This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
310-6-65
MIS77S
Scudder
Greater Europe
Growth Fund
Semiannual Report
April 30, 1995
o For investors seeking long-term growth of capital through investment
primarily in the equity securities of European companies.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange
shares.
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
- --------------------------------------------------------------------------------
CONTENTS
2 In Brief
3 Letter from the Fund's Chairman
4 Portfolio Summary
5 Portfolio Management Discussion
9 Investment Portfolio
13 Financial Statements
16 Financial Highlights
17 Notes to Financial Statements
22 Report of Independent Accountants
25 Officers and Directors
26 Investment Products
and Services
27 How to Contact
Scudder
IN BRIEF
* Scudder Greater Europe Growth Fund returned 3.71% during the six months
ended April 30, 1995, with particularly strong performance in February,
March, and April, when the Fund returned 9.56%.
* The European economic recovery remains on track, and those companies that
have restructured or consolidated are currently reaping the benefits
through above-average profit growth.
* The Fund has maintained core positions in companies that are global leaders
in growth industries, including Reuters in media, SAP in computer software,
and Nokia and Ericsson in cellular telecommunications.
2
<PAGE>
LETTER FROM THE FUND'S CHAIRMAN
- --------------------------------------------------------------------------------
Dear Shareholders,
To those of you who have invested in Scudder Greater Europe Growth Fund in
recent months, welcome. Because of your investments, the Fund's assets have more
than tripled since the end of October to $28.2 million on April 30, 1995, with
more than 5,400 shareholder accounts.
Although considerably larger than at the start of its fiscal year, Scudder
Greater Europe Growth Fund is still relatively small, which means each portfolio
holding can have a greater impact on this Fund, compared with other, larger
funds. Your portfolio managers pursue the Fund's objective of long-term capital
growth through investments chiefly in the larger, more-established and liquid
European markets such as Germany, France, and the United Kingdom. However, the
Fund may also invest in the newer, developing markets of Southern and Eastern
Europe.
As your portfolio managers explain in the following pages, Europe is in the
midst of an economic recovery that is enhanced by widespread privatization and
corporate restructuring. As the political, economic, and financial landscapes
unfold in Europe, Scudder Greater Europe Growth Fund will continue to invest in
quality companies that we believe stand to benefit from the resurgence in
economic growth. These changes are not without risks, as economies and markets
adjust. We believe, however, that the outlook for greater Europe suggests
significant opportunities for capital appreciation.
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
Greater Europe Growth Fund to help meet your investment needs.
Sincerely,
/s/Edmond D. Villani
Edmond D. Villani
Chairman,
Scudder Greater Europe Growth Fund
3
<PAGE>
Portfolio Summary as of April 30, 1995
- ---------------------------------------------------------------------------
Geographical (Excludes 17% Cash Equivalents)
- ---------------------------------------------------------------------------
France 22% Since the Fund's inception in October 1994,
United Kingdom 19% we have invested primarily in relatively
Netherlands 12% large, well-managed companies of Europe's
Germany 11% chief western markets.
Spain 8%
Sweden 8%
Switzerland 6%
Italy 3%
Finland 3%
Other 8%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Sectors (Excludes 17% Cash Equivalents)
- --------------------------------------------------------------------------
Manufacturing 14%
Energy 14%
Health 12% Economic recovery in Europe remains
Durables 12% on track, while many corporations have
Consumer Staples 8% restructured and consolidated, providing
Consumer Discretionary 7% numerous opportunities for long-term
Service Industries 6% capital appreciation.
Utilities 6%
Media 5%
Other 16%
----
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. Philips Electronics N.V.
Leading manufacturer of electrical equipment in the Netherlands
2. VEBA AG
Electric utility, distributor of oil and chemicals in Germany
3. Saga Petroleum AS
Norwegian oil and gas exploration and production
4. Essilor International
Manufacturer of various types of lenses, eyeglasses, contact
lenses and optical measuring instruments in France
5. Heineken Holdings N.V.
Brewery in the Netherlands
6. Club Mediterranee
Operator of informal vacation resorts in France
7. Sligos SA
Electrical payment and computing engineering services company
in France
8. SmithKline Beecham
Manufacturer of ethical drugs and healthcare products in the
United Kingdom
9. Uralita, SA
Processor of concrete pipes and cement for the construction industry
in Spain
10. Acerinox, S.A.
Stainless steel producer in Spain
The Fund has maintained core positions in companies that are global leaders
in growth industries.
