SCUDDER SECURITIES TRUST, 497, 1997-07-14

SCUDDER SECURITIES TRUST
497, 1997-07-14

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SCUDDER
PURE NO-LOAD(TM) FUNDS [logo]

A Collection Of
Prospectuses
For Four
Scudder U.S. Stock Funds

This Outer Cover Not Part of Prospectus

<PAGE>
This combined prospectus sets forth concisely the information a prospective
investor should know before investing in the following open-end funds: Scudder
Small Company Value Fund, Scudder Micro Cap Fund and Scudder 21st Century Growth
Fund, each a series of Scudder Securities Trust; and Scudder Classic Growth
Fund, a series of Scudder Investment Trust. Please retain it for future
reference.

If you require more detailed information, Statements of Additional Information
dated January 1, 1997 for Scudder Small Company Value Fund; August 12, 1996 As
Revised February 7, 1997 for Scudder Micro Cap Fund; September 9, 1996 As
Revised April 7, 1997 for Scudder 21st Century Growth Fund; and September 9,
1996 As Revised March 27, 1997 for Scudder Classic Growth 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 Statements, which are incorporated by reference into this
prospectus, have been filed with the Securities and Exchange Commission and are
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 PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Contents--see page 8.

- -----------------------------------
NOT FDIC- MAY LOSE VALUE
INSURED NO BANK GUARANTEE
- -----------------------------------

SCUDDER [logo]

Scudder Small Company Value Fund
- -----------------------------------
January 1, 1997

Scudder Micro Cap Fund
- -----------------------------------
August 12, 1996
As Revised February 7, 1997

Scudder 21st Century Growth Fund
- -----------------------------------
September 9, 1996
As Revised March 26, 1997

Scudder Classic Growth Fund
- -----------------------------------
September 9, 1996
As Revised March 27, 1997

Four pure no-load(TM) (no sales charges) mutual funds which invest for long-term
growth of capital by investing primarily in different segments of the U.S.
equity markets.

Due to investment considerations, it is presently intended that Scudder Micro
Cap Fund will close to new individual investors when it reaches $100 million in
total assets.

<PAGE>
Expense information

How to compare a Scudder pure no-load(TM) fund

This information is designed to help you understand the various costs and
expenses of investing in Scudder 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.

<TABLE>
<CAPTION>
1) Shareholder transaction expenses: Expenses charged directly to your
individual account in a Fund for various transactions.

Scudder Scudder
Small Company Micro
Value Fund Cap Fund
---------- --------
<S> <C> <C>

Sales commissions to purchase shares (sales load) NONE NONE

Commissions to reinvest dividends NONE NONE

Deferred sales charge NONE NONE

Redemption fees payable to the Fund 1.00%* 1.00%*

Fees to exchange shares payable to the Fund 1.00%* 1.00%*

2) Annual Fund operating expenses: Expenses paid by a Fund (estimated expenses
for Scudder Micro Cap Fund) before it distributes its net investment
income, expressed as a percentage of a Fund's average daily net assets for
the fiscal year ended August 31, 1996 for Scudder Small Company Value Fund
and for Scudder Micro Cap Fund's initial fiscal year.

Investment management fee (after waiver) 0%** 0.64%+++

12b-1 fees NONE NONE

Other expenses 1.50% 1.11%
---- ----

Total Fund operating expenses (after waiver) 1.50%** 1.75%+++
==== ====

Example

Based on the level of total Fund operating expenses listed above (estimated for
Scudder Micro Cap Fund), 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.

One year $ 15 $ 18

Three years 47 55

Five years 82 --

Ten years 179 --
</TABLE>

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.

* There is a 1% fee retained by each Fund which is imposed only on
redemptions or exchanges of shares held less than one year. 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--Exchanging and
redeeming shares."

** Until December 31, 1997, the Adviser has agreed to waive a portion of its
investment management fee to the extent necessary so that total annualized
expenses of Scudder Small Company Value Fund do not exceed 1.50% of average
daily net assets. If the Adviser had not agreed to waive a portion of its
fee, annualized Fund expenses would have been: investment management fee
.75%, other expenses 1.86% and total operating expenses 2.61% for the
fiscal period ended August 31, 1996.

+++ Until August 31, 1997, the Adviser and certain of its subsidiaries have
agreed to waive all or portions of their fees payable by Scudder Micro Cap
Fund to the extent necessary so that the total annualized expenses of the
Fund do not exceed 1.75% of average daily net assets. If the Adviser and
its subsidiaries had not agreed to waive all or portions of their fees, it
is estimated that annualized Fund expenses would be: investment management
fee 0.75%, other expenses 1.11% and total operating expenses 1.86% for the
initial year of operation. To the extent that expenses fall below the
current expense limitation, the Adviser and its subsidiaries reserve the
right to recoup, during the fiscal year incurred, amounts waived during the
period, but only to the extent that the Fund's expenses do not exceed
1.75%.

2
<PAGE>

Expense information

How to compare a Scudder pure no-load(TM) fund

<TABLE>
<CAPTION>
1) Shareholder transaction expenses: Expenses charged directly to your
individual account in a Fund for various transactions.

Scudder Scudder
21st Century Classic
Growth Fund Growth Fund
----------- -----------
<S> <C> <C>

Sales commissions to purchase shares (sales load) NONE NONE

Commissions to reinvest dividends NONE NONE

Deferred sales charge NONE NONE

Redemption fees payable to the Fund 1.00%* NONE*

Fees to exchange shares payable to the Fund 1.00%* NONE

2) Annual Fund operating expenses: Estimated expenses paid by a Fund before it
distributes its net investment income, expressed as a percentage of a
Fund's average daily net assets for the fiscal year.

Investment management fee (after waiver) 0.03%** 0.00%+++

12b-1 fees NONE NONE

Other expenses (after waiver, if applicable) 1.72% 1.25%+++
---- ----

Total Fund operating expenses (after waiver) 1.75%** 1.25%+++
==== ====

Example

Based on the estimated 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.

One year $ 18 $ 13

Three years 55 40
</TABLE>

* 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. There is a 1%
fee retained by Scudder 21st Century Growth Fund which is imposed only on
redemptions or exchanges of shares held less than one year. For additional
information, please refer to "Transaction information--Exchanging and
redeeming shares."

** Until August 31, 1997, the Adviser and certain of its subsidiaries have
agreed to waive all or portions of their fees payable by Scudder 21st
Century Growth Fund to the extent necessary so that the total annualized
expenses of the Fund do not exceed 1.75% of average daily net assets. If
the Adviser and its subsidiaries had not agreed to waive all or portions of
their fees, it is estimated that annualized Fund expenses would be:
investment management fee 1.00%, other expenses 1.72% and total operating
expenses 2.72% for the initial fiscal year. To the extent that expenses
fall below the current expense limitation, the Adviser and its subsidiaries
reserve the right to recoup, during the fiscal year incurred, amounts
waived during the period, but only to the extent that the Fund's expenses
do not exceed 1.75%.

+++ Until August 31, 1997, the Adviser and certain of its subsidiaries have
agreed to waive all or portions of their fees payable by Scudder Classic
Growth Fund to the extent necessary so that the total annualized expenses
of the Fund do not exceed 1.25% of average daily net assets. If the Adviser
and its subsidiaries had not agreed to waive all or portions of their fees,
it is estimated that annualized Fund expenses would be: investment
management fee 0.70%, other expenses 1.45% and total operating expenses
2.15% for the initial fiscal year. To the extent that expenses fall below
the current expense limitation, the Adviser and its subsidiaries reserve
the right to recoup, during the fiscal year incurred, amounts waived during
the period, but only to the extent that the Fund's expenses do not exceed
1.25%.

3
<PAGE>

Financial highlights

Scudder Small Company Value Fund

The following table includes selected data for a share outstanding throughout
the period (a) 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 August 31, 1996 and may be obtained without charge by
writing or calling Scudder Investor Services, Inc.

For the Period
October 6, 1995
(commencement
of operations) to
August 31,
1996
-------------------------------------------------------------------------------

Net asset value, beginning of period $12.00

Income from investment operations:

Net investment income .07

Net realized and unrealized gain on investment transactions 1.53

Total from investment operations 1.60

Less distributions from net investment income (.05)

Redemption fees .02

Net asset value, end of period $13.57
-------------------------------------------------------------------------------
Total Return (%) (b) 13.54(c)**

Ratios and Supplemental Data

Net assets, end of period ($ millions) 41

Ratio of operating expenses, net to average daily net assets (%) 1.50*

Ratio of operating expenses before expense reductions,
to average daily net assets (%) 2.61*

Ratio of net investment income to average daily net assets (%) .67*

Portfolio turnover rate (%) 33.97*

Average commission rate paid $.0364

(a)Per share amounts have been calculated using the weighted average shares
outstanding during the period.

(b)Total return is higher due to maintenance of the Fund's expenses.

(c)Total return does not reflect the effect of the 1% redemption fee on
shares held less than one year.

* Annualized
** Not annualized

4
<PAGE>

Financial highlights

Scudder Micro Cap Fund

The following table includes selected data for a share outstanding throughout
the period (a) and other performance information derived from the audited
financial statements.

