SCUDDER INTERNATIONAL FUND INC, 485APOS, 1997-12-04

SCUDDER INTERNATIONAL FUND INC
485APOS, 1997-12-04

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Filed electronically with the Securities and Exchange Commission
on December 4, 1997

File No. 2-14400
File No. 811-642

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.
------

Post-Effective Amendment No. 58
------

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 38
-----

Scudder International Fund, Inc.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

345 Park Avenue, New York, NY 10154
---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (617) 295-2567
--------------

Thomas F. McDonough
Scudder, Stevens & Clark, Inc.
Two International Place, Boston, MA 02110-4103
----------------------------------------------
(Name and Address of Agent for Service)

It is proposed that this filing will become effective

immediately upon filing pursuant to paragraph (b)
------

on ________________________ pursuant to paragraph (b)
------

60 days after filing pursuant to paragraph (a)(i)
------

X on February 6, 1998 pursuant to paragraph (a)(i)
------

75 days after filing pursuant to paragraph (a)(ii)
------

on ________________________ pursuant to paragraph
------
(a)(ii) of Rule 485

If appropriate, check the following:

this post-effective amendment designates a new effective date for a
------ previously filed post-effective amendment

<PAGE>

SCUDDER INTERNATIONAL FUND, INC.
SCUDDER LATIN AMERICA FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A

PART A

Item No. Item Caption Prospectus Caption
- -------- ------------ ------------------

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed FINANCIAL HIGHLIGHTS
Financial DISTRIBUTION AND PERFORMANCE
Information INFORMATION

4. General INVESTMENT OBJECTIVE AND POLICIES
Description of WHY INVEST IN THE FUND?
Registrant LATIN AMERICAN INVESTMENT EXPERIENCE
ADDITIONAL INFORMATION ABOUT
POLICIES AND INVESTMENTS
FUND ORGANIZATION

5. Management of FINANCIAL HIGHLIGHTS
the Fund A MESSAGE FROM SCUDDER'S CHAIRMAN
FUND ORGANIZATION-Investment
adviser, Transfer agent
SHAREHOLDER BENEFITS-A team approach
to investing
DIRECTORS AND OFFICERS

5A. Management's NOT APPLICABLE
Discussion of
Fund Performance

6. Capital Stock DISTRIBUTION AND PERFORMANCE
and Other INFORMATION-Dividends and capital
Securities gains distributions
FUND ORGANIZATION
TRANSACTION INFORMATION-Tax
Information
SHAREHOLDER BENEFITS-SAIL(TM)-Scudder
Automated Information Line,
Dividend reinvestment plan,
T.D.D. service for the hearing
impaired
HOW TO CONTACT SCUDDER

7. Purchase of PURCHASES
Securities Being FUND ORGANIZATION-Underwriter
Offered TRANSACTION INFORMATION-Purchasing
shares, Share price, Processing
time, Minimum balances, Third
party transactions
SHAREHOLDER BENEFITS-Dividend
reinvestment plan
SCUDDER TAX-ADVANTAGED RETIREMENT PLANS
INVESTMENT PRODUCTS AND SERVICES

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification
number, Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 1
<PAGE>

SCUDDER LATIN AMERICA FUND
(continued)

PART B

Caption in Statement of
Item No. Item Caption Additional Information
- -------- ------------ ----------------------

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUND'S INVESTMENT OBJECTIVE AND POLICIES
Objectives and PORTFOLIO TRANSACTIONS-Brokerage
Policies Commissions, Portfolio Turnover

14. Management of the INVESTMENT ADVISER
Fund DIRECTORS AND OFFICERS
REMUNERATION

15. Control Persons DIRECTORS AND OFFICERS
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER
Advisory and DISTRIBUTOR
Other Services ADDITIONAL INFORMATION-Experts,
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage
Allocation Commissions, Portfolio Turnover
and Other
Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS

19. Purchase, PURCHASES
Redemption and EXCHANGES AND REDEMPTIONS
Pricing of FEATURES AND SERVICES OFFERED BY
Securities Being THE FUND-Dividend and Capital
Offered Gain Distribution Options
SPECIAL PLAN ACCOUNTS
NET ASSET VALUE

20. Tax Status DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference - Page 2
<PAGE>

SCUDDER INTERNATIONAL FUND, INC.
SCUDDER PACIFIC OPPORTUNITIES FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A
PART A

Item No. Item Caption Prospectus Caption
- -------- ------------ ------------------

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed FINANCIAL HIGHLIGHTS
Financial DISTRIBUTION AND PERFORMANCE
Information INFORMATION

4. General INVESTMENT OBJECTIVE AND POLICIES
Description of WHY INVEST IN THE FUND?
Registrant INTERNATIONAL INVESTMENT EXPERIENCE
ADDITIONAL INFORMATION ABOUT
POLICIES AND INVESTMENTS
FUND ORGANIZATION

5A. Management's NOT APPLICABLE
Discussion of
Fund
Performance

7. Purchase of PURCHASES
Securities FUND ORGANIZATION-Underwriter
Being Offered TRANSACTION INFORMATION-Purchasing
shares, Share price, Processing
time, Minimum balances, Third
party transactions
SHAREHOLDER BENEFITS-Dividend
reinvestment plan
SCUDDER TAX-ADVANTAGED RETIREMENT
PLANS
INVESTMENT PRODUCTS AND SERVICES

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification
number, Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 3
<PAGE>

SCUDDER PACIFIC OPPORTUNITIES FUND
(continued)

PART B

Caption in Statement of
Item No. Item Caption Additional Information
- -------- ------------ ----------------------

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUND'S INVESTMENT OBJECTIVE AND
Objectives and POLICIES
Policies PORTFOLIO TRANSACTIONS-Brokerage
Commissions, Portfolio Turnover

14. Management of the INVESTMENT ADVISER
Fund DIRECTORS AND OFFICERS
REMUNERATION

15. Control Persons DIRECTORS AND OFFICERS
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER
Advisory and DISTRIBUTOR
Other Services ADDITIONAL INFORMATION-Experts,
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage
Allocation Commissions, Portfolio Turnover
and Other
Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

20. Tax Status DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference - Page 4
<PAGE>

SCUDDER INTERNATIONAL FUND, INC.
SCUDDER GREATER EUROPE GROWTH FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A
PART A

Item
No. Item Caption Prospectus Caption
- ----- ------------ ------------------

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed FINANCIAL HIGHLIGHTS
Financial DISTRIBUTION AND PERFORMANCE
Information INFORMATION

5A. Management's NOT APPLICABLE
Discussion of
Fund Performance

6. Capital Stock DISTRIBUTION AND PERFORMANCE
and Other INFORMATION-Dividends and capital
Securities gains distributions
FUND ORGANIZATION
TRANSACTION INFORMATION-Tax
information
SHAREHOLDER BENEFITS-SAIL(TM)-Scudder
Automated Information Line,
Dividend reinvestment plan, T.D.D.
service for the hearing impaired
HOW TO CONTACT SCUDDER

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification number,
Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 5
<PAGE>

SCUDDER GREATER EUROPE GROWTH FUND
(continued)

PART B

Caption in Statement of
Item No. Item Caption Additional Information
- -------- ------------ ----------------------

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUNDS' INVESTMENT OBJECTIVE AND
Objectives and POLICIES
Policies PORTFOLIO TRANSACTIONS-Brokerage
Commissions, Portfolio Turnover

14. Management of the INVESTMENT ADVISER
Fund DIRECTORS AND OFFICERS
REMUNERATION

15. Control Persons DIRECTORS AND OFFICERS
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER
Advisory and DISTRIBUTOR
Other Services ADDITIONAL INFORMATION-Experts,
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage
Allocation Commissions, Portfolio Turnover
and Other
Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS

20. Tax Status DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference - Page 6
<PAGE>

SCUDDER INTERNATIONAL FUND, INC.
SCUDDER EMERGING MARKETS GROWTH FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A
PART A

Item
No. Item Caption Prospectus Caption
- ----- ------------ ------------------

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed NOT APPLICABLE
Financial
Information

5. Management of A MESSAGE FROM SCUDDER'S CHAIRMAN
the Fund FUND ORGANIZATION-Investment
adviser, Transfer agent
SHAREHOLDER BENEFITS-A team
approach to investing
DIRECTORS AND OFFICERS

5A. Management's NOT APPLICABLE
Discussion of
Fund Performance

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification number,
Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 7
<PAGE>

SCUDDER EMERGING MARKETS GROWTH FUND
(continued)

PART B

Caption in Statement of
Item No. Item Caption Additional Information
- -------- ------------ ----------------------

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUNDS' INVESTMENT OBJECTIVE AND
Objectives and POLICIES
Policies PORTFOLIO TRANSACTIONS-Brokerage
Commissions, Portfolio Turnover

14. Management of the INVESTMENT ADVISER
Fund DIRECTORS AND OFFICERS
REMUNERATION

15. Control Persons DIRECTORS AND OFFICERS
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER
Advisory and DISTRIBUTOR
Other Services ADDITIONAL INFORMATION-Experts,
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage
Allocation Commissions, Portfolio Turnover
and Other
Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS

20. Tax Status DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference - Page 8
<PAGE>

SCUDDER INTERNATIONAL FUND, INC.
SCUDDER INTERNATIONAL GROWTH AND INCOME FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A
PART A

Item
No. Item Caption Prospectus Caption
- ----- ------------ ------------------

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed NOT APPLICABLE
Financial
Information

4. General INVESTMENT OBJECTIVE AND POLICIES
Description of INVESTMENT PROCESS
Registrant WHY INVEST IN THE FUND?
INTERNATIONAL INVESTMENT EXPERIENCE
ADDITIONAL INFORMATION ABOUT
POLICIES AND INVESTMENTS
RISK CONSIDERATIONS
FUND ORGANIZATION

5. Management of A MESSAGE FROM SCUDDER'S CHAIRMAN
the Fund FUND ORGANIZATION-Investment
adviser, Transfer agent
SHAREHOLDER BENEFITS-A team
approach to investing
DIRECTORS AND OFFICERS

5A. Management's NOT APPLICABLE
Discussion of
Fund Performance

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification number,
Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 9
<PAGE>

SCUDDER INTERNATIONAL GROWTH AND INCOME FUND
(continued)

PART B

Caption in Statement of
Item No. Item Caption Additional Information
- -------- ------------ ----------------------

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUNDS' INVESTMENT OBJECTIVE AND
Objectives and POLICIES
Policies PORTFOLIO TRANSACTIONS-Brokerage
Commissions, Portfolio Turnover

14. Management of the INVESTMENT ADVISER
Fund DIRECTORS AND OFFICERS
REMUNERATION

15. Control Persons DIRECTORS AND OFFICERS
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER
Advisory and DISTRIBUTOR
Other Services ADDITIONAL INFORMATION-Experts,
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage
Allocation Commissions, Portfolio Turnover
and Other
Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS

20. Tax Status DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference - Page 10
<PAGE>

SCUDDER INTERNATIONAL FUND, INC.
SCUDDER INTERNATIONAL FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A
PART A

Item
No. Item Caption Prospectus Caption
- ----- ------------ ------------------

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed NOT APPLICABLE
Financial
Information

5. Management of A MESSAGE FROM SCUDDER'S CHAIRMAN
the Fund FUND ORGANIZATION-Investment
adviser, Transfer agent
SHAREHOLDER BENEFITS-A team
approach to investing
DIRECTORS AND OFFICERS

5A. Management's NOT APPLICABLE
Discussion of
Fund Performance

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification number,
Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 11
<PAGE>

SCUDDER INTERNATIONAL FUND
(continued)

PART B

Caption in Statement of
Item No. Item Caption Additional Information
- -------- ------------ ----------------------

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUNDS' INVESTMENT OBJECTIVE AND
Objectives and POLICIES
Policies PORTFOLIO TRANSACTIONS-Brokerage
Commissions, Portfolio Turnover

14. Management of the INVESTMENT ADVISER
Fund DIRECTORS AND OFFICERS
REMUNERATION

15. Control Persons DIRECTORS AND OFFICERS
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER
Advisory and DISTRIBUTOR
Other Services ADDITIONAL INFORMATION-Experts,
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage
Allocation Commissions, Portfolio Turnover
and Other
Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS

20. Tax Status DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference - Page 12
<PAGE>

Scudder International Fund

Scudder International Fund is a series of Scudder International Fund, Inc., an
open-end management investment company. This prospectus sets forth concisely the
information about Barrett International Shares, a class of shares of Scudder
International Fund, that a prospective investor should know before investing.
Please retain it for future reference.

If you require more detailed information, a Statement of Additional Information
dated February 6, 1998, as amended from time to time, may be obtained without
charge by writing Scudder Investor Services, Inc., Two International Place,
Boston, MA 02110-4103 or calling 1-800-854-8525. The Statement, which is
incorporated by reference into this prospectus, has been filed with the
Securities and Exchange Commission and is available along with other related
materials on the SEC's Internet Web site (http://www.sec.gov).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Contents--see page 3.

- -----------------------------
NOT FDIC- MAY LOSE VALUE
INSURED NO BANK GUARANTEE
- -----------------------------

[LOGO] PRINTED WITH SOY INK [RECYCLE LOGO] Printed on recycled paper

Barrett International
Shares
---------------------

Prospectus
February 6, 1998

A pure no-load(TM) (no sales charges) mutual fund seeking long-term growth of
capital primarily from foreign equity securities.

<PAGE>

- ---------------------------------------
Expense information
- ---------------------------------------

- --------------------------------------------------------------------------------
This information is designed to help you understand the various costs and
expenses of investing in Barrett International Shares (the?"Shares"), a class of
shares of Scudder International Fund (the "Fund").* By reviewing this table and
those in other mutual funds' prospectuses, you can compare the Fund's fees and
expenses with those of other funds.

1) Shareholder transaction expenses: Expenses charged directly to your
individual account in the Fund for various transactions.

Sales commissions to purchase shares (sales load) NONE
Commissions to reinvest dividends NONE
Redemption fees NONE **
Fees to exchange shares NONE

2) Annual Fund operating expenses: Estimated expenses paid by the Fund before
it distributes its net investment income, expressed as a percentage of the
Fund's average daily net assets for the fiscal year ended March 31, 1998.

Investment management fee 0.82%
12b-1 fees NONE
Other expenses 0.28%
----
Total Fund operating expenses 1.10%
====

Example

Based on the level of estimated total Fund operating expenses listed above, the
total expenses relating to a $1,000 investment in the Barrett International
Shares of the Fund, assuming a 5% annual return and redemption at the end of
each period, are listed below. Investors do not pay these expenses directly;
they are paid by the Fund before it distributes its net investment income to
shareholders. (As noted above, the Fund has no redemption fees of any kind.)

1 Year 3 Years
------ -------
$11 $35

See "Fund organization--Investment adviser" for further information about the
investment management fee. This example assumes reinvestment of all dividends
and distributions and that the percentage amounts listed under "Annual Fund
operating expenses" remain the same each year. This example should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than those
shown.

* The information set forth on this page relates only to the Fund's Barrett
International Shares. The Fund also offers International Shares, which may
have different fees and expenses (which may affect performance), have
different minimum investment requirements and are entitled to different
services. More information may be obtained by contacting Scudder Investor
Services, Inc., Two International Place, Boston, MA 02110-4103 or calling
1-800-854-8525.

** You may redeem by writing or calling the Fund. If you wish to receive your
redemption proceeds via wire, there is a $5 wire service fee. For
additional information, please refer to "Transaction information
--Redeeming shares."

- --------------------------------------------------------------------------------

- --
2
<PAGE>

- ---------------------------------------
A message from Scudder's
chairman
- ---------------------------------------

[PHOTO]

Daniel Pierce, Chairman
Scudder, Stevens & Clark, Inc.

Scudder Kemper Investments, Inc., investment adviser to the Scudder Family of
Funds, was founded in 1919. We offered America's first no-load mutual fund in
1928. During the past year, Scudder entered into an alliance with Zurich
Insurance Company in which Zurich has acquired a majority interest in Scudder
and combined Scudder with Zurich Kemper Investments, Inc. Scudder's name has
been changed to Scudder Kemper Investments, Inc. Today, Scudder Kemper
Investments manages in excess of $___ billion for many private accounts and over
___ mutual fund portfolios. We continue to manage the mutual funds in a special
program for the American Association of Retired Persons, as well as the fund
options available through Scudder Horizon Plan, a tax-advantaged variable
annuity. We also advise The Japan Fund and eight closed-end funds that invest in
countries around the world.

- ---------------------------------------
Scudder International Fund
Barrett International Shares
- ---------------------------------------

Investment objective

o long-term growth of capital primarily from foreign equity securities

Investment characteristics

o professional management to help investors without the time or expertise to
invest directly in foreign securities

o international diversification which helps reduce international investment
risk

o convenient participation in investments denominated in foreign currencies

o $25,000 initial minimum investment

- ---------------------------------------
Contents
- ---------------------------------------

Investment objective and policies ...... 4
Why invest in the Fund? ................ 4
International investment experience .... 5
Additional information about policies
and investments ...................... 5
Distribution and performance information 8
Fund organization ...................... 9
Transaction information ................ 11
Shareholder benefits ................... 15
Purchases and redemptions .............. 17
How to contact Scudder ................. 18

--
3
<PAGE>

- ---------------------------------------
Investment objective and
policies
- ---------------------------------------

Scudder International Fund (the "Fund"), a series of Scudder International Fund,
Inc., seeks long-term growth of capital primarily through a diversified
portfolio of marketable foreign equity securities. These securities are selected
primarily to permit the Fund to participate in non-United States companies and
economies with prospects for growth. The Fund invests in companies, wherever
organized, which do business primarily outside the United States. The Fund
intends to diversify investments among several countries and to have represented
in the portfolio, in substantial proportions, business activities in not less
than three different countries. The Fund does not intend to concentrate
investments in any particular industry.

Except as otherwise indicated, the Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders. If there is a
change in investment objective, shareholders should consider whether the Fund
remains an appropriate investment in light of their then current financial
position and needs. There can be no assurance that the Fund's objective will be
met.

Investments

The Fund generally invests in equity securities of established companies, listed
on foreign exchanges, which the Fund's investment adviser, Scudder Kemper
Investments, Inc. (the "Adviser"), believes have favorable characteristics.

When the Adviser believes that it is appropriate to do so in order to achieve
the Fund's investment objective of long-term capital growth, the Fund may invest
up to 20% of its total assets in debt securities. Such debt securities include
debt securities of foreign governments, supranational organizations and private
issuers, including bonds denominated in the European Currency Unit (ECU).
Portfolio debt investments will be selected on the basis of, among other things,
yield, credit quality, and the fundamental outlooks for currency and interest
rate trends in different parts of the globe, taking into account the ability to
hedge a degree of currency or local bond price risk. The Fund may purchase
"investment-grade" bonds, which are those rated Aaa, Aa, A or Baa by Moody's
Investors Service, Inc. ("Moody's") or AAA, AA, A or BBB by Standard & Poor's
Corporation ("S&P") or, if unrated, judged by the Adviser to be of equivalent
quality. The Fund may also invest up to 5% of its total assets in debt
securities which are rated below investment-grade (see "Risk factors").

In addition, the Fund may enter into repurchase agreements, reverse repurchase
agreements, and invest in illiquid and restricted securities, and may engage in
securities lending and strategic transactions, which may include derivatives.

When the Adviser determines that exceptional conditions exist abroad, the Fund
may, for temporary defensive purposes, invest all or a portion of its assets in
Canadian or U.S. Government obligations or currencies, or securities of
companies incorporated in and having their principal activities in Canada or the
U.S. It is impossible to accurately predict for how long such alternative
strategies may be utilized.

- ---------------------------------------
Why invest in the Fund?
- ---------------------------------------

The Fund is designed for investors seeking investment opportunity and
diversification through an actively managed portfolio of foreign securities.

One reason that some investors may wish to invest overseas is that certain
foreign economies may grow more rapidly than the U.S. economy and may offer
opportunities for achieving superior investment returns. Another reason is that
foreign stock and bond markets do not always move in step with each other or
with the U.S. markets. A portfolio invested in a number of

- --
4
<PAGE>

markets worldwide will be better diversified than one which is subject to the
movements of a single market.

Another benefit of the Fund is that it eliminates the complications and extra
costs associated with direct investment in individual foreign securities.

Individuals investing directly in foreign stocks may find it difficult to make
purchases and sales, to obtain current information, to hold securities in
safekeeping, and to convert the value of their investments from foreign
currencies into U.S. dollars. The Fund manages these tasks for the investor.
With a single investment, the investor has a diversified international
investment portfolio, which is actively managed by experienced professionals.
The Adviser has had many years of experience in dealing in foreign markets and
with brokers and custodian banks around the world. The Adviser also has the
benefit of an established information network and believes the Fund affords a
convenient and cost-effective method of investing internationally.

The Fund's investments are generally denominated in foreign currencies. The
strength or weakness of the U.S. dollar against these currencies is responsible
for part of the Fund's investment performance. If the dollar falls in value
relative to the Japanese yen, for example, the dollar value of a Japanese stock
held in the portfolio will rise even though the price of the stock remains
unchanged. Conversely, if the dollar rises in value relative to the yen, the
dollar value of the Japanese stock will fall.

- ---------------------------------------
International investment
experience
- ---------------------------------------

The Adviser has been a leader in international investment management and trading
for over 40 years. In addition to the Fund, which was initially incorporated in
Canada in 1953 as the first foreign investment company registered with the
United States Securities and Exchange Commission, its investment company clients
include Scudder International Bond Fund and Scudder International Growth and
Income Fund, which invest internationally, Scudder Global Fund, Scudder Global
Bond Fund, and Scudder Global Discovery Fund, which invest worldwide, Scudder
Greater Europe Growth Fund, which invests primarily in securities of European
companies, The Japan Fund, Inc., which invests primarily in securities of
Japanese companies, Scudder Latin America Fund, which invests primarily in Latin
American issuers, Scudder Pacific Opportunities Fund, which invests primarily in
issuers located in the Pacific Basin, with the exception of Japan, Scudder
Emerging Markets Income Fund, which invests in debt securities issued in
emerging markets, and Scudder Emerging Markets Growth Fund, which invests in
equity investments in emerging markets. The Adviser also manages the assets of
seven closed-end investment companies investing in foreign securities: The
Argentina Fund, Inc., The Brazil Fund, Inc., The Korea Fund, Inc., Scudder
Global High Income Fund, Inc., Scudder New Asia Fund, Inc., Scudder New Europe
Fund, Inc., and Scudder Spain and Portugal Fund, Inc. Assets of the Adviser's
international investment company clients exceeded $___ billion as of January 1,
1998.

- ---------------------------------------
Additional information about
policies and investments
- ---------------------------------------

Investment restrictions

The Fund has adopted certain fundamental policies which may not be changed
without a vote of shareholders and which are designed to reduce the Fund's
investment risk.

The Fund may not borrow money except as a temporary measure for extraordinary or
emergency purposes or except in connection with reverse repurchase agreements
provided that the Fund maintains asset coverage of 300% for all borrowings, and
may not make loans except through the lending of portfolio securities, the

--
5
<PAGE>

purchase of debt securities or interests in indebtedness, or through repurchase
agreements. Reverse repurchase agreements are not subject to the one-third asset
coverage requirement. The Fund currently intends to borrow only for temporary or
emergency purposes, such as providing for redemptions or distributions, and not
for investment purposes.

A complete description of these and other policies and restrictions is contained
under "Investment Restrictions" in the Shares' Statement of Additional
Information.

Repurchase agreements

As a means of earning income for periods as short as overnight, the Fund may
enter into repurchase agreements with selected banks and broker/dealers. Under a
repurchase agreement, the Fund acquires securities, subject to the seller's
agreement to repurchase them at a specified time and price.

Securities lending

The Fund may lend portfolio securities to registered broker/dealers as a means
of increasing its income. These loans may not exceed 30% of the Fund's total
assets taken at market value. Loans of portfolio securities will be secured
continuously by collateral consisting of U.S. Government securities or
fixed-income obligations that are maintained at all times in an amount at least
equal to the current market value of the loaned securities. The Fund will earn
any interest or dividends paid on the loaned securities and may share with the
borrower some of the income received on the collateral for the loan or will be
paid a premium for the loan.

Strategic Transactions and derivatives

The Fund may, but is not required to, utilize various other investment
strategies as described below to hedge various market risks (such as interest
rates, currency exchange rates, and broad or specific equity or fixed-income
market movements), to manage the effective maturity or duration of fixed-income
securities in the Fund's portfolio or to enhance potential gain. These
strategies may be executed through the use of derivative contracts. Such
strategies are generally accepted as a part of modern portfolio management and
are regularly utilized by many mutual funds and other institutional investors.
Techniques and instruments may change over time as new instruments and
strategies are developed or regulatory changes occur.

Strategic Transactions may be used without limit to attempt to protect against
possible changes in the market value of securities held in or to be purchased
for the Fund's portfolio resulting from securities markets or currency exchange
rate fluctuations, to protect the Fund's unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes, to manage the effective maturity or duration of fixed-income
securities in the Fund's portfolio, or to establish a position in the
derivatives markets as a temporary substitute for purchasing or selling
particular securities. Some Strategic Transactions may also be used to enhance
potential gain although no more than 5% of the Fund's assets will be committed
to Strategic Transactions entered into for non-hedging purposes. Any or all of
these investment techniques may be used at any time and in any combination, and
there is no particular strategy that dictates the use of one technique rather
than another, as use of any Strategic Transaction is a

- --
6
<PAGE>

function of numerous variables including market conditions. The ability of the
Fund to utilize these Strategic Transactions successfully will depend on the
Adviser's ability to predict pertinent market movements, which cannot be
assured. The Fund will comply with applicable regulatory requirements when
implementing these strategies, techniques and instruments.

Strategic Transactions involving financial futures and options thereon will be
purchased, sold or entered into only for bona fide hedging, risk management or
portfolio management purposes and not for speculative purposes. Please refer to
"Risk factors--Strategic Transactions and derivatives" for more information.

Risk factors

The Fund's risks are determined by the nature of the securities held and the
portfolio management strategies used by the Adviser. The following are
descriptions of certain risks related to the investments and techniques that the
Fund may use from time to time.

Foreign securities. Investments in foreign securities involve special
considerations due to limited information, higher brokerage costs, different
accounting standards, thinner trading markets as compared to domestic markets
and the likely impact of foreign taxes on the income from securities. They may
also entail other risks, such as the possibility of one or more of the
following: imposition of dividend or interest withholding or confiscatory taxes;
currency blockages or transfer restrictions; expropriation, nationalization or
other adverse political or economic developments; less government supervision
and regulation of securities exchanges, brokers and listed companies; and the
difficulty of enforcing obligations in other countries. Purchases of foreign
securities are usually made in foreign currencies and, as a result, the Fund may
incur currency conversion costs and may be affected favorably or unfavorably by
changes in the value of foreign currencies against the U.S. dollar. Further, it
may be more difficult for the Fund's agents to keep currently informed about
corporate actions which may affect the prices of portfolio securities.
Communications between the U.S. and foreign countries may be less reliable than
within the U.S., increasing the risk of delayed settlements of portfolio
transactions or loss of certificates for portfolio securities. The Fund's
ability and decisions to purchase and sell portfolio securities may be affected
by laws or regulations relating to the convertibility and repatriation of
assets.

Repurchase agreements. If the seller under a repurchase agreement becomes
insolvent, the Fund's right to dispose of the securities may be restricted, or
the value of the securities may decline before the Fund is able to dispose of
them. In the event of the commencement of bankruptcy or insolvency proceedings
with respect to the seller of the securities before repurchase of the securities
under a repurchase agreement, the Fund may encounter delay and incur costs,
including a decline in the value of the securities, before being able to sell
the securities.

Securities lending. From time to time the Fund may lend its portfolio securities
to registered broker/dealers as described above. The risks of lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in the recovery of the securities
or possible loss of rights in the collateral should the borrower fail
financially. Loans will be made to registered broker/dealers deemed by the
Adviser to be in good standing and will not be made unless, in the judgment of
the Adviser, the consideration to be received in exchange for such loans would
justify the risk.

