Scudder
Value
Fund
Semiannual Report
March 31, 1997
Pure No-Load(TM) Funds
For investors seeking long-term growth of capital through investment in
undervalued equity securities.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Fund's President
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
8 Investment Portfolio
14 Financial Statements
17 Financial Highlights
18 Notes to Financial Statements
24 Officers and Trustees
25 Investment Products and Services
26 Scudder Solutions
In Brief
o Investors were attracted to the defensive characteristics of value stocks,
which posted some of the best returns in an environment of increasing price
volatility for common stocks.
o Scudder Value Fund provided a total return of 15.50% for the six-month period
and a 22.86% return for the one-year period. The one-year return bested 95% of
all growth funds according to Lipper and exceeded the performance of the S&P 500
Index.
o Morningstar assigned the Fund its highest rating of 5-stars for its
risk-adjusted performance among 1,919 domestic equity funds as of March 31,
1997. ^1
^1 Morningstar's proprietary ratings reflect historical risk-adjusted
performance as of March 31, 1997. Ratings are subject to change monthly and are
calculated from the Fund's three-, five-, and ten-year average annual returns in
excess of 90-day Treasury bill returns with appropriate fee adjustments, and a
risk factor that reflects Fund performance below 90-day T-bill returns. In an
investment category, the top 10% of funds receive 5-stars. In the domestic
equity category, the Fund received a 5-star rating for the one-year period and a
5-star rating for the three-year period. The Fund was not rated for the five-
and ten-year periods because it commenced operations on December 31, 1992. Past
performance is no guarantee of future results.
2 - SCUDDER VALUE FUND
<PAGE>
Letter from the Fund's President
Dear Shareholders,
We are pleased to present the semiannual report for Scudder Value Fund for
the six-month period ended March 31, 1997. The Fund's strong performance is
especially gratifying, considering the environment of increased share price
volatility investors experienced during the period. A complete discussion of
your Fund's activities begins on page 6.
We are also pleased with the recognition that the Scudder Fund family has
recently received from Morningstar. The fund rating service recently ranked the
Scudder Family of Funds in the top 4 among 20 leading mutual fund companies for
stability in management and conformity to investment style. According to
Morningstar, these attributes "... can be hard to come by in the fund industry.
In fact, investors can't be sure who'll sign next quarter's shareholder letter,
or that this month's large-cap growth fund will still be a large-cap growth fund
next month. But a few fund families have done a better job than most at
retaining talent and keeping their funds predictable." We are proud of this
achievement and will seek to maintain our reputation of consistent management
and strong performance.
For those of you who are interested in new products and services, we
recently introduced the Scudder Pathway Series. Pathway simplifies investing
through the "fund of funds" approach offering four distinct portfolios:
Conservative, Balanced, Growth, and International. Each portfolio invests in a
select mix of Scudder Funds, providing flexibility, diversification, and
simplicity for regular and retirement plan investors. For more complete
information on Scudder products and services, please turn to page 25.
Thank you for your continued investment in Scudder Value Fund. If you have
questions about your account, please call our Investor Relations representatives
at 1-800-225-2470; they will be happy to assist you. You can also obtain
information by visiting our Internet web site at http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Value Fund
3 - SCUDDER VALUE FUND
<PAGE>
PERFORMANCE UPDATE as of March 31, 1997
- ----------------------------------------------------------------
Fund Index Comparisons
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
3/31/97 $10,000 Cumulative Annual
- --------------------------------------------
Scudder Value Fund
- --------------------------------------------
1 Year $ 12,286 22.86% 22.86%
Life of Fund* $ 19,007 90.07% 16.32%
- --------------------------------------------
S&P 500 Index
1 Year $ 11,983 19.83% 19.83%
Life of Fund* $ 19,371 93.71% 16.84%
- --------------------------------------------
*The Fund commenced operations on December 31, 1992.
- -----------------------------------------------------------------
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 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
3/96 $15,470
9/96 $16,456
3/97 $19,007
S&P 500 INDEX
Year Amount
- ----------------------
12/92* $10,000
3/93 $10,437
9/93 $10,757
3/94 $10,590
9/94 $11,153
3/95 $12,237
9/95 $14,471
3/96 $16,165
9/96 $17,413
3/97 $19,371
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 March 31
1993* 1994 1995 1996 1997
-----------------------------------------------
NET ASSET VALUE... $ 13.12 $ 12.47 $ 13.64 $ 16.48 $ 18.64
INCOME DIVIDENDS.. $ - $ .11 $ .12 $ .04 $ .07
CAPITAL GAINS
DIVIDENDS......... $ - $ .43 $ .13 $ .92 $ 1.48
FUND TOTAL
RETURN (%)........ 9.33 -.94 11.44 28.18 22.86
INDEX TOTAL
RETURN (%)........ 4.37 1.48 15.57 32.10 19.83
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 Fund for the one year
and life of Fund periods would have been lower.
