Scudder
Large Company
Value Fund
Annual Report
September 30, 1997
Pure No-Load(TM) Funds
A fund which seeks to maximize long-term capital appreciation through a
value-driven investment program.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER [logo]
<PAGE>
In Brief
o For the trailing twelve-month period ended September 30, 1997, Scudder Large
Company Value Fund returned 43.06%, exceeding the 42.31% return of the unmanaged
Russell l000 Value Index and the 40.46% return of the unmanaged S&P 500 Index.
The Fund's performance earned it a place among the top 11% of 325 large value
funds, according to Morningstar.
o Value stocks outperformed growth stocks over the twelve months, as
expectations concerning the sustainability of earnings at some large
multinational growth companies have recently moderated.
o Large company stocks delivered strong performance for the twelve months, as
healthy corporate earnings, relatively low interest rates, and benign inflation
provided a favorable environment for the Fund's investments.
Table of Contents
3 Letter from the Fund's President
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
9 Glossary of Investment Terms
10 Investment Portfolio
15 Financial Statements
18 Financial Highlights
19 Notes to Financial Statements
22 Report of Independent Accountants
23 Tax Information
24 Officers and Trustees
25 Investment Products and Services
26 Scudder Solutions
2 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Letter from the Fund's President
Dear Shareholders,
We are pleased to present the annual report for Scudder Large Company Value
Fund, formerly Scudder Capital Growth Fund, for the twelve-month period ended
September 30, 1997.
The Fund's disciplined approach continued to reward shareholders, despite
an increased level of market volatility towards the end of the period. After the
close of the fiscal period, volatility accelerated, as the ripple effects from
the currency crisis in Southeast Asia were felt across the globe. For the U.S.
stock market, which had been viewed by some as amply priced, these events helped
to trigger a 554-point decline in the Dow Jones Industrial Average on October
27. While the Dow recovered, rising more than 330 points the next day, these
events serve as reminders to investors of the truly global nature of the
investment markets and the price volatility which can occur.
The good news, we believe, is that U.S. businesses and the economy are
still healthy. In this context, volatility provides many opportunities. In this
environment, we believe a sound approach to building an investment portfolio
designed to weather a range of market conditions is based on careful
diversification with exposure to small-cap, foreign, emerging market, and fixed
income securities in addition to large-cap U.S. stocks. Scudder Large Company
Value Fund can serve as an important core holding in this type of diversified
portfolio, which, when combined with the habit of investing regularly and a
long-term perspective, can help many investors meet their investing goals.
For those of you who are interested in new Scudder products, we recently
introduced Scudder International Growth and Income Fund, which pursues a
yield-oriented approach to investing in international equities. The Fund seeks
to provide long-term growth of capital plus current income. Investors who desire
international exposure but wish to take a more conservative approach may
appreciate the Fund's emphasis on dividend paying stocks of established
companies listed on foreign exchanges. For further information on this new fund,
please turn to page 27.
Thank you for your investment in Scudder Large Company Value Fund. If you
have any questions about your Fund, please call Scudder Investor Relations at
1-800-225-2470, or visit our Internet Web site at http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Large Company Value Fund
3 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
PERFORMANCE UPDATE as of September 30, 1997
- ----------------------------------------------------------------
Fund Index Comparisons
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
9/30/97 $10,000 Cumulative Annual
- --------------------------------------------
Scudder Capital Growth Fund
- --------------------------------------------
1 Year $ 14,306 43.06% 43.06%
5 year $ 24,831 148.31% 19.95%
10 Year $ 37,339 273.39% 14.08%
- ---------------------------------------------
S&P 500 Index
- ---------------------------------------------
1 Year $ 14,046 40.46% 40.46%
5 Year $ 25,692 156.92% 20.76%
10 Year $ 39,587 295.87% 14.74%
- ---------------------------------------------
- -----------------------------------------------------------------
Growth of a $10,000 Investment
- -----------------------------------------------------------------
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
SCUDDER LARGE COMPANY VALUE FUND
Year Amount
- ----------------------
87 $10,000
88 $ 9,439
89 $13,597
90 $ 9,762
91 $14,238
92 $15,037
93 $19,373
94 $18,459
95 $22,512
96 $26,101
97 $37,339
S&P 500 INDEX
Year Amount
- ----------------------
87 $10,000
88 $ 8,763
89 $11,653
90 $10,577
91 $13,873
92 $15,408
93 $17,411
94 $18,053
95 $23,423
96 $28,183
97 $39,587
Yearly periods ended September 30
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> <C> <C> <C> <C> <C> <C> <C>
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
------------------------------------------------------------------------------------------------
NET ASSET VALUE... $ 16.10 $ 22.30 $ 14.77 $ 19.30 $ 19.12 $ 23.06 $ 19.54 $ 22.92 $ 22.64 $ 28.98
INCOME DIVIDENDS.. $ .20 $ .07 $ .16 $ .37 $ .22 $ .10 $ - $ - $ .08 $ .16
CAPITAL GAINS
DISTRIBUTIONS..... $ 2.38 $ .55 $ 1.45 $ 1.35 $ .98 $ 1.25 $ 2.62 $ .73 $ 3.50 $ 2.48
FUND TOTAL
RETURN (%)........ -5.61 44.05 -28.20 45.85 5.61 28.83 -4.72 21.96 15.94 43.06
INDEX TOTAL
RETURN (%)........ -12.39 32.95 -9.24 31.09 11.04 12.97 3.68 29.75 20.34 40.46
</TABLE>
On February 1, 1997, the Fund adopted its current name. Prior to that date,
the Fund was known as the Scudder Capital Growth Fund. 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.
