Scudder
Small Company
Value Fund
Semiannual Report
February 28, 1997
Pure No-Load(TM) Funds
A pure no-load(TM) (no sales charges) mutual fund which offers opportunities for
long-term growth of capital by seeking undervalued stocks of small U.S.
companies.
SCUDDER
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Fund's President
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
8 Investment Portfolio
17 Financial Statements
20 Financial Highlights
21 Notes to Financial Statements
24 Shareholder Meeting Results
25 Officers and Trustees
26 Investment Products and Services
27 How to Contact Scudder
In Brief
o Scudder Small Company Value Fund provided a total return of 16.52% for the
six-month period, exceeding the 15.81% total return of small company value
stocks and the 8.80% return of small company stocks overall as measured by the
unmanaged Russell 2000 Value and the Russell 2000 indices, respectively.
o As of February 28, 1997, the Fund was invested in 200 small U.S. companies
with a median market capitalization of $343 million and a price-to-earnings
ratio roughly one-half that of the small company stock market, reflecting the
Fund's disciplined, value-oriented approach.
2-Scudder Small Company Value Fund
<PAGE>
Letter From the Fund's President
Dear Shareholders,
We are pleased to present the semiannual report for Scudder Small Company
Value Fund for the six-month period ended February 28, 1997.
Your Fund provided gratifying returns for the six-month period, placing it
among the top 10% best performing small cap funds according to Lipper. The Fund
also bested the return of the unmanaged Russell 2000 Value Index of small
company value stocks.
Scudder Small Company Value Fund employs a disciplined method of stock
selection, using a quantitative model to identify stocks that meet specific
requirements. By systematically analyzing small company stocks for value and
relative attractiveness, the Fund seeks to achieve above-average returns over
the long term. We believe that satisfying investment returns can result from
this approach. A complete discussion of your Fund's activities begins on page 6.
The outstanding performance of U.S. stocks over the last two years has
caused many investors to consider what, if any, adjustments they should make to
their portfolios. In general, diversification across several asset classes can
provide balance to an investment portfolio. Most investors should consider
complementing their core holdings with representation from the money market,
fixed income, international, and small cap stock areas. The performance of these
distinct asset classes tends to differ in any given year, helping to reduce a
portfolio's overall price volatility.
For those of you who are interested in new products and services, we
recently introduced the Scudder Pathway Series. Pathway simplifies investing
through the "fund of funds" approach and offers four distinct portfolios:
Conservative, Balanced, Growth, and International. Each portfolio invests in a
select mix of Scudder Funds, providing flexibility, diversification, and
simplicity for regular and retirement plan investors. For more information on
Scudder products and services, please turn to page 26.
Thank you for your investment in Scudder Small Company Value Fund. If you
have questions about your account, please call our Investor Relations
representatives at 1-800-225-2470; they will be happy to assist you. Or, visit
our Internet Web site at http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Small Company Value Fund
3-Scudder Small Company Value Fund
<PAGE>
PERFORMANCE UPDATE as of February 28, 1997
- ----------------------------------------------------------------
FUND INDEX COMPARISONS
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
2/28/97 $10,000 Cumulative Annual
- ------------------------------------------
SCUDDER SMALL COMPANY VALUE FUND
- ------------------------------------------
1 Year $12,469 24.69% 24.69%
Life of Fund** $13,229 32.29% 22.13%
- ------------------------------------------
RUSSELL 2000 VALUE INDEX
- ------------------------------------------
1 Year $12,159 21.59% 21.59%
Life of Fund** $13,015 30.15% 20.80
- ------------------------------------------
RUSSELL 2000 INDEX
1 Year $11,256 12.56% 12.56%
Life of Fund** $12,206 22.06% 15.36%
- ------------------------------------------
S&P 500 INDEX
1 Year $12,616 26.16% 26.16%
Life of Fund** $13,994 39.94% 27.25%
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
SCUDDER SMALL COMPANY
VALUE FUND
Year Amount
- ----------------------
10/95* $10,000
11/95 $10,409
2/96 $10,844
5/96 $11,930
8/96 $11,605
11/96 $12,837
2/97 $13,522
RUSSELL 2000 VALUE INDEX
Year Amount
- ----------------------
10/95* $10,000
11/95 $10,397
2/96 $10,960
5/96 $11,786
8/96 $11,506
11/96 $12,601
2/97 $13,326
RUSSELL 2000 INDEX
Year Amount
- ----------------------
10/95* $10,000
11/95 $10,420
2/96 $11,017
5/96 $12,309
8/96 $11,398
11/96 $12,141
2/97 $12,400
S&P 500 INDEX
Year Amount
- ----------------------
10/95* $10,000
11/95 $10,440
2/96 $11,104
5/96 $11,670
8/96 $11,433
11/96 $13,348
2/97 $14,009
The Standard & Poor's (S&P) 500 Index is an unmanaged capitalization-weighted
measure of 500 widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange, and NASDAQ Stock Market. The Russell 2000 Index is an
unmanaged capitalization-weighted measure of approximately 2000 small U.S.
stocks. Russell 2000 Value Index measures the performance of those Russell 2000
companies with lower price-to-book ratios and lower forecasted growth rates.
Index returns assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees or expenses.
*The Fund commenced operations on October 6, 1995. The graphed Index comparison
begins October 31, 1995.
- -----------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
Period Ended February 28
1996** 1997
----------- -----------
NET ASSET VALUE... $ 13.57 $ 15.77
INCOME DIVIDENDS.. $ .02 $ .04
CAPITAL GAINS
DISTRIBUTIONS..... $ -- $ .00
FUND TOTAL
RETURN (%)........ 6.09 24.69
RUSSELL 2000 VALUE
INDEX TOTAL
RETURN (%)........ 7.04 21.59
Performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results. Total return
and principal value will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. If the Adviser had not
maintained the Fund's expenses, the total return for the life of Fund
period would have been lower.