4 - SCUDDER VALUE FUND
<PAGE>
PORTFOLIO SUMMARY as of March 31, 1997
- ---------------------------------------------------------------------------
ASSET ALLOCATION
- ---------------------------------------------------------------------------
Equity Securities 83%
Cash Equivalents 17%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
Cash equivalents are temporarily
higher than normal due to
positive cash inflows, and are
rapidly being deployed into
equities.
- --------------------------------------------------------------------------
Sectors
(Excludes 17% Cash Equivalents
- --------------------------------------------------------------------------
Financial 23%
Manufacturing 13%
Technology 10%
Energy 9%
Transportation 9%
Consumer Staples 8%
Communications 7%
Durables 5%
Consumer Discretionary 4%
Other 12%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund's value approach
resulted in significant emphasis
on the financial, manufacturing,
and technology sectors.
- --------------------------------------------------------------------------
Ten Largest Equity Holdings
(17% of Portfolio)
- --------------------------------------------------------------------------
1. Harris Corp.
Maker of electronics and office equipment
2. Interpublic Group of Companies Inc.
Worldwide advertising agencies
3. TRW Inc.
Defense electronics, automotive parts and
systems
4. BankAmerica Corp.
Commercial banking in California
5. MBIA Inc.
Insurer of municipal bonds
6. Safeco Corp.
Insurance and financial services
7. Parker-Hannifin Group
Fluid control components
8. Anheuser-Busch Companies, Inc.
Brewery
9. Williams Cos., Inc.
Owns and operates natural gas and petroleum
products
10. Philips Electronics NV
Manufacturer of electronic equipment
The Fund pursues a disciplined
approach to individual stock
selection.
- -----------------------------------------------------------------------------
For more complete details about the Fund's investment portfolio,
see page 8. A monthly Investment Portfolio Summary and quarterly Portfolio
Holdings are available upon request.
5 - SCUDDER VALUE FUND
<PAGE>
Portfolio Management Discussion
Scudder Value Fund is managed by Donald E. Hall and William J. Wallace, who have
a combined 26 years of investment experience researching and investing in value
stocks. We asked Don, your Fund's lead portfolio manager, to review the Fund's
performance, strategy, and outlook.
Q: Please describe the market environment during the six-month period.
A: Overall, volatility increased. U.S. stocks moved sharply higher in January,
as excellent corporate profits and record cash flows into equity mutual funds
during the fourth quarter of 1996 fueled the market. This momentum continued
into February. Toward the end of the period, however, the Federal Reserve raised
the federal funds rate from 5.25% to 5.5%. This event and some worrisome data on
wage pressures reversed the market's momentum, almost eliminating year-to-date
gains.
Q: How did Scudder Value Fund perform over the six-month period?
A: The Fund performed very well, providing a total return of 15.50% for the six
months, reflecting an increase in net asset value per share from $17.52 to
$18.64, an income distribution of 7 cents per share, and a capital gain
distribution of $1.48 per share. This total return compares very favorably to
the Lipper growth fund (^2) average return of 4.07% and the return of the
unmanaged S&P 500 11.24% for the same six-month period.
Q: And, over the longer term?
A: The Fund has also achieved excellent long run performance as reflected in it
5 star rating from Morningstar (see page 2). In addition, the Fund returned
22.86% for the trailing twelve-month period. This performance placed the Fund
among the top 5% of 738 growth funds according to Lipper. The Fund also
surpassed the performance of the benchmark S&P 500, which returned 19.83% for
the same twelve-month period.
Q: In the September 1996 annual report you stated that a few very large
companies were performing well, driving the capitalization-weighted S&P 500
higher than the broader market, which made it hard to beat. Has there been a
change over the six months with respect to the performance of the broad market
versus the index?
A: While most U.S. stocks are up since the end of September, the very largest 50
companies have continued to outperform the rest. Evidence of this is found in
the returns of the Value Line Composite Index and the S&P MidCap Index, which
were only up 4.07% and 4.48%, respectively, well below the S&P 500 returns for
the same six-month period.