For more complete details about the Fund's Investment Portfolio,
see page 9.
A monthly Investment Portfolio Summary is available upon request.
4
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Dear Shareholders,
Scudder Greater Europe Growth Fund provided a 3.71% total return for the
six months ended April 30, 1995, aided largely by the declining value of the
U.S. dollar relative to many European currencies. The Fund's net asset value
(NAV) rose to $12.61 on April 30, 1995, from $12.18 on October 31, 1994. In
addition, the Fund paid shareholders $0.02 per share in income during the
six-month period. Because of cash inflows into the portfolio during the period
and temporarily large cash balances, the Fund underperformed the unmanaged MSCI
Europe Index, which had a 5.97% return. Nevertheless, the Fund's return compares
favorably to that of the 44 European region funds tracked by Lipper Analytical
Services, which returned 2.37% on average for the same period.
Although economic growth in Europe has been strong and inflation low, most
European markets suffered declining stock prices -- when valued in local
currencies -- during the period. Political uncertainties and disequilibrium
among major European currencies took investors' attention away from the
otherwise positive news about corporate profits and economic growth in the
region. Worldwide, investors switched to the relative safety of the deutschemark
from the U.S. dollar, which seemed caught in the downdraft of the Mexican peso
crisis, among other things. The German deutschemark, on the other hand,
benefited from the Bundesbank's long-standing tradition of maintaining a
credible anti-inflation policy. The mark surged, reaching record highs against
major European currencies and the U.S. dollar. But Germany's strong currency
combined with a higher-than-expected wage package renewed concerns about
potential inflation, and the German market returned -1.76% in local currency
terms for the six-month period. Of course, the strong German currency greatly
enhanced returns for U.S. investors, who received a positive 6.63% return when
translated back into dollars.
Some European markets managed brief rallies toward the end of the
semiannual period. Pre-election optimism helped France move into positive
territory, helped by strong corporate profitability, good national macroeconomic
fundamentals, and attractive stock valuations. Meanwhile, British stocks rallied
on the basis of strong corporate earnings and rising dividends. Sweden closed
out the period with a positive local currency return, despite fears of its
ballooning deficit, while Italy partially recovered from earlier declines in
response to welcome news on pension reform. These brief rallies, combined with
5
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
- --------------------------------------------------------------------------------
continued dollar weakness and strong individual stock performance, contributed
to the Fund's strongest performance during the period. The Fund's return for the
three months ended April 30 was 9.56%.
Investment Opportunities and Risks
The economic recovery in Europe remains on track. European economies showed
positive though sluggish growth in 1994 after emerging from a prolonged
recession. We anticipate somewhat healthier growth in gross domestic product
(projected 2.9% on average) in 1995. Importantly, corporations have restructured
and consolidated, resulting in strong profitability. American-style corporate
restructuring is a relatively recent though badly needed phenomenon in Europe.
Such practices as the 40-hour work week and routine corporate layoffs, which we
take for granted, go against the mores of many European countries.
The structural changes taking place in greater Europe along with the
strengthening economic recovery have provided numerous opportunities for
long-term capital appreciation. However, since the Fund's inception on October
10, 1994, we have invested primarily in relatively large companies in Europe's
chief western markets. With the perception of heightened investment risk still
dominating the emerging markets, we have been reluctant thus far to invest in
the smaller, more rapidly developing markets of Southern and Eastern Europe.
However, we have begun to invest in Western Europe's peripheral markets,
including an 8% position in Spain and a 3% position in Italy as of April 30.
Encouraging Prospects in Telecommunications and Retail
In Europe's more established markets, where the risk/reward equation is
more favorable, companies such as Michelin and Valeo are realizing the benefits
of their restructuring programs, resurgent growth in their principal markets,
and gains associated with consolidation in their industries. Core portfolio
positions have been maintained in companies that are global leaders in growth
industries, exemplified by Reuters in media, SAP in computer software, and Nokia
and Ericsson in cellular telecommunications.
