Scudder
Global
Fund
Annual Report
June 30, 1997
Pure No-Load(TM) Funds
For investors seeking long-term growth of capital from a professionally managed
portfolio consisting primarily of global equity securities.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER (logo)
<PAGE>
In Brief
o The Fund's diversified, global approach benefited from a favorable investment
environment and the Fund's long-term commitment to companies with dominant
market shares and declining production costs.
o Morningstar assigned the Fund an overall four-star rating for its
risk-adjusted performance among 525 global equity funds as of June 30, 1997.^1
o For the twelve-month period ended June 30, 1997, Scudder Global Fund provided
a total return of 24.91%, a performance that ranked the Fund among the top 17%
(30th) of 175 global funds tracked by Lipper Analytical Services, Inc.
^1 Source: Morningstar. Ratings are subject to change monthly and are calculated
from the Fund's three-, five-, and ten-year average annual returns in excess
of 90-day Treasury bill returns with appropriate fee adjustments, and a risk
factor that reflects Fund performance below 90-day T-bill returns. The Fund
received 4 stars for the three-year, 5 stars for the five-year, and 4 stars
for the ten-year periods among 525, 235, and 85 international equity funds,
respectively. In an investment category, the top 10% of funds receive 5 stars,
the next 22.5% receive 4 stars. Past performance is no guarantee of future
results.
Table of Contents
2 In Brief
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
10 Investment Portfolio
16 Financial Statements
19 Financial Highlights
20 Notes to Financial Statements
24 Report of Independent Accountants
25 Tax Information
28 Officers and Directors
29 Investment Products and Services
30 Scudder Solutions
2 - Scudder Global Fund
<PAGE>
Letter From the Fund's Chairman
Dear Shareholders,
We are witnessing a remarkable period in the U.S. stock market. The
six-year rally in stocks continued through the first half of 1997, pausing only
momentarily in March to digest an increase in interest rates before resuming its
rise. The question on every investor's mind seems to be: "How long can stocks
continue to rise?" The answer is, we do not know.
After such a prolonged upward move, some form of correction would seem
logical. Yet, if the "Goldilocks" economy persists as "not too hot and not too
cold," U.S. stocks may continue to rise for some time. The keys to this ideal
environment seem to lie in low inflation, stable-to-falling interest rates, and
improving corporate profits. Any change in these factors could threaten the
favorable outlook for stocks.
What should investors do in this environment?
Careful Portfolio Diversification
Exposure to sectors that have a lower correlation to the S&P 500 can
provide improved diversification and reduced price volatility over the long
term. Small-cap, international, emerging markets, and fixed income sectors have
not had as dramatic run-ups in price and are attractively valued on a relative
basis. Adding representation in these areas can provide valuable diversification
and balance to your investment portfolio.
If you are comfortable with your portfolio's diversification, the
short-term and sometimes unpredictable movements of the market will be of lesser
concern to you. We believe Scudder Global Fund is an attractive choice for many
long-term investors seeking broad exposure to large-scale economic trends,
promising technologies or products, and specific country opportunities. For a
complete discussion of your Fund's recent activities, please turn to page 6.
Thank you for your continued investment in Scudder Global Fund. If you have
any questions about your investment, please call Scudder Investor Relations at
1-800-225-2470 or visit our Internet Web site at http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
Chairman,
Scudder Global Fund
3 - Scudder Global Fund
<PAGE>
PERFORMANCE UPDATE as of June 30, 1997
- -----------------------------------------------------------------
FUND INDEX COMPARISONS
- -----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
6/30/97 $10,000 Cumulative Annual
- ---------------------------------------
SCUDDER GLOBAL FUND
- ---------------------------------------
1 Year $ 12,491 24.91% 24.91%
5 Year $ 20,381 103.81% 15.30%
10 Year $ 31,339 213.39% 12.10%
- ---------------------------------------
MSCI WORLD INDEX
- ---------------------------------------
1 Year $ 12,227 22.27% 22.27%
5 Year $ 20,625 106.25% 15.57%
10 Year $ 24,369 143.69% 9.31%
- ---------------------------------------
- -----------------------------------------------------------------
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 June 30
SCUDDER GLOBAL FUND
Year Amount
- ---------------------------
'87 $10,000
'88 $ 9,561
'89 $11,847
'90 $14,217
'91 $13,477
'92 $15,376
'93 $17,445
'94 $19,712
'95 $21,508
'96 $25,089
'97 $31,339
MSCI WORLD INDEX
Year Amount
- ---------------------------
'87 $10,000
'88 $ 9,895
'89 $11,129
'90 $11,920
'91 $11,387
'92 $11,815
'93 $13,796
'94 $15,208
'95 $16,829
'96 $19,931
'97 $24,369
The Morgan Stanley Capital International (MSCI) World Index is an unmanaged
capitalization-weighted measure of global stock markets including the U.S.,
Canada, Europe, Australia, and the Far East. Index returns assume dividends
reinvested net of withholding tax 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 June 30
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
NET ASSET VALUE... $ 14.47 $ 17.64 $ 20.36 $ 18.06 $ 19.56 $ 21.63 $ 23.93 $ 25.64 $ 28.73 $ 33.67
INCOME
DISTRIBUTIONS..... $ .06 $ .14 $ .20 $ .37 $ .31 $ .16 $ .24 $ .11 $ .25 $ .28
CAPITAL GAINS
DISTRIBUTIONS..... $ .25 $ .08 $ .55 $ .83 $ .66 $ .34 $ .26 $ .34 $ .84 $ 1.53
FUND TOTAL
RETURN (%)........ -4.45 23.90 20.00 -5.20 14.09 13.45 12.99 9.11 16.65 24.91
INDEX TOTAL
RETURN (%)........ -1.05 12.48 7.09 -4.90 4.22 16.75 10.23 10.67 18.44 22.27
</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 maintained
the Fund's expenses in 1988, the average annual and cumulative total returns for
the ten year period would have been lower.
