Scudder
Global
Fund
Semiannual Report
December 31, 1996
Pure No-Load(TM) Funds
For investors seeking long-term growth of capital from a professionally managed
portfolio consisting primarily of U.S. and foreign common stocks.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER
<PAGE>
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
17 Financial Statements
20 Financial Highlights
21 Notes to Financial Statements
25 Report of Independent Accountants
26 Tax Information
29 Officers and Directors
30 Investment Products and Services
31 How to Contact Scudder
In Brief
o Scudder Global Fund's total return for the six months ended December 31, 1996
was 6.84% compared with 5.97% for the unmanaged MSCI World Index. The Fund's
return for the calendar year was 13.65% versus 13.48% for the Index.
o We have continued to increase portfolio holdings of companies with dominant
global market shares and improved cost structures.
o Investment opportunities are expanding in Europe, where progress on financial
and structural reform has been impressive. At the end of the period, 48% of
portfolio assets were invested in Europe.
2 - Scudder Global Fund
<PAGE>
Letter From the Fund's Chairman
Dear Shareholders,
We are pleased to report that most world stock markets, with some notable
exceptions, continued their upward swing in 1996, contributing to Scudder Global
Fund's strong total return of 13.65% for the 12 months ended December 31. The
Fund's return over the six month period since our last report was 6.84%.
Stock prices are at or near historical highs in many markets. Nowhere is
this more true than in the United States where, following a short but sharp
setback this past summer, stock averages rose to record levels on a seemingly
daily basis. It may be too much to expect 1997 to provide a repeat of the last
two years' strong domestic equity performance. In such an environment, we
believe that maintaining a globally diversified portfolio is more important than
ever. Scudder Global Fund will continue to provide exposure to the opportunities
for capital appreciation provided by overseas economies and stock markets.
With tax season upon us, it's worth noting recent favorable changes in the
federal tax code that raised the amount of money that a single-earner married
couple can contribute to an Individual Retirement Account. For the 1997 tax
year, such couples can now invest a combined $4000 into an IRA, up from $2250.
An easy way to budget IRA contributions is by establishing a Scudder Automatic
Investment Plan. Contact Scudder Investor Relations for more information on this
service.
As part of Scudder's ongoing efforts to meet investor needs, we recently
launched an innovative product called Scudder Pathway Series. A "fund of funds,"
Pathway Series is a collection of four distinct portfolios -- Conservative,
Balanced, Growth, and International -- that offers flexibility, diversification,
and simplicity. Each portfolio invests in a select mix of Scudder Funds designed
to help achieve a specific investment objective. For more information on Pathway
Series and other Scudder products and services, please turn to page 30.
Thank you for your continued investment in Scudder Global Fund. If you have
any questions about your investment, please call a Scudder Investor Relations
Representative 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 December 31, 1996
- ----------------------------------------------------------------
FUND INDEX COMPARISONS
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
12/31/96 $10,000 Cumulative Annual
- --------------------------------------
SCUDDER GLOBAL FUND
- --------------------------------------
1 Year $11,365 13.65% 13.65%
5 Year $17,985 79.85% 12.46%
10 Year $33,254 232.54% 12.77%
- --------------------------------------
MSCI World Index
- --------------------------------------
1 Year $11,348 13.48% 13.48%
5 Year $16,712 67.12% 10.80%
10 Year $27,394 173.94% 10.59%
- -----------------------------------------------------------------
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 DECEMBER 31
SCUDDER GLOBAL FUND
Year Amount
- ----------------------
'86 $10,000
'87 $10,303
'88 $12,280
'89 $16,874
'90 $15,794
'91 $18,490
'92 $19,330
'93 $25,342
'94 $24,278
'95 $29,261
'96 $33,254
MSCI WORLD INDEX
Year Amount
- ----------------------
'86 $10,000
'87 $11,616
'88 $14,321
'89 $16,700
'90 $13,858
'91 $16,392
'92 $15,535
'93 $19,031
'94 $19,997
'95 $24,141
'96 $27,394
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 DECEMBER 31
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
--------------------------------------------------------------------------------
NET ASSET VALUE... $12.56 $14.74 $19.48 $17.06 $18.96 $19.32 $24.80 $23.33 $27.01 $28.80
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 (%)........ 3.03 19.19 37.41 -6.40 17.07 4.54 31.10 -4.20 20.53 13.65
INDEX TOTAL
RETURN (%)........ 16.16 23.29 16.61 -17.20 18.28 -5.23 22.50 5.08 20.72 13.48
</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 Advisor had not maintained the
Fund's expenses, the average annual total return for the ten year periods would
have been lower.
4 - SCUDDER GLOBAL FUND
<PAGE>
PORTFOLIO SUMMARY as of December 31, 1996
- ---------------------------------------------------------------------------
GEOGRAPHICAL (Excludes Cash Equivalents)
- ---------------------------------------------------------------------------
Europe 48%
United States 23%
Pacific Basin 12%
Japan 7%
Latin America 4%
Other 6%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
Global Fund's portfolio is overweight in Europe, where we see the most
opportunity at present.
- --------------------------------------------------------------------------
SECTORS (Excludes Cash Equivalents)
- --------------------------------------------------------------------------
Manufacturing 23%
Financial 19%
Technology 8%
Durables 7%
Metals and Minerals 7%
Utilities 7%
Consumer Staples 6%
Service Industries 5%
Health 5%
Other 13%
- ------------------------------------------
100%
- ------------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
Manufacturing holdings include low cost producers and
restructuring beneficiaries.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
(19% OF PORTFOLIO)
- --------------------------------------------------------------------------
1. NOVARTIS AG
Pharmaceutical company in Switzerland
2. HOECHST AG
Chemical producer in Germany
3. INTERNATIONAL BUSINESS MACHINES CORP.
Principal manufacturer and servicer of business
and computing machines in the United States
4. AEGON INSURANCE GROUP NV
Insurance company in the Netherlands
5. VEBA AG
Electric utility, distributor of oil and chemicals in Germany
6. SAP AG
German computer software manufacturer
7. WOODSIDE PETROLEUM LTD.
Major oil and gas producer in Australia
8. BASF AG
Leading international chemical producer in Germany
9. CANADIAN PACIFIC LTD.
Transportation and natural resource conglomerate
10. MANNESMANN AG
Diversified construction and technology company in Germany
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,
The end of 1996 marked another year of prosperity for leading global equity
markets in general. The Scudder Global Fund's total return for the six months
ended December 31, 1996, was 6.84% compared with 5.97% for the unmanaged Morgan
Stanley Capital International World Index. The Fund's return for the calendar
year was 13.65%, versus 13.48% for the Index.
