SCUDDER
INVESTMENTS (SM)
[LOGO]
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EQUITY/GLOBAL
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Scudder Global Fund
Fund #007
Semiannual Report
February 29, 2000
A fund seeking long-term growth of capital by investing at least 65% of its
total assets in U.S. and foreign equities.
A no-load fund with no commissions to buy, sell, or exchange shares.
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Contents
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4 Letter from the Fund's President
6 Performance Update
8 Portfolio Summary
10 Portfolio Management Discussion
15 Glossary of Investment Terms
16 Investment Portfolio
22 Financial Statements
25 Financial Highlights
26 Notes to Financial Statements
31 Officers and Directors
32 Investment Products and Services
34 Scudder Solutions
2
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Scudder Global Fund
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ticker symbol SCOBX fund number 007
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Date of Inception: o Technology and communications stocks outperformed
7/23/86 across all of the global markets, while stocks in the
"Old Economy" sectors lagged substantially.
Total Net Assets as
of 2/29/00: o The portfolio remains balanced between stocks in both
$1.6 billion the technology sector and the traditional economy, in
order to take advantage of the diverse long-term themes
management sees unfolding in the global economy.
o The fund was awarded a 4-star overall rating by
Morningstar(TM) for the period ended February 29,
2000.^1
1 Morningstar proprietary rankings reflect historical risk-adjusted
performance as of February 29, 2000. The ratings are subject to change
every month. Morningstar ratings are calculated from the fund's 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, the next 22.5% receive 4 stars, and the next 35% receive 3 stars.
Scudder Global Fund was rated among 1120, 663, and 129 international funds
for the 3-, 5-, and 10-year periods, respectively, in its broad asset
class. Not all Scudder funds receive 4 and 5 star ratings. Ratings are
subject to change.
3
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Letter from the Fund's President
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Dear Shareholders,
Stock markets around the world have soared to new heights over the past five
years, promoting the development of a new equity culture in many parts of the
world. There are several reasons why this has been so, but one of the most
important factors is that vast changes have taken place in the global economy
over the last decade. Governments have gradually recognized the importance of
reform, corporations have grown leaner and more competitive, and the rise of the
Internet has changed the way the entire world conducts business. Amidst this
swirl of rapid change, the emergence of several important themes has provided
astute investors with the opportunity to take advantage of these long-term
shifts in the business environment.
Combining a broad vision of the global economy on one hand and the international
research capabilities of Scudder Kemper Investments on the other, we strive to
discern these powerful themes before they emerge, and invest in the companies
most likely to benefit. The fund is positioned to take advantage of important
trends such as outsourcing, restructuring, the growing power of the consumer,
and the explosion of Internet traffic. Over time, we believe that a portfolio
that focuses on companies that are poised to capitalize on such themes will
provide steady performance in both bull and bear markets. We discuss areas of
more opportunity on page 10.
4
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Thank you for your continued investment in Scudder Global Fund. For current
information on the fund or your account, visit our Web site at www.scudder.com.
There you'll find a wealth of information, including the most recent fund
performance, the most recent news on Scudder products and services, and the
opportunity to perform account transactions. You can also speak with one of our
representatives by calling 1-800-SCUDDER (1-800-728-3337).
Sincerely,
/s/William E. Holzer
William E. Holzer
President,
Scudder Global Fund
5
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Performance Update
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February 29, 2000
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Growth of a $10,000 Investment
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THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
Scudder Global Fund MSCI World Index*
'90 10000 10000
'91 10676 10299
'92 11519 10375
'93 12104 10472
'94 15650 13143
'95 14517 13115
'96 18334 16228
'97 20849 18407
'98 25506 22841
'99 25529 25743
'00 32108 30566
Yearly periods ended February
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Fund Index Comparison
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Total Return
Period ended 2/29/2000 Growth of Cumulative Average
$10,000 Annual
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Scudder Global Fund
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1 year $ 12,577 25.77% 25.77%
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5 year $ 22,117 121.17% 17.20%
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10 year $ 32,108 221.08% 12.37%
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MSCI World Index*
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1 year $ 11,873 18.73% 18.73%
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5 year $ 23,306 133.06% 18.42%
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10 year $ 30,566 205.66% 11.81%
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* 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.
6
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Returns and Per Share Information
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THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
ILLUSTRATING THE SCUDDER GLOBAL FUND TOTAL RETURN (%) AND
MSCI WORLD INDEX* TOTAL RETURN (%)
BAR CHART DATA:
Yearly periods ended February
<TABLE>
<CAPTION>
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1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Total
Return (%) 6.76 7.90 5.08 29.29 -7.24 26.29 13.72 22.34 .09 25.77
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Index Total
Return (%) 2.99 .74 .93 25.51 -.21 23.74 13.43 24.09 12.71 18.73
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Net Asset
Value ($) 18.93 19.39 19.86 25.14 22.90 27.78 29.64 30.37 27.38 30.36
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Income
Dividends ($) .37 .31 .16 .24 .11 .25 .28 .88 .55 .20
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Capital Gains
Distributions ($) .83 .66 .34 .26 .34 .84 1.53 4.58 2.61 3.91
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</TABLE>
* 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.
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.
7
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Portfolio Summary
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February 29, 2000
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Geographical
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(Excludes 5% Cash Equivalents)
The fund continues to
provide diversified
exposure to the world's
major equity markets.
A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA POINTS IN THE TABLE BELOW.
United States and Canada 38%
Europe 34%
Japan 21%
Pacific Basin 3%
Africa 2%
Latin America 2%
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100%
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Sectors
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(Excludes 5% Cash Equivalents)
Holdings in the
technology,
communications, and
media sectors generally
provided strong
performance during
the period.
