Scudder
Gold
Fund
Semiannual Report
April 30, 1999
No-Load Funds
A mutual fund which seeks maximum return consistent with investing primarily in
a portfolio of gold-related equity securities and gold.
A no-load fund with no commissions to buy, sell, or exchange shares.
SCUDDER
<PAGE>
Scudder Gold Fund
- --------------------------------------------------------------------------------
Date of Inception: 9/2/88 Total Net Assets as of Ticker Symbol: SCDGX
4/30/99: $124.7 million
- --------------------------------------------------------------------------------
o Scudder Gold Fund posted a solid 9.89% total return over its most recent
semiannual period ended April 30, 1999. The Fund outpaced the -3.06% return of
the Salomon/Smith Barney Global Gold Index during the six-month period, and
placed in the top 11% of 44 similar gold-oriented mutual funds as tracked by
Lipper Analytical Services, Inc.
o Gold bullion struggled to keep from falling below its $280-$295 trading range
in the face of possible IMF-related gold sales and forward sales by large gold
producers.
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE:
Total Returns for Gold and Gold Funds
(Periods ended April 30, 1999)
BAR CHART DATA:
Six months Twelve months
---------- -------------
Gold bullion, -1.95% -7.76%
London p.m. fix
Toronto Stock -11.26% -20.83%
Exchange Gold Index
Salomon/Smith Barney -3.06% -19.37%
Gold Index
Lipper Average for 2.81% -17.31%
Gold-Oriented Funds
Scudder 9.89% -16.96%
Gold Fund
Table of Contents
3 Letter from the Fund's Chairman 16 Notes to Consolidated Financial
4 Performance Update Statements
5 Portfolio Summary 21 Report of Independent Accountants
6 Portfolio Management Discussion 22 Stockholder Meeting Results
8 Glossary of Investment Terms 24 Officers and Directors
9 Investment Portfolio 25 Investment Products and Services
12 Consolidated Financial Statements 26 Scudder Solutions
15 Consolidated Financial Highlights
2 - Scudder Gold Fund
<PAGE>
Letter from the Fund's Chairman
Dear Shareholders,
We are pleased to report to you concerning Scudder Gold Fund's most recent
semiannual performance. The Fund benefited from strong merger and acquisition
activity among gold-producing companies during its most recent six-month period.
The Fund posted a 9.89% total return over the period, outperforming by a wide
margin the 2.81% average of similar gold funds tracked by Lipper.
We are pleased to announce that Joann M. Barry assumed the role of Scudder
Gold Fund's Lead Portfolio Manager on April 5, 1999. Joann joined Scudder Kemper
Investments in 1995 as a senior equity analyst, and has worked elsewhere as a
senior equity analyst and portfolio manager, having begun her investment career
in 1988. Robert D. Hardiman, who recently joined Scudder Kemper as a senior
equity analyst for mutual funds and institutional asset management, completes
the Fund's portfolio team. Robert has 25 years of investment experience as a
commodity and specialty chemical analyst.
For those of you interested in new Scudder products, we are pleased to
introduce Scudder Select 500 Fund and Scudder Select 1000 Growth Fund. Both
funds are managed with the goal of pursuing long-term outperformance compared to
their benchmark indices, the S&P 500 Index and the Russell 1000 Growth Index,
respectively. For more information on either Select fund, please call us at the
number below.
If you have any questions regarding Scudder Gold Fund or any other Scudder
fund, please call an Investor Relations representative at 1-800-225-2470. Or
visit Scudder's Web site at www.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
Chairman,
Scudder Gold Fund
3 - Scudder Gold Fund
<PAGE>
Performance Update as of April 30, 1999
--------------------------------------------
Fund Index Comparisons
--------------------------------------------
Total Return
--------------------------------------------
Period Ended Growth of Average
4/30/1999 $10,000 Cumulative Annual
--------------------------------------------
Scudder Gold Fund
--------------------------------------------
1 Year $ 8,304 -16.96% -16.96%
5 Year $ 8,032 -19.68% -4.29%
10 Year $ 9,974 -0.26% -0.03%
--------------------------------------------
S&P 500 Index
--------------------------------------------
1 Year $ 12,181 21.81% 21.81%
5 Year $ 32,891 228.91% 26.87%
10 Year $ 56,120 461.20% 18.81%
--------------------------------------------
Growth of a $10,000 Investment
--------------------------------------------
THE PRINTED DOCUMENT CONTAINS A LINE CHART HERE
CHART DATA:
S&P 500 Index Scudder Gold Fund
'89 10000 10000
'90 11056 9855
'91 13003 8615
'92 14829 7769
'93 16201 10081
'94 17062 12417
'95 20040 12300
'96 26094 19234
'97 32653 15306
'98 46070 12011
'99 56120 9973
Yearly periods ended April 30
The Standard & Poor's 500 Index is a capitalization-weighted index of 500
stocks. The index is designed to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks representing
all major industries. Index returns assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees or expenses. Returns and Per Share
Information
--------------------------------------------
Returns and Per Share Information
--------------------------------------------
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
ILLUSTRATING THE FUND TOTAL RETURN (%) AND
INDEX TOTAL RETURN (%)
CHART DATA:
Yearly periods ended April 30
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value $ 10.49 $ 9.17 $ 8.27 $ 10.73 $ 12.95 $ 12.15 $ 16.53 $ 10.95 $ 8.43 $ 7.01
- ------------------------------------------------------------------------------------------------------------------------------
Income Dividends $ .01 $ -- $ -- $ -- $ .24 $ .25 $ 1.08 $ 2.39 $ .14 $ --
- ------------------------------------------------------------------------------------------------------------------------------
Capital Gains Distributions $ .09 $ -- $ -- $ -- $ -- $ .47 $ .63 $ .26 $ -- $ --
- ------------------------------------------------------------------------------------------------------------------------------
Fund Total Return (%) -1.44 -12.58 -9.81 29.75 23.17 -.93 56.38 -20.42 -21.53 -16.96
- ------------------------------------------------------------------------------------------------------------------------------
Index Total Return (%) 10.56 17.61 14.04 9.25 5.31 17.45 30.21 25.14 41.09 21.81
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
All performance is historical, assumes reinvestment of all dividends and capital
gains, and is not indicative of future results. Investment return and principal
value will fluctuate, so an investor's shares, when redeemed, may be worth more
or less than when purchased.