Q: Did the Fund emphasize the largest 50 stocks in the S&P 500?
A: Generally not. The Fund did hold a few large company stocks including Intel,
Citicorp, and BankAmerica, which benefited the portfolio.
Q: Did the Fund take on higher risk to achieve higher returns?
A: No. Our goal is to seek above average returns without above average risk.
During the period, the Fund's risk was distinctly lower than the average growth
fund as measured by share price volatility. Generally, the Fund was less risky
than the S&P 500.
^2 The Lipper growth fund category includes funds with both growth and value
investment orientations.
6 - SCUDDER VALUE FUND
<PAGE>
There were 22 days over the last six months that the S&P 500 Index was down more
than 0.5%. The Fund outperformed the index on all but one day.
Q: What sectors and stocks contributed most to performance?
A: Our holdings in the financial sector outperformed last fall when interest
rates were declining and also managed to outperform in the last three months,
despite a less hospitable interest rate environment. Several financial stocks in
the portfolio were up at least 20% for the six months, including American States
Financial, Mellon Bank, BankAmerica, State Street Corp., and Allstate. The
Fund's technology and energy holdings were also strong performers. Holdings in
these groups producing 20% gains or better included Intel, Applied Materials,
Philips Electronics, Destec Energy, Zeiglar Coal, Williams Companies, and Amoco.
Q: What were some of the disappointments?
A: Mainly electric utilities, which fortunately only made up 3% of Fund assets.
Financial and utility stocks are often lumped together in the "interest rate
sensitive" category. However, the performance of financials and utilities could
not have been more divergent over this period. The uncertainty facing the
utility industry over the transition to a deregulated rate environment
contributed to the sector's underperformance.
Q: Some believe the U.S. stock market is overvalued. How is the Fund positioned
for the current environment?
A: Our mission is to seek out the best values in the market at any point in
time, regardless of the overall market level. The S&P 500 is selling near 19
times 1997 earnings estimates. By contrast, the Fund's price-to-earnings ratio
is only 13. The Fund is not exposed to speculative stocks and as such is not as
vulnerable to the dramatic declines typical in that area of the market. In
addition, many of the Fund's holdings are also experiencing improving earnings
revisions.
Q: What groups do you find attractive?
A: We continue to believe good values can be found in financial stocks. Despite
recent good performance, BankAmerica sells at only 12 times 1997 estimated
earnings. In the insurance area, Allstate and MBIA, at 13 and 12 times, are very
attractive given their underlying competitive strengths. Outside of financials,
we believe Ford, at 8 times, is compelling. Strong profits from trucks and
continued restructuring should contribute to a positive earnings outlook.
Philips Electronics, the second largest consumer electronics firm in the world,
has a huge reservoir of technology which is not fully reflected in its stock
price. Philips is trading at 13 times earnings.
Q: What is Scudder's outlook?
A: We expect modest growth in the U.S. economy this year and inflation that
remains around 3%. Even though we do not expect earnings growth to be as robust
as it was in 1995 and 1996, this is not an environment conducive to a major
market decline. A return to more normal volatility and returns is more likely.
We believe the Fund is well positioned for this environment.