A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA POINTS IN THE TABLE BELOW.
Technology 15%
Manufacturing 13%
Metals and Minerals 12%
Financial 11%
Communications 9%
Energy 9%
Media 6%
Utilities 6%
Health 5%
Other 14%
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100%
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8
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Ten Largest Equity Holdings
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(18% of Portfolio)
The fund's top ten
holdings reflect
management's emphasis on
companies that are
well-positioned to take
advantage of changes in
the global business
environment.
1. Canal Plus S.A.
Provider of television programs
2. Reuters Group PLC
International news and information agency
3. Sony Corp.
Manufacturer of consumer electronic products
4. Siemens AG
Electrical engineering and electronics company
5. Motorola, Inc.
Manufacturer of telecommunications products and
semiconductors
6. AT&T Corp. -- Liberty Media Group
Holding company of entertainment networks
7. Oracle Corp.
Database management software
8. Carlton Communications PLC
Television post production products and services
9. Enron Corp.
Producer of natural gas and electricity
10. Daiwa Securities Co., Ltd.
Provider of brokerage and other financial services
For more complete details about the Fund's investment portfolio, see page 16. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
9
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Portfolio Management Discussion
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February 29, 2000
In the following interview, lead portfolio manager William E. Holzer discusses
Scudder Global Fund's strategy and the market environment in the six-month
period ended February 29, 2000.
Q: How have the global financial markets performed over the last six months?
A: The major stock indices have done exceptionally well, but their performance
has obscured a bear market in many sectors of the global equity universe. Across
the globe, stocks in the technology, telecommunications, and media sectors have
rocketed to new highs, causing the valuations of many companies to soar to
levels that are supported only by momentum factors, not fundamentals. The fact
that this phenomenon is taking place in all of the world markets is an unusual
event that signifies the growing importance of technology in the global economy.
At the same time as these sectors have rallied, however, "Old Economy" stocks,
such as those in the manufacturing, food, energy, and banking industries, have
generally declined. In this sense, an individual's opinion of whether the past
six months has been a bull or a bear market has been based entirely on what
sector of the market he or she was invested in. For the fund it has been both,
since we are invested in both technology and Old Economy stocks.
Q: How has the fund performed in this environment?
A: We are pleased to report that the fund has outperformed its benchmark amid an
environment of heightened risk. Over the six-month period ended February 29,
2000, the fund returned 10.20%, which surpassed the 9.36% return of the MSCI
World Index. Performance was helped by our position in technology related
securities, which stood at 28% of net assets as of the end of the period, but
our holdings in defensive issues and commodities producers dampened returns. The
fund has been awarded a four-star overall rating by Morningstar(TM) for its
risk-adjusted performance as of the same date.
10
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Q: What is your view of the changes taking place in the global economy?
A: We feel that the economy has arranged itself along two "poles." At one pole
technology-driven growth dominates, sparked by the building of the massive
infrastructure for the high-speed broadband data communications required by the
wired world. This has given rise to the new, Internet-based business models of
new corporations or existing companies that are moving their businesses to
Web-based models. These are represented by the myriad "dot-com" companies that
have dominated the new issue markets in 1999, and those existing companies that
are successfully restructuring to adopt and combine Internet-driven business
models for their suppliers and customers.
At the other pole, there are companies -- such as the producers of raw materials
- -- that cannot pass costs through to their customers. In this area, outsourcing
and consolidation dominate as capacity is reduced and mergers are executed.
Cyclical companies are finally recovering from the inflation-driven thinking
that was the legacy of the 70s and the prolonged growth of the 90s, and this has
created investment opportunities in companies that are willing to embrace change
and use capital prudently.
In between these two poles, companies with traditional business models are being
squeezed in the pincers of technology-driven price deflation on one hand, and a
stronger pricing environment for commodities producers on the other. These are
the companies that we believe will have difficulty adjusting to the realities of
the New Economy.
Q: How has this translated into investment themes for the fund?
A: In managing the portfolio, we employ a theme-based approach that identifies
long-term developments in the global economy, and seeks to invest in the
companies best-positioned to capitalize on these themes. We have
11
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employed a "barbell" approach that focuses on investing in companies at the two
poles of the global economy, and avoiding those in the middle. On the pole of
technology- driven growth are the themes we call "The Empowered Consumer" and
"Virtuality," two concepts that provide the fund with exposure to the rapid
growth of the tech sector. The Empowered Consumer focuses on companies that are
enabling consumers to take advantage of the Internet. Included in this category
are makers of consumer devices (Motorola, Sony, and Sun Microsystems), providers
of Internet access (Nextel, BCE, Inc., and NTT Mobile), and content providers
(Liberty Media, Canal Plus, and Carlton Communications). This segment of the
portfolio, which made up 30.3% of net assets as of February 29, produced
excellent performance over the period.
"Virtuality" is a theme that focuses on companies whose business strategies are
moving to Internet-based models, as well as existing companies that are shifting
their models in a positive direction. These companies are outsourcing their
non-essential functions and retaining functions with the highest intellectual
content and the highest value added for the firm. An example of a company that
fits within this theme is Commerce One, which provides web-based enterprise
procurement solutions that link buying and supplying organizations into
real-time trading communities. Commerce One's technology, in addition to that of
Oracle (also held under Virtuality), will be used to create an automated on-line
parts exchange for Ford, GM, and DaimlerChrysler. This is a powerful example of
the opportunities for Virtual companies to transform the Old Economy. Other
companies that have done well for the fund under this theme are Enron, IBM,
Oracle, and Sabre. Overall, our holdings under the "Virtuality" theme
contributed strongly to fund performance.