European telecommunications are expected to grow at an average rate of 5%
to 7% through the next decade, and Germany represents roughly 23% of the entire
market. Our strategy has been to gain exposure to the sector through major
6
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
German utilities VEBA, RWE, and Viag. Deutsche Telekom's network monopoly
will end on January 1, 1998, at which time private companies will be able to set
up their own communications networks. German utilities have been targeting this
sector for some time and have formed strategic alliances with global partners.
The utilities' ability to manage complicated networks and bill large numbers of
customers gives them a natural advantage in telecommunications.
Though consumer spending generally has been weak and prices restrained, we
have taken positions in high-quality consumer stocks with superior franchises.
Heineken, for example, produces the world's most recognized beer. In the face of
generally slowing beer consumption, the company has built an important position
in the premium beer segment of the market. Significantly, premium beers are
priced on average 25% higher than mainstream beers, yet the cost of production
is roughly equivalent. Heineken is expanding in Asia, where beer consumption is
increasing; and Eastern Europe, where beer consumption historically has been
high. Along with other major European companies in recent years, Heineken has
undergone significant internal restructuring and has demonstrated the ability to
produce consistent earnings and growing dividends. Elsewhere, our exposure to
Carrefour, a leading French food retailer, reflects our belief that stronger job
prospects will ultimately entice the European consumer to spend more. However,
the company is also gaining market share overseas and is a leading retailer in
several Latin American markets. In its effort to reduce costs, Carrefour has
consolidated its suppliers and centralized distribution.
Looking Ahead
The effects of corporate restructuring, accelerating economic growth, and
political change will continue to be felt in Europe in the near future. Despite
contributing to negative local returns in some markets, we do not believe the
recent strength of European currencies will hamper economic growth over the
medium term. In fact, as European exports become more expensive overseas, the
inflationary potential of European economic growth will likely be tempered,
leading to a more positive interest-rate environment.
In the coming months, we will continue to monitor political changes and
economic activity in Europe -- as well as in other countries whose policies and
7
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
- --------------------------------------------------------------------------------
economies could affect European investments -- to determine their potential
impact on Scudder Greater Europe Growth Fund's portfolio. Meanwhile, we believe
the Fund offers long-term investors a diversified approach to the significant
investment opportunities we see in the evolving stock markets of greater Europe.
Sincerely,
Your Portfolio Management Team
/s/Carol L. Franklin /s/Nicholas Bratt
Carol L. Franklin Nicholas Bratt
/s/Joan R. Gregory
Joan R. Gregory
8
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO as of April 30, 1995
- ------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Market
Portfolio Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
------------------------------------------------------------------------------
11.5% REPURCHASE AGREEMENT
------------------------------------------------------------------------------
3,248,000 Repurchase Agreement with Salomon
Brothers dated 4/28/95 at 5.92%,
to be repurchased at $3,249,602 on 5/1/95,
collateralized by a $3,260,000 U.S. Treasury
Note, 7.75%, 3/31/96 (Cost $3,248,000)................ 3,248,000
---------
------------------------------------------------------------------------------
5.6% SHORT-TERM NOTE
------------------------------------------------------------------------------
1,595,000 Federal National Mortgage Association,
Discount Note, 5.95%, 5/1/95 (Cost $1,595,000)........ 1,595,000
---------
