SCUDDER INTERNATIONAL FUND INC, 497, 1998-03-10

SCUDDER INTERNATIONAL FUND INC
497, 1998-03-10

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SCUDDER PURE NO-LOAD(TM) FUNDS (logo)

A Collection Of
Prospectuses
For Four
Scudder Emerging
Market Funds

This Outer Cover Not Part of Prospectus

<PAGE>

This combined prospectus sets forth concisely the information a prospective
investor should know before investing in the following open-end funds: Scudder
Emerging Markets Growth Fund, Scudder Latin America Fund and Scudder Pacific
Opportunities Fund, each a non-diversified series of Scudder International Fund,
Inc.; and Scudder Emerging Markets Income Fund, a diversified series of Scudder
Global Fund, Inc. Please retain it for future reference.

Scudder Emerging Markets Income Fund invests predominantly in lower quality
bonds, commonly referred to as junk bonds. Bonds of this type are considered to
be speculative with regard to the payment of interest and return of principal.
They carry greater risks, including the risk of default, than other debt
securities. Purchasers should carefully assess the risks associated with an
investment in this Fund. Refer to "Additional information about policies and
investments" and "Special risk considerations" for further information.

If you require more detailed information, Statements of Additional Information
dated March 1, 1998, as amended from time to time, may be obtained without
charge by writing Scudder Investor Services, Inc., Two International Place,
Boston, MA 02110-4103 or calling 1-800-225-2470. The Statements, which are
incorporated by reference into this prospectus, have been filed with the
Securities and Exchange Commission and are available along with other related
materials on the SEC's Internet Web site (http://www.sec.gov).

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

Contents--see page 8.

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

SCUDDER (logo)

Scudder Emerging Markets
Growth Fund

Scudder Latin America Fund

Scudder Pacific Opportunities
Fund

Scudder Emerging Markets
Income Fund
- ------------------------------
March 1, 1998

Four pure no-load(TM) (no sales charges) mutual funds offering a broad range of
investment objectives.

<PAGE>

Expense information

How to compare a Scudder Family of Funds pure no-load(TM) fund

This information is designed to help you understand the various costs and
expenses of investing in Scudder funds. By reviewing this table and those in
other mutual funds' prospectuses, you can compare each Fund's fees and expenses
with those of other funds. With Scudder's pure no-load(TM) funds, you pay no
commissions to purchase or redeem shares, or to exchange from one fund to
another. As a result, all of your investment goes to work for you.

1) Shareholder tranaction expenses: Expenses charged directly to your
individual account in a Fund for various transactions.
<TABLE>
<CAPTION>
Scudder Emerging Scudder Latin
Markets Growth Fund America Fund
------------------- ------------
<S> <C> <C>
Sales commissions to purchase shares (sales load) NONE NONE
Commissions to reinvest dividends NONE NONE
Deferred sales charge NONE NONE
Redemption fees payable to the Fund 2.00%* NONE*
Exchange fees payable to the Fund 2.00%* NONE

2) Annual Fund operating expenses: Expenses paid by a Fund before it
distributes its net investment income, expressed as a percentage of its
average daily net assets for the fiscal year ended October 31, 1997.

Investment management fee (after waiver, if applicable) 1.17%** 1.25%
12b-1 fees NONE NONE
Other expenses (after reimbursements, if applicable) 1.08%** 0.64%
----- -----
Total Fund operating expenses (after waiver and reimbursements) 2.25%** 1.89%
===== =====

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

One year $ 23 $ 19
Three years 70 59
Five years 120 102
Ten years 258 221
</TABLE>

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

* You may redeem by writing or calling the Funds. If you wish to receive your
redemption proceeds via wire, there is a $5 wire service fee. For
additional information regarding Scudder Emerging Markets Growth Fund,
please refer to "Transaction information--Redeeming shares--Exchanging and
redeeming shares from Scudder Emerging Markets Growth Fund." There may be a
2% fee retained by Scudder Emerging Markets Growth Fund which is imposed
only on redemptions or exchanges of shares held less than one year. For
additional information regarding Scudder Latin America Fund, please refer
to "Transaction information--Redeeming shares."