For the Period
August 12, 1996
(commencement of
operations) to
August 31, 1996
-------------------------------------------------------------------------------

Net asset value, beginning of period $12.00

Income from investment operations:

Net investment income .01

Net realized and unrealized gain on investments .06

Net asset value, end of period $12.07
-------------------------------------------------------------------------------
Total Return (%) (b) .58(c)**

Ratios and Supplemental Data

Net assets, end of period ($ millions) 8

Ratio of operating expenses, net to average daily net 1.75*
assets (%)

Ratio of operating expenses before expense reductions,
to average daily net assets (%) 22.06*

Ratio of net investment income to average daily net assets (%) 2.58*

Portfolio turnover rate (%) None

Average commission rate paid $.0323

(a)Per share amounts have been calculated using the weighted average shares
outstanding during the period.

(b)Total return is higher due to maintenance of the Fund's expenses.

(c)Total return does not reflect the effect of the 1% redemption fee on
shares held less than one year.

* Annualized
** Not annualized

5
<PAGE>

Financial highlights

Scudder 21st Century Growth Fund

The following table includes selected data for a share outstanding throughout
the period (a) and other performance information derived from the financial
statements.

If you would like more detailed information concerning the Fund's performance, a
complete portfolio listing and financial statements are available in the Fund's
Semiannual Report dated February 28, 1997 and may be obtained without charge by
writing or calling Scudder Investor Services, Inc.

For the Period
September 9, 1996
(commencement
of operations) to
February 28, 1997
(Unaudited)
-------------------------------------------------------------------------------
Net asset value, beginning of period $12.00

Income from investment operations: (.05)

Net investment loss

Net realized and unrealized loss on investments (.90)

Total from investment operations (.95)
Redemption fees (Note A) .01

Net asset value, end of period $11.06
-------------------------------------------------------------------------------
Total Return (%) (b) (7.83)(c)**

Ratios and Supplemental Data

Net assets, end of period ($ millions) 14

Ratio of operating expenses, net to average daily net assets (%) 1.75*

Ratio of operating expenses before expense reductions,
to average daily net assets (%) 5.20*

Ratio of net investment income to average daily net assets (%) (.94)*

Portfolio turnover rate (%) 81.3*

Average commission rate paid $.0378

(a)Based on monthly average shares outstanding during the period.

(b)Total return would have been lower had certain expenses not been reduced.

(c)Total return does not reflect the effect of the 1% redemption fee on share
held less than one year.

* Annualized
** Not annualized

6
<PAGE>

Financial highlights

Scudder Classic Growth Fund

The following table includes selected data for a share outstanding throughout
the period (a) and other performance information derived from the financial
statements.

Income from investment operations: .04

Net investment income

Net realized and unrealized gain on investments 2.29

Total from investment operations $2.33

Less distributions from net investment income (.04)

Net asset value, end of period $14.29
-------------------------------------------------------------------------------
Total Return (%) (b) 19.39**

Ratios and Supplemental Data

Net assets, end of period ($ millions) 21

Ratio of operating expenses, net to average daily net assets (%) 1.25*

Ratio of operating expenses before expense reductions, 3.04*
to average daily net assets (%)

Ratio of net investment income to average daily net assets (%) .72*

Portfolio turnover rate (%) 31.2*

Average commission rate paid $.0363

(a)Based on monthly average shares outstanding during the period.

(b)Total return is higher due to maintenance of the Fund's expenses.

* Annualized
** Not annualized

7
<PAGE>

A message from Scudder's chairman

Scudder, Stevens & Clark, Inc., investment adviser to the Scudder Family of
Funds, was founded in 1919. We offered America's first no-load mutual fund in
1928. Today, we manage in excess of $115 billion for many private accounts and
over 50 mutual fund portfolios. We manage the mutual funds in a special program
for the American Association of Retired Persons, as well as the fund options
available through Scudder Horizon Plan, a tax-advantaged variable annuity. We
also advise The Japan Fund and nine closed-end funds that invest in countries
around the world.

The Scudder Family of Funds is designed to make investing easy and less costly.
It includes money market, tax free, income and growth funds as well as IRAs,
401(k)s, Keoghs and other retirement plans.

Services available to all shareholders include toll-free access to the
professional service representatives of Scudder Investor Relations, easy
exchange among funds, shareholder reports, informative newsletters and the
walk-in convenience of Scudder Funds Centers.

All Scudder mutual funds are pure no-load(TM). This means you pay no commissions
to purchase or redeem your shares or to exchange from one fund to another. There
are no "12b-1" fees either, which many other funds now charge to support their
marketing efforts. All of your investment goes to work for you. We look forward
to welcoming you as a shareholder.

/s/Daniel Pierce

Fund Objectives

o Scudder Small Company Value Fund invests for long-term growth of capital by
seeking out undervalued stocks of small U.S. companies.

o Scudder Micro Cap Fund seeks long-term growth of capital by investing
primarily in a diversified portfolio of U.S. micro-cap stocks.

o Scudder 21st Century Growth Fund seeks long-term growth of capital by
investing primarily in securities of emerging growth companies poised to be
leaders in the 21st century.

o Scudder Classic Growth Fund seeks long-term growth of capital with reduced
share price volatility compared to other growth mutual funds.

Contents

Introduction 9
Scudder Small Company Value Fund 9
Scudder Micro Cap Fund 11
Scudder 21st Century Growth Fund 13
Scudder Classic Growth Fund 15
U.S. investment experience 16
Additional information about policies
and investments 17
Distribution and performance information 20
Fund organization 21
Transaction information 22
Shareholder benefits 27
Purchases 29
Exchanges and redemptions 30
Trustees and Officers 32
Investment products and services 33
How to contact Scudder Back cover

8
<PAGE>

Introduction

Scudder Small Company Value Fund, Scudder Micro Cap Fund, Scudder 21st Century
Growth Fund and Scudder Classic Growth Fund (collectively, the "Funds") are
mutual funds advised by Scudder, Stevens & Clark, Inc. (the "Adviser"). The four
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.

Each Fund offers all the benefits of the Scudder Family of Funds. Scudder,
Stevens & Clark, Inc. manages a diverse family of pure no-load(TM) funds and
provides a wide range of services to help investors meet their investment needs.
Please refer to "Investment products and services" for additional information.

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 objectives, shareholders should consider whether that
Fund remains an appropriate investment in light of their current financial
position and needs. There can be no assurance that each Fund's objectives will
be met.

Scudder Small Company Value Fund

Investment objective and policies

Scudder Small Company Value Fund, a diversified series of Scudder Securities
Trust, invests for long-term growth of capital by seeking out undervalued stocks
of small U.S. companies. The Adviser uses a systematic, proprietary investment
approach to identify small, domestic companies that, in the opinion of the
Adviser, are selling at prices that do not reflect adequately their long-term
business potential. These companies are often out of favor or not closely
followed by investors and, as a result, may offer substantial appreciation
potential over time.

The Fund is expected to provide little, if any, current income and is designed
for the aggressive portion of an investor's portfolio. Although the Fund
typically holds a large number of securities identified through a quantitative,
value-driven investment strategy, it does entail above-average investment risk
in comparison to larger stocks. Shares of the Fund should be purchased with a
long-term horizon in mind. To encourage long-term investment, a 1% redemption
and exchange fee, described more fully below, is payable to the Fund for the
benefit of remaining shareholders on shares held less than one year.

Investments

In pursuit of long-term growth of capital, the Fund invests, under normal
circumstances, at least 90% of its assets in the common stock of small U.S.
companies. The Fund will invest in securities of companies that are similar in
size to those in the Russell 2000(R) Index of small stocks and maintain a median
market capitalization (i.e., current stock price times shares outstanding) below
$500 million. On a temporary basis, the Fund may continue to hold securities of
companies that have grown in market capitalization above the maximum of the
Russell 2000 Index, but will not add to these holdings.

The Fund takes a diversified approach to investing in small capitalization
issues. It will not be unusual for the Fund to participate in more than one
hundred small companies, representing a variety of U.S. industries.

While the Fund invests predominantly in common stocks, it can purchase other
types of equity securities including preferred stocks (either convertible or
nonconvertible), rights, warrants and restricted securities. Securities may be
listed on national exchanges or, more commonly, traded over-the-counter. The
Fund also may invest up to 20% of its assets in U.S. Treasury, agency and
instrumentality obligations on a temporary basis, may enter into repurchase

9
<PAGE>

agreements and may engage in strategic transactions, using such derivatives
contracts as index options and futures, to increase stock market participation,
enhance liquidity and manage transaction costs. In addition, for temporary or
emergency purposes, such as providing for redemptions or distributions, the Fund
may borrow from banks and other financial institutions in an amount not
exceeding the value of one-third of the Fund's total assets. The Fund will not
borrow for investment purposes.

For temporary defensive purposes, the Fund may invest without limit in cash and
cash equivalents when the Adviser deems such a position advisable in light of
economic or market conditions. More information about these investment
techniques is provided under "Additional information about policies and
investments."

Value investment approach

The Fund is actively managed using a disciplined, value-oriented investment
management approach. The Adviser uses a proprietary, computerized model to
identify for investment small public U.S. companies selling at prices that, in
the opinion of the Adviser, do not reflect adequately their long-term business
potential. Companies purchased for the Fund typically have the following
characteristics:

o Attractive valuations relative to the Russell 2000 Index--a widely used
benchmark of small stock performance--based on measures such as price to
earnings, price to book value and price to cash flow ratios.

o Favorable trends in earnings growth rates and stock price momentum.

