Maryland law.
The Adviser receives monthly an investment advisory fee for its services equal
to 0.75% for the first $1 billion of the average daily net assets of the Fund
and 0.70% of the average daily net assets of the Fund exceeding $1 billion on an
annual basis. The fee is graduated so that increases in the Fund's net assets
may result in a lower annual fee rate and decreases in the Fund's net assets may
result in a higher annual fee rate. The fee is payable monthly, provided that
the Fund will make such interim payments as may be requested by the Adviser not
to exceed 75% of the amount of the fee then accrued on the books of the Fund and
unpaid. The Adviser has agreed not to impose all or a portion of its investment
management fee and to take other action, to the extent necessary, to maintain
the annualized expenses of the Fund at not more than 1.00% of average daily net
assets of the Fund until February 29, 1996.
For the fiscal year ended October 31, 1994, under its prior name and investment
objective, the Adviser received an investment management fee of 0.60% of the
Fund's average daily net assets on an annual basis.
The fee is higher than that charged many bond funds which invest primarily in
U.S. debt securities. However, management of the Fund involves analyzing market,
credit and currency relationships in a number of economies throughout the world.
All the Fund's expenses are paid out of gross investment income. Shareholders
pay no direct charges or fees for investment or administrative services.
Scudder, Stevens & Clark, Inc., is located at 345 Park Avenue, New York, New
York.
Transfer agent
Scudder Service Corporation, P.O. Box 2291, Boston, Massachusetts 02107-2291, a
wholly-owned subsidiary of the Adviser, is the transfer, shareholder servicing
and dividend-paying agent for the Fund.
Underwriter
Scudder Investor Services, Inc., a wholly-owned subsidiary of the Adviser, is
the Fund's principal underwriter. Scudder Investor Services, Inc. confirms, as
agent, all purchases of shares of the Fund. Scudder Investor Relations is a
telephone information service provided by Scudder Investor Services, Inc.
Custodian
Brown Brothers Harriman & Co. is the Fund's custodian.
16
<PAGE>
Fund accounting agent
Scudder Fund Accounting Corporation, a wholly-owned subsidiary of the Adviser,
is responsible for determining the daily net asset value per share and
maintaining the general accounting records of the Fund.
Transaction information
Purchasing shares
Purchases are executed at the next calculated net asset value per share after
the Fund's transfer agent in Boston receives the purchase request in good order.
Purchases are made in full and fractional shares. (See "Share price.")
By check. If you purchase shares with a check that does not clear, your purchase
will be canceled and you will be subject to any losses or fees incurred in the
transaction. Checks must be drawn on or payable through a U.S. bank. If you
purchase shares by check and redeem them within seven business days of purchase,
the Fund may hold redemption proceeds until the purchase check has cleared,
which may take up to seven business days. If you purchase shares by federal
funds wire, you may avoid this delay. Redemption or exchange requests by
telephone prior to the expiration of the seven-day period will not be accepted.
By wire. To open a new account by wire, first call Scudder at 1-800-225-5163 to
obtain an account number. A representative will instruct you to send a
completed, signed application to the transfer agent in Boston. Accounts cannot
be opened without a completed, signed application and a Scudder fund account
number. Contact your bank to arrange a wire transfer to:
The Scudder Funds
State Street Bank and Trust Company
Boston, MA 02101
ABA Number 011000028
DDA Account 9903-5552
Your wire instructions must also include:
- -- the name of the fund in which the money is to be invested,
- -- the account number of the fund, and
- -- the name(s) of the account holder(s).
The account will be established once the application and money order are
received in good order.
You may also make additional investments of $100 or more to your existing
account by wire.
By exchange. Your new account will have the same registration and address as
your existing account.
The exchange requirements for corporations, other organizations, trusts,
fiduciaries, agents, institutional investors and retirement plans may be
different from those for regular accounts. Please call 1-800-225-5163 for more
information, including information about the transfer of special account
features.
You can also make exchanges among your Scudder fund accounts on SAIL, the
Scudder Automated Information Line, by calling 1-800-343-2890.