** The Adviser and certain of its subsidiaries agreed not to impose all or a
portion of its management fee until February 28, 1998, in order to maintain
the annualized expenses of Scudder Emerging Markets Growth Fund at not more
than 2.00% of average daily net assets. Due to such waiver and
reimbursements for the fiscal year ended October 31, 1997, the total
annualized expenses of the Fund did not exceed 2.00% of average daily net
assets. From March 1, 1998, until August 31, 1998, the Adviser and certain
of its subsidiaries have agreed to waive and/or reimburse all or portions
of their fees and expenses payable by the Fund to the extent necessary so
that the total annualized expenses of the Fund do not exceed 2.25% of
average daily net assets. Expenses shown above are restated to reflect what
the Fund would have paid during the fiscal year ended October 31, 1997 if
expenses had been maintained at 2.25% throughout the period. If the Adviser
and its subsidiaries had not agreed to waive and/or reimburse all or
portions of their fees and expenses, Fund expenses would have been:
investment management fee 1.25%, other expenses 1.08% and total operating
expenses 2.33% for the fiscal year ending October 31, 1997.

2
<PAGE>

Expense information

How to compare a Scudder Family of Funds pure no-load(TM) fund

1) Shareholder transaction expenses: Expenses charged directly to your
individual account in a Fund for various transactions.
<TABLE>
<CAPTION>

Scudder Scudder
Pacific Emerging
Opportunities Markets
Fund Income Fund
---- ----------
<S> <C> <C>
Sales commissions to purchase shares (sales load) NONE NONE
Commissions to reinvest dividends NONE NONE
Deferred sales charge NONE NONE
Redemption fees NONE* NONE*
Fees to exchange shares NONE NONE

2) Annual Fund operating expenses: Expenses paid by a Fund before it
distributes its net investment income, expressed as a percentage or its
average daily net assets for the fiscal years ended October 31, 1997 for
Scudder Pacific Opportunities Fund and Scudder Emerging Markets Income
Fund.

Investment management fee 1.10% 1.00%
12b-1 fees NONE NONE
Other expenses 0.84% 0.49%
----- -----
Total Fund operating expenses 1.94% 1.49%
===== =====
Example

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

One year $ 20 $ 15
Three years 61 47
Five years 105 81
Ten years 226 178
</TABLE>

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

3
<PAGE>

Financial highlights

Scudder Emerging Markets Growth Fund

The following table includes selected data for a share outstanding throughout
the period (a) and other performance information derived from the financial
statements.

If you would like more detailed information concerning the Fund's performance,
a complete portfolio listing and audited financial statements are available in
the Fund's Annual Report dated October 31, 1997, which may be obtained without
charge by writing or calling Scudder Investor Services, Inc.

<TABLE>
<CAPTION>
For the Period
May 8, 1996
Year (commencement) of
Ended operations) to
October 31, October 31,
1997 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
---------------------------------------------
Net asset value, beginning of period .......................................... $12.85 $12.00
---------------------------------------------
Income from investment operations:
Net investment income (loss)................................................... .02 (.02)
Net realized and unrealized gain on investments ............................... 1.67 .86
---------------------------------------------
Total from investment operations .............................................. 1.69 .84
---------------------------------------------
Less distributions from net investment income ................................. (.03) --
Redemption fees ............................................................... .05 .01
---------------------------------------------
Net asset value, end of period ................................................ $14.56 $12.85
---------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Return (%) (c) (d) ...................................................... 13.51 7.08**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ........................................ 220 76
Ratio of operating expenses, net to average daily net assets (%) .............. 2.00 2.00*
Ratio of operating expenses before expense reductions, to average daily net
assets (%) ................................................................. 2.33 3.79*
Ratio of net investment income (loss) to average daily net assets (%) ......... .11 (.32)*
Portfolio turnover rate (%) ................................................... 61.5 19.5*
Average commission rate paid (b) .............................................. $.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

4
<PAGE>

Financial highlights

Scudder Latin America Fund

The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the audited
financial statements.

