[Image] Scudder Emerging Markets Income Fund Profile [Image]
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The fund profile, a supplement to the full prospectus, is designed as
an easy-to-read summary of fund risks, fees, and objectives. You can
click on any question to link to the Fund's prospectus and get more
information on that topic. Or, if you wish, you can proceed directly
to the Fund's prospectus. Once you have read the prospectus and
considered your investment goals, you can proceed to a Scudder Funds
application.
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Fund Profile
July 1, 1997
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1. What Are The Fund's Objectives?
Scudder Emerging Markets Income Fund seeks to provide high current
income and secondarily, long-term capital appreciation through
investment primarily in high-yielding debt securities issued by
governments and corporations in emerging markets.
2. What Does The Fund Invest In?
The Fund invests primarily (at least 65% of total assets) in high
yield/high risk debt securities issued by governments,
government-related entities and corporations in emerging markets or
the return on which is derived primarily from emerging markets. To
reduce currency risk, the Fund invests at least 65% of its total
assets in U.S. dollar-denominated debt securities. Normally, at least
50% of its total assets will be invested in sovereign debt securities
issued by or guaranteed by governments, government-related entities
and central banks in emerging markets; government owned, controlled or
sponsored entities located in emerging markets; entities organized and
operated for the purpose of restructuring investment characteristics
of instruments issued by government or government-related entities in
emerging markets; and debt obligations issued by supranational
organizations. The Fund invests predominantly in debt securities rated
below investment-grade: below BBB by Standard & Poor's or below Baa by
Moody's Investors Service, Inc., or their equivalent as determined by
the Fund's investment adviser, Scudder, Stevens & Clark, Inc. (i.e.,
"junk bonds"). The Fund may invest regularly in "Brady Bonds" (debt
securities issued under the framework of the Brady Plan).
The Fund takes a global approach to portfolio management. The adviser
currently weights the Fund's investments toward countries in Latin
America, which has offered the largest and most liquid debt markets of
the emerging nations around the globe in the past few years. The Fund
intends to invest in a minimum of three countries at any one time and
will not commit more than 40% of its total assets to issuers in a
single country.
The weighted average maturity of the Fund's portfolio will vary from
period to period and debt securities in which the Fund may invest may
have stated maturities from overnight to 30 years. In managing the
Fund's portfolio, the adviser takes into account such factors as the
credit quality of issuers, changes in and levels of interest rates,
projected economic growth rates, capital flows, debt levels, trends in
inflation, anticipated movements in foreign currencies and government
initiatives.
The Fund may invest up to 35% of its total assets in securities other
than debt obligations issued in emerging markets.
3. What Are The Risks Of Investing In The Fund?
The Fund invests predominantly in lower quality bonds (i.e., "junk
bonds"). Bonds of this type are considered to be speculative with
regard to the payment of interest and return of principal, and
generally involve a greater risk of default and more price volatility
than securities in higher rating categories. A large portion of the
Fund's bond holdings may trade at substantial discounts from face
value. Emerging market securities can be more volatile and less liquid
than securities in more developed markets. In addition, investment in
sovereign debt can involve a high degree of risk. Foreign securities
often have less publicly available information and are subject to
different regulations than domestic securities. Political events,
changes in the perceived creditworthiness of issuers, high rates of
inflation, higher brokerage costs, fluctuating national interest
rates, thinner trading markets, foreign taxes and movements in foreign
currencies will affect the value of the Fund's holdings which
determine the Fund's share price. Consequently, the Fund's share price
is likely to vary from day to day. You incur principal risk when you
invest, because your shares, when sold, may be worth more or less than
what you paid for them.
Because it is non-diversified, the Fund may invest in a smaller number
of issuers, which will subject it to greater market and credit risk
than a diversified fund.
4. For Whom Is This Fund Appropriate?
You may wish to consider this Fund if you are seeking high current
income and:
o plan to hold your investment for the long term (at least 5 years
or more),
o can tolerate fluctuations in share price,
o have or plan to have other investments for the benefit of
diversification, and
o understand the risks of investing in emerging market securities.
5. What Are The Fund's Expenses And Fees?
There are two kinds of expenses that a shareholder may incur, directly
or indirectly, by investing in a mutual fund. These types of expenses,
as they relate to Scudder Emerging Markets Income Fund, are:
Shareholder transaction expenses --
Expenses charged directly to your account for various transactions.
