Scudder
Global
Fund
Annual Report
June 30, 1999
No-Load Funds
For investors seeking long-term growth of capital from a professionally managed
portfolio consisting primarily of global equity securities.
A no-load fund with no commissions to buy, sell, or exchange shares.
SCUDDER
<PAGE>
Scudder Global Fund
- --------------------------------------------------------------------------------
Date of Inception: 7/23/86 Total Net Assets as Ticker Symbol: SCOBX
of 6/30/99: $1.6 billion
- --------------------------------------------------------------------------------
o Despite a high level of volatility, virtually all major world markets rose
during the period. The Fund's theme-based approach allowed it to take advantage
of several of the positive trends helping to shape the evolving global economy,
such as the growth of the Internet and the increasing use of outsourcing as a
means to gain greater efficiencies.
o The Fund, which has posted an average annual return of 12.54% over the ten
years ended June 30, 1999, has been given an overall rating of four stars by
Morningstar(TM).^1
o Believing that there may be reasons to be skeptical about the sustainability
of the recent gains in the world stock markets, we have positioned the portfolio
to thrive in a variety of conditions.
Table of Contents
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
10 Glossary of Investment Terms
11 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
^1 Morningstar proprietary rankings reflect historical risk-adjusted
performance as of June 30, 1999. The ratings are subject to change every
month and are calculated from the funds' 3-, 5-, and 10-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. Past performance is no guarantee of future results. Scudder
Global Fund received 4 stars for the 3-, 5-, and 10-year periods. The top
10% of funds in a broad asset class receive 5 stars, and the next 22.5%
receive 4 stars, and the next 35% receive 3 stars. Scudder Global Fund was
rated among 987, 498, and 114 international equity funds for the 3-, 5-,
and 10-year periods, respectively. Scudder Global Funds one-, three-, and
five-year returns were 7.18%, 15.45%, and 14.39%, respectively.
2 - SCUDDER GLOBAL FUND
<PAGE>
Letter from the Fund's Chairman
Dear Shareholders,
In the volatile market environment of the past year, it has been easy to
get swept up in the fluctuations of the global stock markets. In the age of
round-the-clock information access, where investors must sort through the
meaning of countless news reports, economic releases, and market commentary, a
short-term focus can be difficult to avoid. However, we at Scudder strive to
look past the short-term noise and instead focus on the long-term trends that
lead to investment success over time.
Scudder Global Fund has demonstrated the value of a long-term orientation amid
this increasingly tumultuous environment. The Portfolio Management Team uses a
top-down approach to identify themes that are likely to emerge as the key
drivers of global growth in the years ahead, and seeks to invest in the best
companies that fit within those themes. This approach has led management to
construct a highly diversified portfolio that invests in leading companies in
both the growth and value sectors, as well as a wide variety of industries. In a
volatile market where the smallest signs of inflation can send stocks into a
tailspin, the focus on long-term trends in the business environment has held
Scudder Global Fund in good stead, and allowed it to post market-beating
performance over the last ten years. For more information on the changing market
environment and the Fund's theme-based approach to global investing, please see
the Portfolio Management Discussion beginning on page 6.
For those of you who are interested in new Scudder products, we are pleased to
introduce Scudder Select 500 Fund and Scudder Select 1000 Growth Fund. Both
funds are managed with the goal of providing long term outperformance compared
to their benchmark indices, the S&P 500 Index and the Russell 1000 Growth Index,
respectively. For more information on either Select fund, please call us at the
number below.
Thank you for your continued investment in Scudder Global Fund. If you have any
questions about your investment, please call Scudder Investor Information at
1-800-SCUDDER or visit our Web site at www.scudder.com.
Sincerely,
/S/Daniel Pierce
Daniel Pierce
Chairman,
Scudder Global Fund
3 - SCUDDER GLOBAL FUND
<PAGE>
Performance Update as of June 30, 1999
- --------------------------------------------------------------------------------
Fund Index Comparisons
- --------------------------------------------------------------------------------
Total Return
-------------------------------------------------
Period Ended Growth of Average
6/30/1999 $10,000 Cumulative Annual
-------------------------------------------------
Scudder Global Fund
-------------------------------------------------
1 Year $ 10,718 7.18% 7.18%
5 Year $ 19,584 95.84% 14.39%
10 Year $ 32,586 225.86% 12.54%
-------------------------------------------------
MSCI World Index
-------------------------------------------------
1 Year $ 11,567 15.67% 15.67%
5 Year $ 21,690 116.90% 16.74%
10 Year $ 29,639 196.39% 11.47%
-------------------------------------------------
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Growth of a $10,000 Investment
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THE PRINTED DOCUMENT CONTAINS A LINE CHART HERE
CHART DATA:
MSCI World Index Scudder Global Fund
---------------- -------------------
'89 10000 10000
'90 10711 12000
'91 10186 11377
'92 10616 12979
'93 12396 14725
'94 13665 16639
'95 15121 18155
'96 17909 21178
'97 21897 26454
'98 25625 30403
'99 29639 32586
Yearly periods ended June 30
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
- --------------------------------------------------------------------------------
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
ILLUSTRATING THE FUND TOTAL RETURN (%) AND
INDEX TOTAL RETURN (%)
CHART DATA:
<TABLE>
<CAPTION>
Yearly Periods Ended June 30
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value $ 20.36 $ 18.06 $ 19.56 $ 21.63 $ 23.93 $ 25.64 $ 28.73 $ 33.67 $ 32.41 $ 31.30
- ---------------------------------------------------------------------------------------------------------------------
Income Distributions $ .20 $ .37 $ .31 $ .16 $ .24 $ .11 $ .25 $ .28 $ .88 $ .55
- ---------------------------------------------------------------------------------------------------------------------
Capital Gains Distributions $ .55 $ .83 $ .66 $ .34 $ .26 $ .34 $ .84 $ 1.53 $ 4.58 $ 2.61
- ---------------------------------------------------------------------------------------------------------------------
Fund Total Return (%) 20.00 -5.20 14.09 13.45 12.99 9.11 16.65 24.91 14.93 7.18
- ---------------------------------------------------------------------------------------------------------------------
Index Total Return (%) 7.09 -4.90 4.22 16.75 10.23 10.67 18.44 22.27 17.02 15.67
- ---------------------------------------------------------------------------------------------------------------------
</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.
