Scudder
Global Bond Fund
Semiannual Report
April 30, 1997
Pure No-Load(TM) Funds
A fund which seeks total return with an emphasis on current income by investing
primarily in high-grade bonds denominated in foreign currencies and the U.S.
dollar. Capital appreciation is a secondary objective.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER
[LOGO]
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
9 Investment Portfolio
14 Financial Statements
17 Financial Highlights
18 Notes to Financial Statements
24 Report of Independent Accountants
25 Investment Products and Services
26 Scudder Solutions
In Brief
o Reflecting a difficult environment for U.S. investors in foreign fixed-income
securities, Scudder Global Bond Fund provided a total return of negative 4.47%
for the six-month period ended April 30, 1997, roughly in keeping with the
Salomon World Government Bond Index.
o For most of the period since the October 31 end of the Fund's fiscal year,
global currency markets witnessed a strongly-rising U.S. dollar. The Fund has
implemented a quantitative approach designed to limit the short-term impact of
such currency fluctuations.
o As of the end of the period, approximately half of the Fund's assets were
invested in the fixed-income markets of established Western European economies;
the Fund has also built a core position in higher-yielding, short-term emerging
market securities.
2-SCUDDER GLOBAL BOND FUND
<PAGE>
Letter From the Fund's Chairman
Dear Shareholders,
We are pleased to present the semiannual report for Scudder Global Bond
Fund for the period ended April 30, 1997. As outlined in the portfolio
management discussion that follows, the six months covered by this report were
difficult ones for U.S. investors in overseas fixed-income securities, as
interest rate uncertainties and a rising dollar combined to produce total
returns that were negative in many cases. We believe, however, that Scudder
Global Bond Fund remains an appropriate vehicle for investors seeking valuable
exposure to the opportunities for income and capital appreciation to be found in
the world's fixed-income markets.
As outlined in a special letter sent in April to all Fund shareholders,
Gary P. Johnson, a Managing Director of Scudder Global Bond Fund's investment
adviser, Scudder, Stevens & Clark, Inc., assumed the responsibility of Lead
Portfolio Manager for the Fund during the period. Gary, who joined Scudder in
1987, has broad experience as Research Director of Scudder's Global Bond Group.
Scudder Global Bond Fund's objectives remain the same: to earn attractive income
from high quality bonds around the world, while also seeking to provide the
potential for capital appreciation through careful management of the Fund's
exposure to bond markets, currencies, and interest rates. Recognizing that most
shareholders would prefer to limit their exposure to currency risk, we are
applying a dynamic, quantitative approach to managing the impact on the Fund's
share price of a fluctuating dollar.
For those of you who are interested in new products and services, we
recently introduced the Scudder Pathway Series. Pathway simplifies investing
through the `fund of funds' approach, offering four distinct portfolios:
Conservative, Balanced, Growth, and International. Each portfolio invests in a
select mix of Scudder Funds, providing flexibility, diversification, and
simplicity for regular and retirement plan investors. For more complete
information on Scudder products and services, please turn to page 25.
Thank you for your continued investment in Scudder Global Bond Fund. If you
have questions about your account, please call our Investor Relations
representatives at 1-800-225-2470; they will be happy to assist you. You can
also obtain information by visiting our Internet web site at
http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
Chairman
Scudder Global Bond Fund
3-SCUDDER GLOBAL BOND FUND
<PAGE>
PERFORMANCE UPDATE as of April 30, 1997
- ----------------------------------------------------------------
FUND INDEX COMPARISONS
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
4/30/97 $10,000 Cumulative Annual
- --------------------------------------------
SCUDDER EMERGING MARKETS GROWTH FUND
- --------------------------------------------
1 Year $ 10,097 .97% .97%
5 Year $ 11,596 15.96% 3.01%
Life of Fund* $ 12,870 28.70% 4.17
- --------------------------------------------
SALOMON BROTHERS WORLD GOVERNMENT BOND INDEX
- --------------------------------------------
1 Year $ 10,075 .75% .75%
5 Year $ 14,733 47.33% 8.05%
Life of Fund* $ 16,808 68.08% 8.90%
- --------------------------------------------
*The Fund commenced operations on March 1, 1991.
Index comparisons begin March 31, 1991.
- ----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- ----------------------------------------------------------------
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 April 30
SALOMON BROTHERS WORLD
GOVERNMENT BOND INDEX
Year Amount
- ----------------------
3/91* $10,000
'91 $10,154
'92 $11,408
'93 $13,304
'94 $14,028
'95 $16,202
'96 $16,682
'97 $16,808
SCUDDER GLOBAL BOND FUND
Year Amount
- ----------------------
3/91* $10,000
'91 $10,072
'92 $11,087
'93 $11,859
'94 $12,169
'95 $12,282
'96 $12,733
'97 $12,856
SALOMON BROTHERS CURRENCY-
HEDGED WORLD GOVERNMENT
BOND INDEX (1-3 YEARS)**
Year Amount
- ----------------------
3/91* $10,000
'91 $10,075
'92 $10,896
'93 $11,702
'94 $12,058
'95 $12,748
12/95 $13,625
IFC Emerging Markets Investable Index is an unmanaged capitalization weighted
measure of stock markets in the emerging markets countries worldwide. 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.
<TABLE>
<CAPTION>
1991* 1992 1993 1994 1995 || 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE........... $11.93 $11.95 $11.72 $11.12 $10.39 || $10.00 $ 9.51
INCOME DIVIDENDS.......... $ .17 $ 1.14 $ 1.01 $ .91 $ . 84 || $ .76 $ .60
CAPITAL GAINS ||
DISTRIBUTIONS............. $ -- $ -- $ .02 $ -- $ -- || $ -- $ --
FUND TOTAL RETURN (%)**... .83 10.08 6.97 2.61 .93 || 3.67 .97
INDEX TOTAL RETURN (%).... .75 8.15 7.40 3.04 5.72 || 2.97 .75
</TABLE>
On December 27, 1995, the Fund adopted its current name and objectives.
