SCUDDER
INVESTMENTS(SM)
[LOGO]
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SECTOR/SPECIALTY
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Scudder Gold Fund
Fund #019
Semiannual Report
April 30, 2000
The fund 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.
<PAGE>
Contents
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4 Letter from the Fund's President
6 Performance Update
8 Portfolio Summary
10 Portfolio Management Discussion
12 Glossary of Investment Terms
13 Investment Portfolio
16 Consolidated Financial Statements
19 Consolidated Financial Highlights
20 Notes to Consolidated Financial
Statements
25 Officers and Directors
26 Investment Products and Services
28 Scudder Solutions
2
<PAGE>
Scudder Gold Fund
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ticker symbol SCDGX fund number 019
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Date of o During a disappointing period for gold equities,
Inception: Scudder Gold Fund posted a -16.77% total return over
9/2/88 its most recent semiannual period ended April 30, 2000
The fund trailed the -5.1% return of the Salomon/Smith
Barney Gold Index during the six-month period, but
Total Net placed in the top 17% of 35 similar gold-oriented
Assets as of mutual funds as tracked by Lipper Analytical
4/30/00: Services,
$88.5 million Inc.
o Gold bullion failed to sustain $300 per ounce due to
uncertainty over Swiss Central Bank and International
Monetary Fund gold sales. Gold-related equities
continued to be weighed down by the low level of gold
prices.
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Total Returns for Gold and Gold Funds
(Periods ended April 30, 2000)
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THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
Six months Tweleve months
Gold bullion,
London p.m. fix -8.04 -4.03
Toronto Stock
Exchange Gold Index -41.4 -43.7
Salomon/Smith
Barney Gold Index -5.1 -26.5
Lipper Average for
Gold-Oriented Funds -20.58 -22.75
Scudder
Gold Fund -16.77 -19.98
3
<PAGE>
Letter from the Fund's President
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Dear Shareholders,
During a period when gold mining companies were beset by gold bullion's failure
to move out of a $250-$300 trading range, Scudder Gold Fund posted a -16.77%
total return for the six months ended April 30, 2000. Despite the negative
posting, the fund's return surpassed the -20.58% average performance of 35
similar gold funds as compiled by Lipper.
Gold's inability to sustain $300 per ounce was the biggest news during the
period, and the most disappointing, considering the September 1999 announcement
by the European Central Bank to limit future gold sales. Gold has not yet
recovered from last summer's Bank of England gold auction or the announcement
that the Swiss central bank and the International Monetary Fund will be selling
gold reserves in the near future. At this point, precious metals investors are
confused about the market's mixed signals. Further, central bank sales and
market participants' bearish focus on supply have tended to weigh down the gold
market.
Several large gold producers announced plans to curtail their forward sales of
gold over the past year (forward sales tend to depress gold prices), and
worldwide gold production continues to decline. In addition, your portfolio
management team continues to look for high quality gold mining companies that
will benefit
4
<PAGE>
from higher gold prices and more efficient production in the future. For more
information on Scudder Gold Fund's performance, portfolio strategy, and outlook,
please read the Portfolio Management Discussion that begins on page 9.
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/Lin Coughlin
Linda C. Coughlin
President,
Scudder Gold Fund
5
<PAGE>
Performance Update
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April 30, 2000
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Growth of a $10,000 Investment
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THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
Scudder Gold Fund S&P 500 Index*
'90 10000 10000
'91 8742 11761
'92 7884 13413
'93 10229 14654
'94 12599 15433
'95 12480 18126
'96 19517 23602
'97 15531 29534
'98 12187 41670
'99 10120 50760
'00 8098 55908
Yearly periods ended April 30
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Fund Index Comparison
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Total Return
Growth of Average
Period ended 4/30/2000 $10,000 Cumulative Annual
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Scudder Gold Fund
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1 year $ 8,002 -19.98% -19.98%
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5 year $ 6,488 -35.12% -8.29%
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10 year $ 8,098 -19.02% -2.09%
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S&P 500 Index*
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1 year $ 11,014 10.14% 10.14%
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5 year $ 30,844 208.44% 25.24%
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10 year $ 55,908 459.08% 18.76%
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* 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.
6
<PAGE>
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Returns and Per Share Information
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THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
Yearly periods ended April 30
Scudder Gold Fund S&P 500 Index*
1991 -12.58 17.61
1992 -9.81 14.04
1993 29.75 9.25
1994 23.17 5.31
1995 -0.93 17.45
1996 56.38 30.21
1997 -20.42 25.14
1998 -21.53 41.09
1999 -16.96 21.81
2000 -19.98 10.14
<TABLE>
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Total
Return (%) -12.58 -9.81 29.75 23.17 -.93 56.38 -20.42 -21.53 -16.96 -19.98
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Index Total
Return (%) 17.61 14.04 9.25 5.31 17.45 30.21 25.14 41.09 21.81 10.14
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Net Asset
Value ($) 9.17 8.27 10.73 12.95 12.15 16.53 10.95 8.43 7.01 5.53
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Income
Dividends ($) -- -- -- .24 .25 1.08 2.39 .14 -- .09
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Capital Gains
Distributions ($) -- -- -- -- .47 .63 .26 -- -- --
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</TABLE>
* 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.