4 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
PORTFOLIO SUMMARY as of September 30, 1997
- ---------------------------------------------------------------------------
Diversification
- ---------------------------------------------------------------------------
Equity Securities 98%
Cash Equivalents 2%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund pursues a value-driven
investment program that includes
investing nearly 100% in equity
securities of large companies.
- --------------------------------------------------------------------------
Sectors
(Excludes 2% Cash Equivalents)
- --------------------------------------------------------------------------
Financial 26%
Energy 10%
Consumer Staples 10%
Technology 8%
Manufacturing 7%
Health 6%
Consumer Discretionary 6%
Communications 5%
Durables 5%
Other 17%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund's individual selection
approach resulted in significant
emphasis in the financial and
consumer staples, and energy sectors.
- --------------------------------------------------------------------------
Ten Largest Equity Holdings
(22% of Portfolio)
- --------------------------------------------------------------------------
1. INTERNATIONAL BUSINESS MACHINES CORP.
Principal manufacturer and servicer of business
and computing machines
2. BELL ATLANTIC CORP.
Telecommunication services
3. CHASE MANHATTAN CORP.
Commercial banking
4. EXXON CORP.
International oil & gas company
5. WHIRLPOOL CORP.
Manufacturer of major household appliances
6. TRAVELERS GROUPS, INC.
Provider of diversified financial services
7. BANKAMERICA CORP.
Commercial banking in California
8. PHILIP MORRIS COMPANIES INC.
Tobacco, food products and brewing
9. GOODYEAR TIRE AND RUBBER CO.
Maker of tires & rubber products
10. WEYERHAEUSER CO.
Diversified forest products company
The best returns came from a diverse
group of individual names, not from
emphasizing specific industry sectors.
- -----------------------------------------------------------------------------
For more complete details about the Fund's investment portfolio,
see page 10. A monthly Investment Portfolio Summary and quarterly Portfolio
Holdings are available upon request.
5 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Portfolio Management Discussion
We asked Kathleen T. Millard and Lois Friedman Roman, portfolio managers of
Scudder Large Company Value Fund, to discuss the market environment and their
current investment strategy for the Fund.
Q: How did the Fund perform for the trailing twelve-month period ended September
30, 1997?
A: The Fund provided outstanding returns, reflecting the strong performance of
value stocks and our disciplined approach to seeking superior risk-adjusted
returns. For the period, the Fund returned 43.06%, exceeding the 42.31% return
of the unmanaged Russell 1000 Value Index and the 40.46% return of the unmanaged
S&P 500 Index. In addition, the Fund ranked in the top 11% of 325 large value
funds, surpassing the category's 35.79% average return according to Morningstar.
Q: How would you characterize the market over this period?
A: Overall, it has been an ideal environment for stocks, despite several ups and
downs. Growth stocks have done well until recently, but value stocks performed
better during the third quarter of 1997. Large-caps outperformed small-caps,
although small-caps also had better performance in the third quarter.
Q: It sounds as though something changed during the third quarter.
A: We think investors began to realize how extended prices were in some segments
of the market, and the volatility we've seen over the last few months supports
this. Valuations and earnings have been way above normal. Returning to more
typical conditions in corporate earnings performance or in stock prices may
require a period of increased price volatility. This is why risk control is part
of our decision-making process at all times.
Q: Where do you invest in a market like this?
A: A good question. This is a difficult market in which to invest, unless you
have a regimented investment discipline, such as the one we use in managing the
Fund. Our philosophy is to pursue a disciplined approach to seeking long-term
capital appreciation through a value-driven investment program. We utilize a
quantitative model as well as the fundamental input from our seasoned staff of
research analysts. Our focus is on individual stock selection, based principally
on three criteria: attractive relative valuations; fundamental research; and
portfolio risk control considerations.
Q: How do you use this "discipline" to select stocks for the portfolio?
