Scudder
International
Growth and
Income Fund
Semiannual Report
August 31, 1997
Pure No-Load(TM) Funds
A fund seeking long-term growth of capital and current income primarily from
foreign equity securities.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER (logo)
<PAGE>
In Brief
o From the Fund's start of operations on June 30, 1997, and ending August 31,
1997, Scudder International Growth and Income Fund provided a total return of
- -3.00%, versus -5.67% for the unmanaged MSCI EAFE plus Canada Index.
o The Fund's geographic and industry allocations contributed to its strong
performance to date relative to the benchmark MSCI Index. The Fund is heavily
weighted in Europe, at roughly 70% of the portfolio.
o In an environment of increased volatility for overseas equities, we will
adhere to our relative yield-based discipline, including the important element
of strong fundamental analysis.
Table of Contents
3 Letter from the Fund's Chairman 17 Financial Highlights
4 Portfolio Summary 18 Notes to Financial Statements
5 Portfolio Management Discussion 24 Officers and Directors
8 Glossary of Investment Terms 25 Investment Products and Services
10 Investment Portfolio 26 Scudder Solutions
14 Financial Statements
2 - Scudder International Growth and Income Fund
<PAGE>
Letter From the Fund's Chairman
Dear Shareholders,
We are pleased to present the first semiannual report for Scudder
International Growth and Income Fund, encompassing the abbreviated period
beginning with the Fund's start of operations on June 30, 1997, and ending
August 31, 1997. We would also like to take this opportunity to welcome the more
than 5000 shareholders who have invested in the Fund over the brief period since
its inception. At the end of August, Fund assets totaled in excess of $40
million.
As outlined in the portfolio management discussion that follows, the
two-month period covered by this report witnessed an abrupt shift in overseas
market conditions, as July's favorable returns were in many cases more than
erased over the course of August. The Fund provided a total return of -3.00% for
the period, outperforming its benchmark, the MSCI EAFE plus Canada Index, which
returned -5.67%.
Scudder International Growth and Income Fund employs a yield-oriented
approach to international investing, seeking to provide long-term growth of
capital plus current income. The Fund is well-suited for investors who desire
international exposure but who wish to take a more conservative approach, given
its emphasis on the dividend paying stocks of established companies listed on
foreign exchanges. The Fund is also designed for investors seeking to balance
more aggressive international investments. The value of the Fund's relatively
conservative approach was demonstrated in August, when the Fund declined
significantly less than the overall international stock market, returning -4.43%
versus -7.37% for the MSCI Index. We believe the Fund is well-positioned to
negotiate the current environment for overseas equities, which has featured
increased volatility.
Thank you for your interest in Scudder International Growth and Income
Fund. Please do not hesitate to contact Scudder Investor Information at
1-800-225-2470 with any questions concerning your investment.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
Chairman,
Scudder International Growth and Income Fund
2 - Scudder International Growth and Income Fund
<PAGE>
PORTFOLIO SUMMARY as of August 31, 1997
- ---------------------------------------------------------------------------
GEOGRAPHICAL
(Excludes 9% Cash Equivalents)
- ---------------------------------------------------------------------------
Europe 75%
Japan 12%
Pacific Basin 8%
Canada 3%
Latin America 2%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund is overweighted in
Europe and has modest
exposure in Japan.
- --------------------------------------------------------------------------
SECTORS
(Excludes 9% Cash Equivalents)
- --------------------------------------------------------------------------
Manufacturing 24%
Financial 22%
Consumer Staples 10%
Transportation 8%
Consumer Discretionary 8%
Durables 5%
Construction 5%
Communications 5%
Media 4%
Other 9%
- ---------------------------------------------
100%
- ---------------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Manufacturing and Financial
sectors are attractively valued
relative to the overall market.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
(21% OF PORTFOLIO)
- --------------------------------------------------------------------------
1. RWE AG
Producer and marketer of petroleum and chemical
products in Germany
2. ALLIED IRISH BANK PLC
Bank
3. Moore Corp. Ltd.
Manufacturer of business communication
products in Canada
4. MOEBEL WALTHER AG
Furniture retailer in Germany
5. METSA-SERLA OY
Manufacturer of papers, corrugated and paper
board, soft and hardwood pulp in Finland.
