Shares of Scudder Cash Investment Trust are not insured or guaranteed by
the U.S. Government. The Fund seeks to maintain a constant net asset value
of $1.00 per share but there can be no assurance that the stable net asset
value will be maintained.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder Cash Investment Trust
Semiannual Report
December 31, 1994
* A fixed-price money market fund for investors seeking stability and
liquidity of capital and current income.
* A pure no-load(tm) fund with no commissions to buy, sell, or exchange
shares.
SCUDDER CASH INVESTMENT TRUST
TABLE OF CONTENTS
3 Letter from the Fund's President
4 Portfolio Management Discussion
Your Fund's portfolio management team reviews the period's investing
strategies, financial markets, and economic conditions
7 Investment Portfolio
Itemized list of your Fund's portfolio holdings
10 Financial Statements
13 Financial Highlights
14 Notes to Financial Statements
17 Tax Information
18 Investment Products and Services
19 How to Contact Scudder
LETTER FROM THE FUND'S PRESIDENT
Dear Shareholders,
The world's financial markets were shaken repeatedly in 1994 by a
variety of events. Rising interest rates, losses for investors in highly
leveraged derivatives, municipal bankruptcy in California's Orange County,
and unsettling global developments combined to create a challenging
environment for global stock and bond investors. Not surprisingly, money
funds experienced substantial inflows this past year, as investors sought
to take shelter from the heightened market volatility of longer-term
financial instruments and capture higher yields.
The rise in interest rates in the past year has meant higher income
from fixed-income investments at a time when inflation has remained
relatively stable. As of December 31, Scudder Cash Investment Trust
provided a 7-day effective yield of 5.32%, compared to 2.63% at the start
of 1994. In the coming year, we expect a combination of factors, including
the Federal Reserve's tightening efforts, to keep global economic activity
and inflation on a moderate course. Nevertheless, we expect some upward
pressure to remain on interest rates in 1995. Finite savings around the
world has meant that capital to invest in financial markets and growing
economies increasingly is in short supply. As a result, countries will most
likely continue to compete for much-needed global capital through higher
rates of interest.
Additional rate increases may spark episodes of difficult adjustment
for financial markets and result in higher yields for money funds.
Regardless of the level of interest rates, however, money funds deserve a
place in most investment programs, either as the conservative foundation
for your overall portfolio or as a ready reserve to meet your needs for
cash.
If you have questions about your Fund or your investments, contact a
Scudder Investor Relations representative at 1-800-225-2470. Page 19
provides more information on how to contact Scudder. Thank you for choosing
Scudder Cash Investment Trust to help meet your investment needs.
Sincerely,
/s/David S. Lee
David S. Lee
President,
Scudder Cash Investment Trust
<PAGE>
SCUDDER CASH INVESTMENT TRUST
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
The second half of 1994 remained friendly to money market investors.
Interest rates continued to climb -- albeit less dramatically than during
the year's first half, and shareholders again saw Scudder Cash Investment
Trust's income distributions rise. Meanwhile, the portfolio maintained a
constant share price of $1.00, as has been the case since the Fund's
introduction.
On December 31, 1994, the Fund's 7-day yield was 5.18%. Factoring in
the effect of compounding, the 7-day effective yield for the Fund was
5.32%, up from 3.63% six months ago and 2.63% at the start of the year. The
Fund's total return, which reflects reinvested distributions of $0.022, was
2.20% for the six-month period ended December 31, 1994. Of course, past
performance is no guarantee of future results, and the Fund's yield will
fluctuate.
Investment Environment Continues to Favor
Money Market Investments
Interest rates rose steadily throughout the year, increasing borrowing
costs for mortgages and credit cards and depressing bond prices, which move
in the opposite direction of interest rates. Though persistently higher
rates during 1994 resulted in a poor environment for bond investors,
Scudder Cash Investment Trust benefited from rising rates, since its yield
rose while its share price remained stable.
Money market fund inflows increased, as investors sought to ensure
price stability and higher yields. As always, we strive to provide a stable
share price so that shareholders can count on money market funds to return
their investment dollars in full whenever they need them.
