Scudder
Large Company
Value Fund
Semiannual Report
March 31, 1999
- -------------
No-Load Funds
- -------------
A fund which seeks to maximize capital appreciation over the long term through a
value-oriented approach to investing.
A no-load fund with no commissions to buy, sell, or exchange shares.
SCUDDER
<PAGE>
Scudder Large Company Value Fund
- --------------------------------------------------------------------------------
Date of Inception: 4/5/67 Total Net Assets as of Ticker Symbol: SCDUX
3/31/99: $2.4 billion
- --------------------------------------------------------------------------------
o Value stocks continued to trail the major equity indices during the reporting
period, as investors continued to focus on large companies with well above
average growth prospects.
o Scudder Large Company Value Fund posted a total return of 18.56% for the
six-month period ended March 31, slightly ahead of the 18.28% return of its
unmanaged benchmark index, the Russell 1000 Value Index.
o Management has increased the Fund's weighting in cyclicals and money center
banks, and trimmed exposure to utilities and communications stocks.
Table of Contents
3 Letter from the Fund's President 17 Financial Highlights
4 Performance Update 18 Notes to Financial Statements
5 Portfolio Summary 21 Shareholder Meeting Results
6 Portfolio Management Discussion 24 Officers and Trustees
9 Glossary of Investment Terms 25 Investment Products and Services
10 Investment Portfolio 26 Scudder Solutions
14 Financial Statements
2 - Scudder Large Company Value Fund
<PAGE>
Letter from the Fund's President
Dear Shareholders,
Value investors have faced a difficult environment in the last six months.
Even as the Dow Jones Industrial Average crossed the 10,000 barrier amid a great
deal of fanfare, a large number of stocks in the traditional "value" category
produced negative returns during the period. The underperformance of value
stocks has been caused, in part, by the slowdown in corporate profits in the
second half of 1998. In an environment where earnings growth was increasingly
scarce, investors were more willing to pay high price-to-earnings multiples for
companies whose profit growth is above average and perceived to be most
dependable. Conversely, the market has generally avoided companies that have
failed to demonstrate recent earnings momentum. As a result, returns have been
concentrated in large-cap growth stocks, while value names and smaller companies
continue to languish. For a long-term perspective on the performance of value
versus growth, please see the chart on page 6.
Despite this challenging investment backdrop, Scudder Large Company Value
Fund produced strong returns during the reporting period, and beat its benchmark
by a modest margin. Employing a strategy that focuses on identifying catalysts
for resurgent growth in out-of-favor domestic large-caps, the Fund benefited
from holdings in several companies rebounding from short-term difficulties.
Although value-oriented strategies will not always outpace the returns of the
major indices, we believe that over time, the Fund's emphasis on valuation will
produce strong results.
For those of you who are interested in new Scudder products, we are pleased
to introduce Scudder Select 500 Fund and Scudder Select 1000 Growth Fund. Both
funds are managed with the goal of providing long term outperformance compared
to their benchmark indices, the S&P 500 Index and the Russell 1000 Growth Index,
respectively. For more information on either Select fund, please call us at the
number below.
Thank you for your continued investment in Scudder Large Company Value
Fund. If you have any questions about your investment, please call Scudder
Investor Information at 1-800-225-2470, or visit our Web site at
www.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 March 31, 1999
- ---------------------------
Fund Index Comparison
- ---------------------------
Total Return
--------------------------------------------
Period
Ended Growth of Average
3/31/1999 $10,000 Cumulative Annual
--------------------------------------------
Scudder Large Company Value Fund
--------------------------------------------
1 Year $ 10,144 1.44% 1.44%
5 Year $ 23,036 130.36% 18.16%
10 Year $ 36,966 269.66% 13.97%
--------------------------------------------
Russell 1000 Value Index
--------------------------------------------
1 Year $ 10,506 5.06% 5.06%
5 Year $ 27,100 171.00% 22.05%
10 Year $ 46,903 369.03% 16.70%
- ------------------------------
Growth of a $10,000 Investment
- ------------------------------
THE PRINTED DOCUMENT CONTAINS A LINE CHART HERE
CHART DATA:
Scudder Large Company Russell 1000
Value Fund Value Index
'89 10000 10000
'90 10487 11313
'91 11447 12109
'92 13366 13490
'93 15343 16649
'94 16047 17307
'95 16374 19244
'96 21923 25692
'97 25560 30334
'98 36441 44646
'99 36966 46903
The Russell 1000 Value Index consists of securities with less than average
growth orientation. Index returns assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees or expenses.
