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
Annual Report
October 31, 1995
o For investors seeking long-term growth of capital from a portfolio investing
primarily in the securities of Latin American issuers.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
<PAGE>
SCUDDER LATIN AMERICA FUND
CONTENTS
2 In Brief
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
11 Investment Portfolio
15 Financial Statements
18 Financial Highlights
19 Notes to Financial Statements
24 Report of Independent Accountants
25 Tax Information
25 Officers and Directors
26 Investment Products and Services
27 How to Contact Scudder
IN BRIEF
- Compared with the early years of this decade, the past 12 months have been
highly volatile for most Latin American stock markets. Mexico's decision in
late 1994 to devalue the peso sparked a selloff that resulted in severe
declines in the dollar prices of Mexican stocks. Fearful of currency
devaluations elsewhere, investors liquidated holdings in other Latin
American markets, eroding prices throughout the region.
- Scudder Latin America Fund's -30.96% return for the year, although
disappointing, was less than the decline of the unmanaged IFC Latin America
Investable Total Return Index and the average decline of the 17 Latin
America funds tracked by Lipper Analytical Services.
(bar chart title)
Investment Returns for the 12 Months Ended 10/31/95
(bar chart data)
IFC Latin America
Scudder Latin America Investable Total
Fund Return Index Lipper Average
---- ------------ --------------
-30.96% -37.44% -38.94%
- In the wake of a dramatic outflow of foreign investment this year, Latin
American governments have demonstrated their commitment to economic and
market reforms intended to increase internal savings and investment.
2
<PAGE>
LETTER FROM THE FUND'S CHAIRMAN
Dear Shareholders,
Latin America has been a learning experience for many investors. The
initial success of all Latin American markets in 1993 and most of 1994 convinced
some that these markets were all return and no risk. After the Mexican peso
devaluation in December and subsequent market declines, investors pulled out of
the region en masse, their views on risk and return having made a full pendulum
swing.
As long-term investors, we have tried to put things into perspective.
Similarly, shareholders who have been with the Fund since inception have seen
the best and the worst, and thus can evaluate their commitment to Latin America
with a more complete understanding of the potential risks and rewards. This
year's declines have not lessened our belief in the region's long-term
investment potential. In fact, the dramatic responses in Mexico, Argentina, and
elsewhere to the loss of foreign investment capital have provided new sources of
optimism.
As market-based economic reforms continue in these countries, we
believe opportunities for significant capital appreciation will continue apace.
Over the past few years, your portfolio managers have demonstrated commendable
skill in taking advantage of those opportunities, while also outperforming the
indices in both high and low markets. Scudder Latin America Fund was the
top-performing Latin America fund, according to Lipper, during the two years
ended October 31, 1995 -- a period that encompassed both spectacular gains and
sobering declines.*
As always, please contact a Scudder Investor Relations representative
at 1-800-225-2470 if you have any questions about the Fund or your investments.
Page 27 provides more information on how to contact Scudder. Thank you for
choosing Scudder Latin America Fund to help meet your investment needs.
Sincerely,
/s/Edmond D. Villani
Edmond D. Villani, Chairman
Scudder Latin America Fund
* The Fund was ranked first of nine funds for the two years ended 10/31/95,
second of 17 funds for the 12 months ended 10/31/95, and first of four funds
since inception (12/8/92).
3
<PAGE>
SCUDDER LATIN AMERICA FUND
PERFORMANCE UPDATE as of October 31, 1995
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
SCUDDER LATIN AMERICA FUND
- ----------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $ 6,904 -30.96% -30.96%
Life of
Fund* $14,132 41.32% 12.69%
IFC LATIN AMERICA INVESTABLE TOTAL
RETURN INDEX
- --------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $ 6,256 -37.44% -37.44%
Life of
Fund* $11,826 18.26% 6.11%
IFC GLOBAL LATIN AMERICA COMPOSITE
INDEX
- --------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $ 6,611 -33.89% -33.89%
Life of
Fund* $12,646 26.46% 8.66%
* 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
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
IFC Global Latin America
Composite Index
Year Amount
- ----------------------
12/92* $10,000
4/93 $ 9,995
10/93 $12,910
4/94 $15,013
10/94 $19,129
4/95 $12,981
10/95 $12,646
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 any fees or expenses.
- -----------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
YEARLY PERIODS ENDED OCTOBER 31
1993* 1994 1995
---------------------------
NET ASSET VALUE... $18.41 $24.44 $16.22
INCOME DIVIDENDS.. $ -- $ .06 $ --
CAPITAL GAINS
DISTRIBUTIONS..... $ -- $ .06 $ .73
FUND TOTAL
RETURN (%)........ 53.42** 33.43 -30.96
INDEX TOTAL
RETURN (%)........ 28.72 48.17 -37.44
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results.
Investment return and principal value will fluctuate, so an investor's
shares, when redeemed, may be worth more or less than when purchased.
