This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder
International
Bond Fund
Semiannual Report
December 31, 1995
o For investors seeking an easy and low-cost way to broaden their
income-oriented investments beyond U.S. borders. Invests primarily in
high-grade bonds denominated in foreign currencies.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange
shares.
<PAGE>
SCUDDER INTERNATIONAL BOND 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
25 Report of Independent Accountants
26 Tax Information
29 Officers and Directors
30 Investment Products and Services
31 How to Contact Scudder
IN BRIEF
o Scudder International Bond Fund provided a 3.66% total return for the
second half of 1995, based on improving bond prices in European and dollar
bloc markets and a successful portfolio allocation strategy. By comparison,
the unmanaged Salomon Brothers Non-U.S. Dollar World Government Bond Index
lost 0.40%.
(BAR CHART TITLE)
Investment Returns
(for the six months ended December 31, 1995)
(BAR CHART DATA)
Scudder International Bond Fund 3.66%
World Government Bond Index -0.40%
o European holdings continue to dominate the portfolio, with overweight
positions in Sweden, Italy, the United Kingdom, Germany, and France. An
underweight position in Japan compared with the benchmark Salomon Brothers
Index also contributed to the Fund's outperformance during the period.
o The Fund paid shareholders a total of $0.38 per share in income
distributions during the period and provided a 5.81% 30-day net annualized
SEC yield at the end of December. The Fund's yield declined during the
period, reflecting a trend of declining interest rates worldwide.
2
<PAGE>
LETTER FROM THE FUND'S CHAIRMAN
- --------------------------------------------------------------------------------
Dear Shareholders,
A favorable combination of low inflation, slow economic growth and
declining interest rates around the world made 1995 a rewarding year for most
fixed-income markets. In recent months, we have seen evidence suggesting that
Japanese savings may finally be moving outside the country, providing additional
fuel for the international bond markets.
Nowhere have returns been as celebrated as in the United States bond
market, where investors in 30-year Treasuries enjoyed a 30%+ total return for
the year. The fact that most of Europe and the so-called dollar-bloc markets
failed to keep pace suggests they may now be attractively valued by comparison.
With yields on long-term U.S. Treasuries hovering around 6%, investors may also
find attractive the yields of international bonds--some in excess of 10%.
International bond investors can find additional reasons for optimism in the
Bundesbank's easier monetary policy, political and economic reforms in Europe,
and deficit reduction in places like Sweden.
Scudder International Bond Fund offers U.S. fixed-income investors an
opportunity for portfolio diversification and the potential to reap the benefits
of relatively higher yields and improving bond prices overseas. As the dynamic
of the international bond markets plays out in the coming year, Scudder
International Bond Fund will continue to seek high current income and capital
appreciation for its shareholders.
We would also like to take this opportunity to announce a change in the
Fund's portfolio management team, which now consists of Adam M. Greshin and
Margaret D. Hadzima. Ms. Hadzima, Chairwoman of Scudder's Global Bond Strategy
Committee, has been with Scudder since 1973 and joined the team in 1995.
Margaret Craddock has left Scudder to pursue other career opportunities, and we
wish her success in her new endeavors.
If you have any questions about the Fund or your investments, please
contact a Scudder Investor Relations representative at 1-800-225-2470. Page 31
provides more information on how to contact Scudder. Thank you for your
continued interest in Scudder International Bond Fund.
Sincerely,
/s/Edmond D. Villani
Edmond D. Villani
Chairman,
Scudder International Bond Fund
3
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
PERFORMANCE UPDATE as of December 31, 1995
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
SCUDDER INTERNATIONAL BOND FUND
- ----------------------------------------
Total Return
Period Growth --------------
Ended of Average
12/31/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $10,850 8.50% 8.50%
5 Year $15,110 51.10% 8.61%
Life of
Fund* $20,796 107.96% 10.27%
SALOMON BROTHERS NON-U.S. DOLLAR
WORLD GOVERNMENT BOND INDEX
- --------------------------------------
Total Return
Period Growth --------------
Ended of Average
12/31/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $11,955 19.55% 19.55%
5 Year $17,762 77.62% 12.17%
Life of
Fund* $21,641 116.41% 10.97%
*The Fund commenced operations on
July 6, 1988. Index comparisons begin
July 31, 1988.
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:
YEARLY PERIODS ENDED DECEMBER 31
Scudder International Bond Fund
Year Amount
- ----------------------
7/31/88* $10,000
88 $10,598
89 $11,365
90 $13,764
91 $16,824
92 $18,105
93 $20,971
94 $19,167
95 $20,796
Salomon Brothers Non-U.S. Dollar
World Government Bond Index
Year Amount
- ----------------------
7/31/88* $10,000
88 $10,942
89 $10,569
90 $12,184
91 $14,160
92 $14,835
93 $17,079
94 $18,102
95 $21,641
The unmanaged Salomon Brothers Non-U.S. Dollar World Government
Bond Index consists of worldwide fixed-rate government bonds
with remaining maturities greater than one year. Index returns
assume reinvestment of 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 DECEMBER 31
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1988* 1989 1990 1991 1992 1993 1994 1995
---------------------------------------------------------------
NET ASSET VALUE... $12.21 $11.97 $12.90 $13.53 $12.83 $13.50 $11.38 $11.46
INCOME DIVIDENDS.. $ .49 $ 1.05 $ 1.16 $ 1.17 $ 1.07 $ .92 $ .99 $ .85
CAPITAL GAINS
DISTRIBUTIONS..... $ -- $ -- $ .29 $ .81 $ .62 $ .39 $ -- $ --
FUND TOTAL
RETURN (%)........ 5.98 7.23 21.11 22.23 7.62 15.83 -8.61 8.50
INDEX TOTAL
RETURN (%)........ 9.42 -3.41 15.29 16.22 4.77 15.12 5.99 19.55
</TABLE>
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results.