A: We begin with a review of our universe of large company stocks -- primarily
stocks in the unmanaged Russell 1000 Index. This broad base serves as our
hunting ground. Then we rank stocks based on relative value and the companies'
long-term earnings outlooks. The list is divided into categories from least
expensive to most expensive. The most undervalued stocks -- our "buy" candidates
- -- fall into the top 40% of our ranking; the most expensive stocks -- our "sell"
candidates -- fall into the bottom 20% of our ranking.
Q: How do Scudder's analysts fit into the selection process?
A: Our analysts evaluate prospective portfolio holdings by digging into the
financial statements of each company to assess earnings prospects, and also
evaluate the corporate management and strategy, among other factors. By
6 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
incorporating the input of our research analysts, we attempt to anticipate
changes in the fundamentals of individual companies and the industries in which
they compete.
Q: Risk control is an important component of your investment discipline. How do
you control it?
A: Stocks by definition are volatile, but undervalued (`value') stocks typically
have lower risk characteristics than the average stock contained in the
broad-based S&P 500 Index. By seeking stocks with attractive valuations, the
Fund has tended to have lower volatility than the S&P 500. For example, during
the twelve-month period, the Fund outperformed the broad market on average on
over 75% of the down days. We think the value of this approach can be
particularly useful during periods of increased volatility.
Q: What worked well during the period?
A: The Fund's significant exposure to financial stocks, such as Travelers, which
was up 87% over the twelve months, was an important contributor to performance.
However, the portfolio had many other big winners, and they were a diverse
group, crossing several different industries: Bergen Brunswig, (up 62%), IBM,
(up 72%), Whirlpool (up 35%), Browning Ferris (up 56%), Eaton (up 57%), National
Semiconductor (up 104%), and Consolidated Freight (up 114%), to name a few.
Q: Did you add any new names to the portfolio?
A: Yes, recently we have been adding to our holdings of utility stocks. The
important thing to remember about the utility sector is that while all other
7 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
industry sectors moved up with the bull market, utility stocks have basically
gone nowhere. There are a number of perceived negatives, including flat earnings
and fears concerning the impact of deregulation. Until recently there has been a
big performance disparity between utility stocks and the market. In addition,
valuations in this sector are near all-time lows. Given these factors, we have
made selected, incremental additions in the utility area.
Q: What is your outlook?
A: First, I would like to stress that our model is not based on an outlook for
the markets, but on our value-oriented stock selection using quantitative
disciplines and proprietary fundamental research. We believe this approach
should provide both upside potential and downside protection in varying market
environments. That said, aggregate market price levels reached historical highs
during the period, but we believe that there are always relatively attractive
valuation opportunities to unearth. For investors who are seeking long-term
growth of capital from undervalued securities, we believe the Fund will continue
to provide rewarding returns.
Scudder Large Company
Value Fund:
A Team Approach to Investing
Scudder Large Company 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 Kathleen T. Millard assumed responsibility for the
Fund's day-to-day management in 1995. Ms. Millard, who joined Scudder in 1991,
has been involved in the investment industry since 1983 and has worked as a
portfolio manager since 1986. Lois Friedman Roman, Portfolio Manager, joined
the Fund in 1995 and Scudder in 1994 and has ten years of experience as an
equity analyst.
8 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Glossary of Investment Terms
FUNDAMENTAL RESEARCH Analysis of companies based on
the projected impact of management,
products, sales, and earnings on balance
sheets and income statements. Distinct
from technical analysis, which evaluates
the attractiveness of a stock based on
historical price and trading volume
movements, rather than the financial
results of the underlying company.
GROWTH STOCK Stock of a company that has
displayed above average earnings growth
and is expected to continue to increase
profits rapidly going forward. Stocks of
such companies usually trade at a higher
price relative to earnings and exhibit
greater price volatility.
LIQUIDITY A stock that is liquid has enough shares
outstanding and a substantial enough
market capitalization to allow large
purchases and sales to occur without
causing a significant change in its
market price.
MARKET CAPITALIZATION The value of a company's
outstanding shares of common stock,
determined by the number of shares
outstanding multiplied by the share price
(Shares x Price = Market Capitalization).
The universe of publicly traded companies
is frequently divided into large-, mid-,
and small-capitalizations. In general,
"large-cap" stocks tend to be more liquid
than "small-cap" stocks.
OVER/UNDER WEIGHTING Refers to the allocation of
assets -- usually by sector, industry, or
country -- within a portfolio relative to
a benchmark index, (i.e. the Russell 1000
Value Index) or an investment universe.
PRICE-EARNINGS RATIO (P-E) A widely used gauge of a stock's
(also"earnings multiple") valuation that indicates what investors
are paying fora company's earnings on a
per share basis. Typically based on a
company's projected earnings for the next
12 months, a higher "earnings multiple"
indicates a higher expected growth rate
and the potential for greater price
fluctuations.
