Scudder
Value Fund
Annual Report
September 30, 1995
o For investors seeking long-term growth of capital through investment
in undervalued equity securities.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange
shares. This information must be preceded or accompanied by a current
prospectus. Portfolio changes should not be considered recommendations
for action by individual investors.
<PAGE>
SCUDDER VALUE FUND
CONTENTS
2 In Brief
3 Letter from the Fund's President
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
9 Investment Portfolio
14 Financial Statements
17 Financial Highlights
18 Notes to Financial Statements
24 Report of Independent Accountants
25 Tax Information
25 Officers and Trustees
26 Investment Products and Services
27 How to Contact Scudder
IN BRIEF
o Scudder Value Fund provided a 23.62% total return for the 12-month
period ended September 30, 1995, aided by strong performance from many
of its financial, healthcare, and technology holdings.
o Declining interest rates, gains in corporate earnings, and strong
investor demand for equity mutual funds propelled the U.S. stock
market to new highs during the Fund's fiscal year.
o The Fund's net assets nearly doubled during the year, from $35.1
million to $68.1 million, reflecting stock price appreciation and over
3,000 new shareholder accounts.
o The Fund continues to employ a rigorous value-oriented approach to
stock selection, emphasizing below-average price/earnings ratios
combined with positive momentum in earnings revisions.
2
<PAGE>
LETTER FROM THE FUND'S PRESIDENT
Dear Shareholders,
Scudder Value Fund had a great year, with net assets nearly doubling
from $35.1 to $68.1 million. This increase reflected a net cash inflow of $22
million and a strong stock market. Stock prices rallied sharply in 1995 after a
lackluster 1994, propelled by a confluence of positive economic and
market-related factors. Moreover, stock market corrections in this period have
been few and unusually mild. Given this environment, we are pleased with the
solid performance of Scudder Value Fund, which returned 23.62% for the fiscal
year just ended.
After such impressive stock market gains -- and given the late stage of
the economic cycle -- some market correction would be natural. This might be
precipitated by growing investor recognition that a mild slowdown in economic
activity next year, resulting from the lack of corporate pricing power and a
reduction in consumer spending, is likely. With its focus on undervalued
securities, Scudder Value Fund should provide relatively strong returns in such
an environment, because historically the Fund's investments have been less
sensitive to earnings disappointments than stocks with higher multiples. Despite
near-term uncertainties, it is important to keep in mind that the longer-term
outlook for U.S. equities is favorable, characterized by low inflation, low
interest rates, and strong profit growth.
We would also like to take this opportunity to announce that on October
6, 1995, we introduced another value-oriented fund to the Scudder family of
funds: Scudder Small Company Value Fund. The difference between this new fund
and Scudder Value Fund is that its investment focus will be on small companies.
Further, its investment approach will rely heavily on a proprietary quantitative
discipline. For more information about Scudder Small Company Value Fund and
other investment products and services, see page 26. If you have questions about
Scudder Value Fund, please call a Scudder Investor Relations representative at
1-800-225-2470.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Value Fund
3
<PAGE>
Scudder Value Fund
Performance Update as of September 30, 1995
- -----------------------------------------------------------------
Growth of a $10,000 Investment
- -----------------------------------------------------------------
Scudder Value Fund
- ----------------------------------------
Total Return
Period Growth --------------
Ended of Average
9/30/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $12,362 23.62% 23.62%
Life of
Fund* $14,043 40.43% 13.15%
S&P 500 Index
- --------------------------------------
Total Return
Period Growth --------------
Ended of Average
9/30/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $12,975 29.75% 29.75%
Life of
Fund* $14,473 44.73% 14.43%
*The Fund commenced operations on December 31, 1992.
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
Scudder Value Fund
Year Amount
- ----------------------
12/92* $10,000
3/93 $10,933
9/93 $11,150
3/94 $10,830
9/94 $11,360
3/95 $12,070
9/95 $14,043
S&P 500 Index
Year Amount
- ----------------------
12/92* $10,000
3/93 $10,437
9/93 $10,758
3/94 $10,590
9/94 $11,155
3/95 $12,239
9/95 $14,473
The Standard & Poor's (S&P) 500 Index is an unmanaged capitalization-
weighted measure of 500 widely held common stocks listed on the New
York Stock Exchange, American Stock Exchange, and Over-The-Counter
market. Index returns assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees or expenses.
- -----------------------------------------------------------------
Returns and Per Share Information
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
Yearly periods ended September 30
<TABLE>
<S> <C> <C> <C>
1993* 1994 1995
-------------------------
Net Asset Value... $13.38 $13.08 $15.87
Income Dividends.. -- .11 .12
Capital Gains
Distributions..... -- .43 .13
Fund Total
Return (%)........ 11.50 1.88 23.62
Index Total
Return (%)........ 7.56 3.68 29.75
</TABLE>
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results.
Investment return and principal value will fluctuate, so an investor's
shares, when redeemed, may be worth more or less than when purchased.
If the Adviser had not maintained the Fund's expenses, the average annual
total return for the one year and life of Fund periods would have been
lower.
4
<PAGE>
Portfolio Summary as of September 30, 1995
- ---------------------------------------------------------------------------
Diversification
- ---------------------------------------------------------------------------
Equity Securities 100% The Fund's cash position was
==== eliminated in the third quarter of
1995, after months of strong inflows
had built it up to nearly 20%.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Sectors
- --------------------------------------------------------------------------
Financial 21%
Manufacturing 14%
Technology 13% The Fund's holdings in the
Energy 9% financial, technology, and
Communications 7% healthcare sectors contributed
Health 6% greatly to the Fund's strong
Consumer Staples 6% total return.