Investment return and principal value will fluctuate, so an investor's
shares, when redeemed, may be worth more or less than when purchased.
If the Adviser had not temporarily capped expenses, the average annual
total return for the Fund for the five year and life of Fund periods
would have been lower.
4
<PAGE>
PORTFOLIO SUMMARY as of December 31, 1995
- ---------------------------------------------------------------------------
MARKET EXPOSURE
- ---------------------------------------------------------------------------
Geographical Interest Rate
- ---------------------------- ---------------------------
Germany 15.8% Germany 15.8%
Italy 10.9% Japan 14.1%
United Kingdom 9.5% Italy 10.9%
Sweden 8.0% United Kingdom 9.5%
Australia 7.9% Sweden 8.0%
Supranational Agencies 6.3% Australia 7.9%
France 5.5% France 7.6%
New Zealand 5.4% United States 7.6%
Denmark 5.2% New Zealand 5.4%
Netherlands 4.2% Denmark 5.2%
Japan 4.1% Netherlands 4.3%
Poland 3.8% Canada 2.6%
Austria 3.7% South Africa 1.1%
Canada 2.6% ----
Portugal 2.1% 100%
United States 1.6% ====
Argentina 1.3%
South Africa 1.1%
Brazil 0.5%
Mexico 0.5%
----
100%
====
Graphs in the form of pie charts appears here,
illustrating the exact data points in the above tables.
Currency Exposure (a)
- ----------------------------------------------------------------
Australia 2.6% Netherlands 4.3%
Canada 2.6% New Zealand 4.5%
Denmark 4.1% South Africa 1.1%
France 3.3% Sweden 3.9%
Germany 13.9% United Kingdom 4.8%
Italy 10.3% United States 20.6%
Japan 24.0% -----
100%
=====
(a) Currency exposure after taking into account the effects of
foreign currency options, futures, and forward contracts.
The Fund's foreign currency exposure was further enhanced during the
period, including a greater exposure to Japanese yen and select
European currencies.
- -----------------------------------------------------------------------
For more complete details about the Fund's Investment Portfolio,
see page 9.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings
are available upon request.
5
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Dear Shareholders,
Scudder International Bond Fund provided a total return of 3.66% for the
semiannual period ended December 31, 1995, outpacing the -0.40% return of the
unmanaged Salomon Brothers Non-U.S. Dollar World Government Bond Index.
Reflecting a decline in interest rates worldwide, the Fund's 30-day net
annualized SEC yield finished the period at 5.81%, down from 6.39% on June 30,
1995.
The international bond markets generally provided attractive total returns
in the second half of 1995, propelled by slow economic growth and the subsequent
lack of inflationary pressure. Several central banks, including the German
Bundesbank, moved to lower interest rates during the period in light of
tightening fiscal policy, tepid growth in consumer spending, and weak labor
markets. Meanwhile, consumer confidence continued to deteriorate throughout
Europe. The European Commission's September survey of business and consumer
confidence showed its lowest consumer confidence reading in over a year,
particularly in the core European countries.
Traditionally, bonds have reacted favorably to bad economic news, and the
past six months were no different. Several European markets provided
double-digit returns, including an impressive 14.63% in Italy and 26.31% in
Sweden. Dollar-bloc markets such as Australia and Canada also performed well.
Japan was a major disappointment with a -16.75% return for the six-month period
due largely to a weakening yen. Individual market returns are listed below for
both the six-month period and calendar year 1995.
Investment Returns*
(For periods ended December 31, 1995)
- -------------------------------------------------------------------------
Six Months Twelve Months
- -------------------------------------------------------------------------
Germany 4.84% 25.91%
- -------------------------------------------------------------------------
France 8.41 27.69
- -------------------------------------------------------------------------
United Kingdom 7.55 15.62
- -------------------------------------------------------------------------
Italy 14.63 19.96
- -------------------------------------------------------------------------
Australia 14.10 14.94
- -------------------------------------------------------------------------
Sweden 26.31 34.83
- -------------------------------------------------------------------------
Netherlands 5.59 28.39
- -------------------------------------------------------------------------
Spain 12.60 29.48
- -------------------------------------------------------------------------
Japan -16.75 9.57
- -------------------------------------------------------------------------
Canada 9.46 23.45
- -------------------------------------------------------------------------
Source: Salomon Brothers
- -------------------------------------------------------------------------
*Bond market returns in U.S. dollars.
6
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Bond Allocation was Crucial to Positive Performance
The Fund continued its policy of investing heavily in Europe (69% of
portfolio holdings on December 31) with particular emphasis on the smaller,
peripheral markets. The Fund's 10.9% position in Italy and 8.0% position in
Sweden contributed substantially to the period's positive performance. Sweden's
exceptionally strong return (+26.31%) was the result of a benign combination of
lower interest rates, falling consumer prices, and improving budget and current
account inequities. The fact is, economic indicators throughout Europe have
consistently pointed down since the spring, and we expected the performance of
European bond markets to be stronger. Given our view that these markets still
offer the best relative value in the world, we intend to maintain our overweight
position in the coming months.
Also emphasized in the portfolio during the period were the dollar-bloc
markets of Australia, New Zealand, and Canada, which had lagged the U.S. market
early in 1995 and thus afforded relative value, in our opinion. Coincident with
declines in Europe, interest rates in the dollar bloc moved sharply lower during
the period, igniting bond market rallies. The Fund's weighting in Australia
(7.9% of portfolio holdings on December 31) was particularly beneficial as that
market returned 14.10%. In Canada, a referendum on Quebec sovereignty created
considerable uneasiness among investors early in the period, improving the yield
advantage of those bonds over U.S. Treasuries of equivalent maturity. We took
the opportunity to increase the Fund's holdings in Canadian government bonds to
a high of roughly 9% in late October. After the referendum was defeated (albeit
narrowly), Canadian bonds and the Canadian dollar staged an impressive rally,
with 10-year bonds gaining over 30 basis points (one basis point equals 1/100 of
a percentage point) and the currency rising over 2%. Given the political risk
remaining in Canada, we took profits on our Canadian holdings, trimming the
Fund's total exposure to 2.6% of the portfolio as of December 31.