The Fund's holdings are often out of favor or simply overlooked by investors.
Accordingly, their prices can rise either as a result of improved business
fundamentals, particularly when earnings grow faster than general expectations,
or as more investors come to recognize the full extent of a company's underlying
potential.

While the Fund involves above-average equity risk, the Fund's value-oriented,
systematic approach to investing is designed to mitigate volatility of the
Fund's share price relative to the small capitalization sector of the U.S. stock
market. This risk is further managed by purchasing a large number of stocks, and
employing specialized portfolio management techniques, such as portfolio
optimization.

Why invest in the Fund?

Scudder Small Company Value Fund combines the long-term growth potential of
small company stocks with the defensive nature of value investing. The Fund
focuses on U.S. small capitalization issues that may be out of favor or not
closely followed by investors, yet which, in the opinion of the Adviser, will
reward investors with substantial returns over time. U.S. small capitalization
stocks have outperformed large capitalization stocks over time, albeit with
greater volatility in returns. Since the Fund involves both above-average
performance opportunity and risk, it may be suitable for those individuals who
are investing for a long-term goal, such as accumulating assets for retirement,
funding a child's college education or building wealth for future generations.

While the Fund may invest in a broad range of industries, it is not, by itself,
a complete investment program. Nonetheless, it can help improve the
diversification of an investment portfolio already holding other types of stock
and fixed-income securities. Historically, the prices of value stocks, and in
particular small company value stocks, have not always moved in tandem with the
prices of either large company stocks or higher-risk small company "growth"
issues. Thus, Fund shares can add balance to a personal investment portfolio.

The Fund offers low-cost, convenient access to a sector of the U.S. stock market
in which investors might otherwise find it difficult to participate. On their
own, individual investors might find it a challenge to analyze data on hundreds

10
<PAGE>

of small companies, receive complete, up-to-date financial information, and buy
and sell securities at favorable prices. The Fund's portfolio management team
assumes the burden of these varied responsibilities for investors.

What are the Fund's special risks?

While historically small company stocks have outperformed the stocks of large
companies, the former have customarily involved more risk as well. Small
companies may have limited product lines, markets or financial resources; may
lack management depth or experience; and may be more vulnerable to adverse
general market or economic developments than large companies. The prices of
small compAny securities are often more volatile than prices associated with
large company issues, and can display abrupt or erratic movements at times, due
to limited trading volumes and less publicly available information.

Also, because small companies normally have fewer shares outstanding and these
shares trade less frequently than large companies, it may be more difficult for
the Fund to buy and sell significant amounts of such shares without an
unfavorable impact on prevailing market prices.

Some of the companies in which the Fund may invest may distribute, sell or
produce products which have recently been brought to market and may be dependent
on key personnel.

The securities of small companies are often traded over-the-counter and may not
be traded in the volumes typical on a national securities exchange.
Consequently, in order to sell this type of holding, the Fund may need to
discount the securities from recent prices or dispose of the securities over a
long period of time.

Scudder Micro Cap Fund

Investment objective and policies

Scudder Micro Cap Fund, a diversified series of Scudder Securities Trust, seeks
long-term growth of capital. The Fund pursues its investment objective by
investing primarily in a diversified portfolio of U.S. micro-capitalization
("micro-cap") common stocks. These domestic emerging growth securities provide
little or no current income but, in the opinion of the Adviser, offer
substantial long-term appreciation potential as well as the opportunity to
enhance the overall diversification of an investor's portfolio.

Due to the inherent business characteristics and risks of small companies, along
with the relatively limited trading market for micro-cap stocks, the Fund's
share price can experience periods of significant volatility. As a result, the
Fund should be considered a long-term investment and only one part of a
well-diversified personal investment portfolio. To encourage a long-term
investment holding period and to facilitate portfolio management, a 1%
redemption and exchange fee, described in greater detail below, is payable to
the Fund for the benefit of remaining shareholders on shares held less than one
year.

Due to investment considerations, it is presently intended that the Fund will
close to new individual investors when total assets of the Fund reach $100
million. It is anticipated that current individual shareholders of the Fund will
be able to continue to invest in the Fund after it reaches $100 million in total
assets. Further, the Fund will remain open to investment through qualified
retirement plans.

If the Fund closes at $100 million in total assets as currently expected, the
Trustees may determine to reopen the Fund at some point based on market
conditions and other factors.

Investments

The Fund seeks to provide long-term growth of capital by investing, under normal
market conditions, at least 80% of its assets in common stocks issued by U.S.
micro-cap companies. The Fund will typically invest in companies that, at the
time of purchase, are smaller than the smallest stocks in the Russell 2000 Index

11
<PAGE>

at its annual reconstitution. The median market capitalization (i.e., current
stock price times shares outstanding) of the portfolio is not expected to exceed
$125 million.

While the Fund invests predominantly in common stocks, it can purchase other
types of securities, including preferred stocks, convertible or non-convertible
securities, rights and warrants. Securities may be listed on national exchanges
or traded over-the-counter. The Fund may invest up to 20% of its assets in U.S.
Treasuries, agency and instrumentality obligations, may enter into repurchase
agreements and may engage in strategic transactions to increase stock market
participation, enhance liquidity and manage transaction costs. In addition, for
temporary or emergency purposes, such as providing for redemptions or
distributions, the Fund may borrow from banks and other financial institutions
in an amount not exceeding the value of one-third of the Fund's total assets.
The Fund will not borrow for investment purposes.

Systematic investment approach

The Fund is actively managed using a quantitative, value-oriented investment
approach. The Adviser selects investments from among the more than 4,000
publicly-traded U.S. micro-cap stocks based on a proprietary, quantitative
investment strategy. Using this approach, the Adviser looks for companies
selling at a discount to estimated fair value. Because of their small size, and
less frequent trading activity, the companies represented in the Fund are often
overlooked or not closely followed by investors. Accordingly, their prices can
rise either as a result of improved business fundamentals, particularly when
earnings grow faster than general expectations, or as more investors appreciate
the full extent of a company's underlying business potential. The Fund seeks to
avoid what are judged in the opinion of the Fund's Adviser to be overpriced
companies with high investment risk and deteriorating fundamentals.

Portfolio diversification is an important component of the investment management
process. To help manage the Fund's above-average investment risk and improve
liquidity, the Adviser expects to invest in hundreds of small, publicly-traded
companies, representing a broad cross-section of U.S. industries. The Fund's
systematic, value-oriented approach to investing is designed to mitigate
volatility of the Fund's share price relative to the micro-capitalization sector
of the U.S. stock market. Risk is further managed by employing specialized
portfolio management and trading techniques. Despite these techniques, the
Fund's share price can move up and down significantly, even over short periods
of time.

Why invest in the Fund?

Scudder Micro Cap Fund invests in some of America's smallest, most dynamic
publicly-traded companies. These emerging growth companies are typically in the
early stages of a long-term development cycle. In many cases, these companies
offer unique products, services or technologies and often serve special or
expanding market niches. Despite these benefits, these firms are often
overlooked or under- appreciated, thus in the opinion of the Fund's Adviser,
they offer substantial appreciation potential for meeting retirement and other
long-term goals.

While there are special risks associated with micro-cap investing, an investment
in the Fund can improve the diversification of a personal investment portfolio
already holding other types of securities, including other types of U.S. stocks

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or stock mutual funds. Historically, the prices of U.S. micro-cap stocks have
had relatively low correlation with the prices of mid-cap or large-cap stocks.
Thus, Fund shares can add balance to a personal investment portfolio.

The Fund offers professional investment management and recordkeeping
convenience, which may be particularly valuable in the smaller sectors of the
U.S. stock market. Investors interested in buying and selling micro-cap issues
directly may find it a challenge to collect and process data on these companies,
receive up-to-date financial information, and transact in securities at
favorable prices. The Adviser assumes these varied responsibilities on behalf of
shareholders.

What are the Fund's special risks?

While historically micro-cap company stocks have outperformed the stocks of
large companies, the former have customarily involved more investment risk as
well. Micro-cap companies may have limited product lines, markets or financial
resources; may lack management depth or experience; and may be more vulnerable
to adverse general market or economic developments than large companies. Some of
the companies in which the Fund may invest may distribute, sell or produce
products which have recently been brought to market and may be dependent on key
personnel.

The prices of small company securities are often more volatile than prices
associated with large company issues, and can display abrupt or erratic
movements at times, due to limited trading volumes and less publicly available
information.

Also, because micro-cap companies normally have fewer shares outstanding and
these shares trade less frequently than large companies, it may be more
difficult for the Fund to buy and sell significant amounts of such shares
without an unfavorable impact on prevailing market prices.

Scudder 21st Century Growth Fund

Investment objective and policies

Scudder 21st Century Growth Fund, a diversified series of Scudder Securities
Trust, seeks long-term growth of capital by investing primarily in the
securities of emerging growth companies poised to be leaders in the 21st
century. The Fund is designed for investors in search of substantial long-term
growth who can accept above-average stock market risk and little or no current
income.

Due to the business characteristics and risks of emerging growth companies, the
Fund's share price can experience periods of volatility. As a result, the Fund
should be considered a long-term investment and only one part of a
well-diversified personal investment portfolio. To encourage a long-term holding
period and to facilitate portfolio management, a 1% redemption and exchange fee,
described in greater detail below, is payable to the Fund for the benefit of
remaining shareholders on shares held less than one year.