12
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Q: You noted that some of the fund's holdings in "Old Economy" stocks hurt
performance. Which of the fund's themes emphasize this area of the market?
A: Two themes that we have discussed in past reports have been hurt by the
recent market environment. The first is the "Ultimate Subcontractor," which
invests in commodity producing companies that are poised to benefit from
increasing price advantages and faster global growth. The second is "Secure
Streams of Income," which provides defensive exposure through its positions in
power and infrastructure utilities. Many of the stocks we hold under these
themes have been hurt by the rising interest rate environment before their
high-priced peers in the tech sector. They have also languished as investors'
attention has been focused almost exclusively on growth stocks. Although the
poor recent performance of stocks we hold under these two themes has hampered
fund returns, they remain strategically important to the portfolio as volatility
in the global markets continues to rise. We believe that since the valuations of
New Economy companies have reached what we see as vulnerable levels, it is a
good time to pare back on our technology holdings and take advantage of the
outstanding values among well-positioned industrial stocks.
Q: What is your outlook for the global markets through the remainder of 2000?
A: We strongly believe that the fundamental changes that are taking place in the
global economy are positive for stock prices. On the public sector level,
governments are recognizing the need to support reforms, cut taxes, and let the
free market eliminate inefficiencies in the economy. On the corporate level,
restructuring and consolidation continue to reduce costs and spur increased
profit growth. Despite the existence of these important long-term themes, we are
concerned about the euphoria that has lifted the technology sector worldwide.
While the fundamentals are indeed strong for many of the top companies in this
area, there are just as many companies whose stock prices are
13
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not being supported by tangible earnings. In our view, investors who are chasing
momentum by overloading their portfolios with technology stocks are taking an
undue risk at this juncture. For that reason, we will seek to participate in the
tremendous growth of the industry by investing only in the tech stocks that we
believe are positioned for strong earnings over the long-term. In addition, we
will continue to diversify the portfolio by capitalizing on the value
opportunities in areas of the market that are out of favor. We believe that
diversification will become even more critical to long-term performance as we
move through 2000 and beyond.
14
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Glossary of Investment Terms
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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.
Diversification The spreading of risk by investing in several asset
categories, industry sectors, or individual securities. An
investor with a broadly diversified portfolio will likely
receive some protection from the price declines of an
individual asset class.
Weighting Refers to the allocation of assets -- usually in terms of
(over/under) sectors, industries, or countries -- within a portfolio
relative to the portfolio's benchmark index or investment
universe.
(Source: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
15
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Investment Portfolio as of February 29, 2000 (Unaudited)
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Principal
Amount (c) Value ($)
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Repurchase Agreements 4.6%
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Donaldson, Lufkin & Jenrette, 5.75%, to be repurchased
at $73,377,718 on 3/1/2000 (Cost $73,366,000)** ... 73,366,000 73,366,000
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Bonds 5.6%
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Germany 2.4%
Federal Republic of Germany, 4%, 3/17/2000 .........EUR 39,800,000 38,464,698
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United States 3.2%
U.S. Treasury, Principal only certificate,
2/15/2019 ....................................... 162,130,000 49,608,537
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Total Bonds (Cost $89,104,196) 88,073,235
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Participating Loan Notes 0.4%
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Luxembourg
Eurotunnel Finance Ltd., Step-up Coupon, 1%
to 12/31/2005, 1% plus 26.45% of net available
cash flows to 4/30/2040 (Cost $6,183,494) ....... 4,617(d) 6,246,935
Shares
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Common Stocks 89.4%
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Australia 2.6%
Broken Hill Proprietary Co., Ltd. (Petroleum, mineral
and steel exploration and production) .............. 1,333,800 13,275,180
WMC Ltd. (Mineral exploration and production) ......... 3,268,451 12,371,805
Woodside Petroleum, Ltd. (Producer of oil and gas) .... 2,763,700 15,896,939
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41,543,924
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Brazil 1.7%
Aracruz Celulose S.A. (ADR) (Producer of eucalyptus
kraft pulp) ........................................ 605,400 12,675,563
The accompanying notes are an integral part of the financial statements.