Stocks Reach New Highs in U.S. and Europe
The U.S. equity markets hit record highs in 1996, with most benchmarks providing
double-digit returns. Corporate earnings remained healthy, although profit
growth eased from 1995's exceptional rate. The overall interest rate environment
was slightly negative as long-term rates, which started the year below 6%, ended
it above 6.7% after having broken through the 7% level.
In Europe, where nearly half of the Fund's assets are invested, modest growth
and low inflation provided an ideal backdrop for financial assets, and the
markets broadly benefited. Historic changes focusing on restructuring,
deregulation, and economic reform also helped many European markets hit new
highs during the fourth quarter of 1996. Key central banks played a supportive
role as well, pursuing accommodative monetary policies that helped offset the
impact of fiscal restraint exercised by governments preparing for monetary
union.
The Fund's current underweighting of Japan is indicative of a number of ongoing
concerns. On the positive side, there are signs that Japan's spiral of asset
value deflation is unwinding, helping to reduce the risks to that country's
financial system from real estate-related bad debt. In addition, a limited
number of export-based sectors benefiting from a weaker yen displayed
improvements in corporate income. Stock market performance in 1996, however,
reflected negative investor sentiment regarding lackluster overall corporate
earnings and the slow pace of economic reform. Aggregate profits growth in 1996
was much lower than in 1995 and of poorer quality, as corporate results have
been slow to respond to restructuring and cost-cutting efforts. In the fall, the
government announced plans to implement a more restrictive fiscal policy for
1997, with hikes in the consumption tax, elimination of the income tax break,
and reduced public works spending. These steps will in effect eliminate the
public sector's contribution to economic growth, and the market's expectation
for 1997 real GDP growth has been scaled back accordingly. In turn, concern has
heightened that Japanese equity valuations will "normalize" by global standards
through share price declines rather than earnings increases.
In the aggregate, emerging markets again underperformed relative to the larger,
more developed markets, returning a comparatively lackluster 6% for the year.
There was, however, extreme divergence between the best and worst performing
emerging markets in 1996. While Korean equities declined 26%, stocks in Poland
and Brazil rose 89% and 64%, respectively, for the year.
6 - Scudder Global Fund
<PAGE>
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE: 1996 World Stock Market Returns
-------------------------------
BAR CHART DATA:
% Change in % Change in Currency
Stock Market Relative to
Index US Dollar
----- ---------
Poland 89.1 -13.8
Brazil 63.8 -6.5
Finland 45.8 -4.9
Spain 39.0 -6.7
Sweden 38.4 -2.9
Netherlands 33.6 -7.6
Hong Kong 33.5 0
Norway 32.1 -1.8
Denmark 28.8 -6.4
Germany 28.2 -6.6
Czech Republic 26.0 -2.1
Malaysia 24.4 0.6
Indonesia 24.0 -2.8
France 23.7 -5.4
Philippines 22.2 -0.3
Mexico 21.0 -2.1
U.S. 20.3 0
Switzerland 19.5 -13.8
Italy 13.0 4.4
U.K. 11.6 10.4
Australia 10.1 6.9
Singapore -2.2 0.9
Japan -6.8 -11.1
Korea -26.2 -8.3
Thailand -35.1 -1.8
Most world stock markets provided strong performance in 1996.
Source: Morgan Stanley Capital International
Core Portfolio Holdings
As of December 31, 1996, the portfolio had approximately 48% invested in Europe,
23% in the United States, and 22% in Asia Pacific (not including Japan), Latin
America, Canada, and other countries. The Fund's Japan position is substantially
underweight, at 7%.
As long-term shareholders of the Fund are aware, our approach to investing in
the global equity markets is focused on identifying long-term structural trends
in the world economy and companies positioned to capitalize on them. In this
vein, we have continued to expand the portfolio's holdings of companies that
share two characteristics we believe will provide an increasingly important
advantage in the new global competitive environment: dominant worldwide market
share and declining production costs. Recent purchases along these lines include
automobile tire manufacturers Michelin and Goodyear, both of which have been
able to extend their competitive advantage because of economies of scale,
continued capital investment, and technology. Earlier in the year, we identified
another area of increased portfolio emphasis: industrial gas companies based in
the U.K. and United States. We began to purchase a number of these companies
based on our assessment of that sector's pricing stability, growth potential,
and valuation.
The stocks of restructuring beneficiaries in the U.K. and North America have
performed well recently, as the market continues to recognize the successful
efforts of these companies to focus and rationalize their businesses. Based on
their new valuation levels, we have trimmed some of these positions to fund
other opportunities.
7 - Scudder Global Fund
<PAGE>
Restructuring and reform continued to gather momentum on the continent as well,
and portfolio investments seeking to capitalize on these themes continued to
grow. New additions were Deutsche Telekom, the largest telecommunications
operator in Germany; and Clariant, a global chemical conglomerate based in
Switzerland. The Fund's allocation to Europe was also augmented by the strong
performances of many existing holdings.
Another area of focus is the universe of companies with new technologies and
large market shares. These businesses should be able to set long-term standards
in their respective industries and therefore maintain pricing power. The newest
names added under this category were Sabre, a U.S.-based world leader in
travel-related services through its proprietary distribution systems; and
Electronic Data Systems, a U.S.-based, dominant systems designer for large-scale
data management projects.
Pharmaceutical companies in general have performed well recently, and we
continue to believe that well-managed companies serving the health needs of an
aging world population should thrive going forward. We have also sought to
capitalize on the world's changing demographics by maintaining holdings in
companies positioned to help individuals provide for retirement, including a
number of major life insurers.