- ---------------------------------
Returns and Per Share Information
- ---------------------------------
Yearly periods ended March 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
ILLUSTRATING THE FUND TOTAL RETURN (%) AND
INDEX TOTAL RETURN (%)
CHART DATA:
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value $18.14 $17.74 $19.43 $20.88 $19.42 $19.06 $21.74 $22.68 $29.98 $28.10
- -----------------------------------------------------------------------------------------------------------------------------
Income Dividends $ .16 $ .37 $ .22 $ .10 $ -- $ -- $ .08 $ .16 $ .24 $ .18
- -----------------------------------------------------------------------------------------------------------------------------
Capital Gains Distributions $1.45 $1.35 $ .98 $1.25 $2.62 $ .73 $3.50 $2.48 $1.86 $2.10
- -----------------------------------------------------------------------------------------------------------------------------
Fund Total Return (%) 4.87 9.15 16.76 14.79 4.58 2.04 33.88 16.59 42.57 1.44
- -----------------------------------------------------------------------------------------------------------------------------
Index Total Return (%) 13.13 7.04 11.40 23.42 3.95 11.19 33.51 18.07 47.18 5.06
- -----------------------------------------------------------------------------------------------------------------------------
</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 March 31, 1999
- ---------------
Diversification
- ---------------
A graph in the form of a pie chart appears here, illustrating the exact data
points in the table below.
Equity 99%
Cash Equivalents 1%
------------------------------------
100%
------------------------------------
Management seeks to remain fully invested in reasonably valued large-cap
stocks.
- --------------------------------------
Sectors (Excludes 1% Cash Equivalents)
- --------------------------------------
A graph in the form of a pie chart appears here, illustrating the exact data
points in the table below.
Financial 26%
Technology 13%
Energy 11%
Manufacturing 7%
Communications 7%
Consumer Staples 6%
Durables 6%
Health 5%
Utilities 4%
Other 15%
------------------------------------
100%
------------------------------------
- ------------------------------
Ten Largest Equity Holdings
(30% of Portfolio)
- ------------------------------
The Fund's bottom-up approach is the primary driver of its sector weights.
1. International Business Machines
Corp.
Manufacturer of computers and
servicer of information
processing units
2. Chase Manhattan Corp.
Commercial bank
3. Citigroup Inc.
Diversified financial services
company
4. AT&T Corp. Telecommunication services
5. Union Pacific Corp.
Railroad, trucking, real estate
and mining company
6. Bell Atlantic Corp.
Telecommunication services
7. Dow Chemical Co.
Chemical producer
8. Motorola Inc.
Manufacturer of telecommunication
products and semiconductors
9. Exxon Corp.
International oil and gas company
10. American Home Products Corp.
Diversified pharmaceutical company
Management strives to invest in companies where positive fundamental changes are
likely to result in higher earnings.
For more complex details about the Fund's investment portfolio, see page 10. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
5 - Scudder Large Company Value Fund
<PAGE>
Portfolio Management Discussion
In the following interview, Portfolio Manager Kathleen Millard discusses Scudder
Large Company Value Fund's strategy and the market environment during the
six-month period ending March 31, 1999.
Q: Value stocks generally underperformed growth stocks during the reporting
period, continuing a trend that has been in place for some time. In your view,
what is the cause of this phenomenon?
A: Value stocks have been out of favor for the past eighteen months, but the
divergence has become much more pronounced in the wake of last year's financial
crises. Fears of collapse in the emerging markets led investors to believe that
a slowdown in the U.S. economy was imminent. At the same time, corporate profits
declined across many sectors. In this seemingly uncertain environment, investors
sought cover in larger companies perceived to have the highest potential for
steady growth, and avoided those that appeared to be in danger of missing their
earnings estimates. As a result, even companies that were suffering only
short-term downtrends in their earnings were punished along with those whose
difficulties were more complex. While such an environment can be frustrating for
value investors, especially when Internet companies and technology stocks are
performing so well, we sought to use it as an opportunity to invest in quality
companies at bargain prices.
Q: How did the Fund perform in the period?
A: In the six-month period ended March 31, 1999, the Fund returned 18.56%, in
line with the 18.28% return of the Russell 1000 Value Index. Our position in
money center banks, in which we
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE:
- --------------------------------------------------------------------------------
Market Environment
Russell 1000 Value vs. Russell 1000 Growth
- --------------------------------------------------------------------------------
BAR CHART DATA
Value Growth
outperforms Growth outperforms Value
1979 3.4%
1980 15.2%
1981 12.6%
1982 0.4%
1983 12.3%
1984 11.0%
1985 1.3%
1986 4.6%
1987 4.8%
1988 11.9%
1989 10.7%
1990 7.8%
1991 16.6%
1992 8.8%
1993 15.2%
1994 4.6%
1995 1.2%
1996 1.5%
1997 4.7%
1998 23.1%
The bars in this chart represent the difference between the return of the
Russell 1000 Growth Index and the return of the Russell 1000 Value Index for
each year.
