Filed with the Securities and Exchange Commission on October 30, 1996
File No. 2-55166
File No. 811-2613
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ----
Post-Effective Amendment No. 30
----
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 20
----
Scudder Cash Investment Trust
-----------------------------
(Exact Name of Registrant as Specified in Charter)
Two International Place, Boston, MA 02110-4103
----------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 295-2567
--------------
Thomas F. McDonough
Scudder, Stevens & Clark, Inc.
Two International Place, Boston, MA 02110
-----------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
immediately upon filing pursuant to paragraph (b)
--------
X on November 1, 1996 pursuant to paragraph (b)
--------
60 days after filing pursuant to paragraph (a)(i)
--------
on _______________ pursuant to paragraph (a)(i)
--------
75 days after filing pursuant to paragraph (a)(ii)
--------
on _______________ pursuant to paragraph (a)(ii) of Rule 485.
--------
The Registrant has filed a declaration registering an indefinite amount of
securities pursuant to Rule 24f-2 under the Investment Company Act of 1940, as
amended. The Registrant filed the notice required by Rule 24f-2 for its fiscal
year ended June 30, 1996 on August 29, 1996.
<PAGE>
SCUDDER CASH INVESTMENT TRUST
Calculation of Registration Fee under the Securities Act of 1933
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Offering Aggregate Amount of
Being Amount Price Per Offering Registration
Registered Being Registered Share (1) Price (1,2) Fee (2)
---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Scudder Cash 133,504,439 $1.00 $330,000 $100.00
Investment Trust
</TABLE>
This Post-Effective Amendment No. 30 seeks to register 133,504,439 additional
shares of Scudder Cash Investment Trust under the Securities Act of 1933.
(1) Computed under Rule 457(d) on the basis of the net asset value per share of
registrant's shares of beneficial interest at the close of business on
October 16, 1996. The above calculation shall not be deemed a
representation as to the actual offering price.
(2) Calculated pursuant to Rule 24e-2 under the Investment Company Act of 1940.
<TABLE>
<CAPTION>
<S> <C> <C>
(a) Total number of shares redeemed during previous fiscal year 1,932,327,819
(b) Total number of shares included in (a) previously used under 0
Rule 24e-2 this fiscal year
(c) Total number of shares included in (a) previously used under 1,799,153,380
Rule 24f-2(c) this fiscal year
(d) Total number of shares included in (a) being used to reduce 133,174,439
maximum aggregate offering price in this Post-Effective
Amendment
</TABLE>
<PAGE>
SCUDDER CASH INVESTMENT TRUST
CROSS-REFERENCE SHEET
Items Required By Form N-1A
---------------------------
<TABLE>
<CAPTION>
PART A
- ------
<S> <C> <C> <C>
Item No. Item Caption Prospectus Caption
-------- ------------ ------------------
1. Cover Page COVER PAGE
2. Synopsis EXPENSE INFORMATION
3. Condensed Financial FINANCIAL HIGHLIGHTS
Information
4. General Description of INVESTMENT OBJECTIVE AND POLICIES
Registrant WHY INVEST IN THE FUND?
ADDITIONAL INFORMATION ABOUT POLICIES AND INVESTMENTS
FUND ORGANIZATION
5. Management of the Fund A MESSAGE FROM SCUDDER'S CHAIRMAN
FUND ORGANIZATION--Investment adviser, Transfer agent
SHAREHOLDER BENEFITS--A team approach to investing
TRUSTEES AND OFFICERS
5A. Management Discussion of NOT APPLICABLE
Fund Performance
6. Capital Stock and Securities DISTRIBUTION AND PERFORMANCE INFORMATION--
Dividends and capital gains distributions
FUND ORGANIZATION
SHAREHOLDER BENEFITS--SAIL(TM)--(Scudder Automated
Information Line), Dividend reinvestment plan, T.D.D. service
for the hearing impaired
HOW TO CONTACT SCUDDER
7. Purchase of Securities FUND ORGANIZATION--Underwriter
Being Offered TRANSACTION INFORMATION--Purchasing shares
PURCHASES
SHAREHOLDER BENEFITS--Dividend reinvestment plan
SCUDDER TAX-ADVANTAGED RETIREMENT PLANS
INVESTMENT PRODUCTS AND SERVICES
8. Redemption or Repurchase TRANSACTION INFORMATION--Redeeming shares
EXCHANGES AND REDEMPTIONS
9. Pending Legal Proceedings NOT APPLICABLE
Cross Reference - Page 1
<PAGE>
PART B
- ------
Caption in Statement of
Item No. Item Caption Additional Information
-------- ------------ ----------------------
10. Cover Page COVER PAGE
11. Table of Contents TABLE OF CONTENTS
12. General Information and History ORGANIZATION OF THE FUNDS
13. Investment Objectives and THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES
Policies
14. Management of the Fund TRUSTEES AND OFFICERS
REMUNERATION
15. Control Persons and Principal TRUSTEES AND OFFICERS
Holders of Securities
16. Investment Advisory and Other INVESTMENT ADVISER
Services ADDITIONAL INFORMATION--Experts, Other Information
17. Brokerage Allocation and Other PORTFOLIO TRANSACTIONS
Practices
18. Capital Stock and Other ORGANIZATION OF THE FUNDS
Securities
19. Purchase, Redemption and PURCHASES
Pricing of Securities Being EXCHANGES AND REDEMPTIONS
Offered FEATURES AND SERVICES OFFERED BY THE FUND--
Dividend and Capital Gain Distribution Options
SPECIAL PLAN ACCOUNTS
DIVIDENDS
NET ASSET VALUE
20. Tax Status DIVIDENDS
TAXES
21. Underwriters DISTRIBUTOR
22. Calculation of Performance Data PERFORMANCE INFORMATION
23. Financial Statements FINANCIAL STATEMENTS
</TABLE>
Cross Reference - Page 2
<PAGE>
Scudder
Cash Investment
Trust
Fund Profile
April 1, 1996
<PAGE>
SCUDDER CASH INVESTMENT TRUST
1. What Are The Fund's Objectives?
Scudder Cash Investment Trust is a diversified money market fund that
seeks to maintain stability of capital and, consistent therewith, to
maintain liquidity and provide current income. In pursuit of its
objectives the Fund seeks to maintain a $1.00 share price.
- --------------------------------------------------------------------------------
2. What Does The Fund Invest In?
The Fund invests in U.S. dollar-denominated securities such as
certificates of deposit, commercial paper, and U.S. Treasury
securities. The dollar-weighted average maturity of the Fund's
portfolio will vary with money market conditions, but is always 90
days or less.
All securities must meet credit quality standards established by the
Trustees of the Fund.
- --------------------------------------------------------------------------------
3. What Are The Risks Of Investing In The Fund?
The Fund seeks to eliminate principal risk. Nonetheless, the Fund's
share price is not insured or guaranteed by the U.S. Government, and
there can be no assurance that the Fund will be able to maintain a
stable net asset value of $1.00 per share. The Fund's yield may vary
from day to day.
- --------------------------------------------------------------------------------
4. For Whom Is This Fund Appropriate?
You may wish to consider this Fund if you are seeking safety of
principal as well as current income. Its objectives make the Fund an
appropriate investment for a wide range of goals and for investors
with short- or long-term financial needs.
<PAGE>
5. What Are The Fund's Expenses And Fees?
There are two kinds of expenses that a shareholder may incur, directly
or indirectly, by investing in a mutual fund. These types of expenses,
as they relate to Scudder Cash Investment Trust are:
Shareholder transaction expenses --
Expenses charged directly to your account for various
transactions.
Sales Commission None
Commissions to Reinvest Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund operating expenses --
Expenses paid by the Fund before it distributes its
net investment income, expressed as a percentage of
the Fund's average daily net assets. Figures below
are for the fiscal year ended June 30, 1995.
Investment management fee 0.41%
12b-1 fees None
Other expenses 0.37%
----
Total Fund operating expenses 0.78%
====
Example:
Assuming a 5% annual return and redemption at the end
of each period, the total expenses relating to a
$1,000 investment would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$8 $25 $43 $97
This example assumes reinvestment of all dividends and
distributions and that the total Fund operating expenses
listed above remain the same each year. This example
should not be considered a representation of past or
future expenses or return. Actual Fund expenses and return
vary from year to year and may be higher or lower than
those shown. Please note that there is a $5 service fee if
you request redemption proceeds via wire.
<PAGE>
6. How Has The Fund Performed Historically?
This chart shows how the Fund has performed over the past 10 years,
assuming reinvestment of all distributions. On March 31, 1996, the
Fund's seven-day yield was 4.49%. For the Fund's current yield, call
1-800-343-2890. Performance is historical and may not be indicative of
future results.
BAR CHART INSERTED WITH THE CAPTION:
Total Returns for years
ended December 31:
BAR CHART DATA:
1986 6.40%
1987 6.10
1988 7.18
1989 8.86
1990 7.84
1991 5.96
1992 3.51
1993 2.58
1994 3.70
1995 5.25
- --------------------------------------------------------------------------------
7. Who Manages The Fund?
The Fund's investment adviser is Scudder, Stevens & Clark, Inc., a
leading provider of U.S. and international investment management for
clients throughout the world.
- --------------------------------------------------------------------------------
8. How Can I Invest?
To make it easy for you to open an account, you may invest by mail,
phone, fax, or in person. The minimum initial investment is only
$1,000. Thereafter, additional investments may be made for as little
as $100. You may also exchange Fund shares free of charge within the
Scudder Family of Funds.
- --------------------------------------------------------------------------------
9. How Can I Redeem Shares?
You may redeem shares at the current share price on any business day
by check, telephone, fax, or mail.
- --------------------------------------------------------------------------------
10. When Are Distributions Made?
Dividends are declared daily and distributed monthly. The Fund may
take into account capital gains and losses (other than long-term
capital gains) in its daily dividend declaration. You may elect to
receive distributions in cash or have them reinvested in additional
shares of the Fund.
<PAGE>
11. What Services Does Scudder Provide?
As a shareholder, you'll enjoy:
o professional service from representatives who can answer your
questions and execute your transactions
o automated toll-free touchtone access to account information, share
prices and yields, and to perform transactions
o Scudder's quarterly shareholder newsletter, Perspectives
o regular, informative reports about the performance of your Fund
Scudder wants you to make informed investment decisions. This Fund Profile
contains key information about Scudder Cash Investment Trust. More details
appear in the Fund's accompanying prospectus. Please read it carefully before
you invest. If you have any questions, please call 1-800-225-2470.
<PAGE>
Scudder
Cash Investment
Trust
Fund Profile
July 1, 1996
<PAGE>
SCUDDER CASH INVESTMENT TRUST
1. What Are The Fund's Objectives?
Scudder Cash Investment Trust is a diversified money market fund
that seeks to maintain stability of capital and, consistent
therewith, to maintain liquidity and provide current income. In
pursuit of its objectives the Fund seeks to maintain a $1.00
share price.
2. What Does The Fund Invest In?
The Fund invests in U.S. dollar-denominated securities such as
certificates of deposit, commercial paper, and U.S. Treasury
securities. The dollar-weighted average maturity of the Fund's
portfolio will vary with money market conditions, but is always
90 days or less.
All securities must meet credit quality standards established by
the Trustees of the Fund.
3. What Are The Risks Of Investing In The Fund?
The Fund seeks to eliminate principal risk. Nonetheless, the
Fund's share price is not insured or guaranteed by the U.S.
Government, and there can be no assurance that the Fund will be
able to maintain a stable net asset value of $1.00 per share. The
Fund's yield may vary from day to day.
4. For Whom Is This Fund Appropriate?
You may wish to consider this Fund if you are seeking safety of
principal as well as current income. Its objectives make the Fund
an appropriate investment for a wide range of goals and for
investors with short- or long-term financial needs.
<PAGE>
5. What Are The Fund's Expenses And Fees?
There are two kinds of expenses that a shareholder may incur,
directly or indirectly, by investing in a mutual fund. These
types of expenses, as they relate to Scudder Cash Investment
Trust are:
Shareholder transaction expenses --
Expenses charged directly to your account for various
transactions.
Sales Commission None
Commissions to Reinvest Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund operating expenses --
Expenses paid by the Fund before it distributes its
net investment income, expressed as a percentage of
the Fund's average daily net assets. Figures below
are for the fiscal year ended June 30, 1995.
Investment management fee 0.41%
12b-1 fees None
Other expenses 0.37%
----
Total Fund operating expenses 0.78%
====
Example:
Assuming a 5% annual return and redemption at the end
of each period, the total expenses relating to a
$1,000 investment would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$8 $25 $43 $97
This example assumes reinvestment of all dividends and
distributions and that the total Fund operating expenses
listed above remain the same each year. This example
should not be considered a representation of past or
future expenses or return. Actual Fund expenses and return
vary from year to year and may be higher or lower than
those shown. Please note that there is a $5 service fee if
you request redemption proceeds via wire.
<PAGE>
6. How Has The Fund Performed Historically?
THE PRINTED DOCUMENT CONTAINED A BAR CHART HERE
BAR CHART TITLE: Total returns for years ended December 31:
BAR CHART DATA: Below
1986 6.4%
1987 6.1
1988 7.18
1989 8.86
1990 7.84
1991 5.96
1992 3.51
1993 2.58
1994 3.70
1995 5.25
This chart shows how the Fund has performed over the past 10
years, assuming reinvestment of all distributions. On June 30,
1996, the Fund's seven-day yield was 4.57%. For the Fund's
current yield, call 1-800-343-2890. Performance is historical and
may not be indicative of future results.
7. Who Manages The Fund?
The Fund's investment adviser is Scudder, Stevens & Clark, Inc.,
a leading provider of U.S. and international investment
management for clients throughout the world.
8. How Can I Invest?
To make it easy for you to open an account, you may invest by
mail, phone, fax, or in person. The minimum initial investment is
only $1,000. Thereafter, additional investments may be made for
as little as $100. You may also exchange Fund shares free of
charge within the Scudder Family of Funds.
9. How Can I Redeem Shares?
You may redeem shares at the current share price on any business
day by check, telephone, fax, or mail.
10. When Are Distributions Made?
Dividends are declared daily and distributed monthly. The Fund
may take into account capital gains and losses (other than
long-term capital gains) in its daily dividend declaration. You
may elect to receive distributions in cash or have them
reinvested in additional shares of the Fund.
<PAGE>
11. What Services Does Scudder Provide?
As a shareholder, you'll enjoy:
o professional service from representatives who can answer your
questions and execute your transactions
o automated toll-free touchtone access to account information,
share prices and yields, and to perform transactions
o Scudder's quarterly shareholder newsletter, Perspectives
o regular, informative reports about the performance of your Fund
Scudder wants you to make informed investment decisions. This Fund Profile
contains key information about Scudder Cash Investment Trust. More details
appear in the Fund's accompanying prospectus. Please read it carefully before
you invest. If you have any questions, please call 1-800-225-2470.
<PAGE>
[Image] Scudder Cash Investment Trust Profile [Image]
- ---------------------------------------------------------------------------
The fund profile, a supplement to the full prospectus, is designed as
an easy-to-read summary of fund risks, fees, and objectives. You can
click on any question to link to the Fund's prospectus and get more
information on that topic. Or, if you wish, you can proceed directly
to the Fund's prospectus. Once you have read the prospectus and
considered your investment goals, you can proceed to a Scudder Funds
application.
----------------------------------------------------------------------
Fund Profile
October 1, 1996
----------------------------------------------------------------------
1. What Are The Fund's Objectives?
Scudder Cash Investment Trust is a diversified money market fund that
seeks to maintain stability of capital and, consistent therewith, to
maintain the liquidity of capital and provide current income. In
pursuit of its objectives the Fund seeks to maintain a $1.00 share
price.
2. What Does The Fund Invest In?
The Fund invests in U.S. dollar-denominated securities with remaining
maturities of 397 calendar days or less, except in the case of U.S.
Government securities which may have remaining maturities of 762
calendar days or less. The Fund's investments include obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities; bankers' acceptances; certificates of deposit; and
commercial paper. The dollar-weighted average maturity of the Fund's
portfolio will vary with money market conditions, but is always 90
days or less.
All securities in the Fund's portfolio must meet credit quality
standards pursuant to procedures established by the Trustees of the
Fund. Generally, the Fund may purchase only securities rated, or
issued by a company with comparable securities rated, within the two
highest rating categories of one or more of the following rating
agencies: Moody's Investors Service, Inc., Standard & Poor's and Fitch
Investors Service, Inc., or, if unrated, their equivalent in the
opinion of the Fund's investment adviser, Scudder, Stevens & Clark,
Inc.
3. What Are The Risks Of Investing In The Fund?
The Fund seeks to eliminate principal risk. Nonetheless, the Fund's
share price is not insured or guaranteed by the U.S. Government, and
there can be no assurance that the Fund will be able to maintain a
stable net asset value of $1.00 per share. The Fund's yield may vary
from day to day.
4. For Whom Is This Fund Appropriate?
You may wish to consider this Fund if you are seeking safety of
principal as well as current income. Its objectives make the Fund an
appropriate investment for a wide range of goals and for investors
with short- or long-term financial needs.
5. What Are The Fund's Expenses And Fees?
There are two kinds of expenses that a shareholder may incur, directly
or indirectly, by investing in a mutual fund. These types of expenses,
as they relate to Scudder Cash Investment Trust are:
Shareholder transaction expenses --
Expenses charged directly to your account for various transactions.
Sales Commission None
Commissions to Reinvest Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund operating expenses --
Expenses paid by the Fund before it distributes its net investment
income, expressed as a percentage of the Fund's average daily net
assets. Figures below are for the fiscal year ended June 30, 1995.
Investment management fee 0.41%
12b-1 fees None
Other expenses 0.37%
------
Total Fund operating expenses 0.78%
====
Example:
Assuming a 5% annual return and redemption at the end of each
period, the total expenses relating to a $1,000 investment would be:
1 Year 3 Years 5 Years 10 Years
$8 $ 25 $43 $97
This example assumes reinvestment of all dividends and distributions
and that the total Fund operating expenses listed above remain the
same each year. This example should not be considered a representation
of past or future expenses or return. Actual Fund expenses and return
vary from year to year and may be higher or lower than those shown.
Please note that there is a $5 service fee if you request redemption
proceeds via wire.
6. How Has The Fund Performed Historically?
This chart shows how the Fund has performed over the past 10 years,
assuming reinvestment of all distributions. On September 30, 1996, the
Fund's seven-day yield was 4.60%. For the Fund's current yield, call
1-800-343-2890. Performance is historical and may not be indicative of
future results.
THE PRINTED DOCUMENT CONTAINED A BAR CHART HERE
BAR CHART TITLE: Total returns for years ended December 31:
BAR CHART DATA: Below
1986 6.4%
1987 6.10
1988 7.18
1989 8.86
1990 7.84
1991 5.96
1992 3.51
1993 2.58
1994 3.70
1995 5.25
7. Who Manages The Fund?
The Fund's investment adviser is Scudder, Stevens & Clark, Inc., a
leading provider of U.S. and international investment management for
clients throughout the world. The Fund is managed by a team of Scudder
investment professionals who each play an important role in the Fund's
management process.
Lead Portfolio Manager Stephen L. Akers assumed responsibility for the
Fund's day-to-day management in 1995. Mr. Akers joined the Fund's team
in 1994 and has managed several fixed-income portfolios since joining
Scudder in 1984. Robert T. Neff, Portfolio Manager, joined Scudder in
1972 and has more than 20 years experience managing short-term
fixed-income assets. Debra A. Hanson, Portfolio Manager, assists with
the development and execution of investment strategy and has been with
Scudder since 1983. K. Sue Cote, Portfolio Manager, joined Scudder in
1983 and has 12 years experience working with short-term fixed-income
investments.
8. How Can I Invest?
To make it easy for you to open an account, you may invest by mail,
phone, fax, or in person. The current minimum initial investment is
$1,000 ($500 for IRA's). Effective January 1, 1997, the minimum
initial investment will be $2,500 ($1,000 for IRA's), except that
shareholders may open a regular account with a minimum of $1,000 if an
investment program of $100/month is established. After January 1,
1997, a shareholder who maintains an account balance of less than
$2,500 without establishing an investment program, may be assessed an
annual fee of $10.00, payable to the Fund. You may also exchange Fund
shares free of charge within the Scudder Family of Funds.
9. How Can I Redeem Shares?
You may redeem shares at the current share price on any business day
by check, telephone, fax, or mail.
10. When Are Distributions Made?
Dividends are declared daily and distributed monthly. The Fund may
take into account capital gains and losses (other than long-term
capital gains) in its daily dividend declaration. You may elect to
receive distributions in cash or have them reinvested in additional
shares of the Fund.
Generally, dividends from net investment income are taxable to
shareholders as ordinary income whether received in cash or additional
shares. Long-term capital gains distributions, if any, are taxable as
long-term capital gains regardless of the length of time shareholders
have owned their shares. Short-term capital gains and any other
taxable income distributions are taxable as ordinary income. It is not
expected that dividends will qualify for the dividends-received
deduction for corporations.
11. What Services Does Scudder Provide?
As a shareholder, you'll enjoy:
o professional service from representatives who can answer your
questions and execute your transactions
o automated toll-free touchtone access to account information,
share prices and yields, and to perform transactions
o Scudder's quarterly shareholder newsletter, Scudder Perspectives
o regular, informative reports about the performance of your Fund
[Image]
----------------------------------------------------------------------
[Image]Scudder wants you to make informed investment decisions. This
Fund Profile contains key information about the Fund. If you would
like more information before you invest, please consult the Fund's
accompanying prospectus. For details about the Fund's holdings or
recent investment strategies, please review the Fund's most recent
annual or semiannual report. The reports are free and may be ordered
by calling 1-800-225-2470.
----------------------------------------------------------------------
Contact Scudder
<PAGE>
This prospectus sets forth concisely the information about Scudder Cash
Investment Trust, an open-end management investment company, that a prospective
investor should know before investing. Please retain it for future reference.
Shares of Scudder Cash Investment Trust are not insured or guaranteed by the
U.S. Government. Scudder Cash Investment Trust 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.
If you require more detailed information, a Statement of Additional Information
dated November 1, 1996, as amended from time to time, may be obtained without
charge by writing Scudder Investor Services, Inc., Two International Place,
Boston, MA 02110-4103 or calling 1-800-225-2470. The Statement, which is
incorporated by reference into this prospectus, has been filed with the
Securities and Exchange Commission.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Contents--see page 4.
Scudder
Cash Investment
Trust
Prospectus
November 1, 1996
A pure no-load(TM) (no sales charges) mutual fund seeking stability of capital
while maintaining the liquidity of capital and providing current income from
money market securities.
<PAGE>
Expense information
How to compare a Scudder pure no-load(TM) fund
This information is designed to help you understand the various costs and
expenses of investing in Scudder Cash Investment Trust (the "Fund"). By
reviewing this table and those in other mutual funds' prospectuses, you can
compare the Fund's fees and expenses with those of other funds. With Scudder's
pure no-load(TM) funds, you pay no commissions to purchase or redeem shares, or
to exchange from one Fund to another. As a result, all of your investment goes
to work for you.
1) Shareholder transaction expenses: Expenses charged directly to your
individual account in the Fund for various transactions.
Sales commissions to purchase shares (sales load) NONE
Commissions to reinvest dividends NONE
Redemption fees NONE*
Fees to exchange shares NONE
2) Annual Fund operating expenses: Expenses paid by the Fund before it
distributes its net investment income, expressed as a percentage of the
Fund's average daily net assets for the fiscal year ended June 30, 1996.
Investment management fee 0.41%
12b-1 fees NONE
Other expenses 0.42%
-----
Total Fund operating expenses 0.83%
=====
Example
Based on the level of total Fund operating expenses listed above, the total
expenses relating to a $1,000 investment, assuming a 5% annual return and
redemption at the end of each period, are listed below. Investors do not pay
these expenses directly; they are paid by the Fund before it distributes its
net investment income to shareholders. (As noted above, the Fund has no
redemption fees of any kind.)
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$8 $26 $46 $103
See "Fund organization--Investment adviser" for further information about the
investment management fee. This example assumes reinvestment of all dividends
and distributions and that the percentage amounts listed under "Annual Fund
operating expenses" remain the same each year. This example should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than
those shown.
* You may redeem by writing or calling the Fund or by Write-A-Check. If you
wish to receive your redemption proceeds via wire, there is a $5 wire
service fee. For additional information, please refer to "Transaction
information--Redeeming shares."
2
<PAGE>
Financial highlights
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the audited financial
statements.
If you would like more detailed information concerning the Fund's performance, a
complete portfolio listing and audited financial statements are available in the
Fund's Annual Report dated June 30, 1996 and may be obtained without charge by
writing or calling Scudder Investor Services, Inc.
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1982 1991 1990 1989 1988 1987
-------------------------------------------------------------------------------------------------
<S> <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
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment
income ................. .048 .048 .027 .027 .047 .069 .080 .082 .064 .056
Distributions from net
investment income
and net realized
capital gains .......... (.048) (.048) (.027) (.027) (.047) (.069) (.080) (.082) (.064) (.056)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period .......... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%) ......... 4.89 4.90 2.77 2.75 4.76 7.13 8.23 8.49 6.59 5.71
RATIOS AND
SUPPLEMENTAL DATA
Net assets, end
of period ($ millions).. 1,387 1,520 1,430 1,119 1,361 1,736 1,644 1,563 1,370 1,144
Ratio of operating
expenses to average
daily net assets (%) ... .83 .78 .82 .78 .70 .66 .67 .66 .68 .68
Ratio of net investment
income to average
daily net assets (%) ... 4.79 4.84 2.78 2.72 4.58 6.91 7.93 8.21 6.44 5.55
</TABLE>
3
<PAGE>
A message from Scudder's chairman
Scudder, Stevens & Clark, Inc., investment adviser to the Scudder Family of
Funds, was founded in 1919. We offered America's first no-load mutual fund in
1928. Today, we manage in excess of $100 billion for many private accounts and
over 50 mutual fund portfolios. We manage the mutual funds in a special program
for the American Association of Retired Persons, as well as the fund options
available through Scudder Horizon Plan, a tax-advantaged variable annuity. We
also advise The Japan Fund and nine closed-end funds that invest in countries
around the world.
The Scudder Family of Funds is designed to make investing easy and less costly.
It includes money market, tax free, income and growth funds as well as IRAs,
401(k)s, Keoghs and other retirement plans.
Services available to all shareholders include toll-free access to the
professional service representatives of Scudder Investor Relations, easy
exchange among funds, shareholder reports, informative newsletters and the
walk-in convenience of Scudder Funds Centers.
All Scudder mutual funds are pure no-load(TM). This means you pay no commissions
to purchase or redeem your shares or to exchange from one fund to another. There
are no "12b-1" fees either, which many other funds now charge to support their
marketing efforts. All of your investment goes to work for you. We look forward
to welcoming you as a shareholder.
/s/Daniel Pierce
Scudder Cash Investment Trust
Investment objectives
o stability of capital and, consistent therewith, to maintain the liquidity
of capital and to provide current income from money market securities
Investment characteristics
o stable share price
o fluctuating yield
o daily liquidity and free check writing
o dividends declared daily and paid monthly
Contents
Investment objectives and policies 5
Why invest in the Fund? 6
Additional information about policies and investments 6
Distribution and performance information 7
Fund organization 8
Transaction information 8
Purchases 10
Exchanges and redemptions 11
Shareholder benefits 14
Trustees and Officers 17
Investment products and services 18
How to contact Scudder 19
4
<PAGE>
Invstment objectives and policies
Investment objectives
The investment objectives of Scudder Cash Investment Trust (the "Fund"), a
diversified, open-end management investment company, are to maintain the
stability of capital and, consistent therewith, to maintain the liquidity of
capital and to provide current income. The Fund seeks to maintain a constant net
asset value of $1.00 per share and declares dividends daily.
Except as otherwise indicated, the Fund's investment objectives and policies are
not fundamental and may be changed without a vote of shareholders. If there is a
change in investment objectives, shareholders should consider whether the Fund
remains an appropriate investment in light of their then current financial
position and needs. There can be no assurance that the Fund's objectives will be
met.
Investments
The Fund purchases U.S. dollar-denominated securities with remaining maturities
of 397 calendar days or less, except in the case of U.S. Government securities
which may have remaining maturities of 762 calendar days or less. The
dollar-weighted average maturity of the Fund's portfolio will vary with money
market conditions, but is always 90 days or less. All securities in the Fund's
portfolio must meet credit quality standards pursuant to procedures established
by the Trustees. Generally, the Fund may purchase only securities which are
rated, or issued by a company with comparable securities rated, within the two
highest quality rating categories of one or more of the following rating
agencies: Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's ("S&P")
and Fitch Investors Service, Inc. ("Fitch"). If a security is unrated, the Fund
may purchase the security if, in the opinion of the Fund's investment adviser,
Scudder, Stevens & Clark, Inc. (the "Adviser"), the credit quality of the
security is deemed equivalent to the rated securities mentioned above.
Amendments have been proposed to the federal rules regulating quality, maturity
and diversification requirements of money market funds, like the Fund. If the
amendments are adopted, the Fund intends to comply with such new requirements.
The Fund may invest in short-term securities consisting of: obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities;
obligations of supranational organizations such as the International Bank for
Reconstruction and Development (the World Bank); obligations of domestic banks
and foreign branches of domestic banks, including bankers' acceptances,
certificates of deposit, deposit notes and time deposits; and obligations of
savings and loan institutions.
The Fund may also invest in: instruments whose credit has been enhanced by banks
(letters of credit), insurance companies (surety bonds) or other corporate
entities (corporate guarantees); corporate obligations, including commercial
paper, notes, bonds, loans and loan participations; securities with variable or
floating interest rates; asset-backed securities, including certificates,
participations and notes; and municipal securities, including notes, bonds and
participation interests, either taxable or tax free.
In addition, the Fund may invest in repurchase agreements and securities with
put features.
Each of the above referenced eligible investments and investment practices have
certain risks associated with them. For a more complete description, please
refer to the Fund's Statement of Additional Information.
5
<PAGE>
Why invest in the Fund?
The Fund can be appropriate for investors who are concerned about stability of
principal. If investors are just starting out and want their assets to grow in a
stable investment, if they want to keep their nest egg safe and handy, or if
they are simply looking to "park" their investment capital for a short time, a
money market fund may be a good choice.
One appealing characteristic of a money market fund is that it seeks to maintain
a stable share price. Thus, not only should investors have the value of their
initial investment maintained, they ordinarily will have earnings on that
investment, plus earnings on those earnings, if dividends are reinvested.
In general, the level of income from a money market fund is affected by the
quality of the Fund's investments. The Fund invests in a broad range of money
market securities which are of high quality.
Another important feature of the Fund is daily liquidity. Investors can gain
access to their cash by toll-free telephone redemption or with our convenient
check writing option. Shareholders may write checks of at least $100.
In addition, the Fund offers all the benefits of the Scudder Family of Funds.
Scudder, Stevens & Clark, Inc. manages a diverse family of pure no-load(TM)
funds and provides a wide range of services to help investors meet their
investment needs. Please refer to "Investment products and services" for
additional information.
Additional information about policies and investments
Investment restrictions
The Fund has adopted certain fundamental policies which may not be changed
without a vote of shareholders and which are designed to reduce the Fund's
investment risk. The Fund may not borrow money except as a temporary measure for
extraordinary or emergency purposes and may not make loans except through the
lending of portfolio securities, the purchase of debt obligations or through
repurchase agreements.
In addition, as a matter of nonfundamental policy, the Fund may not invest more
than 10% of its net assets, in the aggregate, in securities which are not
readily marketable, restricted securities and repurchase agreements maturing in
more than seven days. The Fund may not invest more than 5% of its total assets
in restricted securities.
A complete description of these and other policies and restrictions is contained
under "Investment Restrictions" in the Fund's Statement of Additional
Information.
The high quality securities in which the Fund invests are divided into "first
tier" and "second tier" securities. First tier securities are those securities
generally rated in the highest category by at least two rating agencies (or one,
if only one rating agency has rated the security). Securities which are
generally rated in the two highest categories by at least two rating agencies
(or one, if only one rating agency has rated the security) and which do not
qualify as first tier securities are second tier securities. The Adviser may
determine, pursuant to procedures approved by the Trustees, that an unrated
security is equivalent to a first tier or second tier security. The Fund will
not invest more than 5% of its total assets in second tier securities or more
than 1% of its total assets in second tier securities of a single issuer.
6
<PAGE>
Repurchase agreements
As a means of earning income for periods as short as overnight, the Fund may
enter into repurchase agreements with selected banks and broker/dealers. Under a
repurchase agreement, the Fund acquires securities, subject to the seller's
agreement to repurchase those securities at a specified time and price. If the
seller under a repurchase agreement becomes insolvent, the Fund's right to
dispose of the securities might be restricted, or the value of the securities
may decline before the Fund is able to dispose of them. In the event of the
commencement of bankruptcy or insolvency proceedings with respect to the seller
of the securities before repurchase under a repurchase agreement, the Fund may
encounter delay and incur costs, including a decline in the value of the
securities, before being able to sell the securities.
Distribution and performance information
Dividends and capital gains distributions
Dividends are declared daily and distributed monthly to shareholders. The Fund
may take into account capital gains and losses (other than long-term capital
gains) in its daily dividend declaration. The Fund may make additional
distributions for tax purposes, if necessary. Any dividends or capital gains
distributions declared in October, November or December with a record date in
such a month and paid during the following January will be treated by
shareholders for federal income tax purposes as if received on December 31 of
the calendar year declared. According to preference, shareholders may receive
distributions in cash or have them reinvested in additional shares of the Fund.
If an investment is in the form of a retirement plan, all dividends and capital
gains distributions must be reinvested into the shareholder's account.
Generally, dividends from net investment income are taxable to shareholders as
ordinary income whether received in cash or additional shares.
Long-term capital gains distributions, if any, are taxable as long-term capital
gains regardless of the length of time shareholders have owned their shares.
Short-term capital gains and any other taxable income distributions are taxable
as ordinary income. It is not expected that dividends will qualify for the
dividends-received deduction for corporations.
The Fund sends detailed tax information to shareholders about the amount and
type of its distributions by January 31 of the following year.
Performance information
From time to time, quotations of the Fund's performance may be included in
advertisements, sales literature or shareholder reports. All performance figures
are historical, show the performance of a hypothetical investment and are not
intended to indicate future performance. The "yield" of the Fund refers to
income generated by an investment in the Fund over a specified seven-day period.
Yield is expressed as an annualized percentage. The "effective yield" of the
Fund is expressed similarly but, when annualized, the income earned by an
investment in the Fund is assumed to be reinvested and will reflect the effects
of compounding. "Total return" is the change in value of an investment in the
Fund for a specified period. The "average annual total return" of the Fund is
the average annual compound rate of return of an investment in the Fund assuming
the investment has been held for one year, five years and ten years as of a
stated ending date. "Cumulative total return" represents the cumulative change
in value of an investment in the Fund for various periods. All types of total
return calculations assume that all dividends and capital gains distributions
during the period were reinvested in shares of the Fund. Performance will vary
based upon, among other things, changes in market conditions and the level of
the Fund's expenses.
7
<PAGE>
Fund organization
Scudder Cash Investment Trust is a diversified, open-end management investment
company registered under the Investment Company Act of 1940 (the "1940 Act").
The Fund was organized as a Massachusetts business trust in December 1975.
The Fund's activities are supervised by its Board of Trustees. Shareholders have
one vote for each share held on matters on which they are entitled to vote. The
Fund is not required to and has no current intention of holding annual
shareholder meetings, although special meetings may be called for purposes such
as electing or removing Trustees, changing fundamental investment policies or
approving an investment advisory contract. Shareholders will be assisted in
communicating with other shareholders in connection with removing a Trustee as
if Section 16(c) of the 1940 Act were applicable.
Investment adviser
The Fund retains the investment management firm of Scudder, Stevens & Clark,
Inc., a Delaware corporation, to manage the Fund's daily investment and business
affairs subject to the policies established by the Board of Trustees. The
Trustees have overall responsibility for the management of the Fund under
Massachusetts law.
The Adviser received an investment advisory fee for its services which totaled
0.41% of the Fund's average daily net assets during the fiscal year ended June
30, 1996. The fee is graduated so that increases in the Fund's net assets may
result in a lower average fee rate and decreases in the Fund's net assets may
result in a higher average fee rate.
All of the Fund's expenses are paid out of gross investment income. Shareholders
pay no direct charges or fees for investment or administrative services.
Scudder, Stevens & Clark, Inc., is located at Two International Place, Boston,
Massachusetts.
Transfer agent
Scudder Service Corporation, P.O. Box 2291, Boston, Massachusetts 02107-2291, a
subsidiary of the Adviser, is the transfer, shareholder servicing and
dividend-paying agent for the Fund.
Underwriter
Scudder Investor Services, Inc., a subsidiary of the Adviser, is the Fund's
principal underwriter. Scudder Investor Services, Inc. confirms, as agent, all
purchases of shares of the Fund. Scudder Investor Relations is a telephone
information service provided by Scudder Investor Services, Inc.
Fund accounting agent
Scudder Fund Accounting Corporation, a subsidiary of the Adviser, is responsible
for determining the daily net asset value per share and maintaining the general
accounting records of the Fund.
Custodian
State Street Bank and Trust Company is the Fund's custodian.
Transaction information
Purchasing shares
Purchases are executed at the next calculated net asset value per share after
the Fund's transfer agent receives the purchase request in good order. Purchases
are made in full and fractional shares. (See "Share price.")
By check. If you purchase shares with a check that does not clear, your purchase
will be canceled and you will be subject to any losses or fees incurred in the
transaction. Checks must be drawn on or payable through a U.S. bank. If you
purchase shares by check and redeem them within seven business days of purchase,
the Fund may hold redemption proceeds until the purchase check has cleared. If
you purchase shares by federal funds wire, you may avoid this delay. Redemption
8
<PAGE>
requests by telephone or by "Write-A-Check" prior to the expiration of the
seven-day period will not be accepted.
By wire. To open a new account by wire, first call Scudder at 1-800-225-5163 to
obtain an account number. A representative will instruct you to send a
completed, signed application to the transfer agent. Accounts cannot be opened
without a completed, signed application and a Scudder fund account number.
Contact your bank to arrange a wire transfer to:
The Scudder Funds
State Street Bank and Trust Company
Boston, MA 02101
ABA Number 011000028
DDA Account 9903-5552
Your wire instructions must also include:
- -- the name of the fund in which the money is to be invested,
- -- the account number of the fund, and
- -- the name(s) of the account holder(s).
The account will be established once the application and money order are
received in good order.
You may also make additional investments of $100 or more to your existing
account by wire.
By exchange. Your new account will have the same registration and address as
your existing account.
The exchange requirements for corporations, other organizations, trusts,
fiduciaries, agents, institutional investors and retirement plans may be
different from those for regular accounts. Please call 1-800-225-5163 for more
information, including information about the transfer of special account
features.
You can also make exchanges among your Scudder fund accounts on SAIL, the
Scudder Automated Information Line, by calling 1-800-343-2890.
By "AutoBuy." If you elected "AutoBuy" for your account, you can call toll-free
to purchase shares. The money will be automatically transferred from your
predesignated bank checking account. Your bank must be a member of the Automated
Clearing House for you to use this service. If you did not elect "AutoBuy," call
1-800-225-5163 for more information.
To purchase additional shares, call 1-800-225-5163. Purchases must be for at
least $250 but not more than $250,000. Proceeds in the amount of your purchase
will be transferred from your bank checking account in two or three business
days following your call. For requests received by the close of regular trading
on the Exchange, shares will be purchased at the net asset value per share
calculated at the close of trading on the day of your call. "AutoBuy" requests
received after the close of regular trading on the Exchange will begin their
processing and be purchased at the net asset value calculated the following
business day.
If you purchase shares by "AutoBuy" and redeem them within seven days of the
purchase, the Fund may hold the redemption proceeds for a period of up to seven
business days. If you purchase shares and there are insufficient funds in your
bank account, the purchase will be canceled and you will be subject to any
losses or fees incurred in the transaction. "AutoBuy" transactions are not
available for Scudder IRA accounts and most other retirement plan accounts.