Among emerging markets, the portfolio has maintained meaningful positions in
Brazil and Korea, with a focus on low-cost producers. Brazil's market stands to
benefit from ongoing reforms and the prospect, for the first time in decades, of
single-digit inflation. As demonstrated by the poor stock market performance in
1996, Korea's export-driven economy is vulnerable to shifting levels of the
Japanese yen, and share prices in Korea will continue to ebb and flow with the
trade balance and money supply. However, the country is liberalizing its
economy, which will lead in time to a broader industrial base and fundamentally
stronger investment environment.
Portfolio investments in Japan were reduced over the period, as were holdings of
gold- and platinum-related issues in view of a prolonged supply problem with
precious metals. Holdings of precious metals stocks were among the Fund's worst
performers in 1996.
Outlook: Changes in
Europe Hold Promise
New technologies, new markets, deregulation and restructuring will continue to
keep global inflation contained in 1997. Although most developed countries will
face fiscal constraints in the year ahead, accommodating monetary policies
should continue to facilitate growth. In view of its current high levels, we
remain cautious with respect to the domestic stock market, despite the healthy
state of the underlying economy. Accordingly, the Fund's position in U.S. stocks
is somewhat underweight. In Japan, we are concerned about the absence of true
reform, and the portfolio's exposure to that market is very low. We have the
greatest optimism regarding Europe, where we see changes happening and where we
expect to find the most investment opportunities. The progress on financial and
8 - Scudder Global Fund
<PAGE>
structural reform, led by Germany, has been impressive in the past 12 months and
the prognosis continues to look promising. In the past, corporate governance in
continental Europe has not been responsive to shareholder value, but this is
changing swiftly.
The world economy is undergoing a fundamental transformation, with powerful
forces including ongoing market reform, technological innovation, and
globalization driving change. Our long-term outlook is for global economic
expansion without significant inflation -- an extremely positive scenario for
investors. Going forward, we will continue to seek to identify opportunities for
long-term capital appreciation presented by the economic changes sweeping the
globe. Scudder Global Fund remains an appropriate vehicle for individuals
seeking broad exposure to the world's equity markets. Thank you for your
continued investment in the Fund.
Sincerely,
Your Portfolio Management Team
/s/William E. Holzer /s/Nicholas Bratt
William E. Holzer Nicholas Bratt
/s/Alice Ho
Alice Ho
9 - Scudder Global Fund
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO AS OF DECEMBER 31, 1996
PRINCIPAL MARKET
AMOUNT ($) VALUE ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS 1.8%
- -----------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 12/31/96 at 6.7%
to be repurchased at $24,753,210 on 1/2/97, collateralized by a $23,951,000 U.S. Treasury -------------
Bond, 7.875%, 4/15/98 (Cost $24,744,000)...................................................... 24,744,000 24,744,000
-------------
CONVERTIBLE BONDS 0.6%
- -----------------------------------------------------------------------------------------------------------------------------
CANADA 0.5%
Teck Corp., 3.75%, 7/15/06 (Major mining complex)............................................... 6,657,000 7,455,840
-------------
KOREA 0.1%
Cheil Food and Chemical Co., Ltd., 3%, 12/31/06 (Leading sugar refiner and major integrated
food processor)............................................................................... 625,000 756,250
Ssangyong Oil Refining Co., Ltd., 3.75%, 12/31/08 (Major oil refiner)........................... 650,000 689,000
-------------
1,445,250
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $7,057,180) 8,901,090
- -----------------------------------------------------------------------------------------------------------------------------
SHARES
- -----------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS 97.6%
- -----------------------------------------------------------------------------------------------------------------------------
ARGENTINA 0.5%
Electricidad Argentina S.A. "A" (ADR)* (Electric utility)(c).................................... 253,143 3,544,002
YPF S.A. "D" (ADR)(Petroleum company)........................................................... 148,800 3,757,200
-------------
7,301,202
-------------
AUSTRALIA 3.0%
Broken Hill Proprietary Co. Ltd. (Petroleum, minerals and steel)................................ 13,850 197,275
Coca Cola Amatil Ltd. (Soft drink bottler and distributor)...................................... 786,792 8,411,383
Foster's Brewing Group, Ltd. (Leading brewery).................................................. 4,178,400 8,469,063
Woodside Petroleum Ltd. (Major oil and gas producer)............................................ 3,339,900 24,396,873
-------------
41,474,594
-------------
AUSTRIA 0.2%
Flughafen Wien AG (Operator of terminals and facilities at Vienna International Airport)........ 5,400 275,197
Flughafen Wien AG............................................................................... 61,900 3,154,577
-------------
3,429,774
-------------
BERMUDA 2.2%
Mid Ocean Limited (Property and casualty insurance company)..................................... 378,150 19,852,875
PartnerRe Holdings Ltd. (Property and casualty insurance company)............................... 307,200 10,444,800
-------------
30,297,675
-------------
BRAZIL 2.9%
Aracruz Celulose S.A. (ADR) (Producer of eucalyptus kraft pulp)................................. 1,210,800 9,989,100
Centrais Eletricas Brasileiras S/A "B" (pfd.) (Electric utility)................................ 30,401,230 11,293,307
The accompanying notes are an integral part of the financial statements.