Debt securities. The Fund may invest no more than 5% of its total assets in debt
securities which are rated below investment-grade; that is, rated below Baa by
Moody's or BBB by S&P (commonly referred to as "junk bonds"). The

--
7
<PAGE>

lower the ratings of such debt securities, the greater their risks render them
like equity securities. Moody's considers bonds it rates Baa to have speculative
elements as well as investment-grade characteristics. The Fund may invest in
securities which are rated D by S&P or, if unrated, are of equivalent quality.
Securities rated D may be in default with respect to payment of principal or
interest.

Illiquid and restricted securities. The absence of a trading market can make it
difficult to ascertain a market value for illiquid and restricted securities.
Disposing of illiquid and restricted securities may involve time-consuming
negotiation and legal expenses, and it may be difficult or impossible for the
Fund to sell them promptly at an acceptable price.

Strategic Transactions and derivatives. Strategic Transactions, including
derivative contracts, have risks associated with them including possible default
by the other party to the transaction, illiquidity and, to the extent the
Adviser's view as to certain market movements is incorrect, the risk that the
use of such Strategic Transactions could result in losses greater than if they
had not been used. Use of put and call options may result in losses to the Fund,
force the sale or purchase of portfolio securities at inopportune times or for
prices higher than (in the case of put options) or lower than (in the case of
call options) current market values, limit the amount of appreciation the Fund
can realize on its investments or cause the Fund to hold a security it might
otherwise sell. The use of currency transactions can result in the Fund
incurring losses as a result of a number of factors including the imposition of
exchange controls, suspension of settlements or the inability to deliver or
receive a specified currency. The use of options and futures transactions
entails certain other risks. In particular, the variable degree of correlation
between price movements of futures contracts and price movements in the related
portfolio position of the Fund creates the possibility that losses on the
hedging instrument may be greater than gains in the value of the Fund's
position. In addition, futures and options markets may not be liquid in all
circumstances and certain over-the-counter options may have no markets. As a
result, in certain markets, the Fund might not be able to close out a
transaction without incurring substantial losses, if at all. Although the use of
futures contracts and options transactions for hedging should tend to minimize
the risk of loss due to a decline in the value of the hedged position, at the
same time they tend to limit any potential gain which might result from an
increase in value of such position. Finally, the daily variation margin
requirements for futures contracts would create a greater ongoing potential
financial risk than would purchases of options, where the exposure is limited to
the cost of the initial premium. Losses resulting from the use of Strategic
Transactions would reduce net asset value, and possibly income, and such losses
can be greater than if the Strategic Transactions had not been utilized. The
Strategic Transactions that the Fund may use and some of their risks are
described more fully in the Shares' Statement of Additional Information.

- ---------------------------------------
Distribution and performance
information
- ---------------------------------------

Dividends and capital gains distributions

The Fund intends to distribute dividends from its net investment income and any
net realized capital gains after utilization of capital loss carryforwards, if
any, in November or December to prevent application of federal excise tax. An
additional distribution may be made if necessary. Any dividends or capital gains
distributions declared in October, November or December with a record date in
such a month and paid during the following January will be treated by
shareholders for federal income tax purposes as if received on December 31 of
the calendar year declared. According to preference, shareholders may receive
distributions in cash or have them

- --
8
<PAGE>

reinvested in additional Shares of the Fund. If an investment is in the form of
a retirement plan, all dividends and capital gains distributions must be
reinvested into the account.

Generally, dividends from net investment income are taxable to shareholders as
ordinary income. Long-term capital gains distributions, if any, are taxable as
long-term capital gains regardless of the length of time shareholders have owned
their shares. Short-term capital gains and any other taxable income
distributions are taxable as ordinary income.

Shareholders may be able to claim a credit or deduction on their income tax
returns for their pro rata portion of qualified taxes paid by the Fund to
foreign countries.

The Fund sends detailed tax information about the amount and type of its
distributions by January 31 of the following year.

Performance information

From time to time, quotations of the Shares' performance may be included in
advertisements, sales literature or shareholder reports. Performance information
is computed separately for each class of the Fund, in accordance with formulae
prescribed by the Securities and Exchange Commission. All performance figures
are historical, show the performance of a hypothetical investment and are not
intended to indicate future performance. "Total return" is the change in value
of an investment in a class of the Fund for a specified period. The "average
annual total return" of a class of the Fund is the average annual compound rate
of return of an investment in a class of the Fund assuming the investment has
been held for one year, five years and ten years as of a stated ending date.
"Cumulative total return" represents the cumulative change in value of an
investment in a class of the Fund for various periods. All types of total return
calculations assume that all dividends and capital gains distributions during
the period were reinvested in the relevant class of shares of the Fund.
Performance will vary based upon, among other things, changes in market
conditions and the level of the Fund's expenses as well as particular class
expenses.

- ---------------------------------------
Fund organization
- ---------------------------------------

Scudder International Fund is a diversified series of Scudder International
Fund, Inc. (the "Corporation"), an open-end, management investment company
registered under the Investment Company Act of 1940 (the "1940 Act"). The
Corporation is a Maryland corporation whose predecessor was organized in 1953.

The Fund's activities are supervised by the Corporation's Board of Directors.

The Corporation has adopted a plan pursuant to Rule 18f-3 (the "Plan") under the
1940 Act to permit the Corporation to establish a multiple class distribution
system for the Fund.

Under the Plan, shares of each class of the Fund represent an equal pro rata
interest in the Fund and, generally, shall have identical voting, dividend,
liquidation, and other rights, preferences, powers, restrictions, limitations,
qualifications and terms and conditions, except that: (1) each class shall have
a different designation; (2) each class of shares shall bear its own "class
expenses;" (3) each class shall have exclusive voting rights on any matter
submitted to shareholders that relates to its administrative services,
shareholder services or distribution arrangements; (4) each class shall have
separate voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other class; (5) each
class may have separate and distinct exchange privileges; (6) each class may
have different conversion features, and (7) each class may have separate account
size requirements. Expenses currently designated as "Class Expenses" by the
Corporation's Board of Directors under the Plan include, for example,

--
9
<PAGE>

transfer agency fees attributable to a specific class, and certain securities
registration fees.

In addition to the Barrett International Shares class of shares offered herein,
the Fund offers one other class of shares, International Shares, which may have
different fees and expenses (which may affect performance), may have different
minimum investment requirements and are entitled to different services.
Additional information about this other class of shares of the Fund may be
obtained by contacting Scudder Investor Services, Inc., at 1-800-225-2470.

Each share of a class of the Fund shall be entitled to one vote (or fraction
thereof in respect of a fractional share) on matters that such shares (or class
of shares) shall be entitled to vote. Shareholders of the Fund shall vote
together on any matter, except to the extent otherwise required by the 1940 Act,
or when the Board of Directors of the Corporation has determined that the matter
affects only the interest of shareholders of one class of the Fund, in which
case only the shareholders of such class of the Fund shall be entitled to vote
thereon. Any matter shall be deemed to have been effectively acted upon with
respect to the Fund if acted upon as provided in Rule 18f-2 under the 1940 Act,
or any successor rule, and in the Corporation's Articles of Incorporation.

The Corporation is not required to, and has no current intention of, holding
annual shareholder meetings, although special meetings may be called for
purposes such as electing or removing Directors, changing fundamental investment
policies or approving an investment advisory contract. Shareholders will be
assisted in communicating with other shareholders in connection with removing a
Director as if Section 16(c) of the 1940 Act were applicable.

Investment adviser

The Fund retains the investment management firm of Scudder Kemper Investments,
Inc., a Delaware corporation, to manage the Fund's daily investment and business
affairs subject to the policies established by the Board of Directors. The
Directors have overall responsibility for the management of the Fund under
Maryland law.

The Adviser receives an investment management fee for these services. The Fund
pays the Adviser an annual fee of 0.90% of the first $500 million of average
daily net assets, 0.85% of such assets in excess of $500 million, 0.80% of such
assets in excess of $1 billion, 0.75% of such assets in excess of $2 billion and
0.70% of such assets in excess of $3 billion. The Fund's fee is graduated so
that increases in the Fund's net assets may result in a lower annual fee rate
and decreases in the Fund's net assets may result in a higher annual fee rate.

The fee is payable monthly, provided that the Fund will make such interim
payments as may be requested by the Adviser not to exceed 75% of the amount of
the fee then accrued on the books of the Fund and unpaid. The fee is higher than
that charged by many funds which invest primarily in U.S. securities but not
necessarily higher than the fees charged to funds with investment objectives
similar to that of the Fund.

All of the Fund's expenses are paid out of gross investment income. Shareholders
pay no direct charges or fees for investment services.

Scudder Kemper Investments, Inc., is located at 345 Park Avenue, New York, New
York.

Transfer agent

Scudder Service Corporation, P.O. Box 2291, Boston, Massachusetts 02107-2291, a
subsidiary of the Adviser, is the transfer, shareholder servicing and
dividend-paying agent for the Fund.

The Fund, on behalf of Barrett International Shares class, may enter into
arrangements with banks and other institutions which are omnibus account holders
of shares of the Barrett International Shares class providing for the payment of
fees to the institution for servicing and maintaining accounts of beneficial
owners of the omnibus account. Such payments are

- --
10
<PAGE>

expenses of the Barrett International Shares class only.

Underwriter

Scudder Investor Services, Inc., a subsidiary of the Adviser, is the Fund's
principal underwriter. Scudder Investor Services, Inc. confirms, as agent, all
purchases of shares of the Fund. Scudder Investor Relations is a telephone
information service provided by Scudder Investor Services, Inc.

Fund accounting agent

Scudder Fund Accounting Corporation, a subsidiary of the Adviser, is responsible
for determining the daily net asset value per share and maintaining the general
accounting records of the Fund.

Custodian

Brown Brothers Harriman & Co. is the Fund's custodian.

- ---------------------------------------
Transaction information
- ---------------------------------------

Purchasing shares

There is a $25,000 minimum initial investment in the Barrett International
Shares class of the Fund. The minimum subsequent investment for the Barrett
International Shares class of the Fund is $1,000. The minimum investment
requirement may be waived or lowered for investments effected through banks and
other institutions and for investments effected on a group basis by certain
other entities and their employees, such as pursuant to a payroll deduction plan
and for investments made in an Individual Retirement Account offered by the
Corporation. Investment minimums may also be waived for Directors and officers
of the Corporation and existing shareholders as of January 29, 1998, the date of
the creation of the new class. The Corporation and the Distributor reserve the
right to reject any purchase order. All funds will be invested in full and
fractional Shares.

Shares of the Fund may be purchased by writing or calling the Transfer Agent.
Orders for shares of the Fund will be executed at the net asset value per share
next determined after the Fund's transfer agent receives the request in good
order. See "Share Price."

Orders for shares of the Fund will become effective at the net asset value per
share next determined after receipt by the Transfer Agent of a check drawn on
any member of the Federal Reserve System or by the custodian of a bank wire or
Federal Reserve wire.

Checks drawn on a non-member bank or a foreign bank may take substantially
longer to be converted into federal funds and, accordingly, may delay the
execution of an order. Checks must be payable in U.S. dollars and will be
accepted subject to collection at full face value.

By investing in the Fund, a shareholder appoints the Transfer Agent to establish
an open account to which all shares purchased will be credited, together with
any dividends and capital gains distributions that are paid in additional
Shares. See "Distribution and Performance Information--Dividends and Capital
Gains Distributions."

Initial Purchase by Wire

1. Shareholders may open an account by calling toll free from any continental
state: 1-800-854-8525. Give the name(s) in which the Fund's account is to be
registered, address, Social Security or taxpayer identification number, dividend
payment election, amount to be wired, name of the class of Shares, name of the
wiring bank and name and telephone number of the person to be contacted in
connection with the order. An account number will then be assigned.

2. Instruct the wiring bank to transmit the specified amount to:

The Scudder Funds
State Street Bank and Trust Company
Boston, MA 02101
ABA Number 011000028
DDA Account 9903-5552

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11
<PAGE>

3. Complete a Purchase Application. A completed Purchase Application must be
received by the Transfer Agent before the Expedited Redemption Service can be
used. Indicate the services to be used and the name of the class of Shares to
be invested. Mail or fax the Purchase Application to:

Scudder Service Corporation
P.O. Box 9242
Boston, Massachusetts 02205
Fax: (617) 792-4722

Additional Purchases by Wire

Instruct the wiring bank to transmit the specified amount to State Street Bank
and Trust Company with the information stated above.

Additional Purchases by Telephone Order

Existing shareholders may purchase shares at a certain day's price by calling
the Transfer Agent before the close of regular trading on the New York Stock
Exchange (the "Exchange"), normally 4:00 p.m. eastern time, on that day. Orders
must be for $10,000 or more and cannot be for an amount greater than four times
the value of your account at the time the order is placed. A confirmation with
complete purchase information is sent shortly after your order is received. You
must include with your payment the order number given at the time the order is
placed. If payment by check or wire is not received within three business days,
the order is subject to cancellation and the shareholder will be responsible for
any loss to the Fund resulting from this cancellation. The Fund may, at its
discretion, accept purchase orders of less than $10,000 regardless of the
account size or may allow an account to be established through this service.

The Fund uses procedures designed to give reasonable assurance that telephone
instructions are genuine, including recording telephone calls, testing a
caller's identity and sending written confirmation of telephone transactions. If
the Fund does not follow such procedures, it may be liable for losses due to
unauthorized or fraudulent telephone instructions. The Fund will not be liable
for acting upon instructions communicated by telephone that it reasonably
believes to be genuine.

Initial Purchase by Mail

1. Complete a Purchase Application. Indicate the services to be used.

2. Mail the Purchase Application and check payable to the Scudder Funds to the
Transfer Agent at the address set forth above.

Additional Purchases by Mail

1. Make a check payable to the Scudder Funds. Write the shareholder's Fund
account number on the check.

2. Mail the check and the detachable stub from the Statement of Account (or a
letter providing the account number) to the Transfer Agent at the address set
forth above.

Redeeming shares

Upon receipt by the Transfer Agent of a redemption request in proper form,
shares of a class of the Fund will be redeemed at its next determined net asset
value. See "Share Price." For the shareholder's convenience, the Corporation has
established several different redemption procedures.

No redemption of shares purchased by check will be permitted until seven
business days after those shares have been credited to the shareholder's
account.

The Fund reserves the right, if conditions exist which make cash payments
undesirable, to make payment of redemption proceeds in whole or in part in
readily marketable securities. The Corporation may suspend the right of
redemption during any period when (i) trading on the Exchange is restricted or
the Exchange is closed, other than customary weekend and holiday closings, (ii)
the SEC has by order permitted such suspension or (iii) an emergency, as defined
by rules of the SEC, exists making disposal of portfolio securities or
determination of the value

- --
12
<PAGE>

of the net assets of the Fund not reasonably practicable.

The proceeds of redemption may be more or less than the amount invested and,
therefore, a redemption may result in a gain or loss for federal income tax
purposes.

A shareholder's account in the Fund remains open for up to one year following
complete redemption, and all costs during the period will be borne by the Fund.

The Corporation reserves the right to redeem upon not less than 30 days' written
notice the Shares in an account of the Fund that has a value of $25,000 or less.
Reductions in value that result solely from market activity will not trigger an
involuntary redemption. However, any shareholder affected by the exercise of
this right will be allowed to make additional investments prior to the date
fixed for redemption to avoid liquidation of the account.

The Corporation also reserves the right, following 30 days' notice to
shareholders, to redeem all shares in accounts without certified Social Security
or taxpayer identification numbers. A shareholder may avoid involuntary
redemption by providing the Corporation with a taxpayer identification number
during the 30-day notice period.

Redemption by Mail

1. Write a letter of instruction. Indicate the dollar amount or number of shares
to be redeemed. Refer to the shareholder's Fund account number and give Social
Security or taxpayer identification number (where applicable).

2. Sign the letter in exactly the same way the account is registered. If there
is more than one owner of the shares, all must sign.

3. If shares to be redeemed have a value of $100,000 or more, the signature(s)
must be guaranteed by a commercial bank that is a member of the Federal Deposit
Insurance Corporation, a trust company, a member firm of a domestic stock
exchange or a foreign branch of any of the foregoing. In addition, signatures
may be guaranteed by other Eligible Guarantor Institutions, i.e., other banks,
brokers/dealers, municipal securities brokers/dealers, government securities
brokers/dealers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings associations. The
Transfer Agent, however, may reject redemption instructions if the guarantor is
neither a member of nor a participant in a signature guarantee program
(currently known as "STAMPsm"). Signature guarantees by notaries public are not
acceptable. Further documentation, such as copies of corporate resolutions and
instruments of authority, may be requested from corporations, administrators,
executors, personal representatives, trustees or custodians to evidence the
authority of the person or entity making the redemption request.

4. Mail the letter to the Transfer Agent at the address set forth under
"Purchasing shares."

Checks for redemption proceeds will normally be mailed the day following receipt
of the request in proper form, although the Corporation reserves the right to
take up to seven days. Unless other instructions are given in proper form, a
check for the proceeds of a redemption will be sent to the shareholder's address
of record. The Custodian may benefit from the use of redemption proceeds until
the check issued to a redeeming shareholder for such proceeds has cleared.

When proceeds of a redemption are to be paid to someone other than the
shareholder, either by wire or check, the signature(s) on the letter of
instruction must be guaranteed regardless of the amount of the redemption.

Redemption by Expedited Redemption Service

If Expedited Redemption Service has been elected on the Purchase Application on
file with the Transfer Agent, redemption of shares may be requested by
telephoning the Transfer Agent on any day the Corporation and State Street Bank
and Trust Corporation are open for business.

- --
13
<PAGE>

1. Telephone the request to the Transfer Agent by calling toll free from any
continental state: 1-800-854-8525, or

2. Mail the request to the Transfer Agent at the address set forth under
"Purchasing Shares."

Proceeds of Expedited Redemptions of $1,000 or more will be wired to the
shareholder's bank indicated in the Purchase Application. If an Expedited
Redemption request for the Fund is received by the Transfer Agent by the close
of regular trading on the Exchange (currently 4:00 p.m. eastern time) on a day
the Corporation and State Street Bank and Trust Company are open for business,
the redemption proceeds will be transmitted to the shareholder's bank the
following business day. A check for proceeds of less than $1,000 will be mailed
to the shareholder's address of record.

Share price

Purchases and redemptions are made at net asset value. Scudder Fund Accounting
Corporation determines the net asset value per share of the Barrett
International Shares class as of the close of regular trading on the Exchange,
normally 4 p.m. eastern time, on each day the Exchange is open for trading. Net
asset value per share of the Barrett International Shares class is calculated by
dividing the value of total assets attributable to the Barrett International
Shares class, less all liabilities attributable to that class, by the total
number of shares outstanding for that class.

Processing time

All purchase and redemption requests must be received in good order by the
Fund's transfer agent. Those requests received by the close of regular trading
on the Exchange are executed at the net asset value per Share calculated at the
close of regular trading that day.

Purchase and redemption requests received after the close of regular trading on
the Exchange will be executed the following business day.

The Fund will normally send your redemption proceeds within one business day
following the redemption request, but may take up to seven business days (or
longer in the case of shares recently purchased by check).

Purchase restrictions

Purchases and sales should be made for long-term investment purposes only. The
Fund and Scudder Investor Services, Inc. each reserves the right to reject
purchases of Fund shares for any reason, including when a pattern of frequent
purchases and sales made in response to short-term fluctuations in the Fund's
share price appears evident.

Tax information

A redemption of shares is a sale of shares and may result in a gain or loss for
income tax purposes.

Tax identification number

Be sure to complete the Tax Identification Number section of the Fund's
application when you open an account. Federal tax law requires the Fund to
withhold 31% of taxable dividends, capital gains distributions and redemption
proceeds from accounts (other than those of certain exempt payees) without a
correct certified Social Security or tax identification number and certain other
certified information or upon notification from the IRS or a broker that
withholding is required. The Fund reserves the right to reject new account
applications without a correct certified Social Security or tax identification
number. The Fund also reserves the right, following 30 days' notice, to redeem
all shares in accounts without a correct certified Social Security or tax
identification number. A shareholder may avoid involuntary redemption by
providing the Fund with a tax identification number during the 30-day notice
period.

Third party transactions

If purchases and redemptions of Fund shares are arranged and settlement is made
at an investor's election through a member of the National Association of
Securities Dealers, Inc., other than Scudder Investor Services, Inc., that
member

- --
14
<PAGE>

may, at its discretion, charge a fee for that service.

Redemption-in-kind

The Fund reserves the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption or repurchase order by making
payment in whole or in part in readily marketable securities chosen by the Fund
and valued as they are for purposes of computing the Fund's net asset value (a
redemption-in-kind).

If payment is made in securities, a shareholder may incur transaction expenses
in converting these securities to cash. The Corporation has elected, however, to
be governed by Rule 18f-1 under the 1940 Act, as a result of which the Fund is
obligated to redeem shares, with respect to any one shareholder during any
90-day period, solely in cash up to the lesser of $250,000 or 1% of the net
asset value of the Fund at the beginning of the period.

- ---------------------------------------
Shareholder benefits
- ---------------------------------------

Experienced professional management

Scudder Kemper Investments, Inc., one of the nation's most experienced
investment management firms, actively manages your Scudder fund investment.
Professional management is an important advantage for investors who do not have
the time or expertise to invest directly in individual securities.

A team approach to investing

Scudder International Fund is managed by a team of investment professionals who
each play an important role in the Fund's management process. Team members work
together to develop investment strategies and select securities for the Fund's
portfolio. They are supported by the Adviser's large staff of economists,
research analysts, traders and other investment specialists who work in the
Adviser's offices across the United States and abroad. The Adviser believes its
team approach benefits Fund investors by bringing together many disciplines and
leveraging the Adviser's extensive resources.

Lead Portfolio Manager Irene Cheng joined Scudder in 1993. Ms. Cheng, who has
over 13 years of industry experience, focuses on portfolio management and
equity strategy for the Adviser's international equity accounts.

Nicholas Bratt, Portfolio Manager, directs Scudder's overall global equity
investment strategies. Mr. Bratt joined the Adviser and the team in 1976.

Carol L. Franklin joined Scudder International Fund's portfolio management team
in 1986. Ms. Franklin, who has over 20 years of experience in finance and
investing, joined the Adviser in 1981.

Joan Gregory, Portfolio Manager, focuses on stock selection, a role she has
played since she joined the Adviser in 1992. Ms. Gregory, who joined the team in
1994, has been involved with investment in global and international stocks.

Marc Joseph, Portfolio Manager, managed international portfolios prior to
joining the Adviser in 1997 and is a member of the Adviser's Global Equity
Group, where he focuses on managing international equity portfolios. Mr. Joseph
has over 10 years of industry experience.

Sheridan Reilly joined the Adviser in 1995 and is a member of the Adviser's
Global Equity Group. Mr. Reilly has over 10 years of industry experience
focusing on strategies for global portfolios, currency hedging and foreign
equity markets.

Account Services

Shareholders will be sent a Statement of Account from the Distributor, as agent
of the Company, whenever a share transaction is effected in the accounts.
Shareholders can write or call the Company at the address and telephone number
on the cover of this Prospectus with any questions relating to their investment
in shares of the Fund.

Special Monthly Summary of Accounts. A special service is available to banks,
brokers, investment advisers, trust companies and others who have a

--
15
<PAGE>

number of accounts in the Fund. A monthly summary of accounts can be provided,
showing for each account the account number, the month-end share balance and the
dividends and distributions paid during the month.

Shareholder Reports. The fiscal year of the Fund ends on March 31 of each year.
The Fund sends to its shareholders, at least semi-annually, reports showing the
investments in the Fund and other information (including unaudited financial
statements) pertaining to the Fund. An annual report, containing financial
statements audited by the Fund's independent accountants, is sent to
shareholders each year.

Dividend reinvestment plan. You may have dividends and distributions
automatically reinvested in additional Fund Shares. Please call 1-800-854-8525
to request this feature.

- --
16
<PAGE>

- --------------------------------------------------------------------------------
Purchases and redemptions
- --------------------------------------------------------------------------------

Opening Minimum initial investment: $25,000
an account

Make checks o By Mail Send your completed and signed application and check
payable to by regular, express, registered or certified mail to:
"The Scudder
Funds."

Scudder Shareholder Service Center
42 Longwater Drive
Norwell, Massachusetts 02061-1612

o By Wire Please see Transaction information--Purchasing shares--
By wire for details, including the ABA wire transfer
number. Then call 1-800-854-8525 for instructions.
- --------------------------------------------------------------------------------

Purchasing
additional Minimum additional investment: $1,000
shares

Make checks o By Mail Send a check with a purchase application, or with a
payable to letter of instruction including your account number and
"The Scudder the complete Fund name and class, to the address listed
Funds." above.

o By Wire Please see Transaction information--Purchasing shares--
By wire for details, including the ABA wire transfer
number.
- --------------------------------------------------------------------------------
Redeeming o By To speak with a service representative, call
shares Telephone 1-800-854-8525 from 8 a.m. to 6 p.m. eastern time.

o By Mail Send your instructions for redemption to
the address set forth under Opening an Account
above and include:
- the name of the Fund and class and account
number you are redeeming from;
- your name(s) and address as they appear on your
account;
- the dollar amount or number of shares you wish
to redeem;
- your signature(s) as it appears on your
account; and
- a daytime telephone number.

A signature guarantee is required for redemptions
over $100,000. See Transaction information--
Redeeming shares.

- --------------------------------------------------------------------------------

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17
<PAGE>

- --------------------------------------------------------------------------------
How to contact Scudder
- --------------------------------------------------------------------------------

Account Service and Information:

For existing account service and transactions

Scudder Financial Intermediary Services Group -- 1-800-854-8525

Please address all correspondence to:

Scudder Shareholder Service Center
42 Longwater Drive
Norwell, Massachusetts
02061-1612

- --
18
<PAGE>

SCUDDER INTERNATIONAL FUND

Barrett International Shares

A Pure No-Load(TM) (No Sales Charges) Mutual Fund Seeking
Long-Term Growth of Capital Primarily
From Foreign Equity Securities

- --------------------------------------------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION

February 6, 1998

- --------------------------------------------------------------------------------

This Statement of Additional Information is not a prospectus and should be
read in conjunction with the prospectus for the Barrett International Shares, a
class of Scudder International Fund, dated February 6, 1998, as amended from
time to time, a copy of which may be obtained without charge by writing to
Scudder Investor Services, Inc., Two International Place, Boston, Massachusetts
02110-4103.
<PAGE>

TABLE OF CONTENTS
Page

THE FUND'S INVESTMENT OBJECTIVE AND POLICIES ................. 1
General Investment Objective and Policies ............... 1
Investment Restrictions ................................. 11

PURCHASES .................................................... 13

REDEEMING SHARES ............................................. 13

FEATURES AND SERVICES OFFERED BY THE FUND .................... 13

DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS .................... 13

PERFORMANCE INFORMATION ...................................... 14
Average Annual Total Return ............................. 14
Cumulative Total Return ................................. 14
Total Return ............................................ 15
Comparison of Fund Performance .......................... 15

FUND ORGANIZATION ............................................ 19

INVESTMENT ADVISER ........................................... 21
Personal Investments by Employees of the Adviser ........ 24

DIRECTORS AND OFFICERS ....................................... 24

REMUNERATION ................................................. 26
Responsibilities of the Board-Board
and Committee Meetings ................................ 26
Compensation of Officers and Directors .................. 27

DISTRIBUTOR .................................................. 28

TAXES ........................................................ 28

PORTFOLIO TRANSACTIONS ....................................... 32
Brokerage Commissions ................................... 32
Portfolio Turnover ...................................... 33

NET ASSET VALUE .............................................. 33

ADDITIONAL INFORMATION ....................................... 34
Experts ................................................. 34
Other Information ....................................... 34

FINANCIAL STATEMENTS ......................................... 35

APPENDIX

i
<PAGE>

THE FUND'S INVESTMENT OBJECTIVE AND POLICIES

(See "Investment objective and policies" and "Additional
information about policies and investments"
in the Barrett International shares class of
shares of the Fund's prospectus.)

Scudder International Fund (the "Fund"), a series of Scudder International
Fund, Inc. (the "Corporation"), is a pure no-load(TM), open-end management
investment company which continuously offers and redeems its shares at net asset
value. It is a company of the type commonly known as a mutual fund. The Fund is
a diversified series of the Corporation. The Fund offers two classes of shares,
Barrett International Shares (the "Shares") and International Shares. This
statement of additional information applies only to the Shares.

