Scudder
Greater Europe Growth Fund
Semiannual Report
April 30, 1997
Pure No-Load(TM) Funds
For investors seeking long-term growth of capital through investment primarily
in the equity securities of European companies.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER [LOGO]
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
9 Investment Portfolio
14 Financial Statements
17 Financial Highlights
18 Notes to Financial Statements
22 Report of Independent Accountants
24 Officers and Directors
25 Investment Products and Services
26 Scudder Solutions
In Brief
o Scudder Greater Europe Growth Fund provided a total return of 9.53% for the
six months ended April 30, 1997. For the twelve-month period ended April 30,
1997, the Fund's total return was 21.47%, slightly surpassing the benchmark MSCI
Europe Index.
o While European fiscal policy remains tight in anticipation of the Maastricht
deadline for European Monetary Union (EMU), falling interest rates and weaker
currencies are lending support to a pick-up in economic growth. At the company
level, ongoing corporate restructuring is propelling stock prices.
o The Fund's strategy remains focused on identifying companies in Europe poised
for growth on the basis of effective positioning in new or growing markets, as
well as those companies whose global competitiveness will increase as they reap
the benefits of restructuring.
2-Scudder Greater Europe Growth Fund
<PAGE>
Letter From the Fund's Chairman
Dear Shareholders,
We are pleased to present the report for Scudder Greater Europe Growth Fund
for the semiannual period ended April 30, 1997. As outlined in the portfolio
management discussion that follows, the Fund provided a solid total return over
the six-month period of 9.53%. Privatizations of key industries, corporate
restructurings, and improving growth prospects are providing a favorable
backdrop in many European investment venues. We believe the Fund remains an
attractive alternative for investors seeking exposure to the opportunities for
capital appreciation over time to be found in European equity markets.
We are also pleased to share with you the assessment of Morningstar, the
fund rating service, of Scudder Greater Europe Growth Fund. In their March 1997
analysis, they write: "Scudder Greater Europe Growth Fund's double vision makes
it twice as good...Lead manager Carol Franklin views Europe through two lenses,
each of which captures different aspects of the economic changes sweeping across
the region. The Fund's growth themes concentrate on new products and markets,
while its restructuring plays focus on older industries reshaping themselves to
become more competitive...If one misfires, the other can pick up the slack. And
when both are on the mark -- as has been the case so far -- the Fund stands near
the pinnacle of the Europe group."
For those of you who are interested in new products and services, we
recently introduced the Scudder Pathway Series. Pathway simplifies investing
through the "fund of funds" approach, offering four distinct portfolios:
Conservative, Balanced, Growth, and International. Each portfolio invests in a
select mix of Scudder Funds, providing flexibility, diversification, and
simplicity for regular and retirement plan investors. For more complete
information on Scudder products and services, please turn to page 25.
Thank you for your continued investment in Scudder Greater Europe Growth
Fund. If you have questions about your account, please call our Investor
Relations representatives at 1-800-225-2470; they will be happy to assist you.
You can also obtain information by visiting our Internet web site at
http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
Chairman,
Scudder Greater Europe Growth Fund
3-Scudder Greater Europe Growth Fund
<PAGE>
PERFORMANCE UPDATE as of April 30, 1997
- ----------------------------------------------------------------
FUND INDEX COMPARISONS
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
4/30/97 $10,000 Cumulative Annual
- --------------------------------------------
SCUDDER GREATER EUROPE GROWTH FUND
- --------------------------------------------
1 Year $ 12,147 21.47% 21.47%
Life of Fund* $ 16,004 60.04% 20.20%
- --------------------------------------------
MORGAN STANLEY CAPITAL INTERNATIONAL
(MSCI) EUROPE INDEX
- --------------------------------------------
1 Year $ 12,096 20.96% 20.96%
Life of Fund* $ 14,863 48.63% 17.19%
- --------------------------------------------
*The Fund commenced operations on October 10, 1994.
Index comparisons begin October 31, 1994.
- ----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- ----------------------------------------------------------------
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
Scudder Greater Europe Growth Fund
Year Amount
- ----------------------
10/94* $10,000
1/95 $ 9,466
4/95 $10,371
7/95 $11,482
10/95 $11,506
1/96 $11,859
4/96 $12,981
7/96 $13,299
10/96 $14,395
1/97 $15,581
4/97 $15,767
Morgan Stanley Capital International
(MSCI) Europe Index
Year Amount
- ----------------------
10/94* $10,000
1/95 $ 9,596
4/95 $10,598
7/95 $11,486
10/95 $11,321
1/96 $11,840
4/96 $12,288
7/96 $12,362
10/96 $13,298
1/97 $14,282
4/97 $14,863
The Morgan Stanley Capital International (MSCI) Europe Index is
an unmanaged capitalization-weighted measure of 14 stock markets
in Europe. Index returns assume dividends reinvested net of
withholding tax and, unlike Fund returns, do not reflect any
fees or expenses.
- ----------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
- ----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
1995* 1996 1997
-------------------------------
NET ASSET VALUE......... $12.61 $15.50 $ 18.63
INCOME DIVIDENDS........ $ .02 $ .22 $ .06
CAPITAL GAINS
DISTRIBUTIONS........... $ -- $ .14 $ .14
FUND TOTAL RETURN (%)... 5.27 25.16 21.47
INDEX TOTAL RETURN (%).. 5.97 15.95 20.96
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 total returns for the one year and life of Fund periods
would have been lower.