Prior to that date, the Fund was known as the Scudder Short Term Global Income
Fund and its investment objective was to provide high current income through
short-term instruments. Since adopting its current objectives, the cumulative
return is -2.12.
** Prior to December 27, 1995, the Salomon Brothers Currency-Hegded World
Government bond Index (1-3 years) was used as a comparative index.
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 total returns for the Fund for the one year, five year, and
life of Fund periods would have been lower.
4 - SCUDDER GLOBAL BOND FUND
<PAGE>
PORTFOLIO SUMMARY as of April 30, 1997
- ---------------------------------------------------------------------------
GEOGRAPHICAL EXPOSURE
- ---------------------------------------------------------------------------
U.S. 18.5%
Germany 11.4%
Italy 10.1%
U.K. 9.1%
France 8.6%
Australia 4.7%
Japan 4.3%
Canada 4.0%
New Zealand 3.9%
Ireland 3.4%
Supranational 3.2%
Sweden 3.1%
Spain 2.1%
Norway 1.9%
Philippines 1.5%
Egypt 1.3%
Indonesia 1.3%
Greece 1.2%
Poland 1.1%
Other 5.3%
- ------------------------------------
100%
- ------------------------------------
Fund assets are broadly
diversified among world bond
markets.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
INTEREST RATE EXPOSURE
- --------------------------------------------------------------------------
U.S. 19.6%
Germany 11.4%
Italy 10.1%
U.K. 9.1%
France 8.6%
Japan 8.5%
New Zealand 5.0%
Australia 4.7%
Canada 4.0%
Ireland 3.4%
Sweden 3.2%
Norway 1.9%
Philippines 1.5%
Egypt 1.3%
Indonesia 1.3%
Greece 1.2%
Poland 1.1%
South Africa 1.1%
Denmark 1.1%
Other 1.9%
- ------------------------------------
100%
- ------------------------------------
We have taken a somewhat
defensive strategy with respect to
interest rate risk.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
CURRENCY EXPOSURE
- --------------------------------------------------------------------------
Australia 1.2%
Canada 2.7%
Chile 0.7%
Czech Republic 0.5%
Egypt 1.3%
El Salvador 0.4%
France 8.6%
Germany 6.2%
Greece 1.2%
Indonesia 0.6%
Ireland 3.4%
Italy 5.3%
Japan 10.8%
New Zealand 1.5%
Philippines 1.5%
Poland 1.2%
South Africa 1.1%
Sweden 1.9%
Thailand 1.2%
U.K. 5.3%
U.S. 43.4%
- ------------------------------------
100%
- ------------------------------------
Exposure to the U.S. Dollar was
increased slightly towards the end
of the period.
(a) Currency exposure after taking into account the effects of foreign currency
options, futures, and forward contracts.
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 - SCUDDER GLOBAL BOND FUND
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Reflecting a difficult environment for U.S. investors in foreign fixed-income
securities, Scudder Global Bond Fund provided a total return of -4.47% for the
six-month period ended April 30, 1997. The Salomon World Government Bond Index
(unhedged) returned -4.50% for the same period. For the 12 months through the
end of April, the Fund returned a positive 0.97%, versus 0.75% for the Index. As
of April 30, the Fund's 30-day net yield stood at 6.03%.
Scudder Global Bond Fund seeks total return with an emphasis on current income
through investing in high-grade bonds denominated in foreign currencies and the
U.S. dollar, while also seeking capital appreciation by actively managing the
portfolio's currency, bond market, and maturity exposure. The Fund has a minimum
15% allocation to U.S. bonds.
A Rising Dollar Reduces
Returns to U.S. Investors
For most of the period since the October 31 end of the Fund's fiscal year,
global currency markets witnessed a strongly-rising U.S. dollar. Currency
exchange rate changes are one of the risks of international investing, and can,
in fact, have as significant an impact on returns to U.S. holders of foreign
bonds as interest rates and security selection. A rising dollar, such as we have
experienced in the early part of 1997, can reduce returns to U.S. investors in
overseas markets, since it makes holdings of securities denominated in foreign
currencies worth fewer dollars. (By the same token, a falling dollar relative to
foreign currencies may enhance returns to U.S. investors.) For much of the
period, the Fund's exposure to foreign currencies reduced returns in view of the
dollar's rise.
We are currently using a quantitative approach designed to keep the short-term
impact on the Fund of a fluctuating dollar within a relatively narrow range,
while also seeking to minimize the expense of managing currency risk. The
majority of the portfolio's exposure to major foreign markets is being managed
to maintain in effect a currency "put option" -- which allows the holder to lock
in the ability to exchange a foreign currency for U.S. dollars at a
predetermined rate. Our goal is to limit significantly the potential negative
impact on the Fund's share price from a strengthening of the dollar, while
allowing for appreciation potential should the dollar fall. Rather than making
longer-term commitments based on the fundamental outlook for a given market's
currency, the Fund's exposures are adjusted on an ongoing basis with movements
in U.S. and foreign currencies. In view of the dollar's strengthening over the
early part of 1997, this "dynamic" approach to managing currency risk resulted
in our increasing somewhat portfolio exposure to changes in the level of the
dollar relative to foreign currencies at the end of the period.