Portfolio Strategy Took Advantage of Rising Interest Rates
We continued to emphasize shorter average maturities during the six
months ended December 31, anticipating that upward pressure on interest
rates would persist. At the end of the year, the average maturity of the
portfolio stood at 30 days, near its 35-day average six months ago but in
contrast to its 46-day average a year ago. By holding shorter-maturity
money market securities, your Fund can quickly deploy proceeds from
maturing investments to higher-yielding instruments as rates rise.
(LINE CHART TITLE) Short-Term Interest Rates Climb
(December 1993 through December 1994)
(CHART DATA)
<TABLE>
<CAPTION>
INTEREST RATES
<S> <C> <C> <C> <C> <C>
Commercial Paper 3.36 3.86 4.57 5.02 6.26
3-Month Treasury Bill 2.96 3.34 4.25 4.73 5.45
Federal Funds 3.08 3.52 4.18 4.64 5.69
</TABLE>
(CALLOUT NEXT TO CHART) - The continued rise in short-term interest rates
during the last half of 1994 pushed up your Fund's yield from 3.63% to
5.32%.
Corporate commercial paper remained a significant component of the
Fund. These securities, which essentially are IOUs issued by companies to
meet short-term borrowing needs, were in abundant supply, allowing us to
capture attractive yields. In recent months, commercial banks have opted to
sell Treasuries to fund their liabilities instead of issuing CDs.
We also continued to vary the Fund's investment mix by buying floating
rate notes (FRNs). FRNs have fluctuating interest rates that essentially
mimic short-term interest rates but generally "float" above some specified
index. These securities reset their interest rates at regular intervals
that are shorter than their actual maturities. This process worked in the
Fund's favor as interest rates continued to rise during the past six
months. Although FRNs fall under the definition of derivatives since they
are "derived" from an index of short-term interest rates, your Fund invests
only in a very low-risk form of floating rate note. FRNs held by the Fund
reset weekly or monthly to money market rates such as those of Treasury
bills.
As always, we adhere to high standards of security selection. Your
Fund is one of the select number of money market funds to have an AAAm
rating, the top rating bestowed by Standard and Poor's, an independent
rating service. The AAAm rating is historical and based on an analysis of
the portfolio's credit quality, market price exposure and management. To
maintain that rating, we adhere to stringent investment guidelines --
investing a minimum of 75% in securities with the highest A1+ rating, with
the remaining 25% invested in securities rated A1 or higher.
Looking ahead, we believe the Federal Reserve may push short-term
interest rates up a bit further if economic growth remains strong. As a
result, we intend to maintain our current strategy of favoring shorter-term
money market securities. While it is impossible to predict accurately when
interest rates will peak -- early in 1995 or later -- any evidence suggesting
that rates could be ready to decline will prompt us to begin lengthening
maturities to maintain a high relative yield.
Thank you for your continued interest in Scudder Cash Investment
Trust.
Sincerely,
Your Portfolio Management Team
/s/Robert T. Neff /s/Jeanette A. Kelly
Robert T. Neff Jeanette A. Kelly
/s/Robert E. Pruyne /s/Stephen L. Akers
Robert E. Pruyne Stephen L. Akers
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO as of December 31, 1994 (Unaudited)
- - - - ---------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Value ($)
Portfolio Amount ($) (Note A)
- - - - ---------------------------------------------------------------------------------------------------------------
<S> <C>
0.2% REPURCHASE AGREEMENT
3,936,000 Repurchase Agreement with State Street Bank
and Trust Company dated 12/30/94 at 5.5%
to be repurchased at $3,938,405 on 1/3/95
collateralized by a $3,985,000 U.S. Treasury
Note, 6%, 6/30/96 (Cost $3,936,000) ......... 3,936,000
-----------
43.8% COMMERCIAL PAPER
HEALTH 1.5%
Pharmaceuticals 25,000,000 Warner Lambert Co., 5.92%, 2/21/95 ........... 24,790,333
----------
COMMUNICATIONS 2.9%