If the Adviser had not maintained the Fund's expenses, the average annual
total return for the one year and life of Fund periods would have been
lower.
** Total return does not reflect the effect of the applicable redemption
fees.
4
<PAGE>
PORTFOLIO SUMMARY as of October 31, 1995
- ---------------------------------------------------------------------------
GEOGRAPHICAL (Excludes 12% Cash Equivalents)
- ---------------------------------------------------------------------------
Brazil 43%
Mexico 27% The Fund's relatively high
Argentina 22% weighting in Brazilian
Chile 4% and Argentine stocks
Peru 3% provided some protection
Colombia 1% this year against the
---- declines in Mexico.
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
SECTORS (Excludes 12% Cash Equivalents)
- --------------------------------------------------------------------------
Consumer Staples 27%
Communications 16% Consumer staples companies
Energy 14% continue to make up the
Manufacturing 11% Fund's largest sector
Utilities 9% weighting. Such holdings
Financial 8% typically have good cash
Metals and Minerals 7% flow and a large share of
Consumer Discretionary 5% their markets.
Construction 3%
----
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. COMPANHIA ENERGETICA DE MINAS GERAIS
Electric power utility in Brazil
4. COMPANHIA CERVEJARIA BRAHMA
Leading beer producer and distributor in Brazil
5. COMPANHIA VALE DO RIO DOCE
Diverse mining and industrial complex in Brazil
6. KIMBERLY CLARK DE MEXICO S.A. DE C.V.
Consumer paper products company
7. PANAMERICAN BEVERAGES INC.
Soft drink bottler in Mexico
8. BANCO ITAU S.A.
Bank in Brazil
9. PETROLEO BRASILIERO S.A.
Petroleum company in Brazil
10. CENTRAIS ELECTRICAS BRASILEIRAS S/A
Electrical utility in Brazil
The predominance of Brazilian stocks among the Fund's largest holdings
attests to our confidence in the country's continued economic and
political reform.
- --------------------------------------------------------------------------
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,
Fiscal-year 1995 was clearly the most difficult since the Fund's
inception in late 1992. The Fund's -30.96% total return for fiscal year 1995
largely reflects the severe declines most Latin American stock markets
experienced during the first quarter. As we mentioned in previous reports to
shareholders, the unanticipated devaluation of the Mexican peso in late December
1994 was the triggering mechanism for what became one of the worst bear markets
in the region since the debt crisis of the early 1980s.
But market returns for the full year mask substantial recoveries in
some cases -- recoveries prompted by the actions of Latin American governments
to achieve equilibrium in their trade accounts with other nations and to
continue with market-based economic reforms. The Brazilian market, for example,
declined 38% in the six months through April 30, 1995, but cut its losses to 26%
by the end of October. The Peruvian market reversed a 27.47% decline as of April
30, 1995, and posted a 1.28% gain for the full 12-month period ended October 31.
For the same period, the International Finance Corporation's unmanaged Latin
America Investable Total Return Index fell 37.44%. Returns for the individual
country components of the Index are shown below:
(bar chart title)
Investment Returns in Latin American
Stock Markets
(for the 12 months ended October 31, 1995)
(bar chart data)
Argentina -26.33%
Brazil -25.47%
Chile -9.87%
Colombia -28.46%
Mexico -54.54%
Peru +1.28%
Venezuela +4.43%
IFC Latin America -37.44%
Investable Index
Source: IFC Emerging Markets Database
Past performance is no indication of future results.
6
<PAGE>
Mexico Stumbles
Historically, a fundamental problem in Mexico and elsewhere in Latin
America (with the exception of Chile) has been a very low rate of internal
savings. Foreigners have taken up the slack mainly through short-term loans,
adding an element of instability to the extent that investment spending and
therefore economic growth has been highly influenced by the willingness of
foreign savers to supplement internally generated savings.
By late 1994, the situation in Mexico had become unstable. The country
had a current account deficit of over $29 billion and had suffered two unsolved
political assassinations. Given the increase in political and economic risk,
investors who had been sending billions to the country for years decided that it
was no longer prudent to do so. Others demanded steeply higher interest rates,
threatening to snuff out the country's recent economic recovery. The Mexican
government concluded that a devaluation was necessary to trim the current
account deficit and remove the upward pressure on interest rates. In all, gross
fixed investment in Mexico declined from 21.6% of GDP in 1994 to an estimated
17% in 1995, and the economy is expected to contract by upwards of 6% to 7% this
year.
Argentina experienced a similar catastrophe after the Mexico crisis,
losing nearly $8 billion in bank deposits in the three months following the
December devaluation. A subsequent drop in private credit curtailed financing
for investment and consumption goods, as well as working capital, providing an
immediate shock on the supply side from which the economy is only now
recovering. Real GDP this year is expected to be 2% to 3% below that of 1994.
