This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder
Latin America
Fund
Semiannual Report
April 30, 1996
o For investors seeking long-term growth of capital from a portfolio investing
primarily in the securities of Latin American issuers.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
<PAGE>
SCUDDER LATIN AMERICA FUND
- --------------------------------------------------------------------------------
CONTENTS
2 In Brief
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
11 Investment Portfolio
15 Financial Statements
18 Financial Highlights
19 Notes to Financial Statements
24 Report of Independent Accountants
25 Officers and Directors
26 Investment Products
and Services
27 How to Contact
Scudder
IN BRIEF
o Scudder Latin America Fund provided a strong 22.53% total return for the
six months ended April 30, 1996, on the back of improving economic
fundamentals and rebounding stock markets throughout the region.
o The Fund's return compares favorably with that of its benchmark index and
peers.
(BAR CHART TITLE)
Investment Returns for the Six Months
Ended April 30, 1996
(BAR CHART DATA)
Scudder Latin America Fund 22.53%
IFC Latin America Investable Total Return Index 16.83%
Lipper Average 19.72%
o Throughout the period, the Fund maintained its commitment to quality
companies that it believed were best positioned to emerge from the region's
recent economic and market tumult.
2
<PAGE>
LETTER FROM THE FUND'S CHAIRMAN
- --------------------------------------------------------------------------------
Dear Shareholders,
Latin American economies have been on the mend, drawing renewed
investor interest in recent months. We are pleased to report Scudder Latin
America Fund returned 22.53% in the first half of fiscal year 1996. How quickly
things change. Just six months ago, we reported a 31% decline for Scudder Latin
America Fund's 1995 fiscal year. It is safe to say that in the past year and a
half, Latin American stock markets have sorely tested the staying power of
investors.
Not all investors weathered the storm. Despite its strong performance
in past months, your Fund had 6,000 fewer shareholder accounts on April 30 than
at the start of the fiscal year. Those who endured have been rewarded for their
patience (the annualized return since the Fund's inception in December 1992 is
17.56%). Long-time shareholders may also find comfort in the Fund's relative
performance. Its loss last year, although disappointing, was significantly less
than that of its benchmark index and the average of its peers--just as the
Fund's gain so far this year is ahead of both the index and the average Latin
America Fund tracked by Lipper Analytical Services.
In closing, I am pleased to announce that Tara Kenney and Paul Rogers
have joined the Fund's portfolio management team. Former Portfolio Manager Ted
Truscott has left the team to become Director of Scudder's Global Equity
Research. I would also like to note a recent addition to our family of funds:
Scudder Emerging Markets Growth Fund. The Fund became available to investors on
May 8 and 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. As always, please
do not hesitate to contact us at 1-800-225-2470 should you have any questions
about your account.
Sincerely,
/s/Edmond D. Villani
Edmond D. Villani
Chairman,
Scudder Latin America Fund
3
<PAGE>
SCUDDER LATIN AMERICA FUND
PERFORMANCE UPDATE as of April 30, 1996
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
SCUDDER LATIN AMERICA FUND
- ----------------------------------------
Total Return
Period Growth --------------
Ended of Average
4/30/96 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $12,260 22.60% 22.60%
Life of
Fund* $17,315 73.15% 17.56%
IFC LATIN AMERICA INVESTABLE
TOTAL RETURN INDEX
- --------------------------------------
Total Return
Period Growth --------------
Ended of Average
4/30/96 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $11,404 14.04% 14.04%
Life of
Fund* $13,816 38.16% 10.21%
*The Fund commenced operations on
December 8, 1992. Index comparisons
begin December 31, 1992.
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
Scudder Latin America Fund
Year Amount
- ----------------------
12/92* $10,000
4/93 $10,560
10/93 $14,728
4/94 $16,604
10/94 $19,651
4/95 $13,558
10/95 $13,567
4/96 $16,623
IFC Latin America Investable
Total Return Index
Year Amount
- ----------------------
12/92* $10,000
4/93 $10,350
10/93 $13,434
4/94 $15,495
10/94 $18,903
4/95 $12,114
10/95 $11,826
4/96 $13,816
The IFC Latin America Investable Total Return Index is
prepared by International Finance Corporation. It is an
unmanaged, market capitalization-weighted representation
of stock performance in seven Latin American markets, and
measures the returns of stocks that are legally and
practically available to investors. Unlike Fund returns,
Index returns do not reflect fees or expenses.
- -----------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
YEARLY PERIODS ENDED APRIL 30
1993* 1994 1995 1996
--------------------------------
NET ASSET VALUE... $13.20 $20.65 $16.21 $19.70
INCOME DIVIDENDS.. $ -- $ .06 $ -- $ .15
CAPITAL GAINS
DISTRIBUTIONS..... $ -- $ .06 $ .73 $ --
FUND TOTAL
RETURN (%)........ 10.00 57.23 -18.34 22.60
INDEX TOTAL
RETURN (%)........ .47 49.71 -21.85 14.04
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 temporarily capped 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 7% Cash Equivalents)
- ---------------------------------------------------------------------------
Brazil 44% The Fund's strong weighting
Mexico 26% in Argentina, the region's
Argentina 23% best-performing market,
Peru 3% contributed greatly to
Chile 2% performance.