Consumer Discretionary 5%
Utilities 5%
Other 14%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Ten Largest Equity Holdings
- --------------------------------------------------------------------------
1. Philips NV.
Manufacturer of electrical equipment
2. Sterling Software Inc.
Computer software products
3. Tele Danmark A/S
Telecommunication services
4. Intel Corp.
Semiconductor memory circuits
5. TRW Inc.
Defense electronics, automotive parts and systems
6. Destec Energy Inc.
Non-utility producer of cogeneration and coal gasification power
7. Philip Morris Companies Inc.
Tobacco, food products and brewing
8. Sara Lee Corp.
Processed foods maker
9. Allstate Corp.
Property, liability and life insurance company
10. Acclaim Entertainment Inc.
Developer of video game cartridges
The 36.4% gain in Destec Energy during the year was particularly
gratifying, given its -54.5% return in fiscal 1994.
For more complete details about the Fund's Investment Portfolio,
see page 9.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings
are available upon request.
5
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
Thanks to declining interest rates, rising profits, and strong demand
by mutual fund investors, U.S. stock returns exceeded virtually everyone's
expectations during the 12 months ended September 30, 1995. For the 12-month
period, Scudder Value Fund returned 23.62%, based on a $2.79 increase in net
asset value to $15.87 at the end of September and $0.25 per share in income and
capital gain distributions. This compares with a 29.75% total return for the
unmanaged S&P 500 Index and 25.87% on average for the 550 growth funds tracked
by Lipper Analytical Services.
The average U.S. stock in the Fund was up 30% for the 12-month period.
The difference between this return and the return for the total portfolio is
explained by the Fund's cash position and the underperformance of some foreign
holdings. We expect the impact of neither to be as significant going forward.
For the year ended September 30, U.S. stocks outperformed foreign stocks in
general by one of the largest margins ever. We believe that foreign stocks have
some catching up to do and that the Fund's 18% position in foreign holdings will
likely boost returns in the future. The Fund's cash position, as high as 20% of
the portfolio during the period, reflected the fact that strong inflows doubled
the Fund's size over the course of the fiscal year. Typically, we seek to use
such flows to the Fund's advantage by adding to existing holdings during market
dips. However, there were no significant roll-backs in the market during the
period. The monthly string of advances through September without a meaningful
decline was the longest in some forty years. It is unlikely we will experience a
similar combination -- a doubling of the Fund's assets under management and such
persistently higher markets -- in the near future.
Financial Stocks Provide Largest Gains
As mentioned, the U.S. stocks in the Fund generally performed well, led
by holdings in the financial sector, our most significant weighting. The Fund's
sector emphasis contrasts with that of most growth-oriented funds, whose
superior performance for the year was largely due to heavy exposure to the
spectacularly performing technology sector. Financial companies may lack the
excitement of the latest new software company, but the stock returns of the
financial sector over the last 12 months were exciting -- up 42% on average. The
performance of the Fund's financial stocks (21% of portfolio holdings as of
September 30) supports an underlying tenet of our investment strategy: Strong
returns can be produced by relatively staid companies if their stocks are
sufficiently undervalued.
6
<PAGE>
Included among the better-performing financial stocks were Dean Witter,
Discover and Co. and Student Loan Marketing Association (Sallie Mae). A year
ago, Dean Witter, Discover shares were trading at seven times what the company
was likely to earn in 1995, and Student Loan Marketing was under a cloud
associated with losing market share to a government direct loan program. Dean
Witter, Discover (up 50%) saw continued strength in both of its businesses this
year: credit cards and brokerage. With proposals to limit government gaining
steam in Congress, Sallie Mae shares appreciated 64% over the last year and
still sell at only 12 times 1995's estimate.
Drug stocks were also good performers during the period, and the Fund's
most important pharmaceutical position, Eli Lilly, outperformed the group as a
whole. Investors grew to appreciate the wisdom of the company's strategic
alliances and restructurings as a means to focus on "disease management" versus
merely treating symptoms.
Technology was clearly the strongest-performing market group. Important
contributors to the Fund in this area were Intel and Texas Instruments. Other
outperforming holdings included airlines and utilities. Leading the Fund's
utility holdings was the turnaround in Destec Energy, which was gratifying,
given that it was one of the poorest performers last year. Lagging groups
included the Fund's steel, auto-related, and non-U.S. holdings. Shares of steel
stocks were reduced during the period due to declining earnings expectations. We
believe the Fund's auto-related and foreign holdings still offer excellent
value.
Looking Forward
The Fund's primary selection tool is a rigorous valuation discipline.
Stocks attractively ranked by our valuation model typically have below-average
price/earnings ratios. A secondary criterion is the direction of earnings
estimate revisions. A company must demonstrate that an improvement in earnings
revisions is under way or clearly imminent before its stocks can pass our
"directional" screen.
Financial stocks, especially insurance stocks, continue to enjoy the
best valuations among companies with positive earnings revisions. Despite strong
performance this past year, the financial stocks held in the Fund are still
selling at large P/E discounts to the market and have solid earnings prospects
that are not solely dependent on falling interest rates.
7
<PAGE>
The technology sector is controversial in that while strong upward
earnings revisions are occurring, stock prices reflect the sector's positive
outlook. Our conservative valuation discipline dictates extreme selectivity.
Technology is inherently a volatile group, and emotional selling could very well
surface in the coming months, providing some buying opportunities for the Fund.
For the time being, we are content with holdings such as Intel (at 12 times 1996
earnings) and IBM (at less than 8 times). These multiples appear to reflect more
skepticism than enthusiasm.
Some of the more recent additions to the Fund and their 1996 estimated
earnings multiples are as follows:
P/E (based on est. '96 EPS)
Champion International 5x
Royal Caribbean Cruises 9x
Bergen Brunswig 11x
Allstate 9x
These multiples compare favorably with a P/E of 17x for the S&P 500 Index, based
on our 1996 earnings estimates.