The Case for Investing in Latin America
The capital flight early this year and the region's economic
difficulties have not lessened our belief in Latin America's long-term
investment potential. Desperately in need of investment capital, the region has
the potential to offer comparatively higher rates of return than one typically
finds in the more developed countries of the world. With the exception of
Venezuela, governments in Latin America understand that until they can finance
healthy capital formation ratios with assured levels of internal savings, they
will be beholden to foreign savers and subject to the type of economic
7
<PAGE>
contraction that results when the inflow of capital is withheld. The goal of
economic reform in Latin America should be to encourage the inflow of long-term
foreign savings and to promote higher rates of internal savings. Liberalized
capital markets broaden society's choice about how funds are to be allocated.
The recent turmoil in Mexico has reaffirmed the critical importance of reform in
that direction, demonstrating the damage done by the fall-off of foreign savings
in economies with sub-optimal internal savings rates.
The case for investing in Latin America is bolstered by the fact that
in 1995, countries made difficult adjustments when faced with significant
challenges. Mexico reversed its current account deficit virtually overnight and
is expected to post a slight surplus this year. (Exports continued to grow -- up
25% this year -- while imports have declined due to the economic downturn.)
Argentina also has improved its current account deficit through strong exports
and compressed imports. The country's 1994 deficit of $10.2 billion is expected
to shrink to $2.8 billion this year. Meanwhile inflation in Brazil, which had
been a mind-boggling 1,094% in 1994, is likely to finish this year at about a
23% rate. As a result of these adjustments, we expect healthy rates of economic
growth for most countries in 1996, as shown below.
Economic Growth Forecasts (GDP)
Country 1994 1995* 1996*
------- ---- ----- -----
Argentina 7.1% (2-3)% 1-2%
Brazil 5.8 4-5 4-5
Chile 4.2 6-7 6-7
Colombia 5.7 4-5 4-5
Mexico 3.5 (6-7) 2-3
Peru 12.7 7-8 6-7
Venezuela (3.3) (1-2) (2-3)
* Estimated. Estimates may prove to be inaccurate, and even if accurate,
economic growth may not correlate with market activity.
Source: Scudder Latin America Group
8
<PAGE>
The Portfolio
If the long-term case for investing in Latin America rests on the
ability of those countries to increase internal savings and investment, then the
companies in the portfolio should demonstrate the same. We look for companies
that are producing attractive returns on their invested capital and reinvesting
that money to generate future growth.
Holdings in Mexico (currently 23% of portfolio holdings) are largely
concentrated in food and beverage stocks. Given that Mexico has the region's
second-largest population, consumer-oriented businesses tend to provide steady
cash flows, regardless of the economic climate. An example is the recent
addition to the portfolio of Grupo Modelo, a beer exporter (brewer of Corona)
with a dominant market share in Mexico.
In Argentina (19% of portfolio holdings), we have emphasized oil and
natural gas companies such as YPF, Perez Companc, and Astra. In a region subject
to market volatility, we think it is a strategic advantage to own companies with
gas and oil reserves. Moreover, these companies' revenues are tied to the dollar
while many of their costs are peso denominated. Dollar-based revenues provide a
natural way to hedge against any exchange-rate uncertainties.
In Brazil (38% of portfolio holdings), we have increased the Fund's
emphasis on electric utilities. The basis for investment in this sector is the
projected shortage of power by 1997 and the urgent need for the government to
reform the sector's regulatory structure in order to attract additional
investment capital. Presently, Brazilian electric utilities earn little, if
anything, on their invested capital and are priced at deep discounts to book
value. We believe the privatization program underway in Brazil will reveal the
undervalued nature of these companies. Over the long-term, we expect dramatic
earnings improvements based upon more favorable regulatory treatment.
9
<PAGE>
Outlook
We took profits on some holdings this summer, given the opportunity
provided by improving stock prices. As a result, the Fund's cash position as of
October 31, 1995, (12% of total assets) is relatively high. In the coming
months, we intend to redeploy these funds into the market as investment
opportunities arise. As always, we will seek the best values in companies that
have strong market share, pricing power, and healthy cash flows. The past 12
months have been difficult for investors in Latin America, underscoring the fact
that price volatility is an integral part of the emerging markets. However, we
are encouraged by the region's continued economic and market-based reforms, and
believe that over the long-term investors in Latin America will be rewarded for
their commitment.
Sincerely,
Your Portfolio Management Team
/s/Edmund B. Games, Jr. /s/Joyce E. Cornell
Edmund B. Games, Jr. Joyce E. Cornell
/s/William F. Truscott
William F. Truscott
Scudder Latin America Fund:
A Team Approach to Investing
Scudder Latin America Fund is managed by a team of Scudder investment
professionals who each play an important role in the Fund's management process.
Team members work together to develop investment strategies and select
securities for the Fund. They are supported by Scudder's large staff of
economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. We believe our
team approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Lead Portfolio Manager Edmund B. Games, Jr. has set the Fund's investment
strategy and overseen its daily operation since the Fund was introduced in 1992.
