Scudder Tax Free Money Fund
March 1, 1998
------------------------------
Scudder Cash Investment Trust
Scudder U.S. Treasury Money Fund
November 1, 1997
as supplemented December 31, 1997
------------------------------
Prospectus
Three pure no-load(TM) (no sales charges) money market funds. Scudder Tax Free
Money Fund seeks to provide income exempt from regular federal income tax and
stability of principal through investments in municipal securities. Scudder Cash
Investment Trust seeks to maintain the stability of capital and, consistent
therewith, to maintain the liquidity of capital and to provide current income.
Scudder Cash Investment Trust seeks to achieve its objective by investing in
money market securities. Scudder U.S. Treasury Money Fund seeks safety,
liquidity and stability of capital and, consistent therewith, current income.
Scudder U.S. Treasury Money Fund seeks to achieve its objective by investing in
short-term U.S. Government securities and repurchase agreements.
This combined prospectus sets forth concisely the information a prospective
investor should know before investing in the following funds: Scudder Tax Free
Money Fund, Scudder Cash Investment Trust and Scudder U.S. Treasury Money Fund.
Each of the foregoing are open-end management investment companies. Please
retain this prospectus for future reference.
Shares of the Funds are not insured or guaranteed by the U.S. Government. Each
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.
If you require more detailed information, each Fund's Statement of Additional
Information dated March 1, 1998 for Scudder Tax Free Money Fund and November 1,
1997 for Scudder Cash Investment Trust and Scudder U.S. Treasury Money Fund, 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 and
is available along with other related materials on the SEC's Internet Web site
(http://www.sec.gov).
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 COMBINED PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Contents--see page 5.
<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 the Funds. By reviewing this table and those in other
mutual funds' prospectuses, you can compare each 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 either Fund for various transactions.
Scudder Tax Scudder Cash Scudder U.S.
Free Money Investment Treasury
Fund Trust Money Fund
---- ----- ----------
Sales commissions to purchase shares NONE NONE NONE
(sales load)
Commissions to reinvest dividends NONE NONE NONE
Redemption fees NONE* NONE* NONE*
Fees to exchange shares NONE NONE NONE
2) Annual Fund operating expenses: Expenses paid by a Fund before it
distributes its net investment income, expressed as a percentage of its
average daily net assets for the fiscal year ended December 31, 1997 for
Scudder Tax Free Money Fund and June 30, 1997 for Scudder Cash Investment
Trust and Scudder U.S. Treasury Money Fund.
Investment management fee (after 0.50%+ 0.40%++ 0.21%**
waiver) ------ ------- -------
12b-1 fees NONE NONE NONE
Other expenses 0.26% 0.45% 0.44%
----- ----- -----
Total Fund operating expenses
(after waiver, if applicable) 0.76%+ 0.85%++ 0.65%**
==== ==== ====
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 each Fund before it distributes its
net investment income to shareholders. (As noted above, the Funds have no
redemption fees of any kind.)
One year $ 8 $ 9 $ 7
Three years 24 27 21
Five years 42 47 36
Ten years 94 105 81
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 Funds. 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."
+ Until April 30, 1998, the Adviser has agreed to waive a portion of its fee
to the extent necessary so that the total annualized expenses of Scudder
Tax Free Money Fund do not exceed 0.65% of average daily net assets.
Expenses shown above are restated to reflect what the Fund would have paid
during the fiscal year ended December 31, 1997, absent such waiver. Actual
expenses for the fiscal year ended December 31, 1997 were: investment
management fee 0.39%, other expenses 0.26% and total Fund operating
expenses 0.65%.
++ Until October 31, 1998, the Adviser has agreed to waive all or a portion
of its investment management fee payable by Scudder Cash Investment Trust
to the extent necessary so that the total annualized expenses of the Fund
do not exceed 0.85% of the average daily net assets. This expense
information has been restated to reflect current fees. Actual annualized
Fund expenses for the fiscal year ended June 30, 1997 were investment
management fee 0.41%, other expenses 0.45% and total operating expenses
0.86%.
** Until October 31, 1998, the Adviser has agreed to waive all or a portion
of its investment management fee payable by Scudder U.S. Treasury Money
Fund to the extent necessary so that the total annualized expenses of the
Fund do not exceed 0.65% of average daily net assets. If the Adviser had
not agreed to do so, Fund operating expenses would have been: investment
management fee .50%, other expenses .44% and total operating expenses .94%
for the fiscal year ended June 30, 1997.
