This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder Latin America Fund
Semiannual Report
April 30, 1995
o For investors seeking long-term growth of capital from a portfolio
investing primarily in the securities of Latin American issuers.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange
shares.
<PAGE>
SCUDDER LATIN AMERICA 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
14 Financial Statements
17 Financial Highlights
18 Notes to Financial Statements
23 Report of Independent Accountants
25 Officers and Directors
26 Investment Products and Services
27 How to Contact Scudder
IN BRIEF
o Mexico's decision in December to devalue the peso sparked a selloff that
resulted in grave declines in the prices of Mexican stocks. Fearful of
currency devaluations elsewhere, investors liquidated holdings in other
Latin American markets, eroding prices throughout the region.
o Scudder Latin America Fund posted a -31.01% total return for the six months
ended April 30, 1995, after returning +104.70% since the Fund's inception
(December 8, 1992, through October 31, 1994).
(BAR CHART CAPTION)
Investment Returns
Before and After the Peso Devaluation
-------------------------------------------------------------------------------
IFC Latin America Investable
Scudder Latin America Fund Total Return Index
-------------------------------------------------------------------------------
(BAR CHART DATA)
12/31/92-10/31/94 104.70%* 83.49%
11/1/94-4/30/95 -31.01% -35.94%
* Fund returns since inception on December 8, 1992, through October 31, 1994.
o The Fund limited losses to the portfolio through the active buying and
selling of distressed securities and by concentrating Fund purchases on
companies whose revenues were linked in one manner or another to the dollar
but whose costs were substantially denominated in local currencies.
2
<PAGE>
LETTER FROM THE FUND'S CHAIRMAN
- --------------------------------------------------------------------------------
Dear Shareholders,
The markets of Latin America are just now emerging from an
extraordinarily difficult period that was triggered by December's Mexican peso
devaluation. The price declines that subsequently swept through the region were
of a scale not seen in a decade. The Fund's -31.01% total return for the six
months was sobering, and we share your disappointment about the recent
performance of Latin American investments. It is important to note, however,
that your portfolio managers avoided the full impact of the various markets'
declines, guiding the Fund to the second best six-month performance of the 17
Latin American funds tracked by Lipper Analytical Services.
The recent declines have not lessened our belief in the region's
long-term investment potential. In fact, it is highly likely that the
governments of emerging economies worldwide will learn from this experience and
strengthen their collective resolve for market-based economic reforms.
Consequently, we believe significant opportunities for capital appreciation in
the region's stock markets will continue to emerge. As in the past, we would
emphasize that Scudder Latin America Fund is appropriate only for long-term
investors and as part of a broadly diversified portfolio.
You will notice we have added the International Finance Corporation's
Latin America Investable Total Return Index to the performance comparisons on
page 4. The Investable Index more closely represents the Fund's restricted
ability to invest in the Chilean stock market. With its relatively high savings
rate, Chile is less dependent upon foreign investment than its Latin American
neighbors and has imposed various restrictions on non-Chilean trading in and out
of its financial markets. The IFC Global Latin America Composite Index, which we
have used in our reports to shareholders since the Fund's inception, does not
accurately reflect these restrictions. We intend to display both indexes for the
balance of the current fiscal year before dropping the Composite Index from the
reports.
If you have questions about your Fund or your investments, contact 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 Latin
America Fund to help meet your investment needs.
Sincerely,
/s/Edmond D. Villani
Edmond D. Villani, Chairman
Scudder Latin America Fund
3
<PAGE>
Scudder Latin America Fund
Performance Update as of April 30, 1995
- -----------------------------------------------------------------
Growth of a $10,000 Investment
- -----------------------------------------------------------------
Scudder Latin America Fund
- ----------------------------------------
Total Return
Period Growth -------------
Ended of Average
4/30/95 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $ 8,166 -18.34% -18.34%
Life of
Fund* $14,123 41.23% 15.53%
IFC Latin America Investable
Total Return Index
- --------------------------------------
Total Return
Period Growth -------------
Ended of Average
4/30/95 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $ 7,815 -21.85% -21.85%
Life of
Fund* $11,755 17.55% 7.19%
IFC Global Latin America
Composite Index
- --------------------------------------
Total Return
Period Growth -------------
Ended of Average
4/30/95 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $ 8,647 -13.53% -13.53%
Life of
Fund* $12,981 29.81% 11.88%
*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 Latin America Fund
Year Amount
- ----------------------
12/31/92* 10000
1/93 9968
4/93 10560
7/93 11984
10/93 14728
1/94 19595
4/94 16604
7/94 17496
10/94 19651
1/95 14060
4/95 13558
IFC Latin America Investable
Total Return Index
Year Amount
- ----------------------
12/31/92* 10000
1/93 9707
4/93 10047
7/93 11051
10/93 13041
1/94 18231
4/94 15041
7/94 16017
10/94 18349
1/95 12253
4/95 11755
IFC Global Latin America
Composite Index
Year Amount
- ----------------------
12/31/92* 10000
1/93 9788
4/93 9995
7/93 11268
10/93 12910
1/94 17980
4/94 15013
7/94 15894
10/94 19129
1/95 13532
4/95 12981
The IFC Latin America Investable Total Return Index is prepared
by International Finance Corporation. It is an unmanaged, market
capitalization-weighted representation of stock performance
in seven Latin American markets, and measures the returns of stocks
that are legally and pratically available to investors. Unlike Fund
returns, Index returns do not reflect 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... $13.20 $20.65 $16.21
Income Dividends.. $ -- $ .06 $ --
Capital Gains
Distributions..... $ -- $ .06 $ .73
Fund Total
Return (%)........ 10.00** 57.23 -18.34
Index Total
Return (%)........ .47 49.71 -21.85
</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.