Ed joined Scudder's equity research area in 1960 and has focused on Latin
American stocks since 1988. Joyce E. Cornell, Portfolio Manager, has focused on
stock selection since 1993. Joyce, who has eight years of investment experience
as a research analyst, joined Scudder in 1991. William F. Truscott, Portfolio
Manager, contributes expertise on the Fund's Latin American investments, a role
he has filled since the Fund commenced operations. Ted joined Scudder in 1992
and has 12 years of experience in the financial industry, including eight years
specifically focused on Latin American investments.
10
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO as of October 31, 1995
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Market
Portfolio Amount (U.S.$) Value ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
4.7% REPURCHASE AGREEMENT
---------------------------------------------------------------------------------------
24,295,000 Repurchase Agreement with Donaldson,
Lufkin & Jenrette dated 10/31/95 at 5.875%
to be repurchased at $24,298,965 on 11/1/95
collateralized by a $25,423,000 U.S. Treasury
Note, 5.2%, 6/27/96 (Cost $24,295,000) ............... 24,295,000
-----------
---------------------------------------------------------------------------------------
3.8% COMMERCIAL PAPER
---------------------------------------------------------------------------------------
20,000,000 General Electric Corp., 5.7%, 11/15/95
(Cost $19,955,667) ................................. 19,952,083
-----------
---------------------------------------------------------------------------------------
3.7% SHORT TERM NOTES
---------------------------------------------------------------------------------------
19,320,000 Federal Home Loan Mortgage Corp. Discount
Note, 5.85%, 11/1/95 (Cost $19,317,475) ............ 19,317,475
-----------
---------------------------------------------------------------------------------------
87.8% EQUITY SECURITIES
---------------------------------------------------------------------------------------
Shares
---------------------------------------------------------------------------------------
ARGENTINA 19.3% 5,840,890 Astra CAPSA (Petroleum company) ...................... 8,644,085
3,000,000 BI S.A. "A" (Venture capital company) (b) (c) (d) .... 3,159,000
2,591,653 Bagley y Cia Ltd. S.A."B" (Producer of
cookies and biscuits) .............................. 5,234,877
386,701 Corporacion Cementera Argentina "B"
(Cement producer) (b) (c) .......................... 1,662,731
1,472,511 Nobleza Piccardo (Tobacco company) ................... 5,668,884
5,922,160 Perez Companc S.A. "B" (Industrial
conglomerate) ...................................... 26,115,420
737,000 Quilmes Industrial S.A. (Leading beer distributor) ... 12,971,200
2,291,099 Telecom Argentina S.A. "B"
(Telecommunication services) ....................... 8,820,290
80,000 Telecom Argentina S.A. (ADR) ......................... 3,070,000
4,002,068 Telefonica de Argentina (Telecommunication
services) .......................................... 8,443,941
130,000 Telefonica de Argentina (ADR) ........................ 2,697,500
800,000 YPF S.A. "D" (ADR) (Petroleum company) ............... 13,700,000
-----------
100,187,928
-----------
BRAZIL 37.8% 1,235,168,731 Banco Bradesco S.A. (pfd.) (Commercial bank) ......... 11,301,778
57,069,600 Banco Ita# S.A. (pfd.) (Bank) ........................ 16,911,709
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
<TABLE>
SCUDDER LATIN AMERICA FUND
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Market
Portfolio Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
50,000,000 Centrais Eletricas Brasileiras S/A "B" (pfd.)
(Electric utility) ................................. 14,244,866
49,198,681 Companhia Cervejaria Brahma (pfd.) (Leading
beer producer and distributor) ..................... 18,774,022
1,957,888 Companhia Cervejaria Brahma (pfd.) Warrants
(expire 9/30/96) (c) ............................... 285,006
900,875,000 Companhia Energetica de Minas Gerais
(pfd.) (Electric power utility) .................... 19,296,101
63,850,000 Companhia Energetica de Sao Paulo (pfd.)
(Electric utility) ................................. 2,163,630
326,589,100 Companhia Paranaense de Energia (voting)
(Electric utility) ................................. 2,411,004
22,160,000 Companhia Paulista de Forca e Luz (voting)
(Electric power utility) ........................... 1,093,081
52,043,000 Companhia Petroquimica do Sul S.A. (voting)
(Chemical producer) ................................ 2,191,569
115,300,000 Companhia Siderurgica Nacional (voting)
(Steel producer) ................................... 2,469,644
1,085,840 Companhia Suzano de Papel e Celulose S.A.
(pfd.) (Paper products) ............................ 5,758,029
118,350,000 Companhia Vale do Rio Doce (pfd.) (Diverse
mining and industrial complex) ..................... 19,012,295
3,232,000 Empresa Brasileira de Compressores S.A. (pfd.)