<TABLE>
<CAPTION>
FOR THE PERIOD
DECEMBER 8, 1992
(COMMENCEMENT
YEARS ENDED OCTOBER 31, OF OPERATIONS) TO
OCTOBER 31,
1997(a) 1996(a) 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------
Net asset value, beginning of period ............ $20.63 $16.22 $24.44 $18.41 $12.00
--------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) .................... .26 .25 .09 (.03) .03
Net realized and unrealized gain (loss) on
investment transactions ....................... 4.49 4.30 (7.62) 6.10 6.36
--------------------------------------------------------------------------
Total from investment operations ................ 4.75 4.55 (7.53) 6.07 6.39
--------------------------------------------------------------------------
Less distributions:
From net investment income ...................... (.26) (.15) -- -- --
In excess of net investment income .............. -- -- -- (.06) --
From net realized gains on investment transactions -- -- (.73) (.06) --
--------------------------------------------------------------------------
Total distributions ............................. (.26) (.15) (.73) (.12) --
--------------------------------------------------------------------------
Redemption fees (c).............................. -- .01 .04 .08 .02
--------------------------------------------------------------------------
Net asset value, end of period .................. $25.12 $20.63 $ 16.22 $24.44 $18.41
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (%) ................................ 23.25 28.31(d) (30.96)(d) 33.43(d) 53.42(d)**
Ratios and Supplemental Data
Net assets, end of period ($ millions) .......... 883 622 519 809 261
Ratio of operating expenses, net to average
daily net assets (%) .......................... 1.89 1.96 2.08 2.01 2.00*
Ratio of operating expenses before expense
reductions, to average daily net assets (%) ... 1.89 1.96 2.11 2.05 2.69*
Ratio of net investment income (loss) to average
daily net assets (%) .......................... .98 1.32 .52 (.20) .44*
Portfolio turnover rate (%) ..................... 41.8 22.4 39.5 22.4 4.6*
Average commission rate paid (b) ................ $.0002 $.0001 $ -- $ -- $ --
</TABLE>

(a) Based on monthly average of 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 October 31, 1996.
(c) Until September 5, 1996, upon the redemption or exchange of shares held by
shareholders for less than one year, a fee of 2% was assessed and retained
by the Fund for the benefit of the remaining shareholders
(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

5
<PAGE>

Financial highlights

Scudder Pacific Opportunities Fund

The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the audited
financial statements.

<TABLE>
<CAPTION>
For the Period
December 8,
1992
(commencement
of operations) to
Years Ended October 31, October 31,
1997(a) 1996(a) 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------
Net asset value, beginning of period ..... $15.93 $15.59 $17.57 $16.21 $12.00
-----------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) ............. (.04) .02 .10 .04 .04
Net realized and unrealized gain
(loss) on investment transactions ..... (4.50) .42 (1.98) 1.41 4.17
-----------------------------------------------------------------------------
Total from investment operations ......... (4.54) .44 (1.88) 1.45 4.21
-----------------------------------------------------------------------------
Less distributions from:
Net investment income .................... (.01) (.10) (.10) (.08) --
Net realized gains on investment
transactions .......................... -- -- -- (.01) --
-----------------------------------------------------------------------------
Total distributions ...................... (.01) (.10) (.10) (.09) --
-----------------------------------------------------------------------------

-----------------------------------------------------------------------------
Net asset value, end of period ........... $11.38 $15.93 $15.59 $17.57 $16.21
- --------------------------------------------------------------------------------------------------------------------------
Total Return (%) ......................... (28.52) 2.76 (10.73) 8.97 35.08**
Ratios and Supplemental Data
Net assets, end of period
($ millions) .......................... 147 329 384 499 270
Ratio of operating expenses, net to
average daily net assets (%) .......... 1.94 1.75 1.74 1.81 1.75*
Ratio of operating expenses before
expense reductions, to average
daily net assets (%) .................. 1.94 1.75 1.74 1.81 2.90*
Ratio of net investment income
(loss) to average daily net
assets (%) ............................ (.22) .12 .65 .28 1.41*
Portfolio turnover rate (%) .............. 97.2 95.4 64.0 38.5 9.9*
Average commission rate paid (b) ......... $.0094 $.0148 -- -- --
</TABLE>

(a) Based on monthly average shares outstanding during the period.
(b) Average commission rate paid per share of common and preferred stocks is
calculated for periods ending on or after October 31, 1996.
* Annualized
** Not annualized

6
<PAGE>

Financial highlights

Scudder Emerging Markets Income Fund

The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the audited
financial statements.