4 - SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
PORTFOLIO SUMMARY as of April 30, 1997
- ---------------------------------------------------------------------------
GEOGRAPHICAL
(Excludes 8% Cash Equivalents)
- ---------------------------------------------------------------------------
France 27%
United Kingdom 18%
Germany 17%
Sweden 6%
Portugal 5%
Netherlands 5%
Switzerland 5%
Poland 4%
Spain 4%
Other 9%
- --------------------------------------
100%
- --------------------------------------
At the end of the period, 60% of
equity assets were invested in the
core markets of France, the U.K.,
and Germany.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
SECTORS
(Excludes 8% Cash Equivalents)
- --------------------------------------------------------------------------
Manufacturing 18%
Financial 12%
Durables 11%
Health 10%
Technology 9%
Consumer Discretionary 7%
Service Industries 7%
Utilities 6%
Construction 5%
Other 15%
- --------------------------------------
100%
- --------------------------------------
Many manufacturing companies
are beneficiaries of restructuring
and increased labor flexibility.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
(16% of Portfolio)
- --------------------------------------------------------------------------
1. DASSAULT SYSTEMES SA
Computer aided design, manufacturing and
engineering software products
2. ALCATEL ALSTHOM
Manufacturer of transportation,
telecommunication and energy equipment
3. COMPUTERLAND POLAND S.A.
Provider of computer services and systems
4. VOLKSWAGEN AG
Manufacturer of economy and luxury
automobiles for sale worldwide
5. PHILIPS ELECTRONICS NV
Leading manufacturer of electrical equipment
6. BARCLAYS PLC
Commercial and investment banking,
insurance and other financial services
7. SCHNEIDER SA
Manufacturer of electronic components and
automated manufacturing systems
8. ZENECA GROUP PLC
Holding company: manufacturing and
marketing of pharmaceutical and
agrochemical products and specialty
chemicals
9. NOVARTIS AG
Pharmaceutical company
10. POWERGEN PLC
Electric utility
The restructuring theme is
exemplified by the addition of
Volkswagen as one of the
portfolio's largest holdings.
For more complete details about the Fund's investment portfolio, see page 9.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings are
available upon request.
5 - SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Scudder Greater Europe Growth Fund provided a total return of 9.53% for the six
months ended April 30, 1997, while the unmanaged MSCI Europe Index rose 11.77%
over the comparable period. For the twelve-month period ended April 30, 1997,
the Fund's 21.47% return outpaced the MSCI Europe Index return of 20.96%.
Most European equity markets posted positive returns for the six-month period,
with several registering record highs. However, in the last three months, a
strengthening of the dollar versus Continental European currencies eroded
returns for U.S. investors. In this regard, the Fund's partial hedging of its
French franc and German deutschemark positions back into U.S. dollars benefited
performance.
Review of European Markets
Both cyclical and structural developments fueled stock prices in
Continental Europe over the period. While European fiscal policy remains tight
in anticipation of the Maastricht deadline for European Monetary Union (EMU),
falling interest rates and weaker currencies are lending support to a pick-up in
economic growth. At the company level, ongoing corporate restructuring propelled
stock prices in such Fund holdings as Philips Electronics (Netherlands), Alcatel
Alsthom (France), and Volkswagen (Germany). Smaller European markets fared best,
led by Finland, where equities were driven up by falling interest rates and
excellent performance from Nokia, a portfolio holding and substantial part of
that country's market. Spain and Portugal also sparkled, as favorable economic
news and hopes for inclusion in the first round of EMU took hold. Both countries
also enjoyed further success in their privatizations of leading companies. Spain
showed particular progress in developing a broader investor base, as domestic
retail investors enthusiastically participated in the privatizations as well as
in several initial public offerings of smaller, service-oriented companies.
The United Kingdom market, Europe's largest, provided returns that were slightly
above the regional average over the period. Britain stands out from the European
continent in a number of ways. First, the country's economic cycle is ahead of
the rest of Europe, and activity is vibrant. Solid real wage gains and
employment growth, a strong property market, and a stimulative monetary policy
underpin consumer confidence. Britain's currency, the pound sterling, has
strengthened appreciably, a concern for British exporters but a boon to
consumers. In contrast to the rest of Europe, rising inflation and interest rate
increases are a risk. On the political front, the long anticipated election on
May 1 swept out the Conservative government after 18 years in power, as Tony
Blair, the new Prime Minister, pulled together a victory of historic proportions
for the Labor Party. While the country and the markets await policy direction
from the new government, Mr. Blair has transformed Labor into a more centrist
party which appears to be supportive of a free market economy. His initial step
of granting operational independence to the Bank of England is a most
encouraging sign for capital markets.
6-Scudder Greater Europe Growth Fund
<PAGE>
Portfolio Focus on
Beneficiaries of Expanding Markets, Restructuring
The Fund's strategy remains focused on identifying companies in Europe poised
for growth on the basis of effective positioning in new or growing markets, as
well as those companies whose global competitiveness will increase as they reap
the benefits of restructuring.
TelePizza, a small, recently listed company in Spain, was added to the portfolio
recently and is illustrative of a company positioned to capitalize on a rapidly
expanding market opportunity. Started in 1988, the company has already captured
a dominant market share of more than 50% in the nascent market for pizza
restaurants and home delivery service in Spain. The fast food market in Spain is
growing at a rate of over 30% per annum and the home delivery segment -- which
accounts for two-thirds of TelePizza's sales -- is growing even faster.