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results. Investment return
and principal value will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased.
7
<PAGE>
Portfolio Summary
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April 30, 2000
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Diversification
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A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Equity Holdings 91%
Cash Equivalents 9%
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100%
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The fund held a modest cash position at the close of the period.
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Quality Distributions
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Tier breakdown of the Fund's common
stocks
A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Tier I
Premier gold producing
companies 76%
Tier II
Major established gold
producers 12%
Tier III
Junior gold producers with
medium cost production 2%
Tier IV
Companies with some gold
production on stream or
in startup 4%
Tier V
Primarily exploration
companies with or without
mineral reserves 6%
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100%
------------------------------------
During the period, the fund continued to focus on premier and major established
gold producers with strong balance sheets and low production costs.
8
<PAGE>
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Ten Largest Equity Holdings
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(69% of Portfolio)
1. Barrick Gold Corp.
Gold exploration and production in North and South
America
2. Newmont Mining Corp.
International gold exploration and mining company
3. Placer Dome Inc.
Gold, silver and copper mining company
4. De Beers
Diamond mining
5. Anglo American Platinum Corp.
Platinum mining company
6. Franco-Nevada Mining Corp., Ltd.
Gold mining company
7. AngloGold Ltd.
Gold exploration and mining company
8. Homestake Mining Co.
Major international gold producer
9. Impala Platinum Holdings Ltd.
Platinum, nickel and copper mining
10. Gold Fields Ltd.
Gold mining, development and exploration company in
South Africa
The fund continues to emphasize companies that we feel are well positioned to
withstand the current low level of gold prices.
For more complete details about the Fund's investment portfolio, see page 13. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
9
<PAGE>
Portfolio Management Discussion
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April 30, 2000
Dear Shareholders:
Scudder Gold Fund posted a -16.77% total return over its most recent six months
ended April 30, 2000, as gold bullion kept to a $250-$300 trading range. The
fund trailed the -5.12% return of the Salomon/Smith Barney Gold Index during the
period, but ranked in the top 17% of 35 similar gold-oriented mutual funds as
tracked by Lipper Analytical Services, Inc.1 Over the period, the fund's net
asset value declined from $6.73 to $5.53 per share.
Central Banks Remain the Focus
Following a brief rally last September, gold prices declined from $299.10 to
$273.55 over the period as concerns over future gold sales by Switzerland and
the IMF exerted downward price pressure. Since the movement toward a common
European currency took hold in 1996, bearish sentiment over increased supply
from central bank sales has often dominated the gold market. And lower gold
prices -- along with continual forward selling -- have in many cases eroded gold
producers' profit margins. (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 hedge against falling gold prices and to lock in profits for
mining projects.)
Emphasizing Major Gold Producers
Scudder Gold Fund seeks maximum return by investing in a portfolio of primarily
gold-related investments. Over the period, the fund continued to focus on Tier I
and Tier II gold stocks -- premier and major established gold producers with
strong balance sheets and low production costs. We also continued to emphasize
producers that we feel are well positioned to withstand the current low level of
gold prices.
1 Lipper Analytical Services, Inc. is an independent analyst of investment
performance. The fund's one-, five-, and ten-year average annual returns as
of April 30, 2000 were -19.98%, -8.29%, and -2.09%, respectively.
10
<PAGE>
One
recent addition to the fund, De Beers, proved to be a disappointing performer
during the period. De Beers, a major diamond producer, failed to sustain
encouraging gains it had posted during the latter half of 1999. Overall, the
fund seeks to diversify broadly within its asset class; it held 34 separate gold
and gold-related equity issues as of April 30. The fund also continues it broad
diversification by region, with investments in five separate regions of the
world.
Outlook
It is difficult to predict when gold might break out of its current trading
range. Some trends more favorable to gold have recently emerged, however. We
noted two of them in our previous report to you: commitments from the European
Central Bank to limit gold sales and declarations by some major gold producers
that they would curtail forward sales. More recently, we noted the rising prices
of other metals and commodities, declining worldwide gold mining production;
persistent inflationary signals, a burgeoning U.S. trade deficit, and increased
volatility in the Dow and NASDAQ stock averages. These factors have collectively
and individually pointed to higher gold bullion and equity prices in the past.
In the short term, market psychology and price recovery will likely depend on
how the market perceives Swiss and other future central bank sales.
