Scudder
Pacific Opportunities
Fund
Semiannual Report
April 30, 1995
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
o Offers opportunities for long-term capital appreciation through investment
primarily in the equity securities of Pacific Basin companies, excluding
Japan.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
<PAGE>
SCUDDER PACIFIC OPPORTUNITIES FUND
CONTENTS
2 In Brief
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
10 Investment Portfolio
16 Financial Statements
19 Financial Highlights
20 Notes to Financial
Statements
25 Report of Independent
Accountants
26 Investment Products
and Services
27 How to Contact
Scudder
IN BRIEF
o Scudder Pacific Opportunities Fund provided a -13.19% total return for the
six-month period ended April 30, 1995, reflecting rising interest rates,
currency volatility, and investor unease regarding emerging markets in
general.
o The Fund returned a positive 4.91% in the three months ended April 30, 1995,
as investment markets in the Pacific Rim began to recover, with some staging
double-digit rallies.
Investment Returns
(U.S. Dollar Returns of Five Major Pacific Markets)
Hong Kong -28.90% 14.95%
Korea 23.67% 6.99%
Malaysia -19.94% 16.42%
Thailand -9.03% 3.20%
Australia 6.48% 9.32%
1994+++ 1995*
+++ Calendar year. * Three months ended April 30. Source: Morgan Stanley
o The Fund has maintained a long-term investment strategy, focusing on
companies benefiting from strong economic growth, rising standards of
living, massive infrastructure development, and competitive manufacturing
advantages.
o Economic growth in the Pacific region remains among the world's strongest,
creating opportunities for above-average returns over time in these stock
markets.
2
<PAGE>
LETTER FROM THE FUND'S CHAIRMAN
Dear Shareholders,
The stock markets of the Pacific Rim have begun to rally in recent
weeks, after declining for most of 1994 and early 1995. Interest rates worldwide
appear to be stabilizing or falling, and the ripple effect of the Mexican peso
devaluation, which heightened investors' perception of risk in all emerging
markets, has begun to wear off. The unmanaged Morgan Stanley Capital
International Pacific Index (excluding Japan) gained 11.86% in the three months
ended April 30, 1995, compared with a decline of 14.26% in 1994.
Will the recent positive shift in investor sentiment be sustained? In
the near term, the answer is unclear. Currently, the economies of the Pacific
region have some of the highest growth rates in the world. Earnings growth of
many companies throughout the region remains impressive. Inflation is a concern
in some markets, but overall there is a sense that global economic growth rates
are peaking, which will reduce the threat of overheating. And, since many
Pacific Basin currencies are linked to the U.S. dollar, easing U.S. interest
rates should continue to have a positive impact on Asian stock prices.
Over the long term, the opportunity for capital appreciation in Pacific
Rim markets is significant. The brisk pace of economic growth in these countries
has led to enormous gains in corporate earnings in recent years. In our view,
the rapid development and adaptability of Southeast Asian businesses bode well
for continued earnings strength in years to come.
Helping to take advantage of the opportunity in these markets will be
Eileen O. Gerspach, who I am pleased to announce has recently joined the Fund's
portfolio management team. Eileen joined Scudder in 1986 as a financial analyst
and, after a number of years in Scudder's Global Bond Group, joined our Global
Equity Group in 1994.
If you have questions about your Fund or your investments, please call
a Scudder Investor Relations representative at 1-800-225-2470. Page 27 provides
more information on how to contact Scudder. Thank you for choosing Scudder
Pacific Opportunities Fund to help meet your investment needs.
Sincerely,
/s/ Edmond D. Villani
Edmond D. Villani
Chairman,
Scudder Pacific Opportunities Fund
3
<PAGE>
Scudder Pacific Opportunities Fund
Performance Update as of April 30, 1995
- -----------------------------------------------------------------
Growth of a $10,000 Investment
- -----------------------------------------------------------------
Scudder Pacific Opportunities Fund
- ----------------------------------------
Total Return
Period Growth -------------
Ended of Average
4/30/95 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $ 9,491 -5.09% -5.09%
Life of
Fund* $12,779 27.79% 10.80%
MSCI Pacific Index (excluding Japan)
- --------------------------------------
Total Return
Period Growth -------------
Ended of Average
4/30/95 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $10,132 1.32% 1.32%
Life of
Fund* $15,750 57.50% 21.59%
*The Fund commenced operations on December 8, 1992.
Index comparisons begin December 31, 1992.
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 Pacific Opportunities Fund
Year Amount
- ----------------------
12/92* 10000
1/93 9967
4/93 11019
7/93 11195
10/93 13542
1/94 15563
4/94 13498
7/94 13867
10/94 14757
1/95 12211
4/95 12811
MSCI Pacific Index (excluding Japan)
Year Amount
- ----------------------
12/92* 10000
1/93 10071
4/93 11583
7/93 12063
10/93 15352
1/94 17482
4/94 15544
7/94 16141
10/94 17031
1/95 14080
4/95 15750
The Morgan Stanley Capital International (MSCI) Pacific Index
is an unmanaged capitalization-weighted measure of stock markets
in the Pacific Basin countries, excluding Japan. Index returns
assume dividends reinvested net of withholding tax 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 April 30
- ----------------------------------
<TABLE>
<S> <C> <C> <C>
1993* 1994 1995
----------------------
Net Asset Value... $13.19 $16.08 $15.17
Income Dividends.. -- .08 $ .10
Capital Gains
Distributions..... -- .01 --
Fund Total
Return (%)........ 9.92 22.49 -5.09
Index Total
Return (%)........ 15.82 34.19 1.32
</TABLE>
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 one year and life of Fund periods would have
been lower.
