Scudder
Pacific
Opportunities
Fund
Semiannual Report
April 30, 1997
Pure No-Load(TM) Funds
Seeks long-term capital appreciation through investment primarily in the equity
securities of Pacific Basin companies, excluding Japan. 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
13 Financial Statements
16 Financial Highlights
17 Notes to Financial Statements
21 Report of Independent Accountants
24 Officers and Directors
25 Investment Products and Services
26 Scudder Solutions
In Brief
o The malaise overhanging Pacific Basin markets persisted over the six-months
ended April 30, 1997. Yet, there are several positive forces at work that we
expect to lead to an upturn in selected markets.
o Scudder Pacific Opportunities Fund provided a 2.26% total return for the six
months, resulting in a ranking among the top one-third of 86 Pacific funds
(excluding Japan) according to Lipper.
o Stock selection continues to be driven by uncovering the most promising
companies in the region, rather than allocating assets by country
attractiveness.
2 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
Letter From the Fund's Chairman
Dear Shareholders,
We are pleased to present the semiannual report for Scudder Pacific
Opportunities Fund for the six-month period ended April 30, 1997.
Your Fund provided a positive return despite volatility in stock markets
across the Pacific Basin during the period. The Fund avoided many of the
pitfalls of this environment by staying with its individual stock selection
approach. Although the last 18 months have been challenging for investors, we
remain committed to this approach and our belief in the superior long-term
investment opportunities of the Pacific Basin. Your portfolio management team
discusses the Fund's activities in more detail beginning on page 6.
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 Pacific Opportunities
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 Pacific Opportunities Fund
3 -- SCUDDER PACIFIC OPPORTUNITIES 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 PACIFIC OPPORTUNITIES FUND
- --------------------------------------------
1 Year $ 9,554 -4.46% -4.46%
Life of Fund* $ 13,809 38.09% 7.62%
- --------------------------------------------
MSCI ALL COUNTRY ASIA FREE INDEX
(EXCLUDING JAPAN)
- --------------------------------------------
1 Year $ 9,260 -7.40% -7.40%
Life of Fund* $ 18,496 84.96% 15.25%
- --------------------------------------------
* The Fund commenced operations on December 8, 1992.
Index comparisons begin December 31, 1992.
- -----------------------------------------------------------------
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 PACIFIC OPPORTUNITIES FUND
Year Amount
- ----------------------
12/92* $10000
4/93 $10992
10/93 $13508
4/94 $13464
10/94 $14720
4/95 $12779
10/95 $13141
4/96 $14454
10/96 $13504
4/97 $13809
MSCI ALL COUNTRY ASIA FREE INDEX
(EXCLUDING JAPAN)
Year Amount
- ----------------------
12/92* $10000
4/93 $11910
10/93 $16472
4/94 $16806
10/94 $19062
4/95 $16185
10/95 $17131
4/96 $19974
10/96 $18525
4/97 $18496
YEARLY PERIODS ENDED APRIL 30
The Morgan Stanley Capital International (MSCI) All Country Asia Free Index
is an unmanaged capitalization-weighted measure of stock markets in the Pacific
Region, excluding Japan. Index returns assume dividends reinvested 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.
YEARLY PERIODS ENDED APRIL 30
1993* 1994 1995 1996 1997
-----------------------------------------------
NET ASSET VALUE... $ 13.19 $ 16.08 $ 15.17 $ 17.05 $ 16.27
INCOME DIVIDENDS.. $ -- $ .08 $ .10 $ .10 $ .01
CAPITAL GAINS
DISTRIBUTIONS..... $ -- $ .01 $ -- $ -- $ --
FUND TOTAL
RETURN (%)........ 9.92 22.49 -5.09 13.11 -4.46
INDEX TOTAL
RETURN (%)........ 19.10 41.11 -3.69 23.42 -7.40
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 life of Fund period would have
been lower.