Colombia 2%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
SECTORS (Excludes 7% Cash Equivalents)
- --------------------------------------------------------------------------
Consumer Staples 25%
Communications 17% The Fund's energy holdings,
Energy 17% primarily in Argentina,
Manufacturing 10% provided a significant boost
Financial 10% during the period.
Utilities 9%
Consumer Discretionary 6%
Other 6%
----
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. PEREZ COMPANC S.A.
Industrial conglomerate in Argentina
2. TELECOMUNICACOES DE SAO PAULO S.A.
Telecommunication services in Brazil
3. KIMBERLY CLARK DE MEXICO S.A. DE C.V.
Consumer paper products and newsprint
4. PETROLEO BRASILEIRO S.A.
Petroleum company
5. TELEFONOS DE MEXICO S.A. DE C.V.
Telecommunication services
6. BANCO ITAU S.A.
Bank in Brazil
7. COMPANHIA CERVEJARIA BRAHMA
Leading beer producer and distributor in Brazil
8. YPF S.A.
Petroleum company in Argentina
9. COMPANHIA ENRGETICA DE MINAS GERAIS
Electric power utility in Brazil
10. COMPANHIA VALE DO RIO DOCE
Diverse mining and industrial complex in Brazil
Many Latin American companies, such as Banco Itau, are expanding their
businesses and becoming truly regional.
- -----------------------------------------------------------------------
For more complete details about the Fund's Investment Portfolio,
see page 11.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings
are available upon request.
5
<PAGE>
SCUDDER LATIN AMERICA FUND
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Dear Shareholders,
Scudder Latin America Fund enjoyed a 22.53% total investment return during
the six months ended April 30, 1996, based on a $3.48 increase in net asset
value to $19.70 per share and a $0.15 per share income distribution. The
unmanaged IFC Latin America Investable Total Return Index, the Fund's benchmark
index, rose 16.83% for the six months. By comparison, the average return of the
23 Latin America funds tracked by Lipper Analytical Services was 19.72%.
A Region On The Mend
Financial markets in Latin America have by now recovered from the shocks of
the Mexican peso devaluation in late 1994. This is not wholly the result of good
luck. In those countries most affected by the devaluation, governments moved
quickly to adopt adjustment programs fashioned around such goals as budget
discipline, monetary policy firmness, and exchange-rate stability. The costs of
the adjustment, measured by lost output and rising unemployment and social
discontent, were tremendous. Fortunately, they were short lived.
The Mexican economy experienced its worst recession in recent times, with
gross domestic product contracting 7.2%. Due to the government's decisive steps
to contain the inflationary consequences of its maxi-devaluation, Mexico was
able to regain the confidence of global financial markets by the end of the
year. Inflation is now falling, exports are rising, and investment spending by
the private sector is slowly reviving. The economy should grow between 1% and 2%
this year, led by strength in export activity.
Argentina experienced a severe liquidity crisis on the heels of a massive
flight of capital sparked by devaluation fears. This led to a temporary decline
in bank lending and capital investment, and the economy declined 4.4%. With
liquidity now rebuilt, bank lending should recover and nurture consumer spending
and capital expenditures. Economic growth in 1996 is forecast in the 2% to 3%
range, with some acceleration in following years on the back of rising rates of
capital formation.
6
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Economic data for 1994 and 1995 and the Scudder Latin America Group's
estimates for 1996 are shown below.
Economic Growth Forecasts (GDP)
Country 1994 1995 1996*
------- ---- ---- ----
Argentina 7.1% (4.4%) 2-3%
Brazil 5.7 4.2 3-4
Chile 4.1 8.2 6-7
Colombia 5.7 5.3 4-5
Mexico 3.5 (7.2) 1-2
Peru 12.7 6.7 2-3
Venezuela (2.8) 2.2 (2-3)
* Estimated. Estimates may prove inaccurate and, even if
accurate, may not correlate with market activity.
Source: Scudder Latin America Group
Markets Reward Improving Economies
The best-performing stock markets during the Fund's first semester were
Mexico and Argentina, the two countries whose economies were most affected by
the events of 1995. Returns for individual countries in the International
Finance Corporation's unmanaged Latin America Investable Total Return Index are
shown below.
(BAR CHART TITLE)
Investment Returns in Latin American
Stock Markets
(for the six months ended April 30, 1996)
(BAR CHART DATA)
Argentina 38.39%
Brazil 11.73
Chile -0.22
Colombia 11.74
Mexico 30.28
Peru 17.58
Venezuela -8.18
IFC Latin America Investable Index 16.83
Source: IFC Emerging Markets Database.
Past performance is no indication of future results.