**The Fund commenced operations on October 6, 1995.
4 - Scudder Small Company Value Fund
<PAGE>
PORTFOLIO SUMMARY as of February 28, 1997
- ---------------------------------------------------------------------------
ASSET ALLOCATION
- ---------------------------------------------------------------------------
Equity Securities 97%
Cash Equivalents 3%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund pursued a
fully-invested approach.
- --------------------------------------------------------------------------
SECTORS/LARGEST HOLDINGS
(Excludes 1% of Cash Equivalents)
- --------------------------------------------------------------------------
1. FINANCIAL (21%)
Usbancorp, Inc.
Bank holding company
2. MANUFACTURING (16%)
Scotsman Industries, Inc.
Manufacturer of commercial
refrigeration products
3. DURABLES (9%)
SPX Corp.
Manufacturer of automotive and
heavy-duty engine and chassis parts,
repair and maintenance equipment
4. CONSTRUCTION (9%)
Southdown, Inc.
Cement and concrete producer
5. CONSUMER DISCRETIONARY (8%)
Shopko Stores, Inc.
Regional discount store chain
6. SERVICE INDUSTRIES (7%)
Mine Safety Appliance Co.
Manufacturer of safety and health
protection equipment and instruments
7. UTILITIES (6%)
Northwestern Public
Service Co.
Provider of electric service
8. TECHNOLOGY (5%)
CTS Corp.
Manufacturer of electronic and
electromechanical components
9. METALS & MINERALS (5%)
Commercial Metals Co.
Producer and marketer of steel and
copper tubes, and recycling of
abandoned railroad materials
10. OTHER (14%)
Morningstar Group, Inc.
Manufacturer of refrigerated specialty
food products
- ---------------------------------------------------------------------------
STOCK CHARACTERISTICS
- ---------------------------------------------------------------------------
RUSSELL S&P FUND AS % OF
FUND 2000* 500** RUSSELL 2000
---- ---- ------- ------------
SMALL COMPANIES ($ MILLIONS)
Market Capitalization - Median 343 355 5,625 97%
Market Capitalization - Wgt. Avg. 381 638 43,183 60%
Revenues 665 575 24,178 116%
VALUE ORIENTATION
P/E - Trailing Twelve Months 13.5 27.8 20.5 49%
Price/Sales 0.6 1.0 1.3 54%
Price/Book Value 1.6 2.3 3.4 68%
Yield (Avg. Stock) 1.4% 1.4% 1.9% 101%
* The Russell 2000 Index is an unmanaged capitalization-weighted measure of
approximately 2000 small U.S. stocks.
** The Standard and Poor's (S&P) 500 Index is an unmanaged capitalization-
weighted measure of 500 widely held common stocks listed on the New York
Stock Exchange, American Stock Exchange, and NASDAQ Stock market.
The Fund value approach resulted in a lower P/E
than the small cap market overall.
- -----------------------------------------------------------------------------
For more complete details about the Fund's investment portfolio,
see page 8. A monthly Investment Portfolio Summary and quarterly Portfolio
Holdings are available upon request.
5 - Scudder Small Company Value Fund
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
This semiannual report for Scudder Small Company Value Fund covers the period
from August 31, 1996 to February 28, 1997. During this six-month period, the
Fund provided a total return of 16.52%, exceeding the 15.81% return of the
unmanaged Russell 2000 Value Index of small company value stocks and the 8.80%
return of the Russell 2000 Index of small company stocks overall. Among its
peers, the Fund ranked in the top 10% best performing funds according to Lipper.
During the same period, the Fund's net asset value per share increased from
$13.57 to $15.77 and the Fund paid distributions of $0.04 per share.
We are pleased with the Fund's performance during the six-month period. Small
company value stocks, in particular, moved ahead and extended their performance
edge relative to small company stocks overall. From the Fund's inception on
October 5, 1995, this outperformance is significant. The Russell 2000 Value
Index -- an index of small company value stocks -- outperformed the Russell 2000
Index by over eight percentage points (30.15% vs. 22.06%) during this period.
Meanwhile, the Fund surpassed both indexes, with a total return of 32.29% during
the same 17-month period.
The Fund continued to seek long-term capital appreciation by investing in
publicly traded U.S. stocks of small companies, using a disciplined,
value-oriented approach. The Fund's noteworthy performance was achieved during a
period when a number of companies announced earnings disappointments, resulting
in price declines for some stocks. The Fund's value-orientation, along with its
broadly diversified portfolio, helped to mitigate the negative effects of these
surprises. The Fund is currently invested in 200 small stocks with an average
price-to-earnings ratio of 13.5 or roughly one-half of that of the Russell 2000
Index.
As a result of the Fund's approach and its lower than average P/E, the Fund has
been less volatile than the overall stock market, whether measured against the
small company stock universe or the S&P 500 Index of larger company stocks. The
Fund's overall volatility, as measured by the standard deviation of returns over
the six-month reporting period, has been about 20% less than that of small
company stocks and nearly one-half as volatile as the S&P 500. We also seek to
manage tax liability to shareholders by minimizing taxable distributions
whenever possible.
A Disciplined Approach
In pursuing capital appreciation from small company stocks, we utilize a
disciplined approach to selecting securities. Instead of attempting to gauge the
prospects of a company's new products or its management capabilities, we seek to
invest in attractively valued small company stocks. We conduct a quantitative
evaluation on thousands of small company stocks, analyzing valuations, growth
rates, price and earnings momentum, and risk characteristics to identify
possible candidates for the Fund.