4 - SCUDDER GLOBAL FUND
<PAGE>
Portfolio Summary as of June 30, 1999
- --------------------------------------------------------------------------------
Geographical
(Excludes 3% Cash Equivalents)
- --------------------------------------------------------------------------------
A graph in the form of a pie chart appears here, illustrating the exact data
points in the table below.
United States and Canada 46%
Europe 35%
Japan 11%
Pacific Basin 5%
Latin America 2%
Africa 1%
--------------------------------------
100%
--------------------------------------
During the period, management increased the Fund's weighting in Japan, and
trimmed its position in Europe.
- --------------------------------------------------------------------------------
Sectors
(Excludes 3% Cash Equivalents)
- --------------------------------------------------------------------------------
A graph in the form of a pie chart appears here, illustrating the exact data
points in the table below.
Financial 16%
Manufacturing 15%
Energy 13%
Metals and Minerals 9%
Technology 8%
Health 7%
Service Industries 6%
Utilities 5%
Media 4%
Other 17%
--------------------------------------
100%
--------------------------------------
Sector weightings are a function of the Fund's theme-based approach.
- --------------------------------------------------------------------------------
Ten Largest Equity Holdings
(17% of Portfolio)
- --------------------------------------------------------------------------------
1. International Business Machines
Corp.
Manufacturer of computers and
servicer of information
processing units in the United
States
2. Immunex Corp.
Pharmaceutical company in the
United States
3. USEC Inc.
Provider of enriched uranium
products and services in the
United States
4. Enron Corp.
Producer of natural gas and
electricity in the United States
5. General Electric Co., plc
Manufacturer of power,
communications and defense
equipment in the United Kingdom
6. UNUM Corp.
Provider of group disability and
special risk insurance in the
United States
7. Bayer AG
Chemical producer in Germany
8. Electronic Data Systems Corp.
Provider of information
technology systems in the United
States
9. Rio Tinto plc
Mining company in the United
Kingdom
10. Sony Corp.
Manufacturer of consumer
electronic products in Japan
The Fund's top ten holdings illustrate its extensive diversification.
For more complete details about the Fund's investment portfolio, see page 11.
A quarterly Fund Summary and Portfolio Holdings are available upon request.
5 - SCUDDER GLOBAL FUND
<PAGE>
Portfolio Management Discussion
In the following interview, Lead Portfolio Manager William Holzer discusses
Scudder Global Fund's strategy and the market environment in the twelve-month
period ended June 30, 1999.
Q: How would you characterize the global stock markets so far in 1999?
A: The overall rise in stock prices over the first half of the year masked
considerable volatility in the global financial markets. We feel that the
catalyst for rapid market movements has been the high level of uncertainty
regarding the direction of the global economy. While much of the volatility can
be attributed to investors' reaction to stronger-than-expected growth and its
potential effect on interest rates, it still remains to be seen whether the
strength of early 1999 signals the beginnings of a new upleg of the expansion,
or if it merely marks a short-term bump on the road to a more deflationary
environment. This uncertainty is evident in all three of the geographical areas
where we focus our efforts -- the U.S., Europe, and Japan.
In the U.S., large-cap growth names ceded their leadership position to value
stocks in April, but the market's lack of conviction led to an oscillation
between growth and value during the final two months of the period. Meanwhile,
internet stocks gave up significant ground, and bond markets were very nervous
away from the large benchmark Treasury issues. European stocks rose grudgingly
amid an investment environment that took a decided turn for the worse. While
there are signs that growth is picking up in the region, investors were put off
by crisis in Kosovo and the lack of meaningful structural reform on the
continent. In addition, there have been signs of teething problems for the euro
as the "one size fits all" monetary policy is tailored more for the core
economies than those on the periphery. In Japan, investors have been more
optimistic due to the combination of looser monetary policy, meaningful
corporate restructuring, and renewed growth. Despite the resurgence in Japanese
equities, however, we feel that there are still reasons for skepticism. A
significant portion of the recent bounce in the country's GDP was due to an
increase in government spending, while personal consumption, which will be
necessary for a truly meaningful rebound, remains slow. In addition, the
increase in new investment in new capacity is alarming at a time when so much
excess capacity still overhangs the market. We feel that if growth does indeed
resume in Japan, it is likely to be accompanied by inflation.
Given the many stumbling blocks that could potentially disrupt the long stretch
of positive performance that stocks have produced since last year's financial
crisis, we have developed a strategy that is designed to prepare the portfolio
for a variety of scenarios. Specifically, we use a theme-based approach to
identify companies that are positioned to capitalize on powerful long-term
trends in the global economy.
Q: How did the Fund perform in this environment?
A: The Fund provided a total return of 7.18% for the twelve-month period June
30, 1999, trailing the 15.67% return of its unmanaged benchmark, the MSCI World
Index. The Fund's underperformance can be attributed to its lack of exposure to
the large-cap growth stocks that led the markets in both
6 - SCUDDER GLOBAL FUND
<PAGE>
the U.S. and Europe throughout the period. The reason for its underexposure lies
in our investment discipline, which focuses on both growth and value stocks. The
extreme prices at which these large-caps traded were a function of
momentum-based growth investors on one hand, and the effects of passive indexing
on the other. Momentum is not a part of our discipline, and we found the
valuations of many of these stocks to be excessive and risky. Our relative
performance has been particularly strong so far in the 1999 calendar year, as
the Fund's increased exposure to technology proved beneficial in the first
quarter, and its position in cyclicals helped in the second. We remain convinced
in the value of our investment discipline, which we believe will yield
significant benefits in due course.
Q: Have the events of the past six months affected your overall thinking?