<TABLE>
<CAPTION>
For the Period
December 31,
1993
(commencement
of operations) to
Years Ended October 31, October 31,
1997 (a) 1996 (a) 1995 1994
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
----------------------------------------------
Net asset value, beginning of period ......................... $12.98 $10.26 $11.05 $12.00
----------------------------------------------
Income from investment operations:
Net investment income ........................................ 1.06 1.20 1.14 0.60
Net realized and unrealized gain (loss) on
investments ............................................... .46 2.71 (.82) (1.04)
----------------------------------------------
Total from investment operations ............................. 1.52 3.91 .32 (.44)
----------------------------------------------
Less distributions from:
Net investment income ..................................... (1.10) (1.19) (1.11) (.51)
Net realized gain on investment transactions .............. (1.18) -- -- --
----------------------------------------------
Total distributions .......................................... (2.28) (1.19) (1.11) (.51)
----------------------------------------------

----------------------------------------------
Net asset value, end of period ............................... $12.22 $12.98 $10.26 $11.05
- -------------------------------------------------------------------------------------------------------------
Total Return (%) (b) ......................................... 12.34 39.78 3.46 (3.54)**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ....................... 324 305 169 95
Ratio of operating expenses, net to average daily
net assets (%) ............................................ 1.49 1.44 1.50 1.50*
Ratio of operating expense before expense
reductions, to average daily net assets (%) ............... 1.49 1.45 1.68 2.23*
Ratio of net investment income to average daily
net assets (%) ............................................ 8.03 10.05 12.83 9.17*
Portfolio turnover rate (%) .................................. 409.5 430.0(c) 302.2 180.6*
</TABLE>

(a) Based on monthly average shares outstanding during the period.
(b) Total returns are higher due to maintenance of Fund expenses.
(c) Economic and market conditions necessitated more active trading, resulting
in a higher portfolio turnover rate.
* Annualized
** Not annualized

7
<PAGE>

A message from the President

Scudder Kemper Investments, Inc., investment adviser to the Scudder Family of
Funds, is one of the largest and most experienced investment management
organizations worldwide, managing more than $200 billion in assets globally for
mutual fund investors, retirement and pension plans, institutional and corporate
clients, and private family and individual accounts. It is one of the ten
largest mutual fund companies in the U.S.

We offered America's first no-load mutual fund in 1928, and today the Scudder
Family of Funds includes over 45 no-load mutual fund portfolios. We also manage
the mutual funds in a special program for the American Association of Retired
Persons, as well as the fund options available through Scudder Horizon Plan, a
tax-advantaged variable annuity. We also advise The Japan Fund, and numerous
other open and closed-end funds that invest in this country and other countries
around the world.

The Scudder Family of Funds is designed to make investing easy and less costly.
It includes money market, tax free, income and growth funds as well as IRAs,
401(k)s, Keoghs and other retirement plans.

Services available to shareholders include toll-free access to the professional
service representatives of Scudder Investor Relations, easy exchange among
funds, shareholder reports, informative newsletters and the walk-in convenience
of Scudder Investor Centers.

The Scudder Family of Funds includes those Funds, or classes of Funds, advised
by Scudder Kemper Investments, Inc., that are offered without commissions to
purchase or redeem shares or to exchange from one fund to another. There are no
12b-1 fees either, which many other funds now charge to support their marketing
efforts. All of your investment goes to work for you. We look forward to
welcoming you as a shareholder.

/s/Edmond D. Villani

Scudder Mutual Funds

o Scudder Emerging Markets Growth Fund seeks long-term growth of capital
primarily through equity investment in emerging markets around the globe.

o Scudder Latin America Fund seeks long-term capital appreciation through
investment primarily in the securities of Latin American issuers.

o Scudder Pacific Opportunities Fund seeks long-term growth of capital
through investment primarily in the equity securities of Pacific Basin
companies, excluding Japan.

o Scudder Emerging Markets Income Fund seeks to provide investors with high
current income and, secondarily, seeks long-term capital appreciation.

