This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder
Greater Europe
Growth Fund
Semiannual Report
April 30, 1996
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 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
10 Investment Portfolio
16 Financial Statements
19 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Accountants
26 Investment Products
and Services
27 How to Contact
Scudder
IN BRIEF
o Scudder Greater Europe Growth Fund posted a total return of 12.81% for the
six months ended April 30, 1996, outperforming both the unmanaged MSCI
Europe Index and the average of the 46 European region funds tracked by
Lipper Analytical Services.
o The Fund's 25.16% return for the 12 months ended April 30 was also well in
excess of the returns for the MSCI Europe Index and the Lipper average over
the period.
o In Continental Europe, sluggish economic growth, falling interest rates, and
a benign inflation environment are providing a positive backdrop to equity
investing. In addition, the momentum for cost-cutting and streamlining is in
place, and managements, particularly in Germany, are focusing more on
shareholder value.
o We broadened the reach of the portfolio over the period with initial
investments in Poland, one of Europe's most rapidly growing economies.
2
<PAGE>
LETTER FROM THE FUND'S CHAIRMAN
- --------------------------------------------------------------------------------
Dear Shareholders,
We are pleased to present this semiannual report for Scudder Greater
Europe Growth Fund, covering the six months ended April 30, 1996. For the
period, Greater Europe Growth Fund provided a total return of 12.81%, well above
the return for the average of the 46 European region funds tracked by Lipper
Analytical Services. The Fund's total return of 25.16% for the 12 months through
the end of April is also gratifying to report.
European equities in the aggregate performed handsomely over the
period, and there are a number of reasons to believe the outlook for the second
half of the Fund's fiscal year is positive as well. The region's stock markets
are still favorably valued in comparison with our own. While planning for
European Monetary Union is constraining government efforts to stimulate weak
economies, benign inflation and falling interest rates provide the underpinnings
for the current investment climate. A range of favorable business activity,
including privatization of key industries, consolidation of sectors, and
restructuring of individual corporations, is also driving equity performance.
Greater Europe Growth Fund remains focused on identifying the new global
competitors that will emerge as the result of these trends, as well as those
companies positioned to capitalize upon the region's economic integration.
Finally, we would like to take this opportunity to note a recent
addition to our family of funds: Scudder Emerging Markets Growth Fund. The Fund,
which became available to investors on May 8, seeks to provide long-term growth
of capital by investing primarily in the stock markets of such developing
regions as the Pacific Rim, Latin America and Eastern Europe. For more
information on Scudder Emerging Markets Growth Fund and other Scudder products
and services, please see page 26.
Thank you for your continued confidence and investment in Scudder
Greater Europe Growth Fund. Please do not hesitate to contact us at
1-800-225-2470 with any questions about your account.
Sincerely,
/s/ Edmond D. Villani
Edmond D. Villani
Chairman,
Scudder Greater Europe Growth Fund
3
<PAGE>
SCUDDER GREATER EUROPE GROWTH
PERFORMANCE UPDATE as of April 30, 1996
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
SCUDDER GREATER EUROPE GROWTH
- ----------------------------------------
Total Return
Period Growth --------------
Ended of Average
4/30/96 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $12,516 25.16% 25.16%
Life of
Fund* $13,175 31.75% 19.39%
MORGAN STANLEY CAPITAL INTERNATIONAL
(MSCI) EUROPE INDEX
- --------------------------------------
Total Return
Period Growth --------------
Ended of Average
4/30/96 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $11,595 15.95% 15.95%
Life of
Fund* $12,288 22.88% 14.79%
*The Fund commenced operations on
October 10, 1994. Index comparisons
begin October 31, 1994.
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 Greater Europe Growth Fund
Year Amount
- ----------------------
10/94* $10,000
1/95 $ 9,466
4/95 $10,371
7/95 $11,482
10/95 $11,506
1/96 $11,859
4/96 $12,981
Morgan Stanley Capital International
(MSCI) Europe Index
Year Amount
- ----------------------
10/94* $10,000
1/95 $ 9,596
4/95 $10,597
7/95 $11,485
10/95 $11,321
1/96 $11,840
4/96 $12,288
The Morgan Stanley Capital International (MSCI) Europe Index is
an unmanaged capitalization-weighted measure of 14 stock markets
in Europe. Index returns assume dividends reinvested net of
withholding tax and, unlike Fund returns, do not reflect any
fees or expenses.
- -----------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
1995* 1996
--------------------
NET ASSET VALUE......... $12.61 $15.50
INCOME DIVIDENDS........ $ .02 $ .11
CAPITAL GAINS
DISTRIBUTIONS........... $ -- $ .14
FUND TOTAL RETURN (%)... 5.27 25.16
INDEX TOTAL RETURN (%).. 5.97 15.95
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results.