General Investment Objective and Policies

The Fund's investment objective is to seek long-term growth of capital
primarily through a diversified portfolio of marketable foreign equity
securities. These securities are selected primarily to permit the Fund to
participate in non-U.S. companies and economies with prospects for growth.

The Fund invests in companies, wherever organized, which do business
primarily outside the United States.

The Fund intends to diversify investments among several countries and to
have represented in the portfolio, in substantial proportions, business
activities in not less than three different countries. The Fund does not intend
to concentrate investments in any particular industry.

Except as otherwise indicated, the Fund's investment objective and policies
are not fundamental and may be changed without a vote of shareholders. If there
is a change in investment objective, shareholders should consider whether the
Fund remains an appropriate investment in light of their then current financial
position and needs. There can be no assurance that the Fund's objective will be
met.

The Fund generally invests in equity securities of established companies
listed on foreign exchanges, which the Fund's investment adviser, Scudder Kemper
Investments, Inc. (the "Adviser"), believes have favorable characteristics. The
Adviser expects this condition to continue, although the Fund may invest in
other securities. Up to 20% of the total assets of the Fund may be invested in
debt securities of foreign governments, supranational organizations and private
issuers, including bonds denominated in the European Currency Unit (ECU). In
determining the location of the principal activities and interests of a company,
the Adviser takes into account such factors as the location of the company's
assets, personnel, sales and earnings. In selecting securities for the Fund's
portfolio, the Adviser seeks to identify companies whose securities prices do
not adequately reflect their established positions in their fields. In analyzing
companies for investment, the Adviser ordinarily looks for one or more of the
following characteristics: above-average earnings growth per share, high return
on invested capital, healthy balance sheets and overall financial strength,
strong competitive advantages, strength of management and general operating
characteristics which will enable the companies to compete successfully in the
marketplace. Investment decisions are made without regard to arbitrary criteria
as to minimum asset size, debt-equity ratios or dividend history of portfolio
companies.

The Fund may invest in any type of security, including, but not limited
to, shares, preferred or common; bonds and other evidences of indebtedness; and
other securities of issuers wherever organized, and not excluding evidences of
indebtedness of governments and their political subdivisions. The Fund, in view
of its investment objective, intends under normal conditions to maintain a
portfolio consisting primarily of a diversified list of equity securities.

Under exceptional economic or market conditions abroad, the Fund may, for
temporary defensive purposes, until normal conditions return, invest all or a
major portion of its assets in Canadian or U.S. Government obligations or
currencies, or securities of companies incorporated in and having their
principal activities in such countries. It is impossible to accurately predict
for how long such alternate strategies may be utilized.

Foreign securities such as those purchased by the Fund may be subject to
foreign government taxes which could reduce the yield on such securities,
although a shareholder of the Fund may, subject to certain limitations, be
entitled to claim a credit or deduction for U.S. federal income tax purposes for
his or her proportionate share of such foreign taxes paid by the Fund. (See
"TAXES.")
<PAGE>

Foreign Securities. The Fund is intended to provide individual and institutional
investors with an opportunity to invest a portion of their assets in a
diversified group of securities of companies, wherever organized, which do
business primarily outside the U.S., and foreign governments. The Adviser
believes that diversification of assets on an international basis decreases the
degree to which events in any one country, including the U.S., will affect an
investor's entire investment holdings. In certain periods since World War II,
many leading foreign economies and foreign stock market indices have grown more
rapidly than the U.S. economy and leading U.S. stock market indices, although
there can be no assurance that this will be true in the future. Because of the
Fund's investment policy, the Fund is not intended to provide a complete
investment program for an investor.

Investors should recognize that investing in foreign securities involves
certain special considerations, including those set forth below, which are not
typically associated with investing in U.S. securities and which may favorably
or unfavorably affect the Fund's performance. As foreign companies are not
generally subject to uniform accounting, auditing and financial reporting
standards, practices and requirements comparable to those applicable to domestic
companies, there may be less publicly available information about a foreign
company than about a domestic company. Many foreign securities markets, while
growing in volume of trading activity, have substantially less volume than the
U.S. market, and securities of some foreign issuers are less liquid and more
volatile than securities of domestic issuers. Similarly, volume and liquidity in
most foreign bond markets is less than in the U.S. and, at times, volatility of
price can be greater than in the U.S. Fixed commissions on some foreign
securities exchanges and bid to asked spreads in foreign bond markets are
generally higher than commissions or bid to asked spreads on U.S. markets,
although the Fund will endeavor to achieve the most favorable net results on its
portfolio transactions. There is generally less government supervision and
regulation of securities exchanges, brokers and listed companies than in the
U.S. It may be more difficult for the Fund's agents to keep currently informed
about corporate actions which may affect the prices of portfolio securities.
Communications between the U.S. and foreign countries may be less reliable than
within the U.S., thus increasing the risk of delayed settlements of portfolio
transactions or loss of certificates for portfolio securities. Payment for
securities without delivery may be required in certain foreign markets. In
addition, with respect to certain foreign countries, there is the possibility of
expropriation or confiscatory taxation, political or social instability, or
diplomatic developments which could affect U.S. investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position. The management of the Fund seeks to mitigate the risks
associated with the foregoing considerations through continuous professional
management.

Foreign Currencies. Because investments in foreign securities usually will
involve currencies of foreign countries, and because the Fund may hold foreign
currencies and forward contracts, futures contracts and options on foreign
currencies and foreign currency futures contracts, the value of the assets of
the Fund, as measured in U.S. dollars, may be affected favorably or unfavorably
by changes in foreign currency exchange rates and exchange control regulations,
and the Fund may incur costs in connection with conversions between various
currencies. Although the Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. It will do so from time to time, and investors should
be aware of the costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit based on the
difference (the "spread") between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to the Fund at one rate, while offering a lesser rate of exchange should the
Fund desire to resell that currency to the dealer. The Fund will conduct its
foreign currency exchange transactions either on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign currency exchange market, or through
entering into options or forward or futures contracts to purchase or sell
foreign currencies.

Debt Securities. When the Adviser believes that it is appropriate to do so in
order to achieve the Fund's objective of long-term capital growth, the Fund may
invest up to 20% of its total assets in debt securities including bonds of
foreign governments, supranational organizations and private issuers, including
bonds denominated in the ECU. Portfolio debt investments will be selected on the
basis of, among other things, yield, credit quality, and the fundamental
outlooks for currency and interest rate trends in different parts of the globe,
taking into account the ability to hedge a degree of currency or local bond
price risk. The Fund may purchase "investment-grade" bonds, which are those
rated Aaa, Aa, A or Baa by Moody's Investors Service, Inc. ("Moody's") or AAA,
AA, A or BBB by Standard & Poor's Corporation ("S&P") or, if unrated, judged to
be of equivalent quality, as determined by the Adviser. Moody's considers bonds
it rates Baa to have speculative elements as well as investment-grade
characteristics.

2
<PAGE>

High Yield/High Risk Bonds. The Fund may also purchase, to a limited extent,
debt securities which are rated below investment-grade, that is, rated below Baa
by Moody's or below BBB by S&P, and unrated securities, which usually entail
greater risk (including the possibility of default or bankruptcy of the issuers
of such securities), generally involve greater volatility of price and risk of
principal and income, and may be less liquid, than securities in the higher
rating categories. The lower the ratings of such debt securities, the greater
their risks render them like equity securities. The Fund will invest no more
than 5% of its total assets in securities rated BB or lower by Moody's or Ba by
S&P, and may invest in securities which are rated D by S&P. Securities rated D
may be in default with respect to payment of principal or interest. See the
Appendix to this Statement of Additional Information for a more complete
description of the ratings assigned by ratings organizations and their
respective characteristics.

An economic downturn could disrupt the high yield market and impair the
ability of issuers to repay principal and interest. Also, an increase in
interest rates would have a greater adverse impact on the value of such
obligations than on higher quality debt securities. During an economic downturn
or period of rising interest rates, highly leveraged issues may experience
financial stress which would adversely affect their ability to service their
principal and interest payment obligations. Prices and yields of high yield
securities will fluctuate over time and, during periods of economic uncertainty,
volatility of high yield securities may adversely affect the Fund's net asset
value. In addition, investments in high yield zero coupon or pay-in-kind bonds,
rather than income-bearing high yield securities, may be more speculative and
may be subject to greater fluctuations in value due to changes in interest
rates.

The trading market for high yield securities may be thin to the extent
that there is no established retail secondary market. A thin trading market may
limit the ability of the Fund to accurately value high yield securities in its
portfolio and to dispose of those securities. Adverse publicity and investor
perceptions may decrease the values and liquidity of high yield securities.
These securities may also involve special registration responsibilities,
liabilities and costs, and liquidity and valuation difficulties.

Credit quality in the high-yield securities market can change suddenly and
unexpectedly, and even recently-issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield security. For these reasons, it is
the policy of the Adviser not to rely exclusively on ratings issued by
established credit rating agencies, but to supplement such ratings with its own
independent and on-going review of credit quality. The achievement of the Fund's
investment objective by investment in such securities may be more dependent on
the Adviser's credit analysis than is the case for higher quality bonds. Should
the rating of a portfolio security be downgraded, the Adviser will determine
whether it is in the best interest of the Fund to retain or dispose of such
security.

Prices for below investment-grade securities may be affected by
legislative and regulatory developments. For example, new federal rules require
savings and loan institutions to gradually reduce their holdings of this type of
security. Also, Congress has from time to time considered legislation which
would restrict or eliminate the corporate tax deduction for interest payments in
these securities and regulate corporate restructurings. Such legislation may
significantly depress the prices of outstanding securities of this type.

For more information regarding tax issues related to high yield
securities, see "TAXES."

Illiquid and Restricted Securities. The Fund may occasionally purchase
securities other than in the open market. While such purchases may often offer
attractive opportunities for investment not otherwise available on the open
market, the securities so purchased are often "restricted securities" or "not
readily marketable," i.e., securities which cannot be sold to the public without
registration under the Securities Act of 1933 or the availability of an
exemption from registration (such as Rules 144 or 144A) or because they are
subject to other legal or contractual delays in or restrictions on resale.

Repurchase Agreements. The Fund may enter into repurchase agreements with any
member bank of the Federal Reserve System and any broker-dealer which is
recognized as a reporting government securities dealer if the creditworthiness
of the bank or broker-dealer has been determined by the Adviser to be at least
as high as that of other obligations the Fund may purchase or to be at least
equal to that of issuers of commercial paper rated within the two highest grades
assigned by Moody's or S&P.

A repurchase agreement provides a means for the Fund to earn income on
funds for periods as short as overnight. It is an arrangement under which the
purchaser (i.e., the Fund) acquires a security ("Obligation") and the

3
<PAGE>

seller agrees, at the time of sale, to repurchase the Obligation at a specified
time and price. Securities subject to a repurchase agreement are held in a
segregated account and the value of such securities kept at least equal to the
repurchase price on a daily basis. The repurchase price may be higher than the
purchase price, the difference being income to the Fund, or the purchase and
repurchase prices may be the same, with interest at a stated rate due to the
Fund together with the repurchase price upon repurchase. In either case, the
income to the Fund is unrelated to the interest rate on the Obligation itself.
Obligations will be held by the Custodian or in the Federal Reserve Book Entry
system.

For purposes of the Investment Company Act of 1940, as amended (the "1940
Act"), a repurchase agreement is deemed to be a loan from the Fund to the seller
of the Obligation subject to the repurchase agreement and is therefore subject
to the Fund's investment restriction applicable to loans. It is not clear
whether a court would consider the Obligation purchased by the Fund subject to a
repurchase agreement as being owned by the Fund or as being collateral for a
loan by the Fund to the seller. In the event of the commencement of bankruptcy
or insolvency proceedings with respect to the seller of the Obligation before
repurchase of the Obligation under a repurchase agreement, the Fund may
encounter delay and incur costs before being able to sell the security. Delays
may involve loss of interest or decline in price of the Obligation. If the court
characterizes the transaction as a loan and the Fund has not perfected a
security interest in the Obligation, the Fund may be required to return the
Obligation to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, the Fund would be at risk of losing some or
all of the principal and income involved in the transaction. As with any
unsecured debt instrument purchased for the Fund, the Adviser seeks to minimize
the risk of loss through repurchase agreements by analyzing the creditworthiness
of the obligor, in this case the seller of the Obligation. Apart from the risk
of bankruptcy or insolvency proceedings, there is also the risk that the seller
may fail to repurchase the Obligation, in which case the Fund may incur a loss
if the proceeds to the Fund of the sale to a third party are less than the
repurchase price. However, if the market value of the Obligation subject to the
repurchase agreement becomes less than the repurchase price (including
interest), the Fund will direct the seller of the Obligation to deliver
additional securities so that the market value of all securities subject to the
repurchase agreement will equal or exceed the repurchase price. It is possible
that the Fund will be unsuccessful in seeking to enforce the seller's
contractual obligation to deliver additional securities.

Lending of Portfolio Securities. The Fund may seek to increase its income by
lending portfolio securities. Such loans may be made to registered
broker/dealers and are required to be secured continuously by collateral in
cash, U.S. Government Securities and liquid high grade debt obligations
maintained on a current basis at an amount at least equal to the market value
and accrued interest of the securities loaned. The Fund has the right to call a
loan and obtain the securities loaned on no more than five days' notice. During
the existence of a loan, the Fund will continue to receive the equivalent of any
distributions paid by the issuer on the securities loaned and will also receive
compensation based on investment of the collateral. As with other extensions of
credit there are risks of delay in recovery or even loss of rights in the
collateral should the borrower of the securities fail financially. However, the
loans will be made only to firms deemed by the Adviser to be in good standing.
The value of the securities loaned will not exceed 30% of the value of the
Fund's total assets at the time any loan is made.

Strategic Transactions and Derivatives. The Fund may, but is not required to,
utilize various other investment strategies as described below to hedge various
market risks (such as interest rates, currency exchange rates, and broad or
specific equity or fixed-income market movements), to manage the effective
maturity or duration of fixed-income securities in the Fund's portfolio, or to
enhance potential gain. These strategies may be executed through the use of
derivative contracts. Such strategies are generally accepted as a part of modern
portfolio management and are regularly utilized by many mutual funds and other
institutional investors. Techniques and instruments may change over time as new
instruments and strategies are developed or regulatory changes occur.

In the course of pursuing these investment strategies, the Fund may
purchase and sell exchange-listed and over-the-counter put and call options on
securities, equity and fixed-income indices and other financial instruments,
purchase and sell financial futures contracts and options thereon, enter into
various interest rate transactions such as swaps, caps, floors or collars, and
enter into various currency transactions such as currency forward contracts,
currency futures contracts, currency swaps or options on currencies or currency
futures (collectively, all of the above are called "Strategic Transactions").
Strategic Transactions may be used without limit to attempt to protect against
possible changes in the market value of securities held in or to be purchased
for the Fund's portfolio resulting from securities markets or currency exchange
rate fluctuations, to protect the Fund's unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes, to manage the effective maturity or duration

4
<PAGE>

of fixed-income securities in the Fund's portfolio, or to establish a position
in the derivatives markets as a temporary substitute for purchasing or selling
particular securities. Some Strategic Transactions may also be used to enhance
potential gain although no more than 5% of the Fund's assets will be committed
to Strategic Transactions entered into for non-hedging purposes. Any or all of
these investment techniques may be used at any time and in any combination, and
there is no particular strategy that dictates the use of one technique rather
than another, as use of any Strategic Transaction is a function of numerous
variables including market conditions. The ability of the Fund to utilize these
Strategic Transactions successfully will depend on the Adviser's ability to
predict pertinent market movements, which cannot be assured. The Fund will
comply with applicable regulatory requirements when implementing these
strategies, techniques and instruments. Strategic Transactions involving
financial futures and options thereon will be purchased, sold or entered into
only for bona fide hedging, risk management or portfolio management purposes and
not for speculative purposes.

Strategic Transactions, including derivative contracts, have risks
associated with them including possible default by the other party to the
transaction, illiquidity and, to the extent the Adviser's view as to certain
market movements is incorrect, the risk that the use of such Strategic
Transactions could result in losses greater than if they had not been used. Use
of put and call options may result in losses to the Fund, force the sale or
purchase of portfolio securities at inopportune times or for prices higher than
(in the case of put options) or lower than (in the case of call options) current
market values, limit the amount of appreciation the Fund can realize on its
investments or cause the Fund to hold a security it might otherwise sell. The
use of currency transactions can result in the Fund incurring losses as a result
of a number of factors including the imposition of exchange controls, suspension
of settlements, or the inability to deliver or receive a specified currency. The
use of options and futures transactions entails certain other risks. In
particular, the variable degree of correlation between price movements of
futures contracts and price movements in the related portfolio position of the
Fund creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the Fund's position. In addition, futures and
options markets may not be liquid in all circumstances and certain
over-the-counter options may have no markets. As a result, in certain markets,
the Fund might not be able to close out a transaction without incurring
substantial losses, if at all. Although the use of futures and options
transactions for hedging should tend to minimize the risk of loss due to a
decline in the value of the hedged position, at the same time they tend to limit
any potential gain which might result from an increase in value of such
position. Finally, the daily variation margin requirements for futures contracts
would create a greater ongoing potential financial risk than would purchases of
options, where the exposure is limited to the cost of the initial premium.
Losses resulting from the use of Strategic Transactions would reduce net asset
value, and possibly income, and such losses can be greater than if the Strategic
Transactions had not been utilized.

General Characteristics of Options. Put options and call options typically have
similar structural characteristics and operational mechanics regardless of the
underlying instrument on which they are purchased or sold. Thus, the following
general discussion relates to each of the particular types of options discussed
in greater detail below. In addition, many Strategic Transactions involving
options require segregation of Fund assets in special accounts, as described
below under "Use of Segregated and Other Special Accounts."

A put option gives the purchaser of the option, upon payment of a premium,
the right to sell, and the writer the obligation to buy, the underlying
security, commodity, index, currency or other instrument at the exercise price.
For instance, the Fund's purchase of a put option on a security might be
designed to protect its holdings in the underlying instrument (or, in some
cases, a similar instrument) against a substantial decline in the market value
by giving the Fund the right to sell such instrument at the option exercise
price. A call option, upon payment of a premium, gives the purchaser of the
option the right to buy, and the seller the obligation to sell, the underlying
instrument at the exercise price. The Fund's purchase of a call option on a
security, financial future, index, currency or other instrument might be
intended to protect the Fund against an increase in the price of the underlying
instrument that it intends to purchase in the future by fixing the price at
which it may purchase such instrument. An American style put or call option may
be exercised at any time during the option period while a European style put or
call option may be exercised only upon expiration or during a fixed period prior
thereto. The Fund is authorized to purchase and sell exchange listed options and
over-the-counter options ("OTC options"). Exchange listed options are issued by
a regulated intermediary such as the Options Clearing Corporation ("OCC"), which
guarantees the performance of the obligations of the parties to such options.
The discussion below uses the OCC as an example, but is also applicable to other
financial intermediaries.

5
<PAGE>

With certain exceptions, OCC issued and exchange listed options generally
settle by physical delivery of the underlying security or currency, although in
the future cash settlement may become available. Index options and Eurodollar
instruments are cash settled for the net amount, if any, by which the option is
"in-the-money" (i.e., where the value of the underlying instrument exceeds, in
the case of a call option, or is less than, in the case of a put option, the
exercise price of the option) at the time the option is exercised. Frequently,
rather than taking or making delivery of the underlying instrument through the
process of exercising the option, listed options are closed by entering into
offsetting purchase or sale transactions that do not result in ownership of the
new option.

The Fund's ability to close out its position as a purchaser or seller of
an OCC or exchange listed put or call option is dependent, in part, upon the
liquidity of the option market. Among the possible reasons for the absence of a
liquid option market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange; (iii)
trading halts, suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities including
reaching daily price limits; (iv) interruption of the normal operations of the
OCC or an exchange; (v) inadequacy of the facilities of an exchange or OCC to
handle current trading volume; or (vi) a decision by one or more exchanges to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms.

The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the option markets.

OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. The
Fund will only sell OTC options (other than OTC currency options) that are
subject to a buy-back provision permitting the Fund to require the Counterparty
to sell the option back to the Fund at a formula price within seven days. The
Fund expects generally to enter into OTC options that have cash settlement
provisions, although it is not required to do so.

Unless the parties provide for it, there is no central clearing or
guaranty function in an OTC option. As a result, if the Counterparty fails to
make or take delivery of the security, currency or other instrument underlying
an OTC option it has entered into with the Fund or fails to make a cash
settlement payment due in accordance with the terms of that option, the Fund
will lose any premium it paid for the option as well as any anticipated benefit
of the transaction. Accordingly, the Adviser must assess the creditworthiness of
each such Counterparty or any guarantor or credit enhancement of the
Counterparty's credit to determine the likelihood that the terms of the OTC
option will be satisfied. The Fund will engage in OTC option transactions only
with U.S. government securities dealers recognized by the Federal Reserve Bank
of New York as "primary dealers" or broker/dealers, domestic or foreign banks or
other financial institutions which have received (or the guarantors of the
obligation of which have received) a short-term credit rating of A-1 from S&P or
P-1 from Moody's or an equivalent rating from any nationally recognized
statistical rating organization ("NRSRO") or, in the case of OTC currency
transactions, are determined to be of equivalent credit quality by the Adviser.
The staff of the SEC currently takes the position that OTC options purchased by
the Fund, and portfolio securities "covering" the amount of the Fund's
obligation pursuant to an OTC option sold by it (the cost of the sell-back plus
the in-the-money amount, if any) are illiquid, and are subject to the Fund's
limitation on investing no more than 10% of its total assets in illiquid
securities.

If the Fund sells a call option, the premium that it receives may serve as
a partial hedge, to the extent of the option premium, against a decrease in the
value of the underlying securities or instruments in its portfolio or will
increase the Fund's income. The sale of put options can also provide income.

The Fund may purchase and sell call options on securities including U.S.
Treasury and agency securities, mortgage-backed securities, corporate debt
securities, equity securities (including convertible securities) and Eurodollar
instruments that are traded on U.S. and foreign securities exchanges and in the
over-the-counter markets, and on

6
<PAGE>

securities indices, currencies and futures contracts. All calls sold by the Fund
must be "covered" (i.e., the Fund must own the securities or futures contract
subject to the call) or must meet the asset segregation requirements described
below as long as the call is outstanding. Even though the Fund will receive the
option premium to help protect it against loss, a call sold by the Fund exposes
the Fund during the term of the option to possible loss of opportunity to
realize appreciation in the market price of the underlying security or
instrument and may require the Fund to hold a security or instrument which it
might otherwise have sold.

The Fund may purchase and sell put options on securities including U.S.
Treasury and agency securities, mortgage-backed securities, foreign sovereign
debt, corporate debt securities, equity securities (including convertible
securities) and Eurodollar instruments (whether or not it holds the above
securities in its portfolio), and on securities indices, currencies and futures
contracts other than futures on individual corporate debt and individual equity
securities. The Fund will not sell put options if, as a result, more than 50% of
the Fund's assets would be required to be segregated to cover its potential
obligations under such put options, other than those with respect to futures and
options thereon. In selling put options, there is a risk that the Fund may be
required to buy the underlying security at a disadvantageous price above the
market price.

General Characteristics of Futures. The Fund may enter into financial futures
contracts or purchase or sell put and call options on such futures as a hedge
against anticipated interest rate, currency or equity market changes, for
duration management and for risk management purposes. Futures are generally
bought and sold on the commodities exchanges where they are listed with payment
of initial and variation margin as described below. The sale of a futures
contract creates a firm obligation by the Fund, as seller, to deliver to the
buyer the specific type of financial instrument called for in the contract at a
specific future time for a specified price (or, with respect to index futures
and Eurodollar instruments, the net cash amount). Options on futures contracts
are similar to options on securities except that an option on a futures contract
gives the purchaser the right in return for the premium paid to assume a
position in a futures contract and obligates the seller to deliver such
position.

The Fund's use of financial futures and options thereon will in all cases
be consistent with applicable regulatory requirements and in particular the
rules and regulations of the Commodity Futures Trading Commission and will be
entered into only for bona fide hedging, risk management (including duration
management) or other portfolio management purposes. Typically, maintaining a
futures contract or selling an option thereon requires the Fund to deposit with
a financial intermediary as security for its obligations an amount of cash or
other specified assets (initial margin) which initially is typically 1% to 10%
of the face amount of the contract (but may be higher in some circumstances).
Additional cash or assets (variation margin) may be required to be deposited
thereafter on a daily basis as the marked to market value of the contract
fluctuates. The purchase of an option on financial futures involves payment of a
premium for the option without any further obligation on the part of the Fund.
If the Fund exercises an option on a futures contract it will be obligated to
post initial margin (and potential subsequent variation margin) for the
resulting futures position just as it would for any position. Futures contracts
and options thereon are generally settled by entering into an offsetting
transaction but there can be no assurance that the position can be offset prior
to settlement at an advantageous price, nor that delivery will occur.

The Fund will not enter into a futures contract or related option (except
for closing transactions) if, immediately thereafter, the sum of the amount of
its initial margin and premiums on open futures contracts and options thereon
would exceed 5% of the Fund's total assets (taken at current value); however, in
the case of an option that is in-the-money at the time of the purchase, the
in-the-money amount may be excluded in calculating the 5% limitation. The
segregation requirements with respect to futures contracts and options thereon
are described below.

Options on Securities Indices and Other Financial Indices. The Fund also may
purchase and sell call and put options on securities indices and other financial
indices and in so doing can achieve many of the same objectives it would achieve
through the sale or purchase of options on individual securities or other
instruments. Options on securities indices and other financial indices are
similar to options on a security or other instrument except that, rather than
settling by physical delivery of the underlying instrument, they settle by cash
settlement, i.e., an option on an index gives the holder the right to receive,
upon exercise of the option, an amount of cash if the closing level of the index
upon which the option is based exceeds, in the case of a call, or is less than,
in the case of a put, the exercise price of the option (except if, in the case
of an OTC option, physical delivery is specified). This amount of cash is equal
to the excess of the closing price of the index over the exercise price of the
option, which also may be multiplied by a formula value. The seller of the
option is obligated, in return for the premium received, to make delivery of
this

7
<PAGE>

amount. The gain or loss on an option on an index depends on price movements in
the instruments making up the market, market segment, industry or other
composite on which the underlying index is based, rather than price movements in
individual securities, as is the case with respect to options on securities.

Currency Transactions. The Fund may engage in currency transactions with
Counterparties in order to hedge the value of portfolio holdings denominated in
particular currencies against fluctuations in relative value. Currency
transactions include forward currency contracts, exchange listed currency
futures, exchange listed and OTC options on currencies, and currency swaps. A
forward currency contract involves a privately negotiated obligation to purchase
or sell (with delivery generally required) a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. A currency swap is
an agreement to exchange cash flows based on the notional difference among two
or more currencies and operates similarly to an interest rate swap, which is
described below. The Fund may enter into currency transactions with
Counterparties which have received (or the guarantors of the obligations which
have received) a credit rating of A-1 or P-1 by S&P or Moody's, respectively, or
that have an equivalent rating from an NRSRO or are determined to be of
equivalent credit quality by the Adviser.

The Fund's dealings in forward currency contracts and other currency
transactions such as futures, options, options on futures and swaps will be
limited to hedging involving either specific transactions or portfolio
positions. Transaction hedging is entering into a currency transaction with
respect to specific assets or liabilities of the Fund, which will generally
arise in connection with the purchase or sale of its portfolio securities or the
receipt of income therefrom. Position hedging is entering into a currency
transaction with respect to portfolio security positions denominated or
generally quoted in that currency.

The Fund will not enter into a transaction to hedge currency exposure to
an extent greater, after netting all transactions intended wholly or partially
to offset other transactions, than the aggregate market value (at the time of
entering into the transaction) of the securities held in its portfolio that are
denominated or generally quoted in or currently convertible into such currency,
other than with respect to proxy hedging or cross hedging as described below.