TelePizza has high national consumer brand awareness and actively markets on the
local and regional levels as well. The company has shown an ability to increase
sales per outlet, driven by a motivated employee base. It has an efficient cost
structure, benefiting from the centralization of the chain's purchases, as well
as from a flexible workforce. Given the undeveloped state of the Spanish fast
food market, the country seems able to absorb easily the company's aggressive
expansion plans, which call for a 30% increase in stores over each of the next
several years. TelePizza's strong cash flow should enable it to finance this
expansion comfortably and we expect earnings per share to outstrip sales growth.
Another new portfolio holding, Volkswagen, represents the restructuring theme.
The company is rapidly turning around from a situation where it was losing
money. Led by a new CEO, VW has moved aggressively to slash costs, launched an
impressive new model offensive and gained market share. VW decided to reduce the
16 platforms used for production to only four across all brands and regions. The
platform consolidation process will be halfway accomplished by the end of 1997,
allowing for the realization of substantial cost savings. In addition, VW has
increased its focus on adding value, paying careful attention to the 20% of the
car the customer sees and touches. Today VW ranks among the world's four largest
car producers, is market share leader in Western Europe, and is strongly
positioned in South America and other emerging markets. The company's high
production volume allows economies of scale, unit cost declines, and enhanced
competitiveness, positioning VW to win more market share. At the time of
purchase, the stock traded at a modest price/cash flow multiple that undervalued
the company's impressive position and potential.
Over the last six months we have sold a number of positions which seemed fully
valued, including Hennes & Mauritz (Sweden), Christian Dior (France), Bulgari
(Italy), SEBanken and Svenska Handelsbanken (Sweden), Thistle Hotels (UK). We
also exited the disappointing holding VAE in Austria, and reduced our holdings
in Italy.
7-Scudder Greater Europe Growth Fund
<PAGE>
Outlook: Structural Changes Hold Promise
Despite recent market returns that have been rewarding, this is a challenging
time for investors in Europe. Uncertainties over the EMU process, political
change in the UK, electoral volatility in France and Germany, and longstanding
weak growth and high unemployment are among the litany of investor concerns. We
nevertheless remain heartened by the significant changes sweeping Europe and the
conviction behind the moves to deregulate, restructure, develop equity markets,
and recognize shareholder interests. Short-term setbacks may lie ahead for the
markets, as well as for individual companies and stocks, but we believe
investors in Europe will be able to reap substantial rewards over time as the
quality and scope of investment opportunities continues to expand. Scudder
Greater Europe Growth Fund remains an appropriate vehicle for investors seeking
exposure to the potential for long-term capital appreciation offered by European
equities, and we thank you for your continued investment in the Fund.
Sincerely,
Your Portfolio Management Team
/s/Carol L. Franklin /s/Nicholas Bratt
Carol L. Franklin Nicholas Bratt
/s/Joan R. Gregory
Joan R. Gregory
8-Scudder Greater Europe Growth Fund
<PAGE>
Investment Portfolio as of April 30, 1997
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements 7.5%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 4/30/97 at 5.375%, to be
repurchased at $12,205,822 on 5/1/97, collateralized by a $11,426,000 U.S. Treasury ----------
Note, 8.875%, 11/15/98 (Cost $12,204,000) ................................................ 12,204,000 12,204,000
----------
Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stocks 91%
- ------------------------------------------------------------------------------------------------------------------------------------
Czech Republic 0.7%
Central European Media Enterprises Ltd. "A" (Owner and operator of national and regional
private commercial television stations in central Europe and Germany)* ................... 42,000 1,191,750
----------
Denmark 0.7%
Novo-Nordisk AS "B" (Producer of insulin and industrial enzymes) ........................... 10,800 1,067,864
----------
Finland 2.3%
Nokia AB Oy "A" (Leading manufacturer of telecommunications equipment and
cellular telephones) ..................................................................... 11,560 720,840
Pohjola Insurance Co., Ltd. "B" (Insurance company) ........................................ 58,000 1,650,024
TT Tieto Oy "B" (Manufacturer of computer software) ........................................ 19,000 1,442,617
----------
3,813,481
----------
France 24.0%
AXA UPA (Insurance group providing insurance, finance and real estate services)* ........... 17,488 1,075,701
Accor (Catering, hotels, travel services) .................................................. 7,350 1,053,777
Alcatel Alsthom (Manufacturer of transportation, telecommunication and energy equipment)* .. 25,735 2,860,914
Altran Technologies S.A. (Engineering and consulting services for aerospace, telecommunications
and electronics fields) .................................................................. 3,300 1,147,482
Axime (Exseign) (Developer of financial databases, communication networks and trading
computer systems for financial applications)* ............................................ 7,440 894,635
Cap Gemini S.A. (Software consultants)* .................................................... 34,835 2,109,314
Carrefour Supermarche (Hypermarket operator and food retailer) ............................. 1,625 1,014,303
Compagnie Generale des Eaux (Water utility) ................................................ 14,800 2,061,048
Comptoirs Modernes (Operator of supermarkets, grocery and department stores) ............... 2,830 1,320,958
Dassault Systemes S.A. (Computer aided design, manufacturing and engineering
software products)* ...................................................................... 65,200 4,002,686
Elf Aquitaine (Petroleum company) .......................................................... 7,500 727,133
Lafarge (Leading producer of cement, concrete and aggregates) .............................. 3,092 202,744
Lafarge (Registered) ....................................................................... 16,700 1,095,026
Le Carbone-Lorraine (Manufacturer of industrial and technological systems and components) .. 7,000 1,660,671
Legrand (Manufacturer of low~voltage electrical devices) ................................... 5,150 868,919
Lyonnaise des Eaux S.A. (Water utility) .................................................... 18,100 1,636,999
</TABLE>
The accompanying notes are an integral part of the financial statements.