Investment return and principal value will fluctuate, so an investor's
shares, when redeemed, may be worth more or less than when purchased. If
the Adviser had not maintained the Fund's expenses, the average annual
total return for the one year and life of Fund periods would have been lower.
4
<PAGE>
PORTFOLIO SUMMARY as of April 30, 1996
- ---------------------------------------------------------------------------
GEOGRAPHICAL (Excludes 8% Cash Equivalents)
- ---------------------------------------------------------------------------
France 19%
Germany 15%
United Kingdom 14% Nearly half of the Fund's
Italy 12% equity assets are invested
Spain 10% in the "core" European
Sweden 7% markets of France,
Netherlands 7% Germany, and the U.K.
Switzerland 6%
Poland 3%
Other 7%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
SECTORS (Excludes 8% Cash Equivalents)
- --------------------------------------------------------------------------
Manufacturing 14%
Consumer Discretionary 12%
Health 11%
Financial 10% Consolidation in sectors
Consumer Staples 9% such as health is
Service Industries 8% transforming European
Durables 7% industry.
Energy 5%
Communications 5%
Other 19%
----
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. GUCCI GROUP
Designer and producer of personal luxury accessories and apparel
in Italy
2. TELECOM ITALIA MOBILE SPA
Cellular telecommunication services in Italy
3. BULGARI SPA
Manufacturer and retailer of fine jewelry, luxury watches and
perfumes in Italy
4. HOESCHT AG
Chemical producer in Germany
5. HARVEY NICHOLS PLC
Operator of high fashion retail clothing outlet in the United Kingdom
6. ALTRAN TECHNOLOGIES, SA
Engineering and consulting services for aerospace, telecommunications
and electronics fields in France
7. MANNESMAN AG
Diversified construction and technology company in Germany
8. CIBA-GEIGY AG
Pharmaceutical company in Switzerland
9. COMPANIA TELEFONICA NACIONAL DE ESPANA S.A.
Telecommunication services in Spain
10. THORN EMI PLC
Amusement and recreational services in the United Kingdom
Key holdings include beneficiaries of the region's economic integration
as well as emerging global competitors.
- -----------------------------------------------------------------------
For more complete details about the Fund's Investment Portfolio,
see page 10.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings
are available upon request.
5
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Dear Shareholders,
Scudder Greater Europe Growth Fund posted a strong total return of 12.81%
for the six months ended April 30, 1996, outperforming both the unmanaged MSCI
Europe Index and the average of the 46 European region funds tracked by Lipper
Analytical Services, which returned 8.54% and 9.69%, respectively. The Fund's
25.16% return for the twelve months ended April 30 was also well in excess of
the MSCI Europe Index return of 15.95% and the 17.94% return for the Lipper
average over the period.
Falling Rates, Restructuring, and Consolidation Drive Markets
Most European markets had positive returns for the six month period ending
April 30. Falling interest rates, corporate restructuring, and sector
consolidation were dominant themes driving equity performance throughout the
region.
In Germany, stocks were encouraged both by a weaker deutschemark expected
to boost the export sector and the major restructuring being carried out by
German corporations. France rallied as the political situation stabilized, and
was further buoyed by strong earnings and the efforts of several major French
corporations to focus on shareholder value and streamline their businesses. The
U.K. market started on a positive note driven by sector consolidation, new peaks
on Wall Street, and falling interest rates. But sentiment turned negative as the
period progressed, sparked by the financial implications of Mad Cow disease and
the possibility of a less favorable business environment under a new government.
The Spanish market was one of the region's best performers during the period,
underpinned by falling interest rates and a change in political leadership.
Outlook for Slow Growth
In Continental Europe, sluggish economic growth, falling interest rates,
and a benign inflation environment are providing a positive backdrop to equity
investing. Economic activity has been dampened as governments struggle to
restrain fiscal spending ahead of the Maastricht deadline in 1997. The major
European economies, including Germany, no longer qualify for European Monetary
Union (EMU) and with unemployment continuing to soar, the pressures are mounting
to postpone or relax the criteria for EMU. The political commitment to EMU is
significant, how
6
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
ever, and the process will remain at the heart of the European agenda.
As the pressures of global competition build, the momentum for cost-cutting
and streamlining is in place. Managements, particularly in Germany, are focusing
more on shareholder value, and companies such as Daimler Benz have announced
share options for the first time. The anticipated $11 billion privatization of
Deutsche Telekom in 1996, one of the largest in European stock market history,
should help create an equity culture in a country where there has been little
interest in stocks. Even French managements, lagging in this regard and under
pressure from international investors, are beginning to unwind corporate
structures resulting from long standing and misguided diversification
strategies.