Our highly systematic approach starts with collecting extensive financial
information on individual companies. Using a proprietary investment model, we
analyze this data in a consistent, objective way by comparing it to a broad
universe of small companies. The next step involves ranking each stock based on
6-Scudder Small Company Value Fund
<PAGE>
its relative attractiveness. Finally there is the highly complex process of
determining which combination of stocks to hold and how much to weight them in
the portfolio. We employ the assistance of a computer model to assess the
millions of possibilities. The model helps to identify the portfolio with the
highest potential return for a given level of risk. In addition, as new
information streams in, such as recent earnings reports, it is incorporated into
the model so that we can instantly see how the fresh data affects the relative
attractiveness of each stock.
While the process may sound as though computers are making all of the decisions,
this is hardly the case. The model is only as good as the human judgment that
goes into its development, and is subject to revision as deemed necessary.
Moreover, before we buy any stock for the Fund, we carefully consider any
subjective information that may not be fully reflected in the numbers, such as a
recently announced restructuring. We think this is an important reality check
for any quantitative investment approach.
The risks of holding individual small company stocks can be high. Small
companies generally have higher business risks than more established companies,
arising from untested management, less diversified product lines, and limited
financial resources. This makes small companies more vulnerable to adverse
business developments than larger companies. Also, because some small company
stocks are traded less frequently, the price of these issues can drop quickly if
investors rush to sell. Conversely, prices can be bid up dramatically if
investors try to initiate large positions. We attempt to control these risks
throughout the selection process by holding a relatively large number of
securities in the portfolio. That way, if a few individual securities experience
problems, the effect may be minimized. The Fund is also structured to promote a
relatively stable base of assets. To discourage short-term trading, the Fund
imposes a 1% redemption fee on shares held less than one year.
Going forward, we will continue to apply our disciplined, value-oriented
approach to selecting small company stocks in accordance with the Fund's
objective of seeking long-term capital appreciation. We believe the Fund
continues to be appropriate for investors seeking diversification and exposure
to a dynamic sector of the stock market as part of a well-rounded portfolio.
Sincerely,
Your Portfolio Management Team
/s/Philip S. Fortuna /s/James M. Eysenbach
Philip S. Fortuna James M. Eysenbach
Lead Portfolio Manager Portfolio Manager
7-Scudder Small Company Value Fund
<PAGE>
INVESTMENT PORTFOLIO as of February 28, 1997 (Unaudited)
PRINCIPAL MARKET
AMOUNT ($) VALUE ($)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 2.9%
- --------------------------------------------------------------------------------
Repurchase Agreement with State Street Bank
and Trust Company dated 2/28/97 at
5.31%, to be repurchased at $1,891,837 on 3/03/97,
collateralized by a $1,885,000 U.S. Treasury Note, ----------
7.125%, 2/15/23 (Cost $1,891,000) .................... 1,891,000 1,891,000
----------
SHARES
- --------------------------------------------------------------------------------
COMMON STOCKS 97.1%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY 8.0%
APPAREL & SHOES 0.5%
Brown Group, Inc. ...................................... 22,000 357,500
----------
DEPARTMENT & CHAIN STORES 1.5%
AnnTaylor Stores Corp.* ................................ 6,000 120,000
Carson Pirie Scott & Co.* .............................. 10,600 288,850
Shopko Stores, Inc. .................................... 35,900 560,938
----------
969,788
----------
HOME FURNISHINGS 3.9%
Ethan Allen Interiors Inc. ............................. 3,300 151,388
Furniture Brands International Inc.* ................... 22,700 334,825
Interface, Inc. ........................................ 18,400 425,500
Mikasa, Inc.* .......................................... 27,000 270,000
Oneida Ltd. ............................................ 24,900 473,100
Thomas Industries, Inc. ................................ 18,100 447,975
Toro Co. ............................................... 13,600 470,900
----------
2,573,688
----------
HOTELS & CASINO 0.4%
Prime Hospitality Corp.* ............................... 17,600 290,400
----------
RECREATIONAL PRODUCTS 0.2%
K2, Inc. ............................................... 3,800 104,975
----------
RESTAURANTS 0.5%
Ryan's Family Steak Houses, Inc.* ...................... 42,400 312,700
----------
SPECIALTY RETAIL 1.0%
Fabri-Centers of America "A" * ......................... 20,900 342,238
Inacom Corp.* .......................................... 12,100 314,600
----------
656,838
----------
CONSUMER STAPLES 3.6%
FOOD & BEVERAGE 3.3%
Farmer Brothers Co. .................................... 1,300 195,000
The accompanying notes are an integral part of the financial statements.
8 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
MARKET
SHARES VALUE ($)
- --------------------------------------------------------------------------------
Hudson Foods, Inc. "A" ................................. 14,700 257,250
Morningstar Group, Inc.* ............................... 22,200 510,600
Nash-Finch Co. ......................................... 23,900 469,038
Pilgrim's Pride Corp. .................................. 36,700 408,288
Riser Foods, Inc. "A" .................................. 11,000 343,750
----------
2,183,926
----------
TEXTILES 0.3%
Guilford Mills, Inc. ................................... 7,700 220,413
----------
HEALTH 1.2%
BIOTECHNOLOGY 0.4%
Bio-Rad Laboratories, Inc. "A" * ....................... 10,200 269,025
----------
HOSPITAL MANAGEMENT 0.2%
TheraTx, Inc. .......................................... 7,900 130,350
----------
MEDICAL SUPPLY & SPECIALTY 0.6%
Bindley Western Industries, Inc. ....................... 12,500 239,062
West Co., Inc. ......................................... 5,800 161,675
----------
400,737
----------
COMMUNICATIONS 0.3%
TELEPHONE/COMMUNICATIONS
Atlantic Tele-Network, Inc.* ........................... 16,900 211,250
----------
FINANCIAL 20.4%
BANKS 12.2%
ALBANK Financial Corp. ................................. 7,200 252,900
Astoria Financial Corp. ................................ 6,400 275,200
Bankers Corp. .......................................... 17,900 440,788
Banknorth Group, Inc. .................................. 6,500 292,500
Bok Financial Corp. .................................... 10,400 306,800
Chittenden Corp. ....................................... 5,350 147,125
CitFed Bancorp, Inc. ................................... 2,400 82,500
Citizens Banking Corp. ................................. 2,400 78,000
Colonial BancGroup, Inc. ............................... 15,400 350,350
Commerce Bancorp, Inc. ................................. 9,949 299,706
Community First Bankshares, Inc. ....................... 13,200 405,900
Corus Bankshares, Inc. ................................. 9,700 334,650
First Citizens BancShares, Inc. "A" .................... 1,200 92,700
First Indiana Corp. .................................... 8,440 238,430
The accompanying notes are an integral part of the financial statements.
