This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder
Gold
Fund
Annual Report
June 30, 1996
o A convenient and cost-effective way to broaden a portfolio of stocks,
bonds, and money market investments. Offers potential for maximum return
from a portfolio of gold and gold-related investments in exchange for
above-average risk.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange
shares.
<PAGE>
SCUDDER GOLD FUND
CONTENTS
2 In Brief
3 Letter from the Fund's President
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
10 Investment Portfolio
16 Consolidated Financial Statements
19 Consolidated Financial Highlights
20 Notes to Consolidated Financial Statements
25 Report of Independent Accountants
26 Tax Information
29 Officers and Directors
30 Investment Products and Services
31 How to Contact Scudder
IN BRIEF
o Scudder Gold Fund compiled an impressive 36.91% total return for its most
recent fiscal year ended June 30, 1996, more than double the average
performance of the 42 gold-oriented funds tracked by Lipper over the same
period. Please see page 4 for additional performance information.
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE: Total Returns for Gold and Gold Funds
CHART PERIOD: (Periods ended June 30, 1996)
6 months 12 months
-------- ---------
Gold Bullion, -1.28 -2.30
London p.m. fix
Platinum, -2.24 -11.90
free market price
Toronto Stock Exchange 6.28 3.71
Gold Index
Johannesburg (South Africa) 28.15 19.60
Stock Exchange Gold Index
Lipper Average 14.82 16.60
for Gold-Oriented Funds
Scudder Gold Fund 32.96 36.91
Past performance does not guarantee future results.
o The price of gold fluctuated in a $375-$397 range from July through
November 1995, then spiked dramatically to $414 per ounce in February 1996.
The actions of central banks then dampened the market's speculative fever,
and gold closed the Fund's fiscal year at a $382 price.
o Tier V stocks such as Bre-X and Arequipa continued to make sizable gains;
we took substantial profits from these and other small gold stocks during
the fiscal year.
2
<PAGE>
LETTER FROM THE FUND'S PRESIDENT
Dear Shareholders,
Scudder Gold Fund's objective is to seek maximum return through
investments in gold stocks and gold bullion. The Fund offers a convenient and
cost-effective way to diversify an investor's portfolio and the opportunity to
participate in future increases in the price of gold. Your Fund performed well
over its most recent fiscal year, compiling an impressive 36.91% total return.
This return is especially noteworthy considering that while gold and gold stocks
in general made a dramatic run-up during the period, they gave back most of
those gains by the end of June.
To a great extent, the Fund's gains during the period were due to our
investments in Tier V (small gold exploration companies) gold stocks. With
start-up capital gained mainly through stock offerings, these companies search
for gold in promising areas of the world, performing geochemical sampling and
geophysics studies. Several of these companies have made impressive new finds
over the past two years, and your Fund has profited from these holdings. Now we
have entered a new stage of worldwide gold exploration, and the most promising
opportunities lie with Tier V companies that have already found large gold
deposits and are making arrangements with larger, highly capitalized firms to
mine the gold cost-effectively. Please turn to the Portfolio Management
Discussion that begins on page 6 for more information on the Fund's new
emphasis.
We are pleased to announce that information for Scudder investors is
now available on our new Web site on the Internet, at http://funds.scudder.com.
This site provides instant access to fund prospectuses and an exciting and
versatile way for our shareholders to gain access to up-to-the-minute
information from Scudder. We believe we have one of the most creative and
extensive Web sites available for mutual fund investors, and invite you to visit
our site soon.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Gold Fund
3
<PAGE>
SCUDDER GOLD FUND
PERFORMANCE UPDATE as of June 30, 1996
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
SCUDDER GOLD FUND
- ----------------------------------------
Total Return
Period Growth --------------
Ended of Average
6/30/96 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $13,691 36.91% 36.91%
5 Year $19,237 92.37% 13.98%
Life of
Fund* $15,951 59.51% 6.15%
S&P 500 INDEX
- --------------------------------------
Total Return
Period Growth --------------
Ended of Average
6/30/96 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $12,600 26.00% 26.00%
5 Year $20,759 107.59% 15.71%
Life of
Fund* $31,200 212.00% 15.82%
*The Fund commenced operations on September 2,
1988. Index comparisons begin September 30, 1988.
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
YEARLY PERIODS ENDED JUNE 30
Scudder Gold Fund
Year Amount
- ----------------------
9/88 $10,000
'89 $ 9,256
'90 $ 9,005
'91 $ 8 705
'92 $ 8,106
'93 $10,699
'94 $11,378
'95 $12,459
'96 $16,746
S&P 500 Index
Year Amount
- ----------------------
9/88 $10,000
'89 $12,014
'90 $13,995
'91 $15,030
'92 $17,046
'93 $19,369
'94 $19,642
'95 $24,762
'96 $31,200
The Standard & Poor's (S&P) 500 Index is an unmanaged capitalization-
weighted measure of 500 widely held common stocks listed on the New York Stock
Exchange, American Stock Exchange, and Over-The-Counter market. Index returns
assume reinvestment of dividends and, unlike Fund returns, do not reflect any
fees or expenses.
- -----------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
YEARLY PERIODS ENDED JUNE 30
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1989* 1990 1991 1992 1993 1994 1995 1996
---------------------------------------------------------------
NET ASSET VALUE... $10.58 $10.21 $9.87 $9.19 $12.13 $12.64 $12.86 $15.34
INCOME DIVIDENDS.. $ - $ .01 $ - $ - $ - $ .24 $ .25 $1.08
CAPITAL GAINS &
OTHER
DISTRIBUTIONS..... $ - $ .09 $ - $ - $ - $ - $ .47 $ .63
FUND TOTAL
RETURN (%)........ -11.83 -2.71 -3.33 6.89 31.99 6.35 7.50 36.91
INDEX TOTAL
RETURN (%)........ 20.11 16.45 7.37 13.39 13.61 1.40 26.07 26.00
</TABLE>
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results.
Investment return and principal value will fluctuate, so an investor's
shares, when redeemed, may be worth more or less than when purchased. If
the Adviser had not temporarily capped expenses, the average annual
total return for the five year and life of Fund periods would
have been lower.
4
<PAGE>
PORTFOLIO SUMMARY as of June 30, 1996
- ---------------------------------------------------------------------------
DIVERSIFICATION
- ---------------------------------------------------------------------------
As a percentage of net assets
Equity Holdings 85% The Fund is broadly diversified,
Precious Metals 14% and seeks to maintain a balance between
Cash Equivalents, net 1% long-term growth and liquidity.