A: No -- our "top-down" approach has allowed us to uncover several important
trends that we believe stand out above the noise. Most important, we are focused
on the role of technology in society. The Internet enables both businesses and
consumers to leap geographic boundaries and physical barriers, and creates new
markets for consumer-to-business and business-to-business commerce. Over time,
this has been, and will continue to be, a powerful driver of falling prices as
competition increases and corporations become more efficient. The legacy of
excess industrial capacity in Asia and Europe after the long period of
globalization in the 1990s has also contributed to weak prices. Technology is
both a source of secular growth and a driver of fundamental, and deflationary,
corporate change. Our investment themes seek to achieve balanced exposure to
these processes of change by focussing on the companies that can enable and
adapt to the Internet world, and those companies in traditional industries that
can adapt successfully to the shifting global business environment.
Q: With that as a backdrop, what are the most important new investment themes in
the portfolio?
A: The themes we have developed recently are consistent with our goal of
constructing a portfolio that we believe should deliver outperformance in any
environment. Specifically, we have begun to add what we call "virtual
companies," those that retain control over the highest level of intellectual
content and value-added activities, and outsource all other functions to
companies with the strongest competencies in those functions. The investment
potential of virtual companies lies in their ability to create brand names, new
franchises, and monopoly power, as well as their potential to achieve immediate
"first mover" advantages. The extreme case of the virtual company is the
internet firm with no hard assets, where all production is contracted in order
to increase flexibility. We believe that over time, the virtual company will
develop into the superior institution for wealth creation in the global
marketplace. Examples of Fund holdings that fit within this theme are Prudential
Corp. (U.K.) and Sabre Group. Although the investable universe under this theme
is still limited, we expect it, and our exposure to it, to increase in the
coming months.
7 - SCUDDER GLOBAL FUND
<PAGE>
We also introduced a theme called "The Ultimate Subcontractor," which focuses on
the companies whose low costs and superior efficiencies have made them the
leading beneficiaries of the trend toward outsourcing. Several natural resources
companies, such as Rio Tinto and Woodside Petroleum, have carved out a role as
the leading suppliers to companies that are turning "virtual."
Q: In the last report, you discussed themes called "The Empowered Consumer" and
"Secure Streams of Income." Are these two concepts still playing an important
role in the portfolio?
A: Yes. At the end of the period, we had substantial holdings in stocks that fit
within both categories. The Empowered Consumer involves companies that provide
consumer enabling technologies related to the Internet. We believe that the
companies that build the electronic infrastructure that connects businesses and
their customers are poised for significant growth in the years ahead. Holdings
that have performed well within this category are Motorola, Sun Microsystems,
Sony, and TDK. Secure Streams of Income, meanwhile, includes companies that have
the ability to produce stable returns even in adverse economic conditions. We
expect that companies such as Railtrack, an owner and operator of British
Railways, and Peco Energy, a utility, will provide defensive qualities in the
event of a slowdown.
8 - SCUDDER GLOBAL FUND
<PAGE>
Q: What is your outlook for equities from here?
A: Our current thinking is that the set of circumstances that has led the market
to attribute very high values to a small group of large capitalization growth
stocks is unlikely to be repeated. If it is not, we should find that the
thematic strategy, diversification, and value orientation of the portfolio will
add significant value. While the outcome for the global economy is not clear at
this juncture, we are confident that our current strategy has positioned the
Fund for long-term outperformance whether stronger global growth increases
inflationary pressures, or a weaker environment brings about deflation.
Scudder Global Fund:
A Team Approach to Investing
Scudder Global Fund is managed by a team of Scudder Kemper Investments, Inc.
(the "Adviser") professionals, each of whom plays 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
the Adviser's large staff of economists, research analysts, traders, and other
investment specialists who work in our offices across the United States and
abroad. We believe our team approach benefits Fund investors by bringing
together many disciplines and leveraging our 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. Mr. Holzer, who has over 22 years of experience in global
investing, joined the Adviser in 1980. Diego Espinosa, Portfolio Manager, joined
the team in 1997 and the Adviser in 1996. Mr. Espinosa is also responsible for
development of the Fund's strategy and management of the portfolio on a daily
basis. Mr. Espinosa has seven years of investment industry experience. Nicholas
Bratt, Portfolio Manager, directs Scudder's overall global equity investment
strategies. Mr. Bratt joined the Adviser in 1976 and the team in 1993.
9 - SCUDDER GLOBAL FUND
<PAGE>
Glossary of Investment Terms
CYCLICAL STOCKS Companies whose earnings are closely tied to
the business cycle. Cyclical industries
include steel, cement, paper, machinery, and
autos.
DEFENSIVE SECURITIES Stocks and bonds that are more conservative
than average, and tend to perform better
than the overall market when that market is
weak. Often, non-cyclical stocks are used to
establish a defensive position, since they
tend not to be as severely affected during
economic slowdowns.
DEFLATION A decline in the prices of goods and
services. The opposite of inflation,
deflation usually has a negative effect on
output and employment.
MARKET CAPITALIZATION The market value of a company's outstanding
shares of common stock, determined by
multiplying the number of shares outstanding
by the share price (shares x price = market
capitalization). The universe of publicly
traded companies is frequently divided into
large-, mid-, and small-capitalization.
"Large-cap" stocks tend to be more liquid.
TOP-DOWN INVESTING STYLE A method in which the investor first looks
at trends in the general economy (or, in the
case of international investing, the
economies of several countries), and next
selects companies or industries that stand
to benefit from those trends. Opposite of
bottom-up investing.
WEIGHTING (OVER/UNDER) Refers to the allocation of assets --
usually in terms of sectors, industries, or
countries -- within a portfolio relative to
the portfolio's benchmark index or
investment universe.