VALUE STOCK A company whose stock price does
not fully reflect its intrinsic value, as
indicated by price-earnings ratio,
price-book value ratio, dividend yield,
or some other valuation measure, relative
to its industry or the market overall.
Value stocks tend to display less price
volatility and may carry higher dividend
yields.
(Sources: Scudder; Barron's Dictionary of Finance and Investment Terms)
9 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Investment Portfolio as of September 30, 1997
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements 1.7%
- ------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 9/30/97 at 6.02%, to be
repurchased at $37,182,217 on 10/1/97, collateralized by a $37,671,000 U.S. Treasury -------------
Note, 5%, 2/15/99 (Cost $37,176,000) .................................................. 37,176,000 37,176,000
-------------
<CAPTION>
Shares
- ------------------------------------------------------------------------------------------------------------------------------
Common Stocks 98.3%
- ------------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary 6.0%
Apparel & Shoes 0.8%
Reebok International Ltd.* ............................................................. 344,600 16,777,713
-------------
Department & Chain Stores 3.5%
Dayton Hudson Corp. ..................................................................... 385,500 23,105,906
Price/Costco, Inc.* ..................................................................... 815,800 30,694,475
Rite Aid Corp. .......................................................................... 410,700 22,768,181
-------------
76,568,562
-------------
Hotels & Casinos 0.5%
Circus Circus Enterprises, Inc.* ........................................................ 461,300 11,618,994
-------------
Restaurants 1.2%
Brinker International, Inc.* ............................................................ 1,437,900 25,612,594
-------------
Consumer Staples 9.6%
Alcohol & Tobacco 2.0%
Philip Morris Companies, Inc. ........................................................... 1,082,800 45,003,875
-------------
Consumer Electronic & Photographic Products 2.2%
Whirlpool Corp. ......................................................................... 739,600 49,044,725
-------------
Food & Beverage 4.4%
American Stores Co. ..................................................................... 986,700 24,050,813
ConAgra Inc. ............................................................................ 331,800 21,898,800
H.J. Heinz Co. .......................................................................... 548,000 25,310,750
Unilever NV (New York shares) ........................................................... 124,600 26,493,075
-------------
97,753,438
-------------
Textiles 1.0%
VF Corporation .......................................................................... 242,400 22,452,300
-------------
Health 6.4%
Health Industry Services 3.3%
Bergen Brunswig Corp. "A" ............................................................... 829,875 33,506,203
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Humana Inc.* ............................................................................ 1,665,100 39,650,194
-------------
73,156,397
-------------
Hospital Management 1.5%
Tenet Healthcare Corp.* ................................................................. 1,141,200 33,237,450
-------------
Pharmaceuticals 1.6%
American Home Products Corp. ............................................................ 284,900 20,797,700
Bristol-Myers Squibb Co. ................................................................ 173,300 14,340,575
-------------
35,138,275
-------------
Communications 5.2%
Telephone / Communications
American Telephone & Telegraph Co. ...................................................... 275,200 12,194,800
Bell Atlantic Corp. ..................................................................... 671,200 53,989,650
BellSouth Corp. ......................................................................... 474,000 21,922,500
GTE Corp. ............................................................................... 597,100 27,093,413
-------------
115,200,363
-------------
Financial 25.9%
Banks 12.4%
Banc One Corp. .......................................................................... 394,900 22,040,356
BankAmerica Corp. ....................................................................... 633,800 46,465,463
BankBoston Corp. ........................................................................ 443,500 39,222,031
Chase Manhattan Corp. ................................................................... 434,300 51,247,400
First Chicago NBD Corp. ................................................................. 220,200 16,570,050
First Union Corp. ....................................................................... 358,000 17,922,375
J.P. Morgan & Co., Inc. ................................................................. 259,100 29,440,238
KeyCorp ................................................................................. 426,800 27,155,150
NationsBank Corp. ....................................................................... 385,900 23,877,563
-------------
273,940,626
-------------
Insurance 8.7%
Allstate Corp. .......................................................................... 518,600 41,682,475
Chubb Corp. ............................................................................. 317,400 22,555,238
Cigna Corp. ............................................................................. 207,400 38,628,250
EXEL, Ltd. (ADR) ........................................................................ 513,700 30,597,256
General Re Corp. ........................................................................ 142,700 28,325,950
Mid Ocean, Ltd. ......................................................................... 288,200 18,264,667
Safeco Corp. ............................................................................ 224,300 11,887,900
-------------
191,941,736
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Other Financial Companies 4.8%
American Express Credit Corp. ........................................................... 461,600 37,793,500