6. SCOR SA
Property, casualty and life reinsurance
company in France
7. BHF-BANK AG
Universal banking services in Germany
8. GEORG FISCHER AG
Manufacturer of automotive products and
piping systems in Switzerland
9. SIKA FINANZ AG
Manufacturer of water management products
and systems in Switzerland
10.DYCKERHOFF AG
Producer of cement, ready-mixed concrete
and finishing products in Germany
Top holdings include European manufacturers
and financial companies
- -----------------------------------------------------------------------------
TICKER SYMBOL: SIGIX
For more complete details about the Fund's investment portfolio,
see page 10. A monthly Investment Portfolio Summary and quarterly Portfolio
Holdings are available upon request.
4 - Scudder International Growth and Income Fund
<PAGE>
Portfolio Management Discussion
In the following interview, Lead Portfolio Manager Sheridan Reilly discusses
Scudder International Growth and Income Fund's strategy and the market
environment over the period since the Fund began operations on June 30, 1997.
Q: Could you discuss the Fund's performance over the brief period since its
inception?
A: Scudder International Growth and Income Fund's initial two months of
operations witnessed a shifting environment, as July's generally benign
conditions yielded to downdrafts in a number of overseas markets in August. For
the abbreviated semiannual period covered by this report, beginning with the
Fund's start of operations on June 30, 1997, and ending August 31, 1997, Scudder
International Growth and Income Fund provided a total return of -3.00%, versus a
decline of 5.67% for the unmanaged MSCI EAFE plus Canada Index.
I am pleased to note that our relatively conservative approach to investing in
international equities worked as designed in August, when the market as gauged
by the Index fell 7.37% as against a decline of 4.43% for the Fund. The Fund's
"relative yield" discipline, which emphasizes stocks with higher dividends and
lower valuations, is designed to reduce average price volatility compared to
other international investments.
Q: Could you briefly review the Fund's investment approach?
A: Certainly. The Fund seeks long-term growth of capital and current income
through investment in dividend-paying common stocks listed on foreign stock
exchanges. The greater part of our holdings will typically be well-established
companies in mature overseas markets.
Importantly, the Fund utilizes a "relative yield" investment approach that has
previously been applied by Scudder's domestic Growth and Income team. This means
that we target for purchase stocks that have high dividend yields relative to
the median for their market -- typically 25% higher. When a stock's dividend
yield falls 25% below the median for its market, it becomes a candidate for
sale. We also look for attractive relative yield as indicated by a dividend
yield that is high in relation to the historical level for a particular stock.
Q: In addition to attractive relative yield, what other factors go into the
investment process?
A: We seek to add value in at least three other ways. Fundamental analysis is a
key component. Each individual company's financial strength, profitability,
projected earnings, competitive positioning, and management ability are
intensively reviewed.
We also pay close attention to the portfolio's sector and country
diversification. Assets are allocated among sectors based on our evaluation of
how different industries react to changes in economic factors such as interest
rates, inflation, GDP growth, and consumer spending. Finally, country and
currency allocation are critical. The Fund will seek to have broad country
representation, but weightings will naturally reflect our outlook for each
country's economy and currency.
5 - Scudder International Growth and Income Fund
<PAGE>
Q: What factors contributed most significantly to Fund performance over the
period under review?
A: The Fund's geographic distribution has played a positive role in performance
to date. We are heavily weighted in Europe, at roughly 70% of the portfolio.
Europe not only displayed strong performance in July but on the whole weathered
August fairly well. The Pacific Rim was hit hard in August, as Thailand's
devaluation of its currency precipitated a crisis of investor confidence. Our
exposure to the region, including Japan, has been underweight, in the range of
20% of portfolio assets.