9-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Michelin "B" (Leading tire manufacturer) ................................................... 29,695 1,658,708
Pinault-Printemps, S.A. (Distributor of consumer goods) .................................... 2,796 1,175,776
Rexel (Distributor of electrical equipment) ................................................ 4,750 1,265,202
Rhone-Poulenc S.A. "A" (Medical, agricultural and consumer chemicals)* ..................... 37,900 1,274,370
Salomon S.A. (Manufacturer of ski and golf equipment) ...................................... 15,400 1,085,755
Schneider S.A. (Manufacturer of electronic components and automated manufacturing systems) . 41,592 2,343,914
Scor (Property, casualty and life reinsurance company) ..................................... 49,000 1,913,669
Synthelabo (Pharmaceutical and biomedical company) ......................................... 14,600 1,738,095
Total S.A. "B" (International oil and gas exploration, development and production) ......... 17,223 1,427,875
Valeo (Automobile and truck components manufacturer) ....................................... 24,669 1,521,213
----------
39,136,887
----------
Germany 14.8%
Adidas AG (Manufacturer of sport shoes, clothing and equipment) ............................ 13,300 1,385,857
BASF AG (Leading international chemical producer) .......................................... 41,100 1,584,921
Bayer AG (Leading chemical producer) ....................................................... 37,450 1,489,568
Bayerische Vereinsbank AG (Commercial bank)* ............................................... 30,600 1,201,212
Commerzbank AG (Worldwide multi-service bank) .............................................. 73,300 1,965,527
Daimler-Benz AG (Automobile and truck manufacturer) ........................................ 22,250 1,651,811
Daimler Benz Rights* ....................................................................... 22,250 1,927
Fresenius AG (Developer, manufacturer and distributor of pharmaceuticals) .................. 10,380 2,175,171
Fresenius AG Rights* ....................................................................... 10,380 40,148
Hoechst AG (Chemical producer) ............................................................. 28,600 1,122,702
Mannesmann AG (Bearer) (Diversified construction and technology company) ................... 3,500 1,375,956
RWE AG (pfd.) (Producer and marketer of petroleum and chemical products) ................... 31,150 1,046,575
SAP AG (pfd.) (Computer software manufacturer) ............................................. 5,750 1,058,551
Schering AG (Pharmaceutical and chemical producer) ......................................... 14,150 1,355,982
SGL Carbon AG (Manufacturer of specialized graphite products) .............................. 13,600 1,896,031
VEBA AG (Electric utility, distributor of oil and chemicals) ............................... 24,350 1,253,872
VIAG AG (Provider of electrical power and natural gas services, aluminum products, chemicals,
ceramics and glass) ...................................................................... 2,100 933,468
Volkswagen AG (Manufacturer of economy and luxury automobiles for sale worldwide) .......... 5,385 2,667,242
----------
24,206,521
----------
Hungary 0.6%
Graboplast Rt (Producer of home improvement materials, artificial leather and book bindings) 20,500 939,497
----------
Ireland 0.5%
Irish Life PLC (Provider of life and disability insurance and pensions) .................... 181,718 883,443
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Italy 3.2%
Banca Fideuram SpA (Commercial bank) ....................................................... 280,000 702,748
Gucci Group (New York Shares) (Designer and producer of personal luxury
accessories and apparel) ................................................................. 21,500 1,491,563
Saipem SpA (International contractor in oil and gas exploration and drilling, construction
of refineries and pipelines) ............................................................. 260,000 1,226,948
Telecom Italia Mobile SpA (Cellular telecommunication services) ............................ 572,000 1,797,855
----------
5,219,114
----------
Netherlands 4.6%
Akzo-Nobel NV (Chemical producer) .......................................................... 12,500 1,609,717
Getronics NV (Provider of computer installation and maintenance services) .................. 60,584 1,833,901
Koninklijke Nedlloyd Groep NV (Container shipping and transportation) ...................... 26,700 612,329
Philips Electronics NV (Leading manufacturer of electrical equipment) ...................... 48,930 2,553,066
Unilever NV (Producer of packaged consumer goods, food, detergents, personal care items) ... 4,620 898,116
----------
7,507,129
----------
Poland 4.1%
Bank Przemyslowo Handlowy (Bank) ........................................................... 11,700 589,994
Bank Rozwoju Eksportu (Export bank) ........................................................ 54,400 1,307,114
Computerland Poland S.A. (Provider of computer services and systems) ....................... 97,700 2,841,733
Elektrim S.A. (Manufacturer of power equipment, electrical machinery and apparatus) ........ 86,000 769,459
Zaklady Metali Lekkich Kety (Manufacturer of aluminum casting alloys and products) ......... 52,000 1,134,366
----------
6,642,666
----------
Portugal 4.8%
Cimpor Cimentos de Portugal (Manufacturer of cement, ready mix concrete and aggregates)* ... 85,000 1,827,747
Engil-SGPS (Civil and public works construction) ........................................... 100,000 1,124,015
Portugal Telecom S.A. (Telecommunication services) ......................................... 56,900 2,095,352
Semapa S.A. (Cement producer) .............................................................. 53,000 1,133,559
Telecel-Comunicacoes Pessoais, S.A. (Cellular communication services)* ..................... 18,583 1,599,422
----------
7,780,095
----------
Spain 3.5%