Privatizations, mergers and acquisitions, and corporate restructuring will
continue to be positive features of European markets. The merger of Sandoz and
Ciba-Geigy, two holdings in the portfolio, illustrates this trend. Both stocks
rose over 40% as the market recognized the strength and earnings power of the
ciombined entity, Novartis, which will rank as number one globally in
agrochemicals and number three in pharmaceuticals.
Portfolio Strategy and Key Holdings
Fund strategy remains focused on identifying companies in Europe poised for
growth on the basis of their domestic or regional market presence, as well as
those companies whose global competitiveness will increase as they reap the
benefits of restructuring.
New holding Schneider is a world leader in electrical equipment with a
focus on electrical distribution and industrial process control. Domiciled in
France, the company is globally diversified with a third of its business coming
from the United States. Share price performance over the past five years has
been disappointing due to a diversification and reorganization strategy that
created confusion among investors, an increased level of debt, and a lack of
clarity on the part of management. The company has gradually reorganized,
streamlining activities and restructuring troublesome subsidiaries. The group's
current strategy is to focus on electrical equipment, which represents 87% of
sales. We believe the true value of Schneider is misperceived by the market.
Sales in the United States and Asia are growing at a rate of 20-30% and a
gradual pickup in capital spending is anticipated in France and the rest of
Europe. Restructuring is near completion while the level of
7
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
- --------------------------------------------------------------------------------
free cash flow will result in a reduction of debt. The potential for a rebound
in earnings is sufficiently attractive to warrant a revaluation of the share
price.
Another recent addition, Paribas, is a French holding company with
investment and retail banking operations, as well as an important industrial
portfolio. Banque Paribas, Compagnie Bancaire, and Paribas Affaires
Industrielles are the group's main operating subsidiaries. The company has been
under pressure from major shareholders to carry out internal restructuring and
is undertaking a complete reorganization in an attempt to focus on its core
business. The reorganization includes rationalizing market activities,
centralizing the retail banking business, restructuring property interests and
selling off industrial assets. The quality of company assets is sound and the
first signs of recovery should be evident in 1996 when earnings are expected to
improve. The stock is undervalued, trading at a record discount to revalued
assets with one of the highest yields in the financial sector.
Over the last six months, we have broadened the reach of the portfolio with
initial investments in Poland, one of Europe's most rapidly growing economies.
Bank Rozwoju Eksportu (BRE) was the first state-owned bank to be privatized in
Poland, and is the country's third largest bank in terms of market
capitalization. The bank has successfully penetrated the corporate market with a
focus on large-and medium-sized businesses. A leader in technology, BRE has
pioneered new banking products in Poland. Poland is underbanked, and the
industry is expected to grow at rates well above the European norm over the next
five years. BRE is one of the highest-quality companies in the sector, with
excellent management as well as superior controls and technology.
Bydgoska Fabryka Kabli (BFK) is one of the largest cable manufacturers in
Poland, with a diversified product range. The company has an important position
in the domestic market for energy and marine cables and is increasing production
of higher margin copper-core cables for local computer and telephone networks.
BFK is highly geared to the restructuring of the energy and telecommunication
sectors, where demand will be driven by the need to expand the energy grid while
refurbishing and replacing existing telephone lines.
Finally, Stomil is the largest tire company in Poland, with a 55% share of
the market, and the dominant player in tractor and truck tires. The company has
built up a strong brand franchise in tractor tires and is rapidly expanding
production in passenger car
8
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
and light truck tires. Demand should be driven by an increasing level of freight
traffic as Poland, situated at the crossroads of western and eastern Europe,
upgrades its highway network. Poland has a low level of car ownership, and major
international automobile companies such as Fiat, Peugeot, and others are
investing in the industry. A 51% stake by Michelin provides Stomil with greater
access to capital and technology.
European Markets Hold Promise
European markets remain attractively valued relative to the United States.
Slow growth has added to the momentum for rate cuts by central banks, which
should in turn promote a pickup in economic activity as well as progress on the
fiscal front. In addition, inflation in the region is expected to remain benign.
Europe is the home base for a number of global leaders, and the ongoing process
of economic integration and industry restructuring should lead to even more
profitable companies. Scudder Greater Europe Growth Fund remains appropriate for
investors seeking to benefit over time from the many positive developments in
the region.