The Fund's 14.1% weighting in Japan, while less than that of the benchmark
index, clearly hurt overall performance during the period. The Japanese are
committed to stimulating economic growth, and while they have yet to succeed,
even the possibility of stronger economic growth has been damaging to bond
market returns. At the same time, long-term bond yields have sunk so low
7
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
(to roughly 3%) that Japanese investors have begun investing outside Japan,
placing downward pressure on the yen. During the period, a much-anticipated
fiscal stimulus package was announced--larger than expected but lacking in
creativity--and investor disappointment also worked to drive the value of the
yen lower, from 80 to 102 yen per dollar, negatively affecting returns for U.S.
investors. Given this troubling set of circumstances, we expect to remain
underweight in Japan in the coming months.
While decreasing exposure to Japan, the Fund increased its exposure to the
emerging markets during the period, with new holdings in Argentina, Brazil,
Mexico, and Poland. The combined emerging markets exposure is small as a
percentage of portfolio assets (just 6.1% as of December 31) but provides
attractive appreciation potential, in our view. After a tumultuous few months in
early 1995, the countries of Latin America in particular have little choice but
to continue with economic and political reforms aimed at promoting internal
savings and improving credit ratings. In the meantime, these bonds can be
purchased at prices well below par value.
U.S. Dollar Rally Provides Opportunity
During the period, we continued to increase the Fund's exposure to foreign
currencies (roughly 80% on December 31). The U.S. dollar's rally--based in part
on the concerted effort of Japanese, German, and American central
bankers--provided an opportunity to sell dollar holdings on strength and
purchase currencies we believed were more reasonably valued. The Fund's
purchases in peripheral Europe, for example, were made with local currencies,
and exposure to the Japanese yen was increased based on the currency's lower
valuation in recent months.
Looking Ahead
The Fund began the period with a higher-than-average interest
rate exposure, aimed at maximizing bond market returns. After such
strong and sustained rallies in Europe and the dollar-bloc markets, we
reduced our interest rate exposure in November in an attempt to lessen
the impact of a market correction. In
8
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
retrospect, this shift was premature. The markets of Europe in particular
continued to rally through November and into December. We intend to increase our
interest rate exposure prudently as opportunities develop. Meanwhile, we are
optimistic that the recent flow of savings out of Japan--arguably the world's
biggest saver--will provide further fuel for bond markets around the world.
Sincerely,
Your Portfolio Management Team
/s/Adam M. Greshin /s/Margaret D. Hadzima
Adam M. Greshin Margaret D. Hadzima
9
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
INVESTMENT PORTFOLIO as of December 31, 1995
<TABLE>
<CAPTION>
% of Principal Market
Portfolio Amount Value ($)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
92.3% FOREIGN DENOMINATED DEBT OBLIGATIONS
AUSTRALIAN DOLLARS 7.9% AUD 10,150,000 Commonwealth of Australia, 9%, 9/15/04 ........ 7,926,413
14,825,000 Commonwealth of Australia, 10%, 10/15/07 ...... 12,417,408
9,285,000 Commonwealth of Australia, 12%, 11/15/01 ...... 8,200,550
8,080,000 Commonwealth of Australia, 12.5%, 9/15/97 ..... 6,493,537
19,300,000 New South Wales Treasury Bond, 6.5%, 5/1/06 ... 12,430,661
12,800,000 New South Wales Treasury Corp., 7.5%, 2/1/98 .. 9,527,070
-----------
56,995,639
-----------
BRITISH POUNDS 9.5% GBP 16,500,000 Abbey National Treasury Corp., 6%, 8/10/99 .... 24,755,796
14,660,000 United Kingdom Treasury Bond, 6.75%,
11/26/04 .................................... 21,789,122
13,000,000 United Kingdom Treasury Bond, 9.5%, 1/15/99 ... 21,778,839
-----------
68,323,757
-----------
CANADIAN DOLLARS 2.6% CAD 6,610,000 Government of Canada, 8.5%, 3/1/00 ............ 5,202,549
9,460,000 Government of Canada, 8.75%, 12/1/05 .......... 7,756,957
7,340,000 Mobil Oil Canada, Ltd., 8.125%, 1/20/98 ....... 5,549,605
-----------
18,509,111
-----------
DANISH KRONER 5.2% DKK 52,000,000 Kingdom of Denmark, 7%, 12/15/04 .............. 9,279,477
55,000,000 Kingdom of Denmark, 8%, 5/15/03 ............... 10,518,149
88,000,000 Kingdom of Denmark, 9%, 11/15/00 .............. 17,575,028
-----------
37,372,654
-----------
DEUTSCHEMARKS 15.8% DEM 6,600,000 Federal Republic of Germany, 6.25%, 1/4/24 .... 4,278,377
18,500,000 Federal Republic of Germany, 7%, 1/13/00 ...... 13,955,565
12,700,000 Federal Republic of Germany, 7.375%, 1/3/05 ... 9,649,192
39,800,000 Federal Republic of Germany, 8%, 1/21/02 ...... 31,191,266
68,000,000 Federal Republic of Germany, 8.375%, 5/21/01 .. 54,152,220
-----------
