SCUDDER SECURITIES TRUST, 497, 1998-01-06

SCUDDER SECURITIES TRUST
497, 1998-01-06

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SCUDDER
PURE NO-LOAD(TM) FUNDS

[SCUDDER LOGO]

[GRAPHIC OMITTED]

A Collection of
Prospectuses
For Three
Scudder U.S. Stock
Funds

This Outer Cover Not Part of Prospectus

[Soy Ink LOGO] [Recycle LOGO] Printed on recycled paper

360-2-18

<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 21st Century Growth Fund and Scudder
Development Fund, each a diversified series of Scudder Securities Trust. Please
retain it for future reference.

If you require more detailed information, Statements of Additional Information
dated January 1, 1998 for Scudder Small Company Value Fund and Scudder 21st
Century Growth Fund; and November 1, 1997 for Scudder Development 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.

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

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360-2-18

SCUDDER

[SCUDDER LOGO]

[GRAPHIC OMITTED]

Scudder Small Company Value Fund

January 1, 1998

Scudder 21st Century Growth Fund

January 1, 1998

Scudder Development Fund

November 1, 1997

Three 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.
<PAGE>

- ---------------------------------------
Expense information
- ---------------------------------------

Scudder Small Company Value Fund

- --------------------------------------------------------------------------------

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

This information is designed to help you understand the various costs and
expenses of investing in Scudder Small Company Value Fund (the "Fund"). By
reviewing this table and those in other mutual funds' prospectuses, you can
compare the Fund's fees and expenses with those of other funds. With Scudder's
pure no-load(TM) funds, you pay no commissions to purchase or redeem shares, or
to exchange from one fund to another. As a result, all of your investment goes
to work for you.

1) Shareholder transaction expenses: Expenses charged directly to your
individual account in the Fund for various transactions.

Sales commissions to purchase shares (sales load) NONE
Commissions to reinvest dividends NONE
Deferred sales charge NONE
Redemption fees payable to the Fund 1.00%*
Exchange fees payable to the Fund 1.00%*

2) Annual Fund operating expenses: Expenses paid by the Fund before it
distributes its net investment income, expressed as a percentage of the
Fund's average daily net assets for the fiscal year ended August 31, 1997.

Investment management fee 0.75%**
12b-1 fees NONE
Other expenses 0.88%
----
Total Fund operating expenses 1.63%**
====

Example

Based on the level of total Fund operating expenses listed above, the total
expenses relating to a $1,000 investment, assuming a 5% annual return and
redemption at the end of each period, are listed below. Investors do not pay
these expenses directly; they are paid by the Fund before it distributes its net
investment income to shareholders.

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$17 $51 $89 $193

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 the Fund which is imposed only on
redemptions or exchanges of shares held less than one year. You may redeem
by writing or calling the Fund. 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 waived a portion of its investment
management fee to the extent necessary so that the total annualized
expenses of the Fund did not exceed 1.50% of average daily net assets.
Expenses shown above are restated to reflect what the Fund would have paid
during the fiscal year ended August 31, 1997 absent such waiver.

- --------------------------------------------------------------------------------

- --
2
<PAGE>

- ---------------------------------------
Expense information
- ---------------------------------------

Scudder 21st Century Growth Fund

- --------------------------------------------------------------------------------

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

This information is designed to help you understand the various costs and
expenses of investing in Scudder 21st Century Growth Fund (the "Fund"). By
reviewing this table and those in other mutual funds' prospectuses, you can
compare the Fund's fees and expenses with those of other funds. With Scudder's
pure no-load(TM) funds, you pay no commissions to purchase or redeem shares, or
to exchange from one fund to another. As a result, all of your investment goes
to work for you.

1) Shareholder transaction expenses: Expenses charged directly to your
individual account in the Fund for various transactions.