16
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<TABLE>
<CAPTION>
Shares Value ($)
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<S> <C> <C>
Companhia Vale do Rio Doce* (Diverse mining and
industrial complex) ..................................................... 554,300 14,735,351
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27,410,914
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Canada 4.1%
BCE, Inc. (Telecommunication services) ..................................... 171,400 18,666,391
Barrick Gold Corp. (Gold exploration and production
in North and South America) ............................................. 881,700 14,382,731
Canadian National Railway Co. (Railroad operator) .......................... 338,600 7,900,200
Manulife Financial Corp. (Provider of financial services) .................. 1,328,500 16,391,060
Teleglobe Inc. (Provider of telecommunication services) .................... 289,600 7,355,776
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64,696,158
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China 0.2%
American Standard China "B"* (Plumbing products) (b) ....................... 526 3,419,000
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France 6.3%
Aventis S.A. (Pharmaceutical company) ...................................... 367,921 18,845,588
Canal Plus S.A. (Provider of television programs) .......................... 119,195 33,752,419
Compagnie de Saint-Gobain (Glass manufacturer) ............................. 9,967 1,391,911
Eurotunnel S.A.* (Channel Tunnel consortium) ............................... 9,042,631 11,186,237
Suez Lyonnaise des Eaux S.A. (Water and electric utility) .................. 97,455 16,105,696
STMicroelectronics N.V. (Manufacturer of semiconductor
integrated circuits) .................................................... 88,772 17,673,497
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98,955,348
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Germany 6.7%
Allianz AG (Multi-line insurance company) .................................. 18,057 6,320,818
BASF AG (International chemical producer) .................................. 424,799 19,439,394
Bayer AG (Chemical producer) ............................................... 362,562 15,154,711
Muenchener Rueckversicherungs-Gesellschaft AG
(Registered) (Insurance company) ........................................ 41,231 11,587,708
Schering AG (Pharmaceutical and chemical producer) ......................... 143,705 17,346,568
Siemens AG (Electrical engineering and electronics
company) ................................................................ 166,768 29,897,570
Thyssen Krupp AG (Manufacturer of building and industrial
steel materials) ........................................................ 160,640 3,889,025
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103,635,794
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Hungary 0.3%
The First Hungary Fund Limited "A"* (Investment
company) ................................................................ 3,619 5,157,075
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Japan 20.0%
Asahi Chemical Industry Co., Ltd. (Producer of synthetic
fibers, industrial chemicals, petrochemicals, plastics,
rubber, and food products) .............................................. 1,409,000 8,305,550
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
<TABLE>
<CAPTION>
Shares Value ($)
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<S> <C> <C>
Chugai Pharmaceutical Co., Ltd. (Pharmaceutical
company) ................................................................ 802,000 12,237,602
DDI Corp. (Long distance telephone and cellular operator) .................. 1,182 10,950,409
Daiei Inc. (Producer of foods, clothing, household items,
furniture, and toiletries) .............................................. 1,692,000 5,931,989
Daiwa Securities Co., Ltd. (Provider of brokerage and
other financial services) ............................................... 1,571,000 24,899,137
Fujitsu, Ltd. (Manufacturer of computers) .................................. 425,000 14,089,464
Matsushita Electric Industrial Co., Ltd. (Manufacturer of
consumer electronic products) ........................................... 485,000 14,096,276
Mitsubishi Estate Co., Ltd. (Real estate company) .......................... 1,068,000 9,331,662
Mitsui Fudosan Co., Ltd. (Real estate company) ............................. 984,000 7,882,725
NEC Corp. (Manufacturer of telecommunication and
computer equipment) ..................................................... 856,000 19,087,012
NTT Mobile Communications Network, Inc. (Provider of
various telecommunication services and equipment) ....................... 462 18,589,101
Nichii Gakkan Company (Provider of hospital
administrative services) ................................................ 25,500 3,775,204
Nikko Securities Co., Ltd. (Securities broker and dealer) .................. 352,000 4,530,282
Nippon Telegraph & Telephone Corp. (Provider of
telecommunication services) ............................................. 919 12,687,375
Nomura Securities Co., Ltd. (Financial advisor, securities
broker and underwriter) ................................................. 459,000 12,923,706
Sakura Bank, Ltd. (Provider of banking services) ........................... 2,469,000 14,060,518
Sharp Corp. (Manufacturer of consumer and industrial
electronics) ............................................................ 1,132,000 23,647,593
Sony Corp. (CPS) (Manufacturer of consumer electronic
products) ............................................................... 101,900 30,079,473
Sumitomo Metal Mining Co., Ltd. (Gold, nickel and
copper mining company) .................................................. 1,427,000 3,369,846
TDK Corp. (Manufacturer of magnetic tapes and floppy
discs) .................................................................. 100,000 9,545,867
Teijin, Ltd. (Manufacturer of polyester products) .......................... 1,752,000 6,858,420
Toray Industries, Inc. (Manufacturer of synthetic fibers,
leather and polyester films) ............................................ 1,633,000 5,191,190
Toshiba Corp. (Manufacturer of electric machinery) ......................... 2,401,000 19,561,281
Yamanouchi Pharmaceutical Co., Ltd. (Manufacturer of
ethical drugs) .......................................................... 497,000 23,698,910
------------
315,330,592
------------
South Africa 2.1%
Anglo American Platinum Corp., Ltd. (ADR)
(Platinum producer) ..................................................... 568,986 15,960,057
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
<TABLE>
<CAPTION>
Shares Value ($)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Impala Platinum Holdings Ltd. (ADR) (Mines and markets
platinum group metals) .................................................. 473,600 16,812,800
------------
32,772,857
------------
Switzerland 1.1%
Roche Holdings AG (Producer of drugs and medicines) ........................ 856 9,268,264
Swisscom AG (Operator of telecommunication networks
and network application services) ....................................... 25,991 8,514,455
------------
17,782,719
------------
United Kingdom 15.3%
BOC Group PLC (Producer of industrial gases) ............................... 806,556 16,358,095
Cable and Wireless PLC (International telecommunication
services in the United Kingdom and Hong Kong) ........................... 392,710 8,138,399
Carlton Communications PLC (Television post production