Telephone/Communications 50,000,000 Ameritech Corp., 4.98%, 1/6/95................ 49,959,464
----------
FINANCIAL 35.5%
Banks 11.5% 50,000,000 Abbey National NA, 5.07%, 3/6/95 ............. 49,432,153
17,000,000 Barclays U.S. Funding Corp., 6.02%, 3/1/95 ... 16,821,783
40,000,000 CIT Group, 4.9%, 1/12/95 .................... 39,935,997
40,000,000 CIT Group, 6.17%, 3/8/95 .................... 39,531,744
22,000,000 Oesterreichische Kontrollbank AG,
6.05%, 2/14/95 ............................ 21,829,499
30,000,000 Oesterreichische Kontrollbank AG,
5.85%, 2/23/95 ............................ 29,741,625
-----------
197,292,801
-----------
Business Finance 5.9% 29,700,000 Corporate Asset Funding Co., 6%, 1/18/95 ..... 29,615,850
40,000,000 Corporate Asset Funding Co., 5.88%, 1/25/95 .. 39,843,200
11,200,000 Preferred Receivables Funding Corp., 6.1%,
2/13/95 .................................... 11,115,265
20,226,000 Receivables Capital Corp., 5.9%, 1/3/95....... 20,219,370
-----------
100,793,685
-----------
Consumer Finance 9.0% 35,000,000 AT&T Corp., 5.75%, 2/16/95 .................. 34,717,605
26,000,000 Ford Motor Credit Corp., 5.75%, 1/10/95 ...... 25,962,625
18,000,000 Ford Motor Credit Corp., 5.75%, 1/13/95 ...... 17,965,500
35,000,000 Ford Motor Credit Corp., 5.95%, 1/20/95 ...... 34,890,090
40,000,000 General Electric Capital Corp., 5.75%,
1/27/95 ..................................... 39,833,889
-----------
153,369,709
-----------
Other Financial Companies 9.1% 25,000,000 Associates Corp. of North America,
5.75%, 1/4/95 ............................... 24,988,021
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
<TABLE>
SCUDDER CASH INVESTMENT TRUST
- - - - -------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Value ($)
Portfolio Amount ($) (Note A)
- - - - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
20,000,000 Associates Corp. of North America,
5.98%, 1/5/95 . . . . . . . . . . . . . . . 19,986,711
30,000,000 Associates Corp. of North America,
5.81%, 1/17/95 . . . . . . . . . . . . . . 29,922,533
20,000,000 Household Finance, 5.77%, 1/6/95 . . . . . . 19,983,972
21,385,000 Matterhorn Capital, 6.06%, 1/19/95 . . . . . 21,320,204
30,000,000 Nestle Capital Corp., 5.9%, 1/24/95 . . . . 29,886,917
10,000,000 Santander Finance Inc., 6%, 2/1/95 . . . . . 9,948,333
------------
156,036,691
------------
MANUFACTURING 1.8%
Industrial Specialty 31,600,000 Emerson Electric Co., 5.85%, 1/3/95 . . . . 31,589,730
------------
UTILITIES 2.1%
Electric Utilities 20,000,000 Georgia Power Co., 6.08%, 2/2/95 . . . . . . 19,891,911
15,800,000 Georgia Power Co., 6.15%, 2/8/95 . . . . . . 15,697,432
------------
35,589,343
------------
TOTAL COMMERCIAL PAPER (Cost $749,611,481) . . 749,421,756
------------
1.5% U.S. TREASURY OBLIGATIONS
25,000,000 U.S. Treasury Note, 8.5%, 5/15/95
(Cost $25,427,015) . . . . . . . . . . . . 25,187,500
------------
24.3% U.S. GOVERNMENT AGENCY OBLIGATIONS
65,000,000 Federal National Mortgage Association,
6.53%, 7/14/99* . . . . . . . . . . . . . . . 65,159,900
50,000,000 Student Loan Marketing Association,
6.32%, 4/17/95* . . . . . . . . . . . . . . . 50,077,000
100,000,000 Student Loan Marketing Association,
5.94%, 4/16/96* . . . . . . . . . . . . . . . 99,697,000
50,000,000 Student Loan Marketing Association,
6.095%, 11/27/96* . . . . . . . . . . . . . . 49,885,000
25,000,000 Student Loan Marketing Association,
6.145%, 2/14/97* . . . . . . . . . . . . . . 25,030,250
50,000,000 Student Loan Marketing Association,
6.07%, 10/30/97* . . . . . . . . . . . . . . 49,941,500
75,000,000 Student Loan Marketing Association,
6.53%, 7/12/99* . . . . . . . . . . . . . . . 74,953,125
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $415,000,000) . . . . . . . . . . . . . 414,743,775
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
- - - - -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Value ($)
Portfolio Amount ($) (Note A)
- - - - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
30.2% MEDIUM-TERM AND SHORT-TERM NOTES
24,000,000 Advanta Credit Card, 6.22%, 4/30/95* . . . . . . . . . . 24,000,000
54,800,000 Anaheim, CA, Certificate of Participation,