Investment management fee (after waiver) 0.00%**
12b-1 fees NONE
Other expenses (after reimbursements) 1.75%**
----
Total Fund operating expenses (after waiver and reimbursements) 1.75%**
====

Example

1 Year 3 Year 5 Years 10 Years
------ ------ ------- --------
$18 $55 $95 $206

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.

** Until December 31, 1998, the Adviser and certain of its subsidiaries have
agreed to waive and/or reimburse all or portions of their fees payable by
the 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, annualized Fund expenses would have been: investment management fee
1.00%, other expenses 2.52% and total operating expenses 3.52% for the
fiscal period ended August 31, 1997.

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3
<PAGE>

- ---------------------------------------
Expense information
- ---------------------------------------

Scudder Development Fund

- --------------------------------------------------------------------------------

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

This information is designed to help you understand the various costs and
expenses of investing in Scudder Development Fund. By reviewing this table and
those in other mutual funds' prospectuses, you can compare the Fund's fees and
expenses with those of other funds. With Scudder's pure no-load(TM) funds, you
pay no commissions to purchase or redeem shares, or to exchange from one fund to
another. As a result, all of your investment goes to work for you.

1) Shareholder transaction expenses: Expenses charged directly to your
individual account in the Fund for various transactions.

Sales commissions to purchase shares (sales load) NONE
Commissions to reinvest dividends NONE
Redemption fees NONE*
Fees to exchange shares NONE

2) Annual Fund operating expenses: Expenses paid by the Fund before it
distributes its net investment income, expressed as a percentage of the
Fund's average daily net assets, for the fiscal year ended June 30, 1997.

Investment management fee 0.98%
12b-1 fees NONE
Other expenses 0.38%
----
Total Fund operating expenses 1.36%
====

Example

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$14 $43 $75 $164

* You may redeem by writing or calling the Fund. If you wish to receive your
redemption proceeds via wire, there is a $5 wire service fee. For
additional information, please refer to "Transaction
information--Redeeming shares."

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4
<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, 1997 and may be obtained without charge by
writing or calling Scudder Investor Services, Inc.

<TABLE>
<CAPTION>
For the Period
October 6, 1995
(commencement of
Year Ended operations) to
August 31, August 31,
1997 1996
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
--------------------------------------------
Net asset value, beginning of period ............................... $13.57 $12.00
Income from investment operations: --------------------------------------------
Net investment income .............................................. .01 .07
Net realized and unrealized gain on investment
transactions ..................................................... 6.03 1.53
--------------------------------------------
Total from investment operations ................................... 6.04 1.60
--------------------------------------------
Less distributions:
From net investment income ......................................... (.03) (.05)
From net realized gains on investment transactions ................. (.01) --
--------------------------------------------
Total distributions ................................................ (.04) (.05)
--------------------------------------------
Redemption fees .................................................... .01 .02
--------------------------------------------
Net asset value, end of period ..................................... $19.58 $13.57
- -----------------------------------------------------------------------------------------------------------------
Total Return (%) (b) ............................................... 44.67 13.54(c)**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ............................. 123 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 (%) ..................................... 1.63 2.61*
Ratio of net investment income to average daily net assets (%) ..... .07 .67*
Portfolio turnover rate (%) ........................................ 43.64 33.97*
Average commission rate paid ....................................... $.0332 $.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 to the shareholder of the 1%
redemption fee on shares held less than one year.
* Annualized
** Not annualized

- --------------------------------------------------------------------------------

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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 audited
financial statements.

