SCUDDER
INVESMENTS (SM)
[LOGO]
April 12, 2000
Dear Scudder Investor,
On the reverse side, you will find a prospectus supplement for Scudder Select
500 Fund and Scudder Select 1000 Growth Fund. The information regarding the
funds' investment objectives, strategies and risks has been revised to comply
with evolving disclosure requirements.
If you have any questions, please call us at 1-800-SCUDDER and our
representatives will be happy to assist you.
Sincerely,
/s/Mark S. Casady
Mark S. Casady
President,
Scudder Investor Services, Inc.
This letter is for explanatory purposes and is not part of the prospectus
supplement on the reverse side.
(over, please)
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SCUDDER
INVESMENTS (SM)
[LOGO]
Scudder Select 500 Fund
Scudder Select 1000 Growth Fund
Supplement to Prospectus Dated March 31, 1999
The following replaces the sections under "Investment objective" and "Main
investment strategies" on pages 1 and 2 of the funds' prospectus:
Scudder Select 500 Fund
Scudder Select 500 fund seeks long-term growth and income by investing at least
80% of total assets in common stocks of companies that are included in the
Standard & Poor's 500 Composite Stock Price Index. This index is widely
considered to be a measure of the performance of large-cap U.S. stocks.
In choosing stocks, the portfolio managers begin by using a computer model to
rank the stocks in the index, favoring those that the managers believe have
strong potential for growth of earnings, reasonable valuations in light of
business prospects and positive price momentum. The fund generally does not
invest in stocks that the model ranks in the bottom 20%.
The fund generally seeks to keep its portfolio similar to the index in its
industry weightings, average market capitalization and significant fundamental
characteristics (such as price-to-book ratios and dividend yields).
The fund will normally sell a stock when it is dropped from the index or it
falls to the bottom 20% of the model's rankings.
There can be no guarantee that by following these investment strategies the fund
will achieve its objective.
1
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Scudder Select 1000 Growth Fund
Scudder Select 1000 Growth Fund seeks long-term growth and income by investing
at least 80% of total assets in common stocks of companies that are included in
the Russell 1000 Growth Index. This index is widely considered to be a measure
of the performance of mid- and large-cap U.S. stocks with above-average
prospects for growth.
In choosing stocks, the portfolio managers begin by using a computer model to
rank the stocks in the index, favoring those that the managers believe have
strong potential for growth of earnings, reasonable valuations in light of
business prospects and positive price momentum. The fund generally does not
invest in stocks that the model ranks in the bottom 20%.
The fund generally seeks to keep its portfolio similar to the index in its
industry weightings, average market capitalization and significant fundamental
characteristics (such as price-to-book ratios and dividend yields).
The fund will normally sell a stock when it is dropped from the index or it
falls to the bottom 20% of the model's rankings.
There can be no guarantee that by following these investment strategies the fund
will achieve its objective.
The following replaces the section under "Other investments" on page 2 of the
funds' prospectus:
While most of the funds' investments are common stocks, each fund may also
invest up to 20% of total assets in investment-grade debt securities.
Although the funds are permitted to use various types of derivatives (contracts
whose value is based on, for example, indices, currencies or securities), the
managers don't intend to use them as principal investments and may not use them
at all.
2
<PAGE>
The following replaces the sections under "Risk management strategies" and "Main
risks" on pages 2 and 3 of the funds' prospectus:
There are several risk factors that could hurt the funds' performance, cause you
to lose money or make the funds perform less well than other investments.
As with most stock funds, the most important factor with the funds is how stock
markets perform -- in this case, the mid-size and large company portions of the
U.S. stock market. When mid-size and large company stock prices fall, you should
expect the value of your investment to fall as well. Large company stocks at
times may not perform as well as stocks of smaller or mid-size companies.
Mid-size company stocks tend to be more volatile than stocks of larger
companies, in part because mid-size companies tend to be less established than
larger companies and more vulnerable to competitive challenges and bad economic
news. Because a stock represents ownership in its issuer, stock prices can be
hurt by poor management, shrinking product demand and other business risks.
These may affect single companies as well as groups of companies.
The funds' index-related strategy involves several risks. The funds could
underperform the index during short periods or over the long term, either
because its selection of stocks did not perform well or because of the effects
of expenses or shareholder transactions. Also, because the fund intends to
maintain its exposure to index stocks at all times, it may suffer greater losses
than actively managed funds in a declining market.
Other factors that could affect performance include:
o the computer model may eliminate stocks that perform well, or fail to
eliminate those that perform poorly
o growth stocks may be out of favor for certain periods
o derivatives could produce disproportionate losses
o at times, market conditions might make it hard to value some investments or
to get an attractive price for them
April 12, 2000