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
QUALITY
- --------------------------------------------------------------------------
Tier breakdown of the Fund's common stocks
Tier I Premier gold producing
companies 20% We are now focusing on
Tier II Major established gold Tier V companies that have
producers 27% made gold discoveries and
Tier III Junior gold producers are making deals with major
with medium cost producers to develop and mine
productions 13% these large gold deposits.
Tier IV Companies with some gold
production on stream
or in start-up 9%
Tier V Primarily exploration
companies with or
without mineral reserves 31%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS (28% of Portfolio)
- --------------------------------------------------------------------------
1. STILLWATER MINING CO.
Exploration and development of mines in Montana producing platinum,
palladium and associated metals.
2. ASHANTI GOLDFIELDS CO., (ADS)
World class gold producer in Ghana
3. EURO-NEVADA MINING, LTD.
Large North American royalty owner
4. BARRICK GOLD CORP.
Gold exploration and production in North and South America
5. HEMLO GOLD MINES, INC.
Large gold producer, with single mine in Ontario; active exploration company
6. PIONEER GROUP INC.
Fund management company owning major gold producer in Ghana
7. SANTA FE PACIFIC GOLD CORP.
Major domestic gold mining company
8. NEWMONT MINING CORP.
International gold exploration and mining company
9. AREQUIPA RESOURCES LTD.
Exploration company in Peru
10.CAMBIOR INC.
Medium-sized gold producer with a major in Guyana
One month after the close of the Fund's fiscal year, our remaining investment
in Arequipa Resources (our ninth largest holding) was worth 40 times its cost.
- -----------------------------------------------------------------------
For more complete details about the Fund's Investment Portfolio,
see page 10.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings
are available upon request.
5
<PAGE>
SCUDDER GOLD FUND
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
During its most recent fiscal year ended June 30, 1996, Scudder Gold
Fund profited handsomely from the performance of gold stocks -- particularly
Tier V stocks. Meanwhile, prices of gold and gold stocks soared for several
months, then came back to earth. Scudder Gold Fund posted an impressive 36.91%
total return for the period, consisting of a $2.48 increase in net asset value
- -- to $15.34 per share -- and distributions of $1.08 in income dividends and
$0.63 in long-term capital gains. The Fund's total return was more than double
the average for gold funds as tracked by Lipper Analytical Services.
Longer term, Scudder Gold Fund has continued to outpace the average
gold fund as well, as shown in the chart below. In fact, the fund's rankings
fall between the top 10% and top 17% of its peers over the historical periods
listed in the chart.
Investment Returns for Periods Ended June 30, 1996
Scudder Lipper Percentile Number of
Period Gold Fund Average Rank Funds tracked
------ --------- ------- ---- -------------
1 year 36.91% 16.60% 14% 42
2 years* 21.32 7.14 11 35
3 years* 16.11 4.79 10 29
4 years* 19.89 12.36 17 29
5 years* 13.98 8.09 14 28
* Average annual total returns
Performance statistics compiled by Lipper Analytical Services, Inc.
Past performance is no guarantee of future results.
Gold's Topsy Turvy Year
Though the price of gold and the performance of gold stocks are closely
related, the markets for these investments do not move in tandem. From July
through November 1995, gold bullion continued to trade in a relatively narrow
range -- from $375 to $397 -- as "forward sales" by gold producers stemmed any
attempts to break the $400 mark. (In "selling forward," gold producers sell on
the marketplace gold that will not be mined for between six months and four
years, similar to "selling short" in the stock market. They do this to guarantee
a favorable price for the unmined gold.) Then in December, forward sales
6
<PAGE>
diminished as central banks' lease rate for lending gold rose sharply. The gold
market shifted from a scenario of downward price pressure to strong upward
pressure as supply tightened and large commodity funds, sensing an opportunity,
began to purchase large amounts of bullion. Despite a large forward sale by a
South African gold mining company, prices started moving up in January 1996,
peaking at $414 per ounce on February 5.
At the height of this activity, central banks -- desiring an orderly
market -- acted to dampen speculative fever by selling gold reserves into the
rally. Their actions halted the spike and the price of gold gradually subsided
to a $390 to $395 range. In May, many commodity funds sold their gold bullion
positions, and by June gold's price had retreated almost to where it had started
in the $380-$385 range. We believe this range will act as a "floor" for what we
hope will be an orderly re-ascension toward $400 per ounce during the latter
half of 1996 and beyond.
Gold's supply/demand relationship is as it has been for the past
several years: Worldwide demand for gold -- 80-90% of which is represented by
jewelry fabrication demand -- is rising, and is exceeding the supply of newly
mined gold by a gradually increasing margin. Since no significant increase in
supply is expected before 1998, when some more recent worldwide gold discoveries
should begin to bear fruit, we expect this supply/demand gap will continue to
underpin the price of gold bullion.
A New Tier V Strategy
Meanwhile, during the latter half of Scudder Gold Fund's fiscal year,
Wall Street analysts began recommending that more investors hold gold stocks in
their portfolios. Prices of gold stocks from Tier I to Tier V responded with a
sharp rally, due in part -- as we've mentioned in the past -- to the relatively
small (approximately $65 billion) total capitalization of gold stocks worldwide.
The Toronto Stock Exchange Gold Index, registering at less than 10,000 in
November, soared to 13,200 by the last week in May. By the end of June, however,
the Index followed gold bullion's reversal and dipped back to 11,000.
Though Scudder Gold Fund benefited from holdings in gold mining
companies of various sizes, our major focus was on Tier V stocks, primarily
exploration companies. During the 12-month period we dramatically reduced our
holdings in Bre-X Minerals and Arequipa Resources, two exploration companies
7
<PAGE>
that have enjoyed enormous stock price increases. (At fiscal year end our
remaining holdings in Bre-X shares were valued at better than 80 times their
original cost.) We reduced our holdings not only to lock in profits for the
Fund, but also because we have altered our strategy regarding Tier V companies.