</TABLE>
10 - SCUDDER GLOBAL FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Companhia Energetica de Minas Gerais (pfd.) (Electric power utility)............................ 126,000,000 4,292,561
Companhia Energetica de Sao Paulo (pfd.)* (Electric utility).................................... 70,200,000 2,736,793
Companhia Siderurgica Belgo-Mineira (Manufacturer of steel wires and wire products) (c)......... 10,591,625 634,279
Companhia Vale do Rio Doce (pfd.) (Diverse mining and industrial complex) ...................... 348,600 6,776,749
Light Participacoes SA* (Electric power utility)................................................ 8,447,000 2,048,546
Usinas Siderurgicas de Minas Gerais S/A (pfd.) (Non-coated flat products and electrolytic
galvanized products).......................................................................... 3,286,100,000 3,352,195
-------------
41,123,530
-------------
CANADA 2.0%
Barrick Gold Corp.(Gold exploration and production in North and South America).................. 109,000 3,123,608
Cambior, Inc.(Medium-sized gold producer with a major mine in Guyana)........................... 314,900 4,644,238
Canadian Pacific Ltd. (Ord.)(Transportation and natural resource conglomerate).................. 792,556 20,860,554
-------------
28,628,400
-------------
CHINA 1.3%
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)................................................................................. 551,500 12,408,750
-------------
17,668,750
-------------
DENMARK 0.7%
FLS Industries "B" (Machinery for cement and allied industries; manufacturer and shipper
of cement).................................................................................... 77,000 9,868,862
-------------
FRANCE 2.1%
Michelin "B" (Leading tire manufacturer)........................................................ 284,349 15,354,956
Schneider SA (Manufacturer of electronic components and automated manufacturing systems)........ 307,846 14,237,952
-------------
29,592,908
-------------
GERMANY 19.4%
BASF AG (Leading international chemical producer)............................................... 544,100 20,953,161
Bayer AG (Leading chemical producer)............................................................ 394,790 16,106,027
Bayerische Vereinsbank AG (Commercial bank)..................................................... 451,098 18,520,410
Commerzbank AG (Worldwide multi-service bank)................................................... 276,399 7,020,626
Daimler-Benz AG* (Automobile and truck manufacturer)............................................ 248,300 17,097,996
Deutsche Telekom AG* (Telecommunication services)............................................... 379,200 7,993,660
Deutsche Telekom AG* (ADR) (Telecommunication services)......................................... 331,800 6,760,425
Hoechst AG (Chemical producer).................................................................. 773,550 36,533,007
Mannesmann AG (Bearer) (Diversified construction and technology company)........................ 47,812 20,716,929
Muenchener Rueckversicherungs AG (Insurance company)............................................ 2,446 4,417,371
Muenchener Rueckversicherungs AG (Registered)................................................... 3,746 9,356,787
The accompanying notes are an integral part of the financial statements.
</TABLE>
11 - SCUDDER GLOBAL FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RWE AG (pfd.) (Producer and marketer of petroleum and chemical products)........................ 589,435 19,911,404
SAP AG (pfd.) (Computer software manufacturer).................................................. 182,200 25,447,754
Schering AG (Pharmaceutical and chemical producer).............................................. 179,000 15,105,142
Siemens AG (Leading electrical engineering and electronics company)............................. 180,400 8,496,443
VEBA AG (Electric utility, distributor of oil and chemicals).................................... 445,000 25,728,392
VIAG AG * (Provider of electrical power and natural gas services, aluminum products, chemicals,
ceramics and glass)........................................................................... 22,000 8,632,215
VIAG AG "E" (New)*.............................................................................. 6,284 2,388,112
-------------
271,185,861
-------------
GHANA 0.3%
Ashanti Goldfields Co., Ltd. (GDR) (Leading gold producer)...................................... 307,400 3,804,075
-------------
HONG KONG 1.8%
Hutchison Whampoa, Ltd. (Container terminal and real estate company)............................ 1,446,000 11,357,489
Kerry Properties Ltd.* (Real estate company).................................................... 4,100,000 11,237,960
Television Broadcasts, Ltd. (Television broadcasting)........................................... 608,000 2,429,013
-------------
25,024,462
-------------
HUNGARY 0.2%
First Hungary Fund* (Investment company) (c).................................................... 3,619 3,166,625
-------------
INDONESIA 0.9%
Asia Pacific Resources International Holdings Ltd. "A" * (Manufacturer of rayon fiber for Asian
textile markets, owner of world's leading paper pulp mill).................................... 69,700 392,063
Asia Pulp & Paper Co., Ltd. (ADR)* (Producer of pulp and paper)................................. 191,900 2,182,863
HM Sampoerna (Foreign registered) (Tobacco company)............................................. 823,000 4,390,262
Indah Kiat Pulp & Paper (Foreign registered) (Producer of pulp and paper)....................... 4,796,630 3,503,043
Indah Kiat Pulp & Paper Warrants* (expiration 4/13/01).......................................... 425,898 130,727
Pabrik Kertas Tjiwi Kimia (Operator of pulp and paper factory).................................. 1,492,520 1,484,937
-------------
12,083,895
-------------
JAPAN 7.3%
Bridgestone Corp. (Leading automobile tire manufacturer)........................................ 824,000 15,653,225
Canon Inc. (Leading producer of visual image and information equipment)......................... 704,000 15,562,041
Hitachi Ltd. (General electronics manufacturer)................................................. 1,278,000 11,918,142
Iino Kaiun Kaisha, Ltd. *(Operator of tankers and specialized carriers)......................... 1,001,000 3,543,822
Matsushita Electric Industrial Co., Ltd. (Leading manufacturer of consumer electronic products). 788,000 12,860,029
Nichiei Co., Ltd. (Finance company for small and medium-sized firms)............................ 165,000 12,181,591
SMC Corp. (Leading maker of pneumatic equipment)................................................ 43,000 2,892,410
Shohkoh Fund & Co., Ltd. (Finance company for small and medium-sized firms)..................... 29,600 6,440,895
Sony Corp. (Consumer electronic products manufacturer).......................................... 144,000 9,437,527
The accompanying notes are an integral part of the financial statements.