Prospectus
2
<PAGE>
Financial highlights
Scudder Tax Free Money Fund
The following table includes selected data for a share outstanding throughout
each period 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 December 31, 1997, which may be obtained without
charge by writing or calling Scudder Investor Services, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended December 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<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 .............. .031 .029 .032 .022 .018 .025 .041 .053 .057 .046
Less distributions from net
investment income ................ (.031) (.029) (.032) (.022) (.018) (.025) (.041) (.053) (.057) (.046)
----------------------------------------------------------------------------------------
Net asset value, end of period ..... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
- -----------------------------------------------------------------------------------------------------------------------------
Total Return (%) ................... 3.10 2.91 3.27 2.26 1.86 2.54 4.20 5.44 5.83 4.73
Ratios and Supplemental Data
Net assets, end of period
($ millions) ..................... 283 220 239 257 222 267 279 303 279 358
Ratio of operating expenses net,
to average daily net assets (%) .. .65 .70 .75 .77 .75 .73 .70 .72 .70 .67
Ratio of operating expenses
before expense reductions to
average daily net assets ......... .76 .75 .75 .77 .75 .73 .70 .72 .70 .67
Ratio of net investment income
to average daily net assets (%) .. 3.06 2.86 3.21 2.24 1.84 2.53 4.12 5.30 5.67 4.61
</TABLE>
Prospectus
3
<PAGE>
Financial highlights
The following tables include selected data for a share outstanding throughout
each year and other performance information derived from the audited financial
statements for Scudder Cash Investment Trust and Scudder U.S. Treasury Money
Fund.
If you would like more detailed information concerning each Fund's performance,
a complete portfolio listing and audited financial statements are available in
each Fund's Annual Report dated June 30, 1997, which may be obtained without
charge by writing or calling Scudder Investor Services, Inc.
Scudder Cash Investment Trust
<TABLE>
<CAPTION>
Years Ended June 30,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<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 .............. .046 .048 .048 .027 .027 .047 .069 .080 .082 .064
Distributions from net investment
income and net realized
capital gains .................... (.046) (.048) (.048) (.027) (.027) (.047) (.069) (.080) (.082) (.064)
---------------------------------------------------------------------------------------
Net asset value, end of period ..... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
---------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Total Return (%) ................... 4.73 4.89 4.90 2.77 2.75 4.76 7.13 8.23 8.49 6.59
Ratios and Supplemental Data
Net assets, end of period
($ millions)...................... 1,431 1,387 1,520 1,430 1,119 1,361 1,736 1,644 1,563 1,370
Ratio of operating expenses,
net to average daily
net assets (%) ................... .86 .83 .78 .82 .78 .70 .66 .67 .66 .68
Ratio of operating expenses
before expense reduction,
to average daily net
assets (%) ....................... .86 .83 .78 .82 .78 .70 .66 .67 .66 .68
Ratio of net investment income
to average daily net assets (%) .. 4.63 4.79 4.84 2.78 2.72 4.58 6.91 7.93 8.21 6.44
</TABLE>
Scudder U.S. Treasury Money Fund
<TABLE>
<CAPTION>
Years Ended June 30,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<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 .............. .045 .048 .046 .027 .027 .044 .065 .075 .074 .055
Less distributions from net
investment income and net
realized gains on investment
transactions (a) ................. (.045) (.048) (.046) (.027) (.027) (.044) (.065) (.075) (.074) (.055)
Net asset value, ---------------------------------------------------------------------------------------
end of period .................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
---------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Total Return (%) ................... 4.58 4.91 4.70 2.74 2.74 4.48 6.71 7.74 7.66 5.69
Ratios and Supplemental Data
Net assets, end of period
($ millions) ..................... 399 396 383 383 305 299 272 198 167 154
Ratio of operating expenses,
net to daily net average
assets (%) ...................... .65 .65 .65 .65 .65 .65 .82 .98 1.01 1.04
Ratio of operating expenses
before expense reductions,
to average daily net assets (%) . .94 .92 .90 .90 .85 .85 .91 .98 1.01 1.04
Ratio of net investment income to
average net assets (%) .......... 4.49 4.80 4.61 2.75 2.69 4.31 6.37 7.46 7.41 5.54
</TABLE>
(a) Net realized capital gains were less than 6/10 of 1(cents) per share.
Prospectus
4
<PAGE>
A message from the President
Scudder Kemper Investments, Inc., investment adviser to the Scudder Family of
Funds, is one of the largest and most experienced investment management
organizations worldwide, managing more than $200 billion in assets globally for
mutual fund investors, retirement and pension plans, institutional and corporate
clients, and private family and individual accounts. It is one of the ten
largest mutual fund companies in the U.S.
We offered America's first no-load mutual fund in 1928, and today the Scudder
Family of Funds includes over 45 no-load mutual fund portfolios. We also 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 numerous
other open and closed-end funds that invest in this country and other 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 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 Investor Centers.