4 - Scudder Gold Fund
<PAGE>
Portfolio Summary as of April 30, 1999
- ---------------------------------------------
Diversification
- ---------------------------------------------
As a percentage of net assets
Equity Holdings 101%
Cash Equivalents, net -1%
--------------------------------------
100%
--------------------------------------
The Fund was fully invested as of the close of the period.
- ---------------------------------------------
Quality Distribution
- ---------------------------------------------
A graph in the form of a pie chart appears here, illustrating the exact data
points in the table below.
Tier breakdown of the Fund's common
stocks
Tier I
Premier gold producing companies 52%
Tier II
Major established gold producers 23%
Tier III
Junior gold producers with
medium cost production 14%
Tier IV
Companies with some gold
production on stream or in startup 6%
Tier V
Primarily exploration companies
with or without mineral reserves 5%
--------------------------------------
100%
--------------------------------------
During the period, the Fund continued its shift into additional Tier I gold
producers with strong balance sheets and low production costs.
- ---------------------------------------------
Ten Largest Equity Holdings
(51% of Portfolio)
- ---------------------------------------------
1. Newmont Mining Corp.
International gold exploration and
mining company
2. Barrick Gold Corp.
Gold exploration and production
in North and South America
3. Placer Dome, Inc.
Gold, silver and copper mining
company
4. Homestake Mining Co.
Major international gold producer
5. Stillwater Mining Co.
Exploration and development of mines in
Montana producing platinum, palladium and
associated metals
6. Impala Platinum Holdings Ltd.
Platinum, nickel and copper mining
7. Ashanti Goldfields Co., Ltd.
Leading gold producer
8. Anglo American Platinum Corp.
Platinum mining company
9. Normandy Mining Ltd.
Mining and oil enterprises
10. Euro-Nevada Mining, Ltd.
Large North American royalty owner
The Fund benefited from the consolidation of its second and third largest
holdings as of October 31, 1998, when Barrick Gold agreed to purchase Sutton
Resources.
For more complete details about the Fund's investment portfolio, see page 9. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
5 - Scudder Gold Fund
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Scudder Gold Fund posted a solid 9.89% total return over its most recent
semiannual period ended April 30, 1999, even as gold bullion retreated to the
bottom of its current trading range. The Fund outpaced the -3.06% return of the
Salomon/Smith Barney Global Gold Index during the six-month period, and placed
in the top 11% of 44 similar gold-oriented mutual funds as tracked by Lipper
Analytical Services, Inc. Over the period, the Fund's net asset value increased
from $6.37 to $7.01 per share.
Additional Central Bank Sales?
After advancing in the wake of global economic instability in the late summer
and early fall of 1998, the price of gold declined from $295 to $287 during the
six-month period ended April 30, 1999. Negatively affecting gold prices were
discussions concerning possible International Monetary Fund (IMF)-sponsored gold
sales by several central banks, as well as forward sales by several large gold
producers. (In "selling forward," gold producers sell on the open market gold
that will not be mined for between six months and four years, similar to
"selling short" in the stock market; as with short sales, a forward sale can be
canceled through a "buyback" transaction. Gold producers use the forward markets
to lock in profits for mining projects.)
At the same time, several factors provided support to gold pricing during
the period: 1) the fact that jewelry fabrication demand still exceeds the
current supply of newly mined gold; 2) Asia's incipient economic recovery, which
should continue to exert upward pressure on gold's price, since the continent is
the world's largest gold consumer; 3) ongoing worries over a possible currency
devaluation by China (no matter how unlikely, since the threat of devaluation is
an important bargaining chip in China's negotiations with its trading partners);
and 4) the European Central Bank's announcement over the period that it would
maintain a higher absolute level of reserves, and would increase the percentage
of its reserves held in gold bullion.
While gold bullion prices slumped during the period, the performance of
gold stocks was boosted by increased merger and acquisition activity among
gold-producing firms. In particular, Scudder Gold Fund benefited from the
consolidation of its second and third largest holdings (as of October 31, 1998)
when Barrick Gold agreed to purchase Sutton Resources.
A Consistent Strategy
Scudder Gold Fund seeks maximum return by investing in a portfolio of primarily
gold-related investments. Over the period, the Fund continued its shift into
additional Tier I and Tier II gold stocks -- premier and major established gold
producers with strong balance sheets and low production costs. In particular, we
focused on producers that we feel are well positioned to withstand the current
low level of gold prices.