4
<PAGE>
Portfolio Summary as of April 30, 1995
- ---------------------------------------------------------------------------
Geographical (Excludes 15% Cash Equivalents)
- ---------------------------------------------------------------------------
Hong Kong 20%
Korea 12%
Australia 10% We consolidated Fund holdings in several
Malaysia 10% key markets late in the period as prices
Thailand 9% recovered from 1994's lows.
India 8%
Singapore 8%
Other 23%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Sectors (Excludes 15% Cash Equivalents)
- --------------------------------------------------------------------------
Financial 21%
Manufacturing 11%
Utilities 11%
Metals & Minerals 10% We have maintained significant exposure
Consumer Staples 9% to industries financing or providing the
Energy 9% energy and raw materials for the rapid
Construction 7% development of Southeast Asian economies.
Communications 7%
Technology 3%
Other 12%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Ten Largest Equity Holdings
- --------------------------------------------------------------------------
1. PTT Exploration and Production Co., Ltd.
Petroleum refinery in Thailand
2. Korea Electric Power Co.
Korean electric utility
3. Development Bank of Singapore
Banking and financial services in Singapore
4. Hong Kong Telecommunications, Ltd.
Telecommunication services in Hong Kong
5. Hutchison Whampoa, Ltd.
Container terminal and real estate company in Hong Kong
6. Ampol Exploration Ltd.
Australian oil and gas exploration company
7. Broken Hill Proprietary Co. Ltd.
Petroleum, minerals and steel in Australia
8. Overseas Union Bank Ltd.
Leading bank group in Singapore
9. China Light & Power Co., Ltd.
Electric utility in Hong Kong
10. Hong Kong Electric Holdings, Ltd.
Electric utility and real estate in Hong Kong
Thanks to the thriving Korean economy, Korea Electric Power Co.
reported earnings increases of 110% in 1994.
For more complete details about the Fund's Investment Portfolio,
see page 10.
A monthly Investment Portfolio Summary is available upon request.
5
<PAGE>
SCUDDER PACIFIC OPPORTUNITIES FUND
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
The recent positive performance of several Asian markets is encouraging. It
comes on the heels of steep declines throughout the region. Scudder Pacific
Opportunities Fund returned -13.19% during the six months ended April 30, 1995,
reflecting a decline in net asset value from $17.57 on October 31, 1994, to
$15.17 on April 30, plus an income distribution of $0.10 per share. Although
disappointing, the Fund's return was in line with that of other Pacific region
funds during the period, which returned -13.22% on average according to Lipper
Analytical Services, Inc. However, Fund performance lagged that of the unmanaged
Morgan Stanley Capital International Pacific Index (excluding Japan), which
returned -7.52% during the period. The Fund invests in a number of countries not
represented by the Index, including Indonesia, Korea, the Philippines, and
Thailand. While these countries offer significant long-term potential in our
view, some underperformed those included in the Index during this brief period.
The Fund's short-term performance stands in contrast to its longer-term record.
Scudder Pacific Opportunities Fund is designed to seek capital appreciation over
time and since its inception on December 8, 1992, has had an average annualized
return of 10.80%.
Interest-rate worries dominated investor sentiment at the start of the
Fund's fiscal year. The region's dollar-linked markets such as Thailand and
Hong Kong declined in November when the U.S. Federal Reserve raised
interest rates for the sixth time in a year. Although well signaled, the
0.75 percentage-point increase was larger than expected and prompted market
participants to refigure corporate earnings expectations. In December,
market sentiment was further damaged by the Mexican peso devaluation.
Mexico's economic crisis resulted in a search for the "next Mexico" in
emerging markets around the world, causing unanticipated price volatility.
Thus far, fears of looming crises in other emerging markets have proved
unfounded, and investor confidence has slowly returned to the region. By
February 1995, indications of slower economic growth in the United States
suggested that long-term interest rates were peaking, which gave heart to
participants in dollar-linked Asian markets. Stock prices have begun to
recover throughout the region, and some markets have rallied strongly. Hong
Kong and Malaysia provided double-digit returns in February and March.
Scudder Pacific Opportunities Fund returned a positive 4.91% in the three
months ended April 30, 1995, after returning -17.12% in 1994.
6
<PAGE>
In this challenging investment environment, we continued to invest for
the long term, focusing on companies benefiting from strong economic growth,
rising standards of living, massive infrastructure development, and competitive
manufacturing advantages. In view of the region's heightened price volatility,
however, we maintained a relatively large cash position (15% at the end of
April) and continued a process of diversification across companies, industries,
and countries.
Beneficiaries of a stronger yen
The Fund's basic strategy precludes investing in Japan. However, one of the
more conspicuous developments in the Pacific region has been the strength of the
Japanese yen against the U.S. dollar. Japan's somewhat insular, export-driven
economy historically has resulted in a strong yen. A prolonged recession,
repatriation of foreign investments, and more recently the Kobe earthquake have
stemmed the flow of yen outside the country's borders. The scarcity of yen in
global markets has sent its value soaring in recent years (up some 30% against
the currencies of its largest trading partners since 1992), making Japan's
export goods more expensive to foreigners and thus hurting export sales.