<TABLE>
<CAPTION>
For the Period
September 9, 1996
(commencement)
of operations) to
August 31, 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
-----------------------
Net asset value, beginning of period .............................................. $12.00
Income from investment operations: -----------------------
Net investment loss ............................................................... (.15)
Net realized and unrealized gain on investments ................................... 1.25
-----------------------
Total from investment operations .................................................. 1.10
-----------------------
Redemption fees ................................................................... .0l
-----------------------
Net asset value, end of period .................................................... $13.11
- -----------------------------------------------------------------------------------------------------------------
Total Return (%) (b) .............................................................. 9.25(c)**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ............................................ 23
Ratio of operating expenses, net to average daily net assets (%) .................. 175*
Ratio of operating expenses before expense reductions,
to average daily net assets (%) ................................................. 3.52*
Ratio of net investment loss to average daily net assets (%) ...................... (1.27)*
Portfolio turnover rate (%) ....................................................... 92.0*
Average commission rate paid ...................................................... $.0405
</TABLE>

- --------------------------------------------------------------------------------

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6
<PAGE>

- ---------------------------------------
Financial highlights
- ---------------------------------------

Scudder Development Fund

- --------------------------------------------------------------------------------

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

If you would like more detailed information concerning the Fund's performance,
a complete portfolio listing and audited financial statements are available in
the Fund's Annual Report dated June 30, 1997 and may be obtained without charge
by writing or calling Scudder Investor Services, Inc.

<TABLE>
<CAPTION>
Years Ended June 30,
1997(b) 1996(b) 1995(b) 1994(b) 1993(b) 1992(b) 1991(b) 1990(b) 1989(b) 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, -------------------------------------------------------------------------------------------
beginning of period ................. $45.56 $37.35 $27.58 $34.58 $29.92 $27.33 $26.25 $22.54 $22.00 $25.39
Income from investment -------------------------------------------------------------------------------------------
operations:
Net investment loss ................... (.40) (0.38) (.31) (.30) (.27) (.23) (.10) (.08) (.10) (.08)
Net realized and unrealized
gain (loss) on investment
transactions ........................ (1.66) 12.79 12.20 (3.63) 6.63 3.78 2.41 6.07 1.06 (1.41)
Total from investment -------------------------------------------------------------------------------------------
operations .......................... (2.06) 12.41 1l.89 (3.93) 6.36 3.55 2.31 5.99 .96 (1.49)
Less distributions from -------------------------------------------------------------------------------------------
net realized gains
on investment
transactions ........................ (4.48) (4.20) (2.12) (3.07) (1.70) (.96) (1.23) (2.28) (.42) (1.90)
-------------------------------------------------------------------------------------------
Total distributions ................... (4.48) (4.20) (2.12) (3.07) (1.70) (.96) (1.23) (2.28) (.42) (1.90)
-------------------------------------------------------------------------------------------
Net asset value, -------------------------------------------------------------------------------------------
end of period ....................... $39.02 $45.56 $37.35 $27.58 $34.58 $29.92 $27.33 $26.25 $22.54 $22.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (%) ...................... (4.93) 35.26 45.41 (12.91) 22.28 12.83 10.32 28.50 4.66 (5.35)
Ratios and
Supplemental Data
Net assets, end of period
($ millions) ........................ 862 1,040 727 546 821 700 476 361 275 356
Ratio of operating expenses to
average daily net assets (%) ........ 1.36 1.24 1.32 1.27 1.30 1.30 1.29 1.34 1.32 1.30
Ratio of net investment loss to
average daily net assets (%) ........ (1.02) (0.91) (1.01) (.91) (.83) (.70) (.40) (.35) (.47) (.44)
Portfolio turnover rate (%) ........... 52.2 58.8 41.6 48.3 49.2 53.5 70.8 40.1 32.0 39.2
Average commission rate
paid(a) ............................. $.0355 $.0554 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
</TABLE>

(a) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal periods ending on or after June 30, 1996.
(b) Per share amounts have been calculated using the weighted average shares
method.

- --------------------------------------------------------------------------------

--
7
<PAGE>

- ---------------------------------------
A message from the President
- ---------------------------------------

[PHOTO OMITTED]

Edmond D. Villani, President
and CEO, Scudder Kemper
Investments, Inc.