**Total return does not reflect the effect of the applicable redemption fees.
4
<PAGE>
Scudder Latin America Fund
Portfolio Summary as of April 30, 1995
- ---------------------------------------------------------------------------
Geographical (Excludes 10% Cash Equivalents)
- ---------------------------------------------------------------------------
Brazil 40% Brazil surpassed Mexico as the Fund's
Mexico 30% largest country weighting after the
Argentina 22% Mexican peso devaluation.
Chile 4%
Peru 3%
Colombia 1%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Sectors (Excludes 10% Cash Equivalents)
- --------------------------------------------------------------------------
Consumer Staples 25% The Fund's growing holdings of Brazilian
Communications 17% utilities reflect our outlook for the
Energy 14% restructuring and eventual profitability
Manufacturing 12% of these companies.
Metals and Minerals 8%
Consumer Discretionary 7%
Financial 6%
Utilities 6%
Construction 3%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Top Largest Equity Holdings
- --------------------------------------------------------------------------
1. Perez Companc S.A.
Industrial conglomerate in Argentina
2. Telefonos de Mexico S.A. de C.V.
Telecommunication services
3. YPF S.A.
Petroleum company in Argentina
4. Telecomunicacoes de Sao Paulo S.A.
Telecommunication services in Brazil
5. Companhia Cervejaria Brahma
Leading beer producer and distributor in Brazil
6. Companhia Energetica de Minas Gerais
Electric power utility in Brazil
7. Companhia Vale de Rio Doce
Diverse mining and industrial complex in Brazil
8. Grupo CIFRA S.A. de C.V.
Retailer in Mexico
9. Grupo Carso, S.A. de C.V.
Industrial conglomerate in Mexico
10. Banco Itau S.A.
Bank in Brazil
This Fund's exposure to such Argentine companies as Perez Companc
and YPF helped boost returns in recent weeks.
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 LATIN AMERICA FUND
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Dear Shareholders,
Most of the major Latin American stock markets suffered a meltdown during
the first quarter of the Fund's 1995 fiscal year. As we mentioned in our first
quarter report to shareholders, the unanticipated devaluation of the Mexican
peso in late December was the triggering mechanism for what became one of the
severest bear markets in the region since the debt crisis of the early 1980s.
The Fund's net asset value declined 33.67% in the first half of its fiscal
year. Adjusted to reflect the $0.73 per share capital gain distribution paid in
December, the Fund's total return was -31.01%. Over the same period, the
International Finance Corporation's unmanaged Latin America Investable Index
fell by 35.94%. Returns for the individual country components of the IFC Latin
America Investable Index are shown below:
(BAR CHART TITLE)
Investment Returns in Latin American Stock Markets
(for the six months ended April 30, 1995)
(BAR CHART DATA)
Argentina -26.49
Brazil -37.92
Chile -12.87
Colombia -8.70
Mexico -60.73
Peru -27.47
Venezuela -24.47
IFC Latin America Investable Index -35.94
Source: IFC Emerging Markets Database
Past Performance is no indication of future results.
More recently, a recovery in stock prices from the distressed levels
reached during March has taken place, apparently prompted by the actions of the
Mexican and Argentine governments to deflate their domestic economies in order
to achieve equilibrium in their trade accounts with other nations. Both
governments made it clear to investors that they would incur the cost of higher
unemployment and a recession (if necessary) in order to reestablish confidence
in their currencies. The quick action by the U.S. government and international
financial institutions to supply Mexico and Argentina with much needed dollar
liquidity also helped stabilize financial markets. Scudder Latin America Fund
6
<PAGE>
provided a strong 11.79% total return in the month of April as the Fund
participated in the Latin American market rally.