The Scudder Family of Funds includes those Funds, or classes of Funds, advised
by Scudder Kemper Investments, Inc., that are offered without commissions to
purchase or redeem 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/ Edmond D. Villani
President and CEO, Scudder Kemper Investments, Inc.
Scudder money funds
Three pure no-load(TM) (no sales charges) mutual fund:
o Scudder Tax Free Money Fund
o Scudder Cash Investment Trust
o Scudder U.S. Treasury Money Fund
Contents
Investment characteristics ....................... 5
Scudder Tax Free Money Fund ...................... 6
Scudder Cash Investment Trust .................... 7
Scudder U.S. Treasury Money Fund ................. 7
Additional information about
policies and investments ....................... 8
Distribution and performance
information .................................... 10
Fund organization ................................ 10
Transaction information .......................... 12
Shareholder benefits ............................. 14
Investment products and services ................. 16
How to contact Scudder ........................... 17
Investment characteristics
Scudder Tax Free Money Fund, Scudder Cash Investment Trust and Scudder U.S.
Treasury Money Fund (the "Funds") are money market funds advised by Scudder,
Stevens & Clark, Inc. (the "Adviser"). The three Funds' prospectuses are
presented together so you can understand their important differences and decide
which Fund or combination of Funds is most suitable for your investment needs.
Except as otherwise indicated, each 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 objective, shareholders should consider whether that
Fund remains an appropriate investment in light of their then current financial
position and needs. There can be no assurance that each Fund's objectives will
be met.
Amendments have been adopted to the federal rules regulating quality, maturity
and diversification requirements of money market funds like the Funds. Money
market funds must comply with the revised rules by July 1, 1998. Each Fund
intends to be in compliance with the amended requirements by that date.
Prospectus
5
<PAGE>
Scudder Tax Free Money Fund
Investment objectives and policies
Scudder Tax Free Money Fund, a diversified open-end management investment
company, seeks to provide income exempt from regular federal income tax and
stability of principal through investments in municipal securities. All of the
Fund's investments are high quality, have a remaining maturity of 397 calendar
days or less and have minimal credit risk as determined by the Adviser. The
dollar-weighted average maturity of the Fund's portfolio is 90 days or less.
The Fund seeks to maintain a constant net asset value of $1.00 per share,
although in extreme circumstances this may not be possible. A small portion of
the income may be subject to regular federal, alternative minimum, state and
local income taxes.
Investment characteristics
Depending on your tax bracket, your return from the Fund may be substantially
higher than the after-tax return you would earn from comparable taxable
investments. The chart below shows what an investor would have to earn from a
comparable taxable investment to equal the tax-free yield provided by the Fund
for the period ended December 31, 1997.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
TAX-FREE YIELD and CORRESPONDING TAXABLE EQUIVALENTS
Tax-Free Yield Taxable
for the 7-day Equivalent Yield*
period ended -----------------
------------
28% Tax 31% Tax 36% Tax 39.6% Tax
December 31, 1997 Bracket Bracket Bracket Bracket
----------------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Scudder Tax Free Money Fund 3.45% 4.79% 5.00% 5.39% 5.71%
* Based on federal income tax rates in effect for the 1997 taxable year. The
yield levels of tax-free and taxable investments continuously change.
Before investing in a Scudder tax-free fund, you may want to compare its
yield to the after-tax yield of an investment paying taxable income
- ----------------------------------------------------------------------------------------------------
</TABLE>
Investments
All of the Fund's municipal securities must meet certain quality criteria at the
time of purchase. Generally, the Fund may purchase only securities which are
rated, or issued by an issuer rated, within the two highest quality rating
categories of two or more of the following rating agencies: Moody's Investors
Service, Inc. ("Moody's") (Aaa and Aa, MIG 1 and MIG 2, and P1 and P2), Standard
& Poor's ("S&P") (AAA and AA, SP1+ and SP1, A1+ and A1 and A2) and Fitch
Investors Service, Inc. ("Fitch") (AAA and AA, F1 and F2). Where only one rating
agency has rated a security (or its issuer), the Fund generally may purchase
that security as long as the rating falls within the categories described above.
Where a security (or its issuer) is unrated, the Fund may purchase that security
if, in the judgment of the Adviser, it is comparable in quality to securities
described above. All of the securities in which the Fund may invest are
dollar-denominated and must meet credit standards applied by the Adviser
pursuant to procedures established by the Trustees. Should an issue of municipal
securities cease to be rated or if its rating is reduced below the minimum
required for purchase by the Fund, the Adviser will dispose of any such security
unless the Trustees of the Fund determine that such disposal would not be in the
best interests of the Fund.