Scudder Kemper Investments, Inc., investment adviser to the Scudder Family of
Funds, is one of the largest and most experienced investment management
organizations worldwide, managing more than $200 billion in assets globally for
mutual fund investors, retirement and pension plans, institutional and corporate
clients, and private family and individual accounts. It is one of the ten
largest mutual fund companies in the U.S.

We offered America's first no-load mutual fund in 1928, and today the Scudder
Family of Funds includes over 45 no-load mutual fund portfolios. We also manage
the mutual funds in a special program for the American Association of Retired
Persons, as well as the fund options available through Scudder Horizon Plan, a
tax-advantaged variable annuity. We also advise The Japan Fund, and numerous
other open and closed-end funds that invest in this country and other countries
around the world.

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

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

The Scudder Family of Funds includes those Funds, or classes of Funds, advised
by Scudder Kemper Investments, Inc., that are offered without commissions to
purchase or redeem shares or to exchange from one fund to another. There are no
12b-1 fees either, which many other funds now charge to support their marketing
efforts. All of your investment goes to work for you. We look forward to
welcoming you as a shareholder.

/s/ Edmond D. Villani

- ---------------------------------------
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 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 Development Fund seeks long-term growth of capital.

- ---------------------------------------
Contents
- ---------------------------------------

Introduction ................................................... 9

Scudder Small Company Value Fund ............................... 9

Scudder 21st Century Growth Fund ............................... 11

Scudder Development Fund ....................................... 13

U.S. investment experience ..................................... 14

Additional information about policies
and investments .............................................. 14

Distribution and performance information ....................... 17

Fund organization .............................................. 18

Transaction information ........................................ 20

Shareholder benefits ........................................... 24

Purchases ...................................................... 27

Exchanges and redemptions ...................................... 28

Investment products and services ............................... 30

How to contact Scudder ......................................... 31

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8
<PAGE>

- ---------------------------------------
Introduction
- ---------------------------------------

Scudder Small Company Value Fund, Scudder 21st Century Growth Fund and Scudder
Development Fund (collectively, the "Funds") are mutual funds advised by Scudder
Kemper Investments, Inc. (the "Adviser"). The three Funds' prospectuses are
presented together so you can understand their important differences and decide
which Fund or combination of Funds is most suitable for your investment needs.

Except as otherwise indicated, each Fund's investment objectives and policies
are not fundamental and may be changed without a vote of shareholders. If there
is a change in investment 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. The Fund will sell
securities of companies that have grown in market capitalization above the
maximum of the Russell 2000 Index as necessary to keep the Fund focused on
smaller companies.

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 (convertible securities),
rights, warrants and restricted and illiquid 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
agreements and reverse repurchase 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. The Fund currently intends to borrow only for temporary or emergency
purposes, such as providing for redemptions or distributions, and not for
investment leverage purposes.

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9
<PAGE>

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. It is impossible to predict accurately how long
such alternate strategies may be utilized. 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
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

- --
10
<PAGE>

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 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
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
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

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11
<PAGE>

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 Investor Services ("Moody's") or AAA, AA or A by
Standard & Poor's Corporation ("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 also purchase convertible securities, rights,
warrants and illiquid or restricted securities. The Fund may enter into
repurchase agreements and reverse repurchase 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. 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 diverse 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.

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

- --
12
<PAGE>

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 Development Fund
- ---------------------------------------

Investment objective and policies

Scudder Development Fund, a diversified series of Scudder Securities Trust,
seeks long-term growth of capital by investing primarily in securities of small
and medium-size growth companies. 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.

Investments

The Fund generally invests in equity securities, including common stocks and
convertible securities, of small and medium-size companies, commonly referred to
as emerging growth companies, that the Adviser believes have above-average
earnings growth potential and/or may receive greater market recognition. Both
factors are 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. Generally, small and
medium-size companies are those with $50 million to $5 billion in total market
capitalization.

To help reduce risk, the Fund allocates its investments among many companies and
different industries. In selecting industries and companies for investment, the
Adviser will consider overall growth prospects, financial condition, competitive
position, technology, research and development, 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, management and other factors.