4 - Scudder Global Fund
<PAGE>
PORTFOLIO SUMMARY as of June 30, 1997
- ---------------------------------------------------------------------------
GEOGRAPHICAL
(EXCLUDES CASH EQUIVALENTS AND BONDS)
- ---------------------------------------------------------------------------
Europe 49%
United States 22%
Pacific Basin 10%
Japan 8%
Latin America 6%
Other 5%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The portfolio remained overweight
in Europe and underweighted in Japan.
- --------------------------------------------------------------------------
SECTOR
(EXCLUDES CASH EQUIVALENTS AND BONDS)
- --------------------------------------------------------------------------
Manufacturing 22%
Financial 18%
Technology 9%
Metals & Minerals 7%
Health 7%
Durables 7%
Energy 6%
Utilities 6%
Service Industries 5%
Other 13%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund's restructuring and low
cost production themes are
represented in the manufacturing
sector.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
(16% OF PORTFOLIO)
- --------------------------------------------------------------------------
1. NOVARITS AG
Swiss pharmaceutical company
2. INTERNATIONAL BUSINESS MACHINES CORP.
Principal manufacturer and servicer of business and computing machines
in the United States
3. HOECHST AG
German chemical producer
4. VEBA AG
Electric utility, distributor of oil and chemicals in Germany
5. USAIR GROUP, INC.
Major airline in the United States
6. RTZ CORP., PLC
Mining and finance company in the United Kingdom
7. ABB AG
Manufacturer of electrical equipment in Switzerland
8. WOODSIDE PETROLEUM LTD.
Major oil and gas producer in Australia
9. MICHELIN
Leading tire manufacturer in France
10. GOODYEAR TIRE & RUBBER CO.
Manufacturer of tires and rubber products in the United States
Top holdings include companies
with dominant global market
shares and improved cost
structures.
For more complete details about the Fund's investment portfolio,
see page 10. A monthly Investment Portfolio Summary and quarterly Portfolio
Holdings are available upon request.
5 - Scudder Global Fund
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
A favorable investment environment resulted in strong returns for the global
markets, with Scudder Global Fund returning 24.91% for the trailing twelve-month
period ended June 30, 1997. The Fund's benchmark, the unmanaged Morgan Stanley
Capital International World Index, returned 22.27% for the same period.
The Fund's longer-term performance versus its peers has been consistently
above-average. For the twelve-month period, the Fund ranked among the top 17%
(30th) of 175 global funds, as measured by Lipper Analytical Services, Inc. For
the five-year period, the Fund ranked among the top 27% (12th) of 45 funds, and
for the ten-year period, among the top 28% (5th) of 18 funds.
Market Environment
It has been the best of all worlds for most of the global markets over the
twelve months. The six-year bull market in U.S. stocks has resulted in several
new records for the Dow Jones and S&P indices. This performance has been powered
by reports of strong corporate earnings and benign inflation, which have
provided a potent and positive environment for investing. The U.S. economy's
strong 4.3% growth rate in the last quarter of 1996, and evidence of continued
strength early in the year, raised concerns about accelerating inflation, which
encouraged the Federal Reserve (the Fed) to increase short-term interest rates
on March 25. Stocks and bonds initially declined on this news, but after a 4.9%
increase in the first quarter, the economy moderated, inflation remained under
control, and the Fed passed up two opportunities to raise rates. Against this
backdrop, and supported by additional reports of strong corporate earnings, the
U.S. market rebounded in the second quarter for one of its strongest quarterly
returns in history.
Europe also showed strength, despite the Socialist victory in the French
elections and worries over German policy towards European Monetary Union.
Restructuring momentum in Germany helped the German index to return 25% in U.S.
dollar terms for the twelve-month period, and all of the other major European
markets participated in the rally. In Japan, we have recently been encouraged by
signs of economic growth and a rising trade surplus, which pushed the yen and
equities higher towards the end of the period. Although the market declined
9.42% for the twelve-month period, investors are responding favorably to signs
that the government is committed to deregulation of the financial sector.
Brazil was one of the strongest emerging markets, returning 67%. The country
privatized CVRD, the national natural resources giant, and made progress towards
the sell-off of electricity and telecom assets. In Asia, Hong Kong returned 26%,
supported by anticipation of a smooth hand-over of the colony to the mainland
Chinese government.
6 - Scudder Global Fund
<PAGE>
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE:
World Stock Market Returns
Trailing 12-months in U.S. dollars as of June 30, 1997
BAR CHART DATA:
Brazil 66.62%
Finland 51.41%
Spain 45.17%
Sweden 35.36%
Netherlands 34.44%
U.S. 32.81%
U.K. 31.38%
Mexico 31.11%
Denmark 30.68%
Switzerland 27.93%
Hong Kong 25.65%
Germany 25.34%
Norway 20.73%
France 17.42%
Indonesia 14.67%
Australia 13.27%
Italy 9.27%
Malaysia -5.55%
Singpore -7.53%
Japan -9.42%
Philippines -14.63%
South Korea -20.58%
Czech Republic -21.47%
Thailand -60.40%
Source: Morgan Stanley Capital International indices in U.S. dollars.
Portfolio Strategy
On June 30, 1997, the portfolio was 49% invested in Europe, 22% in the U.S., and
21% in Asia/Pacific (excluding Japan), Latin America, Canada, and other
countries. The Fund's Japanese holdings were substantially underweighted at 8%.
During the twelve-month period we took advantage of strong performance from a
number of stocks and pared back selected holdings. Short-term investments have
increased to about 7% of portfolio assets, reflecting these opportunities and
the difficulty in finding attractively valued stocks.
Our approach to investing in the global equity markets continued to be focused
on identifying long-term structural trends in the world economy and companies
positioned to capitalize on them. The Fund's holdings typically share two
characteristics we believe will provide an increasingly important advantage in
the competitive global environment: dominant worldwide market shares and
declining production costs.
Our largest theme, Darkside Restructuring, deals with companies in previously
regulated economies or industries which are restructuring. We have already seen
considerable restructuring in Europe -- primarily Germany and France -- in the
chemicals and pharmaceutical industries. Many industries, such as insurance,
utilities, and banks are still in the early stages of restructuring. Stocks such
as Daimler-Benz, Mannesman, and Siemens, all in Germany, contributed to the
Fund's performance.