Federal National Mortgage Association ................................................... 396,700 18,644,900
Travelers Group, Inc. ................................................................... 716,466 48,898,805
-------------
105,337,205
-------------
Service Industries 3.3%
Environmental Services 1.9%
Browning Ferris Industries .............................................................. 1,112,500 42,344,531
-------------
Investment 1.4%
Merrill Lynch & Co., Inc. ............................................................... 421,800 31,292,288
-------------
Durables 5.0%
Aerospace 0.5%
United Technologies Corp. ............................................................... 138,000 11,178,000
-------------
Automobiles 2.5%
Eaton Corp. ............................................................................. 287,000 26,511,625
Ford Motor Co. .......................................................................... 410,300 18,566,075
General Motors Corp. .................................................................... 162,300 10,863,956
-------------
55,941,656
-------------
Tires 2.0%
Goodyear Tire & Rubber Co. .............................................................. 640,200 44,013,750
-------------
Manufacturing 7.0%
Chemicals 1.8%
Dow Chemical Co. ........................................................................ 318,900 28,920,244
E.I. du Pont de Nemours & Co. ........................................................... 185,000 11,389,063
-------------
40,309,307
-------------
Diversified Manufacturing 2.0%
Dresser Industries, Inc. ................................................................ 450,300 19,362,900
Textron, Inc. ........................................................................... 372,000 24,180,000
-------------
43,542,900
-------------
Electrical Products 1.8%
Emerson Electric Co. .................................................................... 223,900 12,902,238
Philips Electronics NV (New York shares) ................................................ 315,800 26,527,200
-------------
39,429,438
-------------
Specialty Chemicals 1.4%
Witco Corp. ............................................................................. 688,100 31,394,563
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Technology 7.7%
Diverse Electronic Products 1.7%
Harris Corp. ............................................................................ 842,200 38,530,650
-------------
EDP Peripherals 0.7%
Western Digital Corp.* .................................................................. 394,300 15,796,644
-------------
Electronic Data Processing 2.5%
International Business Machines Corp. ................................................... 526,000 55,723,125
-------------
Military Electronics 0.9%
General Dynamics Corp. .................................................................. 228,600 19,916,775
-------------
Semiconductors 1.9%
National Semiconductor Corp.* 1,048,100 42,972,100
-------------
Energy 10.2%
Oil & Gas Production 1.8%
Coastal Corp. ........................................................................... 523,400 32,058,250
Royal Dutch Petroleum Co. ............................................................... 140,000 7,836,792
-------------
39,895,042
-------------
Oil Companies 8.4%
Atlantic Richfield Co. .................................................................. 255,600 21,837,825
British Petroleum PLC (ADR) ............................................................. 272,400 24,737,325
Exxon Corp. ............................................................................. 799,400 51,211,563
Mobil Corp. ............................................................................. 453,200 33,536,800
Royal Dutch Petroleum Co. (New York shares) ............................................. 284,800 15,806,400
Texaco Inc. ............................................................................. 639,800 39,307,713
-------------
186,437,626
-------------
Construction 3.3%
Building Materials 0.6%
Vulcan Materials Co. .................................................................... 139,600 12,145,200
-------------
Building Products 0.8%
Armstrong World Industries, Inc. ........................................................ 255,800 17,154,588
-------------
Forest Products 1.9%
Weyerhaeuser Co. ........................................................................ 725,900 43,100,313
-------------
Transportation 3.7%
Railroads 3.0%
CSX Corp. ............................................................................... 484,800 28,360,800
Canadian National Railway ............................................................... 380,700 19,788,248
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Canadian Pacific Ltd. ................................................................... 648,400 19,168,325
-------------
67,317,373
-------------
Trucking 0.7%
CNF Transportation, Inc. ................................................................ 363,500 15,834,969
-------------
Utilities 5.0%
Electric Utilities 4.2%
American Electric Power Co. ............................................................. 471,900 21,471,450
Duke Power Co. .......................................................................... 485,400 23,996,963
FPL Group, Inc. ......................................................................... 448,600 22,990,750
Pacific Gas & Electric Co. .............................................................. 1,010,900 23,440,244
-------------
91,899,407
-------------
Natural Gas Distribution 0.8%
Pacific Enterprises ..................................................................... 554,800 18,793,850
- ------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $1,465,347,094) 2,177,748,348
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $1,502,523,094) (a) 2,214,924,348
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
(a) The cost for federal income tax purposes was $1,506,252,042. At September
30, 1997, net unrealized appreciation for all securities based on tax cost
was $708,672,306. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of market
value over tax cost of $709,219,770 and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost
over market value of $547,464.
The accompanying notes are an integral part of the financial statements.