4 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
PORTFOLIO SUMMARY as of April 30, 1997
- ---------------------------------------------------------------------------
GEOGRAPHICAL
(Excludes 9% Cash Equivalents)
- ---------------------------------------------------------------------------
Hong Kong 20%
Indonesia 16%
Taiwan 14%
Malaysia 14%
Korea 7%
Australia 7%
Singapore 7%
India 6%
China 3%
Other 6%
- --------------------------------------
100%
- --------------------------------------
Your Fund was broadly diversified
across the Pacific Basin region
during the six-month period ended
April 30, 1997.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
SECTORS
(Excludes 9% Cash Equivalents)
- --------------------------------------------------------------------------
Financial 45%
Manufacturing 14%
Transportation 8%
Consumer Staples 5%
Utilities 4%
Energy 4%
Media 4%
Construction 3%
Durables 3%
Other 10%
- --------------------------------------
100%
- --------------------------------------
The financial sector consists of
insurance companies, banks,
conglomerates, and real estate
companies.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
(28% of Portfolio)
- --------------------------------------------------------------------------
1. ASTRA INTERNATIONAL INC.
Distributor of automobiles, motorcycles and
related spare parts in Indonesia
2. HSBC HOLDINGS LTD.
Bank holding company in Hong Kong
3. TELEVISION BROADCASTS, LTD.
Television broadcasting in Hong Kong
4. HUTCHISON WHAMPOA, LTD.
Container terminal and real estate company in
Hong Kong
5. CHINA DEVELOPMENT CORP.
Leading venture capital firm and
investment bank in Taiwan
6. GUANGSHEN RAILWAY CO. LTD.
Operator of only railroad in the Pearl River Delta
7. BAJAJ AUTO
Maker of two and three wheel vehicles in India
8. EVERGREEN MARINE CORP.
Operator of containerized freighters in Taiwan
9. KOREA ELECTRIC POWER CO.
Electric Utility
10. NEW WORLD DEVELOPMENT CO., LTD.
Property investment and development, construction
and engineering, hotels and restaurants,
telecommunications in Hong Kong
We pursue an individual stock
selection strategy which we
believe is the key to
outperformance in the Pacific
Basin over the long term.
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 PACIFIC OPPORTUNITIES FUND
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Scudder Pacific Opportunities Fund provided a 2.26% total return for the
six-month period ended April 30, 1997, exceeding the performance of the Fund's
benchmark, the unmanaged MSCI All Country Asia Free Index (excluding Japan),
which returned -0.16% for the same period.
Market Summary
Navigating Pacific Basin equity markets remained challenging for the six-month
period, as the performance of the individual markets varied greatly. Weakness in
Thailand and South Korea persisted and the March increase in U.S. short-term
interest rates cooled optimism in Hong Kong, New Zealand and Singapore. Declines
toward the end of the period offset earlier gains in Malaysia and the
Philippines. Only Australia, China, India, Indonesia, and Taiwan -- which
comprise less than 45% of your Fund's investment universe -- posted positive
returns during the period.
In our view, volatility could persist in the near term as the Southeast Asian
markets -- in a case of "guilt-by-association" -- react to Thailand's mounting
financial woes. Your Fund has been underweight in Thailand for quite some time,
and held a near-zero percentage weighting in Thailand at the end of the period.
We view recent weakness in Indonesia, Malaysia and the Philippines as an
opportunity to purchase exceptionally high-quality companies at attractive
valuations.
We anticipate continued strength in Australia, China, Indonesia, India and
Taiwan, and we look for an upturn in the Hong Kong, Malaysian, Philippine, and
South Korean equity markets following recent price declines. In general, we
believe that economic growth should accelerate and current account problems will
likely ease as export growth rebounds and monetary policy is loosened following
a prolonged period of restraint. Recent data releases lead us to believe that
the upturn could occur sooner, rather than later.
Accelerating economic growth and improving trade flows, particularly in the face
of decelerating inflation and stable-to-falling interest rates in the Pacific
Basin, suggest that aggregate corporate profit growth in our favored markets
should ramp-up from the 15% compound annual growth rate of the 1993-96 period to
18%-20% in 1997-98. In our opinion, improving profitability, combined with
attractive stock valuations following nearly three years of market stagnation
portend a rebound in selected Pacific Basin equity markets. While investors were
scrambling to buy shares at price-to-earnings ratios of 25-30 at year end 1993,
the markets are now trading at approximately 15 times projected 1997 earnings.
The price-to-earnings ratio is a gauge of a stock's value given the company's
earnings.