Seeking Attractive Bond
Markets and Yields
Allocation of portfolio assets among the major world bond markets based on
rigorous fundamental research is central to the Fund's pursuit of current income
and competitive total returns. In addition to the rising dollar, overseas
6-SCUDDER GLOBAL BOND FUND
<PAGE>
fixed-income markets -- which are often highly responsive to developments in our
own economy and bond market -- have faced continuing uncertainties regarding the
future direction of U.S. interest rates, including the potential for the Federal
Reserve to implement additional increases in short-term rates. European markets
in particular were hurt by weakness in the United States towards the end of the
period. Given this somewhat unsettled backdrop, we have taken steps to broaden
diversification across global bond markets, with a focus on increasing the
Fund's yield.
As of the end of the period, approximately half of the Fund's assets were
invested in the fixed-income markets of the established Western European
economies. Preparation for European Monetary Union (EMU) has imposed fiscal and
monetary discipline on these countries and has been a dominant factor in the
bond markets. In particular, our holdings in Spain have benefited from the
increased likelihood that that country will qualify for participation in the
first round of EMU.
The dollar-bloc countries of Australia, New Zealand, and Canada were
overweighted versus the Fund's benchmark index at roughly 13% of assets.
Fixed-income instruments in these countries offer a yield advantage over other
major markets. Additionally, the dollar-denominated currencies are negatively
correlated with European currencies, assisting our efforts to manage currency
exposure.
Exposure to Japan, where yields have been at very low levels, was modest at the
end of April. Recently, Japanese rates have edged up, although they remain well
below other world markets. In view of the uncertainties surrounding possible Fed
action to increase U.S. interest rates, the Fund is also underweighted relative
to its benchmark index in domestic securities, at approximately 20% of assets.
Given the relatively low prevailing yields offered by fixed-income securities in
developed countries, the Fund has built a core position in emerging market money
market securities, which stood at around 8% of assets at the end of April. Such
securities offer a substantial yield advantage versus debt offerings in
established economies, as well as less interest rate risk due to their short
duration. Emerging market holdings are spread among Pacific Basin, Latin
American, and Central European countries, and the highest portfolio
concentration in any one of these markets will generally be in the 1% range.
This broad diversification is designed to help reduce the risks of investing in
emerging market securities.
With interest rates in the developed economies at relatively low levels, in our
view there is the potential for rising rates and falling bond prices in the
major markets. Moreover, the interest rate differential in favor of dollar
assets has been the primary support for the dollar's rise. As other central
banks begin tightening monetary policy, this will put pressure on global bond
markets. Accordingly, we have taken a somewhat defensive strategy with respect
to interest rate risk, maintaining an overall portfolio duration below that of
the Fund's benchmark index.
7-SCUDDER GLOBAL BOND FUND
<PAGE>
Scudder Global Bond Fund remains an appropriate vehicle for investors seeking
exposure to the potential for solid income and total returns offered by overseas
bond markets, as well as added portfolio diversification. We thank you for your
continued investment, and encourage you to call Scudder Investor Relations at
1-800-225-2470 with any questions.
Sincerely,
Your Portfolio Management Team
/s/Gary P. Johnson /s/Adam M. Greshin
Gary P. Johnson Adam M. Greshin
/s/Christopher B. Steward
Christopher B. Steward
8-SCUDDER GLOBAL BOND FUND
<PAGE>
Investment Portfolio as of April 30, 1997
<TABLE>
<CAPTION>
Principal Market
Amount Value ($)
- -------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements 0.5%
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Dollars
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 4/30/97 at 5.375%, to be
repurchased at $772,115 on 5/1/97, collateralized by a $772,000 U.S. Treasury ------------
Bond, 5.75%, 12/31/98 (Cost $772,000) .................................................... 772,000 772,000
------------
Foreign Denominated Debt Obligations 80.0%
- -------------------------------------------------------------------------------------------------------------------------------
Australian Dollars 4.6%
Commonwealth of Australia, 13%, 7/15/00 .................................................... 3,900,000 3,574,284
Commonwealth of Australia, 9.5%, 8/15/03 ................................................... 2,315,000 1,982,142
Commonwealth of Australia, 10%, 2/15/06 .................................................... 2,010,000 1,785,957
------------
7,342,383
------------
British Pounds 9.0%
United Kingdom Treasury Bond, 8%, 12/7/00 .................................................. 2,350,000 3,925,138
United Kingdom Treasury Bond, 9.75%, 8/27/02 ............................................... 1,845,000 3,318,412
United Kingdom Treasury Bond, 7.25%, 12/7/07 ............................................... 4,420,000 7,077,700
------------
14,321,250
------------
Canadian Dollars 4.0%
Government of Canada, 6.5%, 6/1/04 ......................................................... 5,830,000 4,192,785
Rogers Cantel Mobile Communications Inc., 10.5%, 6/1/06 .................................... 2,600,000 2,067,609
------------
6,260,394
------------
Chilean Pesos 0.7%
Citibank Time Deposit, 10%, 8/11/97 ........................................................ 458,700,000 1,094,280
------------
Czech Koruna 0.5%
Credit Suisse First Boston Time Deposit, 11.9%, 5/21/97 .................................... 26,228,682 847,864
------------
Danish Kroner 1.1%
Kingdom of Denmark, 8%, 5/15/03 ............................................................ 9,840,000 1,659,473
------------
Deutsche Marks 11.3%
Federal Republic of Germany, 8.875%, 12/20/00 .............................................. 11,100,000 7,375,400
Federal Republic of Germany, 6%, 2/16/06 ................................................... 9,270,000 5,463,281
Treuhandanstalt, 5%, 1/14/99 ............................................................... 8,570,000 5,069,564
------------
17,908,245
------------
Egyptian Pounds 1.3%
Citibank Time Deposit, 9%, 7/7/97 .......................................................... 1,695,000 499,750
Citibank Time Deposit, 9.25%, 8/4/97 ....................................................... 2,206,100 650,325
Citibank Time Deposit, 9.3%, 8/12/97 ....................................................... 2,884,050 850,255
------------
2,000,330
------------