</TABLE>
12 - SCUDDER GLOBAL FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sumitomo Metal Industries, Ltd (Leading integrated crude steel producer)........................ 105,000 258,397
Sumitomo Metal Mining Co., Ltd. (Leading gold, nickel and copper mining company)................ 1,690,000 11,397,030
-------------
102,145,109
-------------
KOREA 3.3%
Cheil Food and Chemical Co., Ltd. (Korea's largest sugar refiner and major integrated
food processor)............................................................................... 9 362
Daewoo Securities Co., Ltd. (Brokerage and financial services).................................. 115,516 1,490,088
Hanil Bank (Major commercial bank).............................................................. 121,464 833,717
Korea Asia Fund (IDR)* (Investment company) (b)................................................. 69,000 1,043,625
Korea Electric Power Co. (Electric utility)..................................................... 25,000 727,811
Korea Electric Power Co. (ADR) (Electric utility)............................................... 353,000 7,236,500
Korea Equity Trust IDR (Investment company) (b)................................................. 140,000 1,050,000
Korea Express Co., Ltd. (General freight transport company)..................................... 98,545 2,367,412
Korea Long Term Credit Bank (New) (Major commercial bank)....................................... 49,799 854,539
Korea Mobile Telecom Corp. (Mobile telecommunication services) (c).............................. 3,850 3,822,845
Korea Zinc Co. (Zinc mining and manufacturing).................................................. 80,000 1,514,793
Lotte Confectionery Co., Ltd. (Major producer of snack food).................................... 26,390 3,060,615
Pang-Rim Spinning Co., Ltd. (Leading manufacturer of cotton-polyester spun fabrics)............. 25,000 1,257,396
Pohang Iron & Steel Co., Ltd. (Leading steel producer) (c)...................................... 7,030 416,018
Samsung Display Devices (Leading manufacturer of CRT and picture tubes)......................... 25,905 1,480,724
Samsung Electromechanics Co., Ltd. (Major electronics parts company)............................ 19,761 449,007
Samsung Electromechanics Co., Ltd. (New)........................................................ 4,945 109,434
Samsung Electronics Co., Ltd.* (Major electronics manufacturer)................................. 8,850 366,169
Samsung Electronics Co., Ltd. (1/2 Voting GDR)(New 1)........................................... 6,935 260,063
Samsung Electronics Co., Ltd. (Non-voting GDS).................................................. 267,946 4,943,604
Samsung Electronics Co., Ltd. (Non-voting GDS)(New)............................................. 80,752 1,413,160
Samsung Heavy Industries Co., Ltd. (Machinery manufacturer)..................................... 106,906 1,107,015
Samsung Heavy Industries Co., Ltd. (New 1)*..................................................... 10,369 104,426
Samsung Securities (Securities company)......................................................... 40,000 672,189
Samsung Securities Co Ltd. (New)* (Provides brokerage and other financial services to customers
in Korea)..................................................................................... 6,400 106,036
Seoul International Trust (Investment company) (b).............................................. 43,000 1,268,500
Ssangyong Cement Industrial Co., Ltd. (Major cement company).................................... 37,206 523,966
Yukong, Ltd. (Korea's leading oil refiner)...................................................... 420,420 7,960,615
-------------
46,440,629
-------------
NETHERLANDS 3.0%
AEGON Insurance Group NV (Insurance company).................................................... 404,492 25,778,287
The accompanying notes are an integral part of the financial statements.
</TABLE>
13 - SCUDDER GLOBAL FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Internationale Nederland Groep NV (Insurance and financial services)............................ 459,915 16,558,644
-------------
42,336,931
-------------
NEW ZEALAND 1.0%
Telecom Corp. of New Zealand (Telecommunication services)....................................... 2,600,000 13,270,867
-------------
SOUTH AFRICA 1.3%
Impala Platinum Holdings (ADR) (Leading platinum producer)...................................... 468,500 4,685,000
Rustenburg Platinum Holdings, Ltd. (ADR) (Leading platinum producer)............................ 79,002 1,086,278
Sasol Ltd. (Coal mining and processing, crude oil exploration and refining, petrochemical
production)................................................................................... 451,096 5,351,251
South African Breweries (Brewery)............................................................... 283,600 7,196,350
-------------
18,318,879
-------------
SWEDEN 4.2%
Astra AB "A" (Free) (Pharmaceutical company).................................................... 368,650 18,217,752
S.K.F. AB "B" (Free) (Manufacturer of roller bearings).......................................... 602,400 14,266,194
Skandia Foersaekrings AB (Free) (Financial conglomerate)........................................ 511,300 14,470,507
Skandinaviska Enskilda Banken "A" (Commercial bank)............................................. 476,700 4,893,210
Volvo AB "B" (Free) (Automobile manufacturer)................................................... 298,900 6,596,492
-------------
58,444,155
-------------
SWITZERLAND 8.1%
ABB AG (Bearer) (Manufacturer of electrical equipment).......................................... 14,275 17,743,841
CS Holdings (Registered) (Provider of bank services, management services and life insurance).... 132,820 13,634,005
Clariant AG (Registered) (Manufacturer of color chemicals)...................................... 17,704 7,573,268
Nestle SA (Registered) (Food manufacturer)...................................................... 9,621 10,321,297
Novartis AG (Bearer) (Pharmaceutical company)................................................... 4,005 4,580,560
Novartis AG (Registered)........................................................................ 29,975 34,305,095
Swiss Bank Corp. Warrants (Registered)* (expiration 6/30/00).................................... 5 14
Swiss Reinsurance (Registered) (Life, accident and health insurance company).................... 10,165 10,844,184
Zurich Insurance Group (Registered) (Insurance company)......................................... 50,750 14,094,065
-------------
113,096,329
-------------
TAIWAN 0.2%
Taiwan Semiconductor Manufacturing Co.* (Manufacturer of integrated circuits and other
semiconductor devices)........................................................................ 1,620,000 3,328,364
-------------
UNITED KINGDOM 8.8%
BOC Group PLC (Producer of industrial gases).................................................... 1,309,000 19,586,415
Carlton Communications PLC (Television post production products and services)................... 1,772,000 15,520,235
General Electric Co., PLC (Manufacturer of power, communications and defense equipment and
other various electrical components).......................................................... 1,703,600 11,170,440
The accompanying notes are an integral part of the financial statements.