Sincerely,
Your Portfolio Management Team
/s/Carol L. Franklin /s/Nicholas Bratt
Carol L. Franklin Nicholas Bratt
/s/Joan R. Gregory
Joan R. Gregory
9
<PAGE>
<TABLE>
SCUDDER GREATER EUROPE GROWTH FUND
INVESTMENT PORTFOLIO as of April 30, 1996
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Market
Portfolio Amount($) Value($)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
------------------------------------------------------------------------------
6.0% REPURCHASE AGREEMENT
------------------------------------------------------------------------------
3,865,000 Repurchase Agreement with Donaldson,
Lufkin & Jenrette dated 4/30/96 at 5.32%
to be repurchased at $3,865,571 on 5/1/96,
collateralized by a $3,921,000 U.S. Treasury
Note, 5.625%, 10/31/97 (Cost $3,865,000) ........... 3,865,000
---------
------------------------------------------------------------------------------
2.3% COMMERCIAL PAPER
------------------------------------------------------------------------------
1,500,000 Ford Credit Receivables Funding Inc., 5.31%,
5/16/96 (Cost $1,496,681) .......................... 1,496,681
---------
------------------------------------------------------------------------------
3.7% PREFERRED STOCKS
------------------------------------------------------------------------------
Shares
------------------------------------------------------------------------------
GERMANY 3.1% 2,600 Draegerwerk AG (Producer of instruments for
medical and aeronautical technology) ............... 424,545
25,250 RWE AG (Producer and marketer of petroleum
and chemical products) ............................. 734,716
5,750 SAP AG (Computer software manufacturer) ............. 763,512
---------
1,922,773
---------
ITALY 0.6% 200,000 Fiat SpA (Multi-industry, automobiles) .............. 381,836
---------
TOTAL PREFERRED STOCKS (Cost $2,133,526) ............ 2,304,609
---------
----------------------------------------------------------------------------
88.0% COMMON STOCKS
----------------------------------------------------------------------------
AUSTRIA 2.1% 6,400 Flughafen Wien AG (Operator of terminals
and facilities at Vienna International Airport) .... 448,612
2,800 OMV AG (Oil and gas company) ........................ 278,154
3,600 VAE Eisenbahnsysteme AG (Manufacturer
of electronic control systems for use in
rail transportation technology) .................... 336,905
4,000 Verbund (Leading supplier of hydro-electricity) ..... 282,611
---------
1,346,282
---------
CZECH REPUBLIC 0.9% 20,000 Central European Media Enterprises Ltd. "A"
(Owner and operator of national and regional
private commercial television stations in central
Europe and Germany)* ............................... 572,500
---------
DENMARK 0.6% 9,200 Unidanmark A/S "A" (Bank holding company) ........... 409,893
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value($)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINLAND 1.0% 9,060 Nokia AB Oy "A" (Preference) (Leading
manufacturer of cellular telephones) .............. 323,531
12,000 Orion-yhtyma Oy "A" (Developer and producer
of pharmaceuticals, bulk drug substances
and other healthcare products) ..................... 346,978
-------
670,509
-------
FRANCE 17.5% 6,628 AXA SA (Insurance group providing insurance,
finance and real estate services) .................. 394,708
3,300 Altran Technologies, SA (Engineering and
consulting services for aerospace,
telecommunications and electronics fields) ......... 891,012
950 Carrefour (Hypermarket operator and
food retailer) ..................................... 741,949
6,110 Club Mediterranee (Operator of informal
vacation resorts) .................................. 579,057
493 Compagnie Bancaire SA (Bank) ........................ 54,446
11,200 Compagnie Financiere de Paribas (Diversified
financial services conglomerate) ................... 720,051
1,625 Comptoirs Modernes (Operator of supermarkets,
grocery and department stores) ..................... 628,590
3,100 Ecco SA (International business contractor active
in employment services, industrial surveillance,
cleaning and sanitation) ........................... 696,111
2,890 Essilor International (Manufacturer of various
types of lenses, eyeglasses, contact lenses and
optical measuring instruments) ..................... 731,122
2,300 L'Air Liquide (World's leading producer of
industrial gases) .................................. 417,713
1,800 LVMH Moet-Hennessy Louis Vuitton SA
(Producer of wines, spirits and luxury
products) .......................................... 460,244
20,000 Lagardere Groupe (Holding company with
interests in publishing, audiovisual production
and services, telecommunications and media) ........ 536,526
2,300 Legrand SA (Manufacturer of low-voltage
electrical devices) ................................ 447,073
12,270 Michelin "B" (Leading tire manufacturer) ............ 607,769
3,100 Rexel SA (Distributor of electrical equipment) ...... 742,878
10,000 Schneider SA (Manufacturer of electronic
