Scudder
Pacific
Opportunities
Fund
Annual Report
October 31, 1996
Pure No-Load(TM) Funds
Offers opportunities for long-term capital appreciation through investment
primarily in the equity securities of Pacific Basin companies, excluding Japan.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
10 Investment Portfolio
15 Financial Statements
18 Financial Highlights
19 Notes to Financial Statements
23 Report of Independent Accountants
24 Tax Information
25 Officers and Directors
26 Investment Products and Services
27 How to Contact Scudder
In Brief
o Pacific Rim markets remained rocky in 1996, the result of political
turbulence, weakening economic fundamentals, and shifting investor sentiment.
The performance of individual markets varied widely, from a gain of 28% to a
decline of more than 36%.
o Scudder Pacific Opportunities Fund provided a 2.76% total return for the 12
months ended October 31, 1996.
o The stage may now be set for an upturn, with attractive stock valuations,
projected gains in corporate profit growth, and accelerating economic growth as
exports pick up and as monetary policy eases.
2 - Scudder Pacific Opportunities Fund
<PAGE>
Letter From the Fund's Chairman
Dear Shareholders,
We are pleased to present the newly redesigned annual report for Scudder
Pacific Opportunities Fund. The new format is designed to enhance the
attractiveness and readability of the reports. Let us know what you think.
In this era of electronic information we have also taken a look at our
abbreviated quarterly reports, which you generally receive during the month
after the end of your fund's first and third fiscal quarters. Going forward,
these printed reports will be discontinued, and portfolio information will be
made available on a more timely basis through one or more of the following:
Scudder's Web site, Scudder's automated information line (SAIL), and by calling
Investor Relations.
We'd like to take this opportunity to announce that Theresa Gusman has
replaced Joyce Cornell on the Scudder Pacific Opportunities Fund's management
team. Theresa has served since 1995 as an analyst focusing on the Pacific Basin
region in Scudder's Global Equity Group. Prior to Joining Scudder, Ms.
Gusman was an equity research analyst at several other firms.
As detailed in the portfolio management discussion that follows, fiscal
year 1996 saw wide variations in the performance of Asian equities -- a
disappointment for investors who participated in the rocky markets of 1994 and
1995. We look forward to the coming year with optimism and remain unshaken in
our belief that the stock markets of the Pacific region embody some of the best
long-term appreciation potential in the world.
We thank you for your continued investment in Scudder Pacific Opportunities
Fund. Please do not hesitate to call Investor Relations at 1-800-225-2470 with
any questions.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
Chairman,
Scudder Pacific Opportunities Fund
3 - Scudder Pacific Opportunities Fund
<PAGE>
PERFORMANCE UPDATE as of October 31, 1996
- ----------------------------------------------------------------
FUND INDEX COMPARISONS
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/96 $10,000 Cumulative Annual
- --------------------------------------
SCUDDER PACIFIC OPPORTUNITIES FUND
- --------------------------------------
1 Year $10,276 2.76% 2.76%
Life of
Fund* $13,504 35.04% 8.01%
- --------------------------------------
MSCI ALL COUNTRY ASIA FREE INDEX
(EXCLUDING JAPAN)
- --------------------------------------
1 Year $10,815 8.15% 8.15%
Life of
Fund* $18,527 85.27% 17.44%
- --------------------------------------
MSCI PACIFIC INDEX
(EXCLUDING JAPAN)
- --------------------------------------
1 Year $11.969 19.69% 19.69%
Life of
Fund* $19,887 98.87% 19.66%
- --------------------------------------
*The Fund commenced operations on December 8, 1992.
Index comparisons begin December 31, 1992.
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
SCUDDER PACIFIC OPPORTUNITIES FUND
Year Amount
- ----------------------
12/92 $10,000
4/93 $11,019
10/93 $13,542
4/94 $13,498
10/94 $14,757
4/95 $12,811
10/95 $13,174
4/96 $14,490
10/96 $13,538
MSCI ALL COUNTRY ASIA FREE
INDEX (EXCLUDING JAPAN)
Year Amount
- ----------------------
12/92 $10,000
4/93 $11,910
10/93 $16,472
4/94 $16,806
10/94 $19,063
4/95 $16,186
10/95 $17,131
4/96 $19,977
10/96 $18,527
MSCI PACIFIC INDEX
(EXCLUDING JAPAN)
Year Amount
- ----------------------
12/92 $10,000
4/93 $11,583
10/93 $15,352
4/94 $15,544
10/94 $17,031
4/95 $15,750
10/95 $16,615
4/96 $19,600
10/96 $19,887
The Morgan Stanley Capital International (MSCI) All Country Asia Free Index is
an unmanaged capitalization-weighted measure of stock markets in the Pacific
Region, excluding Japan. Index returns assume dividends reinvested and, unlike
Fund returns, do not reflect any fees or expenses.
- -----------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
YEARLY PERIODS ENDED OCTOBER 31
1993* 1994 1995 1996
-------------------------------------------
NET ASSET VALUE... $16.21 $17.57 $15.59 $15.93
INCOME DIVIDENDS.. $ -- $ .08 $ .10 $ .10
CAPITAL GAINS
DISTRIBUTIONS..... $ -- $ .01 $ -- $ --
FUND TOTAL
RETURN (%)........ 35.08 8.97 -10.73 2.76
INDEX TOTAL
RETURN (%)........ 64.72 15.73 -10.14 8.15
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results.
Investment return and principal value will fluctuate, so an investor's
shares, when redeemed, may be worth more or less than when purchased.
If the Adviser had not maintained the Fund's expenses, the total return
for the life of Fund period would have been lower.
4 - Scudder Pacific Opportunities Fund
<PAGE>
PORTFOLIO SUMMARY as of October 31, 1996
- ---------------------------------------------------------------------------
GEOGRAPHICAL
(Excludes 4% of Cash Equivalents)
- ---------------------------------------------------------------------------
Hong Kong 26%
Malaysia 14%
Indonesia 12%
Taiwan 11%
Thailand 8%
India 7%
Korea 6%
Singapore 6%
Philippines 4%
Other 6%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund's top two country
allocations were also the region's
best performers during the period.