products and services) .................................................. 2,333,031 26,311,881
Enterprise Oil PLC (Oil and gas exploration and
production) ............................................................. 1,166,447 5,886,661
Gallaher Group PLC (Manufacturer of tobacco products) ...................... 1,523,576
6,064,540
Great Universal Stores PLC "A" (Catalog home shopping,
retailing, finance and property investment) ............................. 2,328,007 13,219,540
Lasmo PLC (Oil production and exploration) ................................. 1,136,744 1,692,299
National Grid Group PLC (Owner and operator of electric
transmission systems) ................................................... 1,960,468 15,266,513
National Power PLC (Electricity generation company) ........................ 2,837,222
16,805,745
Prudential Corp. PLC (Provider of a broad range of
financial services) ..................................................... 665,608 9,819,708
Railtrack Group PLC (Operator of railway infrastructure) ................... 800,938
8,090,449
Reuters Group PLC (International news and information
agency) ................................................................. 1,461,758 32,902,092
Rio Tinto PLC (Mining company) ............................................. 1,351,548 19,960,723
Royal & Sun Alliance Insurance Group PLC
(Insurance company) ..................................................... 2,280,935 12,402,808
Scottish Power PLC (Electric utility) ...................................... 2,110,035 16,014,605
Shell Transport & Trading PLC (Petroleum company) .......................... 2,373,735 16,385,015
SmithKline Beecham PLC (Manufacturer of ethical drugs
and health care products) ............................................... 1,212,226 13,633,167
Standard Chartered PLC (International banking group) ....................... 253,890 3,589,234
------------
242,541,474
------------
United States 29.0%
AT&T Corp. (Telecommunication services) .................................... 321,801 15,909,037
AT&T Corp.-Liberty Media Group "A"* (Holding company
of entertainment networks) .............................................. 523,476 27,351,621
Amerada Hess Corp. (Exploration, production and
transmission of crude oil and natural gas) .............................. 194,800 9,849,575
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
<TABLE>
<CAPTION>
Shares Value ($)
- ---------------------------------------------------------------------------------------
<S> <C> <C>
America Online, Inc.* (Provider of online computer
services) .............................................. 152,200 8,979,800
Biogen, Inc.* (Biotechnology research and development
company) ............................................... 35,940 3,879,274
CINergy Corp. (Holding company of electrical utilities in
Ohio, Indiana and Kentucky) ............................ 306,500 6,551,438
CSX Corp. (Railroad, integrated transportation systems
and shipping container company) ........................ 307,100 6,813,781
Cisco Systems, Inc.* (Manufacturer of computer network
products) .............................................. 39,200 5,181,750
Commerce One, Inc.* (Provider of Web based, enterprise
procurement solutions) ................................. 47,900 10,005,113
Conoco, Inc. "A" (Explorer of crude oil, natural gas, and
natural gas liquids) ................................... 704,800 13,523,350
EMC Corp.* (Manufacturer of enhancement products for
computer systems) ...................................... 40,900 4,867,100
Electronic Data Systems Corp. (Provider of information
technology systems) .................................... 334,000 21,626,500
Enron Corp. (Producer of natural gas and electricity) ..... 377,800 26,068,200
Equity Residential Properties Trust (REIT) (Owner of
apartment properties) .................................. 324,700 12,967,706
Exxon Mobil Corp. (International oil company) ............. 194,300 14,633,219
Freeport McMoRan Copper & Gold, Inc. "B"* (U.S ............
company mining copper, gold and silver in Indonesia) ... 69,100 950,125
Homestake Mining Co. (Major international gold producer) .. 751,600 4,885,400
International Business Machines Corp. (Manufacturer of
computers and servicer of information processing units) . 175,180 17,868,360
Lockheed Martin Corp. (Manufacturer of aircraft, missiles
and space equipment) ................................... 490,900 8,560,069
Motorola Inc. (Manufacturer of telecommunication
products and semiconductors) ........................... 174,100 29,684,050
Newmont Mining Corp. (International gold exploration
and mining company) .................................... 571,500 12,644,438
Nextel Communications Inc.* (Telecommunications
company) ............................................... 69,300 9,446,456
Nextel Communications, Inc. "A"* (Telecommunications
company) ............................................... 98,100 13,372,256
Northrop Grumman Corp.* (Manufacturer of aircraft, aircraft
assemblies and electronic systems for military and
commercial use) ........................................ 255,900 11,627,456
Oracle Corp.* (Database management software) .............. 365,200 27,116,100
Parametric Technology Corp.* (Producer of mechanical
design software) ....................................... 529,400 16,047,438
Peco Energy Co. (Electric and gas utility) ................ 416,900 15,555,581
Phillips Petroleum Co. (Petroleum exploration, production
and refining) .......................................... 247,700 9,474,525
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
<TABLE>
<CAPTION>
Shares Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Sabre Group Holdings, Inc. "A" (Travel reservation system
provider) ................................................ 247,800 9,942,975
Stillwater Mining Co.* (Mining company) ..................... 647,050 24,021,731
Sun Microsystems, Inc.* (Manufacturer of high performance
workstations, servers and software) ...................... 260,700 24,831,675
USEC, Inc. (Provider of enriched uranium products
and services) ............................................ 1,978,200 7,047,338
USX-US Steel Group, Inc. (Integrated steel producer) ........ 471,700 10,318,438
Unocal Corp. (Explorer and producer of oil and gas) ......... 295,400 7,901,950
UnumProvident Corp. (Provider of group disability
and special risk insurance) .............................. 566,100 7,571,588
------------
457,075,413
------------
- ----------------------------------------------------------------------------------------------
Total Common Stocks (Cost $1,123,065,352) 1,410,321,268
- ----------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $1,291,719,042) (a) 1,578,007,438
- ----------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing.
** Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
(a) The cost for federal income tax purposes was $1,299,774,144. At February
29, 2000, net unrealized appreciation for all securities based on tax cost
was $278,233,294. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of value over tax cost of
$421,855,363 and aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over value of $143,622,069.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $3,419,000 (0.21% 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 February 29, 2000 aggregated $5,260,000. These securities may
also have certain restrictions as to resale.
(c) Principal amount stated in U.S. dollars unless otherwise noted.
(d) Represents number of contracts. Each contract equals a nominal value of EUR
2,391.