6 - Scudder Large Company Value Fund
<PAGE>
established a large position following the fall correction, helped
performance significantly. We bought Citigroup and Chase Manhattan Bank when
they fell to extremely attractive levels in late September and early October,
and have since benefited as the stocks rebounded as fears of a global financial
meltdown dissipated. On the negative side, the Fund was hurt by its position in
cyclical stocks, which were depressed due to concerns about slower global
growth. Despite the short-term underperformance of cyclicals, we remain
confident that stock prices do not reflect the long-term opportunities available
in this sector. In the past six months, our bottom-up strategy also prompted us
to trim holdings in sectors that have become more fully valued, such as
utilities and communications.
Q: Please review the Fund's investment strategy.
A: We strive to build the optimal portfolio by combining quantitative value
screens with original research and risk analysis. We begin by applying a
valuation screen to each company in our investment universe, which is the
largest 1000 companies in the U.S. (as represented by the Russell 1000 Index).
Companies that are ranked in the top four deciles based on valuation are our
potential buy candidates, while those that fall into the 9th and 10th deciles
are likely to be sold if they are held in the portfolio. We narrow the list
further by employing intensive fundamental analysis to determine which "buy"
rated companies have the strongest financial positions and most capable
management teams. Finally, we determine which stocks will likely minimize
portfolio risk by contributing to overall diversification. By combining these
disciplines, we hope to build a portfolio of reasonably valued, fundamentally
strong large-cap companies.
Q: When evaluating individual stocks using fundamental analysis, what are you
looking for, specifically?
A: Most important, we look for management teams that are creating value for
shareholders. To accomplish this, we seek to establish the level and direction
of critical income statement, balance sheet, and cash flow drivers such as
volume growth and operating margin. The purpose of this intensive approach is to
distinguish between "value traps," or companies whose stock prices are depressed
for a reason, and "value opportunities," where poor price performance belies
positive changes taking place within the firm. In the process, we search for
companies whose actual earnings have fallen below their normalized earnings.
(Normalized earnings are the smoothed-out level of earnings over an economic
cycle, removing the peaks and troughs associated with fluctuations in the
economy.) We believe that over time, this strategy will allow us to separate
companies that are poised to rebound from those whose difficulties are likely to
continue.
Q: Do you have an example of how your stock selection criteria work on the buy
side?
A: Motorola, the number eight holding in the portfolio as of March 31, is an
example of a company whose stock price was under pressure even though our
fundamental research revealed the underpinnings for a turnaround. We started
buying Motorola late last summer when earnings and valuation reached what we
7 - Scudder Large Company Value Fund
<PAGE>
believed to be their lows. The company was losing money in both its cellular
business and its semiconductor unit, where a cyclical slump was hurting
revenues. As a result, actual earnings were far below normalized earnings at a
time when management was taking steps to get the company back on track. We felt
that the restructuring of the company's semiconductor division was an action
that was guaranteed to take the business unit out of the red. The positive
impact of this change was revealed in the first quarter, when Motorola reported
that their semiconductor unit had turned in an operating profit, two quarters
ahead of schedule. In addition, we believed that new products in their cellular
division would increase the company's position in that market, and indeed,
business has improved. The stock has risen sharply in the months since the tech
correction last fall, and has made a significant contribution to Fund
performance.
Union Pacific Corp. is a traditional cyclical stock that was beaten down during
1998 as the expected benefits of industry consolidation failed to materialize.
Earnings were depressed and the stock was down sharply -- representing the
concurrent troughs we look for in these two areas -- but we felt that the new
management team would begin to turn the company around. If Union Pacific's
growth rate can simply return to the industry average, we believe the stock
could have significant upside. Union Pacific, the fifth largest holding in the
portfolio, is a prime example of a value stock that we believe offers more to
investors than just a low P/E ratio.
Q: How about on the sell side?
A: In January we sold our position in Heinz, which our quantitative models
showed to be overvalued. Although management's rationalization of the product
line had resulted in improved earnings, we felt that the potential for further
good news on this front was limited. In addition, we already had a large
position in consumer staples in the portfolio, so selling the stock helped
reduce the Fund's risk profile. Since we eliminated our position in Heinz, the
stock has fallen off sharply.