Redeeming shares
The Fund allows you to redeem shares (i.e., sell them back to the Fund) without
redemption fees.
By telephone. This is the quickest and easiest way to sell Fund shares. If you
elected telephone redemption to your bank on your application, you can call to
request that federal funds be sent to your authorized bank account. If you did
not elect telephone redemption to your bank on your application, call
1-800-225-5163 for more information.
Redemption proceeds will be wired to your bank unless otherwise requested. If
your bank cannot receive federal reserve wires, redemption proceeds will be
mailed to your bank. There will be a $5 charge for all wire redemptions.
You can also make redemptions from your Scudder fund account on SAIL, the
Scudder Automated Information Line, by calling 1-800-343-2890.
17
<PAGE>
Transaction information (cont'd)
If you open an account by wire, you cannot redeem shares by telephone until the
Fund's transfer agent has received your completed and signed application.
Telephone redemption is not available for shares held in Scudder IRA accounts
and most other Scudder retirement plan accounts.
In the event that you are unable to reach the Fund by telephone, you should
write to the Fund; see "How to contact Scudder" for the address.
Signature guarantees. For your protection and to prevent fraudulent redemptions,
on written redemption requests in excess of $50,000 we require an original
signature and an original signature guarantee for each person in whose name the
account is registered. (The Fund reserves the right, however, to require a
signature guarantee for all redemptions.) You can obtain a signature guarantee
from most banks, credit unions or savings associations, or from broker/dealers,
municipal securities broker/dealers, government securities broker/dealers,
national securities exchanges, registered securities associations, or clearing
agencies deemed eligible by the Securities and Exchange Commission. Signature
guarantees by notaries public are not acceptable. Redemption requirements for
corporations, other organizations, trusts, fiduciaries, agents, institutional
investors and retirement plans may be different from those for regular accounts.
For more information, please call 1-800-225-5163.
Telephone transactions
Shareholders automatically receive the ability to exchange by telephone and the
right to redeem by telephone up to $50,000 to their address of record.
Shareholders also may, by telephone, request that redemption proceeds be sent to
a predesignated bank account. The Fund uses procedures designed to give
reasonable assurance that telephone instructions are genuine, including
recording telephone calls, testing a caller's identity and sending written
confirmation of telephone transactions. If the Fund does not follow such
procedures, it may be liable for losses due to unauthorized or fraudulent
telephone instructions. The Fund will not be liable for acting upon instructions
communicated by telephone that it reasonably believes to be genuine.
Share price
Purchases and redemptions, including exchanges, are made at net asset value.
Scudder Fund Accounting Corporation, a wholly-owned subsidiary of the Adviser,
determines net asset value per share as of the close of regular trading on the
Exchange, normally 4 p.m. eastern time, on each day the Exchange is open for
trading. Net asset value per share is calculated by dividing the value of total
Fund assets, less all liabilities, by the total number of shares outstanding.
Processing time
All purchase and redemption requests must be received in good order by the
Fund's transfer agent in Boston. Those requests received by the close of regular
trading on the Exchange are executed at the net asset value per share calculated
at the close of trading that day. Purchase and redemption requests received
after the close of regular trading on the Exchange will be executed the
following business day. Purchases made by federal funds wire before noon eastern
time will begin earning income that day; all other purchases received before the
close of regular trading on the Exchange will begin earning income the next
business day. Redeemed shares will earn income on the day on which the
redemption request is executed.
If you wish to make a purchase of $500,000 or more, you should notify Scudder
Investor Relations by calling 1-800-225-5163.
The Fund will normally send redemption proceeds within one business day
following the redemption request, but may take up to seven
18
<PAGE>
days (or longer in the case of shares recently purchased by check).
Short-term trading
Purchases and sales should be made for long-term investment purposes only. The
Fund and Scudder Investor Services, Inc. each reserves the right to restrict
purchases of Fund shares (including exchanges) when a pattern of frequent
purchases and sales made in response to short-term fluctuations in the Fund's
share price appears evident.
Tax information
A redemption of shares, including an exchange into another Scudder fund, is a
sale of shares and may result in a gain or loss for income tax purposes.