Our outlook for a mild slowdown in economic activity may lead to some
temporary stock market disappointment. However, we believe this Fund's value
approach, which is reflected in a broad list of holdings with average- to
above-average growth prospects and priced at modest relative valuations,
positions the Fund well for such an environment.
Sincerely,
Your Portfolio Management Team
/s/Donald E. Hall /s/William J. Wallace
Donald E. Hall William J. Wallace
Scudder Value Fund: A Team Approach to Investing
Scudder Value Fund is managed by a team of Scudder investment
professionals who each play an important role in the Fund's management process.
Team members work together to develop investment strategies and select
securities for the Fund's portfolio. They are supported by Scudder's large staff
of economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. We believe our
team approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Lead Portfolio Manager Donald E. Hall has had responsibility for Scudder
Value Fund's day-to-day management since its inception in 1992. Don, who joined
Scudder in 1982, has 12 years of experience in the value style of investing.
William J. Wallace, Portfolio Manager, has been a member of Scudder Value Fund's
team since 1992 and has 14 years of investment experience.
8
<PAGE>
<PAGE>
INVESTMENT PORTFOLIO as of September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Principal Market
Portfolio Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
-------------------------------------------------------------------------
0.6% CONVERTIBLE BONDS
-------------------------------------------------------------------------
MEDIA
Cable Television 1,250,000 Rogers Communications Inc., LYON, 5/20/13
(Cost $499,855)........................ 426,563
------------
-------------------------------------------------------------------------
0.5% CONVERTIBLE PREFERRED STOCKS
-------------------------------------------------------------------------
Shares
-------------------------------------------------------------------------
FINANCIAL
Other Financial Companies 12,200 California Federal Bank "A" Non#Cum. 7.75%
(Cost $ 253,627)....................... 295,850
------------
-------------------------------------------------------------------------
98.9% COMMON STOCKS
-------------------------------------------------------------------------
CONSUMER DISCRETIONARY 5.6%
Department & Chain Stores 1.7% 10,000 J.C. Penney Co., Inc. .................. 496,250
35,000 Price/Costco Inc.* ..................... 599,375
------------
1,095,625
------------
Hotels & Casinos 1.7% 9,100 Carnival Corp., Class A ................ 218,400
36,300 Royal Caribbean Cruises Ltd. ........... 880,275
------------
1,098,675
------------
Recreational Products 2.2% 57,600 Acclaim Entertainment Inc.* ............ 1,483,200
------------
CONSUMER STAPLES 5.6%
Alcohol & Tobacco 2.7% 21,500 Philip Morris Companies Inc. ........... 1,795,250
------------
Food & Beverage 2.9% 10,400 ConAgra Inc. ........................... 412,100
50,400 Sara Lee Corp. ......................... 1,499,400
------------
1,911,500
------------
HEALTH 6.0%
Biotechnology 0.2% 4,810 Guidant Corp. .......................... 140,692
------------
Hospital Management 0.8% 30,400 Tenet Healthcare Corp.* ................ 528,200
------------
Medical Supply & Specialty 1.1% 33,900 Bergen Brunswig Corp. "A" .............. 724,612
------------
Pharmaceutical 3.9% 10,000 Astra AB "A" (Free) .................... 358,428
26,700 BioChem Pharma, Inc.* .................. 851,062
12,422 Eli Lilly Co. .......................... 1,116,427
4,900 Schering#Plough Corp. .................. 252,350
------------
2,578,267
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
---
9
<PAGE>
SCUDDER VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Market
Portfolio Shares Value ($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMUNICATIONS 6.9%
Telephone/Communications 48,100 Century Telephone Enterprises ............... 1,461,037
13,600 Sprint Corp. ................................ 476,000
80,600 Tele Danmark A/S (ADR) ...................... 2,085,525
17,500 Telefonos de Mexico S.A. de C.V. "L" (ADR) .. 555,625
-----------
4,578,187
-----------
FINANCIAL 20.5%
Banks 8.3% 6,000 BankAmerica Corp. ........................... 359,250
6,800 Bankers Trust New York Corp. ................ 477,700
12,000 Chemical Banking Corp. ...................... 730,500
7,600 J.P. Morgan & Co., Inc. ..................... 588,050
25,300 Mellon Bank Corp. ........................... 1,129,013
9,200 NBD Bancorp, Inc. ........................... 351,900
22,800 Norwest Corp. ............................... 746,700
27,800 State Street Boston Corp. ................... 1,112,000
-----------
5,495,113
-----------
Insurance 8.9% 26,800 AMBAC Inc. .................................. 1,179,200
42,100 Allstate Corp. .............................. 1,489,287
9,800 EXEL, Ltd. .................................. 569,625
2,300 MBIA Inc. ................................... 162,150
41,200 PartnerRe Holdings Ltd. ..................... 1,019,700
27,400 UNUM Corp. .................................. 1,445,350
-----------
5,865,312
-----------
Other Financial Companies 2.6% 9,400 Federal National Mortgage Association ....... 972,900
