Scudder
Emerging Markets
Growth Fund
Semiannual Report
April 30, 1998
Pure No-Load(TM) Funds
A fund seeking long-term growth of capital primarily through equity investment
in emerging markets around the globe.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER (logo)
<PAGE>
Scudder Emerging Markets Growth Fund
- --------------------------------------------------------------------------------
Total Net Assets as of
Date of Inception: 5/8/96 4/30/98: $206.7 million Ticker Symbol: SEMGX
- --------------------------------------------------------------------------------
o Scudder Emerging Markets Growth Fund's minimal exposure to the Asian crisis
helped performance in the fourth quarter of 1997. However, this underweighting
held back performance during the first quarter of 1998 when several Asian
markets rebounded sharply.
o The Fund returned 2.22% for the six-month period ended April 30, 1998,
reflecting a volatile environment in a number of emerging markets.
o Many countries in Eastern Europe, Africa, and Latin America possess solid
economic management, strong growth, and compelling stock valuations, which we
believe should provide opportunities for the second half of the Fund's fiscal
year.
Table of Contents
3 Letter from the Fund's Chairman 22 Financial Highlights
4 Performance Update 23 Notes to Financial Statements
5 Portfolio Summary 27 Report of Independent Accountants
6 Portfolio Management Discussion 28 Officers and Directors
9 Glossary of Investment Terms 29 Investment Products and Services
10 Investment Portfolio 30 Scudder Solutions
19 Financial Statements
2 - Scudder Emerging Markets Growth Fund
<PAGE>
Letter from the Fund's Chairman
Dear Shareholders,
Scudder Emerging Markets Growth Fund's near absence from the Asian markets
helped it avoid some of the increased volatility over the six-month period which
ended April 30, 1998. This also meant that the Fund's performance was
constrained, as many Asian markets experienced a sharp rebound during the first
quarter.
The period began under the cloud of the Asian financial crisis as rising
interest rates, ballooning foreign currency debt, and sharp currency
devaluations threatened earnings for many Asian companies. At the same time,
sudden demand for liquidity and panic selling by investors took a significant
toll on the region's stock markets. The announcement of International Monetary
Fund-imposed reform packages in Indonesia, South Korea, and Thailand marked a
turning point, setting the stage for powerful rallies in several markets early
in 1998. The euphoria began to wane as the reality of the situation set in:
near-certain economic hardship, potential social and political instability,
stretched valuations, and government backsliding on announced reform programs.
While Asia's troubles dominated the headlines, other emerging markets provided
attractive opportunities. Lead portfolio manager Joyce Cornell discusses the
environment and fund strategy in detail beginning on page 6.
At the beginning of 1998, your Fund's investment adviser changed its name
to Scudder Kemper Investments, Inc. from Scudder, Stevens & Clark, Inc.,
reflecting the acquisition of a majority interest in Scudder by Zurich Insurance
Company, and the combining of Scudder's business with that of Zurich Kemper
Investments, Inc. We think this combination is very positive, and will provide
your Fund's manager with expanded resources.
For those of you who are interested in new Scudder products, April 6th
marked the debut of our latest entrant in the growth and income category,
Scudder Real Estate Investment Fund. In addition, we plan to add another fund to
this category on July 17, Scudder Dividend & Growth Fund. For further
information on these new funds, please call 1-800-225-2470.
Thank you for your investment in Scudder Emerging Markets Growth Fund. If
you have any questions about your Fund, please call Scudder Investor Relations
at the number above, or visit our web site at http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
Chairman,
Scudder Emerging Markets Growth Fund
3 - Scudder Emerging Markets Growth Fund
<PAGE>
PERFORMANCE UPDATE as of April 30, 1998
- ----------------------------------------------------------------
FUND INDEX COMPARISONS
- ----------------------------------------------------------------
Total Return
- --------------------------------------------
Period Ended Growth of Average
4/30/98 $10,000 Cumulative Annual
- --------------------------------------------
SCUDDER EMERGING MARKETS GROWTH FUND
- --------------------------------------------
1 Year $ 9,627 -3.73% -3.73%
Life of Fund* $ 12,426 24.26% 11.60%
- --------------------------------------------
IFC EMERGING MARKETS INVESTABLE INDEX
- --------------------------------------------
1 Year $ 8,487 -15.13% -15.13%
Life of Fund* $ 9,013 -9.87% -5.28%
- --------------------------------------------
*The Fund commenced operations on May 8, 1996.
Index comparisons begin May 31, 1996.
- ----------------------------------------------------------------
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 EMERGING MARKETS GROWTH FUND
Year Amount
- ----------------------
5/96* $10,000
7/96 $10,142
10/96 $10,708
1/97 $12,698
4/97 $12,907
7/97 $13,825
10/97 $12,156
1/98 $11,202
4/98 $12,417
IFC EMERGING MARKETS INVESTABLE INDEX
Year Amount
- ----------------------
5/96* $10,000
7/96 $ 9,454
10/96 $ 9,679
1/97 $10,559
4/97 $10,621
7/97 $11,567
10/97 $ 8,711
1/98 $ 7,852
4/98 $ 9,013
IFC Emerging Markets Investable Index is an unmanaged capitalization weighted
measure of stock markets in the emerging markets countries worldwide. Index
returns assume reinvestment of dividends 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.
PERIODS ENDED APRIL 30
1997* 1998
------- -------
NET ASSET VALUE........... $15.46 $14.82
INCOME DIVIDENDS.......... $ .03 $ .06
FUND TOTAL RETURN (%)..... 29.07** -3.73
INDEX TOTAL RETURN (%).... 5.72 -15.13
Performance is historical and assumes reinvestment of all dividends and
capital gains and is not indicative of future results. Total 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.
**Fund total return does not reflect the effect of applicable redemption fees.
4 - Scudder Emerging Markets Growth Fund
<PAGE>
PORTFOLIO SUMMARY as of April 30, 1998
- ---------------------------------------------------------------------------
GEOGRAPHICAL
(Excludes 1% Cash Equivalents)
- ---------------------------------------------------------------------------
Europe 35%
Latin America 28%
Africa 21%
Pacific Basin 5%
U.S. & Canada 3%
Other 8%
- --------------------------------------
100%
- --------------------------------------
An emphasis on companies in
Eastern Europe, Africa, and the
Middle East helped the Fund
avoid most of the market
volatility in the Pacific Basin.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
SECTORS
(Excludes 1% Cash Equivalents)
- --------------------------------------------------------------------------
Financial 28%
Communications 12%
Consumer Staples 11%
Metals & Minerals 7%
Construction 7%
Energy 7%
Health 7%
Manufacturing 6%
Consumer Discretionary 5%
Other 10%
- --------------------------------------
100%
- --------------------------------------
The Fund's financial sector
holdings increased while metals &
minerals and manufacturing
sectors decreased over the six
months.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
(17% of Portfolio)
- --------------------------------------------------------------------------
1. OTP Bank Rt
Savings and commercial bank in Hungary
2. Pliva D.D.
Pharmaceutical company in Croatia
3. Telecomunicacoes Brasileiras S.A.
Telecommunication services in Brazil
4. Wielkopolski Bank Kredytowy S.A.
Commercial bank in Poland
5. Cementos Lima S.A.
Cement producer in Peru
6. Omnium Nord Africaine
Conglomerate in Morocco
7. Petroleo Brasileiro S.A.
Petroleum company in Brazil
8. Portugal Telecom S.A.
Telecommunication services in Portugal
9. Fomento Economico Mexicano,
S.A. de C.V.