7 - SCUDDER VALUE FUND
<PAGE>
Investment Portfolio as of March 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements 2.7%
- -----------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 3/31/97 at 6.375%, to be
repurchased at $3,757,665 on 4/1/97, collateralized by a $3,793,000 U.S. Treasury Note, ------------
6.125%, 3/31/98 (Cost $3,757,000) ..................................................... 3,757,000 3,757,000
------------
Short Term Notes 14.7%
- -----------------------------------------------------------------------------------------------------------------------------
Miscellaneous ------------
Federal National Mortgage Association Discount Note, 4/1/97 (Cost $20,000,000) .......... 20,000,000 20,000,000
------------
Shares
- -----------------------------------------------------------------------------------------------------------------------------
Common Stocks 82.6%
- -----------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary 3.5%
Apparel & Shoes 0.0%
Payless ShoeSource Inc.* ................................................................ 1,344 56,280
------------
Department & Chain Stores 1.8%
J.C. Penney Co., Inc. ................................................................... 7,400 352,425
May Department Stores ................................................................... 8,400 382,200
Wal-Mart Stores Inc. .................................................................... 60,000 1,672,500
------------
2,407,125
------------
Hotels & Casinos 0.9%
Grand Casinos Inc.* ..................................................................... 12,200 114,375
Royal Caribbean Cruises Ltd. ............................................................ 36,300 1,107,150
------------
1,221,525
------------
Restaurants 0.5%
Outback Steakhouse Inc.* ................................................................ 32,900 658,000
------------
Specialty Retail 0.3%
Toys "R" Us Inc.* ....................................................................... 14,700 411,600
------------
Consumer Staples 6.4%
Alcohol & Tobacco 2.9%
Anheuser-Busch Companies, Inc. .......................................................... 49,900 2,102,038
Philip Morris Companies Inc. (b) ........................................................ 16,500 1,883,063
------------
3,985,101
------------
Food & Beverage 3.5%
ConAgra Inc. ............................................................................ 35,400 1,920,450
Kroger Co.* ............................................................................. 19,500 989,625
Sara Lee Corp. .......................................................................... 45,700 1,850,850
------------
4,760,925
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8 -- SCUDDER VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Health 1.7%
Health Industry Services 0.9%
Bergen Brunswig Corp. "A" ............................................................... 40,700 1,210,825
------------
Medical Supply & Specialty 0.3%
Becton, Dickinson & Co. ................................................................. 9,800 441,000
------------
Pharmaceuticals 0.5%
Schering-Plough Corp. ................................................................... 4,900 356,475
Watson Pharmaceuticals, Inc.* ........................................................... 9,000 321,750
------------
678,225
------------
Communications 5.9%
Telephone/Communications
Ameritech Corp. ......................................................................... 24,000 1,476,000
Century Telephone Enterprises ........................................................... 44,200 1,303,900
Compania Telefonica Nacional de Espana SA (ADR) ......................................... 14,400 1,033,200
Sprint Corp. ............................................................................ 40,400 1,838,200
Tele Danmark A/S (ADR) .................................................................. 55,400 1,447,325
Tele-Communications International, Inc. "A"* ............................................ 71,200 916,700
------------
8,015,325
------------
Financial 18.6%
Banks 6.2%
Banc One Corp. .......................................................................... 20,800 826,800
BankAmerica Corp. ....................................................................... 23,200 2,337,400
Bankers Trust New York Corp. ............................................................ 12,200 1,000,400
Chase Manhattan Corp. ................................................................... 5,700 533,663
Citicorp ................................................................................ 14,100 1,526,325
First Chicago NBD Corp. ................................................................. 9,200 497,950
J.P. Morgan & Co., Inc. ................................................................. 7,600 746,700
Mellon Bank Corp. ....................................................................... 7,200 523,800
Northern Trust Corp. .................................................................... 14,200 532,500
------------
8,525,538
------------
Insurance 11.5%
Allstate Corp. .......................................................................... 34,200 2,030,625
American States Financial Corp. ......................................................... 27,700 924,488
Cigna Corp. ............................................................................. 13,000 1,899,625
EXEL, Ltd. .............................................................................. 41,400 1,749,150
MBIA Inc. ............................................................................... 24,000 2,301,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 -- SCUDDER VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mid Ocean Limited ....................................................................... 9,400 448,850
Nationwide Financial Services, Inc. "A"* ................................................ 49,700 1,279,775
PartnerRe Holdings Ltd................................................................... 22,400 792,400
Safeco Corp.............................................................................. 57,100 2,284,000
Transamerica Corp. ...................................................................... 11,800 1,056,100
UNUM Corp................................................................................ 12,200 890,600
------------
15,656,613
------------
Other Financial Companies 0.9%
Federal National Mortgage Association ................................................... 25,600 924,800
Student Loan Marketing Association ...................................................... 3,000 285,750
------------
1,210,550
------------
Media 2.1%
Advertising 1.7%
Interpublic Group of Companies Inc. ..................................................... 45,100 2,379,025
------------
Broadcasting & Entertainment 0.4%
TCI Satellite Entertainment, Inc.* ...................................................... 62,800 486,700
------------
Service Industries 1.7%
Environmental Services 1.5%
Destec Energy Inc.* ..................................................................... 98,000 2,021,250
------------
Investment 0.2%
Donaldson, Lufkin & Jenrette Securities Corp. ........................................... 8,300 303,988
------------
Durables 4.2%
Aerospace 1.0%
Lockheed Martin Corp. ................................................................... 16,282 1,367,688
------------
Automobiles 2.3%
Dana Corp. .............................................................................. 28,000 920,500
Ford Motor Co. .......................................................................... 38,600 1,211,075