An Extraordinarily Challenging Investment Environment
The portfolio management team faced two main challenges during the crisis.
The most important was to assure that the Fund at all times had a comfortable
margin of safety with respect to its holdings of liquid assets. The Fund's
sizable cash position going into the bear market and the low level of net
redemptions by shareholders made it relatively easy to accommodate the
redemptions that did occur.
The second challenge was to identify investment value against a background
of exchange rate uncertainty. Mexico posed an especially difficult valuation
challenge because its exchange rate was extremely unstable. Many foreign
investors were understandably anxious to sever their ties with the peso after
the devaluation, and intense selling pressure led to what seemed at times to be
a free-fall in the value of the peso.
Mexican stock prices plummeted in dollar terms following the December
devaluation. The physical assets of many excellent Mexican companies were valued
in the stock market at substantial discounts to dollar prices paid for similar
assets prior to the devaluation. The Fund was an active but selective investor
in Mexican securities throughout the crisis in order to take advantage of such
distress valuations.
Devaluation Averted in Argentina
The Argentine stock market also came under enormous selling pressure
following the Mexican devaluation. Many Argentine and foreign investors had
serious doubts that President Menem's administration would be able to maintain
the peso's parity with the U.S. dollar, as required by the Convertibility Law.
Argentine prices fell so low we estimated that investors at one point had priced
the risk of a 40% or greater devaluation of the Argentine peso into the market.
While we were confident that the peso would not be devalued, we pursued a
cautious investment strategy, concentrating Fund purchases on companies whose
revenues were linked in one manner or another to the dollar but whose costs were
substantially denominated in pesos. We made important additions to the Fund's
existing investments in the two Argentine telephone companies and one of the
country's major oil companies, Perez Companc. Perez Companc was the Fund's
largest equity holding on April 30. Stock prices in Argentina rebounded
significantly once the devaluation risk failed to materialize, and
7
<PAGE>
the Fund's performance during its second fiscal quarter benefited from its
overweighted Argentina exposure.
The following table shows the Fund's country allocations at the end of
April. For comparison purposes, we also show the country weightings for the
unmanaged IFC Latin America Investable Index.
Fund IFC Index
Country Weighting* Weighting
- ------- ---------- ---------
Argentina 21.9% 11.1%
Brazil 39.9% 38.9%
Chile 4.6% 7.1%
Colombia 0.6% 5.7%
Mexico 29.9% 32.0%
Peru 2.8% 3.9%
Venezuela 0.3% 1.7%
* Excludes 10% cash equivalents
Encouraging Prospects in Brazil
Brazil replaced Mexico as the Fund's largest country exposure following the
Mexican peso devaluation. Brazil faces continued economic challenges, but we are
encouraged by the outlook. President Cardoso and the Brazilian congress are now
working in a cooperative manner, and the constitutional revision process is
flowing smoothly. The administration has been successful in keeping inflation
rates from rising to levels that might lead to the re-indexation of the economy,
although the price of this achievement may be a slowdown later this year. Given
the overheated condition of the Brazilian economy at this time, a slowdown is
not necessarily an unwelcome event.
President Cardoso has also committed his administration to expand and
accelerate the privatization program. We expect to see many investment
opportunities linked to an active privatization effort, and the Fund has added
to its holdings of companies that we believe will benefit.
The Fund has also increased its investments in the Brazilian electric
utility industry. A number of restructurings and privatizations in the electric
utility sector will occur out of economic necessity. Brazil is now facing a
serious shortage of electric power due to past underinvestment in new generating
capacity as a result of inadequate returns on capital and poor cash flow.
8
<PAGE>
Utility stocks are priced at deep discounts to book value because of the low
returns capital is now earning. This condition of threadbare profitability must
change if the industry is to attract the capital it requires to finance new
generating facilities. Adequate capital will become available to the industry
only when the government allows it to earn a competitive return. When that
happens, as it must, the steep discount of market price to book value for many
stocks in the industry should quickly disappear.
Outlook
Recent events have not altered our fundamental view that Latin American
securities are compelling long-term investments. Admittedly, recent declines
have been significant, but even after factoring in these declines, the Fund's
average annual return in its two-plus years since inception surpasses that of
the average U.S. stock (15.53% versus 11.21% for the unmanaged S&P 500 Index).