14 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of September 30,1997
<TABLE>
<S> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at market (identified cost $1,502,523,094) ............ $2,214,924,348
Cash ............................................................... 920
Receivable on investments sold ..................................... 2,182,529
Dividends and interest receivable .................................. 3,698,053
Receivable on Fund shares sold ..................................... 923,838
Receivable on foreign taxes recoverable ............................ 49,258
Other assets ....................................................... 33,581
----------------
Total assets ....................................................... 2,221,812,527
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payables for investments purchased ................................. 3,284,374
Payable for Fund shares redeemed ................................... 4,058,758
Accrued management fee ............................................. 1,145,100
Other payables and accrued expenses ................................ 591,157
----------------
Total liabilities .................................................. 9,079,389
--------------------------------------------------------------------------------------------
Net assets, at market value $2,212,733,138
--------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income ................................ 22,560,347
Unrealized appreciation on investments ............................. 712,401,254
Accumulated net realized gain ...................................... 110,159,843
Paid-in capital .................................................... 1,367,611,694
--------------------------------------------------------------------------------------------
Net assets, at market value $2,212,733,138
--------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($2,212,733,138 / 76,343,193 outstanding shares of beneficial ----------------
interest, $.01 par value, unlimited number of shares authorized). $28.98
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Statement of Operations
year ended September 30, 1997
<TABLE>
<S> <C>
Investment Income
- ------------------------------------------------------------------------------------------------------------------------------
Income:
Dividends (net of foreign taxes withheld of $407,878) .............. $ 44,621,845
Interest ........................................................... 1,687,286
-----------------
46,309,131
Expenses:
Management fee ..................................................... 12,187,280
Services to shareholders ........................................... 4,565,962
Trustees' fees and expenses ........................................ 57,362
Custodian and accounting fees ...................................... 338,454
Reports to shareholders ............................................ 267,647
Auditing ........................................................... 45,900
Legal .............................................................. 26,462
Registration fees .................................................. 79,128
Other .............................................................. 43,647
-----------------
17,611,842
---------------------------------------------------------------------------------------------
Net investment income 28,697,289
---------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain from:
Investments ........................................................ 134,428,197
-----------------
Net unrealized appreciation (depreciation) during the period on:
Investments ........................................................ 519,791,121
Foreign currency related transactions .............................. (333)
-----------------
519,790,788
---------------------------------------------------------------------------------------------
Net gain on investment transactions 654,218,985
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 682,916,274
---------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Years Ended September 30,
Increase (Decrease) in Net Assets 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ................................... $ 28,697,289 $ 25,638,335
Net realized gain from investment transactions .......... 134,428,197 156,485,746
Net unrealized appreciation on investment transactions
during the period .................................... 519,790,788 50,222,142
---------------- -----------------
Net increase in net assets resulting from operations .... 682,916,274 232,346,223
---------------- -----------------
Distributions to shareholders from:
Net investment income ................................... (11,553,936) (5,186,735)
---------------- -----------------
Net realized gains on investment transactions ........... (179,180,946) (226,928,336)
---------------- -----------------
Fund share transactions:
Proceeds from shares sold ............................... 255,862,093 242,975,623
Net asset value of shares issued to shareholders in
reinvestment of distributions ........................ 182,941,443 222,385,560
Cost of shares redeemed ................................. (369,711,587) (305,801,902)
---------------- -----------------
Net increase in net assets from Fund share transactions. 69,091,949 159,559,281
---------------- -----------------
Increase in net assets .................................. 561,273,341 159,790,433
Net assets at beginning of period ....................... 1,651,459,797 1,491,669,364
Net assets at end of period (including undistributed
net investment income of $22,560,347 and ---------------- -----------------
$5,294,851, respectively) ............................ $2,212,733,138 $1,651,459,797
---------------- -----------------
Other Information
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ............... 72,934,700 65,078,938
---------------- -----------------
Shares sold ............................................. 10,356,988 11,066,908
Shares issued to shareholders in reinvestment of
distributions ........................................ 8,148,839 10,795,415
Shares redeemed ......................................... (15,097,334) (14,006,561)
---------------- -----------------
Net increase in Fund shares ............................. 3,408,493 7,855,762
---------------- -----------------
Shares outstanding at end of period ..................... 76,343,193 72,934,700
---------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17 -- SCUDDER LARGE COMPANY VALUE FUND
<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>
Years Ended September 30,
1997(a)* 1996 1995 1994 1993(c) 1992 1991 1990 1989 1988
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of --------------------------------------------------------------------------------------