While bad for Japan, the strong yen has had some positive implications
for the rest of Southeast Asia. Korea, for example, competes directly with
Japanese exporters in such key markets as automobiles, steel, shipbuilding, and
electronics, and now has a competitive advantage in foreign markets. Indonesia
and the Philippines have also benefited from their relatively weak currencies,
which have made exports to Japan, their chief trading market, more competitively
priced. In addition, the countries of Southeast Asia have benefited from heavy
and accelerating direct investment from Japan, as Japanese industry relocates to
cheaper operating environs.
Hong Kong
As mentioned above, Hong Kong's stock market has rallied sharply in recent
months, bolstered by the improved interest-rate environment in the United
States. Recent corporate earnings have been mixed, but some of the Fund's
largest holdings such as real estate companies Henderson Land and Hutchinson
Whampoa have reported strong profits and higher stock prices. The Hong Kong
economy is expected to grow by 5.5% this year, with inflation stable at 8.5%.
Given the uncertainties about supply and demand for Hong Kong real estate as
1997 approaches, we have used the recent market rally to reduce our holdings in
7
<PAGE>
real-estate related stocks such as Henderson Land and Cheung Kong. Despite this
portfolio reallocation, we remain committed to investing in Hong Kong, currently
the largest and most liquid market in the region, after Japan.
Malaysia
Malaysia's stock market has also performed well in recent weeks, up 16.42%
in the three months ended April 30. Contributing to the positive investor
sentiment, Moody's upgraded the country's foreign debt to A-1, and the
government's budget deficit (announced in March) came in well under
expectations. Economic growth is strong -- 8.9% is widely forecast for 1995 --
and corporate earnings in the plantation/property and consumer sectors of the
economy have increased rapidly. As with Hong Kong, we took the opportunity in
recent weeks to consolidate the Fund's holdings, given the potential for
overheating. Holdings sold or reduced during the period include Technology
Resources Industries, a mobile telephone operator; and Aokam Perdana Bhd., a
forest products company.
Korea
Unlike most Pacific Rim markets, Korea recorded strong gains in 1994, due
in part to the increasing competitive advantage of Korean manufacturers over
their Japanese counterparts, who have been burdened by the strong yen.
Throughout the year, corporate earnings were exceptional. Korea Electric Power's
earnings increased 110% in 1994, while Samsung, a major electronics
manufacturer, reported earnings increases of 500%. The Korean stock market
finally corrected in early 1995, declining 12% in February, only to gain 6.18%
in March and 0.13% in April. Korea's economy is expected to grow 7.3% in 1995,
and inflation should be manageable at under 6%. While we remain confident about
the long-term potential of the Korean stock market, last year's earnings
increases will be difficult to repeat. We have trimmed some holdings as prices
reached our targets.
Australia
Recent returns of Australian stocks have been strong overall but
inconsistent from month to month. Central to the market's indecisiveness are
concerns over Australia's widening current account deficit. Declines in metal
prices also worried investors, causing volatile price performance among natural
resource and mining companies. In the near term, changes in interest rates will
have significant influence over the Australian equity market. However, the
8
<PAGE>
government's budget for the upcoming fiscal year and signs of further economic
slowdown (which could eventually result in current account deficit reductions)
will be of paramount importance to investors. Meanwhile, over the longer-term,
Australia's oil and mining companies stand to gain from increased worldwide
energy consumption, especially from the developing economies of Eastern Europe,
Latin America, and Southeast Asia.
Outlook
The evidence suggesting long-term capital appreciation in Asian stocks
remains compelling. Our recent visits with company managements, economists,
politicians, and bureaucrats confirm our belief that this region will remain at
the front of the global pack in terms of economic growth. Meanwhile, the Mexican
experience has heightened investors' perceptions of risk in emerging markets. We
believe this is healthy and will lead to more discriminating and longer-term
investing. Investors in these markets are demanding more realistic pricing than
during the buying rushes of recent memory. While price volatility will
undoubtedly remain a feature of the Pacific Rim markets, we believe the
opportunity for long-term capital appreciation is significant.
Sincerely,
Your Portfolio Management Team
/s/ Elizabeth J. Allan /s/ Nicholas Bratt
Elizabeth J. Allan Nicholas Bratt
/s/ Joyce E. Cornell /s/ Eileen O. Gerspach
Joyce E. Cornell Eileen O. Gerspach
9
<PAGE>
<TABLE>
SCUDDER PACIFIC OPPORTUNITIES FUND
INVESTMENT PORTFOLIO as of April 30, 1995
- --------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Market
Portfolio Amount($) Value($)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------
9.9% REPURCHASE AGREEMENT
---------------------------------------------------------------------------------
40,338,000 Repurchase Agreement with Salomon
Brothers dated 4/28/95 at 5.92%, to be
repurchased at $40,357,900 on 5/1/95,
collateralized by a $39,020,000 U.S.