------------------------------------------------------------------------------
3.8% PREFERRED STOCKS
------------------------------------------------------------------------------
Shares
------------------------------------------------------------------------------
GERMANY 2.3% 1,100 Rheinisch-Westfaelisches Elektrizitaetswerk
AG (Electric utility).................................. 295,762
375 SAP AG (Computer software manufacturer).................. 370,631
---------
666,393
---------
ITALY 1.5% 160,000 Fiat SpA (Multi-industry, automobiles)................... 412,749
---------
TOTAL PREFERRED STOCKS (Cost $847,514)................... 1,079,142
---------
------------------------------------------------------------------------------
79.1% COMMON STOCKS
------------------------------------------------------------------------------
AUSTRIA 2.0% 2,300 OMV AG (Oil and gas company)............................. 237,760
3,600 VAE Eisenbahnsysteme AG (Manufacturer of electronic
control systems for use in rail transportation
technology)........................................ 323,782
---------
561,542
---------
DENMARK 1.5% 9,200 Unidanmark A/S "A" (Bank holding company)................ 420,987
---------
FINLAND 2.2% 9,060 Nokia AB Oy (Preference) (Leading manufacturer of
cellular telephones)................................... 369,709
14,300 Outokumpu Oy "A" (Metals and minerals)................... 255,549
---------
625,258
---------
FRANCE 17.9% 750 Carrefour (Hypermarket and food retailing)............... 375,953
5,000 Club Mediterranee (Operator of informal vacation
resorts)............................................... 504,321
700 Comptoirs Modernes (Operator of supermarkets, grocery and
department stores)..................................... 215,231
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
<TABLE>
SCUDDER GREATER EUROPE GROWTH FUND
- ------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value ($)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1,475 ECIA - Equipements et Composants pour
l'Industrie Automobile (Manufacturer of
automobile parts and accessories)...................... 217,763
2,890 Essilor International (Manufacturer of various
types of lenses, eyeglasses, contact lenses
and optical measuring instruments)..................... 517,173
1,800 LVMH Moet-Hennessy Louis Vuitton (Producer
of wine, spirits and luxury products).................. 342,247
3,975 La Brosse et Du Pont (Toiletries manufacturer)........... 266,832
9,870 Michelin "B" (Leading tire manufacturer)................. 442,569
5,600 Sligos SA (Electrical payment and computing engineering
services company)...................................... 483,986
4,780 Societe Nationale Elf Aquitaine (Petroleum company)...... 381,720
4,785 Television Francaise (Television broadcasting)........... 436,902
6,675 Total SA "B" (International oil and gas exploration,
development and production)............................ 416,992
7,850 Valeo SA (Automobile and truck components)............... 446,975
---------
5,048,664
---------
GERMANY 7.1% 480 Kampa-Haus AG (Designing and construction of
prefabricated houses and sub-assemblies)............... 270,101
1,125 Mannesmann AG (Bearer) (Diversified construction and
technology company).................................... 305,162
595 Schering AG (Pharmaceutical and chemical producer)....... 441,480
1,495 VEBA AG (Electric utility, distributor of oil and
chemicals)............................................. 556,520
1,200 Viag AG (Provider of electrical power and natural gas
services, aluminum products, chemicals, ceramics
and glass)............................................. 443,675
---------
2,016,938
---------
IRELAND 1.6% 633,000 Aran Energy PLC (Oil and natural gas exploration)......... 453,156
---------
ITALY 0.9% 7,500 Luxottica Group SpA (ADR) (Manufacturer and marketer of
eyeglasses)............................................. 260,625
---------
NETHERLANDS 9.8% 2,550 Akzo-Nobel N.V. (Chemical producer)....................... 295,728
17,000 Bols Wessanen CVA (Producer and distributor of food
products)............................................... 360,350
8,000 Getronics N.V. (Computer and software distributor)........ 327,299