period $22.64 $22.92 $19.54 $23.06 $19.12 $19.30 $14.77 $22.30 $16.10 $20.41
--------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income (loss) .38 .36 .13 (.02) .06 .12 .20 .30(b) .21 .09
Net realized and unrealized gain
(loss) on investment
transactions 8.60 2.94 3.98 (.88) 5.23 .90 6.05 (6.22) 6.61 (1.82)
Total from investment --------------------------------------------------------------------------------------
operations 8.98 3.30 4.11 (.90) 5.29 1.02 6.25 (5.92) 6.82 (1.73)
--------------------------------------------------------------------------------------
Less distributions from:
Net investment income (.16) (.08) -- -- (.10) (.22) (.37) (.16) (.07) (.20)
Net realized gains on
investment transactions (2.48) (3.50) (.73) (2.62) (1.25) (.98) (1.35) (1.45) (.55) (2.38)
Total distributions (2.64) (3.58) (.73) (2.62) (1.35) (1.20) (1.72) (1.61) (.62) (2.58)
Net asset value, end of --------------------------------------------------------------------------------------
period $28.98 $22.64 $22.92 $19.54 $23.06 $19.12 $19.30 $14.77 $22.30 $16.10
--------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (%) 43.06 15.94 21.96 (4.72) 28.83 5.61 45.85 (28.20) 44.05 (5.61)
Ratios and Supplemental Data
Net assets, end of period
($ millions) 2,213 1,651 1,492 1,338 1,387 1,054 1,058 712 1,013 491
Ratio of operating expenses to
average daily net assets (%) .93 .92 .98 .97 .96 .98 1.04 .94 .88 .95
Ratio of net investment income
(loss) to average daily
net assets (%) 1.51 1.62 .62 (.12) .22 .57 1.24 1.56 1.22 .63
Portfolio turnover rate (%) 43.02 150.7 153.6 75.8 92.2 92.4 93.2 87.9 55.7 48.5
Average commission rate paid (d) $.0562 $.0533 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) Net investment income per share includes nonrecurring dividend income
amounting to $.14 per share.
(c) Effective October 1, 1992, the Fund discontinued using equalization
accounting.
(d) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal years ending on or after September 30, 1996.
* On February 1, 1997, the Fund adopted its current name. Prior to that
date, the Fund was known as the Scudder Capital Growth Fund.
18 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Large Company Value Fund (formerly Scudder Capital Growth 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 Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. Portfolio securities which are traded on U.S. 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 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 most recent 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 other than money market securities 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. Money market
instruments purchased with an original 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 Directors.
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, is equal to at least 100.5% of the repurchase price.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code of 1986, as amended, 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.
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. Earnings
and profits distributed to shareholders on redemption of Fund shares ("tax
equalization") may be utilized by the Fund, to the extent permissible, as part
of the Fund's dividends paid deduction on its federal tax return.
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 the deferral of certain losses for tax purposes. As a
result, net investment income (loss) and net realized gain (loss) on investment
19 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
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.
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 and market discounts are accreted for both tax and financial
reporting purposes.
B. Purchases and Sales of Securities
During the year ended September 30, 1997, purchases and sales of investment
securities (excluding short-term investments) aggregated $800,239,914 and
$908,969,397, respectively.
C. Related Parties
Under the Fund's Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund has agreed to pay to the Adviser
a fee equal to an annual rate of approximately 0.75% of the first $500,000,000
of average daily net assets, 0.65% of the next $500,000,000 of such net assets,
0.60% of the next $500,000,000 of such net assets and 0.55% of such net assets
in excess of $1,500,000,000, 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. For the year ended September 30,
1997, the fee pursuant to the Agreement amounted to $12,187,280 which was
equivalent to an annual effective rate of .64% of the Fund's average daily net
assets.
On June 26, 1997, the Adviser entered into an agreement with The Zurich
Insurance Company ("Zurich"), an international insurance and financial services
organization, pursuant to which Zurich will acquire a majority interest in the
Adviser, and the Adviser will form a new global investment organization by
combining with Zurich's subsidiary, Zurich Kemper Investments, Inc. and change
its name to Scudder Kemper Investments, Inc. Subject to the receipt of the
required regulatory and shareholder approvals, the transaction is expected to
close in the fourth quarter of 1997.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. Included
in services to shareholders is $2,505,046 charged to the Fund by SSC for the
year ended September 30, 1997, of which $206,660 is unpaid at September 30,
1997.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the year ended September 30,
1997, the amount charged to the Fund by STC aggregated $1,562,194, of which
$133,227 is unpaid at September 30, 1997.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
September 30, 1997, the amount charged to the Fund by SFAC aggregated $157,173,
of which $13,819 is unpaid at September 30, 1997.
20 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
The Fund is one of several Scudder Funds (the "Underlying Funds") in which the
Scudder Pathway Series Portfolios (the "Portfolios") invest. In accordance with
the Special Servicing Agreement entered into by the Adviser, the Portfolios, the
Underlying Funds, SSC, SFAC, STC, and Scudder Investor Services, Inc., expenses
from the operation of the Portfolios are borne by the Underlying Funds based on
each Underlying Fund's proportionate share of assets owned by the Portfolios. No
Underlying Funds will be charged expenses that exceed the estimated savings to
each respective Underlying Fund. These estimated savings result from the
elimination of separate shareholder accounts which either currently are or have
potential to be invested in the Underlying Funds. At September 30, 1997, the
Special Servicing Agreement expense charged to the Fund amounted to $26,784.