- --------------------------------------------------------------------------
SECTORS
(Excludes 4% Cash Equivalents)
- --------------------------------------------------------------------------
Financial 42%
Manufacturing 10%
Durables 6%
Consumer Staples 6%
Construction 6%
Transportation 5%
Energy 5%
Service Industries 5%
Consumer Discretionary 4%
Other 11%
- ---------------------------------------------
100%
- ---------------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund's concentration in financial
holdings reflects the region's
overwhelming need for financing
to fund business expansion.
- --------------------------------------------------------------------------
10 LARGEST EQUITY HOLDINGS
(29% OF PORTFOLIO)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
1. HUTCHISON WHAMPOA, LTD.
Container terminal and real estate company in Hong Kong
2. HSBC HOLDINGS, LTD.
Bank in Hong Kong
3. FIRST PACIFIC CO., LTD.
International management and investment company in Hong Kong
4. TELEVISION BROADCASTS, LTD.
Television broadcasting in Hong Kong
5. PTT EXPLORATION AND PRODUCTION CO., LTD
Petroleum refinery in Thailand
6. SWIRE PACIFIC LTD.
General/trading and real estate company in Hong Kong
7. OVERSEAS UNION BANK LTD.
Leading bank group in Singapore
8. BAJAJ AUTO
Maker of two and three wheel vehicles in India
9. RANBAXY LABORATORIES
Pharmaceutical company in India
10. FAR EASTERN DEPARTMENT STORE
Department store chain in Taiwan
The Fund's concentration on diversified regional
Hong Kong companies reflects our belief that these
companies will best weather any shocks associated
with the transfer of sovereignty.
- -----------------------------------------------------------------------------
For more complete details about the Fund's investment portfolio,
see page 10. A monthly Investment Portfolio Summary and quarterly Portfolio
Holdings are available upon request.
5 - Scudder Pacific Opportunities Fund
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Scudder Pacific Opportunities Fund provided a 2.76% total return for the
12-month period ended October 31, 1996, compared with 8.15% for the unmanaged
MSCI All Country Asia Free Index (excluding Japan), the Fund's benchmark index.
Performance in Review
The Fund's investments in Taiwan and Australia, as well as good stock selection
and underweight positions in Korea and Thailand, contributed to a positive
return this year. On the negative side, select Indonesian stock picks were
disappointing, and the portfolio was underweight relative to the MSCI index in
Malaysia and Hong Kong -- the region's top-performing markets this year.
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE:
Investment Returns
BAR CHART PERIOD: 10/31/95 to 10/31/96)
BAR CHART DATA: Hong Kong 28.04%
Singapore -3.14
Philippines 10.57
Indonesia 19.27
Malaysia 26.63
Korea -36.25
Thailand -29.45
Australia 16.89
Source: Morgan Stanley Capital International
Three Difficult Years
1996 will mark the third consecutive year of Asian equity market malaise. The
current slowdown in the pace of economic activity in the Pacific Basin is
related, in large part, to a confluence of the four cycles reviewed in the
following paragraphs, and we believe the worst is past in at least two of those
cycles.
o The region is moving toward the bottom of its economic cycle. In the wake of
the economic and equity market booms of 1992-93, Asian central bankers tightened
monetary policy to combat inflation over the 1994-96 period. Recent news from
China, Indonesia, the Philippines and Thailand -- the most inflation-prone
countries in the region -- suggest that they have won the war.
o Weakness in Europe continues to constrain imports from the Asia-Pacific
region. Europe is an important market for Asian goods. In 1994, for example,
Europe purchased US$113 billion of Asian exports, compared with US$164 billion
for the U.S. and US$98 billion for Japan.
o This year, the vise on Asian growth tightened as the electronics cycle turned
downward. Electronics exports comprised 53% of total 1994 exports from Singapore
in 1994, 50% in Malaysia, 36% in the Philippines and 27% in Korea.
6 - Scudder Pacific Opportunities Fund
<PAGE>
o Finally, a sizeable U.S. inventory correction occurred in the fist nine months
of 1996 in two of Asia's largest export markets: electronic products and
apparel. According to our analysts, U.S. inventories at all levels of the PC
production and distribution networks are at the lowest levels in history
relative to sales and probably cannot fall further. Similarly, our consumer soft
goods analyst recently noted that the U.S. apparel retailers have reduced
purchases, resulting in significantly lower inventory levels system-wide.
Stage Set for Market Upturn
Lackluster returns this year, combined with consistently poor relative
performance over the past two years and a palpable slow down in the pace of
economic activity, have led to speculation that the party is over for Asian
equity markets. In our view, Pacific Basin stock markets are about to get their
second wind.
Regional economic growth should accelerate and current account problems should
ease as export growth rebounds and monetary policy is loosened following a
prolonged period of restraint. The inflationary excesses appear to have been
wrung out of economies region-wide and a pick-up in demand is in prospect,
suggesting that aggregate corporate profit growth should ramp-up from the 15%
growth rate of the 1993-96 period. Accelerating economic growth, improving trade
flows and higher levels of corporate profitability -- combined with attractive
stock valuations following nearly three years of market stagnation -- portend a
rebound in Pacific Basin equity markets.
7 - Scudder Pacific Opportunities Fund
<PAGE>
It is difficult to predict the speed with which Pacific Basin economies will
benefit from monetary ease, or to call the turn in the electronics cycle or an
upturn in Europe. However, it is unlikely that U.S. inventories of electronic
products and apparel can be reduced further in the near term if demand in the
United States does not decline. Hence, we expect an increase in Asian exports to
the U.S., which will presage a reacceleration in Asian economic growth.