7
<PAGE>
SCUDDER LATIN AMERICA FUND
- --------------------------------------------------------------------------------
The Fund's investment returns are clearly influenced by its country
weightings. As shown in the chart on page 9, the Fund was significantly
overweight in Argentina at the end of the period: 23% versus 11.5% for the
Index. The Argentine exposure arises from the portfolio management team's bias
towards oil and gas investments. Argentina is the only Latin American market
with a wide assortment of publicly traded energy companies. Given the dynamic
gains in the Argentine stock market for the six months, the overweighting in
that country made a positive contribution to net asset value performance for the
period. The portfolio's exposure to Mexico was close to a market weighting, and
this was an additional investment positive for the first half.
Chile posted the highest rate of economic growth among the major Latin
American countries last year, yet this superb performance had no impact on stock
market returns for the six months. Measured by the IFC Chile Index, performance
was actually negative and serves as an example of the need for caution when
basing an investment strategy on an economic forecast.
There are a number of technical explanations for Chile's laggard investment
performance in recent months, but the most important consideration by far is the
fact that Chile's more self-reliant economy was the least affected by the
Mexican peso devaluation. As a result, its stock market did not experience any
damaging sell-off and therefore had the least recovery potential among the
region's stock exchanges.
Building a Quality Portfolio
Many considerations enter into the portfolio's country weightings,
including economic forecasts and political risk analyses. A major factor,
however, is the availability of quality companies at reasonable valuations.
Chilean stocks, in our opinion, are generally overvalued, and this viewpoint --
more than anything else -- explains the current low weighting of Chile in the
Fund.
Brazilian stocks account for 44% of the Fund's equity portfolio compared
with an IFC Index weighting of 31.4%. Brazil has the largest stock market in
Latin America, measured by market capitalization and the number of listed
companies. Its size provides for broad diversification over a wide range of
industries, many of which are not widely represented on exchanges in other
8
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
countries. In addition to the opportunities provided by the size of its market,
Brazil offers attractive investment valuations at this time. President Cardoso's
economic and political reform program continues to move through Congress slowly,
which is understandable in light of the controversial nature of many of his
proposals. We believe most substantive issues will eventually be resolved in the
government's favor, setting the stage for long-term economic growth.
The following table shows the Fund's country allocations at the end of
April. For comparison purposes, we also show the country weightings for the
unmanaged IFC Latin America Investable Index.
Fund IFC Index
Country Weighting* Weighting
------- ---------- ---------
Argentina 22.88% 11.50%
Brazil 43.80% 31.44%
Chile 2.17% 19.66%
Colombia 1.48% 2.81%
Mexico 26.18% 29.88%
Peru 3.12% 3.56%
Venezuela 0.37% 1.15%
* Excludes Fund's assets in cash equivalents.
As leading Latin American corporations continue to diversify across the
region, country location will tend to play a lesser role in stock selection.
Corporate fundamentals and company-specific valuations will grow in importance
simply because a company's business address will have decreasing significance.
An excellent example is provided by Panamerican Beverages, Inc. Panamco is the
largest Coca-Cola bottler in Latin America and an important portfolio holding.
The company's legal address is Panama, although its corporate offices are in
Mexico City and for this reason the stock is listed in the portfolio among the
Mexican companies. The company's major profit center, however, is its franchise
in Sao Paulo, Brazil. In addition, Panamco holds important Coca-Cola franchises
in the three largest cities of Colombia and all of Costa Rica. It is truly a
regional company, and its classification is purely arbitrary.
9
<PAGE>
SCUDDER LATIN AMERICA FUND
- --------------------------------------------------------------------------------
Company selection is critical to how we build and manage the portfolio. We
have a bias towards quality; because quality does not change rapidly,
shareholders should not expect major changes over the short term in sector
weightings or portfolio holdings. What has proved to be variable over the short
term has been the portfolio's cash position. This was equal to 12% at the start
of the fiscal year and fell to 7% by April 30. The Fund was relatively liquid
late last year in anticipation of a potentially high level of shareholder
redemptions for tax-loss reasons. Once the tax-loss selling season had ended,
however, the portfolio management team was able to deploy excess liquidity into
the stock market without losing the margin of safety a strong cash position
provides. For example, by the end of the first half the Fund had rebuilt its
investment in Telefonos de Mexico and YPF S.A. Investments in both companies
were reduced during 1995 by the Fund's own tax-loss selling but have now
rejoined the list of top ten holdings.
A More Promising Future
The economic outlook for Latin America is considerably brighter today than
it was a year ago. Investors in Latin America, while certainly aware of the
region's capacity for generating extreme stock market volatility, have been
encouraged by the ability of governments to respond rationally to crisis
situations. In addition, the past year has tested the ability of business
corporations to adjust to a hostile environment. Not all managements have passed
the test, which simply underscores the importance of emphasizing quality above
all other considerations when investing in Latin America. With most economies
now growing again and inflationary pressures under control in the major
countries, the quality company should enjoy an extended period of rising
profitability.