Currency Abbreviation
- ---------------------------
EUR Euro
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
Financial Statements
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities as of February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets
- -------------------------------------------------------------------------------------------
<S> <C>
Investments in securities, at value (cost $1,291,719,042) ............... $ 1,578,007,438
Cash .................................................................... 4,095
Foreign currency, at value (cost $260,110) .............................. 260,114
Receivable for investments sold ......................................... 9,687,603
Dividends receivable .................................................... 2,099,697
Interest receivable ..................................................... 1,498,908
Receivable for Fund shares sold ......................................... 10,709,656
Foreign taxes recoverable ............................................... 651,259
Other assets ............................................................ 5,432
---------------
Total assets ............................................................ 1,602,924,202
Liabilities
- -------------------------------------------------------------------------------------------
Payable for investments purchased ....................................... 7,335,554
Payable for Fund shares redeemed ........................................ 1,647,599
Unrealized depreciation on forward currency exchange contracts .......... 228,834
Accrued management fee .................................................. 1,245,848
Other accrued expenses and payables ..................................... 1,223,537
---------------
Total liabilities ....................................................... 11,681,372
Net assets, at value $ 1,591,242,830
Net Assets
- -------------------------------------------------------------------------------------------
Net assets consists of:
Undistributed net investment income 2,319,250 Net unrealized appreciation
(depreciation) on:
Investments ........................................................... 286,288,396
Foreign currency related transactions ................................. (378,089)
Accumulated net realized gain (loss) .................................... 193,035,240
Paid-in capital ......................................................... 1,109,978,033
Net assets, at value .................................................... $ 1,591,242,830
Net Asset Value
- -------------------------------------------------------------------------------------------
NetAsset Value, offering and redemption price per share ($1,591,242,830 /
52,410,532 shares of capital stock outstanding, $.01 par value, ---------------
100,000,000 shares authorized) ....................................... $ 30.36
---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations for the six months ended February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment Income
- ------------------------------------------------------------------------------------
<S> <C>
Dividends (net of foreign taxes withheld of $670,465) ............. $ 11,786,125
Interest .......................................................... 2,323,474
-------------
Total Income ...................................................... 14,109,599
-------------
Expenses:
Management fee .................................................... 7,397,173
Services to shareholders .......................................... 2,377,107
Custodian and accounting fees ..................................... 510,491
Auditing .......................................................... 40,627
Legal ............................................................. 32,151
Directors fees and expenses ....................................... 23,686
Reports to shareholders ........................................... 118,108
Registration fees ................................................. 12,432
Other ............................................................. 210,070
-------------
Total expenses .................................................... 10,721,845
Net investment income (loss) ...................................... $ 3,387,754
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ....................................................... 214,626,532
Foreign currency related transactions (includes CPMF tax of $7,630) (8,749,277)
-------------
205,877,255
-------------
Net unrealized appreciation (depreciation) during the period on:
Investments ....................................................... (59,308,624)
Foreign currency related transactions ............................. 7,440,821
-------------
(51,867,803)
- ------------------------------------------------------------------------------------
Net gain (loss) on investment transactions 154,009,452
- ------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 157,397,206
- ------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended February Two Months Year Ended
29, 2000 Ended June 30,
Increase (Decrease) in Net Assets (Unaudited) August 31, 1999 1999
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income (loss) .............. $ 3,387,754 $ 1,183,151 $ 12,502,448
Net realized gain (loss) on
investment transactions ................ 205,877,255 40,116,804 177,875,882
Net unrealized appreciation
(depreciation) on investment
transactions during the period ......... (51,867,803) (42,965,272) (90,016,200)
---------------- --------------- ---------------
Net increase (decrease) in net
assets resulting from
operations ............................. 157,397,206 (1,665,317) 100,362,130
---------------- --------------- ---------------
Distributions to shareholders
from:
Net investment income ..................... (9,504,077) -- (27,785,964)
---------------- --------------- ---------------
Net realized gains ........................ (190,452,234) -- (132,754,958)
---------------- --------------- ---------------
Fund share transactions:
Proceeds from shares sold ................. 399,363,180 80,900,406 713,598,163
Reinvestment of distributions ............. 189,685,018 -- 153,008,888
Cost of shares redeemed ................... (507,763,341) (137,216,950) (962,137,062)
---------------- --------------- ---------------
Net increase (decrease) in net
assets from Fund share
transactions ........................... 81,284,857 (56,316,544) (95,530,011)
---------------- --------------- ---------------
Increase (decrease) in net assets ......... 38,725,752 (57,981,861) (155,708,803)
Net assets at beginning of period ......... 1,552,517,078 1,610,498,939 1,766,207,742
Net assets at end of period
(including undistributed net investment
income of $2,319,250 and $8,435,573 for
the period ended Feburary 2 9, 2000 and
August 31, 1999, respectively and
accumulated distributions in excess of
net investment income of $3,209,389 for
the year ended June 30, 1999) ........... $1,591,242,830 $1,552,517,078 $1,610,498,939
</TABLE>
<TABLE>
<CAPTION>
Other Information
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares outstanding at beginning
of period ..................... 49,687,211 51,461,588 54,499,264
---------------- --------------- ---------------
Shares sold ...................... 12,847,284 2,573,566 23,857,882
Shares issued to shareholders in
reinvestment of distributions . 6,204,935 -- 5,351,753