Challenges and Opportunities
We would be remiss to attribute Asia's current economic woes solely to cyclical
factors. The difficulties associated with trading up the value-added curve given
educational and infrastructure constraints, and Asia's unsustainable exchange
rate regimes and political intransigence are well-documented.
Our strategy is to identify companies that are poised to take advantage of the
opportunities created by the structural inefficiencies in the Pacific Basin. We
believe that such companies will fare particularly well in the healthy economic
and export environment that we envision for 1997. In the table on page 9, we
have identified the key challenges and trends that we foresee for the Pacific
Basin, the opportunities created thereby, and selected beneficiaries.
Sincerely,
Your Portfolio Management Team
/s/Elizabeth J. Allan /s/Nicholas Bratt
Elizabeth J. Allan Nicholas Bratt
/s/Theresa M. Gusman
Theresa M. Gusman
Scudder Pacific
Opportunities Fund: A Team
Approach to Investing
Scudder Pacific Opportunities Fund is managed by a team of Scudder investment
professionals who each play an important role in the Fund's management
process. Team members work together to develop investment strategies and
select securities for the Fund. They are supported by Scudder's large staff of
economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. We believe our
team approach benefits Fund investors by bringing together many disciplines
and leveraging Scudder's extensive resources.
Lead Portfolio Manager Elizabeth J. Allan assumed responsibility for the
Fund's day-to-day management and investment strategies in February 1994.
Elizabeth joined Scudder in 1987 as a member of the portfolio management team
of a Scudder closed-end mutual fund concentrating its investments in Asia.
Nicholas Bratt, Portfolio Manager, has been a member of the Fund's team since
1992 and has over 20 years of experience in global investing. Theresa Gusman
joined the Scudder Pacific Opportunities Fund team this summer after having
served as an analyst focusing on the Pacific Basin region in Scudder's Global
Equity Group. Prior to joining Scudder in 1995, Theresa had been an equity
research analyst for 11 years.
8 - Scudder Pacific Opportunities Fund
<PAGE>
<TABLE>
<CAPTION>
Challenges/Trends and Opportunities in the Pacific Basin
<C> <C>
Challenges/Trends Opportunities
Competition is intensifying as international Invest in companies with globally dominant
players enter local markets and tariff barriers fall. partners, as well as local know-how and
established distribution networks. Examples
include Astra International, Bakrie and Siam
Cement.
Regionalization is increasing. Invest in well-managed regional players, which
can leverage cross-border synergies. Such
companies include Evergreen Marine, First Pacific,
Guoco, HSBC, and Hutchinson.
The export model is dead. Identify low-cost producers with a well-defined
competitive advantage. These include Asia Pulp &
Paper, Freeport McMoran, and Pohang Iron &
Steel.
Deregulation rationalizes industries and reduces Invest in companies skillful enough to profit from
costs system-wide -- but it hurts non-competitive inefficiencies, such as Kookmin Bank, Ryohin Keikaku,
players. and State Bank of India.
Skilled labor shortages create upward wage Invest in companies benefiting from a long-term
pressures. bull market in consumer spending. Examples
include Bajaj, Honda, HM Sampoerna, and
Multi-Purpose Co.
Subsidized over-investment is causing negative Consumers of the low-cost output from these
ROIs in target industries, such as selected industries benefiting from low input prices.
chemicals, steel and DRAMs. Examples include Indorama and auto-related
companies.
The above statements are the opinion of the Fund's Adviser. Companies are cited for illustrative purposes and should not be
construed as recommendations to buy or sell securities.
</TABLE>
9 - Scudder Pacific Opportunities Fund
<PAGE>
Investment Portfolio as of October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount ($)(d) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements 3.6%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 10/31/96 at 5.52%, to be
repurchased at $11,780,806 on 11/1/96, collateralized by a $9,226,000 U.S. Treasury -------------
Bond, 9.25%, 2/15/16 (Cost $11,779,000) ........................................................ 11,779,000 11,779,000
-------------
Convertible Bonds 5.2%
- ------------------------------------------------------------------------------------------------------------------------------------
India 0.9%
Mahindra & Mahindra Ltd., 5%, 7/9/01(Manufacturer of automobiles and farm equipment) ............. 2,900,000 2,958,000
-------------
Malaysia 2.8%
Commerce Asset Holdings Berhad, 1.75%, 9/26/04 (Commercial banking and financial services) ....... 3,580,000 4,475,000
Renong Berhad (ICULS), 4%, 5/21/01 (Holding company involved in engineering and
construction, financial services, telecommunication and information technology) ................ MYR 746,000 273,125
United Engineers Malaysia, 2%, 3/1/04 (Holding company involved in expressway operations,
project management, engineering and construction) .............................................. 3,230,000 4,360,500
-------------
9,108,625
-------------
Philippines 1.5%
AYALA International Finance Co., 3%, 6/8/00 (Industrial conglomerate) ............................ 3,587,000 4,645,165
- ------------------------------------------------------------------------------------------------------------------------------------
Total Convertible Bonds (Cost $15,945,803) ....................................................... 16,711,790
- ------------------------------------------------------------------------------------------------------------------------------------
Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stocks 91.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Australia 3.2%
Australia & New Zealand Banking Group Ltd. (General trading and savings bank) .................... 585,915 3,421,953
Coca Cola Amatil Ltd. (Soft drink bottler and distributor) ....................................... 239,899 3,298,374
National Australia Bank, Ltd. (Commercial bank) .................................................. 317,833 3,488,355