Producer of beer and soft drinks in Mexico
10. Al Ahram Beverage Co.
Beverage company in Egypt
The Fund's top holdings were
diversified across a wide range
of countries and industries.
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 Emerging Markets Growth Fund
<PAGE>
Portfolio Management Discussion
In the following interview, Joyce E. Cornell, lead portfolio manager of Scudder
Emerging Markets Growth Fund, discusses the environment and Fund strategy over
the six-month period.
Q: How did the Fund perform for the six-month period ended April 30, 1998?
A: The Fund returned 2.22%, which compares to the 3.47% return of the IFC
Emerging Markets Investable Index for the same period. While the Fund's
six-month return was modest, it was achieved over a relatively short time frame.
Because the emerging markets are characteristically more volatile (and offer
correspondingly greater potential returns) than domestic investments, investing
in this area requires a higher tolerance for risk and a longer term commitment.
Evidence of a strong long-term record is beginning to appear in the Fund's
outperformance of its benchmark since inception (see page 4, top left). We
continue to believe that there are many emerging markets (and companies within
these markets) that offer outstanding long-term potential.
Our absence from Asia at the end of 1997 helped the Fund, but this
underweighting also left the Fund out of the powerful rebound in Asia during the
first quarter of 1998. For the six-month period, our underweighting in Asia was
a significant contributor to the Fund's underperformance relative to its
benchmark.
However, we believe the rebound in Asia was not driven by fundamentals, and is
largely unsupportable. The economies of the stricken countries are still
shrinking. We anticipate negative earnings surprises, asset write-offs, and
bankruptcies ahead. While there are well run companies that will survive and
even grow from here, valuations are extremely rich in comparison with other
parts of the world with notably less systemic risk.
Q: What other areas contributed to performance?
A: Positive contributors included our 12% weighting in Poland, a market that was
up 18% for the six months and added the most value. Avoiding Russia, a market
with a 5% index weight that lost 29%, had a nearly equivalent beneficial effect
relative to the index. Our Ghana position, at only 0.3% of assets at the
beginning of the year, more than doubled, making for a meaningful contribution
to performance (Ghana is not in the index).
Q: Where did you center your attention in managing the portfolio?
A: We focused on the blossoming of the Middle East as an attractive investment
locale, as well as on Latin America, which deserves a nod because we think
Mexico and Peru will enjoy good performance over the remainder of 1998.
Q: Tell us more about the Middle East.
A: While the world is riveted on Asia, many Middle Eastern countries are
undergoing profound economic revolutions. For example, Egypt, with 70 million
people, is the largest and most investable country in the region. The economy
has been growing at 6% per year with low inflation, and the government is
rapidly installing a comprehensive legal and regulatory framework to provide a
transparent system where foreign and domestic investors are treated equally in
all respects. This contrasts sharply with many emerging markets which fear
foreign competition and restrict foreign ownership. Privatization of state
6 - Scudder Emerging Markets Growth Fund
<PAGE>
holdings is well underway, and we believe Egypt has the most constructive
attitude toward foreign investment of any country in the world. For example,
Egypt opened the insurance industry to increased competition by encouraging
foreign insurance companies to either start wholly-owned operations or to buy
stakes in existing Egyptian insurers. Dr. Youssef Boutros-Ghali, the Minister of
the Economy, stated that he hopes foreign companies will come to Egypt because
it is in need of technical expertise and the efficiencies that can result from
foreign competition.
Q: How does Asia compare to a country like Egypt?
A: Asia is behind Egypt in both action and attitude in opening its markets to
foreign ownership or competition. The current crisis is forcing the harder-hit
economies to open somewhat under IMF (International Monetary Fund) requirements.
But it is a grudging effort which will likely be undermined by subtle barriers
and foot dragging. It is still in the early stages, but it seems the afflicted
Asian nations are drifting to a Japanese solution even in the face of IMF
attempts to force a more open, market- driven solution. By "Japanese solution,"
we mean continued government policy allocation of capital -- heavily tainted
with cronyism and corruption -- that allows a bare minimum of poorly run
companies to go bankrupt. The final result of this path will likely be economies
burdened with excess capacity and inefficient companies growing much below
potential and unable to withstand much global competition.
Q: How are these smaller, technically bankrupt Asian countries able to afford
this approach without the reserves of a country such as Japan?
A: We see the answer in the present excess of global liquidity, some of which is
being used to bail out Asia with few questions asked and fewer demands. At this
point, none of the afflicted Asian countries has implemented transparent,
efficient bankruptcy procedures. Thailand took a completely toothless first
step, and the government is slated to do more in October, but we doubt that
their efforts will come to fruition. An endemic lack of transparency and lenient
loan classification policy will allow banks to classify loans as current,
although they are not, which will keep feeding money to failing companies. Thai
banks are raising huge sums of fresh equity capital in the West with ease, even
at great premiums to locally held shares. With all this easy money, there is
less incentive for meaningful economic and financial reforms.
Q: How long can this environment of easy money last?
A: Lots of liquidity is lovely, but it cannot last forever. Not being able to
time such things, we think it is best to position the Fund somewhat defensively
- -- given the apparent excess of liquidity -- by investing in those countries and
companies with strong sustainable growth where expectations aren't as high.
7 - Scudder Emerging Markets Growth Fund
<PAGE>
Q: Where else do you see opportunities?
A: We increasingly believe that strong growth not yet priced into equities is
most abundant in the Middle East, parts of Africa, and Eastern Europe. We think
Peru is not as hurt by El Nino as many believe and will rebound strongly. In
Mexico, we believe the market has been oversold on overblown fears of the effect
of lower oil prices. In general, we are convinced the most robust growth will
come from the well managed emerging economies, which will result in solid
capital appreciation for investors over time.
8 - Scudder Emerging Markets Growth Fund
<PAGE>
Glossary of Investment Terms
CURRENCY DEVALUATION A significant decline of a currency's value
relative to other currencies, such as the
U.S. dollar. This may be prompted by trading
or central bank intervention (or the lack of
intervention) in the currency markets. For
U.S. investors who are investing overseas, a
devaluation of a foreign currency can have
the effect of reducing the total return of
their investment.
FUNDAMENTAL RESEARCH Analysis of companies based on the projected
impact of management, products, sales, and
earnings on balance sheets and income
statements. Distinct from technical analysis,
which evaluates the attractiveness of a stock
based on historical price and trading volume
movements, rather than the financial results
of the underlying company.
INTERNATIONAL MONETARY FUND An organization focused on lowering trade
(IMF) barriers and stabilizing currencies. While
helping developing nations pay their debts,
the IMF usually imposes tough guidelines
aimed at lowering inflation, cutting imports,
and raising exports.
LIQUIDITY A characteristic of an investment or an asset
referring to the ease of convertibility into
cash within a reasonably short period of
time.