Genuine Parts Co. ....................................................................... 8,600 400,975
Magna International, Inc. "A" ........................................................... 10,800 535,950
------------
3,068,500
------------
Construction/Agricultural Equipment 0.3%
PACCAR, Inc. ............................................................................ 6,700 447,225
------------
Telecommunications Equipment 0.3%
Nokia AB Oy "A" (ADR) ................................................................... 7,700 448,525
------------
Tires 0.3%
Goodyear Tire & Rubber Co. .............................................................. 7,700 402,325
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 -- SCUDDER VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Manufacturing 10.8%
Chemicals 1.2%
Lyondell Petrochemical Co. .............................................................. 40,400 924,150
Sigma-Aldrich Corp. ..................................................................... 22,600 697,775
------------
1,621,925
------------
Containers & Paper 0.7%
Crown Cork & Seal Co. Inc. .............................................................. 17,200 887,950
------------
Diversified Manufacturing 3.3%
Canadian Pacific Ltd. (Ord.) ............................................................ 27,000 644,552
Olin Corp. .............................................................................. 38,000 1,510,500
TRW Inc. ................................................................................ 45,400 2,349,450
------------
4,504,502
------------
Electrical Products 1.5%
Philips Electronics NV (New York shares) ................................................ 46,900 2,087,050
------------
Industrial Specialty 0.9%
Schindler Holdings AG (PC) .............................................................. 1,000 1,199,277
------------
Machinery/Components/Controls 2.0%
Parker-Hannifin Group ................................................................... 49,300 2,107,575
Timken Co. .............................................................................. 11,900 636,650
------------
2,744,225
------------
Office Equipment/Supplies 1.2%
Xerox Corp. ............................................................................. 29,000 1,649,375
------------
Technology 8.0%
Diverse Electronic Products 4.3%
Applied Materials, Inc.* ................................................................ 28,500 1,321,688
General Motors Corp. "H" ................................................................ 36,100 1,958,425
Harris Corp. ............................................................................ 33,700 2,590,688
------------
5,870,801
------------
Electronic Data Processing 1.6%
Ceridian Corp.* ......................................................................... 27,500 986,563
Compaq Computer Corp.* .................................................................. 15,500 1,187,688
------------
2,174,251
------------
Precision Instruments 0.5%
Silicon Valley Group Inc.* .............................................................. 29,600 636,400
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 -- SCUDDER VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Semiconductors 1.6%
Advanced Micro Devices Inc.* ............................................................ 13,900 576,850
Intel Corp. ............................................................................. 6,900 959,963
Tower Semiconductor Ltd. ................................................................ 71,900 674,063
------------
2,210,876
------------
Energy 7.7%
Oil & Gas Production 1.5%
Coastal Corp. ........................................................................... 9,800 470,400
Imperial Oil Ltd. ....................................................................... 32,000 1,492,000
------------
1,962,400
------------
Oil Companies 4.7%
Amoco Corp. ............................................................................. 16,400 1,420,650
Mobil Corp. ............................................................................. 8,000 1,045,000
Repsol SA (ADR) ......................................................................... 32,200 1,312,150
Total SA (ADR) .......................................................................... 40,084 1,698,560
YPF S.A. "D" (ADR) ...................................................................... 37,000 980,500
------------
6,456,860
------------
Oil/Gas Transmission 1.5%
Williams Cos., Inc. ..................................................................... 46,950 2,089,275
------------
Metals & Minerals 1.7%
Coal Mining 1.5%
Zeigler Coal Holding Co. ................................................................ 86,700 2,059,125
------------
Steel & Metals 0.2%
Nucor Corp. ............................................................................. 7,000 320,250
------------
Construction 0.2%
Forest Products
Louisiana-Pacific Corp. ................................................................. 11,900 246,925
------------
Transportation 7.2%
Air Freight 0.8%
Federal Express Corp.* .................................................................. 19,800 1,032,075
------------
Airlines 0.8%
AMR Corp.* .............................................................................. 6,400 528,000
USAir Group, Inc.* ...................................................................... 21,300 521,850
------------
1,049,850
------------
Marine Transportation 3.0%
Knightsbridge Tankers Ltd.* ............................................................. 64,200 1,556,850
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 -- SCUDDER VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
London & Overseas Freighters (ADR)* ..................................................... 46,000 609,500
NedLloyd Groep NV (ADR) ................................................................. 142,200 1,741,950
Teekay Shipping Corp. ................................................................... 5,800 166,744
------------
4,075,044
------------
Railroads 1.3%
CSX Corp. ............................................................................... 21,600 1,004,400
Trans Rail Holdings Ltd. (ADR) .......................................................... 45,000 815,625
------------
1,820,025
------------
Trucking 1.3%
Consolidated Freightways Corp.* ......................................................... 70,200 833,625
Consolidated Freightways, Inc. .......................................................... 37,400 1,014,475
------------
1,848,100
------------
Utilities 2.9%
Electric Utilities
Boston Edison Co. ....................................................................... 26,000 679,250
PowerGen PLC (ADR) ...................................................................... 46,400 1,809,600
TNP Enterprises Inc. .................................................................... 9,800 209,475
Unicom Corp. ............................................................................ 64,900 1,265,550
------------
3,963,875
- ----------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $95,348,753) 112,674,294
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio - 100.0% (Cost $119,105,753) (a) 136,431,294
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
(a) The cost for federal income tax purposes was $119,105,753. At March 31,
1997, net unrealized appreciation for all securities based on tax cost was
$17,325,541. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $19,053,625 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$1,728,084.