Sincerely,
Your Portfolio Management Team
/s/Edmund B. Games, Jr. /s/Tara C. Kenney
Edmund B. Games, Jr. Tara C. Kenney
/s/Paul H. Rogers
Paul H. Rogers
10
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO as of April 30, 1996
- -----------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Market
Portfolio Amount (U.S.$) Value($)
- -----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
4.0% REPURCHASE AGREEMENT
-------------------------------------------------------------
<S> <C> <C> <C>
24,711,000 Repurchase Agreement with Donaldson,
Lufkin & Jenrette dated 4/30/96 at 5.32%,
to be repurchased at $24,714,652 on 5/1/96
collateralized by a $24,995,000 U.S. Treasury
Note, 5.75%, 10/31/97 (Cost $24,711,000) ........... 24,711,000
-----------
------------------------------------------------------------------------------------
3.3% COMMERCIAL PAPER
------------------------------------------------------------------------------------
20,000,000 General Electric Capital Corp., 5.09%, 5/30/96
(Cost $19,912,167) ................................. 19,912,167
-----------
------------------------------------------------------------------------------------
92.7% EQUITY SECURITIES
------------------------------------------------------------------------------------
Shares
------------------------------------------------------------------------------------
ARGENTINA 21.2% 5,840,890 Astra CAPSA (Petroleum company) ..................... 12,413,319
3,000,000 BI S.A. "A" (Venture capital company)(b)(c) ......... 3,240,000
2,888,651 Bagley y Cia Ltd. S.A. "B" (Producer of
cookies and biscuits) .............................. 6,124,644
134,545 Central Costanera "B" (Electric utility) ............ 457,506
206,788 Corporacion Cementera Argentina "B"
(Cement producer)(c) ............................... 909,972
1,552,731 Nobleza Piccardo (Tobacco company) .................. 5,046,956
5,352,440 Perez Companc S.A. "B" (Industrial
conglomerate) ...................................... 33,296,006
877,000 Quilmes Industrial S.A. (Leading beer distributor) .. 10,524,000
438,500 Quilmes Industrial S.A. (ADR)(c) .................... 5,207,188
2,081,099 Telecom Argentina S.A. "B" (Telecommunication
services) .......................................... 9,407,649
110,000 Telecom Argentina S.A. (ADR) ........................ 4,977,500
3,192,068 Telefonica de Argentina (Telecommunication
services) .......................................... 9,321,911
170,000 Telefonica de Argentina (ADR) ....................... 4,972,500
1,070,000 YPF S.A. "D" (ADR) (Petroleum company) .............. 23,406,250
-----------
129,305,401
-----------
BRAZIL 40.6% 316,800 Aracruz Celulose S.A. (ADR) (Producer of
eucalyptus kraft pulp) ............................. 2,851,200
1,454,184,741 Banco Bradesco S.A. (pfd.) (Commercial bank) ........ 16,417,387
62,379,600 Banco Itau S.A. (pfd.) (Bank) ....................... 24,397,243
65,000,000 Centrais Eletricas Brasileiras S/A "B" (pfd.)
(Electric utility) ................................. 16,052,618
49,168,681 Companhia Cervejaria Brahma (pfd.)
(Leading beer producer and distributor) ............ 23,641,410
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<TABLE>
SCUDDER LATIN AMERICA FUND
- -----------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value($)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
1,957,888 Companhia Cervejaria Brahma (pfd.)
Warrants (expire 9/30/96)(c) ....................... 513,130
900,875,000 Companhia Energetica de Minas Gerais (pfd.)
(Electric power utility) ........................... 22,702,359
66,850,000 Companhia Energetica de Sao Paulo (pfd.)
(Electric utility)(c) .............................. 2,055,264
362,669,100 Companhia Paranaense de Energia (voting)
(Electric utility) ................................. 2,979,440
42,310,000 Companhia Paulista de Forca e Luz (voting)
(Electric power utility) ........................... 2,732,099
53,543,000 Companhia Petroquimica do Sul S.A. (voting)
(Chemical producer) ................................ 2,930,684
703,500 Companhia Souza Cruz Industria e Comercio
(voting) (Holding company: cigarettes and
tobacco, fiber cellulose) .......................... 5,495,817
1,475,840 Companhia Suzano de Papel e Celulose S.A.(pfd.)
(Paper products) ................................... 5,638,258
986,800 Companhia Vale do Rio Doce (pfd.)
(Diverse mining and industrial complex) ............ 18,004,214
3,402,000 Empresa Brasileira de Compressores S.A. (pfd.)
(Manufacturer of electrical equipment)(b) ......... 1,988,972
2,581,000 Industrias Klabin de Papel e Celulose S/A (pfd.)