MARKET CAPITALIZATION The value of a company's outstanding shares
of common stock, determined by the number of
shares outstanding multiplied by the share
price (Shares x Price = Market
Capitalization). The universe of publicly
traded companies is frequently divided into
large-, mid-, and small-capitalizations.
OVER/UNDER WEIGHTING Refers to the allocation of assets -- usually
by sector, industry, or country -- within a
portfolio relative to a benchmark index,
(i.e., the IFC Emerging Markets Investable
Index) or an investment universe.
TRANSPARENCY The degree to which investors can evaluate if
a company is managed in the interests of
shareholders. Transparency is often not as
good in developing markets, where disclosure
requirements may be less stringent, and
protectionism, subsidies, and cronyism may
distort the business environment.
(Sources: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
9 - Scudder Emerging Markets Growth Fund
<PAGE>
Investment Portfolio as of April 30, 1998
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements 1.0%
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 4/30/98 at 5.5%, to
be repurchased at $2,013,308 on 5/1/98, collateralized by a $2,029,000 U.S. ------------
Treasury Note, 5.75%, 10/31/00 (Cost $2,013,000) ...................................... 2,013,000 2,013,000
------------
Convertible Bonds 0.3%
- ------------------------------------------------------------------------------------------------------------------------------
Mexico 0.3% ------------
Grupo Industrial Alfa S.A. de C.V., 8%, 9/15/00 (Cost $828,938) ......................... 460,000 548,550
------------
Shares
- ------------------------------------------------------------------------------------------------------------------------------
Common Stocks 98.7%
- ------------------------------------------------------------------------------------------------------------------------------
Argentina 0.2%
S.A. San Miguel AGICI "B"* (Cultivation and processing of lemons and lemon
products) ............................................................................. 9,100 122,868
YPF S.A. "D" (ADR) (Petroleum company) .................................................. 6,400 223,200
------------
346,068
------------
Bahrain 0.4%
Arab Insurance Group* (GDR) (Insurance company) ......................................... 39,900 513,713
Arab Insurance Group ................................................................... 216,690 305,533
------------
819,246
------------
Botswana 1.0%
Sechaba Investment Trust Co. (Brewery) .................................................. 1,229,000 1,965,908
------------
Brazil 7.8%
Cia de Eletricidade do Estado de Bahia (Electric power utility) ......................... 2,949,300 166,336
Companhia Energetica da Minas Gerais (pfd.) (Electric power utility) .................... 14,490,000 703,183
Companhia Riograndense Telecomunicacoes S.A. (Telecommunication services) ............... 2,059,000 2,718,568
Companhia Riograndense Telecomunicacoes S.A. (b) ........................................ 90,073 118,926
Petroleo Brasileiro S.A. (pfd.) (Petroleum company) ..................................... 12,214,000 3,097,154
Saraiva S.A. Livreiros Editores (pfd.) (Book publisher) ................................. 245,900 1,107,319
Telecomunicacoes Brasileiras S.A. (Telecommunication services) .......................... 41,450,000 4,113,649
Telecomunicacoes Brasileiras S.A. (pfd.) ................................................ 1,643,000 200,553
Telecomunicacoes de Minas Gerais (voting) (Telecommunication services) .................. 15,530 1,657
Telecomunicacoes de Minas Gerais S.A. "B" (pfd.) ........................................ 192 30
Telecomunicacoes do Parana S.A. (pfd.) (Telecommunication services) ..................... 2,409,668 1,375,870
Telecomunicacoes do Rio Janeiro S.A. (pfd.) (Telecommunication services) ................ 13,938,000 2,193,713
------------
15,796,958
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder Emerging Markets Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Canada 0.4%
Corriente Resources, Inc.* (Mining and processing of gold, bismuth, tin and
tungsten in South America) ............................................................ 405,900 283,777
Etruscan Enterprises Ltd.* (Exploration and development of gold prospect in
Niger) ................................................................................ 104,000 290,838
Gitennes Exploration Inc.* (Exploration and development of gold mining
properties in Peru) ................................................................... 54,000 100,045
Gitennes Exploration Inc., Warrants* (expire 10/2/98) (b) ............................... 27,000 3,398
Kazakhstan Minerals Corp.* (Mineral exploration in Kazakhstan) .......................... 76,700 26,845
Ouraminas Minerals Inc.* (Gold exploration in Brazil) ................................... 290,000 26,357
Solitario Resources Corp.* (Precious and base metals exploration company
primarily in Argentina and Peru) ...................................................... 80,600 169,050
------------
900,310
------------
Chile 2.8%
Compania de Telefonos de Chile, S.A. (ADR) (Telecommunication services) ................. 16,200 406,013
Enersis S.A. (ADR) (Generator and distributor of electricity in Chile and
Argentina) ............................................................................ 54,000 1,589,625
Laboratorio Chile S.A. (ADR) (Manufacturer and distributor of off-patent
pharmaceutical products) .............................................................. 31,650 625,088
Sociedad Quimica y Minera de Chile S.A. (ADR) (Producer of fertilizer, iodine
and industrial chemicals) ............................................................. 24,200 1,051,188
Vina Concha y Toro S.A. (ADR) (Wine producer) ........................................... 60,000 1,950,000
------------
5,621,914
------------
Croatia 3.3%
Pliva D.D. (GDR) (Pharmaceutical company) ............................................... 245,120 4,436,672
Zagrebacka Banka (GDR) (Commercial bank) ................................................ 84,400 2,217,610
------------
6,654,282
------------
Egypt 9.5%
Al Ahram Beverages Co. (Beverage company) ............................................... 87,100 2,765,425
Arab International Construction Co. (Construction company) .............................. 1,100 51,613
Eastern Tobacco Co. (Maker of tobacco products) ......................................... 80,120 1,820,909
Egyptian Financial & Industrial Co. (Fertilizer producer) ............................... 74,300 2,069,941
Egyptian International Pharmaceutical Co. (Pharmaceutical company) ...................... 27,400 1,952,551
Egyptian Mobile Phone Network* (Cellular telecommunication services) (b) ................ 3,260 2,390
International Foods Co.* (Food producer) ................................................ 34,000 667,038
Madinet Nasser City Housing Co. (Real estate development company) ....................... 30,170 1,849,041
Misr International Bank (Commercial and foreign bank) ................................... 57,410 1,473,131
Misr Refrigeration & Air Conditioning Manufacturing Co.* (Manufacturer and
distributor of air conditioning units) ................................................ 27,140 567,950
North Cairo Mills, Ltd. (Flour producer) ................................................ 10,120 233,739
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder Emerging Markets Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ORASCOM (Hotel and resort developer) (b) ................................................ 500 353,372
Olympic Group Financial* (Manufacturer of stoves) ....................................... 223,000 1,046,334
Oriental Weavers Corp. (Carpet manufacturer) ............................................ 11,500 239,443
Suez Cement Co. (Cement producer) ....................................................... 84,677 1,763,070
Suez Cement Co. (GDR) ................................................................... 32,600 663,410
Torah Portland Cement Co. (Cement producer) ............................................. 90,305 1,910,706
------------
19,430,063
------------
Estonia 0.6%
Eesti Uhispanka* (Commercial bank) ...................................................... 49,200 226,068
Eesti Uhispanka* (GDR) .................................................................. 77,600 1,055,360
------------
1,281,428
------------
France 1.1%
Bouygues Offshore S.A. (Drilling services in West Africa) ............................... 50,600 2,213,908
------------
Ghana 0.6%
Social Security Bank Ltd.* (Full service commercial bank) (b) ........................... 804,000 1,246,243
------------
Greece 3.1%
Alpha Credit Bank A.E. (Commercial bank) ................................................ 25,350 2,674,126
Delta Informatics S.A. (Corporate information services) ................................. 11,200 427,603
Ethniki General Insurance Co. (Insurance and reinsurance company) ....................... 20,700 615,448
National Bank of Greece S.A. (Full service bank) ........................................ 12,200 2,146,480