The Fund may also cross-hedge currencies by entering into transactions to
purchase or sell one or more currencies that are expected to decline in value
relative to other currencies to which the Fund has or in which the Fund expects
to have portfolio exposure.

To reduce the effect of currency fluctuations on the value of existing or
anticipated holdings of portfolio securities, the Fund may also engage in proxy
hedging. Proxy hedging is often used when the currency to which the Fund's
portfolio is exposed is difficult to hedge or to hedge against the dollar. Proxy
hedging entails entering into a commitment or option to sell a currency whose
changes in value are generally considered to be correlated to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, in exchange for U.S. dollars. The amount of the
commitment or option would not exceed the value of the Fund's securities
denominated in correlated currencies. For example, if the Adviser considers that
the Austrian schilling is correlated to the German deutschemark (the "D-mark"),
the Fund holds securities denominated in schillings and the Adviser believes
that the value of schillings will decline against the U.S. dollar, the Adviser
may enter into a commitment or option to sell D-marks and buy dollars. Currency
hedging involves some of the same risks and considerations as other transactions
with similar instruments. Currency transactions can result in losses to the Fund
if the currency being hedged fluctuates in value to a degree or in a direction
that is not anticipated. Further, there is the risk that the perceived
correlation between various currencies may not be present or may not be present
during the particular time that the Fund is engaging in proxy hedging. If the
Fund enters into a currency hedging transaction, the Fund will comply with the
asset segregation requirements described below.

Risks of Currency Transactions. Currency transactions are subject to risks
different from those of other portfolio transactions. Because currency control
is of great importance to the issuing governments and influences economic
planning and policy, purchases and sales of currency and related instruments can
be negatively affected by government exchange controls, blockages, and
manipulations or exchange restrictions imposed by governments. These can result
in losses to the Fund if it is unable to deliver or receive currency or funds in
settlement of obligations and could also cause hedges it has entered into to be
rendered useless, resulting in full currency exposure as well as incurring
transaction costs. Buyers and sellers of currency futures are subject to the
same risks that apply to the use of futures generally. Further, settlement of a
currency futures contract for the purchase of most currencies must occur at a
bank

8
<PAGE>

based in the issuing nation. Trading options on currency futures is relatively
new, and the ability to establish and close out positions on such options is
subject to the maintenance of a liquid market which may not always be available.
Currency exchange rates may fluctuate based on factors extrinsic to that
country's economy.

Combined Transactions. The Fund may enter into multiple transactions, including
multiple options transactions, multiple futures transactions, multiple currency
transactions (including forward currency contracts) and multiple interest rate
transactions and any combination of futures, options, currency and interest rate
transactions ("component" transactions), instead of a single Strategic
Transaction, as part of a single or combined strategy when, in the opinion of
the Adviser, it is in the best interests of the Fund to do so. A combined
transaction will usually contain elements of risk that are present in each of
its component transactions. Although combined transactions are normally entered
into based on the Adviser's judgment that the combined strategies will reduce
risk or otherwise more effectively achieve the desired portfolio management
goal, it is possible that the combination will instead increase such risks or
hinder achievement of the portfolio management objective.

Swaps, Caps, Floors and Collars. Among the Strategic Transactions into which the
Fund may enter are interest rate, currency and index swaps and the purchase or
sale of related caps, floors and collars. The Fund expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
duration management technique or to protect against any increase in the price of
securities the Fund anticipates purchasing at a later date. The Fund intends to
use these transactions as hedges and not as speculative investments and will not
sell interest rate caps or floors where it does not own securities or other
instruments providing the income stream the Fund may be obligated to pay.
Interest rate swaps involve the exchange by the Fund with another party of their
respective commitments to pay or receive interest, e.g., an exchange of floating
rate payments for fixed rate payments with respect to a notional amount of
principal. A currency swap is an agreement to exchange cash flows on a notional
amount of two or more currencies based on the relative value differential among
them and an index swap is an agreement to swap cash flows on a notional amount
based on changes in the values of the reference indices. The purchase of a cap
entitles the purchaser to receive payments on a notional principal amount from
the party selling such cap to the extent that a specified index exceeds a
predetermined interest rate or amount. The purchase of a floor entitles the
purchaser to receive payments on a notional principal amount from the party
selling such floor to the extent that a specified index falls below a
predetermined interest rate or amount. A collar is a combination of a cap and a
floor that preserves a certain return within a predetermined range of interest
rates or values.

The Fund will usually enter into swaps on a net basis, i.e., the two
payment streams are netted out in a cash settlement on the payment date or dates
specified in the instrument, with the Fund receiving or paying, as the case may
be, only the net amount of the two payments. Inasmuch as these swaps, caps,
floors and collars are entered into for good faith hedging purposes, the Adviser
and the Fund believe such obligations do not constitute senior securities under
the 1940 Act, and, accordingly, will not treat them as being subject to its
borrowing restrictions. The Fund will not enter into any swap, cap, floor or
collar transaction unless, at the time of entering into such transaction, the
unsecured long-term debt of the Counterparty, combined with any credit
enhancements, is rated at least A by S&P or Moody's or has an equivalent rating
from an NRSRO or is determined to be of equivalent credit quality by the
Adviser. If there is a default by the Counterparty, the Fund may have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years with a large number of banks
and investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid. Caps, floors and collars are more recent innovations for
which standardized documentation has not yet been fully developed and,
accordingly, they are less liquid than swaps.

Eurodollar Instruments. The Fund may make investments in Eurodollar instruments.
Eurodollar instruments are U.S. dollar-denominated futures contracts or options
thereon which are linked to the London Interbank Offered Rate ("LIBOR"),
although foreign currency-denominated instruments are available from time to
time. Eurodollar futures contracts enable purchasers to obtain a fixed rate for
the lending of funds and sellers to obtain a fixed rate for borrowings. The Fund
might use Eurodollar futures contracts and options thereon to hedge against
changes in LIBOR, to which many interest rate swaps and fixed income instruments
are linked.

Risks of Strategic Transactions Outside the U.S. When conducted outside the
U.S., Strategic Transactions may not be regulated as rigorously as in the U.S.,
may not involve a clearing mechanism and related guarantees, and are subject to
the risk of governmental actions affecting trading in, or the prices of, foreign
securities, currencies and other instruments. The value of such positions also
could be adversely affected by: (i) other complex foreign political, legal

9
<PAGE>

and economic factors, (ii) lesser availability than in the U.S. of data on which
to make trading decisions, (iii) delays in the Fund's ability to act upon
economic events occurring in foreign markets during non-business hours in the
U.S., (iv) the imposition of different exercise and settlement terms and
procedures and margin requirements than in the U.S., and (v) lower trading
volume and liquidity.

Use of Segregated and Other Special Accounts. Many Strategic Transactions, in
addition to other requirements, require that the Fund segregate cash or liquid
assets with its custodian to the extent Fund obligations are not otherwise
"covered" through ownership of the underlying security, financial instrument or
currency. In general, either the full amount of any obligation by the Fund to
pay or deliver securities or assets must be covered at all times by the
securities, instruments or currency required to be delivered, or, subject to any
regulatory restrictions, an amount of cash or liquid securities at least equal
to the current amount of the obligation must be segregated with the custodian.
The segregated assets cannot be sold or transferred unless equivalent assets are
substituted in their place or it is no longer necessary to segregate them. For
example, a call option written by the Fund will require the Fund to hold the
securities subject to the call (or securities convertible into the needed
securities without additional consideration) or to segregate cash or liquid
securities sufficient to purchase and deliver the securities if the call is
exercised. A call option sold by the Fund on an index will require the Fund to
own portfolio securities which correlate with the index or to segregate cash or
liquid assets equal to the excess of the index value over the exercise price on
a current basis. A put option written by the Fund requires the Fund to segregate
cash or liquid assets equal to the exercise price.

Except when the Fund enters into a forward contract for the purchase or
sale of a security denominated in a particular currency, which requires no
segregation, a currency contract which obligates the Fund to buy or sell
currency will generally require the Fund to hold an amount of that currency or
liquid securities denominated in that currency equal to the Fund's obligations
or to segregate cash or liquid assets equal to the amount of the Fund's
obligation.

OTC options entered into by the Fund, including those on securities,
currency, financial instruments or indices and OCC issued and exchange listed
index options, will generally provide for cash settlement. As a result, when the
Fund sells these instruments it will only segregate an amount of assets equal to
its accrued net obligations, as there is no requirement for payment or delivery
of amounts in excess of the net amount. These amounts will equal 100% of the
exercise price in the case of a non cash-settled put, the same as an OCC
guaranteed listed option sold by the Fund, or the in-the-money amount plus any
sell-back formula amount in the case of a cash-settled put or call. In addition,
when the Fund sells a call option on an index at a time when the in-the-money
amount exceeds the exercise price, the Fund will segregate, until the option
expires or is closed out, cash or cash equivalents equal in value to such
excess. OCC issued and exchange listed options sold by the Fund other than those
above generally settle with physical delivery, or with an election of either
physical delivery or cash settlement and the Fund will segregate an amount of
assets equal to the full value of the option. OTC options settling with physical
delivery, or with an election of either physical delivery or cash settlement
will be treated the same as other options settling with physical delivery.

In the case of a futures contract or an option thereon, the Fund must
deposit initial margin and possible daily variation margin in addition to
segregating assets sufficient to meet its obligation to purchase or provide
securities or currencies, or to pay the amount owed at the expiration of an
index-based futures contract. Such assets may consist of cash, cash equivalents,
liquid debt or equity securities or other acceptable assets.

With respect to swaps, the Fund will accrue the net amount of the excess,
if any, of its obligations over its entitlements with respect to each swap on a
daily basis and will segregate an amount of cash or liquid assets having a value
equal to the accrued excess. Caps, floors and collars require segregation of
assets with a value equal to the Fund's net obligation, if any.

Strategic Transactions may be covered by other means when consistent with
applicable regulatory policies. The Fund may also enter into offsetting
transactions so that its combined position, coupled with any segregated assets,
equals its net outstanding obligation in related options and Strategic
Transactions. For example, the Fund could purchase a put option if the strike
price of that option is the same or higher than the strike price of a put option
sold by the Fund. Moreover, instead of segregating assets if the Fund held a
futures or forward contract, it could purchase a put option on the same futures
or forward contract with a strike price as high or higher than the price of the
contract held. Other Strategic Transactions may also be offset in combinations.
If the offsetting transaction terminates at the time of or after the primary
transaction no segregation is required, but if it terminates prior to such time,
assets equal to any remaining obligation would need to be segregated.

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<PAGE>

Investment Restrictions

The policies set forth below are fundamental policies of the Fund and may
not be changed without the approval of a majority of the Fund's outstanding
shares. As used in this Statement of Additional Information, a "majority of the
outstanding voting securities of the Fund" means the lesser of (1) 67% or more
of the voting securities present at such meeting, if the holders of more than
50% of the outstanding voting securities of the Fund are present or represented
by proxy; or (2) more than 50% of the outstanding voting securities of the Fund.
The Fund has elected to be classified as a diversified series of an open-end
investment company.

In addition, as a matter of fundamental policy, the Fund will not:

(1) borrow money, except as permitted under the 1940 Act, as amended,
and as interpreted or modified by regulatory authority having
jurisdiction, from time to time;

(2) issue senior securities, except as permitted under the 1940 Act,
as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time;

(3) concentrate its investments in a particular industry, as that
term is used in the 1940 Act, as amended, and as interpreted or
modified by regulatory authority having jurisdiction, from time
to time;

(4) engage in the business of underwriting securities issued by
others, except to the extent that the Fund may be deemed to be an
underwriter in connection with the disposition of portfolio
securities;

(5) purchase or sell real estate, which term does not include
securities of companies which deal in real estate or mortgages or
investments secured by real estate or interests therein, except
that the Fund reserves freedom of action to hold and to sell real
estate acquired as a result of the Fund's ownership of
securities;

(6) purchase physical commodities or contracts relating to physical
commodities; or

(7) make loans to other persons, except (i) loans of portfolio
securities, and (ii) to the extent that entry into repurchase
agreements and the purchase of debt instruments or interests in
indebtedness in accordance with the Fund's objective and policies
may be deemed to be loans.

The Fund will not as a matter of nonfundamental policy:

1) borrow money in an amount greater than 5% of its total assets,
except (i) for temporary or emergency purposes and (ii) by
engaging in reverse repurchase agreements, dollar rolls, or other
investments or transactions described in the Fund's registration
statement which may be deemed to be borrowings;

(2) enter into either of reverse repurchase agreements or dollar
rolls in an amount greater than 5% of its total assets;

(3) purchase securities on margin or make short sales, except (i)
short sales against the box, (ii) in connection with arbitrage
transactions, (iii) for margin deposits in connection with
futures contracts, options or other permitted investments, (iv)
that transactions in futures contracts and options shall not be
deemed to constitute selling securities short, and (v) that the
Fund may obtain such short-term credits as may be necessary for
the clearance of securities transactions;

(4) purchase options, unless the aggregate premiums paid on all such
options held by the Fund at any time do not exceed 20% of its
total assets; or sell put options, if as a result, the aggregate
value of the obligations underlying such put options would exceed
50% of its total assets;

(5) enter into futures contracts or purchase options thereon unless
immediately after the purchase, the value of the aggregate
initial margin with respect to such futures contracts entered
into on behalf of the Fund and the premiums paid for such options
on futures contracts does not exceed 5% of the fair market value
of the Fund's total assets; provided that in the case of an
option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in computing the 5% limit;

11
<PAGE>

(6) purchase warrants if as a result, such securities, taken at the
lower of cost or market value, would represent more than 5% of
the value of the Fund's total assets (for this purpose, warrants
acquired in units or attached to securities will be deemed to
have no value); and

(7) lend portfolio securities in an amount greater than 5% of its
total assets.

In addition to the foregoing restrictions, it is not the policy of the
Fund to concentrate its investments in any particular industry and the Fund's
management does not intend to make acquisitions in particular industries which
would increase the percentage of the market value of the Fund's assets above 25%
for any one industry. The Fund may not deviate from such policy without a vote
of a majority of the outstanding shares as provided by the 1940 Act.

Any investment restrictions herein which involve a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the percentage occurs immediately after, and is caused by, an acquisition
or encumbrance of securities or assets of, or borrowings by, the Fund.

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<PAGE>

PURCHASES

(See "Transaction Information-Purchasing Shares" in the Shares' Prospectus)

There is a $25,000 minimum initial investment in the Barrett International
Shares class of shares of the Fund. The minimum subsequent investment in the
Shares is $1,000. Investment minimums may be waived for Directors and officers
of the Corporation and certain other affiliates and entities. The Fund and
Scudder Investor Services, Inc. (the "Distributor") reserve the right to reject
any purchase order. All funds will be invested in full and fractional Shares.

Shares of the Fund may be purchased by writing or calling Scudder Service
Corporation, a subsidiary of the Adviser (the "Transfer Agent"). Due to the
desire of the Corporation to afford ease of redemption, certificates will not be
issued to indicate ownership in the Fund. Orders for Shares of the Fund will be
executed at the net asset value per Share next determined after an order has
become effective.

By investing in the Fund, a shareholder appoints the Transfer Agent to
establish an open account to which all shares purchased will be credited with
any dividends and capital gains distributions that are paid in additional
Shares. See "Distribution and Performance Information-Dividends and Capital
Gains Distributions" in the Shares' Prospectus.

REDEEMING SHARES

(See "Transaction Information-Redeeming Shares" in the Shares' Prospectus)

Payment of redemption proceeds may be made in securities. The Corporation
may suspend the right of redemption with respect to the Fund during any period
when (i) trading on the New York Stock Exchange (the "Exchange") is restricted
or the Exchange is closed, other than customary weekend and holiday closings,
(ii) the SEC has by order permitted such suspension or (iii) an emergency, as
defined by rules of the SEC, exists making disposal of Fund securities or
determination of the value of the net assets of the Fund not reasonably
practicable.

A shareholder's account remains open for up to one year following complete
redemption and all costs during the period will be borne by the Fund. This
permits an investor to resume investments.

FEATURES AND SERVICES OFFERED BY THE FUND

(See "Shareholders Benefits" in the Shares' Prospectus)

Special Monthly Summary of Accounts. A special service is available to
banks, brokers, investment advisers, trust companies and others who have a
number of accounts in any Fund. In addition to the copy of the regular Statement
of Account furnished to the registered holder after each transaction, a monthly
summary of accounts can be provided. The monthly summary will show for each
account the account number, the month-end share balance and the dividends and
distributions paid during the month. All costs of this service will be borne by
the Corporation. For information on the special monthly summary of accounts,
contact the Corporation.

DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

(See "Distribution and performance information - Dividends and capital gains
distributions" in the Shares' prospectus.)

The Fund intends to follow the practice of distributing all of its
investment company taxable income, which includes any excess of net realized
short-term capital gains over net realized long-term capital losses. The Fund
may follow the practice of distributing the entire excess of net realized
long-term capital gains over net realized short-term capital losses. However,
the Fund may retain all or part of such gain for reinvestment after paying the
related federal income taxes for which the shareholders may then be asked to
claim a credit against their federal income tax liability. (See "TAXES.")

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<PAGE>

If the Fund does not distribute the amount of capital gain and/or ordinary
income required to be distributed by an excise tax provision of the Code, the
Fund may be subject to that excise tax. (See "TAXES.") In certain circumstances,
the Fund may determine that it is in the interest of shareholders to distribute
less than the required amount.

Earnings and profits distributed to shareholders on redemptions of Fund
shares may be utilized by the Fund, to the extent permissible, as part of the
Fund's dividends paid deduction on its federal tax return.

The Fund intends to distribute its investment company taxable income and
any net realized capital gains in November or December to avoid federal excise
tax, although an additional distribution may be made if necessary.

Both types of distributions will be made in Shares of the Fund and
confirmations will be mailed to each shareholder unless a shareholder has
elected to receive cash, in which case a check will be sent. Distributions of
investment company taxable income and net realized capital gains are taxable
(See "TAXES"), whether made in Shares or cash.

Each distribution is accompanied by a brief explanation of the form and
character of the distribution. The characterization of distributions on such
correspondence may differ from the characterization for federal tax purposes. In
January of each year the Fund issues to each shareholder a statement of the
federal income tax status of all distributions in the prior calendar year.

PERFORMANCE INFORMATION

(See "Distribution and performance information-Performance information"
in the Shares' prospectus.)

From time to time, quotations of the Shares' performance may be included
in advertisements, sales literature or reports to shareholders or prospective
investors. These performance figures will be calculated in the following manner:

Average Annual Total Return

Average Annual Total Return is the average annual compound rate of return
for the periods of one year, five years, and ten years, all ended on the last
day of a recent calendar quarter. Average annual total return quotations reflect
changes in the price of the Shares and assume that all dividends and capital
gains distributions during the respective periods were reinvested in the Shares.
Average annual total return is calculated by finding the average annual compound
rates of return of a hypothetical investment over such periods, according to the
following formula (average annual total return is then expressed as a
percentage):

T = (ERV/P)1/n - 1

Where:

P = a hypothetical initial investment of $1,000
T = Average Annual Total Return
n = number of years
ERV = ending redeemable value: ERV is the value, at the end of
the applicable period, of a hypothetical $1,000
investment made at the beginning of the applicable
period.

Cumulative Total Return

Cumulative Total Return is the compound rate of return on a hypothetical
initial investment of $1,000 for a specified period. Cumulative Total Return
quotations reflect changes in the price of the Shares and assume that all
dividends and capital gains distributions during the period were reinvested in
the Shares. Cumulative Total Return is calculated by finding the cumulative
rates of return of a hypothetical investment over such periods, according to the
following formula (Cumulative Total Return is then expressed as a percentage):

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<PAGE>

C = (ERV/P) -1

Where:

C = Cumulative Total Return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: ERV is the value, at the end of
the applicable period, of a hypothetical $1,000
investment made at the beginning of the applicable
period.

Total Return

Total Return is the rate of return on an investment for a specified period
of time calculated in the same manner as Cumulative Total Return.

Comparison of Fund Performance

A comparison of the quoted non-standard performance offered for various
investments is valid only if performance is calculated in the same manner. Since
there are different methods of calculating performance, investors should
consider the effects of the methods used to calculate performance when comparing
performance of the Shares with performance quoted with respect to other
investment companies or types of investments.

In connection with communicating its performance to current or prospective
shareholders, the Fund also may compare these figures to the performance of
unmanaged indices which may assume reinvestment of dividends or interest but
generally do not reflect deductions for administrative and management costs.
Examples include, but are not limited to the Dow Jones Industrial Average, the
Consumer Price Index, Standard & Poor's 500 Composite Stock Price Index (S&P
500), the NASDAQ OTC Composite Index, the NASDAQ Industrials Index, the Russell
2000 Index, and statistics published by the Small Business Administration.

Because some or all of the Fund's investments are denominated in foreign
currencies, the strength or weakness of the U.S. dollar as against these
currencies may account for part of the Shares' investment performance.
Historical information on the value of the dollar versus foreign currencies may
be used from time to time in advertisements concerning the Fund. Such historical
information is not indicative of future fluctuations in the value of the U.S.
dollar against these currencies. In addition, marketing materials may cite
country and economic statistics and historical stock market performance for any
of the countries in which the Fund invests, including, but not limited to, the
following: population growth, gross domestic product, inflation rate, average
stock market price-earnings ratios and the total value of stock markets. Sources
for such statistics may include official publications of various foreign
governments and exchanges.

From time to time, in advertising and marketing literature, The Shares'
performance may be compared to the performance of broad groups of mutual funds
with similar investment goals, as tracked by independent organizations such as,
Investment Company Data, Inc. ("ICD"), Lipper Analytical Services, Inc.
("Lipper"), CDA Investment Technologies, Inc. ("CDA"), Morningstar, Inc., Value
Line Mutual Fund Survey and other independent organizations. When these
organizations' tracking results are used, the Fund will be compared to the
appropriate fund category, that is, by fund objective and portfolio holdings, or
to the appropriate volatility grouping, where volatility is a measure of a
fund's risk. For instance, a Scudder growth fund will be compared to funds in
the growth fund category; a Scudder income fund will be compared to funds in the
income fund category; and so on. Scudder funds (except for money market funds)
may also be compared to funds with similar volatility, as measured statistically
by independent organizations. In addition, the Shares' performance may also be
compared to the performance of broad groups of comparable mutual funds.
Unmanaged indices with which the Fund's performance may be compared include, but
are not limited to, the following:

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<PAGE>

The Europe/Australia/Far East (EAFE) Index
International Finance Corporation's Latin America Investable Total
Return Index
Morgan Stanley Capital International World Index
J.P. Morgan Global Traded Bond Index
Salomon Brothers World Government Bond Index
NASDAQ Composite Index
Wilshire 5000 Stock Index

From time to time, in marketing and other Fund literature, Directors and
officers of the Fund, the Fund's portfolio manager, or members of the portfolio
management team may be depicted and quoted to give prospective and current
shareholders a better sense of the outlook and approach of those who manage the
Fund. In addition, the amount of assets that the Adviser has under management in
various geographical areas may be quoted in advertising and marketing materials.

The Fund may be advertised as an investment choice in Scudder's college
planning program. The description may contain illustrations of projected future
college costs based on assumed rates of inflation and examples of hypothetical
fund performance, calculated as described above.

Statistical and other information, as provided by the Social Security
Administration, may be used in marketing materials pertaining to retirement
planning in order to estimate future payouts of social security benefits.
Estimates may be used on demographic and economic data.

Marketing and other Fund literature may include a description of the
potential risks and rewards associated with an investment in the Fund and the
Shares. The description may include a "risk/return spectrum" which compares the
Fund to other Scudder funds or broad categories of funds, such as money market,
bond or equity funds, in terms of potential risks and returns. Money market
funds are designed to maintain a constant $1.00 share price and have a
fluctuating yield. Share price, yield and total return of a bond fund will
fluctuate. The share price and return of an equity fund also will fluctuate. The
description may also compare the Fund to bank products, such as certificates of
deposit. Unlike mutual funds, certificates of deposit are insured up to $100,000
by the U.S. government and offer a fixed rate of return.

Because bank products guarantee the principal value of an investment and
money market funds seek stability of principal, these investments are considered
to be less risky than investments in either bond or equity funds, which may
involve the loss of principal. However, all long-term investments, including
investments in bank products, may be subject to inflation risk, which is the
risk of erosion of the value of an investment as prices increase over a long
time period. The risks/returns associated with an investment in bond or equity
funds depend upon many factors. For bond funds these factors include, but are
not limited to, a fund's overall investment objective, the average portfolio
maturity, credit quality of the securities held, and interest rate movements.
For equity funds, factors include a fund's overall investment objective, the
types of equity securities held and the financial position of the issuers of the
securities. The risks/returns associated with an investment in international
bond or equity funds also will depend upon currency exchange rate fluctuation.

A risk/return spectrum generally will position the various investment
categories in the following order: bank products, money market funds, bond funds
and equity funds. Shorter-term bond funds generally are considered less risky
and offer the potential for less return than longer-term bond funds. The same is
true of domestic bond funds relative to international bond funds, and bond funds
that purchase higher quality securities relative to bond funds that purchase
lower quality securities. Growth and income equity funds are generally
considered to be less risky and offer the potential for less return than growth
funds. In addition, international equity funds usually are considered more risky
than domestic equity funds but generally offer the potential for greater return.

Risk/return spectrums also may depict funds that invest in both domestic
and foreign securities or a combination of bond and equity securities.

Evaluation of Fund performance or other relevant statistical information
made by independent sources may also be used in advertisements concerning the
Fund, including reprints of, or selections from, editorials or articles about
this Fund. Sources for Fund performance information and articles about the Fund
include the following:

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<PAGE>

American Association of Individual Investors' Journal, a monthly publication of
the AAII that includes articles on investment analysis techniques.

Asian Wall Street Journal, a weekly Asian newspaper that often reviews U.S.
mutual funds investing internationally.

Banxquote, an on-line source of national averages for leading money market and
bank CD interest rates, published on a weekly basis by Masterfund, Inc. of
Wilmington, Delaware.

Barron's, a Dow Jones and Company, Inc. business and financial weekly that
periodically reviews mutual fund performance data.

Business Week, a national business weekly that periodically reports the
performance rankings and ratings of a variety of mutual funds investing abroad.

CDA Investment Technologies, Inc., an organization which provides performance
and ranking information through examining the dollar results of hypothetical
mutual fund investments and comparing these results against appropriate market
indices.

Consumer Digest, a monthly business/financial magazine that includes a "Money
Watch" section featuring financial news.

Financial Times, Europe's business newspaper, which features from time to time
articles on international or country-specific funds.

Financial World, a general business/financial magazine that includes a "Market
Watch" department reporting on activities in the mutual fund industry.

Forbes, a national business publication that from time to time reports the
performance of specific investment companies in the mutual fund industry.

Fortune, a national business publication that periodically rates the performance
of a variety of mutual funds.

The Frank Russell Company, a West-Coast investment management firm that
periodically evaluates international stock markets and compares foreign equity
market performance to U.S. stock market performance.

Global Investor, a European publication that periodically reviews the
performance of U.S. mutual funds investing internationally.

IBC Money Fund Report, a weekly publication of IBC Financial Data, Inc.,
reporting on the performance of the nation's money market funds, summarizing
money market fund activity and including certain averages as performance
benchmarks, specifically "IBC's Money Fund Average," and "IBC's Government Money
Fund Average."

Ibbotson Associates, Inc., a company specializing in investment research and
data.

Investment Company Data, Inc., an independent organization which provides
performance ranking information for broad classes of mutual funds.

Investor's Business Daily, a daily newspaper that features financial, economic,
and business news.

Kiplinger's Personal Finance Magazine, a monthly investment advisory publication
that periodically features the performance of a variety of securities.

Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis, a weekly
publication of industry-wide mutual fund averages by type of fund.

17
<PAGE>

Money, a monthly magazine that from time to time features both specific funds
and the mutual fund industry as a whole.

Morgan Stanley International, an integrated investment banking firm that
compiles statistical information.

Mutual Fund Values, a biweekly Morningstar, Inc. publication that provides
ratings of mutual funds based on fund performance, risk and portfolio
characteristics.

The New York Times, a nationally distributed newspaper which regularly covers
financial news.