</TABLE>
14 - SCUDDER GLOBAL FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Grand Metropolitan PLC (Food and drink producer and retailer)................................... 1,417,720 11,116,289
London & Overseas Freighters (ADR) (Operator of a fleet of oil tankers)......................... 140,900 1,690,800
Lonrho PLC (Widely diversified industrial holding company)...................................... 900,000 1,926,000
PowerGen PLC (Electric utility)................................................................. 1,400,134 13,711,012
RTZ Corp., PLC (Mining and finance company)..................................................... 1,009,014 16,203,316
Reuters Holdings PLC (International news agency)................................................ 1,123,500 14,435,361
Shell Transport & Trading PLC (Part owner of Royal Dutch Shell Co.)............................. 987,100 17,101,946
-------------
122,461,814
-------------
UNITED STATES 22.9%
APL Ltd. (Ocean, rail and truck container distribution and transportation)...................... 212,500 5,020,313
Anheuser-Busch Companies, Inc. (Leading brewery)................................................ 175,400 7,016,000
Biogen Inc.* (Biotechnology research and development)........................................... 275,120 10,660,900
Boeing Co. (Manufacturer of jet airplanes)...................................................... 92,400 9,829,050
Charles Schwab Corp. (Discount brokerage services).............................................. 286,500 9,168,000
Chiron Corp.* (Developer of therapeutic and diagnostic products)................................ 172,900 3,220,263
Destec Energy Inc.* (Non-utility producer of cogeneration and coal gasification power).......... 479,000 7,484,375
EXEL, Ltd. (Provider of liability insurance).................................................... 456,600 17,293,725
Electronic Data Systems Corp. (Provider of information technology services)..................... 373,800 16,166,850
Enron Corp. (Major natural gas pipeline system)................................................. 356,300 15,365,438
First Data Corp. (Credit-card processing services).............................................. 191,400 6,986,100
General Re Corp. (Property and casualty reinsurance)............................................ 46,135 7,277,796
Goodyear Tire & Rubber Co. (Manufacturer of tires and rubber products).......................... 295,000 15,155,625
Homestake Mining Co. (Major international gold producer)........................................ 627,000 8,934,750
International Business Machines Corp. (Principal manufacturer and servicer of business and
computing machines)........................................................................... 183,620 27,726,614
Louisiana-Pacific Corp. (Producer of lumber, plywood and pulp).................................. 400,000 8,450,000
MBIA Inc. (Insurer of municipal bonds).......................................................... 202,650 20,518,313
National Semiconductor Corp.* (Manufacturer of integrated circuits and transistors)............. 346,100 8,436,188
Newmont Mining Corp. (International gold exploration and mining company)........................ 256,400 11,473,900
Parker-Hannifin Group (Fluid control components)................................................ 256,300 9,931,625
Policy Management Systems Corp.* (Insurance company software and services)...................... 107,500 4,958,438
Praxair Inc. (Producer of industrial gases and specialized coatings)............................ 25,200 1,162,350
Sabre Group Holdings Inc. "A" * (Travel reservation system provider)............................ 114,500 3,191,688
Stillwater Mining Co.* (Exploration and development of mines in Montana producing platinum,
palladium and associated metals).............................................................. 472,900 8,571,313
UNUM Corp. (Provider of disability, health and life insurance and group pension products)....... 108,800 7,860,800
USAir Group, Inc.* (Major airline).............................................................. 429,700 10,044,238
The accompanying notes are an integral part of the financial statements.
</TABLE>
15 - SCUDDER GLOBAL FUND
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Unicom Corp. (Electric utility in northern Illinois)............................................ 250,000 6,781,250
United Technologies Corp. (Manufacturer of aerospace equipment, climate control systems, and
elevators).................................................................................... 307,500 20,295,000
WMX Technologies Inc. (Solid and chemical waste management services)............................ 409,100 13,346,888
Xerox Corp. (Leading manufacturer of copiers and duplicators)................................... 329,850 17,358,356
-------------
319,686,146
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $1,004,111,515) 1,364,179,836
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO - 100.0% (COST $1,035,912,695) (a) 1,397,824,926
- -----------------------------------------------------------------------------------------------------------------------------
* Non-income producing security.
(a) The cost for federal income tax purposes was $1,037,984,294. At December 31, 1996, net
unrealized appreciation for all securities based on tax cost was $359,840,632. This
consisted of aggregate gross unrealized appreciation for all securities in which there
was an excess of market value over tax cost of $401,113,510 and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost over market value
of $41,272,878.
(b) 500 shares = 1 IDR unit (International Depository Receipt) for Korea Asia Fund
1,000 shares = 1 IDR unit for Korea Equity Trust
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 $16,843,769 (1.20% 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 December 31, 1996 aggregated $18,505,890. These securities may
also have certain restrictions as to resale.
See page 5 for sector breakdown.
The accompanying notes are an integral part of the financial statements.