113,226,620
-----------
DUTCH GUILDERS 4.3% NLG 32,000,000 Government of the Netherlands, 6.5%, 4/15/03 .. 20,851,741
14,000,000 Government of the Netherlands, 7.75%, 1/15/00 . 9,611,940
-----------
30,463,681
-----------
FRENCH FRANCS 7.6% FRF 86,000,000 Government of France OAT, 5.5%, 4/25/04 ....... 16,346,398
76,000,000 Government of France OAT, 7.25%, 4/25/06 ...... 16,098,400
32,000,000 Government of France OAT, 8.5%, 3/28/00 ....... 7,165,026
70,800,000 Republic of Portugal, 7.7%, 6/7/05 ............ 15,115,255
-----------
54,725,079
-----------
ITALIAN LIRE 10.9% ITL 53,000,000,000 Republic of Italy, 8.5%, 8/1/99 ............... 31,649,811
52,800,000,000 Republic of Italy, 8.5%, 1/1/04 ............... 29,628,514
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ---
10
<PAGE>
INVESTMENT PORTFOLIO
<TABLE>
<CAPTION>
% of Principal Market
Portfolio Amount Value ($)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
27,070,000,000 Republic of Italy, 10.5%, 4/1/00 .............. 17,174,449
-----------
78,452,774
-----------
JAPANESE YEN 14.1% JPY 1,835,000,000 Export-Import Bank of Japan, 4.375%, 10/1/03 .. 19,439,642
700,400,000 International Bank for Reconstruction &
Development, 4.75%, 12/20/04 ................ 7,694,917
3,318,300,000 International Bank for Reconstruction &
Development, 5.25%, 3/20/02 ................. 37,107,836
867,000,000 Japan Development Bank, 6.5%, 9/20/01 ......... 10,183,477
2,250,000,000 Republic of Austria, 6.25%, 10/16/03 .......... 26,764,990
-----------
101,190,862
-----------
NEW ZEALAND
DOLLARS 5.4% NZD 12,200,000 Government of New Zealand, 6.5%, 2/15/00 ...... 7,715,621
45,075,000 Government of New Zealand, 8%, 11/15/06 ....... 31,081,833
-----------
38,797,454
-----------
SOUTH AFRICAN RANDS 1.1% SAR 32,350,000 Republic of South Africa, 12%, 2/28/05 ........ 7,870,310
-----------
SWEDISH KRONOR 7.9% SEK 86,300,000 Kingdom of Sweden, 6%, 2/9/05 ................. 11,008,508
29,000,000 Kingdom of Sweden, 10.25%, 5/5/00 ............. 4,681,445
181,300,000 Kingdom of Sweden, 10.25%, 5/5/03 ............. 30,048,600
70,000,000 Kingdom of Sweden, 11%, 1/21/99 ............... 11,322,230
-----------
57,060,783
-----------
TOTAL FOREIGN DENOMINATED DEBT
(Cost $652,056,430).......................... 662,988,724
-----------
7.6% U.S. DOLLAR DENOMINATED DEBT OBLIGATIONS
U. S. DOLLARS USD 13,250,000 Argentine Republic Floating Rate Note,
7.313%, 3/31/05 ............................. 9,440,625
3,191,000 Associates Corp. of North America,
Commercial Paper 5.954%, 1/2/96 ............. 3,191,000
6,250,000 Federative Republic of Brazil, 4.25%, 4/15/24 . 3,328,125
19,500,000 Republic of Poland, Past Due Interest Bond,
Step-Up Coupon, 3.75%, 10/27/14 ............. 12,723,750
19,000,000 Republic of Poland Collateralized Discount
Bond, LIBOR plus .8125%, 7.125%, 10/27/24 ... 14,321,250
5,000,000 United Mexican States, Collateralized Par
Bond, Series B, 6.25%, 12/31/19 ............. 3,281,250
7,000,000 U.S. Treasury Bill, 4.74%, 2/8/96 ............. 6,965,840
800,000 U.S. Treasury Bill, 5.14%, 5/9/96 ............. 785,864
200,000 U.S. Treasury Bill, 5.15%, 5/16/96 ............ 196,270
-----------
TOTAL U.S. DOLLAR DENOMINATED DEBT
(Cost $46,702,261) .......................... 54,233,974
-----------
TOTAL INVESTMENTS (Cost $698,758,691) ......... 717,222,698
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
---
11
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
<TABLE>
<CAPTION>
% of Principal Market
Portfolio Amount Value ($)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0.1% PURCHASED OPTIONS
AUD 16,250,000 Put on Australian Dollars, strike price
AUD .723, expiration date 2/1/96............. 16,193
DEM 62,270,000 Put on Deutschemarks, strike price DEM
1.4525, expiration date 1/26/96.............. 224,172
FRF 179,305,670 Put on French Francs, strike price FRF 5.0,
expiration date 2/1/96....................... 122,741
FRF 135,778,000 Put on French Francs, strike price
FRF 5.05, expiration date 3/1/96............. 135,180
FRF 267,525,000 Put on French Francs, strike price FRF 5.22,
expiration date 1/12/96...................... 268
JPY 2,931,519,600 Put on Japanese Yen, strike price
JPY 103.8, expiration date 1/29/96........... 269,034
NZD 50,755,000 Put on New Zealand Dollars, strike price
NZD .6365, expiration date 2/1/96............ 17,764
-----------
TOTAL PURCHASED OPTIONS (Cost $3,329,980)...... 785,352
-----------
- -----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $702,088,671) (a)...................... 718,008,050
===========
</TABLE>
(a) The cost for federal income tax purposes was
$703,037,862. At December 31, 1995, net unrealized
appreciation for all securities based on tax cost
was $14,970,188. This consisted of aggregate gross
unrealized appreciation for all securities in
which there was an excess of market value over tax
cost of $28,587,338 and aggregate gross unrealized
depreciation for all securities in which there was
an excess of tax cost over market value of
$13,617,150.