Redeeming shares
The Fund allows you to redeem shares (i.e., sell them back to the Fund) without
redemption fees.
By telephone. This is the quickest and easiest way to sell Fund shares. If you
elected telephone redemption to your bank on your application, you can call to
request that federal funds be sent to your authorized bank account. If you did
not elect telephone redemption to your bank on your application, call
1-800-225-5163 for more information.
(Continued on page 12)
9
<PAGE>
Purchases
<TABLE>
<S> <C> <C> <C>
Opening
an account Minimum initial investment: $2,500; IRAs $1,000
Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums.
See appropriate plan literature.
Make checks o By Mail Send your completed and signed application and check
payable to "The
Scudder Funds." by regular mail to: or by express, registered,
or certified mail to:
The Scudder Funds Scudder Shareholder
P.O. Box 2291 Service Center
Boston, MA 42 Longwater Drive
02107-2291 Norwell, MA
02061-1612
o By Wire Please see Transaction information--Purchasing shares--
By wire for details, including the ABA wire transfer number.
Then call 1-800-225-5163 for instructions.
o In Person Visit one of our Funds Centers to complete your application
with the help of a Scudder representative. Funds Center
locations are listed under Shareholder benefits.
-----------------------------------------------------------------------------------------------------------------------
Purchasing Minimum additional investment: $100; IRAs $50
additional Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums.
shares See appropriate plan literature.
Make checks o By Mail Send a check with a Scudder investment slip, or with a letter of
payable to "The instruction including your account number and the complete
Scudder Funds." Fund name, to the appropriate address listed above.
o By Wire Please see Transaction information--Purchasing shares--
By wire for details, including the ABA wire transfer number.
o In Person Visit one of our Funds Centers to make an additional
investment in your Scudder fund account. Funds Center
locations are listed under Shareholder benefits.
o By Telephone Please see Transaction information--Purchasing shares--
By AutoBuy or By telephone order for more details.
o By Automatic You may arrange to make investments on a regular basis
Investment Plan through automatic deductions from your bank checking
($50 minimum) account. Please call 1-800-225-5163 for more information and an
enrollment form.
</TABLE>
10
<PAGE>
Exchanges and redemptions
<TABLE>
<S> <C> <C>
Exchanging Minimum investments: $2,500 to establish a new account;
shares $100 to exchange among existing accounts
o By Telephone To speak with a service representative, call 1-800-225-5163 from
8 a.m. to 8 p.m. eastern time or to access SAIL(TM), Scudder's Automated
Information Line, call 1-800-343-2890 (24 hours a day).
o By Mail Print or type your instructions and include:
or Fax - the name of the Fund and the account number you are exchanging from;
- your name(s) and address as they appear on your account;
- the dollar amount or number of shares you wish to exchange;
- the name of the Fund you are exchanging into;
- your signature(s) as it appears on your account; and
- a daytime telephone number.
Send your instructions
by regular mail to: or by express, registered, or by fax to:
or certified mail to:
The Scudder Funds Scudder Shareholder 1-800-821-6234
P.O. Box 2291 Service Center
Boston, MA 02107-2291 42 Longwater Drive
Norwell, MA
02061-1612
-----------------------------------------------------------------------------------------------------------------------
Redeeming o By Telephone To speak with a service representative, call 1-800-225-5163 from
shares 8 a.m. to 8 p.m. eastern time or to access SAIL(TM), Scudder's Automated
Information Line, call 1-800-343-2890 (24 hours a day). You may have
redemption proceeds sent to your predesignated bank account, or
redemption proceeds of up to $100,000 sent to your address of record.
o By "Write a You may redeem shares by writing checks against your account balance as often as
Check" you like for at least $100, but not more than $5,000,000.
o By Mail Send your instructions for redemption to the appropriate address or fax number
or Fax above and include:
- the name of the Fund and account number you are redeeming from;
- your name(s) and address as they appear on your account;
- the dollar amount or number of shares you wish to redeem;
- your signature(s) as it appears on your account; and
- a daytime telephone number.
A signature guarantee is required for redemptions over $50,000.
See Transaction information--Redeeming shares.
o By Automatic You may arrange to receive automatic cash payments periodically.
Withdrawal Call 1-800-225-5163 for more information and an enrollment form.
Plan
</TABLE>
11
<PAGE>
Transaction information (cont'd)
(Continued from page 9)
Redemption proceeds will be wired to your bank unless otherwise requested. If
your bank cannot receive federal reserve wires, redemption proceeds will be
mailed to your bank. There will be a $5 charge for all wire redemptions.
You can also make redemptions from your Scudder fund account on SAIL by calling
1-800-343-2890.
If you open an account by wire, you cannot redeem shares by telephone until the
Fund's transfer agent has received your completed and signed application.
Telephone redemption is not available for shares held in Scudder IRA accounts
and most other Scudder retirement plan accounts.
In the event that you are unable to reach the Fund by telephone, you should
write to the Fund; see "How to contact Scudder" for the address.
By "AutoSell." If you elected "AutoSell" for your account, you can call
toll-free to redeem shares. The money will be automatically transferred to your
predesignated bank checking account. Your bank must be a member of the Automated
Clearing House for you to use this service. If you did not elect "AutoSell,"
call 1-800-225-5163 for more information.
To redeem shares, call 1-800-225-5163. Redemptions must be for at least $250.
Proceeds in the amount of your redemption will be transferred to your bank
checking account in two or three business days following your call. For requests
received by the close of regular trading on the Exchange, shares will be
redeemed at the net asset value per share calculated at the close of trading on
the day of your call. "AutoSell" requests received after the close of regular
trading on the Exchange will begin their processing and be redeemed at the net
asset value calculated the following business day.
"AutoSell" transactions are not available for Scudder IRA accounts and most
other retirement plan accounts.
Signature guarantees. For your protection and to prevent fraudulent redemptions,
on written redemption requests in excess of $50,000 we require an original
signature and an original signature guarantee for each person in whose name the
account is registered. (The Fund reserves the right, however, to require a
signature guarantee for all redemptions.) You can obtain a signature guarantee
from most banks, credit unions or savings associations, or from broker/dealers,
municipal securities broker/dealers, government securities broker/dealers,
national securities exchanges, registered securities associations or clearing
agencies deemed eligible by the Securities and Exchange Commission. Signature
guarantees by notaries public are not acceptable. Redemption requirements for
corporations, other organizations, trusts, fiduciaries, agents, institutional
investors and retirement plans may be different from those for regular accounts.
For more information, please call 1-800-225-5163.
By "Write-A-Check." You may redeem shares by writing checks against your account
balance for at least $100. Your Fund investments will continue to earn dividends
until your check is presented to the Fund for payment.
Checks will be returned by the Fund's transfer agent if there are insufficient
shares to meet the withdrawal amount. You should not attempt to close an account
by check because the exact balance at the time the check clears will not be
known when the check is written.
Telephone transactions
Shareholders automatically receive the ability to exchange by telephone and the
right to redeem by telephone up to $100,000 to their address of record.
Shareholders also may, by telephone, request that redemption proceeds be sent to
a predesignated bank account. The Fund uses procedures designed to give
reasonable assurance that telephone instructions are genuine, including
12
<PAGE>
recording telephone calls, testing a caller's identity and sending written
confirmation of telephone transactions. If the Fund does not follow such
procedures, it may be liable for losses due to unauthorized or fraudulent
telephone instructions. The Fund will not be liable for acting upon instructions
communicated by telephone that it reasonably believes to be genuine.
Share price
Purchases and redemptions, including exchanges, are made at net asset value.
Scudder Fund Accounting Corporation determines net asset value per share as of
twelve o'clock noon and as of the close of regular trading on the New York Stock
Exchange (the "Exchange"), normally 4 p.m. eastern time, on each day the
Exchange is open for trading. Net asset value per share is calculated by
dividing the value of total Fund assets, less all liabilities, by the total
number of shares outstanding. In calculating the net asset value per share, the
Fund uses the current market value of the securities. However, for securities
with sixty days or less to maturity, the Fund uses the amortized cost value.
Processing time
Purchases made by wire and received by the Fund's transfer agent before noon on
any business day are executed at noon on that day and begin earning income the
same day. Those made by wire between noon and the close of regular trading on
the Exchange on any business day are executed at the close of trading the same
day and begin earning income the next business day. Purchases made by check are
executed on the day the check is received in good order by the Fund's transfer
agent and begin earning income on the next business day. Redemption requests
received in good order by the Fund's transfer agent between noon and the close
of regular trading on the Exchange are executed at the net asset value
calculated at the close of regular trading on that day and will earn a dividend
on the redeemed shares that day. If a redemption request is received by noon,
proceeds will normally be wired that day, if requested by the shareholder, but
no dividend will be earned on the redeemed shares on that day.
If you wish to make a purchase of $500,000 or more, you should notify Scudder
Investor Relations by calling 1-800-225-5163.
The Fund will normally send redemption proceeds within one business day
following the redemption request, but may take up to seven business days (or
longer in the case of shares recently purchased by check).
If you wish to make a purchase of $500,000 or more, you should notify Scudder
Investor Relations by calling 1-800-225-5163.
The Fund will normally send redemption proceeds within one business day
following the redemption request, but may take up to seven business days (or
longer in the case of shares recently purchased by check).
Purchase Restrictions
The Fund and Scudder Investor Services, Inc. each reserves the right to reject
purchases of Fund shares (including exchanges) for any reason.
Tax identification number
Be sure to complete the Tax Identification Number section of the Fund's
application when you open an account. Federal tax law requires the Fund to
withhold 31% of taxable dividends and capital gains distributions from accounts
(other than those of certain exempt payees) without a certified Social Security
13
<PAGE>
Transaction information (cont'd)
or tax identification number and certain other certified information or upon
notification from the IRS or a broker that withholding is required. The Fund
reserves the right to reject new account applications without a certified Social
Security or tax identification number. The Fund also reserves the right,
following 30 days' notice, to redeem all shares in accounts without a certified
Social Security or tax identification number. A shareholder may avoid
involuntary redemption by providing the Fund with a tax identification number
during the 30-day notice period.
Minimum balances
Shareholders should maintain a share balance worth at least $2,500, which amount
may be changed by the Board of Trustees. Scudder retirement plans have similar
or lower minimum share balance requirements. A shareholder may open an account
with at least $1,000, if an automatic investment plan of $100/month is
established.
Shareholders who maintain a non-fiduciary account balance of less than $2,500 in
the Fund, without establishing an automatic investment plan, will be assessed an
annual $10.00 per fund charge with the fee to be paid to the Fund. The $10.00
charge will not apply to shareholders with a combined household account balance
in any of the Scudder Funds of $25,000 or more. The Fund reserves the right,
following 60 days' written notice to shareholders, to redeem all shares in
accounts below $250, including accounts of new investors, where a reduction in
value has occurred due to a redemption or exchange out of the account. The Fund
will mail the proceeds of the redeemed account to the shareholder. Reductions in
value that result solely from market activity will not trigger an involuntary
redemption. Retirement accounts and certain other accounts will not be assessed
the $10.00 charge or be subject to automatic liquidation. Please refer to
"Exchanges and Redemptions--Other information" in the Fund's Statement of
Additional Information for more information.
Third party transactions
If purchases and redemptions of Fund shares are arranged and settlement is made
at an investor's election through a member of the National Association of
Securities Dealers, Inc., other than Scudder Investor Services, Inc., that
member may, at its discretion, charge a fee for that service.
Shareholder benefits
Experienced professional management
Scudder, Stevens & Clark, Inc., one of the nation's most experienced investment
management firms, actively manages your Scudder fund investment. Professional
management is an important advantage for investors who do not have the time or
expertise to invest directly in individual securities.
A team approach to investing
Scudder Cash Investment Trust is managed by a team of Scudder investment
professionals who each play an important role in the Fund's management process.
Team members work together to develop investment strategies and select
securities for the Fund's portfolio. They are supported by Scudder's large staff
of economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. Scudder believes
its team approach benefits Fund investors by bringing together many disciplines
and leveraging Scudder's extensive resources.
Lead Portfolio Manager David Wines assumed responsibility for the Fund's
day-to-day management in 1996. Mr. Wines focuses on overall investment strategy
and has eight years of investment industry experience. Stephen L. Akers,
Portfolio Manager, joined the Fund's team in 1994 and has managed several
fixed-income portfolios since joining Scudder in 1984. Debra A. Hanson,
Portfolio Manager, assists with the development and execution of investment
strategy and has been with Scudder since 1983.
14
<PAGE>
K. Sue Cote, Portfolio Manager, joined Scudder in 1983 and has 13 years
experience working with short-term fixed-income investments.
SAIL(TM)--Scudder Automated Information Line
For personalized account information including fund prices, yields and account
balances, to perform transactions in existing Scudder fund accounts, or to
obtain information on any Scudder fund, shareholders can call Scudder's
Automated Information Line (SAIL) at 1-800-343-2890, 24 hours a day. During
periods of extreme economic or market changes, or other conditions, it may be
difficult for you to effect telephone transactions in your account. In such an
event you should write to the Fund; please see "How to contact Scudder" for the
address.
Investment flexibility
Scudder offers toll-free telephone exchange between funds at current net asset
value. You can move your investments among money market, income, growth,
tax-free and growth and income funds with a simple toll-free call or, if you
prefer, by sending your instructions through the mail or by fax. Telephone and
fax redemptions and exchanges are subject to termination and their terms are
subject to change at any time by the Fund or the transfer agent. In some cases,
the transfer agent or Scudder Investor Services, Inc. may impose additional
conditions on telephone transactions.
Dividend reinvestment plan
You may have dividends and distributions automatically reinvested in additional
Fund shares. Please call 1-800-225-5163 to request this feature.
Shareholder statements
You receive a detailed account statement every time you purchase or redeem
shares. All of your statements should be retained to help you keep track of
account activity and the cost of shares for tax purposes.
Shareholder reports
In addition to account statements, you receive periodic shareholder reports
highlighting relevant information, including investment results and a review of
portfolio changes.
To reduce the volume of mail you receive, only one copy of most Fund reports,
such as the Fund's Annual Report, may be mailed to your household (same surname,
same address). Please call 1-800-225-5163 if you wish to receive additional
shareholder reports.
Newsletters
Four times a year, Scudder sends you Perspectives, an informative newsletter
covering economic and investment developments, service enhancements and other
topics of interest to Scudder fund investors.
Scudder Funds Centers
As a convenience to shareholders who like to conduct business in person, Scudder
Investor Services, Inc. maintains Funds Centers in Boca Raton, Boston, Chicago,
Cincinnati, Los Angeles, New York, Portland (OR), San Diego, San Francisco and
Scottsdale.
T.D.D. service for the hearing impaired
Scudder's full range of investor information and shareholder services is
available to hearing impaired investors through a toll-free T.D.D. (Telephone
Device for the Deaf) service. If you have access to a T.D.D., call
1-800-543-7916 for investment information or specific account questions and
transactions.
15
<PAGE>
Scudder tax-advantaged retirement plans
Scudder offers a variety of tax-advantaged retirement plans for individuals,
businesses and non-profit organizations. These flexible plans are designed for
use with the Scudder Family of Funds (except Scudder tax-free funds, which are
inappropriate for such plans). Scudder Funds offer a broad range of investment
objectives and can be used to seek almost any investment goal. Using Scudder's
retirement plans can help shareholders save on current taxes while building
their retirement savings.
o Scudder No-Fee IRAs. These retirement plans allow a maximum annual
contribution of $2,000 per person for anyone with earned income. Many
people can deduct all or part of their contributions from their taxable
income, and all investment earnings accrue on a tax deferred basis. The
Scudder No-Fee IRA charges no annual custodial fee.
o 401(k) Plans. 401(k) plans allow employers and employees to make
tax-deductible retirement contributions. Scudder offers a full service
program that includes recordkeeping, prototype plan, employee
communications and trustee services, as well as investment options.
o Profit Sharing and Money Purchase Pension Plans. These plans allow
corporations, partnerships and people who are self-employed to make annual,
tax-deductible contributions of up to $30,000 for each person covered by
the plans. Plans may be adopted individually or paired to maximize
contributions. These are sometimes known as Keogh plans.
o 403(b) Plans. Retirement plans for tax-exempt organizations and school
systems to which employers and employees may both contribute.
o SEP-IRAs. Easily administered retirement plans for small businesses and
self-employed individuals. The maximum annual contribution to SEP-IRA
accounts is adjusted each year for inflation.
o Scudder Horizon Plan. A no-load variable annuity that lets you build assets
by deferring taxes on your investment earnings. You can start with $2,500
or more.
Scudder Trust Company (an affiliate of the Adviser) is Trustee or Custodian for
some of these plans and is paid an annual fee for some of the above retirement
plans. For information about establishing a Scudder No-Fee IRA, SEP-IRA, Profit
Sharing Plan, Money Purchase Pension Plan or a Scudder Horizon Plan, please call
1-800-225-2470. For information about 401(k)s or 403(b)s please call
1-800-323-6105. To effect transactions in existing IRA, SEP-IRA, Profit Sharing
or Pension Plan accounts, call 1-800-225-5163.
The variable annuity contract is provided by Charter National Life Insurance
Company (in New York State, Intramerica Life Insurance Company [S 1802]). The
contract is offered by Scudder Insurance Agency, Inc. (in New York State, Nevada
and Montana, Scudder Insurance Agency of New York, Inc.). CNL, Inc. is the
Principal Underwriter. Scudder Horizon Plan is not available in all states.
16
<PAGE>
Trustees and Officers
David S. Lee*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General Manager, WGBH Educational Foundation
Dawn-Marie Driscoll
Trustee; Attorney and Corporate Director
Cuyler W. Findlay*
Vice President and Trustee
Peter B. Freeman
Trustee; Corporate Director and Trustee
Dudley H. Ladd*
Vice President and Trustee
George M. Lovejoy, Jr.
Trustee; President and Director, Fifty Associates
Stephen L. Akers*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
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*
Income
Scudder Emerging Markets Income Fund
Scudder Global Bond Fund
Scudder GNMA Fund
Scudder High Yield Bond Fund
Scudder Income Fund
Scudder International Bond Fund
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Growth and Income
Scudder Balanced Fund
Scudder Growth and Income Fund
Growth
Scudder Capital Growth Fund
Scudder Classic Growth Fund
Scudder Development Fund
Scudder Emerging Markets Growth Fund
Scudder Global Discovery Fund
Scudder Global Fund
Scudder Gold Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Latin America Fund
Scudder Micro Cap Fund
Scudder Pacific Opportunities Fund
Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder 21st Century Growth Fund
Scudder Value Fund
The Japan Fund
--------------------------------------------------------
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.
--------------------------------------------------------
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
--------------------------------------------------------
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. #Funds advised by Scudder, Stevens & Clark, Inc. and traded on
various stock exchanges. ++An institutional cash management service that
utilizes certain portfolios of Scudder Fund, Inc. ($100,000 minimum). Call
1-800-541-7703 for information.
18
<PAGE>
How to contact Scudder
<TABLE>
<C> <C> <C>
Account Service and Information: Please address all correspondence to:
For existing account Scudder Investor The Scudder Funds
service and transactions Relations P.O. Box 2291
1-800-225-5163 Boston, Massachusetts
02107-2291
For personalized Scudder Automated
information about your Information Line Visit the Scudder World Wide Web Site at:
Scudder accounts; (SAIL)
exchanges and 1-800-343-2890 http://funds.scudder.com
redemptions; or
information on any
Scudder fund
Investment Information: Or Stop by a Scudder Funds Center:
To receive information Scudder Investor Many shareholders enjoy the personal, one-on-one
about the Scudder funds, Relations service of the Scudder Funds Centers. Check for a
for additional applications 1-800-225-2470 Funds Center near you --they can be found in the
and prospectuses, or for following cities:
investment questions
For establishing 401(k) Scudder Defined Boca Raton New York
and 403(b) plans Contribution Boston Portland, OR
Services Chicago San Diego
1-800-323-6105 Cincinnati San Francisco
Los Angeles Scottsdale
For information on Scudder Treasurers Trust(TM), an For information on Scudder Institutional Funds*, funds
institutional cash management service for corporations, designed to meet the broad investment management and
non-profit organizations and trusts which utilizes service needs of banks and other institutions, call:
certain portfolios of Scudder Fund, Inc.* ($100,000 1-800-854-8525.
minimum), call: 1-800-541-7703.
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
* Contact Scudder Investor Services, Inc., Distributor, to receive a
prospectus with more complete information, including management fees and
expenses. Please read it carefully before you invest or send money.
</TABLE>
19
<PAGE>
SCUDDER CASH INVESTMENT TRUST
A Pure No-load(TM) (No Sales Charges) Mutual Fund Seeking the
Stability of Capital while Maintaining the Liquidity of
Capital and Providing Current Income
from Money Market Securities
and
SCUDDER U.S. TREASURY MONEY FUND
A Pure No-load(TM) (No Sales Charges) Money Market Fund Seeking Safety,
Liquidity and Stability of Capital and, consistent therewith, Current
Income from Short-Term U.S. Government Securities
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
November 1, 1996
- --------------------------------------------------------------------------------
This combined Statement of Additional Information is not a prospectus
and should be read in conjunction with the prospectuses of Scudder Cash
Investment Trust and Scudder U.S. Treasury Money Fund each dated November 1,
1996, as may be amended from time to time, copies of which may be obtained
without charge by writing to Scudder Investor Services, Inc., Two International
Place, Boston, Massachusetts 02110-4103.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES........................................................................1
General Investment Objectives and Policies of Scudder Cash Investment Trust.................................1
General Investment Objectives and Policies of Scudder U.S. Treasury Money Fund..............................4
Specialized Investment Techniques of the Funds..............................................................4
Investment Restrictions.....................................................................................7
PURCHASES...........................................................................................................11
Additional Information About Opening an Account............................................................11
Checks.....................................................................................................11
Wire Transfer of Federal Funds.............................................................................11
Additional Information About Making Subsequent Investments by AutoBuy......................................12
Share Price................................................................................................12
Share Certificates.........................................................................................12
Other Information..........................................................................................12
EXCHANGES AND REDEMPTIONS...........................................................................................13
Exchanges..................................................................................................13
Redemption by Telephone....................................................................................14
Redemption By AutoSell.....................................................................................14
Redemption by Mail or Fax..................................................................................15
Redemption by Write-a-Check................................................................................15
Other Information..........................................................................................15
FEATURES AND SERVICES OFFERED BY THE FUNDS..........................................................................16
The Pure No-Load(TM) Concept...............................................................................16
Dividend and Capital Gain Distribution Options.............................................................17
Scudder Funds Centers......................................................................................17
Diversification............................................................................................18
Reports to Shareholders....................................................................................18
Transaction Summaries......................................................................................18
THE SCUDDER FAMILY OF FUNDS.........................................................................................18
SPECIAL PLAN ACCOUNTS...............................................................................................21
Scudder Retirement Plans: Profit-Sharing and Money Purchase Pension Plans for Corporations and
Self-Employed Individuals.............................................................................22
Scudder 401(k): Cash or Deferred Profit-Sharing Plan for Corporations and Self-Employed Individuals........22
Scudder IRA: Individual Retirement Account................................................................22
Scudder 403(b) Plan........................................................................................23
Automatic Withdrawal Plan..................................................................................23
Group or Salary Deduction Plan.............................................................................24
Automatic Investment Plan..................................................................................24
Uniform Transfers/Gifts to Minors Act......................................................................24
DIVIDENDS...........................................................................................................24
PERFORMANCE INFORMATION.............................................................................................25
Yield......................................................................................................26
Effective Yield............................................................................................26
Average Annual Total Return................................................................................26
Cumulative Total Return....................................................................................27
Total Return...............................................................................................27
Comparison of Fund Performance.............................................................................27
Internet access............................................................................................29
i
<PAGE>
TABLE OF CONTENTS (continued)
Page
ORGANIZATION OF THE FUNDS...........................................................................................31
INVESTMENT ADVISER..................................................................................................32
Scudder Cash Investment Trust..............................................................................33
Scudder U.S. Treasury Money Fund...........................................................................33
SCIT and Treasury Fund.....................................................................................35
Personal Investments by Employees of the Adviser...........................................................35
TRUSTEES AND OFFICERS...............................................................................................36
Scudder Cash Investment Trust..............................................................................36
Scudder U.S. Treasury Money Fund...........................................................................37
REMUNERATION........................................................................................................38
DISTRIBUTOR.........................................................................................................39
Scudder Cash Investment Trust..............................................................................39
Scudder U.S. Treasury Money Fund...........................................................................40
TAXES...............................................................................................................40
PORTFOLIO TRANSACTIONS..............................................................................................42
NET ASSET VALUE.....................................................................................................43
ADDITIONAL INFORMATION..............................................................................................44
Experts....................................................................................................44
Shareholder Indemnification................................................................................44
Other Information..........................................................................................44
FINANCIAL STATEMENTS................................................................................................45
Scudder Cash Investment Trust..............................................................................45
Scudder U.S. Treasury Money Fund...........................................................................45
APPENDIX
Ratings of Municipal Obligations
Commercial Paper Ratings
</TABLE>
ii
<PAGE>
THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES
(See "Investment objectives and policies" and
"Additional information about policies and
investments" in each Fund's prospectus.)
Scudder Cash Investment Trust sometimes is referred to herein as
"SCIT." Scudder U.S. Treasury Money Fund sometimes is referred to herein as
"Treasury Fund." SCIT and Treasury Fund sometimes are jointly referred to herein
as the "Funds" or "Scudder Money Market Funds."
General Investment Objectives and Policies of Scudder Cash Investment Trust
Scudder Cash Investment Trust is a pure no-load(TM), open-end,
diversified management investment company. SCIT's investment objectives are to
maintain the stability of capital and, consistent therewith, to maintain the
liquidity of capital and to provide current income. SCIT seeks to maintain a
constant net asset value of $1.00 per share, although in certain circumstances
this may not be possible. SCIT's management seeks to improve investment income
by keeping money at work in what it considers to be the most attractive
short-term debt investments consistent with the objectives of maintaining the
stability and liquidity of capital. There is no assurance that SCIT's investment
objectives will be achieved. The investment objectives and policies of SCIT
stated under this caption may be changed by the Trustees without a vote of a
majority of the outstanding voting securities of the Fund, as that term is
defined below in "Investment Restrictions." All of the securities in which SCIT
may invest are U.S. dollar-denominated. Shares of the Fund are not insured or
guaranteed by an agency of the U.S. Government.
SCIT may invest in short-term obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities; obligations of supranational
organizations such as those listed below; obligations of domestic banks and
foreign branches of domestic banks, including bankers' acceptances, certificates
of deposit, deposit notes and time deposits; and obligations of savings and loan
institutions.
SCIT may also invest in: instruments whose credit has been enhanced by
banks (letters of credit), insurance companies (surety bonds) or other corporate
entities (corporate guarantees); corporate obligations and obligations of
trusts, finance companies and other entities, including commercial paper, notes,
bonds, loans and loan participations; securities with variable or floating
interest rates; asset-backed securities, including certificates, participations
and notes; and municipal securities, including notes, bonds and participation
interests, either taxable or tax free. Securities and instruments in which the
Fund may invest may be issued by the U.S. Government, its agencies and
instrumentalities, corporations, trusts, banks, finance companies and other
business entities.
In addition, SCIT may invest in repurchase agreements and securities
with put features. Obligations which are subject to repurchase agreements will
be limited to those of the type and quality described below. The Fund may also
hold cash.
Investments in corporate and finance company commercial paper and other
corporate obligations will be limited to securities which, in the opinion of
Scudder, Stevens & Clark, Inc. (the "Adviser"), are of high quality and present
minimal credit risk. Commercial paper and finance company paper, at the time of
purchase, will be rated or judged by the Adviser to be the equivalent of paper
rated A-1 by Standard & Poors ("S&P"), Prime-1 by Moody's Investors Service,
Inc. ("Moody's") or F-1 by Fitch Investors Service, Inc. ("Fitch"). (See
Appendix A for a more complete description of commercial paper ratings.)
Investments in other corporate obligations such as bonds and notes will be
limited to issues rated or judged by the Adviser to be the equivalent of
securities rated A-1 by S&P, Prime-1 by Moody's or F-1 by Fitch.
Investments in municipal securities will be limited to those which are
rated at the time of purchase by Moody's within its two highest rating
categories for municipal obligations--Aaa and Aa, or within Moody's short-term
municipal obligations top rating categories of MIG 1 and MIG 2, are rated at the
time of purchase by S&P within S&P's two highest rating categories for municipal
obligations--AAA/AA and SP-1+/SP-1--or are rated at the time of purchase by
Fitch within Fitch's two highest rating categories for municipal
obligations-AAA/AA or within Fitch's highest short term rating categories of F-1
and F-2, all in such proportions as management will determine. SCIT also may
invest in securities rated within the two highest rating categories by only one
of those rating agencies if no other rating agency has rated the security. In
some cases, short-term municipal obligations are rated using the same categories
as are used for corporate obligations. In addition, unrated municipal securities
<PAGE>
will be considered as being within the foregoing quality ratings if the issuer,
or other equal or junior municipal securities of the same issuer, has a rating
within the foregoing ratings of Moody's, S&P or Fitch. SCIT may also invest in
municipal securities which are unrated if, in the opinion of the Adviser, such
securities possess creditworthiness comparable to those rated securities in
which the Fund may invest.
Foreign Securities. Supranational entities are international
organizations designated or supported by governmental entities to promote
economic reconstruction or development and international banking institutions
and related government agencies. Examples include the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, The Asian Development Bank and the InterAmerican Development Bank.
Obligations of supranational entities are backed by the guarantee of one or more
foreign governmental parties which sponsor the entity.
Municipal Securities. Municipal Securities are issued by or on behalf
of states, territories and possessions of the U.S. and their political
subdivisions, agencies and instrumentalities to obtain funds for various public
purposes. The interest on these obligations is generally exempt from federal
income tax in the hands of most investors, except for the possible applicability
of the alternative minimum tax. The two principal classifications of municipal
securities are "Notes" and "Bonds." Municipal Notes are generally used to
provide for short-term capital needs and generally have maturities of one year
or less. Municipal Notes include: Tax Anticipation Notes; Revenue Anticipation
Notes; Bond Anticipation Notes; and Construction Loan Notes. Municipal Bonds,
which meet longer term capital needs and generally have maturities of more than
one year when issued, have two principal classifications: "General Obligation"
Bonds and "Revenue" Bonds.
Industrial Development and Pollution Control Bonds (which are types of
private activity bonds), although nominally issued by municipal authorities, are
generally not secured by the taxing power of the municipality but are secured by
the revenues of the authority derived from payments by the industrial user.
Under Federal tax legislation, certain types of Industrial Development Bonds and
Pollution Control Bonds may no longer be issued on a tax-exempt basis, although
previously-issued bonds of these types and certain refundings of such bonds are
not affected.
Bank and Savings and Loan Obligations. These obligations include
negotiable certificates of deposit, bankers' acceptances, deposit notes, fixed
time deposits or other short-term bank obligations. Certificates of deposit are
negotiable certificates evidencing the obligations of a bank to repay funds
deposited with it for a specified period of time. SCIT may invest in
certificates of deposit of large domestic banks (i.e., banks which at the time
of their most recent annual financial statements show total assets in excess of
$1 billion), and of smaller banks as described below. The Fund does not invest
in certificates of deposit of foreign banks. Although the Fund recognizes that
the size of a bank is important, this fact alone is not necessarily indicative
of its creditworthiness. Investment in certificates of deposit issued by foreign
branches of domestic banks involves investment risks that are different in some
respects from those associated with investment in certificates of deposit issued
by domestic branches of domestic banks, including the possible imposition of
withholding taxes on interest income, the possible adoption of foreign
governmental restrictions which might adversely affect the payment of principal
and interest on such certificates of deposit, or other adverse political or
economic developments. In addition, it might be more difficult to obtain and
enforce a judgment against a foreign branch of a domestic bank.
SCIT may also invest in certificates of deposit issued by banks and
savings and loan institutions which had, at the time of their most recent annual
financial statements, total assets of less than $1 billion, provided that (i)
the principal amounts of such certificates of deposit are insured by an agency
of the U.S. Government, (ii) at no time will the Fund hold more than $100,000
principal amount of certificates of deposit of any one such bank, and (iii) at
the time of acquisition, no more than 10% of the Fund's assets (taken at current
value) are invested in certificates of deposit of such banks having total assets
not in excess of $1 billion.
Banker's acceptances are credit instruments evidencing the obligations
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity.
2
<PAGE>
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by SCIT will not benefit from insurance from the Bank
Insurance Fund or the Savings Association Insurance Fund administered by the
Federal Deposit Insurance Corporation. Fixed time deposits may be withdrawn on
demand by the investor, but may be subject to early withdrawal penalties that
vary with market conditions and the remaining maturity of the obligation. Fixed
time deposits subject to withdrawal penalties maturing in more than seven
calendar days are subject to the Fund's limitation on investments in illiquid
securities.
Eurodollar Obligations. Eurodollar bank obligations are
dollar-denominated certificates of deposit and time deposits issued outside the
U.S. capital markets by foreign branches of U.S. banks and U.S. branches of
foreign banks. Eurodollar obligations are subject to the same risks that pertain
to domestic issues, notably credit risk, market risk and liquidity risk.
Additionally, Eurodollar obligations are subject to certain sovereign risks.
Commercial Paper. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial paper
purchased by SCIT will consist only of direct obligations issued by domestic and
foreign entities. The other corporate obligations in which the Fund may invest
consist of high quality short term bonds and notes (including variable amount
master demand notes) issued by domestic and foreign corporations, including
banks.
Participation Interests. SCIT may purchase from financial institutions
participation interests in securities in which the Fund may invest. A
participation interest gives the Fund an undivided interest in the security in
the proportion that the Fund's participation interest bears to the principal
amount of the security. These instruments may have fixed, floating or variable
interest rates, with remaining maturities of 397 days or less. If the
participation interest is unrated, or has been given a rating below that which
is permissible for purchase by the Fund, the participation interest will be
backed by an irrevocable letter of credit or guarantee of a bank, or the payment
obligation otherwise will be collateralized by U.S. Government securities, or,
in the case of unrated participation interest, determined by the Adviser to be
of comparable quality to those instruments in which the Fund may invest. For
certain participation interests, the Fund will have the right to demand payment,
on not more than seven days' notice, for all or any part of the Fund's
participation interests in the security, plus accrued interest. As to these
instruments, the Fund intends to exercise its right to demand payment only upon
a default under the terms of the security.
Asset-backed securities. Asset backed securities may include pools of
mortgages, loans, receivables or other assets. Payment of principal and interest
may be largely dependent upon the cash flows generated by the assets backing the
securities.
Illiquid or Restricted Securities. SCIT may occasionally purchase
securities other than in the open market. While such purchases may often offer
attractive opportunities for investment not otherwise available on the open
market, the securities so purchased are often "restricted securities", i.e.,
securities which cannot be sold to the public without registration under the
Securities Act of 1933 or the availability of an exemption from registration
(such as Rules 144 or 144A), or which are "not readily marketable" because they
are subject to other legal or contractual delays in or restrictions on resale.
Generally speaking, restricted securities may be sold only to qualified
institutional buyers, or in a privately negotiated transaction to a limited
number of purchasers, or in limited quantities after they have been held for a
specified period of time and other conditions are met pursuant to an exemption
from registration, or in a public offering for which a registration statement is
in effect under the Securities Act of 1933. SCIT may be deemed to be an
"underwriter" for purposes of the Securities Act of 1933 when selling restricted
securities to the public, and in such event the Fund may be liable to purchasers
of such securities if the registration statement prepared by the issuer, or the
prospectus forming a part of it, is materially inaccurate or misleading.
The Adviser will monitor the liquidity of such restricted securities
subject to the supervision of the Board of Directors. In reaching liquidity
decisions, the Adviser will consider the following factors: (1) the frequency of
trades and quotes for the security, (2) the number of dealers wishing to
purchase or sell the security and the number of their potential purchasers, (3)
dealer undertakings to make a market in the security; and (4) the nature of the
security and the nature of the marketplace trades (i.e. the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
the transfer).
3
<PAGE>
SCIT will not invest more than 10% of its net assets in securities
which are not readily marketable, the disposition of which is restricted under
Federal securities laws or in repurchase agreements not terminable within seven
days, and the Fund will not invest more than 5% of its total assets in
restricted securities.
General Investment Objectives and Policies of Scudder U.S. Treasury Money Fund
Scudder U.S. Treasury Money Fund is a pure no-load(TM), open-end,
diversified management investment company. Treasury Fund's investment objectives
are to provide safety, liquidity and stability of capital, and consistent
therewith, to provide current income. Treasury Fund seeks to achieve its
objectives through a portfolio consisting primarily of short-term U.S. Treasury
obligations and similar investments. Treasury Fund will limit its investments to
securities issued or guaranteed by the U.S. Government and repurchase agreements
with respect to such obligations. At least 80% of Treasury Fund's assets will be
invested in either U.S. Treasury securities or in repurchase agreements
collateralized by U.S. Treasury securities. All of the securities in which the
Fund may invest are U.S. dollar-denominated.
Illiquid or Restricted Securities. The Fund may occasionally purchase
securities other than in the open market. While such purchases may often offer
attractive opportunities for investment not otherwise available on the open
market, the securities so purchased are often "restricted securities" or "not
readily marketable," i.e., securities which cannot be sold to the public without
registration under the Securities Act of 1933 or the availability of an
exemption from registration (such as Rules 144 or 144A) or because they are
subject to other legal or contractual delays in or restrictions on resale.
Generally speaking, restricted securities may be sold only to qualified
institutional buyers, or in a privately negotiated transaction to a limited
number of purchasers, or in limited quantities after they have been held for a
specified period of time and other conditions are met pursuant to an exemption
from registration, or in a public offering for which a registration statement is
in effect under the Securities Act of 1933. The Fund may be deemed to be an
"underwriter" for purposes of the Securities Act of 1933 when selling restricted
securities to the public, and in such event the Fund may be liable to purchasers
of such securities if the registration statement prepared by the issuer, or the
prospectus forming a part of it, is materially inaccurate or misleading.
The Adviser will monitor the liquidity of such restricted securities
subject to the supervision of the Board of Directors. In reaching liquidity
decisions, the Adviser will consider the following factors: (1) the frequency of
trades and quotes for the security, (2) the number of dealers wishing to
purchase or sell the security and the number of their potential purchasers, (3)
dealer undertakings to make a market in the security; and (4) the nature of the
security and the nature of the marketplace trades (i.e. the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
the transfer).
Treasury Fund provides convenience, liquidity, and professional
management. Treasury Fund's investment adviser, Scudder, Stevens & Clark, Inc.
(the "Adviser"), seeks to improve income by keeping money at work in what it
considers to be the most attractive short-term debt instruments consistent with
the Fund's objectives of safety, liquidity and stability of capital. There is no
assurance that these objectives will be achieved. Treasury Fund seeks to
maintain a constant net asset value of $1.00 per share, although in certain
circumstances this may not be possible.
Specialized Investment Techniques of the Funds
Maintenance of $1.00 Net Asset Value and Credit Quality. Pursuant to a
Rule of the Securities and Exchange Commission (the "SEC"), each Fund effects
sales, redemptions and repurchases at the net asset value per share, normally
$1.00, rounded to the nearest whole cent. In fulfillment of their
responsibilities under that Rule, the Trustees of each Fund have approved
policies established by the Funds' Adviser reasonably calculated to prevent each
Fund's net asset value per share, as so rounded, from deviating from $1.00
except under unusual or extraordinary circumstances and the Trustees of each
Fund will periodically review the Adviser's operations under such policies at
regularly scheduled Trustees' meetings. Those policies include a daily
monitoring by the Adviser of unrealized gains and losses in each Fund's
portfolio, and when necessary, in an effort to avoid deviation, taking
corrective action, such as adjusting the maturity of the portfolio, or, if
possible, realizing gains or losses to offset in part unrealized losses or
gains. The result of those policies may be that the yield on shares of each Fund
will be lower than would be the case if the policies were not in effect. Such
policies also provide for certain action to be taken with respect to portfolio
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securities which experience a downgrade in rating or suffer a default.