We are beginning to turn our attention to Japan, where early indications are
that the first wave of restructuring may be beginning. We have added Nomura, a
7 - Scudder Global Fund
<PAGE>
financial services company whose recent and widely publicized difficulties have
made the call for change even louder and more immediate. While Japan continues
to be a major question mark, we believe there will be opportunities for
investment at the appropriate time.
Companies which have come through the restructuring process and are becoming
industry leaders dominate our Global Oligopolist theme, which remains our second
largest theme. The tire industry, comprised of several large players, is a good
example. Bridgestone, in particular, has been a strong performer.
Our themes of First-World-Savings and First-World-Health are interrelated, as
they both represent the desire for a healthy and wealthy retirement. Together
they constitute our next largest investment focus. Insurance companies such as
AEGON and ING, and Astra and Biogen in the healthcare area, are examples of good
performing stocks that fit into this theme.
Identification of companies who are and will be leaders in various technological
areas has given rise to a theme we have dubbed Installed Base and Standard
Setters. While this theme represents a small percentage of the portfolio, we
hold a number of stocks in this area which we like but find difficult to
purchase at current valuations. SAP, one of the Fund's larger holdings, and
Charles Schwab are examples of stocks which fit into this theme and have
performed well.
The emerging markets have been one of the strongest areas of the portfolio over
the period. As noted above, the Brazilian market was a star performer, and a
8 - Scudder Global Fund
<PAGE>
number of our holdings, including Eletrobras and Telebras, were strong
contributors. We believe that increased exposure to emerging markets, both
directly and through companies in developed markets with significant business
relationships there, should benefit the portfolio. We expect to continue to make
selective investments as valuations permit.
Early in 1997, we established hedges against both the Deutschemark and the
French Franc. Both have been rolled over during the second quarter, and we see
little reason why the dollar should not continue to rise. Progress towards EMU,
plus the need to reduce unemployment, should work to keep the European
currencies (except Sterling) weaker.
Outlook
Globally, the risk of owning equities has increased, causing us to take a
more conservative stance in the portfolio. Nevertheless, we are still able to
find value in stocks, and believe that our long-term focus on wealth-creating
themes should help us to cushion an increase in volatility. Our emphasis on
global companies should prove to be particularly helpful in this regard, as
their growth and investment opportunities are secular in nature and likely to be
long-lasting. In the meantime, our research is focused on seeing around the next
corner, to outline what the end of the current global restructuring phase looks
like and defining how we can exploit it. The questions that loom large are how
and when Japan will participate, and how to benefit from growth in the emerging
markets. As always, we aim to see the major discontinuities coming well before
the market does.
Sincerely,
Your Portfolio Management Team
/s/William E. Holzer /s/Nicholas Bratt
William E. Holzer Nicholas Bratt
Lead Portfolio Manager Portfolio Manager
/s/Diego Espinosa
Diego Espinosa
Portfolio Manager
Scudder Global Fund:
A Team Approach to Investing
Scudder Global Fund is managed by a team of Scudder investment professionals,
who each play an important role in the Fund's management process. Team members
work together to develop investment strategies and select securities for the
Fund's portfolio. They are supported by Scudder's large staff of economists,
research analysts, traders, and other investment specialists who work in
Scudder's offices across the United States and abroad. We believe our team
approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Lead Portfolio Manager William E. Holzer has had day-to-day responsibility for
Scudder Global Fund's worldwide strategy and investment themes since its
inception in 1986. Willy, who has over 20 years' experience in global
investing, joined Scudder in 1980. Diego Espinosa, Portfolio Manager, joined
the team in 1997 and Scudder in 1996. Diego is also responsible for
development of the Fund's strategy and management of the portfolio on a daily
basis. Diego has six years of investment industry experience. Nicholas Bratt,
Portfolio Manager, directs Scudder's overall global equity investment
strategies. Nick joined Scudder in 1976 and the team in 1993.
9 - Scudder Global Fund
<PAGE>
Investment Portfolio as of June 30, 1997
<TABLE>
<CAPTION>
Principal Market
Amount ($) (d) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements 3.2%
- ------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 6/30/97 at 5.9% to
be repurchased at $50,534,280 on 7/1/97, collateralized by a $49,943,000 U.S. -------------
Treasury Bond, 6.25%, 8/31/00 (Cost $50,526,000) ..................................... 50,526,000 50,526,000
-------------
Commercial Paper 3.7%
- ------------------------------------------------------------------------------------------------------------------------------
United States
Dresdner US Finance Inc. Discount Note, 7/1/97 ......................................... 24,025,000 24,025,000
Private Export Funding Corp. Discount Note, 7/11/97 .................................... 35,000,000 34,946,333
- ------------------------------------------------------------------------------------------------------------------------------
Total Commercial Paper (Cost $58,971,333) 58,971,333
- ------------------------------------------------------------------------------------------------------------------------------
Bonds 2.4%
United Kingdom -------------
United Kingdom Treasury Bond, 7.75%, 9/8/06 (Cost $38,606,117) ......................... GBP 22,435,000 38,872,985
-------------
<CAPTION>
Shares
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks 90.7%
- ------------------------------------------------------------------------------------------------------------------------------
Argentina 1.1%
Electricidad Argentina S.A. "A" (ADS)* (Electric utility) (c) .......................... 253,143 3,544,002
YPF S.A. "D" (ADR) (Petroleum company) ................................................. 450,800 13,862,100
------------
17,406,102
------------
Australia 3.3%
Broken Hill Proprietary Co. Ltd. (Petroleum, minerals and steel) ....................... 849,900 12,509,199
Coca Cola Amatil Ltd. (Soft drink bottler and distributor) ............................. 786,792 10,223,373
Foster's Brewing Group, Ltd. (Leading brewery) ......................................... 4,201,300 7,807,727
Woodside Petroleum Ltd. (Major oil and gas producer) ................................... 2,499,300 21,524,302
------------
52,064,601
------------
Austria 0.4%
Flughafen Wien AG (Operator of terminals and facilities at Vienna
International Airport) ............................................................... 146,900 6,204,933
------------
Bermuda 2.0%
EXEL, Ltd. (Provider of liability insurance) ........................................... 329,000 17,354,750
Mid Ocean, Ltd. (Property and casualty insurance company) .............................. 289,250 15,167,547
------------
32,522,297