5.78%, 2/1/95 . . . . . . . . . . . . . . . . . . . . 54,800,000
35,000,000 Banc One Texas, Note, 5.64%, 6/2/95* . . . . . . . . . . 34,965,000
15,000,000 Colorado Student Obligation, Bond Authority,
5.65%, 7/1/95 . . . . . . . . . . . . . . . . . . . . 14,953,500
35,000,000 Federal Home Loan Mortgage Corp., 6.25%,
1/3/95 . . . . . . . . . . . . . . . . . . . . . . . 34,987,847
40,000,000 Fifth Third Bank, Note, 5.88%, 1/20/95 . . . . . . . . . 40,000,029
40,000,000 Fifth Third Bank, Note, 6.2%, 2/7/95 . . . . . . . . . . 39,996,565
46,500,000 National Bank of Detroit, Note, 5.87%, 1/23/95 . . . . . 46,496,886
50,000,000 Nationsbank of Texas, Note, 5.875%, 1/30/95 . . . . . . 50,000,000
30,000,000 Nationsbank of Texas, Note, 6.2%, 3/7/95 . . . . . . . . 29,987,750
50,000,000 PNC Bank, Cincinnati, Note, 5.82%, 6/15/95* . . . . . . 49,950,000
15,000,000 PNC Bank, Pittsburgh, Note, 5.82%, 4/21/95* . . . . . . 14,985,000
32,000,000 SMM Trust, 6.45%, 3/17/95* . . . . . . . . . . . . . . . 31,987,200
50,000,000 San Bernardino County, CA, Series 1994,
5.925%, 6/30/95 . . . . . . . . . . . . . . . . . . . 49,000,000
-------------
TOTAL MEDIUM-TERM AND SHORT-TERM NOTES
(Cost $517,258,772) . . . . . . . . . . . . . . . . . 516,109,777
-------------
- - - - ---------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0%
(Cost $1,711,233,268) (a) . . . . . . . . . . . . . . 1,709,398,808
=============
<FN>
(a) The cost for federal income tax purposes was
$1,711,233,268. At December 31, 1994, net unrealized
depreciation for all securities based on tax cost was
$1,834,460. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an
excess of market value over tax cost of $267,150 and
aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over market value
of $2,101,610.
* Floating rate notes are securities whose yields vary with
a designated market index or market rate, such as the
coupon-equivalent of the Treasury bill rate. These
securities are shown at their rate as of December 31, 1994.
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
<TABLE>
SCUDDER CASH INVESTMENT TRUST
FINANCIAL STATEMENTS
- - - - -------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994 (UNAUDITED)
- - - - -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $1,711,233,268)
(Note A) . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,709,398,808
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,063,961
Receivables:
Fund shares sold . . . . . . . . . . . . . . . . . . . . . 24,628,489
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 10,226,342
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 23,949
---------------
Total assets . . . . . . . . . . . . . . . . . . . . . 1,747,341,549
LIABILITIES
Payables:
Fund shares redeemed . . . . . . . . . . . . . . . . . . . $7,581,155
Dividends . . . . . . . . . . . . . . . . . . . . . . . . 377,933
Accrued management fee (Note B) . . . . . . . . . . . . . 540,285
Other accrued expenses (Note B) . . . . . . . . . . . . . 480,457
-----------
Total liabilities . . . . . . . . . . . . . . . . . . . 8,979,830
---------------
Net assets, at market value . . . . . . . . . . . . . . . . . 1,738,361,719
===============
NET ASSETS
Net assets consist of:
Unrealized depreciation on investments . . . . . . . . . . $ (1,834,460)
Shares of beneficial interest . . . . . . . . . . . . . . 17,399,424
Additional paid-in capital . . . . . . . . . . . . . . . 1,722,796,755
---------------
Net assets, at market value . . . . . . . . . . . . . . . . . $ 1,738,361,719
===============
NET ASSET VALUE, offering and redemption price per
share ($1,738,361,719 -:-1,739,942,409 outstanding
shares of beneficial interest, $.01 par value,
unlimited number of shares authorized) . . . . . . . . . . $1.00
=====
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
- - - - --------------------------------------------------------------------------------
<CAPTION>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1994 (UNAUDITED)
- - - - --------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C>
Interest . . . . . . . . . . . . . . . . . . $39,320,785
Expenses:
Management fee (Note B) . . . . . . . . . . . $ 3,098,303
Services to shareholders (Note B) . . . . . . 2,390,163
Trustees' fees (Note B) . . . . . . . . . . . 16,230
Custodian and Accounting fees (Note B) . . . 125,674
Reports to shareholders . . . . . . . . . . . 266,060
State registration . . . . . . . . . . . . . 71,078
Legal . . . . . . . . . . . . . . . . . . . . 15,858
Auditing . . . . . . . . . . . . . . . . . . 22,850
Other . . . . . . . . . . . . . . . . . . . . 16,123 6,022,339
---------------------------
Net investment income . . . . . . . . . . . . 33,298,446
-----------
NET UNREALIZED LOSS ON INVESTMENT
Net unrealized depreciation on investments
during the period . . . . . . . . . . . . (1,657,416)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS . . . . . . . . . . . . . . . . $31,641,030
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<TABLE>
SCUDDER CASH INVESTMENT TRUST
- - - - ---------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED
1994 JUNE 30,
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED) 1994
- - - - ---------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income . . . . . . . . . . $ 33,298,446 $ 33,951,880
Net unrealized depreciation on investment
transactions during the period . . . . (1,657,416) (930,801)
---------------- ----------------
Net increase in net assets resulting
from operations . . . . . . . . . . . 31,641,030 33,021,079
---------------- ----------------
Distributions to shareholders from:
Net investment income ($.022 and $.027
per share, respectively) . . . . . . . (33,298,446) (33,951,880)
---------------- ----------------
Fund share transactions at net asset
value of $1.00 per share:
Shares sold . . . . . . . . . . . . . . . 2,169,895,026 3,575,327,981
Net asset value of shares issued to
shareholders in reinvestment of
distributions . . . . . . . . . . . . 30,882,690 31,052,806
Shares redeemed . . . . . . . . . . . . . (1,891,235,680) (3,293,515,684)
---------------- ----------------
Net increase in net assets from Fund share
transactions. . . . . . . . . . . . . 309,542,036 312,865,103
---------------- ----------------
INCREASE IN NET ASSETS . . . . . . . . . 307,884,620 311,934,302
Net assets at beginning of period . . . . 1,430,477,099 1,118,542,797
---------------- ----------------
NET ASSETS AT END OF PERIOD . . . . . . . $ 1,738,361,719 $ 1,430,477,099
================ ================
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
- - - - -------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD AND OTHER PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL
STATEMENTS.
<CAPTION>
Six Months
Ended
December 31, Years Ended June 30,
1994 ---------------------------------------------------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
------------ ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period ........... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment
income ......... .022 .027 .027 .047 .069 .080 .082 .064 .056 .071 .089
Distributions from
net investment
income and net
realized capital
gains ........... (.022) (.027) (.027) (.047) (.069) (.080) (.082) (.064) (.056) (.071) (.089)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%) .. 2.20** 2.77 2.75 4.76 7.13 8.23 8.49 6.59 5.71 7.25 9.26
RATIOS AND
SUPPLEMENTAL DATA
Net assets, end
of year
($ millions)...... 1,738 1,430 1,119 1,361 1,736 1,644 1,563 1,370 1,144 1,104 1,028
Ratio of operating
expenses to
average daily
net assets (%) ... 79* .82 .78 .70 .66 .67 .66 .68 .68 .65 .66
Ratio of net
investment
income to
average net
assets (%) ....... 4.35* 2.78 2.72 4.58 6.91 7.93 8.21 6.44 5.55 7.01 8.87
</TABLE>
* Annualized
** Not annualized
13
<PAGE>
SCUDDER CASH INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- - - - -------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- - - - -------------------------------------------------------------------------------
Scudder Cash Investment Trust (the "Fund") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The policies
described below are followed consistently by the Fund in the preparation of its
financial statements in conformity with generally accepted accounting
principles.