Tax identification number
Be sure to complete the Tax Identification Number section of the Fund's
application when you open an account. Federal tax law requires the Fund to
withhold 31% of taxable dividends, capital gains distributions and redemption
and exchange proceeds from accounts (other than those of certain exempt payees)
without a certified Social Security or tax identification number and certain
other certified information or upon notification from the IRS or a broker that
withholding is required. The Fund reserves the right to reject new account
applications without a certified Social Security or tax identification number.
The Fund also reserves the right, following 30 days' notice, to redeem all
shares in accounts without a certified Social Security or tax identification
number. A shareholder may avoid involuntary redemption by providing the Fund
with a tax identification number during the 30-day notice period.
Minimum balances
Shareholders should maintain a share balance worth at least $1,000, which amount
may be changed by the Board of Directors. Scudder retirement plans have similar
or lower minimum share balance requirements. The Fund reserves the right,
following 60 days' written notice to shareholders, to redeem all shares in
sub-minimum accounts, including accounts of new investors, where a reduction in
value has occurred due to a redemption or exchange out of the account.
Reductions in value that result solely from market activity will not trigger an
involuntary redemption. The Fund will mail the proceeds of the redeemed account
to the shareholder. The shareholder may restore the share balance to $1,000 or
more during the 60-day notice period and must maintain it at no lower than that
minimum to avoid involuntary redemption.
Third party transactions
If purchases and redemptions of Fund shares are arranged and settlement is made
at an investor's election through a member of the National Association of
Securities Dealers, Inc., other than Scudder Investor Services, Inc., that
member may, at its discretion, charge a fee for that service.
Redemption-in-kind
The Fund reserves the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption or repurchase order by making
payment in whole or in part in readily marketable securities chosen by the Fund
and valued as they are for purposes of computing the Fund's net asset value (a
redemption-in-kind). If payment is made in securities, a shareholder may incur
transaction expenses in converting these securities to cash. The Corporation has
elected, however, to be governed by Rule 18f-1 under the 1940 Act, as a result
of which the Fund is obligated to redeem shares, with respect to any one
shareholder during any 90-day period, solely in cash up to the lesser of
$250,000 or 1% of the net asset value of the Fund at the beginning of the
period.
19
<PAGE>
Shareholder benefits
Experienced professional management
Scudder, Stevens & Clark, Inc., one of the nation's most experienced investment
management firms, actively manages your Scudder fund investment. Professional
management is an important advantage for investors who do not have the time or
expertise to invest directly in individual securities.
A team approach to investing
Scudder Global Bond Fund is managed by a team of Scudder investment
professionals who each play an important role in the Fund's management process.
Team members work together to develop investment strategies and select
securities for the Fund's portfolio. They are supported by Scudder's large staff
of economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. Scudder believes
its team approach benefits Fund investors by bringing together many disciplines
and leveraging Scudder's extensive resources.
Lead Portfolio Manager Adam M. Greshin assumed responsibility for the Fund's
day-to-day management and investment strategies in November 1995. Mr. Greshin
joined Scudder in 1986 as an international bond analyst and is Product Leader
for Scudder's global and international fixed-income investing. Portfolio Manager
Margaret D. Hadzima is Chairperson of Scudder's Global Bond Strategy Committee
and Director of Global Bond Research and Global Bond Investment. Ms. Hadzima,
who joined Scudder in 1973 and the team in 1995, plays an active role in setting
the Fund's overall bond strategy.
SAIL(TM)--Scudder Automated Information Line
For touchtone access to account information, prices and yields, or to perform
transactions in existing Scudder fund accounts, shareholders can call Scudder's
Automated Information Line (SAIL) at 1-800-343-2890. During periods of extreme
economic or market changes, or other conditions, it may be difficult for you to
effect telephone transactions in your account. In such an event you should write
to the Fund; please see "How to contact Scudder" for the address.