</TABLE>
The accompanying notes are an integral part of the financial statements
9-SCUDDER GLOBAL BOND FUND
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount Value ($)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
El Salvadoran Colon 0.4%
Citibank Time Deposit, 9.75%, 5/27/97 ................................................... 4,897,530 559,541
------------
French Francs 8.5%
Government of France OAT, 8.5%, 11/25/02 ................................................ 8,200,000 1,650,128
Government of France OAT STRIP, Principal only, 10/25/04 ................................ 30,400,000 3,477,652
Government of France OAT, 7.25%, 4/25/06 ................................................ 21,750,000 4,169,045
Government of France OAT, 8.5%, 4/25/23 ................................................. 19,600,000 4,188,976
------------
13,485,801
------------
Greek Drachmas 1.2%
Bankers Trust Co. Time Deposit, 9.31%, 5/14/97 .......................................... 121,320,000 441,517
Credit Suisse First Boston Time Deposit, 11.35%, 5/14/97 ................................ 267,000,000 971,686
Deutsche Bank Time Deposit, 9.45%, 5/14/97 .............................................. 121,855,500 443,466
------------
1,856,669
------------
Indonesian Rupiah 1.3%
J.P. Morgan & Co. Time Deposit, 11.35%, 6/11/97 ......................................... 4,812,000,000 1,978,036
------------
Irish Pounds 3.4%
Republic of Ireland, 8%, 10/18/00 ....................................................... 2,580,000 4,105,057
Republic of Ireland, 8%, 8/18/06 ........................................................ 760,000 1,236,232
------------
5,341,289
------------
Italian Lire 10.0%
Republic of Italy, 8.5%, 8/1/99 ......................................................... 15,835,000,000 9,533,869
Republic of Italy, 8.5%, 1/1/04 ......................................................... 10,340,000,000 6,359,682
------------
15,893,551
------------
Japanese Yen 8.4%
European Investment Bank, 3%, 9/20/06 ................................................... 400,000,000 3,264,914
Japan Development Bank, 2.875%, 12/20/06 ................................................ 840,000,000 6,780,954
Kingdom of Spain, 3.1%, 9/20/06 ......................................................... 400,000,000 3,269,322
------------
13,315,190
------------
New Zealand Dollars 5.0%
Government of New Zealand, 10%, 7/15/97 ................................................. 2,480,000 1,729,366
Government of New Zealand, 6.5%, 2/15/00 ................................................ 6,600,000 4,450,436
International Bank for Reconstruction & Development, 9%, 7/8/99 ......................... 2,400,000 1,695,510
------------
7,875,312
------------
Norwegian Kroner 1.9%
Kingdom of Norway, 9.5%, 10/31/02 ....................................................... 9,300,000 1,562,245
Kingdom of Norway, 6.75%, 1/15/07 ....................................................... 10,265,000 1,505,451
------------
3,067,696
------------
</TABLE>
The accompanying notes are an integral part of the financial statements
10-SCUDDER GLOBAL BOND FUND
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount Value ($)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Philippine Pesos 1.5%
J.P. Morgan & Co. Time Deposit, 8.85%, 5/29/97 ............................................. 61,285,724 2,322,812
------------
Polish Zlotys 1.1%
ING Groep NV Time Deposit, 20.15%, 5/6/97 .................................................. 5,714,179 1,804,800
------------
South African Rands 1.1%
J.P. Morgan & Co. Time Deposit, 16.25%, 6/11/97 ............................................ 7,799,750 1,753,541
------------
Swedish Kronor 3.1%
Kingdom of Sweden, 13%, 6/15/01 ............................................................ 8,400,000 1,341,120
Kingdom of Sweden, 10.25%, 5/5/03 .......................................................... 10,500,000 1,581,832
Kingdom of Sweden, 6%, 2/9/05 .............................................................. 16,900,000 2,035,970
------------
4,958,922
------------
Thai Bahts 0.6%
J.P. Morgan & Co. Time Deposit, 9.15%, 5/6/97 .............................................. 23,527,773 900,620
- ------------------------------------------------------------------------------------------------------------------------------
Total Foreign Denominated Debt Obligations (Cost $132,093,806) 126,547,999
- ------------------------------------------------------------------------------------------------------------------------------
U.S. Dollar Denominated Debt Obligations 19.0%
- -------------------------------------------------------------------------------------------------------------------------------
U. S. Dollars
Argentine Republic 10-year Floating Rate Note, LIBOR, 5.627%, 4/1/00 ....................... 595,399 581,045
Imperial Credit Industries Inc., 9.875%, 1/15/07 ........................................... 460,000 441,600
Letras del Tesoro Discount Note, 8/15/97 ................................................... 1,200,000 1,178,880
Tenet Healthcare Corp., 8%, 1/15/05 ........................................................ 550,000 539,000
Time Warner Inc., 9.125%, 1/15/13 .......................................................... 4,300,000 4,618,458
U.S. Treasury Bill, 2/5/98 ................................................................. 7,650,000 7,323,345
U.S. Treasury Bond, 7.25%, 8/15/22 (b) ..................................................... 5,900,000 6,029,977
U.S. Treasury Note, 6.375%, 5/15/99 ........................................................ 3,650,000 3,655,147
Webster Financial Corp., 9.36%, 1/29/27 .................................................... 500,000 510,300
WorldCom, Inc., 7.55%, 4/1/04 .............................................................. 5,250,000 5,240,550
- ------------------------------------------------------------------------------------------------------------------------------
Total U.S. Dollar Denominated Debt Obligations (Cost $30,206,894) 30,118,302
- ------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost $163,072,700) 157,438,301
- ------------------------------------------------------------------------------------------------------------------------------
Purchased Options 0.5%
- ------------------------------------------------------------------------------------------------------------------------------
Call on Japanese Yen, strike price 122.15, expire 5/1/97 .......................... JPY 977,200,000 --
Put on Canadian Dollars, strike price .8843, expire 7/3/97 ........................ CAD 9,000,000 48,189
Put on Deutsche Marks, strike price 1.72, expire 7/14/97 .......................... DEM 22,035,600 202,728
Put on Deutsche Marks, strike price 1.725, expire 7/15/97 ......................... DEM 5,692,500 47,295
</TABLE>
The accompanying notes are an integral part of the financial statements
11-SCUDDER GLOBAL BOND FUND