Sidenor SA (Operator of steel mills) .................................................... 10,600 411,441
------------
6,275,098
------------
Hong Kong 0.0%
Moulin International Holdings Ltd., Warrants* (expire 10/16/99) (Manufacturer
of optical products) .................................................................. 249,208 1,705
------------
Hungary 7.5%
Graboplast Rt (Producer of home improvement materials, artificial leather and
book bindings) ........................................................................ 51,329 1,946,446
Graboplast Rt (GDR) ..................................................................... 45,800 297,700
Magyar Olaj-es Gazipari Rt (Integrated domestic oil and gas company) .................... 87,200 2,649,501
Matav Rt Ordinary "A" (Telecommunication services) ...................................... 198,000 1,156,287
OTP Bank Rt (Savings and commercial bank) ............................................... 97,900 4,640,580
Pannonplast Rt (Manufacturer of plastic products from PVC, polyethylene and
other raw materials) (b) .............................................................. 26,457 1,122,414
Pick Szeged Rt (Processes, markets and distributes meat products) ....................... 16,400 1,010,594
Richter Gedeon Rt (Pharmaceutical company) .............................................. 22,100 2,367,502
------------
15,191,024
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 - Scudder Emerging Markets Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
India 2.2%
Ashok Leyland Ltd. (GDR) (Manufacturer of medium and heavy duty commercial
vehicles) ............................................................................. 44,000 165,000
Bharat Petroleum Corp., Ltd (Oil exploration and refining, manufacturer of
petroleum products) ................................................................... 33,500 337,404
Corporation Bank (Commercial bank) ...................................................... 264,800 960,788
HDFC Bank Ltd. (Corporate banking and financial services) ............................... 916,500 1,764,231
Hindustan Petroleum Corp., Ltd (Oil refining, manufacturer of petroleum
products) ............................................................................. 51,300 521,525
Housing Development Finance Corp. Ltd. (Housing finance provider to individuals,
corporations and developers) .......................................................... 1,400 113,756
ICICI Banking Corp. (Bank) .............................................................. 430,600 565,966
------------
4,428,670
------------
Indonesia 0.0%
Pan Indonesia Bank, Warrants* (Expire 6/26/00) (Commercial bank) ........................ 145,714 2,095
------------
Israel 2.6%
ECI Telecommunications Ltd. (Telecommunication services) ................................ 17,500 533,750
ESC Medical Systems Ltd. (Producer of devices for non-invasive treatment of
benign vascular lesions) .............................................................. 55,200 1,794,000
MEMCO Software Ltd.* (Producer of security software) .................................... 79,300 2,379,000
Makhteshim Chemical Works (Chemical producer) ........................................... 74,100 628,068
------------
5,334,818
------------
Jordan 1.8%
Arab Bank PLC (Commercial bank) ......................................................... 60 29,515
Arab Potash Co., Ltd. (GDR) (Salt and chemical extraction from brine) ................... 49,000 384,650
Arab Potash Co., Ltd. (b) ............................................................... 47,400 383,064
Aramex International Ltd.* (Express delivery and freight forwarding in the
Mideast and India) .................................................................... 35,700 473,025
Dar Al Dawa Development & Investment Co. (Pharmaceutical company) (b) ................... 125,500 1,021,286
The Housing Bank (Residential construction finance) ..................................... 154,950 1,313,209
------------
3,604,749
------------
Kenya 2.6%
East African Portland Cement Co. (Cement producer) ...................................... 290,000 120,432
Firestone East Africa Ltd. (Tire manufacturer) .......................................... 1,395,000 400,889
James Finlay PLC (Tea producer) ......................................................... 1,059,000 2,161,091
Kenya Power & Lighting Co., Ltd. (Distribution and sale of electricity) ................. 135,500 382,641
Sasini Tea & Coffee Ltd. (Tea and coffee grower and processor) .......................... 1,387,500 1,613,372
Uchumi Supermarket Ltd. (Supermarket operator) .......................................... 1,030,000 675,831
------------
5,354,256
------------
Lebanon 0.7%
Banque Libanaise pour le Commerce SAL (GDR) (Commercial bank) ........................... 88,000 1,548,800
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 - Scudder Emerging Markets Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Malawi 0.7%
African Lakes Corp. PLC* (Agriculture, mining, engineering, computer supplies
and general trading) .................................................................. 869,928 734,840
Press Corp., Ltd. (GDR) (Conglomerate, industrial holding company) (b) .................. 59,350 629,704
------------
1,364,544
------------
Malaysia 0.1%
PPB Oil Palms Berhad (Refiner and marketer of palm oils and related products) ........... 191,000 164,301
------------
Mexico 10.0%
Consorcio ARA, S.A. de C.V. (Low-income housing developer) .............................. 274,000 1,365,400
Fomento Economico Mexicano, S.A. de C.V. "B" (Producer of beer and soft drinks) ......... 382,000 2,826,129
Gruma S.A. de C.V. "B" (Producer and distributor of corn flour) ......................... 345,900 793,795
Grupo Elektra, S.A. de C.V. "B" (Consumer electronics and appliances retail
stores) ............................................................................... 650,700 929,079
Grupo Financiero Banamex-Accival, S.A. de C.V. "B" (Bank) ............................... 882,200 2,748,918
Grupo Financiero Bancomer S.A. de C.V. "B" (Commercial bank) ............................ 360,000 248,524
Grupo Financiero Banorte S.A. de C.V. "B" (Financial services holding company) .......... 347,100 571,651
Grupo Industrial Alfa S.A. de C.V. "A" (Conglomerate: steel, petrochemicals,
packaged food) ........................................................................ 241,500 1,317,247
Grupo Industrial Maseca S.A. de C.V. "B" (Food producer) ................................ 391,000 281,901
Grupo Industrial Saltillo, S.A. de C.V. Series B (Manufacturer of smelted steel
products) ............................................................................. 86,600 369,314
Grupo Radio Centro S.A. de C.V. (Owner and operator of radio stations) .................. 555,900 881,477
Grupo Radio Centro S.A. de C.V. (ADR) ................................................... 83,200 1,164,800
Industrias Penoles S.A. de C.V. (Exploration and marketing of minerals and
non-ferrous metals such as lead, zinc and silver) ..................................... 503,700 2,076,869
Latinoamericana Duty Free, S.A. de C.V. (Operator of high quality duty free
airport shops) ........................................................................ 320,000 211,109
Organizacion Soriana S.A. de C.V. "A" (Retailer) ........................................ 120,000 453,790
Sigma Alimentos S.A. de C.V. "B" (Producer and distributor of cold storage
foods) ................................................................................ 75,250 1,223,361
TV Azteca, S.A. de C.V. (ADR) (Owner and operator of national television
networks) ............................................................................. 104,900 1,953,763
Telefonos de Mexico S.A. de C.V. "L" (ADR) (Telecommunication services) ................. 14,500 821,063
------------
20,238,190
------------
Morocco 2.9%
Banque Marocaine du Commerce Exterieur S.A. (Commercial bank) ........................... 1,500 106,468
Maghrebail (Real estate leasing, maintenance and insurance) ............................. 1,599 89,480
Omnium Nord Africaine (Conglomerate) .................................................... 29,900 3,168,008
Societe Nationale d'Investissements (Conglomerate, various joint ventures) .............. 6,000 541,288
Societe Nationale d'Investissements (New) (b) ........................................... 600 53,388
Societe des Brasseries du Nord Marocain (Distributor of beer and carbonated
beverages) ............................................................................ 1,600 503,639
WAFABANK (Commercial bank) .............................................................. 12,707 1,447,000
------------
5,909,271
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - Scudder Emerging Markets Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Oman 2.3%
Alliance Housing Bank* (Long-term mortgage bank) ........................................ 90,000 409,107
Bank Muscat Al Ahla Al Omani (Commercial bank) .......................................... 23,625 366,969
Bank Muscat Al Ahla Al Omani Allotment Letters* (b) ..................................... 17,125 254,883