9 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
MARKET
SHARES VALUE ($)
- --------------------------------------------------------------------------------
FirstBank Puerto Rico .................................. 9,700 272,813
Hancock Holding Co. .................................... 7,805 328,786
InterWest Bancorp, Inc. ................................ 3,600 126,000
MAF Bancorp, Inc. ...................................... 9,300 377,813
New York Bancorp, Inc. ................................. 6,900 222,525
People's Heritage Financial Group, Inc. ................ 2,659 83,426
RCSB Financial, Inc. ................................... 9,100 305,988
Riggs National Corp. ................................... 19,300 384,794
Sovereign Bancorp, Inc. ................................ 23,304 294,213
Susquehanna Bancshares, Inc. ........................... 11,600 413,250
T R Financial Corp. .................................... 7,700 271,906
Usbancorp, Inc. ........................................ 9,900 472,725
Webster Financial Corp. ................................ 5,200 204,100
Westamerica Bancorp .................................... 4,900 328,300
Whitney Holding Corp. .................................. 9,500 363,375
----------
8,047,563
----------
INSURANCE 7.0%
Acceptance Insurance Cos., Inc.* ....................... 19,100 403,481
Allied Group, Inc. ..................................... 11,750 393,625
American Annuity Group, Inc. ........................... 25,600 390,400
American Heritage Life Investment Corp. ................ 6,700 174,200
Capitol Transamerica Corp. ............................. 7,300 167,900
Delphi Financial Group, Inc. "A" ....................... 5,180 176,120
First American Financial Co. ........................... 8,500 348,500
Life Re Corp. .......................................... 9,500 408,500
Life USA Holdings Inc.* ................................ 29,500 308,367
MAIC Holdings, Inc. .................................... 4,855 168,097
MMI Companies, Inc. .................................... 16,400 373,100
Nymagic, Inc. .......................................... 12,300 249,075
Presidential Life Corp. ................................ 27,100 406,500
Security-Connecticut Corp. ............................. 6,700 311,550
Trenwick Group, Inc. ................................... 6,100 300,425
----------
4,579,840
----------
BUSINESS FINANCE 0.6%
Imperial Bancorp ....................................... 14,300 373,588
----------
The accompanying notes are an integral part of the financial statements.
10 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
MARKET
SHARES VALUE ($)
- --------------------------------------------------------------------------------
OTHER FINANCIAL COMPANIES 0.6%
Bay View Capital Corp. ................................. 5,300 296,800
Cash America International, Inc. ....................... 11,839 112,471
----------
409,271
----------
MEDIA 0.3%
BROADCASTING & ENTERTAINMENT
ValueVision International, Inc. "A" * .................. 38,900 172,619
----------
SERVICE INDUSTRIES 6.7%
ENVIRONMENTAL SERVICES 1.4%
Mine Safety Appliance Co. .............................. 10,700 623,275
OHM Corp.* ............................................. 37,800 297,675
----------
920,950
----------
INVESTMENT 1.6%
Interra Financial, Inc. ................................ 7,700 314,738
Jefferies Group, Inc. .................................. 8,500 375,063
McDonald & Co. Investments ............................. 10,000 386,250
----------
1,076,051
----------
MISCELLANEOUS COMMERCIAL SERVICES 2.3%
Berlitz International, Inc.* ........................... 25,000 506,250
CORT Business Services Corp.* .......................... 10,300 248,488
McGrath Rentcorp ....................................... 18,700 502,563
Volt Information Sciences, Inc.* ....................... 6,300 281,925
----------
1,539,226
----------
PRINTING/PUBLISHING 1.4%
Bowne & Co., Inc. ...................................... 19,300 521,100
Merrill Corp. .......................................... 16,300 391,200
----------
912,300
----------
DURABLES 8.7%
AEROSPACE 0.8%
Curtiss-Wright Corp. ................................... 2,200 115,500
Tracor, Inc.* .......................................... 16,700 398,713
----------
514,213
----------
AUTOMOBILES 5.9%
A.O. Smith Corp. ....................................... 10,000 336,250
Arvin Industries, Inc. ................................. 10,100 237,350
Coachmen Industries, Inc. .............................. 10,900 220,725
The accompanying notes are an integral part of the financial statements.