We believe Scudder Gold Fund remains an appropriate investment for those seeking
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
11
<PAGE>
Glossary of Investment Terms
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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 The value of a company's outstanding shares of common stock,
Capitalization determined by multiplying the number of shares outstanding
by the share price (shares x price = market capitalization).
Net Asset The price per share of a mutual fund based on the sum of the
Value (NAV) 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.
(Source: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
12
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio as of April 30, 2000 (Unaudited)
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Principal
Amount ($) Value ($)
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Repurchase Agreements 8.8%
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<S> <C> <C>
Donaldson, Lufkin & Jenrette, 5.68%,
to be repurchased at $7,814,697 on 5/1/2000**
(Cost $7,811,000) ........................................... 7,811,000 7,811,000
Shares
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Common Stocks 91.2%
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Australia 3.7%
Delta Gold NL (Emerging junior exploration company
with important platinum property in Zimbabwe) ............... 400,000 373,568
Newcrest Mining, Ltd.* (Senior gold producer and
exploration company) ........................................ 400,000 798,502
Normandy Mining Ltd. (Mining and oil enterprises) .............. 4,010,214 1,989,647
Resolute Ltd. (Exploration and production of gold and
other minerals) ............................................. 700,000 85,804
---------
3,247,521
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Bolivia 0.4%
Corriente Resources, Inc.* (Mining and processing of
gold, bismuth, tin and tungsten in South America) ........... 181,000 366,496
---------
Canada 6.8%
Franco-Nevada Mining Corp., Ltd. (Gold mining
company) .................................................... 338,100 3,925,027
Goldcorp Inc. "A"* (Owner and operator of gold mines) .......... 200,000 1,194,654
Kinross Gold Corp.* (Gold mining company with interests
in Zimbabwe) ................................................ 600,000 809,935
Repadre Capital Corp.* (Junior gold royalty company) ........... 50,000 55,683
---------
5,985,299
---------
Ghana 0.5%
Ranger Minerals NL (Gold producer and exploration
company) .................................................... 394,238 471,739
---------
Indonesia 2.4%
Freeport McMoRan Copper & Gold, Inc. "A"* (Mining
company) .................................................... 232,400 2,149,700
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
Shares Value ($)
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Niger 0.3%
Etruscan Resources Inc.* (Exploration and development
of gold prospect in Niger) ...................... 1,040,500 273,890
----------
Peru 0.1%
Compania de Minas Buenaventura S.A. "B" (ADR)
(Mining company) ................................ 5,400 93,150
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South Africa 27.0%
Anglo American Platinum Corp. (Platinum mining
company) ........................................ 179,300 4,337,690
AngloGold Ltd. (Holding company for a group of
companies that mine gold) ....................... 28,000 1,065,644
AngloGold Ltd. (ADR) ............................... 124,000 2,410,250
De Beers Centenary Linked Shares (Diamond mining) .. 293,700 6,022,171
Gold Fields Ltd. (Gold mining, development and
exploration company in South Africa) ............ 697,500 2,263,608
Gold Fields Ltd. (ADR) ............................. 150,000 492,188
Impala Platinum Holdings Ltd. (Platinum, nickel and
copper mining) .................................. 95,000 3,012,981
Kroondal Platinum Mines, Ltd.* (Platinum, palladium,
and rhodium mining company) ..................... 1,090,000 1,993,804
Kroondal Platinum Mines Ltd. (Warrants)* expire
8/31/2000 ....................................... 450,000 252,250
Lonmin plc (Miner of platinum, gold and coal) ...... 200,400 2,042,377
----------
23,892,963
----------
United States 2.7%
Piedmont Mining Co.* (Gold mining and development
company in the Carolinas) (b) ................... 1,500,000 45,000
Stillwater Mining Co.* (Mining company) ............ 68,181 1,909,068
X-Cal Resources Ltd.* (Gold exploration and mining
in Nevada and British Columbia) (b) ............. 1,993,286 470,876
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2,424,944
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West Africia 2.0%
IAMGOLD* (Development and funding of precious metal
mining in West Africa) .......................... 1,088,000 1,725,702
----------
Zimbabwe 0.1%
Zimbabwe Platinum Mines Ltd. (Mining company which
explores for platinum) .......................... 248,000 50,665
----------
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
Shares Value ($)
------------------------------------------------------------------------------------
International 45.2%
<S> <C> <C>
Apex Silver Mines Ltd.* (Developer of silver properties in
South America, Central America, and Central Asia) ..... 48,300 470,925
Barrick Gold Corp. (Explorer and producer of gold in
North and South America) .............................. 1,048,800 17,636,310
Battle Mountain Gold Co. "A" (Gold, silver and
copper mining and processing) ......................... 319,000 657,938
Homestake Mining Co. (International gold producer) ....... 570,000 3,420,000
Newmont Mining Corp. (International gold exploration
and mining company) ................................... 380,000 8,906,250
Placer Dome Inc. (Gold, silver and copper mining
company) .............................................. 950,100 7,663,131
Solitario Resources Corp.* (Precious and base metals
exploration company primarily in Argentina and Peru) .. 462,247 467,988
TVX Gold, Inc.* (International gold and silver mining) ... 700,000 448,839
Vengold Inc.* (Gold exploration and development
company with interests in Papua New Guinea, Venezuela
and Indonesia) ........................................ 283,400 420,815
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40,092,196
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Total Common Stocks (Cost $87,701,980) 80,774,265
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Total Investment Portfolio -- 100.0% (Cost $95,512,980) (a) 88,585,265
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</TABLE>
* Non-income producing security.