Our management of currency risk was a plus during the period. First, we avoided
those currencies we felt were the most vulnerable, and our exposure to the
weakest currencies -- those in the Pacific Rim -- was modest. We also made a
point of including companies in the portfolio that generally benefit from a
decline in the local currency, for example, Japanese exporters. In Europe, our
dividend yield discipline is leading us to purchase non-exporters, and we
therefore purchased hedges against declines in key European currencies.
On an industry and sector level, the Fund has significant weightings in banks
and insurers, manufacturers, and consumer staples companies, all of which held
up better than the overall market in August. Our focus on attractive relative
yield will give the portfolio a bias towards areas of the market that are
undervalued and tend to be less volatile.
On the downside, as a new, smaller fund, we experienced heavy inflows as a
proportion of fund assets during July. This meant that we were investing funds
into a rising market, rather than being fully positioned as the market began its
rise, somewhat muting the positive impact of many of our selections. At the end
of August, the Fund had $40.8 million in assets, of which 9% was in liquid
short-term investments. The remainder was invested across more than 60 companies
in a broad range of countries and industries.
Q: Could you tell us about any specific companies in the portfolio that
demonstrate the Fund's approach?
A: Bank of Austria represents both the European and financial industry themes in
the portfolio. The stock's dividend yield is about 50% higher than the local
market -- approximately 2.5% versus 1.6% -- and it is priced well below the book
value of the company. The stock has been out of favor with investors due to
political infighting among bank insiders, but stands to benefit longer-term from
the trends of consolidation, restructuring, and rationalization sweeping the
larger European banks.
Dorling Kindersley is a U.K. publisher that represents another leg of the
relative yield strategy, so-called "fallen angels." At the time we purchased the
stock, the company's dividend yield was double its historical level. This
resulted from a price decline following disappointing results from a much
anticipated product introduction. For us, the stock's yield was a "buy" sign,
given the company's excellent growth prospects and sound financial condition.
6 - Scudder International Growth and Income Fund
<PAGE>
Q: What is your outlook for international equities?
A: The market seems to have entered a stage of increased volatility. In this
environment, we will adhere to our relative yield-based discipline, including
the important elements of strong fundamental analysis and close attention to
country and sector allocation. We intend to remain fully invested, and take
advantage of both the market highs and lows -- to take profits as stocks reach
their target prices and yields, and make opportunistic purchases where value is
reflected in lower prices and attractive relative yields.
We are confident in the long-term value of our approach, and believe Scudder
International Growth and Income Fund will continue to be appropriate for
investors who wish to allocate assets overseas in a relatively conservative
fashion, or investors seeking to add balance to other more aggressive
international investments.
7 - Scudder International Growth and Income Fund
<PAGE>
Glossary of Investment Terms
CURRENCY EXCHANGE RATE The price at which one country's currency can be
exchanged into another currency. When a country's
currency rises relative to other currencies, this
decreases the buying power of foreign purchasers of
that country's goods and services and tends to hurt
the earnings of companies that export; by contrast,
a weak currency promotes exports. From the
perspective of a U.S. investor in overseas
securities, a weakening U.S. dollar adds to total
returns, as assets denominated in foreign currencies
then translate into more in dollar terms; a
strengthening dollar relative to foreign currencies
reduces returns to U.S. investors.
DIVIDEND YIELD With stocks, a company's payment out of earnings to
shareholders divided by its share price. For example,
a stock that sells for $10 and pays annual
dividends totaling $1 has a yield of 10%; if the
stock price goes up to $20, the yield would fall
to 5%.
FUNDAMENTAL RESEARCH Analysis of companies based on the projected impact
of management, products, sales, and earnings on
their balance sheets and income statements. Distinct
from technical analysis, which evaluates the
attractiveness of a stock based on historical price
and trading volume movements, rather than the
financial results of the underlying company.
GROWTH STOCK Stock of a company that has displayed above average
earnings growth and is expected to continue to
increase profits rapidly going forward. Stocks of
such companies usually trade at higher multiples to
earnings (see price/earnings ratio) and experience
more price volatility than the market as a whole.
Distinct from value stock.
LIQUIDITY A stock that is liquid has enough shares outstanding
and a substantial enough market capitalization to
allow large purchases and sales to occur without
causing a significant move in its market price as a
result.