In addition, with the exception of strong takeover candidates, the Fund
continued to scale down its holdings in small exploration stocks because of
their illiquidity and because we feel they currently carry excessive risk
compared with their return potential. The Fund also continues to diversify
6 - Scudder Gold Fund
<PAGE>
extensively by region, with holdings in twelve regions.
Outlook
Following the close of the period, the gold bullion market was stung by
Britain's announcement that its central bank will sell 58% of its gold reserves
over 1999 and 2000. Despite this announcement, mitigated by the fact that the
sales will be conducted transparently (rather than in secret as in the past), we
remain optimistic that gold will continue to be a useful financial hedge for
many investors. Gold is especially relevant given the stock and bond markets'
recent worries over higher interest rates and a possible recurrence of
inflation. In addition, an increased level of merger and acquisition activity in
response to lower gold prices should continue to boost gold stock performance.
We believe Scudder Gold Fund remains an appropriate investment for those seeking
portfolio diversification and participation in the world's gold and precious
metals markets. Thank you for investing with Scudder.
Sincerely,
Your Portfolio Management Team
/s/Joann M. Barry /s/Robert D. Hardiman
Joann M. Barry Robert D. Hardiman
7 - Scudder Gold Fund
<PAGE>
Glossary of Investment Terms
CENTRAL BANK A national bank that issues currency, administers
monetary policy (including open market operations),
holds deposits representing the reserves of other
banks, and engages in operations designed to
facilitate the conducting of business and the
protection of the public interest. In the United
States, central banking is a function of the Federal
Reserve system.
DIVERSIFICATION The spreading of risk by putting assets in several
categories of assets -- stocks, bonds, money market
instruments, and precious metals, for example.
INFLATION An overall increase in the prices of goods and
services, as happens when business and consumer
spending increases relative to the supply of goods
available in the marketplace -- in other words, when
too much money is chasing too few goods.
LIQUIDITY A stock that is liquid has enough shares outstanding
and a sufficiently substantial market capitalization
to allow large purchases and sales to occur without
causing a significant move in its market price.
MARKET CAPITALIZATION The value of a company's outstanding shares of
common stock, determined by multiplying the
number of shares outstanding by the share price
(shares x price = market capitalization).
NET ASSET VALUE (NAV) The price per share of a mutual fund based on
the sum of the market value of all the securities
owned by the fund divided by the number of
outstanding shares.
TOTAL RETURN The most common yardstick to measure the
performance of a fund. Total return -- annualized or
compound -- is based on a combination of share price
changes plus income and capital gain distributions,
if any, expressed as a percentage gain or loss in
value.
(Sources: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
8 - Scudder Gold Fund
<PAGE>
Investment Portfolio as of April 30, 1999
<TABLE>
<CAPTION>
Principal Market
Amount Value ($)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements 2.2%
- ---------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 4/30/1999 at 4.87%, to be
repurchased at $2,702,096 on 5/3/1999, collateralized by a $2,731,000 U.S. Treasury Bond, -----------
3.875%, 4/15/2029 (Cost $2,701,000) ................................................................. 2,701,000 2,701,000
-----------
Short Term Investments 16.0%
- ---------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Discount Note, 4.97%, 5/3/1999** (Cost $19,994,556) .................. 20,000,000 19,994,556
-----------
Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Common Stocks 101.4%
- ---------------------------------------------------------------------------------------------------------------------------------
Australia 11.5%
Acacia Resources Ltd. (Gold and mineral exploration company with operations throughout
Australia) .......................................................................................... 1,600,000 2,223,480
Delta Gold NL (Emerging junior exploration company primarily in Australia with important
platinum property in Zimbabwe) ...................................................................... 1,400,000 2,177,157
Newcrest Mining, Ltd.* (Senior gold producer and exploration company) ................................. 1,550,000 3,559,222
Normandy Mining Ltd. (Mining and oil enterprises) ..................................................... 5,098,214 4,419,603
Resolute Ltd. (Exploration and production of gold and other minerals) ................................. 2,500,000 1,885,987
-----------
14,265,449
-----------
Bolivia 0.2%
Corriente Resources, Inc.* (Mining and processing of gold, bismuth, tin and tungsten in
South America) ...................................................................................... 275,000 188,615
-----------
Canada 6.8%
Cambior, Inc. (Medium-sized gold producer with a major mine in Guyana) ................................ 250,000 1,011,660
Euro-Nevada Mining, Ltd. (Large North American royalty owner) ......................................... 250,000 4,278,121
Goldcorp Inc. "A"* (Owner and operator of gold mines) ................................................. 300,000 1,810,700
Kinross Gold Corp.* (Gold mining company, with interests in Zimbabwe) ................................. 600,000 1,337,449
Repadre Capital Corp.* (Junior gold royalty company) .................................................. 50,000 89,163
-----------
8,527,093
-----------
Ghana 5.2%
Ashanti Goldfields Co., Ltd. (GDR) (Leading gold producer) ............................................ 525,000 4,725,000
Ashanti Goldfields Co., Ltd.* (Preference shares) (b) ................................................. 154,701 236,693
Ranger Minerals NL (Gold producer and exploration company) ............................................ 600,000 1,568,347
-----------
6,530,040
-----------
Indonesia 1.6%
Freeport McMoRan Copper & Gold, Inc. "A" (Mining company) ............................................. 140,000 2,038,750