** Repurchase agreements are fully collateralized by U.S. Treasury or
government agency securities.
(a) The cost for federal income tax purposes was $102,530,544. At April 30,
2000, net unrealized depreciation for all investment securities based on
tax cost was $13,945,279. This consisted of aggregate gross unrealized
appreciation for all investments in which there was an excess of value over
tax cost of $10,330,348 and aggregate gross unrealized depreciation for all
investment securities in which there was an excess of tax cost over value
of $24,275,627.
(b) Affiliated issuers (see Notes to Consolidated Financial Statements).
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
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Consolidated Statement of Assets and Liabilities as of April 30, 2000 (Unaudited)
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Assets
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<S> <C>
Investments in securities, at value:
Unaffiliated issuers (cost $93,169,416) .................................. $ 88,069,389
Affiliated issuers (cost $2,343,564) ..................................... 515,876
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Total investments, at value (cost $95,512,980) ........................... 88,585,265
Dividends receivable ..................................................... 305,970
Interest receivable ...................................................... 3,697
Receivable for Fund shares sold .......................................... 129,385
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Total assets ............................................................. 89,024,317
Liabilities
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Due to custodian bank .................................................... 50,293
Payable for Fund shares redeemed ......................................... 33,410
Accrued management fee ................................................... 76,429
Accrued reorganization costs ............................................. 60,031
Accrued Directors' fees and expenses ..................................... 27,369
Other accrued expenses and payables ...................................... 265,200
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Total liabilities ........................................................ 512,732
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Net assets, at value $ 88,511,585
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Net Assets
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Net assets consist of:
Accumulated distributions in excess of net investment income (219,395) Net
unrealized appreciation (depreciation) on:
Investments ............................................................ (6,927,715)
Foreign currency related transactions .................................. (7,291)
Accumulated net realized gain (loss) ..................................... (95,891,280)
Paid-in capital .......................................................... 191,557,266
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Net assets, at value $ 88,511,585
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Net Asset Value
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NetAsset Value, offering and redemption price per share ($88,511,585 /
16,007,573 shares of capital stock outstanding, $.01 par value, -------------
100,000,000 shares authorized) ........................................ $ 5.53
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
--------------------------------------------------------------------------------
Consolidated Statement of Operations for the six months ended April 30, 2000
(Unaudited)
--------------------------------------------------------------------------------
Investment Income
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Income:
Dividends (net of foreign taxes withheld of $49,434) ........... $ 875,767
Interest ....................................................... 227,070
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Total income ................................................... 1,102,837
------------
Expenses:
Management fee ................................................. 520,037
Services to shareholders ....................................... 204,935
Custodian and accounting fees .................................. 59,470
Auditing ....................................................... 30,888
Legal .......................................................... 24,678
Directors' fees and expenses ................................... 66,229
Reorganization ................................................. 65,507
Reports to shareholders ........................................ 41,201
Registration fees .............................................. 33,944
Other .......................................................... 21,046
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Total expenses, before expense reductions ...................... 1,067,935
Expense reductions ............................................. (26,351)
------------
Total expenses, after expense reductions ....................... 1,041,584
--------------------------------------------------------------------------------
Net investment income (loss) 61,253
--------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
--------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments -- Unaffiliated issuers ............................ 556,764
Foreign currency related transactions .......................... (14,160)
------------
542,604
------------
Net unrealized appreciation (depreciation) during the period on:
Investments .................................................... (19,733,730)
Foreign currency related transactions .......................... (3,396)
------------
(19,737,126)