Treasury Note, 7.75%, 2/15/01
(Cost $40,338,000)............................... 40,338,000
-----------
---------------------------------------------------------------------------------
4.9% COMMERCIAL PAPER
---------------------------------------------------------------------------------
20,000,000 General Electric Capital Services, Inc.,
5.92%, 5/9/95 (Cost $19,973,689)................. 19,973,689
-----------
---------------------------------------------------------------------------------
6.1% CONVERTIBLE BONDS
---------------------------------------------------------------------------------
INDIA 3.1% 3,510,000 Essar Gujarat, 5.5%, 8/5/98 (Steel producer)...... 4,036,500
500,000 Industrial Credit & Investment Corp. of India,
Ltd., 2.5%, 4/3/00 (Development bank)............ 376,250
4,810,000 Jindal, 4.25%, 3/31/99 (Steel manufacturer)....... 4,521,400
3,850,000 Reliance Industries, 3.5%, 11/3/99 (Producer
of textiles, synthetic fibers and plastics)...... 3,850,000
-----------
12,784,150
-----------
KOREA 0.9% 3,050,000 Cheil Food and Chemical Co., Ltd., 3%,
12/31/06 (Leading sugar refiner and
major integrated food processor)................. 3,599,000
-----------
MALAYSIA 0.5% 2,560,000 Telekom Malaysia Bhd., 4%, 10/3/04
(Telecommunication services)..................... 2,182,400
-----------
TAIWAN 1.6% 5,100,000 TECO Electric & Machinery, 2.75%, 4/15/04
(Manufacturer of household appliances and
computer products)............................... 4,335,000
1,461,000 United Microelectronics Corp., Ltd., 1.25%,
6/8/04 (Semiconductor manufacturer).............. 2,279,160
-----------
6,614,160
-----------
---------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (Cost $29,777,935)......... 25,179,710
-----------
---------------------------------------------------------------------------------
1.2% CONVERTIBLE PREFERRED STOCKS
---------------------------------------------------------------------------------
Shares
---------------------------------------------------------------------------------
AUSTRALIA 3,150,000 TNT Ltd. (International transportation company)*...
(Cost $3,756,786) 4,834,332
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value($)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------
77.9% COMMON STOCKS
--------------------------------------------------------------------------------
AUSTRALIA 7.8% 3,389,043 Ampol Exploration Ltd. (Oil and gas
exploration company).............................. 9,786,131
660,600 Broken Hill Proprietary Co. Ltd. (Petroleum,
minerals and steel)............................... 9,628,967
804,198 Coca Cola Amatil Ltd. (Soft drink bottler
and distributor).................................. 4,913,440
60,009 M.I.M. Holdings Ltd. (Nonferrous metals
and coal)......................................... 87,732
81,942 TNT Ltd. (International transportation company).... 117,413
1,786,000 Woodside Petroleum Ltd. (Major oil and
gas producer)..................................... 7,313,635
------------
31,847,318
------------
CHINA 2.1% 225,800 China Yuchai International Ltd. (Holding
company for Guangxi Yuchai Machinery Co.,
which manufactures and sells diesel
truck engines)*................................... 2,060,425
132,500 Huaneng Power International, Inc. Series N
(ADR) (Developer and operator of large
coal fired power plants)*......................... 1,921,250
202,300 Shandong Huaneng Power Co. (ADR)
(Electric power utility).......................... 1,643,687
1,733,000 Tsingtao Brewery "H" (Leading brewery)............. 615,650
6,714,000 Yi Zheng Chemical Fibre Co. (Leading
polyester producer)............................... 2,211,691
------------
8,452,703
------------
HONG KONG 17.5% 467,000 Cheung Kong Holdings Ltd. (Real estate
company).......................................... 1,972,730
2,014,700 China Light & Power Co., Ltd. (Electric utility)... 9,499,619
659,726 HSBC Holdings Ltd. (Bank).......................... 7,648,935
2,869,500 Hong Kong Electric Holdings, Ltd. (Electric
utility and real estate).......................... 8,785,318
5,221,200 Hong Kong Telecommunications, Ltd.
(Telecommunication services)...................... 10,184,746
2,306,000 Hutchison Whampoa, Ltd. (Container
terminal and real estate company)................. 9,979,460
2,065,000 Hysan Development Co. (Real estate developer)...... 4,401,563
1,471,800 Jinhui Shipping and Transportation Co., Ltd
(Operator of dry bulk cargo ships in
southern China)*.................................. 1,847,109
1,227,000 Peregrine Investment Holdings Ltd. (Leading
financial services group)......................... 1,291,829
984,000 Swire Pacific Ltd. "A" (General trading and
real estate company)*............................. 6,578,220
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<TABLE>
SCUDDER PACIFIC OPPORTUNITIES FUND
- --------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value($)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1,597,000 Television Broadcasts, Ltd.
(Television broadcasting)......................... 5,931,243
14,011,744 Yips Hang Cheung Holdings, Ltd. (Manufacturer
of mixed solvents and paints)..................... 3,439,131
------------
71,559,903
------------
INDIA 3.5% 192,125 Bajaj Auto (GDR) (Maker of two and three
wheel vehicles)*.................................. 4,995,250
225,600 Ranbaxy Laboratories (GDR) (Pharmaceutical
company).......................................... 5,076,000
830,000 The India Fund (Investment company)*............... 4,513,185
------------
14,584,435
------------
INDONESIA 4.4% 2,715,000 Gadjah Tunggal (Foreign registered)
(Tire manufacturer)............................... 2,370,914
1,214,000 Jaya Real Properties (Foreign registered)
(Property developer).............................. 2,935,781
2,480,000 Kabelmetal Indonesia (Foreign registered)
(Cable manufacturer).............................. 3,887,147
1,191,500 Kalbe Farma (Foreign registered)
(Pharmaceutical producer and distributor)......... 3,988,564
785,750 Modern Photo Film Co. (Foreign registered)
(Photographic film distributor)................... 3,290,086
135,000 Unilever-Indonesia (Foreign registered)
(Consumer products manufacturer).................. 1,753,247
------------
18,225,739
------------
KOREA 9.7% 269,028 Daewoo Heavy Industries Ltd. (Leading
manufacturer of heavy industrial equipment)*...... 3,317,194
302,500 Korea Electric Power Co. (Electric utility)........ 11,070,702
90,860 LG Electronics, Inc. (GDR) (Leading maker of
consumer electronics and electronic
applicances)*..................................... 1,272,040
81,990 LG Merchant Banking Corp. (Financial services
company).......................................... 3,108,167
50,000 Pohang Iron & Steel Co., Ltd. (Korea's
largest steel producer)(b)........................ 5,206,008
37,000 Samchully (Producer and distributor of
anthracite and gas)............................... 2,363,612
102,510 Samsung Electronics Co., Ltd. (GDS)
(Major electronics manufacturer).................. 5,125,500
20,286 Samsung Electronics Co., Ltd. (GDS)(b)
(New (c))*........................................ 1,012,474
157 Samsung Electronics Co., Ltd.(b)*.................. 27,498
31 Samsung Electronics Co., Ltd.(b) (New (c))*........ 5,230
20,000 Samsung Fire and Marine Insurance
(Insurance company)(b)*........................... 5,614,219
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value($)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
30,538 Samsung Heavy Industries Co., Ltd.