Over the last two years there has been a tremendous amount of new exploration
activity around the world, as well as investment in that activity. As several
companies have now made large gold discoveries, we believe this sector has
shifted into a second stage. Rather than in pure exploration, the best
opportunities in our view now lie with Tier V companies that are making deals
with a major producer to have the larger, better capitalized firm develop and
mine newly discovered gold deposits. Of course, the nature of Tier V companies
is inherently aggressive, even with the partnership of more established firms.
In July, Barrick Gold offered to purchase all the stock of Arequipa at
$27 per share. Although this price was 17% below the stock's peak, it still
represented a 30% premium to the market price preceding the offer. One month
after the close of Scudder Gold Fund's fiscal year the Fund's remaining
investment in Arequipa was worth more than 40 times its cost.
Regionally, we remain enthusiastic concerning Venezuela's prospects.
Progress toward removing political uncertainty has been made, and a major gold
mining firm is poised to invest over $400 million to develop its property there.
A new mining code and other legislation must be in place, however, before the
company will commit its resources fully.
Additionally, we are monitoring developments in gold exploration within
Russia and other countries of the Commonwealth of Independent States. Though the
first flush of investor enthusiasm has worn off following the overthrow of
communism in 1989, progress is ongoing. Companies now realize it will take
longer and cost more than first thought to mine gold successfully there. One of
the Fund's holdings, Newmont Mining, is persisting in its exploration there,
with a property in Murantau in Uzbekistan. The prospects for developing the
enormous mineral wealth in this part of the world remain intriguing.
8
<PAGE>
Our Outlook
During the next 12 months we anticipate something of a repeat
performance of the last 12 -- a gradual increase in the price of gold with
intermittent price spikes. It is possible for the low- to moderate-cost
producers that the Fund invests in to reap significant profits at $385 per ounce
of gold; therefore any increase in gold's price would benefit these stocks. We
believe central banks will continue to moderate any speculative movements in
gold's price. And as we stated above, the gap between supply and demand should
provide at least a floor for the price of gold, if not significant upward price
pressure.
As always, we will seek to benefit from developments in these twin
markets and continue to search for exciting companies involved in gold
exploration and development around the world. We believe the Fund remains an
appropriate investment for those seeking portfolio diversification, a hedge
against inflation, and participation in the world's gold and precious metals
markets.
Sincerely,
Your Portfolio Management Team
/s/Douglas D. Donald /s/William J. Wallace
Douglas D. Donald William J. Wallace
Scudder Gold Fund:
A Team Approach to Investing
Scudder Gold Fund is managed by a team of Scudder investment professionals
who each play an important role in the Fund's management process. Team members
work together to develop investment strategies and select securities for the
Fund's portfolio. They are supported by Scudder's large staff of economists,
research analysts, traders, and other investment specialists who work in
Scudder's offices across the United States and abroad. We believe our team
approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Lead Portfolio Manager Douglas D. Donald has been responsible for Scudder
Gold Fund's day-to-day management since its inception in 1988. Doug, who joined
Scudder in 1964, has more than 40 years of experience with investments in
precious metals and mining. William J. Wallace, Portfolio Manager, has been a
member of Scudder Gold Fund's team since 1991 and also serves as a Portfolio
Manager for Scudder Value Fund. Bill, who has over 15 years of investment
experience, contributes expertise in quantitative analysis.
9
<PAGE>
SCUDDER GOLD FUND
INVESTMENT PORTFOLIO as of June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Principal Market
Net Assets Amount ($) Value ($)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
----------------------------------------------------------------------
3.0% REPURCHASE AGREEMENTS
----------------------------------------------------------------------
5,248,000 Repurchase Agreement with Donaldson,
Lufkin & Jenrette dated 6/28/96 at 5.45%
to be repurchased at $5,250,383 on 7/1/96,
collateralized by a $3,515,000 U.S. Treasury
Note, 12.5%, 8/15/14 (Cost $5,248,000) ........ 5,248,000
----------
----------------------------------------------------------------------
3.7% CONVERTIBLE BONDS
----------------------------------------------------------------------
CHILE 0.5% 500,000 Bema Gold Corp., 7.5%, 2/28/00 ................. 900,000
----------
INTERNATIONAL 3.2% 2,500,000 Golden Shamrock Mines Ltd., 7.5%, 5/9/00 ....... 3,150,000
2,500,000 Horsham Corp., 3.25%, 12/10/18 ................. 2,325,000
----------
5,475,000
----------
TOTAL CONVERTIBLE BONDS (Cost $5,583,125) ...... 6,375,000
----------
----------------------------------------------------------------------
82.1% COMMON STOCKS
----------------------------------------------------------------------
Shares
----------------------------------------------------------------------
AUSTRALIA 7.2% 600,000 Acacia Resources Ltd.* (Gold and mineral
exploration company with operations
throughout Australia) ......................... 1,414,531
500,000 Delta Gold NL* (Emerging junior exploration
company with important platinum property in
Zimbabwe) ..................................... 1,277,007
2,500,000 Gold Mines of Kalgoorlie (Major gold
producer) ..................................... 2,730,830
413,992 Newcrest Mining, Ltd. (Senior gold producer
and exploration company) ...................... 1,659,212
550,000 Orion Resources (Junior exploration company) ... 799,603
1,133,976 Poseidon Gold Ltd. (Growing Tier III gold
producer) ..................................... 2,789,254
1,600,000 Ross Mining NL (Junior exploration company) .... 1,772,878
----------
12,443,315
----------
BOLIVIA 1.7% 519,900 Corriente Resources, Inc.*(Exploration and
development company operating in Bolivia) ..... 1,142,428
100,000 Corriente Resources, Inc. Warrants*
(expire 3/8/97) (c) ........................... 13,917
650,000 Da Capo Resources Ltd.* (Mineral exploration
and development company in Bolivia) ........... 1,809,192
----------
2,965,537
----------
</TABLE>
The accompanying notes are an integral part of the financial statement.