Shares redeemed .................. (16,328,898) (4,347,943) (32,247,311)
---------------- --------------- ---------------
Net increase (decrease) in Fund
shares ........................ 2,723,321 (1,774,377) (3,037,676)
Shares outstanding at end of
period ........................ 52,410,532 49,687,211 51,461,588
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<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>
- -------------------------------------------------------------------------------------
2000(b) 1999(c) 1999(d) 1998(d) 1997(d) 1996(d) 1995(d)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $31.25 $31.30 $32.41 $33.67 $28.73 $25.64 $23.93
----------------------------------------------------------------
- -------------------------------------------------------------------------------------
Income (loss) from
investment operations:
- -------------------------------------------------------------------------------------
Net investment
income (loss) .07(a) .02(a) .23(a) .38(a) .17(a) .24 .25
- -------------------------------------------------------------------------------------
Net realized and
unrealized gain
(loss) on investment
transactions 3.15 (.07) 1.82 3.82 6.58 3.94 1.91
----------------------------------------------------------------
- -------------------------------------------------------------------------------------
Total from
investment
operations 3.22 (.05) 2.05 4.20 6.75 4.18 2.16
- -------------------------------------------------------------------------------------
Less distributions from:
- -------------------------------------------------------------------------------------
Net investment
income (.20) -- (.55) (.88) (.28) (.25) (.11)
- -------------------------------------------------------------------------------------
Net realized gains
on investment
transactions (3.91) -- (2.61) (4.58) (1.53) (.84) (.34)
----------------------------------------------------------------
- -------------------------------------------------------------------------------------
Total distributions (4.11) -- (3.16) (5.46) (1.81) (1.09) (.45)
- -------------------------------------------------------------------------------------
Net asset value, end
of period $30.36 $31.25 $31.30 $32.41 $33.67 $28.73 $25.64
----------------------------------------------------------------
- -------------------------------------------------------------------------------------
Total Return (%) 10.20** (.16)** 7.18 14.93 24.91 16.65 9.11
- -------------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
- -------------------------------------------------------------------------------------
Net assets, end of
period ($ millions) 1,591 1,553 1,610 1,766 1,604 1,368 1,168
- -------------------------------------------------------------------------------------
Ratio of expenses (%) 1.37* 1.36* 1.35 1.34 1.37 1.34 1.38
- -------------------------------------------------------------------------------------
Ratio of net
investment income
(loss) (%) .43* .44* .79 1.19 .59 .84 1.03
- -------------------------------------------------------------------------------------
Portfolio turnover
rate (%) 82* 29* 70 51 41 29 44
- -------------------------------------------------------------------------------------
</TABLE>
(a) Per share amounts have been calculated using average shares outstanding.
(b) For the six months ended February 29, 2000 (Unaudited).
(c) For the two months ended August 31, 1999. On June 7, 1999 the Fund changed
its fiscal year end from June 30 to August 31.
(d) Years ended June 30.
* Annualized
** Not annualized
25
<PAGE>
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
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.
On June 7, 1999, the Fund changed its fiscal year end from June 30 to August 31.
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.
26
<PAGE>
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.
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
27
<PAGE>
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 0.38% Contribuicao Provisoria sobre Movimentacao
Financiera (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. All discounts
are accreted for both tax and financial reporting purposes.
B. Purchases and Sales of Securities
For the six months ended February 29, 2000 purchases and sales of investment
securities (excluding short-term investments and U.S. Government obligations)
aggregated $519,589,666 and $652,033,563, respectively.
28
<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, 0.95% of the next $500,000,000 of such
net assets, 0.90% of the next $500,000,000 of such net assets and 0.85% on such
net assets in excess of $1,500,000,000 computed and accrued daily and payable
monthly. For the six months ended February 29, 2000, the fee pursuant to such
Agreement amounted to $7,397,173, which was equivalent to an annual effective
rate of 0.95% 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. For the
six months ended February 29, 2000, the amount charged to the Fund by SSC
aggregated $1,076,765, of which $343,658 is unpaid at February 29, 2000.
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 February
29, 2000, the amount charged to the Fund by STC aggregated $579,324, all of
which is paid at February 29, 2000.
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 February 29, 2000, the amount charged to the Fund by SFAC aggregated
$290,200, of which $46,666 is unpaid at February 29, 2000.
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 six months ended February 29,
2000, Directors' fees and expenses aggregated $23,686.
29
<PAGE>
D. Commitments
As of February 29, 2000, the Fund had entered into the following forward foreign
currency exchange contracts resulting in net unrealized depreciation of
$228,834.
<TABLE>
<CAPTION>
Net Unrealized
Appreciation
Settlement (Depreciation)
Contracts to Deliver: In Exchange For Date (U.S.$)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Japanese Yen 14,356,161,705 U.S. Dollars 131,930,000 5/22/2000 (228,834)
(228,834)
</TABLE>
E. Line of Credit
The Fund and several Scudder funds (the "Participants") share in a $1 billion
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.
30
<PAGE>
Officers and Directors
- --------------------------------------------------------------------------------
William E. Holzer*
o President
Sheryle J. Bolton
o Director; Chief Executive
Officer, Scientific
Learning Corporation
William T. Burgin
o Director; General
Partner, Bessemer Venture
Partners
Keith R. Fox
o Director; General
Partner, The Exeter Group
of Funds
William H. Luers
o Director; Chairman and
President, U.N.
Association of America
Kathryn L. Quirk*
o Director; Vice President
and Assistant Secretary
Joan E. Spero
o Director; President,
Doris Duke Charitable
Foundation
Paul Bancroft III
o Honorary Director;
Venture Capitalist and
Consultant
Thomas J. Devine
o Honorary Director;
Consultant
William H. Gleysteen, Jr.
o Honorary Director;
Consultant; Guest
Scholar, Brookings
Institute
Robert G. Stone, Jr.
o Honorary Director;
Chairman Emeritus and
Director, Kirby
Corporation
Jan C. Faller*
o Vice President
Ann M. McCreary*
o Vice President
Gerald J. Moran*
o Vice President
Robert C. Peck*
o Vice President
M. Isabel Saltzman*
o Vice President
John Millette*
o Vice President and
Secretary
John R. Hebble*
o Treasurer
Caroline Pearson*
o Assistant Secretary
*Scudder Kemper Investments, Inc.