(Producer of papers and paper products,
newsprint, and cardboard boxes) .................... 2,549,650
3,824,000 Investimentos Itau S/A (pfd) (Diversified holding
company, involved in finance, chemicals,
electronics, wood products) ........................ 2,621,158
120,667,360 Lojas Americanas S.A. (pfd.) (Discount
department store chain) ............................ 2,797,590
217,308,380 Lojas Americanas S.A. (voting) ...................... 4,490,521
215,000,000 Petroleo Brasileiro S.A. (pfd.) (Petroleum
company) ........................................... 25,031,501
9,563,146,120 S/A White Martins (voting) (Chemical company) ....... 12,338,921
8,964,000 Sadia Concordia S/A (pfd.) (Processed poultry,
pork and beef) ..................................... 6,776,876
149,410,000 Telecomunicacoes de Sao Paulo S.A. (pfd.)
(Telecommunication services) ....................... 26,657,497
7,384,986 Telecomunicacoes do Parana S/A (pfd.)
(Telecommunication services) ....................... 2,754,342
10,500,000,000 Usinas Siderurgicas de Minas Gerais S/A (pfd)
(Non-coated flat products and electrolytic
products) ......................................... 11,960,083
2,490,000 Weg S.A. (pfd.) (Manufacturer of electrical
equipment)(b) ..................................... 1,071,750
-----------
247,449,984
-----------
</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>
CHILE 2.0% 60,000 Compania de Telefonos de Chile, S/A (ADR)
(Telecommunication services) ....................... 5,475,000
100,000 Enersis S.A. (ADR) (Generator and distributor
of electricity) .................................... 2,975,000
240,200 Maderas y Sinteticos S.A. (ADR) (Manufacturer
of particle board and veneers) ..................... 3,813,175
-----------
12,263,175
-----------
COLOMBIA 1.4% 806,761 Bavaria S/A (Producer and distributor of beer
and other malt beverages, mineral water and
soft drinks) ...................................... 3,418,318
761,871 Colombiana de Tabaco S.A.
(Tobacco producer) ................................. 2,503,583
294,397 Compania Nacional de Chocolates
(Chocolate producer) ............................... 2,467,053
-----------
8,388,954
-----------
MEXICO 24.3% 1,000,000 Apasco, S.A. de C.V. (Cement producer) .............. 5,423,957
2,152,000 Fomento Economico Mexicano, S.A. de C.V.
"B" (Producer of beer and soft drinks) ............. 6,487,860
200,000 Grupo Carso, S.A. de CV "A" (Diversified
industrial group)(c) ............................... 1,520,861
10,002,000 Grupo CIFRA S.A. de C.V. "C" (Retailer)(c) .......... 13,300,102
2,912,700 Grupo Continental, S.A. "B" (Soft drink bottler) .... 10,427,701
6,544,500 Grupo Embotellador de Mexico SA de C.V.
"B" (Soft drink bottler) ........................... 2,378,217
306,950 Grupo Embotellador de Mexico SA de C.V.
(GDR)(c) ........................................... 2,839,288
1,969,134 Grupo Embotelladora Unidas SA de CV "B"
(Soft drink producer) .............................. 3,339,312
2,000,000 Grupo Financiero Inbursa S.A. de C.V. "B"
(Banking and insurance services) ................... 7,779,273
7,252,000 Grupo Herdez S.A. de C.V. "A" (Producer of
packaged foods) .................................... 2,254,659
1,462,000 Grupo Industrial Bimbo, S.A. de C.V. "A"
(Producer of bread and other baked goods) .......... 6,591,790
80,000 Grupo Industrial Maseca S.A. de C.V. (ADR)
(Food producer) .................................... 1,170,000
850,000 Grupo Modelo SA "C" (Leading brewery) ............... 3,998,318
1,400,000 Kimberly Clark de Mexico S.A. de C.V. "A"
(Consumer paper products and newsprint) ............. 25,625,841
8,512,022 Organizacion Soriana S.A. de CV "A" (Retailer) ...... 11,227,162
400,800 Panamerican Beverages Inc. "A" (ADR)
(Soft drink bottler) ............................... 17,585,100
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
<TABLE>
SCUDDER LATIN AMERICA FUND
- -----------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value($)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
730,000 Telefonos de Mexico S.A. de C.V. "L" (ADR)
(Telecommunication services) ....................... 24,820,000
140,800 Tubos de Acero de Mexico S.A. (New)
(Manufacturer of various types of
pipes, casings and tubing)(c) ..................... 1,196,800
-----------
147,966,241
-----------
PERU 2.9% 2,046,932 Cementos Lima S.A. "T" (Cement producer) ............ 2,512,791
2,606,500 Cerveceria Backus & Johnston S.A. "T"
(Brewery) .......................................... 3,496,591
1,066,734 Consorcio de Alimentos Fabril Pacifico "T"
(Food producer)(c) ................................. 1,350,011
2,034,706 Embotelladora Latino-Americana S/A (Bottler) ........ 1,356,185
3,466,735 Industrias Pacocha S.A. "T" (Food Producer) ......... 2,193,673
3,000,000 Telefonica del Peru S.A. "B" (Public and
cellular telephone services) ........................ 6,707,446
-----------
17,616,697
-----------
VENEZUELA 0.3% 412,500 Mavesa SA (ADR) (Food processor) .................... 2,114,062
-----------
TOTAL EQUITY SECURITIES (Cost $508,710,104) ......... 565,104,514
-----------
======================================================================================================
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $553,333,271) (a) ............................ 609,727,681
===========
- ----------
<FN>
(a) The cost for federal income tax purposes was $561,021,653. At April 30, 1996,
net unrealized appreciation for all securities based on tax cost was
$48,706,028. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $93,495,769 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$44,789,741.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors. The cost of these securities at April 30, 1996 aggregated
$6,528,959. These securities may also have certain restrictions as to
resale. See Note A of the Notes to Financial Statements.