--------------------------------------------------------------------------------
Net gain (loss) on investment transactions (19,194,522)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ (19,133,269)
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Consolidated Statements of Changes in Net Assets
------------------------------------------------------------------------------------
Six Months
Ended
April 30, Year Ended
2000 October 31,
Increase (Decrease) in Net Assets (Unaudited) 1999
------------------------------------------------------------------------------------
Operations:
<S> <C> <C>
Net investment income (loss) ................... $ 61,253 $ 58,939
Net realized gain (loss) on investment
transactions ................................ 542,604 (5,180,473)
Net unrealized appreciation (depreciation) on
investment transactions during the period ... (19,737,126) 11,324,886
------------- -------------
Net increase (decrease) in net assets resulting
from operations ............................ (19,133,269) 6,203,352
------------- -------------
Distributions to shareholders in excess of net
investment income ........................... (1,472,534) --
------------- -------------
Fund share transactions:
Proceeds from shares sold ...................... 119,376,577 441,850,053
Reinvestment of distributions .................. 1,376,990 --
Cost of shares redeemed ........................ (127,925,597) (462,160,899)
------------- -------------
Net increase (decrease) in net assets from Fund
share transactions ......................... (7,172,030) (20,310,846)
------------- -------------
Increase (decrease) in net assets .............. (27,777,833) (14,107,494)
Net assets at beginning of period .............. 116,289,418 130,396,912
Net assets at end of period (including
accumulated distributions in excess of net
investment income of $219,395 and
undistributed net investment
income of $1,191,886, respectively) ......... $ 88,511,585 $ 116,289,418
Other Information
------------------------------------------------------------------------------------
Shares outstanding at beginning of period ...... 17,269,141 20,470,266
------------- -------------
Shares sold .................................... 18,594,133 68,747,856
Shares issued to shareholders in reinvestment of
distributions ............................... 208,957 --
Shares redeemed ................................ (20,064,658) (71,948,981)
------------- -------------
Net increase (decrease) in Fund shares ......... (1,261,568) (3,201,125)
Shares outstanding at end of period ............ 16,007,573 17,269,141
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
<TABLE>
<CAPTION>
Consolidated Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the consolidated
financial statements.
-----------------------------------------------------------------------------------------
2000(b) 1999(c) 1998(d) 1998(e) 1997(e) 1996(e) 1995(e)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 6.73 $ 6.37 $ 6.65 $10.49 $15.34 $12.86 $12.64
-----------------------------------------------------------------------------------------
Income (loss) from investment operations:
-----------------------------------------------------------------------------------------
Net investment
income (loss) (a) .00 .00 .00 .00 (.08) (.09) (.08)
-----------------------------------------------------------------------------------------
Net realized and
unrealized gain
(loss) on investment
transactions (1.11) .36 (.28) (3.70) (2.12) 4.28 1.02
------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Total from
investment operations (1.11) .36 (.28) (3.70) (2.20) 4.19 .94
-----------------------------------------------------------------------------------------
Less distributions from:
In excess of net
investment income (.09) -- -- (.14) (2.39) (1.08) (.25)
-----------------------------------------------------------------------------------------
Net realized gains
on investment
transactions -- -- -- -- (.26) (.63) (.47)
------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Total distributions (.09) -- -- (.14) (2.65) (1.71) (.72)
-----------------------------------------------------------------------------------------
Net asset value, end
of period $ 5.53 $ 6.73 $ 6.37 $ 6.65 $10.49 $15.34 $12.86
------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Total Return (%) (16.77)** 5.65 (4.21)** (35.45) (17.72) 36.91 7.50
-----------------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
-----------------------------------------------------------------------------------------
Net assets, end of
period ($ millions) 89 116 130 132 164 173 126
-----------------------------------------------------------------------------------------
Ratio of expenses
before expense
reductions (%) 1.94(f)* 2.01 2.13* 1.82 1.60 1.50 1.65
-----------------------------------------------------------------------------------------
Ratio of expenses
after expense
reductions (%) 1.92(f)* 2.01 2.13* 1.82 1.60 1.50 1.65
-----------------------------------------------------------------------------------------
Ratio of net
investment income
(loss) (%) .12* .05 (.08)* .04 (.62) (.61) (.69)
-----------------------------------------------------------------------------------------
Portfolio turnover
rate (%) 24* 91 154* 68 39 30 42
-----------------------------------------------------------------------------------------
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) For the six months ended April 30, 2000 (Unaudited).
(c) Year ended October 31, 1999.
(d) Four months ended October 31, 1998. On September 15, 1998 the Board of
Directors of the Fund changed the fiscal year end from June 30 to October
31.
(e) Years ended June 30.
(f) The ratios of operating expenses excluding costs incurred in connection
with the reorganization before and after expense reductions were 1.84% and
1.83%, respectively.