Q: What is your outlook for the remainder of the year? A: In general, we feel
that the prospects for value stocks are positive, although it is impossible to
say exactly when the turn will come. The trends of 1998 continued into the first
quarter of 1999, although we have seen a bounce in cyclicals and other depressed
sectors in April, after the close of the reporting period. Over the long term,
we expect that a bounce in the overseas economies could be the elixir necessary
to produce a sustained rebound in cyclicals and other value names. Regardless of
what happens in the market this year, however, it is important for investors to
keep in mind that the market's preference between value and growth tends to move
in long cycles. While investors have favored growth at any price over the last
six quarters, longer-term history is on the side of a price-sensitive value
approach.
8 - Scudder Large Company Value Fund
<PAGE>
Glossary of Investment Terms
CONSUMER STAPLES Products purchased by consumers on a regular basis,
such as food, beverages, alcohol, and tobacco. In the
aggregate, sales of consumer staples tend to be
steady and less sensitive to economic fluctuations.
CYCLICAL STOCKS Companies whose earnings are closely tied to the
business cycle. Cyclical industries include steel,
cement, paper, machinery, and autos.
FUNDAMENTAL RESEARCH Analysis of companies based on the projected impact
of management, products, sales, and earnings on their
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.
MONEY CENTER BANK A bank in one of the major financial centers of the
world. These banks play a major national and
international economic role because they are large
lenders, depositors, and buyers of money market
instruments and securities as well as large lenders
to international governments and corporations. As
distinct from regional banks, which focus on one area
of the country.
PRICE/EARNINGS RATIO A widely used gauge of a stock's valuation that
(P/E) indicates what investors are paying for a company's
(also "earnings earning power at the current stock price. A P/E ratio
multiple") may be based on a company's projected earnings for
the coming 12 months. A higher "earnings
multiple" indicates higher expected earnings growth,
along with greater risk of
earnings disappointment.
RESTRUCTURING The general term for major corporate changes aimed at
greater efficiency and adaptation to changing
markets. Cost-cutting initiatives, debt retirement,
management realignments, and the sale of non-core
businesses are all developments frequently
associated with corporate restructuring.
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. Distinct from growth stock.
(Sources: Scudder Kemper Investments Inc.; Barron's Dictionary of Finance and
Investment Terms)
9 - Scudder Large Company Value Fund
<PAGE>
Investment Portfolio as of March 31, 1999 (Unaudited)
Principal Market
Amount ($) Value ($)
- --------------------------------------------------------------------------------
Repurchase Agreements 1.1%
- --------------------------------------------------------------------------------
Repurchase Agreement with Donaldson, Lufkin &
Jenrette dated 3/31/1999 at 4.9%, to be
repurchased at $27,731,774 on 4/1/1999,
collateralized by a $25,582,000 U.S. Treasury Note, ===========
6.5%, 10/15/2006 (Cost $27,728,000)...... 27,728,000 27,728,000
===========
Shares
- -------------------------------------------------------------------------------
Common Stocks 98.9%
- -------------------------------------------------------------------------------
Consumer Discretionary 3.9%
Department & Chain Stores
Consolidated Stores Corp.* ................. 432,800 13,119,250
Dayton Hudson Corp. ........................ 691,400 46,064,525
Federated Department Stores, Inc.* ......... 849,000 34,066,125
-----------
93,249,900
-----------
Consumer Staples 6.0%
Alcohol & Tobacco 2.1%
Philip Morris Companies, Inc. .............. 1,402,100 49,336,394
-----------
Food & Beverage 3.0%
ConAgra, Inc. .............................. 1,350,700 34,527,269
Unilever NV (New York shares) .............. 553,600 36,779,800
-----------
71,307,069
-----------
Textiles 0.9%
VF Corporation ............................. 476,500 22,484,844
-----------
Health 4.5%
Health Industry Services 0.7%
Humana Inc.* ............................... 1,017,200 17,546,700
-----------
Pharmaceuticals 3.8%
American Home Products Corp. ............... 897,100 58,535,775
Pharmacia & Upjohn, Inc. ................... 515,400 32,148,075
-----------
90,683,850
-----------
Communications 7.2%
Telephone/Communications
AT&T Corp. ................................. 980,100 78,224,225
Bell Atlantic Corp. ........................ 1,278,200 66,066,963
BellSouth Corp. ............................ 740,800 29,678,300
-----------
173,969,488
-----------
The accompanying notes are an integral part of the financial statements.
