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.
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15
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SCUDDER CASH INVESTMENT TRUST
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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.
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16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
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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
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17
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18
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19
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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>
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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
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IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
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The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
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Scudder Institutional Fund, Inc. Scudder Treasurers Trust(TM)++
Scudder Fund, Inc.
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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>
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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
- --------------------------------------------------------------------------------------------------------------
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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
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THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Visit the Scudder World Wide Web Site at:
- --------------------------------------------------------------------------------------------------------------
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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.
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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.