MARKET CAPITALIZATION The value of a company's outstanding shares of
common stock, determined by the number of shares
outstanding multiplied by the share price (shares x
price = market capitalization). The universe of
publicly traded companies is frequently divided into
large-, mid-, and small-capitalization. "Large-cap"
stocks tend to be more liquid.
8 - Scudder International Growth and Income Fund
<PAGE>
OVER/UNDER WEIGHTING Refers to the allocation of assets -- usually by
sector, industry, or country -- within a portfolio
relative to the portfolio's benchmark index or
investment universe.
PRICE/EARNINGS RATIO A widely used gauge of a stock's valuation, that
indicates what investors are paying for a company's
earning power at the current stock price. May be
based on a company's projected earnings for the
coming 12 months. A higher "earnings multiple"
indicates higher expected earnings growth, along
with greater risk of earnings disappointments.
VALUE STOCK A company whose stock price does not fully reflect
its intrinsic value, as indicated by price/earnings
ratio, price/book value ratio, dividend yield, or
some other valuation measure, relative to its
industry or the market overall. Value stocks tend to
display less price volatility and may carry higher
dividend yields. Distinct from growth stock.
(Sources: Scudder; Barron's Dictionary of Finance and Investment Terms)
9 - Scudder International Growth and Income Fund
<PAGE>
Investment Portfolio as of August 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal Market
Amount ($)* Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements 2.7%
- ------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 8/29/97 at 5.53%,
to be repurchased at $1,056,649 on 9/2/97, collateralized by a $1,011,000 U.S. ------------
Treasury Note, 7.5%, 10/31/99 (Cost $1,056,000) ....................................... 1,056,000 1,056,000
------------
Short Term Notes 6.3%
- ------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Discount Note, 9/2/97 (Cost $2,499,618) ................ 2,500,000 2,499,618
------------
Convertible Bonds 4.8%
- ------------------------------------------------------------------------------------------------------------------------------
Hong Kong 1.3%
Hysan Development Finance Co., Ltd., 6.750%, 6/1/00 (Investment holding company) ........ 470,000 526,400
-----------
United Kingdom 1.6%
Royal & Sun Alliance Insurance Group PLC, 7.250%, 11/30/08 (Multi-national
insurance company) ..................................................................... GBP 291,000 617,827
-----------
Netherlands 1.9%
BPH Finance Co., 3%, 5/22/02 (Finance company) .......................................... 700,000 742,000
- ------------------------------------------------------------------------------------------------------------------------------
Total Convertible Bonds (Cost $1,853,598) 1,886,227
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Shares
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Preferred Stocks 1.7%
- ------------------------------------------------------------------------------------------------------------------------------
Austria
Bank Austria AG (Commercial and corporate banking and financial services) ------------
(Cost $549,510) ....................................................................... 17,370 655,678
------------
Common Stocks 84.4%
- ------------------------------------------------------------------------------------------------------------------------------
Australia 2.6%
Commonwealth Bank of Australia (Bank) ................................................... 43,850 484,406
Foster's Brewing Group, Ltd. (Leading brewery) .......................................... 283,010 534,228
-----------
1,018,634
-----------
Brazil 2.1%
Aracruz Celulose SA (ADR) (Producer of eucalyptus kraft pulp) ........................... 18,400 374,900
Usinas Siderurgicas de Minas Gerais SA (pfd.) (Steel manufacturer) ...................... 44,500 452,625
-----------
827,525
-----------
Canada 2.2%
Moore Corp. Ltd. (Manufacturer of business communication products) ...................... 42,600 856,204
-----------
Finland 3.8%
Merita Ltd. "B" (Financial services group) .............................................. 179,210 705,136
Metsa-Serla Oy "B" (Manufacturer of papers, corrugated and paper board, soft and
hardwood pulp) ........................................................................ 96,700 800,085
-----------
1,505,221
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder International Growth and Income Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
France 9.9%
Bongrain SA (Manufacturer of cheese and other dairy products) ........................... 1,580 559,287
Credit Local de France (Bank) ........................................................... 7,820 674,648
Havas SA (Advertising, publishing and broadcasting conglomerate) ........................ 10,000 610,656
Scor SA (Property, casualty and life reinsurance company) ............................... 19,470 799,790
Societe Nationale Elf Aquitaine (Petroleum company) ..................................... 5,550 616,789
Sommer-Allibert (Manufacturer of plastic products for automotive industry) .............. 18,660 662,062
-----------
3,923,232
-----------
Germany 10.1%
BHF-Bank AG (Universal banking services) ................................................ 28,345 789,325