10 - Scudder Large Company Value Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Financial 25.4%
Banks 12.9%
BANC ONE CORP ............................................. 426,214 23,468,408
BankAmerica Corp. ......................................... 773,728 54,644,540
BankBoston Corp. .......................................... 760,600 32,943,488
Chase Manhattan Corp. ..................................... 1,100,900 89,516,931
First Union Corp. ......................................... 729,800 38,998,688
J.P. Morgan & Co., Inc. ................................... 331,900 40,948,163
KeyCorp ................................................... 922,900 27,975,406
-----------
308,495,624
-----------
Insurance 4.9%
Allstate Corp. ............................................ 1,156,600 42,866,488
Cigna Corp. ............................................... 621,900 52,122,994
XL Capital Ltd. " A" ...................................... 379,700 23,066,775
-----------
118,056,257
-----------
Consumer Finance 5.7%
American Express Credit Corp. ............................. 468,700 55,072,250
Citigroup Inc. ............................................ 1,281,899 81,881,299
-----------
136,953,549
-----------
Other Financial Companies 1.9%
Federal National Mortgage Association ..................... 664,800 46,037,400
-----------
Media 3.2%
Broadcasting & Entertainment 1.7%
Viacom Inc. "B"* .......................................... 505,900 42,463,981
-----------
Print Media 1.5%
Knight-Ridder, Inc. ....................................... 710,500 35,525,000
-----------
Service Industries 2.3%
Investment
Merrill Lynch & Co., Inc. ................................. 615,100 54,397,906
-----------
Durables 5.9%
Aerospace 3.0%
Boeing Co. ................................................ 501,300 17,106,863
United Technologies Corp. ................................. 397,200 53,795,775
-----------
70,902,638
-----------
Automobiles 2.0%
Ford Motor Co. ............................................ 846,500 48,038,875
-----------
</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>
Tires 0.9%
Goodyear Tire & Rubber Co. ................................ 449,800 22,405,663
-----------
Manufacturing 7.3%
Chemicals 3.8%
Dow Chemical Co. .......................................... 688,800 64,187,550
E.I. du Pont de Nemours & Co. ............................. 466,700 27,097,769
-----------
91,285,319
-----------
Containers & Paper 0.8%
Sonoco Products Co. ....................................... 793,810 18,257,630
-----------
Diversified Manufacturing 1.5%
Textron, Inc. ............................................. 461,900 35,739,513
-----------
Hand Tools 1.2%
Black & Decker Corp. ...................................... 546,600 30,302,138
-----------
Technology 12.8%
Diverse Electronic Products 2.6%
Motorola Inc. ............................................. 843,800 61,808,350
-----------
EDP Peripherals 1.7%
Seagate Technology, Inc.* ................................. 1,408,100 41,626,956
-----------
Electronic Data Processing 6.2%
Hewlett-Packard Co. ....................................... 859,900 58,311,969
International Business Machines Corp. ..................... 507,100 89,883,475
-----------
148,195,444
-----------
Military Electronics 2.3%
General Dynamics Corp. .................................... 253,700 16,300,225
Raytheon Co. "A" .......................................... 669,800 38,680,950
-----------
54,981,175
-----------
Energy 10.6%
Oil & Gas Production 2.5%
Coastal Corp. ............................................. 597,700 19,724,100
Royal Dutch Petroleum Co. ................................. 140,000 7,451,774
Royal Dutch Petroleum Co. (New York shares) ............... 650,800 33,841,600
-----------
61,017,474
-----------
Oil Companies 8.1%
Atlantic Richfield Co. .................................... 213,100 15,556,300
BP Amoco PLC .............................................. 189,700 19,147,844
Chevron Corp. ............................................. 297,200 26,283,625
Exxon Corp. ............................................... 873,000 61,601,063
</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>
Mobil Corp. ........................................... 395,200 34,777,600
Texaco Inc. ........................................... 646,200 36,671,850
-----------
194,038,282
-----------
Metals & Minerals 0.7%
Steel & Metals
Phelps Dodge Corp. .................................... 361,500 17,803,875
-----------
Construction 2.1%
Forest Products
Weyerhaeuser Co. ...................................... 893,200 49,572,600
-----------
Transportation 3.1%
Railroads
Union Pacific Corp. ................................... 1,374,500 73,449,844
-----------
Utilities 3.9%
Electric Utilities
American Electric Power Co. ........................... 378,500 15,021,719
Duke Energy Corp. ..................................... 606,700 33,140,988
FPL Group, Inc. ....................................... 474,800 25,283,100
Unicom Corp. .......................................... 584,900 21,385,406
-----------
94,831,213
-----------
=======================================================================================
Total Common Stocks (Cost $1,650,523,390) 2,374,764,951
=======================================================================================
- ---------------------------------------------------------------------------------------
=======================================================================================
Total Investment Portfolio -- 100.0% (Cost $1,678,251,390) (a) 2,402,492,951
=======================================================================================
</TABLE>
* Non-income producing security.