Municipal securities in which the Fund may invest include municipal notes,
short-term municipal bonds, variable rate demand instruments and tax-exempt
commercial paper. Municipal notes are generally used to provide for short-term
capital needs and generally have maturities of one year or less. Examples
include tax anticipation and revenue anticipation notes, which are generally
issued in anticipation of various seasonal revenues, bond anticipation notes,
and construction loan notes. Short-term municipal bonds may include general
obligation bonds, which are secured by the issuer's pledge of its faith, credit
and taxing power for payment of principal and interest, and revenue bonds, which
are generally paid from the revenues of a particular facility or a specific
excise tax or other source. Examples of taxable investments in which the Fund
may invest include obligations of corporate issuers, U.S. Treasury obligations,
U.S. Government obligations, money market instruments and repurchase agreements.
In addition, the Fund may invest to a limited extent, in illiquid or restricted
securities.
The Fund may invest more than 25% of its assets in industrial development or
other private activity bonds, subject to the Fund's fundamental investment
policies, and also subject to the Fund's 20% limitation on investing in
securities whose investment income is taxable or subject to the alternative
minimum tax ("AMT" bonds) and the Fund's current intention not to invest in
municipal securities whose investment income is subject to regular federal
income tax. For purposes
Prospectus
6
<PAGE>
of the Fund's investment limitation regarding concentration of investments in
any one industry, industrial development or other private activity bonds
ultimately payable by companies within the same industry will be considered as
if they were issued by issuers in the same industry.
It is a fundamental policy, which may not be changed without a vote of
shareholders, that at least 80% of the Fund's assets will normally be invested
in short-term municipal securities.
Under normal market conditions the Fund expects to invest 100% of its portfolio
securities in municipal securities. The Fund may, on a temporary basis, hold and
invest up to 20% of its assets in cash and cash equivalents and in temporary
investments of taxable securities with remaining maturities of 397 calendar days
or less. For temporary defensive purposes the Fund may invest more than 20% in
such investments or may otherwise vary from its investment policies during
periods when the Adviser determines that it is advisable to do so because of
conditions in the securities markets or other economic or political conditions.
It is impossible to accurately predict how long such alternative strategies may
be utilized. In 1997, all the Fund's dividends were 100% federally tax-exempt.
The Fund may also invest in stand-by commitments and other puts, repurchase
agreements, reverse repurchase agreements, participation interests and
when-issued or forward delivery securities. See "Additional information about
policies and investments" for more information about these investment
techniques.
Scudder Cash Investment Trust
Investment objective
The investment objective of Scudder Cash Investment Trust, a diversified,
open-end management investment company, is to seek to maintain the stability of
capital and, consistent therewith, to maintain the liquidity of capital and to
provide current income. The Fund seeks to achieve its objective by investing in
money market securities. The Fund also seeks to maintain a constant net asset
value of $1.00 per share and declares dividends daily.
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, S&P and Fitch. If a security is unrated, the Fund may
purchase the security if, in the opinion of the Adviser, the credit quality of
the security is deemed equivalent to the rated securities mentioned above.
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; when-issued securities, asset-backed securities,
including certificates, participations and notes; municipal securities,
including notes, bonds and participation interests, either taxable or tax free;
and illiquid or restricted securities.
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.
Scudder U.S. Treasury Money Fund
Investment objective
Scudder U.S. Treasury Money Fund, a diversified, open-end management investment
company, seeks to provide safety, liquidity and stability of capital and,
consistent therewith, to provide current income. The Fund seeks to achieve its
objective by investing in short-term U.S. Government
Prospectus
7
<PAGE>
securities and repurchase agreements. The Fund also seeks to maintain a constant
net asset value of $1.00 and declares dividends daily.
Investment characteristics
The Fund seeks to provide investors with current income and stability of capital
through a portfolio consisting primarily of short-term U.S. Treasury obligations
and similar investments. The Fund is a "fixed price" fund; that is, it seeks to
maintain a constant share price of $1.00, although under certain circumstances
this may not be possible. This price stability makes the Fund suitable for
investors who are seeking current income and who are unwilling to accept stock
or bond market risk.
The Fund is also designed to minimize credit risk. It invests exclusively in
short-term securities unconditionally guaranteed by the U.S. Government (as to
payment of both principal and interest) and repurchase agreements backed fully
by U.S. Treasury securities.
The Fund invests in U.S. Government securities whose interest is specifically
exempted from state and local income taxes under federal law; the interest is
not exempt from federal income tax. Most, but not all, states allow this
tax-exempt character of the Fund's income to pass through to its shareholders,
so that distributions from the Fund to the extent derived from interest that is
exempt from state and local income taxes, are exempt from such taxes when earned
by a shareholder of the Fund. Shareholders should, however, contact their own
tax advisers regarding the possible exclusion for state and local income tax
purposes of the portion of distributions received from the Fund which is
attributable to interest from U.S. Government securities. Income earned by the
Fund from U.S. Treasury-backed repurchase agreements generally is not exempt
from state and local tax.