31
<PAGE>
Investment Products and Services
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
<S> <C>
Money Market U.S. Growth and Income
Scudder U.S. Treasury Money Fund Scudder Balanced Fund
Scudder Cash Investment Trust Scudder Dividend & Growth Fund
Scudder Money Market Series -- Scudder Growth and Income Fund***
Prime Reserve Shares* Scudder Select 500 Fund
Premium Shares* Scudder S&P 500 Index Fund
Managed Shares* Scudder Real Estate Investment Fund
Scudder Government Money Market
Series -- Managed Shares* U.S. Growth
Value
Tax Free Money Market+ Scudder Large Company Value Fund
Scudder Tax Free Money Fund Scudder Value Fund***
Scudder Tax Free Money Market Scudder Small Company Value Fund
Series -- Managed Shares* Scudder Micro Cap Fund
Scudder California Tax Free Money Fund** Growth
Scudder New York Tax Free Money Fund** Scudder Classic Growth Fund***
Scudder Large Company Growth Fund***
Tax Free+ Scudder Select 1000 Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Medium Term Tax Free Fund Scudder 21st Century Growth Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund Global Equity
Scudder California Tax Free Fund** Worldwide
Scudder Massachusetts Limited Term Scudder Global Fund
Tax Free Fund** Scudder International Value Fund
Scudder Massachusetts Tax Free Fund** Scudder International Growth and
Scudder New York Tax Free Fund** Income Fund
Scudder Ohio Tax Free Fund** Scudder International Fund++
Scudder International Growth Fund
U.S. Income Scudder Global Discovery Fund***
Scudder Short Term Bond Fund Scudder Emerging Markets Growth Fund
Scudder GNMA Fund Scudder Gold Fund
Scudder Income Fund Regional
Scudder Corporate Bond Fund Scudder Greater Europe Growth Fund
Scudder High Yield Bond Fund Scudder Pacific Opportunities Fund
Scudder Latin America Fund
Global Income The Japan Fund, Inc.
Scudder Global Bond Fund
Scudder International Bond Fund Industry Sector Funds
Scudder Emerging Markets Income Fund Choice Series
Scudder Financial Services Fund
Asset Allocation Scudder Health Care Fund
Scudder Pathway Conservative Portfolio Scudder Technology Fund
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio Preferred Series
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small Company Fund
</TABLE>
32
<PAGE>
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
- --------------------------------------------------------------------------------
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs Education Accounts
Traditional IRA Education IRA
Roth IRA UGMA/UTMA
SEP-IRA IRA for Minors
Inherited IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Closed-End Funds#
- -----------------------------------------------------------------------------------------
<S> <C>
The Argentina Fund, Inc. Montgomery Street Income Securities, Inc.
The Brazil Fund, Inc. Scudder Global High Income Fund, Inc.
The Korea Fund, Inc. Scudder New Asia Fund, Inc.
</TABLE>
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.
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Scudder Solutions
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1-800-SCUDDER www.scudder.com
Convenient Automatic Investment Plan
ways to invest,
quickly and A convenient investment program in which money is
reliably electronically debited from your bank account monthly to
regularly purchase fund shares and "dollar cost average" --
buy more shares when the fund's price is lower and fewer
when it's higher, which can reduce your average purchase
price over time.*
Automatic Dividend Transfer
The most timely, reliable, and convenient way to purchase
shares -- use distributions from one Scudder fund to
purchase shares in another, automatically (accounts with
identical registrations or the same social security or tax
identification number).
QuickBuy
Lets you purchase Scudder fund shares electronically,
avoiding potential mailing delays; money for each of your
transactions is electronically debited from a previously
designated bank account.
Payroll Deduction and Direct Deposit
Have all or part of your paycheck -- even government checks
-- invested in up to four Scudder funds at one time.
* 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- Scudder Automated Information Line: SAIL(TM) --
clock electronic 1-800-343-2890
account
service and Personalized account information, the ability to exchange
information, or redeem shares, and information on other Scudder funds
including some and services via touchtone telephone.
transactions
Scudder's Web Site -- www.scudder.com
Personal Investment Organizer: Offering account information
and transactions, interactive worksheets, prospectuses and
applications for all Scudder funds, plus your current asset
allocation, whenever your need them. Scudder's site also
provides news about Scudder funds, retirement planning
information, and more.
34
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1-800-SCUDDER www.scudder.com
Retirees and Automatic Withdrawal Plan
those who depend
on investment You designate the bank account, determine the schedule (as
proceeds for frequently as once a month) and amount of the redemptions,
living expenses and Scudder does the rest.
can enjoy these
convenient, Distributions Direct
timely, and
reliable Automatically deposits your fund distributions into the
automated bank account you designate within three business days after
withdrawal each distribution is paid.
programs
QuickSell
Provides speedy access to your money by electronically
crediting your redemption proceeds to the bank account you
previously designated.
For more Call a Scudder representative at
information about 1-800-SCUDDER
these services
Or visit our Web site at
www.scudder.com
Please address The Scudder Funds
all written PO Box 2291
correspondence Boston, Massachusetts
to 02107-2291
35
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Notes
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<PAGE>
Notes
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<PAGE>
Notes
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<PAGE>
Notes
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<PAGE>
About the Fund's Adviser
SCUDDER
INVESTMENTS (SM)
[LOGO]
PO Box 2291
Boston, MA 02107-2291
1-800-SCUDDER
www.scudder.com
A member of the [LOGO] Zurich Financial Services Group
Scudder Kemper Investments, Inc. is one of the largest and most experienced
investment management organizations worldwide, managing more than $290 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 over 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.