Investments

The Fund generally invests in equity securities, including common stocks and
convertible securities, of relatively small or little-known companies, commonly
referred to as emerging growth companies, with market capitalization typically
below $750 million. The Fund may continue to hold securities of companies that
have grown in market capitalization above $750 million, but will generally not
add to these holdings. The Adviser believes these companies are well-positioned
for above-average earnings growth and/or greater market recognition. Such
favorable prospects may be a result of new or innovative products or services a
given company is developing or provides, products or services that have the

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<PAGE>

potential to impact significantly the industry in which the company competes or
to change dramatically customer behavior into the 21st century. The
above-average earnings growth potential and/or greater market recognition
expected are factors believed to offer significant opportunity for capital
appreciation, and the Adviser will attempt to identify these opportunities
before their potential is recognized by investors in general.

To help reduce risk in its search for high quality emerging growth companies,
the Adviser allocates the Fund's investments among many companies and different
industries in the U.S. and, where opportunity warrants, abroad as well. The
Adviser seeks companies that, in the Adviser's opinion, have excellent
management which own a significant stake in the company, clean balance sheets,
conservative accounting, and either a commanding position in a growing market or
the real possibility of building a commanding position as the 21st century
approaches. Emerging growth companies are those with the ability, in the
Adviser's opinion, to expand earnings per share by at least 15% per annum over
the next three to five years at a minimum. In selecting specific industries and
companies for investment, the Adviser will make full use of its extensive
fundamental and field research capabilities in taking into account such other
factors as overall growth prospects and financial condition, competitive
situation, technology, research and development activities, productivity, labor
costs, raw material costs and sources, profit margins, return on investment,
structural changes in local economies, capital resources, the degree of
governmental regulation or deregulation facing a company, and quality and
experience of management.

For temporary defensive purposes the Fund may vary from its investment policy
during periods in which conditions in securities markets or other economic or
political conditions warrant. In such cases, the Fund may hold without limit,
cash, high quality debt securities, without equity features, which are rated
Aaa, Aa or A by Moody's Investors Service ("Moody's") or AAA, AA or A by
Standard & Poor's ("S&P"), or, if unrated, are deemed by the Adviser to be of
equivalent quality, U.S. Government securities and invest in money market
instruments which are rated in the two highest categories by Moody's or S&P or,
if unrated, are deemed by the Adviser to be of equivalent quality.

In addition, the Fund may invest in preferred stocks when management anticipates
that the capital appreciation is likely to equal or exceed that of common stocks
over a selected time. The Fund may enter into repurchase agreements and may
engage in strategic transactions. More information about these investment
techniques is provided under "Additional information about policies and
investments."

Why invest in the Fund?

Scudder 21st Century Growth Fund offers participation in the potential growth of
emerging growth companies that may be destined to become leading companies in
the 21st century. The Fund offers the benefit of professional management to
identify investments in emerging growth companies with the greatest potential,
in the Adviser's opinion, to have a profound and positive impact on the lives of
consumers and businesses as we enter the 21st century. The Adviser anticipates
finding these companies in many rapidly changing sectors of the economy.
Examples include innovative retailing concepts, the on-going U.S. transition to
an increasingly service-based economy, advances in health care in areas such as
biotechnology, and the tremendous, rapid advances occurring in communications,
computing, software and technology generally. In return for accepting
above-average market risk, investors gain access to a broadly diversified
portfolio designed for above-average capital appreciation compared to that
available from larger companies such as those in the Standard & Poor's 500 Stock
Index.

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<PAGE>

What are the Fund's special risks?

While historically small company stocks have outperformed the stocks of large
companies, the former have customarily involved more investment risk as well.
Small companies may have limited product lines, markets or financial resources;
may lack management depth or experience; and may be more vulnerable to adverse
general market or economic developments than large companies. Some of the
companies in which the Fund may invest may distribute, sell or produce products
which have recently been brought to market and may be dependent on key
personnel. The prices of small company securities are often more volatile than
prices associated with large company issues, and can display abrupt or erratic
movements at times, due to limited trading volumes and less publicly available
information.

Scudder Classic Growth Fund

Investment objectives and policies

Scudder Classic Growth Fund, a series of Scudder Investment Trust, seeks to
provide long-term growth of capital and to keep the value of its shares more
stable than other growth mutual funds. This diversified equity fund is designed
for investors looking to grow their investment principal over time for
retirement and other long-term needs. While current income is not a stated
objective of the Fund, many of the Fund's securities may provide regular
dividends, which are also expected to grow over time.

While the Fund is broadly diversified and conservatively managed, with attention
paid to stock valuation and risk, its share price will move up and down with
changes in the general level of the financial markets. Accordingly, shareholders
should be comfortable with stock market risk and view the Fund as a long-term
investment.

Investments

Under normal market conditions, the Fund invests primarily in a diversified
portfolio of common stocks which the Adviser believes offers above-average
appreciation potential yet, as a portfolio, offers the potential for less share
price volatility than other growth mutual funds.

In seeking such investments, the Adviser focuses its investment in high quality,
medium- to large- sized U.S. companies with leading competitive positions. Using
in-depth fundamental company research, along with proprietary financial quality,
stock rating and risk measures, the Adviser looks for companies with strong and
sustainable earnings growth, a proven ability to add value over time, and
reasonable stock market valuations. These companies often have important
business franchises, leading products, services or technologies, or dominant
marketing and distribution systems.

The Fund allocates its investments among different industries and companies, and
adjusts its portfolio securities based on long-term investment considerations as
opposed to short-term trading. While the Fund emphasizes U.S. investments, it
can commit a portion of its assets to the equity securities of foreign growth
companies that meet the criteria applicable to domestic investments.

While the Fund invests primarily in common stocks, it can purchase other types
of equity securities including securities convertible into common stocks,
preferred stocks, rights and warrants. The Fund's policy is to remain

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<PAGE>

substantially invested in these securities, which may be listed on national
securities exchanges or, less commonly, traded over-the-counter. Also, the Fund
may enter into repurchase agreements and engage in strategic transactions.

For temporary defensive purposes, the Fund may invest without limit in high
quality money market securities, including U.S. Treasury bills, repurchase
agreements, commercial paper, certificates of deposit issued by domestic and
foreign branches of U.S. banks, bankers' acceptances, and other debt securities,
such as U.S. Government obligations and corporate debt instruments when the
Adviser deems such a position advisable in light of economic or market
conditions. The Fund may invest up to 20% of its net assets in debt securities
when the Adviser anticipates that the capital appreciation on debt securities is
likely to equal or exceed the capital appreciation on common stocks over a
selected time, such as during periods of unusually high interest rates. As
interest rates fall, the prices of debt securities tend to rise. The Fund may
also invest in money market securities in anticipation of meeting redemptions or
paying Fund expenses. More information about investment techniques is provided
under "Additional information about policies and investments."

Why invest in the Fund?

Scudder Classic Growth Fund invests principally in the common stock of seasoned,
financially- sound, medium- to large-sized U.S. companies with strong
competitive positions in their industries. This broadly diversified portfolio
seeks to take advantage of Scudder's extensive research capabilities to locate
companies displaying the potential for continuing strong growth in earnings, yet
with common stocks available at reasonable prices. The Fund uses an investment
style that was originally designed for individual clients of Scudder who wanted
long-term growth of capital without the volatility of more aggressive growth
funds. Rooted in the investment practices and accumulated experience of
Scudder's 75+ years of investing, this investment approach to growth stock
investing seeks out companies which, in the opinion of the Adviser, have a
history of, and the potential for, consistent and strong corporate earnings, and
whose future growth will be supported by quality management, a differentiated
business franchise, and competitive strength. This Fund will pursue long-term
growth opportunities while seeking to reduce the overall impact of fluctuations
in the stock market and individual security price volatility. Indeed, one of the
Fund's objectives is to keep its share price more stable than that of other
growth funds.

The Fund is intended to be a core equity component of a long-term portfolio and,
as such, can be an excellent retirement investment vehicle. As part of an
investment plan geared towards retirement or long-term investment, the Fund can
complement an individual portfolio consisting of more or less aggressive funds,
considering individual timeframes and tolerance for risk. As an investment for
those already in their retirement years, this Fund seeks long-term growth, but
with less share price volatility than other growth funds.

U.S. investment experience

The Adviser is one of America's largest independent investment managers and has
been involved in U.S. stock investing since its founding over 75 years ago. As
of June 30, 1996, Scudder managed in excess of $23 billion in U.S. equity
securities, including over $6 billion in domestically-oriented growth mutual
funds. The Adviser manages Scudder Development Fund, one of America's first
small company mutual funds.

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<PAGE>

Additional information about policies and investments

Investment restrictions

Each Fund has adopted certain fundamental policies which may not be changed
without a vote of shareholders and which are designed to reduce each Fund's
investment risk.

Each Fund may not borrow money except as a temporary measure for extraordinary
or emergency purposes and may not make loans except through the lending of
portfolio securities, the purchase of debt securities or through repurchase
agreements.

A complete description of these and other policies and restrictions is contained
under "Investment Restrictions" in each Fund's Statement of Additional
Information.