Securities eligible for investment by the Funds are those securities
which are generally rated (or issued by an issuer with comparable securities
rated) in the highest rating category by at least two rating services (or by one
rating service, if no other rating agency has issued a rating with respect to
that security). These securities are known as "first tier securities."
Securities generally rated (or issued by an issuer with comparable securities
rated) in the top two categories by at least two rating agencies (or one, if
only one rating agency has rated the security) which do not qualify as first
tier securities are known as "second tier securities." To ensure diversity of a
Fund's investments, as a matter of non-fundamental policy, each Fund will not
invest more than 5% of its total assets in the securities of a single issuer,
other than the U.S. Government. Each Fund may, however, invest more than 5% of
its total assets in the first tier securities of a single issuer for a period of
up to three business days after purchase, although a Fund may not make more than
one such investment at any time. Each Fund may not invest more than 5% of its
total assets in securities which were second tier securities when acquired by
the Fund. Further, each Fund may not invest more than the greater of (1) 1% of
its total assets, or (2) one million dollars, in the securities of a single
issuer which were second tier securities when acquired by the Fund.
Portfolio Maturity. The assets of each Fund consist entirely of cash
items and investments having a stated maturity date of 397 calendar days or less
(except in the case of Government securities, 762 calendar days) from date of
purchase (including investment in repurchase agreements, in which case maturity
is measured by the repurchase date, without respect to the maturity of the
obligation). The term "Government securities," as used herein, means securities
issued or guaranteed as to principal or interest by the U.S. Government, its
agencies or instrumentalities. The portfolio of each Fund will be managed so
that the average maturity of all instruments (on a dollar-weighted basis) will
be 90 days or less. The average maturity of the two portfolios will vary
according to the management's appraisal of money market conditions. Each Fund
will invest only in securities determined by or under the direction of the
Trustees to be of high quality with minimal credit risks.
Portfolio Turnover. The Funds may sell portfolio securities to take
advantage of investment opportunities arising from changing market levels or
yield relationships. Although such transactions involve additional costs in the
form of spreads, they will be undertaken in an effort to improve a Fund's
overall investment return, consistent with its objectives.
U.S. Government Securities. U.S. Government Securities are securities
issued or guaranteed by the U.S. Treasury, by federal agencies, or by
instrumentalities established or sponsored by the U.S. Government. Obligations
issued by the U.S. Treasury are backed by the full faith and credit of the U.S.
Government. They include Treasury bills, notes and bonds, which differ in their
interest rates, maturities and times of issuance. Obligations guaranteed by the
U.S. Treasury include Government National Mortgage Association participation
certificates. Obligations of a federal agency or U.S. Government instrumentality
may be supported in various ways, including the limited authority of the issuer
to borrow from the U.S. Treasury, such as securities of the Federal Home Loan
Bank; the discretionary authority of the U.S. Government to purchase obligations
of the agency or instrumentality, such as Federal National Mortgage Association
bonds; or the credit only of the issuing agency or instrumentality, such as
Student Loan Marketing Association. In the case of obligations not backed by the
full faith and credit of the U.S. Government, the Fund must look principally to
the agency issuing or guaranteeing the obligations for ultimate repayment, which
agency may be privately owned. These securities may bear fixed, floating or
variable rates of interest. Interest may fluctuate based on generally recognized
reference rates or the relationship of rates.
When-issued and Forward Delivery Securities. Government securities are
frequently offered on a "when-issued" or "forward delivery" basis. When so
offered, the price, which is generally expressed in yield terms, is fixed at the
time the commitment to purchase is made, but delivery and payment for the
when-issued or forward delivery securities take place at a later date. During
the period between purchase and settlement, no payment is made by the Funds to
the issuer and no interest accrues to the Funds. To the extent that assets of
the Funds are not invested prior to the settlement of a purchase of securities,
the Funds will earn no income; however, it is intended that both Funds will be
fully invested to the extent practicable and subject to the policies stated
herein. When-issued or forward delivery purchases are negotiated directly with
the other party and are not traded on an exchange. While when-issued or forward
delivery securities may be sold prior to the settlement date, it is intended
that both Funds will purchase such securities with the purpose of actually
acquiring them unless a sale appears desirable for investment reasons. At the
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time SCIT and Treasury Fund make the commitment to purchase securities on a
when-issued or forward delivery basis, they will record the transaction and
reflect the value of the security in determining their respective net asset
values. Neither Fund believes that its net asset value or income will be
adversely affected by its purchase of securities on a when-issued or forward
delivery basis. SCIT and Treasury Fund will establish a segregated account in
which to maintain cash, U.S. Government securities or other high-grade debt
obligations equal in value to commitments for when-issued or forward delivery
securities. Such segregated securities either will mature or, if necessary, be
sold on or before the settlement date. Neither SCIT nor Treasury Fund will enter
into such transactions for leverage purposes.
Repurchase Agreements. Each Fund may enter into repurchase agreements
with any member bank of the Federal Reserve System or any broker/dealer which is
recognized as a reporting government securities dealer if the creditworthiness
of the bank or broker/dealer has been determined by the Adviser to be at least
as high as that of other obligations the Funds may purchase or to be at least
equal to that of issuers of commercial paper rated within the two highest
ratings categories assigned by Moody's, S&P or Fitch.
A repurchase agreement provides a means for a Fund to earn income on
funds for periods as short as overnight. It is an arrangement under which the
purchaser (i.e., a Fund) acquires a security ("Obligation") and the seller
agrees, at the time of sale, to repurchase the Obligation at a specified time
and price. Securities subject to a repurchase agreement are held in a segregated
account and, as described in more detail below, the value of such securities is
kept at least equal to the repurchase price on a daily basis. The repurchase
price may be higher than the purchase price, the difference being income to a
Fund, or the purchase and repurchase prices may be the same, with interest at a
stated rate due to a Fund together with the repurchase price upon repurchase. In
either case, the income to a Fund is unrelated to the interest rate on the
Obligation itself. Obligations will be held by the custodian or in the Federal
Reserve Book Entry System.
For purposes of the Investment Company Act of 1940, as amended (the
"1940 Act"), a repurchase agreement is deemed to be a loan from a Fund to the
seller of the Obligation subject to the repurchase agreement and is therefore
subject to each Fund's investment restriction applicable to loans. It is not
clear whether a court would consider the Obligation purchased by a Fund subject
to a repurchase agreement as being owned by that Fund or as being collateral for
a loan by that Fund to the seller. In the event of the commencement of
bankruptcy or insolvency proceedings with respect to the seller of the
Obligation before repurchase of the Obligation under a repurchase agreement, a
Fund may encounter delay and incur costs before being able to sell the security.
Delays may involve loss of interest or decline in price of the Obligation. If
the court characterizes the transaction as a loan and a Fund has not perfected a
security interest in the Obligation, that Fund may be required to return the
Obligation to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, a Fund would be at risk of losing some or all
of the principal and income involved in the transaction. As with any unsecured
debt Obligation purchased for a Fund, the Adviser seeks to minimize the risk of
loss through repurchase agreements by analyzing the creditworthiness of the
obligor, in this case the seller of the Obligation. Apart from the risk of
bankruptcy or insolvency proceedings, there is also the risk that the seller may
fail to repurchase the Obligation, in which case a Fund may incur a loss if the
proceeds to that Fund of the sale to a third party are less than the repurchase
price. However, if the market value (including interest) of the Obligation
subject to the repurchase agreement becomes less than the repurchase price
(including interest), a Fund will direct the seller of the Obligation to deliver
additional securities so that the market value (including interest) of all
securities subject to the repurchase agreement will equal or exceed the
repurchase price.
The conclusions and investment decisions of the Adviser with respect to
each Fund are based primarily on the analyses of its own research specialists.
While these specialists have the major responsibility for doing research on debt
securities, they receive the support of the Adviser's general economics
department for studies on interest rate trends and of the Adviser's stock
research analysts for consultation on the qualitative aspects of credit analysis
which enable the Adviser to establish its own credit ratings for issuers of
senior securities. The Adviser believes it is important to have this combination
of specialized skills available for developing the proper investment strategies
for the Funds. The Adviser subscribes to leading bond information services and
receives directly published reports and statistical compilations of the issuers
themselves, as well as analyses from brokers and dealers who may execute
portfolio transactions for the Adviser's clients. However, the Adviser regards
this information and material as an adjunct to its own research activities.
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Investment Restrictions
Unless specified to the contrary, the following restrictions may not be
changed without the approval of a majority of the outstanding voting securities
of the Fund involved which, under the 1940 Act and the rules thereunder and as
used in this Statement of Additional Information, means the lesser of (1) 67% or
more of the voting securities present at a meeting, if the holders of more than
50% of the outstanding voting securities of the Fund are present or represented
by proxy; or (2) more than 50% of the outstanding voting securities of a Fund.
Any investment restrictions herein which involve a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the percentage occurs immediately after, and is caused by, an acquisition
or encumbrance of securities or assets of, or borrowings by, a Fund.
As a matter of fundamental policy, SCIT may not:
1. borrow money except from banks as a temporary measure for
extraordinary or emergency purposes (a Fund is required to
maintain asset coverage (including borrowings) of 300% for all
borrowings) and no purchases of securities will be made while
such borrowings exceed 5% of the value of the Fund's assets;
2. act as underwriter of the securities issued by others, except
to the extent that the purchase of securities in accordance
with its investment objective and policies directly from the
issuer thereof and the later disposition thereof may be deemed
to be underwriting;
3. make loans to other persons, except loans of portfolio
securities and except to the extent that the purchase of debt
obligations in accordance with its investment objective and
policies and the entry into repurchase agreements may be
deemed to be loans;
4. enter into repurchase agreements or purchase any securities
if, as a result thereof, more than 10% of the total assets of
a Fund (taken at market value) would be, in the aggregate,
subject to repurchase agreements maturing in more than seven
days and invested in restricted securities or securities which
are not readily marketable;
5. participate on a joint or a joint and several basis in any
trading account in securities, but may for the purpose of
possibly achieving better net results on portfolio
transactions or lower brokerage commission rates join with
other investment company and client accounts managed by
Scudder, Stevens & Clark, Inc. in the purchase or sale of
portfolio securities;
6. purchase or retain securities of an issuer any of whose
officers, directors, trustees or security holders is an
officer, director or Trustee of a Fund or a member, officer,
director or trustee of the investment adviser of a Fund if one
or more of such individuals owns beneficially more than
one-half of one percent (1/2 of 1%) of the shares or
securities or both (taken at market value) of such issuer and
such individuals owning more than one-half of one percent (1/2
of 1%) of such shares or securities together own beneficially
more than 5% of such shares or securities or both;
7. purchase securities on margin or make short sales unless, by
virtue of its ownership of other securities, it has the right
to obtain securities equivalent in kind and amount to the
securities sold and, if the right is conditional, the sale is
made upon the same conditions;
8. issue senior securities, except as appropriate to evidence
indebtedness which a Fund is permitted to incur pursuant to
Investment Restriction (1) and except for shares of any
additional series which may be established by the Trustees;
9. with respect to 75% of the value of the total assets of the
Fund, invest more than 5% of the value of total assets of the
Fund in the securities of any one issuer, except U.S.
Government securities;
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10. purchase and sell real estate (though it may invest in
short-term securities of companies which deal in real estate
and in other permitted investments secured by real estate) or
commodities or commodities contracts;
11. purchase securities of any issuer with a record of less than
three years continuous operation, including predecessors,
except obligations issued or guaranteed by the U.S. Government
or its agencies, if such purchase would cause the Fund's
investments in all such issuers to exceed 5% of the Fund's
total assets taken at market value;
12. purchase common stocks or other voting securities;
13. purchase securities if such purchase would cause more than 25%
in the aggregate of the market value of the total assets of
the Fund at the time of such purchase to be invested in the
securities of one or more issuers having their principal
business activities in the same industry, provided that there
is no limitation in respect to investments in obligations
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or in certificates of deposit or bankers'
acceptances (for the purposes of this restriction telephone
companies are considered to be a separate industry from gas
and electric public utilities, and wholly-owned finance
companies are considered to be in the industry of their
parents if their activities are primarily related to financing
the activities of the parents); or
14. invest for the purpose of controlling or managing any other
company.
In addition, although not a matter of fundamental policy, SCIT may not:
(a) purchase or sell interests in oil, gas or other mineral
leases, or exploration or development programs (although they
may invest in securities of issuers which own or invest in
such interests);
(b) pledge, mortgage or hypothecate its assets, except that, to
secure borrowings permitted by Investment Restriction (1), it
may pledge securities having a market value at the time of
pledge not exceeding 15% of the cost of the Fund's total
assets;
(c) purchase or sell any put or call options or any combination
thereof, not including warrants;
(d) purchase restricted securities (for these purposes restricted
security means a security with a legal or contractual
restriction on resale in the principal market in which the
security is traded), including repurchase agreements maturing
in more than seven days and securities which are not readily
marketable if as a result more than 10% of SCIT's net assets
(valued at market at purchase) would be invested in such
securities;
(e) purchase securities if, as a result thereof, more than 5% of
the value of SCIT's net assets would be invested in restricted
securities;
(f) invest in the securities of other investment companies, except
by purchase in the open market when no commission or profit to
a sponsor or dealer results from such purchase other than the
customary broker's commission, or except when such purchase,
though not made on the open market, is part of a plan of
merger or consolidation;
(g) purchase or sell real estate limited partnership interests;
(h) invest more than 5% of its total assets in the securities of
any one issuer or subject to puts from any one issuer, except
U.S. Government securities, provided that the Fund may invest
more than 5% of its total assets in first tier securities of
any one issuer for a period of up to three business days or,
in unrated securities that have been determined to be of
comparable quality by the Fund's Adviser;
(i) invest more than 5% of its total assets in second tier
securities, or in unrated securities determined by the Adviser
to be of comparable quality;
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(j) invest more than the greater of $1,000,000 or 1% of total
assets in second tier securities of any one issuer;
(k) invest more than 10% of its total assets in securities subject
to an unconditional put issued by any one institution;
(l) borrow money, including reverse repurchase agreements, in
excess of 5% of its total assets (taken at market value)
except for temporary or emergency purposes, or borrow other
than from banks; or
(m) make loans unless all loans of portfolio securities are fully
collateralized and marked to market daily.
As a matter of fundamental policy, unless and to the extent permitted
by an exemptive order of the SEC, Treasury Fund may not:
1. borrow money, except as a temporary measure for extraordinary
or emergency purposes or except in connection with reverse
repurchase agreements, provided that the Fund maintains asset
coverage of 300% for all borrowings;
2. purchase or sell real estate (except that the Fund may invest
in (i) securities of companies which deal in real estate or
mortgages, and (ii) securities secured by real estate or
interests therein, and that the Fund reserves freedom of
action to hold and to sell real estate acquired as a result of
the Fund's ownership of securities); or purchase or sell
physical commodities or contracts relating to physical
commodities;
3. act as an underwriter of securities issued by others, except
to the extent that it may be deemed an underwriter in
connection with the disposition of portfolio securities of the
Fund;
4. make loans to other persons, except (a) loans of portfolio
securities, and (b) to the extent the entry into repurchase
agreements and the purchase of debt securities in accordance
with its investment objective and investment policies may be
deemed to be loans; or
5. issue senior securities, except as appropriate to evidence
indebtedness which it is permitted to incur, and except for
shares of the separate classes or series of the Trust,
provided that collateral arrangements with respect to
currency-related contracts, futures contracts, options or
other permitted investments, including deposits of initial and
variation margin, are not considered to be the issuance of
senior securities for purposes of this restriction.
Treasury Fund has undertaken that if the Fund obtains an exemptive
order of the SEC which would permit the taking of action in contravention of any
policy which may not be changed without a shareholder vote, the Fund will not
take such action unless either (i) the applicable exemptive order permits the
taking of such action without a shareholder vote or (ii) the staff of the SEC
has issued to the Fund a "no action" or interpretive letter to the effect that
the Fund may proceed without a shareholder vote.
Although not a matter of fundamental policy Treasury Fund may not:
(a) purchase or retain securities of any open-end investment
company, or securities of closed-end investment companies
except by purchase in the open market where no commission or
profit to a sponsor or dealer results from such purchases, or
except when such purchase, though not made in the open market,
is part of a plan of merger, consolidation, reorganization or
acquisition of assets; in any event the Fund may not purchase
more than 3% of the outstanding voting securities of another
investment company, may not invest more than 5% of its assets
in another investment company, and may not invest more than
10% of its assets in other investment companies;
(b) pledge, mortgage or hypothecate its assets in excess, together
with permitted borrowings, of 1/3 of its total assets;
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(c) purchase or retain securities of an issuer any of whose
officers, directors, trustees or security holders is an
officer, director or trustee of the Fund or a member, officer,
director or trustee of the investment adviser of the Fund if
one or more of such individuals owns beneficially more than
one-half of one percent (1/2%) of the outstanding shares or
securities or both (taken at market value) of such issuer and
such individuals owning more than one-half of one percent
(1/2%) of such shares or securities together own beneficially
more than 5% of such shares or securities or both;
(d) purchase securities on margin or make short sales, unless, by
virtue of its ownership of other securities, it has the right
to obtain securities equivalent in kind and amount to the
securities sold and, if the right is conditional, the sale is
made upon the same conditions, except that the Fund may obtain
such short-term credits as may be necessary for the clearance
of purchases and sales of securities;
(e) invest more than 10% of its net assets in securities which are
not readily marketable, the disposition of which is restricted
under Federal securities laws, or in repurchase agreements not
terminable within 7 days, and the Fund will not invest more
than 10% of its total assets in restricted securities;
(f) purchase securities of any issuer with a record of less than
three years continuous operations, including predecessors,
except U.S. Government securities and obligations issued or
guaranteed by any foreign government or its agencies or
instrumentalities, if such purchase would cause the
investments of the Fund in all such issuers to exceed 5% of
the total assets of the Fund taken at market value;
(g) purchase more than 10% of the voting securities of any one
issuer, except securities issued by the U.S. Government, its
agencies or instrumentalities;
(h) invest in oil, gas or other mineral leases, or exploration or
development programs (although it may invest in issuers which
own or invest in such interests);
(i) borrow money, including reverse repurchase agreements, in
excess of 5% of its total assets (taken at market value)
except for temporary or emergency purposes, or borrow other
than from banks;
(j) purchase or sell any put or call options or any combination
thereof;
(k) purchase or sell real estate limited partnership interests;
(l) invest more than 5% of its total assets in the securities of
any one issuer or subject to puts from any one issuer, except
U.S. Government securities, provided that the Fund may invest
more than 5% of its total assets in first tier securities of
any one issuer for a period of up to three business days or,
in unrated securities that have been determined to be of
comparable quality by the Fund's Adviser;
(m) invest more than 5% of its total assets in second tier
securities, or in unrated securities determined by the Adviser
to be of comparable quality;
(n) invest more than the greater of $1,000,000 or 1% of total
assets in second tier securities of any one issuer;
(o) invest more than 10% of its total assets in securities subject
to an unconditional put issued by any one institution; or
(p) make loans unless all loans of portfolio securities are fully
collateralized and marked to market daily.
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PURCHASES
(See "Purchases" and "Transaction information" in each
Fund's prospectus.)
Additional Information About Opening an Account
Clients having a regular investment counsel account with the Adviser or
its affiliates and members of their immediate families, officers and employees
of the Adviser or of any affiliated organization and their immediate families,
members of the National Association of Securities Dealers, Inc. ("NASD") and
banks may, if they prefer, subscribe initially for at least $2,500 of Fund
shares through Scudder Investor Services, Inc. (the "Distributor") by letter,
fax, TWX or telephone.
Shareholders of other Scudder funds who have submitted an account
application and have a certified tax identification number, clients having a
regular investment counsel account with Scudder or its affiliates and members of
their immediate families, officers and employees of the Adviser or of any
affiliated organization and their immediate families, members of the NASD and
banks may open an account by wire. These investors must call 1-800-225-5163 to
get an account number. During the call the investor will be asked to indicate
the Fund name, amount to be wired ($2,500 minimum), name of bank or trust
company from which the wire will be sent, the exact registration of the new
account, the tax identification number or Social Security number, address and
telephone number. The investor must then call the bank to arrange a wire
transfer to The Scudder Funds, Boston, MA 02110, ABA Number 011000028, Account
Number: 9903-5552. The investor must give the Scudder fund name, account name
and the new account number. Finally, the investor must send the completed and
signed application to the Fund promptly.
Checks
A certified check is not necessary, but checks are only accepted
subject to collection at full face value in U.S. funds and must be drawn on or
payable through a United States bank.
If shares of a Fund are purchased with a check which proves to be
uncollectible, that Fund reserves the right to cancel the purchase immediately
and the purchaser will be responsible for any loss incurred by that Fund or the
principal underwriter by reason of such cancellation. If the purchaser is a
shareholder, such Fund will have the authority, as agent of the shareholder, to
redeem shares in the account in order to reimburse the Fund or the principal
underwriter for the loss incurred. Investors whose orders have been canceled may
be prohibited from or restricted in placing future orders in any of the Scudder
funds.
Wire Transfer of Federal Funds
To purchase shares of a Fund and obtain the same day dividend you must
have your bank forward federal funds by wire transfer and provide the required
account information so as to be available to a Fund prior to twelve o'clock noon
eastern time on that day. If you wish to make a purchase of $500,000 or more,
you should notify the Fund's transfer agent, Scudder Service Corporation (the
"Transfer Agent") of such a purchase by calling 1-800-225-5163. If either the
federal funds or the account information is received after twelve o'clock noon
eastern time, but both the funds and the information are made available before
the close of regular trading on the New York Stock Exchange (the "Exchange")
(normally 4 p.m. eastern time) on any business day, shares will be purchased at
net asset value determined on that day but will not receive the dividend; in
such cases, dividends commence on the next business day.
The bank sending an investor's federal funds by bank wire may charge
for the service. Presently, each Fund pays a fee for receipt by State Street
Bank and Trust Company (the "Custodian") of "wired funds," but the right to
charge investors for this service is reserved.
Boston banks are closed on certain holidays although the Exchange may
be open. These holidays include Martin Luther King Jr., Day (the 3rd Monday in
January), Columbus Day (the 2nd Monday in October) and Veterans' Day (November
11). Investors are not able to purchase shares by wiring federal funds on such
holidays because the Custodian is not open to receive such federal funds on
behalf of either Fund.
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Additional Information About Making Subsequent Investments by AutoBuy
Shareholders, whose predesignated bank account of record is a member of
the Automated Clearing House Network (ACH) and who have elected to participate
in the AutoBuy program, may purchase shares of a Fund by telephone. Through this
service shareholders may purchase up to $250,000 but not less than $250. To
purchase shares by AutoBuy, shareholders should call before 4 p.m. eastern time.
Proceeds in the amount of your purchase will be transferred from your bank
checking account two or three business days following your call. For requests
received by the close of regular trading on the Exchange, shares will be
purchased at the net asset value per share calculated at the close of trading on
the day of your call. AutoBuy requests received after the close of regular
trading on the Exchange will begin their processing and be purchased at the net
asset value calculated the following business day. If you purchase shares by
AutoBuy and redeem them within seven days of the purchase, the Fund may hold the
redemption proceeds for a period of up to seven business days. If you purchase
shares and there are insufficient funds in your bank account the purchase will
be canceled and you will be subject to any losses or fees incurred in the
transaction. Auto Buy transactions are not available for Scudder IRA accounts
and most other retirement plan accounts.
In order to request purchases by AutoBuy, shareholders must have
completed and returned to the Transfer Agent the application, including the
designation of a bank account from which the purchase payment will be debited.
New investors wishing to establish AutoBuy may so indicate on the application.
Existing shareholders who wish to add AutoBuy to their account may do so by
completing an AutoBuy Enrollment Form. After sending in an enrollment form
shareholders should allow for 15 days for this service to be available.
The Funds employ procedures, including recording telephone calls,
testing a caller's identity, and sending written confirmation of telephone
transactions, designed to give reasonable assurance that instructions
communicated by telephone are genuine, and to discourage fraud. To the extent
that a Fund does not follow such procedures, it may be liable for losses due to
unauthorized or fraudulent telephone instructions. The Funds will not be liable
for acting upon instructions communicated by telephone that they reasonably
believe to be genuine.
Share Price
Purchases made by check will be filled without sales charge at the
close of regular trading on the Exchange on the day the check is received by the
Transfer Agent in good order. Net asset value of each Fund normally is computed
twice a day, as of twelve o'clock noon and the close of regular trading on the
Exchange on each day when the Exchange is open for trading.
Share Certificates
Due to the desire of each Fund's management to afford ease of
redemption, certificates will not be issued to indicate ownership in either
Fund. Share certificates now in a shareholder's possession may be sent to the
Transfer Agent for cancelation and credit to such shareholder's account.
Shareholders who prefer may hold the certificates in their possession until they
wish to exchange or redeem such shares.
Other Information
If purchases and redemptions of shares of either Fund are arranged and
settlement is made at the investor's election through a member of the NASD,
other than Scudder Investor Services, Inc., that member may, at its discretion,
charge a fee for that service. The Trustees of each Fund and Scudder Investor
Services, Inc., the Funds' principal underwriter, each has the right to limit,
for any reason, the amount of purchases and to refuse to sell to any person. The
Board of Trustees of each Fund and Scudder Investor Services, Inc. may suspend
or terminate the offering of shares of their respective Fund at any time.
The "Tax Identification Number" section of the application must be
completed when opening an account. Applications and purchase orders without a
certified tax identification number and certain other certified information
(e.g. from exempt investors a certification of exempt status) will be returned
to the investor.
The minimum initial purchase amount is less than $2,500 under certain
special plan accounts.
12
<PAGE>
The Funds may issue shares at net asset value in connection with any
merger or consolidation with, or acquisition of the assets of, any investment
company (or series thereof) or personal holding company, subject to the
requirements of the 1940 Act.
EXCHANGES AND REDEMPTIONS
(See "Exchanges and redemptions" and
"Transaction information" in each Fund's prospectus.)
Exchanges
Exchanges are comprised of a redemption from one Scudder fund and a
purchase into another Scudder fund. The purchase side of the exchange either may
be an additional investment into an existing account or may involve opening a
new account in the other fund. When an exchange involves a new account, the new
account will be established with the same registration, tax identification
number, address, telephone redemption option, "Scudder Automated Information
Line" (SAIL(TM)) transaction authorization and dividend option as the existing
account. Other features will not carry over automatically to the new account.
Exchanges to a new fund account must be for a minimum of $2,500. When an
exchange represents an additional investment into an existing account, the
account receiving the exchange proceeds must have identical registration, tax
identification number, address, and account options/features as the account of
origin. Exchanges into an existing account must be for $100 or more. If the
account receiving the exchange proceeds is to be different in any respect, the
exchange request must be in writing and must contain an original signature
guarantee as described under "Transaction information--Redeeming
shares--Signature guarantees" in each Fund's prospectus.
Exchange orders received before the close of regular trading on the
Exchange on any business day ordinarily will be executed at the respective net
asset values determined on that day. Exchange orders received after the close of
regular trading on the Exchange will be executed on the following business day.
Investors may also request, at no extra charge, to have exchanges
automatically executed on a predetermined schedule from one Scudder fund to an
existing account in another Scudder fund, at current net asset value, through
Scudder's Automatic Exchange Program. Exchanges must be for a minimum of $50.
Shareholders may add this free feature over the telephone or in writing.
Automatic Exchanges will continue until the shareholder requests by telephone or
in writing to have the feature removed, or until the originating account is
depleted. The Trusts and the Transfer Agent each reserve the right to suspend or
terminate the privilege of the Automatic Exchange Program at any time.
There is no charge to the shareholder for any exchange described above.
An exchange into another Scudder fund is a redemption of shares, and therefore
may result in tax consequences (gain or loss) to the shareholder, and the
proceeds of such an exchange may be subject to backup withholding. (See
"TAXES.")
Investors currently receive the exchange privilege, including exchange
by telephone, automatically without having to elect it. The Trusts employ
procedures, including recording telephone calls, testing a caller's identity,
and sending written confirmation of telephone transactions, designed to give
reasonable assurance that instructions communicated by telephone are genuine,
and to discourage fraud. To the extent that the Trusts do not follow such
procedures, they may be liable for losses due to unauthorized or fraudulent
telephone instructions. The Trusts will not be liable for acting upon
instructions communicated by telephone that they reasonably believe to be
genuine. The Trusts and the Transfer Agent each reserve the right to suspend or
terminate the privilege of exchanging by telephone or fax at any time.
The Scudder funds into which investors may make an exchange are listed
under "The Scudder Family of Funds" herein. Before making an exchange,
shareholders should obtain from Scudder Investor Services, Inc. a prospectus of
the Scudder fund into which the exchange is being contemplated.
Scudder retirement plans may have different exchange requirements.
Please refer to appropriate plan literature.
13
<PAGE>
Redemption by Telephone
In order to request redemptions by telephone, shareholders must have
completed and returned to the Transfer Agent the application, including the
designation of a bank account to which the redemption proceeds are to be sent.
Shareholders currently receive the right to redeem up to $100,000 to their
address of record automatically, without having to elect it. Shareholders may
also request to have the proceeds mailed or wired to their pre-designated bank
account.
(a) NEW INVESTORS wishing to establish telephone redemption to a
pre-designated bank account must complete the appropriate
section on the application.
(b) EXISTING SHAREHOLDERS (except those who are Scudder IRA,
Scudder Pension and Profit-Sharing, Scudder 401(k) and Scudder
403(b) Planholders) who wish to establish telephone redemption
to a pre-designated bank account or who want to change the
bank account previously designated to receive redemption
payments should either return a Telephone Redemption Option
Form (available upon request) or send a letter identifying the
account and specifying the exact information to be changed.
The letter must be signed exactly as the shareholder's name(s)
appears on the account. A signature and a signature guarantee
are required for each person in whose name the account is
registered.
Telephone redemption is not available with respect to shares
represented by share certificates or shares held in certain retirement accounts.
If a request for redemption to a shareholder's bank account is made by
telephone or fax, payment will be by Federal Reserve bank wire to the bank
account designated on the application, unless a request is made that the
redemption check be mailed to the designated bank account. There will be a $5
charge for all wire redemptions.
Note: Investors designating a savings bank to receive their telephone
redemption proceeds are advised that if the savings bank is not a participant in
the Federal Reserve System, redemption proceeds must be wired through a
commercial bank which is a correspondent of the savings bank. As this may delay
receipt by the shareholder's account, it is suggested that investors wishing to
use a savings bank discuss wire procedures with their bank and submit any
special wire transfer information with the telephone redemption authorization.
If appropriate wire information is not supplied, redemption proceeds will be
mailed to the designated bank.
The Funds employ procedures, including recording telephone calls,
testing a caller's identity, and sending written confirmation of telephone
transactions, designed to give reasonable assurance that instructions
communicated by telephone are genuine, and to discourage fraud. To the extent
that the Funds do not follow such procedures, they may be liable for losses due
to unauthorized or fraudulent telephone instructions. The Funds will not be
liable for acting upon instructions communicated by telephone that they
reasonably believe to be genuine.
Redemption requests by telephone (technically a repurchase by agreement
between the Fund and the shareholder) of shares purchased by check will not be
accepted until the purchase check has cleared which may take up to seven
business days.
Redemption By AutoSell
Shareholders, whose predesignated bank account of record is a member of
the Automated Clearing House Network (ACH) and have elected to participate in
the AutoSell program may sell shares of a Fund by telephone. To sell shares by
AutoSell, shareholders should call before 4 p.m. eastern time. Redemptions must
be for at least $250. Proceeds in the amount of your redemption will be
transferred to your bank checking account in two or three business days
following your call. For requests received by the close of regular trading on
the Exchange, shares will be redeemed at the net asset value per share
calculated at the close of trading on the day of your call. AutoSell requests
received after the close of regular trading on the Exchange will begin their
processing and be redeemed at the net asset value calculated the following
business day. AutoSell transactions are not available for Scudder IRA accounts
and most other retirement plan accounts.
14
<PAGE>
In order to request redemptions by AutoSell, shareholders must have
completed and returned to the Transfer Agent the application, including the
designation of a bank account from which the purchase payment will be debited.
New investors wishing to establish AutoSell may so indicate on the application.
Existing shareholders who wish to add AutoSell to their account may do so by
completing an AutoSell Enrollment Form. After sending in an enrollment form,
shareholders should allow for 15 days for this service to be available.
The Funds employ procedures, including recording telephone calls,
testing a caller's identity, and sending written confirmation of telephone
transactions, designed to give reasonable assurance that instructions
communicated by telephone are genuine, and to discourage fraud. To the extent
that a Fund does not follow such procedures, it may be liable for losses due to
unauthorized or fraudulent telephone instructions. The Funds will not be liable
for acting upon instructions communicated by telephone that they reasonably
believe to be genuine.
Redemption by Mail or Fax
Any existing share certificates representing shares being redeemed must
accompany a request for redemption and be duly endorsed or accompanied by a
proper stock assignment form with signatures guaranteed as explained in each
Fund's prospectus.
In order to ensure proper authorization before redeeming shares, the
Transfer Agent may request additional documents such as, but not restricted to,
stock powers, trust instruments, certificates of death, appointments as
executor, certificates of corporate authority and waivers of tax (required in
some states when settling estates).
It is suggested that shareholders holding share certificates or shares
registered in other than individual names contact the Transfer Agent prior to
any redemptions to ensure that all necessary documents accompany the request.
When shares are held in the name of a corporation, trust, fiduciary, agent,
attorney or partnership, the Transfer Agent requires, in addition to the stock
power, certified evidence of authority to sign. These procedures are for the
protection of shareholders and should be followed to ensure prompt payment.
Redemption requests must not be conditional as to date or price of the
redemption. Proceeds of a redemption will be sent within five days after receipt
by the Transfer Agent of a request for redemption that complies with the above
requirements. Delays of more than seven business days of payment for shares
tendered for repurchase or redemption may result, but only until the purchase
check has cleared.
The requirements for IRA redemptions are different from those for
regular accounts. For more information call 1-800-225-5163.
Redemption by Write-a-Check
All new investors and existing shareholders who apply to State Street
Bank and Trust Company for checks may use them to pay any person, provided that
each check is for at least $100 and not more than $5 million. By using the
checks, the shareholder will receive daily dividend credit on his or her shares
until the check has cleared the banking system. Investors who purchased shares
by check may write checks against those shares only after they have been on a
Fund's book for seven business days. Shareholders who use this service may also
use other redemption procedures. No shareholder may write checks against
certificated shares. The Funds pay the bank charges for this service. However,
each Fund will review the cost of operation periodically and reserve the right
to determine if direct charges to the persons who avail themselves of this
service would be appropriate. Each Fund, Scudder Service Corporation and State
Street Bank and Trust Company reserve the right at any time to suspend or
terminate the "Write-a-Check" procedure.
Other Information
If a shareholder redeems all shares in the account, the shareholder
will receive, in addition to the net asset value thereof, all declared but
unpaid dividends thereon. Neither Fund imposes a redemption or repurchase
charge, although a wire charge may be applicable for redemption proceeds wired
to an investor's bank account. Redemptions of shares, including redemptions
undertaken to effect an exchange for shares of another Scudder fund or
portfolio, and including exchanges and redemptions by Write-a-Check, may result
in tax consequences (gain or loss) to the shareholder and the proceeds of such
redemptions may be subject to backup withholding (see "TAXES").
15
<PAGE>
Shareholders who wish to redeem shares from Special Plan Accounts
should contact the employer, trustee or custodian of the Plan for the
requirements.
The determination of net asset value may be suspended at times and a
shareholder's right to redeem shares and to receive payment may be suspended at
times during which (a) during which the Exchange is closed, other than customary
weekend and holiday closings, (b) during which trading on the Exchange is
restricted for any reason, (c) during which an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund fairly to determine
the value of its net assets, or (d) during which the SEC by order permits
suspension of the right of redemption or a postponement of the date of payment
or of redemption; provided that applicable rules and regulations of the SEC (or
any succeeding governmental authority) shall govern as to whether the conditions
prescribed in (b), (c) or (d) exist.
Shareholders should maintain a share balance worth at least $2,500
($1,000 for IRAs, Uniform Gift to Minor Act, and Uniform Trust to Minor Act
accounts), which amount may be changed by the Board of Trustees. Scudder
retirement plans have similar or lower minimum balance requirements. A
shareholder may open an account with at least $1,000 ($500 for an UGMA, UTMA,
IRA and other retirement accounts), if an automatic investment plan (AIP) of
$100/month ($50/month for an UGMA, UTMA, IRA and other retirement accounts) is
established.
Shareholders who maintain a non-fiduciary account balance of less than
$2,500 in the Fund, without establishing an AIP, will be assessed an annual
$10.00 per fund charge with the fee to be reinvested in the Fund. The $10.00
charge will not apply to shareholders with a combined household account balance
in any of the Scudder Funds of $25,000 or more. The Fund reserves the right,
following 60 days' written notice to shareholders, to redeem all shares in
accounts below $250, including accounts of new investors, where a reduction in
value has occurred due to a redemption or exchange out of the account. The Fund
will mail the proceeds of the redeemed account to the shareholder at the address
of record. Reductions in value that result solely from market activity will not
trigger an involuntary redemption. UGMA, UTMA, IRA and other retirement accounts
will not be assessed the $10.00 charge or be subject to automatic liquidation.
FEATURES AND SERVICES OFFERED BY THE FUNDS
(See "Shareholder benefits" in each Fund's prospectus.)
The Pure No-Load(TM) Concept
Investors are encouraged to be aware of the full ramifications of
mutual fund fee structures, and of how Scudder distinguishes its funds from the
vast majority of mutual funds available today. The primary distinction is
between load and no-load funds.
Load funds generally are defined as mutual funds that charge a fee for
the sale and distribution of fund shares. There are three types of loads:
front-end loads, back-end loads, and asset-based 12b-1 fees. 12b-1 fees are
distribution-related fees charged against fund assets and are distinct from
service fees, which are charged for personal services and/or maintenance of
shareholder accounts. Asset-based sales charges and service fees are typically
paid pursuant to distribution plans adopted under 12b-1 under the 1940 Act.
A front-end load is a sales charge, which can be as high as 8.50% of
the amount invested. A back-end load is a contingent deferred sales charge,
which can be as high as 8.50% of either the amount invested or redeemed. The
maximum front-end or back-end load varies, and depends upon whether or not a
fund also charges a 12b-1 fee and/or a service fee or offers investors various
sales-related services such as dividend reinvestment. The maximum charge for a
12b-1 fee is 0.75% of a fund's average annual net assets, and the maximum charge
for a service fee is 0.25% of a fund's average annual net assets.
A no-load fund does not charge a front-end or back-end load, but can
charge a small 12b-1 fee and/or service fee against fund assets. Under the NASD
Rules of Fair Practice, a mutual fund can call itself a "no-load" fund only if
the 12b-1 fee and/or service fee does not exceed 0.25% of a fund's average
annual net assets.
16
<PAGE>
Because Scudder funds do not pay any asset-based sales charges or
service fees, Scudder developed and trademarked the phrase pure no-load(TM) to
distinguish Scudder funds from other no-load mutual funds. Scudder pioneered the
no-load concept when it created the nation's first no-load fund in 1928, and
later developed the nation's first family of no-load mutual funds.
The following chart shows the potential long-term advantage of
investing $10,000 in a Scudder pure no-load fund over investing the same amount
in a load fund that collects an 8.50% front-end load, a load fund that collects
only a 0.75% 12b-1 and/or service fee, and a no-load fund charging only a 0.25%
12b-1 and/or service fee. The hypothetical figures in the chart show the value
of an account assuming a constant 10% rate of return over the time periods
indicated and reinvestment of dividends and distributions.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Scudder
Pure No-Load(TM) Load Fund with 0.75% No-Load Fund with
YEARS Fund 8.50% Load Fund 12b-1 Fee 0.25% 12b-1 Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10 $ 25,937 $ 23,733 $ 24,222 $ 25,354
- -------------------------------------------------------------------------------------------------------------------
15 41,772 38,222 37,698 40,371
- -------------------------------------------------------------------------------------------------------------------
20 67,275 61,557 58,672 64,282
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Investors are encouraged to review the fee tables on page 2 of each
Fund's prospectus for more specific information about the rates at which
management fees and other expenses are assessed.