(Sources: Scudder Kemper Investments, Inc., Barron's Dictionary of Finance and
Investment Terms)
10 - SCUDDER GLOBAL FUND
<PAGE>
Investment Portfolio as of June 30, 1999
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------
Repurchase Agreements 2.5%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 6/30/1999 at 4.8%
to be repurchased at $40,413,388 on 7/1/1999, collateralized by a $40,946,000
U.S. Treasury Bond, 3.625%, 4/15/2028 (Cost $40,408,000) ....................... 40,408,000 40,408,000
Shares
- ------------------------------------------------------------------------------------------------------------
Participating Loan Notes 0.4%
- ------------------------------------------------------------------------------------------------------------
Luxembourg
Eurotunnel Finance Ltd., Step-up Coupon, 1.0% to 12/31/2005, 1% plus 26.45% of net
available cash flow to 4/30/2040 (Cost $6,183,494) ............................. 4,617 6,498,886
Common Stocks 97.1%
- ------------------------------------------------------------------------------------------------------------
Australia 2.2%
Foster's Brewing Group, Ltd. (Brewery) ........................................... 2,832,000 8,028,052
WMC Ltd. (Mineral exploration and production) .................................... 2,021,351 8,733,689
Woodside Petroleum Ltd. (Oil and gas producer) ................................... 2,763,700 18,822,522
------------
35,584,263
------------
Austria 0.4%
Flughafen Wien AG (Operator of terminals and facilities at Vienna International
Airport) ....................................................................... 146,900 6,186,566
------------
Brazil 1.6%
Aracruz Celulose S.A. (ADR) (pfd.) "B" (Producer of eucalyptus kraft pulp) ....... 605,400 13,318,800
Companhia Vale do Rio Doce (pfd.) "A" (Diverse mining and industrial complex) .... 621,200 12,360,432
------------
25,679,232
------------
Canada 4.4%
Barrick Gold Corp. (Gold exploration and production in North and South America) .. 857,800 16,619,875
BCE, Inc. (Telecommunication services) ........................................... 235,000 11,503,104
Canadian National Railway Co. (Railroad operator) ................................ 261,400 17,637,099
Canadian Pacific Ltd. (Transportation and natural resource conglomerate) ......... 492,656 11,763,515
Molson Cos., Ltd. "A" (Brewery) .................................................. 484,000 8,816,210
Noranda, Inc. (International mining and metals company) (c) ...................... 269,000 3,560,240
------------
69,900,043
------------
China 0.5%
American Standard China "B"* (Plumbing products) (b) ............................. 526 3,419,000
Huaneng Power International, Inc. "N" (ADR) (Developer and operator of
large coal-fired power plants) ................................................. 319,300 5,468,013
------------
8,887,013
------------
</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>
France 1.5%
AXA S.A. (Insurance group providing insurance, finance and real estate services) 65,651 8,038,338
Canal Plus (Pay television network) ............................................ 56,602 15,940,446
------------
23,978,784
------------
Germany 10.6%
Allianz AG (Multi-line insurance company) (c) .................................. 29,438 8,195,977
BASF AG (International chemical producer) ...................................... 424,799 18,839,721
Bayer AG (Chemical producer) (c) ............................................... 551,474 23,059,324
Bayerische Vereinsbank AG (Commercial bank) .................................... 225,514 14,704,634
Heidelberger Druckmaschinen AG (Manufacturer of commercial printing presses) ... 75,651 4,329,921
Hoechst AG (Chemical producer) ................................................. 483,993 21,990,938
Muenchener Rueckversicherungs-Gesellschaft AG (Registered) (Insurance company) . 59,290 11,015,040
RWE AG (pfd.) (Producer of petroleum and chemical products) .................... 382,775 17,784,159
Schering AG (Pharmaceutical and chemical producer) (c) ......................... 143,705 15,289,918
VEBA AG (Provider of electricity, heating, and water services) (c) ............. 277,482 16,370,043
VIAG AG (Provider of electrical power, aluminum products, and chemicals) (c) ... 34,476 16,342,651
------------
167,922,326
------------
Hong Kong 2.6%
Cheung Kong Holdings Ltd. (Real estate company) ................................ 449,000 3,993,066
Citic Pacific Ltd. (Diversified holding company) ............................... 4,776,000 15,235,284
Hutchison Whampoa, Ltd. (Diversified investment holding company) ............... 1,795,000 16,252,562
New World Development Co., Ltd. (Property investment and development) .......... 1,707,421 5,116,519
------------
40,597,431
------------
Hungary 0.2%
The First Hungary Fund Limited "A"* (Investment company) ....................... 3,619 4,161,850
------------
Italy 0.2%
Istituto Nazionale delle Assicurazione* (Insurance company) .................... 1,338,300 3,116,565
------------
Japan 10.5%
Bank of Tokyo-Mitsubishi, Ltd. (Provider of financial services) ................ 647,000 9,213,066
Daiwa Securities Co., Ltd. (Provider of brokerage and other financial services) 1,844,000 12,191,736
Mitsubishi Estate Co., Ltd. (Real estate company) .............................. 1,643,000 16,036,223
Mitsui Fudosan Co., Ltd. (Real estate company) ................................. 984,000 7,969,587
Nichiei Co., Ltd. (Finance company for small and medium-sized firms) ........... 89,800 7,866,777
Sanwa Bank, Ltd. (Bank) ........................................................ 775,000 7,628,306
Sharp Corp. (Manufacturer of consumer and industrial electronics) .............. 1,556,000 18,389,091
Shohkoh Fund & Co., Ltd. (Finance company for small and medium-sized firms) .... 18,300 13,127,603
</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>
Sony Corp. (Manufacturer of consumer electronic products) ....................... 209,800 22,627,190
Sumitomo Metal Mining Co., Ltd. (Gold, nickel and copper mining company) ........ 1,427,000 5,896,694
TDK Corp. (Manufacturer of magnetic tapes and floppy discs) ..................... 100,000 9,148,760
Toshiba Corp. (Manufacturer of electric machinery) .............................. 2,401,000 17,124,488
Yamanouchi Pharmaceutical Co., Ltd. (Manufacturer of ethical drugs) ............. 497,000 19,017,438
------------
166,236,959
------------
South Africa 1.5%
Anglo American Platinum Corp., Ltd. (Platinum producer) ......................... 60,000 1,404,197
Anglo American Platinum Corp., Ltd. (ADR) ....................................... 462,586 10,361,926
Impala Platinum Holdings Ltd. (ADR) (Miner and marketer of platinum group metals) 468,500 11,712,500
------------
23,478,623
------------
Sweden 0.4%
AGA AB "B" (Producer and distributor of industrial and medical gases) ........... 458,730 5,692,953
------------
Switzerland 4.6%
Clariant AG (Registered) (Manufacturer of color chemicals) ...................... 14,410 5,959,548
Nestle S.A. (Registered) (Food manufacturer) .................................... 6,863 12,422,141