11 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
MARKET
SHARES VALUE ($)
- --------------------------------------------------------------------------------
Exide Corp. ............................................ 14,900 292,413
SPX Corp. .............................................. 14,400 660,600
Simpson Industries, Inc. ............................... 39,100 381,225
Standard Products Co. .................................. 9,200 216,200
Stant Corp. ............................................ 22,000 302,500
Thor Industries, Inc. .................................. 7,900 203,425
Titan Wheel International, Inc. ........................ 19,000 268,375
Walbro Inc. ............................................ 19,700 359,525
Wynn's International, Inc. ............................. 19,050 392,906
----------
3,871,494
----------
CONSTRUCTION/AGRICULTURAL EQUIPMENT 1.3%
Global Industrial Technologies, Inc.* .................. 18,900 335,475
NACCO Industries, Inc. "A" ............................. 9,200 499,100
----------
834,575
----------
LEASING COMPANIES 0.7%
Interpool, Inc. ........................................ 18,900 448,875
----------
MANUFACTURING 16.0%
CHEMICALS 1.5%
Cambrex Corp. .......................................... 10,650 356,775
Rexene Corp. ........................................... 21,200 280,900
Stepan Co. ............................................. 18,200 352,625
----------
990,300
----------
CONTAINERS & PAPER 1.4%
Mosinee Paper Corp. .................................... 13,366 444,420
Park Ohio Industries Inc.* ............................. 22,500 323,438
Shorewood Packaging Corp.* ............................. 8,000 140,000
----------
907,858
----------
DIVERSIFIED MANUFACTURING 4.2%
ACX Technologins, Inc.* ................................ 11,800 225,670
Griffon Corp.* ......................................... 26,300 368,200
Insilco Corp.* ......................................... 10,400 379,600
Robbins & Myers, Inc. .................................. 14,300 393,250
Scotsman Industries, Inc. .............................. 20,300 565,863
Tredegar Industries, Inc. .............................. 11,400 457,425
Valmont Industries ..................................... 8,200 346,450
----------
2,736,458
----------
The accompanying notes are an integral part of the financial statements.
12 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
MARKET
SHARES VALUE ($)
- --------------------------------------------------------------------------------
HAND TOOLS 0.8%
L.S. Starrett Corp. .................................... 18,000 537,750
----------
INDUSTRIAL SPECIALTY 2.9%
Barnes Group, Inc. ..................................... 7,900 526,338
Commercial Intertech Corp. ............................. 22,800 290,700
FSI International, Inc.* ............................... 9,600 142,800
Greenbrier Companies, Inc. ............................. 15,400 144,375
Kulicke & Soffa Industries, Inc.* ...................... 11,700 310,050
O'Sullivan Corp. ....................................... 9,900 87,863
Spartech Corp. ......................................... 22,000 255,750
Wyman-Gordon Co.* ...................................... 8,300 148,363
----------
1,906,239
----------
MACHINERY/COMPONENTS/CONTROLS 3.0%
Amcast Industrial Corp. ................................ 17,200 397,750
Gleason Corp. .......................................... 10,400 373,100
Mueller Industries, Inc.* .............................. 5,500 237,188
Reliance Steel & Aluminum Co. .......................... 8,300 256,263
Sequa Corp. "A" ........................................ 10,900 427,825
Zero Corporation ....................................... 12,100 266,200
----------
1,958,326
----------
WHOLESALE DISTRIBUTORS 2.2%
A.M. Castle & Co. ...................................... 11,075 231,191
Applied Industrial Technology, Inc. .................... 15,550 480,106
Fisher Scientific International ........................ 1,600 72,400
Hughes Supply, Inc. .................................... 8,800 309,100
Rexel, Inc.* ........................................... 21,300 383,400
----------
1,476,197
----------
TECHNOLOGY 5.2%
COMPUTER SOFTWARE 0.5%
MTS Systems Corp. ...................................... 15,700 341,475
----------
DIVERSE ELECTRONIC PRODUCTS 0.9%
Esterline Technologies Corp.* .......................... 13,700 345,925
HADCO Corp.* ........................................... 6,400 259,200
----------
605,125
----------
EDP PERIPHERALS 0.1%
DH Technology, Inc.* ................................... 2,900 48,575
----------
The accompanying notes are an integral part of the financial statements.
13 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
MARKET
SHARES VALUE ($)
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS/DISTRIBUTORS 2.3%
CTS Corp. .............................................. 12,400 599,850
Furon Corp. ............................................ 16,800 371,700
Park Electrochemical Corp. ............................. 12,700 309,563
Rogers Corp.* .......................................... 9,800 264,600
----------
1,545,713
----------
MILITARY ELECTRONICS 0.6%
Watkins-Johnson Co. .................................... 16,700 421,675
----------
PRECISION INSTRUMENTS 0.3%
Silicon Valley Group Inc.* ............................. 9,000 192,375
----------
SEMICONDUCTORS 0.5%
Siliconix, Inc.* ....................................... 8,200 192,700
VLSI Technology, Inc. .................................. 8,700 162,581
----------
355,281
----------
ENERGY 4.5%
OIL & GAS PRODUCTION 1.1%
Belden & Blake Corp.* .................................. 11,400 256,500
KCS Energy, Inc. ....................................... 3,000 108,000
Plains Resources, Inc.* ................................ 15,000 198,750
Tesoro Petroleum Corp.* ................................ 16,500 193,875
----------
757,125
----------
OIL COMPANIES 1.0%
Giant Industries, Inc. ................................. 17,900 248,363
Holly Corp. ............................................ 14,900 398,575
----------
646,938
----------
OILFIELD SERVICES/EQUIPMENT 2.4%
Cliffs Drilling Co.* ................................... 6,400 296,800
Getty Petroleum Corp. .................................. 19,200 374,400
Pride Petroleum Services, Inc.* ........................ 23,500 393,625
RPC, Inc.* ............................................. 33,400 492,650
----------
1,557,475
----------
METALS & MINERALS 5.1%
STEEL & METALS
Acme Metals, Inc.* ..................................... 17,000 280,495
Brush Wellman, Inc. .................................... 22,100 389,513
Carpenter Technology Corp. ............................. 1,100 40,150
The accompanying notes are an integral part of the financial statements.