Dividend and Capital Gain Distribution Options
Investors have freedom to choose whether to receive cash or to reinvest
any dividends from net investment income or distributions from realized capital
gains in additional shares of a Fund. A change of instructions for the method of
payment must be given to the Transfer Agent at least five days prior to a
dividend record date. Shareholders may change their dividend option either by
calling 1-800-225-5163 or by sending written instructions to the Transfer Agent.
See "How to contact Scudder" in each Fund's prospectus for the address. Please
include your account number with your written request.
Reinvestment is usually made on the day following the record date.
Investors may leave standing instructions with the Transfer Agent designating
their option for either reinvestment or cash distribution of any income
dividends or capital gains distributions. If no election is made, dividends and
distributions will be invested in additional shares of the relevant Fund.
Investors may also have dividends and distributions automatically
deposited to their predesignated bank account through Scudder's
DistributionsDirect Program. Shareholders who elect to participate in the
DistributionsDirect Program, and whose predesignated checking account of record
is with a member bank of the Automated Clearing House Network (ACH) can have
income and capital gain distributions automatically deposited to their personal
bank account usually within three business days after a Fund pays its
distribution. A DistributionsDirect request form can be obtained by calling
1-800-225-5163. Confirmation statements will be mailed to shareholders as
notification that distributions have been deposited.
Scudder Funds Centers
Investors may visit any of the Centers maintained by Scudder Investor
Services, Inc. The Centers are designed to provide individuals with services
during any business day. Investors may pick up literature or obtain assistance
with opening an account, adding monies or special options to existing accounts,
making exchanges within the Scudder Family of Funds, redeeming shares or opening
retirement plans. Checks should not be mailed to the Centers but should be
mailed to "The Scudder Funds" at the address listed under "How to contact
Scudder" in the Funds' prospectuses.
17
<PAGE>
Diversification
Your investment represents an interest in a large, diversified
portfolio of carefully selected securities. Diversification helps protect you
against the risks associated with concentrating in fewer securities or in a
specific market sector.
Reports to Shareholders
Each Fund issues to their respective shareholders semiannual financial
statements (audited annually by independent accountants), including a list of
investments held and statements of assets and liabilities, operations, changes
in net assets, and financial highlights for each Fund.
Transaction Summaries
Annual summaries of all transactions in each Fund account are available
to shareholders. The summaries may be obtained by calling 1-800-225-5163.
THE SCUDDER FAMILY OF FUNDS
(See "Investment products and services" in the Fund's prospectus.)
The Scudder Family of Funds is America's first family of mutual funds
and the nation's oldest family of no-load mutual funds. To assist investors in
choosing a Scudder fund, descriptions of the Scudder funds' objectives follow.
Initial purchases in each Scudder fund must be at least $2,500 or $1,000 in the
case of IRAs. Subsequent purchases must be for $100 or more. Minimum investments
for special plan accounts may be lower.
MONEY MARKET
Scudder Cash Investment Trust ("SCIT") seeks to maintain the stability
of capital, and consistent therewith, to maintain the liquidity of
capital and to provide current income through investment in a
supervised portfolio of short-term debt securities. SCIT intends to
seek to maintain a constant net asset value of $1.00 per share,
although in certain circumstances this may not be possible.
Scudder U.S. Treasury Money Fund seeks to provide safety, liquidity and
stability of capital and consistent therewith to provide current income
through investment in a supervised portfolio of U.S. Government and
U.S. Government guaranteed obligations with maturities of not more than
762 calendar days. The Fund intends to seek to maintain a constant net
asset value of $1.00 per share, although in certain circumstances this
may not be possible.
INCOME
Scudder Emerging Markets Income Fund seeks to provide high current
income and, secondarily, long-term capital appreciation through
investments primarily in high-yielding debt securities issued in
emerging markets.
Scudder Global Bond Fund seeks to provide total return with an emphasis
on current income by investing primarily in high-grade bonds
denominated in foreign currencies and the U.S. dollar. As a secondary
objective, the Fund will seek capital appreciation.
Scudder GNMA Fund seeks to provide investors with high current income
from a portfolio of high-quality GNMA securities.
Scudder High Yield Bond Fund seeks to provide a high level of current
income and, secondarily, capital appreciation through investment
primarily in below investment grade domestic debt securities.
18
<PAGE>
Scudder Income Fund seeks to earn a high level of income consistent
with the prudent investment of capital through a flexible investment
program emphasizing high-grade bonds.
Scudder International Bond Fund seeks to provide income from a
portfolio of high-grade bonds denominated in foreign currencies. As a
secondary objective, the Fund seeks protection and possible enhancement
of principal value by actively managing currency, bond market and
maturity exposure and by security selection.
Scudder Short Term Bond Fund seeks to provide a higher and more stable
level of income than is normally provided by money market investments,
and more price stability than investments in intermediate- and
long-term bonds.
Scudder Zero Coupon 2000 Fund seeks to provide as high an investment
return over a selected period as is consistent with the minimization of
reinvestment risks through investments primarily in zero coupon
securities.
TAX FREE MONEY MARKET
Scudder Tax Free Money Fund ("STFMF") is designed to provide investors
with income exempt from regular federal income tax while seeking
stability of principal. STFMF seeks to maintain a constant net asset
value of $1.00 per share, although in certain circumstances this may
not be possible.
Scudder California Tax Free Money Fund* is designed to provide
California taxpayers income exempt from California state and regular
federal income taxes, and seeks stability of capital and the
maintenance of a constant net asset value of $1.00 per share, although
in certain circumstances this may not be possible.
Scudder New York Tax Free Money Fund* is designed to provide New York
taxpayers income exempt from New York state, New York City and regular
federal income taxes, and seeks stability of capital and the
maintenance of a constant net asset value of $1.00 per share, although
in certain circumstances this may not be possible.
TAX FREE
Scudder High Yield Tax Free Fund seeks to provide high income which is
exempt from regular federal income tax by investing in municipal
securities.
Scudder Limited Term Tax Free Fund seeks to provide as high a level of
income exempt from regular federal income tax as is consistent with a
high degree of principal stability.
Scudder Managed Municipal Bonds seeks to provide income which is exempt
from regular federal income tax primarily through investments in
long-term municipal securities with an emphasis on high-grade quality.
Scudder Medium Term Tax Free Fund seeks to provide a high level of
income free from regular federal income taxes and to limit principal
fluctuation by investing in high-grade municipal securities of
intermediate maturities.
Scudder California Tax Free Fund* seeks to provide income exempt from
both California and regular federal income taxes through the
professional and efficient management of a portfolio consisting of
California state, municipal and local government obligations.
Scudder Massachusetts Limited Term Tax Free Fund* seeks to provide as
high a level of income exempt from Massachusetts personal and regular
federal income tax as is consistent with a high degree of principal
stability.
- ----------------------------
* These funds are not available for sale in all states. For information,
contact Scudder Investor Services, Inc.
19
<PAGE>
Scudder Massachusetts Tax Free Fund* seeks to provide income exempt
from both Massachusetts and regular federal income taxes through the
professional and efficient management of a portfolio consisting of
Massachusetts state, municipal and local government obligations.
Scudder New York Tax Free Fund* seeks to provide income exempt from New
York state, New York City and regular federal income taxes through the
professional and efficient management of a portfolio consisting of
investments in New York state, municipal and local government
obligations.
Scudder Ohio Tax Free Fund* seeks to provide income exempt from both
Ohio and regular federal income taxes through the professional and
efficient management of a portfolio consisting of Ohio state, municipal
and local government obligations.
Scudder Pennsylvania Tax Free Fund* seeks to provide income exempt from
both Pennsylvania and regular federal income taxes through a portfolio
consisting of Pennsylvania state, municipal and local government
obligations.
GROWTH AND INCOME
Scudder Balanced Fund seeks to provide a balance of growth and income,
as well as long-term preservation of capital, from a diversified
portfolio of equity and fixed income securities.
Scudder Growth and Income Fund seeks to provide long-term growth of
capital, current income, and growth of income through a portfolio
invested primarily in common stocks and convertible securities by
companies which offer the prospect of growth of earnings while paying
current dividends.
GROWTH
Scudder Capital Growth Fund seeks to maximize long-term growth of
capital through a broad and flexible investment program emphasizing
common stocks.
Scudder Classic Growth Fund seeks long-term growth of capital with
reduced share price volatility compared to other growth mutual funds.
Scudder Development Fund seeks to achieve long-term growth of capital
primarily through investments in marketable securities, principally
common stocks, of relatively small or little-known companies which in
the opinion of management have promise of expanding their size and
profitability or of gaining increased market recognition for their
securities, or both.
Scudder Emerging Markets Growth Fund seeks long-term growth of capital
primarily through equity investment in emerging markets around the
globe.
Scudder Global Discovery Fund seeks above-average capital appreciation
over the long term by investing primarily in the equity securities of
small companies located throughout the world.
Scudder Global Fund seeks long-term growth of capital primarily through
a diversified portfolio of marketable equity securities selected on a
worldwide basis. It may also invest in debt securities of U.S.
and foreign issuers. Income is an incidental consideration.
Scudder Gold Fund seeks maximum return (principal change and income)
consistent with investing in a portfolio of gold-related equity
securities and gold.
Scudder Greater Europe Growth Fund seeks long-term growth of capital
through investments primarily in the equity securities of European
companies.
- ----------------------------
* These funds are not available for sale in all states. For information,
contact Scudder Investor Services, Inc.
20
<PAGE>
Scudder International Fund seeks long-term growth of capital through
investment principally in a diversified portfolio of marketable equity
securities selected primarily to permit participation in non-U.S.
companies and economies with prospects for growth. It also invests in
fixed-income securities of foreign governments and companies, with a
view toward total investment return.
Scudder Latin America Fund seeks to provide long-term capital
appreciation through investment primarily in the securities of Latin
American issuers.
Scudder Micro Cap Fund seeks long-term growth of capital by investing
primarily in a diversified portfolio of U.S. micro-cap stocks.
Scudder Pacific Opportunities Fund seeks long-term growth of capital
through investment primarily in the equity securities of Pacific Basin
companies, excluding Japan.
Scudder Quality Growth Fund seeks to provide long-term growth of
capital through investment primarily in the equity securities of
seasoned, financially strong U.S. growth companies.
Scudder Small Company Value Fund invests for long-term growth of
capital by seeking out undervalued stocks of small U.S. companies.
Scudder 21st Century Growth Fund seeks long-term growth of capital by
investing primarily in securities of emerging growth companies poised
to be leaders in the 21st century.
Scudder Value Fund seeks long-term growth of capital through investment
in undervalued equity securities.
The Japan Fund, Inc. seeks capital appreciation through investment in
Japanese securities, primarily in common stocks of Japanese companies.
The net asset values of most Scudder Funds can be found daily in the
"Mutual Funds" section of The Wall Street Journal under "Scudder Funds," and in
other leading newspapers throughout the country. Investors will notice the net
asset value and offering price are the same, reflecting the fact that no sales
commission or "load" is charged on the sale of shares of the Scudder Funds. The
latest seven-day yields for the money-market funds can be found every Monday and
Thursday in the "Money-Market Funds" section of The Wall Street Journal. This
information also may be obtained by calling the Scudder Automated Information
Line (SAIL) at 1-800-343-2890.
The Scudder Family of Funds offers many conveniences and services,
including: active professional investment management; broad and diversified
investment portfolios; pure no-load funds with no commissions to purchase or
redeem shares or Rule 12b-1 distribution fees; individual attention from a
service representative of Scudder Investor Relations; easy telephone exchanges
into other Scudder funds; shares redeemable at net asset value at any time.
SPECIAL PLAN ACCOUNTS
(See "Scudder tax-advantaged retirement plans," "Purchases--By
Automatic Investment Plan" and "Exchanges and redemptions--By
Automatic Withdrawal Plan" in each Fund's prospectus.)
Detailed information on any Scudder investment plan, including the
applicable charges, minimum investment requirements and disclosures made
pursuant to Internal Revenue Service (the "IRS") requirements, may be obtained
by contacting Scudder Investor Services, Inc., Two International Place, Boston,
Massachusetts 02110-4103 or by calling toll free, 1-800-225-2470. It is
advisable for an investor considering the funding of the investment plans
described below to consult with an attorney or other investment or tax adviser
with respect to the suitability requirements and tax aspects thereof.
Shares of the Fund may also be a permitted investment under profit
sharing and pension plans and IRA's other than those offered by the Fund's
distributor depending on the provisions of the relevant plan or IRA.
21
<PAGE>
None of the plans assures a profit or guarantees protection against
depreciation, especially in declining markets.
Scudder Retirement Plans: Profit-Sharing and Money Purchase
Pension Plans for Corporations and Self-Employed Individuals
Shares of the Fund may be purchased as the investment medium under a
plan in the form of a Scudder Profit-Sharing Plan (including a version of the
Plan which includes a cash-or-deferred feature) or a Scudder Money Purchase
Pension Plan (jointly referred to as the Scudder Retirement Plans) adopted by a
corporation, a self-employed individual or a group of self-employed individuals
(including sole proprietorships and partnerships), or other qualifying
organization. Each of these forms was approved by the IRS as a prototype. The
IRS's approval of an employer's plan under Section 401(a) of the Internal
Revenue Code will be greatly facilitated if it is in such approved form. Under
certain circumstances, the IRS will assume that a plan, adopted in this form,
after special notice to any employees, meets the requirements of Section 401(a)
of the Internal Revenue Code.
Scudder 401(k): Cash or Deferred Profit-Sharing Plan
for Corporations and Self-Employed Individuals
Shares of the Fund may be purchased as the investment medium under a
plan in the form of a Scudder 401(k) Plan adopted by a corporation, a
self-employed individual or a group of self-employed individuals (including sole
proprietors and partnerships), or other qualifying organization. This plan has
been approved as a prototype by the IRS.
Scudder IRA: Individual Retirement Account
Shares of the Fund may be purchased as the underlying investment for an
Individual Retirement Account which meets the requirements of Section 408(a) of
the Internal Revenue Code.
A single individual who is not an active participant in an
employer-maintained retirement plan, a simplified employee pension plan, or a
tax-deferred annuity program (a "qualified plan"), and a married individual who
is not an active participant in a qualified plan and whose spouse is also not an
active participant in a qualified plan, are eligible to make tax deductible
contributions of up to $2,000 to an IRA prior to the year such individual
attains age 70 1/2. In addition, certain individuals who are active participants
in qualified plans (or who have spouses who are active participants) are also
eligible to make tax-deductible contributions to an IRA; the annual amount, if
any, of the contribution which such an individual will be eligible to deduct
will be determined by the amount of his, her, or their adjusted gross income for
the year. Whenever the adjusted gross income limitation prohibits an individual
from contributing what would otherwise be the maximum tax-deductible
contribution he or she could make, the individual will be eligible to contribute
the difference to an IRA in the form of nondeductible contributions.
An eligible individual may contribute as much as $2,000 of qualified
income (earned income or, under certain circumstances, alimony) to an IRA each
year (up to $2,250 for married couples if one spouse has earned income of no
more than $250). All income and capital gains derived from IRA investments are
reinvested and compound tax-deferred until distributed. Such tax-deferred
compounding can lead to substantial retirement savings.
The table below shows how much individuals would accumulate in a fully
tax-deductible IRA by age 65 (before any distributions) if they contribute
$2,000 at the beginning of each year, assuming average annual returns of 5, 10,
and 15%. (At withdrawal, accumulations in this table will be taxable.)
22
<PAGE>
<TABLE>
<CAPTION>
Value of IRA at Age 65
Assuming $2,000 Deductible Annual Contribution
- -----------------------------------------------------------------------------------------------------------
Starting Annual Rate of Return
Age of ------------------------------------------------------------------------------
Contributions 5% 10% 15%
- -----------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
25 $253,680 $973,704 $4,091,908
35 139,522 361,887 999,914
45 69,439 126,005 235,620
55 26,414 35,062 46,699
</TABLE>
This next table shows how much individuals would accumulate in non-IRA
accounts by age 65 if they start with $2,000 in pretax earned income at the
beginning of each year (which is $1,380 after taxes are paid), assuming average
annual returns of 5, 10 and 15%. (At withdrawal, a portion of the accumulation
in this table will be taxable.)
<TABLE>
<CAPTION>
Value of a Non-IRA Account at
Age 65 Assuming $1,380 Annual Contributions
(post tax, $2,000 pretax) and a 31% Tax Bracket
- -----------------------------------------------------------------------------------------------------------
Starting
Age of Annual Rate of Return
------------------------------------------------------------------------------
Contributions 5% 10% 15%
- -----------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
25 $119,318 $287,021 $741,431
35 73,094 136,868 267,697
45 40,166 59,821 90,764
55 16,709 20,286 24,681
</TABLE>
Scudder 403(b) Plan
Shares of the Fund may also be purchased as the underlying investment
for tax sheltered annuity plans under the provisions of Section 403(b)(7) of the
Internal Revenue Code. In general, employees of tax-exempt organizations
described in Section 501(c)(3) of the Internal Revenue Code (such as hospitals,
churches, religious, scientific, or literary organizations and educational
institutions) or a public school system are eligible to participate in a 403(b)
plan.
Automatic Withdrawal Plan
Non-retirement plan shareholders may establish an Automatic Withdrawal
Plan to receive monthly, quarterly or periodic redemptions from his or her
account for any designated amount of $50 or more. Payments are mailed at the end
of each month. The check amounts may be based on the redemption of a fixed
dollar amount, fixed share amount, percent of account value or declining
balance. The Plan provides for income dividends and capital gains distributions,
if any, to be reinvested in additional shares. Shares are then liquidated as
necessary to provide for withdrawal payments. Since the withdrawals are in
amounts selected by the investor and have no relationship to yield or income,
payments received cannot be considered as yield or income on the investment and
the resulting liquidations may deplete or possibly extinguish the initial
investment. Requests for increases in withdrawal amounts or to change payee must
be submitted in writing, signed exactly as the account is registered and contain
signature guarantee(s) as described under "Transaction information--Redeeming
shares--Signature guarantees" in the Fund's prospectus. Any such requests must
be received by the Fund's transfer agent by the 15th of the month in which such
change is to take effect. An Automatic Withdrawal Plan may be terminated at any
time by the shareholder, the Trust or its agent on written notice, and will be
terminated when all shares of the Fund under the Plan have been liquidated or
upon receipt by the Trust of notice of death of the shareholder.
An Automatic Withdrawal Plan request form can be obtained by calling
1-800-225-5163.
23
<PAGE>
Group or Salary Deduction Plan
An investor may join a Group or Salary Deduction Plan where
satisfactory arrangements have been made with Scudder Investor Services, Inc.
for forwarding regular investments through a single source. The minimum annual
investment is $240 per investor which may be made in monthly, quarterly,
semiannual or annual payments. The minimum monthly deposit per investor is $20.
Except for trustees or custodian fees for certain retirement plans, at present
there is no separate charge for maintaining group or salary deduction plans;
however, the Trust and its agents reserve the right to establish a maintenance
charge in the future depending on the services required by the investor.
The Trust reserves the right, after notice has been given to the
shareholder, to redeem and close a shareholder's account in the event that the
shareholder ceases participating in the group plan prior to investment of $1,000
per individual or in the event of a redemption which occurs prior to the
accumulation of that amount or which reduces the account value to less than
$1,000 and the account value is not increased to $1,000 within a reasonable time
after notification. An investor in a plan who has not purchased shares for six
months shall be presumed to have stopped making payments under the plan.
Automatic Investment Plan
Shareholders may arrange to make periodic investments through automatic
deductions from checking accounts by completing the appropriate form and
providing the necessary documentation to establish this service. The minimum
investment is $50.
The Automatic Investment Plan involves an investment strategy called
dollar cost averaging. Dollar cost averaging is a method of investing whereby a
specific dollar amount is invested at regular intervals. By investing the same
dollar amount each period, when shares are priced low the investor will purchase
more shares than when the share price is higher. Over a period of time this
investment approach may allow the investor to reduce the average price of the
shares purchased. However, this investment approach does not assure a profit or
protect against loss. This type of regular investment program may be suitable
for various investment goals such as, but not limited to, college planning or
saving for a home.
Uniform Transfers/Gifts to Minors Act
Grandparents, parents or other donors may set up custodian accounts for
minors. The minimum initial investment is $1,000 unless the donor agrees to
continue to make regular share purchases for the account through Scudder's
Automatic Investment Plan (AIP). In this case, the minimum initial investment is
$500.
The Trust reserves the right, after notice has been given to the
shareholder and custodian, to redeem and close a shareholder's account in the
event that regular investments to the account cease before the $1,000 minimum is
reached.
DIVIDENDS
(See "Distribution and performance
information--Dividends and capital gains
distributions" in each Fund's prospectus.)
The net income of each Fund is determined as of the close of regular
trading on the Exchange, usually 4 p.m. eastern time on each day the Exchange is
open for trading.
All the net investment income and all net realized short-term capital
gains and net realized short and long-term capital losses of SCIT so determined
normally will be declared as a dividend to shareholders of record as of
determination of the net asset value at 12:00 noon after the purchase and
redemption of shares. Any losses may be included in the daily dividend for such
number of days as is deemed appropriate in order to avoid a disproportionate
impact on holders of shares of beneficial interest of the Fund on any one day on
which a dividend is declared. All the net investment income and all net realized
short-term capital gains of Treasury Fund so determined normally will be
declared as a dividend to shareholders of record as of determination of the net
asset value at twelve o'clock noon after the purchase and redemption of shares.
Shares purchased as of the determination of net asset value made as of the
24
<PAGE>
regular close of the Exchange will not participate in that day's dividend; in
such cases dividends commence on the next business day. Checks will be mailed to
shareholders electing to take dividends in cash, and confirmations will be
mailed to shareholders electing to invest dividends in additional shares for the
month's dividends within four business days after the dividend is calculated.
Dividends will be invested at the net asset value per share, normally $l.00,
determined as of the close of regular trading on the Exchange on the last
business day of each month.
Dividends are declared daily on each day on which the Exchange is open
for business. The dividends for a business day immediately preceding a weekend
or holiday will normally include an amount equal to the net income for the
subsequent days on which dividends are not declared. However, no daily dividend
will include any amount of net investment income in respect of a subsequent
semiannual accounting period.
Net investment income (from the time of the immediately preceding
determination thereof) consists of all interest income accrued on the portfolio
assets of a Fund, less all actual and accrued expenses. Interest income included
in the daily computation of net investment income is comprised of original issue
discount earned on discount paper accrued to the date of maturity as well as
accrued interest. Expenses of each Fund, including the management fee payable to
the Adviser, are accrued each day.
Normally, each Fund will have a positive net investment income at the
time of each determination thereof. Net investment income may be negative if an
unexpected liability must be accrued or a loss realized. If the net investment
income of a Fund determined at any time is a negative amount, the net asset
value per share will be reduced below $l.00 unless one or more of the following
steps are taken: the Trustees have the authority (1) to reduce the number of
shares in each shareholder's account, (2) to offset each shareholder's pro rata
portion of negative net investment income from the shareholder's accrued
dividend account or from future dividends, or (3) to combine these methods in
order to seek to maintain the net asset value per share at $1.00. Each Fund may
endeavor to restore the net asset value per share to $l.00 by not declaring
dividends from net investment income on subsequent days until restoration, with
the result that the net asset value per share will increase to the extent of
positive net investment income which is not declared as a dividend.
Because the net investment income of each Fund is declared as a
dividend each time the net investment income of the Fund is determined, the net
asset value per share of each Fund (i.e., the fair value of the net assets of
the Fund divided by the number of shares of the Fund outstanding) will remain at
$l.00 per share immediately after each such determination and dividend
declaration, unless (i) there are unusual or extended fluctuations in short-term
interest rates or other factors, such as unfavorable changes in the
creditworthiness of issuers affecting the value of securities in the Fund's
portfolio, or (ii) net income is a negative amount.
Should a Fund incur or anticipate any unusual or unexpected significant
expense or loss which would affect disproportionately that Fund's income for a
particular period, the Trustees would at that time consider whether to adhere to
the dividend policy described above or to revise it in the light of the then
prevailing circumstances in order to ameliorate to the extent possible the
disproportionate effect of such expense, loss or depreciation on then existing
shareholders. Such expenses or losses may nevertheless result in a shareholder's
receiving no dividends for the period during which the shares are held and in
receiving upon redemption a price per share lower than that which was paid.
Neither Fund anticipates realizing any long-term capital gains.
PERFORMANCE INFORMATION
(See "Distribution and performance
information--Performance information" in
each Fund's prospectus.)
From time to time, quotations of each Fund's performance may be
included in advertisements, sales literature or reports to shareholders or
prospective investors. These performance figures may be calculated in the
following manner:
25
<PAGE>
Yield
Yield is the net annualized yield based on a specified 7 calendar days
calculated at simple interest rates. Yield is calculated by determining the net
change, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the
period, and dividing the difference by the value of the account at the beginning
of the base period to obtain the base period return. The yield is annualized by
multiplying the base period return by 365/7. The yield figure is stated to the
nearest hundredth of one percent. The yield for the seven-day period ended June
30, 1996 was 4.57% for SCIT and 4.45% for Treasury Fund.
Effective Yield
Effective yield is the net annualized yield for a specified 7 calendar
days assuming a reinvestment of the income or compounding. Effective yield is
calculated by the same method as yield except the effective yield figure is
compounded by adding 1, raising the sum to a power equal to 365 divided by 7,
and subtracting 1 from the result, according to the following formula:
Effective yield = [(Base Period Return + 1)^365/7] - 1.
The effective yield for the seven-day period ended June 30, 1996 was
4.67% for SCIT and 4.55% for Treasury Fund.
Quotations of each Fund's performance are based on historical earnings
and are not intended to indicate future performance. An investor's shares when
redeemed may be worth more or less than their original cost. Performance of the
Fund will vary based on changes in market conditions and the level of each
Fund's expenses.
Average Annual Total Return
Average annual total return is the average annual compound rate of
return for the periods of one year, five years and ten years, all ended on the
last day of a recent calendar quarter. Average annual total return quotations
reflect changes in the price of a Fund's shares, if any, and assume that all
dividends and capital gains distributions during the respective periods were
reinvested in Fund shares. Average annual total return is calculated by finding
the average annual compound rates of return of a hypothetical investment over
such periods, according to the following formula (average annual total return is
then expressed as a percentage):
T = (ERV/P)^1/n - 1
Where:
P = a hypothetical initial investment of $1,000
T = Average Annual Total Return
n = number of years
ERV = ending redeemable value: ERV is the value,
at the end of the applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.
Average Annual Total Return for periods ended June 30, 1996
-----------------------------------------------------------
One Five Ten
Year Years Years
---- ----- -----
SCIT 4.89% 4.01% 5.61%
Treasury Fund* 4.91% 3.91% 5.24%
* If the Adviser had not absorbed a portion of Fund expenses and
had imposed a full management fee, the average annual total
return for the one year, five year and ten year periods ended
June 30, 1996, would have been lower.
26
<PAGE>
Cumulative Total Return
Cumulative Total Return is the cumulative rate of return on a
hypothetical initial investment of $1,000 for a specified period. Cumulative
total return quotations reflect the change in the price of a Fund's shares and
assume that all dividends and capital gains distributions during the period were
reinvested in Fund shares. Cumulative total return is calculated by finding the
cumulative rates of return of a hypothetical investment over such periods,
according to the following formula (cumulative total return is then expressed as
a percentage):
C = (ERV/P)-1
Where:
C = Cumulative Total Return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: ERV is the value,
at the end of the applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.
Cumulative Total Return for periods ended June 30, 1996
-------------------------------------------------------
One Five Ten
Year Years Years
SCIT 4.89% 21.73% 72.54%
Treasury Fund* 4.91% 21.14% 66.60%
* If the Adviser had not absorbed a portion of Fund expenses and
had imposed a full management fee, the cumulative total return
for the one year, five year and ten year periods ended June
30, 1996, would have been lower.
Total Return
Total return is the rate of return on an investment for a specified
period of time calculated in the manner as cumulative total return.
Quotations of the Funds' performance are historical, show the
performance of a hypothetical investment and are not intended to indicate future
performance. Average annual total return, cumulative total return and yield for
a Fund will vary based on changes in market conditions and the level of each
Fund's expenses. An investor's shares when redeemed may be worth more or less
than their original cost.
Investors should be aware that the principal of each Fund is not
insured.
Comparison of Fund Performance
A comparison of the quoted non-standard performance offered for various
investments is valid only if performance is calculated in the same manner. Since
there are different methods of calculating performance, investors should
consider the effects of the methods used to calculate performance when comparing
performance of a Fund with performance quoted with respect to other investment
companies or types of investments.
In connection with communicating its performance to current or
prospective shareholders, a Fund also may compare these figures to the
performance of unmanaged indices which may assume reinvestment of dividends or
interest but generally do not reflect deductions for administrative and
management costs. Examples include, but are not limited to the Dow Jones
Industrial Average, the Consumer Price Index, Standard & Poor's 500 Composite
Stock Price Index (S&P 500), the NASDAQ OTC Composite Index, the NASDAQ
Industrials Index, the Russell 2000 Index, and statistics published by the Small
Business Administration.
From time to time, in advertising and marketing literature, a Fund's
performance may be compared to the performance of broad groups of mutual funds
with similar investment goals, as tracked by independent organizations such as,
27
<PAGE>
Investment Company Data, Inc. ("ICD"), Lipper Analytical Services, Inc.
("Lipper"), CDA Investment Technologies, Inc. ("CDA"), Morningstar, Inc., Value
Line Mutual Fund Survey and other independent organizations. When these
organizations' tracking results are used, a Fund will be compared to the
appropriate fund category, that is, by fund objective and portfolio holdings, or
to the appropriate volatility grouping, where volatility is a measure of a
fund's risk. For instance, a Scudder growth fund will be compared to funds in
the growth fund category; a Scudder income fund will be compared to funds in the
income fund category; and so on. Scudder funds (except for money market funds)
may also be compared to funds with similar volatility, as measured statistically
by independent organizations.
From time to time, in marketing and other Fund literature, Trustees and
officers of the Funds, the Funds' portfolio manager, or members of the portfolio
management team may be depicted and quoted to give prospective and current
shareholders a better sense of the outlook and approach of those who manage the
Funds. In addition, the amount of assets that the Adviser has under management
in various geographical areas may be quoted in advertising and marketing
materials.
The Funds may be advertised as an investment choice in Scudder's
college planning program. The description may contain illustrations of projected
future college costs based on assumed rates of inflation and examples of
hypothetical fund performance, calculated as described above.
Statistical and other information, as provided by the Social Security
Administration, may be used in marketing materials pertaining to retirement
planning in order to estimate future payouts of social security benefits.
Estimates may be used on demographic and economic data.
Marketing and other Fund literature may include a description of the
potential risks and rewards associated with an investment in the Funds. The
description may include a "risk/return spectrum" which compares the Funds to
other Scudder funds or broad categories of funds, such as money market, bond or
equity funds, in terms of potential risks and returns. Money market funds are
designed to maintain a constant $1.00 share price and have a fluctuating yield.
Share price, yield and total return of a bond fund will fluctuate. The share
price and return of an equity fund also will fluctuate. The description may also
compare the Funds to bank products, such as certificates of deposit. Unlike
mutual funds, certificates of deposit are insured up to $100,000 by the U.S.
government and offer a fixed rate of return.
Because bank products guarantee the principal value of an investment
and money market funds seek stability of principal, these investments are
considered to be less risky than investments in either bond or equity funds,
which may involve the loss of principal. However, all long-term investments,
including investments in bank products, may be subject to inflation risk, which
is the risk of erosion of the value of an investment as prices increase over a
long time period. The risks/returns associated with an investment in bond or
equity funds depend upon many factors. For bond funds these factors include, but
are not limited to, a fund's overall investment objective, the average portfolio
maturity, credit quality of the securities held, and interest rate movements.
For equity funds, factors include a fund's overall investment objective, the
types of equity securities held and the financial position of the issuers of the
securities. The risks/returns associated with an investment in international
bond or equity funds also will depend upon currency exchange rate fluctuation.
A risk/return spectrum generally will position the various investment
categories in the following order: bank products, money market funds, bond funds
and equity funds. Shorter-term bond funds generally are considered less risky
and offer the potential for less return than longer-term bond funds. The same is
true of domestic bond funds relative to international bond funds, and bond funds
that purchase higher quality securities relative to bond funds that purchase
lower quality securities. Growth and income equity funds are generally
considered to be less risky and offer the potential for less return than growth
funds. In addition, international equity funds usually are considered more risky
than domestic equity funds but generally offer the potential for greater return.
Risk/return spectrums also may depict funds that invest in both
domestic and foreign securities or a combination of bond and equity securities.
28
<PAGE>
Internet access
World Wide Web Site -- The address of the Scudder Funds site is
http://funds.scudder.com. The site offers guidance on global investing and
developing strategies to help meet financial goals and provides access to the
Scudder investor relations department via e-mail. The site also enables users to
access or view fund prospectuses and profiles with links between summary
information in Profiles and details in the Prospectus. Users can fill out new
account forms on-line, order free software, and request literature on funds.
The site is designed for interactivity, simplicity and maneuverability.
A section entitled "Planning Resources" provides information on asset
allocation, tuition, and retirement planning to users who fill out interactive
"worksheets." Investors can easily establish a "Personal Page," that presents
price information, updated daily, on funds they're interested in following. The
"Personal Page" also offers easy navigation to other parts of the site. Fund
performance data from both Scudder and Lipper Analytical Services, Inc. are
available on the site. Also offered on the site is a news feature, which
provides timely and topical material on the Scudder Funds.
Scudder has communicated with shareholders and other interested parties
on Prodigy since 1988 and has participated since 1994 in GALT's Networth
"financial marketplace" site on the Internet. The firm made Scudder Funds
information available on America Online in early 1996.
Account Access -- Scudder is among the first mutual fund families to allow
shareholders to manage their fund accounts through the World Wide Web. Scudder
Fund shareholders can view a snapshot of current holdings, review account
activity and move assets between Scudder Fund accounts.
Scudder's personal portfolio capabilities -- known as SEAS (Scudder
Electronic Account Services) -- are accessible only by current Scudder Fund
shareholders who have set up a Personal Page on Scudder's Web site. Using a
secure Web browser, shareholders sign on to their account with their Social
Security number and their SAIL password. As an additional security measure,
users can change their current password or disable access to their portfolio
through the World Wide Web.
An Account Activity option reveals a financial history of transactions
for an account, with trade dates, type and amount of transaction, share price
and number of shares traded. For users who wish to trade shares between Scudder
Funds, the Fund Exchange option provides a step-by-step procedure to exchange
shares among existing fund accounts or to new Scudder Fund accounts.
A Call Me(TM) feature enables users to speak with a Scudder Investor
Relations telephone representative while viewing their account on the Web site.
In order to use the Call Me(TM) feature, an individual must have two phone lines
and enter on the screen the phone number that is not being used to connect to
the Internet. They are connected to the next available Scudder Investor
Relations representative from 8 a.m. to 8 p.m. eastern time.
Evaluation of Fund performance or other relevant statistical
information made by independent sources may also be used in advertisements
concerning the Funds, including reprints of, or selections from, editorials or
articles about these Funds. Sources for Fund performance information and
articles about the Funds include the following:
American Association of Individual Investors' Journal, a monthly publication of
the AAII that includes articles on investment analysis techniques.
Asian Wall Street Journal, a weekly Asian newspaper that often reviews U.S.
mutual funds investing internationally.
Banxquote, an on-line source of national averages for leading money market and
bank CD interest rates, published on a weekly basis by Masterfund, Inc. of
Wilmington, Delaware.
Barron's, a Dow Jones and Company, Inc. business and financial weekly that
periodically reviews mutual fund performance data.
Business Week, a national business weekly that periodically reports the
performance rankings and ratings of a variety of mutual funds investing abroad.
29
<PAGE>
CDA Investment Technologies, Inc., an organization which provides performance
and ranking information through examining the dollar results of hypothetical
mutual fund investments and comparing these results against appropriate market
indices.
Consumer Digest, a monthly business/financial magazine that includes a "Money
Watch" section featuring financial news.
Financial Times, Europe's business newspaper, which features from time to time
articles on international or country-specific funds.
Financial World, a general business/financial magazine that includes a "Market
Watch" department reporting on activities in the mutual fund industry.
Forbes, a national business publication that from time to time reports the
performance of specific investment companies in the mutual fund industry.
Fortune, a national business publication that periodically rates the performance
of a variety of mutual funds.
The Frank Russell Company, a West-Coast investment management firm that
periodically evaluates international stock markets and compares foreign equity
market performance to U.S. stock market performance.
Global Investor, a European publication that periodically reviews the
performance of U.S. mutual funds investing internationally.
IBC/Donoghue's Money Fund Report, a weekly publication of the Donoghue
Organization, Inc., of Holliston, Massachusetts, reporting on the performance of
the nation's money market funds, summarizing money market fund activity and
including certain averages as performance benchmarks, specifically "Donoghue's
Money Fund Average," and "Donoghue's Government Money Fund Average."
Ibbotson Associates, Inc., a company specializing in investment research and
data.
Investment Company Data, Inc., an independent organization which provides
performance ranking information for broad classes of mutual funds.
Investor's Daily, a daily newspaper that features financial, economic, and
business news.
Kiplinger's Personal Finance Magazine, a monthly investment advisory publication
that periodically features the performance of a variety of securities.
Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis, a weekly
publication of industry-wide mutual fund averages by type of fund.
Money, a monthly magazine that from time to time features both specific funds
and the mutual fund industry as a whole.
Morgan Stanley International, an integrated investment banking firm that
compiles statistical information.
Mutual Fund Values, a biweekly Morningstar, Inc. publication that provides
ratings of mutual funds based on fund performance, risk and portfolio
characteristics.
The New York Times, a nationally distributed newspaper which regularly covers
financial news.
The No-Load Fund Investor, a monthly newsletter, published by Sheldon Jacobs,
that includes mutual fund performance data and recommendations for the mutual
fund investor.
30
<PAGE>
No-Load Fund*X, a monthly newsletter, published by DAL Investment Company, Inc.,
that reports on mutual fund performance, rates funds and discusses investment
strategies for the mutual fund investor.
Personal Investing News, a monthly news publication that often reports on
investment opportunities and market conditions.
Personal Investor, a monthly investment advisory publication that includes a
"Mutual Funds Outlook" section reporting on mutual fund performance measures,
yields, indices and portfolio holdings.
Smart Money, a national personal finance magazine published monthly by Dow Jones
and Company, Inc. and The Hearst Corporation. Focus is placed on ideas for
investing, spending and saving.
Success, a monthly magazine targeted to the world of entrepreneurs and growing
business, often featuring mutual fund performance data.
United Mutual Fund Selector, a semi-monthly investment newsletter, published by
Babson United Investment Advisors, that includes mutual fund performance data
and reviews of mutual fund portfolios and investment strategies.
USA Today, a leading national daily newspaper.
U.S. News and World Report, a national news weekly that periodically reports
mutual fund performance data.
Value Line Mutual Fund Survey, an independent organization that provides
biweekly performance and other information on mutual funds.
The Wall Street Journal, a Dow Jones and Company, Inc. newspaper which regularly
covers financial news.
Wiesenberger Investment Companies Services, an annual compendium of information
about mutual funds and other investment companies, including comparative data on
funds' backgrounds, management policies, salient features, management results,
income and dividend records and price ranges.
Working Woman, a monthly publication that features a "Financial Workshop"
section reporting on the mutual fund/financial industry.
Worth, a national publication put out 10 times per year by Capital Publishing
Company, a subsidiary of Fidelity Investments. Focus is placed on personal
financial journalism.
ORGANIZATION OF THE FUNDS
(See "Fund organization" in each Fund's prospectus.)
Scudder Cash Investment Trust is a Massachusetts business trust
established under a Declaration of Trust dated December 12, 1975. Treasury Fund
is a Massachusetts business trust established under a Declaration of Trust dated
April 4, 1980. On February 12, 1991, the Board of Trustees of Treasury Fund
approved the change in name from Scudder Government Money Fund to Scudder U.S.