WRITTEN OPTIONS
At December 31, 1995, outstanding written options
were as follows (Note A):
<TABLE>
<CAPTION>
Principal
Amount Expiration Market
Call Options (000's) Date Strike Price Value ($)
---------------- ---------------------------------------------------------
<S> <C> <C> <C> <C>
GBP ............ 15,114 1/4/96 GBP 1.535 273,563
SEK ............ 52,552 1/8/96 SEK 6.676 64,549
SEK ............ 261,586 1/9/96 SEK 6.6365 230,588
ITL ............ 10,563,100 1/18/96 ITL 1590.75 29,577
DEM ............ 67,780 1/26/96 DEM 1.33 3,389
JPY ............ 2,931,520 1/29/96 JPY 107 53,339
-------
Total outstanding written options (Premiums received $1,712,382)..... 655,005
=======
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ---
12
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $698,758,691) (Note A) .... $717,222,698
Purchased options, at market (identified cost $3,329,980)
(Note A)........................................................... 785,352
Cash .............................................................. 797
Foreign currency at market (identified cost $235,452) (Note A) .... 236,445
Net receivable on closed forward currency exchange
contracts (Note A) .............................................. 252,554
Receivables:
Investments sold ................................................ 15,088,415
Interest ........................................................ 23,073,775
Fund shares sold ................................................ 474,712
Unrealized appreciation on forward currency exchange
contracts (Notes A & D) ......................................... 230,343
Other ............................................................. 11,234
------------
Total assets ................................................. 757,376,325
LIABILITIES
Payables:
Investments purchased ........................................... $12,796,346
Fund shares redeemed ............................................ 3,670,282
Dividends ....................................................... 891,114
Accrued management fee (Note C) ................................. 594,205
Other accrued expenses (Note C) ................................. 478,355
Written options at market (premiums received $1,712,382)
(Note A) ................................................ 655,005
Unrealized depreciation on forward currency exchange
contracts (Notes A & D) ....................................... 1,848,809
-----------
Total liabilities............................................. 20,934,116
------------
Net assets, at market value ....................................... $736,442,209
============
NET ASSETS
Net assets consist of:
Net unrealized appreciation (depreciation) on:
Investments ............................................. $ 18,464,007
Options ................................................. (1,487,251)
Foreign currency related transactions ................... (1,645,785)
Accumulated net realized loss ................................... (119,034,868)
Capital stock ................................................... 642,683
Additional paid-in capital ...................................... 839,503,423
------------
Net assets, at market value ....................................... $736,442,209
============
NET ASSET VALUE, offering and redemption price per share
($736,442,209 divided by 64,268,289 shares of capital stock
outstanding, $.01 par value, 200,000,000 shares of capital
stock authorized) ......................................... $ 11.46
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
---
13
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest (net of withholding taxes of $614,608) ................... $32,702,481
Expenses:
Management fee (Note C) ........................................... $ 3,522,478
Services to shareholders (Note C) ................................. 806,708
Custodian and accounting fees (Note C) ............................ 582,651
Directors' fees (Note C) .......................................... 24,092
Reports to shareholders ........................................... 136,658
Auditing .......................................................... 52,226
Legal ............................................................. 34,730
State registration ................................................ 22,248
Other ............................................................. 40,579 5,222,370
--------------------------
Net investment income ............................................. 27,480,111
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized gain (loss) from:
Investments ..................................................... 17,033,032
Options ......................................................... 5,654,967
Futures contracts ............................................... (17,037,434)
Foreign currency related transactions ........................... (11,670,551) (6,019,986)
------------
Net unrealized appreciation (depreciation) during the period on:
Investments ..................................................... (1,072,157)
Options ......................................................... 4,811,275
Foreign currency related transactions ........................... 3,641,137 7,380,255
--------------------------
Net gain on investment transactions ............................... 1,360,269
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .............. $ 28,840,380
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ---
14
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
DECEMBER 31, JUNE 30,
INCREASE (DECREASE) IN NET ASSETS 1995 1995
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .................................... $ 27,480,111 $ 92,566,481
Net realized loss from investment transactions ........... (6,019,986) (189,123,181)
Net unrealized appreciation on investment
transactions during the period ......................... 7,380,255 130,714,791
------------- --------------
Net increase in net assets resulting
from operations ........................................ 28,840,380 34,158,091
------------- --------------
Distributions to shareholders:
From net investment income ($.38 per share for
December 31, 1995) ................................... (27,480,111) --
------------- --------------
Tax return of capital ($.98 per share for June 30, 1995) -- (92,566,481)
------------- --------------
Fund share transactions:
Proceeds from shares sold ................................ 54,529,851 318,060,128
Net asset value of shares issued to shareholders
in reinvestment of distributions ....................... 25,031,487 72,680,706
Cost of shares redeemed .................................. (253,987,010) (653,886,791)
------------- --------------
Net decrease in net assets from Fund
share transactions ..................................... (174,425,672) (263,145,957)
------------- --------------
DECREASE IN NET ASSETS ................................... (173,065,403) (321,554,347)
Net assets at beginning of period ........................ 909,507,612 1,231,061,959
------------- --------------
NET ASSETS AT END OF PERIOD .............................. $ 736,442,209 $ 909,507,612
============= ==============
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period ................ 79,574,801 102,881,085
------------- --------------
Shares sold .............................................. 4,801,749 27,314,845
Shares issued to shareholders in reinvestment of
distributions .......................................... 2,195,150 6,274,380
Shares redeemed .......................................... (22,303,411) (56,895,509)
------------- --------------
Net decrease in Fund shares .............................. (15,306,512) (23,306,284)
------------- --------------
Shares outstanding at end of period ...................... 64,268,289 79,574,801
============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
---
15
<PAGE>
SCUDDER INTERNATIONAL BOND 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.