------------
Brazil 4.4%
Aracruz Celulose S.A. (ADR) (Producer of eucalyptus kraft pulp) ........................ 605,400 12,335,025
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder Global Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Centrais Eletricas Brasileiras S/A "B" (pfd.) (Electric utility) ....................... 30,401,230 18,157,153
Companhia Energetica de Sao Paulo (pfd.)* (Electric utility) ........................... 70,200,000 4,694,780
Companhia Siderurgica Belgo-Mineira* (Manufacturer of steel wires
and wire products) ................................................................... 10,591,625 632,731
Companhia Vale do Rio Doce (pfd.) (Diverse mining and industrial complex) .............. 348,600 7,787,321
Companhia Vale do Rio Doce "B"* (c) .................................................... 348,600 --
Light Participacoes S.A. (Electric power utility) ...................................... 8,447,000 3,365,933
Telecomunicacoes Brasileiras S.A. (pfd.) (Telecommunication services) .................. 84,800,000 12,862,567
Uniao de Bancos Brasileiros S.A. (Major bank) .......................................... 175,900 6,530,288
Usinas Siderurgicas de Minas Gerais S.A. (pfd.) (Steel manufacturer) ................... 328,610 3,659,701
------------
70,025,499
------------
Canada 0.9%
Canadian Pacific Ltd. (Ord.) (Transportation and natural resources) .................... 526,156 14,973,700
------------
China 0.8%
American Standard China "B"* (Plumbing products) (c) ................................... 526 5,260,000
Huaneng Power International, Inc. Series N (ADR)* (Developer and operator
of large coal-fired power plants) .................................................... 319,300 8,142,150
------------
13,402,150
------------
France 2.4%
Michelin "B" (Leading tire manufacturer) ............................................... 357,408 21,462,604
Schneider S.A. (Manufacturer of electronic components and automated
manufacturing systems) ............................................................... 307,846 16,385,766
------------
37,848,370
------------
Germany 15.6%
BASF AG (Leading international chemical producer) ...................................... 544,100 20,106,212
Bayer AG (Leading chemical producer) ................................................... 394,790 15,170,475
Bayerische Vereinsbank AG (Commercial bank) ............................................ 387,296 15,832,925
Commerzbank AG (Worldwide multi-service bank) .......................................... 276,399 7,828,743
Daimler-Benz AG (Automobile and truck manufacturer) .................................... 248,300 20,144,745
Deutsche Telekom AG (Telecommunication services) ....................................... 379,200 9,131,586
Deutsche Telekom AG (ADR) .............................................................. 285,300 6,882,863
Hoechst AG (Chemical producer) ......................................................... 592,836 25,146,498
Mannesmann AG (Bearer) (Diversified construction and technology company) ............... 47,812 21,300,341
Muenchener Rueckversicherungs AG (Insurance company) ................................... 2,446 4,768,305
Muenchener Rueckversicherungs AG (Registered) .......................................... 3,746 10,502,804
RWE AG (pfd.) (Producer and marketer of petroleum and chemical products) ............... 589,435 20,514,136
SAP AG (pfd.) (Computer software manufacturer) ......................................... 81,900 16,998,911
Schering AG (Pharmaceutical and chemical producer) ..................................... 145,918 15,590,746
VEBA AG (Electric utility, distributor of oil and chemicals) ........................... 445,000 25,004,300
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder Global Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VIAG AG (Provider of electrical power and natural gas services, aluminum
products, chemicals, ceramics and glass) ............................................. 22,000 10,002,867
VIAG AG* (New) ......................................................................... 6,284 2,848,175
------------
247,774,632
------------
Ghana 0.2%
Ashanti Goldfields Co., Ltd. (GDR) (Leading gold producer) ............................. 312,275 3,649,714
------------
Hong Kong 1.4%
Hutchison Whampoa Ltd. (Container terminal and real estate company) .................... 1,446,000 12,551,921
Kerry Properties, Ltd. (Real estate company) ........................................... 4,100,000 9,949,273
------------
22,501,194
------------
Hungary 0.2%
First Hungary Fund "A"* (Investment company) (c) ....................................... 3,619 3,184,720
------------
Indonesia 0.8%
Asia Pacific Resources International Holdings Ltd.* (Manufacturer of rayon
fiber for Asian textile markets, owner of world's leading paper pulp mill) ........... 72,700 354,413
Asia Pulp & Paper Co., Ltd. (ADR)* (Producer of pulp and paper) ........................ 191,900 2,902,488
HM Sampoerna (Foreign registered) (Tobacco company) .................................... 823,000 3,138,703
Indah Kiat Pulp & Paper (Foreign registered) (Producer of pulp and paper) .............. 5,222,528 3,060,075
Indah Kiat Pulp & Paper (Rights)* (expire 8/14/97) (c) ................................. 4,700,275 967,415
Pabrik Kertas Tjiwi Kimia (Operator of pulp and paper factory) ......................... 1,492,520 1,733,704
------------
12,156,798
------------
Japan 7.5%
Bridgestone Corp. (Leading automobile tire manufacturer) ............................... 824,000 19,124,335
Canon Inc. (Leading producer of visual image and information equipment) ................ 704,000 19,164,820
Iino Kaiun Kaisha, Ltd. (Operator of tankers and specialized carriers) ................. 728,000 2,229,535
Matsushita Electric Industrial Co., Ltd. (Leading manufacturer of consumer
electronic products) ................................................................. 788,000 15,882,384
Nichiei Co., Ltd. (Finance company for small and medium-sized firms) ................... 165,000 19,147,544
Nomura Securities Co., Ltd. (Financial adviser, securities broker and underwriter) ..... 657,000 9,057,325
Shohkoh Fund & Co., Ltd. (Finance company for small and medium-sized firms) ............ 33,200 10,051,828
Sony Corp. (Consumer electronic products manufacturer) ................................. 144,000 12,551,784
Sumitomo Metal Mining Co., Ltd. (Leading gold, nickel and copper mining company) ....... 1,690,000 11,943,984
------------
119,153,539
------------
Korea 2.0%
Cheil Food and Chemical Co., Ltd. (Korea's largest sugar refiner and major
integrated food processor) ........................................................... 9 422
Korea Asia Fund (IDR)* (Investment company) (b) ........................................ 69,000 1,198,875
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 - Scudder Global Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Korea Long Term Credit Bank (New) (Major commercial bank) .............................. 52,289 806,710
Pohang Iron & Steel Co., Ltd. (Leading steel producer) (c) ............................. 7,030 714,970
Samsung Display Devices (Leading manufacturer of CRT and picture tubes) ................ 75,509 3,920,006
Samsung Electronics Co., Ltd. (Major electronics manufacturer) ......................... 21,831 1,266,198
Samsung Electronics Co., Ltd. (Non-voting GDS) ......................................... 348,698 9,414,846