* Annualized
** Not annualized
19
<PAGE>
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------
(Unaudited)
A. Significant Accounting Policies
Scudder Gold Fund (the "Fund") is a non-diversified series of Scudder Mutual
Funds, Inc. (the "Corporation") which is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end management investment
company organized as a Maryland Corporation.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
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. Investments are stated at value determined as of the close
of regular trading on the New York Stock Exchange. Securities which are traded
on U.S. or foreign stock exchanges are valued at the most recent sale price
reported on the exchange on which the security is traded most extensively. If no
sale occurred, the security is then valued at the calculated mean between the
most recent bid and asked quotations. If there are no such bid and asked
quotations, the most recent bid quotation is used. Securities quoted on the
Nasdaq Stock Market ("Nasdaq"), for which there have been sales, are valued at
the most recent sale price reported. If there are no such sales, the value is
the most recent bid quotation. Securities which are not quoted on Nasdaq but are
traded in another over-the-counter market are valued at the most recent sale
price, or if no sale occurred, at the calculated mean between the most recent
bid and asked quotations on such market. If there are no such bid and asked
quotations, the most recent bid quotation shall be used.
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.
Precious Metals Valuation. Gold, silver, platinum and palladium bullion shall be
valued based on the London Fixing or, if there is no London Fixing available, on
the last spot settlement; coins and precious metals other than
20
<PAGE>
gold, silver, platinum and palladium bullion shall be valued at the calculated
mean between the most recent bid and asked market quotations or, if there are no
such bid and ask quotations available simultaneously, at the most recent bid
quotation provided by a bona fide market maker at the time of valuation.
Foreign Currency Translations. The books and records of the Fund are maintained
in U.S. dollars. Investment securities and other assets and liabilities
denominated in a foreign currency are translated into U.S. dollars at the
prevailing exchange rates at period end. Purchases and sales of investment
securities, income and expenses are translated into U.S. dollars at the
prevailing exchange rates on the respective dates of the transactions.
Net realized and unrealized gains and losses on foreign currency transactions
represent net gains and losses between trade and settlement dates on securities
transactions, the disposition of forward foreign currency exchange contracts and
foreign currencies, and the difference between the amount of net investment
income accrued and the U.S. dollar amount actually received. That portion of
both realized and unrealized gains and losses on investments that results from
fluctuations in foreign currency exchange rates is not separately disclosed but
is included with net realized and unrealized gains and losses on investment
securities.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, receives delivery of the underlying securities, the amount
of which at the time of purchase and each subsequent business day is required to
be maintained at such a level that the market value is equal to at least the
principal amount of the repurchase price plus accrued interest.
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. Accordingly, the Fund paid no federal income taxes and no federal
income tax provision was required.
At October 31, 1999 the Fund had a net tax basis capital loss carryforward of
approximately $88,879,000 which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until October 31,
2005 ($26,073,000), October 31, 2006 ($52,412,000) or October 31, 2007
($10,394,000), the respective expiration dates.
Distribution of Income and Gains. Distributions of net investment income, if
any, are made annually. Net realized gains from investment transactions, in
21
<PAGE>
excess of available capital loss carryforwards, would be taxable to the Fund if
not distributed, and, therefore, will be distributed to shareholders at least
annually.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. These
differences primarily relate to investments in passive foreign investment
companies and certain securities sold at a loss. As a result, net investment
income (loss) and net realized gain (loss) on investment transactions for a
reporting period may differ significantly from distributions during such period.
Accordingly, the Fund may periodically make reclassifications among certain of
its capital accounts without impacting the net asset value of the Fund.
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date. Certain dividends
from foreign securities may be recorded subsequent to the ex-dividend date as
soon as the Fund is informed of such dividends. Realized gains and losses from
investment transactions are recorded on an identified cost basis.
B. Purchases and Sales
During the six months ended April 30, 2000, purchases and sales of investment
securities (excluding short-term investments) aggregated $11,327,097 and
$11,123,056, respectively.
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, 2000, the fee pursuant to this Agreement aggregated
$520,037.
22
<PAGE>
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, 2000, the amount charged to the Fund by SSC aggregated $182,019
of which $28,364 is unpaid at April 30, 2000.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six months ended April 30,
2000, the amount charged to the Fund by STC aggregated $14,487, of which $1,326
is unpaid at April 30, 2000.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six months
ended April 30, 2000, the amount charged to the Fund by SFAC aggregated $18,671,
of which $3,125 is unpaid at April 30, 2000.
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, 2000, Directors' fees and expenses aggregated $18,636. In
addition, a one-time fee of $47,600 was accrued for payment to those Directors
not affiliated with the Adviser who are not standing for re-election, under the
reorganization discussed in Note G. Inasmuch as the Adviser will also benefit
from administrative efficiencies of a consolidated Board, the Adviser has agreed
to bear $23,800 of such costs.
D. Line of Credit
The Fund and several Scudder Funds (the "Participants") share in a $1 billion
revolving credit facility for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 33 1/3 percent of its consolidated net assets under the agreement.