14 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
MARKET
SHARES VALUE ($)
- --------------------------------------------------------------------------------
Chaparral Steel Co. .................................... 34,000 416,500
Commercial Metals Co. .................................. 18,400 533,600
Quanex Corp. ........................................... 15,000 401,250
Rouge Steel Co. "A" .................................... 23,600 380,550
Shiloh Industries, Inc.* ............................... 14,800 259,000
WHX Corporation* ....................................... 36,000 292,500
Wolverine Tube, Inc.* .................................. 10,100 371,175
----------
3,364,733
----------
CONSTRUCTION 8.6%
BUILDING MATERIALS 5.7%
Butler Manufacturing Co. ............................... 8,200 297,250
Fibreboard Corp.* ...................................... 8,800 293,700
Florida Rock Industries, Inc. .......................... 14,700 501,638
Lone Star Industries, Inc. ............................. 11,200 485,800
Medusa Corp. ........................................... 9,700 386,788
Puerto Rican Cement Co., Inc. .......................... 16,500 480,563
Southdown, Inc. ........................................ 14,100 504,075
Triangle Pacific Corp.* ................................ 14,700 415,275
Universal Forest Products, Inc. ........................ 26,700 377,138
----------
3,742,227
----------
HOMEBUILDING 2.4%
Champion Enterprises, Inc. ............................. 9,200 178,250
Continental Homes Holding Corp. ........................ 13,800 293,250
NVR Inc.* .............................................. 25,100 320,025
Skyline Corp. .......................................... 15,400 371,525
U.S. Home Corp.* ....................................... 15,100 409,588
----------
1,572,638
----------
MISCELLANEOUS 0.5%
Granite Construction, Inc. ............................. 17,100 306,731
----------
TRANSPORTATION 2.5%
AIRLINES 1.2%
Alaska Air Group Inc.* ................................. 18,900 448,874
America West Holdings Corp. "B" * ...................... 16,900 234,488
Skywest, Inc. .......................................... 9,200 112,125
----------
795,487
----------
The accompanying notes are an integral part of the financial statements.
15 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
MARKET
SHARES VALUE ($)
- --------------------------------------------------------------------------------
MARINE TRANSPORTATION 0.4%
Avondale Industries, Inc.* ............................. 13,800 284,625
----------
TRUCKING 0.9%
Landstar System, Inc.* ................................. 12,300 275,213
US Freightways Corp. ................................... 12,700 306,388
----------
581,601
----------
UTILITIES 6.0%
ELECTRIC UTILITIES 2.3%
Central Hudson Gas & Electric Co. ...................... 8,400 277,200
Commonwealth Energy System Cos ......................... 25,700 575,038
Northwestern Public Service Co. ........................ 17,400 652,500
----------
1,504,738
----------
NATURAL GAS DISTRIBUTION 3.3%
Bay State Gas Co. ...................................... 5,600 149,100
Energen Corp.* ......................................... 19,800 594,000
New Jersey Resources Corp. ............................. 5,600 161,000
North Carolina Natural Gas Corp. ....................... 11,000 353,375
Northwest Natural Gas Co. .............................. 26,300 637,775
Southern Union Co. ..................................... 11,810 265,725
----------
2,160,975
----------
WATER SUPPLY 0.4%
Aquarion Co. ........................................... 11,100 302,475
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $54,571,125) 63,983,270
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0%
(Cost $56,462,125) (a) 65,874,270
- --------------------------------------------------------------------------------
(a) The cost for federal income tax purposes was $56,462,125. At February 28,
1997, net unrealized appreciation for all securities based on tax cost was
$9,412,145. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $10,618,479 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
($1,206,334).
* Non-income producing security.
The accompanying notes are an integral part of the financial statements.
16 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investments, at market (identified cost $56,462,125) (Note A) .......... $ 65,874,270
Cash ................................................................... 826
Receivable on Fund shares sold ......................................... 106,377
Dividends and interest receivable ...................................... 48,144
Deferred organization expense (Note A) ................................. 17,091
----------------
Total assets ........................................................... 66,046,708
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed ....................................... 70,480
Accrued management fee (Note C) ........................................ 30,241
Other accrued expenses/payables (Note C) ............................... 225,730
----------------
Total liabilities ...................................................... 326,451
-------------------------------------------------------------------------------------------
NET ASSETS, AT MARKET VALUE $ 65,720,257
-------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated distributions in excess of net investment income ........... (25,936)
Net unrealized appreciation on investments ............................. 9,412,145
Accumulated net realized gain .......................................... 880,705
Paid-in capital ........................................................ 55,453,343
-------------------------------------------------------------------------------------------
NET ASSETS, AT MARKET VALUE $ 65,720,257
-------------------------------------------------------------------------------------------
NET ASSET VALUE
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, offering and redemption price (Note A) per share
($65,720,257 / 4,167,177 outstanding shares of beneficial interest, ---------------
$.01 par value, unlimited number of shares authorized) ................. $15.77
---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Income:
Dividends ........................................................... $ 344,058
Interest ............................................................ 50,291
-----------------
394,349
Expenses:
Management fee (Note C) ............................................. 195,391
Services to shareholders (Note C) ................................... 136,660
Custodian and accounting fees (Note C) .............................. 39,318
Trustees' fees and expenses (Note C) ................................ 13,197
Registration fees ................................................... 5,169
Reports to shareholders ............................................. 35,779
Auditing ............................................................ 14,116
Legal ............................................................... 7,990
Amortization of organization expense (Note A) ....................... 2,355
Other ............................................................... 8,627
-----------------
Total expenses before reductions .................................... 458,602
Expense reductions (Note C) ......................................... (72,326)
-----------------
Expenses, net ....................................................... 386,276
--------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 8,073
--------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments .................................. 905,879
Net unrealized appreciation during the period on investments ........ 6,609,083
--------------------------------------------------------------------------------------------
NET GAIN ON INVESTMENT TRANSACTIONS 7,514,962
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,523,035
--------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 6,
1995
SIX MONTHS (COMMENCE-