-----------
Niger 0.7%
Etruscan Enterprises Ltd.* (Exploration and development of gold prospect) ............................. 1,350,000 814,815
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 - Scudder Gold Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount Value ($)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Peru 2.6%
Compania de Minas Buenaventura S.A. "B" (ADR) (Mining company) ............................... 200,000 3,225,000
----------
South Africa 17.8%
Anglo American Platinum Corp. (Platinum mining company) ...................................... 250,000 4,560,394
AngloGold Ltd. (ADR) (Gold exploration and mining company) ................................... 175,000 4,178,125
Driefontein Consolidated Ltd. (ADR) (Gold mining and exploration) ............................ 150,000 609,375
Gold Field Ltd. (Gold exploration and mining) ................................................ 450,000 2,791,701
Harmony Gold Mining Co., Ltd. (Gold mining company) .......................................... 500,000 2,875,924
Impala Platinum Holdings Ltd. (Platinum, nickel and copper mining) ........................... 250,000 5,686,113
Kroondal Platinum Mines Ltd. Warrants* (expire 8/31/2000) (Platinum, palladium and rhodium
mining company) ............................................................................ 450,000 111,668
Kroondal Platinum Mines, Ltd.* ............................................................... 1,100,000 1,410,025
----------
22,223,325
----------
United States 8.9%
Getchell Gold Corp.* (Developer of a gold mining project in Nevada) .......................... 100,000 3,412,500
Piedmont Mining Co.* (Gold mining and development company in the Carolinas) (d) .............. 800,000 34,000
Piedmont Mining Co.* (d) ..................................................................... 700,000 29,750
Stillwater Mining Co.* (Exploration and development of mines in Montana producing platinum,
palladium and associated metals) ........................................................... 248,181 7,026,625
X-Cal Resources* (Gold exploration and mining in Nevada and British Columbia) ................ 1,714,286 423,280
X-Cal Resources Units* (Private placement) (expire 5/14/1999) (b) (c) ........................ 500,000 130,316
----------
11,056,471
----------
Venezuela 0.0%
El Callao Mining Corp. (Gold exploration and development company with interests in Venezuela) 104,500 10,751
----------
West Africa 2.6%
IAMGOLD* (Development and funding of precious metal mining in west Africa) ................... 1,200,000 3,209,877
----------
Zimbabwe 0.1%
Zimbabwe Platinum Mines Ltd.* (Mining company which explores for platinum) ................... 502,680 119,753
----------
International 43.4%
Apex Silver Mines Ltd.* (Developer of silver properties in South America, Central America, and
Central Asia) .............................................................................. 100,000 1,262,500
Barrick Gold Corp. (Gold exploration and production in North and South America) .............. 624,100 12,560,013
Battle Mountain Canada (Gold and silver mining) .............................................. 400,000 1,146,776
Homestake Mining Co. (Major international gold producer) ..................................... 900,000 8,606,250
Meridian Gold Inc.* (Gold exploration and production) ........................................ 650,000 3,722,565
Newmont Mining Corp. (International gold exploration and mining company) ..................... 575,000 13,835,935
Placer Dome Inc. (Gold, silver and copper mining company) .................................... 750,400 10,602,359
</TABLE>
10 - Scudder Gold Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Solitario Resources Corp.* (Precious and base metals exploration company primarily in Argentina
and Peru) .......................................................................................... 600,000 658,436
TVX Gold, Inc.* (International gold and silver mining) ............................................... 1,400,000 1,632,373
Vengold Inc.* (Gold exploration and development company with interests in Papua New Guinea,
Venezuela and Indonesia) ........................................................................... 751,400 144,302
------------
54,171,509
- ------------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $104,570,061) 126,381,448
- ------------------------------------------------------------------------------------------------------------------------------------
% of
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio (Cost $127,265,617) (a) ................................................... 119.6 149,077,004
Other assets and liabilities, net .................................................................... -19.6 (24,426,159)
------- ------------
Net Assets............................................................................................ 100.0 124,650,845
======= ============
</TABLE>
* Non-income producing security or commodity.
** Annualized yield at time of purchase; not a coupon rate. (Unaudited)
(a) The cost for federal income tax purposes was $135,365,812. At April 30,
1999, net unrealized appreciation for all investment securities based on
tax cost was $13,711,192. This consisted of aggregate gross unrealized
appreciation for all investments in which there was an excess of market
value over tax cost of $26,218,391 and aggregate gross unrealized
depreciation for all investment securities in which there was an excess of
tax cost over market value of $12,507,199.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $367,009 (.29% 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 April 30, 1999 aggregated $193,969. These securities
may also have certain restrictions as to resale.
(c) Restricted Securities are securities which have not been registered with
the Securities and Exchange Commission under the Securities Act of 1933.
The aggregate fair value of restricted securities at April 30, 1999,
amounted to $130,316 which represents .10% of net assets. Information
concerning such restricted securities at April 30, 1999 is as follows:
Security Shares Acquisition Date Cost ($)
-------- -------------------- ----------------- -----------------
X-Cal Resources 500,000 3/19/1998 193,969
(d) Affiliated issuers (see Notes to Consolidated Financial Statements).