(c) 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.
14
<PAGE>
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
<TABLE>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
<CAPTION>
APRIL 30, 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $553,333,271)
(Note A) ....................................... $609,727,681
Cash ............................................... 105,576
Foreign currency holdings, at market
(identified cost $133,173) (Note A) ............ 133,174
Receivables:
Investments sold ............................... 439,503
Fund shares sold ............................... 454,863
Dividends ...................................... 4,732,683
Deferred organization expenses (Note A) ............ 25,750
Other assets ....................................... 11,079
------------
Total assets ................................ 615,630,309
LIABILITIES
Payables:
Investments purchased .......................... $2,710,592
Fund shares redeemed ........................... 455,514
Accrued management fee (Note C) ................ 605,341
Other accrued expenses (Note C) ................ 638,408
----------
Total liabilities ........................... 4,409,855
------------
Net assets, at market value ........................ $611,220,454
============
NET ASSETS
Net assets consist of:
Undistributed net investment income ............ $ 5,362,805
Unrealized appreciation (depreciation) on
Investments ................................. 56,394,410
Foreign currency related transactions ....... (1,090)
Accumulated net realized loss .................. (79,557,600)
Capital stock .................................. 310,198
Additional paid-in capital ..................... 628,711,731
------------
Net assets, at market value ........................ $611,220,454
============
NET ASSET VALUE, offering and redemption price
(Note A) per share ($611,220,454 [Divided by]
31,019,793 shares of capital stock outstanding,
$.01 par value, 100,000,000 shares
authorized) ................................ $19.70
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
SCUDDER LATIN AMERICA FUND
- -------------------------------------------------------------------------------
<TABLE>
- --------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED APRIL 30, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $1,572,384) ......... $ 11,895,221
Interest ........................................................ 1,290,549
------------
13,185,770
Expenses:
Management fee (Note C) ......................................... $ 3,544,456
Services to shareholders (Note C) ............................... 937,999
Custodian and accounting fees (Note C) .......................... 789,506
Directors' fees and expenses (Note C) ........................... 34,770
Reports to shareholders ......................................... 193,178
Auditing ........................................................ 45,035
State registration .............................................. 15,145
Legal ........................................................... 12,909
Amortization of organization expenses (Note A) .................. 8,024
Other ........................................................... 58,308 5,639,330
-------------------------
Net investment income ........................................... 7,546,440
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT TRANSACTIONS
Net realized loss from:
Investments ............................................. (11,712,632)
Foreign currency related transactions ................... (183,732) (11,896,364)
-------------------------
Net unrealized appreciation during the period on:
Investments ............................................. 114,522,169
Foreign currency related transactions ................... 1,008 114,523,177
-------------------------
Net gain on investment transactions ............................. 102,626,813
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $110,173,253
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------
<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 ....................................... $ 7,546,440 $ 3,061,657
Net realized loss from investment
transactions ............................................ (11,896,364) (68,151,320)
Net unrealized appreciation (depreciation) on
investment transactions during the period ............... 114,523,177 (193,283,640)
------------ -------------
Net increase (decrease) in net assets
resulting from operations ............................... 110,173,253 (258,373,303)
------------ -------------
Distributions to shareholders from:
Net investment income ($.15 per share) .................. (4,560,568) --
------------ -------------
Net realized gains from investment
transactions ($.73 per share) ........................ -- (24,333,536)
------------ -------------
Fund share transactions:
Proceeds from shares sold ................................... 70,150,820 199,888,429
Net asset value of shares issued to
shareholders in reinvestment of
distributions ........................................... 4,261,866 23,383,847
Cost of shares redeemed ..................................... (88,297,619) (232,138,679)
Redemption fees (Note A) .................................... 239,897 1,459,400
------------ -------------
Net decrease in net assets from Fund
share transactions ...................................... (13,645,036) (7,407,003)
------------ -------------
Increase (decrease) in net assets ........................... 91,967,649 (290,113,842)
Net assets at beginning of period ........................... 519,252,805 809,366,647
------------ -------------
NET ASSETS AT END OF PERIOD (including
undistributed net investment income of