6 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE: Market Performance
CHART PERIOD: 10/31/96 to 4/30/97
CHART DATA:
Taiwan 25.04%
India 16.03%
Indonesia 7.55%
Australia 3.53%
Hong Kong -1.75%
Philippines -6.34%
New Zealand -6.47%
Malaysia -6.91%
Singapore -7.26%
Korea -14.23%
Thailand -27.22%
Source: Morgan Stanley Capital International indices in U.S. dollars
Portfolio Strategy
We maintain our view that superior stock selection is the key to outstanding
performance in both the healthy trade and economic environment for the Pacific
Basin that we envision for the balance of 1997 and over the longer term. We look
for companies that are undervalued, fast-growing, and exceptionally
well-managed. Among these, we select companies with dominant positions in
clearly identifiable market niches and distinct competitive advantages. High or
improving returns on equity and operating margins, and strong balance sheets,
are also important characteristics we emphasize in selecting stocks for the
portfolio.
This emphasis on stock selection was a significant contributor to your Fund's
positive performance for the six-month period. Five of the Fund's ten largest
holdings were among the portfolio leaders in U.S. dollar terms. These were Astra
International, Indonesia's dominant supplier of motor vehicles; China
Development Corporation, a Taiwanese holding company with significant exposure
to the technology sector; HSBC, which is among the largest and least expensive
bank holding companies in the world with leadership positions in Hong Kong and
throughout the Asia-Pacific region; Hutchison Whampoa, the world's largest
independent port operator; and TVB, Hong Kong's leading television broadcaster.
Your Fund's automotive-related holdings continued to move higher, and positions
in Taiwan turned in excellent performance. In addition, our bottom-up investment
approach yielded an underweight position in Thailand, the weakest market for the
six month period. However, the Fund's limited holdings in that market
dramatically outperformed the local MSCI index. On the negative side, the Fund's
Hong Kong property exposure hurt Fund performance, with Kerry Properties and New
World Development among the laggards.
Recent portfolio additions and current holdings reflect our views that...
o The electronics cycle has bottomed. The Fund's technology holdings in Taiwan
were among the top performers during the six-month period. We initiated
positions in Acer Peripherals, one of the world's leading producers of computer
peripheral equipment; Delta Electronics, a niche-oriented Taiwanese electronic
components manufacturer; Samsung Electronics, a leading South Korean DRAM
7 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
producer; and UMC, a Taiwanese memory producer.
o The stage has been set for a recovery in selected Pacific Basin economies. We
believe that economic activity should accelerate in 1997 in the face of
improving trade flows, decelerating inflation, and stable-to-lower interest
rates. During the period, we added to our vehicle-related holdings, and we
initiated positions in selected Indonesian banks. We also purchased a few
downtrodden economically sensitive stocks, including Crompton Greaves in India,
and Fletcher Challenge Building in New Zealand.
o Europe and Japan could buoy global economic growth later this year. Based on
this view, we recently initiated positions in two diversified, globally
competitive Australian metals mining companies, and we maintained your Fund's
exposure to the Indonesian pulp and paper sector and Posco, a South Korean steel
producer.
The evidence suggesting long-term capital appreciation in Asian stocks remains
compelling. Economic growth throughout the region is robust by western standards
and is expected to accelerate over 1997-98. While the past few years have shown
that strong economic growth is no guarantee of satisfying stock market
performance, we see many attractive values emerging. Our visits with company
managements and our research suggest that corporate earnings should be strong
for many companies. Near-term market volatility is always a risk when investing
in Asia. However, in our view, superior stock selection will be the key to
outperformance in both the improving trade and economic environment that we
envision over the long term.