-------------
10,208,682
-------------
China 2.2%
China Yuchai International Ltd. (Holding company which manufactures and sells diesel
truck engines) ................................................................................. 225,800 987,875
Guangshen Railway Co. Ltd. (ADR)* (Operator of only railroad in the Pearl River delta) ........... 326,895 6,088,419
-------------
7,076,294
-------------
Hong Kong 24.6%
First Pacific Co., Ltd. (International management and investment company) ........................ 9,035,849 12,504,020
Guoco Group Ltd. (Investment holding company) .................................................... 711,000 3,760,883
HSBC Holdings Ltd. (Bank) ........................................................................ 663,775 13,520,675
Hang Seng Bank Ltd. (Commercial banking and related financial services) .......................... 523,000 6,222,809
Hutchison Whampoa, Ltd. (Container terminal and real estate company) ............................. 2,416,000 16,872,818
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder Pacific Opportunities Fund
<PAGE>
<TABLE>
<CAPTION>
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Jinhui Shipping and Transportation Ltd. (Operator of cargo fleet of ships transporting steel,
iron ore, non-ferrous metals and agricultural products) ........................................ 1,842,800 1,842,800
Kerry Properties Ltd.* (Real estate company) ..................................................... 1,558,000 3,667,210
Shangri-La Asia Ltd. (Hotel and property holding company) ........................................ 3,097,900 4,427,174
Swire Pacific Ltd."A" (General trading and real estate company) ................................. 842,500 7,463,755
Television Broadcasts, Ltd. (Television broadcasting) ............................................ 2,635,000 9,235,211
-------------
79,517,355
-------------
India 5.9%
Ashok Leyland Ltd. (GDR) (Manufacturer of medium and heavy duty commerical vehicles).............. 150,000 1,687,500
Bajaj Auto (GDR) (Maker of two and three wheel vehicles) ......................................... 222,015 7,104,480
Ranbaxy Laboratories (GDR) (Pharmaceutical company) .............................................. 366,920 6,879,75
State Bank of India (GDR)* (Bank) ................................................................ 229,500 3,465,40
-------------
19,137,180
-------------
Indonesia 11.5%
Asia Pacific Resources International Holdings Ltd. (Manufacturer of rayon fiber for Asian textile
markets, owner of world's leading paper pulp mill) ............................................. 578,200 3,180,100
Asia Pulp & Paper Co., Ltd. (ADR)* (Producer of pulp and paper) .................................. 455,200 4,495,101
Astra International Inc. (Foreign registered) (Distributor of automobiles, motorcycles and
related spare parts) ........................................................................... 2,525,000 5,258,722
Bakrie & Brothers (Foreign registered)(Manufacturer of industrial steel products, steel pipes,
corrugated sheet iron, asbestos and fiber cements) ............................................. 3,913,000 5,797,037
Ciputra Development Co. (Foreign registered) (Developer of office properties, shipping and
commercial centers, industrial properties and sports facilities) ............................... 3,752,000 2,738,980
HM Sampoerna (Foreign registered) (Tobacco company) .............................................. 553,500 5,145,797
Indorama Synthetics (Foreign registered) (Producer of polyester fiber, yarn and fabric) .......... 2,143,000 6,119,571
Jaya Real Properties (Foreign registered) (Property developer) ................................... 2,428,000 2,645,647
Modern Photo Film Co.(Foreign registered) (Photographic film distributor) ........................ 532,300 1,468,611
Modern Photo Film Co.(Foreign registered) (New) (c) .............................................. 133,750 369,015
-------------
37,218,581
-------------
Korea 6.3%
Daewoo Securities Co., Ltd. (Brokerage and financial services) ................................... 110,332 2,216,655
Hyundai Engineering & Construction Co.* (Leading general contractor) ............................. 66,000 1,917,095
Kookmin Bank (GDR)* (Major commercial bank) ...................................................... 126,000 2,661,750
Korea Electric Power Co. (Electric utility) ...................................................... 214,730 6,315,206
Korean Airlines Co., Ltd. (Airline) .............................................................. 85,309 1,590,026
Pohang Iron & Steel Co., Ltd. (Leading steel producer) (b) ....................................... 47,530 3,028,689
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder Pacific Opportunities Fund
<PAGE>
<TABLE>
<CAPTION>
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Samsung Heavy Industries Co., Ltd. (Machinery manufacturer) ...................................... 3,996 48,847
Samsung Heavy Industries Co., Ltd. (New) (c) ..................................................... 387 4,501
Ssangyong Oil Refining Co. (Major oil refiner) ................................................... 108,900 2,438,306
-------------
20,221,075
-------------
Malaysia 10.4%
AMMB Holdings Berhad (Holding company for Arab Malaysian Merchant Bank Berhad which
provides financial, insurance and investment services) ......................................... 616,000 4,169,246
AMMB Holdings Berhad (Foreign registered) ........................................................ 314,000 1,690,243
Arab-Malaysian Corp. (Investment holding company with interests in financial services,
infrastructure and property) ................................................................... 1,210,000 5,363,942
Malayan Banking Berhad (Leading banking and financial services group) (b) ........................ 497,000 4,917,871
Malaysia Assurance Alliance Berhad (Multiline insurance company) ................................. 698,000 3,425,767
Malaysian Resources Corp. (Property development and investment) (b) .............................. 616,000 2,365,011
Multi-Purpose Holdings Berhad (Investment holding company) ....................................... 749,000 1,280,697