(b) At March 31, 1997 these securities, in part, have been pledged to cover
initial margin requirements for open futures contracts. At March 31, 1997,
open futures contracts purchased long were as follows (Note A):
<TABLE>
<CAPTION>
Aggregate
Futures Expiration Contracts Face Value ($) Market Value ($)
------- ---------- --------- -------------- ----------------
<S> <C> <C> <C> <C>
S&P500 Index June 1997 36 14,658,452 13,747,500
---------- ----------
Total unrealized depreciation on open futures contracts purchased long ......... (910,952)
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 -- SCUDDER VALUE FUND
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of March 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Assets
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at market (identified cost $119,105,753) .................. $ 136,431,294
Cash ................................................................... 800
Dividends and interest receivable ...................................... 169,885
Receivable for Fund shares sold ........................................ 909,970
Receivable for investments sold ........................................ 1,689,379
Receivable for foreign taxes recoverable ............................... 25,113
Deferred organization expense .......................................... 11,444
Other assets ........................................................... 2,239
-------------
Total assets ........................................................... 139,240,124
Liabilities
- ----------------------------------------------------------------------------------------------------------
Payable for investments purchased ...................................... 3,524,272
Payable for Fund shares redeemed ....................................... 1,294,682
Accrued management fee ................................................. 121,577
Other accrued expenses ................................................. 90,250
Daily variation margin on futures contracts ............................ 211,510
-------------
Total liabilities ...................................................... 5,242,291
----------------------------------------------------------------------------------------
Net assets, at market value $ 133,997,833
----------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income .................................... 1,343,574
Unrealized appreciation (depreciation) on:
Investments ......................................................... 17,325,541
Futures ............................................................ (910,952)
Foreign currency related transactions ............................... (769)
Accumulated net realized gain .......................................... 5,891,097
Paid-in capital ........................................................ 110,349,342
----------------------------------------------------------------------------------------
Net assets, at market value $ 133,997,833
----------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($133,997,833/
7,187,858 outstanding shares of beneficial interest, $.01 par value, -------------
unlimited number of shares authorized) .............................. $18.64
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 -- SCUDDER VALUE FUND
<PAGE>
Statement of Operations
six months ended March 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Investment Income
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Income:
Dividends (net of foreign taxes withheld of $52,110) ................... $ 1,115,925
Interest ............................................................... 316,268
-------------
1,432,193
Expenses:
Management fee ......................................................... 382,335
Services to shareholders ............................................... 212,679
Custodian and accounting fees .......................................... 27,150
Trustees' fees and expenses ............................................ 19,394
Reports to shareholders ................................................ 28,901
Auditing ............................................................... 17,700
Registration fees ...................................................... 21,203
Legal .................................................................. 7,095
Amortization of organization expenses .................................. 4,454
Other .................................................................. 1,347
-------------
Total expenses before reductions ....................................... 722,258
Expense reductions ..................................................... (43,292)
-------------
Expenses, net .......................................................... 678,966
----------------------------------------------------------------------------------------
Net investment income 753,227
----------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ----------------------------------------------------------------------------------------------------------
Net realized gain from:
Investments ............................................................ 5,903,159
Futures ................................................................ 585,002
Foreign currency related transactions .................................. 500
-------------
6,488,661
Net unrealized appreciation (depreciation) during the period on:
Investments ............................................................ 7,246,763
Futures ................................................................ (896,472)
Foreign currency related transactions .................................. (813)
-------------
6,349,478
----------------------------------------------------------------------------------------