Banco Bilbao Vizcaya, S.A. (Leading financial group) ....................................... 22,600 1,521,042
Compania Telefonica Nacional de Espana S.A. (Telecommunication services) ................... 67,000 1,716,186
Empresa Nacional de Electricidad S.A. (Electric utility) ................................... 20,400 1,425,998
TelePizza, S.A. (Operator of fast-food pizza restaurants in Spain, Portugal, Poland, Mexico
and Chile)* .............................................................................. 23,400 1,072,330
----------
5,735,556
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sweden 5.9%
AGA AB "B" (Free) (Producer and distributor of industrial and medical gases) ............... 100,500 1,312,888
Autoliv AB (Manufacturer of automobile safety bags) ........................................ 39,700 1,444,556
Investor AB "B" (Investment company with holdings in listed shares of industrial companies). 42,200 1,844,779
L.M. Ericsson Telephone Co. "B" (ADR) (Leading manufacturer of cellular telephone equipment). 48,220 1,621,398
Skandia Foersaekrings AB (Free) (Financial conglomerate) ................................... 68,500 1,981,775
WM-Data AB (Data consulting and systems for large Nordic companies) ........................ 18,325 1,331,241
----------
9,536,637
----------
Switzerland 4.7%
CS Holdings (Registered) (Provider of bank services, management services and life insurance). 9,435 1,062,918
Ciba Specialty Chemical (Manufacturer of chemical products for plastics, coatings,
fibers and fabrics)* ..................................................................... 1,984 171,000
Ciba Specialty Chemical (Registered)* ...................................................... 8,253 711,321
Clariant AG (Registered) (Manufacturer of color chemicals) ................................. 2,683 1,536,785
Holderbank Financiere Glaris AG (Bearer) (Cement producer) ................................. 700 544,893
Novartis AG (Bearer) (Pharmaceutical company) .............................................. 938 1,236,238
Novartis AG (Registered) ................................................................... 815 1,074,130
Roche Holdings AG (PC) (Producer of drugs and medicines) ................................... 159 1,343,434
----------
7,680,719
----------
United Kingdom 16.6%
Avis Europe PLC (Car rental services)* ..................................................... 990,000 2,165,263
B.A.T. Industries PLC (Tobacco, retailing, and financial services) ......................... 114,000 958,548
BOC Group PLC (Producer of industrial gases) ............................................... 127,767 1,955,588
Barclays PLC (Commercial and investment banking, insurance and other financial services) ... 126,300 2,346,975
British Petroleum PLC (Major integrated world oil company) ................................. 90,404 1,036,961
Carlton Communications PLC (Television post production products and services) .............. 197,800 1,621,506
Compass Group PLC (International catering group) ........................................... 172,400 1,888,103
General Electric Co., PLC (Manufacturer of power, communications and defense equipment
and other various electrical components) ................................................. 234,000 1,388,731
Glaxo Wellcome PLC (Pharmaceutical company) ................................................ 80,000 1,572,145
Granada Group PLC (Television systems and broadcast, travel and leisure services,
entertainment and theme park operator) ................................................... 56,000 808,365
Next PLC (Retailer of clothing, accessories and fashion jewelry, also through home shopping). 94,000 992,165
Pearson PLC (Diversified media and entertainment holding company) .......................... 167,000 1,926,363
PowerGen PLC (Electric utility) ............................................................ 214,750 2,247,540
SmithKline Beecham PLC (Manufacturer of ethical drugs and healthcare products) ............. 107,952 1,734,064
WPP Group PLC (Advertising agency) ......................................................... 496,000 2,016,959
</TABLE>
The accompanying notes are an integral part of the financial statements.
12-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Zeneca Group PLC (Holding company: manufacturing and marketing of pharmaceutical
and agrochemical products and specialty chemicals) ....................................... 77,600 2,343,415
-----------
27,002,691
- -------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $122,642,714) 148,344,050
- -------------------------------------------------------------------------------------------------------------------------------
Principal
Amount
- -------------------------------------------------------------------------------------------------------------------------------
Purchased Options 1.5%
- -------------------------------------------------------------------------------------------------------------------------------
France 0.9%
Put on French Francs, strike price FRF 5.56, expire 7/25/97 ......................... FRF 195,000,000 1,522,950
-----------
Germany 0.6%
Put on Deutsche Marks, strike price DEM 1.6833, expire 8/15/97 ...................... DEM 50,499,000 888,782
- -------------------------------------------------------------------------------------------------------------------------------
Total Purchased Options (Cost $1,261,991) 2,411,732
- -------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio - 100.0% (Cost $136,108,705) (a) 162,959,782
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
(a) The cost for federal income tax purposes was $136,108,705. At April 30,
1997, net unrealized appreciation for all securities based on tax cost was
$26,851,077. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $28,501,535 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$1,650,458.
Currency Abbreviations:
FRF French Franc
DEM Deutsche Mark
The accompanying notes are an integral part of the financial statements.