$5,362,805 and $2,376,933, respectively) ................ $611,220,454 $ 519,252,805
============ =============
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period ................... 32,011,664 33,122,382
------------ -------------
Shares sold ................................................. 3,829,290 11,349,018
Shares issued to shareholders in
reinvestment of distributions ........................... 250,550 1,285,533
Shares redeemed ............................................. (5,071,711) (13,745,269)
------------ -------------
Net decrease in Fund shares ................................. (991,871) (1,110,718)
------------ -------------
Shares outstanding at end of period ......................... 31,019,793 32,011,664
============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
SCUDDER LATIN AMERICA FUND
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
DECEMBER 8, 1992
SIX MONTHS YEARS ENDED (COMMENCEMENT
ENDED OCTOBER 31, OF OPERATIONS)
APRIL 30, ------------------ TO OCTOBER 31,
1996 1995 1994 1993
---------- ------------------ ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................. $16.22 $ 24.44 $18.41 $12.00
------ ------- ------ ------
Income from investment operations:
Net investment income (loss) (a) .................. .24(b) .09 (.03) .03
Net realized and unrealized gain (loss)
on investment transactions ...................... 3.38 (7.62) 6.10 6.36
------ ------- ------ ------
Total from investment operations ..................... 3.62 (7.53) 6.07 6.39
Less distributions: ------ ------- ------ ------
From net investment income ........................ (.15) -- -- --
In excess of net investment income ................ -- -- (.06) --
From net realized gains on
investment transactions .......................... -- (.73) (.06) --
------ ------- ------ ------
Total distributions .................................. (.15) (.73) (.12) --
------ ------- ------ ------
Redemption fees (Note A) ............................. .01 .04 .08 .02
------ ------- ------ ------
Net asset value, end of period ....................... $19.70 $ 16.22 $24.44 $18.41
====== ======= ====== ======
TOTAL RETURN (%) ..................................... 22.53** (30.96) 33.43 53.42**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions) ............... 611 519 809 261
Ratio of operating expenses, net to
average daily net assets (%) (a) .................... 2.04* 2.08 2.01 2.00*
Ratio of net investment income (loss)
to average daily net assets (%) ..................... 2.73* .52 (.20) .44*
Portfolio turnover rate (%) .......................... 22.4* 39.5 22.4 4.6*
Average commission rate paid (c) ..................... $.0001 $ -- $ -- $ --
(a) Reflects a per share amount of management fee not
imposed by the Adviser of ...................... $ -- $ .01 $ .01 $ .04
Operating expense ratio before
expense reductions (%) ....................... -- 2.11 2.05 2.69*
(b) Per share amounts have been calculated using the weighted average shares
outstanding during the period method.
(c) Average commission rate paid per share of portfolio securities is calculated
for fiscal years beginning on or after September 1, 1995.
* Annualized
** Not annualized
</TABLE>
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
Scudder Latin America Fund (the "Fund") is a non-diversified series of Scudder
International Fund, Inc. (the "Corporation"). The Corporation is organized as a
Maryland corporation and is registered under the Investment Company Act of 1940,
as amended, as an open-end, management investment company.
The 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. Securities valued in good
faith by the Valuation Committee of the Board of Directors at fair value
amounted to $6,300,722 (1.0% of net assets) and have been noted in the
investment portfolio as of April 30, 1996. Their values have been estimated by
the Board of Directors in the absence of readily ascertainable market values.
However, because of the inherent uncertainty of valuation, those estimated
values may differ significantly from the values that would have been used had a
ready market for the securities existed, and the difference could be material.
19
<PAGE>
SCUDDER LATIN AMERICA FUND
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement and the underlying collateral, is equal to at least 100.5% of the
resale price.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency transactions are translated into U.S. dollars
on the following basis:
(i) market value of investment securities, other assets and liabilities at
the daily rates of exchange, and
(ii) purchases and sales of investment securities, dividend and interest
income and certain expenses at the daily rates of exchange prevailing
on the respective dates of such transactions.
The Fund does not isolate that portion of gains and losses on investments which
is due to changes in foreign exchange rates from that which is due to changes in
market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments.
Net realized and unrealized gain (loss) from foreign currency related
transactions includes gains and losses between trade and settlement dates on
securities transactions, gains and losses arising from the sales of foreign
currency, and gains and losses between the ex and payment dates on dividends,
interest and foreign withholding taxes.
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.
As of October 31, 1995, the Fund had a net tax basis capital loss carryforward
of approximately $59,200,000, which may be applied against any realized net
taxable capital gains of each succeeding year until fully utilized or until
October 31, 2003, the expiration date, whichever occurs first.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