E. Transactions in Securities of Affiliated Issuers
An affiliated issuer is a company in which the Fund has ownership of at least 5%
of the voting securities. A summary of the Fund's transactions with
23
<PAGE>
companies which are or were affiliates during the six months ended April 30,
2000 is as follows:
Purchases Sales Dividend
Affiliate Cost ($) Proceeds ($) Income ($) Value ($)
---------------------------- ------------ ------------ ------------ -----------
Piedmont Mining Co. -- -- -- 45,000
X-CAL Resources -- -- -- 470,876
-- -- -- 515,876
F. Expense Off-Set Arrangements
The Fund has entered into arrangements with its custodian and transfer agent
whereby credits realized as a result of uninvested cash balances were used to
reduce a portion of the Fund's expenses. During the period, the Fund's custodian
and transfer agent fees were reduced by $1,984 and $567, respectively, under
these arrangements.
G. Reorganization
In early 2000, Scudder Kemper initiated a restructuring program for most of its
Scudder no-load open-end funds in response to changing industry conditions and
investor needs. The program proposes to streamline the management and operations
of most of the no-load open-end funds Scudder Kemper advises principally through
the liquidation of several small funds, mergers of certain funds with similar
investment objectives, the creation of one Board of Directors/Trustees and the
adoption of an administrative fee covering the provision of most of the services
currently paid for by the affected funds. Costs incurred in connection with this
restructuring initiative are being borne jointly by Scudder Kemper and certain
of the affected funds. These costs, including printing, shareholder meeting
expenses and professional fees, are presented as reorganization expenses in the
Statement of Operations of the Fund.
24
<PAGE>
Officers and Directors
--------------------------------------------------------------------------------
Linda C. Coughlin* Joann M. Barry*
o President o Vice President
Sheryle J. Bolton Ann M. McCreary*
o Director; Chief Executive Officer, o Vice President
Scientific Learning Corporation
John Millette*
William T. Burgin o Vice President and Secretary
o Director; General Partner,
Bessemer Venture Partners John R. Hebble*
o Treasurer
Keith R. Fox
o Director; General Partner, Caroline Pearson*
The Exeter Group of Funds o Assistant Secretary
William H. Luers
o Director; Chairman and President, *Scudder Kemper Investments, Inc.
U.N. Association of America
Kathryn L. Quirk*
o Director, Vice President and
Assistant Secretary
Joan E. Spero
o Director; President, Doris Duke
Charitable Foundation
Paul Bancroft III
o Honorary Director; Consultant
Thomas J. Devine
o Honorary Director; Consultant
Robert G. Stone, Jr.
o Honorary Director; Chairman
Emeritus and Director, Kirby
Corporation
25
<PAGE>
Investment Products and Services
--------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
The Scudder Family of Funds+++
--------------------------------------------------------------------------------
<S> <C>
Money Market U.S. Growth
Scudder U.S. Treasury Money Fund Value
Scudder Cash Investment Trust Scudder Large Company Value Fund
Scudder Money Market Series -- Scudder Value Fund***
Prime Reserve Shares* Scudder Small Company Value Fund
Premium Shares* Scudder Micro Cap Fund
Managed Shares*
Growth
Tax Free Money Market+ Scudder Classic Growth Fund***
Scudder Tax Free Money Fund Scudder Large Company Growth Fund***
Scudder California Tax Free Money Fund** Scudder Select 1000 Growth Fund
Scudder New York Tax Free Money Fund** Scudder Development Fund
Scudder 21st Century Growth Fund
Tax Free+
Scudder Limited Term Tax Free Fund Global Equity
Scudder Medium Term Tax Free Fund Worldwide
Scudder Managed Municipal Bonds Scudder Global Fund
Scudder High Yield Tax Free Fund Scudder International Value Fund
Scudder California Tax Free Fund** Scudder International Growth and
Scudder Massachusetts Limited Term Income Fund
Tax Free Fund** Scudder International Fund++
Scudder Massachusetts Tax Free Fund** Scudder International Growth Fund
Scudder New York Tax Free Fund** Scudder Global Discovery Fund***
Scudder Ohio Tax Free Fund** Scudder Emerging Markets Growth Fund
Scudder Gold Fund
U.S. Income
Scudder Short Term Bond Fund Regional
Scudder GNMA Fund Scudder Greater Europe Growth Fund
Scudder Income Fund Scudder Pacific Opportunities Fund
Scudder Corporate Bond Fund Scudder Latin America Fund
Scudder High Yield Bond Fund The Japan Fund, Inc.