ENDED MENT OF OPERA-
FEBRUARY 28, TIONS) TO
1997 AUGUST 31,
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED) 1996
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ............................................... $ 8,073 $ 153,303
Net realized gain (loss) from investment transactions ............... 905,879 (6,985)
Net unrealized appreciation on investment transactions during
the period ....................................................... 6,609,083 2,803,062
----------------- ----------------
Net increase in net assets resulting from operations ................ 7,523,035 2,949,380
----------------- ----------------
Distributions to shareholders from net investment income ............ (127,322) (61,519)
----------------- ----------------
Distributions to shareholders from net realized gains ............... (18,189) --
----------------- ----------------
Fund share transactions:
Proceeds from shares sold ........................................... 21,806,801 42,630,158
Net asset value of shares issued to shareholders in reinvestment
of distributions ................................................. 138,706 59,327
Cost of shares redeemed ............................................. (4,811,546) (4,422,357)
Redemption fees (Note A) ............................................ 21,586 30,997
----------------- ----------------
Net increase in net assets from Fund share transactions ............. 17,155,547 38,298,125
----------------- ----------------
INCREASE IN NET ASSETS 24,533,071 41,185,986
Net assets at beginning of period 41,187,186 1,200
NET ASSETS AT END OF PERIOD (including distributions in excess of
net investment income and undistributed net investment income ----------------- ----------------
of ($25,936) and $93,313, respectively) ........................... $65,720,257 $41,187,186
----------------- ----------------
OTHER INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period ........................... 3,034,156 100
----------------- ----------------
Shares sold ......................................................... 1,442,322 3,368,696
Shares issued to shareholders in reinvestment of distributions ...... 9,042 4,792
Shares redeemed ..................................................... (318,343) (339,432)
----------------- ----------------
Net increase in Fund shares ......................................... 1,133,021 3,034,056
----------------- ----------------
Shares outstanding at end of period ................................. 4,167,177 3,034,156
----------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period (a) and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
For the Period
Six Months October 6, 1995
Ended (commencement
February 28, of operations) to
1997 August 31,
(Unaudited) 1996
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
-----------------------------------------
Net asset value, beginning of period .......................................... $13.57 $12.00
-----------------------------------------
Income from investment operations: -- .07
Net investment income .........................................................
Net realized and unrealized gain on investment transactions ................... 2.23 1.53
-----------------------------------------
Total from investment operations .............................................. 2.23 1.60
-----------------------------------------
Less distributions:
From net investment income .................................................... (.04) (.05)
From net realized gains on investment transactions ............................ .00 --
-----------------------------------------
Total distributions ........................................................... (.04) (.05)
-----------------------------------------
Redemption fees (Note A) ...................................................... .01 .02
-----------------------------------------
Net asset value, end of period ................................................ $15.77 $13.57
--------------------------------------------------------------------------------------------------------------------------
Total Return (%) (b) .......................................................... 16.52(c)** 13.54(c)**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ........................................ 66 41
Ratio of operating expenses, net to average daily net assets (%) .............. 1.50* 1.50*
Ratio of operating expenses before expense reductions, to average daily net
assets (%) ................................................................. 1.78* 2.61*
Ratio of net investment income to average daily net assets (%) ................ .03* .67*
Portfolio turnover rate (%) ................................................... 42.8* 33.97*
Average commission rate paid .................................................. $.0353 $.0364
</TABLE>
(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 shares
held less than one year.
* Annualized
** Not annualized
20 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
Notes to Financial Statements (Unaudited)
A. Significant Accounting Policies
Scudder Small Company Value Fund (the "Fund") is a diversified series of Scudder
Securities Trust (the "Trust"). The Trust is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. Portfolio securities which are traded on U.S. stock
exchanges are valued at the most recent sale price reported on the exchange on
which the security is traded most extensively. If no sale occurred, the security
is then valued at the calculated mean between the most recent bid and asked
quotations. If there are no such bid and asked quotations, the most recent bid
quotation is used. Securities quoted on the National Association of Securities
Dealers Automatic Quotation ("NASDAQ") System, for which there have been sales,
are valued at the most recent sale price reported on such system. If there are
no such sales, the value is the high or "inside" bid quotation. Securities which
are not quoted on the NASDAQ System but are traded in another over-the-counter
market are valued at the most recent sale price on such market. If no sale
occurred, the security is then valued at the calculated mean between the most
recent bid and asked quotations. If there are no such bid and asked quotations,
the most recent bid quotation shall be used. Short-term investments having a
maturity of sixty days or less are valued at amortized cost. All other
securities are valued at their fair value as determined in good faith by the
Valuation Committee of the Board of Trustees.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement and the underlying collateral, is equal to at least 100.5% of the
resale price.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. Accordingly,
the Fund paid no federal income taxes and no provision for federal income tax
was required.
Redemption Fees. In general, shares of the Fund may be redeemed at net asset
value. However, upon the redemption or exchange of shares held by shareholders
for less than one year, a fee of 1% of the current net asset value of the shares
will be assessed and retained by the Fund for the benefit of the remaining
shareholders. The redemption fee is accounted for as an addition to paid-in
capital.
Distribution of Income and Gains. Distributions of net investment income are
made annually. During any particular year net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed and, therefore, will be distributed to
shareholders annually. An additional distribution may be made to the extent
necessary to avoid the payment of a four percent federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. As a result, net
investment income (loss) and net realized gain (loss) on investment transactions
for a reporting period may differ significantly from distributions
21 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
during such period. Accordingly, the Fund may periodically make
reclassifications among certain of its capital accounts without impacting the
net asset value of the Fund.