(a) The cost for federal income tax purposes was $1,680,279,948. At March 31,
1999, net unrealized appreciation for all securities based on tax cost was
$722,213,003. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $748,258,871 and aggregate gross unrealized (a) depreciation for all
securities in which there was an excess of tax cost over market value of
$26,045,868.
The accompanying notes are an integral part of the financial statements.
13 - Scudder Large Company Value Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Assets
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investments, at market (identified cost $1,678,251,390) ........ $2,402,492,951
Cash ........................................................... 892
Receivable for investments sold ................................ 238,375
Dividends and interest receivable .............................. 3,604,372
Receivable on Fund shares sold ................................. 2,509,927
Other assets ................................................... 39,170
--------------
Total assets ................................................... 2,408,885,687
Liabilities
- ------------------------------------------------------------------------------------------------------
Payable for investments purchased .............................. 11,745,559
Payable for Fund shares redeemed ............................... 2,617,849
Accrued management fee ......................................... 1,151,352
Other payables and accrued expenses ............................ 699,949
--------------
Total liabilities .............................................. 16,214,709
====================================================================================
Net assets, at market value $2,392,670,978
====================================================================================
Net Assets
- ------------------------------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income ............................ 22,175,752
Unrealized appreciation (depreciation) on investments .......... 724,241,561
Accumulated net realized gain (loss) ........................... 27,455,407
Paid-in capital ................................................ 1,618,798,258
====================================================================================
Net assets, at market value $2,392,670,978
====================================================================================
Net Asset Value
------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($2,392,670,978 / 85,154,220 outstanding shares of
beneficial interest, $.01 par value, unlimited =============
number of shares authorized) ................................ $28.10
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - Scudder Large Company Value Fund
<PAGE>
Statement of Operations
six months ended March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Investment Income
- --------------------------------------------------------------------------------------------------------
<S> <C>
Income:
Dividends (net of foreign taxes withheld of $78,858) .......... $ 22,436,801
Interest ...................................................... 1,048,318
------------
23,485,119
Expenses:
Management fee ................................................ 7,013,609
Services to shareholders ...................................... 2,623,380
Trustees' fees and expenses ................................... 14,797
Custodian and accounting fees ................................. 121,012
Reports to shareholders ....................................... 156,749
Auditing ...................................................... 24,755
Legal ......................................................... 13,712
Registration fees ............................................. 69,386
Other ......................................................... 73,865
------------
10,111,265
==============================================================================
Net investment income 13,373,854
==============================================================================
Realized and unrealized gain (loss) on investment transactions
--------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ................................................... 63,282,086
Net unrealized appreciation (depreciation) during the period on:
Investments ................................................... 292,661,028
==============================================================================
Net gain (loss) on investment transactions 355,943,114
==============================================================================
==============================================================================
Net increase (decrease) in net assets resulting from operations $369,316,968
==============================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - Scudder Large Company Value Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended Year
March 31, 1999 Ended September
Increase (Decrease) in Net Assets (Unaudited) 30, 1998
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .............................. $ 13,373,854 $ 28,421,758
Net realized gain (loss) from investment transactions 63,282,086 162,388,328
Net unrealized appreciation (depreciation) on
investment transactions during the period ........ 292,661,028 (280,820,721)
---------------- ----------------
Net increase (decrease) in net assets resulting from
operations ....................................... 369,316,968 (90,010,635)
---------------- ----------------
Distributions to shareholders from:
Net investment income .............................. (14,320,246) (18,248,388)
---------------- ----------------
Net realized gain on investment transactions ....... (166,948,064) (141,425,011)
---------------- ----------------
Fund share transactions:
Proceeds from shares sold .......................... 346,259,731 349,010,684
Net asset value of shares issued to shareholders in
reinvestment of distributions .................... 172,806,566 152,377,751
Cost of shares redeemed ............................ (311,609,851) (467,271,665)
---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions ..................................... 207,456,446 34,116,770
---------------- ----------------
Increase (decrease) in net assets .................. 395,505,104 (215,567,264)
Net assets at beginning of period .................. 1,997,165,874 2,212,733,138