13-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of April 30, 1997
<TABLE>
<S> <C>
Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Investments, at market (identified cost $134,846,714) ............. $ 160,548,050
Cash .............................................................. 974
Purchased options, at value (cost $1,261,991) ..................... 2,411,732
Receivable for investments sold ................................... 2,200,991
Receivable for Fund shares sold ................................... 748,341
Dividends and interest receivable ................................. 381,417
Foreign taxes recoverable ......................................... 132,715
Deferred organization expenses .................................... 28,813
Other assets ...................................................... 2,652
--------------
Total assets ...................................................... 166,455,685
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed .................................. 237,349
Accrued management fee ............................................ 135,103
Other accrued expenses and payables ............................... 160,490
--------------
Total liabilities ................................................. 532,942
-----------------------------------------------------------------------------------------
Net assets, at market value $ 165,922,743
-----------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated distributions in excess of net investment income ...... (160,267)
Unrealized appreciation (depreciation) on:
Investments .................................................... 25,701,336
Options ........................................................ 1,149,741
Foreign currency related transactions .......................... (13,328)
Accumulated net realized gain ..................................... 3,613,005
Paid-in capital ................................................... 135,632,256
-----------------------------------------------------------------------------------------
Net assets, at market value $ 165,922,743
-----------------------------------------------------------------------------------------
Net Asset Value
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($165,922,743 /
8,905,484 shares of capital stock outstanding, $.01 par value, --------------
100,000,000 shares authorized) ................................. $18.63
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
Statement of Operations
six months ended April 30, 1997
<TABLE>
<CAPTION>
Investment Income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Dividends (net of foreign taxes withheld of $135,794) ............. $ 906,970
Interest .......................................................... 304,221
--------------
1,211,191
--------------
Expenses:
Management fee .................................................... 802,011
Services to shareholders .......................................... 305,215
Custodian and accounting fees ..................................... 183,263
Directors' fees and expenses ...................................... 26,050
Auditing .......................................................... 27,340
Reports to shareholders ........................................... 35,783
Amortization of organization expense .............................. 5,879
Registration fees ................................................. 32,991
Legal ............................................................. 4,882
Interest expense .................................................. 8,409
Other ............................................................. 8,893
--------------
Total expenses before reductions .................................. 1,440,716
Expense reductions ................................................ (100,865)
--------------
Expenses, net ..................................................... 1,339,851
-----------------------------------------------------------------------------------------
Net investment loss (128,660)
-----------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ....................................................... 3,775,536
Foreign currency related transactions ............................. (70,228)
--------------
3,705,308
--------------
Net unrealized appreciation (depreciation) during the period on:
Investments ....................................................... 8,155,693
Options ........................................................... 1,149,741
Foreign currency related transactions ............................. (16,161)
--------------
9,289,273
-----------------------------------------------------------------------------------------
Net gain on investment transactions 12,994,581
-----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 12,865,921
-----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
April 30, October 31,
Increase (Decrease) in Net Assets 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) ................................ $ (128,660) $ 537,629
Net realized gain from investment transactions .............. 3,705,308 986,362
Net unrealized appreciation on investment transactions
during the period ......................................... 9,289,273 13,130,041
------------- -------------
Net increase in net assets resulting from operations ........ 12,865,921 14,654,032
------------- -------------
Distributions to shareholders from:
Net investment income ....................................... (490,975) (320,199)
------------- -------------
Net realized gains .......................................... (1,145,608) (427,101)
------------- -------------
Fund share transactions:
Proceeds from shares sold ................................... 127,858,595 110,490,941
Net asset value of shares issued to shareholders in
reinvestment of distributions.............................. 1,574,869 727,064
Cost of shares redeemed ..................................... (95,040,117) (45,416,671)
------------- -------------
Net increase in net assets from Fund share transactions ..... 34,393,347 65,801,334
------------- -------------
Increase in net assets ...................................... 45,622,685 79,708,066
Net assets at beginning of period ........................... 120,300,058 40,591,992
Net assets at end of period (including accumulated
distributions in excess of net investment income of
$160,267 and undistributed net investment income of
$459,368, respectively) ................................... $165,922,743 $120,300,058
------------- -------------
Other Information
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ................... 6,993,392 2,901,077
------------- -------------
Shares sold ................................................. 7,003,528 6,939,733
Shares issued to shareholders in reinvestment of
distributions ............................................. 88,625 52,194
Shares redeemed ............................................. (5,180,061) (2,899,612)
------------- -------------
Net increase in Fund shares ................................. 1,912,092 4,092,315
------------- -------------
Shares outstanding at end of period ......................... 8,905,484 6,993,392
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
For the Period
October 10,
1994
Six months (commencement
Ended Years Ended October 31, of operations) to
April 30, October 31,
1997 (a) 1996 (a) 1995 1994
====================================================================================================================
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $17.20 $13.99 $12.18 $12.00
---------------------------------------------------------------
Income from investment operations:
Net investment income (loss) ..................... (.02) .13 .13 .01
Net realized and unrealized gain on investment
transactions .................................. 1.65 3.33 1.70 .17
---------------------------------------------------------------
Total from investment operations ................. 1.63 3.46 1.83 .18
---------------------------------------------------------------
Less distributions from:
Net investment income ............................ (.06) (.11) (.02) --
Net realized gains on investment transactions .... (.14) (.14) -- --
---------------------------------------------------------------
Total distributions .............................. (.20) (.25) (.02) --
---------------------------------------------------------------
Net asset value, end of period ................... $18.63 $17.20 $13.99 $12.18
====================================================================================================================
Total Return (%) (b) ............................. 9.53** 25.11 15.06 1.50**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ........... 166 120 41 8
Ratio of operating expenses, net to average
daily net assets (%)........................... 1.69* 1.50 1.50 1.50*
Ratio of operating expenses before expense
reductions, to average daily net assets (%) ... 1.81* 1.97 2.74 11.46*
Ratio of net investment income (loss) to average
daily net assets (%) .......................... (.16)* .82 1.25 2.40*
Portfolio turnover rate (%) ...................... 95.25* 39.0 27.9 --
Average commission rate paid (c) ................. $.0817 $.0509 $ -- $ --
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) Total returns would have been lower had certain expenses not been reduced.