(Machinery manufacturer) .......................... 913,316
3,988 Samsung Heavy Industries Co., Ltd. (New (c)) ....... 104,624
56,000 Yukong, Ltd. (GDR) (Leading oil refiner) ........... 616,000
------------
39,756,584
------------
MALAYSIA 7.6% 893,200 Aokam Perdana Bhd. (Forest products
company) .......................................... 4,011,540
1,124,000 Arab-Malaysian Corp. Bhd. (Investment holding
company with interests in financial services,
infrastructure and property)* ..................... 3,092,535
336,000 Genting Bhd. (Operator of tourist resorts,
hotels and restaurants) ........................... 3,058,871
405,000 Kim Hin Industries (Ceramic tile manufacturer)* .... 1,950,030
555,000 Malayan Banking Bhd. (Leading banking
and financial services group) ..................... 3,795,064
1,460,000 Technology Resources Industries Bhd. (Mobile
telephone operator)* .............................. 3,721,627
527,000 United Engineers Bhd. (Leading comprehensive
contractor) ....................................... 3,027,878
213,000 Westmont Bhd. (Conglomerate: construction
and repair of ships and offshore oil platforms,
power transmission, garment manufacturing,
marketing services) ............................... 922,153
1,654,000 YTL Corp. Bhd. (General construction company) ...... 7,495,367
------------
31,075,065
------------
NEW ZEALAND 1.6% 1,542,400 Telecom Corp. of New Zealand
(Telecommunication services) ...................... 6,479,527
------------
PHILIPPINES 4.5% 3,552,900 Ayala Corp. "B" (Industrial conglomerate) .......... 4,773,570
480,300 Benpres Holdings Corp. (GDR) (Media
and infrastructure conglomerate)* ................. 3,482,175
450,900 Manila Electric Co. "B" (Electric utility) ......... 4,673,436
1,523,990 San Miguel Corp. "B" (Brewery) ..................... 5,440,732
------------
18,369,913
------------
SINGAPORE 6.6% 986,000 Development Bank of Singapore (Foreign
Registered) (Banking and financial services) ...... 10,542,806
320,400 Jardine Matheson Holdings, Ltd.
(Conglomerate: real estate, merchandising,
engineering) ...................................... 2,547,180
1,661,000 Overseas Union Bank Ltd. (Foreign registered)
(Leading bank group) .............................. 9,595,300
611,000 Sembawang Corp. (Ship repair and maritime
services group) ................................... 4,187,334
------------
26,872,620
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
<TABLE>
SCUDDER PACIFIC OPPORTUNITIES FUND
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value($)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAIWAN 2.8% 361,935 President Enterprises Corp. (GDR)
(Food and beverage conglomerate)*................. 6,514,830
58 units Taipei Fund IDR (Investment company)(d)*........... 5,017,000
-----------
11,531,830
-----------
THAILAND 7.6% 1,169,300 PTT Exploration and Production Co., Ltd.
(Foreign registered) (Petroleum refinery)......... 11,410,124
516,000 Padaeng Industry Co., Ltd. (Foreign
registered) (Mining and refining of zinc ore)*.... 587,436
645,800 Sahavirya Steel Industry (Steel producer)*......... 1,667,343
821,200 Sahavirya Steel Industry (Foreign registered)*..... 2,120,195
128,500 Siam Cement Co., Ltd. (Foreign registered)
(Construction materials and industrial
conglomerate)..................................... 7,387,640
340,200 TPI Polene Co., Ltd. (Foreign registered)
(Producer and distributor of low density
polyethylene plastic pellets)..................... 1,922,659
692,600 Thai Farmers Bank (Foreign registered)
(Commercial bank)................................. 6,082,602
-----------
31,177,999
-----------
UNITED STATES 2.2% 385,800 Freeport McMoRan Copper & Gold, Inc.
"A" (U.S. company mining in Indonesia)............ 8,053,575
75,300 Pacific Basin Bulk Shipping Ltd. (Shipping
company specializing in the handysize dry
bulk carrier segment in the Pacific region)*...... 1,016,550
75,300 Pacific Basin Bulk Shipping Ltd., Warrants
(expire 9/30/99)*................................. 42,356
-----------
9,112,481
-----------
TOTAL COMMON STOCKS (Cost $316,047,387)............ 319,046,117
-----------
- -------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $409,893,797)(a)............................ 409,371,848
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
(a) The cost for federal income tax purposes was $412,704,305. At April
30, 1995, net unrealized depreciation for all securities based on tax
cost was $3,332,457. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of market
value over tax cost of $35,538,980 and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax
cost over market value of $38,871,437.