SECURITY VALUATION. Portfolio securities which have remaining maturities of
sixty days or less are valued by the amortized cost method permitted in
accordance with Rule 2a-7 under the Investment Company Act of 1940. Portfolio
securities for which market quotations are readily available and which have
remaining maturities of sixty-one days or more from the date of valuation are
valued at the calculated mean between the over-the-counter bid and asked
prices, using quotations supplied by independent registered broker/dealers.
On the sixtieth day prior to maturity and thereafter until maturity,
securities originally purchased with more than sixty days remaining to
maturity are valued at amortized cost calculated daily, based upon the
market valuation of the securities on the sixty-first day prior to maturity.
Other securities are appraised at fair value as determined in good faith by or
on behalf of the Trustees of the Fund. Repurchase agreements are valued at
identified cost which, when combined with accrued interest receivable,
approximates market.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement and the underlying collateral, is equal to at least 100.5% of the
resale price.
FEDERAL INCOME TAXES. The Fund's policy is to comply with the
requirements of the Internal Revenue Code which are applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. The Fund accordingly paid no federal income taxes and no
provision for federal income taxes was required.
DISTRIBUTION OF INCOME AND GAINS. All of the net investment income of the Fund
is declared as a dividend to shareholders of record as of
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- - - - -------------------------------------------------------------------------------
twelve o'clock noon on each business day and is paid to shareholders
monthly. 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
the 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 specific identification method for determining realized
gain or loss on investments for both financial and federal income tax
reporting purposes.
OTHER. Investment transactions are accounted for on a trade-date basis (which
in most instances is the same as the settlement date). Interest income is
accrued pro rata to maturity. All premiums and discounts are amortized/accreted
for both tax and financial reporting purposes.
B. RELATED PARTIES
- - - - -------------------------------------------------------------------------------
Under the Fund's Investment Advisory Agreement (the "Agreement") with Scudder
Stevens & Clark, Inc. (the "Adviser"), the Fund agrees to pay the Adviser a fee
equal to an annual rate of 0.50% of the first $250,000,000 of the Fund's
average daily net assets, 0.45% of the next $250,000,000 of such net assets,
0.40% of the next $500,000,000 of such net assets and 0.35% of such net assets
in excess of $1,000,000,000, computed and accrued daily and payable monthly.
For the six months ended December 31, 1994, the fee pursuant to the Agreement
amounted to $3,098,303 which was equivalent to an annual effective rate of .40%
of the Fund's average daily net assets. The Agreement also provides that if the
Fund's expenses, exclusive of taxes, interest and extraordinary expenses,
exceed specified limits, such excess, up to the amount of the management fee,
will be paid by the Adviser.
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of the Adviser,
is the transfer, dividend paying and shareholder service agent for the Fund.
For the six months ended December 31, 1994, the amount charged to the Fund by
SSC aggregated $2,036,422, of which $359,653 is unpaid at December 31, 1994.
15
<PAGE>
SCUDDER CASH INVESTMENT TRUST
- - - - ------------------------------------------------------------------------------
Effective August 1, 1994, Scudder Fund Accounting Corporation ("SFAC"), a
wholly-owned subsidiary of the Adviser, assumed responsibility for determining
the daily net asset value per share and maintaining the portfolio and general
accounting records for the Fund. For the six months ended December 31, 1994,
the amount charged to the Fund by SFAC aggregated $44,508, of which $9,428 is
unpaid at December 31, 1994.
The Fund pays each Trustee not affiliated with the Adviser $4,000 annually plus
specified amounts for attended board and committee meetings. For the six months
ended December 31, 1994, Trustees' fees aggregated $16,230.
16
<PAGE>
TAX INFORMATION
- - - - --------------------------------------------------------------------------------
By now shareholders for whom year-end tax reporting is required by the IRS
should have received their Form 1099-DIV and tax information letter from the
Fund. For corporate shareholders no amount of the income dividends paid by the
Fund qualified for the dividends received deduction.
In many states the amount of income distributed to you by the Fund which is
derived from obligations of the U.S. Government may be exempt from state and
local income taxes. Of the income dividends paid by the Fund for its calendar
year ended December 31, 1994, 1.50% was derived from direct obligations of the
U.S. Government, 24.19% from the Student Loan Marketing Association, and 0.01%
from Federal Home Loan Bank.