Transactions in written options during the period ended April 30, 1999
were:
Options on Securities
-------------------------------------------
Contracts Premiums Received ($)
-------------------- ---------------------
-------------------- ---------------------
Outstanding at October 31, 1998 -- --
Written 2,000 353,375
Exercised (528) (110,791)
Expired (1,472) (242,584)
------- --------
Outstanding at April 30, 1999 -- --
======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
11 - Scudder Gold Fund
<PAGE>
Financial Statements
Consolidated Statement of Assets and Liabilities
as of April 30, 1999
<TABLE>
<CAPTION>
Assets
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investments, at market:
Unaffiliated issuers (identified cost $126,046,517) ........... $ 149,013,254
Affiliated issuers (identified cost $1,219,100) ............... 63,750
-------------
Total investments, at market (identified cost $127,265,617) ...... 149,077,004
Foreign currency holdings, at market (identified cost $187) ...... 190
Receivable for Fund shares sold .................................. 1,512,944
Dividends and interest receivable ................................ 296,755
Receivable for investments sold .................................. 4,774
Other assets ..................................................... 1,562
-------------
Total assets ..................................................... 150,893,229
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------
Due to custodian bank ............................................ 3,415
Payable for investments purchased ................................ 19,969,981
Payable for Fund shares sold ..................................... 5,927,468
Accrued management fee ........................................... 91,977
Other payables and accrued expenses .............................. 249,543
-------------
Total liabilities ................................................ 26,242,384
-----------------------------------------------------------------------------------
Net assets, at market value $ 124,650,845
-----------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated distributions in excess of net investment income
(loss)......................................................... (358,360)
Net unrealized appreciation (depreciation)
on:
Investment securities ......................................... 21,811,387
Foreign currency related transactions ......................... 1,248
Accumulated net realized gain (loss) ............................. (98,381,221)
Paid-in capital .................................................. 201,577,791
-----------------------------------------------------------------------------------
Net assets, at market value $ 124,650,845
-----------------------------------------------------------------------------------
Net Asset Value
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($124,650,845 / 17,783,791 shares of capital stock outstanding, -------------
$.01 par value, 100,000,000 shares of capital stock authorized) $ 7.01
-------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
12 - Scudder Gold Fund
<PAGE>
Consolidated Statements of Operations
six months ended April 30, 1999
<TABLE>
<CAPTION>
Investment Income
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income:
Dividends (net of foreign taxes withheld of $29,689) .......... $ 1,001,365
Interest ...................................................... 279,748
------------
1,281,113
------------
Expenses:
Management fee ................................................ 572,421
Services to shareholders ...................................... 318,352
Custodian and accounting fees ................................. 125,406
Directors' fees and expenses .................................. 19,196
Auditing ...................................................... 36,637
Reports to shareholders ....................................... 34,546
Registration fees ............................................. 28,304
Legal ......................................................... 31,527
Other ......................................................... 8,574
------------
1,174,963
-----------------------------------------------------------------------------------
Net investment income (loss) 106,150
-----------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------------------------------------------
Investments-- Unaffiliated issuers ............................ (9,060,405)
Investments-- Affiliated issuers .............................. (432,316)
Platinum ...................................................... 4,482
Futures ....................................................... 34,172
Written options ............................................... 15,875
Foreign currency related transactions ......................... 5,821
------------
(9,432,371)
------------
Net unrealized appreciation (depreciation) during the period
on:
Investment securities ......................................... 20,344,604
Platinum ...................................................... 73,613
Futures ....................................................... (43,180)
Foreign currency related transactions ......................... (39,636)
------------
20,335,401
-----------------------------------------------------------------------------------
Net gain (loss) on investment transactions 10,903,030
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 11,009,180
-----------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
13 - Scudder Gold Fund
<PAGE>
Consolidated Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Four Months
Six Months Ended
Ended October 31,
April 30 1998 Year Ended
Increase (Decrease) in Net Assets 1999 (Note F) June 30, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income (loss) ...................... $ 106,150 $ (31,517) $ 64,784
Net realized gain (loss) from investment
transactions ................................... (9,432,371) (27,938,959) (50,731,480)
Net unrealized appreciation (depreciation) on
investment transactions during the period ...... 20,335,401 26,737,732 (12,911,654)
------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations................................. 11,009,180 (1,232,744) (63,578,350)
------------- ------------- -------------
Distributions to shareholders:
In excess of net investment income ................ -- -- (2,264,120)
------------- ------------- -------------
Fund share transactions:
Proceeds from shares sold ......................... 233,325,947 273,681,361 749,811,359
Net asset value of shares issued to shareholders in
reinvestment of distributions .................. -- -- 2,054,132
Cost of shares redeemed ........................... (250,081,194) (274,183,250) (717,824,287)
------------- ------------- -------------
Net increase (decrease) in net assets from Fund
share transactions.............................. (16,755,247) (501,889) 34,041,204
------------- ------------- -------------
Increase (decrease) in net assets ................. (5,746,067) (1,734,633) (31,801,266)
Net assets at beginning of period ................. 130,396,912 132,131,545 163,932,811
Net assets at end of period (including accumulated
distributions in excess of net investment income
of $358,360, $464,510, and $7,582,297, ------------- ------------- -------------
respectively) .................................. $ 124,650,845 $ 130,396,912 $ 132,131,545
------------- ------------- -------------
Other Information
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ......... 20,470,266 19,861,886 15,622,172
------------- ------------- -------------
Shares sold ....................................... 37,031,828 43,924,388 92,092,490
Shares issued to shareholders in reinvestment of
distributions .................................. -- -- 282,938
Shares redeemed ................................... (39,718,303) (43,316,008) (88,135,714)
------------- ------------- -------------
Net increase (decrease) in Fund shares ............ (2,686,475) 608,380 4,239,714
------------- ------------- -------------
Shares outstanding at end of period ............... 17,783,791 20,470,266 19,861,886
------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
14 - Scudder Gold Fund
<PAGE>
Consolidated Financial Highlights
The following table includes selected data (a) for a share outstanding
throughout each period and other performance information derived from the
financial statements.