Net gain on investment transactions 12,838,139
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 13,591,366
----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 -- SCUDDER VALUE FUND
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended
March 31, Year Ended
1997 September 30,
Increase (Decrease) in Net Assets (Unaudited) 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ........................................ $ 753,227 $ 1,057,206
Net realized gain from investment transactions ............... 6,488,661 8,670,285
Net unrealized appreciation on investment transactions
during the period .......................................... 6,349,478 2,372,894
------------- -------------
Net increase in net assets resulting from operations ......... 13,591,366 12,100,385
------------- -------------
Distributions to shareholders from:
Net investment income ........................................ (370,246) (175,992)
------------- -------------
Net realized gains from investment transactions .............. (7,822,998) (4,025,296)
------------- -------------
Fund share transactions:
Proceeds from shares sold .................................... 53,468,190 34,987,688
Net asset value of shares issued to shareholders in
reinvestment of distributions............................... 8,028,456 4,132,230
Cost of shares redeemed ...................................... (21,771,227) (26,219,135)
------------- -------------
Net increase in net assets from Fund share transactions ...... 39,725,419 12,900,783
------------- -------------
Increase in net assets ....................................... 45,123,541 20,799,880
Net assets at beginning of period ............................ 88,874,292 68,074,412
Net assets at end of period (including undistributed net ------------- -------------
investment income of $1,343,574 and $960,593, respectively). $ 133,997,833 $ 88,874,292
------------- -------------
Other Information
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period .................... 5,071,691 4,288,446
------------- -------------
Shares sold .................................................. 2,828,315 2,121,557
Shares issued to shareholders in reinvestment of
distributions .............................................. 446,770 263,367
Shares redeemed .............................................. (1,158,918) (1,601,679)
------------- -------------
Net increase in Fund shares .................................. 2,116,167 783,245
------------- -------------
Shares outstanding at end of period .......................... 7,187,858 5,071,691
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 -- SCUDDER 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>
For the Period
Six months December 31, 1992
Ended (commencement of
March 31, Years Ended September 30, operations) to
1997 September 30,
(Unaudited)(a) 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------
Net asset value, beginning of period ................ $17.52 $15.87 $13.08 $13.38 $12.00
-----------------------------------------------------------------------
Income from investment operations:
Net investment income ............................... .13 .21 .18 .13 .10
Net realized and unrealized gain on investments ..... 2.54 2.40 2.86 .11 1.28
-----------------------------------------------------------------------
Total from investment operations .................... 2.67 2.61 3.04 .24 1.38
-----------------------------------------------------------------------
Less distributions from:
Net investment income ............................... (.07) (.04) (.12) (.11) --
Net realized gains on investment transactions ....... (1.48) (.92) (.13) (.43) --
-----------------------------------------------------------------------
Total distributions ................................. (1.55) (.96) (.25) (.54) --
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Net asset value, end of period ...................... $18.64 $17.52 $15.87 $13.08 $13.38
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (%) (b) ................................ 15.50** 17.18 23.62 1.88 11.50**
Ratios and Supplemental Data
Net assets, end of period ($ millions) .............. 134 89 68 35 29
Ratio of operating expenses, net to average daily net
assets (%) ....................................... 1.25* 1.25 1.25 1.25 1.25*
Ratio of operating expenses before expense
reductions, to average daily net assets(%) ....... 1.33* 1.31 1.44 1.61 2.16*
Ratio of net investment income to average daily net
assets (%) ....................................... 1.39* 1.34 1.57 1.16 1.56*
Portfolio turnover rate (%) ......................... 64.37* 90.8 98.2 74.6 60.8*
Average commission rate paid (c) .................... $.0551 $.0577 $ -- $ -- $ --
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) Total return would have been lower had certain expenses not been reduced.
(c) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal years beginning on or after October 1, 1995.
* Annualized
** Not annualized
17 -- SCUDDER VALUE FUND
<PAGE>
Notes to Financial Statements (Unaudited)
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 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 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.
Foreign Currency Translations. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency transactions are translated into U.S. dollars
on the following basis:
(i) market value of investment securities, other assets and liabilities at the
daily rates of exchange, and
(ii) purchases and sales of investment securities, dividend and interest income
and certain expenses at the rates of exchange prevailing on the respective
dates of such transactions.