</TABLE>
16 - SCUDDER GLOBAL FUND
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AS OF DECEMBER 31, 1996
ASSETS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at market (identified cost $1,035,912,695) (Note A)................... $1,397,824,926
Cash............................................................................... 523
Foreign currency, at market (identified cost $3,990,214)........................... 4,023,039
Receivable on investments sold..................................................... 14,824,462
Receivable on Fund shares sold..................................................... 1,737,081
Dividends and interest receivable.................................................. 2,190,795
Foreign taxes recoverable.......................................................... 640,080
Unrealized appreciation on forward currency exchange contracts (Note D)............ 2,615,324
Other assets....................................................................... 1,241
--------------
Total assets....................................................................... 1,423,857,471
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased.................................................. 11,065,026
Payable for Fund shares redeemed................................................... 1,856,423
Accrued management fee (Note C).................................................... 1,162,029
Other accrued expenses (Note C).................................................... 757,162
Other payables..................................................................... 90,470
--------------
Total liabilities.................................................................. 14,931,110
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS, AT MARKET VALUE $1,408,926,361
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated distributions in excess of net investment income....................... (3,429,891)
Net unrealized appreciation on:
Investments...................................................................... 361,912,231
Foreign currency related transactions............................................ 2,599,153
Accumulated net realized gain...................................................... 11,710,383
Paid-in capital.................................................................... 1,036,134,485
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS, AT MARKET VALUE $1,408,926,361
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, offering and redemption price per share ($1,408,926,361 / 48,919,595
shares of capital stock outstanding, $.01 par value, 100,000,000 shares --------------
authorized)...................................................................... $ 28.80
--------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
17 - SCUDDER GLOBAL FUND
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1996
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Income:
Dividends (net of withholding taxes of $817,371).................................. $ 7,916,049
Interest.......................................................................... 1,978,448
--------------
9,894,497
--------------
Expenses:
Management fee (Note C)........................................................... 6,567,663
Services to shareholders (Note C)................................................. 1,682,048
Custodian and accounting fees (Note C)............................................ 640,942
Directors' fees (Note C).......................................................... 18,410
Reports to shareholders........................................................... 157,828
Legal............................................................................. 32,838
Auditing.......................................................................... 53,944
Registration fees................................................................. 24,399
Other............................................................................. 55,150
--------------
9,233,222
- ------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 661,275
- ------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments....................................................................... 30,998,204
Foreign currency related transactions............................................. (25,223)
--------------
30,972,981
--------------
Net unrealized appreciation (depreciation) during the period on:
Investments....................................................................... 56,652,253
Foreign currency related transactions............................................. 2,590,245
--------------
59,242,498
- ------------------------------------------------------------------------------------------------------------------------
NET GAIN ON INVESTMENT TRANSACTIONS 90,215,479
- ------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 90,876,754
- ------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
18 - SCUDDER GLOBAL FUND
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
DECEMBER 31, JUNE 30,
INCREASE (DECREASE) IN NET ASSETS 1996 1996
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income................................................... $ 661,275 $ 10,749,042
Net realized gain from investment transactions.......................... 30,972,981 77,304,108
Net unrealized appreciation on investment transactions during the
period................................................................ 59,242,498 106,226,499
----------------- ----------------
Net increase in net assets resulting from operations.................... 90,876,754 194,279,649
----------------- ----------------
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............................................... 117,811,313 276,103,348
Net asset value of shares issued to shareholders in reinvestment of
distributions......................................................... 80,805,423 46,815,558
Cost of shares redeemed................................................. (162,697,841) (267,766,187)
----------------- ----------------
Net increase in net assets from Fund share transactions................. 35,918,895 55,152,719
----------------- ----------------
Increase in net assets.................................................. 41,211,675 199,531,160
Net assets at beginning of period....................................... 1,367,714,686 1,168,183,526
Net assets at end of period (including accumulated distributions in
excess of net investment income and undistributed net investment ----------------- ----------------
income of $(3,429,891) and $9,106,858, respectively).................. $ 1,408,926,361 $ 1,367,714,686
----------------- ----------------
OTHER INFORMATION
- ----------------------------------------------------------------------------------------------------------------------------------
INCREASE IN FUND SHARES
Shares outstanding at beginning of period............................... 47,606,518 45,559,445
----------------- -----------------
Shares sold............................................................. 4,112,435 10,053,643
Shares issued to shareholders in reinvestment of distributions.......... 2,905,119 1,745,054
Shares redeemed......................................................... (5,704,477) (9,751,624)
----------------- -----------------
Net increase (decrease) in Fund shares.................................. 1,313,077 2,047,073
----------------- -----------------
Shares outstanding at end of period..................................... 48,919,595 47,606,518
----------------- -----------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
19 - SCUDDER GLOBAL FUND
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
AND OTHER PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL STATEMENTS.
SIX MONTHS
ENDED
DECEMBER 31, YEARS ENDED JUNE 30,
1996(a) 1996 1995 1994(a) 1993 1992 1991 1990 1989 1988 1987(e)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <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 $12.00
Income from investment
operations:
Net investment income......... .01 .24 .25 .23 .15 .19 .40 .19 .19 .18 .05
Net realized and unrealized
gain (loss) on investments.. 1.87 3.94 1.91 2.57 2.42 2.28 (1.50) 3.28 3.20 (.82) 3.37
Total from investment -------------------------------------------------------------------------------------------------
operations.................. 1.88 4.18 2.16 2.80 2.57 2.47 (1.10) 3.47 3.39 (.64) 3.42
-------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income ........ (0.28) (.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 $28.80 $28.73 $25.64 $23.93 $21.63 $19.56 $18.06 $20.36 $17.64 $14.47 $15.42
- -------------------------------------------------------------------------------------------------------------------------------
Total Return (%).............. 6.84** 16.65 9.11 12.99 13.45 14.09 (5.20) 20.00 23.9 (4.45) 28.50**
Ratios and Supplemental Data
Net assets, end of period
($ millions)................ 1,409 1,368 1,168 1,096 577 371 268 257 91 81 102
Ratio of operating expenses,
net to average daily net
assets (%).................. 1.34* 1.34 1.38 1.45 1.48 1.59 1.70 1.81 1.98 1.71 1.84*
Ratio of operating expenses
before expense reductions,
to average net assets (%)... 1.34* 1.34 1.38 1.45 1.48 1.59 1.70 1.81 1.98 1.91 2.13*
Ratio of net investment
income to average daily
net assets (%).............. .05(d) .84 1.03 0.97 .90 1.09 2.21 1.77 1.22 1.23 .63*
Portfolio turnover rate (%)... 38.0* 29.1 44.4 59.7 64.9 44.6 85.0(c) 38.3 30.7 53.8 32.2*
Average commission rate
paid (b).................... $.0004 $.0272 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
(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 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.
(d) The ratio for the six months ended December 31, 1996 has not been annualized since the Fund
believes it would not be appropriate because the Fund's dividend income is not earned ratably
throughout the fiscal year.
(e) For the Period July 23, 1986 (commencement of operations) to June 30, 1987.
* Annualized **Not annualized.
</TABLE>
20 - 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 National Association of
Securities Dealers Automatic Quotation ("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 resale 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.
21 - SCUDDER GLOBAL FUND
<PAGE>
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.
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.
22 - SCUDDER GLOBAL FUND
<PAGE>
B. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
investments) for the six months ended December 31, 1996 aggregated
$253,564,521 and $315,171,797, respectively.