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 invest without limit
in cash and may invest in high quality debt securities without equity features,
U.S. Government securities and 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. It is impossible to accurately predict how
long such alternative strategies may be utilized.

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 invest in illiquid or
restricted securities, foreign securities, convertible bonds, and may engage in
strategic transactions. More information about these investment techniques is
provided under "Additional information about policies and investments."

--
13
<PAGE>

Why invest in the Fund?

Scudder Development Fund offers participation in the potential growth of small
and medium-size growth companies with favorable long-term prospects. The Fund
offers the benefits of professional management of investments chiefly in U.S.
companies with histories of rapid earnings growth and like prospects for the
future. In return for accepting above-average risk, investors gain access to a
large, 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.

- ---------------------------------------
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. The
Adviser manages more than $200 billion in assets globally.

- ---------------------------------------
Additional information about
policies and investments
- ---------------------------------------

Investment restrictions

Each Fund has certain investment restrictions which are designed to reduce a
Fund's investment risk. Fundamental investment restrictions may not be changed
without a vote of shareholders; non-fundamental investment restrictions may be
changed by a vote of a Fund's Board of Trustees. A complete listing of
investment restrictions is contained under "Investment Restrictions" in each
Fund's Statement of Additional Information.

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

As a matter of fundamental policy, Scudder Small Company Value Fund and Scudder
21st Century Growth Fund may not borrow money, except as permitted under Federal
law. Further, as a matter of non-fundamental policy, Scudder Small Company Value
Fund and Scudder 21st Century Growth Fund may not borrow money in an amount
greater than 5% of total assets, except for temporary or emergency purposes,
although each Fund may engage up to 5% of total assets in reverse repurchase
agreements or dollar rolls.

As a matter of fundamental policy, Scudder Small Company Value Fund and Scudder
21st Century Growth Fund may not make loans except through the lending of
portfolio securities, the purchase of debt securities or through repurchase
agreements. Each Fund has adopted a non-fundamental policy restricting the
lending of portfolio securities to no more than 5% of total assets.

A complete description of these and other policies and restrictions is contained
under "Investment Restrictions" in the 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 common stocks 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.

- --
14
<PAGE>

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 and Scudder 21st Century Growth 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.

Illiquid 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. 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 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 Development Fund each may invest in listed and
unlisted foreign securities that meet the same criteria as its domestic
holdings. Scudder Development Fund has no current intention of investing more
than 20% of its net assets in 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

--
15
<PAGE>

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
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.

Investing in emerging growth companies. The investment risk associated with
emerging growth companies, which are generally small to medium-size, is higher
than that normally associated with larger, older companies due to the greater
business risks of smaller size, the relative age of the company, limited product
lines, distribution channels and financial and managerial resources. Further,
there is typically less publicly available information concerning smaller
companies than for larger, more established ones.

The securities of small and medium-size 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, a Fund
may need to discount the securities from recent prices or dispose of the
securities over a long period of time. The prices of this type of security may
be more volatile than those of larger companies which are often traded on a
national securities exchange.

Illiquid 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 and thinner trading markets as compared to
domestic

- --
16
<PAGE>

markets and the likely impact of foreign taxes on income from securities. 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.

Further, it may be more difficult for a Fund's agents to keep currently informed
about corporate actions which may affect the prices of portfolio securities.
Communications between the U.S. and foreign countries may be less reliable than
within the U.S., increasing the risk of delayed settlements of portfolio
transactions or loss of certificates for portfolio securities. A Fund's ability
and decisions to purchase and sell portfolio securities may be affected by laws
or regulations relating to the convertibility and repatriation of assets.

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
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

Scudder Small Company Value Fund and Scudder 21st Century Growth Fund intend to
distribute

--
17
<PAGE>

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. Scudder
Development 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 December to prevent application of federal excise tax.
An additional distribution for Scudder Development Fund 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.