Investments
The Fund invests without limitation in short-term securities consisting of U.S.
Treasury notes, bonds, bills and in other securities issued or guaranteed by the
U.S. Government and thus backed by the full faith and credit of the United
States. The Fund may invest its assets, when conditions are appropriate, in
repurchase agreements, but only if they are fully collateralized by U.S.
Treasury obligations. At least 80% of the Fund's assets will be invested in
either U.S. Treasury securities or in repurchase agreements collateralized by
U.S. Treasury obligations. All of the securities in which the Fund may invest
are U.S. dollar-denominated. The Fund's investments in U.S. Government
obligations provide a high degree of safety and liquidity. The Fund may also
invest in when-issued securities, whose market value may involve an unrealized
gain or loss prior to settlement. In addition, the Fund may invest, to a limited
extent, in illiquid or restricted securities.
The Fund's investments in U.S. Government securities may have maturities of up
to 762 calendar days; all other portfolio securities will have maturities of up
to 397 calendar days. The dollar-weighted average maturity of the Fund's
portfolio investments varies with money market conditions, but is always 90 days
or less. As a money market fund with a short-term maturity, the Fund's income
fluctuates with changes in interest rates but its price is expected to remain
fixed at $1.00 per share.
Additional information about policies and investments
Investment restrictions
The Funds have certain investment restrictions which are designed to reduce the
Funds' investment risk. Fundamental investment restrictions may not be changed
without a vote of shareholders; non-fundamental investment restrictions may be
changed by a vote of the Trust's Board of Trustees. A complete listing of
investment restrictions is contained under "Investment Restrictions" in each
Fund's Statement of Additional Information.
As a matter of fundamental policy, the Funds may not borrow money, except as
permitted under Federal law. Further, as a matter of non-fundamental policy, the
Funds may not borrow money in an amount greater than 5% of total assets, except
for temporary or emergency purposes, although the Funds may engage up to 5% of
total assets in reverse repurchase agreements or dollar rolls.
As a matter of fundamental policy, the Funds may not make loans except through
the lending of portfolio securities, the purchase of debt securities, interests
in indebtedness or through repurchase agreements. The Funds have adopted a
non-fundamental policy restricting the lending of portfolio securities to no
more than 5% of total assets.
A complete description of these and other policies and restrictions is contained
under "Investment Restrictions" in each Fund's Statement of Additional
Information.
Prospectus
8
<PAGE>
The high quality securities in which Scudder Cash Investment Trust 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.
When-issued securities
Each of the Funds may purchase securities on a when-issued or forward delivery
basis, for payment and delivery at a later date. The price and yield are
generally fixed on the date of commitment to purchase. During the period between
purchase and settlement, no interest accrues to the Fund. At the time of
settlement, the market value of the security may be more or less than the
purchase price.
Repurchase agreements
As a means of earning taxable income for periods as short as overnight, each of
the Funds 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 them at a specified time and
price. Income from repurchase agreements will be taxable when distributed to
shareholders. See "Risk factors."
Stand-by commitments
To facilitate liquidity, Scudder Tax Free Money Fund may enter into "stand-by
commitments" permitting the Fund to resell municipal securities to the original
seller at a specified price. Stand-by commitments generally involve no cost, and
any costs would be, in any event, limited to no more than 0.50% of the value of
the assets of the Fund. Any such costs may, however, reduce yield.
Third party puts
Scudder Tax Free Money Fund may purchase long-term fixed-rate bonds that have
been coupled with an option granted by a third party financial institution
allowing the Fund at specified intervals, not exceeding 397 calendar days, to
tender (or "put") its bonds to the institution and receive the face value
thereof. These third party puts are available in several different forms, may be
represented by custodial receipts or trust certificates and may be combined with
other features such as interest rate swaps. See "Risk factors."
Variable rate demand instruments
Scudder Tax Free Money Fund may also invest in variable rate demand instruments.
Variable rate demand instruments are securities with long-stated maturities but
demand features that allow the holder to demand 100% of the principal plus
interest within one to seven days. The coupon varies daily, weekly or monthly
with the market. The price remains at par and this provides a great deal of
stability to the portfolio at market yields.
Risk factors
The Funds' risks are determined by the nature of the securities held and the
portfolio management strategies used by the Adviser. The following are
descriptions of certain risks related to the investments and techniques that
certain Funds may use from time to time.
Repurchase agreements. If the seller under a repurchase agreement becomes
insolvent, the Fund's right to dispose of the securities may 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 of the securities
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.
Third party puts. In connection with third party puts, the financial institution
granting the option does not provide credit enhancement, and typically if there
is a default on or significant downgrading of the bond or a loss of its
tax-exempt status, the put option will terminate automatically, the risk to the
Fund will be that of holding a long-term bond thus, the weighted average
maturity of a Fund's portfolio would be adversely affected.