The No-Load Fund Investor, a monthly newsletter, published by Sheldon Jacobs,
that includes mutual fund performance data and recommendations for the mutual
fund investor.

No-Load Fund*X, a monthly newsletter, published by DAL Investment Company, Inc.,
that reports on mutual fund performance, rates funds and discusses investment
strategies for the mutual fund investor.

Personal Investing News, a monthly news publication that often reports on
investment opportunities and market conditions.

Personal Investor, a monthly investment advisory publication that includes a
"Mutual Funds Outlook" section reporting on mutual fund performance measures,
yields, indices and portfolio holdings.

Smart Money, a national personal finance magazine published monthly by Dow Jones
and Company, Inc. and The Hearst Corporation. Focus is placed on ideas for
investing, spending and saving.

Success, a monthly magazine targeted to the world of entrepreneurs and growing
business, often featuring mutual fund performance data.

United Mutual Fund Selector, a semi-monthly investment newsletter, published by
Babson United Investment Advisors, that includes mutual fund performance data
and reviews of mutual fund portfolios and investment strategies.

USA Today, a leading national daily newspaper.

U.S. News and World Report, a national news weekly that periodically reports
mutual fund performance data.

Value Line Mutual Fund Survey, an independent organization that provides
biweekly performance and other information on mutual funds.

The Wall Street Journal, a Dow Jones and Company, Inc. newspaper which regularly
covers financial news.

Wiesenberger Investment Companies Services, an annual compendium of information
about mutual funds and other investment companies, including comparative data on
funds' backgrounds, management policies, salient features, management results,
income and dividend records and price ranges.

Working Woman, a monthly publication that features a "Financial Workshop"
section reporting on the mutual fund/financial industry.

Worth, a national publication issued 10 times per year by Capital Publishing
Company, a subsidiary of Fidelity Investments. Focus is placed on personal
financial journalism.

Taking a Global Approach

Many U.S. investors limit their holdings to U.S. securities because they
assume that international or global investing is too risky. While there are
risks connected with investing overseas, it's important to remember that no
investment - even in blue-chip domestic securities - is entirely risk free.
Looking outside U.S. borders, an investor today can find opportunities that
mirror domestic investments - everything from large, stable multinational
companies

18
<PAGE>

to start-ups in emerging markets. To determine the level of risk with which you
are comfortable, and the potential for reward you're seeking over the long term,
you need to review the type of investment, the world markets, and your time
horizon.

The U.S. is unusual in that it has a very broad economy that is well
represented in the stock market. However, many countries around the world are
not only undergoing a revolution in how their economies operate, but also in
terms of the role their stock markets play in financing activities. There is
vibrant change throughout the global economy and all of this represents
potential investment opportunity.

Investing beyond the United States can open this world of opportunity, due
partly to the dramatic shift in the balance of world markets. In 1970, the
United States alone accounted for two-thirds of the value of the world's stock
markets. Now, the situation is reversed - only 35% of global stock market
capitalization resides here. There are companies in Southeast Asia that are
starting to dominate regional activity; there are companies in Europe that are
expanding outside of their traditional markets and taking advantage of faster
growth in Asia and Latin America; other companies throughout the world are
getting out from under state control and restructuring; developing countries
continue to open their doors to foreign investment.

Stocks in many foreign markets can be attractively priced. The global
stock markets do not move in lock step. When the valuations in one market rise,
there are other markets that are less expensive. There is also volatility within
markets in that some sectors may be more expensive while others are depressed in
valuation. A wider set of opportunities can help make it possible to find the
best values available.

International or global investing offers diversification because the
investment is not limited to a single country or economy. In fact, many experts
agree that investment strategies that include both U.S. and non-U.S. investments
strike the best balance between risk and reward.

Scudder's 30% Solution

The 30 Percent Solution - A Global Guide for Investors Seeking Better
Performance With Reduced Portfolio Risk is a booklet, created by Scudder, to
convey its vision about the new global investment dynamic. This dynamic is a
result of the profound and ongoing changes in the global economy and the
financial markets. The booklet explains how Scudder believes an equity
investment portfolio with up to 30% in international holdings and 70% in
domestic holdings can improve long-term performance while simultaneously helping
to reduce overall risk.

FUND ORGANIZATION

(See "Fund organization" in the Shares' prospectus.)

The Corporation was organized as Scudder Fund of Canada Ltd. in Canada in
1953 by the investment management firm of Scudder, Stevens & Clark, Inc.. On
March 16, 1964, the name of the Corporation was changed to Scudder International
Investments Ltd. On July 31, 1975, the corporate domicile of the Corporation was
changed to the U.S. through the transfer of its net assets to a newly formed
Maryland corporation, Scudder International Fund, Inc., in exchange for shares
of the Corporation which then were distributed to the shareholders of the
Corporation.

The authorized capital stock of the Corporation consists of 700 million
shares of a par value of $.01 each-all of one class and all having equal rights
as to voting, redemption, dividends and liquidation. Shareholders have one vote
for each share held. The Corporation's capital stock is comprised of six series:
Scudder International Fund, the original series; Scudder Latin America Fund,
Scudder Pacific Opportunities Fund, both organized in December 1992, Scudder
Greater Europe Growth Fund, organized in October 1994, Scudder Emerging Markets
Growth Fund, organized in May 1996 and Scudder International Growth and Income
Fund, organized in June 1997. Each series consists of 100 million shares except
for the Fund which consists of 200 million shares. The Directors have the
authority to issue additional series of shares and to designate the relative
rights and preferences as between the different series. All shares issued and
outstanding are fully paid and non-assessable, transferable, and redeemable at
net asset value at the option of the shareholder. Shares have no pre-emptive or
conversion rights.

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<PAGE>

The shares of the Corporation have non-cumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election of
Directors can elect 100% of the Directors if they choose to do so, and, in such
event, the holders of the remaining less than 50% of the shares voting for the
election of Directors will not be able to elect any person or persons to the
Board of Directors. The assets of the Corporation received for the issue or sale
of the shares of each series and all income, earnings, profits and proceeds
thereof, subject only to the rights of creditors, are specifically allocated to
such series and constitute the underlying assets of such series. The underlying
assets of each series are segregated on the books of account, and are to be
charged with the liabilities in respect to such series and with such a share of
the general liabilities of the Corporation. If a series were unable to meet its
obligations, the assets of all other series may in some circumstances be
available to creditors for that purpose, in which case the assets of such other
series could be used to meet liabilities which are not otherwise properly
chargeable to them. Expenses with respect to any two or more series are to be
allocated in proportion to the asset value of the respective series except where
allocations of direct expenses can otherwise be fairly made. The officers of the
Corporation, subject to the general supervision of the Directors, have the power
to determine which liabilities are allocable to a given series, or which are
general or allocable to two or more series. In the event of the dissolution or
liquidation of the Corporation or any series, the holders of the shares of any
series are entitled to receive as a class the underlying assets of such shares
available for distribution to shareholders.

Shares of the Corporation entitle their holders to one vote per share;
however, separate votes are taken by each series on matters affecting an
individual series. For example, a change in investment policy for a series would
be voted upon only by shareholders of the series involved. Additionally,
approval of the investment advisory agreement is a matter to be determined
separately by each series. Approval by the shareholders of one series is
effective as to that series whether or not enough votes are received from the
shareholders of the other series to approve such agreement as to the other
series.

The Directors, in their discretion, may authorize the division of shares
of the Corporation (or shares of a series) into different classes permitting
shares of different classes to be distributed by different methods. Although
shareholders of different classes of a series would have an interest in the same
portfolio of assets, shareholders of different classes may bear different
expenses in connection with different methods of distribution.

Pursuant to the approval of a majority of stockholders, the Fund's
Trustees have the discretion to retain the current distribution arrangement
while investing in a master fund in a master/feeder fund structure if the Board
determines that the objectives of the Fund would be achieved more efficiently
thereby.

A master/feeder fund structure is one in which a fund (a "feeder fund"),
instead of investing directly in a portfolio of securities, invests most or all
of its investment assets in a separate registered investment company (the
"master fund") with substantially the same investment objective and policies as
the feeder fund. Such a structure permits the pooling of assets of two or more
feeder funds, preserving separate identities or distribution channels at the
feeder fund level. Based on the premise that certain of the expenses of
operating an investment portfolio are relatively fixed, a larger investment
portfolio may eventually achieve a lower ratio of operating expenses to average
net assets. An existing investment company is able to convert to a feeder fund
by selling all of its investments, which involves brokerage and other
transaction costs and realization of a taxable gain or loss, or by contributing
its assets to the master fund and avoiding transaction costs and, if proper
procedures are followed, the realization of taxable gain or loss.

The Corporation's Amended and Restated Articles of Incorporation (the
"Articles") provide that the Directors of the Corporation, to the fullest extent
permitted by Maryland General Corporation Law and the 1940 Act, shall not be
liable to the Corporation or its shareholders for damages. Maryland law
currently provides that Directors shall be immune from liability for any action
taken by them in good faith, in a manner reasonably believed to be in the best
interests of the Corporation and with the care that an ordinarily prudent person
in a like position would use under similar circumstances. In so acting, a
Director shall be fully protected in relying in good faith upon the records of
the Corporation and upon reports made to the Corporation by persons selected in
good faith by the Directors as qualified to make such reports. The Articles and
the By-Laws provide that the Corporation will indemnify its Directors, officers,
employees or agents against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices with the
Corporation consistent with applicable law. Nothing in the Articles or the
By-Laws protects or indemnifies a Director, officer, employee or agent against
any liability to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.

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<PAGE>

INVESTMENT ADVISER

(See "Fund organization-Investment adviser" in the Shares' prospectus.)

Scudder Kemper Investments, Inc., an investment firm, acts as investment
adviser to the Fund. Scudder, Stevens & Clark, Inc. ("Scudder"), the predecessor
organization to the Adviser, is one of the most experienced investment
management firms in the U.S. It was established as a partnership in 1919 and
pioneered the practice of providing investment counsel to individual clients on
a fee basis. In 1928 it introduced the first no-load mutual fund to the public.
In 1953, the Adviser introduced the Fund, the first mutual fund available in the
U.S. investing internationally in securities of issuers in several foreign
countries. The firm reorganized from a partnership to a corporation on June 28,
1985.

Effective November __, 1997, Scudder and Zurich Insurance Company
("Zurich"), an international insurance and financial services organization,
formed a new global investment organization by combining Zurich's subsidiary,
Zurich Kemper Investments, Inc., and changing its name to Scudder Kemper
Investments, Inc. As a result of the transaction, Zurich owns approximately 70%
of the new organization with the balance owned by the new organization's
officers and employees.

The principal source of the Adviser's income is professional fees received
from providing continuous investment advice, and the firm derives no income from
brokerage or underwriting of securities. Today, it provides investment counsel
for many individuals and institutions, including insurance companies, colleges,
industrial corporations, and financial and banking organizations. In addition,
it manages Montgomery Street Income Securities, Inc., Scudder California Tax
Free Trust, Scudder Cash Investment Trust, Scudder Equity Trust, Scudder Fund,
Inc., Scudder Funds Trust, Scudder Global Fund, Inc., Scudder Global High Income
Fund, Inc., Scudder GNMA Fund, Scudder Portfolio Trust, Scudder Institutional
Fund, Inc., Scudder International Fund, Inc., Scudder Investment Trust, Scudder
Municipal Trust, Scudder Mutual Funds, Inc., Scudder New Asia Fund, Inc.,
Scudder New Europe Fund, Inc., Scudder Pathway Series, Scudder Securities Trust,
Scudder State Tax Free Trust, Scudder Tax Free Money Fund, Scudder Tax Free
Trust, Scudder U.S. Treasury Money Fund, Scudder Variable Life Investment Fund,
The Argentina Fund, Inc., The Brazil Fund, Inc., The Korea Fund, Inc., The Japan
Fund, Inc. and Scudder Spain and Portugal Fund, Inc. Some of the foregoing
companies or trusts have two or more series.

The Adviser also provides investment advisory services to the mutual funds
which comprise the AARP Investment Program from Scudder. The AARP Investment
Program from Scudder has assets over $13 billion and includes the AARP Growth
Trust, AARP Income Trust, AARP Tax Free Income Trust, AARP Managed Investment
Portfolios Trust and AARP Cash Investment Funds.

Pursuant to an Agreement between Scudder Kemper Investments, Inc. ("Scudder")
and AMA Solutions, Inc., a subsidiary of the American Medical Association (the
"AMA"), dated May 9, 1997, Scudder has agreed, subject to applicable state
regulations, to pay AMA Solutions, Inc. royalties in an amount equal to 5% of
the management fee received by Scudder with respect to assets invested by AMA
members in Scudder funds in connection with the AMA InvestmentLinkSM Program.
Scudder will also pay AMA Solutions, Inc. a general monthly fee, currently in
the amount of $833. The AMA and AMA Solutions, Inc. are not engaged in the
business of providing investment advice and neither is registered as an
investment adviser or broker/dealer under federal securities laws. Any person
who participates in the AMA InvestmentLink(SM) Program will be a customer of
Scudder (or of a subsidiary thereof) and not the AMA or AMA Solutions, Inc. AMA
InvestmentLink(SM) is a service mark of AMA Solutions, Inc.

The Adviser maintains a large research department, which conducts
continuous studies of the factors that affect the position of various
industries, companies and individual securities. The Adviser receives published
reports and statistical compilations from issuers and other sources, as well as
analyses from brokers and dealers who may execute portfolio transactions for the
Adviser's clients. However, the Adviser regards this information and material as
an adjunct to its own research activities. Scudder's international investment
management team travels the world, researching hundreds of companies. In
selecting the securities in which the Fund may invest, the conclusions and
investment decisions of the Adviser with respect to the Fund are based primarily
on the analyses of its own research department.

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<PAGE>

Certain investments may be appropriate for the Fund and also for other
clients advised by the Adviser. Investment decisions for the Fund and other
clients are made with a view to achieving their respective investment objectives
and after consideration of such factors as their current holdings, availability
of cash for investment and the size of their investments generally. Frequently,
a particular security may be bought or sold for only one client or in different
amounts and at different times for more than one but less than all clients.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In addition, purchases or sales
of the same security may be made for two or more clients on the same day. In
such event, such transactions will be allocated among the clients in a manner
believed by the Adviser to be equitable to each. In some cases, this procedure
could have an adverse effect on the price or amount of the securities purchased
or sold by the Fund. Purchase and sale orders for the Fund may be combined with
those of other clients of the Adviser in the interest of achieving the most
favorable net results to the Fund.

The Investment Management Agreement (the "Agreement") dated September 5,
1996 was approved by the Directors of the Fund on September 5, 1996. Because the
transaction between Scudder and Zurich resulted in the assignment of the Fund's
investment management agreement with Scudder, that agreement was deemed to be
automatically terminated at the consummation of the transaction. In anticipation
of the transaction, however, a new investment management agreement between the
Fund and the Adviser was approved by the Corporation's Directors. At the special
meeting of the Fund's stockholders held on October 23, 1997, the stockholders
also approved the new investment management agreement. The new investment
management agreement (the "Agreement") became effective as of November __, 1997
and will be in effect for an initial term ending on September 30, 1998. The
Agreement is in all material respects on the same terms as the previous
investment management agreement which it supersedes. The Agreement incorporates
conforming changes which promote consistency among all of the funds advised by
the Adviser and which permit ease of administration. The Agreement will continue
in effect and from year to year thereafter only if its continuance is approved
annually by the vote of a majority of those Directors who are not parties to
such Agreement or interested persons of the Adviser or the Fund, cast in person
at a meeting called for the purpose of voting on such approval, and either by a
vote of the Corporation's Directors or of a majority of the outstanding voting
securities of the Fund. The Agreement may be terminated at any time without
payment of penalty by either party on sixty days' written notice, and
automatically terminates in the event of its assignment.

Under the Agreement, the Adviser regularly provides the Fund with
continuing investment management for the Fund's portfolio consistent with the
Fund's investment objectives, policies and restrictions and determines which
securities shall be purchased, held or sold and what portion of the Fund's
assets shall be held uninvested, subject to the Corporation's Articles, By-Laws,
the 1940 Act, the Code and to the Fund's investment objective, policies and
restrictions, and subject, further, to such policies and instructions as the
Board of Directors of the Corporation may from time to time establish.

Under the Agreement, the Adviser renders significant administrative
services (not otherwise provided by third parties) necessary for the
Corporation's operations as an open-end investment company including, but not
limited to, preparing reports and notices to the Directors and shareholders;
supervising, negotiating contractual arrangements with, and monitoring various
third-party service providers to the Fund (such as the Fund's transfer agent,
pricing agents, custodian, accountants and others); preparing and making filings
with the Commission and other regulatory agencies; assisting in the preparation
and filing of the Fund's federal, state and local tax returns; preparing and
filing the Fund's federal excise tax returns; assisting with investor and public
relations matters; monitoring the valuation of securities and the calculation of
net asset value; monitoring the registration of shares of the Fund under
applicable federal and state securities laws; maintaining the Fund's books and
records to the extent not otherwise maintained by a third party; assisting in
establishing accounting policies of the Fund; assisting in the resolution of
accounting and legal issues; establishing and monitoring the Fund's operating
budget; processing the payment of the Fund's bills; assisting the Fund in, and
otherwise arranging for, the payment of distributions and dividends and
otherwise assisting the Fund in the conduct of its business, subject to the
direction and control of the Directors.

The Adviser pays the compensation and expenses (except those of attending
Board and committee meetings outside New York, New York or Boston,
Massachusetts) of all Directors, officers and executive employees of the Fund
affiliated with the Adviser and makes available, without expense to the Fund,
the services of such Directors, officers and employees of the Adviser as may
duly be elected officers of the Fund, subject to their individual consent to
serve and to any limitations imposed by law, and provides the Fund's office
space and facilities.

22
<PAGE>

On September 5, 1996, the Corporation's Board of Directors approved a new
Investment Management Agreement (the "Management Agreement") with Scudder Kemper
Investments, Inc. (the "Adviser"). The management fee payable under the
Management Agreement is equal to an annual rate of approximately 0.90% of the
first $500,000,000 of average daily net assets, 0.85% of the next $500,000,000
of such net assets, 0.80% of the next $1,000,000,000 of such net assets, 0.75%
of the next $1,000,000,000 of such net assets, and 0.70% of such net assets in
excess of $3,000,000,000, computed and accrued daily and payable monthly.

Under the Investment Management Agreement between the Fund and the Adviser
which was in effect prior to September 5, 1996 (the "Agreement"), the Fund
agreed to pay to the Adviser a fee equal to an annual rate of 0.90% on the first
$500,000,000 of the Fund's average daily net assets, 0.85% on the next
$500,000,000, 0.80% on the next $1,000,000,000, and 0.75% of such net assets in
excess of $2,000,000,000, computed and accrued daily and payable monthly.

The net investment advisory fees for the fiscal years ended March 31,
1997, 1996 and 1995 were $20,989,160, $19,502,443 and $19,032,146, respectively.

Under the Agreement the Fund is responsible for all of its other expenses
including: fees and expenses incurred in connection with membership in
investment company organizations; brokers' commissions; legal, auditing and
accounting expenses; the calculation of net asset value; taxes and governmental
fees; the fees and expenses of the Transfer Agent; the cost of preparing share
certificates or any other expenses of issue, sale, underwriting, distribution,
redemption or repurchase of shares; the expenses of and the fees for registering
or qualifying securities for sale; the fees and expenses of Directors, officers
and employees of the Fund who are not affiliated with the Adviser; the cost of
printing and distributing reports and notices to stockholders; and the fees and
disbursements of custodians. The Fund may arrange to have third parties assume
all or part of the expenses of sale, underwriting and distribution of shares of
the Fund. The Fund is also responsible for its expenses of shareholders'
meetings, the cost of responding to shareholders' inquiries, and its expenses
incurred in connection with litigation, proceedings and claims and the legal
obligation it may have to indemnify its officers and Directors of the Fund with
respect thereto.

The Agreement expressly provides that the Adviser shall not be required to
pay a pricing agent of the Fund for portfolio pricing services, if any.

The Agreement identifies the Adviser as the exclusive licensee of the
rights to use and sublicense the names "Scudder," "Scudder Kemper Investments,
Inc." and "Scudder Stevens and Clark, Inc." (together, the "Scudder Marks").
Under this license, the Corporation, with respect to the Fund, has the
non-exclusive right to use and sublicense the Scudder name and marks as part of
its name, and to use the Scudder Marks in the Corporation's investment products
and services.

In reviewing the terms of the Agreement and in discussions with the
Adviser concerning such Agreement, the Directors of the Fund who are not
"interested persons" of the Adviser are represented by independent counsel at
the Fund's expense.

The Agreement provides that the Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with matters to which the Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the Adviser in
the performance of its duties or from reckless disregard by the Adviser of its
obligations and duties under the Agreement.

Officers and employees of the Adviser from time to time may have
transactions with various banks, including the Fund's custodian bank. It is the
Adviser's opinion that the terms and conditions of those transactions which have
occurred were not influenced by existing or potential custodial or other Fund
relationships.

None of the officers or Directors of the Fund may have dealings with the
Fund as principals in the purchase or sale of securities, except as individual
subscribers to or holders of shares of the Fund.

23
<PAGE>

Personal Investments by Employees of the Adviser

Employees of the Adviser are permitted to make personal securities
transactions, subject to requirements and restrictions set forth in the
Adviser's Code of Ethics. The Code of Ethics contains provisions and
requirements designed to identify and address certain conflicts of interest
between personal investment activities and the interests of investment advisory
clients such as the Fund. Among other things, the Code of Ethics, which
generally complies with standards recommended by the Investment Company
Institute's Advisory Group on Personal Investing, prohibits certain types of
transactions absent prior approval, imposes time periods during which personal
transactions may not be made in certain securities, and requires the submission
of duplicate broker confirmations and monthly reporting of securities
transactions. Additional restrictions apply to portfolio managers, traders,
research analysts and others involved in the investment advisory process.
Exceptions to these and other provisions of the Code of Ethics may be granted in
particular circumstances after review by appropriate personnel.

DIRECTORS AND OFFICERS

<TABLE>
<CAPTION>
Position with
Underwriter,
Scudder
Position Principal Investor
Name, Age, and Address with Fund Occupation** Services,Inc.
- ---------------------- --------- ------------ -------------

<S> <C> <C> <C>
Daniel Pierce (63)+* Chairman of Chairman of the Vice
the Board Board and Managing President,
and Director Director of Scudder Director &
Kemper Investments, Assistant
Inc. Treasurer

Paul Bancroft III (67) Director Venture Capitalist -
1120 Cheston Lane and Consultant;
Queenstown, MD Retired President,
21658 Chief Executive
Officer and
Director, Bessemer
Securities Corporation

Sheryle J. Bolton (51) Director CEO, Scientific -
Scientific Learning Learning
Corporation Corporation, Former
1995 University President and Chief
Avenue, Suite 400 Operating Officer,
Berkeley, CA Physicians' Online,
94704 Inc. (electronic
transmission of
clinical information
for physicians (1994-
1995); Member,
Senior Management
Team, Rockefeller &
Co. (1990-1993).

William T. Burgin (53) Director General Partner,
83 Walnut Street Bessemer Venture
Wellesley, MA Partners; General
02181 Partner, Deer &
Company; Director,
James River Corp.; Director,
Galile Corp., Director of
various privately held
companies.

Thomas J. Devine (70) Director Consultant -
641 Lexington
Avenue
New York, NY
10022

Keith R. Fox (43) Director President, Exeter -
10 East 53rd Street Capital Management
New York, NY Corporation
10022

William H. Director Consultant; Guest -
Gleysteen, Jr. (71) Scholar, Brookings
Institute
</TABLE>

24
<PAGE>

<S> <C> <C> <C>
William H. Luers (68) Director President, The -
The Metropolitan Metropolitan Museum
Museum of Art of Art (1986 to
1000 Fifth Avenue present)
New York, NY
10028

Wilson Nolen (70) Director Consultant (1989 to -
1120 Fifth Avenue present); Corporate
New York, NY Vice President,
10128 Becton, Dickinson &
Company
(manufacturer of
medical and
scientific products)
until 1989

Kathryn L. Quirk (44)#@ Director; Managing Director of Vice
Vice Scudder Kemper President
President Investments, Inc.
and
Assistant
Secretary

Robert G. Stone, Jr. (74) Honorary Chairman Emeritus -
405 Lexington Director and Director, Kirby
Avenue Corporation (inland
New York, NY and offshore marine
10174 transportation and
diesel repairs)

Robert W. Lear (80) Honorary Executive-in- -
429 Silvermine Road Director Residence,
New Canaan, CT Visiting Professor,
06840 Columbia University
Graduate School of
Business

Elizabeth J. Allan (44) # Vice Principal of Scudder -
President Kemper Investments, Inc.

Joyce E. Cornell (53)# Vice Managing Director of -
President Scudder Kemper
Investments, Inc.

Carol L. Franklin (44)# Vice Managing Director of -
President Scudder Kemper
Investments, Inc.

Edmund B. Games, Jr. (60)+ Vice Principal of Scudder -
President Kemper Investments, Inc.

Jerard K. Hartman (64) # Vice Managing Director of -
President Scudder Kemper
Investments, Inc.

Thomas W. Joseph (58)+ Vice Principal of Scudder Vice President,
President Kemper Investments, Inc. Director, Treasurer &
Assistant Clerk

Thomas F. McDonough (50)+ Vice Principal of Scudder Clerk
President and Kemper Investments, Inc.
Secretary

Pamela A. McGrath (43)+ Vice Managing Director of -
President Scudder Kemper
and Investments, Inc.
Treasurer
</TABLE>

25
<PAGE>

<S> <C> <C> <C>
Edward J. O'Connell (52)# Vice Principal of Scudder Assistant
President Kemper Investments, Inc. Treasurer
and
Assistant
Treasurer

Richard W. Desmond (61)# Assistant Vice President of Vice
Secretary Scudder Kemper President
Investments, Inc.
</TABLE>

* Mr. Pierce and Ms. Quirk are considered by the Fund and its counsel to be
persons who are "interested persons" of the Adviser or of the Fund within
the meaning of the 1940 Act.
** Unless otherwise stated, all officers and directors have been associated
with their respective companies for more than five years, but not
necessarily in the same capacity.
@ Ms. Quirk is a member of the Executive Committee which may exercise
substantially all of the powers of the Board of Directors when it is not
in session.
+ Address: Two International Place, Boston, Massachusetts 02110
# Address: 345 Park Avenue, New York, New York 10154

As of December 31, 1997 all Directors and officers of the Fund as a group
owned beneficially (as that term is defined under Section 13(d) of the
Securities Exchange Act of 1934) less than 1% of the shares of the Fund
outstanding on such date.

As of December 31, 1997, ____ shares in the aggregate, ___% of the
outstanding shares of the Fund, were held in the name of __________ who may be
deemed to be the beneficial owner of certain of these shares, but disclaims any
beneficial ownership therein.

To the best of the Fund's knowledge, as of December 31, 1997 no person
owned beneficially (as so defined) more than 5% of the Fund's outstanding shares
except as stated above.

The Directors and officers of the Fund also serve in similar capacities
with other Scudder Funds.

REMUNERATION

Responsibilities of the Board-Board and Committee Meetings

The Board of Directors is responsible for the general oversight of the
Fund's business. A majority of the Board's members are not affiliated with
Scudder Kemper Investments, Inc. (the "Adviser"). These "Independent Directors"
have primary responsibility for assuring that the Fund is managed in the best
interests of its shareholders.

The Board of Directors meets at least quarterly to review the investment
performance of the Fund and other operational matters, including policies and
procedures designated to assure compliance with various regulatory requirements.
At least annually, the Independent Directors review the fees paid to the Adviser
and its affiliates for investment advisory services and other administrative and
shareholder services. In this regard, they evaluate, among other things, the
Fund's investment performance, the quality and efficiency of the various other
services provided, costs incurred by the Adviser and its affiliates, and
comparative information regarding fees and expenses of competitive funds. They
are assisted in this process by the Fund's independent public accountants and by
independent legal counsel selected by the Independent Directors.

All of the Independent Directors serve on the Committee on Independent
Directors, which nominates Independent Trustees and considers other related
matters, and the Audit Committee, which selects the Fund's independent public
accountants and reviews accounting policies and controls. In addition,
Independent Directors from time to time have established and served on task
forces and subcommittees focusing on particular matters such as investment,
accounting and shareholder service issues.