Samsung Heavy Industries Co., Ltd. (Machinery manufacturer) ............................ 117,275 1,236,142
Samsung Securities (Securities company) ................................................ 46,400 804,685
Seoul International Trust (Investment company) (b) ..................................... 43,000 1,526,500
Yukong, Ltd. (Korea's leading oil refiner) ............................................. 420,420 10,179,088
------------
31,068,442
------------
Netherlands 2.5%
AEGON Insurance Group NV (Insurance company) ........................................... 222,092 15,500,843
ING Groep NV (Insurance and financial services) ........................................ 262,115 12,084,878
Philips Electronics NV (Leading manufacturer of electrical equipment) .................. 168,800 12,090,927
------------
39,676,648
------------
New Zealand 0.8%
Telecom Corp. of New Zealand* (Telecommunication services) ............................. 2,600,000 13,245,375
------------
South Africa 1.7%
Impala Platinum Holdings (ADR) (Leading platinum producer) ............................. 468,500 5,212,063
Rustenburg Platinum Holdings, Ltd. (ADR) (Leading platinum producer) ................... 79,586 1,462,393
Sasol Ltd. (Coal mining and processing, crude oil exploration and refining,
petrochemical production) ............................................................ 921,600 12,086,224
South African Breweries (Brewery) ...................................................... 283,600 8,704,276
------------
27,464,956
------------
Sweden 3.2%
AGA AB "B" (Free) (Producer and distributor of industrial and medical gases) ........... 161,200 2,146,416
Astra AB "A" (Free) (Pharmaceutical company) ........................................... 767,333 14,284,268
S.K.F. AB "B" (Free) (Manufacturer of roller bearings) ................................. 602,400 15,574,947
Skandia Foersaekrings AB (Free) (Financial conglomerate) ............................... 511,300 18,837,890
------------
50,843,521
------------
Switzerland 9.5%
ABB AG (Bearer) (Manufacturer of electrical equipment) ................................. 14,275 21,600,650
Ciba Specialty Chemical (Registered) (Manufacturer of chemical products for
plastics, coatings, fibers and fabrics) .............................................. 161,271 14,906,939
Clariant AG (Registered) (Manufacturer of color chemicals) ............................. 21,734 14,062,739
Credit Suisse Group (Registered) (Provider of bank services, management
services and life insurance) ......................................................... 132,820 17,051,523
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 - Scudder Global Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Novartis AG (Registered) (Pharmaceutical company) ...................................... 29,975 47,902,533
Swiss Bank Corp. Warrants* (Registered) (expires 6/30/00) .............................. 5 49
Swiss Reinsurance* (Registered) (Life, accident and health insurance company) .......... 11,326 16,013,824
Zurich Group (Registered) (Insurance, financial and money management company) .......... 50,750 20,188,805
------------
151,727,062
------------
United Kingdom 9.8%
BOC Group PLC (Producer of industrial gases) ........................................... 1,099,112 19,099,728
Carlton Communications PLC (Television post production products and services) .......... 1,772,000 15,005,396
General Electric Co., PLC (Manufacturer of power, communications and
defense equipment and other various electrical components) ........................... 1,703,600 10,184,855
London & Overseas Freighters (ADR)* (Operator of a fleet of oil tankers) ............... 140,900 1,919,763
Lonrho PLC (Widely diversified industrial holding company) ............................. 900,000 1,903,439
Norwich Union PLC* (Multi-line insurance company) ...................................... 488,500 2,586,929
PowerGen PLC (Electric utility) ........................................................ 1,400,134 16,647,943
RTZ Corp., PLC (Mining and finance company) ............................................ 1,389,914 24,222,554
Reuters Holdings PLC (International news agency) ....................................... 1,123,500 11,843,214
Shell Transport & Trading PLC (Part owner of Royal Dutch Shell Co.) .................... 2,961,300 20,218,970
SmithKline Beecham PLC (Manufacturer of ethical drugs and healthcare products) ......... 801,700 14,759,220
Unilever PLC (Manufacturer of consumer goods, food and personal care products) ......... 596,900 17,087,174
------------
155,479,185
------------
United States 20.2%
Advanced Micro Devices Inc.* (Manufacturer of semiconductors and
integrated circuits) ................................................................. 403,300 14,518,800
Biogen Inc.* (Biotechnology research and development) .................................. 169,920 5,756,040
Boeing Co. (Manufacturer of jet airplanes) ............................................. 184,800 9,805,950
Boston Scientific Corp.* (Developer and producer of medical devices) ................... 128,600 7,900,863
Charles Schwab Corp. (Discount brokerage services.) .................................... 286,500 11,656,969
Chiron Corp.* (Developer of therapeutic and diagnostic products) ....................... 172,900 3,609,288
Electronic Data Systems Corp. (Provider of information technology services) ............ 454,500 18,634,500
Enron Corp. (Major natural gas pipeline system) ........................................ 356,300 14,541,494
First Data Corp. (Credit-card processing services) ..................................... 298,700 13,124,131
Goodyear Tire & Rubber Co. (Manufacturer of tires and rubber products) ................. 337,100 21,342,644
Guidant Corp. (Developer and manufacturer of products used in minimally
invasive surgery) .................................................................... 104,900 8,916,500
International Business Machines Corp. (Principal manufacturer and servicer
of business and computing machines) .................................................. 299,840 27,041,820
MBIA Inc. (Insurer of municipal bonds) ................................................. 184,050 20,763,141
National Semiconductor Corp.* (Manufacturer of integrated circuits
and transistors) ..................................................................... 430,100 13,171,813
Newmont Mining Corp. (International gold exploration and mining company) ............... 256,400 9,999,600
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - Scudder Global Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Parametric Technology Corp.* (Mechanical design software producer) ..................... 286,100 12,177,131
Praxair Inc. (Producer of industrial gases and specialized coatings) ................... 278,900 15,618,400
Sabre Group Holdings Inc.* (Travel reservation system provider) ........................ 380,900 10,331,913
Stillwater Mining Co.* (Exploration and development of mines in Montana
producing platinum, palladium and associated metals) ................................. 472,900 10,137,794
Tele-Communications International, Inc. "A"* (Telecommunication and broadband
cable television services) ........................................................... 271,500 4,191,281
Toys "R" Us Inc.* (Discount toy supermarts) ............................................ 261,900 9,166,500
UNUM Corp. (Provider of disability, health and life insurance and
group pension products) .............................................................. 217,600 9,139,200