Muscat Marriott (Hotel operator) (b) .................................................... 100,000 135,070
National Bank of Oman Allotment Letters* (Commercial bank) (b) .......................... 15,000 232,217
National Bank of Oman Ltd. .............................................................. 122,090 1,921,803
Oman Cable Industry SAOG* (Manufacturer of electrical and power cables) (b) ............. 6,185 49,803
Oryx Fund, Ltd.* (Mutual fund domiciled in Guernsey, investing in the Middle
East) ................................................................................. 79,500 1,391,250
------------
4,761,102
------------
Papua New Guinea 0.8%
Interoil Corp.* (Oil exploration) (b) ................................................... 78,300 528,525
Orogen Minerals Ltd. (Investment company with controlling interest in gold and
oil companies) ........................................................................ 229,300 495,047
Orogen Minerals Ltd. (GDR) .............................................................. 28,400 612,375
------------
1,635,947
------------
Peru 6.5%
CPT Telefonica del Peru S.A. "B" (ADR) (Telecommunication services) ..................... 14,100 311,963
Cementos Lima S.A. "T" (Cement producer) ................................................ 148,477 3,265,916
Compania Peruana de Telefonos S.A. "B" (Public and cellular telephone services) ......... 698,000 1,536,563
Edegel S.A. "B" (Electric power utility) ................................................ 3,307,637 1,229,170
Enrique Ferreyros y Cia. (Machinery manufacturer) ....................................... 2,119,312 2,662,735
Minas Buenaventura S.A. "B" (Mining company) ............................................ 280,500 2,184,038
Minas Buenaventura S.A. (ADR) ........................................................... 14,800 229,400
Minera Milpo "T" (Mining company) ....................................................... 135,885 1,033,986
Peru Pacifico (Food producer) ........................................................... 2,433,334 809,532
Volcan Compania Minera S.A. "T"* (Mining company) ....................................... 137,426 89,007
------------
13,352,310
------------
Philippines 1.6%
Aboitiz Equity Ventures Inc.* (Conglomerate: electricity, infrastructure,
shipbuilding) ......................................................................... 14,818,000 738,132
Ayala Land, Inc. (Real estate and land developer) ....................................... 1,560,000 611,955
International Container Terminal Services, Inc.* (Containerized cargo handling
firm) ................................................................................. 6,046,750 798,201
Mondragon International Philippines, Inc.* (Wholesale and direct selling of
clothing, housewares and homecare products) ........................................... 3,003,600 71,069
Philippine Long Distance Telephone Co. (Telecommunication services) ..................... 21,100 564,944
Philippine Long Distance Telephone Co. (pfd.) ........................................... 9,000 461,250
------------
3,245,551
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - Scudder Emerging Markets Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Poland 12.5%
Amica* (Manufacturer of home appliances) ................................................ 106,522 1,897,418
Bank Przemyslowo Handlowy (Bank) ........................................................ 27,298 2,411,129
Bydgoska Fabryka Kabli S.A.* (Manufacturer of cables, wires and insulating
materials) ............................................................................ 239,050 2,224,048
Cersanit SA* (Manufacturer of ceramic sanitary products) (b) ............................ 17,500 1,081,996
Computerland Poland S.A.* (Provider of computer services and systems) ................... 57,300 1,324,319
Debica S.A. "A" (Tire manufacturer) ..................................................... 64,350 1,638,827
ITI Group S.A. (Telecommunication services) (b) ......................................... 8,315 2,078,750
Jelfa* (Pharmaceutical company) ......................................................... 39,100 1,082,114
Kutnowskie Zaklady Farmaceutyczne Polfa S.A. (Producer of pharmaceuticals,
veterinary medicines, food components) ................................................ 42,600 1,109,996
Mostostal Zabrze Holding S.A. (Construction company) .................................... 271,100 1,436,714
Netia Holdings BV* (Telecommunication services) (b) ..................................... 96,742 1,934,840
Netia Holdings BV "O"* (b) .............................................................. 8,729 174,580
Netia Holdings BV "P"* (b) .............................................................. 7,330 146,600
Netia Holdings BV "R"* (b) .............................................................. 3,980 79,600
Orbis S.A.* (Hotel owner operator) ...................................................... 48,200 479,658
Wielkopolski Bank Kredytowy S.A. (Commercial bank) ...................................... 516,800 4,077,798
Zaklady Lentex (Producer of PVC products used in cars, footwear, housing and
public construction) .................................................................. 37,800 544,213
Zaklady Metali Lekkich Kety* (Manufacturer of aluminum casting alloys and
products) ............................................................................. 98,300 1,823,318
------------
25,545,918
------------
Portugal 5.5%
Banco Comercial Portugues (Commercial bank) ............................................. 31,800 1,115,040
Banco Comercial Portugues (New) (b) ..................................................... 6,289 213,903
Banco Espirito Santo (Commercial and investment banking) ................................ 26,750 1,279,904
Banco Portugues do Investimento (Bank) .................................................. 31,400 1,459,711
Electricidade de Portugal (Electric utility) ............................................ 102,100 2,664,637
Portugal Telecom S.A. (Telecommunication services) ...................................... 54,000 2,902,294
Semapa Cement SA (Cement producer) ...................................................... 55,400 1,620,552
------------
11,256,041
------------
Romania 0.4%
Societe Generale Romania Fund* (Investment company) ..................................... 9,400 822,500
------------
Slovenia 0.2%
BTC (GDR) (Property management) ......................................................... 57,000 356,250
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - Scudder Emerging Markets Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
South Africa 2.0%
Energy Africa Ltd.* (Oil and gas exploration and production) ............................ 203,133 984,522
Nampak Ltd. (Manufacturer of paper and packaging) ....................................... 109,200 470,932
Protea Furnishers Ltd. (Retailer of household furniture and appliances) ................. 1,082,300 1,070,524
Sasol Ltd. (Coal mining and processing, crude oil exploration and refining,
petrochemical production) ............................................................. 151,000 1,523,442
------------
4,049,420
------------
Sri Lanka 0.1%
Tea Plantations Investment Trust PLC* (Trust investing in regional plantations) ......... 100,700 157,492
------------
Switzerland 0.3%
Holderbank Financiere Glaris AG (Bearer) (Cement producer) .............................. 565 597,947
------------
Turkey 0.7%
Aksigorta A.S. (Multi-line insurance company) ........................................... 10,100,000 747,550
Migros Turkey (Retailer) ................................................................ 691,000 677,315
------------
1,424,865
------------
United States 2.2%
Benton Oil & Gas Co.* (Oil and gas exploration, development and production) ............. 111,600 1,360,125
Diamond Offshore Drilling, Inc. (Offshore oil and gas well drilling) .................... 33,100 1,675,688
Santa Fe International Corp. (International offshsore and land contract driller) ........ 24,500 960,094
Schlumberger Ltd. (Oil field services and electronics) .................................. 5,900 488,963
------------
4,484,870
------------
Zimbabwe 1.7%
Delta Corp., Ltd. (Brewery) ............................................................. 693,740 507,120
Meikles Africa Ltd. (GDR) (Hotel operator) .............................................. 965,400 1,255,020
National Merchant Bank of Zimbabwe Ltd. (Commercial bank) ............................... 342,500 239,750
Reunion Mining PLC* (Mineral exploration and copper production) ......................... 203,000 271,646
Tanganda Tea Co., Ltd. (Tea producer and distributor) ................................... 2,461,212 791,618
Wankie Colliery Co., Ltd. (Coal mining at Hwange) ....................................... 1,965,000 445,285
------------
3,510,439
- ------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $188,906,611) 200,894,501
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $191,748,549) (a) 203,456,051
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17 - Scudder Emerging Markets Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
* Non-income producing security.