3,906 Heineken Holdings N.V. "A" (Brewery)...................... 510,901
14,630 Philips Electronics N.V. (Leading manufacturer of
electrical equipment)................................... 558,016
</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>
3,160 Telegraaf Holdings CVA (Newspaper publisher)...... 384,795
4,000 Wolters Kluwer CVA (Publisher).................... 325,494
---------
2,762,583
---------
NORWAY 1.8% 35,700 Saga Petroleum AS "A" (Free) (Oil and gas
exploration and production)...................... 518,429
---------
SPAIN 6.9% 4,000 Acerinox, S.A. (Stainless steel producer)......... 458,164
10,000 Cortefiel, S.A. (Operator of retail clothing
stores and clothing manufacturer)................ 300,975
13,000 Empresa Nacional de Celulosas SA
(Manufacturer of cellulose paper pulp)........... 332,128
12,570 Repsol SA (Integrated oil company)................ 400,279
42,000 Uralita, SA (Processor of concrete pipes
and cement for the construction industry)........ 458,895
---------
1,950,441
---------
SWEDEN 6.6% 13,350 Astra AB "A" (Free) (Pharmaceutical company)...... 389,138
6,300 L.M. Ericsson Telephone Co. "B" (ADR)
(Leading manufacturer of cellular telephone
equipment)....................................... 422,494
7,700 Mooch Domsjo AB "B" (Free)
(Manufacturer of newsprint, paperboard,
and various sawn timber products)................ 428,778
21,000 S.K.F. AB "A" (Free) (Manufacturer of
roller bearings)................................. 420,116
11,000 Volvo AB "B" (Free) (Automobile manufacturer)..... 206,449
---------
1,866,975
---------
SWITZERLAND 5.3% 700 Alusuisse-Lonza Holdings AG (Registered)
(Manufacturer of aluminum, chemicals,
and paper packaging products).................... 387,632
430 Brown, Boveri & Cie. AG (Bearer)
(Manufacturer of electrical equipment)........... 424,779
500 Ciba-Geigy AG (Bearer) (Pharmaceutical
company)......................................... 341,515
500 Sandoz Ltd. AG (Registered) (Pharmaceutical
company)......................................... 327,103
---------
1,481,029
---------
UNITED KINGDOM 15.5% 81,306 BBA Group PLC (Manufacturer of automotive
components and industrial materials)............. 273,661
46,342 British Petroleum PLC (Major integrated world
oil company)..................................... 333,973
22,000 Carlton Communications PLC (Television post
production products and services)................ 334,455
66,000 Enterprise Oil PLC (Oil and gas exploration
and production).................................. 437,378
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<TABLE>
SCUDDER GREATER EUROPE GROWTH FUND
- ----------------------------------------------------------------------------------
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------
<S> <C> <C>
36,500 Guinness PLC (Brewery)........................ 276,270
81,800 Hanson PLC (Industrial management company).... 311,550
61,600 House of Fraser PLC (Department store chain).. 150,788
45,000 PowerGen PLC (Electric utility)............... 350,391
52,000 Reuters Holdings PLC (International news
agency)...................................... 395,684
63,549 Royal Bank of Scotland PLC (Bank)............. 425,741
59,369 SmithKline Beecham "A" (Manufacturer of
ethical drugs and healthcare products)....... 469,445
19,000 Southern Electric PLC (Electric company)...... 202,255
29,000 Zeneca Group PLC (Holding company:
manufacturing and marketing of
pharmaceutical and agrochemical products
and specialty chemicals)..................... 422,192
----------
4,383,783
----------
TOTAL COMMON STOCKS (Cost $20,837,301)....... 22,350,410
----------
- ----------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $26,527,815) (a)....................... 28,272,552
==========
<FN>
(a) The cost for federal income tax purposes was $26,527,815. At April 30, 1995,
net unrealized appreciation for all securities based on tax cost was $1,744,737.
This consisted of aggregate gross unrealized appreciation for all securities
in which there was an excess of market value over tax cost of $2,131,144 and
aggregate gross unrealized depreciation for all securities in which there was
an excess of tax cost over market value of $386,407.