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount Value ($)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Put on Italian Lire, strike price 1663, expire 5/9/97 ............................. ITL 13,855,250,000 231,383
Put on Japanese Yen, strike price 125.55, expire 7/24/97 .......................... JPY 884,000,000 117,483
Number of
Contracts
--------------
Call on Chicago Board of Trade Treasury Note Future, strike price 104.5, expire 5/19/97 . 33 3,609
Put on TSE 10-year Japan Bond Index, strike price 125, expire 6/2/97 .................... 22 135,054
Put on LIFFE Gilt Futures, strike price 108, expire 8/22/97 ............................. 54 39,030
- ------------------------------------------------------------------------------------------------------------------------------
Total Purchased Options (Cost $862,807) 824,771
- ------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio - 100.0% (Cost $163,935,507) (a) 158,263,072
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $163,914,192. At April 30,
1997, net unrealized depreciation for all securities based on tax cost
was $5,651,120. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over tax
cost of $878,729 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$6,529,849.
(b) At April 30, 1997, these securities, in whole or in part, were pledged to
cover initial margin requirements on open future contracts.
At April 30, 1997, open future contracts sold short were as follows:
<TABLE>
<CAPTION>
Aggregate
Futures Expiration Contracts Face Value ($) Market Value ($)
------- ---------- --------- -------------- ----------------
<S> <C> <C> <C> <C>
MATIF French Francs 10 year June 17, 1997 37 4,107,063 4,092,564
---------- ----------
Total net unrealized appreciation on open futures contracts sold short .............. 14,499
==========
</TABLE>
At April 30, 1997, outstanding written options were as follows:
<TABLE>
<CAPTION>
Principal
Amount Expiration Strike Market
Call Options (000's) Date Price Value
- ------------ -------------------------------------------------------------------
<S> <C> <C> <C> <C>
AUD ...................... 9,500 5/15/97 AUD .771 107,920
GBP vs. DEM .............. 3,336 5/22/97 GBP 2.7747 81,548
GBP vs. DEM .............. 2,296 5/15/97 GBP 2.799 32,514
NZD ...................... 11,456 5/8/97 NZD .6885 62,433
SEK ...................... 13,500 7/23/97 SEK 7.6375 12,150
SEK ...................... 27,500 7/15/97 SEK 7.6775 29,508
Number of
Contracts
-----------
LIFFE Gilt Futures 44 8/22/97 GBP 110 74,764
------
Total outstanding written options (Premiums received $362,199) ........................... 400,837
=======
</TABLE>
The accompanying notes are an integral part of the financial statements
12-SCUDDER GLOBAL BOND FUND
<PAGE>
-------------------------------------------------------------------------------
Currency Abbreviations
----------------------------------------------------------------------
AUD Australian Dollar ITL Italian Lira
CAD Canadian Dollar JPY Japanese Yen
DEM Deutsche Mark NLG Netherland Guilders
DKK Danish Kroner NOK Norwegian Kroner
FRF French Franc NZD New Zealand Dollar
GBP British Pound SEK Swedish Krona
IND Indonesian Rupiah THB Thai Baht
The accompanying notes are an integral part of the financial statements
13-SCUDDER GLOBAL BOND FUND
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of April 30, 1997
<TABLE>
<S> <C>
Assets
----------------------------------------------------------------------------------------------------------------------------
Investments, at market (identified cost $163,072,700) ................. $ 157,438,301
Purchased options, at market (identified cost $862,807) ............... 824,771
Cash .................................................................. 457
Foreign currency, at market (identified cost $22,547) ................. 22,099
Interest receivable ................................................... 3,210,115
Receivable on investments sold ........................................ 132,939
Receivable on Fund shares sold ........................................ 24,748
Unrealized appreciation on forward currency exchange contracts ........ 586,127
Other assets .......................................................... 10,234
----------------
Total assets .......................................................... 162,249,791
Liabilities
----------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased ..................................... 432,865
Dividends payable ..................................................... 240,256
Payable for Fund shares redeemed ...................................... 458,877
Accrued management fee ................................................ 101,045
Other payables and accrued expenses ................................... 125,327
Written options, at market (premiums received $362,199) ............... 400,837
Unrealized depreciation on forward currency exchange contracts ........ 413,984
Daily variation margin on futures contracts ........................... 21,668
----------------
Total liabilities ..................................................... 2,194,859
-------------------------------------------------------------------------------------------
Net assets, at market value $ 160,054,932
-------------------------------------------------------------------------------------------
Net Assets
----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Net unrealized appreciation (depreciation) on:
Investments ........................................................ (5,634,399)
Options ............................................................ (76,674)
Futures ............................................................ 14,499
Foreign currency related transactions .............................. 96,162
Accumulated net realized loss ......................................... (16,282,047)
Paid-in capital ....................................................... 181,937,391
-------------------------------------------------------------------------------------------
Net assets, at market value $ 160,054,932
-------------------------------------------------------------------------------------------
Net Asset Value
----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($160,054,932/16,838,010 shares of capital stock outstanding, ----------------
$.01 par value, 300,000,000 shares authorized) ...................... $9.51
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements
14-SCUDDER GLOBAL BOND FUND
<PAGE>
Statement of Operations
six months ended April 30, 1997
<TABLE>
<S> <C>
Investment Income
------------------------------------------------------------------------------------------------------------------------------
Interest (net of foreign taxes withheld of $59,791) ................... $ 6,421,280
-----------------
Expenses:
Management fee ........................................................ 711,510
Services to shareholders .............................................. 295,628