<TABLE>
<CAPTION>
Four Months
Ended
Six Months October 31,
Ended April 30, 1998 Years Ended June 30,
1999 (Note F) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of ------------------------------------------------------------------------------------
period........................ $ 6.37 $ 6.65 $ 10.49 $ 15.34 $ 12.86 $ 12.64 $ 12.13
------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income (loss).... .01 .00 .00 (.08) (.09) (.08) (.10)
Net realized and unrealized
gain (loss) on investment
transactions.................. .63 (.28) (3.70) (2.12) 4.28 1.02 .85
------------------------------------------------------------------------------------
Total from investment operations .64 (.28) (3.70) (2.20) 4.19 .94 .75
------------------------------------------------------------------------------------
Less distributions:
In excess of net investment
income........................ -- -- (.14) (2.39) (1.08) (.25) (.24)
From net realized gains on
investment transactions....... -- -- -- (.26) (.63) (.47) --
------------------------------------------------------------------------------------
Total distributions -- -- (.14) (2.65) (1.71) (.72) (.24)
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Net asset value, end of period.. $ 7.01 $ 6.37 $ 6.65 $ 10.49 $ 15.34 $ 12.86 $ 12.64
- ------------------------------------------------------------------------------------------------------------------------------
Total Return (%) ............... 9.89** -4.21** -35.45 -17.72 36.91 7.50 6.35
Ratios and Supplemental Data
Net assets, end of period
($ millions).................. 125 130 132 164 173 126 130
Ratio of operating expenses to
average daily net assets (%).. 2.05* 2.13* 1.82 1.60 1.50 1.65 1.69
Ratio of net investment income
(loss) to average daily
net assets (%)................ .19* (.08)* .04 (.62) (.61) (.69) (.81)
Portfolio turnover rate (%) 85.0* 153.6* 68.3 38.9 29.7 42.0 50.8
</TABLE>
(a) Based on monthly average shares outstanding during the period.
* Annualized
** Not annualized
15 - Scudder Gold Fund
<PAGE>
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 Nasdaq Stock Market, Inc.
("Nasdaq"), for which there have been sales, are valued at the most recent sale
price reported on Nasdaq. 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 on
such market. If no sale occurred, the security is then valued at the 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 other than money market instruments purchased with an
original maturity over sixty days are valued by pricing agents approved by the
officers of the Fund, which quotations reflect broker/dealer-supplied valuations
and electronic data processing techniques. If the pricing agents are unable to
provide such quotations, the most recent bid quotation supplied by a bona fide
market maker shall be used. 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.
Options. An option contract is a contract in which the writer of the option
grants the buyer of the option the right to purchase from (call option), or sell
to (put option), the writer a designated instrument at a specified price within
a specified period of time. Certain options, including options on indices, will
require cash settlement by the Fund if the option is exercised. During the
period, the Fund purchased put options on securities and wrote call options on
securities as a hedge against potential adverse price movements in the value of
portfolio assets. In addition, during the period, the Fund wrote put options on
securities to enhance potential gains.
If the Fund writes an option and the option expires unexercised, the Fund will
realize income, in the form of a capital gain, to the extent of the amount
received for the option (the "premium"). If the Fund elects to close out the
option it would recognize a gain or loss based on the difference between the
cost of closing the option and the initial premium received. If the Fund
purchased an option and allows the option to expire, it would realize a loss to
the extent of the premium paid. If the Fund elects to close out the option it
would recognize a gain or loss equal to the difference between the cost of
acquiring the option and the amount realized upon the sale of the option.
16 - Scudder Gold Fund
<PAGE>
The gain or loss recognized by the Fund upon the exercise of a written call or
purchased put option is adjusted for the amount of option premium. If a written
put or purchased call option is exercised the Fund's cost basis of the acquired
security or currency would be the exercise price adjusted for the amount of the
option premium.
The liability representing the Fund's obligation under an exchange traded
written option or investment in a purchased option is valued at the last sale
price or, in the absence of a sale, the mean between the closing bid and asked
price or at the most recent asked price (bid for purchased options) if no bid
and asked price are available. Over-the-counter written or purchased options are
valued using dealer supplied quotations.
When the Fund writes a covered call option, the Fund foregoes, in exchange for
the premium, the opportunity to profit during the option period from an increase
in the market value of the underlying security or currency above the exercise
price. When the Fund writes a put option it accepts the risk of a decline in the
market value of the underlying security or currency below the exercise price.
Over-the-counter options have the risk of the potential inability of
counterparties to meet the terms of their contracts. The Fund's maximum exposure
to purchased options is limited to the premium initially paid. In addition,
certain risks may arise upon entering into option contracts including the risk
that an illiquid secondary market will limit the Fund's ability to close out an
option contract prior to the expiration date and, that a change in the value of
the option contract may not correlate exactly with changes in the value of the
securities or currencies hedged.
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 is equal to at least the repurchase 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 dates on
securities transactions, gains and losses arising from the sales of foreign
currency, and gains and losses between the ex and payment dates on dividends,
interest, and foreign withholding taxes.