Sector breakdown of the Fund's equity securities is noted on page 4.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- -----------------------------------------------------------------------------------
APRIL 30, 1995
- -----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (including repurchase
agreements of $3,248,000) (identified cost $26,527,815)
(Note A)............................................... $28,272,552
Cash...................................................... 341
Forward foreign currency exchange contracts to buy,
at market (contract cost $563,474) (Notes A and D)..... 559,934
Receivable on forward foreign currency exchange
contracts to sell (Notes A and D)...................... 265,548
Other Receivables:
Investments sold....................................... 268,329
Fund shares sold....................................... 125,532
Dividends and interest................................. 79,519
Foreign taxes recoverable.............................. 10,217
Deferred organization expense (Note A).................... 67,491
-----------
Total assets........................................... 29,649,463
LIABILITIES
Payables:
Investments purchased.................................. $559,934
Fund shares redeemed................................... 16,171
Organization fees...................................... 16,580
Other accrued expenses (Note C)........................ 48,987
Forward foreign currency exchange contracts to buy
(Notes A and D)..................................... 563,474
Forward foreign currency exchange contracts to sell,
at market (contract cost $265,548) (Notes A and D).. 268,329
--------
Total liabilities...................................... 1,473,475
-----------
Net assets, at market value............................... $28,175,988
===========
NET ASSETS
Net assets consist of:
Undistributed net investment income.................... $ 109,473
Unrealized appreciation on:
Investments......................................... 1,744,737
Foreign currency related transactions............... 1,415
Accumulated net realized loss.......................... (98,262)
Capital stock.......................................... 22,340
Additional paid-in capital............................. 26,396,285
-----------
Net assets, at market value............................... $28,175,988
===========
NET ASSET VALUE, offering and redemption price per
share ($28,175,988 / 2,233,970 shares of
capital stock outstanding, $.01 par value,
100,000,000 shares authorized)......................... $12.61
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
<TABLE>
SCUDDER GREATER EUROPE GROWTH FUND
- ----------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- ----------------------------------------------------------------------------------
SIX MONTHS ENDED APRIL 30, 1995
- ----------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $20,932)...... $ 144,307
Interest.................................................. 131,432
----------
275,739
Expenses:
Management fee (Note C)................................... $ -
Services to shareholders (Note C)......................... 16,206
Custodian and accounting fees (Note C).................... 30,575
Directors' fees and expenses (Note C)..................... 9,151
Auditing.................................................. 32,300
Reports to shareholders................................... 20,836
Amortization of organization expense (Note A)............. 7,523
Federal registration...................................... 6,866
Legal..................................................... 6,702
State registration........................................ 5,115
Other..................................................... 5,791 141,065
-----------------------
Net investment income..................................... 134,674
----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized loss from:
Investments............................................ (92,159)
Foreign currency related transactions.................. (6,103) (98,262)
----------
Net unrealized appreciation during the period on:
Investments............................................ 1,639,607
Foreign currency related transactions.................. 3,374 1,642,981
-----------------------
Net gain on investment transactions....................... 1,544,719
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...... $1,679,393
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------
<CAPTION>
FOR THE PERIOD
OCTOBER 10, 1994
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS) TO
APRIL 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income.............................. $ 134,674 $ 6,080
Net realized loss from investment transactions..... (98,262) (4,369)
Net unrealized appreciation on investment
transactions during the period.................. 1,642,981 103,171
----------- ----------
Net increase in net assets resulting
from operations ................................ 1,679,393 104,882
----------- ----------
Distributions to shareholders:
From net investment income ($.02 per share)........ (26,912) --
----------- ----------
Fund share transactions:
Proceeds from shares sold.......................... 24,059,683 7,878,987
Net asset value of shares issued to
shareholders in reinvestment of distributions... 26,407 --
Cost of shares redeemed............................ (5,422,325) (125,327)
----------- ----------
Net increase in net assets from Fund share
transactions.................................... 18,663,765 7,753,660
----------- ----------
INCREASE IN NET ASSETS............................. 20,316,246 7,858,542
Net assets at beginning of period.................. 7,859,742 1,200
----------- ----------
NET ASSETS AT END OF PERIOD (including
undistributed net investment income
of $109,473 and $1,711, respectively)........... $28,175,988 $7,859,742
=========== ==========
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period.......... 645,237 100
----------- ----------
Shares sold........................................ 2,048,736 655,588
Shares issued to shareholders in reinvestment
of distributions................................ 2,316 --
Shares redeemed.................................... (462,319) (10,451)
----------- ----------
Net increase in Fund shares........................ 1,588,733 645,137
----------- ----------
Shares outstanding at end of period................ 2,233,970 645,237
=========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<TABLE>
SCUDDER GREATER EUROPE GROWTH FUND
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 OCTOBER 10, 1994
ENDED (COMMENCEMENT
APRIL 30, OF OPERATIONS) TO
1995 OCTOBER 31, 1994
--------- -----------------
<S> <C> <C>
Net asset value, beginning of period.................................... $12.18 $12.00
------ ------
Income from investment operations:
Net investment income (a)............................................ .07 .01
Net realized and unrealized gain on investment transactions.......... .38 .17
------ ------
Total from investment operations........................................ .45 .18
------ ------
Less distributions:
From net investment income........................................... (.02) --
------ ------
Net asset value, end of period.......................................... $12.61 $12.18
====== ======
TOTAL RETURN (%) (b).................................................... 3.71** 1.50**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions).................................. 28 8
Ratio of operating expenses, net to average daily net assets (%) (a).... 1.50* 1.50*
Ratio of net investment income to average daily net assets (%).......... 1.43* 2.40*
Portfolio turnover rate (%) ............................................ 19.4* --
<FN>
(a) Reflects a per share amount of expenses, exclusive of
management fees, reimbursed by the Adviser of.................... $ -- $ .01
Reflects a per share amount of management fee and other
fees not imposed................................................. $ .09 $ .02
Operating expense ratio including expenses reimbursed,
management fee and other expenses not imposed (%)................ 3.54* 11.46*
(b) Total return is higher due to maintenance of the Fund's expenses.