Treasury Money Fund. Each Fund's authorized capital consists of an unlimited
number of shares of beneficial interest, par value $.01 per share, all of which
are one class and have equal rights as to voting, dividends and liquidation.
Shareholders have one vote for each share held. All shares issued and
outstanding will be fully paid and non-assessable by the Funds, and redeemable
as described in this combined Statement of Additional Information and in each
Fund's prospectus. The Trustees of both Funds have the authority to issue more
than one series of shares, but have no present intention to do so.
The Trustees of Treasury Fund, in their discretion, may authorize the
division of shares of the Fund (or shares of a series) into different classes,
permitting shares of different classes to be distributed by different methods.
Although shareholders of different classes would have an interest in the same
portfolio of assets, shareholders of different classes may bear different
expenses in connection with different methods of distribution. The Trustees have
no present intention of taking the action necessary to effect the division of
31
<PAGE>
shares into separate classes, nor of changing the method of distribution of
shares of Treasury Fund.
Each Fund has a Declaration of Trust which provides that obligations of
the Fund involved are not binding upon the Trustees individually but only upon
the property of that Fund, that the Trustees and officers will not be liable for
errors of judgment or mistakes of fact or law, and that the Fund involved will
indemnify its Trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Fund involved except if it is determined in the manner provided
in the Declarations of Trust that they have not acted in good faith in the
reasonable belief that their actions were in the best interests of the Fund
involved. However, nothing in the Declarations of Trust protects or indemnifies
a Trustee or officer against any liability to which he or she would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his or her office.
INVESTMENT ADVISER
(See "Fund organization--Investment adviser" in each Fund's prospectus.)
Scudder, Stevens & Clark, Inc., an investment counsel firm, acts as
investment adviser to the Funds. This organization is one of the most
experienced investment management firms in the United States. It was established
as a partnership in 1919 and pioneered the practice of providing investment
counsel to individual clients on a fee basis. In 1928, it introduced the first
no-load mutual fund to the public. In 1953, the Adviser introduced Scudder
International Fund, Inc., the first mutual fund registered with the SEC in the
United States investing internationally in several foreign countries. The firm
reorganized from a partnership to a corporation on June 28, 1985.
The principal source of the Adviser's income is professional fees
received from providing continuous investment advice, and the firm derives no
income from brokerage or underwriting of securities. Today, it provides
investment counsel for many individuals and institutions, including insurance
companies, colleges, industrial corporations, and financial and banking
organizations. In addition, it manages Montgomery Street Income Securities,
Inc., Scudder California Tax Free Trust, Scudder Cash Investment Trust, Scudder
Equity Trust, Scudder Fund, Inc., Scudder Funds Trust, Scudder Global Fund,
Inc., Scudder GNMA Fund, Scudder Portfolio Trust, Scudder Institutional Fund,
Inc., Scudder International Fund, Inc., Scudder Investment Trust, Scudder
Municipal Trust, Scudder Mutual Funds, Inc., Scudder New Asia Fund, Inc.,
Scudder New Europe Fund, Inc., Scudder Securities Trust, Scudder State Tax Free
Trust, Scudder Tax Free Money Fund, Scudder Tax Free Trust, Scudder U.S.
Treasury Money Fund, Scudder Variable Life Investment Fund, Scudder World Income
Opportunities Fund, Inc., The Argentina Fund, Inc., The Brazil Fund, Inc., The
First Iberian Fund, Inc., The Korea Fund, Inc., The Japan Fund, Inc. and The
Latin America Dollar Income Fund, Inc. Some of the foregoing companies or trusts
have two or more series.
The Adviser also provides investment advisory services to the mutual
funds which comprise the AARP Investment Program from Scudder. The AARP
Investment Program from Scudder has assets over $12 billion and includes the
AARP Growth Trust, AARP Income Trust, AARP Tax Free Income Trust and AARP Cash
Investment Funds.
The Adviser maintains a large research department, which conducts
continuous studies of the factors that affect the position of various
industries, companies and individual securities. The Adviser receives published
reports and statistical compilations from issuers and other sources, as well as
analyses from brokers and dealers who may execute portfolio transactions for the
Adviser's clients. However, the Adviser regards this information and material as
an adjunct to its own research activities. In selecting the securities in which
the Fund may invest, the conclusions and investment decisions of the Adviser
with respect to the Fund are based primarily on the analyses of its own research
department.
Certain investments may be appropriate for both SCIT and Treasury Fund
as well as other clients advised by the Adviser. Investment decisions for the
Funds and other clients are made with a view to achieving their respective
investment objectives and after consideration of such factors as their current
holdings, availability of cash for investment and the size of their investments
generally. Frequently, a particular security may be bought or sold for only one
client or in different amounts and at different times for more than one but less
than all clients. Likewise, a particular security may be bought for one or more
clients when one or more other clients are selling the security. In addition,
32
<PAGE>
purchases or sales of the same security may be made for two or more clients on
the same day. In such event, such transactions will be allocated among the
clients in a manner believed by the Adviser to be equitable to each. In some
cases, this procedure could have an adverse effect on the price or amount of the
securities purchased or sold by the Funds. Purchase and sales orders for each
Fund may be combined with those of other clients of the Adviser in the interest
of achieving the most favorable net results to the Funds.
Scudder Cash Investment Trust
The Investment Advisory Agreement between SCIT and the Adviser (the
"Agreement"), dated November 12, 1985, will remain in effect until the earlier
of the approval of a new Investment Management Agreement by the Shareholders of
the Fund at the Special Meeting on November 5, 1996, or until September 30, 1997
and will continue in effect from year to year thereafter only if its continuance
is approved annually by the vote of a majority of those Trustees who are not
parties to such Agreement or "interested persons" of the Adviser or SCIT cast in
person at a meeting called for the purpose of voting on such approval and either
by vote of a majority of the Trustees or a majority of the outstanding voting
securities of SCIT. The Agreement was last approved by the Trustees (including a
majority of the Trustees who are not such "interested persons") on August 13,
1996 and by the shareholders of the Fund on November 3, 1987. The Agreement may
be terminated at any time without payment of penalty by either party on sixty
days' written notice, and automatically terminates in the event of its
assignment.
Under the Agreement, the Adviser regularly provides SCIT with
investment research, advice and supervision and furnishes continuously an
investment program consistent with SCIT's investment objectives and policies and
determines what securities shall be purchased for SCIT, what securities shall be
held or sold by SCIT, and what portion of SCIT's assets shall be held
uninvested, subject always to the provisions of SCIT's Declaration of Trust and
By-Laws, and of the 1940 Act and to SCIT's investment objectives, policies and
restrictions, and subject further to such policies and instructions as the
Trustees of SCIT may from time to time establish. The Adviser also advises and
assists the officers of SCIT in taking such steps as are necessary or
appropriate to carry out the decisions of its Trustees and the appropriate
committees of the Trustees regarding the conduct of the business of SCIT.
The Adviser pays the compensation and expenses of all affiliated
Trustees and executive employees of SCIT and makes available, without expense to
the Fund, the services of such Trustees, officers and employees as may duly be
elected Trustees, officers or employees of the Fund, subject to their individual
consent to serve and to any limitations imposed by law, and pays the Fund's
office rent and provides investment advisory, research and statistical
facilities and all clerical services relating to research, statistical and
investment work. For these services SCIT pays a monthly fee at an annual rate of
0.50 of 1% of the first $250 million of the Fund's average daily net assets,
0.45 of 1% on the next $250 million of such net assets, 0.40 of 1% of the next
$500 million of such net assets and 0.35 of 1% on such net assets in excess of
$1 billion.
For the fiscal years ended June 30, 1994, 1995 and 1996 the investment
advisory fee was $5,150,393, $6,372,462 and $5,898,959, respectively.
Under the Agreement, SCIT is responsible for all its other expenses,
including clerical salaries; fees and expenses incurred in connection with
membership in investment company organizations; brokers' commissions; legal,
auditing and accounting expenses; taxes and governmental fees; the fees and
expenses of custodians, transfer agents and other agents; any other expenses,
including clerical expenses, of issue, sale, underwriting, distribution,
redemption or repurchase of shares of beneficial interest; the expenses of and
fees for registering or qualifying securities for sale; the fees and expenses of
the Trustees of the Fund who are not affiliated with the Adviser; and the cost
of preparing and distributing reports and notices to shareholders. SCIT may
arrange to have third parties assume all or part of the expense of sale,
underwriting and distribution of shares of the Fund. (See "DISTRIBUTOR" for
expenses paid by Scudder Investor Services, Inc.) SCIT is also responsible for
its expenses incurred in connection with litigation, proceeding and claims and
the legal obligation it may have to indemnify its officers and Trustees with
respect thereto.
Scudder U.S. Treasury Money Fund
The Investment Management Agreement between Treasury Fund and the
Adviser (the "Agreement") was last approved by the Trustees on August 13, 1996
and by the shareholders on November 13, 1990. The Agreement is dated November
14, 1990 and will continue in effect until September 30, 1997 and from year to
year thereafter only if its continuance is approved annually by the vote of a
33
<PAGE>
majority of those Trustees who are not parties to such Agreement or interested
persons of the Adviser or the Fund, cast in person at a meeting called for the
purpose of voting on such approval, and either by vote of a majority of the
Trustees or of the outstanding voting securities of the Fund. The Agreement may
be terminated at any time without payment of penalty by either party on sixty
days' written notice, and automatically terminates in the event of its
assignment.
Under the Agreement, the Adviser regularly provides Treasury Fund with
continuing investment management for the Fund's portfolio consistent with the
Fund's investment objectives, policies and restrictions and determines what
securities shall be purchased for the portfolio of the Fund, what portfolio
securities shall be held or sold by the Fund, and what portion of the Fund's
assets shall be held uninvested, subject always to the provisions of the Fund's
Declaration of Trust and By-Laws, of the 1940 Act and the Code and to the Fund's
investment objectives, policies and restrictions, and subject, further, to such
policies and instructions as the Trustees of the Fund may from time to time
establish. The Adviser also advises and assists the officers of the Fund in
taking such steps as are necessary or appropriate to carry out the decisions of
its Trustees and the appropriate committees of the Trustees regarding the
conduct of the business of the Fund.
Under the Agreement, the Adviser also renders significant
administrative services (not otherwise provided by third parties) necessary for
Treasury Fund's operations as an open-end investment company including, but not
limited to, preparing reports and notices to the Trustees and shareholders;
supervising, negotiating contractual arrangements with, and monitoring various
third-party service providers to the Fund (such as the Fund's transfer agent,
pricing agents, custodian, accountants and others); preparing and making filings
with the SEC and other regulatory agencies; assisting in the preparation and
filing the Fund's federal, state and local tax returns; preparing and filing the
Fund's federal excise tax returns; assisting with investor and public relations
matters; monitoring the valuation of securities and the calculation of net asset
value; monitoring the registration of shares of the Fund under applicable
federal and state securities laws; maintaining the Fund's books and records to
the extent not otherwise maintained by a third party; assisting in establishing
accounting policies of the Fund; assisting in the resolution of accounting and
legal issues; establishing and monitoring the Fund's operating budget;
processing the payment of the Fund's bills; assisting the Fund in, and otherwise
arranging for, the payment of distributions and dividends and otherwise
assisting the Fund in the conduct of its business, subject to the direction and
control of the Trustees.
The Adviser pays the compensation and expenses of all Trustees,
officers and executive employees of Treasury Fund (except those of attending
Board and committee meetings outside New York, New York or Boston,
Massachusetts) who are affiliated persons of the Adviser and makes available,
without expense to Treasury Fund, the services of the directors, officers and
employees of the Adviser as may duly be elected officers of Treasury Fund,
subject to their individual consent to serve and to any limitations imposed by
law and provides the Fund's office space and facilities.
For these services, Treasury Fund pays the Adviser a fee equal to 0.50
of 1% of the Fund's average daily net assets. The fee is payable monthly,
provided the Fund will make such interim payments as may be requested by the
Adviser not to exceed 75% of the amount of the fee then accrued on the books of
the Fund and unpaid. For the fiscal years ended June 30, 1994, 1995 and 1996 the
investment advisory fee imposed was $793,617, $939,421 and $890,672,
respectively and the fees not imposed amounted to $813,560, $967,383 and
$1,077,479, respectively.
The Adviser has agreed until October 31, 1997 not to impose all or a
portion of its investment management fee and take other action, to the extent
necessary, to maintain the annualized expenses of Treasury Fund at not more than
0.65% of average daily net assets. The Adviser retains the ability to be repaid
by the Treasury Fund if expenses fall below the specified limit prior to the end
of the fiscal year. These expense limitation arrangements can decrease the
Treasury Fund's expenses and improve its performance.
Under the Agreement, Treasury Fund is responsible for all its other
expenses, including fees and expenses incurred in connection with membership in
investment company organizations; brokers' commissions; payments for portfolio
pricing services to a pricing agent, if any; legal, auditing and accounting
expenses; taxes and governmental fees; the fees and expenses of the Transfer
Agent; the cost of preparing share certificates or any other expenses, including
expenses of issuance, sale, redemption or repurchase of shares of beneficial
interest; the expenses of and fees for registering or qualifying securities for
sale; the fees and expenses of Trustees, officers and employees of the Fund who
are not affiliated with the Adviser; the cost of printing and distributing
reports and notices to shareholders; and the fees and disbursements of
34
<PAGE>
custodians. Treasury Fund may arrange to have third parties assume all or part
of the expense of sale, underwriting and distribution of shares of the Fund.
(See "DISTRIBUTOR" for expenses paid by Scudder Investor Services, Inc.)
Treasury Fund is also responsible for expenses of shareholder meetings and
expenses incurred in connection with litigation, proceedings and claims and the
legal obligation it may have to indemnify its officers and Trustees with respect
thereto.
SCIT and Treasury Fund
The expense ratios for SCIT for the fiscal years ended June 30, 1994,
1995 and 1996 were 0.82%, 0.78% and 0.83%, respectively. The ratios of expenses
to annual investment income for SCIT for the same years were 22.82%, 13.89% and
14.75%, respectively. The expense ratios for Treasury Fund for the fiscal years
ended June 30, 1994, 1995 and 1996 were 0.65%, 0.65% and 0.65%, respectively.
The ratios of expenses to annual investment income for the same periods were
19.13%, 12.36% and 11.94%, respectively. If reimbursement is required, it will
be made as promptly as practicable after the end of a Fund's fiscal year.
However, no fee payment will be made to the Adviser during any fiscal year which
will cause year-to-date expenses to exceed the cumulative pro rata expense
limitation at the time of such payment.
Each Agreement also provides a Fund may use any name derived from the
name "Scudder, Stevens & Clark" only as long as the Agreement or any extension,
renewal or amendment thereof remains in effect.
In reviewing the terms of the Agreements and in discussions with the
Adviser concerning the Agreements, Trustees of each Fund who are not "interested
persons" of the Fund or the Adviser are represented by independent counsel at
that Fund's expense. Dechert Price & Rhoads acts as general counsel for each
Fund.
Each Agreement provides that the Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by a Fund in
connection with matters to which the Agreements relate, except a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of the
Adviser in the performance of its duties or from reckless disregard by the
Adviser of its obligations and duties under the Agreement.
Officers and employees of the Adviser from time to time may have
transactions with various banks, including the Funds' custodian bank. It is the
Adviser's opinion that the terms and conditions of those transactions were not
influenced by existing or potential custodial or other Fund relationships.
None of the Trustees or officers of a Fund may have dealings with that
Fund as principals in the purchase or sale of securities, except as individual
subscribers to or holders of shares of the Fund.
Personal Investments by Employees of the Adviser
Employees of the Adviser are permitted to make personal securities
transactions, subject to requirements and restrictions set forth in the
Adviser's Code of Ethics. The Code of Ethics contains provisions and
requirements designed to identify and address certain conflicts of interest
between personal investment activities and the interests of investment advisory
clients such as the Funds. Among other things, the Code of Ethics, which
generally complies with standards recommended by the Investment Company
Institute's Advisory Group on Personal Investing, prohibits certain types of
transactions absent prior approval, imposes time periods during which personal
transactions may not be made in certain securities, and requires the submission
of duplicate broker confirmations and monthly reporting of securities
transactions. Additional restrictions apply to portfolio managers, traders,
research analysts and others involved in the investment advisory process.
Exceptions to these and other provisions of the Code of Ethics may be granted in
particular circumstances after review by appropriate personnel.
35
<PAGE>
TRUSTEES AND OFFICERS
Scudder Cash Investment Trust
<TABLE>
<CAPTION>
Principal Occupation** Position with Underwriter,
Name, Age and Address Position with Fund and Affiliations Scudder Investor Services, Inc.
- --------------------- ------------------ --------------------- -------------------------------
<S> <C> <C> <C>
David S. Lee (62)*#@ President and Trustee Managing Director of President, Assistant Treasurer
Scudder, Stevens & Clark, and Director
Inc.
Henry P. Becton, Jr. (52)# Trustee President and General --
WGBH Manager, WGBH Educational
125 Western Avenue Foundation
Allston, MA 02134
Dawn-Marie Driscoll (49) Trustee Attorney and Corporate --
5760 Flamingo Drive Director; former Partner,
Cape Coral, FL 33904 Palmer & Dodge (law firm)
from 1988-1990
Cuyler W. Findlay (63)*#+ Vice President and Managing Director of Senior Vice President and Director
Trustee Scudder, Stevens & Clark,
Inc.
Peter B. Freeman (64) Trustee Corporate Director and --
100 Alumni Avenue Trustee
Providence, RI 02906
Dudley H. Ladd (52)*@ Vice President and Managing Director of Senior Vice President and Director
Trustee Scudder, Stevens & Clark,
Inc.
George M. Lovejoy, Jr. (66)# Trustee President and Director, --
160 Federal Street Fifty Associates
Boston, MA 02110
Stephen L. Akers (45)++ Vice President Managing Director of --
Scudder, Stevens & Clark,
Inc.
Jerard K. Hartman (63)+ Vice President Managing Director of --
Scudder, Stevens & Clark,
Inc.
Thomas W. Joseph (57)@ Vice President Principal of Scudder, Vice President, Director,
Stevens & Clark, Inc. Treasurer & Assistant Clerk
Thomas F. McDonough (49)@ Vice President and Principal of Scudder, Clerk
Secretary Stevens & Clark, Inc.
Pamela A. McGrath (43)@ Vice President and Managing Director of --
Treasurer Scudder, Stevens & Clark,
Inc.
Edward J. O'Connell (51)+ Vice President and Principal of Scudder, Assistant Treasurer
Assistant Treasurer Stevens and Clark, Inc.
36
<PAGE>
Principal Occupation** Position with Underwriter,
Name, Age and Address Position with Fund and Affiliations Scudder Investor Services, Inc.
- --------------------- ------------------ --------------------- -------------------------------
Coleen Downs Dinneen (35)@ Assistant Secretary Vice President of Assistant Clerk
Scudder, Stevens & Clark,
Inc.
</TABLE>
* Messrs. Findlay, Ladd and Lee are considered by the Fund and its
counsel to be Trustees who are "interested persons" of the Adviser of
the Fund, within the meaning of the 1940 Act, as amended.
** Unless otherwise stated, all officers and Trustees have been associated
with their respective companies for more than five years, but not
necessarily in the same capacity.
# Messrs. Becton, Findlay, Lee and Lovejoy are members of the Executive
Committee, which has the power to declare dividends from ordinary
income and distributions of realized capital gains to the same extent
as the Board is so empowered.
@ Address: Two International Place, Boston, Massachusetts 02110
+ Address: 345 Park Avenue, New York, New York 10154
++ Address: 333 South Hope Street, 37th floor, Los Angeles, CA 90071
As of September 30, 1996, all Trustees and officers of SCIT as a group
owned beneficially (as that term is defined under Section 13(d) of the
Securities Exchange Act of 1934) less than __% of the shares of the Fund
outstanding on such date.
To the best of SCIT's knowledge, no person owned beneficially more than
__% of SCIT's outstanding shares.
The Trustees and officers of the Fund also serve in similar capacities
with other Scudder Funds.
<TABLE>
<CAPTION>
Scudder U.S. Treasury Money Fund
Principal Occupation** Position with Underwriter,
Name, Age and Address Position with Fund and Affiliations Scudder Investor Services, Inc.
- --------------------- ------------------ --------------------- -------------------------------
<S> <C> <C> <C>
David S. Lee (62)*#@ President and Trustee Managing Director of President, Assistant Treasurer
Scudder, Stevens & Clark, and Director
Inc.
E. Michael Brown (56)*@ Trustee Managing Director of Assistant Treasurer
Scudder, Stevens & Clark,
Inc.
Dawn-Marie Driscoll (49)# Trustee Attorney and Corporate --
5760 Flamingo Drive Director; former Partner,
Cape Coral, FL 33904 Palmer & Dodge (law firm)
from 1988-1990
George M. Lovejoy, Jr. (66)# Trustee President and Director, --
160 Federal Street Fifty Associates
Boston, MA 02110
Jean C. Tempel (53) Trustee General Partner, TL --
Ten Post Office Square Ventures
Suite 1325
Boston, MA 02109-4603
Stephen L. Akers (45)++ Vice President Managing Director of --
Scudder, Stevens & Clark,
Inc.
37
<PAGE>
Principal Occupation** Position with Underwriter,
Name, Age and Address Position with Fund and Affiliations Scudder Investor Services, Inc.
- --------------------- ------------------ --------------------- -------------------------------
Jerard K. Hartman (63)+ Vice President Managing Director of --
Scudder, Stevens & Clark,
Inc.
Thomas W. Joseph (57)@ Vice President Principal of Scudder, Vice President, Director,
Stevens & Clark, Inc. Treasurer & Assistant Clerk
Dudley H. Ladd (52)@ Vice President Managing Director of Senior Vice President and Director
Scudder, Stevens & Clark,
Inc.
Thomas F. McDonough (49)@ Vice President and Principal of Scudder, Clerk
Secretary Stevens & Clark, Inc.
Pamela A. McGrath (43)@ Vice President and Managing Director of --
Treasurer Scudder, Stevens & Clark,
Inc.
Edward J. O'Connell (51)+ Vice President and Principal of Scudder, Assistant Treasurer
Assistant Treasurer Stevens & Clark, Inc.
Coleen Downs Dinneen (35)@ Assistant Secretary Vice President of Assistant Clerk
Scudder, Stevens & Clark,
Inc.
</TABLE>
* Messrs. Brown and Lee are considered by the Fund and its counsel to be
Trustees who are "interested persons" of the Adviser of the Fund,
within the meaning of the 1940 Act.
** Unless otherwise stated, all officers and Trustees have been associated
with their respective companies for more than five years but not
necessarily in the same capacity.
# Messrs. Lee and Lovejoy and Ms. Driscoll are members of the Executive
Committee, which has the power to declare dividends from ordinary
income and distributions of realized capital gains to the same extent
as the Board is so empowered.
@ Address: Two International Place, Boston, Massachusetts 02110
+ Address: 345 Park Avenue, New York, New York 10154
++ Address: 333 South Hope Street, 37th floor, Los Angeles, CA 90071
As of September 30, 1996, all Trustees and officers of the Treasury
Fund as a group owned beneficially (as that term is defined under Section 13(d)
of the Securities Exchange Act of 1934) less than __% of the shares of the Fund
outstanding on such date.
To the best of Treasury Fund's knowledge, no person owned beneficially
more than __% of the Fund's outstanding shares except as stated above.
The Trustees and officers of Treasury Fund also serve in similar
capacities with other Scudder Funds.
REMUNERATION
Several of the officers and Trustees of each Fund may also be officers
or employees of the Adviser, Scudder Fund Accounting Corporation, Scudder
Investor Services, Inc., Scudder Service Corporation or Scudder Trust Company
from whom they receive compensation, as a result of which they may be deemed to
participate in fees paid by each Fund. The Funds pay no direct remuneration to
any officer of a Fund. However, each Trustee of the Funds who is not affiliated
with the Adviser will be paid by the Fund. Each of these unaffiliated Trustees
receives an annual Trustee's fee of $4,000 and a fee of $300 for each Trustees'
meeting, audit committee meeting or meeting held for the purpose of considering
arrangements between a Fund and the Adviser or any of its affiliates. Each
unaffiliated Trustee also receives $100 per committee meeting attended, other
38
<PAGE>
than those set forth above. For the fiscal year ended June 30, 1996, such fees,
including expenses, totaled $34,046 for SCIT and $26,352 for Treasury Fund.
The following Compensation Table provides, in tabular form, the following data:
Column (1): All Trustees who receive compensation from the Funds. Column (2):
Aggregate compensation received by a Trustee from the Funds.
Columns (3) and (4): Pension or retirement benefits accrued or proposed be paid
by the Fund Complex. Scudder Cash Investment Trust and Scudder U.S. Treasury
Money Fund do not pay its Trustees such benefits. Column (5): Total compensation
received by a Trustee from the Funds, plus compensation received from all funds
managed by Scudder for which a Trustee serves. The total number of funds from
which a Trustee receives such compensation is also provided in Column (5).
Generally, compensation received by a Trustee for serving on the Board of a
closed-end fund is greater than the compensation received by a Trustee for
serving on the Board of an open-end fund.
<TABLE>
<CAPTION>
Compensation Table
for the year ended December 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Aggregate Compensation from
Total Compensation From
Scudder Cash
Pension or Investment Trust and
(a) (b) Retirement Scudder U.S. Treasury
Scudder Cash Scudder U.S. Benefits Accrued Estimated Annual Money Fund and Scudder
Name of Person, Position Investment Treasury As Part of Fund Benefits Upon Fund Complex Paid to
Trust Money Fund Complex Expenses Retirement Trustee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Henry P. Becton, Jr., $8,600 -- N/A N/A $82,800
Trustee (15 funds)
Dawn-Marie Driscoll, $8,900 $8,600 N/A N/A $92,800
Trustee (16 funds)
Peter B. Freeman, $8,900 -- N/A N/A $126,750
Trustee (31 funds)
George M. Lovejoy, Jr., $8,900 $8,600 N/A N/A $112,900
Trustee (12 funds)
Jean C. Tempel, -- $8,600 N/A N/A $92,200
Trustee (15 funds)
</TABLE>
DISTRIBUTOR
Both Funds have an underwriting agreement with Scudder Investor
Services, Inc. (the "Distributor"), a Massachusetts corporation, which is a
wholly-owned subsidiary of the Adviser, a Delaware corporation.
As agent, the Distributor currently offers shares of both Funds on a
continual basis to investors in all states in which the Funds may from time to
time be registered or where permitted by applicable law. The underwriting
agreement provides that the Distributor accept orders for shares at net asset
value as no sales commission or load is charged the investor. The Distributor
has made no firm commitment to acquire shares of either Fund.
Scudder Cash Investment Trust
SCIT's underwriting agreement dated July 20, 1976 will remain in effect
until September 30, 1996 and from year to year only if its continuance is
approved annually by a majority of the Board of Trustees who are not parties to
such agreement or "interested persons" of any such party and either by vote of a
majority of the Trustees or a majority of the outstanding voting securities of
39
<PAGE>
the Fund. SCIT has agreed to pay all expenses in connection with registration of
its shares with the SEC and auditing and filing fees in connection with
registration of its shares under the various state "blue-sky" laws and to assume
the cost of preparation of prospectuses and other expenses. The Distributor pays
all expenses of printing prospectuses used in offering shares (other than
prospectuses used by SCIT for transmission to shareholders, for which the Fund
pays printing expenses), expenses, other than filing fees, of qualification of
SCIT's shares in various states, including registering SCIT as a dealer, and all
other expenses in connection with the offer and sale of shares which are not
specifically allocated to the Funds. The underwriting agreement was last
approved by the Trustees August 8, 1995.
Scudder U.S. Treasury Money Fund
Treasury Fund's underwriting agreement dated September 10, 1985 will
remain in effect until September 30, 1996 and from year to year thereafter only
if its continuance is approved annually by a majority of the members of the
Board of Trustees who are not parties to such agreement or "interested persons"
of any such party and either by vote of a majority of the Board of Trustees or a
majority of the outstanding voting securities of Treasury Fund. The underwriting
agreement was last approved by the Trustees on August 8, 1995.
Under the principal underwriting agreement, Treasury Fund is
responsible for: the payment of all fees and expenses in connection with the
preparation and filing with the SEC of its registration statement and prospectus
and any amendments and supplements thereto; the registration and qualification
of shares for sale in the various states, including registering Treasury Fund as
a broker or dealer; the fees and expenses of preparing, printing and mailing
prospectuses, notices, proxy statements, reports or other communications
(including newsletters) to shareholders of Treasury Fund; the cost of printing
and mailing confirmations of purchases of shares and the prospectuses
accompanying such confirmations; any issuance taxes or any initial transfer
taxes; a portion of shareholder toll-free telephone charges and expenses of
customer service representatives; the cost of wiring funds for share purchases
and redemptions (unless paid by the shareholder who initiates the transaction);
the cost of printing and postage of business reply envelopes; and a portion of
the cost of computer terminals used by both Treasury Fund and the Distributor.
Although Treasury Fund does not currently have a 12b-1 Plan and shareholder
approval would be required in order to adopt one, Treasury Fund will also pay
those fees and expenses permitted to be paid or assumed by Treasury Fund
pursuant to a 12b-1 Plan, if any, adopted by Treasury Fund, notwithstanding any
other provision to the contrary in the underwriting agreement and Treasury Fund
or a third party will pay those fees and expenses not specifically allocated to
the Distributor in the underwriting agreement.
The Distributor will pay for printing and distributing prospectuses or
reports prepared for its use in connection with the offering of the shares to
the public and preparing, printing and mailing any other literature or
advertising in connection with the offering of shares of Treasury Fund to the
public. The Distributor will pay all fees and expenses in connection with its
qualification and registration as a broker or dealer under federal and state
laws, a portion of the cost of toll-free telephone service and expenses of
customer service representatives, a portion of the cost of computer terminals,
and of any activity which is primarily intended to result in the sale of shares
issued by the Fund, unless a 12b-1 Plan is in effect which provides that the
Fund shall bear some or all of such expenses.
TAXES
(See "Transaction information--Tax identification
number" and "Distribution and performance information--Dividends
and capital gains distributions" in each Fund's prospectus.)
Each Fund has elected to be treated as a regulated investment company
under Subchapter M of the Code, or a predecessor statute and has qualified as
such since its inception. Each Fund intends to continue to qualify for such
treatment. Such qualification does not involve governmental supervision or
management of investment practices or policy.
A regulated investment company qualifying under Subchapter M of the
Code is required to distribute to its shareholders at least 90% of its
investment company taxable income (including net short-term capital gain) and
generally is not subject to federal income tax to the extent that it distributes
annually its investment company taxable income and net realized capital gains in
40
<PAGE>
the manner required under the Code. Each Fund intends to distribute, at least
annually, all of its investment company taxable income and net realized capital
gains.
The Funds are subject to a 4% nondeductible excise tax on amounts
required to be but not distributed under a prescribed formula. The formula
requires payment to shareholders during a calendar year of distributions
representing at least 98% of a Fund's ordinary income for the calendar year, at
least 98% of the excess of its capital gains over capital losses (adjusted for
certain ordinary losses) realized during the one-year period ending October 31
during such year (although investment companies with taxable years ending on
November 30 or December 31 may make an irrevocable election to measure the
required capital gain distribution using their actual taxable year), and all
ordinary income and capital gains for prior years that were not previously
distributed.
Investment company taxable income generally includes interest and net
short-term capital gains in excess of net long-term capital losses, less
expenses. Net realized capital gains for a fiscal year are computed by taking
into account any capital loss carryforward of the Funds.
Distributions of investment company taxable income are taxable to
shareholders as ordinary income.
Since no portion of the Funds' income is comprised of dividends from
domestic corporations, none of the income distributions of the Funds is eligible
for the deduction for dividends received by corporations.
Distributions of the excess of net long-term capital gain over net
short-term capital loss are taxable to shareholders as long-term capital gain,
regardless of the length of time the shares of the Fund involved have been held
by such shareholders. Such distributions are not eligible for the
dividends-received deduction. Any loss realized upon the redemption of shares
held at the time of redemption for six months or less will be treated as a
long-term capital loss to the extent of any amounts treated as distributions of
long-term capital gains during such six-month period.
Distributions of investment company taxable income and net realized
capital gains will be taxable as described above, whether received in shares or
in cash. Shareholders electing to receive distributions in the form of
additional shares will have a cost basis for federal income tax purposes in each
share so received equal to the net asset value of a share on the reinvestment
date.
All distributions of investment company taxable income and net realized
capital gain, whether received in shares or in cash, must be reported by each
shareholder on his or her federal income tax return. Dividends declared in
October, November or December with a record date in such a month are deemed to
have been received by shareholders on December 31 if paid in January of the
following year. Redemptions of shares, including exchanges for shares of another
Scudder fund, may result in tax consequences (gain or loss) to the shareholder
and are also subject to these reporting requirements.
A portion of the difference between the issue price of zero coupon
securities and their face value ("original issue discount") is considered to be
income to a Fund each year, even though a Fund will not receive cash interest
payments from these securities. This original issue discount imputed income will
comprise a part of the investment company taxable income of the Funds which must
be distributed to shareholders in order to maintain the qualification of the
Funds as regulated investment companies and to avoid federal income tax at the
level of the Funds. In the event that a Fund acquires a debt instrument at a
market discount, it is possible that a portion of any gain recognized on the
disposition of such instrument may be treated as ordinary income.
A qualifying individual may make a deductible IRA contribution of up to
$2,000 or, if less, the amount of the individual's earned income for any taxable
year only if (i) neither the individual nor a spouse (unless filing separate
returns) is an active participant in an employer's retirement plan, or (ii) the
individual (and a spouse, if applicable) has an adjusted gross income below a
certain level ($40,050 for married individuals filing a joint return, with a
phase-out of the deduction for adjusted gross income between $40,050 and
$50,000; $25,050 for a single individual, with a phase-out for adjusted gross
income between $25,050 and $35,000). However, an individual not permitted to
make a deductible contribution to an IRA for any such taxable year may
nonetheless make nondeductible contributions up to $2,000 to an IRA (up to
$2,250 to IRAs for an individual and a nonearning spouse) for that year. There
are special rules for determining how withdrawals are to be taxed if an IRA
contains both deductible and nondeductible amounts. In general, a proportionate
amount of each withdrawal will be deemed to be made from nondeductible
contributions; amounts treated as a return of nondeductible contributions will
41
<PAGE>
not be taxable. Also, annual contributions may be made to a spousal IRA even if
the spouse has earnings in a given year if the spouse elects to be treated as
having no earnings (for IRA contribution purposes) for the year.
The Funds will be required to report to the IRS all distributions of
taxable income and capital gains as well as gross proceeds from the redemption
or exchange of Fund shares, except in the case of certain exempt shareholders.
Under the backup withholding provisions of Section 3406 of the Code,
distributions of taxable income and capital gains (and proceeds from the
redemption or exchange of the shares of a regulated investment company if the
funds fail to maintain a constant $1.00 NAV per share) may be subject to
withholding of federal income tax at the rate of 31% in the case of non-exempt
shareholders who fail to furnish the investment company with their taxpayer
identification numbers and with required certifications regarding their status
under the federal income tax law. Withholding may also be required if a Fund is
notified by the IRS or a broker that the taxpayer identification number
furnished by the shareholder is incorrect or that the shareholder has previously
failed to report interest or dividend income. If the withholding provisions are
applicable, any such distributions and proceeds, whether taken in cash or
reinvested in additional shares, will be reduced by the amounts required to be
withheld.
Shareholders of the Funds may be subject to state and local taxes on
distributions received from the Funds and on redemptions of the Funds' shares.
Under the laws of certain states, distributions of investment company taxable
income are taxable to shareholders as dividends, even though a portion of such
distributions may be derived from interest on U.S. Government obligations which,
if received directly by such shareholders, would be exempt from state income
tax.
Each distribution is accompanied by a brief explanation of the form and
character of the distribution. In January of each year, the Funds issue to each
shareholder a statement of the federal income tax status of all distributions.
Each Fund is organized as a Massachusetts business trust and, provided
that it qualifies as a regulated investment company for federal income tax
purposes, is not liable for any income or franchise tax in the Commonwealth of
Massachusetts.
The foregoing discussion of U.S. federal income tax law relates solely
to the application of that law to U.S. persons, i.e., U.S. citizens and
residents and U.S. corporations, partnerships, trusts and estates. Each
shareholder who is not a U.S. person should consider the U.S. and foreign tax
consequences of ownership of shares of a Fund, including the possibility that
such a shareholder may be subject to a U.S. withholding tax at a rate of 30% (or
at a lower rate under an applicable income tax treaty) on amounts constituting
ordinary income received by the shareholder, where such amounts are treated as
income from U.S. sources under the Code.
Shareholders should consult their tax advisers about the application of
the provisions of tax law described in this combined Statement of Additional
Information in light of their particular tax situations.
PORTFOLIO TRANSACTIONS
To the maximum extent feasible, the Adviser places orders for portfolio
transactions for the Funds through the Distributor, which in turn places orders
on behalf of the Funds with other brokers and dealers. The Distributor will
receive no commissions, fees or other remuneration for this service. Allocation
of brokerage is supervised by the Adviser.
A Fund's purchases and sales of portfolio securities are generally
placed by the Adviser with the issuer or a primary market maker for these
securities on a net basis, without any brokerage commission being paid by the
Funds. Trading does, however, involve transaction costs. Transactions with
dealers serving as primary market makers reflect the spread between the bid and
asked prices. Transaction costs may also include fees paid to third parties for
information as to potential purchasers or sellers of securities but only if a
Fund would obtain the most favorable net results, including such fee, on a
particular transaction. Purchases of underwritten issues may be made which will
include an underwriting fee paid to the underwriter. To date, no brokerage
commissions have been paid.
42
<PAGE>
The primary objective of the Adviser in placing orders for the purchase
and sale of securities for the Funds' portfolios is to obtain the most favorable
net results taking into account such factors as price, commission (negotiable in
the case of national securities exchange transactions), if any, size of order,
difficulty of execution and skill required of the executing broker/dealer. The
Adviser seeks to evaluate the overall reasonableness of brokerage commissions
paid (to the extent applicable) through the familiarity of the Distributor with
commissions charged on comparable transactions, as well as by comparing
commissions paid by the Funds to reported commissions paid by others. The
Adviser reviews on a routine basis commission rates, execution and settlement
services performed, making internal and external comparisons.
When it can be done consistently with the policy of obtaining the most
favorable net results, it is the Adviser's practice to place such orders with
brokers and dealers, who supply research, market and statistical information to
the Adviser. The term "research, market and statistical information" includes
advice as to the value of securities, the advisability of investing in,
purchasing or selling securities; and the availability of securities or
purchasers or sellers of securities; and furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts. The Adviser is authorized
when placing portfolio transactions for the Funds to pay a brokerage commission
(to the extent applicable) in excess of that which another broker might have
charged for effecting the same transaction solely on account of the receipt of
research, market or statistical information. The Adviser will not place orders
with brokers or dealers on the basis that a broker or dealer has or has not sold
shares of the Funds. In effecting transactions in over-the-counter securities,
orders are placed with the principal market-makers for the security being traded
unless, after exercising care, it appears that more favorable results are
available otherwise.
Although certain research, market and statistical information from
brokers and dealers can be useful to the Funds and to the Adviser, it is the
opinion of the management of the Funds that such information is only
supplementary to the Adviser's own research effort, since the information must
still be analyzed, weighed, and reviewed by the Adviser's staff. Such
information may be useful to the Adviser in providing services to clients other
than the Funds, and not all such information is used by the Adviser in
connection with the Funds. Conversely, such information provided to the Adviser
by brokers and dealers through whom other clients of the Adviser effect
securities transactions may be useful to the Adviser in providing services to
the Funds.
The Trustees of each Fund review from time to time whether the
recapture for the benefit of each Fund of some portion of the brokerage
commissions or similar fees paid by each Fund on portfolio transactions is
legally permissible and advisable. To date, no such recapture has been effected.
NET ASSET VALUE
The net asset value per share of each Fund is computed twice daily as
of twelve o'clock noon and the close of regular trading on the Exchange,
normally 4 p.m. eastern time, on each day when the Exchange is open for trading.