26
<PAGE>

Compensation of Officers and Directors

The Independent Directors receive the following compensation: an annual
director's fee of $4,000; a fee of $400 for attendance at each Board meeting,
audit committee meeting, or other meeting held for the purposes of considering
arrangements between the Funds and the Adviser or any affiliate of the Adviser;
$150 for any other committee meeting (although in some cases the Independent
Directors have waived committee meeting fees); and reimbursement of expenses
incurred for travel to and from Board Meetings. No additional compensation is
paid to any Independent Director for travel time to meetings, attendance at
directors' educational seminars or conferences, service on industry or
association committees, participation as speakers at directors' conferences,
service on special director task forces or subcommittees or service as lead or
liaison director. Independent Directors do not receive any employee benefits
such as pension, retirement or health insurance.

The Independent Directors also serve in the same capacity for other funds
managed by the Adviser. These funds differ broadly in type and complexity and in
some cases have substantially different Director fee schedules. The following
table shows the aggregate compensation received by each Independent Director
during 1997 from the Corporation and from all of the Scudder funds as a group.

To Be Updated

<TABLE>
<CAPTION>
Name Scudder International Fund, Inc.* All Scudder Funds
---- --------------------------------- -----------------
<S> <C> <C>
Paul Bancroft III, Director $41,486 $143,358 (16 funds)

Sheryle J. Bolton, Director $___ $___

William T. Burgin, Director $___ $___

Thomas J. Devine, Director $44,086 $156,058 (18 funds)

Keith R. Fox, Director $43,486 $87,508 (10 funds)

William H. Gleysteen, Jr., Director $44,086 $130,336 (13 funds)

William H. Luers, Director $43,486 $100,486 (11 funds)

Wilson Nolen, Director $45,086 $165,608 (17 funds)

Dr. Gordon Shillinglaw, Director $45,086 $119,918 (19 funds)
</TABLE>

* Scudder International Fund, Inc. consists of six funds: Scudder
International Fund, Scudder Latin America Fund, Scudder Pacific
Opportunities Fund, Scudder Greater Europe Growth Fund, Scudder Emerging
Markets Growth Fund and Scudder International Growth and Income Fund.

Members of the Board of Directors who are employees of Scudder or its
affiliates receive no direct compensation from the Corporation, although they
are compensated as employees of Scudder, or its affiliates, as a result of which
they may be deemed to participate in fees paid by each Fund.

27
<PAGE>

DISTRIBUTOR

The Corporation has an underwriting agreement with Scudder Investor
Services, Inc. (the "Distributor"), a Massachusetts corporation, which is a
subsidiary of the Adviser, a Delaware corporation. The Corporation's
underwriting agreement dated September 17, 1992 will remain in effect until
September 30, 1998 and from year to year thereafter only if its continuance is
approved annually by a majority of the members of the Board of Directors who are
not parties to such agreement or interested persons of any such party and either
by vote of a majority of the Board of Directors or a majority of the outstanding
voting securities of the Fund. The underwriting agreement was last approved by
the Directors on September 10-11, 1997.

Under the underwriting agreement, the Fund is responsible for: the payment
of all fees and expenses in connection with the preparation and filing with the
Commission of its registration statement and prospectus and any amendments and
supplements thereto; the registration and qualification of shares for sale in
the various states, including registering the Fund as a broker or dealer in
various states as required; the fees and expenses of preparing, printing and
mailing prospectuses annually to existing shareholders (see below for expenses
relating to prospectuses paid by the Distributor); notices, proxy statements,
reports or other communications to shareholders of the Fund; the cost of
printing and mailing confirmations of purchases of shares and any prospectuses
accompanying such confirmations; any issuance taxes and/or any initial transfer
taxes; a portion of shareholder toll-free telephone charges and expenses of
shareholder service representatives; the cost of wiring funds for share
purchases and redemptions (unless paid by the shareholder who initiates the
transaction); the cost of printing and postage of business reply envelopes; and
a portion of the cost of computer terminals used by both the Fund and the
Distributor.

The Distributor will pay for printing and distributing prospectuses or
reports prepared for its use in connection with the offering of the Fund's
shares to the public and preparing, printing and mailing any other literature or
advertising in connection with the offering of shares of the Fund to the public.
The Distributor will pay all fees and expenses in connection with its
qualification and registration as a broker or dealer under federal and state
laws, a portion of the cost of toll-free telephone service and expenses of
shareholder service representatives, a portion of the cost of computer
terminals, and expenses of any activity which is primarily intended to result in
the sale of shares issued by the Fund, unless a Rule 12b-1 Plan is in effect
which provides that the Fund shall bear some or all of such expenses.

Note: Although the Fund does not currently have a 12b-1 Plan, and the Directors
have no current intention of adopting one, the Fund would also pay those
fees and expenses permitted to be paid or assumed by the Fund pursuant to
a Rule 12b-1 Plan, if any, were adopted by the Fund, notwithstanding any
other provision to the contrary in the underwriting agreement.

As agent, the Distributor currently offers shares of the Fund on a
continuous basis to investors in all states in which shares of the Fund may from
time to time be registered or where permitted by applicable law. The
underwriting agreement provides that the Distributor accepts orders for shares
at net asset value as no sales commission or load is charged to the investor.
The Distributor has made no firm commitment to acquire shares of the Fund.

TAXES

(See "Distribution and performance information - Dividends and capital
gains distributions" and "Transaction information-Tax information,
Tax identification number" in the Shares' prospectus.)

The Fund has elected to be treated as a regulated investment company under
Subchapter M of the Code, or a predecessor statute and has qualified as such
since its inception. Such qualification does not involve governmental
supervision or management of investment practices or policy.

A regulated investment company qualifying under Subchapter M of the Code
is required to distribute to its shareholders at least 90 percent of its
investment company taxable income (including net short-term capital gain) and
generally is not subject to federal income tax to the extent that it distributes
annually its investment company taxable income and net realized capital gains in
the manner required under the Code.

28
<PAGE>

The Fund is subject to a 4% nondeductible excise tax on amounts required
to be but not distributed under a prescribed formula. The formula requires
payment to shareholders during a calendar year of distributions representing at
least 98% of the Fund's ordinary income for the calendar year, at least 98% of
the excess of its capital gains over capital losses (adjusted for certain
ordinary losses) realized during the one-year period ending October 31 during
such year, and all ordinary income and capital gains for prior years that were
not previously distributed.

Investment company taxable income generally is made up of dividends,
interest and net short-term capital gains in excess of net long-term capital
losses, less expenses. Net realized capital gains for a fiscal year are computed
by taking into account any capital loss carryforward of the Fund. Presently, the
Fund has no capital loss carryforwards.

If any net realized long-term capital gains in excess of net realized
short-term capital losses are retained by the Fund for reinvestment, requiring
federal income taxes to be paid thereon by the Fund, the Fund intends to elect
to treat such capital gains as having been distributed to shareholders. As a
result, each shareholder will report such capital gains as long-term capital
gains, will be able to claim a proportionate share of federal income taxes paid
by the Fund on such gains as a credit against the shareholder's federal income
tax liability, and will be entitled to increase the adjusted tax basis of the
shareholder's Fund shares by the difference between the shareholder's pro rata
share of such gains and the shareholder's tax credit.

Distributions of investment company taxable income are taxable to
shareholders as ordinary income.

Dividends from domestic corporations are not expected to comprise a
substantial part of the Fund's gross income. If any such dividends constitute a
portion of the Fund's gross income, a portion of the income distributions of the
Fund may be eligible for the 70% deduction for dividends received by
corporations. Shareholders will be informed of the portion of dividends which so
qualify. The dividends-received deduction is reduced to the extent the shares of
the Fund with respect to which the dividends are received are treated as
debt-financed under federal income tax law and is eliminated if either those
shares or the shares of the Fund are deemed to have been held by the Fund or the
shareholders, as the case may be, for less than 46 days during the 90-day period
beginning 45 days before the shares become ex-dividend.

Properly designated distributions of the excess of net long-term capital
gain over net short-term capital loss are taxable to shareholders as long-term
capital gain, regardless of the length of time the shares of the Fund have been
held by such shareholders. Such distributions are not eligible for the
dividends-received deduction. Any loss realized upon the redemption of shares
held at the time of redemption for six months or less will be treated as a
long-term capital loss to the extent of any amounts treated as distributions of
long-term capital gain during such six-month period.

Distributions of investment company taxable income and net realized
capital gains will be taxable as described above, whether received in shares or
in cash. Shareholders electing to receive distributions in the form of
additional shares will have a cost basis for federal income tax purposes in each
share so received equal to the net asset value of a share on the reinvestment
date.

All distributions of investment company taxable income and net realized
capital gain, whether received in shares or in cash, must be reported by each
shareholder on his or her federal income tax return. Dividends declared in
October, November or December with a record date in such a month will be deemed
to have been received by shareholders on December 31, if paid during January of
the following year. Redemptions of shares, including exchanges for shares of
another Scudder Fund, may result in tax consequences (gain or loss) to the
shareholder and are also subject to these reporting requirements.

An individual may make a deductible IRA contribution of up to $2,000 or,
if less, the amount of the individual's earned income for any taxable year only
if (i) neither the individual nor his or her spouse (unless filing separate
returns) is an active participant in an employer's retirement plan, or (ii) the
individual (and his or her spouse, if applicable) has an adjusted gross income
below a certain level ($40,050 for married individuals filing a joint return,
with a phase-out of the deduction for adjusted gross income between $40,050 and
$50,000; $25,050 for a single individual, with a phase-out for adjusted gross
income between $25,050 and $35,000). However, an individual not permitted to
make a deductible contribution to an IRA for any such taxable year may
nonetheless make nondeductible contributions up to $2,000 to an IRA (up to
$2,000 per individual for married couples if only one spouse has earned income)
for that year. There are special rules for determining how withdrawals are to be
taxed if an IRA contains both

29
<PAGE>

deductible and nondeductible amounts. In general, a proportionate amount of each
withdrawal will be deemed to be made from nondeductible contributions; amounts
treated as a return of nondeductible contributions will not be taxable. Also,
annual contributions may be made to a spousal IRA even if the spouse has
earnings in a given year if the spouse elects to be treated as having no
earnings (for IRA contribution purposes) for the year.

Distributions by the Fund result in a reduction in the net asset value of
the Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above, even though,
from an investment standpoint, it may constitute a partial return of capital. In
particular, investors should consider the tax implications of buying shares just
prior to a distribution. The price of shares purchased at that time includes the
amount of the forthcoming distribution. Those purchasing just prior to a
distribution will then receive a partial return of capital upon the
distribution, which will nevertheless be taxable to them.

The Fund intends to qualify for and may make the election permitted under
Section 853 of the Code so that shareholders may (subject to limitations) be
able to claim a credit or deduction on their federal income tax returns for, and
will be required to treat as part of the amounts distributed to them, their pro
rata portion of qualified taxes paid by the Fund to foreign countries (which
taxes relate primarily to investment income). The Fund may make an election
under Section 853 of the Code, provided that more than 50% of the value of the
total assets of the Fund at the close of the taxable year consists of securities
in foreign corporations. The foreign tax credit available to shareholders is
subject to certain limitations imposed by the Code, except in the case of
certain electing individual taxpayers who have limited creditable foreign taxes
and no foreign source income other than passive investment-type income.
Furthermore, the payment of foreign taxes withheld on dividends if the
dividend-paying shares or the shares of the Fund are held by the Fund or the
shareholder, as the case may be, for less than 16 days (46 days in the case of
preferred shares) during the 30-day period (90-day period for preferred shares
beginning 15 days (45 days for preferred shares) before the shares become
ex-dividend.

If the Fund does not make the election permitted under section 853 any
foreign taxes paid or accrued will represent an expense to the Fund which will
reduce its investment company taxable income. Absent this election, shareholders
will not be able to claim either a credit or a deduction for their pro rata
portion of such taxes paid by the Fund, nor will shareholders be required to
treat as part of the amounts distributed to them their pro rata portion of such
taxes paid.

Equity options (including covered call options written on portfolio stock)
and over-the-counter options on debt securities written or purchased by the Fund
will be subject to tax under Section 1234 of the Code. In general, no loss will
be recognized by the Fund upon payment of a premium in connection with the
purchase of a put or call option. The character of any gain or loss recognized
(i.e. long-term or short-term) will generally depend, in the case of a lapse or
sale of the option, on the Fund's holding period for the option, and in the case
of the exercise of a put option, on the Fund's holding period for the underlying
property. The purchase of a put option may constitute a short sale for federal
income tax purposes, causing an adjustment in the holding period of any stock in
the Fund's portfolio similar to the stocks on which the index is based. If the
Fund writes an option, no gain is recognized upon its receipt of a premium. If
the option lapses or is closed out, any gain or loss is treated as short-term
capital gain or loss. If a call option is exercised, the character of the gain
or loss depends on the holding period of the underlying stock.

Positions of the Fund which consist of at least one stock and at least one
stock option or other position with respect to a related security which
substantially diminishes the Fund's risk of loss with respect to such stock
could be treated as a "straddle" which is governed by Section 1092 of the Code,
the operation of which may cause deferral of losses, adjustments in the holding
periods of stocks or securities and conversion of short-term capital losses into
long-term capital losses. An exception to these straddle rules exists for
certain "qualified covered call options" on stock written by the Fund.

Many futures and forward contracts entered into by the Fund and listed
nonequity options written or purchased by the Fund (including options on debt
securities, options on futures contracts, options on securities indices and
options on currencies), will be governed by Section 1256 of the Code. Absent a
tax election to the contrary, gain or loss attributable to the lapse, exercise
or closing out of any such position generally will be treated as 60% long-term
and 40% short-term, and on the last trading day of the Fund's fiscal year, all
outstanding Section 1256 positions will be marked to market (i.e., treated as if
such positions were closed out at their closing price on such day), with any

30
<PAGE>

resulting gain or loss recognized as 60% long-term and 40% short-term. Under
Section 988 of the Code, discussed below, foreign currency gain or loss from
foreign currency-related forward contracts, certain futures and options and
similar financial instruments entered into or acquired by the Fund will be
treated as ordinary income or loss.

Notwithstanding any of the foregoing, the Fund may recognize gain (but not
loss) from a constructive sale of certain "appreciated financial positions" if
the Fund enters into a short sale, offsetting national principal contract,
futures or forward contraction with respect to the appreciated position or
substantially identical property. Appreciated financial positions subject to
this constructive sale treatment are interests (including options, futures and
forward contracts and short sales) in stock, partnership interests, certain
actively traded trust instruments and certain debt instruments. Constructive
sale treatment of appreciated financial positions does not apply to certain
transactions closed in the 90-day period ending with the 30th day after the
close of the Fund's taxable year, if certain conditions are met.

Similarly, if the Fund enters into a short sale of property that becomes
substantially worthless, the Fund will recognize gain at that time as though it
had closed the short sale. Future regulatories may supply similar treatment to
other transactions with respect to property that becomes substantially
worthless.

Under the Code, gains or losses attributable to fluctuations in exchange
rates which occur between the time the Fund accrues receivables or liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables or pays such liabilities generally are treated as ordinary income or
ordinary loss. Similarly, on disposition of debt securities denominated in a
foreign currency and on disposition of certain options, futures and forward
contracts, gains or losses attributable to fluctuations in the value of foreign
currency between the date of acquisition of the security or contract and the
date of disposition are also treated as ordinary gain or loss. These gains or
losses, referred to under the Code as "Section 988" gains or losses, may
increase or decrease the amount of the Fund's investment company taxable income
to be distributed to its shareholders as ordinary income.

If the Fund invests in stock of certain foreign investment companies, the
Fund may be subject to U.S. federal income taxation on a portion of any "excess
distribution" with respect to, or gain from the disposition of, such stock. The
tax would be determined by allocating such distribution or gain ratably to each
day of the Fund's holding period for the stock. The distribution or gain so
allocated to any taxable year of the Fund, other than the taxable year of the
excess distribution or disposition, would be taxed to the Fund at the highest
ordinary income rate in effect for such year, and the tax would be further
increased by an interest charge to reflect the value of the tax deferral deemed
to have resulted from the ownership of the foreign company's stock. Any amount
of distribution or gain allocated to the taxable year of the distribution or
disposition would be included in the Fund's investment company taxable income
and, accordingly, would not be taxable to the Fund to the extent distributed by
the Fund as a dividend to its shareholders.

The Fund may make an election to mark to market its shares of these
foreign investment companies in lieu of being subject to U.S. federal income
taxation. At the end of each taxable year to which the election applies, the
Fund would report as ordinary income the amount by which the fair market value
of the foreign company's stock exceeds the Fund's adjusted basis in these
shares; any mark-to-market losses and any loss from an actual disposition of
shares would be reported as ordinary loss to the extent of any net
mark-to-market gains included in income in prior years. The effect of the
election would be to treat excess distributions and gain on dispositions as
ordinary income which is not subject to a fund level tax when distributed to
shareholders as a dividend. Alternatively, the Fund may elect to include as
income and gain its share of the ordinary earnings and net capital gain of
certain foreign investment companies in lieu of being taxed in the manner
described above.

If the Fund invests in certain high yield original issue discount
obligations issued by corporations, a portion of the original issue discount
accruing on the obligation may be eligible for the deduction for dividends
received by corporations. In such event, dividends of investment company taxable
income received from the Fund by its corporate shareholders, to the extent
attributable to such portion of accrued original issue discount, may be eligible
for this deduction for dividends received by corporations if so designated by
the Fund in a written notice to shareholders.

The Fund will be required to report to the IRS all distributions of
investment company taxable income and capital gains as well as gross proceeds
from the redemption or exchange of Fund shares, except in the case of certain
exempt shareholders. Under the backup withholding provisions of Section 3406 of
the Code, distributions of investment company taxable income and capital gains
and proceeds from the redemption or exchange of the shares of a regulated
investment company may be subject to withholding of federal income tax at the
rate of 31% in the case of

31
<PAGE>

non-exempt shareholders who fail to furnish the investment company with their
taxpayer identification numbers and with required certifications regarding their
status under the federal income tax law. Withholding may also be required if a
Fund is notified by the IRS or a broker that the taxpayer identification number
furnished by the shareholder is incorrect or that the shareholder has previously
failed to report interest or dividend income. If the withholding provisions are
applicable, any such distributions and proceeds, whether taken in cash or
reinvested in additional shares, will be reduced by the amounts required to be
withheld.

Shareholders of the Fund may be subject to state and local taxes on
distributions received from the Fund and on redemptions of the Fund's shares.

The foregoing discussion of U.S. federal income tax law relates solely to
the application of that law to U.S. persons, i.e., U.S. citizens and residents
and U.S. corporations, partnerships, trusts and estates. Each shareholder who is
not a U.S. person should consider the U.S. and foreign tax consequences of
ownership of shares of the Fund, including the possibility that such a
shareholder may be subject to a U.S. withholding tax at a rate of 30% (or at a
lower rate under an applicable income tax treaty) on amounts constituting
ordinary income received by him or her, where such amounts are treated as income
from U.S. sources under the Code.

Shareholders should consult their tax advisers about the application of
the provisions of tax law described in this statement of additional information
in light of their particular tax situations.

PORTFOLIO TRANSACTIONS

Brokerage Commissions

To the maximum extent feasible, the Adviser places orders for portfolio
transactions for the Fund through the Distributor which in turn places orders on
behalf of the Fund with issuers, underwriters or other brokers and dealers. The
Distributor receives no commissions, fees or other remuneration from the Fund
for this service. Allocation of brokerage is supervised by the Adviser.

The primary objective of the Adviser in placing orders for the purchase
and sale of securities for the Fund's portfolio is to obtain the most favorable
net results taking into account such factors as price, commission where
applicable (negotiable in the case of U.S. national securities exchange
transactions but generally fixed in the case of foreign exchange transactions)
size of order, difficulty of execution and skill required of the executing
broker/dealer. The Adviser seeks to evaluate the overall reasonableness of
brokerage commissions paid (to the extent applicable) through the familiarity of
the Distributor with commissions charged on comparable transactions, as well as
by comparing commissions paid by the Fund to reported commissions paid by
others. The Adviser reviews on a routine basis commission rates, execution and
settlement services performed, making internal and external comparisons.

When it can be done consistently with the policy of obtaining the most
favorable net results, it is the Adviser's practice to place such orders with
brokers and dealers who supply market quotations to the Custodian for appraisal
purposes, or who supply research, market and statistical information to the
Fund. The term "research, market and statistical information" includes advice as
to the value of securities, the advisability of investing in, purchasing or
selling securities, and the availability of securities or purchasers or sellers
of securities; and analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts. The Adviser is not authorized when placing portfolio transactions
for the Fund to pay a brokerage commission (to the extent applicable) in excess
of that which another broker might have charged for executing the same
transaction solely on account of the receipt of research, market or statistical
information. The Adviser will not place orders with brokers or dealers on the
basis that the broker or dealer has or has not sold shares of the Fund. Except
for implementing the policy stated above, there is no intention to place
portfolio transactions with particular brokers or dealers or groups thereof. In
effecting transactions in over-the-counter securities, orders are placed with
the principal market makers for the security being traded unless, after
exercising care, it appears that more favorable results are available otherwise.

Although certain research, market and statistical information from brokers
and dealers can be useful to the Fund and to the Adviser, it is the opinion of
the Adviser that such information will only supplement the Adviser's own
research effort since the information must still be analyzed, weighed, and
reviewed by the Adviser's staff. Such

32
<PAGE>

information may be useful to the Adviser in providing services to clients other
than the Fund, and not all such information will be used by the Adviser in
connection with the Fund. Conversely, such information provided to the Adviser
by brokers and dealers through whom other clients of the Adviser effect
securities transactions may be useful to the Adviser in providing services to
the Fund.

The Directors intend to review whether the recapture for the benefit of
the Fund of some portion of the brokerage commissions or similar fees paid by
the Fund on portfolio transactions is legally permissible and advisable. Within
the past three years no such recapture has been effected.

In the fiscal years ended March 31, 1997, 1996 and 1995, the Fund paid
brokerage commissions of $5,275,727, $7,301,706 and $5,463,019, respectively.
For the fiscal year ended March 31, 1997, $4,915,740 (93%) of the total
brokerage commissions paid by the Fund resulted from orders for transactions,
placed consistently with the policy of seeking to obtain the most favorable net
results, with brokers and dealers who provided supplementary research, market
and statistical information to the Fund or the Adviser. The amount of such
transactions aggregated $1,688,398,843 (92% of all brokerage transactions). The
balance of such brokerage was not allocated to particular broker or dealer with
regard to the above-mentioned or other special factors.

Portfolio Turnover

The Fund's average annual portfolio turnover rate is the ratio of the
lesser of sales or purchases to the monthly average value of the portfolio
securities owned during the year, excluding all securities with maturities or
expiration dates at the time of acquisition of one year or less. The Fund's
portfolio turnover rates for the fiscal years ended March 31, 1997 and 1996 were
35.8% and 45.2%, respectively. Purchases and sales are made for the Fund's
portfolio whenever necessary, in management's opinion, to meet the Fund's
objective.

NET ASSET VALUE

The net asset value of Shares of the Fund is computed as of the close of
regular trading on the Exchange on each day the Exchange is open for trading.
The Exchange is scheduled to be closed on the following holidays: New Year's
Day, Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. Net asset value per
Share is determined by dividing the value of the total assets of the Fund
attributable to the Shares, less all liabilities attributable to the Shares, by
the total number of shares outstanding.

An exchange-traded equity security is valued at its most recent sale
price. Lacking any sales, the security is valued at the calculated mean between
the most recent bid quotation and the most recent asked quotation (the
"Calculated Mean"). Lacking a Calculated Mean, the security is valued at the
most recent bid quotation. An equity security which is traded on the Nasdaq
Stock Market ("Nasdaq") is valued at its most recent sale price. Lacking any
sales, the security is valued at the most recent bid quotation. The value of an
equity security not quoted on the Nasdaq System, but traded in another
over-the-counter market, is its most recent sale price. Lacking any sales, the
security is valued at the Calculated Mean. Lacking a Calculated Mean, the
security is valued at the most recent bid quotation.

Debt securities, other than short-term securities, are valued at prices
supplied by the Fund's pricing agent(s) which reflect broker/dealer supplied
valuations and electronic data processing techniques. Short-term securities
purchased with remaining maturities of sixty days or less shall be valued by the
amortized cost method, which the Board believes approximates market value. If it
is not possible to value a particular debt security pursuant to these valuation
methods, the value of such security is the most recent bid quotation supplied by
a bona fide marketmaker. If it is not possible to value a particular debt
security pursuant to the above methods, the Adviser may calculate the price of
that debt security, subject to limitations established by the Board.

An exchange traded options contract on securities, currencies, futures and
other financial instruments is valued at its most recent sale price on such
exchange. Lacking any sales, the options contract is valued at the Calculated
Mean. Lacking any Calculated Mean, the options contract is valued at the most
recent bid quotation in the case of a purchased options contract, or the most
recent asked quotation in the case of a written options contract. An options
contract on securities, currencies and other financial instruments traded
over-the-counter is valued at the most recent bid quotation in the case of a
purchased options contract and at the most recent asked quotation in the case of
a

33
<PAGE>

written options contract. Futures contracts are valued at the most recent
settlement price. Foreign currency exchange forward contracts are valued at the
value of the underlying currency at the prevailing exchange rate.

If a security is traded on more than one exchange, or upon one or more
exchanges and in the over-the-counter market, quotations are taken from the
market in which the security is traded most extensively.

If, in the opinion of the Fund's Valuation Committee, the value of a
portfolio asset as determined in accordance with these procedures does not
represent the fair market value of the portfolio asset, the value of the
portfolio asset is taken to be an amount which, in the opinion of the Valuation
Committee, represents fair market value on the basis of all available
information. The value of other portfolio holdings owned by the Fund is
determined in a manner which, in the discretion of the Valuation Committee most
fairly reflects fair market value of the property on the valuation date.

Following the valuations of securities or other portfolio assets in terms
of the currency in which the market quotation used is expressed ("Local
Currency"), the value of these portfolio assets in terms of U.S. dollars is
calculated by converting the Local Currency into U.S. dollars at the prevailing
currency exchange rate on the valuation date.

ADDITIONAL INFORMATION

Experts

The Financial Highlights of the Fund, which reflects information for the
Fund prior to the creation of multiple classes for the Fund, and therefore,
prior to the creation of the Shares as a class of the Fund, included in the
prospectus and the Financial Statements incorporated by reference in this
Statement of Additional Information have been so included or incorporated by
reference in reliance on the report of Coopers & Lybrand L.L.P., One Post Office
Square, Boston, Massachusetts 02109, independent accountants, and given on the
authority of that firm as experts in accounting and auditing.

Other Information

Many of the investment changes in the Fund will be made at prices
different from those prevailing at the time they may be reflected in a regular
report to shareholders of the Fund. These transactions will reflect investment
decisions made by the Adviser in the light of its other portfolio holdings and
tax considerations and should not be construed as recommendations for similar
action by other investors.

The CUSIP number of the Shares is __________.

The Fund has a fiscal year end of March 31.

The Fund employs Brown Brothers Harriman and Company, 40 Water Street,
Boston, Massachusetts 02109 as Custodian for the Fund.

The law firm of Dechert Price & Rhoads is counsel to the Fund.

Information herein is provided at the Fund level which consisted of only
one class of shares, the International Shares, on March 31, 1997.

Scudder Service Corporation ("Service Corporation"), P.O. Box 2291,
Boston, Massachusetts, 02107-2291, a subsidiary of the Adviser, is the transfer
and dividend disbursing agent for the Fund. Service Corporation also serves as
shareholder service agent and provides subaccounting and recordkeeping services
for shareholder accounts in certain retirement and employee benefit plans. The
Fund pays Service Corporation an annual fee of $26.00 for each retail account
and $29.00 for each retirement account. Included in services to shareholders was
$3,050,321 charged to the Fund by Scudder Service Corporation during the fiscal
year ended March 31, 1997, of which $296,627 was unpaid at March 31, 1997.