(a) The cost for federal income tax purposes was $192,737,946. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$10,718,105. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $31,121,852 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$20,403,747.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $11,844,952 (5.73% of net assets).
Their values have been estimated by the Valuation Committee in the absence
of readily ascertainable market values. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the difference could be material. The cost of
these securities at April 30, 1998 aggregated $10,594,414. These
securities may also have certain restrictions as to resale.
The accompanying notes are an integral part of the financial statements.
18 - Scudder Emerging Markets Growth Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of April 30, 1998
<TABLE>
<S> <C> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at market (identified cost $191,748,549) ................ $ 203,456,051
Foreign currency, at market (identified cost $741,944) ............... 740,259
Receivable for investments sold ...................................... 2,579,267
Dividends and interest receivable .................................... 1,117,407
Receivable for Fund shares sold ...................................... 420,452
Deferred organization expenses ....................................... 10,443
Other assets ......................................................... 956
----------------
Total assets 208,324,835
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased .................................... 675,189
Payable for Fund shares redeemed ..................................... 188,663
Accrued management fee ............................................... 399,151
Other payables and accrued expenses .................................. 402,187
----------------
Total liabilities 1,665,190
-------------------------------------------------------------------------------------------
Net assets, at market value $ 206,659,645
-------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated distributions in excess of net investment income ......... (886,213)
Unrealized appreciation (depreciation) on:
Investment securities ............................................. 11,707,502
Foreign currency related transactions ............................. (636)
Accumulated net realized loss ........................................ (4,772,730)
Paid-in capital ...................................................... 200,611,722
-------------------------------------------------------------------------------------------
Net assets, at market value $ 206,659,645
-------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($206,659,645 / 13,946,567 shares of capital stock ----------------
outstanding, $.01 par value, 100,000,000 shares authorized) ........ $14.82
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19 - Scudder Emerging Markets Growth Fund
<PAGE>
Statement of Operations
six months ended April 30, 1998
<TABLE>
<S> <C> <C>
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------
Income:
Dividends (net of foreign taxes withheld of $97,660) ................. $ 2,036,855
Interest ............................................................. 498,743
-----------------
2,535,598
-----------------
Expenses:
Management fee ....................................................... 1,249,201
Custodian and accounting fees ........................................ 410,924
Services to shareholders ............................................. 471,408
Directors' fees and expenses ......................................... 27,603
Registration fees .................................................... 9,139
Auditing ............................................................. 20,451
Reports to shareholders .............................................. 37,586
Legal ................................................................ 8,663
Other ................................................................ 938
-----------------
Total expenses before reductions ..................................... 2,235,913
Expense reductions ................................................... (150,896)
-----------------
Expenses, net ........................................................ 2,085,017
-------------------------------------------------------------------------------------------
Net investment income 450,581
-------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments .......................................................... (3,935,196)
Foreign currency related transactions ................................ (137,892)
-----------------
(4,073,088)
-----------------
Net unrealized appreciation (depreciation) during the period on:
Investments (net of India tax $82,955) ............................... 6,921,422
Foreign currency related transactions ................................ 19,707
-----------------
6,941,129
-------------------------------------------------------------------------------------------
Net gain (loss) on investment transactions 2,868,041
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 3,318,622
-------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
20 - Scudder Emerging Markets Growth Fund
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
April 30, October 31,
Increase (Decrease) in Net Assets 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income (loss) ...................................... $ 450,581 $ 196,739
Net realized gain (loss) .......................................... (4,073,088) (551,775)
Net unrealized appreciation (depreciation) on
investment transactions during the period ....................... 6,941,129 3,155,703
---------------- ----------------
Net increase (decrease) in net assets resulting from
operations ...................................................... 3,318,622 2,800,667
---------------- ----------------
Distributions to shareholders from net investment
income .......................................................... (862,031) (178,523)
---------------- ----------------
Fund share transactions:
Proceeds from shares sold ......................................... 32,026,151 195,752,276
Net asset value of shares issued to shareholders in
reinvestment of distributions ................................... 731,288 144,724
Cost of shares redeemed ........................................... (48,443,341) (55,248,506)
Redemption fees ................................................... 264,475 560,150
---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions .................................................... (15,421,427) 141,208,644
---------------- ----------------
Increase (decrease) in net assets ................................. (12,964,836) 143,830,788
Net assets at beginning of period ................................. 219,624,481 75,793,693
Net assets at end of period (including accumulated
distributions in excess of net investment income ---------------- ----------------
$886,213 and $474,763, respectively) ............................ $ 206,659,645 $ 219,624,481
---------------- ----------------
Other Information
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ......................... 15,080,532 5,896,839
---------------- ----------------
Shares sold ....................................................... 2,278,097 12,807,944
Shares issued to shareholders in reinvestment of
distributions ................................................... 52,272 10,595
Shares redeemed ................................................... (3,464,334) (3,634,846)
---------------- ----------------
Net increase (decrease) in Fund shares ............................ (1,133,965) 9,183,693
---------------- ----------------
Shares outstanding at end of period ............................... 13,946,567 15,080,532
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21 - Scudder Emerging Markets Growth Fund
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period (a) and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
For the Period
May 8, 1996
Six Months Year (commencement)
Ended Ended of operations) to
April 30, October 31, October 31,
1998 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
-----------------------------------------------
Net asset value, beginning of period ............................. $14.56 $12.85 $12.00
-----------------------------------------------
Income from investment operations:
Net investment income (loss) .................................. .03 .02 (.02)
Net realized and unrealized gain (loss) on investments ........... .27 1.67 .86
-----------------------------------------------
Total from investment operations ................................. .30 1.69 .84
-----------------------------------------------
Less distributions from net investment income .................... (.06) (.03) --
Redemption fees .................................................. .02 .05 .01
-----------------------------------------------
Net asset value, end of period ................................... $14.82 $14.56 $12.85
-----------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (%) (c) (d) ......................................... 2.22** 13.51 7.08**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ........................... 207 220 76
Ratio of operating expenses, net, to average daily net
assets (%) .................................................... 2.08* 2.00 2.00*
Ratio of operating expenses, before expense reductions, to
average daily net assets (%) .................................. 2.24* 2.33 3.79*
Ratio of net investment income (loss) to average daily net
assets (%) .................................................... .45* .11 (.32)*
Portfolio turnover rate (%) ...................................... 34.2* 61.5 19.5*
Average commission rate paid (b) ................................. $.0076 $.0013 $.0006
</TABLE>
(a) Based on monthly average of shares outstanding during the period.