Common stocks

Common stock in which each Fund may invest is issued by companies to raise cash
for business purposes and represents a proportionate interest in the issuing
companies. Therefore, each Fund participates in the success or failure of any
company in which it holds stock. The market values of equity securities can
fluctuate significantly, reflecting the business performance of the issuing
company, investor perception and general economic or financial market movements.
Smaller companies are especially sensitive to these factors and may even become
valueless. Despite the risk of price volatility, however, common stocks also
offer the greatest potential for gain on investment, compared to other classes
of financial assets such as bonds or cash equivalents.

Convertible securities

The convertible securities in which each Fund may invest consist of bonds,
notes, debentures and preferred stocks which may be converted or exchanged at a
stated or determinable exchange ratio into underlying shares of common stock.

Prior to their conversion, convertible securities may have characteristics
similar to nonconvertible securities of the same type.

Repurchase agreements

As a means of earning income for periods as short as overnight, each Fund may
enter into repurchase agreements with selected banks and broker/dealers. Under a
repurchase agreement, each Fund acquires securities, subject to the seller's
agreement to repurchase at a specified time and price.

Scudder Small Company Value Fund may enter into repurchase commitments with any
party deemed creditworthy by the Adviser if the transaction is entered into for
investment purposes and the counterparty's creditworthiness is at least equal to
that of issuers of securities which each Fund may purchase.

Debt securities

Consistent with each Fund's investment objective of long-term capital growth,
Scudder Micro Cap Fund and Scudder Classic Growth Fund may purchase
investment-grade debt securities, which are those rated Aaa, Aa, A or Baa by
Moody's, or AAA, AA, A or BBB by S&P or, if unrated, of equivalent quality as
determined by the Adviser. Receipt of income from debt securities is incidental
to each Fund's objective of long-term growth of capital. (See "Risk factors.")

Illiquid and restricted securities

Each Fund may invest a portion of its assets in securities for which there is
not an active trading market, or which have resale restrictions. Such securities
may have been acquired through private placements (transactions in which the
securities acquired have not been registered with the Securities and Exchange
Commission (the "SEC")). These illiquid securities generally offer a higher
return than more readily marketable securities, but carry the risk that the Fund
may not be able to dispose of them at an advantageous time or price. Some
restricted securities purchased by the Fund, however, may be considered liquid

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<PAGE>

despite resale restrictions, since they can be sold to other qualified
institutional buyers under Rule 144A of the SEC. The Board of Trustees for
Scudder 21st Century Growth Fund has delegated to the Adviser the authority to
determine those Rule 144A securities that will be considered liquid.

Foreign securities

In addition to investments in companies domiciled in the U.S., Scudder 21st
Century Growth Fund and Scudder Classic Growth Fund each may invest in listed
and unlisted foreign securities that meet the same criteria as its domestic
holdings. Scudder Classic Growth Fund may invest up to 25% of its assets in such
foreign securities. Each Fund may invest in foreign securities when the
anticipated performance of foreign securities is believed by the Adviser to
offer more potential than domestic alternatives in keeping with the investment
objectives of each Fund.

Strategic Transactions and derivatives

Each Fund may, but is not required to, utilize various other investment
strategies as described below to hedge various market risks or to seek gain.
These strategies may be executed through the use of derivative contracts. Such
strategies are generally accepted as a part of modern portfolio management and
are regularly utilized by many mutual funds and other institutional investors.
Techniques and instruments may change over time as new instruments and
strategies are developed or regulatory changes occur.

In the course of pursuing these investment strategies, each Fund may purchase
and sell exchange-listed and over-the-counter put and call options on
securities, equity and other financial instruments, and purchase and sell
financial futures contracts and options thereon (collectively, all the above are
called "Strategic Transactions").

Strategic Transactions may be used without limit to attempt to protect against
possible changes in the market value of securities held in or to be purchased
for each Fund's portfolio resulting from securities market fluctuations, to
protect each Fund's unrealized gains in the value of its portfolio securities,
to facilitate the sale of such securities for investment purposes, or to
establish a position in the derivatives markets as a temporary substitute for
purchasing or selling particular securities. Some Strategic Transactions may
also be used to enhance potential gain although no more than 5% of a Fund's
assets will be committed to Strategic Transactions entered into for non-hedging
purposes. Any or all of these investment techniques may be used at any time and
in any combination, and there is no particular strategy that dictates the use of
one technique rather than another, as use of any Strategic Transaction is a
function of numerous variables including market conditions. The ability of a
Fund to utilize these Strategic Transactions successfully will depend on the
Adviser's ability to predict pertinent market movements, which cannot be
assured. The Funds will comply with applicable regulatory requirements when
implementing these strategies, techniques and instruments. Strategic
Transactions involving financial futures and options thereon will be purchased,
sold or entered into only for bona fide hedging, risk management or portfolio
management purposes and not for speculative purposes. Please refer to "Risk
factors--Strategic Transactions and derivatives" for more information.

Risk factors

Each Fund's 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 a
Fund may use from time to time.

Convertible securities. While convertible securities generally offer lower
yields than nonconvertible debt securities of similar quality, their prices may
reflect changes in the value of the underlying common stock. Convertible

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<PAGE>

securities entail less credit risk than the issuer's common stock.

Repurchase agreements. If the seller under a repurchase agreement becomes
insolvent, a Fund's right to dispose of the securities may be restricted, or the
value of the securities may decline before a 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, a Fund may encounter delay and incur costs,
including a decline in the value of the securities, before being able to sell
the securities. Some repurchase commitment transactions may not provide a Fund
with collateral marked-to-market during the term of the commitment.

Debt securities. Securities rated BBB by S&P or Baa by Moody's are neither
highly protected nor poorly secured. These securities normally pay higher yields
but involve potentially greater price variability than higher-quality
securities. These securities are regarded as having adequate capacity to repay
principal and pay interest, although adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to do so. Moody's
considers bonds it rates Baa to have speculative elements as well as
investment-grade characteristics.

Illiquid and restricted securities. The absence of a trading market can make it
difficult to ascertain a market value for illiquid or restricted investments.
Disposing of illiquid or restricted investments may involve time-consuming
negotiation and legal expenses, and it may be difficult or impossible for a Fund
to sell them promptly at an acceptable price.

Foreign securities. Investments in foreign securities involve special
considerations, due to more limited information, higher brokerage costs and
different accounting standards. They may also entail certain risks, such as
possible imposition of dividend or interest withholding or confiscatory taxes,
possible currency blockages or transfer restrictions, expropriation,
nationalization or other adverse political or economic developments and the
difficulty of enforcing obligations in other countries. Foreign securities may
be less liquid and more volatile than comparable domestic securities, and there
is less government regulation of stock exchanges, brokers, listed companies and
banks than in the U.S. Purchases of foreign securities are usually made in
foreign currencies and, as a result, the Fund may incur currency conversion
costs and may be affected favorably or unfavorably by changes in the value of
foreign currencies against the U.S. dollar.

Borrowing. Although the principal of a Fund's borrowing will be fixed, a Fund's
assets may change in value during the time a borrowing is outstanding,
increasing exposure to capital risk.

Strategic Transactions and derivatives. Strategic Transactions, including
derivative contracts, have risks associated with them including possible default
by the other party to the transaction, illiquidity and, to the extent the
Adviser's view as to certain market movements is incorrect, the risk that the
use of such Strategic Transactions could result in losses greater than if they
had not been used. Use of put and call options may result in losses to a Fund,
force the sale or purchase of portfolio securities at inopportune times or for
prices higher than (in the case of put options) or lower than (in the case of
call options) current market values, limit the amount of appreciation a Fund can
realize on its investments or cause a Fund to hold a security it might otherwise
sell. The use of options and futures transactions entails certain other risks.
In particular, the variable degree of correlation between price movements of
futures contracts and price movements in the related portfolio position of a
Fund creates the possibility that losses on the hedging instrument may be
greater than gains in the value of a Fund's position. In addition, futures and
options markets may not be liquid in all circumstances and certain

19
<PAGE>

over-the-counter options may have no markets. As a result, in certain markets, a
Fund might not be able to close out a transaction without incurring substantial
losses, if at all. Although the use of futures contracts and options
transactions for hedging should tend to minimize the risk of loss due to a
decline in the value of the hedged position, at the same time they tend to limit
any potential gain which might result from an increase in value of such
position. Finally, the daily variation margin requirements for futures contracts
would create a greater ongoing potential financial risk than would purchases of
options, where the exposure is limited to the cost of the initial premium.
Losses resulting from the use of Strategic Transactions would reduce net asset
value, and possibly income, and such losses can be greater than if the Strategic
Transactions had not been utilized. The Strategic Transactions that a Fund may
use and some of their risks are described more fully in each Fund's Statement of
Additional Information.

Distribution and performance information

Dividends and capital gains distributions

Each Fund intends to distribute any dividends from net investment income and any
net realized capital gains after utilization of capital loss carryforwards, if
any, in November or December, although an additional distribution may be made if
necessary. 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 a Fund. If an investment is in the form of a retirement
plan, all dividends and capital gains distributions must be reinvested into the
shareholder's account. The reinvestment of dividends or capital gains will not
be restricted during periods when Scudder Micro Cap Fund is closed.