Net assets at end of period (including undistributed
net investment income of $22,175,752 and ================ ================
$23,122,144, respectively) ....................... $ 2,392,670,978 $ 1,997,165,874
================ ================
Other Information
- ----------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period .......... 77,857,803 76,343,193
---------------- ----------------
Shares sold ........................................ 12,199,865 12,220,382
Shares issued to shareholders in reinvestment of
distributions ...................................... 6,234,005 5,700,627
Shares redeemed .................................... (11,137,453) (16,406,399)
---------------- ----------------
Net increase (decrease) in Fund shares ............ 7,296,417 1,514,610
================ ================
Shares outstanding at end of period ................ 85,154,220 77,857,803
================ ================
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - 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>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended
March 31,
1999(a) Years Ended September 30,
(Unaudited) 1998(a) 1997(a)+ 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
==================================================================================
Net asset value, beginning of period ........... $25.65 $28.98 $22.64 $22.92 $19.54 $23.06
Income from investment operations: ==================================================================================
Net investment income (loss) ................... .16 .36 .38 .36 .13 (.02)
Net realized and unrealized gain (loss) on
investment transactions ...................... 4.57 (1.59) 8.60 2.94 3.98 (.88)
==================================================================================
Total from investment operations ............... 4.73 (1.23) 8.98 3.30 4.11 (.90)
==================================================================================
Less distributions from:
Net investment income .......................... (.18) (.24) (.16) (.08) -- --
Net realized gains on investment transactions .. (2.10) (1.86) (2.48) (3.50) (.73) (2.62)
==================================================================================
Total distributions ............................ (2.28) (2.10) (2.64) (3.58) (.73) (2.62)
==================================================================================
==================================================================================
Net asset value, end of period ................. $28.10 $25.65 $28.98 $22.64 $22.92 $19.54
==================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (%) ............................... 18.56** (4.54) 43.06 15.94 21.96 (4.72)
Ratios and Supplemental Data
Net assets, end of period ($ millions) ......... 2,393 1,997 2,213 1,651 1,492 1,338
Ratio of operating expenses to average daily net
assets (%) ................................... .89* .88 .93 .92 .98 .97
Ratio of net investment income (loss) to average
daily net assets (%) ......................... 1.18* 1.25 1.51 1.62 .62 (.12)
Portfolio turnover rate (%) .................... 39.2* 39.5 43.0 150.7 153.6 75.8
</TABLE>
(a) Based on monthly average shares outstanding during the period.
+ On February 1, 1997, the Fund adopted its current name. Prior to that date,
the Fund was known as the Scudder Capital Growth Fund.
* Annualized.
** Not Annualized.
17 - Scudder Large Company Value Fund
<PAGE>
Notes to Financial Statements (Unaudited)
A. Significant Accounting Policies
Scudder Large Company Value Fund (formerly Scudder Capital Growth Fund) (the
"Fund") is a diversified series of the Value Equity Trust (the "Trust")
(formerly Scudder Equity 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 Stock Market, Inc.
("Nasdaq"), 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 with remaining maturities greater than sixty days are
valued by pricing agents approved by the officers of the Trust, whose 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
Trustees.
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 is equal to at least 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
18 - Scudder Large Company Value Fund
<PAGE>
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.
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 six months ended March 31, 1999, purchases and sales of investment
securities (excluding short-term investments) aggregated $504,950,556 and
$436,185,459, respectively.
C. Related Parties
Under the Investment Management Agreement (the "Agreement") with Scudder Kemper
Investments, Inc. ("Scudder Kemper" or 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, 0.55% of
the next $500,000,000 of such net assets, and 0.50% of such net assets in excess
of $2,000,000,000 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 Management Agreement. For the six months ended
March 31, 1999, the fees pursuant to these agreements amounted to $7,013,609
which was equivalent to an annual effective rate of .62% of the Fund's average
daily net assets.
Effective September 7, 1998, Zurich Insurance Company ("Zurich"), majority owner
of the Adviser, entered into an agreement with B.A.T Industries p.l.c. ("B.A.T")
pursuant to which the financial services businesses of B.A.T were combined with
Zurich's businesses to form a new global insurance and financial services
company known as Zurich Financial Services. Upon consummation of the
transaction, the Fund's Management Agreement with Scudder Kemper was deemed to
have been assigned and, therefore, terminated. In December 1998, the Board of
Trustees and the shareholders of the Fund approved a new investment management
agreement with Scudder Kemper, which is substantially identical to the former
Management Agreement, except for the dates of execution and termination.
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 $1,246,863 charged to the Fund by SSC for the six
months ended March 31, 1999, of which $204,726 is unpaid at March 31, 1999.
19 - Scudder Large Company Value Fund
<PAGE>
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,
1999, the amount charged to the Fund by STC aggregated $956,980, of which
$316,112 is unpaid at March 31, 1999.
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, 1999, the amount charged to the Fund by SFAC aggregated $86,410,
of which $28,767 is unpaid at March 31, 1999.