(b) Average commission rate paid per share of common and preferred stocks.
(c) Total return is higher due to maintenance of the Fund's expenses.
(d) Total return does not reflect the effect to the shareholder of the 2%
redemption fee on shares held less than one year.
* Annualized
** Not annualized
22 - Scudder Emerging Markets Growth Fund
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Emerging Markets Growth Fund ("the Fund") is a non-diversified series of
Scudder International Fund, Inc. (the "Corporation"). The Corporation is
organized as a Maryland corporation and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed by the Fund in the preparation of its
financial statements.
Security Valuation. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the Nasdaq Stock Market, Inc.
("Nasdaq"), for which there have been sales, are valued at the most recent sale
price reported on Nasdaq. If there are no such sales, the value is the most
recent bid quotation. Securities which are not quoted on Nasdaq 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 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 other than money market instruments with an original
maturity over sixty days are valued by pricing agents approved by the officers
of the Fund, whose 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. Money market instruments purchased with an original
maturity of sixty days or less are valued at amortized cost. All other
securities are valued at their fair value as determined in good faith by the
Valuation Committee of the Board of Directors.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which, at the time
of purchase and each subsequent business day, is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement, is equal to at least 100.5% of the repurchase price.
Forward Foreign Currency Exchange Contracts. A forward foreign currency exchange
contract (forward contract) is a commitment to purchase or sell a foreign
currency at the settlement date at a negotiated rate. During the period, the
Fund utilized forward contracts as a hedge in connection with portfolio
purchases and sales of securities denominated in foreign currencies.
Forward contracts are valued at the prevailing forward exchange rate of the
underlying currencies and unrealized gain/loss is recorded daily. Forward
contracts having the same settlement date and broker are offset and any gain
(loss) is realized on the date of offset; otherwise, gain (loss) is realized on
settlement date. Realized and unrealized gains and losses which represent the
difference between the value of the forward contract to buy and the forward
contract to sell are included in net realized and unrealized gain (loss) from
foreign currency related transactions.
Certain risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contracts. Additionally,
when utilizing forward contracts to hedge, the Fund gives up the opportunity to
profit from favorable exchange rate movements during the term of the contract.
23 - Scudder Emerging Markets Growth Fund
<PAGE>
Foreign Currency Translations. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency transactions are translated into U.S. dollars
on the following basis:
(i) market value of investment securities, other assets and other
liabilities at the daily rates of exchange, and
(ii) purchases and sales of investment securities, dividend and interest
income and certain expenses at the rates of exchange prevailing on the
respective dates of such transactions.
The Fund does not isolate that portion of gains and losses on investments which
is due to changes in foreign exchange rates from that which is due to changes in
market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments.
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-dividend and payment dates on
dividends, interest, and foreign withholding taxes.
Taxation. The Fund's policy is to comply with the requirements of the Internal
Revenue Code, as amended, which are applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. The Fund paid
no federal income taxes and no federal income tax provision was required.
At October 31, 1997, the Fund had a net tax basis capital loss carryforward of
approximately $370,000, which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until October 31,
2004, the expiration date, whichever occurs first.
Redemption Fees. In general, shares of the Fund may be redeemed at net asset
value. However, upon the redemption or exchange of shares held by shareholders
for less than one year, a fee of 2% of the current net asset value of the shares
will be assessed and retained by the Fund for the benefit of the remaining
shareholders. The redemption fee is included as an addition to paid-in capital.
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. Earnings
and profits distributed to shareholders on redemption of Fund shares ("tax
equalization") may be utilized by the Fund, to the extent permissible, as part
of the Fund's dividends paid deduction on its federal income tax return.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. The differences
primarily relate to passive foreign investment companies, foreign denominated
investments, and certain securities sold at a loss. As a result, net investment
income (loss) and net realized gain (loss) on investment transactions for a
reporting period may differ significantly from distributions during such period.
Accordingly, the Fund may periodically make reclassifications among certain of
its capital accounts without impacting the net asset value of the Fund.
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
24 - Scudder Emerging Markets Growth Fund
<PAGE>
Organization Costs. Costs incurred by the Fund in connection with its
organization have been deferred and are being amortized on a straight-line basis
over a five-year period.
Other. Investment security transactions are accounted for on a trade date basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis.
B. Purchases and Sales of Securities
For the six months ended April 30, 1998, purchases and sales of investment
securities (excluding short-term investments) aggregated $43,295,820 and
$31,924,812, respectively.
C. Related Parties
Effective December 31, 1997, Scudder, Stevens & Clark, Inc. ("Scudder") and The
Zurich Insurance Company ("Zurich"), an international insurance and financial
services organization, formed a new global investment organization by combining
Scudder's business with that of Zurich's subsidiary, Zurich Kemper Investments,
Inc. As a result of the transaction, Scudder changed its name to Scudder Kemper
Investments, Inc. ("Scudder Kemper" or the "Adviser"). The transaction between
Scudder and Zurich resulted in the termination of the Fund's Investment
Management Agreement with Scudder. However, a new Investment Management
Agreement (the "Management Agreement") between the Fund and Scudder Kemper was
approved by the Fund's Board of Directors and by the Fund's Shareholders. The
Management Agreement, which is effective December 31, 1997, is the same in all
material respects as the corresponding previous Investment Management Agreement,
except that Scudder Kemper is the new investment adviser to the Fund.
