SCUDDER
Scudder Value Fund
Supplement to Prospectus
Dated February 1, 1999
The following text replaces the first three paragraphs under the section
entitled "Fund Summary -- Investment objective and principal strategies" on page
1 of the fund's prospectus:
Value Fund seeks to provide long-term growth of capital through investment in
undervalued equity securities. The fund invests primarily in the stock of
larger, established U.S. companies that the fund's portfolio management team
believes are undervalued in the marketplace.
Stocks trade at a discount for many reasons. Typically, these companies, or
their industries, have fallen out of favor with investors because of such things
as earnings disappointments, negative industry or economic events, or investor
skepticism. As a result, their stock prices may not accurately reflect their
long-term business potential. Accordingly, the prices of these stocks may rise
as business fundamentals improve or as investor perceptions change. For example,
stock prices are often affected beneficially when a company's earnings exceed
general expectations or when investors begin to appreciate the full extent of a
company's business potential.
The following text replaces the section entitled "Principal Risks -- Value
Investing Risk" on page 2 of the fund's prospectus:
Value Investing Risk. The determination that a stock is undervalued is
subjective; the market may not agree, and a stock's price may not rise to what
the investment manager believes is its full value. It may even decrease in
value.
The following text replaces the section entitled "About the Fund -- Principal
strategies and investments" on pages 4 and 5 of the fund's prospectus:
The fund invests at least 80% of its assets in equity securities, primarily
common stocks of larger established domestic companies with market
capitalizations of at least $1 billion. The investment manager uses in-depth
fundamental and quantitative research to identify companies that are currently
undervalued in relation to future business prospects.
The portfolio management team uses a proprietary computer model to rank the 1000
stocks that comprise the Russell 1000 Index -- a widely used large stock
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universe -- based on their relative valuations. A company's valuation is
measured by comparing its stock price to its business fundamentals, such as
sales, earnings or book value. The portfolio management team focuses on the
stocks with the lowest valuations, which are further analyzed and rated using
fundamental research, such as an examination of a company's historical earnings
patterns, sales growth and profit margins in order to assess the likelihood of a
rebound in the stock price if a company's business fundamentals improve or
market conditions change.
In an effort to manage the risk exposure of the fund, the portfolio management
team then assesses the expected volatility of the fund and the potential impact
the most promising of the stocks may have on the fund's risk level. Based on
this information, the fund's portfolio management team selects approximately
60-90 stocks that it believes offer the greatest potential for attractive
long-term gains.
The fund typically sells a stock when its price is no longer considered to be a
value, it is less likely to benefit from the current market or economic
environment, it experiences deteriorating fundamentals or its price performance
falls short of the portfolio management team's expectations.
For temporary defensive purposes, the fund may invest without limit in cash and
cash equivalents. Because this defensive policy differs from the fund's
investment objective, the fund may not achieve its goals during a defensive
period.
While not principal investments or strategies of the fund, the fund may utilize
other investments and investment techniques that may impact fund performance,
including options, futures and other strategic transactions.
More information about these and other investments and strategies of the fund is
provided in the Statement of Additional Information. Of course, there can be no
guarantee that, by following this investment strategy, the fund will achieve its
objective.
The following text replaces the section entitled "About the Fund -- Additional
principal risks" on page 5 of the fund's prospectus:
Equity investing risk. An investment in the common stock of a company represents
a proportionate ownership interest in that company. Therefore, the fund
participates in the success or failure of any company in which it holds stock.
Compared to other classes of financial assets, such as bonds or cash
equivalents, common stocks have historically offered a greater potential for
gain on investment. However, the market value of common stocks can fluctuate
significantly, reflecting such things as the business performance of the issuing
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company, investors' perceptions of the company or the overall stock market and
general economic or financial market movements.
Inflation risk. There is a possibility that the rising prices of goods and
services may have the effect of offsetting a fund's real return.
The following information replaces the disclosure concerning the fund's Lead
Manager in the "Portfolio management" section on page 7 of the fund's
prospectus:
Lois Friedman Roman is the Lead Manager for the Scudder Value Fund. Ms.
Roman joined the team of the fund in 1999, and joined Scudder Kemper in
1994 as an equity analyst. Prior to joining the Adviser, she was an analyst
for an unaffiliated investment management firm for three years. She has ten
years of investment experience as an equity analyst.
The following information replaces the disclosure concerning the fund's Manager
in the "Portfolio management" section on page 7 of the fund's prospectus:
Kathleen T. Millard is a Manager for the Scudder Value Fund. Ms. Millard
joined the team of the fund in 1999, and joined Scudder Kemper in 1991 as a
portfolio manager. She has 15 years of investment experience and has been a
portfolio manager since 1986.
June 30, 1999