(b) Securities valued in good faith by the Valuation Committee of the
Board of Directors. The cost of these securities at April 30, 1995
aggregated $11,669,055. See Note A of the Notes to Financial
Statements.
(c) New shares issued during 1995, eligible for a pro rata share of 1995
dividends.
(d) 1,000 shares = 1 IDR unit for Taipei Fund.
* Non-income producing security.
Sector breakdown of the Fund's equity securities is noted on page 5.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<TABLE>
SCUDDER PACIFIC OPPORTUNITIES FUND
FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------------------------
APRIL 30, 1995
- ----------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $409,893,797)
(Note A)............................................... $409,371,848
Cash 675
Foreign currency holdings, at market
(identified cost $1,978,092) (Note A).................. 1,978,119
Forward foreign currency exchange contracts to buy,
at market (contract cost $16,775,252) (Notes A and D).. 16,768,063
Receivable on forward foreign currency
exchange contracts to sell (Notes A and D)............ 4,685,974
Other receivables:
Investments sold....................................... 2,813,296
Dividends and interest................................. 1,702,640
Fund shares sold....................................... 1,038,379
Deferred organization expense (Note A).................... 30,283
------------
Total assets........................................... 438,389,277
LIABILITIES
Payables:
Investments purchased.................................. $ 18,606,830
Fund shares redeemed................................... 689,044
Accrued management fee (Note C)........................ 351,786
Other accrued expenses (Note C)........................ 395,856
Forward foreign currency exchange contracts to buy
(Notes A and D)..................................... 16,775,252
Forward foreign currency exchange contracts to sell,
at market (contract cost $4,685,974)
(Notes A and D)..................................... 4,680,295
------------
Total liabilities...................................... 41,499,063
------------
Net assets, at market value............................... $396,890,214
============
NET ASSETS
Net assets consist of:
Accumulated distributions in excess of
net investment income............................... $ (1,968,140)
Unrealized appreciation (depreciation) on:
Investments......................................... (521,949)
Foreign currency related transactions............... 2,858
Accumulated net realized loss.......................... (6,191,403)
Capital stock.......................................... 261,550
Additional paid-in capital............................. 405,307,298
------------
Net assets, at market value............................... $396,890,214
============
NET ASSET VALUE, offering and redemption price per
share ($396,890,214 divided by 26,155,033 shares of
capital stock outstanding, $.01 par value,
100,000,000 shares authorized)......................... $15.17
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- -----------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED APRIL 30, 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $261,077)..... $ 2,786,044
Interest.................................................. 1,983,910
------------
4,769,954
Expenses:
Management fee (Note C)................................... $ 2,272,738
Services to shareholders (Note C)......................... 672,946
Directors' fees and expenses (Note C)..................... 24,344
Custodian fees............................................ 476,847
Reports to shareholders................................... 131,900
Auditing.................................................. 45,245
Legal..................................................... 12,703
Amortization of organization expense (Note A)............. 5,765
Other..................................................... 75,642 3,718,130
---------------------------
Net investment income..................................... 1,051,824
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT TRANSACTIONS
Net realized loss from:
Investments........................................... (2,952,608)
Foreign currency related transactions................. (87,137) (3,039,745)
-------------
Net unrealized appreciation (depreciation) during the
period on:
Investments.......................................... (61,410,060)
Foreign currency related transactions................ 5,288 (61,404,772)
----------------------------
Net loss on investment transactions..................... (64,444,517)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS.... $(63,392,693)
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
<TABLE>
SCUDDER PACIFIC OPPORTUNITIES FUND
- -------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 1995 1994
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income................................ $ 1,051,824 $ 1,182,190
Net realized loss from investment
transactions...................................... (3,039,745) (3,433,942)
Net unrealized appreciation (depreciation)
on investment transactions during
the period........................................ (61,404,772) 26,525,823
------------- -------------
Net increase (decrease) in net assets
resulting from operations......................... (63,392,693) 24,274,071
------------- -------------
Distributions to shareholders from:
Net investment income ($.10 and
$.08 per share, respectively).................. (2,548,920) (1,850,366)
------------- -------------
Net realized gains ($.01 per share)............... -- (231,296)
------------- -------------
Fund share transactions:
Proceeds from shares sold............................ 105,899,637 526,344,940
Net asset value of shares issued to
shareholders in reinvestment of distributions..... 2,255,971 1,853,767
Cost of shares redeemed.............................. (144,475,188) (321,356,695)
------------- -------------
Net increase (decrease) in net assets from
Fund share transactions........................... (36,319,580) 206,842,012
------------- -------------
INCREASE (DECREASE) IN NET ASSETS.................... (102,261,193) 229,034,421
Net assets at beginning of period.................... 499,151,407 270,116,986
------------- -------------
NET ASSETS AT END OF PERIOD (including
accumulated distributions in excess of
net investment income of $1,968,140
and $471,044, respectively)....................... $ 396,890,214 $ 499,151,407
============= =============
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period............ 28,405,889 16,662,536
------------- ------------
Shares sold.......................................... 6,881,897 30,394,493
Shares issued to shareholders in
reinvestment of distributions..................... 142,964 98,710
Shares redeemed...................................... (9,275,717) (18,749,850)
------------- ------------
Net increase in Fund shares.......................... (2,250,856) 11,743,353
------------- ------------
Shares outstanding at end of period.................. 26,155,033 28,405,889
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD AND OTHER PERFORMANCE
INFORMATION DERIVED FROM THE FINANCIAL STATEMENTS.