Sincerely,
Your Portfolio Management Team
/s/Elizabeth J. Allan /s/Nicholas Bratt
Elizabeth J. Allan Nicholas Bratt
/s/Theresa M. Gusman
Theresa M. Gusman
8 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
Investment Portfolio as of April 30, 1997
<TABLE>
<CAPTION>
Principal Market
Amount ($) (c) Value ($)
- -----------------------------------------------------------------------------------------
Repurchase Agreements 9.0%
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement with Donaldson, Lufkin & Jenrette
dated 4/30/97 at 5.375%, to be repurchased at
$26,060,890 on 5/1/97, collateralized by a $26,445,000 -----------
U.S. Treasury Note, 5.5%, 2/28/99 (Cost $26,057,000) ...... 26,057,000 26,057,000
-----------
Bonds 0.1%
- -----------------------------------------------------------------------------------------
Malaysia
-----------
AMMB Holdings Berhad, 5%, 5/13/02 (Cost $249,060) (b) ...... MYR 616,000 303,031
-----------
Convertible Bonds 2.6%
- -----------------------------------------------------------------------------------------
Malaysia 0.3%
AMMB Holdings Berhad (ICULS), 7.5%, 5/8/02 (b) ............. MYR 616,000 183,752
Arab Malaysian Finance Berhad (ICULS), 7.5%, 5/25/02 (b) ... MYR 540,000 140,837
Multi-Purpose Holdings Berhad (ICULS) 3%, 12/31/02 ......... MYR 829,000 308,749
Renong Berhad (ICULS), 4%, 5/21/01 ......................... MYR 746,000 264,465
----------
897,803
----------
Philippines 1.2%
AYALA International Finance Co., 3%, 6/8/00 ................. 1,087,000 1,206,570
International Container Terminal, Inc., 1.75%, 3/13/04 ...... 2,244,000 2,199,120
----------
3,405,690
----------
Taiwan 1.1%
Acer Peripherals Inc., 1.25%, 11/27/06 ...................... 2,590,000 3,211,600
- -----------------------------------------------------------------------------------------
Total Convertible Bonds (Cost $8,302,701) 7,515,093
- -----------------------------------------------------------------------------------------
Shares
- -----------------------------------------------------------------------------------------
Common Stocks 88.3%
- -----------------------------------------------------------------------------------------
Australia 6.1%
Australia & New Zealand Banking Group Ltd.
(General trading and savings bank) .......................... 620,302 3,960,835
C R A Ltd. (Mining, manufacturing and development) .......... 197,100 2,938,151
GIO Australia Holdings Ltd. (Insurance company) ............. 1,448,800 4,292,316
National Australia Bank, Ltd. (Commercial bank) ............. 314,931 4,309,155
Woodside Petroleum Ltd. (Major oil and gas producer) ........ 303,500 2,413,562
----------
17,914,019
----------
China 2.7%
Guangshen Railway Co. Ltd.* (ADR) (Operator of
only railroad in the Pearl River delta) .................... 326,895 7,763,756
----------
Hong Kong 18.6%
First Pacific Co., Ltd. (International management
and investment company) .................................... 5,091,849 6,080,114
Great Eagle Holdings Ltd. (Property development) ............ 874,000 2,594,978
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Guoco Group Ltd. (Investment holding company) ............... 711,000 3,395,985
HSBC Holdings Ltd. (Bank holding company) ................... 387,775 9,786,357
Hutchison Whampoa, Ltd. (Container terminal and
real estate company) ....................................... 1,222,000 9,070,548
Kerry Properties Ltd.* (Real estate company) ................ 1,558,000 3,569,935
New World Development Co., Ltd. (Property investment
and development, construction and engineering, hotels
and restaurants, and telecommunications) ................... 1,090,000 6,289,679
Shangri-La Asia Ltd. (Hotel and property holding company) ... 3,097,900 3,839,133
Television Broadcasts, Ltd. (Television broadcasting) ....... 2,290,000 9,430,194
----------
54,056,923
----------
India 5.8%
Bajaj Auto (GDR) (Maker of two and three wheel vehicles) .... 222,015 7,293,193
Crompton Greaves Ltd.* (GDR) (Manufacturer of
electrical equipment) ...................................... 922,689 2,652,731
Ranbaxy Laboratories (GDR) (Pharmaceutical company) ......... 56,205 1,405,125
State Bank of India* (GDR) (Bank) ........................... 229,500 5,582,588
----------
16,933,637
----------
Indonesia 14.8%
Asia Pacific Resources International Holdings Ltd.*
(Manufacturer of rayon fiber for Asian textile
markets, owner of world's leading paper pulp mill) ......... 578,200 2,601,900
Asia Pulp & Paper Co., Ltd.* (ADR) (Producer of
pulp and paper) ............................................ 455,200 6,088,300