Bayer AG (Leading chemical producer) .................................................... 19,045 700,902
Dyckerhoff AG (Producer of cement, ready-mixed concrete and finishing products) ......... 2,205 757,606
Moebel Walther AG (Furniture retailer) .................................................. 16,420 809,853
RWE AG (Producer and marketer of petroleum and chemical products) ....................... 20,990 948,011
-----------
4,005,697
-----------
India 1.0%
Indorama Synthetics (Foreign registered) (Producer of polyester fiber,
yarn and fabric) ...................................................................... 756,000 410,034
-----------
Ireland 2.3%
Allied Irish Bank PLC (Bank) ............................................................ 108,080 911,115
-----------
Italy 2.9%
La Rinascente SpA di Risparmio (Department store chain) ................................. 237,000 671,217
Telecom Italia SpA (Telecommunications, electronics, network construction) .............. 138,000 486,981
-----------
1,158,198
-----------
Japan 10.5%
East Japan Railway Co. (Railroad operator) .............................................. 160 728,597
Matsushita Electric Works, Inc. (Leading maker of building materials and lighting
equipment) ............................................................................ 65,000 699,619
Mitsubishi Heavy Industries, Ltd. (Diversified heavy machinery manufacturer and
leading shipbuilder) .................................................................. 68,000 449,843
Mitsubishi Rayon Co., Ltd. (Producer of acrylic and polyester fibers) ................... 127,000 481,586
Nintendo Co., Ltd. (Game equipment manufacturer) ........................................ 9,200 757,145
Nippon Meat Packers, Inc. (Leading meat processor) ...................................... 53,000 636,281
Sumitomo Metal Industries, Ltd. (Leading integrated crude steel producer) ............... 179,000 414,969
-----------
4,168,040
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder International Growth and Income Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Malaysia 0.9%
Guinness Anchor (Brewery) ............................................................... 214,000 365,968
-----------
Netherlands 6.1%
DSM NV (Plastics producer) .............................................................. 5,910 556,834
KLM Royal Dutch Air Lines NV (World-wide full service airline) .......................... 20,620 657,405
Koninklijke Nedlloyd Groep NV (Container shipping and transportation) ................... 20,330 602,148
Royal Dutch Petroleum Co. (Owner of 60% of Royal Dutch/Shell Group) ..................... 12,130 615,900
-----------
2,432,287
-----------
New Zealand 1.8%
Telecom Corp. of New Zealand (Telecommunication services) ............................... 140,800 694,416
-----------
Spain 4.2%
Autopistas del Mare Nostrum SA (Builder and operator of toll motorways) ................. 27,000 389,828
Banco Bilbao Vizcaya SA (Commercial bank) ............................................... 15,150 398,200
Compania Telefonica Nacional de Espana SA (Telecommunication services) .................. 19,100 495,127
Iberdrola SA (Electric utility) ......................................................... 33,100 371,459
-----------
1,654,614
-----------
Sweden 5.4%
AssiDoman AB (Forestry group) ........................................................... 20,540 623,389
OM Gruppen AB (Free) (Operator of financial exchanges and clearing organizations) ....... 17,390 485,828
S.K.F. AB "B" (Free) (Manufacturer of roller bearings) .................................. 20,770 561,793
Svedala Industri AB (Manufacturer of machinery for construction, mineral processing and
materials handling) ................................................................... 21,130 456,151
-----------
2,127,161
-----------
Switzerland 7.3%
ABB AG (Registered) (Manufacturer of electrical equipment and rail transit systems) ..... 2,365 698,999
Georg Fischer AG (Bearer) (Manufacturer of automotive products and piping systems) ...... 557 770,005
Sika Finanz AG (Registered) (Manufacturer of water management products and systems) ..... 14,760 763,431
Winterthur Schweizerische Versicherungs-Gesellschaft "B" (Registered)
(Multi-line insurance company) ........................................................ 762 660,294
-----------
2,892,729
-----------
United Kingdom 11.3%
Courtaulds Textiles PLC (Producer of clothing, fabrics and home furnishings) ............ 105,370 560,990
Dorling Kindersley Holdings PLC (Book publisher) ........................................ 165,700 717,029
Energy Group PLC (Electricity generation and distribution) .............................. 58,880 595,464
General Electric Co., PLC (Manufacturer of power, communications and defense equipment
and other various electrical components) .............................................. 92,450 572,365
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 - Scudder International Growth and Income Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Harrisons & Crosfield PLC (Manufacturer of chemicals, timber products, pet food, flour,
breakfast cereals and other consumer products) ........................................ 291,270 521,628
Railtrack Group PLC (Operator of most of British railway infrastructure) ................ 41,620 521,079
Rank Group PLC (Diversified leisure services: hotels, amusement machines, restaurants,