--
10
<PAGE>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Market
Net Assets Shares Value ($)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CANADA 10.9% 185,000 Agnico-Eagle Mines, Ltd. (Silver and gold
mining) ........................................ 3,015,016
125,000 Euro-Nevada Mining, Ltd. (Large North
American royalty owner) ........................ 5,356,162
117,188 Golden Knight Resources, Inc. Warrants*
(expire 10/6/96) ............................... 21,459
434,287 Golden Knight Resources, Inc.* (Junior gold
producer, with recently opened mine in
Quebec) ........................................ 2,687,951
448,500 Hemlo Gold Mines, Inc. (Large gold producer,
with single mine in Ontario; active exploration
company) ....................................... 4,796,264
300,000 Redfern Resources Ltd.* (Exploration company in
British Columbia) .............................. 435,085
622,700 Repadre Capital Corp.* (Junior gold royalty
company) ....................................... 2,599,810
----------
18,911,747
----------
CHILE 2.1% 241,500 Bema Gold Corp.* (Partner in development of
large Chilean gold deposit) .................... 910,981
370,500 Dayton Mining Corp.* (Junior company
developing Chilean gold deposits) .............. 2,225,307
550,000 Minera Rayrock Inc.* "A" (Company developing a
low cost property in Chile) .................... 362,571
100,000 Minera Rayrock Inc.* "B" ........................ 87,896
----------
3,586,755
----------
ECUADOR 0.5% 723,800 Ecuadorian Minerals Corp.* (Exploration
company in Ecuador) ............................ 927,779
----------
FRENCH GUIANA 1.2% 300,000 Guyanor Resources S.A.* "B" (Company holding
interests in mineral properties in French
Guiana) ........................................ 2,109,504
----------
GHANA 7.8% 305,800 Ashanti Goldfields Co., Ltd. (ADS) (Leading gold
producer) ...................................... 6,039,550
175,000 Pioneer Group Inc. (Fund management company
owning major gold producer in Ghana) ........... 4,681,250
850,000 Ranger Minerals NL* (Gold producer and
exploration company in Ghana) .................. 2,805,486
----------
13,526,286
----------
INDONESIA 3.9% 175,000 Bre-X Minerals Ltd.* (Gold exploration
company in Indonesia) .......................... 2,922,542
500,000 Golden Bear Minerals, Inc. Units*
(expire 3/22/97) (Gold exploration
company) (c) (d) ............................... 711,958
</TABLE>
The accompanying notes are an integral part of the financial statement.
--
11
<PAGE>
SCUDDER GOLD FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Market
Net Assets Shares Value ($)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
200,000 Scorpion Minerals, Inc. (Holder of interests in
gold, copper and base metal mining properties
in Indonesia) .................................. 695,843
525,000 South Pacific Resources* (Gold exploration
company operating in Indonesia) ................ 2,403,406
---------
6,733,749
---------
KAZAKHSTAN 1.4% 140,000 Control Science Special Warrants*
(expire 5/28/98) (c) (h) (Manufacturer of
artificial intelligence-based equipment) ....... 235,444
770,000 Control Science Special Warrants*
(expire 5/28/98) (c) (g) ....................... 1,030,427
100,000 Kazakhstan Minerals Corp.*(Joint venturing in
Kazakhstan) .................................... 945,000
50,000 Kazakhstan Minerals Corp. Warrants* (Expire
11/30/96) (c) .................................. 143,975
---------
2,354,846
---------
NICARAGUA 1.1% 400,000 Triton Mining Corp.* (Exploration and
development of mineral properties in Central
and South America) ............................. 1,904,413
---------
NAMIBIA 0.9% 300,000 Namibian Minerals Corp.* (Diamond exploration
and development company, offshore Namibia) ..... 1,560,154
---------
PERU 3.7% 150,000 Arequipa Resources Ltd.* (Exploration company
in Peru) ....................................... 2,043,582
150,000 Arequipa Resources Ltd. Warrants*
(expire 1/14/97) (c) ........................... 1,866,911
150,000 Southwestern Gold Corp.* (Multiple gold and
gold/copper exploration properties in Peru) .... 2,417,140
---------
6,327,633
---------
PHILIPPINES 1.8% 400,000 Chase Resource Corp.* (Acquisition, exploration
and development of resource mineral
properties) .................................... 1,245,193
1,000,000 Climax Mining Ltd.* (Gold exploration company
in Australia and the Philippines Islands) ...... 1,100,190
620,000 TVI Pacific, Inc.* (Gold exploration and mining
in the Philippines) ............................ 781,102
---------
3,126,485
---------
SOUTH AFRICA 2.0% 401,846 Potgietersrust Platinum Holdings, Ltd.
(Leading platinum producer) .................... 2,017,113
170,000 Vaal Reefs Exploration & Mining Co., Ltd.
(ADR)* (Mining and exploration for gold,
uranium oxide and sulfuric acid in
South Africa) .................................. 1,360,000
---------
3,377,113
---------
</TABLE>
The accompanying notes are an integral part of the financial statement.
--
12
<PAGE>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Market
Net Assets Shares Value ($)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TANZANIA 0.8% 400,000 Pangea Goldfields Inc.* (Gold exploration
company operating in Tanzania) ................. 1,450,284
----------
UNITED STATES 12.3% 250,000 Crown Butte Resources Ltd.* (Small exploration
company holding an important gold deposit
in Montana) .................................... 512,727
200,000 FMC Gold Co. (Medium-sized producer of gold
and silver in Nevada) .......................... 900,000
100,000 Getchell Gold Corp.* (Expanding gold mining
project in Nevada) ............................. 3,300,000
700,000 Granges, Inc.* (Emerging junior gold producer
and exploration company) ....................... 974,181
400,000 Granges, Inc. Special Warrants*
(expire 10/31/97) (c) (g) ...................... 534,408
989,000 Piedmont Mining Co.* (Gold and mining
development company in the Carolinas) .......... 618,125
300,001 Santa Fe Pacific Gold Corp. (Major domestic
gold mining company) ........................... 4,237,515
300,000 Stillwater Mining Co.* (Exploration and
development of mines in Montana producing
platinum, palladium and associated metals) ..... 7,087,500
2,334,500 Texas Star Resources Corp.* (Diamond
exploration in Arkansas and northern Canada) ... 1,162,761
340,000 Viceroy Resources Corp.* (Gold producer in
California) .................................... 1,967,405
----------
21,294,622
----------
VENEZUELA 3.6% 847,600 Bolivar Goldfields Ltd.* (Gold exploration
company in Venezuela) .......................... 931,258
415,700 Carson Gold Corp.* (Gold exploration and
development company operating in
Venezuela) (c) ................................. 517,627
274,000 Crystallex International Corp.* (Junior company
developing gold property in Venezuela) ......... 571,983
500,000 Crystallex International Corp. Special Option*
(expire 6/14/97) (c) (i) ....................... 939,388
200,000 Crystallex International Corp. Units*
(expire 3/11/98) (c) (e) ....................... 404,029
1,124,000 El Callao Mining Corp.* (Gold exploration and
development company with interests in
Venezuela) ..................................... 946,786
700,000 Jordex Resources, Inc.* (Operator of two mines
producing zinc, lead and silver) ............... 1,153,635
600,000 Tombstone Exploration Co., Ltd. Special
Warrants* "A" (expire 5/17/98) (c) (f) ......... 716,177
----------
6,180,883
----------
</TABLE>
The accompanying notes are an integral part of the financial statement.