components and automated manufacturing
systems) ........................................... 465,737
6,200 Sligos SA (Electrical payment and computing
engineering services company) ...................... 595,981
7,800 Synthelabo (Pharmaceutical and biomedical
producer) .......................................... 608,123
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<TABLE>
SCUDDER GREATER EUROPE GROWTH FUND
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value($)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6,867 Total SA "B" (International oil and gas exploration,
development and production) ........................ 465,787
7,919 Valeo SA (Automobile and truck components
manufacturer) ...................................... 439,272
----------
11,224,149
----------
GERMANY 11.0% 10,000 Adidas AG (Manufacturer of sport shoes, clothing
and equipment)* .................................... 760,916
1,800 BASF AG (Manufacturer of diversified chemicals
for industrial use) ................................ 491,427
2,100 Bayer AG (Leading chemical producer) ................ 676,203
1,375 Daimler-Benz AG (Automobile and truck
manufacturer) ...................................... 753,037
3,750 Fresenius AG (Developer, manufacturer and
distributor of pharmaceuticals) .................... 597,629
3,100 Hoechst AG (Chemical producer) ...................... 1,043,963
2,575 Mannesmann AG (Bearer) (Diversified
construction and technology company) ............... 879,609
5,950 Schering AG (Pharmaceutical and chemical
producer) .......................................... 437,200
1,275 Siemens AG (Bearer) (Manufacturer of electrical
and electronic equipment) .......................... 698,104
14,950 VEBA AG (Electric utility, distributor of oil
and chemicals) ..................................... 743,082
----------
7,081,170
----------
IRELAND 0.7% 116,718 Irish Life PLC (Provider of life and disability
insurance and pensions) ............................ 452,362
----------
ITALY 10.0% 100,000 Bulgari SpA (Manufacturer and retailer of fine
jewelry, luxury watches and perfumes)* ............. 1,247,202
16,200 De Rigo SpA (ADR) (Manufacturer and
distributor of sunglasses and prescription
eyeglass frames)* .................................. 498,150
30,500 Gucci Group (New York Shares) (Designer
and producer of personal luxury
accessories and apparel)* .......................... 1,658,251
7,500 Luxottica Group SpA (ADR) (Manufacturer
and marketer of eyeglasses) ........................ 603,750
205,000 Saipem SpA (International contractor in oil and
gas exploration and drilling, construction of
refineries and pipelines) .......................... 747,362
572,000 Telecom Italia Mobile SpA (Cellular
telecommunication services) ........................ 1,262,168
55,000 Unicem SpA (Cement producer)* ....................... 376,399
----------
6,393,282
----------
</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>
NETHERLANDS 6.1% 2,550 Akzo-Nobel N.V. (Chemical producer) ................. 296,148
17,000 Bols Wessanen CVA (Producer and distributor
of food products) .................................. 332,361
8,196 Getronics N.V. (Computer and software
distributor) ....................................... 569,200
3,906 Heineken Holdings N.V. "A" (Brewery) ................ 731,781
14,100 Koninklijke PTT Nederland (Telecommunication
services) .......................................... 529,110
12,330 Philips Electronics N.V. (Leading manufacturer
of electrical equipment) ........................... 435,346
3,160 Telegraaf Holdings CVA (Newspaper publisher) ........ 564,318
4,000 Wolters Kluwer CVA (Publisher) ...................... 437,234
---------
3,895,498
---------
NORWAY 0.9% 250,000 Christiania Bank og Kreditkasse (Commercial
bank) .............................................. 544,260
---------
POLAND 2.7% 30,000 Bank Rozwoju Eksportu SA (Export bank) .............. 716,031
25,000 Bydgoska Fabryka Kabli SA (Manufacturer of
cables, wires, and insulating materials)* .......... 695,358
22,000 Stomil Olsztyn SA (Tire manufacturer)* .............. 322,496
---------
1,733,885
---------
PORTUGAL 0.6% 17,400 Portugal Telecom SA (Telecommunication
services) .......................................... 378,483
---------
SPAIN 9.5% 6,100 Acerinox, S.A. (Stainless steel producer) ........... 689,336
30,000 Autopistas Concesionaria Espanol SA
(Motorway builder and operator) .................... 313,556
32,000 Autopistas del Mare Nostrum SA (Builder
and operator of toll motorways) .................... 384,754
13,000 Banco Bilbao Vizcaya, S.A. (Leading financial
group) ............................................. 493,949
2,800 Banco Popular Espanol, S.A. (Retail bank) ........... 463,843
26,000 Centros Comerciales Pryca, SA (Owner
and operator of hypermarkets selling
consumer products including groceries,
appliances and clothing) ........................... 599,686
46,000 Compania Telefonica Nacional de Espana S.A.