(c) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal years beginning on or after September 1, 1995.
* Annualized
** Not annualized
17-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Greater Europe Growth Fund (the "Fund") is a non-diversified series of
Scudder International Fund, Inc. (the "Corporation"). The Corporation is
organized as a Maryland corporation and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The 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 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.
Options. An option contract is a contract in which the writer of the option
grants the buyer of the option the right to purchase from (call option), or sell
to (put option), the writer a designated instrument at a specified price within
a specified period of time. Certain options, including options on indices, will
require cash settlement by the Fund if the option is exercised. During the
period, the Fund purchased put options as a hedge against potential adverse
price movements in the value of portfolio assets.
If the Fund writes an option and the option expires unexercised, the Fund will
realize income, in the form of a capital gain, to the extent of the amount
received for the option (the "premium"). If the Fund elects to close out the
option it would recognize a gain or loss based on the difference between the
cost of closing the option and the initial premium received. If the Fund
purchased an option and allows the option to expire it would realize a loss to
the extent of the premium paid. If the Fund elects to close out the option it
would recognize a gain or loss equal to the difference between the cost of
acquiring the option and the amount realized upon the sale of the option.
The gain or loss recognized by the Fund upon the exercise of a written call or
purchased put option is adjusted for the amount of option premium. If a written
put or purchased call option is exercised the Fund's cost basis of the acquired
security or currency would be the exercise price adjusted for the amount of the
option premium.
The liability representing the Fund's obligation under an exchange traded
written option or investment in a purchased option is valued at the last sale
price or, in the absence of a sale, the mean between the closing bid and asked
price or at the most recent asked price (bid for purchased options) if no bid
and asked price are available. Over-the-counter written or purchased options are
valued using dealer supplied quotations.
18-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
When the Fund writes a covered call option, the Fund foregoes, in exchange for
the premium, the opportunity to profit during the option period from an increase
in the market value of the underlying security or currency above the exercise
price. When the Fund writes a put option it accepts the risk of a decline in the
market value of the underlying security or currency below the exercise price.
Over-the-counter options have the risk of the potential inability of
counterparties to meet the terms of their contracts. The Fund's maximum exposure
to purchased options is limited to the premium initially paid. In addition,
certain risks may arise upon entering into option contracts including the risk
that an illiquid secondary market will limit the Fund's ability to close out an
option contract prior to the expiration date and, that a change in the value of
the option contract may not correlate exactly with changes in the value of the
securities or currencies hedged.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement, is equal to at least 100.5% of the repurchase 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 rates of exchange prevailing on the
respective dates of such transactions.
The Fund does not isolate that portion of gains and losses on investments which
is due to changes in foreign exchange rates from that which is due to changes in
market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments.
Net realized and unrealized gain (loss) from foreign currency related
transactions includes gains and losses between trade and settlement dates on
securities transactions, gains and losses arising from the sales of foreign
currency, and gains and losses between the ex and payment dates on dividends,
interest, and foreign withholding taxes.
Forward Foreign Currency Exchange Contracts. A forward foreign currency exchange
contract (forward contract) is a commitment to purchase or sell a foreign
currency at the settlement date at a negotiated rate. During the period, the
Fund utilized forward contracts as a hedge in connection with portfolio
purchases and sales of securities denominated in foreign currencies.
Forward contracts are valued at the prevailing forward exchange rate of the
underlying currencies and unrealized gain/loss is recorded daily. Forward
contracts having the same settlement date and broker are offset and any gain
(loss) is realized on the date of offset; otherwise, gain (loss) is realized on
settlement date. Realized and unrealized gains and losses which represent the
difference between the value of the forward contract to buy and the forward
contract to sell are included in net realized and unrealized gain (loss) from
foreign currency related transactions.
Certain risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contracts. Additionally,
when utilizing forward contracts to hedge, the Fund gives up the opportunity to
profit from favorable exchange rate movements during the term of the contract.
19-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. Accordingly,
the Fund paid no federal income taxes and no federal income tax provision was
required.
Distribution of Income and Gains. Distributions of net investment income are
made annually. During any particular year net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed and, therefore, will be distributed to
shareholders annually. An additional distribution may be made to the extent
necessary to avoid the payment of a four percent federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. The difference
primarily relates to investments in foreign denominated investments, 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
For the six months ended April 30, 1997, purchases and sales of investment
securities (excluding short-term investments) aggregated $95,464,370 and
$70,711,298, respectively.
C. Related Parties
Under the Fund's Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund has agreed to pay to the Adviser
a fee equal to an annualized rate of 1.00% of the Fund's average daily net
assets, computed and accrued daily and payable monthly. As manager of the assets
of the Fund, the Adviser directs the investments of the Fund in accordance with
its investment objectives, policies, and restrictions. The Adviser determines
the securities, instruments, and other contracts relating to investments to be
purchased, sold or entered into by the Fund. In addition to portfolio management
services, the Adviser provides certain administrative services in accordance
with the Agreement. The Agreement provides that if the Fund's expenses,
exclusive of taxes, interest, and extraordinary expenses, exceed specified
limits, such excess, up to the amount of the management fee, will be paid by the
Adviser. In addition, the Adviser agreed not to impose all or a portion of its
management fee until February 28, 1997, and during such period to maintain the
annualized expenses of the Fund at not more than 1.50% of average daily net
assets. For the six months ended April 30, 1997, the Adviser did not impose a
portion of its management fee amounting to $100,865, and the amount imposed
amounted to $701,146.