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 6, 1988
SIX MONTHS (COMMENCEMENT
ENDED YEARS ENDED JUNE 30, OF OPERATIONS)
DECEMBER 31, ----------------------------------------------------- TO JUNE 30,
1995 1995 1994(b) 1993 1992 1991 1990 1989
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $11.43 $11.97 $13.57 $13.68 $12.35 $12.08 $11.27 $12.00
------ ------ ------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income (a) ............ .38 .98 .92 1.03 1.08 1.21 1.10 1.00
Net realized and unrealized
gain (loss) on investment
transactions (c) ................... .03 (.54) (1.22) .52 2.15 .56 .80 (.73)
------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations ....... .41 .44 (.30) 1.55 3.23 1.77 1.90 .27
------ ------ ------ ------ ------ ------ ------ ------
Less distributions:
From net investment income ........... (.38) -- (.91) (1.04) (1.09) (1.21) (1.09) (1.00)
From net realized gains on investment
transactions ....................... -- -- -- (.62) (.81) (.29) -- --
In excess of net realized gains on
investment transactions ............ -- -- (.39) -- -- -- -- --
Tax return of capital ................ -- (.98) -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------
Total distributions .................... (.38) (.98) (1.30) (1.66) (1.90) (1.50) (1.09) (1.00)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ......... $11.46 $11.43 $11.97 $13.57 $13.68 $12.35 $12.08 $11.27
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%) ....................... 3.66** 3.92 (2.83) 12.24 28.25 14.88 17.59 2.16**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions) . 736 910 1,231 1,017 542 144 73 13
Ratio of operating expenses, net to
average net assets (%) (a) ........... 1.26* 1.30 1.27 1.25 1.25 1.25 1.25 1.00*
Ratio of net investment income to
average net assets (%) ............... 6.65* 8.52 6.86 7.69 8.31 9.48 9.57 8.58*
Portfolio turnover rate (%) ............ 236.39* 318.5 232.9 249.7 147.9 260.1 215.6 103.8*
(a) Reflects a per share amount of
expenses, exclusive of management
fees, reimbursed by the
Adviser of ....................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ .39
Reflects a per share amount of
management fee not imposed
by the Adviser of ................ $ -- $ -- $ -- $ .02 $ .04 $ .06 $ .10 $ .10
Operating expense ratio before
expense reductions (%) ........... -- -- 1.29 1.37 1.57 1.75 2.51 5.59*
</TABLE>
(b) Per share amounts have been calculated using weighted average shares
outstanding.
(c) Includes exchange gain (loss) of $.01, $.01 and ($.02) for the periods ended
June 30, 1991, 1990 and 1989, previously included in net investment income.
* Annualized
** Not annualized
- ---
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
A. SIGNIFICANT ACCOUNTING POLICIES
Scudder International Bond 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 prices 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. All other debt securities are valued at their fair value as
determined in good faith by the Valuation Committee of the Board of Directors.
Short-term investments having a maturity of sixty days or less are valued at
amortized cost.
OPTIONS. An option contract is a contract in which the writer of the option
grants the buyer of the option the right to purchase from (call option), or sell
to (put option), the writer a designated instrument at a specified price within
a specified period of time. Certain options, including options on indices, will
require cash settlement by the Fund if the option is exercised. During the
period, the Fund purchased put options on currencies and wrote call options on
securities and currencies primarily as a hedge against potential adverse price
movements in the value of portfolio assets. In addition, during the period, the
Fund purchased call options and wrote put options on currencies to lock in the
exchange rate component of the purchase price of securities expected to be
purchased in the near future and to enhance potential gain.
If the Fund writes an option and 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 Fund elects to close out the
option it would recognize a gain or loss based on the difference between the
cost of closing the option and the initial premium received. If the Fund
purchased an option and allows the option to expire it would realize a loss to
the extent of the premium paid. If the Fund elects to close out the option it
would recognize a
---
17
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
gain or loss equal to the difference between the cost of acquiring the option
and the amount realized upon the sale of the option.
The gain or loss recognized by the Fund upon the exercise of a written call or
purchased put option is adjusted for the amount of option premium. If a written
put or purchased call option is exercised the Fund's cost basis of the acquired
security or currency would be the exercise price adjusted for the amount of the
option premium.
The liability representing the Fund's obligation under an exchange traded
written option or investment in a purchased option is valued at the last sale
price or, in the absence of a sale, the mean between the closing bid and asked
price or at the most recent asked price (bid for purchased options) if no bid
and asked price are available. Over-the-counter written or purchased options are
valued using dealer supplied quotations.
When the Fund writes a covered call option, the Fund foregoes, in exchange for
the 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. When the Fund writes a put option it accepts the risk of a decline in the
market value of the underlying security or currency below the exercise price.
Over-the-counter options have the risk of the potential inability of
counterparties to meet the terms of their contracts. The Fund's maximum exposure
to purchased options is limited to the premium initially paid. In addition,
certain risks may arise upon entering into option contracts including the risk
that an illiquid secondary market will limit the Fund's ability to close out an
option contract prior to the expiration date and, that a change in the value of
the option contract may not correlate exactly with changes in the value of the
securities or currencies hedged.
FUTURES CONTRACTS. A futures contract is an agreement between a buyer or seller
and an established futures exchange or its clearinghouse in which the buyer or
seller agrees to take or make a delivery of a specific amount of an item at a
specified price on a specific date (settlement date). During the period, the
Fund purchased interest rate futures to manage the duration of the portfolio. In
addition, the Fund sold interest rate futures to hedge against declines in the
value of portfolio securities.
Upon entering into a futures contract, the Fund is required to deposit with a
financial intermediary an amount ("initial margin") equal to a
- ---
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
certain percentage of the face value indicated in the futures contract.
Subsequent payments ("variation margin") are made or received by the Fund each
day, dependent on the daily fluctuations in the value of the underlying
security, and are recorded for financial reporting purposes as unrealized gains
or losses by the Fund. When entering into a closing transaction, the Fund will
realize a gain or loss equal to the difference between the value of the futures
contract to sell and the futures contract to buy. Futures contracts are valued
at the most recent settlement price.
Certain risks may arise upon entering into futures contracts including the risk
that an illiquid secondary market will limit the Fund's ability to close out a
futures contract prior to the settlement date and that a change in the value of
a futures contract may not correlate exactly with changes in the value of the
securities or currencies hedged. When utilizing futures contracts to hedge the
Fund gives up the opportunity to profit from favorable price movements in the
hedged positions during the term of the contract.