Astra International Inc. (Foreign registered)
(Distributor of automobiles, motorcycles
and related spare parts) ................................... 2,758,000 10,101,317
Bakrie & Brothers (Foreign registered)
(Manufacturer of industrial steel products,
steel pipes, corrugated sheet iron,
asbestos and fiber cements) ................................ 5,345,000 2,364,558
Bank Danamon Indonesia (Commercial and foreign
exchange bank) ............................................. 1,497,000 1,447,716
Bank International Indonesia (Foreign registered) (Bank) .... 2,202,500 1,586,163
Ciputra Development Co. (Foreign registered)
(Developer of office properties, shipping and
commercial centers, industrial properties and
sports facilities) ......................................... 4,798,500 4,245,586
HM Sampoerna (Foreign registered) (Tobacco company) ......... 599,500 2,411,569
Indorama Synthetics (Foreign registered) (Producer
of polyester fiber, yarn and fabric) ....................... 7,714,800 5,794,037
Jaya Real Properties (Foreign registered)
(Property developer) ....................................... 2,428,000 3,147,407
Lippobank (Foreign registered) (Private bank) ............... 1,497,000 1,432,315
Putra Surya Multidana (Manufacturer of motorcycles
and automobile parts) ...................................... 532,000 602,058
Telekomunikasi Indonesia (Telecommunication services) ....... 836,000 1,212,716
----------
43,035,642
----------
Korea 6.4%
Hyundai Engineering & Construction Co.*
(Leading general contractor) ............................... 1,320 26,489
Kookmin Bank* (GDS) (Major commercial bank) ................. 126,000 2,252,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Korea Electric Power Co. (Electric utility) ................. 214,730 6,403,383
Korean Air Co., Ltd. (Airline) .............................. 85,309 1,539,770
Pohang Iron & Steel Co., Ltd. (Leading steel producer) (b) .. 47,530 3,541,518
Samsung Electronics Co., Ltd. (Major electronics
manufacturer) .............................................. 38,564 2,619,931
Samsung Heavy Industries Co., Ltd.* (Machinery manufacturer) 4,383 39,015
Ssangyong Oil Refining Co. (Major oil refiner) .............. 108,900 2,185,325
----------
18,607,681
----------
Malaysia 11.9%
AMMB Holdings Berhad (Holding company for Arab Malaysian
Merchant Bank Berhad which provides financial, insurance
and investment services) ................................... 616,000 4,097,670
Arab Malaysian Finance Berhad (Foreign registered)
(Licensed finance company) ................................. 973,000 2,131,647
Arab-Malaysian Corp. (Investment holding company with
interests in financial services, infrastructure
and property) .............................................. 1,063,000 4,403,585
Commerce Asset Holding Berhad (Banking and financial
services holding company) .................................. 302 1,804
Malakoff Berhad (Cultivation and processing of natural
rubber, oil palm and cocoa) ................................ 495,000 1,971,719
Malayan Banking Berhad (Leading banking and financial
services group) ............................................ 497,000 4,949,213
Malaysia Assurance Alliance Berhad
(Multiline insurance company) .............................. 324,000 1,742,282
Malaysian Airline System Berhad (Air transportation
and related services) ...................................... 1,398,000 3,090,580
Malaysian Resources Corp. (Property development and
investment) ................................................ 427,000 1,224,617
Multi-Purpose Holdings Berhad (Investment holding company) .. 409,000 667,955
Oriental Holdings Berhad (Investment holding company) ....... 319,200 2,415,774
Public Bank Berhad (Foreign registered) (Commercial bank) ... 1,446,000 2,396,080
Tenaga Nasional Berhad (Electric power generator
and distributor) ........................................... 676,000 3,123,521
United Engineers (Malaysia) Berhad (Leading
comprehensive contractor) .................................. 324,000 2,297,232
----------
34,513,679
----------
New Zealand 1.1%
Fletcher Challenge Building Corp. (Commercial,
industrial and residential construction) ................... 1,125,700 3,160,586
----------
Philippines 1.4%
Aboitiz Equity Ventures Inc. (Conglomerate: electricity,
infrastructure, shipbuilding) .............................. 13,309,270 1,160,839
First Philippine Holdings Corp. "B" (Holding company
involved in electric power distribution, construction
services and passenger bus transportation) ................. 1,248,450 2,177,804
International Container Terminal Services, Inc. .............