film and television) .................................................................. 92,950 533,280
Tomkins PLC (Manufacturer of fluid controls, industrial products, garden and
leisure products) ..................................................................... 95,320 461,911
-----------
4,483,746
- ------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $34,812,525) 33,434,821
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Principal
Amount*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Purchased Options 0.1%
2 - Scudder International Growth and Income Fund---------------------------------------------------------------
Put on French Francs, strike price 6.515 FRF, expire 2/10/98 ........................... FRF 19,545,000 18,372
Put on British Pounds, strike price 0.6514 GBP, expire 2/10/98 ......................... GBP 1,954,397 29,121
Put on Deutsche Marks, strike price 1.93 DEM, expire 2/10/98 ........................... DEM 5,790,000 20,265
- ------------------------------------------------------------------------------------------------------------------------------
Total Purchased Options (Cost $134,850) 67,758
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $40,906,101) (a) 39,600,102
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $40,906,101. At August 31,
1997, net unrealized depreciation for all securities based on tax cost was
$1,305,999. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $639,107 and aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over market value of $1,945,106.
* Principal amount is stated in U.S. dollars unless otherwise specified.
Currency abbreviations:
FRF French Franc
GBP British Pound
DEM German Deutschemark
The accompanying notes are an integral part of the financial statements.
13 - Scudder International Growth and Income Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of August 31, 1997 (Unaudited)
<TABLE>
<S> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at market (identified cost $40,906,101) ................... $ 39,600,102
Foreign currency, at value (identified cost $427,523) .................. 428,537
Receivable for investments sold ........................................ 1,757,511
Dividends and interest receivable ...................................... 86,224
Receivable for Fund shares sold ........................................ 296,336
Foreign taxes recoverable .............................................. 7,208
Reimbursement from Adviser ............................................. 11,705
Deferred organization expenses ......................................... 38,456
----------------
Total assets ........................................................... 42,226,079
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased ...................................... 1,173,392
Due to custodian bank .................................................. 97,715
Payable for Fund shares redeemed ....................................... 59,322
Other payables and accrued expenses .................................... 93,443
----------------
Total liabilities ...................................................... 1,423,872
--------------------------------------------------------------------------------------------
Net assets, at market value $ 40,802,207
--------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income .................................... 80,531
Unrealized appreciation (depreciation) on:
Investments ......................................................... (1,305,999)
Foreign currency related transactions ............................... 7,918
Accumulated net realized loss .......................................... (120,176)
Paid-in capital ........................................................ 42,139,933
--------------------------------------------------------------------------------------------
Net assets, at market value $ 40,802,207
--------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($40,802,207 / 3,504,165 shares of capital stock ----------------
outstanding, $.01 par value, 100,000,000 shares authorized) ......... $11.64
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - Scudder International Growth and Income Fund
<PAGE>
Statement of Operations
For the period June 30, 1997 (commencement of operations)
to August 31, 1997 (Unaudited)
<TABLE>
<S> <C>
Investment Income
- ------------------------------------------------------------------------------------------------------------------------------
Income:
Dividends (net of foreign taxes withheld of $12,114) ................... $ 103,753
Interest ............................................................... 82,671
-----------------
186,424
-----------------
Expenses:
Management fee ......................................................... 60,511
Custodian and accounting fees .......................................... 51,704
Services to shareholders ............................................... 60,676
Directors' fees and expenses ........................................... 4,667
Registration fees ...................................................... 33,496
Auditing ............................................................... 13,140
Reports to shareholders ................................................ 11,789
Legal .................................................................. 2,719
Amortization of organization expense ................................... 988