Contents

Investment characteristics 9
Scudder Emerging Markets Growth Fund 9
Scudder Latin America Fund 11
Scudder Pacific Opportunities Fund 14
Scudder Emerging Markets Income Fund 15
Investment experience 19
Additional information about policies
and investments 19
Distribution and performance information 28
Fund organization 30
Transaction information 31
Shareholder benefits 36
Purchases 39
Exchanges and redemptions 40
Appendix 42
Investment products and services 44
How to contact Scudder 45

8
<PAGE>

Investment characteristics

Scudder Emerging Markets Growth Fund, Scudder Latin America Fund, Scudder
Pacific Opportunities Fund and Scudder Emerging Markets Income Fund (the
"Funds") are mutual funds advised by Scudder, Stevens & Clark, Inc. (the
"Adviser"). The prospectuses of the four Funds are presented together here so
that you can understand their important differences and decide which Fund or
combination of Funds is most suitable for your investment needs.

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

Scudder Emerging Markets Growth Fund

Investment objective and policies

Scudder Emerging Markets Growth Fund, a non-diversified series of Scudder
International Fund, Inc., seeks long-term growth of capital primarily through
equity investment in emerging markets around the globe.

The Fund will invest in the Asia-Pacific region, Latin America, less developed
nations in Europe, the Middle East and Africa, focusing investments in countries
and regions where there appears to be the best value and appreciation potential,
subject to considerations of portfolio diversification and liquidity. In the
opinion of the Adviser, many emerging nations around the globe are likely to
continue to experience economic growth rates well in excess of those found in
the U.S., Japan and other developed markets. In the opinion of the Adviser, this
economic growth should translate into strong stock market performance over the
long term.

While the Fund offers the potential for substantial price appreciation over
time, it also involves above-average investment risk. The Fund is designed as a
long-term investment and not for short-term trading purposes. It should not be
considered a complete investment program. The Fund's net asset value (price) can
fluctuate significantly with changes in stock market levels, political
developments, movements in currencies, investment flows and other factors. To
encourage a long-term investment horizon, a 2% redemption and exchange fee,
described more fully below, is payable to the Fund for the benefit of remaining
shareholders on shares held less than one year.

Investments

At least 65% of the Fund's total assets will be invested in the equity
securities of emerging market issuers. The Fund considers "emerging markets" to
include any country that is defined as an emerging or developing economy by any
one of the International Bank for Reconstruction and Development (i.e., the
World Bank), the International Finance Corporation or the United Nations or its
authorities. The Fund intends to allocate its investments among at least three
countries at all times, and does not expect to concentrate in any particular
industry. There is no limitation, however, on the amount the Fund can invest in
a specific country or region of the world.

The Fund deems an issuer to be located in an emerging market if:

o the issuer is organized under the laws of an emerging market country;

o the issuer's principal securities trading market is in an emerging market;
or

o at least 50% of the issuer's non-current assets, capitalization, gross
revenue or profit in any one of the two most recent fiscal years is derived
(directly or indirectly through subsidiaries) from assets or activities
located in emerging markets.

9
<PAGE>

The Fund's equity investments are common stock, preferred stock (either
convertible or non-convertible), depository receipts and warrants. Equity
securities may also be purchased through rights. Securities may be listed on
securities exchanges, traded over-the-counter, or have no organized market. The
Fund may invest in illiquid and restricted securities.

The Fund may invest up to 35% of its total assets in emerging market and
domestic debt securities if the Adviser determines that the capital appreciation
of debt securities is likely to equal or exceed the capital appreciation of
equity securities. Debt instruments held by the Fund take the form of bonds,
notes, bills, debentures, convertible securities, warrants, bank obligations,
short-term paper, loan participations, loan assignments, and trust interests.

Although Scudder Emerging Markets Growth Fund invests in debt securities which
are predominantly denominated in U.S. dollars, the Fund may also invest in debt
securities denominated in foreign currencies. Such securities may be rated below
investment-grade; that is, rated below Baa by Moody's Investors Service, Inc.
("Moody's") or below BBB by Standard & Poor's ("S&P"), or may be unrated but
equivalent to those rated below investment-grade by internationally recognized
rating agencies such as S&P or Moody's.

Under normal market conditions, the Fund may invest up to 35% of its assets in
equity securities of issuers in the U.S. and other developed markets. In
evaluating the appropriateness of such investments for the Fund, the Adviser
takes into account the issuer's involvement in the emerging markets and the
potential impact of that involvement on business results. The Fund may also
purchase securities on a when-issued or forward delivery basis, enter into
reverse repurchase agreements and engage in various strategic transactions,
including derivatives.