14,100 Student Loan Marketing Association .......... 761,400
-----------
1,734,300
-----------
Real Estate 0.7% 13,900 Meditrust SBI (REIT) ........................ 481,288
-----------
MEDIA 0.2%
Cable Television 13,909 Rogers Communications Inc. "B"* ............. 137,129
-----------
SERVICE INDUSTRIES 3.8%
Environmental Services 1.2% 87,600 Laidlaw Inc. Class B ........................ 766,500
-----------
Investment 0.7% 7,900 Dean Witter, Discover & Co. ................. 444,375
-----------
Miscellaneous Consumer
Services 0.4% 6,700 H & R Block Inc. ............................ 254,600
-----------
Printing/Publishing 1.5% 30,700 Deluxe Corp. ................................ 1,016,937
-----------
DURABLES 4.5%
Aerospace 1.6% 3,749 Lockheed Corp. .............................. 251,652
-----------
8,800 United Technologies Corp. ................... 777,700
-----------
1,029,352
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ----
10
<PAGE>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Market
Portfolio Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Automobiles 1.4% 2,000 Chrysler Corp. ............................. 106,000
7,600 Ford Motor Co. ............................. 236,550
12,700 Magna International, Inc. "A" .............. 573,088
-----------
915,638
-----------
Tires 1.5% 42,600 Cooper Tire & Rubber Co. ................... 1,033,050
-----------
MANUFACTURING 13.9%
Chemicals 1.7% 23,100 Sigma#Aldrich Corp. ........................ 1,120,350
-----------
Containers & Paper 1.5% 18,500 Champion International Corp. ............... 996,687
-----------
Diversified Manufacturing 3.4% 27,000 Canadian Pacific Ltd. ...................... 431,936
24,700 TRW Inc. ................................... 1,837,063
-----------
2,268,999
-----------
Electrical Products 4.2% 8,600 Mabuchi Motor Co., Ltd. .................... 507,900
46,800 Philips NV (New York shares) ............... 2,281,500
-----------
2,789,400
-----------
Industrial Specialty 2.6% 1,000 Schindler Holdings AG (PC) ................. 886,870
78,800 Wandel & Goltermann Technologies, Inc.* .... 807,700
-----------
1,694,570
-----------
Specialty Chemical 0.5% 7,900 Betz Laboratories Inc. ..................... 322,912
-----------
TECHNOLOGY 13.3%
Computer Software 3.2% 46,400 Sterling Software Inc.* .................... 2,111,200
-----------
EDP Peripherals 1.3% 71,300 Intergraph Corp.* .......................... 864,513
-----------
Electronic Data Processing 0.6% 4,300 International Business Machines Corp. ...... 405,813
-----------
Office/Plant Automation 2.0% 18,900 Cisco Systems, Inc.* ....................... 1,304,100
-----------
Semiconductors 6.2% 21,800 Atmel Corp.* ............................... 735,750
34,400 Intel Corp. ................................ 2,068,300
16,400 Texas Instruments Inc. ..................... 1,309,950
-----------
4,114,000
-----------
ENERGY 8.7%
Engineering 1.3% 7,400 VA Technologie AG .......................... 852,132
-----------
Oil & Gas Production 0.5% 9,600 Imperial Oil Ltd. .......................... 357,600
-----------
Oil Companies 6.9% 5,300 Amoco Corp. ................................ 339,862
9,900 Exxon Corp. ................................ 715,275
12,900 Mobil Corp. ................................ 1,285,163
23,100 Repsol SA (ADR) ............................ 733,425
10,803 Total SA (ADR) ............................. 325,440
64,400 YPF SA "D" (ADR) ........................... 1,159,200
-----------
4,558,365
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
----
11
<PAGE>
SCUDDER VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Market
Portfolio Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
METALS & MINERALS 1.6%
Steel & Metals 23,500 Allegheny Ludlum Corp. ..................... 478,812
12,200 Nucor Corp. ................................ 545,950
-----------
1,024,762
-----------
CONSTRUCTION 0.4%
Forest Products 11,900 Louisiana#Pacific Corp. .................... 287,088
-----------
TRANSPORTATION 3.3%
Airlines 3.1% 10,700 AMR Corp.* ................................. 771,738
46,100 America West Airlines, Inc.* ............... 714,550
17,500 ValueJet Airlines Inc.* .................... 570,938
-----------
2,057,226
-----------
Marine Transportation 0.2% 5,800 Teekay Shipping Corp.* ..................... 139,200
-----------
UTILITIES 4.6%
Electric Utilities 121,700 Destec Energy Inc.* ........................ 1,825,500
25,200 Public Service Co. of New Mexico* .......... 412,650
31,100 TNP Enterprises Inc. ....................... 552,025
9,200 Unicom Corp. ............................... 278,300
-----------
3,068,475
-----------
TOTAL COMMON STOCKS
(Cost $57,739,574) ........................ 65,445,194
-----------
- -----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO # 100.0%
(Cost $58,493,056) (a) .................... 66,167,607
===========
<FN>
(a) The cost for federal income tax purposes was $58,482,598. At September 30, 1995, net unrealized appreciation
for all securities based on tax cost was $7,685,009. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over tax cost of $8,870,957 and aggregate gross
unrealized depreciation for all securities in which there was an excess of tax cost over market value of
$1,185,948.