The truly good news, however, is that the Mexican peso crisis appears to have
fortified the resolve of elected officials throughout the region to stay the
course in terms of continued economic reform through freer trade, increased
privatization, and the reduction of inflation. The ability of Latin American
markets to withstand or recover from the kind of economic vulnerability
associated with a currency devaluation will become the benchmark against which
all emerging markets will be measured. Those countries in need of foreign
investment will learn from Mexico's mistakes. Price volatility will undoubtedly
remain a feature of investments in the stock markets of Latin America, but
opportunities for significant long-term capital appreciation will remain as
well.
Sincerely,
Your Portfolio Management Team
/s/Edmund B. Games, Jr. /s/Joyce E. Cornell
Edmund B. Games, Jr. Joyce E. Cornell
/s/William F. Truscott
William F. Truscott
9
<PAGE>
<TABLE>
SCUDDER LATIN AMERICA FUND
- ----------------------------------------------------------------------------------------------------------
INVESTMENT PORTFOLIO as of April 30, 1995
<CAPTION>
% of Principal Market
Portfolio Amount (U.S.$) Value ($)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------
6.3% REPURCHASE AGREEMENT
-----------------------------------------------------------------------------------
34,312,000 Repurchase Agreement with Salomon
Brothers dated 4/28/95 at 5.92%,
to be repurchased at $34,328,927 on 5/1/95,
collateralized by a $34,840,000 U.S. Treasury
Note, 4.25%, 7/31/95 (Cost $34,312,000) ............. 34,312,000
-----------
---------------------------------------------------------------------------------
3.6% COMMERCIAL PAPER
---------------------------------------------------------------------------------
20,000,000 Ford Motor Credit Co., 5.98%, 6/7/95
(Cost $19,877,078) .................................. 19,877,078
-----------
-----------------------------------------------------------------------------------
90.1% EQUITY SECURITIES
----------------------------------------------------------------------------------
Shares
----------------------------------------------------------------------------------
ARGENTINA 19.8% 5,208,930 Astra CAPSA (Petroleum company)...................... 8,021,352
2,571,654 Bagley y Cia Ltd. S.A. "B" (Producer of
cookies and biscuits).............................. 5,785,932
3,000,000 BI S.A. "A" (Venture capital company) (b) (c) (d) 3,000,000
396,701 Corporacion Cementera Argentina "B"
(Cement producer) (c).............................. 1,963,572
282,592 Juan Minetti y Cia "B" (Cement producer)............. 904,249
1,541,530 Nobleza Piccardo (Tobacco company)................... 5,055,966
6,622,160 Perez Companc S.A. "B" (Industrial
conglomerate)...................................... 27,017,062
577,000 Quilmes Industrial S.A. (Leading beer distributor)... 10,963,000
2,591,099 Telecom Argentina S.A. "B" (Telecommunication
services).......................................... 11,244,807
10,000 Telecom Argentina S.A. (ADR)......................... 437,500
4,802,068 Telefonica de Argentina (Telecommunication
services).......................................... 11,284,296
30,000 Telefonica de Argentina (ADR)........................ 705,000
1,100,000 YPF SA "D" (ADR) (Petroleum company)................. 22,275,000
-----------
108,657,736
-----------
BRAZIL 35.9% 700,000,000 Banco Bradesco S.A. (pfd.) (Commercial bank)......... 5,377,534
57,569,600 Banco Itau S.A. (pfd.) (Bank)........................ 15,457,043
31,000,000 Centrais Eletricas Brasileiras S/A "B" (pfd.)
(Electric utility)................................. 8,357,260
69,225,145 Companhia Cervejaria Brahma (pfd.) (Leading
beer producer and distributor)..................... 20,104,499
1,957,888 Companhia Cervejaria Brahma (pfd.) Warrants
(expire 9/30/96) (b) (c)........................... 107,282
</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>
813,875,000 Companhia Energetica de Minas Gerais
(pfd.) (Electric power utility).................... 19,078,122
47,850,000 Companhia Energetica de Sao Paulo (pfd.)
(Electric utility)................................. 1,861,562
224,289,100 Companhia Paranaense de Energia (voting)
(Electric utility)................................. 1,573,096
41,983,000 Companhia Petroquimica do Sul S.A. (voting)
(Chemical producer)................................ 2,116,403
9,905,000 Companhia Siderurgica Belgo-Mineira (pfd.)
(Steel wires and wire products).................... 1,152,236
305,300,000 Companhia Siderurgica Nacional (voting)
(Steel producer)................................... 7,762,148
1,333,840 Companhia Suzano de Papel e Celulose S.A.
(pfd.) (Paper products)............................ 7,747,235
115,000,000 Companhia Vale do Rio Doce (pfd.) (Diverse
mining and industrial complex)..................... 18,904,110
121,388 Companhia Vidraria Santa Marina (voting)
(Glass manufacturer) (b)........................... 452,295
2,092,000 Empresa Brasileira de Compressores S.A. (pfd.)