Prospectus
9
<PAGE>
Distribution and performance information
Dividends and capital gains distributions
Each Fund's dividends from net investment income are declared daily and
distributed monthly. Scudder Cash Investment Trust may take into account capital
gains and losses (other than long-term capital gains) in its daily dividend
declaration. Scudder U.S. Treasury Money Fund takes into account realized gains
and losses on securities held for one year or less (short-term capital
gain/loss) in its daily dividend. Each Fund intends to distribute net realized
capital gains after utilization of capital loss carryforwards, if any, in
November or December to prevent application of a federal excise tax. An
additional distribution may be made if required. Any dividends or capital gains
distributions declared in October, November or December with a record date in
such a month and paid 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.
Distributions of tax-exempt income are not subject to federal income taxes,
except for the possible applicability of the alternative minimum tax. However,
distributions may be subject to state and local income taxes. A portion of
Scudder Tax Free Money Fund's income, including income from repurchase
agreements, gains from options, and market discount bonds, may be taxable to
shareholders as ordinary income. For Scudder Cash Investment Trust and Scudder
U.S. Treasury Money 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 to
individual shareholders at a maximum 20% or 28% capital gains rate (depending on
the Fund's holding period for the assets giving rise to the gain), regardless of
the length of time shareholders have owned shares. Short-term capital gains and
any other taxable income distributions are taxable as ordinary income.
Distributions of tax-exempt income from Scudder Tax Free Money Fund are taken
into consideration in computing the portion, if any, of Social Security and
railroad retirement benefits subject to federal and, in some cases, state taxes.
Each Fund sends detailed tax information about the amount and type of its
distributions to its shareholders by January 31 of the following year.
Performance information
From time to time, quotations of the Funds' 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 a Fund refers to income generated by an investment in a Fund over
a specified seven-day period. Yield is expressed as an annualized percentage.
The "effective yield" of a Fund is expressed similarly but, when annualized, the
income earned by an investment in a Fund is assumed to be reinvested and will
reflect the effects of compounding."Total return" is the change in value of an
investment in a Fund for a specified period. The "average annual total return"
of a Fund is the average annual compound rate of return of an investment in a
Fund assuming the investment has been held for one year, five years and ten
years as of a stated ending date. (If the Fund has not been in operation for at
least ten years, the life of the Fund will be used where applicable.)
"Cumulative total return" represents the cumulative change in value of an
investment in a 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 a Fund. The tax-equivalent yield for Scudder Tax Free
Money Fund is calculated by determining the rate of return that would have to be
achieved on a fully taxable investment to produce the after-tax equivalent of a
Fund's yield, assuming certain tax brackets for the Fund's shareholder.
Performance for any of the Funds will vary based upon, among other things,
changes in market conditions and the level of the Funds' expenses.
Fund organization
Each Fund is an open-end management investment company registered under the
Investment Company Act of 1940 (the "1940 Act").
The activities of the Funds are supervised by their respective Boards of
Trustees. Shareholders have one vote for each share held on matters on which
they are entitled to vote. The Trusts are not required and have no current
intention of holding annual shareholder meetings, although special meetings may
be called for purposes such as electing or removing Trustees, changing
fundamental
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10
<PAGE>
investment policies or approving an investment management agreement.
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.
The prospectuses of each of the three Funds are combined in this prospectus.
Each Fund offers only its own shares, yet it is possible that a Fund might
become liable for a misstatement or omission regarding another Fund. The
Trustees of each Trust have considered this and approved the use of a combined
prospectus.
Scudder Tax Free Money Fund
Scudder Tax Free Money Fund was organized as a Massachusetts business trust in
October 1979.
Scudder Cash Investment Trust
Scudder Cash Investment Trust was organized as a Massachusetts business trust in
December 1975.
Scudder U.S. Treasury Money Fund
Scudder U.S. Treasury Money Fund, formerly known as Scudder Government Money
Fund, was organized as a Massachusetts business trust in April 1980. The Fund
changed its name on March 1, 1991.
Investment adviser
The Funds retain the investment management firm of Scudder Kemper Investments,
Inc., a Delaware corporation formerly known as Scudder, Stevens & Clark, Inc.,
to manage each Fund's daily investment and business affairs subject to the
policies established by the relevant Trust's Board of Trustees. The Trustees
have overall responsibility for the management of their respective Funds under
Massachusetts law.
Scudder, Stevens & Clark, Inc. ("Scudder"), and Zurich Insurance Company
("Zurich"), an international insurance and financial services organization, have
formed a new global investment organization by combining Scudder's business with
that of Zurich's subsidiary, Zurich Kemper Investments, Inc. and Scudder has
changed its name to Scudder Kemper Investments, Inc. As a result of the
transaction, Zurich owns approximately 70% of the Adviser, with the balance
owned by the Adviser's officers and employees.