--
13
<PAGE>
SCUDDER GOLD FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Market
Net Assets Shares Value ($)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WEST AFRICA 1.3% 150,000 Nevsun Resources Ltd.* (Holder of interests in
gold prospects) ................................ 1,115,180
75,000 Nevsun Resources Ltd. Special Warrants*
(expire 3/21/97) (c) (f) ....................... 535,287
100,000 Oliver Gold Corp.* (Exploration and
development company with interests in gold
and gold-copper prospects in British
Columbia) ...................................... 249,039
300,040 Pan African Resources Corp.* (Gold exploration
in West Africa) ................................ 285,700
-----------
2,185,206
-----------
INTERNATIONAL 17.9% 107,399 Barrick Gold Corp. (Gold exploration and
production in North and South America) ......... 2,913,198
275,000 Cambior, Inc. (Medium-sized gold producer with
a major mine in Guyana) ........................ 3,635,781
775,600 Canarc Resources Corp.* (Exploration and
development company) ........................... 965,772
304,000 Crown Resources Corp.* (Gold, silver and
mineral exploration company) ................... 1,596,000
200,000 Golden Star Resources Ltd.* (Junior company,
with permits in North and South America and
West Africa) ................................... 2,871,269
150,000 Homestake Mining Co. (Major international gold
producer) ...................................... 2,568,750
300,000 Kinross Gold Corp.* (Gold mining company,
with interests in Zimbabwe) .................... 2,263,322
80,000 Newmont Mining Corp. (International gold
exploration and mining company) ................ 3,950,000
440,000 Orvana Minerals Corp.* (International exploration
and development company) ....................... 2,546,054
110,000 Placer Dome Inc. (International gold, silver and
copper mining) ................................. 2,626,250
300,000 Rayrock Yellowknife Resources, Inc.* (Junior
diversified mineral producer with operations in
Nevada, Canada and Latin America) .............. 1,889,764
525,353 Solitario Resources Corp.* (Precious and base
metals exploration company primarily in
Argentina and Peru) ............................ 615,686
350,000 TVX Gold, Inc.* (International gold and silver
mining) ........................................ 2,563,633
-----------
31,005,479
-----------
TOTAL COMMON STOCKS (Cost $107,491,808) 141,971,790
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statement.
--
14
<PAGE>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
% of Market
Net Assets Value ($)
-----------------------------
<S> <C> <C>
INVESTMENT PORTFOLIO (Cost $118,322,933) (a) ......... 88.8 153,594,790
SCUDDER PRECIOUS METALS, INC. (NOTE A):
GOLD* (Cost $23,231,024) (b) ........................ 13.0 22,534,295
PLATINUM* (Cost $899,757) (b) ........................ 0.6 947,550
OTHER ASSETS AND LIABILITIES, NET .................... (2.4) (4,196,191)
----- -----------
NET ASSETS ........................................... 100.0 172,880,444
===== ===========
<FN>
* Non-income producing security or commodity.
(a) The cost for federal income tax purposes was $139,927,382. At June 30, 1996, net unrealized
appreciation for all investment securities based on tax cost was $13,667,408. This consisted of
aggregate gross unrealized appreciation for all investments in which there was an excess of
market value over tax cost of $25,156,516 and aggregate gross unrealized depreciation for all
investment securities in which there was an excess of tax cost over market value of $11,489,108.
(b) The cost of Gold for federal income tax purposes was $23,231,024. At June 30, 1996, gross and
net unrealized depreciation was $696,729 based on tax cost. The cost of Platinum for federal
income tax purposes was $899,757 At June 30, 1996, gross and net unrealized appreciation was
$47,793 based on tax cost.
(c) Securities valued in good faith by the Valuation Committee of the Board of Directors. The cost
for these securities at June 30, 1996, aggregated $5,926,429. See Note A of the Notes to
Consolidated Financial Statements.
(d) 1 Unit = 1 common share and 1/2 purchase warrant.
(e) 1 Unit = 1 common share and 1 purchase warrant.
(f) 1 Special Warrant = 1 common share.
(g) 1 Special Warrant = 1 common share and 1/2 purchase warrant.
(h) 1 Special Warrant = 1 common share and 1 purchase warrant.
(i) 1 Special Option = 1 common share.
See page 5 for the breakdown of the Fund's common stocks.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statement.