(Manufacturer of electrical equipment) (b)......... 1,673,600
2,200,829 Industrias Klabin de Papel e Celulose S/A (pfd.)
(Producer of papers and paper products,
newsprint, and cardboard boxes).................... 3,159,546
174,967,360 Lojas Americanas S.A. (pfd.) (Discount
department store chain)............................ 3,834,901
179,308,380 Lojas Americanas S.A. (voting)....................... 3,880,921
8,250,000 Metal Leve S.A. Industria e Comercio (pfd.)
(Manufacturer of automobile parts)................. 266,712
145,000,000 Petroleo Brasileiro S/A (pfd.) (Petroleum
company)........................................... 13,506,849
8,763,146,120 S/A White Martins (voting) (Chemical company)........ 8,643,103
10,164,000 Sadia Concordia S/A (pfd.) (Processed poultry
and meat).......................................... 9,813,133
833,500 Souza Cruz S.A. (voting) (Holding company:
cigarettes and tobacco, fiber cellulose)........... 5,261,326
171,410,000 Telecomunicacoes de Sao Paulo S.A. (pfd.)
(Telecommunication services)....................... 21,604,235
5,455,986 Telecomunicacoes do Parana S/A (pfd.)
(Telecommunication services)....................... 1,554,582
10,800,000,000 Usinas Siderurgicas de Minas Gerais S/A
(pfd.) (Non-coated flat products and
electrolytic galvanized products).................. 13,137,534
1,750,000 Weg S.A. (pfd.) (Manufacturer of electrical
equipment)......................................... 901,370
-----------
197,288,637
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<TABLE>
SCUDDER LATIN AMERICA FUND
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value ($)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CHILE 4.1% 142,000 Compania de Telefonos de Chile, S/A (ADR)
(Telecommunication services)....................... 9,798,000
200,400 Cristalerias de Chile (ADR) (Glassworks)............. 3,707,400
106,300 Embotelladora Adina (ADR) (Soft drink
producer).......................................... 3,056,125
350,200 Maderas y Sinteticos S.A. (ADR) (Manufacturer
of particle board and veneers)..................... 6,128,500
----------
22,690,025
----------
COLOMBIA 0.5% 325,000 Bavaria S/A (Producer and distributor of
beer and other malt beverages, mineral
water and soft drinks)............................. 890,583
270,000 Colombiana de Tabaco S.A. (Tobacco producer)......... 691,323
121,997 Compania Nacional de Chocolates
(Chocolate producer)............................... 1,186,998
----------
2,768,904
----------
MEXICO 27.0% 1,380,000 Apasco, S.A. de C.V. (Cement producer)............... 4,844,315
400,000 Coca-Cola FEMSA, S.A. de C.V. "L" (ADR)
(Soft drink bottler and distributor)............... 7,950,000
4,152,000 Fomento Economico Mexicano, S.A. de C.V.
"B" (Producer of beer and soft drinks)............. 8,972,455
3,059,000 Grupo Carso, S.A. de CV "A" (Diversified
industrial group) (c).............................. 16,246,971
12,102,000 Grupo CIFRA S.A. de C.V. "C" (Retailer).............. 16,671,635
2,389,000 Grupo Continental, S.A. "B" (Soft drink bottler)..... 5,432,249
2,191,500 Grupo Embotellador de Mexico SA de C.V.
"B" (Soft drink bottler)........................... 4,066,551
200,150 Grupo Embotellador de Mexico SA de C.V.
(GDR).............................................. 2,126,594
1,549,500 Grupo Embotelladora Unidas SA de CV "B"
(Soft drink producer) (b).......................... 3,471,909
1,947,000 Grupo Financiero Inversiones Bursatiles S.A.