Forward Foreign Currency Exchange Contracts. A forward foreign currency exchange
contract (forward contract) is a commitment to purchase or sell a foreign
currency at the settlement date at a negotiated rate. During the period, the
Fund utilized forward contracts as a hedge in connection with portfolio
purchases and sales of securities denominated in foreign currencies.
17 - Scudder Gold Fund
<PAGE>
Forward contracts are valued at the prevailing forward exchange rate of the
underlying currencies and unrealized gain/loss is recorded daily. Forward
contracts having the same settlement date and broker are offset and any gain
(loss) is realized on the date of offset; otherwise, gain (loss) is realized on
settlement date. Realized and unrealized gains and losses which represent the
difference between the value of the forward contract to buy and the forward
contract to sell are included in net realized and unrealized gain (loss) from
foreign currency related transactions.
Certain risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contracts. Additionally,
when utilizing forward contracts to hedge, the Fund gives up the opportunity to
profit from favorable exchange rate movements during the term of the contract.
Futures Contracts. A futures contract is an agreement between a buyer or seller
and an established futures exchange or its clearinghouse in which the buyer or
seller agrees to take or make a delivery of a specific amount of an item at a
specified price on a specific date (settlement date).
Upon entering into a futures contract, the Fund is required to deposit with a
financial intermediary an amount ("initial margin") equal to a certain
percentage of the face value indicated in the futures contract. Subsequent
payments ("variation margin") are made or received by the Fund each day,
dependent on the daily fluctuations in the value of the underlying security, and
are recorded for financial reporting purposes as unrealized gains or losses by
the Fund. When entering into a closing transaction, the Fund will realize a gain
or loss equal to the difference between the value of the futures contract to
sell and the futures contract to buy. Futures contracts are valued at the most
recent settlement price.
Certain risks may arise upon entering into futures contracts including the risk
that an illiquid secondary market will limit the Fund's ability to close out a
futures contract prior to the settlement date and that a change in the value of
a futures contract may not correlate exactly with changes in the value of the
securities or currencies hedged. When utilizing futures contracts to hedge, the
Fund gives up the opportunity to profit from favorable price movements in the
hedged positions during the term of the contract.
Federal Income 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. The Fund paid no federal income taxes and no federal income tax
provision was required. At October 31, 1998, the Fund had a net tax basis
capital loss carryforward of approximately $78,000,000 which may be applied
against any realized net taxable capital gains of each succeeding year until
fully utilized or until October 31, 2005 ($24,000,000) or October 31, 2006
($54,000,000), the respective expiration dates, whichever comes first.
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 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.
18 - Scudder Gold Fund
<PAGE>
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 premiums and discounts are amortized or accreted for both tax and
financial reporting purposes.
B. Purchases and Sales
During the six months ended April 30, 1999, purchases and sales of investment
securities (excluding short-term investments) aggregated $45,125,187 and
$45,806,008, respectively. During the six months ended April 30, 1999 the
aggregate value of platinum sold was $729,966.
The aggregate face value of futures contracts closed during the six months ended
April 30, 1999 was $5,843,976. There were no futures contracts opened during the
period.
C. Related Parties
Under the Investment 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 Fund's
average net assets, computed and accrued daily and payable monthly. For the six
months ended April 30, 1999, the fee pursuant to this Agreement aggregated
$572,421, of which $91,977 is unpaid at April 30, 1999.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent. For the six months
ended April 30, 1999, the amount charged to the Fund by SSC aggregated $210,041,
of which $36,049 is unpaid at April 30, 1999.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six months ended April 30,
1999, the amount charged to the Fund by STC aggregated $11,368, of which $1,895
is unpaid at April 30, 1999.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six months
ended April 30, 1999, the amount charged to the Fund by SFAC aggregated $29,923,
of which $9,599 is unpaid at April 30, 1999.
The Fund pays each Director not affiliated with the Adviser an annual retainer
plus specified amounts for attended board and committee meetings. For the six
months ended April 30, 1999, Directors' fees and expenses aggregated $19,196.
D. Line of Credit
The Fund and several Scudder Funds (the "Participants") share in a $850 million
revolving credit facility for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
19 - Scudder Gold Fund
<PAGE>
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 33 1/3 percent of its net assets under the agreement.
E. Transactions in Securities of Affiliated Issuers
An affiliated issuer is a company in which the Fund has ownership of at least 5%
of the voting securities. A summary of the Fund's transactions with companies
which are or were affiliates for the six months ended April 30, 1999 is as
follows:
<TABLE>
<CAPTION>
Purchases Sales Dividend Market
Affiliate Cost ($) Proceeds($) Income ($) Value ($)
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
International Roraima Gold Corp. -- 13,830 -- --
Piedmont Mining Co. -- -- -- 63,750
-------------------------------------------------------------------------
-- 13,830 -- 63,750
=========================================================================
</TABLE>
F. Year End Change
On September 15, 1998, the Board of Directors of the Fund changed the fiscal
year end from June 30 to October 31.