Oriental Holdings Berhad (Investment holding company) ............................................ 319,200 2,173,062
Petronas Gas Berhad (Natural gas producer, processor and distributor) ............................ 1,375,000 5,605,581
Renong Berhad (Holding company involved in engineering, construction, financial services,
telecommunication and information technology) .................................................. 1,729,000 2,723,697
-------------
33,715,117
-------------
New Zealand 0.7%
Air New Zealand "B" Rights (expires 11/12/96) .................................................... 182,290 189,559
Telecom Corp. of New Zealand (Telecommunication services) ........................................ 390,200 2,028,803
-------------
2,218,362
-------------
Philippines 2.1%
Aboitiz Equity Ventures Inc.* (Conglomerate: electricity, infrastructure, shipbuilding) .......... 13,309,270 1,595,289
C & P Homes, Inc. (Home construction company) .................................................... 3,922,800 1,791,233
First Philippine Holdings Corp."B" (Holding company involved in electric power distribution,
construction services and passenger bus transportation) ........................................ 998,760 2,014,242
Philippine National Bank* (Commercial bank) ...................................................... 119,140 1,371,379
-------------
6,772,143
-------------
Singapore 6.2%
City Developments Ltd. (Developer of residential, industrial, retail and investment properties,
owner and operator of hotels) .................................................................. 698,000 5,500,160
Fraser & Neave Ltd. (Producer of soft drinks, beer, stout and dairy products) .................... 144,000 1,431,157
Oversea-Chinese Banking Corp., Ltd. (Foreign registered) (Provider of banking and financial
services) ...................................................................................... 308,000 3,520,250
Overseas Union Bank Ltd. (Leading bank group) .................................................... 1,051,000 7,162,602
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 - Scudder Pacific Opportunities Fund
<PAGE>
<TABLE>
<CAPTION>
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Wing Tai Holdings Ltd. (Property investment and development, garment manufacturing, trading
in fabric and architectural products) .......................................................... 969,000 2,380,109
-------------
19,994,278
-------------
Taiwan 10.3%
Asia Cement Corp. (Cement producer) .............................................................. 3,656,000 6,637,618
Cathay Life Insurance Co. (Life insurance company) ............................................... 1,050,500 6,293,845
China Development Corp. (Provider of loan and guarantee services to manufacturing and
service industries) ............................................................................ 2,470,750 6,638,907
Evergreen Marine Corp. (Operator of containerized freighters) .................................... 3,630,000 6,313,617
Far Eastern Department Store (Department store chain) ............................................ 5,050,000 6,582,970
Far Eastern Department Store Rights* (expires 11/18/96) (b) ...................................... 338,350 84,772
Sangyang Industrial Co. (Motorcycle manufacturer) ................................................ 450,000 931,373
-------------
33,483,102
-------------
Thailand 7.8%
Ban Pu Coal Public Co., Ltd. (Foreign registered) (Leading miner of sub-bituminous coal
in southeast Asia) ............................................................................. 216,400 4,004,736
Bangkok Bank Ltd. (Foreign registered) (Leading commercial bank) ................................. 290,100 3,093,793
Finance One Public Co., Ltd. (Commercial, consumer and real estate financing,
investment banking) ............................................................................ 123,800 349,484
Industrial Finance Co. (Bank) .................................................................... 182,000 535,189
PTT Exploration and Production Co., Ltd. (Foreign registered) (Petroleum refinery) ............... 545,300 7,825,124
Sahavirya Steel Industry (Foreign registered)* (Steel producer) .................................. 165,700 63,019
Siam Cement Co., Ltd.(Foreign registered) (Construction materials and industrial conglomerate) ... 76,100 2,601,811
TPI Polene Co., Ltd. (Foreign registered) (Producer and distributor of low density
polyethylene plastic pellets) .................................................................. 512 1,094
Telecomasia, Ltd. (Foreign registered)* (Telecommunication services) ............................. 1,035,800 1,989,971
Thai Farmers Bank (Foreign registered) (Commercial bank) ......................................... 363,000 2,775,338
Thai Farmers Bank Warrants* (expires 9/15/02) (b) ................................................ 45,375 144,104
Thai Telephone & Telecommunication PCL* (Telecommunication services) ............................. 1,201,300 1,978,224
25,361,887
-------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $268,715,409) .......................................................... 294,924,056
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio - 100.0% (Cost $296,440,212) (a) ...................................... 323,414,846
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 - Scudder Pacific Opportunities Fund
<PAGE>
(a) The cost for federal income tax purposes was $296,982,490. At October 31,
1996, net unrealized appreciation for all securities based on tax cost was
$26,432,356. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $44,237,869 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$17,805,513.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors. The cost of these securities at October 31, 1996 aggregated
$9,964,116. See Note A of the Notes to Financial Statements.
(c) New shares issued during 1996, eligible for a pro rata share of 1996
dividends.
(d) Principal amount stated in U.S. dollars unless otherwise noted.
* Non-income producing security
Sector breakdown of the Fund's equity securities is noted on page 5.
Currency Abbreviations
MYR Malaysian Ringgits
The accompanying notes are an integral part of the financial statements.