Please consult a tax adviser if you have questions about federal or state
income tax laws, or on how to prepare your tax returns. If you have specific
questions about your Scudder Fund account, please call a Scudder Service
Representative at 1-800-225-5163.
17
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
The Scudder Family of Funds
Money market
Scudder Cash Investment Trust
Scudder U.S. Treasury Money Fund
Tax free money market+
Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax free+
Scudder California Tax Free Fund*
Scudder High Yield Tax Free Fund
Scudder Limited Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder Massachusetts Limited Term Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder Medium Term Tax Free Fund
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
Growth and Income
Scudder Balanced Fund
Scudder Growth and Income Fund
Income
Scudder Emerging Markets Income Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder International Bond Fund
Scudder Short Term Bond Fund
Scudder Short Term Global Income Fund
Scudder Zero Coupon 2000 Fund
Growth
Scudder Capital Growth Fund
Scudder Development Fund
Scudder Global Fund
Scudder Global Small Company Fund
Scudder Gold Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Latin America Fund
Scudder Pacific Opportunities Fund
Scudder Quality Growth Fund
Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
IRAs
Keogh Plans
Scudder Horizon Plan+++* (a variable annuity)
401(k) Plans
403(b) Plans
SEP-IRAs
Profit Sharing and Money Purchase Pension Plans
Closed-end Funds#
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities Fund, Inc.
Institutional Cash Management
Scudder Institutional Fund, Inc.
Scudder Fund, Inc.
Scudder Treasurers Trust(tm)++
For complete information on any of the above Scudder funds, including
management fees and expenses, call or write for a free prospectus. Read it
carefully before you invest or send money. +A portion of the income from
the tax-free funds may be subject to federal, state and local taxes. *Not
available in all states. +++A no-load variable annuity contract provided by
Charter National Life Insurance Company and its affiliate, offered by
Scudder's insurance agencies, 1-800-225-2470. #These funds, advised by
Scudder, Stevens & Clark, Inc., are traded on various stock exchanges.
++For information on Scudder Treasurers Trust(tm), an institutional cash
management service that utilizes certain portfolios of Scudder Fund, Inc.
($100,000 minimum), call: 1-800-541-7703.
HOW TO CONTACT SCUDDER
Account Service and Information
For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For account updates, prices, yields, exchanges and redemptions
SCUDDER AUTOMATED INFORMATION LINE (SAIL)
1-800-343-2890
Investment Information
To receive information about the Scudder funds, for additional
applications and prospectuses, or for investment questions
SCUDDER INVESTOR RELATIONS
1-800-225-2470
For establishing 401(k) and 403(b) plans
SCUDDER DEFINED CONTRIBUTION SERVICES
1-800-323-6105
Please address all correspondence to
THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Or stop by a Scudder Funds Center
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they can be
found in the following cities:
Boca Raton
Boston
Chicago
Cincinnati
Los Angeles
New York
Portland, OR
San Diego
San Francisco
Scottsdale
For information on Scudder Treasurers Trust(tm), an institutional cash
management service for corporations, non-profit organizations and trusts
which utilizes certain portfolios of Scudder Fund, Inc.* ($100,000
minimum), call: 1-800-541-7703.
For information on Scudder Institutional Funds,* funds designed to meet the
broad investment management and service needs of banks and other
institutions, call: 1-800-854-8525.
Scudder Investor Relations and Scudder Funds Centers are services
provided through Scudder Investor Services, Inc., Distributor.
* Contact Scudder Investor Services, Inc., Distributor, to receive a
prospectus with more complete information, including management fees
and expenses. Please read it carefully before you invest or send
money.
Celebrating 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven
Clark, Scudder, Stevens & Clark was the first independent investment
counsel firm in the United States. Since its birth, Scudder's pioneering
spirit and commitment to professional long-term investment management have
helped shape the investment industry. In 1928, we introduced the nation's
first no-load mutual fund. Today we offer 36 pure no load(tm) funds,
including the first international mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication
to research and fundamental investment disciplines have helped Scudder
become one of the largest and most respected investment managers in the
world. Though times have changed since our beginnings, we remain committed
to our longstanding principles: managing money with integrity and
distinction, keeping the interests of our clients first; providing access
to investments and markets that may not be easily available to individuals;
and making investing as simple and convenient as possible through friendly,
comprehensive service.