(Manufacturer of electrical equipment) ............. 2,117,141
2,300,000 Investimentos Ita# S/A (pfd.) (Diversified holding
company, involved in finance, electronics,
wood products) ..................................... 1,315,311
107,667,360 Lojas Americanas S.A. (pfd.) (Discount
department store chain) ............................ 2,574,837
201,708,380 Lojas Americanas S.A. (voting) ....................... 4,509,207
175,000,000 Petroleo Brasileiro S.A. (pfd.) (Petroleum
company) ........................................... 15,104,497
10,063,146,120 S/A White Martins (voting) (Chemical company) ........ 9,730,934
8,764,000 Sadia Concordia S/A (pfd.) (Processed poultry
and meat) .......................................... 6,925,542
703,500 Souza Cruz S.A. (voting) (Holding company:
cigarettes and tobacco, fiber cellulose) ........... 5,032,576
153,410,000 Telecomunicacoes de Paulo Paulo S.A. (pfd.)
(Telecommunication services) ....................... 22,014,156
6,710,986 Telecomunicacoes do Parana S/A (pfd.)
(Telecommunication services) ....................... 2,093,367
8,800,000,000 Usinas Siderurgicas de Minas Gerais S/A
(pfd.) (Non-coated flat products and
electrolytic galvanized products) .................. 8,234,988
2,090,000 Weg S.A. (pfd.) (Manufacturer of electrical
equipment) ......................................... 1,043,099
-----------
196,608,389
-----------
</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>
CHILE 3.2% 100,000 Compania de Telefonos de Chile, S/A (ADR)
(Telecommunication services) ....................... 7,200,000
100,000 Enersis S.A. (ADR) (Generator and distributor
of electricity in Chile and Argentina) ............. 2,512,500
400,200 Maderas y Sinteticos S.A. (ADR) (Manufacturer
of particle board and veneers) ..................... 7,153,575
----------
16,866,075
----------
COLOMBIA 0.9% 495,000 Bavaria S/A (Producer and distributor of
beer and other malt beverages, mineral
water and soft drinks) ............................. 1,340,286
631,000 Colombiana de Tabaco S.A. (Tobacco
producer) (b) ...................................... 1,629,428
239,397 Compania Nacional de Chocolates
(Chocolate producer) ............................... 1,908,598
----------
4,878,312
----------
MEXICO 23.3% 1,150,000 Apasco, S.A. de C.V. (Cement producer) ............... 4,212,632
200,000 Coca-Cola FEMSA, S.A. de C.V. "L" (ADR)
(Soft drink bottler and distributor) ............... 3,600,000
2,602,000 Fomento Economico Mexicano, S.A. de C.V.
"B" (Producer of beer and soft drinks) ............. 5,390,248
1,669,000 Grupo Carso, S.A. de CV "A" (Diversified
industrial group) (c) .............................. 8,737,361
8,302,000 Grupo CIFRA S.A. de C.V. "C" (Retailer) .............. 8,459,301
2,462,000 Grupo Continental, S.A. (Soft drink bottler) ......... 6,123,037
6,544,500 Grupo Embotellador de Mexico SA de C.V.
"B" (Soft drink bottler) ........................... 3,834,847
256,950 Grupo Embotellador de Mexico SA de C.V.
(GDR) (c) .......................................... 2,665,856
1,619,500 Grupo Embotelladora Unidas SA de CV "B"
(Soft drink producer) (b) .......................... 3,936,806
2,000,000 Grupo Financiero Inbursa S.A. de CV
"B" (Banking and insurance) ........................ 5,417,544
7,452,000 Grupo Herdez S.A. de C.V. "A" (Producer of
packaged foods) .................................... 1,851,234
1,452,000 Grupo Industrial Bimbo, S.A. de C.V. "A"
(Producer of bread and other baked goods) .......... 5,502,316
2,543,000 Grupo Industrial Maseca S.A. de C.V. "B"
(Food producer) .................................... 1,584,691
160,000 Grupo Industrial Maseca S.A. de C.V. (ADR) ........... 1,540,000
400,000 Grupo Modelo SA "C" (Leading brewery) ................ 1,521,404
1,400,000 Kimberly Clark de Mexico S.A. de C.V. "A"
(Consumer paper products company) .................. 18,273,684
8,012,704 Organizacion Soriana S.A. de CV "B"
(Retailer) ......................................... 8,096,483
</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> <C>
620,800 Panamerican Beverages Inc. "A" (ADR)
(Soft drink bottler) ............................... 16,994,400
480,000 Telefonos de Mexico S.A. de C.V. "L" (ADR)
(Telecommunication services) ....................... 13,200,000
85,800 Tubos de Acero de Mexico SA (New)
(Manufacturer of various types of pipes,
casings and tubing) ................................ 579,150
-----------
121,520,994
-----------
PERU 2.8% 1,376,077 Cementos Lima S.A. "T" (Cement producer) ............. 2,002,229
1,676,500 Cerveceria Backus & Johnston S.A. "T"
(Brewery) .......................................... 3,001,142
3,000,000 Telefonia del Peru S.A. "B"
(Public and cellular telephone services) ........... 5,357,143
803,207 Embotelladora Latino-Americana S/A "T"
(Bottler) .......................................... 1,034,111
2,420,504 Industrias Pacocha S.A. "T" (Food producer) .......... 1,814,313
1,492,107 Consorcio de Alimentos Fabril Pacifico "T"
(Food producer) .................................... 1,546,054
-----------
14,754,992
-----------
VENEZUELA 0.5% 532,500 Mavesa SA (ADR) (Food processor) ..................... 2,196,562
-----------
TOTAL EQUITY SECURITIES (Cost $515,137,427) .......... 457,013,252
-----------
=================================================================================================================
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $578,705,569) (a) ............................ 520,577,810
===========
<FN>
(a) The cost for federal income tax purposes was $587,373,807. At October 31, 1995, net unrealized depreciation
for all securities based on tax cost was $66,795,997. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of market value over tax cost of $29,954,970
and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over
market value of $96,750,967.