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 rates of exchange prevailing on the respective
dates of such transactions.
The Fund does not isolate that portion of gains and losses on investments which
is due to changes in foreign exchange rates from that which is due to changes in
market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments.
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.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward foreign currency exchange
contract (forward contract) is a commitment to purchase or sell a foreign
currency at the settlement date at a
---
19
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
negotiated rate. During the period, the Fund utilized forward contracts as a
hedge in connection with portfolio purchases and sales of securities denominated
in foreign currencies and as a hedge against changes in exchange rates relating
to foreign currency denominated assets.
Forward contracts are valued at the prevailing forward exchange rate of the
underlying currencies and unrealized gain/loss is recorded daily. Forward
contracts having the same settlement date and broker are offset and any gain
(loss) is realized on the date of offset; otherwise, gain (loss) is realized on
settlement date. Realized and unrealized gains and losses which represent the
difference between the value of the forward contract to buy and the forward
contract to sell are included in net realized and unrealized gain (loss) from
foreign currency related transactions.
Certain risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contracts. Additionally,
when utilizing forward contracts to hedge the Fund gives up the opportunity to
profit from favorable exchange rate movements during the term of the contract.
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 June 30, 1995, the Fund had a net tax basis capital
loss carryforward of approximately $77,681,000, which may be applied against any
realized net taxable capital gains of each succeeding year until fully utilized
or until June 30, 2003, whichever occurs first. In addition, from November 1,
1994 through June 30, 1995, the Fund incurred $26,583,252 of net realized
capital losses and $23,044,146 of net realized currency losses. As permitted by
tax regulations, the Fund intends to elect to defer $26,583,252 of net realized
capital losses and $5,541,013 of net realized currency losses and treat them as
arising in the fiscal year ended June 30, 1996.
DISTRIBUTION OF INCOME AND GAINS. Distribution of net investment income is
declared as a dividend to shareholders of record as of the close of business
each day and is distributed to shareholders monthly. During any particular year
net realized gains and certain unrealized gains (which for federal income tax
reporting purposes may be
- ---
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
considered realized) 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. Distributions of net realized gains to shareholders are recorded on
the ex-dividend date.
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 investments in options, futures, forward
contracts, 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. It appears likely that a portion of the Fund's
income distributions for the fiscal year ending June 30, 1996 will be treated as
a non-taxable return of capital.
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
OTHER. Investment security transactions are accounted for on a trade date basis.
Interest income is recorded on the accrual basis. All discounts are accreted for
both tax and financial reporting purposes.
B. PURCHASES AND SALES OF SECURITIES
For the six months ended December 31, 1995, purchases and sales of investment
securities (excluding short-term investments) aggregated $915,481,032, and
$1,058,863,377, respectively.
The aggregate face value of futures contracts opened and closed during the six
months ended December 31, 1995 was $7,277,521,985 and $7,277,521,985,
respectively.
---
21
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
Transactions in written options for the six months ended December 31, 1995 are
summarized as follows:
<TABLE>
<CAPTION>
OPTION CONTRACTS OPTIONS ON CURRENCIES (000 OMITTED)
------------------------- ---------------------------------------
NUMBER OF PREMIUMS PREMIUMS
CONTRACTS RECEIVED ($) DEM FRF RECEIVED ($)
------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
Beginning of
Period ..... -- $ -- 51,803 241,600 $ 851,774
Written ..... 417 386,768 192,076 -- 2,070,803
Closed ...... (417) (386,768) (176,099) -- (1,964,100)
Exercised ... -- -- -- -- --
Expired ..... -- -- -- (241,600) (436,571)
---- --------- -------- -------- -----------
End of
Period ...... -- $ -- 67,780 -- $ 521,906
==== ========= ======== ======== ===========
<CAPTION>
OPTIONS ON CURRENCIES (000 OMITTED) (CONTINUED)
--------------------------------------------------------------------
PREMIUMS
GBP ITL JPY SEK RECEIVED ($)
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Beginning of
Period ...... 11,773 -- 2,219,500 273,521 $ 1,208,470
Written ..... 15,114 209,863,100 19,803,434 810,985 6,351,338
Closed ...... -- (99,650,000) (19,091,414) (544,847) (5,050,988)
Exercised ... (11,773) (99,650,000) -- (225,521) (1,318,344)
Expired ..... -- -- -- -- --
------- ----------- ----------- -------- -----------
End of
Period ...... 15,114 10,563,100 2,931,520 314,138 $ 1,190,476
======= =========== =========== ======== ===========
</TABLE>
- --
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
C. RELATED PARTIES
Under the Investment Management Agreement (the "Management Agreement") with
Scudder, Stevens & Clark, Inc. (the "Adviser") the Adviser directs the
investments of the Fund in accordance with its investment objective, 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 Management Agreement. The
management fee payable under the Management Agreement is equal to an annual rate
of 0.85% on the first $1,000,000,000 of average daily net assets and 0.80% of
such net assets in excess of $1,000,000,000, computed and accrued daily and
payable monthly. For the six months ended December 31, 1995, the fee pursuant to
both the Management Agreement and the Agreement amounted to $3,522,478, which is
equivalent to an annual effective rate of 0.85% of the Fund's average daily net
assets.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended December 31, 1995, the amount charged by SSC aggregated
$579,176, of which $106,417 is unpaid at December 31, 1995.
Effective August 3, 1995, Scudder Fund Accounting Corporation ("SFAC"), a
subsidiary of the Adviser, assumed responsibility for determining the daily net
asset value per share and maintaining the portfolio and general accounting
records of the Fund. For the six months ended December 31, 1995, the amount
charged to the Fund by SFAC aggregated $228,446, of which $42,171 is unpaid at
December 31, 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 December 31, 1995, Directors' fees and expenses aggregated $24,092.
---
23
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
D. COMMITMENTS
As of December 31, 1995, the Fund had entered into the following forward
currency exchange contracts resulting in net unrealized depreciation of
$1,618,466.