"C" (Banking and insurance)........................ 3,683,950
7,992,000 Grupo Herdez S.A. de C.V. "A" (Producer of
packaged foods).................................... 2,944,770
1,482,000 Grupo Industrial Bimbo, S.A. de C.V. "A"
(Producer of bread and other baked goods).......... 5,362,257
6,143,000 Grupo Industrial Maseca S.A. de C.V. "B"
(Food producer).................................... 4,934,792
100,000 Grupo Industrial Maseca S.A. de C.V. (ADR)........... 1,212,500
1,510,000 Kimberly Clark de Mexico S.A. de C.V. "A"
(Consumer paper products and newsprint)............ 15,162,656
</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>
8,517,704 Organizacion Soriana S.A. "A" de CV
(Retailer) (c)..................................... 9,895,442
477,800 Panamerican Beverages Inc. "A" (Soft drink
bottler)........................................... 12,422,800
750,000 Telefonos de Mexico S.A. de C.V. "L" (ADR)
(Telecommunication services)....................... 22,687,500
-----------
148,089,346
-----------
PERU 2.5% 595,319 Banco de Credito del Peru (Bank)..................... 1,247,158
1,244,692 Cementos Lima S.A. "T" (Cement producer)............. 2,762,900
1,076,487 Cerveceria Backus & Johnston S.A. "T"
(Brewery).......................................... 2,605,449
1,300,000 Compania Peruana de Telefonos S.A. "B"
(Public and cellular telephone services)........... 2,178,739
811,179 Embotelladora Latino-Americana S/A "T" (Bottler)..... 2,024,784
1,470,595 Industrias Pacocha S.A. "T" (Food producer).......... 1,809,156
1,457,056 La Fabril S.A. "T" (Food producer)................... 1,298,913
3,533 Southern Peru Copper Corp. "T" (Mining
company)........................................... 15,826
-----------
13,942,925
-----------
VENEZUELA 0.3% 507,250 Mavesa SA (ADR) (Food processor)..................... 1,648,563
-----------
TOTAL EQUITY SECURITIES (COST $588,622,158).......... 495,086,136
-----------
==========================================================================================================
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $642,811,236) (a)............................ 549,275,214
===========
</TABLE>
(a) The cost for federal income tax purposes was $642,986,096. At April 30,
1995, net unrealized depreciation for all securities based on tax cost was
$93,710,882 This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $30,970,307 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$124,681,189.
(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
$11,299,570. See Note A of the Notes to Financial Statements.
(c) Non-income producing security.
(d) This security has certain restrictions as to resale. Information
concerning such security holding at April 30, 1995 is as follows:
<TABLE>
<CAPTION>
Acquisition Date Cost ($) % of Total Assets
---------------- --------- -----------------
<S> <C> <C>
10/22/93 3,000,000 0.5
</TABLE>
Sector breakdown of the Fund's equity securities is noted on page 5.
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
<TABLE>
SCUDDER LATIN AMERICA FUND
FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- -----------------------------------------------------------------------------------------------
<CAPTION>
APRIL 30, 1995
------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Investments, at market (identified cost $642,811,236)
(Note A)............................................. $549,275,214
Foreign currency holdings, at market
(identified cost $426,269) (Note A).................. 426,554
Forward foreign currency exchange contracts
to buy, at market (contract cost $339,128)
(Notes A and D)...................................... 338,042
Receivable on Fund shares sold.......................... 877,358
Dividends and interest receivable....................... 1,691,080
Deferred organization expenses (Note A)................. 41,887
Other assets............................................ 11,079
------------
Total assets...................................... 552,661,214
LIABILITIES
Payables:
Due to custodian bank................................ $ 717,294
Investments purchased................................ 3,019,308
Fund shares redeemed................................. 311,977
Accrued management fee (Note C)...................... 304,643
Other accrued expenses (Note C)...................... 694,543
Forward foreign currency exchange
contracts to buy (Notes A and D).................. 339,128
----------
Total liabilities................................. 5,386,893
------------
Net assets, at market value............................. $547,274,321
============
NET ASSETS
Net assets consist of:
Undistributed net investment income................. $ 1,940,310
Unrealized depreciation on:
Investments....................................... (93,536,022)
Foreign currency related transactions............. (19,641)
Accumulated net realized loss........................ (32,274,751)
Capital stock........................................ 337,694
Additional paid-in capital........................... 670,826,731
------------
Net assets, at market value............................. $547,274,321
============
NET ASSET VALUE, offering and redemption price
(Note A) per share ($547,274,321 divided by
33,769,381 shares of capital stock outstanding,
$.01 par value, 100,000,000 shares authorized)....... $16.21
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------------------
SIX MONTHS ENDED APRIL 30, 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $656,141).... $ 6,445,565
Interest................................................. 1,912,890
-------------
8,358,455
Expenses:
Management fee (Note C).................................. $ 3,557,474
Services to shareholders (Note C)........................ 1,140,016
Directors' fees and expenses (Note C).................... 24,524
Custodian fees........................................... 966,893
Brazilian transaction tax................................ 360,329
Reports to shareholders.................................. 224,424
Auditing................................................. 58,300
Legal.................................................... 12,021
Amortization of organization expenses (Note A)........... 7,980
Other.................................................... 66,184 6,418,145
--------------------------------
Net investment income.................................... 1,940,310
-------------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENT TRANSACTIONS