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
Organization Costs. Costs incurred by the Fund in connection with its
organization have been deferred and are being amortized on a straight-line basis
over a five-year period.
Other. Investment security transactions are accounted for on a trade-date basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on an accrual basis.
B. Purchases and Sales of Securities
During the six month period ended February 28, 1997, purchases and sales of
investment securities (excluding short-term investments) aggregated $26,658,346
and $10,861,806, respectively.
C. Related Parties
Under the Fund's Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund pays the Adviser a fee equal to
an annual rate of 0.75% of the Fund's average daily net assets, computed and
accrued daily and payable monthly. As manager of the assets of the Fund, the
Adviser directs the investments of the Fund in accordance with its investment
objectives, policies, and restrictions. The Adviser determines the securities,
instruments, and other contracts relating to investments to be purchased, sold
or entered into by the Fund. In addition to portfolio management services, the
Adviser provides certain administrative services in accordance with the
Agreement. The Agreement also provides that if the Fund's expenses, exclusive of
taxes, interest, and extraordinary expenses, exceed specified limits, such
excess, up to the amount of the management fee, will be paid by the Adviser. In
addition, the Adviser has agreed not to impose all or a portion of its
management fee until December 31, 1997 in order to maintain the annualized
expenses of the Fund at not more than 1.50% of average daily net assets. For the
six month period ended February 28, 1997, the fee pursuant to the Agreement
aggregated $195,391, of which $72,326 was not imposed, and $30,241 was unpaid as
of February 28, 1997.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six month period ended February 28, 1997, the amount charged by SSC aggregated
$120,319.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six month period ended
February 28, 1997, the amount charged to the Fund by STC aggregated $6,193, of
which $3,767 is unpaid at February 28, 1997.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six month
period ended February 28, 1997, the amount charged to the Fund by SFAC
aggregated $25,531, of which $5,298 is unpaid at February 28, 1997.
The Fund pays each of its Trustees not affiliated with the Adviser $4,000
annually, plus specified amounts for attended board and committee meetings. For
the six month period ended February 28, 1997, Trustees' fees and expenses
aggregated $13,197.
22 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
D. Lines of Credit
The Fund and several affiliated Funds (the "Participants") share in a $500
million revolving credit facility for temporary or emergency purposes, including
the meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 33.33% of its net assets under the agreement. In addition, the Fund
also maintains an uncommitted line of credit.
23 -- SCUDDER SMALL COMPANY VALUE FUND
<PAGE>
Shareholder Meeting Results
A special meeting of shareholders of Scudder Small Company Value Fund was held
on Monday, December 2, 1996, at the offices of Scudder, Stevens & Clark, Inc.,
345 Park Avenue, New York, New York. The two matters voted upon by the
shareholders and the resulting votes for each matter are presented below.
1. The election of eight Trustees to hold office until their respective
successors shall have been duly elected and qualified.
<TABLE>
<CAPTION>
Trustee Number of Votes:
------- ----------------
For Withheld Broker Non-Votes*
--- -------- -----------------
<S> <C> <C> <C>
Daniel Pierce 2,041,314 47,006 0
Paul Bancroft III 2,033,817 54,503 0
Thomas J. Devine 2,040,253 48,067 0
Keith R. Fox 2,045,096 43,225 0
Dudley H. Ladd 2,038,598 49,722 0
Dr. Wilson Nolen 2,046,457 41,863 0
Kathryn L. Quirk 2,038,519 49,801 0
Dr. Gordon Shillinglaw 2,046,135 42,185
</TABLE>
2. Ratification or rejection of the action taken by the Board of Trustees
in selecting Coopers & Lybrand L.L.P as independent accountants for the
fiscal year ending August 31, 1997.
<TABLE>
<CAPTION>
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
<S> <C> <C> <C> <C>
2,002,868 29,269 56,182 0
</TABLE>
- -------------------
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary
power to vote on a particular matter.
24-Scudder Small Company Value Fund
<PAGE>
Officers and Trustees
Daniel Pierce*
President and Trustee
Paul Bancroft III
Trustee; Venture Capitalist and Consultant
Thomas J. Devine
Trustee; Consultant
Keith R. Fox
Trustee; President, Exeter Capital Management Corporation
Dudley H. Ladd*
Trustee
Dr. Wilson Nolen
Trustee; Consultant
Kathryn L. Quirk*
Trustee, Vice President and Assistant Secretary
Dr. Gordon Shillinglaw
Trustee; Professor Emeritus of Accounting, Columbia University Graduate School
of Business
Robert W. Lear
Honorary Trustee; Executive-in-Residence, Visiting Professor, Columbia
University Graduate School of Business
Robert G. Stone, Jr.
Honorary Trustee; Chairman Emeritus and Director, Kirby Corporation
Edmund R. Swanberg*
Honorary Trustee
Peter Chin*
Vice President
James M. Eysenbach*
Vice President
Philip S. Fortuna*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
David S. Lee*
Vice President
Roy C. McKay*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Richard W. Desmond*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
25-Scudder Small Company Value Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Tax Free Money Market+
Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax Free+
Scudder 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 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.
26-Scudder Small Company Value Fund
<PAGE>
How to Contact Scudder
Account Service and Information
- --------------------------------------------------------------------------------
For existing account services 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 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 CounselSM -- 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 Funds Center
- --------------------------------------------------------------------------------
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they
can be found in the following cities:
Boca Raton 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.
27-Scudder Small Company Value Fund
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Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark,
Scudder, Stevens & Clark was the first independent investment counsel firm in
the United States. Since its birth, Scudder's pioneering spirit and commitment
to professional long-term investment management have helped shape the investment
industry. In 1928, we introduced the nation's first no-load mutual fund. Today
we offer over 40 pure no load(TM) funds, including the first international
mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