(b) Securities valued in good faith by the Valuation Committee of the Board of Directors. The cost of these
securities at October 31, 1995 aggregated $13,308,947. See Note A of the Notes to Financial Statements.
(c) Non-income producing security.
(d) This security has certain restrictions as to resale. Information concerning such security holding at October
31, 1995 is as follows:
Acquisition Date Cost ($) % of Total Assets
---------------- -------- -----------------
10/22/93 3,000,000 0.6
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>
<TABLE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------------------
<CAPTION>
OCTOBER 31, 1995
- --------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $578,705,569)
(Note A) ...................................... $520,577,810
Cash .................................................. 148
Foreign currency holdings, at market
(identified cost $1,075,936) (Note A) ......... 1,074,936
Receivables:
Investments sold .............................. 885,847
Fund shares sold .............................. 277,608
Dividends and interest ........................ 344,942
Deferred organization expenses (Note A) ............... 33,774
Other assets .......................................... 11,079
------------
Total assets .......................... 523,206,144
LIABILITIES
Payables:
Investments purchased ......................... $2,357,642
Fund shares redeemed .......................... 400,522
Accrued management fee (Note C) ............... 581,727
Other accrued expenses (Note C) ............... 613,448
---------
Total liabilities ..................... 3,953,339
------------
Net assets, at market value ........................... $519,252,805
============
NET ASSETS
Net assets consist of:
Undistributed net investment income .......... $ 2,376,933
Unrealized depreciation on:
Investments ........................... (58,127,759)
Foreign currency related transactions . (2,098)
Accumulated net realized loss ................. (67,661,236)
Capital stock ................................. 320,117
Additional paid-in capital .................... 642,346,848
------------
Net assets, at market value ........................... $519,252,805
============
NET ASSET VALUE, offering and redemption price
(Note A) per share ($519,252,805 -:- 32,011,664)
shares of capital stock outstanding, $.01 par
value, 100,000,000 shares authorized) ......... $16.22
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<TABLE>
SCUDDER LATIN AMERICA FUND
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED OCTOBER 31, 1995
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $1,174,981) .. $ 11,548,569
Interest ................................................. 3,765,742
-------------
15,314,311
Expenses:
Management fee (Note C) .................................. $ 7,166,386
Services to shareholders (Note C) ........................ 2,184,847
Custodian and accounting fees (Note C) ................... 1,779,808
Directors' fees and expenses (Note C) .................... 66,435
Reports to shareholders .................................. 443,295
Brazilian transaction tax ................................ 360,329
Auditing ................................................. 103,742
State registration ....................................... 55,845
Legal .................................................... 25,702
Amortization of organization expenses (Note A) ........... 16,093
Other .................................................... 50,172 12,252,654
-----------------------------
Net investment income .................................... 3,061,657
-------------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENT TRANSACTIONS
Net realized loss from:
Investments ...................................... (67,486,374)
Foreign currency related transactions ........... (664,946) (68,151,320)
------------
Net unrealized appreciation (depreciation) during the
period on:
Investments ...................................... (193,288,349)
Foreign currency related transactions ............ 4,709 (193,283,640)
-----------------------------
Net loss on investment transactions ...................... (261,434,960)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ..... $(258,373,303)
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------
<CAPTION>
YEARS ENDED OCTOBER 31,
------------------------------
INCREASE (DECREASE) IN NET ASSETS 1995 1994
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) ............................. $ 3,061,657 $ (1,196,271)
Net realized gain (loss) from investment
transactions ..................................... (68,151,320) 25,731,015
Net unrealized appreciation (depreciation) on
investment transactions during the period ........ (193,283,640) 90,401,699
------------- --------------
Net increase (decrease) in net assets
resulting from operations ........................ (258,373,303) 114,936,443
------------- --------------
Distributions to shareholders:
In excess of net investment income
($.055 per share) ........................ -- (1,013,185)
------------- --------------
From net realized gains from investment
transactions ($.73 and $.055 per share,
respectively) ............................ (24,333,536) (1,013,185)
------------- --------------
Fund share transactions:
Proceeds from shares sold ................................ 199,888,429 635,744,643
Net asset value of shares issued to
shareholders in reinvestment of
distributions .................................... 23,383,847 1,910,655
Cost of shares redeemed (Note A) ......................... (230,679,279) (201,760,965)
------------- --------------
Net increase (decrease) in net assets from Fund
share transactions ............................... (7,407,003) 435,894,333
------------- --------------
INCREASE (DECREASE) IN NET ASSETS ........................ (290,113,842) 548,804,406
Net assets at beginning of period ........................ 809,366,647 260,562,241
------------- --------------
NET ASSETS AT END OF PERIOD (including
undistributed net investment income of
$2,376,933 at October 31, 1995) .................. $ 519,252,805 $ 809,366,647
============= ==============
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period ................ 33,122,382 14,153,599
------------- --------------
Shares sold .............................................. 11,349,018 28,213,736
Shares issued to shareholders in
reinvestment of distributions .................... 1,285,533 88,171
Shares redeemed .......................................... (13,745,269) (9,333,124)
------------- --------------
Net increase (decrease) in Fund shares ................... (1,110,718) 18,968,783
------------- --------------
Shares outstanding at end of period ...................... 32,011,664 33,122,382
============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
<TABLE>
SCUDDER LATIN AMERICA FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD AND OTHER
PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL STATEMENTS.