(Telecommunication services) ....................... 818,782
13,200 Cortefiel, S.A. (Operator of retail clothing
stores, clothing manufacturer) ..................... 285,265
3,000 Cristaleria Espanola, S.A. (Producer of sheet
glass and glass fibers for construction)* .......... 189,312
48,000 Iberdrola SA (Electric utility) ..................... 469,627
15,570 Repsol SA (Integrated oil company) .................. 570,798
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
<TABLE>
SCUDDER GREATER EUROPE GROWTH FUND
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value($)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
42,000 Uralita, SA (Processor of concrete pipes and
cement for the construction industry) ............... 412,574
4,300 Zardoya-Otis SA (Manufacturer and installer of
elevator equipment) ................................. 425,776
---------
6,117,258
---------
SWEDEN 6.3% 40,000 AGA AB "B" (Producer and distributor of
industrial and medical gases) ....................... 643,020
13,350 Astra AB "A" (Free) (Pharmaceutical company) ......... 593,618
8,000 Autoliv AB (Free) (Manufacturer of safety airbags
for automobiles) .................................... 436,546
32,720 L.M. Ericsson Telephone Co. "B" (ADR)
(Leading manufacturer of cellular telephone
equipment) .......................................... 666,670
21,000 S.K.F. AB "A" (Free) (Manufacturer of roller
bearings) ........................................... 478,505
21,000 Skandia Foersaekrings AB (Free) (Financial
conglomerate) ....................................... 480,053
45,000 Skandinaviska Enskilda Banken (Commercial
bank) ............................................... 338,471
20,000 Svenska Handelbanken "A" (Commercial bank) ........... 409,999
---------
4,046,882
---------
SWITZERLAND 5.6% 130 Baloise Holding Ltd. (Registered) (Provider of
private, commercial and corporate insurance,
life insurance, international reinsurance) .......... 278,743
430 Brown, Boveri & Cie. AG (Bearer) (Manufacturer
of electrical equipment) ............................ 517,564
725 Ciba-Geigy AG (Bearer) (Pharmaceutical
company) ............................................ 835,888
1,825 Elektrowatt AG (Bearer) (Holding company:
owner of electric plants and interests in hydro
and nuclear power plants) ........................... 715,081
700 Holderbank Financiere Glaris AG (Bearer)
(Cement company) .................................... 528,844
650 Sandoz Ltd. AG (Registered) (Pharmaceutical
company) ............................................ 709,148
---------
3,585,268
---------
UNITED KINGDOM 12.5% 711 Argyll Group PLC (Owner and operator of retail
food supermarkets) .................................. 3,551
45,000 BOC Group PLC (Producer of industrial gases) ......... 624,811
62,142 British Petroleum PLC (Major integrated world
oil company) ........................................ 560,414
83,000 Carlton Communications PLC (Television
post production products and services) .............. 581,833
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
Market
Shares Value($)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
28,787 De La Rue PLC (Printer of commercial bank
notes and securities) .............................. 321,534
36,500 Guinness PLC (Brewery) .............................. 262,455
215,000 Harvey Nichols PLC (Operator of high fashion
retail clothing outlet)* ........................... 1,041,427
65,278 Kingfisher PLC (Retailer of wide range of
consumer goods and merchandise) .................... 583,785
94,000 Next PLC (Retailer of clothing, accessories and
fashion jewelry, also through home shopping) ....... 749,442
76,464 PowerGen PLC (Electric utility) ..................... 641,839
52,000 Reuters Holdings PLC (International news
agency) ............................................ 588,242
61,892 SmithKline Beecham PLC "A" (Manufacturer of
ethical drugs and healthcare products) ............. 656,384
28,000 Thorn EMI PLC (Amusement and recreational
services) .......................................... 776,068
29,000 Zeneca Group PLC (Holding company:
manufacturing and marketing of
pharmaceutical and agrochemical
products and specialty chemicals) .................. 607,474
----------
7,999,259
----------
TOTAL COMMON STOCKS (Cost $46,150,686) .............. 56,450,940
----------
--------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $53,645,893) (a) ............................. 64,117,230
==========
<FN>
(a) The cost for federal income tax purposes was $53,645,893. At April 30,
1996, net unrealized appreciation for all securities based on tax cost was
$10,471,337. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $11,207,370 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$736,033.
* Non-income producing security.