<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION
(DEPRECIATION)
CONTRACTS TO DELIVER IN EXCHANGE FOR SETTLEMENT DATE (U.S.$)
- --------------------- -------------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
AUD 10,880,272 JPY 807,061,618 1/10/96 (264,849)
DEM 22,447,000 ECU 12,261,263 1/10/96 53,016
DEM 8,433,380 GBP 3,796,639 1/10/96 19,863
ECU 9,320,000 DEM 16,949,119 1/10/96 (119,073)
GBP 3,770,369 DEM 8,433,380 1/10/96 (1,359)
ECU 2,941,263 DEM 5,299,541 1/10/96 (40,851)
DKK 43,904,995 JPY 807,061,618 1/10/96 (73,318)
FRF 76,662,392 JPY 1,568,665,875 1/10/96 (440,198)
GBP 5,120,353 JPY 802,333,646 1/10/96 (171,317)
GBP 3,821,383 JPY 603,998,676 1/10/96 (77,444)
JPY 1,614,123,236 ECU 12,345,205 1/10/96 148,803
ECU 12,345,205 JPY 1,620,785,635 1/10/96 (84,304)
AUD 742,776 USD 557,082 1/16/96 5,766
AUD 36,494,573 USD 27,078,973 1/24/96 2,895
USD 7,494,000 JPY 758,415,282 2/20/96 (107,875)
USD 7,494,000 JPY 763,721,034 2/20/96 (56,203)
USD 21,600,495 JPY 2,175,655,901 2/20/96 (412,018)
----------
(1,618,466)
==========
</TABLE>
E. LETTER OF CREDIT
The Fund and several affiliated Funds ("The Participants") share in a $500
million revolving credit facility for temporary or emergency purposes, including
the meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 33 percent of its net assets under the agreement. In addition, the
Fund also maintains an uncommitted line of credit.
- ---
24
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE DIRECTORS OF SCUDDER GLOBAL FUND, INC. AND TO THE SHAREHOLDERS OF SCUDDER
INTERNATIONAL BOND FUND:
We have audited the accompanying statement of assets and liabilities of Scudder
International Bond Fund including the investment portfolio, as of December 31,
1995, and the related statement of operations for the six-month period then
ended, the statements of changes in net assets for the six-month period then
ended and for the year ended June 30, 1995, and the financial highlights for the
six-month period ended December 31, 1995, for each of the six years in the
period ended June 30, 1995 and for the period July 6, 1988 (commencement of
operations) to June 30, 1989. 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
December 31, 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 International Bond Fund as of December 31, 1995, the results of its
operations for the six month period then ended, the changes in its net assets
for the six-month period then ended and for the year ended June 30, 1995, and
the financial highlights for the six months ended December 31, 1995, for each of
the six years in the period ended June 30, 1995 and for the period July 6, 1988
(commencement of operations) to June 30, 1989, in conformity with generally
accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
February 12, 1996
---
25
<PAGE>
SCUDDER INTERNATIONAL BOND FUND
TAX INFORMATION
By now shareholders to which year-end tax reporting is required by the IRS
should have received their Form 1099-DIV and tax information letter form the
Fund. For corporate shareholders no amount of the income dividends paid by the
Fund qualified for the dividends received deduction.
In many states the amount of income distributed to you by the Fund which is
derived from obligations of the U.S. Government may be exempt from state and
local income taxes. Of the income dividends paid by the Fund for its calendar
year ended December 31, 1995, 0.61% was derived from direct obligations of the
U.S. Government.
Please consult a tax adviser if you have any questions about federal or state
income tax laws, or on how to prepare your tax returns. If you have specific
questions about your Scudder Fund account, please call a Scudder Investor
Relations Representative at 1-800-225-5163.
- ---
26
(This page intentionally left blank.)
27
<PAGE>
(This page intentionally left blank.)
28
<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
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
Daniel Pierce*
Director and Vice President
Robert G. Stone, Jr.
Honorary Director; Chairman of the Board and Director, Kirby Corporation
Robert W. Lear
Honorary Director; Executive-in-Residence, Visiting Professor,
Columbia University Graduate School of Business
Adam M. Greshin*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
David S. Lee*
Vice President and Assistant Treasurer
Douglas M. Loudon*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Gerald J. Moran*
Vice President
Edward J. O'Connell*
Vice President and Assistant Treasurer
Juris Padegs*
Vice President and Assistant Secretary
Kathryn L. Quirk*
Vice President and Assistant Secretary
Cornelia M. Small*
Vice President
Isabel Saltzman*
Vice President
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
29
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PRODUCTS AND SERVICES
- --------------------------------------------------------------------------------
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 Global Bond Fund
Tax Free Money Market+ Scudder GNMA Fund
Scudder Tax Free Money Fund Scudder Income Fund
Scudder California Tax Free Money Fund* Scudder International Bond Fund
Scudder New York Tax Free Money Fund* Scudder Short Term Bond 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 Small Company Value Fund
Scudder Growth and Income Fund Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
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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#
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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
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Scudder Institutional Fund, Inc. Scudder Treasurers Trust(TM)++
Scudder Fund, Inc.
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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
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For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For personalized information about your Scudder accounts;
exchanges and redemptions; or information on any Scudder fund
SCUDDER AUTOMATED INFORMATION LINE (SAIL)
1-800-343-2890
Investment Information
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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
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THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Or stop by a Scudder Funds Center
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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
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For information on Scudder For information on Scudder
Treasurers Trust,(TM) an institutional Institutional Funds,* funds
cash management service for designed to meet the broad
corporations, non-profit investment management and
organizations and trusts that uses service needs of banks and
certain portfolios of Scudder Fund, other institutions, call
Inc.* ($100,000 minimum), call 1-800-854-8525.
1-800-541-7703.
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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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Celebrating Over 75 Years of Serving Investors
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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 37 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.