The management fees for Scudder Tax Free Money Fund and Scudder Cash Investment
Trust are graduated so that increases in a Fund's net assets may result in a
lower fee and decreases in a Fund's assets may result in a higher fee. For the
year ended December 31, 1997 and June 30, 1997, the Adviser received investment
management fees of 0.39% and 0.41% for Scudder Tax Free Money Fund and Scudder
Cash Investment Trust, respectively. Until April 30, 1998, the Adviser has
agreed not to impose a portion of its investment management fee and to take
other action, to the extent necessary, to maintain the annualized expenses of
Scudder Tax Free Money Fund at 0.65% of the Fund's average daily net assets.
Until October 31, 1998, the Adviser has agreed to waive all or portions of its
investment management fee payable by Scudder Cash Investment Trust to the extent
necessary so that the total annualized expenses of the Fund do not exceed 0.85%
of average daily net assets of the Fund.
For Scudder U.S. Treasury Money Fund's fiscal year ended June 30, 1997, the
Adviser received an investment management fee of 0.21% of the Fund's average
daily net assets on an annual basis. Until October 31, 1998, the Adviser has
agreed to maintain the total annualized expenses of Scudder U.S. Treasury Money
Fund at 0.65% of average daily net assets of the Fund.
The management fees are payable monthly, provided that each 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.
All of a Fund's expenses are paid out of gross investment income. Shareholders
pay no direct charges or fees for investment or administrative services.
Scudder Kemper Investments, 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 Funds.
Underwriter
Scudder Investor Services, Inc., a subsidiary of the Adviser, is the Funds'
principal underwriter. Scudder Investor Services, Inc. confirms, as agent, all
purchases of shares of the Funds. Scudder Investor Relations is a telephone
information service provided by Scudder Investor Services, Inc.
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11
<PAGE>
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 Funds.
Custodian
State Street Bank and Trust Company is the custodian for each Fund.
Transaction information
Purchasing shares
Purchases are executed at the next calculated net asset value per share after
the Funds' 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
requests by telephone prior to the expiration of the seven-day period will not
be accepted.
By exchange. Each Fund may be exchanged for shares of other funds in the Scudder
Family of Funds unless otherwise determined by each Fund's Board of Trustees.
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.
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
provided your banking information on your application, you can call to request
that federal funds be sent to your authorized bank account. If you did not
include your banking information on your application, call 1-800-225-5163 for
more information.
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.
Signature guarantees. For your protection and to prevent fraudulent redemptions,
on written redemption requests in excess of $100,000 we require an original
signature and an original signature guarantee for each person in whose name the
account is registered. (Each 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.
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. Each Fund uses procedures designed to
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12
<PAGE>
give reasonable assurance that telephone instructions are genuine, including
recording telephone calls, testing a caller's identity and sending written
confirmation of telephone transactions. If a Fund does not follow such
procedures, it may be liable for losses due to unauthorized or fraudulent
telephone instructions. Each 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 Exchange on
each day the Exchange is open for trading. Net asset value per share is
calculated for purchases and redemptions 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, Scudder Cash Investment Trust and
Scudder U.S. Treasury Money Fund use the current market value of the securities,
except for securities with sixty days or less to maturity, each Fund uses the
amortized cost value. Scudder Tax Free Money Fund uses the amortized cost value
in calculating net asset value per share.
Processing time
All purchase and redemption requests must be received in good order by the
Funds' transfer agent.
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 the Funds'
transfer agent of such a purchase by calling 1-800-225-5163.
The Trusts 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 Funds and Scudder Investor Services, Inc. each reserve 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 these Funds to
withhold 31% of taxable dividends, capital gains distributions from accounts
(other than those of certain exempt payees) without a correct certified Social
Security or tax identification number and certain other certified information or
upon notification from the IRS or a broker that withholding is required. The
Funds reserve the right to reject new account applications without a correct
certified Social Security or tax identification number. The Funds also reserve
the right, following 30 days' notice to shareholders, to redeem all shares in
accounts without a correct 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 a Fund's Board of Trustees. Scudder retirement plans and
certain other accounts have similar or lower minimum balance requirements. The
initial investment and minimum account balance for fiduciary accounts such as
IRAs will increase from $500 to $1,000 per fund account, while the subsequent
minimum investment will remain at $50. A shareholder may open a regular account
with a minimum of $1,000, if an investment program of at least $100 per month is
established.