Custodian and accounting fees ......................................... 158,629
Directors' fees and expenses .......................................... 18,516
Reports to shareholders ............................................... 26,608
Auditing .............................................................. 40,360
Legal ................................................................. 7,018
Registration fees ..................................................... 15,205
Other ................................................................. 8,335
-----------------
Total expenses before reductions ...................................... 1,281,809
Expense reductions .................................................... (339,511)
-----------------
Expenses, net ......................................................... 942,298
--------------------------------------------------------------------------------------------
Net investment income 5,478,982
--------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ........................................................... (5,356,943)
Options ............................................................... 1,568,628
Futures contracts ..................................................... (760,932)
Foreign currency related transactions ................................. (1,275,890)
-----------------
(5,825,137)
Net unrealized appreciation (depreciation) during the period on:
Investments ........................................................... (7,223,550)
Options ............................................................... (1,031,336)
Futures contracts ..................................................... 14,499
Foreign currency related transactions ................................. 330,214
-----------------
(7,910,173)
--------------------------------------------------------------------------------------------
Net loss on investment transactions (13,735,310)
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (8,256,328)
--------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements
15-SCUDDER GLOBAL BOND FUND
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
April 30, October 31,
Increase (Decrease) in Net Assets 1997 1996
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ........................................... $ 5,478,982 $18,417,604
Net realized loss from investment transactions .................. (5,825,137) (9,160,980)
Net unrealized depreciation on investment transactions
during the period ............................................ (7,910,173) (1,385,338)
-------------- --------------
Net increase (decrease) in net assets resulting from operations . (8,256,328) 7,871,286
-------------- --------------
Distributions to shareholders from:
Net investment income ........................................... (5,478,982) (11,459,193)
-------------- --------------
Tax return of capital ........................................... -- (6,958,411)
-------------- --------------
Fund share transactions:
Proceeds from shares sold ....................................... 13,200,079 18,750,629
Net asset value of shares issued to shareholders in
reinvestment of distributions ................................ 3,869,125 14,288,523
Cost of shares redeemed ......................................... (60,682,869) (162,428,423)
-------------- --------------
Net decrease in net assets from Fund share transactions ......... (43,613,665) (129,389,271)
-------------- --------------
Decrease in net assets .......................................... (57,348,975) (139,935,589)
Net assets at beginning of period ............................... 217,403,907 357,339,496
-------------- --------------
Net assets at end of period ..................................... $160,054,932 $217,403,907
-------------- --------------
Other Information
-------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ....................... 21,216,085 33,924,422
-------------- --------------
Shares sold ..................................................... 1,352,162 1,831,418
Shares issued to shareholders in reinvestment of distributions .. 390,874 1,396,784
Shares redeemed ................................................. (6,121,111) (15,936,539)
-------------- --------------
Net decrease in Fund shares ..................................... (4,378,075) (12,708,337)
-------------- --------------
Shares outstanding at end of period ............................. 16,838,010 21,216,085
-------------- --------------
</TABLE>
The accompanying notes are an integral part of the financial statements
16-SCUDDER GLOBAL BOND FUND
<PAGE>
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
March 1, 1991
Six Months (commencement of
Ended Years Ended October 31, operations) to
April 30, October 31,
1997 1996 1995 1994 1993 1992 1991
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of ------------------------------------------------------------------------
period ............................ $10.25 $10.53 $10.78 $11.68 $11.84 $12.01 $12.00
------------------------------------------------------------------------
Income from investment operations:
Net investment income ................ .29 .67 .80 .87 .95 1.08 .76
Net realized and unrealized gain
(loss) on investment transactions . (.74) (.28) (.25) (.90) (.14) (.17) .01
------------------------------------------------------------------------
Total from investment operations ..... (.45) .39 .55 (.03) .81 .91 .77
------------------------------------------------------------------------
Less distributions from:
Net investment income ................ (.29) (.42) (.36) (.02) (.95) (1.08) (.76)
Net realized gains on investments .... -- -- -- -- (.02) -- --
Tax return of capital ................ -- (.25) (.44) (.85) -- -- --
------------------------------------------------------------------------
Total distributions .................. (.29) (.67) (.80) (.87) (.97) (1.08) (.76)
------------------------------------------------------------------------
------------------------------------------------------------------------
Net asset value, end of period ....... $9.51 $10.25 $10.53 $10.78 $11.68 $11.84 $12.01
----------------------------------------------------------------------------------------------------------------
Total Return (%) (a) ................. (4.47)** 3.97 5.43 (.25) 7.14 7.83 6.65**
Ratios and Supplemental Data
Net assets, end of period
($ millions) ..................... 160 217 357 560 1,041 1,369 205
Ratio of operating expenses, net to
average daily net assets (%) ..... 1.00* 1.00 1.00 1.00 1.00 1.00 1.00*
Ratio of operating expenses before
expense reductions, to average
daily net assets (%) .............. 1.36* 1.28 1.20 1.15 1.11 1.23 1.89*
Ratio of net investment income to
average daily net assets (%) ...... 5.82* 6.67 7.73 7.76 8.10 8.94 9.97*
Portfolio turnover rate (%) .......... 258.4* 335.7 182.8 272.4 259.8 274.2 26.1*
</TABLE>
* Annualized
** Not annualized
(a) Total returns would have been lower had certain expenses not been reduced.