<CAPTION>
FOR THE PERIOD
DECEMBER 8, 1992
(COMMENCEMENT
YEARS ENDED OCTOBER 31, OF OPERATIONS)
------------------------- TO OCTOBER 31,
1995 1994 1993
------------------------- ---------------
<S> <C> <C> <C>
Net asset value, beginning of period ......................................... $24.44 $18.41 $12.00
------ ------ ------
Income from investment operations:
Net investment income (loss) (a) ..................................... .09 (.03) .03
Net realized and unrealized gain (loss) on investment transactions .. (7.58) 6.18 6.38
------ ------ ------
Total from investment operations ............................................. (7.49) 6.15 6.41
------ ------ ------
Less distributions:
In excess of net investment income ................................... -- (.06) --
From net realized gains on investment transactions ................... (.73) (.06) --
------ ------ ------
Total distributions .......................................................... (.73) (.12) --
------ ------ ------
Net asset value, end of period ............................................... $16.22 $24.44 $18.41
====== ====== ======
TOTAL RETURN (%) ............................................................. (30.96) 33.43 53.42(b)**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions) ....................................... 519 809 261
Ratio of operating expenses, net to average daily net assets (%) (a) ......... 2.08 2.01 2.00*
Ratio of net investment income (loss) to average daily net assets (%) ........ .52 (.20) .44*
Portfolio turnover rate (%) .................................................. 39.5 22.4 4.6*
<FN>
(a) Reflects a per share amount of management fee not imposed
by the Adviser of ...................................................... $ .01 $ .01 $ .04
Operating expense ratio including management fee not imposed (%) ....... 2.11 2.05 2.69*
(b) Total return does not reflect the effect of the applicable redemption fees.
* Annualized
** Not annualized
</FN>
</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 policies
described below are followed consistently by the Fund in the preparation of its
financial statements in conformity with generally accepted accounting
principles.
SECURITY VALUATION. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the National Association of
Securities Dealers Automatic Quotation ("NASDAQ") System, for which there have
been sales, are valued at the most recent sale price reported on such system.
If there are no such sales, the value is the high or "inside" bid quotation.
Securities which are not quoted on the NASDAQ System but are traded in another
over-the-counter market are valued at the most recent sale price on such
market. If no sale occurred, the security is then valued at the calculated
mean between the most recent bid and asked quotations. If there are no such
bid and asked quotations, the most recent bid quotation shall be used. Short-
term investments having a maturity of sixty days or less are valued at
amortized cost.
All other securities are valued at their fair value as determined in good faith
by the Valuation Committee of the Board of Directors. Securities valued in good
faith by the Valuation Committee of the Board of Directors at fair value
amounted to $10,387,965 (2.0% of net assets) and have been noted in the
investment portfolio as of October 31, 1995.
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.
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.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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.
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.
REDEMPTION FEES. In general, shares of the Fund may be redeemed at net asset
value. However, upon the redemption or exchange of shares held by shareholders
for less than one year, a fee of 2% of the lower of cost or the current net
asset value of the shares will be assessed and retained by the Fund for the
benefit of the remaining shareholders. The redemption fee is accounted for
as an addition to Brazilian capital. Total redemption fees received by the
Fund for the year ended October 31, 1995 amounted to $1,459,400.
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
21
<PAGE>
SCUDDER LATIN AMERICA FUND
- --------------------------------------------------------------------------------
distributed to shareholders on redemption of Fund shares ("tax equalization")
may be utilized by the Fund, to the extent permissible, as part of the Fund's
dividends paid deduction on its federal tax returns.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax
regulations which may differ from generally accepted accounting principles.