20 - Scudder Gold Fund
<PAGE>
Report of Independent Accountants
To the Board of Directors of Scudder Mutual Funds, Inc. and the Shareholders of
Scudder Gold Fund:
In our opinion, the accompanying consolidated statement of assets and
liabilities, including the investment portfolio, and the related consolidated
statements of operations and of changes in net assets and the consolidated
financial highlights present fairly, in all material respects, the financial
position of Scudder Gold Fund (the "Fund") at April 30, 1999, the results of its
operations, the changes in its net assets, and the financial highlights for the
periods indicated therein, in conformity with generally accepted accounting
principles. These consolidated financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at April 30, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
Boston, Massachusetts PricewaterhouseCoopers LLP
June 16, 1999
21 - Scudder Gold Fund
<PAGE>
Stockholder Meeting Results
A Special Meeting of Stockholders (the "Meeting") of Scudder Gold Fund (the
"Fund") was held on December 15, 1998, at the office of Scudder Kemper
Investments, Inc., Two International Place, Boston, Massachusetts 02110. At the
Meeting the following matters were voted upon by the shareholders (the resulting
votes for each matter are presented below).
1. To approve a new Investment Management Agreement for the Fund with Scudder
Kemper Investments, Inc.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
9,594,098 671,231 523,820 0
2. To approve the revision of the Fund's fundamental lending policy.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
7,957,578 1,061,165 679,140 1,091,266
- --------------------------------------------------------------------------------
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary power
to vote on a particular matter.
22 - Scudder Gold Fund
<PAGE>
This Page
intentionally
left blank.
23 - Scudder Gold Fund
<PAGE>
Officers and Directors
Daniel Pierce*
Chairman of the Board, President
and Director
Paul Bancroft III
Director; Venture Capitalist and
Consultant
Sheryle J. Bolton
Director; Chief Executive Officer,
Scientific Learning Corporation
William T. Burgin
Director; General Partner, Bessemer
Venture Partners
Keith R. Fox
Director; Private Equity Investor
William H. Luers
Director; Chairman and President,
U.N. Association of the U.S.A.
Kathryn L. Quirk*
Director, Vice President and
Assistant Secretary
Joan E. Spero
Director; President, Doris Duke
Charitable Foundation
Thomas J. Devine
Honorary Director; Consultant
Robert G. Stone, Jr.
Honorary Director; Chairman
Emeritus and Director, Kirby
Corporation
Joann M. Barry*
Vice President
Thomas W. Joseph*
Vice President
Ann M. McCreary*
Vice Presidnet
John R. Hebble*
Treasurer
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, Inc.
24 - Scudder Gold Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series --
Prime Reserve Shares*
Premium Shares*
Managed Shares*
Scudder Government Money Market Series --
Managed Shares*
Tax Free Money Market^+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series --
Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**
Tax Free^+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**
U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder Corporate Bond Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Dividend & Growth Fund
Scudder Growth and Income Fund
Scudder Select 500 Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment Fund
U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund***
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Scudder Select 1000 Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Equity
- -------------
Worldwide
Scudder Global Fund
Scudder International Value Fund
Scudder International Growth and Income Fund
Scudder International Fund++
Scudder International Growth Fund
Scudder Global Discovery Fund***
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.
Industry Sector Funds
- ---------------------
Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund
Preferred Series
- ----------------
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small
Company Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
Education Accounts
- ------------------
Education IRA
UGMA/UTMA
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed in order from
expected least risk to most risk. Certain Scudder funds or classes thereof may
not be available for purchase or exchange. +A portion of the income from the
tax-free funds may be subject to federal, state, and local taxes. *A class of
shares of the Fund. **Not available in all states. ***Only the Scudder Shares of
the Fund are part of the Scudder Family of Funds. ++Only the International
Shares of the Fund are part of the Scudder Family of Funds. +++ +++A no-load
variable annuity contract provided by Charter National Life Insurance Company
and its affiliate, offered by Scudder's insurance agencies, 1-800-225-2470. +++
+++ +++A no-load variable annuity contract issued by Glenbrook Life and Annuity
Company and underwritten by Allstate Financial Services, Inc., sold by Scudder's
insurance agencies, 1-800-225-2470. #These funds, advised by Scudder Kemper
Investments, Inc., are traded on the New York Stock Exchange and, in some cases,
on various other stock exchanges.
25 - Scudder Gold Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
A convenient investment program in which money is Lets you purchase Scudder fund shares
electronically debited from your bank account monthly to electronically, avoiding potential mailing delays;
regularly purchase fund shares and "dollar cost average" money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from a previously designated bank
fewer when it's higher, which can reduce your average account.
purchase price over time.*
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
* Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- www.scudder.com
1-800-343-2890
Personal Investment Organizer: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you previously designated.
Distributions Direct
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
26 - Scudder Gold Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 8,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
800 no-load funds from well-known companies--with no
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder
Brokerage account already reserved for them, with
no minimum investment. For information about
Scudder Brokerage Services, call 1-800-700-0820.
Fund Folio funds held less than six months will be charged a transaction fee. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Investor Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Investor Centers. Check for an Investor Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
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27 - Scudder Gold Fund
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About the Fund's Adviser
Scudder Kemper Investments, Inc., is one of the largest and most experienced
investment management oganizations worldwide, managing more than $280 billion in
assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 80
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Financial Services Group. As a result, Zurich's subsidiary, Zurich
Kemper Investments, Inc., with 50 years of mutual fund and investment management
experience, was combined with Scudder. Headquartered in New York, Scudder Kemper
Investments offers a full range of investment counsel and asset management
capabilities, based on a combination of proprietary research and disciplined,
long-term investment strategies. With its global investment resources and
perspective, the firm seeks opportunities in markets throughout the world to
meet the needs of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Financial Services Group. The Zurich Financial Services Group is
an internationally recognized leader in financial services, including
property/casualty and life insurance, reinsurance, and asset management.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