Sector breakdown of the Fund's equity securities is noted on page 5.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
<CAPTION>
April 30, 1996
<S> <C> <C>
ASSETS
Investments, at market (identified cost $53,645,893)
(Note A) ...................................... $64,117,230
Cash .............................................. 166
Receivables:
Investments sold .............................. 247,469
Fund shares sold .............................. 166,799
Dividends and interest ........................ 201,430
Foreign taxes recoverable ..................... 64,286
Deferred organization expense (Note A) ............ 40,668
-----------
Total assets 64,838,048
LIABILITIES
Payables:
Investments purchased ......................... $2,310,085
Fund shares redeemed .......................... 150,868
Accrued management fee (Note C) ............... 18,340
Other accrued expenses (Note C) ............... 83,299
----------
Total liabilities ............................. 2,562,592
-----------
Net assets, at market value ....................... $62,275,456
===========
NET ASSETS
Net assets consist of:
Undistributed net investment income ........... $ 184,443
Unrealized appreciation (depreciation) on:
Investments ................................. 10,471,337
Foreign currency related transactions ....... (2,751)
Accumulated net realized loss ................. (80,911)
Capital stock ................................. 40,168
Additional paid-in capital .................... 51,663,170
-----------
Net assets, at market value ....................... $62,275,456
===========
NET ASSET VALUE, offering and redemption price per
share ($62,275,456/4,016,793 shares of capital
stock outstanding, $.01 par value, 100,000,000
shares authorized) ............................ $15.50
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED APRIL 30, 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $61,589) $ 418,392
Interest ........................................... 146,271
----------
564,663
Expenses:
Management fee (Note C) ............................ $ 245,848
Services to shareholders (Note C) .................. 110,152
Custodian and accounting fees (Note C) ............. 62,519
Directors' fees and expenses (Note C) .............. 31,126
Auditing ........................................... 26,619
Reports to shareholders ............................ 17,677
Amortization of organization expense (Note A) ...... 5,911
Federal registration ............................... 5,432
Legal .............................................. 3,676
State registration ................................. 8,018
Other .............................................. 5,586
---------
Total expenses before reductions ................... 522,564
Expense reductions (Note C) ........................ (155,467)
---------
Expenses, net ...................................... 367,097
----------
Net investment income .............................. 197,566
----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized loss from:
Investments .................................... (55,259)
Foreign currency related transactions .......... (17,332) (72,591)
---------
Net unrealized appreciation (depreciation) during
the period on:
Investments .................................... 6,053,232
Foreign currency related transactions .......... (3,081) 6,050,151
-----------------------
Net gain on investment transactions ................ 5,977,560
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,175,126
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
<TABLE>
SCUDDER GREATER EUROPE GROWTH FUND
- -------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income......................... $ 197,566 $ 345,669
Net realized gain (loss) from investment
transactions.............................. (72,591) 394,420
Net unrealized appreciation on investment
transactions during the period............ 6,050,151 4,315,264
------------ ------------
Net increase in net assets resulting
from operations........................... 6,175,126 5,055,353
------------ ------------
Distributions to shareholders from:
Net investment income ($.11 and $.02
per share, respectively).............. (320,199) (26,912)
------------ ------------
Net realized gains ($.14 per share)....... (427,101) --
------------ ------------
Fund share transactions:
Proceeds from shares sold..................... 32,433,290 49,268,332
Net asset value of shares issued to
shareholders in reinvestment of
distributions............................. 727,064 26,407
Cost of shares redeemed....................... (16,904,716) (21,590,930)
------------ ------------
Net increase in net assets from Fund share
transactions.............................. 16,255,638 27,703,809
------------ ------------
INCREASE IN NET ASSETS........................ 21,683,464 32,732,250
Net assets at beginning of period............. 40,591,992 7,859,742
------------ ------------
NET ASSETS AT END OF PERIOD (including
undistributed net investment income
of $184,443 and $307,076, respectively)... $ 62,275,456 $ 40,591,992
============ ============
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period..... 2,901,077 645,237
------------ ------------
Shares sold................................... 2,235,233 3,909,689
Shares issued to shareholders in reinvestment
of distributions.......................... 52,194 2,316
Shares redeemed............................... (1,171,711) (1,656,165)
------------ ------------
Net increase in Fund shares................... 1,115,716 2,255,840
------------ ------------
Shares outstanding at end of period........... 4,016,793 2,901,077
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------
<TABLE>
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD AND OTHER PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL
STATEMENTS.
<CAPTION>
FOR THE PERIOD
SIX MONTHS YEAR OCTOBER 10, 1994
ENDED ENDED (COMMENCEMENT
APRIL 30, OCTOBER 31, OF OPERATIONS) TO
1996 1995 OCTOBER 31, 1994
---------- ----------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period................ $13.99 $12.18 $12.00
Income from investment operations:
Net investment income (a)......................... .05 .13 .01
Net realized and unrealized gain on investment
transactions.................................... 1.71 1.70 .17
------ ------ ------
Total from investment operations.................... 1.76 1.83 .18
------ ------ ------
Less distributions from:
Net investment income............................. (.11) (.02) --
Net realized gains on investment transactions..... (.14) -- --
------ ------ ------
Total distributions................................. (.25) (.02) --
------ ------ ------
Net asset value, end of period...................... $15.50 $13.99 $12.18
====== ====== ======
TOTAL RETURN (%).................................... 12.81** 15.06 1.50**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions).............. 62 41 8
Ratio of operating expenses, net to average
daily net assets (%) (a).......................... 1.50* 1.50 1.50*
Ratio of net investment income to average daily
net assets (%).................................... .81* 1.25 2.40*
Portfolio turnover rate (%)......................... 37.2* 27.9 --
Average commission rate paid (b).................... $.0598 $ -- $ --
<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................. $ .04 $ .13 $ .02
Operating expense ratio before expense
reductions (%)................................. 2.14* 2.74 11.46*
(b) Average commission rate paid per share of portfolio securities is calculated
for fiscal years beginning on or after September 1, 1995.