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.

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
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. 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 Scudder Securities Trust, which is an
open-end management investment company registered under the Investment Company
Act of 1940 (the "1940 Act"). Scudder Securities Trust, formerly Scudder
Development Fund, 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.

The Funds' activities are supervised by the Board of Trustees. Shareholders have
one vote for each share held on matters on which they are entitled to vote. The
Trust is not required to and has no current intention of holding annual
shareholder meetings, although special meetings may be called for purposes such
as electing or removing Trustees, changing fundamental investment policies or
approving an investment 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.

- --
18
<PAGE>

The prospectuses of each of the three Funds are combined in this prospectus.
Each Fund offers only its own shares, yet it is possible that a Fund might
become liable for a misstatement 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 Kemper Investments,
Inc., a Delaware corporation formerly known as Scudder, Stevens & Clark, Inc.,
to manage its daily investment and business affairs subject to the policies
established by the Board of Trustees. The Trustees have overall responsibility
for the management of the Fund under Massachusetts law.

Scudder, Stevens & Clark, Inc. ("Scudder"), and Zurich Insurance Company
("Zurich"), an international insurance and financial services organization, have
formed a new global investment organization by combining Scudder's business with
that of Zurich's subsidiary, Zurich Kemper Investments, Inc. and Scudder has
changed its name to Scudder Kemper Investments, Inc. As a result of the
transaction, Zurich owns approximately 70% of the Adviser, with the balance
owned by the Adviser's officers and employees.

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.

Scudder Small Company Value Fund and Scudder 21st Century Growth Fund each pays
the Adviser an annual fee of 0.75% and 1.00%, respectively, of each Fund's
average daily net assets. The fees for Scudder Small Company Value 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 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. As a result of this waiver the Adviser received an
investment management fee of 0.62% of Scudder Small Company Value Fund's average
daily net assets for the fiscal period ended 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 December 31, 1998. For the fiscal period ended August 31, 1997, the
Adviser took action to reduce Scudder 21st Century Growth Fund's total expenses
and as a result did not receive an investment management fee.

For the fiscal year ended June 30, 1997, the Adviser received an investment
management fee of 0.98% of Scudder Development Fund's average daily net assets.
The fee is graduated so that increases in Scudder Development Fund's net assets
may result in a lower fee and decreases in the Fund's net assets may result in a
higher fee. Because of the higher cost of research, this fee is higher than that
charged by most funds, but not necessarily higher than fees charged to funds
with investment objectives similar to those of the Fund.

All of a Fund's expenses are paid out of gross investment income. Shareholders
pay no direct charges or fees for investment or administrative services.

Scudder Kemper Investments, Inc. is located at 345 Park Avenue, New York, New
York.

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.

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19
<PAGE>

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
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 "QuickBuy." If you elected "QuickBuy" 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

- --
20
<PAGE>

of the Automated Clearing House for you to use this service. If you did not
elect "QuickBuy," 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. "QuickBuy" 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 "QuickBuy" 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. "QuickBuy" transactions are not
available for most retirement plan accounts. However, "QuickBuy" transactions
are available for Scudder IRA accounts.

Exchanging and redeeming shares of Scudder Small Company Value 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
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 Development 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 provided your banking information on your application, you can
call to request that federal funds be sent to your authorized bank account. If

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21
<PAGE>

you did not include your banking information on your application, call
1-800-225-5163 for more information.

Redemption proceeds will be wired to your bank unless otherwise requested. If
your bank cannot receive federal reserve wires, redemption proceeds will be
mailed to your bank. There will be a $5 charge for all wire redemptions.

You can also make redemptions from your Scudder fund account on SAIL by calling
1-800-343-2890.

If you open an account by wire, you cannot redeem shares by telephone until the
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 "QuickSell." If you elected "QuickSell" 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 "QuickSell,"
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. "QuickSell" 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.