* Non-income producing security.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ----
12
<PAGE>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
- ------------------------------------------------------------------------------------------------
At September 30, 1995, outstanding written call options were as follows (Note A):
<CAPTION>
NUMBER OF EXPIRATION STRIKE MARKET
CONTRACTS DATE PRICE VALUE ($)
------------------------------------------------------------
<S> <C> <C> <C> <C>
S&P 500 Index ............. 200 Oct. 95 590 75,000
------
Total outstanding written options (Premiums received $91,897) ............ 75,000
======
</TABLE>
<TABLE>
Transactions in written call options during the year ended September 30, 1995 were:
<CAPTION>
PREMIUMS
NUMBER OF CONTRACTS RECEIVED ($)
-----------------------------------------------
<S> <C> <C>
Outstanding at
September 30, 1994 .................. -- --
Contracts written ................... 1,825 1,178,993
Contracts expired ................... (100) (15,224)
Contracts closed ................... (1,265) (1,030,403)
Contracts exercised ................. (260) (41,469)
-----------------------------------------------
Outstanding at
September 30, 1995 .................. 200 91,897
=== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
----
13
<PAGE>
SCUDDER VALUE FUND
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
---------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
---------------------------------------------------
<TABLE>
SEPTEMBER 30, 1995
------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $58,493,056)
(Note A) ........................................ $ 66,167,607
Cash ................................................ 568
Receivables:
Investments sold ................................ 7,649,738
Dividends and interest .......................... 89,340
Fund shares sold ................................ 66,233
Deferred organization expense (Note A) .............. 24,853
------------
Total assets ................................ 73,998,339
LIABILITIES
Payables:
Investments purchased ........................... $ 109,193
Fund shares redeemed ............................ 55,283
Note payable (Note D) ........................... 5,592,000
Interest payable on note (Note D) .............. 2,718
Accrued management fee (Note C) ................. 31,923
Other accrued expenses (Note C) ................. 57,810
Written options, at market (premiums
received $91,897) (Note A) .................. 75,000
-----------
Total liabilities ........................... 5,923,927
------------
Net assets, at market value ......................... $ 68,074,412
============
NET ASSETS
Net assets consist of:
Undistributed net investment income ............. $ 102,110
Unrealized appreciation on:
Investments ................................. 7,674,551
Options ..................................... 16,897
Accumulated net realized gain ................... 2,557,715
Shares of beneficial interest ................... 42,884
Additional paid#in capital ...................... 57,680,255
------------
Net assets, at market value ......................... $ 68,074,412
============
NET ASSET VALUE, offering and redemption price per
share ($68,074,412 / 4,288,446 outstanding
shares of beneficial interest, $.01 par value,
unlimited number of shares authorized) ......... $ 15.87
=======
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ----
14
<PAGE>
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
- --------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------
<TABLE>
YEAR ENDED SEPTEMBER 30, 1995
- --------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income:
Dividends ....................................... $ 1,010,746
Interest ........................................ 411,465
-----------
1,422,211
Expenses:
Management fee (Note C) ......................... $ 257,942
Services to shareholders (Note C) ............... 152,097
Custodian and accounting fees (Note C)........... 56,129
Trustees' fees (Note C) ......................... 43,076
Reports to shareholders ......................... 35,499
Registration .................................... 22,984
Auditing ........................................ 26,258
Legal ........................................... 12,243
Amortization of organization expense (Note A) ... 8,932
Interest expense (Note D) ....................... 2,718
Other ........................................... 13,064 630,942
-----------------------
Net investment income ........................... 791,269
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT TRANSACTIONS
Net realized gain (loss) from:
Investments ................................. 3,810,528
Options ..................................... (1,381,331)
Futures ..................................... 338,400 2,767,597
----------
Net unrealized appreciation during the period on:
Investments ................................. 7,347,398
Options ..................................... 16,897 7,364,295
-----------------------
Net gain on investment transactions ............. 10,131,892
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................ $ 10,923,161
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
----
15
<PAGE>
SCUDDER VALUE FUND
- -------------------------------------------------------------------------------
----------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
----------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
-----------------------------
INCREASE (DECREASE) IN NET ASSETS 1995 1994
-----------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .............................. $ 791,269 $ 384,856
Net realized gain from investment
transactions ................................... 2,767,597 486,834
Net unrealized appreciation (depreciation) on
investment transactions during the period ...... 7,364,295 (213,830)
------------ ------------
Net increase in net assets resulting from
operations ..................................... 10,923,161 657,860
------------ ------------
Distributions to shareholders from:
Net investment income ($.12 and $.11
per share, respectively) ....................... (309,372) (271,039)
------------ ------------
Net realized gains ($.13 and $.43
per share, respectively) ....................... (336,274) (1,059,888)
------------ ------------
Fund share transactions:
Proceeds from shares sold .......................... 48,559,462 17,585,449
Net asset value of shares issued to
shareholders in reinvestment of distributions .. 599,884 1,279,362
Cost of shares redeemed ............................ (26,461,130) (11,604,314)
------------ ------------
Net increase in net assets from Fund share
transactions ................................... 22,698,216 7,260,497
INCREASE IN NET ASSETS ............................. 32,975,731 6,587,430
Net assets at beginning of period .................. 35,098,681 28,511,251
NET ASSETS AT END OF PERIOD (including
undistributed net investment income of
$102,110 and $314,180, respectively) ........... $ 68,074,412 $ 35,098,681
============ ============
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period .......... 2,683,720 2,131,497
------------ ------------
Shares sold ........................................ 3,327,977 1,354,224
Shares issued to shareholders in
reinvestment of distributions .................. 47,124 99,950
Shares redeemed .................................... (1,770,375) (901,951)
------------ ------------
Net increase in Fund shares ........................ 1,604,726 552,223
------------ ------------
Shares outstanding at end of period ................ 4,288,446 2,683,720
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ----
16
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD AND OTHER PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL
STATEMENTS.