Shareholders with non-fiduciary accounts who maintain an account balance of less
than $2,500 in a Fund without establishing a regular investment program may be
assessed an annual $10.00 per fund charge with the fee to be paid to a Fund. The
$10.00 charge will not apply to shareholders with a
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13
<PAGE>
combined household account balance (same surname, same address) in any of the
Scudder Funds of $25,000 or more. Each Fund reserves the right, following 60
days' written notice to shareholders, to redeem all shares in accounts below
$250, where a reduction in value has occurred due to a redemption or exchange
out of the account. The shareholder may restore the share balance to $250 or
more during the 60-day notice period and must maintain it at no lower than that
minimum to avoid an involuntary redemption. A 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 each Fund's Statement of Additional 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 Kemper Investments, 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
Each 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 the Adviser's large staff of economists, research
analysts, traders and other investment specialists who work in the Adviser's
offices across the United States and abroad. The Adviser believes its team
approach benefits Fund investors by bringing together many disciplines and
leveraging the its extensive resources.
Frank J. Rachwalski, Lead Portfolio Manager for each Fund, joined the Adviser in
1973 and has over 20 years' experience in short-term fixed income investing and
research. Mr. Rachwalski assumed responsibility for each Fund's investment
strategy and operations in 1998.
Jerri Cohen, Portfolio Manager for Scudder Tax Free Money Fund since 1998,
joined the Adviser in 1981 and has over 15 years' experience in tax-exempt money
market fund investing.
John W. Stuebe, Portfolio Manager for Scudder Cash Investment Trust, joined the
Adviser in 1979 and has over 15 years in taxable money market investing.
Mitchell W. Wilner, Portfolio Manager for Scudder U.S. Treasury Money Fund,
joined Zurich Kemper's Fixed Income Department as a Research Analyst in 1992.
Mr. Wilner has 11 years of financial industry experience.
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. (The exchange
privilege may not be available for certain Scudder Funds. For more information,
please call 1-800-225-5163.) 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.
Personal Counsel(SM) -- A Managed Fund Portfolio Program
If you would like to receive direct guidance and management of your overall
mutual fund portfolio to help you pursue your investment goals, you may be
interested in Personal Counsel from Scudder. Personal Counsel, a program of
Scudder Investor Services, Inc., a registered investment adviser and a
subsidiary of Scudder Kemper Investments, Inc., combines the benefits of a
customized portfolio of pure no-load Scudder Funds with ongoing portfolio
monitoring and individualized service, for an annual fee of generally 1% or less
of assets (with a $1,000 minimum). In addition, it draws upon Scudder's more
than 75-year heritage of providing investment counsel to large corporate and
private clients. If you have $100,000 or more to invest initially and would like
more information about Personal Counsel, please call 1-800-700-0183.
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<PAGE>
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.
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.
Prospectus
15
<PAGE>
Investment products and services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series--
Premium Shares*
Managed Shares*
Scudder Government Money Market Series--Managed Shares*
Tax Free Money Market+
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**
Tax Free+
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited
Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**
U.S. Income
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund
Global Income
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
Scudder Balanced Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund
U.S. Growth
Value
Scudder Large Company Value Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.
Industry Sector Funds
Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
Traditional IRA
Roth IRA
SEP-IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan **+++ +++
(a variable annuity)
Education Accounts
Education IRA
UGMA/UTMA
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal Fund, Inc.
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed in order from
expected least risk to most risk. Certain Scudder funds may not be available for
purchase or exchange. +A portion of the income from the tax-free funds may be
subject to federal, state, and local taxes. *A class of shares of the Fund.
**Not available in all states. +++ +++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 Kemper Investments, Inc., are traded on the New York Stock Exchange and,
in some cases, on various foreign stock exchanges.
Prospectus
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<PAGE>
How to contact Scudder
Account Service and Information:
For existing account service and transactions
Scudder Investor Relations -- 1-800-225-5163
For 24 hour account information, fund information, exchanges, and an
overview of all the services available to you
Scudder Electronic Account Services -- http://funds.scudder.com
For personalized information about your Scudder accounts, exchanges and
redemptions
Scudder Automated Information Line (SAIL) -- 1-800-343-2890
Investment Information:
For information about the Scudder funds, including additional applications
and prospectuses, or for answers to investment questions
Scudder Investor Relations -- 1-800-225-2470
[email protected]
Scudder's World Wide Web Site -- http://funds.scudder.com
For establishing 401(k) and 403(b) plans
Scudder Defined Contribution Services -- 1-800-323-6105
Personal Counsel(SM) -- A Managed Fund Portfolio Program:
To receive information about this mutual fund portfolio guidance and
management program
Personal Counsel from Scudder -- 1-800-700-0183
Please address all correspondence to:
The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291
Scudder Investor Relations and Scudder Investor Centers are services provided
through Scudder Investor Services, Inc., Distributor.
Prospectus
17