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
objectives, policies, and restrictions. The Adviser determines the
securities, instruments, and other contracts relating to investments to
be purchased, sold or entered into by the Fund. In addition to portfolio
management services, the Adviser provides certain administrative
services in accordance with the 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. The
Management Agreement also provides that if the Fund's expenses,
exclusive of taxes, interest, and extraordinary expenses, exceed
specified limits, such excess, up to the amount of the management fee,
will be paid by the Adviser. For the six months ended December 31, 1996,
the fee pursuant to the Management Agreement amounted to $6,567,663,
which was equivalent to an annualized effective rate of .95% of the
Fund's average daily net assets.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend-paying and shareholder service agent for the Fund.
Included in services to shareholders is $1,094,459 charged to the Fund
by SSC during the six months ended December 31, 1996, of which $219,420
is unpaid at December 31, 1996.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement
and employee benefit plans invested in the Fund. For the six months
ended December 31, 1996, the amount charged to the Fund by STC
aggregated $345,915, of which $73,149 is unpaid at December 31, 1996.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the
Adviser, is responsible for determining the daily net asset value per
share and maintaining the portfolio and general accounting records of
the Fund. For the six months ended December 31, 1996, the amount charged
to the Fund by SFAC aggregated $273,343, of which $47,341 is unpaid at
December 31, 1996.
The Fund pays each Director not affiliated with the Adviser $4,000
annually, plus specified amounts for attended board and committee
meetings. For the six months ended December 31, 1996, Directors' fees
and expenses aggregated $18,410.
D. COMMITMENTS
As of December 31, 1996, the Fund had entered into the following forward
foreign currency exchange contracts resulting in net unrealized
appreciation of $2,615,324.
CONTRACTS TO DELIVER IN EXCHANGE FOR
-------------------------- ---------------------
French Francs 549,850,500 U.S. Dollars 109,000,000
NET UNREALIZED
APPRECIATION
SETTLEMENT (DEPRECIATION)
DATE (U.S.$)
---------------- --------------------
3/06/97 2,615,324
23 - SCUDDER GLOBAL FUND
<PAGE>
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.
24 - SCUDDER GLOBAL FUND
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the 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 December
31, 1996, and the related statement of operations for the six months
then ended, the statements of changes in net assets for the six months
then ended and for the year ended June 30, 1996 and the financial
highlights for the six months ended December 31, 1996, for each of the
nine years in the period ended June 30, 1996, and for the period July
23, 1986 (commencement of operations) to June 30, 1987. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1996, 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 December 31, 1996, the
results of its operations for the six months then ended, the changes in
its net assets for the six months then ended and for the year ended June
30, 1996, and the financial highlights for the six months ended December
31, 1996, for each of the nine years in the period ended June 30, 1996,
and for the period July 23, 1986 (commencement of operations) to June
30, 1987 in conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
February 19, 1997
25 - SCUDDER GLOBAL FUND
<PAGE>
TAX INFORMATION
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.
26 - SCUDDER GLOBAL FUND
<PAGE>
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27 - Scudder Global Fund
<PAGE>
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28 - 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
Thomas J. Devine
Director; Consultant
William H. Gleysteen, Jr.
Director; Consultant
Dudley H. Ladd*
Director
William H. Luers
Director; President, The Metropolitan Museum of Art
Robert G. Stone, Jr.
Honorary Director; Chairman of the Board and Director, Kirby Corporation
Robert W. Lear
Honorary Director; Executive-in-Residence, Visiting Professor, Columbia
University Graduate School of Business
Susan E. Gray*
Vice President
Adam M. Greshin*
Vice President
Jerard K. Hartman*
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
Kathryn L. Quirk*
Vice President and Assistant Secretary
*Scudder, Stevens & Clark, Inc.
29 - 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
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
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
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 Quality Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
- -------------
Worldwide
Scudder Global 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
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
Retirement Programs
- -------------------
IRA
SEP IRA
SIMPLE 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 First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities
Fund, Inc.
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed from expected
least to most risk. +A portion of the income from the tax-free funds may be
subject to federal, state, and local taxes. *Not available in all states.
+++ +++A no-load variable annuity contract provided by Charter National Life
Insurance Company and its affiliate, offered by Scudder's insurance agencies,
1-800-225-2470. #These funds, advised by Scudder, Stevens & Clark, Inc., are
traded on various stock exchanges.
30 - Scudder Global Fund
<PAGE>
How to Contact Scudder
Account Service and Information
- --------------------------------------------------------------------------------
For existing account services and transactions
Scudder Investor Relations -- 1-800-225-5163
For 24 hour account information, fund information, exchanges, and an
overview of all the services available to you
Scudder Electronic Account Services -- http://funds.scudder.com
For information about your Scudder accounts, exchanges and redemptions
Scudder Automated Information Line (SAIL) -- 1-800-343-2890
Investment Information
- --------------------------------------------------------------------------------
For information about the Scudder funds, including additional
applications and prospectuses, or for answers to investment questions
Scudder Investor Relations -- 1-800-225-2470
[email protected]
Scudder's World Wide Web Site -- http://funds.scudder.com
For establishing 401(k) and 403(b) plans
Scudder Defined Contribution Services -- 1-800-323-6105
Scudder Brokerage Services
- --------------------------------------------------------------------------------
To receive information about this discount brokerage service and to
obtain an application
Scudder Brokerage Services* -- 1-800-700-0820
Please address all correspondence to
- --------------------------------------------------------------------------------
The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291
Or Stop by a Scudder Funds Center
- --------------------------------------------------------------------------------
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they
can be found in the following cities:
Boca Raton Chicago San Francisco
Boston New York
For information on Scudder Treasurers Trust(TM), an institutional cash
management service for corporations, non-profit organizations and trusts
which utilizes certain portfolios of Scudder Fund, Inc.*
($100,000 minimum), call: 1-800-541-7703.
For information on Scudder Institutional Funds**, funds designed to meet
the broad investment management and service needs of banks and other
institutions, call: 1-800-854-8525.
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
* Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061--
Member NASD/SIPC.
** Contact Scudder Investor Services, Inc., Distributor, to receive a prospectus
with more complete information, including management fees and expenses. Please
read it carefully before you invest or send money.
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