Investment flexibility
Scudder offers toll-free telephone exchange between funds at current net asset
value. You can move your investments among money market, income, growth,
tax-free and growth and income funds with a simple toll-free call or, if you
prefer, by sending your instructions through the mail or by fax. Telephone and
fax redemptions and exchanges are subject to termination and their terms are
subject to change at any time by the Fund or the transfer agent. In some cases,
the transfer agent or Scudder Investor Services, Inc. may impose additional
conditions on telephone transactions.
Dividend reinvestment plan
You may have dividends and distributions automatically reinvested in additional
Fund shares. Please call 1-800-225-5163 to request this feature.
Shareholder statements
You receive a detailed account statement every time you purchase or redeem
shares. All of your statements should be retained to help you keep track of
account activity and the cost of shares for tax purposes.
Shareholder reports
In addition to account statements, you receive periodic shareholder reports
highlighting relevant information, including investment results and a review of
portfolio changes.
To reduce the volume of mail you receive, only one copy of most Fund reports,
such as the Fund's Annual Report, may be mailed to your household (same surname,
same address). Please call 1-800-225-5163 if you wish to receive additional
shareholder reports.
20
<PAGE>
Newsletters
Four times a year, Scudder sends you At the Helm, an informative newsletter
covering economic and investment developments, service enhancements and other
topics of interest to Scudder fund investors.
Scudder Funds Centers
As a convenience to shareholders who like to conduct business in person, Scudder
Investor Services, Inc. maintains Funds Centers in Boca Raton, Boston, Chicago,
Cincinnati, Los Angeles, New York, Portland (OR), San Diego, San Francisco and
Scottsdale.
T.D.D. service for the hearing impaired
Scudder's full range of investor information and shareholder services is
available to hearing impaired investors through a toll-free T.D.D. (Telephone
Device for the Deaf) service. If you have access to a T.D.D., call
1-800-543-7916 for investment information or specific account questions and
transactions.
Scudder tax-advantaged retirement plans
Scudder offers a variety of tax-advantaged retirement plans for individuals,
businesses and non-profit organizations. These flexible plans are designed for
use with the Scudder Family of Funds (except Scudder tax-free funds, which are
inappropriate for such plans). Scudder Funds offer a broad range of investment
objectives and can be used to seek almost any investment goal. Using Scudder's
retirement plans can help shareholders save on current taxes while building
their retirement savings.
* Scudder No-Fee IRAs. These retirement plans allow a maximum annual
contribution of $2,000 per person for anyone with earned income. Many
people can deduct all or part of their contributions from their taxable
income, and all investment earnings accrue on a tax deferred basis. The
Scudder No-Fee IRA charges no annual custodial fee.
* 401(k) Plans. 401(k) plans allow employers and employees to make
tax-deductible retirement contributions. Scudder offers a full service
program that includes recordkeeping, prototype plan, employee
communications and trustee services, as well as investment options.
* Profit Sharing and Money Purchase Pension Plans. These plans allow
corporations, partnerships and people who are self-employed to make annual,
tax-deductible contributions of up to $30,000 for each person covered by
the plans. Plans may be adopted individually or paired to maximize
contributions. These are sometimes known as Keogh plans.
* 403(b) Plans. Retirement plans for tax-exempt organizations and school
systems to which employers and employees may both contribute.
* SEP-IRAs. Easily administered retirement plans for small businesses and
self-employed individuals. The maximum annual contribution to SEP-IRA
accounts is adjusted each year for inflation.
* Scudder Horizon Plan. A no-load variable annuity that lets you build assets
by deferring taxes on your investment earnings. You can start with $2,500
or more.
Scudder Trust Company (an affiliate of the Adviser) is Trustee or Custodian for
some of these plans and is paid an annual fee for some of the above retirement
plans. For information about establishing a Scudder No-Fee IRA, SEP-IRA, Profit
Sharing Plan, Money Purchase Pension Plan or a Scudder Horizon Plan, please call
1-800-225-2470. For information about 401(k)s or 403(b)s please call
1-800-323-6105. To effect transactions in existing IRA, SEP-IRA, Profit Sharing
or Pension Plan accounts, call 1-800-225-5163.