Novartis AG (Registered) (Pharmaceutical company) ............................... 9,812 14,393,047
Roche Holdings AG (Producer of drugs and medicines) ............................. 1,462 15,097,099
Swisscom AG (Operator of telecommunication networks and network application
services) ..................................................................... 36,953 13,969,309
UBS AG (Registered) (Provider of banking and asset management services) ......... 36,616 10,978,885
------------
72,820,029
------------
United Kingdom 15.8%
BOC Group plc (Producer of industrial gases) .................................... 806,556 15,804,494
British Telecom plc (Telecommunication services) ................................ 701,760 11,758,112
Carlton Communications plc (Television post production products and services) ... 1,806,896 14,994,893
Enterprise Oil plc (Oil and gas exploration and production) ..................... 1,166,447 7,450,837
Gallaher Group plc (Manufacturer of tobacco products) ........................... 1,494,152 9,217,136
General Electric Co., plc (Manufacturer of power, communications and defense
equipment) .................................................................... 2,501,693 25,437,909
Great Universal Stores plc "A" (Catalog home shopping) .......................... 1,083,880 12,098,516
J Sainsbury plc (Retail distributor of food through supermarkets) ............... 1,921,215 12,124,405
LASMO plc* (Oil production and exploration) ..................................... 3,852,035 8,690,619
National Grid Group plc (Owner and operator of electric transmission systems) ... 2,048,142 14,282,584
Prudential Corporation plc (Provider of a broad range of financial services) .... 999,808 14,748,664
Railtrack Group plc (Operator of railway infrastructure) ........................ 788,955 16,144,206
Reed International plc (Publisher of scientific, professional and business to
business materials) ........................................................... 1,177,947 7,842,647
Reuters Group plc (International news agency) (c) ............................... 1,445,469 19,030,912
</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>
Rio Tinto plc (Mining company) ............................................... 1,351,548 22,666,748
Shell Transport & Trading plc (Petroleum company) ............................ 2,800,363 21,030,314
SmithKline Beecham plc (Manufacturer of ethical drugs and healthcare products) 1,323,035 17,220,658
-----------
250,543,654
-----------
United States 40.1%
Amerada Hess Corp. (Exploration, production and transmission of crude oil and
natural gas) ............................................................... 194,800 11,590,600
America Online Inc. (Provider of online computer services) ................... 65,800 7,270,900
AT&T Corp. (Telecommunication services) ...................................... 290,301 16,202,425
AT&T Corp - Liberty Media Group* (Holding company of entertainment networks) . 591,776 21,747,762
Atlantic Richfield Co. (Petroleum company) ................................... 188,100 15,718,106
Azurix Corp.* (Provider of wastewater related services) ...................... 411,400 8,228,000
Biogen Inc.* (Biotechnology research and development company) ................ 194,040 12,479,198
CSX Corp. (International transportation company) ............................. 307,100 13,915,469
Comcast Corp. "A" (Operator of cable communication networks) ................. 363,700 13,979,719
Conoco Inc. "A" (Explorer of crude oil, natural gas, and natural gas liquids) 442,800 12,343,050
Duke Energy Corp. (Electric utility in the Carolinas) ........................ 216,500 11,772,188
Electronic Data Systems Corp. (Provider of information technology systems) (c) 403,100 22,800,344
Enron Corp. (Producer of natural gas and electricity) ........................ 354,700 28,996,725
Equity Residential Properties Trust (REIT) (Owner of apartment properties) ... 363,300 16,371,206
Freeport McMoRan Copper & Gold, Inc. "B" (Copper, gold and silver mining in
Indonesia) ................................................................. 69,100 1,239,481
Homestake Mining Co. (International gold producer) ........................... 1,377,800 11,280,738
Immunex Corp.* (Pharmaceutical company) ...................................... 231,600 29,514,525
International Business Machines Corp. (Manufacturer of computers and servicer
of information processing units) ........................................... 284,680 36,794,890
Lockheed Martin Corp. (Manufacturer of aircraft, missiles and space equipment) 429,200 15,987,700
MBIA, Inc. (Insurer of municipal bonds) ...................................... 111,600 7,226,100
Motorola Inc. (Manufacturer of telecommunication products and semiconductors) 189,400 17,945,650
Newmont Mining Corp. (International gold exploration and mining company) ..... 804,800 15,995,400
Northrop Grumman Corp. (Manufacturer of aircraft, aircraft assemblies
and electronic systems for military and commercial use) .................... 255,900 16,969,369
Oracle Systems Corp.* (Database management software) ......................... 480,200 17,827,425
PacifiCorp (Electric utility) ................................................ 854,400 15,699,600
Parametric Technology Corp.* (Mechanical design software producer) ........... 529,400 7,345,425
Peco Energy Co. (Electric and gas utility) ................................... 416,900 17,457,688
Phillips Petroleum Co. (Petroleum exploration, production and refining) ...... 247,700 12,462,406
ProLogis Trust (REIT) (Global owner of corporate distribution facilities) .... 219,800 4,450,950
Progressive Corp. (Property and casualty insurance company) .................. 45,300 6,568,500
</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>
Sabre Group Holdings Inc. "A"* (Travel reservation system provider) .......... 300,300 20,645,625
Sterling Commerce, Inc.* (Producer of electronic data interchange products and
services) .................................................................. 451,500 16,479,750
Stillwater Mining Co.* (Exploration and development of mines in Montana
producing platinum, palladium and associated metals) ....................... 647,050 21,150,447
Sun Microsystems, Inc.* (Producer of high-performance workstations, servers
and networking software) ................................................... 299,800 20,648,725
US Airways Group, Inc.* (Airline) ............................................ 265,100 11,548,419
USEC Inc. (Provider of enriched uranium products and services) ............... 1,978,200 29,425,725
Unocal Corp. (Explorer and producer of oil and gas) .......................... 295,400 11,705,225
UNUM Corp. (Provider of group disability and special risk insurance) ......... 463,800 25,393,050
Williams Cos., Inc. (Gas pipeline operator and petroleum producer) ........... 430,700 18,331,669
XL Capital Ltd. "A" (Provider of insurance) .................................. 236,933 13,386,714
-----------
636,896,888
Total Common Stocks (Cost $1,161,137,466) 1,541,683,179
- ------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $ $1,207,728,960) (a) 1,588,590,065
</TABLE>
* Non-income producing security.