* Annualized
** Not annualized
19
<PAGE>
</FN>
</TABLE>
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
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 Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
SECURITY VALUATION. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the 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.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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. A forward foreign currency exchange
contract (forward contract) is a commitment to purchase or sell a foreign
currency at the settlement date at a negotiated rate. During the period, the
Fund utilized forward contracts as a hedge in connection with portfolio
purchases and sales of securities denominated in foreign currencies.
Forward contracts are valued at the prevailing forward exchange rate of the
underlying currencies and unrealized gain/loss is recorded daily. Forward
contracts having the same settlement date and broker are offset and any gain
(loss) is realized on the date of offset; otherwise, gain (loss) is realized on
settlement date. Realized and unrealized gains and losses which represent the
difference between the value of the forward contract to buy and the forward
contract to sell are included in net realized and unrealized gain (loss) from
foreign currency related transactions.
Certain risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contracts. Additionally,
when utilizing forward contracts to hedge, the Fund gives up the opportunity to
profit from favorable exchange rate movements during the term of the contract.
21
<PAGE>
SCUDDER GREATER EUROPE GROWTH 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.
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, 1996, purchases and sales of investment
securities (excluding short-term investments) aggregated $24,689,056 and
$8,385,362, respectively.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 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 has agreed not to impose all or a portion of
its management fee until February 28, 1997, 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, 1996, the Adviser did not impose a
portion of its management fee amounting to $155,467, and the amount imposed
amounted to $90,381.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended April 30, 1996, the amount charged by SSC aggregated $81,088,
of which $15,488 was unpaid at April 30, 1996.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six months ended April 30,
1996, the amount charged by STC aggregated $4,465, of which $689 was unpaid at
April 30, 1996.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records for the Fund. For the six months
ended April 30, 1996, the amount charged by SFAC aggregated $26,137, of which
$4,703 was unpaid at April 30, 1996.
23
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
- --------------------------------------------------------------------------------
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, 1996, Directors' fees and expenses aggregated $31,126.
D. LINES OF CREDIT
- --------------------------------------------------------------------------------
The Fund and several affiliated Funds (the "Participants") share in a $500
million revolving credit facility for temporary or emergency purposes, including
the meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 33 percent of its net assets under the agreement. In addition, the
Fund also maintains an uncommitted line of credit.
24
<PAGE>
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,
1996, and the related statements of operations for the six months then ended,
the statements of changes in net assets for the six months then ended and for
the year ended October 31, 1995, and the financial highlights for the six months
ended April 30, 1996, for the year ended October 31, 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, 1996, 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, 1996, the results of its
operations for the six months then ended, the changes in its net assets for the
six months then ended and for the year ended October 31, 1995, and the financial
highlights for the six months ended April 30, 1996, for the year ended October
31, 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 10, 1996
25
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PRODUCTS AND SERVICES
- --------------------------------------------------------------------------------
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<C> <C>
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder Global Bond Fund
Tax Free Money Market+ Scudder GNMA Fund
Scudder Tax Free Money Fund Scudder Income Fund
Scudder California Tax Free Money Fund* Scudder International Bond Fund
Scudder New York Tax Free Money Fund* Scudder Short Term Bond 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 Emerging Markets Growth Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Global Fund
Scudder Massachusetts Tax Free Fund* Scudder Global Discovery Fund
Scudder Medium Term Tax Free Fund Scudder Gold Fund
Scudder New York Tax Free Fund* Scudder Greater Europe Growth Fund
Scudder Ohio Tax Free Fund* Scudder International Fund
Scudder Pennsylvania Tax Free Fund* Scudder Latin America Fund
Growth and Income Scudder Pacific Opportunities Fund
Scudder Balanced Fund Scudder Quality Growth Fund
Scudder Growth and Income Fund Scudder Small Company Value Fund
Scudder Value 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 Treasurers Trust(TM)++
Scudder Fund, Inc.
-----------------------------------------------------------------------------------------------------------------
For complete information on any of the above Scudder funds, including management fees and expenses, call or
write for a free prospectus. Read it carefully before you invest or send money. +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 personalized information about your Scudder accounts;
exchanges and redemptions; or information on any Scudder fund
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 Over 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 38 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.