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

Signature guarantees. For your protection and to prevent fraudulent redemptions,
on written redemption requests in excess of $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.

- --
22
<PAGE>

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 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.

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
correct certified Social Security or tax identification number and certain other
certified information or upon notification from the IRS or a broker that
withholding is required. Each Fund reserves the right to reject new account
applications without a correct 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 correct 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 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

--
23
<PAGE>

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. The 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.

- ---------------------------------------
Shareholder benefits
- ---------------------------------------

Experienced professional management

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

A team approach to investing

Each of the Funds is managed by a team of Scudder Kemper's 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 the Adviser's large
staff of economists, research analysts, traders and other investment specialists
who work in the Adviser's offices across the United States and abroad. Scudder
Kemper believes its team approach benefits Fund investors by bringing together
many disciplines and leveraging its extensive resources.

Scudder Small Company Value Fund. Co-lead Portfolio Managers Philip S. Fortuna
and James M. Eysenbach have responsibility for the Fund's day-to-day management
and investment strategies. Mr. Fortuna joined the Adviser in 1986 as a manager
of institutional equity accounts, served as director of quantitative services
from 1987 to 1993 and director of investment operations from 1993 to 1995. From
1995 to 1997 he was involved in global planning and new product development in
addition to his portfolio management responsibilities. Mr. Fortuna is currently
director of the Adviser's quantitative group.

Mr. Eysenbach joined the Adviser in 1991 as a senior quantitative analyst,
served as director of

- --
24
<PAGE>

quantitative services from 1993 to 1997 and has been co-manager of quantitative
equity products at the Adviser since 1995. He is currently managing portfolios
full-time. Mr. Eysenbach has more than 10 years investment management
experience, specializing in quantitative research, analysis and portfolio
management.

Calvin S. Young serves as Portfolio Manager for the Fund. Mr. Young joined the
Adviser in 1990 as a quantitative analyst. Since 1995 he has been providing
analytical support for the Adviser's quantitative equity products. Mr. Young
has more than 9 years of investment industry experience with a special focus on
small companies.

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 24 years of research and portfolio management experience, primarily
in small company growth stocks. Roy C. McKay, Portfolio Manager, has 30 years of
investment experience, with 21 years specializing in small company growth
stocks.

Scudder Development Fund. Lead Portfolio Manager Roy C. McKay assumed
responsibility for the Fund's day-to-day management when he joined the Adviser
in 1988. Mr. McKay has more than 30 years of investment experience, with over
20 years specializing in small and medium-size company growth stocks. Peter
Chin, who has been with the Adviser since 1973, joined Scudder's small company
group in 1986 and became a Portfolio Manager of the Fund in 1993. Mr. Chin
contributes expertise in manufacturing, service and energy companies. Mr. Chin
has 28 years of investment experience, including over ten years in small and
medium-size company growth stocks.

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. (The exchange
privilege may not be available for certain Scudder funds. For more information,
please call 1-800-225-5163.) Telephone and fax redemptions and exchanges are
subject to termination and their terms are subject to change at any time by the
Fund or the transfer agent. In some cases, the transfer agent or Scudder
Investor Services, Inc. may impose additional conditions on telephone
transactions.

Personal Counsel(SM) -- A Managed Fund Portfolio Program

If you would like to receive direct guidance and management of your overall
mutual fund portfolio to help you pursue your investment goals, you may be
interested in Personal Counsel from Scudder. Personal Counsel, a program of
Scudder Investor Services, Inc., a registered investment adviser and a
subsidiary of Scudder Kemper Investments, Inc., combines the benefits of a
customized portfolio of pure no-load Scudder Funds with ongoing portfolio
monitoring and individualized service, for an annual fee of generally 1% or less
of assets (with a $1,000 minimum). In addition, it draws upon the Adviser'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.

--
25
<PAGE>

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.