(Containerized cargo handling firm) ........................ 1,337,600 786,227
----------
4,124,870
----------
Singapore 6.1%
City Developments Ltd. (Developer of residential,
industrial, retail and investment properties,
owner and operator of hotels) .............................. 698,000 5,643,815
Fraser & Neave Ltd. (Producer of soft drinks, beer,
stout and dairy products) .................................. 373,000 2,706,634
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Oversea-Chinese Banking Corp., Ltd. (Foreign registered)
(Provider of banking and financial services) ............... 308,000 3,597,236
Overseas Union Bank Ltd. (Foreign registered)
(Leading bank group) ....................................... 872,000 5,724,948
----------
17,672,633
----------
Taiwan 11.6%
Asustek Computer Inc.* (Manufacturer of computer mainboards,
audio/video cards and network cards) ....................... 62,000 1,826,826
Cathay Life Insurance Co. (Life insurance company) .......... 1,050,500 6,266,540
China Development Corp. (Leading venture capital firm
and investment bank) ....................................... 2,177,750 9,054,275
Delta Electronic Industrial (Manufacturer of power
supply equipment) .......................................... 800,000 4,121,475
Evergreen Marine Corp. (Operator of containerized freighters) 3,630,000 6,627,440
Pacific Construction Co. (Land development and
public works construction) ................................. 2,118,000 2,243,579
United World Chinese Commercial Bank (Commercial banking) ... 1,394,950 3,580,674
----------
33,720,809
----------
Thailand 1.8%
PTT Exploration and Production Co., Ltd.*
(Foreign registered) (Petroleum refinery) .................. 389,700 4,982,670
Thai Telephone & Telecommunications PCL* (Foreign
registered) (Telecommunication services) ................... 420,450 257,525
----------
5,240,195
- -----------------------------------------------------------------------------------------
Total Common Stocks (Cost $226,715,067) 256,744,430
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $261,323,828) (a) 290,619,554
- -----------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $261,859,272. At April 30,
1997, net unrealized appreciation for all securities based on tax cost was
$28,760,282. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $41,740,882 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$12,980,600.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $4,169,138 (1.47% of net assets). Their
values have been estimated by the Valuation Committee in the absence of
readily ascertainable market values. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the difference could be material. The cost of these
securities at April 30, 1997 aggregated $5,148,350.
(c) Principal amount stated in U.S. dollars unless otherwise noted.
* Non-income producing security
Currency Abbreviations
MYR Malaysian Ringgits
The accompanying notes are an integral part of the financial statements.
12 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of April 30, 1997
<TABLE>
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments, at market (identified cost $261,323,828) ........... $ 290,619,554
Cash ............................................................ 192
Foreign currency holdings, at market (identified cost $1,703,175) 1,701,248
Receivables for investments sold ................................ 2,264,209
Dividends and interest receivable ............................... 513,323
Receivables for Fund shares sold ................................ 955,563
Deferred organization expense ................................... 7,002
Other assets .................................................... 6,429
-------------
Total assets .................................................... 296,067,520
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable for investments purchased ............................... 5,496,303
Payable for Fund shares redeemed ................................ 7,878,376
Accrued management fee .......................................... 262,714
Other payables and accrued expenses ............................. 289,943
-------------
Total liabilities ............................................... 13,927,336
----------------------------------------------------------------------------------
Net assets, at market value $ 282,140,184
----------------------------------------------------------------------------------
Net Assets
- ---------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated net investment loss ................................. (1,165,441)
Unrealized appreciation on:
Investments .................................................. 29,295,726
Foreign currency related transactions ........................ 1,445
Accumulated net realized loss ................................... (3,601,238)
Paid-in capital ................................................. 257,609,692
----------------------------------------------------------------------------------
Net assets, at market value $ 282,140,184
----------------------------------------------------------------------------------
Net Asset Value
- ---------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($282,140,184 / 17,336,183 shares of capital stock --------------
outstanding, $.01 par value, 100,000,000 shares authorized).... $16.27
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
Statement of Operations
six months ended April 30, 1997
<TABLE>
<S> <C>
Investment Income
- ---------------------------------------------------------------------------------------------------
Dividends (net of foreign taxes withheld of $169,779) ........... $ 1,502,519
Interest (net of foreign taxes withheld $503) ................... 607,489
-------------
2,110,008
-------------
Expenses:
Management fee .................................................. 1,804,113
Services to shareholders ........................................ 691,207
Custodian and accounting fees ................................... 387,354
Directors' fees and expenses .................................... 26,001
Reports to shareholders ......................................... 60,316
Auditing ........................................................ 48,050