Net realized loss from:
Investments.......................................... (32,416,945)
Foreign currency related transactions............... (398,834) (32,815,779)
-------------
Net unrealized depreciation during the period on:
Investments.......................................... (228,696,612)
Foreign currency related transactions................ (12,834) (228,709,446)
--------------------------------
Net loss on investment transactions...................... (261,525,225)
-------------
Net decrease in net assets resulting from operations..... $(259,584,915)
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<TABLE>
SCUDDER LATIN AMERICA 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 (loss).............................. $ 1,940,310 $ (1,196,271)
Net realized gain (loss) from investment
transactions............................................ (32,815,779) 25,731,015
Net unrealized appreciation (depreciation) on
investment transactions during the period............... (228,709,446) 90,401,699
------------- ------------
Net increase (decrease) in net assets resulting
from operations......................................... (259,584,915) 114,936,443
------------- ------------
Distributions to shareholders:
In excess of net investment income ($.055 per share).... - (1,013,185)
------------- ------------
From net realized gains from investment
transactions ($.73 and $.055 per share,
respectively)......................................... (24,333,536) (1,013,185)
------------- ------------
Fund share transactions:
Proceeds from shares sold................................. 143,463,927 635,744,643
Net asset value of shares issued to
shareholders in reinvestment of distributions........... 23,383,847 1,910,655
Cost of shares redeemed (Note A).......................... (145,021,649) (201,760,965)
------------- ------------
Net increase in net assets from Fund share transactions... 21,826,125 435,894,333
------------- ------------
Increase (decrease) in net assets......................... (262,092,326) 548,804,406
Net assets at beginning of period......................... 809,366,647 260,562,241
------------- ------------
Net assets at end of period (including
undistributed net investment income of $1,940,310
at April 30, 1995).................................... $ 547,274,321 $ 809,366,647
============= ============
Other Information
Increase (decrease) in Fund shares
Shares outstanding at beginning of period................. 33,122,382 14,153,599
------------- ------------
Shares sold............................................... 8,098,713 28,213,736
Shares issued to shareholders in reinvestment
of distributions........................................ 1,285,533 88,171
Shares redeemed........................................... (8,737,247) (9,333,124)
------------- ------------
Net increase in Fund shares............................... 646,999 18,968,783
------------- ------------
Shares outstanding at end of period....................... 33,769,381 33,122,382
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<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
DECEMBER 8, 1992
SIX MONTHS YEAR (COMMENCEMENT
ENDED ENDED OF OPERATIONS)
APRIL 30, OCTOBER 31, TO OCTOBER 31,
1995 1994 1993
---------- ----------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period.............................................. $ 24.44 $18.41 $12.00
------- ------ ------
Income from investment operations:
Net investment income (loss) (a)................................................ .06 (.03) .03
Net realized and unrealized gain (loss) on investment transactions............. (7.56) 6.18 6.38
------- ------ ------
Total from investment operations.................................................. (7.50) 6.15 6.41
------- ------ ------
Less distributions:
In excess of net investment income.............................................. - (.06) -
From net realized gains on investment transactions.............................. (.73) (.06) -
------- ------ ------
Total distributions............................................................... (.73) (.12) -
------- ------ ------
Net asset value, end of period.................................................... $ 16.21 $24.44 $18.41
======= ====== ======
Total Return (%).................................................................. (31.01)(b)** 33.43 53.42(b)**
Ratios and Supplemental Data
Net assets, end of period ($ millions)............................................ 547 809 261
Ratio of operating expenses, net to average daily net assets (%) (a).............. 2.14* 2.01 2.00*
Ratio of net investment income (loss) to average daily net assets (%)............. .65* (.20) .44*
Portfolio turnover rate (%)....................................................... 33.7* 22.4 4.6*
<FN>
(a) Reflects a per share amount of management fee not imposed
by the Adviser of....................................................... $ .01 $ .01 $ .04
Operating expense ratio including management fee not imposed(%)............. 2.22* 2.05 2.69*
(b) Total return does not reflect the effect of the applicable redemption fees.
* Annualized
** Not annualized
</FN>
</TABLE>
17
<PAGE>
SCUDDER LATIN AMERICA FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
Scudder Latin America 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. 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 $8,705,086 (1.6% of net assets) and have been noted in the
investment portfolio as of April 30, 1995.
18
<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.
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 daily 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.
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 counter-parties 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 from investment and foreign currency related transactions.
19
<PAGE>
SCUDDER LATIN AMERICA 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.
REDEMPTION FEES. In general, shares of the Fund may be redeemed at net asset
value. However, upon the redemption or exchange of shares held by shareholders
for less than one year, a fee of 2% of the lower of cost or the current net
asset value of the shares will be assessed and retained by the Fund for the
benefit of the remaining shareholders. The redemption fee is accounted for as an
addition to paid-in capital. Total redemption fees received by the Fund for the
six months ended April 30, 1995 amounted to $1,372,931.