14 - Scudder Pacific Opportunities Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of October 31, 1996
<TABLE>
<CAPTION>
Assets
----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at market (identified cost $296,440,212) (Note A) .. $323,414,846
Cash ............................................................ 500
Foreign currency holdings, at market (identified cost $2,508,753)
(Note A) ........................................................ 2,572,579
Receivables for investments sold ................................ 5,727,822
Dividends and interest receivable ............................... 336,303
Receivables for Fund shares sold ................................ 2,316,762
Foreign taxes recoverable ....................................... 8,222
Deferred organization expense (Note A) .......................... 12,767
------------
Total assets .................................................... 334,389,801
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased ............................... $ 1,668,750
Payable for Fund shares redeemed ................................ 2,639,970
Accrued management fee (Note C) ................................. 312,093
Other accrued expenses (Note C) ................................. 370,942
Other payables .................................................. 6,506
------------
Total liabilities ............................................... 4,998,261
--------------------------------------------------------------------------------
Net assets, at market value ..................................... $329,391,540
--------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income ............................. 33,023
Unrealized appreciation on:
Investments .................................................. 26,974,634
Foreign currency related transactions ........................ 59,595
Accumulated net realized loss ................................... (13,483,591)
Paid-in capital ................................................. 315,807,879
--------------------------------------------------------------------------------
Net assets, at market value ..................................... $329,391,540
--------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($329,391,540 / 20,682,798 shares of capital stock ------------
outstanding, $.01 par value, 100,000,000 shares authorized) . $ 15.93
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - Scudder Pacific Opportunities Fund
<PAGE>
Statement of Operations
year ended October 31, 1996
<TABLE>
<CAPTION>
Investment Income
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Dividends (net of foreign taxes withheld of $694,852) .......... $ 5,562,436
Interest (net of foreign taxes withheld $1,182) ................ 1,615,060
------------
7,177,496
------------
Expenses:
Management fee (Note C) ........................................ 4,235,329
Services to shareholders (Note C) .............................. 1,128,110
Custodian and accounting fees (Note C) ......................... 912,474
Directors' fees and expenses (Note C) .......................... 67,863
Reports to shareholders ........................................ 155,334
Auditing ....................................................... 95,650
Registration fees .............................................. 22,185
Legal .......................................................... 20,983
Amortization of organization expenses (Note A) ................. 11,657
Other .......................................................... 67,242
------------
6,716,827
-------------------------------------------------------------------------------
Net investment income .......................................... 460,669
-------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments .................................................... 2,732,574
Foreign currency related transactions .......................... (591,421)
------------
2,141,153
------------
Net unrealized appreciation during the period on:
Investments .................................................... 9,866,164
Foreign currency related transactions .......................... 63,536
------------
9,929,700
------------
Net gain on investment transactions ............................ 12,070,853
-------------------------------------------------------------------------------
Net increase in net assets resulting from operations ........... $ 12,531,522
-------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - Scudder Pacific Opportunities Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Years Ended October 31,
Increase (Decrease) in Net Assets 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .................................. $ 460,669 $ 2,715,584
Net realized gain (loss) from investment transactions .. 2,141,153 (10,226,019)
Net unrealized appreciation (depreciation) on investment
transactions)
during the period ................................... 9,929,700 (43,781,152
------------ ------------
Net increase (decrease) in net assets resulting from
operations .......................................... 12,531,522 (51,291,587)
------------ ------------
Distributions to shareholders from net investment income (2,376,933) (2,548,920)
------------ ------------
Fund share transactions:
Proceeds from shares sold .............................. 339,049,361 224,335,340
Net asset value of shares issued to shareholders in
reinvestment of distributions........................ 2,101,548 2,255,971
Cost of shares redeemed ................................ (405,479,114) (288,337,055)
------------ ------------
Net decrease in net assets from Fund share transactions (64,328,205) (61,745,744)
------------ ------------
Decrease in net assets ................................. (54,173,616) (115,586,251)
Net assets at beginning of period ...................... 383,565,156 499,151,407
Net assets at end of period (including undistributed net
investment income of $33,023, and $2,313,689, ------------ ------------
respectively) ........................................ $329,391,540 $383,565,156
------------ ------------
Other Information
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ............. 24,595,415 28,405,889
------------ ------------
Shares sold ........................................... 20,929,794 14,244,117
Shares issued to shareholders in reinvestment of
distributions.......................................... 133,516 142,964
Shares redeemed ....................................... (24,975,927) (18,197,555)
------------ ------------
Net decrease in Fund shares ........................... (3,912,617) (3,810,474)
------------ ------------
Shares outstanding at end of period ................... 20,682,798 24,595,415
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17 - Scudder Pacific Opportunities Fund
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
For the Period
December 8, 1992
(commencement of
operations) to
Years Ended October 31, October 31,
1996(a) 1995 1994 1993
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............... $15.59 $17.57 $16.21 $12.00
----------------------------------------------------------
Income from investment operations:
Net investment income (loss) ....................... .02 .10 .04 .04
Net realized and unrealized gain (loss) on
investment transactions ......................... .42 (1.98) 1.41 4.17
----------------------------------------------------------
Total from investment operations ................... .44 (1.88) 1.45 4.21
----------------------------------------------------------
Less distributions from:
Net investment income .............................. (.10) (.10) (.08) --
Net realized gains on investment transactions ...... -- -- (.01) --
----------------------------------------------------------
Total distributions ................................ (.10) (.10) (.09) --
----------------------------------------------------------
----------------------------------------------------------
Net asset value, end of period ..................... $15.93 $15.59 $17.57 $16.21
----------------------------------------------------------------------------------------------------------------------
Total Return (%) ................................... 2.76 (10.73) 8.97 35.08**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ............. 329 384 499 270
Ratio of operating expenses, net to average daily
net assets (%) .................................. 1.75 1.74 1.81 1.75
Ratio of operating expenses before expense
reductions, to average daily net assets (%)...... 1.75 1.74 1.81 2.90*
Ratio of net investment income (loss) to average
daily net assets (%) ............................ .12 .65 .28 1.41*
Portfolio turnover rate (%) ........................ 95.4 64.0 38.5 9.9*
Average commission rate paid (b) ................... $.0148 $ -- $ -- $ --
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal years beginning on or after September 1, 1995.
* Annualized
** Not annualized
18 - Scudder Pacific Opportunities Fund
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Pacific Opportunities Fund (the "Fund") is a non-diversified series of
Scudder International Fund, Inc. (the "Corporation"). The Corporation is
organized as a Maryland corporation and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the National Association of
Securities Dealers Automatic Quotation ("NASDAQ") System, for which there have
been sales, are valued at the most recent sale price reported on such system. If
there are no such sales, the value is the high or "inside" bid quotation.
Securities which are not quoted on the NASDAQ System but are traded in another
over-the-counter market are valued at the most recent sale price on such market.
If no sale occurred, the security is then valued at the calculated mean between
the most recent bid and asked quotations. If there are no such bid and asked
quotations, the most recent bid quotation shall be used.
Portfolio debt securities with remaining maturities greater than sixty days are
valued by pricing agents approved by the officers of the Fund, which quotations
reflect broker/dealer-supplied valuations and electronic data processing
techniques. If the pricing agents are unable to provide such quotations, the
most recent bid quotation supplied by a bona fide market maker shall be used.
Short-term investments having a maturity of sixty days or less are valued at
amortized cost.
All other securities are valued at their fair value as determined in good faith
by the Valuation Committee of the Board of Directors. Securities valued in good
faith by the Valuation Committee of the Board of Directors at fair value
amounted to $10,540,447 (3.20% of net assets) and have been noted in the
investment portfolio as of October 31, 1996.