Registration fees ............................................... 32,753
Legal ........................................................... 6,989
Amortization of organization expenses ........................... 5,765
Other ........................................................... 37,642
-------------
3,100,190
----------------------------------------------------------------------------------
Net investment loss (990,182)
----------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ---------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ..................................................... 9,975,895
Foreign currency related transactions ........................... (93,542)
-------------
9,882,353
-------------
Net unrealized appreciation (depreciation) during the period on:
Investments ..................................................... 2,321,092
Foreign currency related transactions ........................... (58,150)
-------------
2,262,942
----------------------------------------------------------------------------------
Net gain on investment transactions 12,145,295
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 11,155,113
----------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 -- SCUDDER PACIFIC OPPORTUNITIES 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) .................................... $ (990,182) $ 460,669
Net realized gain (loss) from investment transactions ........... 9,882,353 2,141,153
Net unrealized appreciation (depreciation) on investment
transactions during the period ................................ 2,262,942 9,929,700
------------- -------------
Net increase (decrease) in net assets resulting from
operations .................................................... 11,155,113 12,531,522
------------- -------------
Distributions to shareholders from net investment income ........ (208,282) (2,376,933)
------------- -------------
Fund share transactions:
Proceeds from shares sold ....................................... 221,705,461 339,049,361
Net asset value of shares issued to shareholders in
reinvestment of distributions ................................. 183,112 2,101,548
Cost of shares redeemed ......................................... (280,086,760) (405,479,114)
------------- -------------
Net decrease in net assets from Fund share transactions ......... (58,198,187) (64,328,205)
------------- -------------
Decrease in net assets .......................................... (47,251,356) (54,173,616)
Net assets at beginning of period ............................... 329,391,540 383,565,156
Net assets at end of period (including accumulated net
investment loss of $1,165,442, and undistributed net --------------- ---------------
investment income of $33,023, respectively) ................... $ 282,140,184 $ 329,391,540
--------------- ---------------
Other Information
- --------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ....................... 20,682,798 24,595,415
------------- -------------
Shares sold ..................................................... 13,157,318 20,929,794
Shares issued to shareholders in reinvestment of
distributions ................................................ 10,985 133,516
Shares redeemed ................................................. (16,514,918) (24,975,927)
------------- -------------
Net decrease in Fund shares ..................................... (3,346,615) (3,912,617)
--------------- ---------------
Shares outstanding at end of period ............................. 17,336,183 20,682,798
--------------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 -- SCUDDER PACIFIC OPPORTUNITIES 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
December 8,
1992
Six Months (commencement
Ended Years Ended October 31, of operations) to
April 30, October 31,
1997(a) 1996(a) 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------
Net asset value, beginning of period ..... $15.93 $15.59 $17.57 $16.21 $12.00
-----------------------------------------------------------------
Income from investment operations:
Net investment income (loss) ............. (.05) .02 .10 .04 .04
Net realized and unrealized gain
(loss) on investment transactions ..... .40 .42 (1.98) 1.41 4.17
-----------------------------------------------------------------
Total from investment operations ......... .35 .44 (1.88) 1.45 4.21
-----------------------------------------------------------------
Less distributions from:
Net investment income .................... (.01) (.10) (.10) (.08) --
Net realized gains on investment
transactions .......................... -- -- -- (.01) --
-----------------------------------------------------------------
Total distributions ...................... (.01) (.10) (.10) (.09) --
-----------------------------------------------------------------
-----------------------------------------------------------------
Net asset value, end of period ........... $16.27 $15.93 $15.59 $17.57 $16.21
-----------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Total Return (%) ......................... 2.26** 2.76 (10.73) 8.97 35.08**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ... 282 329 384 499 270
Ratio of operating expenses, net to
average daily net assets (%) .......... 1.91* 1.75 1.74 1.81 1.75*
Ratio of operating expenses before
expense reductions, to average
daily net assets (%) .................. 1.91* 1.75 1.74 1.81 2.90*
Ratio of net investment income
(loss) to average daily net
assets (%) ............................ (.61)* .12 .65 .28 1.41*
Portfolio turnover rate (%) .............. 79.6* 95.4 64.0 38.5 9.9*
Average commission rate paid (b) ......... $.0170 $.0148 -- -- --
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) Average commission rate paid per share of common and preferred stocks is
calculated for periods ending on or after October 31, 1996.
* Annualized
** Not annualized
16 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Pacific Opportunities 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.
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.
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.
17 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
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.