USAir Group, Inc. (Major airline) ...................................................... 692,700 24,244,500
United Technologies Corp. (Manufacturer of aerospace equipment, climate
control systems, and elevators) ...................................................... 93,100 7,727,300
Xerox Corp. (Leading manufacturer of copiers and duplicators) .......................... 230,350 18,168,856
------------
321,686,428
- ------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $975,607,066) 1,444,059,866
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $1,123,710,516) (a) 1,592,430,184
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
(a) The cost for federal income tax purposes was $1,136,711,708. At June 30,
1997, net unrealized appreciation for all securities based on tax cost was
$455,718,476. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over tax
cost of $486,588,548 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$30,870,072.
(b) 500 shares = 1 IDR unit (International Depository Receipt) for Korea
Asia Fund
1,000 shares = 1 unit for Seoul International Trust
(c) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $13,648,117 (.85% of net assets).
Their values have been estimated by the Board of Directors in the absence
of readily ascertainable market values. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the difference could be material. The cost of
these securities at June 30, 1997 aggregated $13,895,516. These securities
may also have certain restrictions as to resale.
(d) Principal amount is stated in U.S. dollars unless otherwise noted.
Currency Abbreviations:
GBP British Pounds
The accompanying notes are an integral part of the financial statements.
15 - Scudder Global Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of June 30, 1997
<TABLE>
<S> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at market (identified cost $1,123,710,516) .............. $1,592,430,184
Foreign currency, at market (identified cost $182,193) ............... 182,193
Receivable for investments sold ...................................... 16,969,507
Receivable for Fund shares sold ...................................... 3,179,276
Dividends and interest receivable .................................... 3,502,898
Foreign taxes recoverable ............................................ 1,241,238
Unrealized appreciation on forward currency exchange contracts ....... 4,225,590
Other assets ......................................................... 25,234
-----------------
Total assets ......................................................... 1,621,756,120
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed ..................................... 15,200,335
Due to custodian bank ................................................ 19,436
Accrued management fee ............................................... 1,257,511
Other payables and accrued expenses .................................. 813,068
-----------------
Total liabilities .................................................... 17,290,350
--------------------------------------------------------------------------------------------
Net assets, at market value $1,604,465,770
--------------------------------------------------------------------------------------------
Net Assets
- ---------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income .................................. 21,810,028
Net unrealized appreciation on:
Investments ....................................................... 468,719,668
Foreign currency related transactions ............................. 4,210,099
Accumulated net realized gain ........................................ 112,423,802
Paid-in capital ...................................................... 997,302,173
--------------------------------------------------------------------------------------------
Net assets, at market value $1,604,465,770
--------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($1,604,465,770 / 47,646,208 shares of capital stock
outstanding, $.01 par value, 100,000,000 shares -----------------
authorized) ....................................................... $33.67
-----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - Scudder Global Fund
<PAGE>
Statement of Operations
year ended June 30, 1997
<TABLE>
<S> <C>
Investment Income
- ------------------------------------------------------------------------------------------------------------------------------
Income:
Dividends (net of withholding taxes of $2,363,885) ................... $ 22,861,165
Interest ............................................................. 4,817,364
-----------------
27,678,529
-----------------
Expenses:
Management fee ....................................................... 13,450,790
Services to shareholders ............................................. 3,731,870
Custodian and accounting fees ........................................ 1,357,843
Directors' fees ...................................................... 47,377
Reports to shareholders .............................................. 335,290
Legal ................................................................ 62,820
Auditing ............................................................. 102,700
Registration fees .................................................... 51,962
Other ................................................................ 132,597
-----------------
19,273,249
---------------------------------------------------------------------------------------------
Net investment income 8,405,280
---------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments .......................................................... 131,911,680
Foreign currency related transactions ................................ 17,271,912
-----------------
149,183,592
-----------------
Net unrealized appreciation (depreciation) during the period on:
Investments .......................................................... 163,459,690
Foreign currency related transactions ................................ 4,201,191
-----------------
167,660,881
---------------------------------------------------------------------------------------------
Net gain on investment transactions 316,844,473
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $325,249,753
---------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17 - Scudder Global Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Years Ended June 30,
Increase (Decrease) in Net Assets 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ........................................ $ 8,405,280 $ 10,749,042
Net realized gain from investment transactions ............... 149,183,592 77,304,108
Net unrealized appreciation on investment transactions
during the period ......................................... 167,660,881 106,226,499
---------------- ----------------
Net increase in net assets resulting from operations ......... 325,249,753 194,279,649
---------------- ----------------
Distributions to shareholders from:
Net investment income ........................................ (13,198,024) (11,338,078)
---------------- ----------------
Net realized gains from investment transactions .............. (72,385,950) (38,563,130)
---------------- ----------------
Fund share transactions:
Proceeds from shares sold .................................... 286,843,471 276,103,348
Net asset value of shares issued to shareholders in
reinvestment of distributions ............................. 80,805,423 46,815,558