Their values have been estimated by the Board of Directors in the absence of
readily ascertainable market values. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly from
the values that would have been used had a ready market for the securities
existed, and the difference could be material.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement and the underlying collateral, is equal to at least 100.5% of the
resale price.
Forward Foreign Currency Exchange Contracts. A forward foreign currency exchange
contract (forward contract) is a commitment to purchase or sell a foreign
currency at the settlement date at a negotiated rate. During the period, the
Fund utilized forward contracts as a hedge in connection with portfolio
purchases and sales of securities denominated in foreign currencies.
19 - Scudder Pacific Opportunities Fund
<PAGE>
Forward contracts are valued at the prevailing forward exchange rate of the
underlying currencies and unrealized gain/loss is recorded daily. Forward
contracts having the same settlement date and broker are offset and any gain
(loss) is realized on the date of offset; otherwise, gain (loss) is realized on
settlement date. Realized and unrealized gains and losses which represent the
difference between the value of the forward contract to buy and the forward
contract to sell are included in net realized and unrealized gain (loss) from
foreign currency related transactions.
Certain risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contracts. Additionally,
when utilizing forward contracts to hedge, the Fund gives up the opportunity to
profit from favorable exchange rate movements during the term of the contract.
Foreign Currency Translations. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency transactions are translated into U.S. dollars
on the following basis:
(i) market value of investment securities, other assets and liabilities at the
daily rates of exchange, and
(ii) purchases and sales of investment securities, dividend and interest income
and certain expenses at the rates of exchange prevailing on the respective
dates of such transactions.
The Fund does not isolate that portion of gains and losses on investments which
is due to changes in foreign exchange rates from that which is due to changes in
market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments.
Net realized and unrealized gain (loss) from foreign currency related
transactions includes gains and losses between trade and settlement dates on
securities transactions, gains and losses arising from the sales of foreign
currency, and gains and losses between the ex and payment dates on dividends,
interest, and foreign withholding taxes.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment
companies, and to distribute all of its taxable income to its shareholders.
Accordingly, the Fund paid no federal income taxes, and no federal income tax
provision was required.
At October 31, 1996, the Fund had a net tax basis capital loss carryforward of
approximately $12,900,000, which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until October 31,
2002 ($100,000) and October 31, 2003 ($12,800,000), the respective expiration
dates, whichever occurs first.
Distribution of Income and Gains. Distributions of net investment income are
made annually. During any particular year, net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed and, therefore, will be distributed to
shareholders annually. An additional distribution may be made to the extent
necessary to avoid the payment of a four percent federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. These
differences primarily relate to investments in passive foreign investment
companies and foreign currency denominated investments. As a result, net
investment income (loss) and net realized gain (loss) on investment transactions
for a reporting period may differ significantly from distributions during such
period. Accordingly, the Fund may periodically make reclassifications among
certain of its capital accounts without impacting the net asset value of the
Fund.
20 - Scudder Pacific Opportunities Fund
<PAGE>
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
Organization Costs. Costs incurred by the Fund in connection with its
organization and initial registration of shares have been deferred and are being
amortized on a straight-line basis over a five-year period.
Other. Investment security transactions are accounted for on a trade date basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. All original issue discounts are accreted for both tax and
financial reporting purposes. Interest income is recorded on the accrual basis.
B. Purchases and Sales of Securities
For the year ended October 31, 1996, purchases and sales of investment
securities (excluding short-term investments) aggregated $347,884,845 and
$411,358,822, respectively.
C. Related Parties
Under the Investment Management Agreement (the "Management Agreement") with
Scudder, Stevens & Clark, Inc. (the "Adviser"), the Adviser directs the
investments of the Fund in accordance with its investment objectives, policies,
and restrictions. The Adviser determines the securities, instruments, and other
contracts relating to investments to be purchased, sold or entered into by the
Fund. In addition to portfolio management services, the Adviser provides certain
administrative services in accordance with the Management Agreement. The
management fee payable under the Management Agreement is equal to an annual rate
of 1.10% of the Fund's average daily net assets, computed and accrued daily and
payable monthly. The Management Agreement provides that if the Fund's expenses
exceed specified limits, such excess, up to the amount of the management fee,
will be paid by the Adviser. For the year ended October 31, 1996, the fee
pursuant to the Agreement amounted to $4,235,329 of which $312,093 is unpaid at
October 31, 1996.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
year ended October 31, 1996, the amount charged to the Fund by SSC aggregated
$843,600, of which $63,272 is unpaid at October 31, 1996.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans for the Fund. For the year ended October 31, 1996, the
amount charged to the Fund by STC aggregated $38,626, of which $6,046 is unpaid
at October 31, 1996.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
October 31, 1996, the amount charged to the Fund by SFAC aggregated $233,855, of
which $19,672 is unpaid at October 31, 1996.
The Fund pays each Director not affiliated with the Adviser $4,000 annually,
plus specified amounts for attended board and committee meetings. For the year
ended October 31, 1996, Directors' fees and expenses aggregated $67,863.
21 - Scudder Pacific Opportunities Fund
<PAGE>
D. Investing in Emerging Markets
Investing in emerging markets may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currencies, high rates of inflation, repatriation restrictions on
income and capital, and future adverse political and economic developments.
Moreover, securities issued in these markets may be less liquid, subject to
government ownership controls, delayed settlements, and their prices more
volatile than those of comparable securities in the United States.
E. Lines of Credit
The Fund and several affiliated Funds (the "Participants") share in a $500
million revolving credit facility for temporary or emergency purposes, including
the meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 25 percent of its net assets under the agreement. In addition, the
Fund also maintains an uncommitted line of credit.