The Exchange is normally closed on the following national holidays: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving, and Christmas. Net asset value is determined by dividing the total
assets of a Fund, less all of its liabilities, by the total number of shares of
that Fund outstanding. The Funds use the penny-rounding method of security
valuation as permitted under Rule 2a-7 under the 1940 Act. Under this method,
portfolio securities for which market quotations are readily available and which
have remaining maturities of more than 60 days from the date of valuation are
valued at the mean between the over-the-counter bid and asked prices. Securities
which have remaining maturities of 60 days or less are valued by the amortized
cost method; if acquired with remaining maturities of 61 days or more, the cost
thereof for purposes of valuation is deemed to be the value on the 61st day
prior to maturity. Other securities are appraised at fair value as determined in
good faith by or on behalf of the Trustees of each Fund. For example, securities
with remaining maturities of more than 60 days for which market quotations are
not readily available are valued on the basis of market quotations for
securities of comparable maturity, quality and type. Determinations of net asset
value per share for each Fund made other than as of the close of the Exchange
may employ adjustments for changes in interest rates and other market factors.
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<PAGE>
ADDITIONAL INFORMATION
Experts
The financial highlights of each Fund included in each Fund's
prospectus and the Financial Statements incorporated by reference in this
Statement of Additional Information have been so included or incorporated by
reference in reliance on the report of Coopers & Lybrand L.L.P., One Post Office
Square, Boston, Massachusetts 02109, independent accountants, and given on the
authority of that firm as experts in accounting and auditing.
Shareholder Indemnification
The Funds are organizations of the type commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders of such a
trust may, under certain circumstances, be held personally liable as partners
for the obligations of that trust. The Declarations of Trust of each Fund
contain an express disclaimer of shareholder liability in connection with the
Funds' property or the acts, obligations or affairs of the Funds. The
Declarations of Trust also provide for indemnification out of the Funds'
property of any shareholder held personally liable for the claims and
liabilities to which a shareholder may become subject by reason of being or
having been a shareholder. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which a
Fund itself would be unable to meet its obligations.
Other Information
Both Funds have a fiscal year ending on June 30.
Portfolio securities of each Fund are held separately, pursuant to
separate custodian agreements, by State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02101 as custodian.
The CUSIP number of Scudder Cash Investment Trust is 811118-10-8.
The CUSIP number of Scudder U.S. Treasury Money Fund is 81123P-10-6.
"Scudder Cash Investment Trust" is the designation of the Trustees for
the time being under a Declaration of Trust dated December 12, 1975, and the
name "Scudder U.S. Treasury Money Fund" is the designation of the Trustees for
the time being under a Declaration of Trust dated April 4, 1980, each as amended
from time to time, and all persons dealing with a Fund must look solely to the
property of that Fund for the enforcement of any claims against that Fund as
neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of a Fund. Upon the initial
purchase of shares, the shareholder agrees to be bound by a Fund's Declaration
of Trust, as amended from time to time. No series is liable for the obligations
of any other series. The Declaration of Trust of each Fund is on file at the
Massachusetts Secretary of State's Office in Boston, Massachusetts.
Scudder Fund Accounting Corporation (SFAC), Two International Place,
Boston, Massachusetts, 02110-4103, a subsidiary of the Adviser, computes the
Funds' net asset value. Each Fund pays SFAC an annual fee equal to 0.02% of the
first $150 million of average daily net assets, 0.006% of such assets in excess
of $150 million, 0.0035% of such assets in excess of $1 billion, plus holding
and transaction charges for this service. For the fiscal year ended June 30,
1996, SFAC charged SCIT aggregate fees of $104,207 and charged Treasury Fund
aggregate fees of $49,647.
Scudder Service Corporation ("Service Corporation"), P.O. Box 2291,
Boston, Massachusetts 02107-2291, a subsidiary of the Adviser, is the transfer
and dividend disbursing agent for both funds. Service Corporation also serves as
shareholder service agent for the Funds and provides subaccounting and
recordkeeping services for shareholder accounts in certain retirement and
employee benefit plans. The Funds each pay Service Corporation an annual fee of
$28.90 for each account maintained for a participant. For the fiscal year ended
June 30, 1996, Service Corporation charged SCIT aggregate fees of $2,884,988 and
charged Treasury Fund aggregate fees of $682,565.
Scudder Trust Company, Two International Place, Boston, MA 02110-4103,
an affiliate of the Adviser provides services for certain retirement plan
accounts. The Funds each pay Scudder Trust Company an annual fee of $28.90 for
44
<PAGE>
each account maintained for a participant. For the fiscal year ended June 30,
1996, Scudder Trust Company's fee amounted to $1,431,726 for SCIT and $447,051
for Treasury Fund.
This Statement of Additional Information contains the information of
both Scudder Cash Investment Trust and Scudder U.S. Treasury Money Fund. Each
Fund, through its individual prospectus, offers only its own shares, yet it is
possible that one Fund might become liable for a misstatement regarding the
other Fund. The Trustees of each Fund have considered this, and have approved
the use of this Statement of Additional Information.
Each Fund's prospectus and this combined Statement of Additional
Information omit certain information contained in the Registration Statements
which the Funds have filed with the SEC under the Securities Act of 1933 and
reference is hereby made to the Registration Statements for further information
with respect to the Funds and the securities offered hereby. These Registration
Statements are available for inspection by the public at the offices of the SEC
in Washington, D.C.
FINANCIAL STATEMENTS
Scudder Cash Investment Trust
The financial statements, including the investment portfolio, of
Scudder Cash Investment Trust, together with the Report of Independent
Accountants, Financial Highlights and notes to financial statements are
incorporated by reference and attached hereto on pages 7 through 17, inclusive,
in the Annual Report to the Shareholders of the Fund dated June 30, 1996, and
are hereby deemed to be a part of this combined Statement of Additional
Information.
Scudder U.S. Treasury Money Fund
The financial statements, including the investment portfolio, of
Scudder U.S. Treasury Money Fund, together with the Report of Independent
Accountants, Financial Highlights and notes to financial statements are
incorporated by reference and attached hereto on pages 7 through 16, inclusive,
in the Annual Report to the Shareholders of the Fund dated June 30, 1996, and
are hereby deemed to be a part of this combined Statement of Additional
Information.
45
<PAGE>
APPENDIX
DESCRIPTION OF COMMERCIAL PAPER RATINGS
---------------------------------------
Ratings of Municipal Obligations
The six highest ratings of Moody's for municipal bonds are Aaa, Aa, A,
Baa, Ba and B. Bonds rated Aaa are judged by Moody's to be of the best quality.
Bonds rated Aa are judged to be of high quality by all standards. Together with
the Aaa group, they comprise what are generally known as high-quality bonds.
Moody's states that Aa bonds are rated lower than the best bonds because margins
of protection or other elements make long-term risks appear somewhat larger than
for Aaa municipal bonds. Municipal bonds which are rated A by Moody's possess
many favorable investment attributes and are considered "upper medium grade
obligations." Factors giving security to principal and interest of A rated
municipal bonds are considered adequate, but elements may be present which
suggest a susceptibility to impairment sometime in the future. Securities rated
Baa are considered medium grade, with factors giving security to principal and
interest adequate at present but may be unreliable over any period of time. Such
bonds have speculative elements as well as investment-grade characteristics.
Securities rated Ba or below by Moody's are considered below investment grade,
with factors giving security to principal and interest inadequate and
potentially unreliable over any period of time. Such securities are commonly
referred to as "junk" bonds and as such they carry a high margin of risk.
Moody's ratings for municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the differences between short-term and long-term credit risk. Loans bearing the
designation MIG1 are of the best quality, enjoying strong protection by
establishing cash flows of funds for their servicing or by established and
broad-based access to the market for refinancing, or both. Loans bearing the
designation MIG2 are of high quality, with margins of protection ample although
not as large as in the preceding group.
The six highest ratings of S&P for municipal bonds are AAA (Prime), AA
(High-grade), A (Good-grade), BBB (Investment-grade) and BB and B (Below
investment-grade). Bonds rated AAA have the highest rating assigned by S&P to a
municipal obligation. Capacity to pay interest and repay principal is extremely
strong. Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in a small degree. Bonds
rated A have a strong capacity to pay principal and interest, although they are
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions. Bonds rated BBB have an adequate capacity to pay principal
and interest. Adverse economic conditions or changing circumstances are likely
to lead to a weakened capacity to pay interest and repay principal for bonds of
this category than for bonds of higher rated categories. Securities rated BB or
below by S&P are considered below investment grade, with factors giving security
to principal and interest inadequate and potentially unreliable over any period
of time. Such securities are commonly referred to as "junk" bonds and as such
they carry a high margin of risk.
S&P's top ratings for municipal notes issued after July 29, 1984 are
SP-1 and SP-2. The designation SP-1 indicates a very strong capacity to pay
principal and interest. A "+" is added for those issues determined to possess
overwhelming safety characteristics. An "SP-2" designation indicates a
satisfactory capacity to pay principal and interest.
The six highest ratings of Fitch for municipal bonds are AAA, AA, A,
BBB, BB and B. Bonds rated AAA are considered to be investment-grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events. Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds rated 'AAA.'
Because bonds rated in the 'AAA' and 'AA' categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these issuers
is generally rated 'f-1+.' Bonds rated A are considered to be investment grade
and of high credit quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more vulnerable to adverse
changes in economic conditions and circumstances than bonds with higher rates.
Bonds rated BBB are considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse effects on these bonds, and therefore
impair timely payment. The likelihood that the ratings of these bonds will fall
below investment grade is higher than for bonds with greater ratings. Securities
rated BB or below by Fitch are considered below investment grade, with factors
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giving security to principal and interest inadequate and potentially unreliable
over any period of time. Such securities are commonly referred to as "junk"
bonds and as such they carry a high margin of risk.
Commercial Paper Ratings
Commercial paper rated A-1 or better by S&P has the following
characteristics: liquidity ratios are adequate to meet cash requirements;
long-term senior debt is rated "A" or better, although in some cases "BBB"
credits may be allowed; the issuer has access to at least two additional
channels of borrowing; and basic earnings and cash flow have an upward trend
with allowance made for unusual circumstances. Typically, the issuer's industry
is well established and the issuer has a strong position within the industry.
The reliability and quality of management are unquestioned.
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over
a period of ten years; (7) financial strength of a parent company and the
relationship which exists with the issuer; and (8) recognition by the management
of obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations.
The rating F-1+ is the highest rating assigned by Fitch. Among the
factors considered by Fitch in assigning this rating are: (1) the issuer's
liquidity; (2) its standing in the industry; (3) the size of its debt; (4) its
ability to service its debt; (5) its profitability; (6) its return on equity;
(7) its alternative sources of financing; and (8) its ability to access the
capital markets. Analysis of the relative strength or weakness of these factors
and others determines whether an issuer's commercial paper is rated F-1+.
Relative strength or weakness of the above factors determine how the
issuer's commercial paper is rated within the above categories.
<PAGE>
Scudder
Cash
Investment
Trust
Annual Report
June 30, 1996
o A money market fund for investors seeking stability and liquidity of
capital and current income.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange
shares.
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.
<PAGE>
SCUDDER CASH INVESTMENT TRUST
TABLE OF CONTENTS
3 Letter from the Fund's President
4 Portfolio Management Discussion
Your portfolio management team reviews the period's investing
strategies, financial markets, and economic conditions
7 Investment Portfolio
Itemized list of portfolio holdings
10 Financial Statements
13 Financial Highlights
14 Notes to Financial Statements
17 Report of Independent Accountants
21 Officers and Trustees
22 Investment Products and Services
23 How to Contact Scudder
2
<PAGE>
LETTER FROM THE FUND'S PRESIDENT
Dear Shareholders,
No matter what type of investor you are or where you think the
financial markets are headed, money market funds form an important part of a
well-balanced portfolio by providing a convenient parking place for cash
savings. Scudder Cash Investment Trust is designed to provide safety and
stability by investing in high quality short-term securities.
The markets both elated and frustrated investors over the past 12
months. In an environment of rising interest rates and falling prices on
fixed-income securities, stock funds experienced strong inflows at the expense
of bond funds, with aggressive stock funds taking center stage until recently.
Money market funds continued to provide a relatively stable haven for those
uncomfortable with the uncertain economic and market environment, and produced
modest gains during the year. The average money market fund returned 5.02% for
the 12-month period ended June 30th, according to Lipper Analytical Services. In
addition, money funds experienced strong inflows during the period, with assets
reaching more than $828 billion, according to IBC's Money Fund Report.
Looking ahead, we expect the economy to remain slow and steady for the
remainder of the year, with interest rates remaining at or above their current
level. Regardless of the economic environment, Scudder Cash Investment Trust
will seek to maintain its $1.00 share price and competitive yield. Should you
have any questions about your investment, please call a Scudder Investor
Relations representative at 1-800-225-2470. 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
3
<PAGE>
SCUDDER CASH INVESTMENT TRUST
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
The key to maintaining investor confidence in a money market fund is the
ability to provide share price stability and a competitive yield. Investing in
high quality money market securities helps Scudder Cash Investment Trust pursue
both objectives. At the close of the Fund's fiscal year, its 7-day net
annualized yield was 4.67%. The Fund's total return for the year was 4.89%,
compared with the 5.02% return of the 276 taxable money funds tracked by Lipper
Analytical Services.
Elements Affecting Money Fund Yields
Interest rate fluctuations, average maturity, and stock and bond market
performance are all factors that money fund managers analyze when investing in
money market securities. Each element contributes to the performance of a fund
in a unique way.
Interest Rates. Declining interest rates generally translate into lower
yields for money fund investors, as cash received from maturing investments must
be reinvested at lower rates. Rising interest rates, on the other hand, help
boost money fund yields. During the first half of the Fund's fiscal year,
interest rates declined. Over the last six months of the period, they remained
relatively flat, and ended the period at less than they were one year ago.
Average Maturity. Yields are also affected by the average length to
maturity of the securities in a fund's portfolio. Longer maturities tend to
provide higher yields to reward investors for taking additional risk, while
shorter maturities provide safety and liquidity. If interest rates were expected
to rise, for instance, decreasing a Fund's average maturity would allow the fund
to buy higher-yielding securities with the money from maturing securities. If
rates were expected to fall, locking into securities with longer maturities
would provide the Fund with higher yields until these securities matured. Due to
increased market volatility and the potential for rising interest rates, we
shortened Scudder Cash Investment Trust's average maturity to 42 days during the
second half of the 12-month period. The following chart shows the effect that
this shorter average maturity had on the Fund's yield.
4
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
LINE CHART TITLE: Your Fund's Yield Compared
with Short-Term Interest Rates*
CHART DATA:
Fund Interest
Date Yield Rate
---- ----- ----
6/95 5.12 5.61
7/95 5.11 5.59
8/95 5.01 5.45
9/95 4.92 5.4
10/95 4.91 5.48
11/95 4.91 5.33
12/95 4.85 5.19
1/96 4.75 4.96
2/96 4.63 4.99
3/96 4.59 5.18
4/96 4.49 5.16
5/96 4.53 5.19
6/96 4.67 5.19
* The Fund yield shown is the 7-day net annualized SEC yield. Interest rates
are represented by the 3-month Treasury bill rate.
Other Markets. Stock and bond market performance can have an effect on
money funds, as investors tend to flock toward money funds when other markets
experience volatility. The stock market saw heavy inflows during the first six
months of 1996, as investors' confidence was heightened after a strong 1995.
Uncertainty about the direction of interest rates caused bond returns to pale
after a healthy start. Many investors seeking a safe haven chose money funds,
whose assets rose to $828 billion as of the week ended June 25, from $775
billion six months earlier. Such inflows will help money funds take advantage of
new issues in the marketplace, as well as invest in securities with longer
maturities to help boost yields in the current rate environment. If inflows are
too strong, though, pressure can mount to invest extra cash quickly, and can
sometimes force a fund to buy securities whose relative value is low. We are
happy to report that Scudder Cash Investment Trust's manageable size aids
careful selection of quality issues.
Portfolio Makeup
During the first half of the period, floating rate notes (FRNs) made up 23%
of the portfolio. The interest rates of these securities "float" above a
particular interest rate, and they typically provide higher yields than
three-month Treasury bills and some commercial paper. We reduced the Fund's
exposure to these instruments over the second half of the year, as their yield
advantage was minimal. At the close of the period, 84% of the portfolio was
invested in commercial paper and short-term notes.
5
<PAGE>
SCUDDER CASH INVESTMENT TRUST
Outlook
We expect economic growth to remain slow in the second half of the year,
prompting us to keep the Fund's average maturity fairly short. And, we will
continue to purchase high-quality investments to help provide a stable share
price. We believe Scudder Cash Investment Trust remains an appropriate place for
your short-term investment needs.
Should you have any questions about the Fund or your investments, please
call a Scudder Investor Relations representative at 1-800-225-2470. Thank you
for choosing Scudder Cash Investment Trust to help meet your investment needs.
Sincerely,
Your Portfolio Management Team
/s/Stephen L. Akers /s/Robert T. Neff
Stephen L. Akers Robert T. Neff
/s/Debra A. Hanson /s/K. Sue Cote
Debra A. Hanson K. Sue Cote
Scudder Cash Investment Trust:
A Team Approach to Investing
Scudder Cash Investment Trust is managed by a team of investment
professionals who each play an important role in the Fund's management process.
Team members work together to develop investment strategies and select
securities for the Fund's portfolio. They are supported by Scudder's large staff
of economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. We believe our
team approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Lead Portfolio Manager Stephen L. Akers assumed responsibility for the
Fund's day-to-day management in 1995. Steve joined the Fund's team in 1994 and
has managed several fixed-income portfolios since joining Scudder in 1984.
Portfolio Manager Robert T. Neff joined Scudder in 1972 and has managed several
fixed-income portfolios. Bob has more than 20 years experience managing
short-term fixed-income assets. Debra A. Hanson, Portfolio Manager, assists with
the development and execution of investment strategy and has been with Scudder
since 1983. K. Sue Cote, Portfolio Manager, joined Scudder in 1983 and has 13
years experience working with short-term fixed-income investments.
6
<PAGE>
INVESTMENT PORTFOLIO as of June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF PRINCIPAL VALUE ($)
PORTFOLIO AMOUNT ($) (NOTE A)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2.7% REPURCHASE AGREEMENTS
30,000,000 Repurchase Agreement with Donaldson,
Lufkin & Jenrette, dated 6/28/96 at 5.45%
to be repurchased at $30,013,625 on 7/1/96,
collateralized by a $29,820,000 U.S. Treasury
Note, 6.875%, 10/31/99 .............................. 30,000,000
6,833,000 Repurchase Agreement with State Street Bank
and Trust Company, dated 6/28/96 at 5% to
be repurchased at $6,835,847 on 7/1/96,
collateralized by a $6,840,000 U.S. Treasury
Note, 6%, 8/31/97 .................................... 6,833,000
-----------
Total Repurchase Agreements
(Cost $36,833,000) ................................... 36,833,000
-----------
66.0% COMMERCIAL PAPER
CONSUMER STAPLES 7.6%
Food & Beverage 40,000,000 Campbell Soup Co., 5.21%, 7/30/96 ........................ 39,826,967
40,000,000 Coca-Cola Co., 4.7%, 7/9/96 .............................. 39,953,067
25,000,000 Unilever Capital Corp., 5.58%, 10/15/96 .................. 24,592,063
-----------
104,372,097
-----------
HEALTH 1.4%
Pharmaceuticals 20,000,000 Warner-Lambert Co., 5.58%, 10/17/96 ...................... 19,667,550
-----------
COMMUNICATIONS 2.2%
Telephone/
Communications 30,000,000 Ameritech Corp., 5.41%, 8/16/96 .......................... 29,789,672
-----------
FINANCIAL 43.2%
Banks 7.9% 35,000,000 ABN-AMRO N.A. Finance Inc., 5.61%, 11/12/96 .............. 34,279,438
20,000,000 Credit Agricole USA Inc., 5.58%, 10/9/96 ................. 19,691,950
25,000,000 J.P. Morgan & Co. Inc., 5.43%, 8/29/96 ................... 24,775,833
30,000,000 Wachovia Corp., 5.11%, 7/29/96 ........................... 29,877,033
-----------
108,624,254
===========
Insurance 4.3% 25,000,000 Prudential Funding Corp., 5.29%, 7/22/96 ................. 24,919,486
25,000,000 Prudential Funding Corp., 5.19%, 7/31/96 ................. 24,888,750
10,000,000 Prudential Funding Corp., 5.45%, 9/23/96 ................. 9,872,972
-----------
59,681,208
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-----
7
<PAGE>
SCUDDER CASH INVESTMENT TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF PRINCIPAL VALUE ($)
PORTFOLIO AMOUNT ($) (NOTE A)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Business Finance 11.0% 40,000,000 CIT Group Holdings Inc., 4.73%, 7/9/96 ........... 39,952,711
25,000,000 Ciesco L.P., 5.33%, 8/6/96 ....................... 24,863,818
15,000,000 Corporate Asset Funding Co. Inc., 5.60%, 7/1/96 .. 15,000,000
20,000,000 New Center Asset Trust, 4.66%, 7/8/96 ............ 19,979,311
25,000,000 New Center Asset Trust, 5.45%, 9/24/96 ........... 24,678,694
28,000,000 Norwest Corp., 5.04%, 7/17/96 27,933,547
-----------
152,408,081
-----------
Consumer Finance 9.9% 25,000,000 Ford Motor Credit Corp., 5.59%, 10/28/96 .......... 24,542,500
40,000,000 Ford Motor Credit Corp., 5.28%, 7/11/96 ........... 39,935,588
22,000,000 General Electric Capital Services Inc., 5%,
7/16/96 ......................................... 21,951,233
20,000,000 General Electric Capital Services Inc., 5.42%,
8/23/96 ......................................... 19,838,599
30,000,000 Pitney Bowes Credit Corp., 5.12%, 7/24/96 ......... 29,898,033
-----------
136,165,953
-----------
Other Financial
Companies 10.1% 30,000,000 AIG Funding Inc., 5.16%, 7/30/96 .................. 29,871,675
40,000,000 Associates Corp. of North America, 4.79%,
7/10/96 ......................................... 39,946,900
20,000,000 Associates Corp. of North America, 4.99%,
7/15/96 ......................................... 19,958,467
5,000,000 Associates Corp. of North America, 6.875%,
1/15/97 ......................................... 5,021,800
25,000,000 American General Finance Corp., 5.43%,
8/26/96 ......................................... 24,787,041
20,093,000 Matterhorn Capital Corp., 5.26%, 7/2/96 ........... 20,090,064
-----------
139,675,947
-----------
MEDIA 2.2%
Broadcasting &
Entertainment 30,000,000 Walt Disney Co., 5.13%, 7/25/96 ................... 29,893,600
-----------
TECHNOLOGY 4.7%
Diverse Electronic
Products 30,000,000 Emerson Electric Co., 4.88%, 7/12/96 .............. 29,951,233
35,000,000 Motorola Inc., 4.73%, 7/9/96 ...................... 34,958,622
-----------
64,909,855
-----------
ENERGY 4.7%
Oil Companies 2.5% 35,000,000 Chevron Oil Finance Co., 4.97%, 7/15/96 ........... 34,927,725
Oilfield Services/
Equipment 2.2% 29,700,000 Halliburton Co., 4.9%, 7/12/96 .................... 29,651,540
-----------
TOTAL COMMERCIAL PAPER (COST $910,003,252) ........ 909,767,482
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
- -----
8
<PAGE>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF PRINCIPAL VALUE ($)
PORTFOLIO AMOUNT ($) (NOTE A)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
16.4% U.S. GOVERNMENT AGENCY OBLIGATIONS
56,000,000 Federal National Mortgage Association,
5.449%, 7/14/99* ................................. 55,367,200
50,000,000 Student Loan Marketing Association, 4.68%,
11/27/96* ........................................ 50,099,500
25,000,000 Student Loan Marketing Association, 5.66%,
2/14/97* ........................................ 25,058,250
50,000,000 Student Loan Marketing Association, 5.51%,
10/30/97* ........................................ 50,019,000
46,500,000 Student Loan Marketing Association, 5.14%,
7/12/99* ........................................ 46,035,000
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $227,500,000) ............................... 226,578,950
=============
14.9% MEDIUM-TERM AND SHORT TERM NOTES
20,000,000 Banc One Corp., 5.56%, 3/25/97 ..................... 19,972,143
15,000,000 Bank of America Illinois, 5.7%, 5/28/97 ............ 15,000,049
35,000,000 FCC National Bank Note, 5.5%, 9/16/96 .............. 35,000,244
20,000,000 FCC National Bank Note, 5.8%, 10/10/96 ............. 19,993,800
25,000,000 Fifth Third Bancorp, 5.39%, 8/16/96 ................ 25,000,000
5,000,000 General Electric Capital Corp., 7.625%, 1/10/97 .... 5,043,550
12,250,000 General Electric Capital Corp., 5.29%, 1/13/97 ..... 12,211,780
35,000,000 Harris Trust & Savings Bank, 5.44%, 9/9/96 ......... 34,996,146
10,000,000 Nationsbank of Texas, 5.55%, 11/8/96 ............... 9,988,398
20,000,000 Pittsburgh National Bank, 5.4%, 7/1/97 ............. 19,980,340
8,000,000 Wachovia Corp., 6.3%, 7/15/96 ...................... 8,002,459
-------------
TOTAL MEDIUM-TERM AND SHORT-TERM NOTES
(Cost $205,268,901) ............................... 205,188,909
=============
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0%
(Cost $1,379,605,153) (a) ........................ 1,378,368,341
=============
</TABLE>
(a) The cost for federal income tax purposes was $1,379,605,153. At June 30,
1996, net unrealized depreciation for all securities based on tax cost was
$1,236,812. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $192,602 and aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over market value of $1,429,414.
* 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 June 30, 1996.
The accompanying notes are an integral part of the financial statements.
-----
9
<PAGE>
SCUDDER CASH INVESTMENT TRUST
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
June 30, 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at value (identified cost $1,379,605,153)
(Note A) ................................................ $1,378,368,341
Cash 1,908,979
Receivables:
Investments sold ........................................ 25,750,000
Fund shares sold ........................................ 3,829,061
Interest ................................................ 5,845,729
Other assets ................................................ 23,949
--------------
Total assets .......................................... 1,415,726,059
LIABILITIES
Payables:
Investments purchased ................................... $19,980,340
Fund shares redeemed .................................... 6,904,741
Dividends ............................................... 329,985
Accrued management fee (Note B) ......................... 476,686
Other accrued expenses (Note B) ......................... 668,430
-----------
Total liabilities ..................................... 28,360,182
--------------
Net assets, at value ........................................ $1,387,365,877
==============
NET ASSETS
Net assets consist of:
Unrealized depreciation on investments .................. $ (1,236,812)
Shares of beneficial interest ........................... 13,883,569
Additional paid-in capital .............................. 1,374,719,120
--------------
Net assets, at value ........................................ $1,387,365,877
==============
NET ASSET VALUE, offering and redemption price per
share ($1,387,365,877 divided by 1,388,356,869 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>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended June 30, 1996
- ------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest .............................................. $80,717,847
Expenses:
Management fee (Note B) ............................... $5,898,959
Services to shareholders (Note B) ..................... 5,180,023
Trustees' fees and expenses (Note B) .................. 34,046
Custodian and accounting fees (Note B) ................ 259,856
Reports to shareholders ............................... 323,727
State registration .................................... 78,566
Legal ................................................. 23,202
Auditing .............................................. 40,526
Other ................................................. 69,523 11,908,428
-----------------------------
Net investment income ................................. 68,809,419
-----------
NET UNREALIZED GAIN ON INVESTMENT TRANSACTIONS
Net unrealized appreciation on investments during the
period ........................................ 268,338
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $69,077,757
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-----
11
<PAGE>
SCUDDER CASH INVESTMENT TRUST
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
---------------------------------------------
INCREASE (DECREASE) IN NET ASSETS 1996 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income............................ $ 68,809,419 $ 75,760,622
Net unrealized appreciation (depreciation)
on investment transactions during
the period.................................... 268,338 (1,328,106)
--------------- ---------------
Net increase in net assets resulting
from operations............................... 69,077,757 74,432,516
--------------- ---------------
Distributions to shareholders from net
investment income ($.048 and $.048
per share, respectively)...................... (68,809,419) (75,760,622)
--------------- ---------------
Fund share transactions at net asset
value of $1.00 per share:
Shares sold...................................... 1,734,972,406 3,872,417,037
Net asset value of shares issued to
shareholders in reinvestment of
distributions................................. 64,180,974 70,361,737
Shares redeemed ................................. (1,932,327,819) (3,851,655,789)
--------------- ---------------
Net increase (decrease) in net assets from
Fund share transactions....................... (133,174,439) 91,122,985
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS................ (132,906,101) 89,794,879
Net assets at beginning of period................ 1,520,271,978 1,430,477,099
--------------- ---------------
NET ASSETS AT END OF PERIOD...................... $ 1,387,365,877 $ 1,520,271,978
=============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
- -----
12
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD AND OTHER PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL
STATEMENTS.
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1982 1991 1990 1989 1988 1987
-------------------------------------------------------------------------------------------------
<S> <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
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment
income ................. .048 .048 .027 .027 .047 .069 .080 .082 .064 .056
Distributions from net
investment income
and net realized
capital gains .......... (.048) (.048) (.027) (.027) (.047) (.069) (.080) (.082) (.064) (.056)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period .......... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%) ......... 4.89 4.90 2.77 2.75 4.76 7.13 8.23 8.49 6.59 5.71
RATIOS AND
SUPPLEMENTAL DATA
Net assets, end
of period ($ millions).. 1,387 1,520 1,430 1,119 1,361 1,736 1,644 1,563 1,370 1,144
Ratio of operating
expenses to average
daily net assets (%) ... .83 .78 .82 .78 .70 .66 .67 .66 .68 .68
Ratio of net investment
income to average
daily net assets (%) ... 4.79 4.84 2.78 2.72 4.58 6.91 7.93 8.21 6.44 5.55
</TABLE>
-----
13
<PAGE>
SCUDDER CASH INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
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 Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
SECURITY VALUATION. 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.
-----
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
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 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. As manager of
the assets of the Fund, 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 Management Agreement. 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. For the year ended June 30,
1996, the fee pursuant to the Agreement amounted to $5,898,959 which was
equivalent to an annual effective rate of 0.41% of the Fund's average daily net
assets.
-----
15
<PAGE>
SCUDDER CASH INVESTMENT TRUST
- -------------------------------------------------------------------------------
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
year ended June 30, 1996, the amount charged to the Fund by SSC aggregated
$2,884,988, of which $235,893 is unpaid at June 30, 1996.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the year ended June 30, 1996,
the amount charged to the Fund by STC aggregated $1,431,726, of which $232,303
is unpaid at June 30, 1996.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
June 30, 1996, the amount charged to the Fund by SFAC aggregated $104,207, of
which $17,019 is unpaid at June 30, 1996.
The Fund pays each Trustee not affiliated with the Adviser $4,000 annually plus
specified amounts for attended board and committee meetings. For the year ended
June 30, 1996, Trustees' fees and expenses aggregated $34,046.
-----
16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE TRUSTEES AND SHAREHOLDERS OF SCUDDER CASH INVESTMENT TRUST:
We have audited the accompanying statement of assets and liabilities of Scudder
Cash Investment Trust, including the investment portfolio, as of June 30, 1996,
and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended and
the financial highlights for each of the ten years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Cash Investment Trust as of June 30, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the ten years
in the period then ended, in conformity with generally accepted accounting
principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
August 6, 1996
-----
17
<PAGE>
(This page intentionally left blank.)
18
<PAGE>
(This page intentionally left blank.)
19
<PAGE>
(This page intentionally left blank.)
20
<PAGE>
OFFICERS AND TRUSTEES
David S. Lee*
President and Trustee
Cuyler W. Findlay*
Vice President and Trustee
Dudley H. Ladd*
Vice President and Trustee
Henry P. Becton, Jr.
Trustee; President and
General Manager, WGBH
Educational Foundation
Dawn-Marie Driscoll
Trustee; Attorney and
Corporate Director
Peter B. Freeman
Trustee; Corporate
Director and Trustee
George M. Lovejoy, Jr.
Trustee; President and
Director, Fifty Associates
Stephen L. Akers*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Robert T. Neff*
Vice President
Edward J. O'Connell*
Vice President and Assistant Treasurer
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
21
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PRODUCTS AND SERVICES
The Scudder Family of Funds
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder Global Bond Fund
Tax Free Money Market+ Scudder GNMA Fund
Scudder Tax Free Money Fund Scudder High Yield Bond Fund
Scudder California Tax Free Money Fund* Scudder Income Fund
Scudder New York Tax Free Money Fund* Scudder International Bond Fund
Tax Free+ Scudder Short Term Bond Fund
Scudder California Tax Free Fund* Scudder Zero Coupon 2000 Fund
Scudder High Yield Tax Free Fund Growth
Scudder Limited Term Tax Free Fund Scudder Capital Growth Fund
Scudder Managed Municipal Bonds Scudder Development Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Emerging Markets Growth Fund
Scudder Massachusetts Tax Free Fund* Scudder Global Fund
Scudder Medium Term Tax Free Fund Scudder Global Discovery Fund
Scudder New York Tax Free Fund* Scudder Gold Fund
Scudder Ohio Tax Free Fund* Scudder Greater Europe Growth Fund
Scudder Pennsylvania Tax Free Fund* Scudder International Fund
Growth and Income Scudder Latin America Fund
Scudder Balanced Fund Scudder Pacific Opportunities Fund
Scudder Growth and Income Fund Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Scudder Institutional Fund, Inc. Scudder Treasurers Trust(TM)++
Scudder Fund, Inc.
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +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.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
HOW TO CONTACT SCUDDER
Account Service and Information
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For personalized information about your
Scudder accounts; exchanges and
redemptions; or information on any
Scudder fund SCUDDER AUTOMATED
INFORMATION LINE (SAIL) 1-800-343-2890
Investment Information
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
To receive information about the
Scudder funds, for additional
applications and prospectuses, or for
investment questions SCUDDER INVESTOR
RELATIONS 1-800-225-2470
For establishing 401(k) and 403(b) plans
SCUDDER DEFINED CONTRIBUTION SERVICES
1-800-323-6105
Please address all correspondence to
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Visit the Scudder World Wide Web Site at:
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
http://funds.scudder.com
Or stop by a Scudder Funds Center
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they can
be found in the following cities:
Boca Raton New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
For information on Scudder For information on Scudder
Treasurers Trust,(TM) an institutional Institutional Funds,* funds
cash management service for designed to meet the broad
corporations, non-profit investment management and
organizations and trusts that uses service needs of banks and
certain portfolios of Scudder Fund, other institutions, call
Inc.* ($100,000 minimum), call 1-800-854-8525.
1-800-541-7703.
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
* Contact Scudder Investor Services, Inc., Distributor, to receive a prospectus
with more complete information, including management fees and expenses.
Please read it carefully before you invest or send money.
</TABLE>
23
<PAGE>
Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven
Clark, Scudder, Stevens & Clark was the first independent investment counsel
firm in the United States. Since its birth, Scudder's pioneering spirit and
commitment to professional long-term investment management have helped shape the
investment industry. In 1928, we introduced the nation's first no-load mutual
fund. Today we offer 39 pure no load(TM) funds, including the first
international mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
<PAGE>
Shares of Scudder U.S. Treasury Money Fund 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 U.S. Treasury Money Fund
Annual Report
June 30, 1996
o A money market fund investing in short-term U.S. government securities. For
investors seeking current income plus liquidity and stability of capital.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange
shares.
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
TABLE OF CONTENTS
3 Letter from the Fund's President
4 Portfolio Management Discussion Your portfolio management team reviews the
period's investing strategies, financial markets, and economic conditions
7 Investment Portfolio
Itemized list of portfolio holdings
9 Financial Statements
12 Financial Highlights
13 Notes to Financial Statements
16 Report of Independent Accountants
17 Officers and Trustees
18 Investment Products and Services
19 How to Contact Scudder
2
<PAGE>
LETTER FROM THE FUND'S PRESIDENT
Dear Shareholders,
No matter what type of investor you are or where you think the
financial markets are headed, money market funds form an important part of a
well-balanced portfolio by providing a convenient parking place for cash
savings. Scudder U.S. Treasury Money Fund is designed to provide safety and
stability with minimal credit risk. It achieves this by investing exclusively in
short-term securities unconditionally guaranteed by the U.S. government.
The markets both elated and frustrated investors over the past 12
months. In an environment of rising interest rates and falling prices on
fixed-income securities, stock funds experienced strong inflows at the expense
of bond funds, with aggressive stock funds taking center stage until recently.
Money market funds continued to provide a relatively stable haven for those
uncomfortable with the uncertain economic and market environment, and produced
modest gains during the year. The average money market fund returned 5.02% for
the 12-month period ended June 30th, according to Lipper Analytical Services. In
addition, money funds experienced strong inflows during the period, with assets
reaching more than $828 billion, according to IBC's Money Fund Report.
Looking ahead, we expect the economy to remain slow and steady for the
remainder of the year, with interest rates remaining at or above their current
level. Regardless of the economic environment, Scudder U.S. Treasury Money Fund
will seek to maintain its $1.00 share price and competitive yield. Should you
have any questions about your investment, please call a Scudder Investor
Relations representative at 1-800-225-2470. Thank you for choosing Scudder U.S.
Treasury Money Fund to help meet your investment needs.
Sincerely,
/s/David S. Lee
David S. Lee
President,
Scudder U.S. Treasury Money Fund
3
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
The key to maintaining investor confidence in a money market fund is the
ability to provide share price stability and a competitive yield. Investing in
the highest quality money market securities available helps Scudder U.S.
Treasury Money Fund pursue both objectives. Moreover, the Fund's investment
solely in U.S. Treasury securities allows for income free from most state and
local taxes. At the close of the Fund's fiscal year, its 7-day net annualized
yield was 4.45%. The Fund's total return for the 12 months was 4.91%, compared
with the 4.95% return of the 92 U.S. Treasury money funds tracked by Lipper
Analytical Services.
Elements Affecting Money Fund Yields
Interest rate fluctuations, average maturity, and stock and bond market
performance are all factors that money fund managers analyze when investing in
money market securities. Each element contributes to the performance of a fund
in a unique way.
Interest Rates. Declining interest rates generally translate into lower
yields for money fund investors, as cash received from maturing investments must
be reinvested at lower rates. Rising interest rates, on the other hand, help
boost money fund yields. During the first half of the Fund's fiscal year,
interest rates declined. Over the last six months of the period, they remained
relatively flat, and ended the period at less than they were one year ago.
Average Maturity. Yields are also affected by the average length to
maturity of the securities in a fund's portfolio. Longer maturities tend to
provide higher yields to reward investors for taking additional risk, while
shorter maturities provide safety and liquidity. If interest rates were expected
to rise, for instance, decreasing a Fund's average maturity would allow the fund
to buy higher-yielding securities with the money from maturing securities. If
rates were expected to fall, locking into securities with longer maturities
would provide the Fund with higher yields until these securities matured. Due to
increased market volatility and the potential for rising interest rates, we
shortened Scudder U.S. Treasury Money Fund's average maturity to 45 days during
the second half of the 12-month period. The following chart shows the effect
that this shorter average maturity had on the Fund's yield.
4
<PAGE>
THE PRINTED VERSION CONTAINS A LINE CHART HERE
CHART TITLE:
Your Fund's Yield Compared
with Short-Term Interest Rates*
Fund Yield Interest Rate
---------- -------------
6/95 5.20% 5.61%
7/95 5.11 5.59
8/95 5.08 5.45
9/95 5.02 5.4
10/95 4.98 5.48
11/95 5.01 5.33
12/95 4.89 5.19
1/96 4.78 4.96
2/96 4.57 4.99
3/96 4.54 5.18
4/96 4.44 5.16
5/96 4.42 5.19
6/96 4.45 5.19
* The Fund yield shown is the 7-day net annualized SEC yield. Interest rates
are represented by the 3-month Treasury bill rate.