<TABLE>
<CAPTION>
FOR THE PERIOD
DECEMBER 31, 1992
YEARS ENDED SEPTEMBER 30, (COMMENCEMENT
---------------------------- OF OPERATIONS) TO
1995 1994 SEPTEMBER 30, 1993
---------------------------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of period ................................... $13.08 $13.38 $12.00
------ ------ ------
Income from investment operations:
Net investment income (a) .......................................... .18 .13 .10
Net realized and unrealized gain on investments .................... 2.86 .11 1.28
------ ------ ------
Total from investment operations ....................................... 3.04 .24 1.38
------ ------ ------
Less distributions from:
Net investment income .............................................. (.12) (.11) --
Net realized gains on investment transactions ...................... (.13) (.43) --
------ ------ ------
Total distributions .................................................... (.25) (.54) --
------ ------ ------
Net asset value, end of period ......................................... $15.87 $13.08 $13.38
====== ====== ======
TOTAL RETURN (%) ....................................................... 23.62 1.88 11.50**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions) ................................. 68 35 29
Ratio of operating expenses, net to average daily net assets (%) (a) ... 1.25 1.25 1.25*
Ratio of net investment income to average daily net assets (%) ......... 1.57 1.16 1.56*
Portfolio turnover rate (%) ............................................ 98.2 74.6 60.8*
(a) Reflects a per share amount of management fee and
other fees not imposed .......................................... $ .02 $ .04 $ .06
Operating expense ratio including expenses
reimbursed, management fee and other expenses
not imposed (%) ................................................. 1.44 1.61 2.16*
<FN>
* Annualized
** Not annualized
</FN>
</TABLE>
----
17
<PAGE>
SCUDDER VALUE FUND NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
Scudder Value Fund (the "Fund") is a diversified series of Scudder
Equity Trust (the "Trust"). The Trust is organized as a
Massachusetts business trust and is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment
company. The policies described below are followed consistently by the
Fund in the preparation of its financial statements in conformity with
generally accepted accounting principles.
SECURITY VALUATION. Portfolio securities which are traded on U.S. or
foreign stock exchanges are valued at the most recent sale price
reported on the exchange on which the security is traded most
extensively. If no sale occurred, the security is then valued at the
calculated mean between the most recent bid and asked quotations. If
there are no such bid and asked quotations, the most recent bid
quotation is used. Securities quoted on the National Association of
Securities Dealers Automatic Quotation ("NASDAQ") System, for which
there have been sales, are valued at the most recent sale price
reported on such system. If there are no such sales, the value is the
high or "inside" bid quotation. Securities which are not quoted on the
NASDAQ System but are traded in another over-the-counter market are
valued at the most recent sale price on such market. If no sale
occurred, the security is then valued at the calculated mean between
the most recent bid and asked quotations. If there are no such bid and
asked quotations, the most recent bid quotation shall be used.
Portfolio debt securities with remaining maturities greater than sixty
days are valued by pricing agents approved by the officers of the Fund,
which quotations reflect broker/dealer-supplied valuations and
electronic data processing techniques. If the pricing agents are
unable to provide such quotations, the most recent bid quotation
supplied by a bona fide market maker shall be used. Short-term
investments having a maturity of sixty days or less are valued at
amortized cost.
All other securities are valued at their fair value as determined in
good faith by the Valuation Committee of the Board of Trustees.
- ----
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
OPTIONS. An option contract is a contract in which the writer of the
option grants the buyer of the option the right to purchase from (call
option), or sell to (put option), the writer a designated instrument at
a specified price within a specified period of time. Certain options,
including options on indices, will require cash settlement by the Fund
if the option is exercised. During the period, the Fund wrote call
options on financial instruments as a hedge against potential adverse
price movements in the value of portfolio assets.
If the Fund writes an option and the option expires unexercised, the
Fund will realize income, in the form of a capital gain, to the
extent of the amount received for the option (the "premium"). If the
Fund elects to close out the option it would recognize a gain or loss
based on the difference between the cost of closing the option and the
initial premium received. If the Fund purchased an option and allows
the option to expire it would realize a loss to the extent of the
premium paid. If the Fund elects to close out the option it would
recognize a gain or loss equal to the difference between the cost of
acquiring the option and the amount realized upon the sale of the
option.
The gain or loss recognized by the Fund upon the exercise of a written
call or purchased put option is adjusted for the amount of option
premium. If a written put or purchased call option is exercised the
Fund's cost basis of the acquired security or currency would be the
exercise price adjusted for the amount of the option premium.
The liability representing the Fund's obligation under an exchange
traded written option or investment in a purchased option is valued at
the last sale price or, in the absence of a sale, the mean between the
closing bid and asked price or at the most recent asked price (bid for
purchased options) if no bid and asked price are available.
Over-the-counter written or purchased options are valued using dealer
supplied quotations.
When the Fund writes a covered call option, the Fund foregoes, in
exchange for the premium, the opportunity to profit during the
option period from an increase in the market value of the underlying
security or currency above the exercise price. When the Fund writes a
put option it accepts the risk of a decline in the market value of the
underlying security or currency below the exercise price.
Over-the-counter options have the risk of the potential inability of
counterparties to meet the terms of their contracts. The Fund's maximum
exposure to purchased options is limited to the premium initially paid.
In addition, certain risks may arise upon entering into
----
19
<PAGE>
SCUDDER VALUE FUND
- -------------------------------------------------------------------------------
option contracts including the risk that an illiquid secondary market
will limit the Fund's ability to close out an option contract prior
to the expiration date and, that a change in the value of the option
contract may not correlate exactly with changes in the value of the
securities or currencies hedged.
FUTURES CONTRACTS. A futures contract is an agreement between a buyer
or seller and an established futures exchange or its clearinghouse in
which the buyer or seller agrees to take or make a delivery of a
specific amount of an item at a specified price on a specific date
(settlement date). During the period, the Fund purchased securities
index futures as a temporary substitute for purchasing selected
investments.
Upon entering into a futures contract, the Fund is required to deposit
with a financial intermediary an amount ("initial margin") equal to a
certain percentage of the face value indicated in the futures contract.
Subsequent payments ("variation margin") are made or received by the
Fund each day, dependent on the daily fluctuations in the value of the
underlying security, and are recorded for financial reporting purposes
as unrealized gains or losses by the Fund. When entering into a closing
transaction, the Fund will realize a gain or loss equal to the
difference between the value of the futures contract to sell and the
futures contract to buy. Futures contracts are valued at the most
recent settlement price.