* Annualized
** Not annualized
</FN>
</TABLE>
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
Scudder Greater Europe Growth 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.
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, is equal to at least 100.5% of the resale price.
17
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
- --------------------------------------------------------------------------------
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.
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.
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.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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. 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. Interest income is recorded on the accrual basis.
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 $16,488,546 and
$1,512,189, respectively.
C. RELATED PARTIES
- --------------------------------------------------------------------------------
Under the Fund's Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund has agreed to pay to the Adviser
a fee equal to an annualized rate of 1.00% of the Fund's average daily net
assets, computed and accrued daily and payable monthly. As manager of the assets
of the Fund, the Adviser directs the investments of the Fund in accordance with
its
19
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
- --------------------------------------------------------------------------------
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 Agreement. The 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. In addition, the Adviser agreed not to impose all or a
portion of its management fee until February 29, 1996, and during such period
to maintain the annualized expenses of the Fund at not more than 1.50% of
average daily net assets. For the six months ended April 30, 1995, the Adviser
did not impose all of its management fee amounting to $95,928.
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 by SSC aggregated
$57,818, all of which was not imposed at April 30, 1995.
Scudder Fund Accounting Corporation ("SFAC"), a wholly-owned subsidiary of
the Adviser, is responsible for determining the daily net asset value per share
and maintaining the portfolio and general accounting records for the Fund.
For the six months ended April 30, 1995, the amount charged by SFAC aggregated
$25,000, all of which was not imposed 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 $21,774,
of which $12,623 was not imposed at April 30, 1995.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
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 $6,321.
<CAPTION>
NET UNREALIZED
SETTLEMENT DEPRECIATION
CONTRACTS TO DELIVER IN EXCHANGE FOR DATE (U.S.$)
- -------------------------- ---------------------------- -------- ---------
<S> <C> <C> <C>
U.S. Dollars 198,498 Swedish Kronor 1,435,720 5/3/95 (1,094)
U.S. Dollars 364,976 Dutch Guilders 562,683 5/4/95 (2,446)
Italian Lire 450,390,000 U.S. Dollars 265,548 5/31/95 (2,781)
------
(6,321)
=======
</TABLE>
21
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS OF SCUDDER INTERNATIONAL FUND, INC. AND TO THE
SHAREHOLDERS OF SCUDDER GREATER EUROPE GROWTH FUND:
We have audited the accompanying statement of assets and liabilities of Scudder
Greater Europe Growth 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
period October 10, 1994 (commencement of operations) to October 31,1994,
and the financial highlights for the six months ended April 30, 1995 and for the
period October 10, 1994 (commencement of operations) to October 31, 1994. 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 Greater Europe Growth 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 period October 10, 1994 (commencement of
operations) to October 31, 1994, and the financial highlights for the six
months ended April 30, 1995 and for the period October 10, 1994 (commencement
of operations) to October 31, 1994 in conformity with generally accepted
accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 6, 1995
22
PAGES 23 AND 24 WERE INTENTIONALLY LEFT BLANK
<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>
INVESTMENT PRODUCTS AND SERVICES
- --------------------------------------------------------------------------------
<TABLE>
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<S> <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)++
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.
26
<PAGE>
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.