22 - Scudder Pacific Opportunities Fund
<PAGE>
Report of Independent Accountants
To the Board of Directors of Scudder International Fund, Inc. and to the
Shareholders of Scudder Pacific Opportunities Fund:
We have audited the accompanying statement of assets and liabilities of Scudder
Pacific Opportunities Fund, including the investment portfolio, as of October
31, 1996, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the three years in the period
then ended, and for the period December 8, 1992 (commencement of operations) to
October 31, 1993. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Pacific Opportunities Fund as of October 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the three years in the period then ended, and for the period December 8, 1992
(commencement of operations) to October 31, 1993 in conformity with generally
accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
December 16, 1996
23 - Scudder Pacific Opportunities Fund
<PAGE>
Tax Information
The Fund paid foreign taxes of $696,034 and the Fund recognized $708,172 of
foreign source income during the taxable year ended October 31, 1996. Pursuant
to section 853 of the Internal Revenue Code, the Fund designates $.034 per share
of foreign taxes and $.034 of income from foreign sources as having been paid in
the taxable year ended October 31, 1996.
Please consult a tax adviser if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your Scudder Fund account, please call a Scudder Service Representative at
1-800-225-5163.
24 - Scudder Pacific Opportunities Fund
<PAGE>
Officers and Directors
Daniel Pierce*
Chairman of the Board and Director
Nicholas Bratt*
President and Director
Paul Bancroft III
Director; Venture Capitalist and Consultant
Thomas J. Devine
Director; Consultant
Keith R. Fox
Director; President, Exeter Capital Management Corporation
William H. Gleysteen, Jr.
Director; President, The Japan Society, Inc.
Dudley H. Ladd*
Director
William H. Luers
Director; President, The Metropolitan Museum of Art
Dr. Wilson Nolen
Director; Consultant
Juris Padegs*
Director, Vice President and Assistant Secretary
Dr. Gordon Shillinglaw
Director; Professor Emeritus of Accounting, Columbia University
Graduate School of Business
Robert W. Lear
Honorary Director; Executive-in-Residence, Visiting Professor,
Columbia University Graduate School of Business
Robert G. Stone, Jr.
Honorary Director; Chairman of the Board and Director, Kirby Corporation
Elizabeth J. Allan*
Vice President
Joyce Cornell*
Vice President
Carol L. Franklin*
Vice President
Edmund B. Games, Jr.*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
David S. Lee*
Vice President and Assistant Treasurer
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Kathryn L. Quirk*
Vice President and Assistant Secretary
Richard W. Desmond*
Assistant Secretary
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
25 - Scudder Pacific Opportunities Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund*
Scudder Massachusetts Limited Term
Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder Zero Coupon 2000 Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
U.S. Growth
- -----------
Value
Scudder Capital Growth Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund
Scudder Quality Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Emerging Markets Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund
Retirement Programs
- -------------------
IRA
SEP IRA
SIMPLE IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan *+++ +++
(a variable annuity)
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities
Fund, Inc.
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed from expected
least to most risk. +A portion of the income from the tax-free funds may be
subject to federal, state, and local taxes. *Not available in all states.
+++ +++A no-load variable annuity contract provided by Charter National Life
Insurance Company and its affiliate, offered by Scudder's insurance agencies,
1-800-225-2470. #These funds, advised by Scudder, Stevens & Clark, Inc., are
traded on various stock exchanges. How to Contact Scudder
26 - Scudder Pacific Opportunities Fund
<PAGE>
<TABLE>
How to Contact Scudder
<CAPTION>
Account Service and Information
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C>
For existing account services and transactions
Scudder Investor Relations -- 1-800-225-5163
For 24 hour account information, fund information, exchanges, and an overview of all the services available to you
Scudder Electronic Account Services -- http://funds.scudder.com
For information about your Scudder accounts, exchanges and redemptions
Scudder Automated Information Line (SAIL) -- 1-800-343-2890
Investment Information
- -----------------------------------------------------------------------------------------------------------------------------------
For information about the Scudder funds, including additional applications and prospectuses, or for answers to
investment questions
Scudder Investor Relations -- 1-800-225-2470
[email protected]
Scudder's World Wide Web Site -- http://funds.scudder.com
For establishing 401(k) and 403(b) plans
Scudder Defined Contribution Services -- 1-800-323-6105
Scudder Brokerage Services
- -----------------------------------------------------------------------------------------------------------------------------------
To receive information about this discount brokerage service and to obtain an application
Scudder Brokerage Services* -- 1-800-700-0820
Please address all correspondence to
- -----------------------------------------------------------------------------------------------------------------------------------
The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291
Or Stop by a Scudder Funds Center
- -----------------------------------------------------------------------------------------------------------------------------------
Many shareholders enjoy the personal, one-on-one service of the Scudder Funds Centers. Check for a Funds Center
near you--they can be found in the following cities:
Boca Raton Chicago San Francisco
Boston New York
For information on Scudder Treasurers Trust(TM), an institutional cash management service for corporations,
non-profit organizations and trusts which utilizes certain portfolios of Scudder Fund, Inc.* ($100,000 minimum),
call: 1-800-541-7703.
For information on Scudder Institutional Funds**, funds designed to meet the broad investment management and
service needs of banks and other institutions, call: 1-800-854-8525.
Scudder Investor Relations and Scudder Funds Centers are services provided through Scudder Investor Services, Inc., Distributor.
* Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061 -- Member NASD/SIPC
** Contact Scudder Investor Services, Inc., Distributor, to receive a prospectus with more complete information, including
management fees and expenses. Please read it carefully before you invest or send money.
</TABLE>
27 - Scudder Pacific Opportunities Fund
<PAGE>
Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark,
Scudder, Stevens & Clark was the first independent investment counsel firm in
the United States. Since its birth, Scudder's pioneering spirit and commitment
to professional long-term investment management have helped shape the investment
industry. In 1928, we introduced the nation's first no-load mutual fund. Today
we offer over 40 pure no load(TM) funds, including the first international
mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