Certain risks may arise upon entering into futures contracts including
the risk that an illiquid secondary market will limit the Fund's
ability to close out a futures contract prior to the settlement date
and that a change in the value of a futures contract may not correlate
exactly with changes in the value of the securities or currencies
hedged. When utilizing futures contracts to hedge, the Fund gives up
the opportunity to profit from favorable price movements in the hedged
positions during the term of the contract.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements
with certain banks and broker/dealers whereby the Fund, through its
custodian, receives delivery of the underlying securities, the amount
of which at the time of purchase and each subsequent business day is
required to be maintained at such a level that the market value,
depending on the maturity of the repurchase agreement and the
underlying collateral, is equal to at least 100.5% of the resale price.
- ----
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
FEDERAL INCOME TAXES. The Fund's policy is to comply with the
requirements of the Internal Revenue Code which are applicable to
regulated investment companies and to distribute all of its taxable
income to its shareholders. Accordingly, the Fund paid no federal
income taxes and no federal income tax provision was required.
In addition, from November 1, 1994 through September 30, 1995, the Fund
incurred approximately $136,302 of net long-term capital losses which
the Fund intends to elect to defer and treat as arising in the fiscal
year ended September 30, 1996.
DISTRIBUTION OF INCOME AND GAINS. Distributions of net investment
income are made annually. During any particular year net realized
gains from investment transactions, in excess of available capital loss
carryforwards, would be taxable to the Fund if not distributed and,
therefore, will be distributed to shareholders annually. An additional
distribution may be made to the extent necessary to avoid the payment
of a four percent federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax
regulations which may differ from generally accepted accounting
principles. The differences primarily relate to deferral of certain
losses for tax purposes. As a result, net investment income (loss) and
net realized gain (loss) on investment transactions for a reporting
period may differ significantly from distributions during such period.
Accordingly, the Fund may periodically make reclassifications among
certain of its capital accounts without impacting the net asset value
of the Fund.
The Fund uses the identified cost method for determining realized gain
or loss on investments for both financial and federal income tax
reporting purposes.
ORGANIZATION COSTS. Costs incurred by the Fund in connection with its
organization and initial registration of shares have been deferred and
are being amortized on a straight-line basis over a five-year period.
Other. Investment security transactions are accounted for on a
trade-date basis. Dividend income and distributions to shareholders
are recorded on the ex-dividend date. Interest income is recorded on an
accrual basis. Original issue discounts are accreted for both tax and
financial reporting purposes.
----
21
<PAGE>
SCUDDER VALUE FUND
- --------------------------------------------------------------------------------
B. PURCHASES AND SALES OF SECURITIES
- --------------------------------------------------------------------------------
During the year ended September 30, 1995, purchases and sales of
investment securities (excluding short-term investments) aggregated
$65,934,349 and $43,629,606, respectively.
The aggregate face value of futures contracts opened and closed during
the year ended September 30, 1995 was $14,768,600.
C. RELATED PARTIES
- --------------------------------------------------------------------------------
Under the Fund's Investment Management Agreement (the "Agreement") with
Scudder, Stevens & Clark, Inc. (the "Adviser"), the Fund pays the
Adviser a fee equal to an annual rate of 0.70% of the Fund's average
daily net assets, computed and accrued daily and payable monthly. As
manager of the assets of the Fund, the Adviser directs the investments
of the Fund in accordance with its investment objectives, policies, and
restrictions. The Adviser determines the securities, instruments, and
other contracts relating to investments to be purchased, sold or
entered into by the Fund. In addition to portfolio management services,
the Adviser provides certain administrative services in accordance with
the Agreement. The Agreement provides that if the Fund's expenses,
exclusive of taxes, interest, and extraordinary expenses, exceed
specified limits, such excess, up to the amount of the management fee,
will be paid by the Adviser. In addition, the Adviser has agreed not
to impose all or a portion of its management fee until January 31, 1996
in order to maintain the annualized expenses of the Fund at not more
than 1.25% of average daily net assets. For the year ended September
30, 1995, the Adviser did not impose a portion of its management fee
amounting to $95,355, and the amount imposed amounted to $257,942.
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of the
Adviser, is the transfer, dividend paying and shareholder service agent
for the Fund. For the year ended September 30, 1995, the amount charged
to the Fund by SSC aggregated $125,734, of which $14,964 is unpaid at
September 30, 1995.
Effective October 24, 1994, Scudder Fund Accounting Corporation
("SFAC"), a wholly-owned subsidiary of the Adviser, assumed
responsibility for determining the daily net asset value per share and
maintaining the portfolio and general accounting records of the Fund.
For the year ended September 30, 1995, the amount charged to the
- ----
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Fund by SFAC aggregated $35,363, of which $6,250 is unpaid at September
30, 1995.
The Fund pays each of its Trustees not affiliated with the Adviser
$4,000 annually, plus specified amounts for attended board and
committee meetings. For the year ended September 30, 1995,
Trustees' fees aggregated $43,076.
D. SHORT-TERM DEBT
- ------------------------------------------------------------------------
During the year ended September 30, 1995, the Fund borrowed an amount
from a bank at the existing prime rate. The arrangement with the
bank allows the Fund to borrow a maximum amount based on the Fund's net
asset value. Borrowings outstanding at the end of the period amounted
to $5,592,000.
During the year ended September 30, 1995, the weighted average
outstanding daily balance of bank loans (based on the number of
days the loans were outstanding) was $5,592,000 with a weighted average
interest rate of 8.75%. Interest expense for the year ended September
30, 1995 was $2,718 (less than $.01 per share).