--
15
<PAGE>
SCUDDER GOLD FUND
CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
<TABLE>
JUNE 30, 1996
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
ASSETS
<S> <C> <C>
Investments, at market (identified cost $118,322,933) (Note A) .............. $153,594,790
Gold, at market, 58,990.301 oz. (identified cost $23,231,024) (Note A) ...... 22,534,295
Platinum, at market, 2,433.672 oz. (identified cost $899,757) (Note A) ...... 947,550
Cash ........................................................................ 5,974
Receivables:
Fund shares sold .................................................... 286,217
Dividends and interest .............................................. 157,222
Other assets ................................................................ 2,649
------------
Total assets ................................................ 177,528,697
LIABILITIES
Payables:
Investments purchased ............................................... $2,219,137
Fund shares redeemed ................................................ 2,146,972
Accrued management fee (Note C) ..................................... 165,945
Other accrued expenses (Note C) ..................................... 116,199
----------
Total liabilities ........................................... 4,648,253
------------
Net assets, at market value ................................................. $172,880,444
============
NET ASSETS
Net assets consist of:
Undistributed net investment income ................................. $ 4,078,347
Net unrealized appreciation (depreciation) on:
Investment securities ....................................... 35,271,857
Gold ........................................................ (696,729)
Platinum .................................................... 47,793
Foreign currency related transactions ....................... (190)
Accumulated net realized gains ...................................... 1,707,488
Capital stock ....................................................... 112,734
Additional paid-in capital .......................................... 132,359,144
------------
Net assets, at market value ................................................. $172,880,444
============
NET ASSET VALUE, offering and redemption price per share
($172,880,444 [Division Sign] 11,273,441 shares of capital stock
outstanding, $.01 par value, 100,000,000 shares of capital stock
authorized) ......................................................... $15.34
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
--
16
<PAGE>
CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
YEAR ENDED JUNE 30, 1996
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of withholding taxes of $58,261) ............................ $ 703,326
Interest (net of withholding taxes of $11,782) ............................. 671,957
-----------
1,375,283
Expenses:
Management fee (Note C) .................................................... $ 1,545,158
Services to shareholders (Note C) .......................................... 356,795
Custodian and accounting fees (Note C) ..................................... 150,537
Directors' fees and expenses (Note C) ...................................... 28,616
Auditing ................................................................... 80,342
Reports to shareholders .................................................... 64,544
Federal and state registration ............................................. 46,726
Legal ...................................................................... 14,711
Other ...................................................................... 30,149 2,317,578
-------------------------------
Net investment loss ........................................................ (942,295)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized gain (loss) from
Investment securities .............................................. 25,110,297
Gold ............................................................... (913,932)
Platinum ........................................................... 40,000
Foreign currency related transactions .............................. (1,067) 24,235,298
-----------
Net unrealized appreciation (depreciation) during the period on:
Investment securities .............................................. 21,896,243
Gold ............................................................... (662,959)
Platinum ........................................................... (179,789)
Foreign currency related transactions .............................. (505) 21,052,990
-------------------------------
Net gain on investment transactions ........................................ 45,288,288
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....................... $44,345,993
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
--
17
<PAGE>
SCUDDER GOLD FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
---------------------------------
INCREASE (DECREASE) IN NET ASSETS 1996 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment loss ..................................................... $ (942,295) $ (890,406)
Net realized gain from investment transactions .......................... 24,235,298 3,275,125
Net unrealized appreciation on investment transactions
during the period ............................................... 21,052,990 5,187,427
------------- -------------
Net increase in net assets resulting from operations .................... 44,345,993 7,572,146
------------- -------------
Distributions to shareholders:
In excess of net investment income ($1.08 and $.25 per
share, respectively) ............................................ (10,004,029) (2,869,449)
------------- -------------
From net realized gains from investment
transactions ($.63 and $.47 per share, respectively) ............ (5,863,581) (5,245,021)
------------- -------------
Fund share transactions:
Proceeds from shares sold ............................................... 245,536,569 143,035,136
Net asset value of shares issued to shareholders
in reinvestment of distributions ................................ 14,863,510 7,611,778
Cost of shares redeemed ................................................. (242,408,708) (153,550,282)
------------- -------------
Net increase (decrease) in net assets from Fund
share transactions .............................................. 17,991,371 (2,903,368)
------------- -------------
INCREASE DECREASE IN NET ASSETS ......................................... 46,469,754 (3,445,692)
Net assets at beginning of period ....................................... 126,410,690 129,856,382
------------- -------------
NET ASSETS AT END OF PERIOD (including undistributed net
investment income of $4,078,347 and accumulated
distributions in excess of net investment income of
$3,028,694, respectively) ....................................... $ 172,880,444 $ 126,410,690
============= =============
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period ............................... 9,826,603 10,277,443
------------- -------------
Shares sold ............................................................. 16,651,785 11,733,937
Shares issued to shareholders in reinvestment of distributions .......... 1,267,675 589,031
Shares redeemed ......................................................... (16,472,622) (12,773,808)
------------- -------------
Net increase (decrease) in Fund shares .................................. 1,446,838 (450,840)
------------- -------------
Shares outstanding at end of period ..................................... 11,273,441 9,826,603
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
--
18
<PAGE>
CONSOLIDATED FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD AND OTHER PERFORMANCE INFORMATION
DERIVED FROM THE FINANCIAL STATEMENTS.
<CAPTION>
FOR THE PERIOD
SEPTEMBER 2, 1988
(COMMENCEMENT
YEARS ENDED JUNE 30, OF OPERATIONS)
------------------------------------------------------------ TO JUNE 30,
1996(b) 1995(b) 1994(b) 1993(b) 1992(b) 1991 1990 1989
------------------------------------------------------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $12.86 $12.64 $12.13 $ 9.19 $ 9.87 $10.21 $10.58 $12.00
------ ------ ------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss) (a) .......... (.09) (.08) (.10) (.08) (.12) (.04) .07 (.06)
Net realized and unrealized gain (loss) ...
on investment transactions .............. 4.28 1.02 .85 3.02 (.56) (.30) (.34) (1.36)
------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations ............ 4.19 .94 .75 2.94 (.68) (.34) (.27) (1.42)
------ ------ ------ ------ ------ ------ ------ ------
Less distributions:
From net investment income ................ -- -- -- -- -- -- (.01) --
In excess of net investment income ........ (1.08) (.25) (.24) -- -- -- -- --
From net realized gains on
investment transactions ................. (0.63) (.47) -- -- -- -- (.03) --
From additional paid-in capital ........... -- -- -- -- -- -- (.06) --
------ ------ ------ ------ ------ ------ ------ ------
Total distributions ....................... (1.71) (.72) (.24) -- -- -- (.10) --
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period .............. $15.34 $12.86 $12.64 $12.13 $ 9.19 $ 9.87 $10.21 $10.58
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%) ............................ 36.91 7.50 6.35 31.99 (6.89) (3.33) (2.71) (11.83)**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions) ...... 173 126 130 90 31 33 17 9
Ratio of operating expenses,
net to average daily net assets (%) (a) ... 1.50 1.65 1.69 2.17 2.54 2.54 2.60 3.00*
Ratio of net investment income (loss) to
average daily net assets (%) .............. (.61) (.69) (.81) (.81) (1.34) (.59) .34 (1.06)*
Portfolio turnover rate (%) ................. 29.7 42.0 50.8 59.2 57.5 71.4 80.6 34.5*
Average commission rate paid (c) ............ $.0309 $ -- $ -- $ -- $ -- $ -- $ -- $ --
(a) Reflects a per share amount
of expenses reimbursed by
the Adviser of ........................ $ -- $ -- $ -- $ -- $ -- $ .02 $ .20 $ .18
Operating expense ratio
before expense reductions (%) ......... -- -- -- -- 2.57 2.82 3.74 6.59*
(b) Based on monthly average shares outstanding during the period.