Other Markets. Stock and bond market performance can have an effect on
money funds, as investors tend to flock toward money funds when other markets
experience volatility. The stock market saw heavy inflows during the first six
months of 1996, as investors' confidence was heightened after a strong 1995.
Uncertainty about the direction of interest rates caused bond returns to pale
after a healthy start. Many investors seeking a safe haven chose money funds,
whose assets rose to $828 billion as of June 25, from $775 billion six months
earlier. Such inflows help money funds take advantage of new issues in the
marketplace, as well as invest in securities with longer maturities to help
boost yields in the current rate environment. If inflows are too strong, though,
pressure can mount to invest extra cash quickly, and can sometimes force a fund
to buy securities whose relative value is low. We are happy to report that
Scudder U.S. Treasury Money Fund's manageable size aids careful selection of
quality issues.
Portfolio Makeup
As you might expect, a major portion of the Fund was invested in U.S.
Treasury securities during the period. These securities are backed by the U.S.
government, and provide the highest degree of safety available in a money market
security. At the period's close, these securities made up 95% of the Fund's
portfolio. Repurchase agreements made up the remaining 5% of the portfolio at
the close of the period. During much of the second quarter, securities with
shorter maturities actually provided higher yields than those with longer
5
<PAGE>
maturities -- a situation known as an inverted yield curve. We took advantage of
this opportunity with 30% of the Fund's assets in these shorter-term repurchase
agreements at the close of the period six months ago. As the yield curve
reversed itself over the course of the third quarter, we moved out of repurchase
agreements and back into U.S. Treasury bills.
Outlook
We expect economic growth to remain slow in the second half of the year,
prompting us to keep the Fund's average maturity short. And, we will continue to
purchase only the highest quality investments to help provide a stable share
price. We believe Scudder U.S. Treasury Money Fund remains an appropriate place
for your short-term investment needs.
Should you have any questions about the Fund or your investments, please
call a Scudder Investor Relations representative at 1-800-225-2470. Thank you
for choosing Scudder U.S. Treasury Money Fund to help meet your investment
needs.
Sincerely,
Your Portfolio Management Team
/s/Stephen L. Akers /s/Robert T. Neff
Stephen L. Akers Robert T. Neff
/s/Debra A. Hanson /s/K. Sue Cote
Debra A. Hanson K. Sue Cote
Scudder U.S. Treasury
Money Fund:
A Team Approach to Investing
Scudder U.S. Treasury Money Fund is managed by a team of investment
professionals who each play an important role in the Fund's management process.
Team members work together to develop investment strategies and select
securities for the Fund's portfolio. They are supported by Scudder's large staff
of economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. We believe our
team approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Lead Portfolio Manager Stephen L. Akers assumed responsibility for the
Fund's day-to-day management in 1995. Steve joined the Fund's team in 1994 and
has managed several fixed-income portfolios since joining Scudder in 1984.
Portfolio Manager Robert T. Neff joined Scudder in 1972 and has managed several
fixed-income portfolios. Bob has more than 20 years experience managing
short-term fixed-income assets. Debra A. Hanson, Portfolio Manager, assists with
the development and execution of investment strategy and has been with Scudder
since 1983. K. Sue Cote, Portfolio Manager, joined Scudder in 1983 and has 13
years experience working with short-term fixed-income investments.
6
<PAGE>
INVESTMENT PORTFOLIO as of June 30, 1996
<TABLE>
<CAPTION>
% of Principal Value ($)
Portfolio Amount ($) (Note A)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
4.8% REPURCHASE AGREEMENTS
13,751,000 Repurchase Agreement with Donaldson,
Lufkin & Jenrette dated 6/28/96 at 5.45%,
to be repurchased at $13,757,245
on 7/1/96, collateralized by a $13,284,000
U.S. Treasury Note, 7.875%, 4/15/98............. 13,751,000
5,402,000 Repurchase Agreement with State Street
Bank and Trust Company dated 6/28/96
at 5%, to be repurchased at $5,404,251
on 7/1/96, collateralized by a $5,405,000
U.S. Treasury Note, 6%, 8/31/97.................. 5,402,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $19,153,000)............................. 19,153,000
-----------
95.2% U.S. TREASURY OBLIGATIONS
35,000,000 U.S. Treasury Bill, 4.85%, 7/5/96................ 34,976,445
35,000,000 U.S. Treasury Bill, 4.84%, 7/11/96............... 34,948,263
45,000,000 U.S. Treasury Bill, 4.83%, 7/25/96............... 44,849,639
45,000,000 U.S. Treasury Bill, 4.85%, 8/1/96................ 44,806,685
40,000,000 U.S. Treasury Bill, 4.88%, 8/8/96................ 39,789,546
25,000,000 U.S. Treasury Bill, 4.85%, 8/15/96............... 24,846,163
35,000,000 U.S. Treasury Bill, 4.92%, 8/22/96............... 34,748,357
30,000,000 U.S. Treasury Bill, 4.85%, 8/29/96............... 29,759,508
10,000,000 U.S. Treasury Bill, 5.01%, 9/5/96................ 9,907,600
15,000,000 U.S. Treasury Bill, 5.02%, 9/12/96............... 14,846,700
10,000,000 U.S. Treasury Bill, 5.05%, 9/19/96............... 9,887,600
5,000,000 U.S. Treasury Bill, 5.04%, 9/26/96............... 4,939,100
10,000,000 U.S. Treasury Bill, 5.07%, 10/3/96............... 9,868,100
10,000,000 U.S. Treasury Bill, 5.11%, 10/10/96.............. 9,857,200
10,000,000 U.S. Treasury Bill, 5.15%, 10/17/96.............. 9,846,400
5,000,000 U.S. Treasury Bill, 5.20%, 11/14/96.............. 4,902,900
5,000,000 U.S. Treasury Bill, 5.21%, 11/21/96.............. 4,897,900
5,000,000 U.S. Treasury Bill, 5.21%, 11/29/96.............. 4,892,400
5,000,000 U.S. Treasury Bill, 5.26%, 12/5/96............... 4,887,250
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $377,469,071) 377,457,756
-----------
- -------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0%
(Cost $396,622,071)(a) 396,610,756
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
- ----------------------------------------------
(a) The cost for federal income tax purposes was $396,622,071. At
June 30, 1996, net unrealized depreciation for all securities
based on tax cost was $11,315. This consisted of aggregate
gross unrealized appreciation for all securities in which
there was an excess of market value over tax cost of $16,663
and aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over market value of
$27,978.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
- ---------------------------------------------------------------
<TABLE>
ASSETS
<S> <C> <C>
Investments, at value (identified cost $396,622,071)
(Note A) ......................................... $ 396,610,756
Cash ..................................................... 82,335
Receivables:
Fund shares sold ................................. 1,997,363
Interest ......................................... 8,496
Other assets ............................................. 2,792
-------------
Total assets ............................. 398,701,742
LIABILITIES
Payables:
Fund shares redeemed ................. $ 2,166,478
Dividends ............................ 87,802
Accrued management fee (Note B) ...... 40,016
Other accrued expenses (Note B) ...... 205,602
-------------
Total liabilities ............ 2,499,898
--------------
Net assets, at value $ 396,201,844
==============
NET ASSETS
Net assets consist of:
Net unrealized depreciation on investments ....... $ (11,315)
Accumulated net realized gain .................... 2,458
Shares of beneficial interest .................... 3,962,107
Additional paid-in capital ....................... 392,248,594
--------------
Net assets, at value ..................................... $ 396,201,844
==============
NET ASSET VALUE, offering and redemption price per share
($396,201,844 divided by 396,210,701 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.
9
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended June 30, 1996
- ------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest .......................................... $ 21,449,541
Expenses:
Management fee (Note B) ........................... $ 1,968,151
Services to shareholders (Note B) ................. 1,323,337
Custodian and accounting fees (Note B) ............ 106,485
Trustees' fees and expenses (Note B) .............. 26,352
Reports to shareholders ........................... 83,571
State registration ................................ 59,833
Auditing .......................................... 33,606
Legal ............................................. 15,245
Other ............................................. 22,074
------------
Total expenses before reductions .................. 3,638,654
Expense reductions (Note B) ....................... (1,077,479)
------------
Expenses, net ..................................... 2,561,175
------------
Net investment income ............................. 18,888,366
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain from investment transactions .... 2,458
Net unrealized depreciation on investments
during the period ......................... (136,004)
------------
Net loss on investments ........................... (133,546)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 18,754,820
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended June 30,
----------------------------
Increase (Decrease) in Net Assets 1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income $ 18,888,366 $ 17,568,420
Net realized gain from investment
transactions 2,458 20,664
Net unrealized appreciation (depreciation)
on investments during the period (136,004) 420,699
--------------- --------------
Net increase in net assets resulting from
operations 18,754,820 18,009,783
--------------- --------------
Distributions to shareholders:
From net investment income ($.048 and $.046
per share, respectively) (18,888,366) (17,568,420)
--------------- --------------
From net realized gains from investment
transactions -- (20,664)
Fund share transactions at net asset value of
$1.00 per share:
Shares sold 641,265,052 647,745,827
Shares issued to shareholders in
reinvestment of distributions 17,575,662 15,894,921
Shares redeemed (645,982,556) (663,250,580)
--------------- --------------
Net increase in net assets from
Fund share transactions 12,858,158 390,168
--------------- --------------
INCREASE IN NET ASSETS 12,724,612 810,867
Net assets at beginning of period 383,477,232 382,666,365
--------------- --------------
NET ASSETS AT END OF PERIOD $ 396,201,844 $ 383,477,232
=============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
Years Ended June 30,
--------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
--------------------------------------------------------------------------------------------
<S> <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
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income .048 .046 .027 .027 .044 .065 .075 .074 .055 .050
Less distributions from net
investment income and net
realized gains on investment
transactions (b) (.048) (.046) (.027) (.027) (.044) (.065) (.075) (.074) (.055) (.050)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%) 4.91 4.70 2.74 2.74 4.48 6.71 7.74 7.66 5.69 5.13
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
($ millions) 396 383 383 305 299 272 198 167 154 143
Ratio of operating expenses,
net to average daily net
assets (%) (a) .65 .65 .65 .65 .65 .82 .98 1.01 1.04 .92
Ratio of net investment income to
average daily net assets (%) 4.80 4.61 2.75 2.69 4.31 6.37 7.46 7.41 5.54 4.95
(a) Operating expense ratio,
including management
fee not imposed by the
adviser (%) .92 .90 .90 .85 .85 .91 -- -- -- --
</TABLE>
(b) Net realized capital gains were less than 6/10 of 1 cent per share.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
A. Significant Accounting Policies
- -------------------------------------------------------------------------------
Scudder U.S. Treasury Money Fund (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 Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
SECURITY VALUATION. 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.
13
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
- -------------------------------------------------------------------------------
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
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 shareholders. An additional distribution may be made to
the extent necessary to avoid the payment of a four percent federal
excise tax.
The Fund uses the identified cost method for determining realized gain
or loss on investments for both financial and federal income tax
reporting purposes.
OTHER. Investment security 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 Investment Management Agreement (the "Management 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 its average
daily net assets computed and accrued daily and payable monthly. As
manager of the assets of the Fund, 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 Management Agreement. 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. The Adviser has agreed not
to impose all or a portion of its management fee until October 31,
1996, and during such period to maintain the annualized expenses of the
Fund at not more than 0.65% of average daily net assets. Accordingly,
for the year ended June 30, 1996, the Adviser did not impose a portion
of its fees amounting to $1,077,479, and the portion imposed amounted
to $890,672, of which $40,016 is unpaid at June 30, 1996.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
year ended June 30, 1996, the amount charged to the Fund by SSC aggregated
$682,565, of which $56,225 is unpaid at June 30, 1996.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the year ended June 30, 1996,
the amount charged to the Fund by STC aggregated $447,051, of which $72,269 is
unpaid at June 30, 1996.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
June 30, 1996, the amount charged to the Fund by SFAC aggregated $49,647, of
which $8,297 is unpaid at June 30, 1996.
The Fund pays each Trustee not affiliated with the Adviser $4,000 annually plus
specified amounts for attended board and committee meetings. For the year ended
June 30, 1996, Trustees' fees and expenses aggregated $26,352.
15
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE TRUSTEES AND SHAREHOLDERS OF SCUDDER U.S. TREASURY MONEY FUND:
We have audited the accompanying statement of assets and liabilities of
Scudder U.S. Treasury Money Fund, including the investment portfolio,
as of June 30, 1996, and the related statement of operations for the
year then ended, the statements of changes in net assets for each of
the two years in the period then ended, and the financial highlights
for each of the ten years in the period then ended. These financial
statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of June 30, 1996, by correspondence
with the custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Scudder U.S. Treasury Money Fund as of June 30,
1996, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the ten years in the
period then ended, in conformity with generally accepted accounting
principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
August 6, 1996
16
<PAGE>
OFFICERS AND TRUSTEES
David S. Lee*
President and Trustee
E. Michael Brown*
Trustee
Dawn-Marie Driscoll
Trustee; Attorney and Corporate Director
George M. Lovejoy, Jr.
Trustee; President and Director, Fifty Associates
Jean C. Tempel
Trustee; General Partner,
TL Ventures
Stephen L. Akers*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Dudley H. Ladd*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Robert T. Neff*
Vice President
Edward J. O'Connell*
Vice President and Assistant Treasurer
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
17
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
<TABLE>
<CAPTION>
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder Global Bond Fund
Tax Free Money Market+ Scudder GNMA Fund
Scudder Tax Free Money Fund Scudder High Yield Bond Fund
Scudder California Tax Free Money Fund* Scudder Income Fund
Scudder New York Tax Free Money Fund* Scudder International Bond Fund
Tax Free+ Scudder Short Term Bond Fund
Scudder California Tax Free Fund* Scudder Zero Coupon 2000 Fund
Scudder High Yield Tax Free Fund Growth
Scudder Limited Term Tax Free Fund Scudder Capital Growth Fund
Scudder Managed Municipal Bonds Scudder Development Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Emerging Markets Growth Fund
Scudder Massachusetts Tax Free Fund* Scudder Global Fund
Scudder Medium Term Tax Free Fund Scudder Global Discovery Fund
Scudder New York Tax Free Fund* Scudder Gold Fund
Scudder Ohio Tax Free Fund* Scudder Greater Europe Growth Fund
Scudder Pennsylvania Tax Free Fund* Scudder International Fund
Growth and Income Scudder Latin America Fund
Scudder Balanced Fund Scudder Pacific Opportunities Fund
Scudder Growth and Income Fund Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
-----------------------------------------------------------------------------------------------------------------
IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
-----------------------------------------------------------------------------------------------------------------
The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
-----------------------------------------------------------------------------------------------------------------
Scudder Institutional Fund, Inc. Scudder Treasurers Trust(TM)++
Scudder 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. +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.
18
<PAGE>
HOW TO CONTACT SCUDDER
<TABLE>
<CAPTION>
Account Service and Information
-------------------------------------------------------------------------------------------------------------
<S> <C>
For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For personalized information about your
Scudder accounts; exchanges and
redemptions; or information on any
Scudder fund
SCUDDER AUTOMATED INFORMATION LINE (SAIL) 1-800-343-2890
Investment Information
-------------------------------------------------------------------------------------------------------------
To receive information about the
Scudder funds, for additional
applications and prospectuses, or for
investment questions
SCUDDER INVESTOR RELATIONS 1-800-225-2470
For establishing 401(k) and 403(b) plans
SCUDDER DEFINED CONTRIBUTION SERVICES
1-800-323-6105
Please address all correspondence to
-------------------------------------------------------------------------------------------------------------
THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Visit the Scudder World Wide Web Site at:
-------------------------------------------------------------------------------------------------------------
http://funds.scudder.com
Or stop by a Scudder Funds Center
-------------------------------------------------------------------------------------------------------------
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they can
be found in the following cities:
Boca Raton New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
-------------------------------------------------------------------------------------------------------------
For information on Scudder For information on Scudder
Treasurers Trust,(TM) an Institutional Funds,* funds
institutional cash management designed to meet the broad
service for corporations, non-profit investment management and
organizations and trusts that uses service needs of banks and
certain portfolios of Scudder Fund, other institutions, call
Inc.* ($100,000 minimum), call 1-800-854-8525.
1-800-541-7703.
-------------------------------------------------------------------------------------------------------------
</TABLE>
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.
19
<PAGE>
Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven
Clark, Scudder, Stevens & Clark was the first independent investment counsel
firm in the United States. Since its birth, Scudder's pioneering spirit and
commitment to professional long-term investment management have helped shape the
investment industry. In 1928, we introduced the nation's first no-load mutual
fund. Today we offer 39 pure no load(TM) funds, including the first
international mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
<PAGE>
SCUDDER CASH INVESTMENT TRUST
PART C. OTHER INFORMATION
<TABLE>
Item 24. Financial Statements and Exhibits
- ------- ---------------------------------
<S> <C>
a. Financial Statements:
Included in Part A of this Registration Statement:
Financial Highlights for the ten fiscal years ended June 30, 1996
Included in Part B of this Registration Statement:
Investment Portfolio as of June 30, 1996
Statement of Assets and Liabilities as of June 30, 1996
Statement of Operations for the fiscal year ended June 30, 1996
Statements of Changes in Net Assets for the two fiscal years ended June 30,
1996
Financial Highlights for the ten fiscal years ended June 30, 1996
Notes to Financial Statements
Report of Independent Accountants
Statements, schedules and historical information other than those listed above have been
omitted since they are either not applicable or are not required.
b. Exhibits:
All references are to the Registrant's Registration Statement on Form N-1A filed with
the Securities and Exchange Commission on December 12, 1975. File Nos. 2-5516 &
811-2613 (the "Registration Statement").
1. Amended and Restated Declaration of Trust dated November 3, 1987.
(Incorporated by reference to Exhibit 2 to Post-Effective Amendment No. 21
to the Registration Statement.)
2. (a)(1) By-Laws amended as of June 30, 1979.
(Incorporated by reference to Exhibit 2 to Post-Effective
Amendment No. 7 to the Registration Statement.)
(a)(2) Amendment to the By-Laws dated August 13, 1991.
(Incorporated by reference to Exhibit 2 to Post-Effective
Amendment No. 26 to the Registration Statement.)
(a)(3) Amendment to the By-Laws dated November 12, 1991.
(Incorporated by reference to Exhibit 2 to Post-Effective
Amendment No. 26 to the Registration Statement.)
3. Inapplicable.
4. Specimen certificate representing shares of beneficial interest of $.01 par
value.
(Incorporated by reference to Exhibit 4 to Post-Effective Amendment No. 21
to the Registration Statement.)
Part C - Page 1
<PAGE>
5. Investment Advisory Agreement with Scudder, Stevens & Clark Ltd. dated
November 12, 1985.
(Incorporated by reference to Exhibit 5 to Post-Effective
Amendment No. 19 to the Registration Statement.)
6. Underwriting Agreement with Scudder Investor Services, Inc. (formerly
Scudder Fund Distributors, Inc.) dated July 20, 1976.
(Incorporated by reference to Exhibit 6 to Post-Effective Amendment No. 7 to
the Registration Statement.)
7. Inapplicable.
8. (a)(1) Custodian Contract with State Street Bank and Trust Company dated
March 19, 1980.
(Incorporated by reference to Exhibit 8(a)(1) to Post-Effective
Amendment No. 9 to the Registration Statement.)
(a)(2) Amendment to the Custodian Contract with State Street Bank and Trust
Company dated August 11, 1987.
(Incorporated by reference to Exhibit 8(a)(2) to Post-Effective
Amendment No. 21 to the Registration Statement.)
(a)(3) Amendment to the Custodian Contract with State Street Bank and Trust
Company dated August 9, 1988
(Incorporated by reference to Exhibit 8(a)(3) to Post-Effective
Amendment No. 21 to the Registration Statement.)
(a)(4) Fee schedule for Exhibit 8(a)(l).
(Incorporated by reference to Exhibit 8(a)(4) to Post-Effective
Amendment No. 21 to the Registration Statement.)
(a)(5) Amendment to the Custodian Contract with State Street Bank and Trust
Company dated November 13, 1990.
(Incorporated by reference to Exhibit 8(b)(3) to Post-Effective
Amendment No. 25 to the Registration Statement.)
(a)(6) Fee schedule for Exhibit 8(a)(1).
(Incorporated by reference to Exhibit 8(a)(6) to Post-Effective
Amendment No. 29 to the Registration Statement.)
(b)(1) Subcustodian Agreement between State Street Bank and Trust
Company and The Bank of New York, London office, dated March 27, 1979.
(Incorporated by reference to Exhibit 8(b)(l) to Post-Effective
Amendment No. 7 to the Registration Statement.)
(b)(2) Fee schedule for Exhibit 8(b)(1).
(Incorporated by reference to Exhibit 8(b)(2) to Post-Effective
Amendment No. 7 to the Registration Statement.)
9. (a)(1) Transfer Agency and Service Agreement with
Scudder Service Corporation dated October 2, 1989.
(Incorporated by reference to Exhibit 9(a)(1) to Post-Effective
Amendment No. 24 to the Registration Statement.)
Part C - Page 2
<PAGE>
(a)(2) Fee schedule for Exhibit 9(a)(1).
(Incorporated by reference to Exhibit 9(a)(2) to Post-Effective
Amendment No. 24 to the Registration Statement.)
(a)(3) Fee schedule for exhibit 9(a)(1) is filed herein.
(a)(4) Form of revised fee schedule dated October 1, 1996 for exhibit
9(a)(1) is filed herein.
(b)(1) COMPASS Service Agreement with Scudder Trust Company dated
January 1, 1990.
(Incorporated by reference to Exhibit 9(b)(1) to Post-Effective
Amendment No. 24 to the Registration Statement.)
(b)(2) Fee schedule for Exhibit 9(b)(1).
(Incorporated by reference to Exhibit 9(b)(2) to Post-Effective
Amendment No. 24 to the Registration Statement.)
(b)(3) Shareholder Services Agreement with Charles Schwab & Co., Inc. dated
June 1, 1990.
(Incorporated by reference to Exhibit 9(b)(3) to Post-Effective
Amendment No. 24 to the Registration Statement.)
(b)(4) COMPASS Service Agreement with Scudder Trust Company dated
October 1, 1995 is filed herein.
(b)(5) Form of revised fee schedule dated October 1, 1996 for exhibit
9(b)(4) is filed herein.
(c) Inapplicable.
(d) Fund Accounting Services Agreement between the Registrant and
Scudder Financial Accounting Corporation dated August 1, 1994.
(Incorporated by reference to Exhibit 9(d) to Post-Effective
Amendment No. 29 to the Registration Statement.)
10. Opinion of Counsel is filed herein.
11. Consent of Independent Accountants is filed herein.
12. Inapplicable.
13. Inapplicable.
14. (a) Scudder Flexi-Plan for Corporations and
Self-Employed Individuals.
(Incorporated by reference to Exhibit 14(a) to Scudder Income
Fund, Post-Effective Amendment No. 46 to its Registration
Statement on Form N-1A (file nos. 2-13627 and 811-42).)
(b) Scudder Individual Retirement Plan.
(Incorporated by reference to Exhibit 14(b) to Scudder Income
Fund, Post-Effective Amendment No. 46 to its Registration
Statement on Form N-1A (file nos. 2-13627 and 811-42).)
(c) Scudder Funds 403(b) Plan.
Part C - Page 3
<PAGE>
(Incorporated by reference to Exhibit 14(c) to Scudder Income
Fund, Post-Effective Amendment No. 46 to its Registration
Statement on Form N-1A (file nos. 2-13627 and 811-42).)
(d) Scudder Employer-Select 403(b) Plan.
(Incorporated by reference to Exhibit 14(e)(2) to Scudder Income
Fund, Inc., Post-Effective Amendment No. 43 to its Registration
Statement on Form N-1A (file nos. 2-13627 and 811-42).)
(e) Scudder Cash or Deferred Profit Sharing Plan under Section 401(k).
(Incorporated by reference to Exhibit 14(f) to Scudder Income Fund,
Inc., Post-Effective Amendment No. 43 to its Registration Statement
on Form N-1A (File Nos. 2-13627 and 811-42).)
15. Inapplicable.
16. Schedule for Computation of Performance Quotation.
(Incorporated by reference to Exhibit 16 to Post-Effective Amendment No.
23 to the Registration Statement.)
17. Financial Data Schedule is filed herein.
18. Inapplicable.
Power of Attorney filed as part of Post-Effective
Amendment No. 25 to the Registration Statement
filed on August 28, 1991.
</TABLE>
Item 25. Persons Controlled by or under Common Control with Registrant
- -------- -------------------------------------------------------------
None
<TABLE>
<CAPTION>
Item 26. Number of Holders of Securities (as of September 30, 1996).
- -------- -----------------------------------------------------------
<S> <C> <C>
(1) (2)
Title of Class Number of Record Shareholders
-------------- -----------------------------
Shares of beneficial
interest par value $.01 per share 82,167
</TABLE>
Item 27. Indemnification.
- -------- ----------------
A policy of insurance covering Scudder, Stevens & Clark, Inc.,
its affiliates including Scudder Investor Services, Inc., and
all of the registered investment companies advised by Scudder,
Stevens & Clark, Inc., insures the Registrant's directors and
officers and others against liability arising by reason of an
alleged breach of duty caused by any negligent act, error or
accidental omission in the scope of their duties.
Article IV of Registrant's Declaration of Trust states as
follows:
Section 4.1. No Personal Liability of Shareholders, Trustees,
-------------------------------------------------------------
Etc.
---
No Shareholder shall be subject to any personal liability
whatsoever to any Person in connection with Trust Property or
the acts, obligations or affairs of the Trust. No Trustee,
officer, employee or agent of the Trust shall be subject to
any personal liability whatsoever to any Person, other than to
the Trust or its Shareholders, in connection with Trust
Property or the affairs of the Trust, save only that arising
from bad faith, willful misfeasance, gross negligence or
Part C - Page 4
<PAGE>
reckless disregard of his duties with respect to such Person;
and all such Persons shall look solely to the Trust Property
for satisfaction of claims of any nature arising in connection
with the affairs of the Trust. If any Shareholder, Trustee,
officer, employee, or agent, as such, of the Trust, is made a
party to any suit or proceeding to enforce any such liability
of the Trust, he shall not, on account thereof, be held to any
personal liability. The Trust shall indemnify and hold each
Shareholder harmless from and against all claims and
liabilities, to which such Shareholder may become subject by
reason of his being or having been a Shareholder, and shall
reimburse such Shareholder for all legal and other expenses
reasonably incurred by him in connection with any such claim
or liability. The indemnification and reimbursement required
by the preceding sentence shall be made only out of the assets
of the one or more Series of which the Shareholder who is
entitled to indemnification or reimbursement was a Shareholder
at the time the act or event occurred which gave rise to the
claim against or liability of said Shareholder. The rights
accruing to a Shareholder under this Section 4.1 shall not
impair any other right to which such Shareholder may be
lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a
Shareholder in any appropriate situation even though not
specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc.
------------ -------------------------------
No Trustee, officer, employee or agent of the Trust shall be
liable to the Trust, its Shareholders, or to any Shareholder,
Trustee, officer, employee, or agent thereof for any action or
failure to act (including without limitation the failure to
compel in any way any former or acting Trustee to redress any
breach of trust) except for his own bad faith, willful
misfeasance, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Section 4.3. Mandatory Indemnification.
----------- --------------------------
(a) Subject to the exceptions and limitations contained in
paragraph (b) below:
(i) every person who is, or has been, a Trustee or
officer of the Trust shall be indemnified by the
Trust to the fullest extent permitted by law
against all liability and against all expenses
reasonably incurred or paid by him in connection
with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred
by him in the settlement thereof;
(ii)the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions,
suits or proceedings (civil, criminal,
administrative, or other, including appeals),
actual or threatened; and the words "liability"
and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid
in settlement, fines, penalties and other
liabilities.
(b) No indemnification shall be provided hereunder to a
Trustee or officer:
(i) any liability to the Trust, a Series thereof, or
the Shareholders by reason of a final
adjudication by a court or any other body before
which a proceeding was brought that he engaged in
willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in
the conduct of his office;
(ii)with respect to any matter as to which he shall
have been finally adjudicated not to have acted
in good faith in the reasonable belief that his
action was in the best interest of the Trust;
(iii) in the event of a settlement or other
disposition not involving a final adjudication as
provided in paragraph (b)(i) or (b)(ii) resulting
in a payment by a Trustee or officer, unless
there has been a determination that such Trustee
or officer did not engage in willful misfeasance,
Part C - Page 5
<PAGE>
bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his
office:
(A) by the court or other body approving the
settlement or other disposition; or
(B) based upon a review of readily available
facts (as opposed to a full trial-type
inquiry) by (x) vote of a majority of the
Disinterested Trustees acting on the matter
(provided that a majority of the
Disinterested Trustees then in office act on
the matter) or (y) written opinion of
independent legal counsel.
(c) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall
be severable, shall not affect any other rights to which
any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such
Trustee or officer and shall inure to the benefit of the
heirs, executors, administrators and assigns of such a
person. Nothing contained herein shall affect any rights
to indemnification to which personnel of the Trust other
than Trustees and officers may be entitled by contract or
otherwise under law.
(d) Expenses of preparation and presentation of a defense to
any claim, action, suit or proceeding of the character
described in paragraph (a) of this Section 4.3 may be
advanced by the Trust prior to final disposition thereof
upon receipt of an undertaking by or on behalf of the
recipient, to repay such amount if it is ultimately
determined that he is not entitled to indemnification
under this Section 4.3, provided that either:
(i) such undertaking is secured by a surety bond or some
other appropriate security provided by the recipient,
or the Trust shall be insured against losses arising
out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on
the matter (providing that a majority of the
Disinterested Trustees act on the matter) or an
independent legal counsel in a written opinion shall
determine, based upon a review of readily available
facts (as opposed to a full trial-type inquiry), that
there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
As used in this Section 4.3, a "Disinterested Trustee" is one
who is not (i) an Interested Person of the Trust (including
anyone who has been exempted from being an Interested Person
by any rule, regulation or order of the Commission, or (ii)
involved in the claim, action, suit or proceeding.
<TABLE>
<CAPTION>
Item 28. Business or Other Connections of Investment Adviser
- -------- ---------------------------------------------------
The Adviser has stockholders and employees who are denominated
officers but do not as such have corporation-wide
responsibilities. Such persons are not considered officers for
the purpose of this Item 28.
Business and Other Connections of Board
Name of Directors of Registrant's Adviser
---- ------------------------------------
<S> <C>
Stephen R. Beckwith Director, Vice President, Assistant Treasurer, Chief Operating Officer & Chief
Financial Officer, Scudder, Stevens & Clark, Inc. (investment adviser)**
Lynn S. Birdsong Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Supervisory Director, The Latin America Income and Appreciation Fund N.V. (investment
company) +
Supervisory Director, The Venezuela High Income Fund N.V. (investment company) xx
Supervisory Director, Scudder Mortgage Fund (investment company)+
Part C - Page 6
<PAGE>
Supervisory Director, Scudder Floating Rate Funds for Fannie Mae Mortgage Securities
I & II (investment company) +
Director, Scudder, Stevens & Clark (Luxembourg) S.A. (investment manager) #
Trustee, Scudder Funds Trust (investment company)*
President & Director, The Latin America Dollar Income Fund, Inc. (investment company)**
President & Director, Scudder World Income Opportunities Fund, Inc. (investment
company)**
Director, Canadian High Income Fund (investment company)#
Director, Hot Growth Companies Fund (investment company)#
President, The Japan Fund, Inc. (investment company)**
Director, Sovereign High Yield Investment Company (investment company)+
Nicholas Bratt Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
President & Director, Scudder New Europe Fund, Inc. (investment company)**
President & Director, The Brazil Fund, Inc. (investment company)**
President & Director, The First Iberian Fund, Inc. (investment company)**
President & Director, Scudder International Fund, Inc. (investment company)**
President & Director, Scudder Global Fund, Inc. (President on all series except Scudder
Global Fund) (investment company)**
President & Director, The Korea Fund, Inc. (investment company)**
President & Director, Scudder New Asia Fund, Inc. (investment company)**
President, The Argentina Fund, Inc. (investment company)**
Vice President, Scudder, Stevens & Clark Corporation (Delaware) (investment adviser)**
Vice President, Scudder, Stevens & Clark Japan, Inc. (investment adviser)###
Vice President, Scudder, Stevens & Clark of Canada Ltd. (Canadian investment adviser)
Toronto, Ontario, Canada
Vice President, Scudder, Stevens & Clark Overseas Corporation oo
E. Michael Brown Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Trustee, Scudder GNMA Fund (investment company)*
Trustee, Scudder U.S. Treasury Fund (investment company)*
Trustee, Scudder Tax Free Money Fund (investment company)*
Assistant Treasurer, Scudder Investor Services, Inc. (broker/dealer)*
Director & President, Scudder Realty Holding Corporation (a real estate holding
company)*
Director & President, Scudder Trust Company (a trust company)+++
Director, Scudder Trust (Cayman) Ltd.
Mark S. Casady Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Director & Vice President, Scudder Investor Services, Inc. (broker/dealer)*
Vice President, Scudder Service Corporation (in-house transfer agent)*
Director, SFA, Inc. (advertising agency)*
Linda C. Coughlin Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Director & Senior Vice President, Scudder Investor Services, Inc. (broker/dealer)*
President & Trustee, AARP Cash Investment Funds (investment company)**
President & Trustee, AARP Growth Trust (investment company)**
President & Trustee, AARP Income Trust (investment company)**
President & Trustee, AARP Tax Free Income Trust (investment company)**
Director, SFA, Inc. (advertising agency)*
Margaret D. Hadzima Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Assistant Treasurer, Scudder Investor Services, Inc. (broker/dealer)*
Part C - Page 7
<PAGE>
Jerard K. Hartman Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Vice President, Scudder California Tax Free Trust (investment company)*
Vice President, Scudder Equity Trust (investment company)**
Vice President, Scudder Cash Investment Trust (investment company)*
Vice President, Scudder Fund, Inc. (investment company)**
Vice President, Scudder Global Fund, Inc. (investment company)**
Vice President, Scudder GNMA Fund (investment company)*
Vice President, Scudder Portfolio Trust (investment company)*
Vice President, Scudder Institutional Fund, Inc. (investment company)**
Vice President, Scudder International Fund, Inc. (investment company)**
Vice President, Scudder Investment Trust (investment company)*
Vice President, Scudder Municipal Trust (investment company)*
Vice President, Scudder Mutual Funds, Inc. (investment company)**
Vice President, Scudder New Asia Fund, Inc. (investment company)**
Vice President, Scudder New Europe Fund, Inc. (investment company)**
Vice President, Scudder Securities Trust (investment company)*
Vice President, Scudder State Tax Free Trust (investment company)*
Vice President, Scudder Funds Trust (investment company)**
Vice President, Scudder Tax Free Money Fund (investment company)*
Vice President, Scudder Tax Free Trust (investment company)*
Vice President, Scudder U.S. Treasury Money Fund (investment company)*
Vice President, Scudder Variable Life Investment Fund (investment company)*
Vice President, The Brazil Fund, Inc. (investment company)**
Vice President, The Korea Fund, Inc. (investment company)**
Vice President, The Argentina Fund, Inc. (investment company)**
Vice President & Director, Scudder, Stevens & Clark of Canada, Ltd. (Canadian
investment adviser) Toronto, Ontario, Canada
Vice President, The First Iberian Fund, Inc. (investment company)**
Vice President, The Latin America Dollar Income Fund, Inc. (investment company)**
Vice President, Scudder World Income Opportunities Fund, Inc. (investment company)**
Richard A. Holt Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Vice President, Scudder Variable Life Investment Fund (investment company)*
Dudley H. Ladd Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Director, Scudder Global Fund, Inc. (investment company)**
Director, Scudder International Fund, Inc. (investment company)**
Senior Vice President & Director, Scudder Investor Services, Inc. (broker/dealer)*
President & Director, SFA, Inc. (advertising agency)*
Vice President & Trustee, Scudder Cash Investment Trust (investment company)*
Trustee, Scudder Investment Trust (investment company)*
Trustee, Scudder Portfolio Trust (investment company)*
Trustee, Scudder Municipal Trust (investment company)*
Trustee, Scudder Securities Trust (investment company)*
Trustee, Scudder State Tax Free Trust (investment company)*
Trustee, Scudder Equity Trust (investment company)**
Vice President, Scudder U.S. Treasury Money Fund (investment company)*
John T. Packard Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
President, Montgomery Street Income Securities, Inc. (investment company) o
Director, Scudder Realty Advisors, Inc. (realty investment adviser) x
Daniel Pierce Chairman & Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Chairman & Director, Scudder New Europe Fund, Inc. (investment company)**
Trustee, Scudder California Tax Free Trust (investment company)*
Part C - Page 8
<PAGE>
President & Trustee, Scudder Equity Trust (investment company)**
Director, The First Iberian Fund, Inc. (investment company)**
President & Trustee, Scudder GNMA Fund (investment company)*
President & Trustee, Scudder Portfolio Trust (investment company)*
President & Trustee, Scudder Funds Trust (investment company)**
President & Director, Scudder Institutional Fund, Inc. (investment company)**
President & Director, Scudder Fund, Inc. (investment company)**
Chairman & Director, Scudder International Fund, Inc. (investment company)**
President & Trustee, Scudder Investment Trust (investment company)*
Vice President & Trustee, Scudder Municipal Trust (investment company)*
President & Director, Scudder Mutual Funds, Inc. (investment company)**
Director, Scudder New Asia Fund, Inc. (investment company)**
President & Trustee, Scudder Securities Trust (investment company)*
Trustee, Scudder State Tax Free Trust (investment company)*
Vice President & Trustee, Scudder Variable Life Investment Fund (investment company)*
Director, The Brazil Fund, Inc. (until 7/94) (investment company)**
Vice President & Assistant Treasurer, Montgomery Street Income Securities, Inc.
(investment company) o
Chairman, Vice President & Director, Scudder Global Fund, Inc. (investment company)**
Vice President, Director & Assistant Treasurer, Scudder Investor Services, Inc.
(broker/dealer)*
President & Director, Scudder Service Corporation (in-house transfer agent)*
Chairman & President, Scudder, Stevens & Clark of Canada, Ltd. (Canadian investment
adviser), Toronto, Ontario, Canada
President & Director, Scudder Precious Metals, Inc. xxx
Chairman & Director, Scudder Global Opportunities
Luxembourg
Chairman, Scudder, Stevens & Clark, Ltd. (investment adviser) London, England
Director, Scudder Fund Accounting Corporation (in-house fund accounting agent)*
Director, Vice President & Assistant Secretary,
Scudder Realty Holdings Corporation (a real estate holding company)*
Director, Scudder Latin America Investment Trust PLC(investment company) @
Incorporator, Scudder Trust Company (a trust company)+++
Director, Fiduciary Trust Company (banking & trust company) Boston, MA
Director, Fiduciary Company Incorporated (banking & trust company) Boston, MA
Trustee, New England Aquarium, Boston, MA
Kathryn L. Quirk Director & Secretary, Scudder, Stevens & Clark, Inc. (investment adviser)**
Vice President, Scudder Fund, Inc. (investment company)**
Vice President, Scudder Institutional Fund, Inc. (investment company)**
Vice President & Assistant Secretary, Scudder World Income Opportunities Fund, Inc.
(investment company)**
Vice President & Assistant Secretary, The Korea Fund, Inc. (investment company)**
Vice President & Assistant Secretary, The Argentina Fund, Inc. (investment company)**
Vice President & Assistant Secretary, The Brazil Fund, Inc. (investment company)**
Vice President & Assistant Secretary, Scudder International Fund, Inc. (investment
company)**
Vice President & Assistant Secretary, Scudder Equit Trust (investment company)**
Vice President & Assistant Secretary, Scudder Securities Trust (investment
company)*
Vice President & Assistant Secretary, Scudder Funds Trust (investment company)**
Vice President & Assistant Secretary, Scudder Global Fund, Inc. (investment company)**
Part C - Page 9
<PAGE>
Vice President & Assistant Secretary, Montgomery Street Income Securities, Inc.