Other .................................................................. 3,766
-----------------
Total expenses before reductions ....................................... 243,456
Expense reductions ..................................................... (137,563)
-----------------
Expenses, net .......................................................... 105,893
---------------------------------------------------------------------------------------------
Net investment income 80,531
---------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ............................................................ (105,843)
Foreign currency related transactions .................................. (14,333)
-----------------
(120,176)
-----------------
Net unrealized appreciation (depreciation) during the period on:
Investments ............................................................ (1,305,999)
Foreign currency related transactions .................................. 7,918
-----------------
(1,298,081)
---------------------------------------------------------------------------------------------
Net gain (loss) on investment transactions (1,418,257)
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ (1,337,726)
---------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - Scudder International Growth and Income Fund
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the Period
June 30, 1997
(commencement
of operations) to
August 31, 1997
Increase (Decrease) in Net Assets (Unaudited)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Operations:
Net investment income .............................................. $ 80,531
Net realized loss .................................................. (120,176)
Net unrealized depreciation on investment transactions during
the period ......................................................... (1,298,081)
--------------------
Net decrease in net assets resulting from operations ............... (1,337,726)
--------------------
Fund share transactions:
Proceeds from shares sold .......................................... 45,946,104
Cost of shares redeemed ............................................ (3,807,371)
--------------------
Net increase in net assets from Fund share transactions ............ 42,138,733
--------------------
Increase in net assets ............................................. 40,801,007
Net assets at beginning of period .................................. 1,200
Net assets at end of period (including undistributed net --------------------
investment income of $80,531) ................................... $40,802,207
--------------------
Other Information
- -------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period .......................... 100
--------------------
Shares sold ........................................................ 3,819,244
Shares redeemed .................................................... (315,179)
--------------------
Net increase in Fund shares ........................................ 3,504,065
--------------------
Shares outstanding at end of period ................................ 3,504,165
--------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - Scudder International Growth and Income Fund
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
the period (a) and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
For the Period
June 30, 1997
(commencement
of operations) to
August 31, 1997
(Unaudited)
------------------------------------------------------------------------------------------------------------
<S> <C>
-------------
Net asset value, beginning of period ............................................... $12.00
-------------
Income from investment operations:
Net investment income .............................................................. .02
Net realized and unrealized gain (loss) on investments ............................. (.38)
-------------
Total from investment operations ................................................... (.36)
-------------
-------------
Net asset value, end of period ..................................................... $11.64
-------------
------------------------------------------------------------------------------------------------------------
Total Return (%) (c) ............................................................... (3.00)**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ............................................. 41
Ratio of operating expenses, net to average daily net assets (%) ................... 1.75*
Ratio of operating expenses before expense reductions, to average daily net
assets (%) ...................................................................... 4.02*
Ratio of net investment income to average daily net assets (%) ..................... 1.33*
Portfolio turnover rate (%) ........................................................ 42.4*
Average commission rate paid (b) ................................................... $0.0256
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) Average commission rate paid per share of common and preferred stocks.
(c) Total return would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
17 - Scudder International Growth and Income Fund
<PAGE>
Notes to Financial Statements (Unaudited)
A. Significant Accounting Policies
Scudder International Growth and Income Fund ("the Fund") is a 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 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.