These differences primarily relate to investments in foreign denominated
investments and passive foreign investment companies and certain securities
sold at a loss. As a result, net investment income (loss) and net realized gain
(loss) on investment transactions for a reporting period may differ
significantly from distributions during such period. Accordingly, the Fund may
periodically make reclassifications among certain of its capital accounts
without impacting the net asset value of the Fund.
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
ORGANIZATION COSTS. Costs incurred by the Fund in connection with its
organization and initial registration of shares have been deferred and are
being amortized on a straight-line basis over a five-year period.
OTHER. Investment security transactions are accounted for on a trade-date
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis.
B. PURCHASES AND SALES OF SECURITIES
- --------------------------------------------------------------------------------
During the year ended October 31, 1995, purchases and sales of investment
securities (excluding short-term investments) aggregated $207,795,134 and
$207,762,835, respectively.
C. RELATED PARTIES
- --------------------------------------------------------------------------------
Under the Investment Management Agreement (the "Management Agreement") with
Scudder, Stevens & Clark, Inc. (the "Adviser"), the Adviser directs the
investments of the Fund in accordance with its investment objectives, policies,
and restrictions. The Adviser determines the securities, instruments, and other
contracts relating to investments to be purchased, sold or entered into by the
Fund. In addition to portfolio management services, the Adviser provides
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
certain administrative services in accordance with the Management Agreement.
The management fee payable under the Management Agreement is equal to an annual
rate of 1.25% of the Fund's average daily net assets, computed and accrued
daily and payable monthly. The Management Agreement provides that if the Fund'
expenses, exclusive of taxes, interest, and extraordinary expenses, exceed
specified limits, such excess, up to the amount of the management fee, will be
paid by the Adviser. As a result, for the year ended October 31, 1995, the
Adviser did not impose a portion of its management fee amounting to $216,058,
and the portion imposed amounted to $7,166,386.
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of the Adviser,
is the transfer, dividend paying and shareholder service agent for the Fund.
For the year ended October 31, 1995, the amount charged to the Fund by SSC
aggregated $1,778,233 of which $134,608 is unpaid at October 31, 1995.
Effective May 17, 1995, Scudder Fund Accounting Corporation ("SFAC"), a wholly-
owned subsidiary of the Adviser, assumed responsibility for determining the
daily net asset value per share and maintaining the portfolio and general
accounting records of the Fund. For the year ended October 31, 1995, the amount
charged to the Fund by SFAC aggregated $147,987, of which $26,620 is unpaid at
October 31, 1995.
The Fund pays each of its Directors not affiliated with the Adviser $4,000
annually, plus specified amounts for attended board and committee meetings.
For the year ended October 31, 1995, Directors' fees and expenses aggregated
$66,435.
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.
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 October 31, 1995,
and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended,
and the financial highlights for each of the two years in the period then ended
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 October 31, 1995, by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Scudder Latin America Fund as of October 31, 1995, the results of its operation
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of the
two years in the period then ended 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.
December 7, 1995
24
<PAGE>
TAX INFORMATION
For its fiscal year ended October 31, 1995, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was $.092 per share (representing a total of $2,960,786). The total
amount of taxes paid by the Fund to such countries was $.037 per share
(representing a total of $1,174,981).
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
William F. Truscott*
Vice President
David S. Lee*
Vice President and Assistant Treasurer
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Kathryn L. Quirk*
Vice President and Assistant Secretary
Richard W. Desmond*
Assistant Secretary
Coleen Downs Dinneen*
Assistant Secretary
* Scudder, Stevens & Clark, Inc.
25
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
<TABLE>
<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 GNMA Fund
Tax Free Money Market+ Scudder Income Fund
Scudder Tax Free Money Fund Scudder International Bond Fund
Scudder California Tax Free Money Fund* Scudder Short Term Bond Fund
Scudder New York Tax Free Money Fund* Scudder Short Term Global Income Fund
Tax Free+ Scudder Zero Coupon 2000 Fund
Scudder California Tax Free Fund* Growth
Scudder High Yield Tax Free Fund Scudder Capital Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Managed Municipal Bonds Scudder Global Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Global Small Company Fund
Scudder Massachusetts Tax Free Fund* Scudder Gold Fund
Scudder Medium Term Tax Free Fund Scudder Greater Europe Growth Fund
Scudder New York Tax Free Fund* Scudder International Fund
Scudder Ohio Tax Free Fund* Scudder Latin America Fund
Scudder Pennsylvania Tax Free Fund* Scudder Pacific Opportunities Fund
Growth and Income Scudder Quality Growth Fund
Scudder Balanced Fund Scudder Small Company Value Fund
Scudder Growth and Income 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>
<CAPTION>
<S> <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.
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Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
<FN>
* Contact Scudder Investor Services, Inc., Distributor, to receive a
prospectus with more complete information, including management fees and
expenses. Please read it carefully before you invest or send money.
</FN>
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27
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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 37 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.