Under the Management Agreement with Scudder Kemper, the Fund pays the Adviser a
fee equal to an annual rate of 1.25% of the Fund's average daily net assets,
computed and accrued daily and payable monthly. As manager of the assets of the
Fund, the Adviser directs the investments of the Fund in accordance with its
investment objective, policies, and restrictions. The Adviser determines the
securities, instruments and other contracts relating to investments to be
purchased, sold or entered into by the Fund. In addition to portfolio management
services, the Adviser provides certain administrative services in accordance
with the Management Agreement. The Adviser has agreed not to impose all or a
portion of its management fee until February 28, 1998, in order to maintain the
annualized expenses of the Fund at not more than 2.00% of average daily net
assets. On March 1, 1998, the Advisor agreed to maintain the annualized expenses
of the Fund at 2.25% until August 31, 1998. For the six months ended April 30,
1998, the Adviser did not impose a portion of its management fee amounting to
$150,896, and the amount imposed amounted to $1,098,305.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six months ended April 30,
1998, the amount charged to the Fund by STC aggregated $35,732, of which $7,154
is unpaid at April 30, 1998.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six months
ended April 30, 1998, the amount charged to the Fund by SFAC aggregated $79,391,
of which $13,277 is unpaid at April 30, 1998.
25 - Scudder Emerging Markets Growth Fund
<PAGE>
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended April 30, 1998 the amount charged by SSC aggregated $253,666,
of which $39,813 is unpaid at April 30, 1998.
The Fund is one of several Scudder Funds (the "Underlying Funds") in which the
Scudder Pathway Series Portfolios (the "Portfolios") invest. In accordance with
the Special Servicing Agreement entered into by the Adviser, the Portfolios, the
Underlying Funds, SSC, SFAC, STC, and Scudder Investor Services, Inc., expenses
from the operation of the Portfolios are borne by the Underlying Funds based on
each Underlying Fund's proportionate share of assets owned by the Portfolios. No
Underlying Funds will be charged expenses that exceed the estimated savings to
each respective Underlying Fund. These estimated savings result from the
elimination of separate shareholder accounts which either currently are or have
potential to be invested in the Underlying Funds. For the six months ended April
30, 1998, the Special Servicing Agreement expense charged to the Fund amounted
to $122,978.
The Fund pays each Director not affiliated with the Adviser an annual retainer
plus specified amounts for attended board and committee meetings. For the six
months ended April 30, 1998, Directors' fees and expenses aggregated $27,603.
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.
26 - Scudder Emerging Markets Growth Fund
<PAGE>
Report of Independent Accountants
To the Board of Directors of Scudder International Fund, Inc. and the
Shareholders of Scudder Emerging Markets Growth Fund:
We have audited the accompanying statement of assets and liabilities of Scudder
Emerging Markets Growth Fund, including the investment portfolio, as of April
30, 1998, and the related statement of operations for the six months then ended,
the statements of changes in net assets for the six months then ended and for
the year ended October 31, 1997, and the financial highlights for the six months
ended April 30, 1998, for the year ended October 31, 1997 and for the period May
8, 1996 (commencement of operations) to October 31, 1996. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998 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 Emerging Markets Growth Fund as of April 30, 1998, the results of its
operations for the six months then ended, the changes in its net assets for the
six months then ended and for the year ended October 31, 1997 and the financial
highlights for the six months ended April 30, 1998, for the year ended October
31, 1997 and for the period May 8, 1996 (commencement of operations) to October
31, 1996, in conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 19, 1998
27 - Scudder Emerging Markets Growth Fund
<PAGE>
Officers and Directors
Daniel Pierce*
Chairman of the Board and Director
Nicholas Bratt*
President
Paul Bancroft III
Director; Venture Capitalist and
Consultant
Sheryle J. Bolton
Director; Chief Executive
Officer, Scientific Learning
Corporation
William T. Burgin
Director; General Partner,
Bessemer Venture Partners
Thomas J. Devine
Director; Consultant
Keith R. Fox
Director; President, Exeter
Capital Management
Corporation
William H. Gleysteen, Jr.
Director; Consultant; Guest
Scholar, Brookings Institute
William H. Luers
Director; President, The
Metropolitan Museum of Art
Wilson Nolen
Director; Consultant
Kathryn L. Quirk*
Director, Vice President and
Assistant Secretary
Robert W. Lear
Honorary Director;
Executive-in-Residence, Visiting
Professor, Columbia University
Graduate School of Business
Robert G. Stone, Jr.
Honorary Director; Chairman
Emeritus and Director, Kirby
Corporation
Elizabeth J. Allan*
Vice President
Irene T. Cheng*
Vice President
Joyce E. Cornell*
Vice President
Susan E. Dahl*
Vice President
Carol L. Franklin*
Vice President
Edmund B. Games, Jr.*
Vice President
Theresa Gusman*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Thomas F. McDonough*
Vice President, Secretary and
Treasurer
Sheridan P. Reilly*
Vice President
John R. Hebble*
Assistant Treasurer
Richard W. Desmond*
Assistant Secretary
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, Inc.
28 - Scudder Emerging Markets Growth Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series --
Premium Shares*
Managed Shares*
Scudder Government Money Market Series --
Managed Shares*
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--
Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**
Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**
U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment Fund
U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund***
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund***
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.
Industry Sector Funds
- ---------------------
Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan**+++ +++
(a variable annuity)
Education Accounts
- ------------------
Education IRA
UGMA/UTMA
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal Fund, Inc.
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed in order from
expected least risk to most risk. Certain Scudder funds may not be available for
purchase or exchange. +A portion of the income from the tax-free funds may be
subject to federal, state, and local taxes. *A class of shares of the Fund.
**Not available in all states. ***Only the Scudder Shares of the Fund are part
of the Scudder Family of Funds. +++ +++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 Kemper Investments, Inc., are traded on the New York Stock Exchange and,
in some cases, on various other stock exchanges.
29 - Scudder Emerging Markets Growth Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
A convenient investment program in which money is Lets you purchase Scudder fund shares
electronically debited from your bank account monthly to electronically, avoiding potential mailing delays;
regularly purchase fund shares and "dollar cost average" money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from a previously designated bank
fewer when it's higher, which can reduce your average account.
purchase price over time.
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- http://funds.scudder.com
1-800-343-2890
Scudder Electronic Account Services: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you previously designated.
Distributions Direct
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
30 - Scudder Emerging Markets Growth Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 8,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
500 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM)
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load
Brokerage account already reserved for them, with Scudder funds but want ongoing professional assistance in
no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly
Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for
individuals investing $100,000 or more.
Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a
program offered by Scudder Investor Services, Inc., Adviser.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Investor Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Investor Centers. Check for an Investor Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
</TABLE>
31 - Scudder Emerging Markets Growth Fund
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc., is one of the largest and most experienced
investment management oganizations worldwide, managing more than $200 billion in
assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts. It is one of the ten largest mutual fund companies in the
U.S.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 79
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Group. As a result, Zurich's subsidiary, Zurich Kemper Investments,
Inc., with 50 years of mutual fund and investment management experience, was
combined with Scudder. Headquartered in New York, Scudder Kemper Investments
offers a full range of investment counsel and asset management capabilities,
based on a combination of proprietary research and disciplined, long-term
investment strategies. With its global investment resources and perspective,
the firm seeks opportunities in markets throughout the world to meet the needs
of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Group. The Zurich Group is an internationally recognized leader in
financial services, including property/casualty and life insurance, reinsurance,
and asset management.
This information must be preceded or accompanied by a
current prospectus.
Portfolio changes should not be considered recommendations
for action by individual investors.
SCUDDER
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