34
<PAGE>

Scudder Fund Accounting Corporation, Two International Place, Boston,
Massachusetts, 02110-4103, a subsidiary of the Adviser, computes net asset value
for the Fund. The Fund pays Scudder Fund Accounting Corporation an annual fee
equal to 0.065% of the first $150 million of average daily net assets, 0.040% of
such assets in excess of $150 million, 0.020% of such assets in excess of $1
billion, plus holding and transaction charges for this service. For the year
ended March 31, 1997, Scudder Fund Accounting Corporation's fee aggregated
$795,122, of which $65,991 was unpaid at March 31, 1997.

Scudder Trust Company, an affiliate of the Adviser, provides subaccounting
and recordkeeping services for shareholder accounts in certain retirement and
employee benefit plans. Annual service fees are paid by the Fund to Scudder
Trust Company, Two International Place, Boston, Massachusetts 02110-4103, an
affiliate of the Adviser, for such accounts. The Fund pays Scudder Trust Company
an annual fee of $17.55 per shareholder account. The Fund incurred fees of
$930,582, $520,034 and $351,249 during the fiscal years ended March 31, 1997,
1996 and 1995, respectively, of which $111,209 was unpaid at March 31, 1997 for
the fiscal year ended March 31, 1997.

The Share's prospectus and this Statement of Additional Information omit
certain information contained in the Registration Statement which the Fund has
filed with the Commission under the Securities Act of 1933 and reference is
hereby made to the Registration Statement for further information with respect
to the Fund and the securities offered hereby. This Registration Statement and
its amendments are available for inspection by the public at the Commission in
Washington, D.C.

FINANCIAL STATEMENTS

The financial statements, including the investment portfolio of the Fund,
together with the Report of Independent Accountants, Financial Highlights and
notes to financial statements in the Annual Report to the Shareholders of the
Fund dated March 31, 1997 are incorporated herein by reference and are hereby
deemed to be a part of this Statement of Additional Information by reference in
its entirety. The financial statements incorporated herein reflect the
investment performance of the Fund prior to the addition of the Barrett
International Shares class of shares of the Fund.

35
<PAGE>

APPENDIX

The following is a description of the ratings given by Moody's and S&P to
corporate bonds.

Ratings of Corporate Bonds

S&P: Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong. Debt rated AA has a very
strong capacity to pay interest and repay principal and differs from the highest
rated issues only in small degree. Debt rated A has a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories. Debt rated BBB is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher rated categories.

Debt rated BB, B, CCC, CC and C is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. BB indicates the least degree of speculation and C the highest. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major exposures to adverse conditions.

Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating. Debt rated B has a greater
vulnerability to default but currently has the capacity to meet interest
payments and principal repayments. Adverse business, financial, or economic
conditions will likely impair capacity or willingness to pay interest and repay
principal. The B rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied BB or BB- rating.

Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating. The rating CC typically is applied to debt subordinated to
senior debt that is assigned an actual or implied CCC rating. The rating C
typically is applied to debt subordinated to senior debt which is assigned an
actual or implied CCC- debt rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments
are continued. The rating C1 is reserved for income bonds on which no interest
is being paid. Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date due even
if the applicable grace period had not expired, unless S&P believes that such
payments will be made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

Moody's: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues. Bonds
which are rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the long
term risks appear somewhat larger than in Aaa securities. Bonds which are rated
A possess many favorable investment attributes and are to be considered as upper
medium grade obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a susceptibility
to impairment sometime in the future.
<PAGE>

Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Bonds which are rated Ba are
judged to have speculative elements; their future cannot be considered as well
assured. Often the protection of interest and principal payments may be very
moderate and thereby not well safeguarded during both good and bad times over
the future. Uncertainty of position characterizes bonds in this class. Bonds
which are rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings. Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
<PAGE>
Item 24. Financial Statements and Exhibits
<TABLE>
<CAPTION>
<S> <C> <C>
a. Financial Statements

Included in Part A of this Registration Statement:

For Scudder International Fund:

Financial highlights for the ten fiscal years ended March 31, 1997
(Incorporated by reference to Post-Effective Amendment No. 56 to the
Registration Statement.)

For Scudder Latin America Fund:

Financial highlights for the period December 8, 1992
(commencement of operations) to October 31, 1993 and for the three fiscal
years ended October 31, 1996
(Incorporated by reference to Post-Effective Amendment No. 52 to the
Registration Statement.)

For Scudder Pacific Opportunities Fund:

For Scudder Greater Europe Growth Fund:

Financial highlights for the period October 10, 1994
(commencement of operations) to October 31, 1994 and for the two fiscal years
ended October 31, 1996
(Incorporated by reference to Post-Effective Amendment No. 52 to the
Registration Statement.)

For Scudder Emerging Markets Growth Fund:

Financial highlights for the period May 8, 1996 (commencement of operations)
to October 31, 1996
(Incorporated by reference to Post-Effective Amendment No. 52 to the
Registration Statement.)

For Scudder International Growth and Income Fund:

Financial highlights for the period June 30, 1997
(commencement of operations) to August 31, 1997

Included in Part B of this Registration Statement:

For Scudder International Fund:

Investment Portfolio as of March 31, 1997
Statement of Assets and Liabilities as of March 31, 1997

Part C - Page 1
<PAGE>

Statement of Operations for the fiscal year ended March 31, 1997
Statements of Changes in Net Assets for the two fiscal years ended
March 31, 1997
Financial Highlights for the ten fiscal years ended March 31, 1997
Notes to Financial Statements
Report of Independent Accountants
(Incorporated by reference to Post-Effective Amendment No. 56 to the
Registration Statement.)

For Scudder Latin America Fund:

Investment Portfolio as of October 31, 1996
Statement of Assets and Liabilities as of October 31, 1996
Statement of Operations for the fiscal year ended October 31, 1996
Statements of Changes in Net Assets for the three fiscal years ended October
31, 1996
Financial Highlights for the period December 8, 1992
(commencement of operations) to October 31, 1993 and for the three fiscal
years ended October 31, 1996
Notes to Financial Statements
Report of Independent Accountants
(Incorporated by reference to Post-Effective Amendment No. 52 to the
Registration Statement.)

For Scudder Pacific Opportunities Fund:

For Scudder Greater Europe Growth Fund:

Investment Portfolio as of October 31, 1996
Statement of Assets and Liabilities as of October 31, 1996
Statement of Operations for the fiscal year ended October 31, 1996
Statement of Changes in Net Assets for the period October 10, 1994
(commencement of operations) to October 31, 1994 and for the two fiscal years
ended October 31, 1996
Financial Highlights for the period October 10, 1994 (commencement of
operations) to October 31, 1994 and for the two fiscal years ended October 31,
1996
Notes to Financial Statements
Report of Independent Accountants
(Incorporated by reference to Post-Effective Amendment No. 52 to the
Registration Statement.)

Part C - Page 2
<PAGE>

For Scudder Emerging Markets Growth Fund:

Investment Portfolio as of October 31, 1996
Statement of Assets and Liabilities as of October 31, 1996
Statement of Operations for the period May 8, 1996 (commencement of
operations) to October 31, 1996
Statement of Changes in Net Assets for the period May 8, 1996 (commencement of
operations) to October 31, 1996
Financial Highlights for the period May 8, 1996 (commencement of operations)
to October 31, 1996
Notes to Financial Statements
Report of Independent Accountants
(Incorporated by reference to Post-Effective Amendment No. 52 to the
Registration Statement.)

For Scudder International Growth and Income Fund:

Statement of Assets and Liabilities as of May 23, 1997 and related notes
(Incorporated by reference to Post-Effective Amendment No. 55 to the
Registration Statement.)
Investment Portfolio as of August 31, 1997
Statement of Assets and Liabilities as of August 31, 1997
Statement of Operations for the period ended August 31, 1997
Statements of Changes in Net Assets for the period ended August 31, 1997
Financial Highlights for the period June 30, 1997 (commencement of operations)
to August 31, 1997
Notes to Financial Statements

b. Exhibits:

1. (a) Articles of Amendment and Restatement of the Registrant as of
January 24, 1991.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(b) Articles Supplementary dated September 17, 1992.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(c) Articles Supplementary dated December 1, 1992.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(d) Articles Supplementary dated August 3, 1994.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(e) Articles Supplementary dated February 20, 1996.
(Incorporated by reference to Exhibit 1(e) to Post-Effective
Amendment No. 46 to the Registration Statement.)

(f) Articles Supplementary dated September 5, 1996.
(Incorporated by reference to Exhibit 1(f) to Post-Effective
Amendment No. 52 to the Registration Statement.)

Part C - Page 3
<PAGE>

(g) Articles Supplementary dated December 12, 1996.
(Incorporated by reference to Post-Effective Amendment No. 55 to
the Registration Statement.)

(h) Articles Supplementary dated March 3, 1997.
(Incorporated by reference to Post-Effective Amendment No. 55 to
the Registration Statement.)

2. (a) Amended and Restated By-Laws of the Registrant dated March 4,
1991.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(b) Amended and Restated By-Laws of the Registrant dated September
20, 1991.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(c) Amended and Restated By-Laws of the Registrant dated December 12,
1991.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(d) Amended and Restated By-Laws of the Registrant dated September 4,
1996.
(Incorporated by reference to Post-Effective Amendment No. 55 to
the Registration Statement.)

3. Inapplicable.

4. Specimen certificate representing shares of Common Stock ($.01
par value) for Scudder International Fund.
(Incorporated by reference to Exhibit 4 to Post-Effective
Amendment No. 31 to the Registration Statement.)

5. (a) Investment Management Agreement between the Registrant, on behalf
of Scudder International Fund, and Scudder, Stevens & Clark, Inc.
dated December 14, 1990.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(b) Investment Management Agreement between the Registrant, on behalf
of Scudder Latin America Fund, and Scudder, Stevens & Clark, Inc.
dated December 7, 1992.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(c) Investment Management Agreement between the Registrant, on behalf
of Scudder Pacific Opportunities Fund, and Scudder, Stevens &
Clark, Inc. dated December 7, 1992.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

Part C - Page 4
<PAGE>

(d) Investment Management Agreement between the Registrant, on behalf
of Scudder Greater Europe Growth Fund, and Scudder, Stevens &
Clark, Inc. dated October 10, 1994.
(Incorporated by reference to Post-Effective Amendment No. 44 to
the Registration Statement.)

(e) Investment Management Agreement between the Registrant on behalf
of Scudder International Fund, and Scudder, Stevens & Clark, Inc.
dated September 8, 1994.
(Incorporated by reference to Post-Effective Amendment No. 45 to
the Registration Statement.)

(f) Investment Management Agreement between the Registrant on behalf
of Scudder Emerging Markets Growth Fund and Scudder, Stevens &
Clark, Inc. dated May 8, 1996.
(Incorporated by reference to Post-Effective Amendment No. 48 to
the Registration Statement.)

(g) Investment Management Agreement between the Registrant, on behalf
of Scudder International Growth and Income Fund, and Scudder,
Stevens & Clark, Inc. dated June 10, 1997.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(h) Investment Management Agreement between the Registrant, on behalf
of Scudder International Fund, and Scudder, Stevens & Clark, Inc.
dated September 5, 1996.
(Incorporated by reference to Post-Effective Amendment No. 55 to
the Registration Statement.)

6. (a) Underwriting Agreement between the Registrant and Scudder
Investor Services, Inc., formerly Scudder Fund Distributors,
Inc., dated July 15, 1985.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(b) Underwriting Agreement between the Registrant and Scudder
Investor Services, Inc. dated September 17, 1992.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

7. Inapplicable.

8. (a)(1) Custodian Contract between the Registrant and Brown Brothers
Harriman & Co. dated April 14, 1986.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(a)(2) Custodian Contract between the Registrant, on behalf of Scudder
Latin America Fund, and Brown Brothers Harriman & Co. dated
November 25, 1992.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

Part C - Page 5
<PAGE>

(a)(3) Custodian Contract between the Registrant, on behalf of Scudder
Pacific Opportunities Fund, and Brown Brothers Harriman & Co.
dated November 25, 1992.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(a)(4) Custodian Contract between the Registrant, on behalf of Scudder
Greater Europe Growth Fund, and Brown Brothers Harriman & Co.
dated October 10, 1994.
(Incorporated by reference to Post-Effective Amendment No. 44 to
the Registration Statement.)

(a)(5) Fee schedule for Exhibit 8(a)(1).
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(a)(6) Revised fee schedule for Exhibit 8(a)(1).
(Incorporated by reference to Post-Effective Amendment No. 45 to
the Registration Statement.)

(a)(7) Custodian Contract between the Registrant and Brown Brothers
Harriman & Co. dated March 7, 1995.
(Incorporated by reference to Post-Effective Amendment No. 55 to
the Registration Statement.)

(a)(8) Fee schedule for Exhibit 8(a)(7).
(Incorporated by reference to Post-Effective Amendment No. 55 to
the Registration Statement.)

(b)(1) Master Subcustodian Agreement between Brown Brothers Harriman &
Co. and Morgan Guaranty Trust Company of New York, Tokyo office,
dated November 8, 1976.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(b)(2) Fee schedule for Exhibit 8(b)(1).
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(c)(1) Master Subcustodian Agreement between Brown Brothers Harriman &
Co. and Morgan Guaranty Trust Company of New York, Brussels
office, dated November 15, 1976.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(c)(2) Fee schedule for Exhibit 8(c)(l).
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(d)(1) Subcustodian Agreement between Brown Brothers Harriman & Co. and
The Bank of New York, London office, dated January 30, 1979.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

Part C - Page 6
<PAGE>

(d)(2) Fee schedule for Exhibit 8(d)(1).
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(e)(1) Master Subcustodian Agreement between Brown Brothers Harriman &
Co. and The Chase Manhattan Bank, N.A., Singapore office, dated
June 9, 1980.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(e)(2) Fee schedule for Exhibit 8(e)(1).
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.).

(f)(1) Master Subcustodian Agreement between Brown Brothers Harriman &
Co. and The Chase Manhattan Bank, N.A., Hong Kong office, dated
June 4, 1979.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(f)(2) Fee schedule for Exhibit 8(f)(1).
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(g)(1) Master Subcustodian Agreement between Brown Brothers Harriman &
Co. and Citibank, N.A. New York office, dated July 16, 1981.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(g)(2) Fee schedule for Exhibit 8(g)(1).
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

9. (a)(1) Transfer Agency and Service Agreement between the Registrant and
Scudder Service Corporation dated October 2, 1989.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(a)(2) Fee schedule for Exhibit 9(a)(1).
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(a)(3) Service Agreement between Copeland Associates, Inc. and Scudder
Service Corporation dated June 8, 1995.
(Incorporated by reference to Post-Effective Amendment No. 45 to
the Registration Statement.)

(b) Letter Agreement between the Registrant and Cazenove, Inc. dated
January 23, 1978, with respect to the pricing of securities.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

Part C - Page 7
<PAGE>

(c)(1) COMPASS Service Agreement between the Registrant and Scudder
Trust Company dated January 1, 1990.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(c)(2) Fee schedule for Exhibit (9)(c)(1).
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(c)(3) COMPASS and TRAK 2000 Service Agreement between the Registrant
and Scudder Trust Company dated October 1, 1995.
(Incorporated by reference to Exhibit 9(c)(3) to Post-Effective
Amendment No. 47 to the Registration Statement.)

(d)(1) Shareholder Services Agreement between the Registrant and Charles
Schwab & Co., Inc. dated June 1, 1990.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(d)(2) Administrative Services Agreement between the Registrant and
McGladrey & Pullen, Inc. dated September 30, 1995.
(Incorporated by reference to Exhibit 9(d)(2) to Post-Effective
Amendment No. 47 to the Registration Statement.)

(e)(1) Fund Accounting Services Agreement between the Registrant, on
behalf of Scudder Greater Europe Growth Fund, and Scudder Fund
Accounting Corporation dated October 10, 1994.
(Incorporated by reference to Post-Effective Amendment No. 44 to
the Registration Statement.)

(e)(2) Fund Accounting Services Agreement between the Registrant, on
behalf of Scudder International Fund, and Scudder Fund Accounting
Corporation dated April 12, 1995 is filed herein.
(Incorporated by reference to Post-Effective Amendment No. 45 to
the Registration Statement.)

(e)(3) Fund Accounting Services Agreement between the Registrant, on
behalf of Scudder Latin America Fund, dated May 17, 1995.
(Incorporated by reference to Exhibit 9(e)(3) to Post-Effective
Amendment No. 47 to the Registration Statement.)

(e)(4) Fund Accounting Services Agreement between the Registrant, on
behalf of Scudder Pacific Opportunities Fund, dated May 5, 1995.
(Incorporated by reference to Exhibit 9(e)(4) to Post-Effective
Amendment No. 47 to the Registration Statement.)

(e)(5) Fund Accounting Services Agreement between the Registrant, on
behalf of Scudder Emerging Markets Growth Fund dated May 8, 1996.
(Incorporated by reference to Exhibit 9(e)(5) to Post-Effective
Amendment No. 49 to the Registration Statement.)

Part C - Page 8
<PAGE>

(e)(6) Fund Accounting Services Agreement between the Registrant, on
behalf of Scudder International Growth and Income Fund dated June
3, 1997.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

10. Opinion and Consent of Counsel.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

11. Inapplicable.

12. Inapplicable.

13. Inapplicable.

14. (a) Scudder Flexi-Plan for Corporations and Self-Employed Individuals.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(b) Scudder Individual Retirement Plan.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(c) Scudder Funds 403(b) Plan.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(d) Scudder Employer - Select 403(b) Plan.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

(e) Scudder Cash or Deferred Profit Sharing Plan under Section 401(k).
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

15. Inapplicable.

16. Schedule for Computation of Performance Quotations.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

17. Financial Data Schedule for Scudder International Fund.
(Incorporated by reference to Post-Effective Amendment No. 56 to
the Registration Statement.)

</TABLE>
18. Inapplicable.

Power of Attorney for Nicholas Bratt, Paul Bancroft III, Thomas
J. Devine, William H. Gleysteen, Jr., William H. Luers, Wilson
Nolen, Juris Padegs, Daniel Pierce, and Gordon Shillinglaw is
incorporated by reference to the signature page of Post-Effective
Amendment No. 35.

Part C - Page 9
<PAGE>

Power of Attorney for Keith R. Fox is incorporated by reference
to the Signature Page of Post-Effective Amendment No. 47.

Power of Attorney for Kathryn L. Quirk is incorporated by
reference to the signature page of Post-Effective Amendment No.
54.

Power of Attorney for David S. Lee is incorporated by reference
to the signature page of Post-Effective Amendment No. 56.

Item 25. Persons Controlled by or under Common Control with Registrant.

None

Item 25. Persons Controlled by or under Common Control with Registrant.

None

Item 26. Number of Holders of Securities (as of November 3, 1997).
<TABLE>
<CAPTION>
<S> <C>

(1) (2)

Title of Class Number of Shareholders

Capital Stock ($.01 par value per share)
Scudder International Fund 109,082
Scudder Latin America Fund 71,835
Scudder Pacific Opportunities Fund 24,031
Scudder Greater Europe Growth Fund 13,751
Scudder Emerging Markets Growth Fund 14,737
Scudder International Growth and Income Fund 6,635
</TABLE>

Item 27. Indemnification.

A policy of insurance covering Scudder, Stevens & Clark, Inc.,
its affiliates including Scudder Investor Services, Inc., and
all of the registered investment companies advised by Scudder,
Stevens & Clark, Inc. insures the Registrant's directors and
officers and others against liability arising by reason of an
alleged breach of duty caused by any negligent act, error or
accidental omission in the scope of their duties.

Article Tenth of Registrant's Articles of Incorporation state
as follows:

TENTH: Liability and Indemnification

To the fullest extent permitted by the Maryland
General Corporation Law and the Investment Company Act of
1940, no director or officer of the Corporation shall be
liable to the Corporation or to its stockholders for damages.
The limitation on liability applies to events occurring at the
time a person serves as a director or officer of the
Corporation, whether or not such person is a director or
officer at the time of any proceeding in which liability is
asserted. No amendment to these Articles of Amendment and
Restatement or repeal of any of its provisions shall limit or
eliminate the benefits provided to directors and officers
under this provision with respect to any act or omission which
occurred prior to such amendment or repeal.

The Corporation, including its successors and
assigns, shall indemnify its directors and officers and make
advance payment of related expenses to the fullest extent
permitted, and in accordance with the procedures required by
Maryland law, including Section 2-418 of the Maryland General
Corporation law, as may be amended from time to time, and the
Investment Company Act of 1940. The By-Laws may provide that
the Corporation shall indemnify its employees and/or agents in
any manner and within such limits as permitted by applicable
law. Such indemnification shall be in addition to any other
right or claim to which any director, officer, employee or
agent may otherwise be entitled.

Part C - Page 10
<PAGE>

The Corporation may purchase and maintain insurance
on behalf of any person who is or was a director, officer,
employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer,
partner, trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or
other enterprise or employee benefit plan against any
liability asserted against and incurred by such person in any
such capacity or arising out of such person's position,
whether or not the Corporation would have had the power to
indemnify against such liability.

The rights provided to any person by this Article
shall be enforceable against the Corporation by such person
who shall be presumed to have relied upon such rights in
serving or continuing to serve in the capacities indicated
herein. No amendment of these Articles of Amendment and
Restatement shall impair the rights of any person arising at
any time with respect to events occurring prior to such
amendment.

Nothing in these Articles of Amendment and
Restatement shall be deemed to (i) require a waiver of
compliance with any provision of the Securities Act of 1933,
as amended, or the Investment Company Act of 1940, as amended,
or of any valid rule, regulation or order of the Securities
and Exchange Commission under those Acts or (ii) protect any
director or officer of the Corporation against any liability
to the Corporation or its stockholders to which he would
otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of his or her
duties or by reason of his or her reckless disregard of his or
her obligations and duties hereunder.

Article V of Registrant's Amended and Restated By-Laws states
as follows:

ARTICLE V

INDEMNIFICATION AND INSURANCE

SECTION 1. Indemnification of Directors and Officers. Any person who
was or is a party or is threatened to be made a party in any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that such person is a current or former
Director or officer of the Corporation, or is or was serving while a Director or
officer of the Corporation at the request of the Corporation as a Director,
officer, partner, trustee, employee, agent or fiduciary or another corporation,
partnership, joint venture, trust, enterprise or employee benefit plan, shall be
indemnified by the Corporation against judgments, penalties, fines, excise
taxes, settlements and reasonable expenses (including attorneys' fees) actually
incurred by such person in connection with such action, suit or proceeding to
the fullest extent permissible under the Maryland General Corporation Law, the
Securities Act of 1933 and the 1940 Act, as such statutes are now or hereafter
in force, except that such indemnity shall not protect any such person against
any liability to the Corporation or any stockholder thereof to which such person
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office ("disabling conduct").

SECTION 2. Advances. Any current or former Director or officer of the
Corporation claiming indemnification within the scope of this Article V shall be
entitled to advances from the Corporation for payment of the reasonable expenses
incurred by him in connection with proceedings to which he is a party in the
manner and to the fullest extent permissible under the Maryland General
Corporation Law, the Securities Act of 1933 and the 1940 Act, as such statutes
are now or hereafter in force; provided however, that the person seeking
indemnification shall provide to the Corporation a written affirmation of his
good faith belief that the standard of conduct necessary for indemnification by
the Corporation has been met and a written undertaking by or on behalf of the
Director to repay any such advance if it is ultimately determined that he is not
entitled to indemnification, and provided further that at least one of the
following additional conditions is met: (1) the person seeking indemnification
shall provide a security in form and amount acceptable to the Corporation for
his undertaking; (2) the Corporation is insured against losses arising by reason
of the advance; or (3) a majority of a quorum of Directors of the Corporation
who are neither "interested persons" as defined in Section 2(a)(19) of the 1940
Act, as amended, nor parties to the proceeding ("disinterested non-party

Part C - Page 11
<PAGE>

Directors") or independent legal counsel, in a written opinion, shall determine,
based on a review of facts readily available to the Corporation at the time the
advance is proposed to be made, that there is reason to believe that the person
seeking indemnification will ultimately be found to be entitled to
indemnification.

SECTION 3. Procedure. At the request of any current or former Director
or officer, or any employee or agent whom the Corporation proposes to indemnify,
the Board of Directors shall determine, or cause to be determined, in a manner
consistent with the Maryland General Corporation Law, the Securities Act of 1933
and the 1940 Act, as such statutes are now or hereafter in force, whether the
standards required by this Article V have been met; provided, however, that
indemnification shall be made only following: (1) a final decision on the merits
by a court or other body before whom the proceeding was brought that the person
to be indemnified was not liable by reason of disabling conduct or (2) in the
absence of such a decision, a reasonable determination, based upon a review of
the facts, that the person to be indemnified was not liable by reason of
disabling conduct, by (a) the vote of the majority of a quorum of disinterested
non-party Directors or (b) an independent legal counsel in a written opinion.

SECTION 4. Indemnification of Employees and Agents. Employees and
agents who are not officers or Directors of the Corporation may be indemnified,
and reasonable expenses may be advanced to such employees or agents, in
accordance with the procedures set forth in this Article V to the extent
permissible under the Maryland General Corporation Law, the Securities Act of
1933 and the 1940 Act, as such statutes are now or hereafter in force, and to
such further extent, consistent with the foregoing, as may be provided by action
of the Board of Directors or by contract.

SECTION 5. Other Rights. The indemnification provided by this Article V
shall not be deemed exclusive of any other right, in respect of indemnification
or otherwise, to which those seeking such indemnification may be entitled under
any insurance or other agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action by a Director or officer of the
Corporation in his official capacity and as to action by such person in another
capacity while holding such office or position, and shall continue as to a
person who has ceased to be a Director or officer and shall inure to the benefit
of the heirs, executors and administrators of such a person.

SECTION 6. Constituent, Resulting or Surviving Corporations. For the
purposes of this Article V, references to the "Corporation" shall include all
constituent corporations absorbed in a consolidation or merger as well as the
resulting or surviving corporation so that any person who is or was a Director,
officer, employee or agent of a constituent corporation or is or was serving at
the request of a constituent corporation as a Director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under this Article V with respect to
the resulting or surviving corporation as he would if he had served the
resulting or surviving corporation in the same capacity.

Item 28. Business or Other Connections of Investment Adviser

The Adviser has stockholders and employees who are denominated
officers but do not as such have corporation-wide
responsibilities. Such persons are not considered officers for
the purpose of this Item 28.

Business and Other Connections of Board
Name of Directors of Registrant's Adviser
<TABLE>
<CAPTION>
<S> <C>

Stephen R. Beckwith Director, Vice President, Treasurer, Chief Operating Officer & Chief Financial Officer,
Scudder, Stevens & Clark, Inc. (investment adviser)**

Lynn S. Birdsong Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
President & Director, The Latin America Dollar Income Fund, Inc. (investment company)**
President & Director, Scudder World Income Opportunities Fund, Inc. (investment company)**

Part C - Page 12
<PAGE>

President, The Japan Fund, Inc. (investment company)**
Supervisory Director, The Latin America Income and Appreciation Fund N.V. (investment company) +
Supervisory Director, The Venezuela High Income Fund N.V. (investment company) xx
Supervisory Director, Scudder Mortgage Fund (investment company)+
Supervisory Director, Scudder Floating Rate Funds for Fannie Mae Mortgage Securities I & II
(investment company) +
Director, Canadian High Income Fund (investment company)#
Director, Hot Growth Companies Fund (investment company)#
Director, Sovereign High Yield Investment Company (investment company)+
Director, Scudder, Stevens & Clark (Luxembourg) S.A. (investment manager) #

Nicholas Bratt Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
President & Director, Scudder New Europe Fund, Inc. (investment company)**
President & Director, The Brazil Fund, Inc. (investment company)**
President & Director, The First Iberian Fund, Inc. (investment company)**
President & Director, Scudder International Fund, Inc. (investment company)**
President & Director, Scudder Global Fund, Inc. (President on all series except Scudder Global
Fund) (investment company)**
President & Director, The Korea Fund, Inc. (investment company)**
President & Director, Scudder New Asia Fund, Inc. (investment company)**
President, The Argentina Fund, Inc. (investment company)**
Vice President, Scudder, Stevens & Clark Corporation (Delaware) (investment adviser)**
Vice President, Scudder, Stevens & Clark Japan, Inc. (investment adviser)###
Vice President, Scudder, Stevens & Clark of Canada Ltd. (Canadian investment adviser) Toronto,
Ontario, Canada
Vice President, Scudder, Stevens & Clark Overseas Corporationoo

E. Michael Brown Director, Chief Administrative Officer, Scudder, Stevens & Clark, Inc. (investment adviser)**
Trustee, Scudder GNMA Fund (investment company)*
Trustee, Scudder Portfolio Trust (investment company)*
Trustee, Scudder U.S. Treasury Fund (investment company)*
Trustee, Scudder Tax Free Money Fund (investment company)*
Trustee, Scudder State Tax Free Trust (investment company)*
Trustee, Scudder Cash Investment Trust (investment company)*
Assistant Treasurer, Scudder Investor Services, Inc. (broker/dealer)*
Director & President, Scudder Realty Holding Corporation (a real estate holding company)*
Director & President, Scudder Trust Company (a trust company)+++
Director, Scudder Trust (Cayman) Ltd.