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, 1997, Trustees' fees and expenses aggregated
$57,362.
21 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Report of Independent Accountants
To the Trustees of Scudder Equity Trust and the Shareholders of Scudder Large
Company Value Fund:
We have audited the accompanying statement of assets and liabilities of Scudder
Large Company Value Fund (formerly Scudder Capital Growth Fund), including the
investment portfolio, as of September 30, 1997, 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 ten years in the period then ended. 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, 1997 by correspondence with the custodian. 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 Large Company Value Fund (formerly Scudder Capital Growth Fund), as of
September 30, 1997, 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 ten years in the period then ended,
in conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
November 5, 1997
22 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Tax Information
The Fund paid distributions of $.80 per share from long-term capital gains
during its taxable year ended September 30, 1997. Pursuant to section 852 of the
Internal Revenue Code, the Fund designates $74,182,619 as long-term capital gain
dividends for the year ended September 30, 1997.
Pursuant to section 854 of the Internal Revenue Code, the Fund designates
$37,399,677 as dividends eligible for the dividends received deduction for
corporations for the year ended September 30, 1997.
23 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Officers and Trustees
Daniel Pierce*
President and Trustee
Paul Bancroft III
Trustee; Venture Capitalist and Consultant
Sheryle J. Bolton
Trustee; Chief Executive Officer, Scientific Learning Corporation
William T. Burgin
Trustee; General Partner, Bessemer Venture Partners
Thomas J. Devine
Trustee; Consultant
Keith R. Fox
Trustee; President, Exeter Capital Management Corporation
David S. Lee*
Trustee and Vice President
Wilson Nolen
Trustee; Consultant
Kathryn L. Quirk*
Trustee, Vice President and Assistant Secretary
Dr. Gordon Shillinglaw
Trustee; Professor Emeritus of Accounting, Columbia University Graduate School
of Business
Robert G. Stone, Jr.
Honorary Trustee; Chairman Emeritus 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
Thomas F. McDonough*
Vice President, Secretary and Assistant Treasurer
Pamela A. McGrath*
Vice President and Treasurer
Kathleen T. Millard*
Vice President
Edward J. O'Connell*
Vice President and Assistant Treasurer
*Scudder, Stevens & Clark, Inc.
24 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
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
- -------------------
IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan**+++ +++
(a variable annuity)
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal Fund, Inc.
Scudder World Income Opportunities
Fund, Inc.
For complete information on any of the above Scudder funds, including
management fees and expenses, call or write for a free prospectus. Read it
carefully before you invest or send money. +++Funds within categories are listed
in order from expected least risk to most risk. 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, Stevens & Clark, Inc., are traded on various stock exchanges.
25 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
A convenient investment program in which you designate Lets you purchase Scudder fund shares
the purchase details and the bank account, and money is electronically, avoiding potential mailing delays;
electronically debited from that account monthly to designate a bank account and the transaction
regularly purchase fund shares and "dollar cost average" details, and money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from that account.
fewer when it's higher, which can reduce your average
purchase price over time.
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- http://funds.scudder.com
1-800-343-2890
Scudder Electronic Account Services: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you designate.
DistributionsDirect
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
26 -- SCUDDER LARGE COMPANY VALUE FUND
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 6,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
500 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM)
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load
Brokerage account already reserved for them, with Scudder funds but want ongoing professional assistance in
no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly
Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for
individuals investing $100,000 or more.
Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a
program offered by Scudder Investor Services, Inc., Adviser.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Investor Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Investor Centers. Check for an Investor Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
- ------------------------------------------------------------------------------------------------------------------------------
New From Scudder: Scudder International Growth and Income Fund
Scudder International Growth and Income Fund takes a yield-oriented approach to investing in international equities. The
Fund seeks to provide long-term growth of capital plus current income. Investors who desire international exposure but
who wish to take a more conservative approach may appreciate the Fund's emphasis on the dividend paying stocks of
well-established companies outside the United States.
- ------------------------------------------------------------------------------------------------------------------------------
The share price of Scudder International Growth and Income Fund will fluctuate. International investing involves special
risks including currency fluctuation and political instability. Contact Scudder Investor Services, Inc., Distributor,
for a prospectus which contains more complete information, including management fees and other expenses. Please read it
carefully before you invest or send money.
</TABLE>
27 -- SCUDDER LARGE COMPANY VALUE FUND
<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 over 40 pure no load(TM) funds, including the first international
mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
This information must be preceded or accompanied by a
current prospectus.
Portfolio changes should not be considered recommendations
for action by individual investors.
SCUDDER
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