(a) The cost for federal income tax purposes was $1,219,879,863. At June 30,
1999, net unrealized appreciation for all securities based on tax cost was
$368,710,202. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over tax
cost of $414,347,093 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$45,636,891.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $3,419,000 (.21% 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, 1999 aggregated $5,260,000. These securities
may also have certain restrictions as to resale.
(c) At June 30, 1999, these securities, in part or in whole, have been
segregated to cover forward currency contracts.
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, 1999
<TABLE>
<CAPTION>
Assets
- --------------------------------------------------------------------------------------------------
<S> <C>
Investments, at market (identified cost $1,207,728,960) ...... $ 1,588,590,065
Cash ......................................................... 528
Receivable for investments sold .............................. 17,918,592
Receivable for Fund shares sold .............................. 10,505,088
Dividends and interest receivable ............................ 1,576,738
Foreign taxes recoverable .................................... 1,024,746
Other assets ................................................. 1,241
-----------------
Total assets ................................................. 1,619,616,998
Liabilities
- --------------------------------------------------------------------------------------------------
Payable for investments purchased ............................ 6,173,173
Payable for Fund shares redeemed ............................. 985,106
Unrealized depreciation on forward currency exchange contracts 54,673
Accrued management fee ....................................... 1,225,843
Other payables and accrued expenses .......................... 679,264
---------------
Total liabilities ............................................ 9,118,059
Net assets, at market value .................................. $ 1,610,498,939
Net Assets
- --------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated distributions in excess of net investment income . (3,209,389)
Net unrealized appreciation (depreciation) on:
Investments ............................................... 380,861,105
Foreign currency related transactions ..................... (117,723)
Accumulated net realized gain (loss) ......................... 144,298,156
Paid-in capital .............................................. 1,088,666,790
Net assets, at market value .................................. $ 1,610,498,939
Net Asset Value
- --------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($1,610,498,939 / 51,461,588 shares of capital stock
outstanding, $.01 par value, 100,000,000 shares
authorized) ............................................... $ 31.30
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - SCUDDER GLOBAL FUND
<PAGE>
Statement of Operations
year ended June 30, 1999
<TABLE>
<CAPTION>
Investment Income
- -----------------------------------------------------------------------------------------------------
<S> <C>
Income:
Dividends (net of withholding taxes of $1,880,981) ................ $ 25,583,903
Interest .......................................................... 8,332,797
-------------
33,916,700
-------------
Expenses:
Management fee .................................................... 14,936,557
Services to shareholders .......................................... 4,784,033
Custodian and accounting fees ..................................... 1,077,981
Directors' fees ................................................... 47,073
Reports to shareholders ........................................... 250,977
Legal ............................................................. 25,320
Auditing .......................................................... 111,361
Registration fees ................................................. 49,603
Other ............................................................. 131,347
-------------
21,414,252
Net investment income ............................................. 12,502,448
Realized and unrealized gain (loss) on investment transactions
- -----------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ....................................................... 186,056,003
Foreign currency related transactions (includes CPMF tax of $3,047) (8,180,121)
-------------
177,875,882
-------------
Net unrealized appreciation (depreciation) during the period on:
Investments ....................................................... (90,456,649)
Foreign currency related transactions ............................. 440,449
-------------
(90,016,200)
Net gain (loss) on investment transactions ........................ 87,859,682
Net increase (decrease) in net assets resulting from operations ... $ 100,362,130
</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 1999 1998
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ............................... $ 12,502,448 $ 19,606,752
Net realized gain (loss) from investment transactions 177,875,882 212,859,587
Net unrealized appreciation (depreciation) on
investment transactions during the period ........ (90,016,200) (2,170,185)
------------- ----------------
Net increase (decrease) in net assets resulting from
operations ....................................... 100,362,130 230,296,154
------------- ----------------
Distributions to shareholders from:
Net investment income ............................... (27,785,964) (41,122,886)
------------- ----------------
Net realized gains from investment transactions ..... (132,754,958) (214,025,939)
------------- ----------------
Fund share transactions:
Proceeds from shares sold ........................... 713,598,163 528,099,294
Net asset value of shares issued to shareholders in
reinvestment of distributions .................... 153,008,888 242,394,548
Cost of shares redeemed ............................. (962,137,062) (583,899,199)
------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions ..................................... (95,530,011) 186,594,643
------------- ----------------
Increase (decrease) in net assets ................... (155,708,803) 161,741,972
Net assets at beginning of period ................... 1,766,207,742 1,604,465,770
Net assets at end of period (including accumulated
distributions in excess of net investment
income of $19,397,657, respectively) ............. $ 1,610,498,939 $ 1,766,207,742
Other Information
- -------------------------------------------------------------------------------------------------------------
Shares outstanding at beginning of period ........... 54,499,264 47,646,208
------------- ----------------
Shares sold ......................................... 23,857,882 16,505,655
Shares issued to shareholders in reinvestment of
distributions .................................... 5,351,753 8,610,819
Shares redeemed ..................................... (32,247,311) (18,263,418)
------------- ----------------
Net increase (decrease) in Fund shares .............. (3,037,676) 6,853,056
Shares outstanding at end of period ................. 51,461,588 54,499,264
</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,
1999(a) 1998(a) 1997(a) 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................. $ 32.41 $ 33.67 $ 28.73 $ 25.64 $ 23.93
Income from investment operations:
Net investment income ................................ .23 .38 .17 .24 .25
Net realized and unrealized gain (loss) on investments 1.82 3.82 6.58 3.94 1.91
Total from investment operations ..................... 2.05 4.20 6.75 4.18 2.16
Less distributions from:
Net investment income ................................ (.55) (.88) (.28) (.25) (.11)
Net realized gains from investment transactions ...... (2.61) (4.58) (1.53) (.84) (.34)
Total distributions .................................. (3.16) (5.46) (1.81) (1.09) (.45)
Net asset value, end of period ....................... $ 31.30 $ 32.41 $ 33.67 $ 28.73 $ 25.64
- --------------------------------------------------------------------------------------------------------------------------
Total Return (%) ..................................... 7.18 14.93 24.91 16.65 9.11
Ratios and Supplemental Data
Net assets, end of period ($ millions) ............... 1,610 1,766 1,604 1,368 1,168
Ratio of operating expenses to average daily net
assets (%) ........................................ 1.35 1.34 1.37 1.34 1.38
Ratio of net investment income to average daily net
assets (%) ......................................... .79 1.19 .59 .84 1.03
Portfolio turnover rate (%) .......................... 70.2 51.3 40.5 29.1 44.4
</TABLE>
(a) Per share amounts have been calculated using weighted average shares
outstanding.