Generally, dividends from net investment income are taxable to shareholders as
ordinary income. Long-term capital gains distributions, if any, are taxable as
long-term capital gains regardless of the length of time shareholders have owned
their shares. Short-term capital gains and any other taxable income
distributions are taxable as ordinary income. A portion of such dividends from
net investment income may qualify for the dividends-received deduction for
corporations.

Each Fund sends detailed tax information to shareholders about the amount and
type of its distributions by January 31 of the following year.

Under normal investment conditions, it is anticipated that Scudder Small Company
Value Fund's portfolio turnover rate will not exceed 75% per year. In addition,
under normal investment conditions, it is anticipated that the portfolio
turnover rates for Scudder Micro Cap Fund, Scudder 21st Century Growth Fund and
Scudder Classic Growth Fund will not exceed 75%, 100% and 70%, respectively, for
each Fund's initial fiscal year. However, economic and market conditions may
necessitate more active trading, resulting in a higher portfolio turnover rate.
A higher rate involves greater brokerage expenses to each Fund and may result in
the realization of net capital gains, which would be taxable to shareholders
when distributed.

Performance information

From time to time, quotations of a Fund's performance may be included in
advertisements, sales literature or shareholder reports. All performance figures
are historical, show the performance of a hypothetical investment and are not
intended to indicate future performance. "Total return" is the change in value
of an investment in the 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 the Fund assuming the investment has been held for one year and the life of a

20
<PAGE>

Fund as of a stated ending date. (If a Fund has not been in operation for at
least a year, only the life of the Fund will be used.) "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. "Capital change" measures return from capital, including reinvestment of
any capital gains distributions but does not include the reinvestment of
dividends. Performance for any of the four Funds will vary based upon, among
other things, changes in market conditions and the level of the Fund's expenses.

Fund organization

Each Fund is a diversified series of a Trust which is an open-end management
investment company registered under the Investment Company Act of 1940 (the
"1940 Act"). Scudder Small Company Value Fund, Scudder Micro Cap Fund and
Scudder 21st Century Growth Fund are series of Scudder Securities Trust,
formerly Scudder Development Fund. Scudder Securities Trust was organized as a
Massachusetts business trust in October 1985 and on December 31, 1985 assumed
the business of its predecessor. Its predecessor was organized as a Delaware
corporation in February 1970. Scudder Classic Growth Fund is a series of Scudder
Investment Trust, formerly Scudder Growth and Income Fund. Scudder Investment
Trust was organized as a Massachusetts business trust in September 1984.

The Funds' activities are supervised by the respective Trust's Board of
Trustees. Shareholders have one vote for each share held on matters on which
they are entitled to vote. The Trusts are not required to 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 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 four 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 regarding another Fund. The Trustees of the Funds have
considered this and approved the use of a combined prospectus.

Investment adviser

Each Fund retains the investment management firm of Scudder, Stevens & Clark,
Inc., a Delaware corporation, to manage its daily investment and business
affairs subject to the policies established by the respective Board of Trustees.
The Trustees have overall responsibility for the management of the Fund under
Massachusetts law.

Scudder Small Company Value Fund, Scudder Micro Cap Fund, Scudder 21st Century
Growth Fund and Scudder Classic Growth Fund each pays the Adviser an annual fee
of 0.75%, 0.75%, 1.00% and 0.70%, respectively, of each Fund's average daily net
assets. Each Fund's fee is payable monthly, provided that a 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. The fees for
Scudder Small Company Value Fund, Scudder Micro Cap Fund and Scudder 21st
Century Growth Fund are higher than the average management fee, but not
necessarily higher than that charged by funds with similar investment
objectives.

The Adviser has agreed to maintain the annualized expenses of Scudder Small
Company Value Fund at no more than 1.50% of the average daily net assets of the
Fund until December 31, 1997.

The Adviser has agreed to maintain the annualized expenses of Micro Cap Fund at

21
<PAGE>

no more than 1.75% of the average daily net assets of the Fund until August 31,
1997.

The Adviser has agreed to maintain the annualized expenses of Scudder 21st
Century Growth Fund at no more than 1.75% of the average daily net assets of the
Fund until August 31, 1997.

The Adviser has agreed to maintain the annualized expenses of Scudder Classic
Growth Fund at no more than 1.25% of the average daily net assets of the Fund
until August 31, 1997.

Under its Investment Management Agreement with the Adviser, each Fund is
responsible for all of its expenses, including fees and expenses incurred in
connection with membership in investment company organizations; fees and
expenses of each Fund's accounting agent; brokers' commissions; legal, auditing
and accounting expenses; taxes and governmental fees; the fees and expenses of
the transfer agent; the expenses of and the fees for registering or qualifying
securities for sale; the fees and expenses of Trustees, officers and employees
of the Trust who are not affiliated with the Adviser; the cost of printing and
distributing reports and notices to shareholders; and the fees and disbursements
of custodians.

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, Stevens & Clark, Inc. is located at 345 Park Avenue, New York, New York
and, in the case of Scudder Classic Growth Fund, 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.

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 each Fund's custodian.

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 wire. To open a new account by wire, first call Scudder at 1-800-225-5163 to
obtain an account number. A representative will instruct you to send a
completed, signed application to the transfer agent. Accounts cannot be opened

22
<PAGE>

without a completed, signed application and a Scudder fund account number.
Contact your bank to arrange a wire transfer to:

The Scudder Funds
State Street Bank and Trust Company
Boston, MA 02101
ABA Number 011000028
DDA Account 9903-5552

Your wire instructions must also include:

- -- the name of the fund in which the money is to be invested,
- -- the account number of the fund, and
- -- the name(s) of the account holder(s).

The account will be established once the application and money order are
received in good order.

You may also make additional investments of $100 or more to your existing
account by wire.

By telephone order. Existing shareholders may purchase shares at a certain day's
price by calling 1-800-225-5163 before the close of regular trading on the New
York Stock Exchange (the "Exchange"), normally 4 p.m. eastern time, on that day.
Orders must be for $10,000 or more and cannot be for an amount greater than four
times the value of your account at the time the order is placed. A confirmation
with complete purchase information is sent shortly after your order is received.
You must include with your payment the order number given at the time the order
is placed. If payment by check or wire is not received within three business
days, the order is subject to cancellation and the shareholder will be
responsible for any loss to the Fund resulting from this cancellation. Telephone
orders are not available for shares held in Scudder IRA accounts and most other
Scudder retirement plan accounts.

By "AutoBuy." If you elected "AutoBuy" for your account, you can call toll-free
to purchase shares. The money will be automatically transferred from your
predesignated bank checking account. Your bank must be a member of the Automated
Clearing House for you to use this service. If you did not elect "AutoBuy," call
1-800-225-5163 for more information.

To purchase additional shares, call 1-800-225-5163. Purchases may not be for
more than $250,000. Proceeds in the amount of your purchase will be transferred
from your bank checking account in two or three business days following your
call. For requests received by the close of regular trading on the Exchange,
shares will be purchased at the net asset value per share calculated at the
close of trading on the day of your call. "AutoBuy" requests received after the
close of regular trading on the Exchange will begin their processing and be
purchased at the net asset value calculated the following business day.

If you purchase shares by "AutoBuy" and redeem them within seven days of the
purchase, the Fund may hold the redemption proceeds for a period of up to seven
business days. If you purchase shares and there are insufficient funds in your
bank account, the purchase will be canceled and you will be subject to any
losses or fees incurred in the transaction. "AutoBuy" transactions are not
available for most retirement plan accounts. However, "AutoBuy" transactions are
available for Scudder IRA accounts.

Exchanging and redeeming shares of Scudder Small Company Value Fund, Scudder
Micro Cap Fund, and Scudder 21st Century Growth Fund

Upon the redemption or exchange of shares held less than one year, a fee of 1%
of the current net asset value of the shares will be assessed and retained by a
Fund for the benefit of the remaining shareholders. The fee is waived for all
shares purchased through certain Scudder retirement plans, including 401(k)
plans, 403(b) plans, 457 plans, Keogh accounts, and Profit Sharing and Money
Purchase Pension Plans. However, if such shares are purchased through a broker,
financial institution or recordkeeper maintaining an omnibus account for the
shares, such waiver may not apply. (Before purchasing shares, please check with
your account representative concerning the availability of the fee waiver.) In

23
<PAGE>

addition, this waiver does not apply to IRA and SEP-IRA accounts. This fee is
intended to encourage long-term investment in a Fund, to avoid transaction and
other expenses caused by early redemptions, and to facilitate portfolio
management. The fee is not a deferred sales charge, is not a commission paid to
the Adviser or its subsidiaries, and does not benefit the Adviser in any way.
Each Fund reserves the right to modify the terms of or terminate this fee at any
time.

The fee applies to redemptions from these Funds and exchanges to other Scudder
funds, but not to dividend or capital gains distributions which have been
automatically reinvested in a Fund.

The fee is applied to the shares being redeemed or exchanged in the order in
which they were purchased. See "Exchanges and Redemptions" in each Fund's
Statement of Additional Information for a more detailed description of the
redemption fee.

Scudder Classic Growth Fund allows you to redeem shares (i.e., sell them back to
the Fund) without redemption fees.

Exchanges. 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.

Redemptions by telephone. This is the quickest and easiest way to sell Fund
shares. If you elected telephone redemption to your bank on your application,
you can call to request that federal funds be sent to your authorized bank
account. If you did not elect telephone redemption to your bank on your
application, call 1-800-225-5163 for more information.