----
23
<PAGE>
SCUDDER VALUE FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE TRUSTEES OF SCUDDER EQUITY TRUST AND THE SHAREHOLDERS OF SCUDDER
VALUE FUND:
We have audited the accompanying statement of assets and liabilities of
Scudder Value Fund, including the investment portfolio, as of September
30, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each
of the two years in the period then ended and for the period December
31, 1992 (commencement of operations) to September 30, 1993. These
financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of September 30, 1995 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Scudder Value Fund as of September 30, 1995, the
results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the
financial highlights for each of the two years in the period then ended
and for the period December 31, 1992 (commencement of operations) to
September 30, 1993, in conformity with generally accepted accounting
principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
November 3, 1995
- ----
24
<PAGE>
TAX INFORMATION
Pursuant to section 854 of the Internal Revenue Code, the Fund designates
$780,043 as dividends eligible for the dividends received deduction for
corporations for the year ended September 30, 1995.
OFFICERS AND TRUSTESS
Daniel Pierce*
President and Trustee
Paul Bancroft III
Trustee; Venture Capitalist and Consultant
Thomas J. Devine
Trustee; Consultant
David S. Lee*
Vice President and Trustee
Douglas M. Loudon*
Vice President and Trustee
Dr. Wilson Nolen
Trustee; Consultant
Juris Padegs*
Vice President and Trustee
Dr. Gordon Shillinglaw
Trustee; Professor Emeritus of Accounting, Columbia University Graduate
School of Business
Robert G. Stone, Jr.
Trustee; Chairman of the Board and Director, Kirby Corporation
Robert W. Lear
Honorary Trustee; Executive-in-Residence, Visiting Professor, Columbia
University Graduate School of Business
Donald E. Hall*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Kathleen T. Millard*
Vice President
Thomas F. McDonough*
Vice President, Secretary and Assistant Treasurer
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Kathryn L. Quirk*
Vice President and Assistant Secretary
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
25
<PAGE>
INVESTMENT PRODUTS AND SERVICES
<TABLE>
<CAPTION>
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<C> <C>
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder GNMA Fund
Tax Free Money Market+ Scudder Income Fund
Scudder Tax Free Money Fund Scudder International Bond Fund
Scudder California Tax Free Money Fund* Scudder Short Term Bond Fund
Scudder New York Tax Free Money Fund* Scudder Short Term Global Income Fund
Tax Free+ Scudder Zero Coupon 2000 Fund
Scudder California Tax Free Fund* Growth
Scudder High Yield Tax Free Fund Scudder Capital Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Managed Municipal Bonds Scudder Global Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Global Small Company Fund
Scudder Massachusetts Tax Free Fund* Scudder Gold Fund
Scudder Medium Term Tax Free Fund Scudder Greater Europe Growth Fund
Scudder New York Tax Free Fund* Scudder International Fund
Scudder Ohio Tax Free Fund* Scudder Latin America Fund
Scudder Pennsylvania Tax Free Fund* Scudder Pacific Opportunities Fund
Growth and Income Scudder Quality Growth Fund
Scudder Balanced Fund Scudder Small Company Value Fund
Scudder Growth and Income Fund Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
-----------------------------------------------------------------------------------------------------------------
IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
-----------------------------------------------------------------------------------------------------------------
The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
-----------------------------------------------------------------------------------------------------------------
Scudder Institutional Fund, Inc. Scudder Treasurers Trust(TM)++
Scudder 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. +A portion of the income from the
tax-free funds may be subject to federal, state, and local taxes. *Not
available in all states. +++A no-load variable annuity contract provided by
Charter National Life Insurance Company and its affiliate, offered by
Scudder's insurance agencies, 1-800-225-2470. #These funds, advised by
Scudder, Stevens & Clark, Inc. are traded on various stock exchanges. ++For
information on Scudder Treasurers Trust,(TM) an institutional cash
management service that utilizes certain portfolios of Scudder Fund, Inc.
($100,000 minimum), call 1-800-541-7703.
26
<PAGE>
HOW TO CONTACT SCUDDER
Account Service and Information
-------------------------------------------------------------------------------------------------------------
For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For personalized information about your
Scudder accounts; exchanges and
redemptions; or information on any
Scudder fund SCUDDER AUTOMATED
INFORMATION LINE (SAIL) 1-800-343-2890
Investment Information
-------------------------------------------------------------------------------------------------------------
To receive information about the
Scudder funds, for additional
applications and prospectuses, or for
investment questions SCUDDER INVESTOR
RELATIONS 1-800-225-2470
For establishing 401(k) and 403(b) plans
SCUDDER DEFINED CONTRIBUTION SERVICES
1-800-323-6105
Please address all correspondence to
-------------------------------------------------------------------------------------------------------------
THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Or stop by a Scudder Funds Center
-------------------------------------------------------------------------------------------------------------
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they can
be found in the following cities:
Boca Raton New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
-------------------------------------------------------------------------------------------------------------
For information on Scudder For information on Scudder
Treasurers Trust,(TM) an Institutional Funds,* funds
institutional cash management designed to meet the broad
service for corporations, investment management and
non-profit organizations and service needs of banks and
trusts that uses certain portfolios other institutions, call
of Scudder Fund, Inc.* ($100,000 1-800-854-8525.
minimum), call 1-800-541-7703.
-------------------------------------------------------------------------------------------------------------
</TABLE>
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
* Contact Scudder Investor Services, Inc., Distributor, to receive a
prospectus with more complete information, including management fees and
expenses. Please read it carefully before you invest or send money.
27
<PAGE>
Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark,
Scudder, Stevens & Clark was the first independent investment counsel firm in
the United States. Since its birth, Scudder's pioneering spirit and commitment
to professional long-term investment management have helped shape the investment
industry. In 1928, we introduced the nation's first no-load mutual fund. Today
we offer 37 pure no load(TM) funds, including the first international mutual
fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