The Fund does not isolate that portion of gains and losses on investments which
is due to changes in foreign exchange rates from that which is due to changes in
market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments.
Net realized and unrealized gain (loss) from foreign currency related
transactions includes gains and losses between trade and settlement dates on
securities transactions, gains and losses arising from the sales of foreign
currency, and gains and losses between the ex and payment dates on dividends,
interest, and foreign withholding taxes.
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
18 -- SCUDDER VALUE FUND
<PAGE>
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, 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 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.
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.
19 -- SCUDDER VALUE FUND
<PAGE>
B. Purchases and Sales of Securities
During the six months ended March 31, 1997, purchases and sales of investment
securities (excluding short-term investments) aggregated $48,668,060 and
$31,317,979, respectively.
The aggregate face value of futures contracts opened and closed during the six
months ended March 31, 1997 was $34,770,233 and $22,891,861, respectively.
C. Related Parties
Under the Fund's Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund pays the Adviser a fee equal to
an annual rate of 0.70% 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 July 31, 1997 in order to maintain the annualized expenses
of the Fund at not more than 1.25% of average daily net assets. For the six
months ended March 31, 1997, the Adviser did not impose a portion of its
management fee amounting to $43,292 and the amount imposed amounted to $295,751,
of which $121,577 is unpaid at March 31, 1997.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended March 31, 1997, the amount charged to the Fund by SSC
aggregated $163,029, of which $31,915 is unpaid at March 31, 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 six months ended March 31,
1997, the amount charged to the Fund by STC aggregated $25,502, of which $5,005
is unpaid at March 31, 1997.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six months
ended March 31, 1997, the amount charged to the Fund by SFAC aggregated $20,314,
of which $4,044 is unpaid at March 31, 1997.
The Fund pays each of its Trustees not affiliated with the Adviser $4,000
annually, plus specified amounts for attended board and committee meetings. For
the six months ended March 31, 1997, Trustees' fees and expenses aggregated
$19,394.
20 -- SCUDDER VALUE FUND
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21 - SCUDDER VALUE FUND
<PAGE>
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22 - SCUDDER VALUE FUND
<PAGE>
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23 - SCUDDER VALUE FUND
<PAGE>
Officers and Trustees
Daniel Pierce*
President and Trustee
Paul Bancroft III
Trustee; Venture Capitalist and Consultant
Sheryle J. Bolton
Trustee
Thomas J. Devine
Trustee; Consultant
Keith R. Fox
Trustee
Dudley H. Ladd*
Trustee
David S. Lee*
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.
Honorary 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.
24 - SCUDDER VALUE FUND
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund*
Scudder Massachusetts Limited Term
Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund
Retirement Programs
- -------------------
IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan *+++ +++
(a variable annuity)
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities
Fund, Inc.
For complete information on any of the above Scudder funds, including
management fees and expenses, call or write for a free prospectus. Read it
carefully before you invest or send money. +++Funds within categories are listed
in order from expected least risk to most risk. +A portion of the income from
the tax-free funds may be subject to federal, state, and local taxes. *Not
available in all states. +++ +++A no-load variable annuity contract provided by
Charter National Life Insurance Company and its affiliate, offered by Scudder's
insurance agencies, 1-800-225-2470. #These funds, advised by Scudder, Stevens &
Clark, Inc., are traded on various stock exchanges.
25 - SCUDDER VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Scudder Solutions
Convenient ways to invest, quickly and reliably
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan AutoBuy
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 higher and electronically debited from that account.
fewer when it's lower, 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 AutoSell
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 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 Developed for investors who prefer the benefits of no-load
shareholders can take advantage of a Scudder Scudder funds but want ongoing professional assistance in
Brokerage account already reserved for them, with managing a portfolio. Personal CounselSM is a highly
no minimum investment. For information about customized, fee-based asset management service for
Scudder Brokerage Services, call 1-800-700-0820. 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 Service, 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 Funds 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 Funds Centers. Check for a Funds 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: Pathway Series
In a complex financial world, Scudder Pathway Series is a refreshingly simple concept. With one
investment, Pathway gives you instant access to broad diversification in U.S. markets and
across the globe. Select from four Portfolios -- Growth, Balanced, Conservative, or
International -- each with a distinct investment objective that can match your goals. Each
Portfolio, rather than investing in individual securities, invests in carefully selected
Scudder mutual funds.
The share price of each Pathway Series portfolio will fluctuate and the risk associated with
each portfolio is determined by the securities held in each underlying Scudder fund. 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 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 (logo)