REDEMPTION FEES. In general, shares of the Fund may be redeemed at net asset
value. However, upon the redemption or exchange of shares held by shareholders
for less than one year, a fee of 2% of the lower of cost or the current net
asset value of the shares will be assessed and retained by the Fund for the
benefit of the remaining shareholders. The redemption fee is included as an
addition to paid-in capital. Certain amounts have been reclassified in the
fiscal 1995 Statement of Changes in Net Assets and in the fiscal 1993, 1994 and
1995 Financial Highlights to conform with the fiscal 1996 presentation.
DISTRIBUTION OF INCOME AND GAINS. Distribution of net investment income is made
annually. During any particular year net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed and, therefore, will be distributed to
shareholders annually. An additional distribution may be made to the extent
necessary to avoid the payment of a four percent federal excise tax. Earnings
and profits distributed to shareholders on redemption of Fund shares ("tax
equalization") may be utilized by the Fund, to the extent permissible, as part
of the Fund's dividends paid deduction on its federal tax returns.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. These
differences primarily relate to investments in foreign denominated investments,
passive foreign investment companies, and certain securities sold at a loss. As
a result, net investment income (loss) and net realized gain (loss) on
investment transactions for a reporting period may differ significantly from
distributions during such period. Accordingly, the Fund may periodically make
reclassifications among certain of its capital accounts without impacting the
net asset value of the Fund.
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.
21
<PAGE>
SCUDDER LATIN AMERICA FUND
- -------------------------------------------------------------------------------
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. Dividend
income from certain portfolio companies may fluctuate significantly from year to
year due to dividend distribution policies of such companies.
B. PURCHASES AND SALES OF SECURITIES
- -------------------------------------------------------------------------------
During the six months ended April 30, 1996, purchases and sales of investment
securities (excluding short-term investments) aggregated $62,430,789 and
$57,148,783, respectively.
C. RELATED PARTIES
- -------------------------------------------------------------------------------
Under the Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Adviser directs the investments of
the Fund in accordance with its investment objectives, policies, and
restrictions. The Adviser determines the securities, instruments, and other
contracts relating to investments to be purchased, sold or entered into by the
Fund. In addition to portfolio management services, the Adviser provides certain
administrative services in accordance with the Agreement. The management fee
payable under the Agreement is equal to an annual rate of 1.25% of the Fund's
average daily net assets, computed and accrued daily and payable monthly. The
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. For the six months
ended April 30, 1996, the fee pursuant to the Agreement aggregated $3,544,456.
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 to the Fund by SSC
aggregated $771,060 of which $126,302 is 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 to the Fund by STC aggregated $1,122.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
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 of the Fund. For the six months
ended April 30, 1996, the amount charged to the Fund by SFAC aggregated
$149,205, of which $26,690 is unpaid at April 30, 1996.
The Fund pays each of its Directors not affiliated with the Adviser $4,000
annually, plus specified amounts for attended board and committee meetings. For
the six months ended April 30, 1996, Directors' fees and expenses aggregated
$34,770.
D. INVESTING IN EMERGING MARKETS
- -------------------------------------------------------------------------------
Investing in emerging markets may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currencies and future adverse political and economic
developments. Moreover, securities issued in these markets may be less liquid
and their prices more volatile than those of comparable securities in the United
States.
E. 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 25 percent of its net assets under the agreement. In addition, the
Fund also maintains an uncommitted line of credit.
23
<PAGE>
SCUDDER LATIN AMERICA FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS OF SCUDDER INTERNATIONAL FUND, INC. AND TO THE
SHAREHOLDERS OF SCUDDER LATIN AMERICA FUND:
We have audited the accompanying statement of assets and liabilities of Scudder
Latin America Fund including the investment portfolio, as of April 30, 1996, and
the related statement of operations for the six-month period then ended, the
statements of changes in net assets for the six-month period then ended and for
the year ended October 31, 1995, and the financial highlights for the six-month
period ended April 30, 1996, for each of the two years in the period ended
October 31, 1995 and for the period December 8, 1992 (commencement of
operations) to October 31, 1993. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 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 Latin America Fund as of April 30, 1996, the results of its operations
for the six-month period then ended, the changes in its net assets for the
six-month period then ended and for the year ended October 31, 1995, and the
financial highlights for the six-month period ended April 30, 1996, for each of
the two years in the period ended October 31, 1995 and for the period December
8, 1992 (commencement of operations) to October 31, 1993 in conformity with
generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 10, 1996
24
<PAGE>
OFFICERS AND DIRECTORS
- --------------------------------------------------------------------------------
Edmond D. Villani*
Chairman of the Board and Director
Nicholas Bratt*
President and Director
Paul Bancroft III
Director; Venture Capitalist and Consultant
Thomas J. Devine
Director; Consultant
Keith R. Fox
Director; President, Exeter Capital Management Corporation
William H. Gleysteen, Jr.
Director; President, The Japan Society, Inc.
William H. Luers
Director; President, The Metropolitan Museum of Art
Dr. Wilson Nolen
Director; Consultant
Juris Padegs*
Director, Vice President and Assistant Secretary
Daniel Pierce*
Director
Dr. Gordon Shillinglaw
Director; Professor Emeritus of Accounting, Columbia University Graduate
School of Business
Robert G. Stone, Jr.
Honorary 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
Elizabeth J. Allan*
Vice President
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
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>
<CAPTION>
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>
HOW TO CONTACT SCUDDER
- --------------------------------------------------------------------------------
<TABLE>
<C> <C>
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.