<CAPTION>
FOR THE PERIOD
SIX MONTHS YEAR DECEMBER 8, 1992
ENDED ENDED (COMMENCEMENT
APRIL 30, OCTOBER 31, OF OPERATIONS) TO
1995 1994 OCTOBER 31, 1993
---------- ----------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................. $17.57 $16.21 $12.00
------ ------ ------
Income from investment operations:
Net investment income(a)............................................ .04 .04 .04
Net realized and unrealized gain (loss) on investment transactions.. (2.34) 1.41 4.17
------ ------ ------
Total from investment operations...................................... (2.30) 1.45 4.21
------ ------ ------
Less distributions from:
Net investment income............................................... (.10) (.08) --
Net realized gains on investment transactions....................... -- (.01) --
------ ------ ------
Total distributions................................................... (.10) (.09) --
------ ------ ------
Net asset value, end of period........................................ $15.17 $17.57 $16.21
====== ====== ======
TOTAL RETURN (%)...................................................... (13.19)** 8.97 35.08**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions)................................ 397 499 270
Ratio of operating expenses, net to average daily net assets (%)(a)... 1.80* 1.81 1.75*
Ratio of net investment income to average daily net assets (%)........ .51* .28 1.41*
Portfolio turnover rate (%)........................................... 43.0* 38.5 9.9*
<FN>
(a) Reflects a per share amount of management fee and other fees
not imposed by the Adviser of.................................... -- -- .03
Operating expense ratio including expenses reimbursed,
management fee and other expenses not imposed (%)................ -- -- 2.90*
* Annualized
** Not annualized
</FN>
</TABLE>
19
<PAGE>
SCUDDER PACIFIC OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
Scudder Pacific Opportunities Fund (the "Fund") is a non-diversified series of
Scudder International Fund, Inc. (the "Corporation"). The Corporation is
organized as a Maryland corporation and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements in conformity with generally accepted
accounting principles.
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 Directors. Securities valued in good
faith by the Valuation Committee of the Board of Directors at fair value
amounted to $11,865,429 (2.99% of net assets) and have been noted in the
investment portfolio as of April 30, 1995.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 and the underlying collateral, is equal to at least 100.5% of the
resale price.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. In connection with portfolio
purchases and sales of securities denominated in a foreign currency, the Fund
may enter into forward foreign currency exchange contracts ("contracts").
Additionally, the Fund may enter into contracts to hedge certain other foreign
currency denominated assets. Contracts are recorded at market value. Certain
risks may arise upon entering into these contracts from the potential inability
of counterparties to meet the terms of their contracts. Realized and unrealized
gains and losses arising from such transactions are included in net realized and
unrealized gain (loss) from foreign currency related transactions.
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.
21
<PAGE>
SCUDDER PACIFIC OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
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.
At October 31, 1994, the Fund had a net tax basis capital loss carryforward of
approximately $3,151,658, which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until October 31,
2002, whichever occurs first.
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. These
differences primarily relate to investments in passive foreign investment
companies. 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. All original issue discounts are accreted for both tax and
financial reporting purposes. Interest income is recorded on the accrual basis.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
B. PURCHASES AND SALES OF SECURITIES
- --------------------------------------------------------------------------------
For the six months ended April 30, 1995, purchases and sales of investment
securities (excluding short-term investments) aggregated $101,556,428 and
$79,074,880, respectively.
C. RELATED PARTIES
- --------------------------------------------------------------------------------
Under the Investment Management Agreement (the "Management Agreement") with
Scudder, Stevens & Clark, Inc. (the "Adviser"), 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. The
management fee payable under the Management Agreement is equal to an annual rate
of 1.10% of the Fund's average daily net assets, computed and accrued daily and
payable monthly. The Management Agreement provides that if the Fund's expenses
exceed specified limits, such excess, up to the amount of the management fee,
will be paid by the Adviser. For the six months ended April 30, 1995, the fee
pursuant to the Agreement amounted to $2,272,738.
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of the Adviser,
is the transfer, dividend paying and shareholder service agent for the Fund. For
the six months ended April 30, 1995, the amount charged to the Fund by SSC
aggregated $552,256 of which $89,810 is unpaid at April 30, 1995.
The Fund pays each Director not affiliated with the Adviser $4,000 annually,
plus specified amounts for attended board and committee meetings. For the six
months ended April 30, 1995, Directors' fees and expenses aggregated $24,344.
23
<PAGE>
SCUDDER PACIFIC OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
D. COMMITMENTS
- --------------------------------------------------------------------------------
As of April 30, 1995, the Fund had entered into the following forward foreign
currency exchange contracts resulting in net unrealized depreciation of $1,510.