Cost of shares redeemed ...................................... (370,563,589) (267,766,187)
---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions .............................................. (2,914,695) 55,152,719
---------------- ----------------
Increase in net assets ....................................... 236,751,084 199,531,160
Net assets at beginning of period ............................ 1,367,714,686 1,168,183,526
Net assets at end of period (including undistributed
net investment income of $21,810,028 and $9,106,858, ---------------- ----------------
respectively) ............................................. $1,604,465,770 $1,367,714,686
---------------- ----------------
Other Information
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in Fund shares
Shares outstanding at beginning of period .................... 47,606,518 45,559,445
---------------- ----------------
Shares sold .................................................. 9,673,152 10,053,643
Shares issued to shareholders in reinvestment of
distributions ............................................. 2,905,119 1,745,054
Shares redeemed .............................................. (12,538,581) (9,751,624)
---------------- ----------------
Net increase (decrease) in Fund shares ....................... 39,690 2,047,073
---------------- ----------------
Shares outstanding at end of period .......................... 47,646,208 47,606,518
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 - Scudder Global 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>
Years Ended June 30,
1997(a) 1996 1995 1994(a) 1993 1992 1991 1990 1989 1988
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning --------------------------------------------------------------------------------------------
of period .................. $28.73 $25.64 $23.93 $21.63 $19.56 $18.06 $20.36 $17.64 $14.47 $15.42
--------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income ........ .17 .24 .25 .23 .15 .19 .40 .19 .19 .18
Net realized and unrealized
gain (loss) on investments . 6.58 3.94 1.91 2.57 2.42 2.28 (1.50) 3.28 3.20 (.82)
Total from investment --------------------------------------------------------------------------------------------
operations ................. 6.75 4.18 2.16 2.80 2.57 2.47 (1.10) 3.47 3.39 (.64)
--------------------------------------------------------------------------------------------
Less distributions from:
Net investment income ........ (.28) (.25) (.11) (.24) (.16) (.31) (.37) (.20) (.14) (.06)
Net realized gains from
investment transactions .... (1.53) (.84) (.34) (.26) (.34) (.66) (.83) (.55) (.08) (.25)
--------------------------------------------------------------------------------------------
Total distributions .......... (1.81) (1.09) (.45) (.50) (.50) (.97) (1.20) (.75) (.22) (.31)
--------------------------------------------------------------------------------------------
Net asset value, end of --------------------------------------------------------------------------------------------
period ..................... $33.67 $28.73 $25.64 $23.93 $21.63 $19.56 $18.06 $20.36 $17.64 $14.47
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (%) ............. 24.91 16.65 9.11 12.99 13.45 14.09 (5.20) 20.00 23.90 (4.45)
Ratios and Supplemental Data
Net assets, end of period
($ millions) ............... 1,604 1,368 1,168 1,096 577 371 268 257 91 81
Ratio of operating expenses
to average daily net
assets (%) ................. 1.37 1.34 1.38 1.45 1.48 1.59 1.70 1.81 1.98 1.71(c)
Ratio of net investment income
to average daily net
assets (%) ................. .59 .84 1.03 .97 .90 1.09 2.21 1.77 1.22 1.23
Portfolio turnover rate (%) .. 40.5 29.1 44.4 59.7 64.9 44.6 85.0(d) 38.3 30.7 53.8
Average commission rate
paid (b) ................... $.0007 $.0272 -- -- -- -- -- -- -- --
</TABLE>
(a) Per share amounts have been calculated using weighted average shares
outstanding.
(b) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal periods ending on or after June 30, 1996.
(c) The Adviser absorbed a portion of the Fund's expenses exclusive of
management fees; the ratio of operating expenses before expense
reductions, to average daily net assets was 1.91%.
(d) The portfolio turnover rate on equity securities and debt securities was
62.7% and 174.4%, respectively, based on average monthly equity holdings
and average monthly debt holdings.
19 - Scudder Global Fund
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Global Fund (the "Fund") is a diversified series of Scudder Global Fund,
Inc., a Maryland corporation (the "Corporation") registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
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 securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the Nasdaq System, for which
there have been sales, are valued at the most recent sale price reported on such
system. If there are no such sales, the value is the high or "inside" bid
quotation. Securities which are not quoted on the Nasdaq System but are traded
in another over-the-counter market are valued at the most recent sale price on
such market. If no sale occurred, the security is then valued at the calculated
mean between the most recent bid and asked quotations. If there are no such bid
and asked quotations, the most recent bid quotation shall be used.
Portfolio debt securities with remaining maturities greater than sixty days are
valued by pricing agents approved by the officers of the Fund, which quotations
reflect broker/dealer-supplied valuations and electronic data processing
techniques. If the pricing agents are unable to provide such quotations, the
most recent bid quotation supplied by a bona fide market maker shall be used.
Short-term investments having a maturity of sixty days or less are valued at
amortized cost. All other securities are valued at their fair value as
determined in good faith by the Valuation Committee of the Board of Directors.
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.
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, dividend and 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 ex and payment dates on dividends,
interest, and foreign withholding taxes.
20 - Scudder Global Fund
<PAGE>
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. The Fund paid
no federal income taxes and no federal income tax provision was required.
Distribution of Income and Gains. Distributions of net investment income are
made annually. During any particular year net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed and, therefore, will be distributed to
shareholders annually. 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 primarily relate to investments in forward contracts, passive
foreign investment companies, and certain securities sold at a loss. As a
result, net investment income (loss) and net realized gain (loss) on investment
transactions for a reporting period may differ significantly from distributions
during such period. Accordingly, the Fund may periodically make
reclassifications among certain of its capital accounts without impacting the
net asset value of the Fund.
The Fund uses the 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.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Original
issue discounts are accreted for both tax and financial reporting purposes.
B. Purchases and Sales of Securities
Purchases and sales of investment securities (excluding short-term investments)
for the year ended June 30, 1997 aggregated $552,171,930 and $711,709,937,
respectively.