(c) Average commission rate paid per share of common and preferred stocks is calculated for fiscal years ending on or
after June 30, 1996.
* Annualized
** Not annualized
</TABLE>
--
19
<PAGE>
SCUDDER GOLD FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
Scudder Gold Fund (the "Fund") is a non-diversified series of Scudder Mutual
Funds, Inc. (the "Corporation"). The Corporation is a Maryland corporation,
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund's financial statements are prepared in
accordance with generally accepted accounting principles which require the use
of management estimates. The policies described below are followed consistently
by the Fund in the preparation of its financial statements.
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements of the Fund
include the accounts of the Fund and Scudder Precious Metals, Inc., a
wholly-owned subsidiary of the Corporation, whose principal assets are precious
metals. All intercompany accounts and transactions have been eliminated.
SECURITY VALUATION. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the National Association of
Securities Dealers Automatic Quotation ("NASDAQ") System, for which there have
been sales, are valued at the most recent sale price reported on such system. If
there are no such sales, the value is the high or "inside" bid quotation.
Securities which are not quoted on the NASDAQ System but are traded in another
over-the-counter market are valued at the most recent sale price on such market.
If no sale occurred, the security is then valued at the calculated mean between
the most recent bid and asked quotations. If there are no such bid and asked
quotations, the most recent bid quotation shall be used.
Portfolio debt securities with remaining maturities greater than sixty days are
valued by pricing agents approved by the Officers of the Fund, which prices
reflect broker/dealer-supplied valuations and electronic data processing
techniques. If the pricing agents are unable to provide such quotations, the
most recent bid quotation supplied by a bona fide market maker shall be used.
Short-term investments having a maturity of sixty days or less are valued at
amortized cost. All other
--
20
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
securities are valued at their fair value as determined in good faith by the
Valuation Committee of the Board of Directors. Securities valued in good faith
by the Valuation Committee of the Board of Directors at fair value amounted to
$7,649,548 (4.4% of net assets) and have been noted in the investment portfolio
as of June 30, 1996. 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.
PRECIOUS METALS VALUATION. Gold bullion will be valued on quotations obtained
from U.S. dealers and on the London afternoon gold price. Precious metals other
than gold will be valued on current prices provided by market makers.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement and the underlying collateral, is equal to at least 100.5% of the
resale price.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency transactions are translated into U.S. dollars
on the following basis:
(i) market value of investment securities, other assets and liabilities at
the daily rates of exchange, and
(ii) purchases and sales of investment securities, dividend and interest
income and certain expenses at the rates of exchange prevailing on the
respective dates of such transactions.
The Fund does not isolate that portion of gains and losses on investments which
is due to changes in foreign exchange rates from that which is due to changes in
market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments.
Net realized and unrealized gain (loss) from foreign currency related
transactions includes gains and losses between trade and settlement
--
21
<PAGE>
SCUDDER GOLD FUND
- --------------------------------------------------------------------------------
dates on securities transactions, gains and losses arising from the sales of
foreign currency, and gains and losses between the ex and payment dates on
dividends, interest, and foreign withholding taxes.
FEDERAL INCOME TAXES. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment
companies, and to distribute all of its taxable income to its shareholders. The
Fund paid no federal income taxes and no federal income tax provision was
required.
DISTRIBUTION OF INCOME AND GAINS. Distributions of net investment income are
made annually. During any particular year net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed and, therefore, will be distributed to
shareholders. An additional distribution may be made to the extent necessary to
avoid the payment of a four percent federal excise tax. The Fund uses the
identified cost method for determining realized gain or loss on investments for
both financial and federal income tax reporting purposes.
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 relate primarily to investments in Passive Foreign Investment
Companies. 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.
OTHER. Investment security and precious metals transactions are accounted for on
a trade date basis. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis. All original issue discounts are accreted for both tax and financial
reporting purposes.
B. PURCHASES AND SALES
- --------------------------------------------------------------------------------
For the year ended June 30, 1996, purchases and sales of investment securities
(excluding short-term investments) aggregated $38,774,560 and $54,944,305,
respectively. During the year ended June 30, 1996,
--
22
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
purchases and sales of gold aggregated $46,824,787 and $27,006,790,
respectively; and sales of platinum aggregated $430,000.
C. RELATED PARTIES
- --------------------------------------------------------------------------------
Under the Fund's Investment Advisory Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund agrees to pay to the Adviser a
fee equal to an annual rate of 1% of the Fund's average net assets, computed and
accrued daily and payable monthly. For the year ended June 30, 1996, the fee
pursuant to the Agreement amounted to $1,545,158 of which $165,945 is unpaid at
June 30, 1996. However, the Adviser agreed to absorb a portion of expenses in
order to maintain the annualized expenses of the Fund at not more than 3% of the
average net assets until October 31, 1995. The Adviser did not absorb any
expenses for the year ended June 30, 1996. The Agreement also provides that if
the Fund's expenses, exclusive of taxes, interest and extraordinary expenses,
exceed the lowest applicable state expense limitation, such excess up to the
amount of the management fee will be paid by the Adviser.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent. For the year ended June
30, 1996, the amount charged to the Fund by SSC aggregated $287,010, of which
$27,581 is unpaid at June 30, 1996.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the year ended June 30, 1996,
the amount charged to the Fund by STC aggregated $9,658, of which $1,778 is
unpaid at June 30, 1996.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
June 30, 1996, the amount charged to the Fund by SFAC aggregated $56,134, of
which $10,978 is unpaid at June 30, 1996.
The Fund pays each Director not affiliated with the Adviser $4,000 annually,
plus specified amounts for attended board and committee meetings. For the year
ended June 30, 1996, Directors' fees and expenses aggregated $28,616.
--
23
<PAGE>
SCUDDER GOLD FUND
- --------------------------------------------------------------------------------
D. LINES OF CREDIT
- --------------------------------------------------------------------------------
The Fund and several affiliated Funds ("the Participants") share in a $500
million revolving credit facility for temporary or emergency purposes, including
the meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 33 percent of its net assets under the agreement. In addition, the
Fund also maintains an uncommitted line of credit.