Mark S. Casady Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Director & Vice President, Scudder Investor Services, Inc. (broker/dealer)*
Director & Vice President, Scudder Service Corporation (in-house transfer agent)*
Director, SFA, Inc. (advertising agency)*

Linda C. Coughlin Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Chairman & Trustee, AARP Cash Investment Funds (investment company)**
Chairman & Trustee, AARP Growth Trust (investment company)**
Chairman & Trustee, AARP Income Trust (investment company)**
Chairman & Trustee, AARP Tax Free Income Trust (investment company)**
Chairman & Trustee, AARP Managed Investment Portfolios Trust (investment company)**
Director & Senior Vice President, Scudder Investor Services, Inc. (broker/dealer)*

Part C - Page 13
<PAGE>

Director, SFA, Inc. (advertising agency)*

Margaret D. Hadzima Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Assistant Treasurer, Scudder Investor Services, Inc. (broker/dealer)*

Jerard K. Hartman Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Vice President, Scudder California Tax Free Trust (investment company)*
Vice President, Scudder Equity Trust (investment company)**
Vice President, Scudder Cash Investment Trust (investment company)*
Vice President, Scudder Fund, Inc. (investment company)**
Vice President, Scudder Global Fund, Inc. (investment company)**
Vice President, Scudder GNMA Fund (investment company)*
Vice President, Scudder Portfolio Trust (investment company)*
Vice President, Scudder Institutional Fund, Inc. (investment company)**
Vice President, Scudder International Fund, Inc. (investment company)**
Vice President, Scudder Investment Trust (investment company)*
Vice President, Scudder Municipal Trust (investment company)*
Vice President, Scudder Mutual Funds, Inc. (investment company)**
Vice President, Scudder New Asia Fund, Inc. (investment company)**
Vice President, Scudder New Europe Fund, Inc. (investment company)**
Vice President, Scudder Securities Trust (investment company)*
Vice President, Scudder State Tax Free Trust (investment company)*
Vice President, Scudder Funds Trust (investment company)**
Vice President, Scudder Tax Free Money Fund (investment company)*
Vice President, Scudder Tax Free Trust (investment company)*
Vice President, Scudder U.S. Treasury Money Fund (investment company)*
Vice President, Scudder Pathway Series (investment company)*
Vice President, Scudder Variable Life Investment Fund (investment company)*
Vice President, The Brazil Fund, Inc. (investment company)**
Vice President, The Korea Fund, Inc. (investment company)**
Vice President, The Argentina Fund, Inc. (investment company)**
Vice President & Director, Scudder, Stevens & Clark of Canada, Ltd. (Canadian investment
adviser) Toronto, Ontario, Canada
Vice President, The First Iberian Fund, Inc. (investment company)**
Vice President, The Latin America Dollar Income Fund, Inc. (investment company)**
Vice President, Scudder World Income Opportunities Fund, Inc. (investment company)**

Richard A. Holt Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Vice President, Scudder Variable Life Investment Fund (investment company)*

John T. Packard Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
President, Montgomery Street Income Securities, Inc. (investment company) o
Chairman, Scudder Realty Advisors, Inc. (realty investment adviser) x

Daniel Pierce Chairman & Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Chairman, Vice President & Director, Scudder Global Fund, Inc. (investment company)**
Chairman & Director, Scudder New Europe Fund, Inc. (investment company)**
Chairman & Director, The First Iberian Fund, Inc. (investment company)**
Chairman & Director, Scudder International Fund, Inc. (investment company)**
Chairman & Director, Scudder New Asia Fund, Inc. (investment company)**
President & Trustee, Scudder Equity Trust (investment company)**
President & Trustee, Scudder GNMA Fund (investment company)*
President & Trustee, Scudder Portfolio Trust (investment company)*
President & Trustee, Scudder Funds Trust (investment company)**

Part C - Page 14
<PAGE>

President & Trustee, Scudder Securities Trust (investment company)*
President & Trustee, Scudder Investment Trust (investment company)*
President & Director, Scudder Institutional Fund, Inc. (investment company)**
President & Director, Scudder Fund, Inc. (investment company)**
President & Director, Scudder Mutual Funds, Inc. (investment company)**
Vice President & Trustee, Scudder Municipal Trust (investment company)*
Vice President & Trustee, Scudder Variable Life Investment Fund (investment company)*
Vice President & Trustee, Scudder Pathway Series (investment company)*
Trustee, Scudder California Tax Free Trust (investment company)*
Trustee, Scudder State Tax Free Trust (investment company)*
Vice President, Montgomery Street Income Securities, Inc. (investment company)o
Chairman & President, Scudder, Stevens & Clark of Canada, Ltd. (Canadian investment adviser),
Toronto, Ontario, Canada
Chairman & Director, Scudder Global Opportunities Funds (investment company) Luxembourg
Chairman, Scudder, Stevens & Clark, Ltd. (investment adviser) London, England
President & Director, Scudder Precious Metals, Inc. xxx
Vice President, Director & Assistant Secretary, Scudder Realty Holdings Corporation
(a real estate holding company)*
Vice President, Director & Assistant Treasurer, Scudder Investor Services, Inc. (broker/dealer)*
Director, Scudder Latin America Investment Trust PLC (investment company)@
Director, Fiduciary Trust Company (banking & trust company) Boston, MA
Director, Fiduciary Company Incorporated (banking & trust company) Boston, MA
Trustee, New England Aquarium, Boston, MA
Incorporator, Scudder Trust Company (a trust company)+++

Kathryn L. Quirk Director, Chief Legal Officer, Chief Compliance Officer and Secretary, Scudder, Stevens & Clark,
Inc. (investment adviser)**
Director, Vice President & Assistant Secretary, The Argentina Fund, Inc. (investment company)**
Director, Vice President & Assistant Secretary, Scudder International Fund, Inc. (investment
company)**
Director, Vice President & Assistant Secretary, Scudder New Asia Fund (investment company)**
Director, Vice President & Assistant Secretary, Scudder Global Fund, Inc. (investment company)**
Trustee, Vice President & Assistant Secretary, Scudder Equity Trust (investment company)**
Trustee, Vice President & Assistant Secretary, Scudder Securities Trust (investment company)*
Trustee, Vice President & Assistant Secretary, Scudder Funds Trust (investment company)**
Trustee, Scudder Investment Trust (investment company)*
Trustee, Scudder Municipal Trust (investment company)*
Vice President & Trustee, Scudder Cash Investment Trust (investment company)*
Vice President & Trustee, Scudder Tax Free Money Fund (investment company)*
Vice President & Trustee, Scudder Tax Free Trust (investment company)*
Vice President & Secretary, AARP Growth Trust (investment company)**
Vice President & Secretary, AARP Income Trust (investment company)**
Vice President & Secretary, AARP Tax Free Income Trust (investment company)**
Vice President & Secretary, AARP Cash Investment Funds (investment company)**
Vice President & Secretary, AARP Managed Investment Portfolios Trust (investment company)**
Vice President & Secretary, The Japan Fund, Inc. (investment company)**

Part C - Page 15
<PAGE>

Vice President & Assistant Secretary, Scudder World Income Opportunities Fund, Inc. (investment
company)**
Vice President & Assistant Secretary, The Korea Fund, Inc. (investment company)**
Vice President & Assistant Secretary, The Brazil Fund, Inc. (investment company)**
Vice President & Assistant Secretary, Montgomery Street Income Securities, Inc. (investment
company)o
Vice President & Assistant Secretary, Scudder Mutual Funds, Inc. (investment company)**
Vice President & Assistant Secretary, Scudder Pathway Series (investment company)*
Vice President & Assistant Secretary, Scudder New Europe Fund, Inc. (investment company)**
Vice President & Assistant Secretary, Scudder Variable Life Investment Fund (investment company)*
Vice President & Assistant Secretary, The First Iberian Fund, Inc. (investment company)**
Vice President & Assistant Secretary, The Latin America Dollar Income Fund, Inc. (investment
company)**
Vice President, Scudder Fund, Inc. (investment company)**
Vice President, Scudder Institutional Fund, Inc. (investment company)**
Vice President, Scudder GNMA Fund (investment company)*
Director, Senior Vice President & Clerk, Scudder Investor Services, Inc. (broker/dealer)*
Director, Vice President & Secretary, Scudder Fund Accounting Corporation (in-house fund
accounting agent)*
Director, Vice President & Secretary, Scudder Realty Holdings Corporation (a real estate
holding company)*
Director & Clerk, Scudder Service Corporation (in-house transfer agent)*
Director, SFA, Inc. (advertising agency)*
Vice President, Director & Assistant Secretary, Scudder Precious Metals, Inc. xxx

Cornelia M. Small Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
President, AARP Cash Investment Funds (investment company)**
President, AARP Growth Trust (investment company)**
President, AARP Income Trust (investment company)**
President, AARP Tax Free Income Trust (investment company)**
President, AARP Managed Investment Portfolio Trust (investment company)**

Edmond D. Villani Director, President & Chief Executive Officer, Scudder, Stevens & Clark, Inc. (investment
adviser)**
Chairman & Director, The Argentina Fund, Inc. (investment company)**
Chairman & Director, The Latin America Dollar Income Fund, Inc. (investment company)**
Chairman & Director, Scudder World Income Opportunities Fund, Inc. (investment company)**
Supervisory Director, Scudder Mortgage Fund (investment company) +
Supervisory Director, Scudder Floating Rate Funds for Fannie Mae Mortgage Securities I & II
(investment company)+
Director, Scudder, Stevens & Clark Japan, Inc. (investment adviser)###
Director, The Brazil Fund, Inc. (investment company)**
Director, Indosuez High Yield Bond Fund (investment company) Luxembourg
President & Director, Scudder, Stevens & Clark Overseas Corporationoo
President & Director, Scudder, Stevens & Clark Corporation (Delaware) (investment adviser)**
Director, Scudder Realty Advisors, Inc. (realty investment adviser) x
Director, IBJ Global Investment Management S.A., (Luxembourg investment management company)
Luxembourg, Grand-Duchy of Luxembourg

Part C - Page 16
<PAGE>

Stephen A. Wohler Director, Scudder, Stevens & Clark, Inc. (investment adviser)**
Vice President, Montgomery Street Income Securities, Inc. (investment company)o

* Two International Place, Boston, MA
x 333 South Hope Street, Los Angeles, CA
** 345 Park Avenue, New York, NY
++ Two Prudential Plaza, 180 N. Stetson Avenue, Chicago, IL
+++ 5 Industrial Way, Salem, NH
o 101 California Street, San Francisco, CA
# Societe Anonyme, 47, Boulevard Royal, L-2449 Luxembourg, R.C. Luxembourg B 34.564
+ John B. Gorsiraweg 6, Willemstad Curacao, Netherlands Antilles
xx De Ruyterkade 62, P.O. Box 812, Willemstad Curacao, Netherlands Antilles
## 2 Boulevard Royal, Luxembourg
*** B1 2F3F 248 Section 3, Nan King East Road, Taipei, Taiwan
xxx Grand Cayman, Cayman Islands, British West Indies
oo 20-5, Ichibancho, Chiyoda-ku, Tokyo, Japan
### 1-7, Kojimachi, Chiyoda-ku, Tokyo, Japan
@ c/o Sinclair Hendersen Limited, 23 Cathedral Yard, Exeter, Devon, U.K.
</TABLE>

Item 29. Principal Underwriters.

(a) Scudder California Tax Free Trust
Scudder Cash Investment Trust
Scudder Equity Trust
Scudder Fund, Inc.
Scudder Funds Trust
Scudder Global Fund, Inc.
Scudder GNMA Fund
Scudder Institutional Fund, Inc.
Scudder International Fund, Inc.
Scudder Investment Trust
Scudder Municipal Trust
Scudder Mutual Funds, Inc.
Scudder Pathway Series
Scudder Portfolio Trust
Scudder Securities Trust
Scudder State Tax Free Trust
Scudder Tax Free Money Fund
Scudder Tax Free Trust
Scudder U.S. Treasury Money Fund
Scudder Variable Life Investment Fund
AARP Cash Investment Funds
AARP Growth Trust
AARP Income Trust
AARP Tax Free Income Trust
AARP Managed Investment Portfolios Trust
The Japan Fund, Inc.

Part C - Page 17
<PAGE>

(b)
<TABLE>
<CAPTION>
<S> <C> <C>

(1) (2) (3)

Name and Principal Position and Offices with Positions and
Business Address Scudder Investor Services, Inc. Offices with Registrant

Lynn S. Birdsong Senior Vice President None
345 Park Avenue
New York, NY 10154

E. Michael Brown Assistant Treasurer None
Two International Place
Boston, MA 02110

Mark S. Casady Director and Vice President None
Two International Place
Boston, MA 02110

Linda Coughlin Director and Senior Vice President None
Two International Place
Boston, MA 02110

Richard W. Desmond Vice President Assistant Secretary
345 Park Avenue
New York, NY 10154

Paul J. Elmlinger Senior Vice President and None
345 Park Avenue Assistant Clerk
New York, NY 10154

Margaret D. Hadzima Assistant Treasurer None
Two International Place
Boston, MA 02110

Thomas W. Joseph Director, Vice President, Treasurer Vice President
Two International Place and Assistant Clerk
Boston, MA 02110

David S. Lee Director, President and Vice President and Assistant
Two International Place Assistant Treasurer Treasurer
Boston, MA 02110

Thomas F. McDonough Clerk Vice President and Secretary
Two International Place
Boston, MA 02110

Thomas H. O'Brien Assistant Treasurer None
345 Park Avenue
New York, NY 10154

Edward J. O'Connell Assistant Treasurer Vice President and Assistant
345 Park Avenue Treasurer
New York, NY 10154

Part C - Page 18
<PAGE>

Daniel Pierce Director, Vice President Chairman of the Board and
Two International Place and Assistant Treasurer Director
Boston, MA 02110

Kathryn L. Quirk Director, Senior Vice President Director, Vice President and
345 Park Avenue and Assistant Clerk Assistant Secretary
New York, NY 10154

Robert A. Rudell Vice President None
Two International Place
Boston, MA 02110

Edmund J. Thimme Vice President None
345 Park Avenue
New York, NY 10154

Benjamin Thorndike Vice President None
Two International Place
Boston, MA 02110

Sydney S. Tucker Vice President None
Two International Place
Boston, MA 02110

David B. Watts Assistant Treasurer None
Two International Place
Boston, MA 02110

Linda J. Wondrack Vice President None
Two International Place
Boston, MA 02110
</TABLE>

The Underwriter has employees who are denominated officers of an operational
area. Such persons do not have corporation-wide responsibilities and are not
considered officers for the purpose of this Item 29.

(c)

<TABLE>
<S> <C> <C> <C> <C> <C>
<CAPTION>
(1) (2) (3) (4) (5)
Net Underwriting Compensation on
Name of Principal Discounts and Redemptions Brokerage Other
Underwriter Commissions and Repurchases Commissions Compensation
----------- ----------- --------------- ----------- ------------

Scudder Investor None None None None
Services, Inc.
</TABLE>

Item 30. Location of Accounts and Records.

Certain accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act and the Rules
promulgated thereunder are maintained by Scudder, Stevens &
Clark, Inc., 345 Park Avenue, New York, New York 10154. Records
relating to the duties of the Registrant's custodian are
maintained by Brown Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts. Records relating to the duties of the
Registrant's transfer agent are maintained by Scudder Service
Corporation, Two International Place, Boston, Massachusetts
02110-4103.

Part C - Page 19
<PAGE>

Item 31. Management Services.

Inapplicable.

Item 32. Undertakings

Inapplicable.

Part C - Page 20
<PAGE>
SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this amendment to its Registration
Statement pursuant to Rule 485(a) under the Securities Act of 1933 and has duly
caused this amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Boston and the
Commonwealth of Massachusetts on the 24th day of November, 1997.

SCUDDER INTERNATIONAL FUND, INC.

By /s/Thomas F. McDonough
-------------------------------
Thomas F. McDonough,
Vice President and Secretary

Pursuant to the requirements of the Securities Act of 1933, this
amendment to its Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

<TABLE>
<S> <C> <C>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----

/s/Paul Bancroft, III
- --------------------------------------
Paul Bancroft, III* Director November 24, 1997

/s/Sheryle J. Bolton
- --------------------------------------
Sheryle J. Bolton* Director November 24, 1997

/s/William T. Burgin
- --------------------------------------
William T. Burgin* Director November 24, 1997

/s/Thomas J. Devine
- --------------------------------------
Thomas J. Devine* Director November 24, 1997

/s/Keith R. Fox
- --------------------------------------
Keith R. Fox* Director November 24, 1997

/s/William H. Gleysteen, Jr.
- --------------------------------------
William H. Gleysteen, Jr.* Director November 24, 1997

/s/William H. Luers
- --------------------------------------
William H. Luers* Director November 24, 1997

<PAGE>

SIGNATURE TITLE DATE
- --------- ----- ----

/s/Wilson Nolen
- --------------------------------------
Wilson Nolen* Director November 24, 1997

/s/Daniel Pierce
- --------------------------------------
Daniel Pierce* Chairman of the Board and Director November 24, 1997

/s/Kathryn L. Quirk
- --------------------------------------
Kathryn L. Quirk* Director, Vice President and November 24, 1997
Assistant Secretary

/s/Pamela A. McGrath
- --------------------------------------
Pamela A. McGrath Vice President and Treasurer November 24, 1997
(Principal Financial and Accounting
Officer)

</TABLE>

*By: /s/Thomas F. McDonough
---------------------------------
Thomas F. McDonough,
Attorney-in-Fact pursuant to a power of attorney
contained in the signature page of Post-Effective
Amendment Nos. 35, 47, 49, 54, 56 and 58 to the
Registration Statement, filed October 8, 1992,
February 27, 1996, July 17, 1996, June 2, 1997, July
31, 1997 and December 4, 1997, respectively.

<PAGE>

SIGNATURES
----------

SCUDDER INTERNATIONAL FUND, INC.

By /s/Thomas F. McDonough
` ------------------------------------
Thomas F. McDonough,
Secretary and Vice President

Pursuant to the requirements of the Securities Act of 1933, this
amendment to its Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated. By so signing, the
undersigned in her capacity as a director or officer, or both, as the case may
be of the Registrant, does hereby appoint Kathryn L. Quirk, Thomas F. McDonough
and Sheldon A. Jones and each of them, severally, or if more than one acts, a
majority of them, her true and lawful attorney and agent to execute in her name,
place and stead (in such capacity) any and all amendments to the Registration
Statement and any post-effective amendments thereto and all instruments
necessary or desirable in connection therewith, to attest the seal of the
Registrant thereon and to file the same with the Securities and Exchange
Commission. Each of said attorneys and agents shall have power to act with or
without the other and have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or advisable to be done in the premises as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and approving the act of said attorneys and agents and each of them.

<TABLE>
<S> <C> <C>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----

/s/Sheryle J. Bolton
- --------------------------------------
Sheryle J. Bolton Director November 24, 1997

</TABLE>

2
<PAGE>

SIGNATURES
----------

SCUDDER INTERNATIONAL FUND, INC.

By /s/Thomas F. McDonough
---------------------------------
Thomas F. McDonough,
Secretary and Vice President

Pursuant to the requirements of the Securities Act of 1933, this
amendment to its Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated. By so signing, the
undersigned in his capacity as a director or officer, or both, as the case may
be of the Registrant, does hereby appoint Kathryn L. Quirk, Thomas F. McDonough
and Sheldon A. Jones and each of them, severally, or if more than one acts, a
majority of them, his true and lawful attorney and agent to execute in his name,
place and stead (in such capacity) any and all amendments to the Registration
Statement and any post-effective amendments thereto and all instruments
necessary or desirable in connection therewith, to attest the seal of the
Registrant thereon and to file the same with the Securities and Exchange
Commission. Each of said attorneys and agents shall have power to act with or
without the other and have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or advisable to be done in the premises as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and approving the act of said attorneys and agents and each of them.

<TABLE>
<S> <C> <C>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----

/s/William T. Burgin
- --------------------------------------
William T. Burgin Director November 24, 1997

</TABLE>

<PAGE>

File No. 2-14400
File No. 811-642

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

EXHIBITS

FORM N-1A

POST-EFFECTIVE AMENDMENT No. 58

TO REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

AND

AMENDMENT NO. 38

TO REGISTRATION STATEMENT

UNDER

THE INVESTMENT COMPANY ACT OF 1940

SCUDDER INTERNATIONAL FUND, INC.

<PAGE>

SCUDDER INTERNATIONAL FUND, INC.

EXHIBIT INDEX

<PAGE>
SCUDDER INTERNATIONAL FUND, INC.

EXHIBIT INDEX

Exhibit 18

SCUDDER INTERNATIONAL FUND, INC.
(the "Fund")

PLAN WITH RESPECT TO
SCUDDER INTERNATIONAL FUND
(the "PORTFOLIO")
PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940

The Plan

1. Introduction

As required by Rule 18f-3 under the Investment Company Act of 1940, as
amended ("1940 Act"), this Plan describes the multi-class system for the Fund
that will apply to shares of capital stock, $0.01 par value of Scudder
International Fund (the "shares"), including the separate class arrangements for
shareholder and administrative services and the distribution of shares, the
method for allocating expenses, income, gain and loss of the Fund among classes
and, any related exchange privileges and conversion features applicable to the
classes.

Upon the effective date of this Plan, the Fund elects to offer multiple
classes of shares of the Portfolio, as described herein, pursuant to Rule 18f-3
and this Plan.

II. The Multi-Class System

The Portfolio may offer two classes of shares, shares of Scudder
International Fund Class and Barrett International Shares. Shares of each class
of the Portfolio shall represent an equal pro rata interest in the Portfolio
and, generally, shall have identical voting, dividend, liquidation, and other
rights, preferences, powers, restrictions, limitations, qualifications and terms
and conditions, except that: (a) each class shall have a different designation;
(b) each class of shares shall bear any Class Expenses, as defined by Section
A.2, below; (c) each class shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its shareholder services,
administrative services or distribution arrangement; (d) each class shall have
separate voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other class; (e) each
class may have separate exchange privileges; (f) each class of shares may have
separate account size requirements; and (g) each class may have different
conversion features. In addition, the following provisions shall apply to the
classes authorized hereby.

<PAGE>

A. Allocation of Income and Expenses

1. General.

The gross income, realized and unrealized capital gains and
losses and expenses (other than Class Expenses, as defined below) of the
Portfolio shall be allocated to each share of the Portfolio, on the basis of its
net asset value relative to the net asset value of the Portfolio. Expenses to be
so allocated include expenses of the Fund that are not attributable to the
Portfolio, any class of the Portfolio or any other series of the Fund ("Fund
Expenses") and expenses of the Portfolio not attributable to a particular class
of the Portfolio ("Portfolio Expenses"). Fund Expenses include, but are not
limited to, Directors' fees, certain insurance costs and certain legal fees.
Portfolio Expenses include, but are not limited to, certain filing fees (i.e.
state filing fees imposed on a Fund-wide basis and Securities and Exchange
Commission registration fees), custodial fees, advisory fees and other expenses
relating to the management of the Portfolio's assets.

2. Class Expenses.

Expenses attributable to one or more particular classes, which
are allocated on the basis of the amount incurred on behalf of each class
("Class Expenses") may include: (a) transfer agent fees attributable to a
specific class, (b) printing and postage expenses related to preparing and
distributing material such as shareholder reports, prospectuses and proxy
materials to current Fund shareholders; (c) registration fees (other than those
set forth in sub section A1 above); (d) the expense of administrative personnel
and services as required to support the shareholders of a specific class; (e)
litigation or other legal expenses and audit or other accounting expenses
relating to a specific class; (f) Director's fees incurred as a result of issues
relating to a specific class; and (g) shareholder or Directors' meeting costs
that relate to a specific class. All expenses described in this paragraph may be
allocated as Class Expenses, but only if the Fund's President and Treasurer have
determined, subject to the Board of Directors' approval or ratification, which
of such categories of expenses will be treated as Class Expenses, consistent
with applicable legal principles under the 1940 Act and the Internal Revenue
Code of 1986, as amended ("Code").

In the event that a particular expense is no longer reasonably
allocable by class or to a particular class, it shall be treated as a Fund
Expense or Portfolio Expense, and in the event a Fund Expense or Portfolio
Expense becomes allocable at a different level, including as a Class Expense, it
shall be so

2
<PAGE>

allocated, subject to compliance with Rule 18f-3 and to approval or ratification
by the Board of Directors.

The initial determination of expenses that will be allocated as Class
Expenses and any subsequent changes thereto shall be reviewed by the Board of
Directors and approved by such Board and by a majority of the Directors who are
not "interested persons" of the Fund or Portfolio, as defined in the 1940 Act
(the "Independent Directors"). Such expense allocation shall be set forth in a
schedule, as amended from time to time, by the Board of Directors, including a
majority of the Independent Directors, and shall form a part of this plan.

3. Waivers or Reimbursements of Expenses

Expenses may be waived or reimbursed by the Fund's investment
adviser, its principal underwriter, or any other provider of services to the
Portfolio or the Fund without the prior approval of the Board of Directors to
the extent such waiver or reimbursement does not jeopardize the Fund's status as
a "regulated investment company" under the Code.

Barrett Shares shall be offered only to persons who are
clients of Barrett Associates, Inc. and shares of Scudder International Fund
shall be offered to any investors.

B. Exchange Privileges

Shareholders of the Multi-Class Portfolio (other than the Barrett
class) may exchange shares of their class for shares of another fund in the
Scudder family, at the relative net asset values of the respective shares to be
exchanged and with no sales charge, subject to applicable law, and to the
applicable requirements, if any, as to minimum amount.

C. Board Review

1. Initial Approval

The Board of Directors, including a majority of the
Independent Directors, at a meeting held December 3, 1997, approved the Plan
based on a determination that the Plan, including the expense allocation, is in
the best interests of each class individually and of the Portfolio and the Fund.
Their determination was based on their review of information furnished to them
which they deemed reasonably necessary and sufficient to evaluate the Plan.

3
<PAGE>

2. Approval of Amendments

The Plan may not be amended materially unless the Board of Directors,
including a majority of the Independent Directors has found that the proposed
amendment, including any proposed related expense allocation, is in the best
interests of each class individually and of the Portfolio and the Fund. Such
finding shall be based on information requested by, and furnished to, the Board
that the Board deems reasonably necessary to evaluate the proposed amendment.

3. Periodic Review

The Board shall review reports of expense allocations and such
other information as they request at such times, or pursuant to such schedule,
as they may determine consistent with applicable legal requirements.

D. Contracts

Any Agreement related to the multi-class system shall require
the parties thereto to furnish to the Board of Directors, upon their request,
such information as is reasonably necessary to permit the Directors to evaluate
the plan or any proposed amendment.

E. Effective Date

The Plan, having been reviewed and approved by the Board of Directors
and by a majority of the Independent Directors as indicated in subsection D1 of
Section II of the Plan, shall take effect as of the implementation of the
multi-class system, except that allocation of Class Expenses shall not occur
until the effective date of the Fund's post-effective amendment to its
registration statement containing disclosure concerning the multi-class system.

F. Amendments

The Plan may not be amended to modify materially its terms unless such
amendment has been approved in the manner specified in subsection D2 of Section
II of the Plan.