19 - SCUDDER GLOBAL FUND
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Global Fund (the "Fund") is a diversified series of Global/International
Fund, Inc., (the "Corporation") which is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end management investment
company organized as a Maryland Corporation.
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. Investments are stated at value determined as of the close
of regular trading on the New York Stock Exchange. 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 Stock Market ("Nasdaq"), for which there have been sales, are valued at
the most recent sale price reported. If there are no such sales, the value is
the most recent bid quotation. Securities which are not quoted on Nasdaq but are
traded in another over-the-counter market are valued at the most recent sale
price, or if no sale occurred, at the calculated mean between the most recent
bid and asked quotations on such market. If there are no such bid and asked
quotations, the most recent bid quotation shall be used.
Portfolio debt securities purchased with an original maturity greater than sixty
days are valued by pricing agents approved by the officers of the Fund, whose
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. Money market instruments purchased with an original 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.
Foreign Currency Translations. The books and records of the Fund are maintained
in U.S. dollars. Investment securities and other assets and liabilities
denominated in a foreign currency are translated into U.S. dollars at the
prevailing exchange rates at period end. Purchases and sales of investment
securities, income and expenses are translated into U.S. dollars at the
prevailing exchange rates on the respective dates of the transactions.
Net realized and unrealized gains and losses on foreign currency transactions
represent net gains and losses between trade and settlement dates on securities
transactions, the disposition of forward foreign currency exchange contracts and
foreign currencies, and the difference between the amount of net investment
income accrued and the U.S. dollar amount actually received. That portion of
both realized and unrealized gains and losses on investments that results from
fluctuations in foreign currency exchange rates is not separately disclosed but
is included with net realized and unrealized gains and losses on investment
securities.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, 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 is equal to at least the
principal amount of the repurchase price plus accrued interest.
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 against changes in the 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. Sales and
purchases of 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 a forward contract to buy
and a 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.
Taxes. The Fund's policy is to comply with the requirements of the Internal
Revenue Code, as amended, which are applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. Accordingly,
the Fund paid no federal income taxes and no federal income tax provision was
required.
The Fund is subject to a .20% Contribuicao Provisoria sobre Movimentacoes
Financieras (CPMF) tax which is applied to foreign exchange transactions
representing capital inflows or outflows to the Brazilian market.
Distribution of Income and Gains. Distributions of net investment income, if
any, are made annually. 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 at least
annually.
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 foreign denominated investments,
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.
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date. Certain dividends
from foreign securities may be recorded subsequent to the ex-dividend date as
soon as the Fund is informed of such dividends. Realized gains and losses from
investment transactions are recorded on an identified cost basis. Original issue
discounts are accreted for both tax and financial reporting purposes.
B. Purchases and Sales of Securities
During the year ended June 30, 1999, purchases and sales of investment
securities (excluding short-term investments and U.S. Government obligations)
aggregated $768,428,551 and $923,755,660, respectively. Purchases and sales of
U.S. Government obligations aggregated $309,134,395 and $411,742,405,
respectively.
21 - SCUDDER GLOBAL FUND
<PAGE>
C. Related Parties
Under the Management Agreement (the "Agreement") with Scudder Kemper
Investments, Inc. ("Scudder Kemper" or 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 Agreement. The management fee
payable under the 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
net assets, 0.90% of the next $500,000,000 of such net assets and .85% on such
net assets in excess of $1,500,000,000 computed and accrued daily and payable
monthly. For the year ended June 30, 1999, the fee pursuant to such Agreement
amounted to $14,936,557, which was equivalent to an annual effective rate of
.94% 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 $2,380,471 charged to the Fund by SSC during the
year ended June 30, 1999, of which $183,745 is unpaid at June 30, 1999.
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, 1999,
the amount charged to the Fund by STC aggregated $1,427,397, of which $118,894
is unpaid at June 30, 1999.
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, 1999, the amount charged to the Fund by SFAC aggregated $585,537, of
which $48,212 is unpaid at June 30, 1999.
The Fund pays each Director not affiliated with the Adviser an annual retainer,
divided equally among the series of the Corporation, plus specified amounts for
attended board and committee meetings. For the year ended June 30, 1999,
Directors' fees and expenses aggregated $47,073.
D. Commitments
As of June 30, 1999, the Fund had entered into the following forward foreign
currency exchange contracts resulting in net unrealized depreciation of $54,673.
<TABLE>
<CAPTION>
Net Unrealized
Appreciation
Settlement (Depreciation)
Contracts to Deliver In Exchange For Date (U.S.$)
---------------------------------- --------------------------------- -------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Japanese Yen 3,381,423 U.S. Dollars 3,470,000 9/1/1999 88,577
Japanese Yen 15,633,219 U.S. Dollars 15,750,000 9/10/1999 116,781
U.S. Dollars 4,130,000 Japanese Yen 4,146,909 9/29/1999 16,909
Japanese Yen 67,919,161 U.S. Dollars 67,642,221 9/29/1999 (276,940)
---------
(54,673)
=========
</TABLE>
22 - SCUDDER GLOBAL FUND
<PAGE>
E. Line of Credit
The Fund and several Scudder funds (the "Participants") share in a $850 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 pro rata 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.