Global Income Industry Sector Funds
Scudder Global Bond Fund Choice Series
Scudder International Bond Fund Scudder Financial Services Fund
Scudder Emerging Markets Income Fund Scudder Health Care Fund
Scudder Technology Fund
Asset Allocation
Scudder Pathway Conservative Portfolio Preferred Series
Scudder Pathway Balanced Portfolio Scudder Tax Managed Growth Fund
Scudder Pathway Growth Portfolio Scudder Tax Managed Small Company Fund
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
</TABLE>
26
<PAGE>
--------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
--------------------------------------------------------------------------------
Retirement Programs and Education Accounts
--------------------------------------------------------------------------------
Retirement Programs Education Accounts
Traditional IRA Education IRA
Roth IRA UGMA/UTMA
SEP-IRA IRA for Minors
Inherited IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Closed-End Funds#
-----------------------------------------------------------------------------------------
<S> <C>
The Argentina Fund, Inc. Montgomery Street Income Securities, Inc.
The Brazil Fund, Inc. Scudder Global High Income Fund, Inc.
The Korea Fund, Inc. Scudder New Asia Fund, Inc.
</TABLE>
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money.
+++ Funds within categories are listed in order from expected least
risk to most risk. Certain Scudder funds or classes thereof may
not be available for purchase or exchange.
+ A portion of the income from the tax-free funds may be subject to
federal, state, and local taxes.
* A class of shares of the fund.
** Not available in all states.
*** Only the Scudder Shares of the fund are part of the Scudder Family
of Funds.
++ Only the International Shares of the fund are part of the Scudder
Family of Funds.
+++ +++ A no-load variable annuity contract provided by Charter National
Life Insurance Company and its affiliate, offered by Scudder
Kemper Investment'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 Kemper Investment'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.
27
<PAGE>
Scudder Solutions
--------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Convenient Automatic Investment Plan
ways to invest,
quickly and A convenient investment program in which money is
reliably electronically debited from your bank account monthly to
regularly purchase fund shares and "dollar cost average" --
buy more shares when the fund's price is lower and fewer
when it's higher, which can reduce your average purchase
price over time.*
Automatic Dividend Transfer
The most timely, reliable, and convenient way to purchase
shares -- use distributions from one Scudder fund to
purchase shares in another, automatically (accounts with
identical registrations or the same social security or tax
identification number).
QuickBuy
Lets you purchase Scudder fund shares electronically,
avoiding potential mailing delays; money for each of your
transactions is electronically debited from a previously
designated bank account.
Payroll Deduction and Direct Deposit
Have all or part of your paycheck -- even government checks
-- invested in up to four Scudder funds at one time.
* Dollar cost averaging involves continuous investment in
securities regardless of price fluctuations and does not
assure a profit or protect against loss in declining
markets. Investors should consider their ability to
continue such a plan through periods of low price
levels.
Around-the- Scudder Automated Information Line: SAIL(TM) --
clock electronic 1-800-343-2890
account
service and Personalized account information, the ability to exchange
information, or redeem shares, and information on other Scudder funds
including some and services via touchtone telephone.
transactions
Scudder's Web Site -- www.scudder.com
Personal Investment Organizer: Offering account information
and transactions, interactive worksheets, prospectuses and
applications for all Scudder funds, plus your current asset
allocation, whenever your need them. Scudder's site also
provides news about Scudder funds, retirement planning
information, and more.
28
<PAGE>
--------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Retirees and Automatic Withdrawal Plan
those who depend
on investment You designate the bank account, determine the schedule (as
proceeds for frequently as once a month) and amount of the redemptions,
living expenses and Scudder does the rest.
can enjoy these
convenient, Distributions Direct
timely, and
reliable Automatically deposits your fund distributions into the
automated bank account you designate within three business days after
withdrawal each distribution is paid.
programs
QuickSell
Provides speedy access to your money by electronically
crediting your redemption proceeds to the bank account you
previously designated.
For more Call a Scudder representative at
information about 1-800-SCUDDER
these services
Or visit our Web site at
www.scudder.com
Please address The Scudder Funds
all written PO Box 2291
correspondence Boston, Massachusetts
to 02107-2291
29
<PAGE>
Notes
<PAGE>
Notes
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc. is one of the largest and most experienced
investment management organizations worldwide, managing more than $290 billion
in assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded over 80
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Financial Services Group. As a result, Zurich's subsidiary, Zurich
Kemper Investments, Inc., with 50 years of mutual fund and investment management
experience, was combined with Scudder. Headquartered in New York, Scudder Kemper
Investments offers a full range of investment counsel and asset management
capabilities, based on a combination of proprietary research and disciplined,
long-term investment strategies. With its global investment resources and
perspective, the firm seeks opportunities in markets throughout the world to
meet the needs of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Financial Services Group. The Zurich Financial Services Group is
an internationally recognized leader in financial services, including
property/casualty and life insurance, reinsurance, and asset management.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
RT019400
87-6-40
SCUDDER
INVESTMENTS(SM)
[LOGO]
PO Box 2291
Boston, MA 02107-2291
1-800-SCUDDER
www.scudder.com
A member of the [LOGO] Zurich Finanical Services Group