--
24
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS OF SCUDDER MUTUAL FUNDS, INC. AND THE SHAREHOLDERS
OF SCUDDER GOLD FUND:
We have audited the accompanying consolidated statement of assets and
liabilities of Scudder Gold Fund, including the investment portfolio, as of June
30, 1996, and the related consolidated statement of operations for the year then
ended, the consolidated statements of changes in net assets for each of the two
years in the period then ended, and the consolidated financial highlights for
each of the seven years in the period then ended, and for the period September
2, 1988 (commencement of operations) to June 30, 1989. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities and precious
metals owned as of June 30, 1996, by correspondence with the custodians and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the consolidated financial
position of Scudder Gold Fund as of June 30, 1996, the consolidated results of
its operations for the year then ended, the consolidated changes in its net
assets for each of the two years in the period then ended, and the consolidated
financial highlights for each of the seven years in the period then ended, and
for the period September 2, 1988 (commencement of operations) to June 30, 1989,
in conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
August 16, 1996
--
25
<PAGE>
SCUDDER GOLD FUND
TAX INFORMATION
- --------------------------------------------------------------------------------
The Fund paid distributions of $.63 per share from long-term capital gains
during its year ended June 30, 1996. Pursuant to section 852 of the Internal
Revenue Code, the Fund designates $5,652,288 as capital gain dividends for its
fiscal year ended June 30, 1996.
Please consult a tax adviser if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your Scudder Fund account, please call a Scudder Investors Relations
Representative at 1-800-225-5163.
--
26
<PAGE>
(This page intentionally left blank.)
27
<PAGE>
(This page intentionally left blank.)
28
<PAGE>
OFFICERS AND TRUSTEES
Daniel Pierce*
President and Director
Thomas J. Devine
Director; Consultant
Keith R. Fox
Director
Dr. Gordon Shillinglaw
Director; Professor Emeritus of Accounting, Columbia University
Graduate School of Business
Robert G. Stone, Jr.
Honorary Director; Chairman of the Board, Kirby Corporation
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
David S. Lee*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Juris Padegs*
Vice President and Assistant Secretary
Kathryn L. Quirk*
Vice President and Assistant Secretary
Coleen Downs Dinneen*
Assistant Secretary
* Scudder, Stevens & Clark, Inc.
29
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
<TABLE>
<CAPTION>
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<C> <C>
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder Global Bond Fund
Tax Free Money Market+ Scudder GNMA Fund
Scudder Tax Free Money Fund Scudder High Yield Bond Fund
Scudder California Tax Free Money Fund* Scudder Income Fund
Scudder New York Tax Free Money Fund* Scudder International Bond Fund
Tax Free+ Scudder Short Term Bond Fund
Scudder California Tax Free Fund* Scudder Zero Coupon 2000 Fund
Scudder High Yield Tax Free Fund Growth
Scudder Limited Term Tax Free Fund Scudder Capital Growth Fund
Scudder Managed Municipal Bonds Scudder Development Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Emerging Markets Growth Fund
Scudder Massachusetts Tax Free Fund* Scudder Global Fund
Scudder Medium Term Tax Free Fund Scudder Global Discovery Fund
Scudder New York Tax Free Fund* Scudder Gold Fund
Scudder Ohio Tax Free Fund* Scudder Greater Europe Growth Fund
Scudder Pennsylvania Tax Free Fund* Scudder International Fund
Growth and Income Scudder Latin America Fund
Scudder Balanced Fund Scudder Micro Cap Fund
Scudder Growth and Income Fund Scudder Pacific Opportunities Fund
Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
-----------------------------------------------------------------------------------------------------------------
IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
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The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
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Scudder Institutional Fund, Inc. Scudder Treasurers Trust(TM)++
Scudder Fund, Inc.
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<FN>
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. +A portion of the income from the
tax-free funds may be subject to federal, state, and local taxes. *Not
available in all states. +++A no-load variable annuity contract provided by
Charter National Life Insurance Company and its affiliate, offered by
Scudder's insurance agencies, 1-800-225-2470. #These funds, advised by
Scudder, Stevens & Clark, Inc. are traded on various stock exchanges. ++For
information on Scudder Treasurers Trust,(TM) an institutional cash
management service that utilizes certain portfolios of Scudder Fund, Inc.
($100,000 minimum), call 1-800-541-7703.
</FN>
</TABLE>
30
<PAGE>
HOW TO CONTACT SCUDDER
<TABLE>
<CAPTION>
Account Service and Information
-------------------------------------------------------------------------------------------------------------
<S> <C>
For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For personalized information about your Scudder accounts;
exchanges and redemptions; or information on any Scudder fund
SCUDDER AUTOMATED INFORMATION LINE (SAIL)
1-800-343-2890
Investment Information
-------------------------------------------------------------------------------------------------------------
To receive information about the Scudder funds, for additional
applications and prospectuses, or for investment questions
SCUDDER INVESTOR RELATIONS
1-800-225-2470
For establishing 401(k) and 403(b) plans
SCUDDER DEFINED CONTRIBUTION SERVICES
1-800-323-6105
Please address all correspondence to
-------------------------------------------------------------------------------------------------------------
THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Visit the Scudder World Wide Web Site at:
-------------------------------------------------------------------------------------------------------------
http://funds.scudder.com
Or stop by a Scudder Funds Center
-------------------------------------------------------------------------------------------------------------
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they can
be found in the following cities:
Boca Raton New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
-------------------------------------------------------------------------------------------------------------
For information on Scudder For information on Scudder
Treasurers Trust,(TM)an institutional Institutional Funds,* funds
cash management service for designed to meet the broad
corporations, non-profit investment management and
organizations and trusts that uses service needs of banks and
certain portfolios of Scudder Fund, other institutions, call
Inc.* ($100,000 minimum), call 1-800-854-8525.
1-800-541-7703.
-------------------------------------------------------------------------------------------------------------
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
* Contact Scudder Investor Services, Inc., Distributor, to receive a
prospectus with more complete information, including management fees and
expenses. Please read it carefully before you invest or send money.
</TABLE>
31
<PAGE>
Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven
Clark, Scudder, Stevens & Clark was the first independent investment counsel
firm in the United States. Since its birth, Scudder's pioneering spirit and
commitment to professional long-term investment management have helped shape the
investment industry. In 1928, we introduced the nation's first no-load mutual
fund. Today we offer 40 pure no load(TM) funds, including the first
international mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication
to research and fundamental investment disciplines have helped us become one of
the largest and most respected investment managers in the world. Though times
have changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