21 - Scudder Global Fund
<PAGE>
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 1% of the first $500,000,000 of average daily net assets, .95% of the next
$500,000,000 of such assets and 0.90% of such assets in excess of $1,000,000,000
computed and accrued daily and payable monthly. For the year ended June 30,
1997, the fee pursuant to the Management Agreement amounted to $13,450,790,
which was equivalent to an annualized effective rate of .95% of the Fund's
average daily net assets.
On June 26, 1997, the Adviser entered into an agreement with The Zurich
Insurance Company ("Zurich"), an international insurance and financial services
organization, pursuant to which Zurich will acquire a majority interest in the
Adviser, and the Adviser will form a new global investment organization by
combining with Zurich's subsidiary, Zurich Kemper Investments, Inc. and change
its name to Scudder Kemper Investments, Inc. Subject to the receipt of the
required regulatory and shareholder approvals, the transaction is expected to
close in the fourth quarter of 1997.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend-paying and shareholder service agent for the Fund. Included
in services to shareholders is $2,374,492 charged to the Fund by SSC during the
year ended June 30, 1997, of which $213,068 is unpaid at June 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 year ended June 30, 1997,
the amount charged to the Fund by STC aggregated $830,991, of which $81,891 is
unpaid at June 30, 1997.
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 year ended
June 30, 1997, the amount charged to the Fund by SFAC aggregated $552,664, of
which $49,387 is unpaid at June 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 year
ended June 30, 1997, Directors' fees and expenses aggregated $47,377.
22 - Scudder Global Fund
<PAGE>
D. Commitments
As of June 30, 1997, the Fund had entered into the following forward foreign
currency exchange contracts resulting in net unrealized appreciation of
$4,225,590.
<TABLE>
<CAPTION>
Net Unrealized
Appreciation
Settlement (Depreciation)
Contracts to Deliver In Exchange For Date (U.S.$)
--------------------------------- --------------------------------- -------------- --------------------
<S> <C> <C> <C> <C> <C>
French Francs 549,850,500 U.S. Dollars 96,454,001 9/08/97 2,460,676
Deutsche Marks 115,911,495 U.S. Dollars 67,606,588 7/31/97 996,746
Deutsche Marks 47,325,548 U.S. Dollars 27,991,358 8/14/97 768,168
-------
4,225,590
=========
</TABLE>
E. Lines 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 Fund
<PAGE>
Report of Independent Accountants
To the Board of Directors of Scudder Global Fund, Inc. and to the Shareholders
of Scudder Global Fund:
We have audited the accompanying statement of assets and liabilities of Scudder
Global Fund including the investment portfolio, as of June 30, 1997, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the ten years in the period then ended.
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 June
30, 1997 by correspondence with the custodian. 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 Fund as of June 30, 1997, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the ten years in the
period then ended in conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
August 20, 1997
24 - Scudder Global Fund
<PAGE>
Tax Information
The Fund paid distributions of $1.05 per share from net long-term capital gains
during its Fiscal year ended June 30, 1997.
Pursuant to Section 852 of the Internal Revenue Code, the fund designates
$129,228,839 as a long-term capital gain dividend for the Fiscal year ended June
30, 1997.
For its Fiscal year ended June 30, 1997, the total amount of income received by
the Fund from sources within foreign countries and possessions of the United
States was $.33 per share (representing a total of $15,778,555). The total
amount of taxes paid by the Fund to such countries was $.05 per share
(representing a total of $2,363,885).
By now shareholders for whom year-end tax reporting is required by the IRS
should have received their Form 1099-DIV and tax information letter from the
Fund.
Please consult a tax adviser if you have 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.
25 - Scudder Global Fund
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26 - Scudder Global Fund
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27 - Scudder Global Fund
<PAGE>
Officers and Directors
Daniel Pierce*
Chairman of the Board, Director
and Vice President
William E. Holzer*
President
Paul Bancroft III
Director; Venture Capitalist and
Consultant
Sheryle J. Bolton
Director; Consultant
Nicholas Bratt*
Director
William T. Burgin*
Director; General Partner,
Bessemer Venture Partners
Thomas J. Devine
Director; Consultant
William H. Gleysteen, Jr.
Director; Consultant
William H. Luers
Director; President, The
Metropolitan Museum of Art
Kathryn L. Quirk*
Director, Vice President and
Assistant Secretary
Robert W. Lear
Honorary Director;
Executive-in-Residence, Visiting
Professor, Columbia University
Graduate School of Business
Robert G. Stone, Jr.
Honorary Director; Chairman
of the Board and Director, Kirby
Corporation
Susan E. Gray*
Vice President
Jerard K. Hartman*
Vice President
Gary P. Johnson*
Vice President
Thomas W. Joseph*
Vice President
Gerald J. Moran*
Vice President
Isabel Saltzman*
Vice President
David S. Lee*
Vice President and Assistant
Treasurer
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant
Treasurer
*Scudder, Stevens & Clark, Inc.
28 - Scudder Global Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series --
Premium Shares*
Managed Shares*
Scudder Government Money Market Series --
Managed Shares*
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--
Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**
Tax Free+
- ---------
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
- -----------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
U.S. Growth
- -----------
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
- -------------
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, Inc.
Retirement Programs
- -------------------
IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan**+++ +++
(a variable annuity)
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil 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 Spain and Portugal 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. *A class of shares of
the Fund. **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.
29 - Scudder Global Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
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:
- ------------------------------------------------------------------------------------------------------------------------------
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:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
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
- ------------------------------------------------------------------------------------------------------------------------------
30 - Scudder Global Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
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 Investor 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 Investor Centers. Check for an Investor 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
- ------------------------------------------------------------------------------------------------------------------------------
New From Scudder: Scudder International Growth and Income Fund
Scudder International Growth and Income Fund takes a yield-oriented approach to investing in international equities. The
Fund seeks to provide long-term growth of capital plus current income. Investors who desire international exposure but
who wish to take a more conservative approach may appreciate the Fund's emphasis on the dividend paying stocks of
well-established companies outside the United States.
- ------------------------------------------------------------------------------------------------------------------------------
The share price of Scudder International Growth and Income Fund will fluctuate. International investing involves special
risks including currency fluctuation and political instability. 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.
</TABLE>
31 - Scudder Global Fund
<PAGE>
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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