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
Funds' 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 a Fund by telephone, you should write
to the Funds; see "How to contact Scudder" for the address.

By "AutoSell." If you elected "AutoSell" for your account, you can call
toll-free to redeem shares. The money will be automatically transferred to your
predesignated bank checking account. Your bank must be a member of the Automated
Clearing House for you to use this service. If you did not elect "AutoSell,"
call 1-800-225-5163 for more information.

To redeem shares, call 1-800-225-5163. Redemptions must be for at least $250.
Proceeds in the amount of your redemption will be transferred to your bank
checking account in two or three business days following your call. For requests
received by the close of regular trading on the Exchange, shares will be
redeemed at the net asset value per share calculated at the close of trading on
the day of your call. "AutoSell" requests received after the close of regular
trading on the Exchange will begin their processing and be redeemed at the net
asset value calculated the following business day.

"AutoSell" transactions are not available for Scudder IRA accounts and most
other retirement plan accounts.

24
<PAGE>

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 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.
There is a 1% fee payable to Scudder Small Company Value Fund, Scudder Micro Cap
Fund and Scudder 21st Century Growth Fund for exchanges or redemptions of shares
held less than one year. Scudder Fund Accounting Corporation determines net
asset value per share as of the close of regular trading on the Exchange,
normally 4 p.m. eastern time, on each day the Exchange is open for trading. Net
asset value per share is calculated by dividing the value of total Fund assets,
less all liabilities, by the total number of shares outstanding.

Processing time

All purchase and redemption requests must be received in good order by the
Funds' transfer agent. Those requests received by the close of regular trading
on the Exchange are executed at the net asset value per share calculated at the
close of regular trading that day.

Purchase and redemption requests received after the close of regular trading on
the Exchange will be executed the following business day.

If you wish to make a purchase of $500,000 or more, you should notify Scudder
Investor Relations by calling 1-800-225-5163.

Each Fund will normally send your 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 reserves the right to reject
purchases of Fund shares (including exchanges) for any reason including when a
pattern of frequent purchases and sales made in response to short-term
fluctuations in a Fund's share price appears evident. Purchases and sales should
be made for long-term investment purposes only.

Tax information

A redemption of shares, including an exchange into another Scudder fund, is a
sale of shares and may result in a gain or loss for income tax purposes.

25
<PAGE>

Tax identification number

Be sure to complete the Tax Identification Number section of the application
when you open an account. Federal tax law requires a Fund to withhold 31% of
taxable dividends, capital gains distributions and redemption and exchange
proceeds from accounts (other than those of certain exempt payees) without a
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. Each Fund reserves the right to reject new account
applications without a certified Social Security or tax identification number.
Each Fund also reserves the right, following 30 days' notice, to redeem all
shares in accounts without a certified Social Security or tax identification
number. A shareholder may avoid involuntary redemption by providing a Fund with
a tax identification number during the 30-day notice period. Redemptions for
failure to provide a tax identification number are not subject to the 1%
redemption fee for Scudder Small Company Value Fund, Scudder Micro Cap Fund and
Scudder 21st Century Growth Fund.

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 share balance requirements.
A shareholder may open an account with at least $1,000, if an automatic
investment plan of $100/month is established.

Shareholders who maintain a non-fiduciary account balance of less than $2,500 in
a Fund, without establishing an automatic investment plan, will be assessed an
annual $10.00 per fund charge with the fee to be paid to the Fund. The $10.00
charge will not apply to shareholders with a combined household account balance
in any of the Scudder Funds of $25,000 or more. Each Fund reserves the right,
following 60 days' written notice to shareholders, to redeem all shares in
accounts below $250, including accounts of new investors, where a reduction in
value has occurred due to a redemption or exchange out of the account. Each 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 for more information.

Third party transactions

If purchases and redemptions of Fund shares are arranged and settlement is made
at an investor's election through a member of the National Association of
Securities Dealers, Inc., other than Scudder Investor Services, Inc., that
member may, at its discretion, charge a fee for that service.

Redemption-in-kind

Each Fund reserves the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption or repurchase order by making
payment in whole or in part in readily marketable securities chosen by a Fund
and valued as they are for purposes of computing a Fund's net asset value (a
redemption-in-kind). If payment is made in securities, a shareholder may incur
transaction expenses in converting these securities to cash. Each Trust has
elected, however, to be governed by Rule 18f-1 under the 1940 Act, as a result
of which a Fund is obligated to redeem shares, with respect to any one
shareholder during any 90-day period, solely in cash up to the lesser of
$250,000 or 1% of the net asset value of each Fund at the beginning of the
period.

26
<PAGE>

Shareholder benefits

Experienced professional management

Scudder, Stevens & Clark, Inc., one of the nation's most experienced investment
management firms, actively manages your Scudder fund investment. Professional
management is an important advantage for investors who do not have the time or
expertise to invest directly in individual securities.

A team approach to investing

Each of the Funds is managed by a team of Scudder investment professionals, who
each play an important role in a Fund's management process. Team members work
together to develop investment strategies and select securities for a Fund's
portfolio. They are supported by Scudder's large staff of economists, research
analysts, traders and other investment specialists who work in Scudder's offices
across the United States and abroad. Scudder believes its team approach benefits
Fund investors by bringing together many disciplines and leveraging Scudder's
extensive resources.

Scudder Small Company Value Fund and Scudder Micro Cap Fund. Philip S. Fortuna
is the Lead Portfolio Manager for Scudder Small Company Value Fund and Portfolio
Manager for Scudder Micro Cap Fund. Mr. Fortuna joined Scudder in 1986 as
manager of institutional equity accounts. He became director of quantitative
research in 1987 and served as director of investment operations from 1993 to
1994. James M. Eysenbach is the Lead Portfolio Manager for Scudder Micro Cap
Fund and Portfolio Manager for Scudder Small Company Value Fund. Mr. Eysenbach
joined Scudder in 1991 as a senior quantitative analyst and is currently
director of quantitative research for Scudder. He has more than ten years'
investment research and management experience.

Scudder 21st Century Growth Fund. Lead Portfolio Manager Peter Chin has
responsibility for the Fund's day-to-day management and investment strategies.
Mr. Chin has 23 years of research and portfolio management experience, primarily
in small company growth stocks. Roy C. McKay, Portfolio Manager, has 29 years of
investment experience, with 20 years specializing in small company growth
stocks.

Scudder Classic Growth Fund. Lead Portfolio Manager William F. Gadsden focuses
on overall investment strategy, has 14 years of investment industry experience
and joined Scudder in 1983. Bruce F. Beaty, Portfolio Manager, focuses on
securities selection and assists with the creation and implementation of
investment strategy for the Fund. He has 15 years of investment industry
experience and joined Scudder in 1991.

SAIL(TM)--Scudder Automated Information Line

For personalized account information including fund prices, yields and account
balances, to perform transactions in existing Scudder fund accounts, or to
obtain information on any Scudder fund, shareholders can call Scudder's
Automated Information Line (SAIL) at 1-800-343-2890, 24 hours a day. During
periods of extreme economic or market changes, or other conditions, it may be
difficult for you to effect telephone transactions in your account. In such an
event you should write to the Fund; please see "How to contact Scudder" for the
address.

Investment flexibility

Scudder offers toll-free telephone exchange between funds at current net asset
value. You can move your investments among money market, income, growth,
tax-free and growth and income funds with a simple toll-free call or, if you
prefer, by sending your instructions through the mail or by fax. Telephone and
fax redemptions and exchanges are subject to termination and their terms are
subject to change at any time by the Fund or the transfer agent. In some cases,
the transfer agent or Scudder Investor Services, Inc. may impose additional

<PAGE>
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, Stevens & Clark, 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.

Dividend reinvestment plan

You may have dividends and distributions automatically reinvested in additional
Fund shares. Please call 1-800-225-5163 to request this feature.

Shareholder statements

You receive a detailed account statement every time you purchase or redeem
shares. All of your statements should be retained to help you keep track of
account activity and the cost of shares for tax purposes.

Shareholder reports

In addition to account statements, you receive periodic shareholder reports
highlighting relevant information, including investment results and a review of
portfolio changes.

To reduce the volume of mail you receive, only one copy of most Fund reports,
such as the Fund's Annual Report, may be mailed to your household (same surname,
same address). Please call 1-800-225-5163 if you wish to receive additional
shareholder reports.

Newsletters

Four times a year, Scudder sends you Perspectives, an informative newsletter
covering economic and investment developments, service enhancements and other
topics of interest to Scudder fund investors.

Scudder Investor Centers

As a convenience to shareholders who like to conduct business in person, Scudder
Investor Services, Inc. maintains Investor Centers in Boca Raton, Boston,
Chicago, New York and San Francisco.

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.

28
<PAGE>
<TABLE>
<CAPTION>
Purchases
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Opening Minimum initial investment: $2,500; IRAs $1,000
an account Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums.
See appropriate plan literature.