- --
26
<PAGE>

- ---------------------------------------
Purchases
- ---------------------------------------

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
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.

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

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

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

o In Person Visit one of our Investor Centers to complete your application with the
help of a Scudder representative. Investor Center locations are listed
under Shareholder benefits.

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Purchasing Minimum additional investment: $100; IRAs $50
additional Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums.
shares See appropriate plan literature.

<S> <C> <C>
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 QuickBuy or By telephone order for more details.

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

- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

--
27
<PAGE>

- ---------------------------------------
Exchanges and redemptions
- ---------------------------------------

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Exchanging Minimum investments: $2,500 to establish a new account;
shares $100 to exchange among existing accounts

<S> <C> <C>
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 - the name of the Fund and the account number you are exchanging from;
to Scudder Small - your name(s) and address as they appear on your account;
Company Value - the dollar amount or number of shares you wish to exchange;
Fund and - the name of the Fund you are exchanging into;
Scudder 21st - your signature(s) as it appears on your account; and
Century Growth - a daytime telephone number.
Fund for
exchanges of Send your instructions
shares held less by regular mail to: or by express, registered, or by fax to:
than one year. 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 - the name of the Fund and account number you are redeeming from;
Company Value - your name(s) and address as they appear on your account;
Fund and - the dollar amount or number of shares you wish to redeem;
Scudder 21st - your signature(s) as it appears on your account; and
Century Growth - a daytime telephone number.
Fund for
redemption of A signature guarantee is required for redemptions over $100,000.
shares held less See Transaction information--Redeeming shares.
than one year.
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>

- --
28
<PAGE>

- ---------------------------------------
Scudder Kemper tax-advantaged
retirement plans
- ---------------------------------------

Scudder Kemper 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 Scudder Roth No-Fee IRAs. Similar to the traditional IRA in many respects,
these retirement plans provide a unique opportunity for qualifying
individuals to accumulate investment earnings tax free. Unlike a
traditional IRA, with a Roth IRA, if you meet the distribution
requirements, you can withdraw your money without paying any taxes on the
earnings. The Scudder Roth 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.

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29
<PAGE>

- --------------------------------------------------------------------------------
Investment products and services
- --------------------------------------------------------------------------------

The Scudder Family of Funds++
- --------------------------------------------------------------------------------

Money Market
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series--
Premium Shares*
Managed Shares*
Scudder Government Money Market Series--Managed Shares*

Tax Free Money Market+
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**

Tax Free+
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited
Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**

U.S. Income
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund

Global Income
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund

Asset Allocation
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio

U.S. Growth and Income
Scudder Balanced Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund

U.S. Growth
Value
Scudder Large Company Value Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund

Growth
Scudder Classic Growth Fund
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund

Global Growth
Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.

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

Education Accounts
Education IRA
UGMA/UTMA

Closed-End Funds#
- --------------------------------------------------------------------------------

The Argentina Fund, Inc.

The Brazil Fund, Inc.

The Korea Fund, Inc.

Montgomery Street Income Securities, Inc.

Scudder Global High Income Fund, Inc.

Scudder New Asia Fund, Inc.

Scudder New Europe Fund, Inc.

Scudder Spain and Portugal Fund, Inc.

For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. ++Funds within categories are listed in order from
expected least risk to most risk. Certain Scudder funds may not be available for
purchase or exchange. +A portion of the income from the tax-free funds may be
subject to federal, state, and local taxes. *A class of shares of the Fund.
**Not available in all states. +++A no-load variable annuity contract provided
by Charter National Life Insurance Company and its affiliate, offered by
Scudder's insurance agencies, 1-800-225-2470. #These funds, advised by Scudder
Kemper Investments, Inc., are traded on the New York Stock Exchange and, in some
cases, on various foreign stock exchanges.

- --
30
<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
Investor Centers. Check for an 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 Investor Centers are services provided
through Scudder Investor Services, Inc., Distributor.

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

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31