Portfolio debt securities with remaining maturities greater than sixty days are
valued by pricing agents approved by the officers of the Fund, which quotations
reflect broker/dealer-supplied valuations and electronic data processing
techniques. If the pricing agents are unable to provide such quotations, the
most recent bid quotation supplied by a bona fide market maker 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 on currencies 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
18 - Scudder International Growth and Income Fund
<PAGE>
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.
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.
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.
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 other
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.
19 - Scudder International Growth and Income Fund
<PAGE>
Net realized and unrealized gain (loss) from foreign currency related
transactions includes gains and losses between trade and settlement dates on
securities transactions, gains and losses arising from the sales of foreign
currency, and gains and losses between the ex and payment dates on dividends,
interest, and foreign withholding taxes.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. 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 semiannually. 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 differences
primarily relate to investments in forward contracts, passive foreign investment
companies, 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 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 period June 30, 1997 (commencement of operations) to August 31, 1997,
purchases and sales of investment securities (excluding short-term investments)
aggregated $39,811,080 and $2,489,604, respectively.
C. Related Parties
Under the Fund's Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund pays the Adviser a fee equal to
an annual 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
objective, 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 also provides that if the Fund's expenses, exclusive of
taxes, interest, and extraordinary expenses, exceed specified limits, such
excess, up to the amount of the management fee, will be paid by the Adviser. In
addition, the Adviser has agreed not to impose all or a portion of its
20 - Scudder International Growth and Income Fund
<PAGE>
management fee until June 30, 1998 in order to maintain the annualized expenses
of the Fund at not more than 1.75% of average daily net assets. For the period
June 30, 1997 (commencement of operations) to August 31, 1997, the Adviser did
not impose any of its management fee which amounted to $60,511. Further due to
the limitations of such Agreement, the Adviser reimbursement payable to the Fund
for the period amounted to $11,705.
On June 26, 1997, the Adviser entered into an agreement with The Zurich
Insurance Company ("Zurich"), an international insurance and financial services
organization, pursuant to which Zurich will acquire a majority interest in the
Adviser, and the Adviser will form a new global investment organization by
combining with Zurich's subsidiary, Zurich Kemper Investments, Inc. and change
its name to Scudder Kemper Investments, Inc. Subject to the receipt of the
required regulatory and shareholder approvals, the transaction is expected to
close in the fourth quarter of 1997.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
period June 30, 1997 (commencement of operations) to August 31,1997, SSC did not
impose any of its fee amounting to $53,558.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the period June 30, 1997
(commencement of operations) to August 31,1997, STC did not impose any of its
fee amounting to $750.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the period June
30, 1997 (commencement of operations) to August 31,1997, SFAC did not impose any
of its fee amounting to $11,039.
The Fund pays each Director not affiliated with the Adviser $4,000 annually plus
specified amounts for attended board and committee meetings. For the period June
30, 1997 (commencement of operations) to August 31, 1997, Directors' fees and
expenses aggregated $4,667.
21 - Scudder International Growth and Income Fund
<PAGE>
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intentionally
left blank.
22 - Scudder International Growth and Income Fund
<PAGE>
This Page
intentionally
left blank.
23 - Scudder International Growth and Income 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; Private Equity
Investor, Exeter Capital
Management Corporation
William H. Gleysteen, Jr.
Director; Consultant
William H. Luers
Director; President, The
Metropolitan Museum of Art
Dr. 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
Emeritus 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*
Director, Vice President and A
ssistant 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 International Growth and Income Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series --
Premium Shares*
Managed Shares*
Scudder Government Money Market Series --
Managed Shares*
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--
Managed Shares*
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
Scudder S&P 500 Index 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, Inc.
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 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 Spain and Portugal 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. Certain Scudder funds may not be
available for purchase or exchange. +A portion of the income from the tax-free
funds may be subject to federal, state, and local taxes. *A class of shares of
the Fund. **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 International Growth and Income Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
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:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
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
- ------------------------------------------------------------------------------------------------------------------------------
26 - Scudder International Growth and Income Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
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 Investor 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 Investor Centers. Check for an Investor 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
</TABLE>
27 - Scudder International Growth and Income 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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