(investment company) o
Vice President & Assistant Secretary, Scudder Mutual Funds, Inc.(investment company)**
Vice President & Assistant Secretary, Scudder New Europe Fund, Inc. (investment
company)**
Vice President & Assistant Secretary, Scudder Variable Life Investment Fund (investment
company)*
Vice President & Assistant Secretary, The First Iberian Fund, Inc. (investment
company)**
Vice President & Assistant Secretary, The Latin America Dollar Income Fund, Inc.
(investment company)**
Vice President & Secretary, AARP Growth Trust(investment company)**
Vice President & Secretary,AARP Income Trust (investment company)**
Vice President & Secretary, AARP Tax Free Income Trust (investment company)**
Vice President & Secretary, AARP Cash Investment Funds (investment company)**
Vice President, Scudder GNMA Fund (investment company)*
Vice President & Secretary, The Japan Fund,Inc. (investment company)**
Director, Vice President & Secretary, Scudder Fund Accounting Corporation (in-house
fund accounting agent)*
Senior Vice President, Scudder Investor Services, Inc. (broker/dealer)*
Director, Vice President & Secretary, Scudder Realty Holdings Corporation (a real
estate holding company)*
Vice President & Assistant Secretary, Scudder Precious Metals, Inc. xxx
Cornelia M. Small Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Vice President, Scudder Global Fund, Inc. (investment company)**
Vice President, AARP Cash Investment Funds (investment company)**
Vice President, AARP Growth Trust (investment company)**
Vice President, AARP Income Trust (investment company)**
Vice President, AARP Tax Free Income Trust (investment company)**
Edmond D. Villani Director, President & Chief Executive Officer, Scudder, Stevens & Clark, Inc.
(investment adviser)**
Chairman & Director, Scudder New Asia Fund, Inc. (investment company)**
Chairman & Director, The Argentina Fund, Inc. (investment company)**
Director, Scudder Realty Advisors, Inc. (realty investment adviser) x
Supervisory Director, Scudder Mortgage Fund (investment company) +
Chairman & Director, The Latin America Dollar Income Fund, Inc. (investment company)**
Director, Scudder, Stevens & Clark Japan, Inc. (investment adviser)###
Chairman & Director, Scudder World Income Opportunities Fund, Inc. (investment
company)**
Supervisory Director, Scudder Floating Rate Funds for Fannie Mae Mortgage Securities
I & II (investment company)+
Director, The Brazil Fund, Inc. (investment company)**
Director, Indosuez High Yield Bond Fund (investment company) Luxembourg
President & Director, Scudder, Stevens & Clark Overseas Corporation oo
President & Director, Scudder, Stevens & Clark Corporation (Delaware) (investment
adviser)**
Director, IBJ Global Investment Management S.A., (Luxembourg investment
management company) Luxembourg, Grand-Duchy of Luxembourg
Stephen A. Wohler Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Vice President, Montgomery Street Income Securities, Inc. (investment company) o
</TABLE>
Part C - Page 10
<PAGE>
<TABLE>
<S> <C>
* Two International Place, Boston, MA
x 333 South Hope Street, Los Angeles, CA
** 345 Park Avenue, New York, NY
++ Two Prudential Plaza, 180 N. Stetson Avenue, Chicago, IL
+++ 5 Industrial Way, Salem, NH
o 101 California Street, San Francisco, CA
# Societe Anonyme, 47, Boulevard Royal, L-2449 Luxembourg, R.C. Luxembourg B 34.564
+ John B. Gorsiraweg 6, Willemstad Curacao, Netherlands Antilles
xx De Ruyterkade 62, P.O. Box 812, Willemstad Curacao, Netherlands Antilles
## 2 Boulevard Royal, Luxembourg
*** B1 2F3F 248 Section 3, Nan King East Road, Taipei, Taiwan
xxx Grand Cayman, Cayman Islands, British West Indies
oo 20-5, Ichibancho, Chiyoda-ku, Tokyo, Japan
### 1-7, Kojimachi, Chiyoda-ku, Tokyo, Japan
@ c/o Sinclair Hendersen Limited, 23 Cathedral Yard, Exeter, Devon
</TABLE>
Item 29. Principal Underwriters.
- -------- -----------------------
(a) Scudder California Tax Free Trust
Scudder Cash Investment Trust
Scudder Equity Trust
Scudder Fund, Inc.
Scudder Funds Trust
Scudder Global Fund, Inc.
Scudder GNMA Fund
Scudder Institutional Fund, Inc.
Scudder International Fund, Inc.
Scudder Investment Trust
Scudder Municipal Trust
Scudder Mutual Funds, Inc.
Scudder Portfolio Trust
Scudder Securities Trust
Scudder State Tax Free Trust
Scudder Tax Free Money Fund
Scudder Tax Free Trust
Scudder U.S. Treasury Money Fund
Scudder Variable Life Investment Fund
AARP Cash Investment Funds
AARP Growth Trust
AARP Income Trust
AARP Tax Free Income Trust
The Japan Fund, Inc.
<TABLE>
(b)
<S> <C> <C>
(1) (2) (3)
Name and Principal Position and Offices with Positions and
Business Address Scudder Investor Services, Inc. Offices with Registrant
---------------- ------------------------------- -----------------------
E. Michael Brown Assistant Treasurer None
Two International Place
Boston, MA 02110
Part C - Page 11
<PAGE>
Name and Principal Position and Offices with Positions and
Business Address Scudder Investor Services, Inc. Offices with Registrant
---------------- ------------------------------- -----------------------
Mark S. Casady Director and Vice President None
Two International Place
Boston, MA 02110
Linda Coughlin Director and Senior Vice President None
Two International Place
Boston, MA 02110
Richard W. Desmond Vice President None
345 Park Avenue
New York, NY 10154
Coleen Downs Dinneen Assistant Clerk Assistant Secretary
Two International Place
Boston, MA 02110
Paul J. Elmlinger Senior Vice President None
345 Park Avenue
New York, NY 10154
Margaret D. Hadzima Assistant Treasurer None
Two International Place
Boston, MA 02110
Thomas W. Joseph Director, Vice President, Vice President
Two International Place Treasurer and Assistant Clerk
Boston, MA 02110
Dudley H. Ladd Director and Senior Vice President Vice President and Trustee
Two International Place
Boston, MA 02110
David S. Lee Director, President and Assistant President and Trustee
Two International Place Treasurer
Boston, MA 02110
Thomas F. McDonough Clerk Vice President and
Two International Place Secretary
Boston, MA 02110
Thomas H. O'Brien Assistant Treasurer None
345 Park Avenue
New York, NY 10154
Edward J. O'Connell Assistant Treasurer Vice President and
345 Park Avenue Assistant Treasurer
New York, NY 10154
Daniel Pierce Director, Vice President None
Two International Place and Assistant Treasurer
Boston, MA 02110
Part C - Page 12
<PAGE>
Name and Principal Position and Offices with Positions and
Business Address Scudder Investor Services, Inc. Offices with Registrant
---------------- ------------------------------- -----------------------
Kathryn L. Quirk Senior Vice President None
345 Park Avenue
New York, NY 10154
Edmund J. Thimme Director and Vice President None
345 Park Avenue
New York, NY 10154
David B. Watts Assistant Treasurer None
Two International Place
Boston, MA 02110
Linda J. Wondrack Vice President None
Two International Place
Boston, MA 02110
</TABLE>
The Underwriter has employees who are denominated officers of an
operational area. Such persons do not have corporation-wide
responsibilities and are not considered officers for the purpose of
this Item 29.
<TABLE>
(c)
(1) (2) (3) (4) (5)
<S> <C> <C> <C> <C> <C>
Net Underwriting Compensation on
Name of Principal Discounts and Redemptions Brokerage Other
Underwriter Commissions and Repurchases Commissions Compensation
----------- ----------- --------------- ----------- ------------
Scudder Investor None None None None
Services, Inc.
</TABLE>
Item 30. Location of Accounts and Records.
- -------- ---------------------------------
Certain accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act and the Rules
promulgated thereunder are maintained by Scudder, Stevens &
Clark, Inc., Two International Place, Boston, MA 02110.
Records relating to the duties of the Registrant's custodian
are maintained by State Street Bank and Trust Company,
Heritage Drive, North Quincy, Massachusetts.
Item 31. Management Services.
- -------- --------------------
Inapplicable.
Item 32. Undertakings.
- -------- -------------
Inapplicable.
Part C - Page 13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this amendment to its Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Boston, and the
Commonwealth of Massachusetts, on the 25th day of October, 1996.
SCUDDER CASH INVESTMENT TRUST
By/s/Thomas F. McDonough
----------------------
Thomas F. McDonough
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
amendment to its Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURE TITLE DATE
- --------- ----- ----
/s/David S. Lee
- --------------------------------------
David S. Lee* President (Principal Executive October 25, 1996
Officer) and Trustee
/s/Henry P. Becton, Jr.
- --------------------------------------
Henry P. Becton, Jr.* Trustee October 25, 1996
/s/Dawn-Marie Driscoll
- --------------------------------------
Dawn-Marie Driscoll* Trustee October 25, 1996
/s/Cuyler W. Findlay
- --------------------------------------
Cuyler W. Findlay* Vice President and Trustee October 25, 1996
/s/Peter B. Freeman
- --------------------------------------
Peter B. Freeman* Trustee October 25, 1996
/s/Dudley H. Ladd
- --------------------------------------
Dudley H. Ladd* Vice President and Trustee October 25, 1996
<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
/s/George M. Lovejoy, Jr.
- --------------------------------------
George M. Lovejoy, Jr.* Trustee October 25, 1996
/s/Pamela A. McGrath
- --------------------------------------
Pamela A. McGrath Vice President and Treasurer October 25, 1996
(Principal Financial and Accounting
Officer)
</TABLE>
*By:/s/Thomas F. McDonough
----------------------
Thomas F. McDonough
Attorney-in-fact pursuant to a power of attorney
included with the signature page of Post-Effective
Amendment No. 25 to the Registration Statement
filed August 28, 1991.
2
<PAGE>
File No. 2-55166
File No. 811-2613
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM N-1A
POST-EFFECTIVE AMENDMENT NO. 30
TO REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AND
AMENDMENT NO. 20
TO REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
SCUDDER CASH INVESTMENT TRUST
<PAGE>
SCUDDER CASH INVESTMENT TRUST
EXHIBIT INDEX
Exhibit 9(a)(3)
Exhibit 9(a)(4)
Exhibit 9(b)(4)
Exhibit 9(b)(5)
Exhibit 10
Exhibit 11
Exhibit 17
Exhibit 9(a)(3)
SCUDDER SERVICE CORPORATION
FEE INFORMATION FOR SERVICES PROVIDED UNDER
TRANSFER AGENCY AND SERVICE AGREEMENT
Scudder Family of Funds
Annual maintenance fee for each account
1/12th of the annual maintenance fee shall be charged and payable each month. It
will be charged for any account which at any time during the month had a share
balance in the fund.
The minimum monthly charge to any portfolio is $1,000.
Money Market Funds $28.90
Monthly Income Funds 25.00
Quarterly Distribution Funds 20.40
Annual Distribution Funds 17.55
Other fees
New Account Set Up $ 5.00 each
Disaster Recovery 0.25 per year
Closed Accounts 1.20 per year
TIN Certificates 0.15 each
TIN Maintenance 0.25 each
Check Writing:
Set Up 5.00 per account
Retail Check Clearance 0.96 per check
Corporate Check Clearance 0.46 per check
Out of pocket expenses shall be reimbursed by the fund to Scudder Service
Corporation or paid directly by the fund. Such expenses include but are not
limited to the following:
Telephone (portion allocable to servicing accounts)
Postage, overnight service or similar services
Stationery and envelopes
Shareholder Statements - printing and postage
Checks - stock supply, printing and postage
Data circuits
Lease and maintenance of S.A.I.L. and Easy Access
Forms
Microfilm and microfiche
Expenses incurred at the specific direction of the fund
Payment
The above will be billed within the first five (5) business days of each month
and will be paid by wire within five (5) business days of receipt.
On behalf of the Funds listed on
Attachment A: Scudder Service Company
By: /s/David S. Lee By: /s/Daniel Pierce
David S. Lee Daniel Pierce
Vice President President
Date: October 1, 1995 Date: October 1, 1995
<PAGE>
ATTACHMENT A
TRANSFER AGENCY AND SERVICE AGREEMENT
Money Market Accounts
Scudder California Tax Free Money Fund
Scudder Cash Investment Trust
Scudder New York Tax Free Money Fund
Scudder Tax Free Money Fund
Scudder U.S. Treasury Money Fund
Monthly Income Funds
Scudder California Tax Free Fund
Scudder Global Bond Fund
Scudder GNMA Fund
Scudder High Yield Tax Free Fund
Scudder International Bond 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
Scudder Short Term Bond Fund
Quarterly Distribution Funds
Scudder Balanced Fund
Scudder Growth and Income Fund
Scudder Emerging Markets Income Fund
Scudder Income Fund
Annual Distribution Funds
<TABLE>
<S> <C>
Scudder Capital Growth Fund Scudder Latin America Fund
Scudder Development Fund Scudder Pacific Opportunities Fund
Scudder Global Fund Scudder Quality Growth Fund
Scudder Global Discovery Fund Scudder Small Company Value Fund
Scudder Gold Fund Scudder Value Fund
Scudder Greater Europe Growth Fund Scudder Zero Coupon 2000 Fund
Scudder International Fund
</TABLE>
dated as of October 6, 1995
revised as of March 6, 1996
SCUDDER TRUST COMPANY
FEE INFORMATION FOR SERVICES PROVIDED UNDER
COMPASS AND TRAK 2000 SERVICE AGREEMENT
Annual service charge for each participant's account in a retirement and
employee benefit plan:
Each Account or
Sub Account
-----------
Money Market Funds $ 34.50
Non-Money Market Funds 29.00
Closed Account 5.00
Information Access:
o VRU Access Charge per Call 0.20
o Internet To be determined
1/12th of the annual service charge shall be charged and payable each month. It
will be charged for any account or subaccount which at any time during the month
had a share or unit account balance in the fund.
Out of pocket expenses shall be paid by the Fund directly to the Vendor. Such
expenses include but are not limited to the following:
Supplies:
Stationery and envelopes in connection with participant statements and
administrative
Reports
Telephone (portion allocable to servicing accounts)
Postage, overnight service or similar services
Microfilm and Microfiche
Checks
On behalf of the Funds listed on
Attachment A: Scudder Trust Company
By:_________________________ By:_____________________
David S. Lee Dennis M. Cronin, Jr.
President or Vice President Senior Vice President and Treasurer
Date: October 1, 1996 Date: October 1, 1996
<PAGE>
ATTACHMENT A
COMPASS and TRAK 2000 SERVICE AGREEMENT
MONEY MARKET FUND SERVICE ACCOUNTS
Money Market Accounts
Scudder Cash Investment Trust
Scudder U.S. Treasury Money Fund
NON-MONEY MARKET FUND SERVICE ACCOUNTS
Monthly Income Funds
Scudder Global Bond Fund
Scudder GNMA Fund
Scudder High Yield Bond Fund
Scudder International Bond Fund
Scudder Short Term Bond Fund
Quarterly Distribution Funds
Scudder Balanced Fund
Scudder Emerging Markets Income Fund
Scudder Growth and Income Fund
Scudder Income Fund
Annual Distribution Funds
Scudder Capital Growth Fund
Scudder Classic Growth Fund
Scudder Development Fund
Scudder Global Discovery Fund
Scudder Global Fund
Scudder Gold Fund
Scudder Emerging Markets Growth Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Latin America Fund
Scudder Micro Cap Fund
Scudder Pacific Opportunities Fund
Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder 21st Century Growth Fund
Scudder Value Fund
Scudder Zero Coupon 2000 Fund
October 1, 1996
2
COMPASS AND TRAK 2000 SERVICE AGREEMENT
THIS AGREEMENT is made as of this 1st day of October, 1995, by and
between SCUDDER TRUST COMPANY, a New Hampshire banking corporation ("Trust
Company") and SCUDDER CASH INVESTMENT TRUST, a Massachusetts business trust (the
"Fund").
WITNESSETH:
WHEREAS, Trust Company is engaged in the business of providing certain
recordkeeping and other services; and
WHEREAS, Trust Company and the Fund entered into a "Compass Service
Agreement," dated January 1, 1990 (the "Former Agreement") under which Trust
Company has been providing certain recordkeeping and other services, and Trust
Company also has been performing certain recordkeeping and other services for
the Fund in connection with the TRAK 2000 system; and
WHEREAS, the Fund is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, Trust Company is willing to continue to provide to the Fund
such recordkeeping and other services in connection with the COMPASS and TRAK
2000 systems and in addition is willing to provide certain order processing
services as agent for the Fund; and
WHEREAS, Trust Company and the Fund wish to amend, restate and replace
the Former Agreement with this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Terms of Appointment; Performance of Duties.
1.1. Appointment. Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints Trust Company (i) to act as, and
Trust Company agrees to act as, recordkeeping agent with respect to the
authorized and issued shares of beneficial interest of the Fund ("Shares") or
units representing such Shares ("Units"), and (ii) to act as an agent of the
Fund for the purpose of receiving requests for the purchase and redemption of
Shares or Units (collectively, "Shares") and communicating such requests to the
Fund's transfer agent ("Transfer Agent"), in connection with certain retirement
and employee benefit plans established under the Internal Revenue Code of 1986
including but not limited to defined contribution plans, Section 403(b) plans,
individual retirement accounts and deferred compensation plans (each a "Plan" or
collectively the "Plans"), utilizing the Comprehensive Participant Accounting
Services ("COMPASS") or TRAK 2000 system, and established by plan
administrators, employers, trustees, custodians and other persons (each
individually an "Administrator" or collectively the "Administrators") on behalf
of employers (each individually an "Employer" or collectively the "Employers")
and individuals for certain participants in such Plans (each individually a
"Participant" or collectively the "Participants").
1.2. Recordkeeping. Trust Company agrees that it will perform the
following recordkeeping services in connection with the COMPASS and TRAK 2000
systems in accordance with procedures established from time to time by
<PAGE>
agreement between the Fund and Trust Company. Subject to instructions from the
Administrators, Trust Company shall:
(i) receive from Administrators instructions for the purchase of Shares
of the Fund, confirm compliance with such instructions and, as agent of the
respective Administrators, deliver within a reasonable time such instructions
and any appropriate documentation therefor to the Transfer Agent of the Fund
duly appointed by the Trustees of the Fund (the "Transfer Agent");
(ii) record the purchase by Plans of the appropriate number of Shares
or Units and within a reasonable time allocate such Shares or Units among the
Participants' accounts;
(iii) record dividends and capital gains distributions on behalf of
Participants;
(iv) receive from Administrators instructions for redemption and
repurchase requests and directions, confirm compliance with such instructions
and as agent of the respective Administrators deliver within a reasonable time
such instructions and any appropriate documentation therefor to the Transfer
Agent;
(v) record the redemption or repurchase by Plans of the appropriate
number of Shares or Units and within a reasonable time make the appropriate
adjustments among the Participants' accounts;
(vi) certify to the Fund no less frequently than annually the number of
Participants accounts for which records are maintained hereunder;
(vii) maintain records of account for and advise the Fund and
Administrators and Participants, when appropriate, as to the foregoing;
(viii) maintain all Plan and Participant accounts other than accounts
maintained by the Transfer Agent; and
(ix) maintain and mail administrative reports and Participant
statements.
Procedures applicable to certain of these services may be established
from time to time by agreement between the Fund and Trust Company.
1.3. Order Processing.
(a) In addition to the recordkeeping to be performed in accordance with
Section 1.02 above, the Fund hereby appoints Trust Company, and Trust Company
agrees to act, as the Fund's agent for the purpose of receiving requests for the
purchase and redemption of Shares or Units and communicating such requests to
the Fund's Transfer Agent, subject to and in accordance with the terms of this
Agreement, and as follows:
(i) Trust Company shall receive from the Plans, Plan participants,
Plan sponsors, authorized Plan committees or Plan trustees, according to Trust
Company's agreement with each Plan, by the close of regular trading on the New
York Stock Exchange (the "Close of Trading") each business day that the New York
Stock Exchange is open for business ("Business Day") instructions for the
purchase and redemption of Shares (together, "Instructions"). Instructions
received by Trust Company after the Close of Trading on any Business Day shall
be treated as received on the next Business Day.
2
<PAGE>
(ii) In connection with the COMPASS system, Trust Company shall
compute net purchase requests or net redemption requests to the extent
practicable for Shares of the Fund for each Plan based on Instructions received
each Business Day.
(iii) Trust Company shall communicate purchase and redemption
requests for Shares of the Fund, netted to the extent practicable in accordance
with (ii) above in the case of COMPASS ("Orders"), to the Transfer Agent, for
acceptance by the Fund or its agents, in the manner specified herein, and
promptly deliver, or instruct the Plans (or the Plans' trustees as the case may
be) to deliver, appropriate documentation and, in the case of purchase requests,
payment therefor to the Transfer Agent. Orders shall be based solely on
Instructions received by Trust Company from the Plans, Plan participants, Plan
sponsors, authorized Plan committees or Plan trustees.
(b) Trust Company shall maintain adequate records related to, and
advise the Transfer Agent as to, the foregoing, as instructed by the Fund, or by
the Transfer Agent or other person designated to act on the Fund's behalf. To
the extent required under the 1940 Act and rules thereunder, Trust Company
agrees that such records maintained by it hereunder will be preserved,
maintained and made available in accordance with the provisions of the 1940 Act
and rules thereunder, and copies or, if required, originals will be surrendered
promptly to the Fund, Transfer Agent or other person designated to act on the
Fund's behalf, on and in accordance with its request. Records surrendered
hereunder shall be in machine readable form, except to the extent that Trust
Company has maintained such records only in paper form. This provision shall
survive the termination of this Agreement.
(c) Trust Company shall perform its duties hereunder subject to the
terms and conditions of the Fund's current prospectus; the Fund and the Trust
Company may establish such additional procedures for order processing not
inconsistent with the terms of this Agreement as they reasonably determine to be
necessary or advisable from time to time.
(d) Trust Company acknowledges that it is not authorized by the Fund to
register the transfer of the Fund's Shares or to transfer record ownership of
the Fund's Shares, and that only the Transfer Agent is authorized to perform
such activities.
1.4. Agents of Trust Company. Trust Company may engage one or more
individuals, corporations, partnerships, trusts or other entities (including
affiliates of Trust Company) to act as its subcontractor(s) or agent(s)
("Agents") in providing the services contemplated hereunder. Any such Agent
shall be required to comply with the terms of this Agreement applicable to the
performance of such services it is performing as though it were the Trust
Company. Further, the Trust Company shall be solely responsible for, and assumes
all liability for, the actions and inactions of such Agents in connection with
their performance of such services.
2. Fees and Expenses.
2.1. Fees. For performance by Trust Company of services pursuant to
this Agreement, the Fund agrees to pay Trust Company an annual maintenance fee
for each Participant account as set out in the fee schedule, as amended from
time to time. Such fee schedule and out-of-pocket expenses and advances
identified under Section 2.2 below may be changed from time to time by mutual
agreement between the Fund and Trust Company. The parties hereto acknowledge
that the fees payable hereunder are for administrative and recordkeeping
services only and do not constitute payment in any manner for investment
advisory or distribution services.
3
<PAGE>
2.2. Expenses. In addition to the fee paid under Section 2.1 above, the
Fund agrees to reimburse Trust Company for out-of-pocket expenses or advances
incurred by Trust Company for the items set out in the fee schedule. In
addition, any other expenses incurred by Trust Company, at the request or with
the consent of the Fund, will be reimbursed by the Fund. The Fund agrees to pay
all fees and reimbursable expenses promptly. Postage and the cost of materials
for mailing of administrative reports, Participant statements and other mailings
to all Employer accounts or Participants shall be advanced to Trust Company by
the Fund at least two (2) days prior to the mailing date of such materials or
paid within two (2) days of the receipt by the Fund of a bill therefor.
3. Representations and Warranties of Trust Company.
Trust Company represents and warrants to the Fund that:
(i) It is a banking corporation duly organized and existing and in good
standing under the laws of The State of New Hampshire.
(ii) It has the legal power and authority to carry on its business in
any jurisdiction where it does business.
(iii) It is empowered under applicable laws and by its charter and
By-Laws to enter into and perform this Agreement.
(iv) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
(v) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
4. Representations and Warranties of the Fund.
The Fund represents and warrants to Trust Company that:
(i) It is a business trust duly organized and existing and in good
standing under the laws of The Commonwealth of Massachusetts.
(ii) It is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform this Agreement.
(iii) All proceedings required by said Declaration of Trust and By-Laws
have been taken to authorize it to enter into and perform this Agreement.
(iv) It is an investment company registered under the 1940 Act.
(v) It makes available its Shares in connection with certain Plans.
(vi) A majority of the Trustees of the Fund who are not interested
persons have made findings to the effect that:
4
<PAGE>
(a) the Agreement is in the best interest of the Fund and its
shareholders;
(b) the services to be performed pursuant to the Agreement are
services required for the operation of the Fund;
(c) Trust Company can provide services the nature and quality of
which are at least equal to those provided by others offering the same or
similar services; and
(d) the fees charged by Trust Company for such services are fair
and reasonable in the light of the usual and customary charges made by others
for services of the same nature and quality.
(vii) A registration statement under the Securities Act of 1933, as
amended (the "33 Act"), has been filed and has become effective, and appropriate
state securities law filings have been made with respect to all Shares of the
Fund being offered for sale. The Fund shall notify Trust Company (i) if such
registration statement or any state securities registration or qualification has
been terminated or a stop order has been entered with respect to the Shares or
(ii) if such registration statement shall have been amended to cover Shares of
any additional Series (as hereinafter defined in Section 8.1).
5. Indemnification.
5.1. By Fund. Trust Company shall not be responsible for, and the Fund
shall indemnify and hold Trust Company harmless from and against, any and all
losses, damages, costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributable to:
(a) All actions of Trust Company or its agents required to be
taken pursuant to this Agreement, provided that such actions are taken in good
faith and without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by Trust Company or its agents of
information, records and documents which (i) are received by Trust Company or
its agents and furnished to it by or on behalf of the Fund, and (ii) have been
prepared and/or maintained by the Fund or any other person or firm (except Trust
Company) on behalf of the Fund.
(d) The reliance on or the carrying out by Trust Company or its
agents of any written instructions or requests of the Fund or any person acting
on behalf of the Fund.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations, or the securities laws or
regulations of any state that such Shares be registered in such state, or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.
5.2. By Trust Company. Trust Company shall indemnify and hold the Fund
harmless from and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liabilities arising out of or attributable to Trust
Company's refusal or failure to comply with the terms of this Agreement, or
which arise out of Trust Company's lack of good faith, negligence or willful
misconduct or which arise out of the breach of any representation or warranty of
Trust Company hereunder.
5
<PAGE>
5.3. Reliance. At any time Trust Company may apply to any officer of
the Fund for instructions, and may consult with legal counsel (which may also be
legal counsel for the Fund) with respect to any matter arising in connection
with the services to be performed by Trust Company under this Agreement, and
Trust Company shall not be liable and shall be indemnified by the Fund for any
action taken or omitted by it in reliance upon such instructions or upon the
opinion of such counsel. Trust Company and its agents shall be protected and
indemnified in acting upon any paper or document furnished by or on behalf of
the Fund, reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data, records or
documents provided Trust Company or its agents by telephone, in person,
machine-readable input, telex, CRT data entry or other similar means authorized
by the Fund, and shall not be held to have notice of any change of authority of
any person, until receipt of written notice thereof from the Fund.
5.4. Acts of God. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not be liable to
the other for any damages resulting from such failure to perform or otherwise
from such causes.
5.5. Procedures. In order that the indemnification provisions contained
in this Article 5 shall apply, upon the assertion of a claim for which either
party may be required to indemnify the other, the party seeking indemnification
shall promptly notify the other party of such assertion, and shall keep the
other party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate with
the party seeking indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
6. Covenants of the Fund and Trust Company.
6.1. Adequate Facilities. Trust Company hereby agrees to establish and
maintain facilities, personnel, and computer and other facilities and procedures
reasonably acceptable to the Fund for safekeeping of records, for the
preparation or use, and for keeping account of, such records, and for order
processing.
6.2. Insurance. Trust Company shall at all times maintain insurance
coverage which is reasonable and customary in light of its duties hereunder and
its other obligations and activities, and shall notify the Fund of any changes
in its insurance coverage unless the Fund is covered by the same policy and such
change is also applicable to the Fund.
6.3. Records. Trust Company shall keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable.
6.4. Confidentiality. Trust Company and the Fund agree that all books,
records, information and data pertaining to the business of the other party
which are exchanged or received pursuant to the negotiation or the carrying out
of this Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law.
6.5. Inspection. In case of any requests or demands for the inspection
of the records relating to Plan accounts and Participant accounts with the Fund,
Trust Company will endeavor to notify the Fund and to secure instructions from
6
<PAGE>
an authorized officer of the Fund as to such inspection. Trust Company reserves
the right, however, to exhibit such records to any person whenever it is
reasonably advised by counsel to the Fund that it may be held liable for the
failure to exhibit such records to such person.
6.6. Laws Applicable to Fund. Trust Company acknowledges that the Fund,
as a registered investment company under the 1940 Act, is subject to the
provisions of the 1940 Act and the rules and regulations thereunder, and that
the offer and sale of the Fund's Shares are subject to the provisions of federal
and state laws and regulations applicable to the offer and sale of securities.
The Fund acknowledges that Trust Company is not responsible for the Fund's
compliance with such laws, rules and regulations. If the Fund advises Trust
Company that a procedure of Trust Company related to the discharge of its
obligations hereunder has or may have the effect of causing the Fund to violate
any of such laws or regulations, Trust Company shall use its best efforts to
develop an alternative procedure which does not have such effect.
6.7. Relationship to Plans. Trust Company acknowledges to the Fund
that, as the offeror of COMPASS and TRAK 2000, Trust Company does not act as a
plan administrator or as a fiduciary under the Employee Retirement Income
Security Act of 1974, as amended from time to time, with respect to any Plan.
Trust Company shall not be responsible for determining whether the terms of a
particular Plan or the Shares of the Fund are appropriate for the Plan or
Participant and does not guarantee the performance of the Fund.
7. Termination of Agreement.
This Agreement may be terminated by either party on the last day of the
month next commencing after thirty (30) days written notice to the other party.
Upon termination of this Agreement, the Fund shall pay to Trust Company such
fees and expenses as may be due as of the date of such termination. Should the
Fund exercise its right to terminate this Agreement, Trust Company reserves the
right to charge for any other reasonable expenses associated with such
termination.
8. Additional Series of the Fund.
8.1. Establishment of Series. Shares of the Fund are of a single class;
however, Shares may be divided into additional series ("Series") that may be
established from time to time by action of the Trustees of the Fund. If the
context requires and unless otherwise specifically provided herein, the term
"Fund" as used in this Agreement shall mean in addition each separate Series
currently existing or subsequently created, and the term "Shares" shall mean all
shares of beneficial interest of the Fund, whether of a single class or divided
into separate Series of the Fund currently existing or hereinafter created.
8.2. Notice to Trust Company. In the event that the Fund establishes
one or more or additional Series of Shares in addition to the original Series
with respect to which it desires to have Trust Company render services as
recordkeeping agent under the terms hereof, it shall so notify Trust Company in
writing, and upon the effectiveness of a registration statement under the 33 Act
relating to such Series of Shares and unless Trust Company objects in writing to
providing such services, such Series shall be subject to this Agreement.
8.3. Suspension. In the event that the Fund suspends the offering of
Shares of any one or more Series, it shall so notify Trust Company in writing to
such effect.
7
<PAGE>
9. Assignment.
Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns.
10. Amendment.
This Agreement may be amended or modified by a written agreement
executed by both parties.
11. Massachusetts Law to Apply.
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
12. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
hereto.
13. Correspondence.
Trust Company will answer correspondence from Administrators relating
to Plan and Plan participant accounts and such other correspondence as may from
time to time be mutually agreed upon and notify the Fund of any correspondence
which may require an answer from the Fund.
14. Further Actions.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
15. Interpretive Provisions.
In connection with the operation of this Agreement, Trust Company and
the Fund may agree from time to time on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions are to be signed by the parties and annexed hereto, but no
such provisions shall contravene any applicable federal or state law or
regulation and no such interpretive or additional provision shall be deemed to
be an amendment of this Agreement.
16. Miscellaneous.
The name Scudder Cash Investment Trust is the designation of the
Trustees for the time being under a Declaration of Trust dated November 3, 1987,
as amended, and all persons dealing with the Fund must look solely to the Fund
property for the enforcement of any claims against the Fund as neither the
Trustees, officers, agents nor shareholders assume any personal liability for
obligations entered into on behalf of the Fund. No Series of the Fund shall be
liable for any claims against any other Series of the Fund.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
SCUDDER TRUST COMPANY
By: /s/Dennis M. Cronin, Jr.
-------------------------------
Dennis M. Cronin, Jr.
Title: Vice President and Treasurer
SCUDDER CASH INVESTMENT TRUST
By: /s/David S. Lee
-------------------------------
David S. Lee
Title: Vice President and Trustee
9
SCUDDER TRUST COMPANY
FEE INFORMATION FOR SERVICES PROVIDED UNDER
COMPASS AND TRAK 2000 SERVICE AGREEMENT
Annual service charge for each participant's account in a retirement and
employee benefit plan:
Each Account or
---------------
Sub Account
-----------
Money Market Funds $ 34.50
Non-Money Market Funds 29.00
Closed Account 5.00
Information Access:
o VRU Access Charge per Call 0.20
o Internet To be determined
1/12th of the annual service charge shall be charged and payable each month. It
will be charged for any account or subaccount which at any time during the month
had a share or unit account balance in the fund.
Out of pocket expenses shall be paid by the Fund directly to the Vendor. Such
expenses include but are not limited to the following:
Supplies:
Stationery and envelopes in connection with participant statements and
administrative Reports
Telephone (portion allocable to servicing accounts)
Postage, overnight service or similar services
Microfilm and Microfiche
Checks
On behalf of the Funds listed on
Attachment A: Scudder Trust Company
By:_________________________ By:_____________________
David S. Lee Dennis M. Cronin, Jr.
President or Vice President Senior Vice President and Treasurer
Date: October 1, 1996 Date: October 1, 1996
<PAGE>
ATTACHMENT A
COMPASS and TRAK 2000 SERVICE AGREEMENT
MONEY MARKET FUND SERVICE ACCOUNTS
Money Market Accounts
Scudder Cash Investment Trust
Scudder U.S. Treasury Money Fund
NON-MONEY MARKET FUND SERVICE ACCOUNTS
Monthly Income Funds
Scudder Global Bond Fund
Scudder GNMA Fund
Scudder High Yield Bond Fund
Scudder International Bond Fund
Scudder Short Term Bond Fund
Quarterly Distribution Funds
Scudder Balanced Fund
Scudder Emerging Markets Income Fund
Scudder Growth and Income Fund
Scudder Income Fund
Annual Distribution Funds
Scudder Capital Growth Fund
Scudder Classic Growth Fund
Scudder Development Fund
Scudder Global Discovery Fund
Scudder Global Fund
Scudder Gold Fund
Scudder Emerging Markets Growth Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Latin America Fund
Scudder Micro Cap Fund
Scudder Pacific Opportunities Fund
Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder 21st Century Growth Fund
Scudder Value Fund
Scudder Zero Coupon 2000 Fund
October 1, 1996
2
LAW OFFICES OF
DECHERT PRICE & RHOADS
TEN POST OFFICE SQUARE SOUTH
BOSTON, MA 02109-4603
TELEPHONE: (617) 728-7100
FAX: (617) 426-6567
October 29, 1996
Scudder Cash Investment Trust
Two International Place
Boston, Massachusetts 02110
Re: Post-Effective Amendment No. 30 to Registration Statement on Form N-1A
(File No.2-55166) (the "Registration Statement")
Gentlemen:
Scudder Cash Investment Trust (the "Trust") is a trust created under a
written Declaration of Trust dated December 12, 1975, and executed and delivered
in Boston, Massachusetts. The Declaration of Trust was amended by an Amended and
Restated Declaration of Trust dated November 3, 1987 (the "Declaration of
Trust"). The beneficial interest thereunder is represented by transferable
shares with par value $.0l per share (the "Shares"). The Trustees have the
powers set forth in the Declaration of Trust, subject to the terms, provisions
and conditions therein provided.
We are of the opinion that the legal requirements have been complied
with in the creation of the Trust and that said Declaration of Trust is legal
and valid.
Under Article V, Section 5.4 of the Declaration of Trust, the Trustees
are empowered, in their discretion, from time to time, to issue Shares for such
amount and type of consideration, at such time or times and on such terms as the
Trustees may deem best. Under Article V, Section 5.1, it is provided that the
number of Shares authorized to be issued under the Declaration of Trust is
unlimited.
By votes adopted on and November 8, 1994 and November 14, 1995, the
Trustees of the Trust authorized the President, any Vice President, the
Secretary, and the Treasurer, from time to time, to determine the appropriate
<PAGE>
number of Shares to be registered, to register with the Securities and Exchange
Commission, and to issue and sell to the public, such Shares.
We understand that you are about to register under the Securities Act
of 1933, 133,504,439 Shares by Post-Effective Amendment No. 30 to the
Registration Statement.
We are of the opinion that all necessary Trust action precedent to the
issue of said 133,504,439 Shares, comprising the Shares covered by
Post-Effective Amendment No. 30 to the Registration Statement, has been duly
taken, and that all such Shares may be legally and validly issued for cash, and
when sold will be fully paid and non-assessable by the Trust upon receipt by the
Trust or its agent of consideration for such Shares in accordance with the terms
in the Registration Statement, subject to compliance with the Securities Act of
1933, as amended, the Investment Company Act of 1940, as amended, and applicable
state laws regulating the sale of securities.
We consent to your filing this opinion with the Securities and Exchange
Commission as an Exhibit to Post-Effective Amendment No. 30 to the Registration
Statement.
Very truly yours,
/s/Dechert Price & Rhoads
Coopers & Lybrand L.L.P.
Coopers
& Lybrand a professional services firm
Consent of Independent Accountants
To the Trustees of Scudder Cash Investment Trust:
We consent to the inclusion in Post-Effective Amendment No. 30 to the
Registration Statement of Scudder Cash Investment Trust Fund on Form N-1A, of
our report dated August 6, 1996 on our audit of the financial statements and
financial highlights of the Scudder Cash Investment Trust Fund, which reports
are included in the Annual Report to Shareholders for the year ended June 30,
1996, which is incorporated by reference in the Registration Statement.
We also consent to the reference to our Firm under the caption, "Experts."
/s/ Coopers & Lybrand L.L.P.
Boston, Massachusetts Coopers & Lybrand L.L.P.
October 16, 1996
Coopers & Lybrand L.L.P. is a member of Coopers & Lybrand International, a
limited liability association incorporated in Switzerland.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Scudder
Cash Investment Trust Annual Report for the fiscal year ended June 30, 1996 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER>2
<NAME> SCUDDER CASH INVESTMENT TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 1,379,605,153
<INVESTMENTS-AT-VALUE> 1,378,368,341
<RECEIVABLES> 35,424,790
<ASSETS-OTHER> 23,949
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,415,726,059
<PAYABLE-FOR-SECURITIES> 19,980,340
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,379,842
<TOTAL-LIABILITIES> 28,360,182
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,388,602,689
<SHARES-COMMON-STOCK> 1,388,356,689
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,236,812)
<NET-ASSETS> 1,387,365,877
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 80,717,847
<OTHER-INCOME> 0
<EXPENSES-NET> 11,908,428
<NET-INVESTMENT-INCOME> 68,809,419
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 268,338
<NET-CHANGE-FROM-OPS> 69,077,757
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (68,809,419)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,734,972,406
<NUMBER-OF-SHARES-REDEEMED> (1,932,327,819)
<SHARES-REINVESTED> 64,180,974
<NET-CHANGE-IN-ASSETS> (132,906,101)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,898,959
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,908,428
<AVERAGE-NET-ASSETS> 1,435,768,336
<PER-SHARE-NAV-BEGIN> $1.00
<PER-SHARE-NII> .048
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.048)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> $1.00
<EXPENSE-RATIO> 0.83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