The variable annuity contract is provided by Charter National Life Insurance
Company (in New York State, Intramerica Life Insurance Company [S 1802]). The
contract is offered by Scudder Insurance Agency, Inc. (in New York State, Nevada
and Montana, Scudder Insurance Agency of New York, Inc.). CNL, Inc. is the
Principal Underwriter. Scudder Horizon Plan is not available in all states.
21
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Directors and Officers
Edmond D. Villani*
Chairman of the Board and Director
Nicholas Bratt*
President and Director
Daniel Pierce*
Vice President and Director
Paul Bancroft III
Director; Venture Capitalist and Consultant
Sheryle J. Bolton
Director; 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
Robert G. Stone, Jr.
Honorary Director; Chairman of the Board and Director, Kirby Corporation
Robert W. Lear
Honorary Director; Executive-in-Residence, Columbia University
Graduate School of Business
Adam M. Greshin*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Douglas M. Loudon*
Vice President
Gerald J. Moran*
Vice President
M. Isabel Saltzman*
Vice President
Cornelia M. Small*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
David S. Lee*
Vice President and Assistant Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Juris Padegs*
Vice President and Assistant Secretary
Kathryn L. Quirk*
Vice President and Assistant Secretary
Coleen Downs Dinneen*
Assistant Secretary
* Scudder, Stevens & Clark, Inc.
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Investment products and services
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The Scudder Family of Funds Income
Money market Scudder Emerging Markets Income Fund
Scudder Cash Investment Trust Scudder Global Bond 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 Zero Coupon 2000 Fund
Tax free+ Growth
Scudder California Tax Free Fund* Scudder Capital Growth Fund
Scudder High Yield Tax Free Fund Scudder Development Fund
Scudder Limited Term Tax Free Fund Scudder Global Fund
Scudder Managed Municipal Bonds Scudder Global Small Company Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Gold Fund
Scudder Massachusetts Tax Free Fund* Scudder Greater Europe Growth Fund
Scudder Medium Term Tax Free Fund Scudder International Fund
Scudder New York Tax Free Fund* Scudder Latin America Fund
Scudder Ohio Tax Free Fund* Scudder Pacific Opportunities Fund
Scudder Pennsylvania Tax Free Fund* Scudder Quality Growth Fund
Growth and Income Scudder Small Company Value Fund
Scudder Balanced Fund Scudder Value Fund
Scudder Growth and Income Fund The Japan Fund
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Retirement Plans and Tax-Advantaged Investments
IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan*+++ (a variable annuity) Profit Sharing and
401(k) Plans Money Purchase Pension Plans
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Closed-end Funds#
The Argentina Fund, Inc. Scudder New Europe Fund, Inc.
The Brazil Fund, Inc. Scudder World Income Opportunities Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc. Institutional Cash Management
The Latin America Dollar Income Fund, Inc. Scudder Institutional Fund, Inc.
Montgomery Street Income Securities, Inc. Scudder Fund, Inc.
Scudder New Asia Fund, Inc. Scudder Treasurers Trust(TM)++
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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.
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How to contact Scudder
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Account Service and Information: Please address all correspondence to:
Scudder Investor Relations The Scudder Funds
For existing account service 1-800-225-5163 P.O. Box 2291
and transactions Boston, Massachusetts
02107-2291
For account updates, prices, Scudder Automated
yields, exchanges and Information Line (SAIL)
redemptions 1-800-343-2890
Investment Information: Or Stop by a Scudder Funds Center:
Scudder Investor Relations
To receive information about 1-800-225-2470 Many shareholders enjoy the personal, one-on-one
the Scudder funds, for service of the Scudder Funds Centers. Check for a
additional applications and Funds Center near you--they can be found in the
prospectuses, or for following cities:
investment questions
For establishing 401(k) and Scudder Defined Boca Raton New York
403(b) plans Contribution Services Boston Portland, OR
1-800-323-6105 Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
For information on Scudder Treasurers Trust(TM), an For information on Scudder Institutional Funds*, funds
institutional cash management service for corporations, designed to meet the broad investment management and
non-profit organizations and trusts which utilizes service needs of banks and other institutions, call:
certain portfolios of Scudder Fund, Inc.* ($100,000 1-800-854-8525.
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.
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