20-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
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, 1997, the amount charged by SSC aggregated $243,264,
of which $41,076 was unpaid at April 30, 1997.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
record keeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six months ended April 30,
1997, the amount charged by STC aggregated $12,517, of which $2,134 was unpaid
at April 30, 1997.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records for the Fund. For the six months
ended April 30, 1997, the amount charged by SFAC aggregated $67,328, of which
$10,936 was unpaid at April 30, 1997.
The Fund pays each Director not affiliated with the Adviser $4,000 annually,
plus specified amounts for attended board and committee meetings. For the six
months ended April 30, 1997, Directors' fees and expenses aggregated $26,050.
D. Lines of Credit
The Fund and several affiliated Funds (the "Participants") share in a $500
million revolving credit facility for temporary or emergency purposes, including
the meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 33 percent of its net assets under the agreement. In addition, the
Fund also maintains an uncommitted line of credit.
21-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
Report of Independent Accountants
To the Board of Directors of Scudder International Fund, Inc. and to the
Shareholders of Scudder Greater Europe Growth Fund:
We have audited the accompanying statement of assets and liabilities of Scudder
Greater Europe Growth Fund, including the investment portfolio, as of April 30,
1997, and the related statements of operations for the six months then ended,
the statements of changes in net assets for the six months then ended and for
the year ended October 31, 1996, and the financial highlights for the six months
ended April 30, 1997, for each of the two years in the period ended October 31,
1996 and for the period October 10, 1994 (commencement of operations) to October
31, 1994. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1997, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Greater Europe Growth Fund as of April 30, 1997, the results of its
operations for the six months then ended, the changes in its net assets for the
six months then ended, and for the year ended October 31, 1996, and the
financial highlights for the six months ended April 30, 1997, for each of the
two years in the period ended October 31, 1996 and for the period October 10,
1994 (commencement of operations) to October 31, 1994, in conformity with
generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 5, 1997
22-SCUDDER GREATER EUROPE GROWTH FUND
<PAGE>
This Page
intentionally
left blank.
23-Scudder Greater Europe Growth Fund
<PAGE>
Officers and Directors
Daniel Pierce*
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.
Dudley H. Ladd*
Director
William H. Luers
Director; President, The Metropolitan Museum of Art
Wilson Nolen
Director; Consultant
Kathryn L. Quirk*
Director, Vice President and Assistant Secretary
Dr. Gordon Shillinglaw
Director; Professor Emeritus of Accounting, Columbia
University Graduate School of Business
Robert W. Lear
Honorary Director; Executive-in-Residence, Visiting Professor,
Columbia University Graduate School of Business
Robert G. Stone, Jr.
Honorary Director; Chairman of the Board and Director, Kirby Corporation
Elizabeth J. Allan*
Vice President
Joyce E. Cornell*
Vice President
Carol L. Franklin*
Vice President
Edmund B. Games, Jr.*
Vice President
Jerard K. Hartman*
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
Richard W. Desmond*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
24-Scudder Greater Europe Growth Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund*
Scudder Massachusetts Limited Term Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund
Retirement Programs
- -------------------
IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan*+++ +++
(a variable annuity)
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities 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. +++Funds within categories are listed in order from
expected least risk to most risk. +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.
25-Scudder Greater Europe Growth Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan AutoBuy
A convenient investment program in which you designate Lets you purchase Scudder fund shares
the purchase details and the bank account, and money is electronically, avoiding potential mailing delays;
electronically debited from that account monthly to designate a bank account and the transaction
regularly purchase fund shares and "dollar cost average" details, and money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from that account.
fewer when it's higher, which can reduce your average
purchase price over time.
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- http://funds.scudder.com
1-800-343-2890
Scudder Electronic Account Services: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
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Automatic Withdrawal Plan AutoSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you designate.
DistributionsDirect
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
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26-Scudder Greater Europe Growth Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
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Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 6,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
500 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM)
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load
Brokerage account already reserved for them, with Scudder funds but want ongoing professional assistance in
no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly
Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for
individuals investing $100,000 or more.
Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a
program offered by Scudder Investor Services, Inc., Adviser.
For more information about these services, call a Scudder representative at 1-800-225-5163
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Additional Information on How to Contact Scudder:
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For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Funds Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Funds Centers. Check for a Funds Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
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New From Scudder: Pathway Series
In a complex financial world, Scudder Pathway Series is a refreshingly simple concept. With one
investment, Pathway gives you instant access to broad diversification in U.S. markets and
across the globe. Select from four Portfolios -- Conservative, Balanced, Growth, or
International -- each with a distinct investment objective that can match your goals. Each
Portfolio, rather than investing in individual securities, invests in carefully selected
Scudder mutual funds.
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The share price of each Pathway Series portfolio will fluctuate and the risk associated with
each portfolio is determined by the securities held in each underlying Scudder fund. Contact
Scudder Investor Services, Inc., Distributor, for a prospectus which contains more complete
information, including management fees and other expenses. Please read it carefully before you
invest or send money.
</TABLE>
27-Scudder Greater Europe Growth Fund
<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 over 40 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.
This information must be preceded or accompanied by a
current prospectus.
Portfolio changes should not be considered recommendations
for action by individual investors
SCUDDER
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