23 - SCUDDER GLOBAL FUND
<PAGE>
Report of Independent Accountants
To the Board of Directors of Global/International Fund, Inc. and to the
Shareholders of Scudder Global Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Scudder Global Fund (the "Fund") at
June 30, 1999, the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated therein, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at June 30, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
Boston, Massachusetts PricewaterhouseCoopers LLP
August 9, 1999
24 - SCUDDER GLOBAL FUND
<PAGE>
Tax Information
The Fund paid distributions of $2.44 per share from net long-term capital gains
during its year ended June 30, 1999, of which 100% represents 20% rate gains.
Pursuant to section 852 of the Internal Revenue Code, the Fund designates
$194,000,000 as capital gain dividends for its year ended June 30, 1999, of
which 100% represents 20% rate gains.
For corporate shareholders, 31% of the income dividends paid during the Fund's
fiscal year ended June 30, 1999 qualified for the dividends received deduction.
The Fund paid foreign taxes $1,880,981 and earned $6,506,792 of foreign source
income during the year ended June 30, 1999. Pursuant to section 853 of the
Internal Revenue Code, the Fund designates $0.04 per share as foreign taxes paid
and $0.13 per share as income earned from foreign sources for the year ended
June 30, 1999.
Please consult a tax adviser if you have any questions about federal or state
income tax laws, or on how to prepare your tax returns. If you have a specific
questions about your account, please call 1-800-SCUDDER.
25 - SCUDDER GLOBAL FUND
<PAGE>
This Page
intentionally
left blank.
26 - SCUDDER GLOBAL FUND
<PAGE>
This Page
intentionally
left blank.
27 - SCUDDER GLOBAL FUND
<PAGE>
Daniel Pierce*
Chairman of the Board,
Vice President and Director
William E. Holzer*
President
Paul Bancroft III
Director; Venture Capitalist and Consultant
Sheryle J. Bolton
Director; Chief Executive Officer, Scientific Learning Corporation
William T. Burgin
Director; General Partner, Bessemer Venture Partners
Keith R. Fox
Director; Private Equity Investor
William H. Luers
Director; Chairman and President, U.N. Association of the U.S.A.
Kathryn L. Quirk*
Director, Vice President and Assistant Secretary
Joan E. Spero
Director; President, Doris Duke Charitable Foundation
Thomas J. Devine
Honorary Director; Consultant
William H. Gleysteen, Jr.
Honorary Director; Consultant; Guest Scholar, Brookings Institute
Robert G. Stone, Jr.
Honorary Director; Chairman Emeritus of the Board and Director,
Kirby Corporation
Susan E. Dahl*
Vice President
Thomas W. Joseph*
Vice President
Ann M. McCreary*
Vice President
Gerald J. Moran*
Vice President
M. Isabel Saltzman*
Vice President
John Millette*
Vice President and Secretary
John R. Hebble*
Treasurer
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, Inc.
28
<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 --
Prime Reserve Shares*
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 GNMA Fund
Scudder Income Fund
Scudder Corporate Bond Fund
Scudder High Yield Bond Fund
Global Income
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Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
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 Dividend & Growth Fund
Scudder Growth and Income Fund
Scudder Select 500 Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment Fund
U.S. Growth
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Value
Scudder Large Company Value Fund
Scudder Value Fund***
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Scudder Select 1000 Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Equity
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Worldwide
Scudder Global Fund
Scudder International Value Fund
Scudder International Growth and Income Fund
Scudder International Fund++
Scudder International Growth 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.
Industry Sector Funds
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Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund
Preferred Series
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Scudder Tax Managed Growth Fund
Scudder Tax Managed Small
Company Fund
Retirement Programs and Education Accounts
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Retirement Programs
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Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
Education Accounts
- ------------------
Education IRA
UGMA/UTMA
Closed-End Funds#
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The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe 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. Certain Scudder funds or classes thereof may
not be available for purchase or exchange. +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. ***Only the Scudder Shares of
the Fund are part of the Scudder Family of Funds. ++Only the International
Shares of the Fund are part of the Scudder Family of Funds. +++ +++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. +++
+++ +++A no-load variable annuity contract issued by Glenbrook Life and Annuity
Company and underwritten by Allstate Financial Services, Inc., sold by Scudder's
insurance agencies, 1-800-225-2470. #These funds, advised by Scudder Kemper
Investments, Inc., are traded on the New York Stock Exchange and, in some cases,
on various other stock exchanges.
29
<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 money is Lets you purchase Scudder fund shares
electronically debited from your bank account monthly to electronically, avoiding potential mailing delays;
regularly purchase fund shares and "dollar cost average" money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from a previously designated bank
fewer when it's higher, which can reduce your average account.
purchase price over time.*
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
* Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
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Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- www.scudder.com
1-800-343-2890
Personal Investment Organizer: 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 previously designated.
Distributions Direct
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 8,000 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
800 no-load funds from well-known companies -- with no
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder
Brokerage account already reserved for them, with
no minimum investment. For information about
Scudder Brokerage Services, call 1-800-700-0820.
Fund Folio funds held less than six months will be charged a transaction fee. 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.
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
</TABLE>
31 - SCUDDER GLOBAL FUND
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc. is one of the largest and most experienced
investment management organizations worldwide, managing more than $280 billion
in assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 80
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Financial Services Group. As a result, Zurich's subsidiary, Zurich
Kemper Investments, Inc., with 50 years of mutual fund and investment management
experience, was combined with Scudder. Headquartered in New York, Scudder Kemper
Investments offers a full range of investment counsel and asset management
capabilities, based on a combination of proprietary research and disciplined,
long-term investment strategies. With its global investment resources and
perspective, the firm seeks opportunities in markets throughout the world to
meet the needs of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Financial Services Group. The Zurich Financial Services Group is
an internationally recognized leader in financial services, including
property/casualty and life insurance, reinsurance, and asset management.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