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 March 31, 1999, the Special
Servicing Agreement expense charged to the Fund amounted to $19,047, of which
$10,829 is unpaid at March 31, 1999.
The Fund pays each of its Trustees not affiliated with the Adviser an annual
retainer plus specified amounts for attended board and committee meetings. For
the six months ended March 31, 1999, Trustees' fees and expenses aggregated
$14,797.
D. Line of Credit
The Fund and several Scudder Funds (the "Participants") share in a $850 million
revolving credit facility for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated pro rata among each of the Participants. Interest is
calculated based on the market rates at the time of the borrowing. The Fund may
borrow up to a maximum of 33 percent of its net assets under the agreement.
20 - Scudder Large Company Value Fund
<PAGE>
Shareholder Meeting Results
A Special Meeting of Shareholders (the "Meeting") of Scudder Large Company Value
Fund (the "Fund") was held on December 15, 1998, at the office of Scudder Kemper
Investments, Inc., Two International Place, Boston, Massachusetts 02110. At the
Meeting the following matters were voted upon by the shareholders (the resulting
votes for each matter are presented below).
1. To approve a new Investment Management Agreement for the Fund with
Scudder Kemper Investments, Inc.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
40,548,767 1,235,900 1,585,712 0
2. To approve the revision of the Fund's fundamental lending policy.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
37,468,110 1,928,963 2,287,319 1,685,987
- --------------------------------------------------------------------------------
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary
power to vote on a particular matter.
21 - Scudder Large Company Value Fund
<PAGE>
This Page
intentionally
left blank.
22 - Scudder Large Company Value Fund
<PAGE>
This Page
intentionally
left blank.
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
Keith R. Fox
Trustee; Private Equity Investor
William H. Luers
Trustee; Chairman and President of the U.N. Association of the U.S.A.
Kathryn L. Quirk*
Trustee, Vice President and Assistant Secretary
Joan Spero
Trustee; President, Doris Duke Charitable Foundation
Thomas J. Devine
Honorary Trustee; Consultant
Wilson Nolen
Honorary Trustee; Consultant
Robert G. Stone, Jr.
Honorary Trustee; Chairman Emeritus and Director, Kirby Corporation
Donald E. Hall*
Vice President
Ann M. McCreary*
Vice President
Thomas W. Joseph*
Vice President
Kathleen T. Millard*
Vice President
John R. Hebble*
Treasurer
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, 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 --
Prime Reserve Shares*
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 Corporate Bond 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 Dividend & Growth Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment 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 Equity
- -------------
Worldwide
Scudder Global Fund
Scudder International Value Fund
Scudder International Growth and Income Fund
Scudder International Fund++
Scudder International Growth 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.
Industry Sector Funds
- ---------------------
Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund
Preferred Series
- ----------------
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small
Company Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
Education Accounts
- ------------------
Education IRA
UGMA/UTMA
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
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. ***Only the Scudder Shares of the Fund are part
of the Scudder Family of Funds. ++Only the International Shares of the Fund are
part of the Scudder Family of Funds. +++ +++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. +++ +++ +++A no-load variable
annuity contract issued by Glenbrook Life and Annuity Company and underwritten
by Allstate Financial Services, Inc., sold by Scudder's insurance agencies,
1-800-225-2470. #These funds, advised by Scudder Kemper Investments, Inc., are
traded on the New York Stock Exchange and, in some cases, on various other 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 money is Lets you purchase Scudder fund shares
electronically debited from your bank account monthly to electronically, avoiding potential mailing delays;
regularly purchase fund shares and "dollar cost average" money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from a previously designated bank
fewer when it's higher, which can reduce your average account.
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 -- www.scudder.com
1-800-343-2890
Personal Investment Organizer: 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 previously designated.
Distributions Direct
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 8,000 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
800 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 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
</TABLE>
27 - Scudder Large Company Value Fund
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc., is one of the largest and most experienced
investment management oganizations worldwide, managing more than $280 billion in
assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 79
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Financial Services Group. As a result, Zurich's subsidiary, Zurich
Kemper Investments, Inc., with 50 years of mutual fund and investment management
experience, was combined with Scudder. Headquartered in New York, Scudder Kemper
Investments offers a full range of investment counsel and asset management
capabilities, based on a combination of proprietary research and disciplined,
long-term investment strategies. With its global investment resources and
perspective, the firm seeks opportunities in markets throughout the world to
meet the needs of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Financial Services Group. The Zurich Financial Services Group is
an internationally recognized leader in financial services, including
property/casualty and life insurance, reinsurance, and asset management.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