DISTRIBUTION OF INCOME AND GAINS. Distribution of net investment income is 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 returns.
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 foreign denominated investments
and passive foreign investment companies and certain securities sold at a loss.
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.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
ORGANIZATION COSTS. Costs incurred by the Fund in connection with its
organization and initial registration of shares have been deferred and are being
amortized on a straight-line basis over a five-year period.
OTHER. Investment security transactions are accounted for on a trade-date basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis.
B. PURCHASES AND SALES OF SECURITIES
- --------------------------------------------------------------------------------
During the six months ended April 30, 1995, purchases and sales of investment
securities (excluding short-term investments) aggregated $131,683,960 and
$93,228,955, 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 1.25% 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,
exclusive of taxes, interest, and extraordinary expenses, exceed specified
limits, such excess, up to the amount of the management fee, will be paid by the
Adviser. As a result, for the six months ended April 30, 1995, the Adviser did
not impose a portion of its management fee amounting to $227,090, and the
portion imposed amounted to $3,557,474.
21
<PAGE>
SCUDDER LATIN AMERICA FUND
- --------------------------------------------------------------------------------
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 $935,153 of which $147,501 is unpaid at April 30, 1995.
The Fund pays each of its Directors 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 $24,524.
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 $1,086.
<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION
SETTLEMENT (DEPRECIATION)
CONTRACTS TO DELIVER IN EXCHANGE FOR DATE (U.S.$)
- -------------------------- ------------------------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
U.S. Dollar 165,489 Argentinean Peso 165,455 5/2/95 (41)
U.S. Dollar 173,639 Peruvian New Sol 387,216 5/2/95 (1,045)
------
(1,086)
======
</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 comparable securities in the United
States.
22
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS OF SCUDDER INTERNATIONAL FUND, INC. AND TO THE
SHAREHOLDERS OF SCUDDER LATIN AMERICA FUND:
We have audited the accompanying statement of assets and liabilities of Scudder
Latin America Fund including the investment portfolio, as of April 30, 1995, and
the related statement of operations for the six month period then ended, the
statements of changes in net assets for the six month period then ended and for
the year ended October 31, 1994, and the financial highlights for the six month
period 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. 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 Latin America Fund as of April 30, 1995, the results of its operations
for the six month period then ended, the changes in its net assets for the six
month period then ended and for the year ended October 31, 1994, and the
financial highlights for the six month period 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 20, 1995
23
<PAGE>
(This page intentionally left blank.)
24
<PAGE>
OFFICERS AND DIRECTORS
- --------------------------------------------------------------------------------
Edmond D. Villani*
Chairman of the Board and Director
Nicholas Bratt*
President and Director
Paul Bancroft III
Director; Venture Capitalist and Consultant
Thomas J. Devine
Director; Consultant
William H. Gleysteen, Jr.
Director; President, The Japan Society, Inc.
William H. Luers
Director; President, The Metropolitan Museum of Art
Wilson Nolen
Director; Consultant
Juris Padegs*
Director, Vice President and Assistant Secretary
Daniel Pierce*
Director
Gordon Shillinglaw
Director; Professor Emeritus of Accounting, Columbia University Graduate
School of Business
Robert G. Stone, Jr.
Director; Chairman of the Board and Director, Kirby Corporation
Robert W. Lear
Honorary Director; Executive-in-Residence, Visiting Professor,
Columbia University Graduate School of Business
Carol L. Franklin*
Vice President
Edmund B. Games, Jr.*
Vice President
Jerard K. Hartman*
Vice President
William E. Holzer*
Vice President
Thomas W. Joseph*
Vice President
William F. Truscott*
Vice President
David S. Lee*
Vice President and Assistant Treasurer
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Kathryn L. Quirk*
Vice President and Assistant Secretary
Richard W. Desmond*
Assistant Secretary
Coleen Downs Dinneen*
Assistant Secretary
* Scudder, Stevens & Clark, Inc.
25
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PRODUCTS AND SERVICES
- ------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
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)++
-----------------------------------------------------------------------------------------------------------------
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.
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
<C> <C>
HOW TO CONTACT SCUDDER
- --------------------------------------------------------------------------------------------------------------
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 For information on Scudder
Treasurers Trust,(TM) an institutional Institutional Funds,* funds
cash management service for designed to meet the broad
corporations, non-profit investment management and
organizations and trusts that uses service needs of banks and
certain portfolios of Scudder Fund, other institutions, call
Inc.* ($100,000 minimum), call 1-800-854-8525.
1-800-541-7703.
-------------------------------------------------------------------------------------------------------------
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.
</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.