<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION
SETTLEMENT (DEPRECIATION)
CONTRACTS TO DELIVER IN EXCHANGE FOR DATE (U.S.$)
- -------------------------------- ---------------------------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
U.S. Dollars 15,864,155 Hong Kong Dollars 122,759,946 5/2/95 (5,746)
U.S. Dollars 255,374 Thailand Bahts 6,269,420 5/2/95 (467)
U.S. Dollars 255,071 Thailand Bahts 6,262,000 5/3/95 (467)
U.S. Dollars 82,877 Thailand Bahts 2,037,118 5/4/95 (51)
U.S. Dollars 317,775 Australian Dollars 436,264 5/5/95 (458)
Hong Kong Dollars 2,918,523 U.S. Dollars 377,217 5/1/95 195
Hong Kong Dollars 3,594,656 U.S. Dollars 464,516 5/2/95 150
Malaysian Ringgits 3,682,480 U.S. Dollars 1,494,387 5/2/95 4,409
Thailand Bahts 1,268,289 U.S. Dollars 51,662 5/2/95 94
Hong Kong Dollars 16,069,470 U.S. Dollars 2,076,212 5/3/95 322
Malaysian Ringgits 265,544 U.S. Dollars 108,006 5/4/95 564
Thailand Bahts 353,410 U.S. Dollars 14,375 5/4/95 6
Thailand Bahts 2,451,141 U.S. Dollars 99,599 5/8/95 (61)
------
(1,510)
======
</TABLE>
E. INVESTING IN EMERGING MARKETS
- --------------------------------------------------------------------------------
Investing in emerging markets may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currencies and future adverse political and economic
developments. Moreover, securities issued in these markets may be less liquid
and their prices more volatile than those of securities of comparable U.S.
companies.
24
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS OF SCUDDER INTERNATIONAL FUND, INC. AND TO THE
SHAREHOLDERS OF SCUDDER PACIFIC OPPORTUNITIES FUND:
We have audited the accompanying statement of assets and liabilities of Scudder
Pacific Opportunities Fund including the investment portfolio, as of April 30,
1995, and the related statement of operations for the six months then ended, the
statements of changes in net assets for the six months then ended and for the
year ended October 31, 1994 and the financial highlights for the six months
ended April 30, 1995, the year ended October 31, 1994, and for the period
December 8, 1992 (commencement of operations) to October 31, 1993. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Pacific Opportunities Fund as of April 30, 1995, the results of its
operations for the six months then ended, the changes in net assets for the six
months then ended and for the year ended October 31, 1994 and the financial
highlights for the six months ended April 30, 1995, for the year ended October
31, 1994, and for the period December 8, 1992 (commencement of operations) to
October 31, 1993 in conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 14, 1995
25
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
<TABLE>
<CAPTION>
The Scudder Family of Funds
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder GNMA Fund
Tax Free Money Market+ Scudder Income Fund
Scudder Tax Free Money Fund Scudder International Bond Fund
Scudder California Tax Free Money Fund* Scudder Short Term Bond Fund
Scudder New York Tax Free Money Fund* Scudder Short Term Global Income Fund
Tax Free+ Scudder Zero Coupon 2000 Fund
Scudder California Tax Free Fund* Growth
Scudder High Yield Tax Free Fund Scudder Capital Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Managed Municipal Bonds Scudder Global Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Global Small Company Fund
Scudder Massachusetts Tax Free Fund* Scudder Gold Fund
Scudder Medium Term Tax Free Fund Scudder Greater Europe Growth Fund
Scudder New York Tax Free Fund* Scudder International Fund
Scudder Ohio Tax Free Fund* Scudder Latin America Fund
Scudder Pennsylvania Tax Free Fund* Scudder Pacific Opportunities Fund
Growth and Income Scudder Quality Growth Fund
Scudder Balanced Fund Scudder Value Fund
Scudder Growth and Income Fund The Japan Fund
Retirement Plans and Tax-Advantaged Investments
- ------------------------------------------------------------------------------------------------------------------
IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
- ------------------------------------------------------------------------------------------------------------------
The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
- ------------------------------------------------------------------------------------------------------------------
Scudder Institutional Fund, Inc.
Scudder Fund, Inc.
Scudder Treasurers Trust(TM)++
<FN>
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. +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. ++For
information on Scudder Treasurers Trust,(TM) an institutional cash management service that utilizes certain portfolios
of Scudder Fund, Inc. ($100,000 minimum), call 1-800-541-7703.
</FN>
</TABLE>
26
<PAGE>
HOW TO CONTACT SCUDDER
<TABLE>
<CAPTION>
<S> <C>
Account Service and Information
- --------------------------------------------------------------------------------------------------------------
For existing account service and
transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For account updates, prices, yields,
exchanges, and redemptions SCUDDER
AUTOMATED INFORMATION LINE (SAIL)
1-800-343-2890
Investment Information
- --------------------------------------------------------------------------------------------------------------
To receive information about the
Scudder funds, for additional
applications and prospectuses, or for
investment questions
SCUDDER INVESTOR RELATIONS
1-800-225-2470
For establishing 401(k) and 403(b) plans
SCUDDER DEFINED CONTRIBUTION SERVICES
1-800-323-6105
Please address all correspondence to
- --------------------------------------------------------------------------------------------------------------
THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Or stop by a Scudder Funds Center
- --------------------------------------------------------------------------------------------------------------
Many shareholders enjoy the personal,
one-on-one service of the Scudder Funds
Centers. Check for a Funds Center near
you--they can be found in the following
cities:
Boca Raton New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
- --------------------------------------------------------------------------------------------------------------
For information on Scudder Treasurers Trust,(TM) an
institutional cash management service for corporations,
non-profit organizations and trusts that uses certain
portfolios of Scudder Fund, Inc.* ($100,000 minimum), call
1-800-541-7703.
For information on Scudder Institutional Funds,* funds
designed to meet the broad investment management and service
needs of banks and other institutions, call 1-800-854-8525.
- --------------------------------------------------------------------------------------------------------------
<FN>
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
* Contact Scudder Investor Services, Inc., Distributor, to receive a prospectus
with more complete information, including management fees and expenses.
Please read it carefully before you invest or send money.
</FN>
</TABLE>
27
<PAGE>
Celebrating 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 36 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.
<PAGE>