Sales Commission None
Commissions to Reinvest Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund operating expenses --
Expenses paid by the Fund before it distributes its net investment
income, expressed as a percentage of the Fund's average daily net
assets. Figures below are for the fiscal year ended October 31,
1996.
Investment management fee 0.99%
12b-1 fees None
Other expenses 0.45%
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Total Fund operating expenses 1.44%
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Example:
Assuming a 5% annual return and redemption at the end of each
period, the total expenses relating to a $1,000 investment would be:
1 Year 3 Years 5 Years 10 Years
$15 $46 $79 $172
This example assumes reinvestment of all dividends and distributions
and that the total Fund operating expenses listed above remain the
same each year. This example should not be considered a representation
of past or future expenses or return. Actual Fund expenses and return
vary from year to year and may be higher or lower than those shown.
Please note that there is a $5 service fee if you request redemption
proceeds via wire.
6. How Has The Fund Performed Historically?
This chart shows how the Fund has performed since it commenced
operations on December 31, 1993, assuming reinvestment of all
distributions. Performance is historical and may not be indicative of
future results. Total return and principal value will fluctuate. The
Fund's 30-day net annualized SEC yield on June 30, 1997 was 7.53%.
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE:
Total returns for the years ended December 31:
BAR CHART DATA: 1994 -8.06%
1995 19.48
1996 34.55
The Fund's Average Annual Total Return for the period
ended June 30, 1997
One Year 29.27%
Life of Fund 15.17%
If the adviser had not maintained the total annualized expenses of the
Fund until February 29, 1996, average annual total return for the one
year and life of Fund periods would have been lower.
7. Who Manages The Fund?
The Fund's investment adviser is Scudder, Stevens & Clark, Inc., a
leading provider of U.S. and international investment management for
clients throughout the world. The Fund is managed by a team of Scudder
investment professionals who each play an important role in the Fund's
management process.
Lead Portfolio Manager Susan E. Gray assumed responsibility for the
Fund's investment strategies and day-to-day management in 1996. Ms.
Gray, who has over six years of investment experience in emerging
markets, joined the Fund's team in 1994 and has worked at Scudder
since 1987. M. Isabel Saltzman, Portfolio Manager, assists with the
development and execution of investment strategy. Ms. Saltzman, who
joined Scudder in 1990, has been involved in foreign finance and
investing since 1979 and contributes special expertise in Latin
America.
8. How Can I Invest?
To make it easy for you to open an account, you may invest by mail,
phone, fax, or in person. The minimum initial investment is $2,500,
except that shareholders may open an account with at least $1,000 if
an automatic investment plan of $100/month is established. Scudder
retirement plans and certain other accounts have similar or lower
minimum share balance requirements. A shareholder who maintains an
account balance of less than $2,500 without establishing an automatic
investment plan, will be assessed an annual fee of $10.00, payable to
the Fund. Retirement accounts and certain other accounts will not be
assessed the $10.00 charge. You may also exchange Fund shares free of
charge within the Scudder Family of Funds.
9. How Can I Redeem Shares?
You may redeem shares at the current share price on any business day
by telephone, fax, or mail.
10. When Are Distributions Made?
The Fund typically makes dividend distributions in March, June,
September, and December. Capital gain distributions, if any, will be
made in December. You may elect to receive distributions in cash or
have them reinvested in additional shares of the Fund.
Generally, dividends from net investment income are taxable to
shareholders as ordinary income. Long-term capital gains
distributions, if any, are taxable as long-term capital gains
regardless of the length of time shareholders have owned their shares.
Short-term capital gains and any other taxable income distributions
are taxable as ordinary income.
11. What Services Does Scudder Provide?
As a shareholder, you'll enjoy:
o professional service from representatives who can answer your
questions and execute your transactions
o automated toll-free touchtone access to account information,
share prices and yields, and to perform transactions
o Scudder's quarterly shareholder newsletter, Scudder Perspectives
o regular, informative reports about the performance of your Fund
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[Image]Scudder wants you to make informed investment decisions. This
Fund Profile contains key information about the Fund. If you would
like more information before you invest, please consult the Fund's
accompanying prospectus. For details about the Fund's holdings or
recent investment strategies, please review the Fund's most recent
annual or semiannual report. The reports are free and may be ordered
by calling 1-800-225-2470.
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