On December 27, 1995, the Fund adopted its current name and objectives.
Prior to that date, the Fund was known as the Scudder Short Term Global
Income Fund and its investment objective was to provide high current income
through short-term instruments. Financial information prior to December 27,
1995 should not be considered representative of the present Fund.
17-SCUDDER GLOBAL BOND FUND
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Global 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 Board of Directors and the shareholders of the Fund approved, effective
December 27, 1995, a change to the Fund's name and investment objective, as well
as certain investment policies. The new objective of the Fund 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. Prior to
December 27, 1995, the name of the Fund was Scudder Short Term Global Income
Fund.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
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.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement, is equal to at least 100.5% of the repurchase price.
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 and wrote call options on currencies 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 purchase price of a security or
currency which it expects to purchase 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 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.
18-SCUDDER GLOBAL BOND FUND
<PAGE>
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, as
a temporary substitute for purchasing selected investments, and to lock in the
purchase price of a security which it expects to purchase in the near future.
Also, during the period, 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 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 daily rates of exchange prevailing on the respective
dates of such transactions.
19-SCUDDER GLOBAL BOND FUND
<PAGE>
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 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 October 31, 1996, the Fund had a net tax basis
capital loss carryforward of approximately $10,171,000 which may be applied
against any realized net taxable capital gains of each succeeding year until
fully utilized or until October 31, 2002 ($4,463,000), October 31, 2003
($5,009,000) and October 31, 2004 ($699,000), the respective expiration dates,
whichever occurs first.
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 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.
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
currency contracts and foreign currency denominated investments. 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.
20-SCUDDER GLOBAL BOND FUND
<PAGE>
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.
Distributions of net realized gains to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. All
discounts are accreted for both tax and financial reporting purposes.
B. Purchases and Sales of Securities
For the six months ended April 30, 1997, purchases and sales of investment
securities (excluding short-term investments and U.S. Government obligations)
aggregated $206,882,128 and $254,626,012, respectively. Purchases and sales of
U.S. Government obligations aggregated $22,459,414 and $39,210,292,
respectively.
The aggregate face value of futures contracts opened and closed during the six
months ended April 30, 1997 was $585,189,300 and $581,082,237, respectively.
Transactions in written options for the six months ended April 30, 1997 are
summarized as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Exchange Traded Options Over the Counter Options (000 omitted)
---------------------------- ------------------------------------------
Number of
Contracts Premiums AUD DEM FRF Premiums
---------------------------- ------------------------------------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Beginning
of Period .. -- $ -- -- 6,611 -- $ 69,390
Written ..... 131 172,947 23,696 52,231 28,027 808,751
Closed ...... (87) (116,311) (9,500) (39,335) -- (355,548)
Exercised ... -- -- (4,696) (6,615) (28,027) (408,997)
Expired ..... -- -- -- (12,892) -- (49,471)
----------- ----------- ----------- ----------- ----------- ----------
End of
Period ..... 44 $ 56,636 9,500 -- -- $ 64,125
=========== =========== =========== =========== =========== ===========
-----------------------------------------------------------------------------------------
</TABLE>
21-SCUDDER GLOBAL BOND FUND
<PAGE>
Transactions in written options for the six months ended April 30, 1997 are
summarized as follows (continued):
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
Over-the-Counter Options on Currencies (000 omitted)
-------------------------------------------------------------------------------------
GBP JPY NZD SEK GBP/DEM NOK/DEM Premiums
------------------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning
of Period .. -- 3,084,706 5,660 -- -- -- $ 455,387
Written ..... 3,568 4,696,145 91,847 41,000 37,658 37,000 2,169,859
Closed ...... (3,568) (3,522,345) (38,893) -- (13,472) (37,000) (1,425,723)
Exercised ... -- (1,173,800) (35,558) -- (12,278) -- (528,881)
Expired ..... -- (3,084,706) (11,600) -- (6,276) -- (429,204)
----------- ----------- ----------- ----------- ----------- ----------- -----------
End of
Period ..... -- -- 11,456 41,000 5,632 -- $ 241,438
=========== =========== =========== =========== =========== =========== ===========
------------------------------------------------------------------------------------------------------
</TABLE>
C. Related Parties
Under the Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund has agreed to pay to the Adviser
a fee equal to an annual rate of 0.75% of the first $1,000,000,000 of average
daily net assets and 0.70% of such assets in excess of $1,000,000,000 computed
and accrued daily and payable monthly. As manager of the assets of the Fund, the
Adviser directs the investments of the Fund in accordance with its investment
objectives, policies, and restrictions. The Adviser determines the securities,
instruments, and other contracts relating to investments to be purchased, sold
or entered into by the Fund. In addition to portfolio management services, the
Adviser provides certain administrative services in accordance with the
Agreement. The Adviser has agreed not to impose all or a portion of its
management fee until February 28, 1998, and during such period to maintain the
annualized expenses of the Fund at not more than 1.00% of average daily net
assets. For the six months ended April 30, 1997, the Adviser did not impose a
portion of its management fee aggregating $339,511 and the amount imposed
aggregated $371,999 which was equivalent to an annual effective rate of 0.39% 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 April 30, 1997, the amount charged to the Fund by SSC
aggregated $204,808, of which $30,752 is unpaid at April 30, 1997.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six months ended April 30,
1997, the amount charged to the Fund by STC aggregated $8,361, of which $1,272
is unpaid at April 30, 1997.