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.
At October 31, 1996, the Fund had a net tax basis capital loss carryforward of
approximately $12,900,000, which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until October 31,
2002 ($100,000) and October 31, 2003 ($12,800,000), the respective expiration
dates, whichever occurs first.
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. These
differences primarily relate to investments in passive foreign investment
companies and foreign currency denominated investments. 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. All original issue discounts are accreted for both tax and
financial reporting purposes. Interest income is recorded on the accrual basis.
18 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
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 $122,832,470 and
$182,283,744, respectively.
C. Related Parties
Under the Investment Management Agreement (the "Management Agreement") with
Scudder, Stevens & Clark, Inc. (the "Adviser"), the Adviser directs the
investments of the Fund in accordance with its investment objectives, policies,
and restrictions. The Adviser determines the securities, instruments, and other
contracts relating to investments to be purchased, sold or entered into by the
Fund. In addition to portfolio management services, the Adviser provides certain
administrative services in accordance with the Management Agreement. The
management fee payable under the Management Agreement is equal to an annual rate
of 1.10% of the Fund's average daily net assets, computed and accrued daily and
payable monthly. For the six months ended April 30, 1997, the fee pursuant to
the Agreement amounted to $1,804,113 of which $262,714 is unpaid at April 30,
1997.
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 to the Fund by SSC
aggregated $584,034, of which $84,779 is unpaid at April 30, 1997.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans for the Fund. For the six months ended April 30, 1997,
the amount charged to the Fund by STC aggregated $31,724, of which $4,830 is
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 of the Fund. For the six months
ended April 30, 1997, the amount charged to the Fund by SFAC aggregated
$101,979, of which $17,378 is 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 $26,001.
D. Investing in Emerging Markets
Investing in emerging markets may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currencies, high rates of inflation, repatriation restrictions on
income and capital, and future adverse political and economic developments.
Moreover, securities issued in these markets may be less liquid, subject to
government ownership controls, delayed settlements, and their prices more
volatile than those of comparable securities in the United States.
19 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
E. Lines of Credit
The Fund and several affiliated Funds (the "Participants") share in a $500
million revolving credit facility for temporary or emergency purposes, including
the meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 25 percent of its net assets under the agreement. In addition, the
Fund also maintains an uncommitted line of credit.
20 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
Report of Independent Accountants
To the Board of Directors of Scudder International Fund, Inc. and to the
Shareholders of Scudder Pacific Opportunities Fund:
We have audited the accompanying statement of assets and liabilities of Scudder
Pacific Opportunities Fund, including the investment portfolio, as of April 30,
1997, and the related statement of operations for the six months then ended, the
statements of changes in net assets for the six month period 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 three years in the period ended October
31, 1996, and for the period December 8, 1992 (commencement of operations) to
October 31, 1993. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 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 Pacific Opportunities 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 month period then ended and for the year ended October 31, 1996, and the
financial highlights for the six month period ended April 30, 1997, for each of
the three years in the period ended October 31, 1996, and for the period
December 8, 1992 (commencement of operations) to October 31, 1993 in conformity
with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 12, 1997
21 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
This Page
intentionally
left blank.
22 -- SCUDDER PACIFIC OPPORTUNITIES FUND
<PAGE>
This Page
intentionally
left blank.
23 -- SCUDDER PACIFIC OPPORTUNITIES 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 PACIFIC OPPORTUNITIES 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. Scudder Solutions
25 -- SCUDDER PACIFIC OPPORTUNITIES 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:
- ------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------
26 -- SCUDDER PACIFIC OPPORTUNITIES 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 Developed for investors who prefer the benefits of no-load
shareholders can take advantage of a Scudder Scudder funds but want ongoing professional assistance in
Brokerage account already reserved for them, with managing a portfolio. Personal Counsel(SM) is a highly
no minimum investment. For information about customized, fee-based asset management service for
Scudder Brokerage Services, call 1-800-700-0820. 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 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
- ------------------------------------------------------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------------------------------------------------------
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 PACIFIC OPPORTUNITIES FUND
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Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark,
Scudder, Stevens & Clark was the first independent investment counsel firm in
the United States. Since its birth, Scudder's pioneering spirit and commitment
to professional long-term investment management have helped shape the investment
industry. In 1928, we introduced the nation's first no-load mutual fund. Today
we offer 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.
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