Make checks o By Mail Send your completed and signed application and check
payable to "The
Scudder Funds."
by regular mail to: or by express, registered,
or certified mail to:

The Scudder Funds Scudder Shareholder Service
P.O. Box 2291 Center
Boston, MA 42 Longwater Drive
02107-2291 Norwell, MA
02061-1612

o By Wire Please see Transaction information--Purchasing shares-- By
wire for details, including the ABA wire transfer number. Then call
1-800-225-5163 for instructions.

o In Person Visit one of our Investor Centers to complete your application with the
help of a Scudder representative. Investor Center locations are listed
under Shareholder benefits.
-----------------------------------------------------------------------------------------------------------------------
Purchasing Minimum additional investment: $100; IRAs $50
additional shares Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums.
See appropriate plan literature.

Make checks o By Mail Send a check with a Scudder investment slip, or with a letter of
payable to "The instruction including your account number and the
Scudder Funds." complete Fund name, to the appropriate address listed above.

o By Wire Please see Transaction information--Purchasing shares-- By
wire for details, including the ABA wire transfer number.

o In Person Visit one of our Investor Centers to make an additional
investment in your Scudder fund account. Investor Center locations
are listed under Shareholder benefits.

o By Telephone Please see Transaction information--Purchasing shares-- By
AutoBuy or By telephone order for more details.

o By Automatic You may arrange to make investments on a regular basis through automatic
Investment Plan deductions from your bank checking account. Please call 1-800-225-5163 for
($50 minimum) more information and an enrollment form.
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

29
<PAGE>
<TABLE>
<CAPTION>
Exchanges and redemptions
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Exchanging shares Minimum investments: $2,500 to establish a new account;
$100 to exchange among existing accounts

o By Telephone To speak with a service representative, call 1-800-225-5163 from
8 a.m. to 8 p.m. eastern time or to access SAIL(TM), Scudder's Automated
Information Line, call 1-800-343-2890 (24 hours a day).

There may be a o By Mail Print or type your instructions and include:
1% fee payable or Fax
to Scudder Small - the name of the Fund and the account number you are exchanging from;
Company Value
Fund, Scudder - your name(s) and address as they appear on your account;
Micro Cap Fund
and Scudder 21st - the dollar amount or number of shares you wish to exchange;
Century Growth
Fund for - the name of the Fund you are exchanging into;
exchanges of
shares held less - your signature(s) as it appears on your account; and
than one year.
- a daytime telephone number.

Send your instructions

by regular mail to: or by express, registered, or by fax to:
or certified mail to:

The Scudder Funds Scudder Shareholder 1-800-821-6234
P.O. Box 2291 Service Center
Boston, MA 02107-2291 42 Longwater Drive
Norwell, MA 02061-1612
-----------------------------------------------------------------------------------------------------------------------
Redeeming shares o By Telephone To speak with a service representative, call 1-800-225-5163 from 8 a.m. to 8 p.m.
eastern time or to access SAIL(TM), Scudder's Automated Information Line, call
1-800-343-2890 (24 hours a day). You may have redemption proceeds sent to your
predesignated bank account, or redemption proceeds of up to $100,000 sent to your
address of record.

There may be a o By Mail Send your instructions for redemption to the appropriate address or fax number
1% fee payable or Fax above and include:
to Scudder Small
Company Value - the name of the Fund and account number you are redeeming from;
Fund, Scudder
Micro Cap Fund - your name(s) and address as they appear on your account;
and Scudder 21st
Century Growth - the dollar amount or number of shares you wish to redeem;
Fund for
redemption of - your signature(s) as it appears on your account; and
shares held less
than one year. - a daytime telephone number.

A signature guarantee is required for redemptions over
$100,000. See Transaction information--Redeeming shares.

o By Automatic You may arrange to receive automatic cash payments periodically.
Withdrawal Call 1-800-225-5163 for more information and an enrollment form.
Plan
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

30
<PAGE>

Scudder tax-advantaged retirement plans

Scudder offers a variety of tax-advantaged retirement plans for individuals,
businesses and non-profit organizations. These flexible plans are designed for
use with the Scudder Family of Funds (except Scudder tax-free funds, which are
inappropriate for such plans). Scudder Funds offer a broad range of investment
objectives and can be used to seek almost any investment goal. Using Scudder's
retirement plans can help shareholders save on current taxes while building
their retirement savings.

o Scudder No-Fee IRAs. These retirement plans allow a maximum annual
contribution of up to $2,000 per person for anyone with earned income (up to
$2,000 per individual for married couples if only one spouse has earned
income). Many people can deduct all or part of their contributions from
their taxable income, and all investment earnings accrue on a tax-deferred
basis. The Scudder No-Fee IRA charges you no annual custodial fee.

o 401(k) Plans. 401(k) plans allow employers and employees to make
tax-deductible retirement contributions. Scudder offers a full service
program that includes recordkeeping, prototype plan, employee communications
and trustee services, as well as investment options.

o Profit Sharing and Money Purchase Pension Plans. These plans allow
corporations, partnerships and people who are self-employed to make annual,
tax-deductible contributions of up to $30,000 for each person covered by the
plans. Plans may be adopted individually or paired to maximize
contributions. These are sometimes known as Keogh plans. The Scudder Keogh
charges you no annual custodial fee.

o 403(b) Plans. Retirement plans for tax-exempt organizations and school
systems to which employers and employees may both contribute.

o SEP-IRAs. Easily administered retirement plans for small businesses and
self-employed individuals. The maximum annual contribution to SEP-IRA
accounts is adjusted each year for inflation. The Scudder SEP-IRA charges
you no annual custodial fee.

o Scudder Horizon Plan. A no-load variable annuity that lets you build assets
by deferring taxes on your investment earnings. You can start with $2,500 or
more.

Scudder Trust Company (an affiliate of the Adviser) is Trustee or Custodian for
some of these plans and is paid an annual fee for some of the above retirement
plans. For information about establishing a Scudder No-Fee IRA, SEP-IRA, Profit
Sharing Plan, Money Purchase Pension Plan or a Scudder Horizon Plan, please call
1-800-225-2470. For information about 401(k)s or 403(b)s please call
1-800-323-6105. To effect transactions in existing IRA, SEP-IRA, Profit Sharing
or Pension Plan accounts, call 1-800-225-5163.

The variable annuity contract is provided by Charter National Life Insurance
Company (in New York State, Intramerica Life Insurance Company [S 1802]). The
contract is offered by Scudder Insurance Agency, Inc. (in New York State, Nevada
and Montana, Scudder Insurance Agency of New York, Inc.). CNL, Inc. is the
Principal Underwriter. Scudder Horizon Plan is not available in all states.

Scudder Investor Relations is a service provided through Scudder Investor
Services, Inc., Distributor.

31
<PAGE>

Trustees and Officers

Daniel Pierce*
President and Trustee

Paul Bancroft III
Trustee(1); Venture Capitalist and Consultant

Henry P. Becton, Jr.
Trustee(2); President and General Manager,
WGBH Educational Foundation

Thomas J. Devine
Trustee(1); Consultant

Keith R. Fox
Trustee(1); President, Exeter Capital Management Corporation

Dudley H. Ladd*
Trustee

George M. Lovejoy, Jr.
Trustee(2); President and Director,
Fifty Associates

Wesley W. Marple, Jr.
Trustee(2); Professor of Business Administration, Northeastern University

Dr. Wilson Nolen
Trustee(1); Consultant

Juris Padegs*
Trustee

Dr. Gordon Shillinglaw
Trustee(1); Professor Emeritus of Accounting, Columbia University
Graduate School of Business

Jean C. Tempel
Trustee(2); General Partner,
TL Ventures

Robert W. Lear
Honorary Trustee(1); Executive-in-Residence, Visiting Professor, Columbia
University Graduate School of Business

Robert G. Stone, Jr.
Honorary Trustee(1); Chairman of the Board and Director, Kirby Corporation

Edmund R. Swanberg*
Honorary Trustee(1)

Bruce F. Beaty*
Vice President(2)

Peter Chin*
Vice President(1)

James M. Eysenbach*
Vice President(1)

Philip S. Fortuna*
Vice President(1)

Jerard K. Hartman*
Vice President

Robert T. Hoffman*
Vice President(2)

Thomas W. Joseph*
Vice President

David S. Lee*
Vice President

Valerie F. Malter*
Vice President(2)

Roy C. McKay*
Vice President(1)

Thomas F. McDonough*
Vice President(1,2), Secretary(1,2) and Assistant Treasurer(2)

Pamela A. McGrath*
Vice President and Treasurer

Edward J. O'Connell*
Vice President and Assistant Treasurer

Kathryn L. Quirk*
Vice President(1) and Assistant Secretary(1)

Richard W. Desmond*
Assistant Secretary(1)

Coleen Downs Dinneen*
Assistant Secretary

*Scudder, Stevens & Clark, Inc.

(1) Scudder Securities Trust

(2) Scudder Investment Trust

Both Trusts unless otherwise indicated

<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**
Scudder Government Money Market Series**

Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series**
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

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

Retirement Programs
- -------------------
IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan *+++ +++
(a variable annuity)

Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities
Fund, Inc.

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. +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.

33
<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

Scudder Brokerage Services:

To receive information about this discount brokerage service and to obtain
an application

Scudder Brokerage Services* -- 1-800-700-0820

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

Or Stop by a Scudder Investor Center:

Many shareholders enjoy the personal, one-on-one service of the Scudder
Funds Centers. Check for a Investor Center near you--they can be found in
the following cities:

Boca Raton Chicago San Francisco
Boston New York

Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.

* Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061--
Member NASD/SIPC.