22-SCUDDER GLOBAL BOND FUND
<PAGE>
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible 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 April 30, 1997, the amount charged to the Fund by SFAC aggregated $87,389,
of which $11,820 is unpaid at April 30, 1997.
The Fund pays each Director not affiliated with the Adviser $4,000 annually,
plus specified amounts for attended board and committee meetings. For the six
months ended April 30, 1997, Directors' fees and expenses aggregated $18,516.
D. Commitments
As of April 30, 1997, the Fund had entered into the following forward foreign
currency exchange contracts resulting in net unrealized appreciation of
$172,143.
Net Unrealized
Appreciation
(Depreciation)
Contracts to Deliver In Exchange For Settlement Date (U.S.$)
----------------------- -------------------- --------------- ---------------
DEM 1,551,747 USD 951,000 5/6/97 53,627
USD 921,290 DEM 1,551,747 5/6/97 (23,917)
DEM 11,500,000 USD 6,665,121 5/13/97 11,393
GBP 3,500,000 USD 5,649,000 5/27/97 (29,415)
NLG 15,064,800 USD 8,000,000 5/27/97 244,712
NLG 1,152,565 USD 611,732 5/27/97 18,396
USD 5,650,750 GBP 3,500,000 5/27/97 27,665
USD 2,663,784 NLG 5,100,000 5/27/97 (38,327)
USD 35,000 NLG 66,221 5/27/97 (910)
USD 5,836,482 NLG 11,051,144 5/27/97 (147,404)
IND 2,429,500,000 THB 26,213,006 6/11/97 7,728
NOK 22,200,000 JPY 397,879,500 7/7/97 41,596
DKK 11,400,000 JPY 219,526,380 7/8/97 6,999
------------
172,143
============
E. Line 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.
23-SCUDDER GLOBAL BOND FUND
<PAGE>
Report of Independent Accountants
To the Board of Directors of Scudder Global Fund, Inc. and to the Shareholders
of Scudder Global Bond Fund:
We have audited the accompanying statement of assets and liabilities of Scudder
Global Bond Fund including the investment portfolio, as of April 30, 1997, and
the related statement of operations for the six months then ended, the
statements of changes in net assets for the six months then ended and for the
year ended October 31, 1996, and the financial highlights for the six months
ended April 30, 1997, for each of the five years in the period ended October 31,
1996 and for the period March 1, 1991 (commencement of operations) to October
31, 1991. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1997, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Global Bond Fund as of April 30, 1997, the results of its operations for
the six months then ended, the changes in its net assets for the six months then
ended and for the year ended October 31, 1996, and the financial highlights for
the six months ended April 30, 1997, for each of the five years in the period
ended October 31, 1996 and for the period March 1, 1991 (commencement of
operations) to October 31, 1991 in conformity with generally accepted accounting
principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 20, 1997
24-SCUDDER GLOBAL BOND FUND
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
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Money Market
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Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Tax Free Money Market+
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Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax Free+
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Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund*
Scudder Massachusetts Limited Term Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
U.S. Income
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Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund
Global Income
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Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
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Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
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Scudder Balanced Fund
Scudder Growth and Income Fund
U.S. Growth
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Value
Scudder Large Company Value Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
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Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund
Retirement Programs
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IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan*+++ +++
(a variable annuity)
Closed-End Funds#
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The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities Fund, Inc.
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. +++Funds within categories are listed in order from
expected least risk to most risk. +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.
25-SCUDDER GLOBAL BOND FUND
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Scudder Solutions
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Convenient ways to invest, quickly and reliably:
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Automatic Investment Plan AutoBuy
A convenient investment program in which you designate Lets you purchase Scudder fund shares
the purchase details and the bank account, and money is electronically, avoiding potential mailing delays;
electronically debited from that account monthly to designate a bank account and the transaction
regularly purchase fund shares and "dollar cost average" details, and money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from that account.
fewer when it's higher, which can reduce your average
purchase price over time.
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
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Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- http://funds.scudder.com
1-800-343-2890
Scudder Electronic Account Services: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
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Automatic Withdrawal Plan AutoSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you designate.
DistributionsDirect
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
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26-SCUDDER GLOBAL BOND FUND
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Mutual Funds and More -- Brokerage and Guidance Services:
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Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 6,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
500 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM)
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load
Brokerage account already reserved for them, with Scudder funds but want ongoing professional assistance in
no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly
Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for
individuals investing $100,000 or more.
Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a
program offered by Scudder Investor Services, Inc., Adviser.
For more information about these services, call a Scudder representative at 1-800-225-5163
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Additional Information on How to Contact Scudder:
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For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Funds Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Funds Centers. Check for a Funds Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
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New From Scudder: Pathway Series
In a complex financial world, Scudder Pathway Series is a refreshingly simple concept. With one
investment, Pathway gives you instant access to broad diversification in U.S. markets and
across the globe. Select from four Portfolios -- Conservative, Balanced, Growth, or
International -- each with a distinct investment objective that can match your goals. Each
Portfolio, rather than investing in individual securities, invests in carefully selected
Scudder mutual funds.
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The share price of each Pathway Series portfolio will fluctuate and the risk associated with
each portfolio is determined by the securities held in each underlying Scudder fund. Contact
Scudder Investor Services, Inc., Distributor, for a prospectus which contains more complete
information, including management fees and other expenses. Please read it carefully before you
invest or send money.
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27-SCUDDER GLOBAL BOND FUND
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Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark,
Scudder, Stevens & Clark was the first independent investment counsel firm in
the United States. Since its birth, Scudder's pioneering spirit and commitment
to professional long-term investment management have helped shape the investment
industry. In 1928, we introduced the nation's first no-load mutual fund. Today
we offer over 40 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.
This information must be preceded or accompanied by a
current prospectus.
Portfolio changes should not be considered recommendations
for action by individual investors
SCUDDER
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