For temporary defensive purposes, the Fund may hold, without limit, debt
instruments as well as cash and cash equivalents, including foreign and domestic
money market instruments, short-term government and corporate obligations, and
repurchase agreements. It is impossible to accurately predict how long such
alternative strategies will be utilized. The Fund may also invest in closed-end
investment companies investing primarily in the emerging markets. To the extent
the Fund invests in such closed-end investment companies, shareholders will
incur certain duplicate fees and expenses. Such closed-end investment company
investments will generally only be made when market access or liquidity
restricts direct investment in the market.

More information about the investments and policies of the Fund is provided
under "Additional information about policies and investments."

Investment strategy

The Adviser takes a top-down approach to evaluating investments for the Fund,
using extensive fundamental and field research. The process begins with a study
of the economic fundamentals of each country and region as well as an
examination of regional themes such as growing trade, increases in direct
foreign investment and deregulation of capital markets. Understanding regional
themes allows the Adviser to identify the industries and companies most likely
to benefit from the political, social and economic changes taking place in a
given region of the world.

Within a market, the Adviser looks for individual companies with exceptional
business prospects, which may be due to market dominance, unique franchises,
high growth potential, or innovative services, products or technologies. The
Adviser seeks to identify companies with favorable potential for appreciation
through growing earnings or greater market recognition over time. While these
companies may be among the largest

10
<PAGE>

in their local markets, they may be small by the standards of U.S. stock market
capitalization.

Why invest in the Fund?

This Fund is designed as a convenient, low cost way for investors to participate
in the growth opportunities afforded by a broad range of emerging markets.
Through one actively managed, pure no-load(TM) fund, investors can tap into
developing regions throughout the world, without the burden of deciding where
and when to invest on their own.

The Adviser believes the emerging markets will continue to experience some of
the fastest rates of economic growth over the next decade and continue to offer
attractive stock market potential. In the Pacific Rim and other parts of Asia,
economies are typically characterized by large, relatively low cost labor pools,
high savings rates and worldwide demand for their products. The Adviser believes
that the economies of the Pacific Basin, although experiencing many economic
challenges currently, could return to above average rates of economic growth
within a few years. In Latin America, the region has benefited from governmental
efforts to reduce inflation and budget deficits, invest in much needed
infrastructure, deregulate or privatize industry and liberalize their capital
markets. Eastern European countries are experiencing strong economic growth as
capitalism takes hold. Many African and Middle Eastern countries are also
benefiting from the shift to market based economies and from improved fiscal and
monetary discipline. These regions, as a whole, are attracting a growing pool of
foreign investment and benefiting from growing regional trade, which is helping
fuel rapid economic growth. Stock markets in many of these countries have
outperformed our own and those of the other more developed countries.

Investors should be aware that participation in the Fund involves special
considerations and risks not typically associated with a mutual fund investing
principally in the securities of U. S. issuers. However, movements in the Fund's
share price may have a low correlation with movements in the U.S. markets, so
adding shares of the Fund to an investor's portfolio may, over time, increase
the investor's overall diversification, and reduce overall risk.

Investing directly in emerging market securities is usually impractical for
individual investors. Investors frequently find it difficult to arrange
purchases and sales, obtain current market, industry or corporate information,
hold securities for safekeeping, and convert profits from foreign currencies to
U.S. dollars. The Fund offers professional management and administrative
convenience to shareholders wishing to invest in these more dynamic, emerging
markets of the world.

Scudder Latin America Fund

Investment objective and policies

Scudder Latin America Fund, a non-diversified series of Scudder International
Fund, Inc., seeks long-term capital appreciation through investment primarily in
the securities of Latin American issuers.

The Fund seeks to benefit from economic and political trends emerging throughout
Latin America. These trends are supported by governmental initiatives designed
to promote freer trade and market-oriented economies. The Adviser believes that
efforts by Latin American countries to, among other things, reduce government
spending and deficits, control inflation, lower trade barriers, stabilize
currency exchange rates, increase foreign and domestic investment and privatize
state-owned companies, will set the stage for attractive investment returns over
time.

The Fund involves above-average investment risk. It is designed as a long-term
investment and not for short-term trading purposes, and should not be considered
a complete investment program.

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Investments

At least 65% of the Fund's total assets will be invested in the securities of
Latin American issuers, and 50% of the Fund's total assets will be invested in
Latin American equity securities. To meet its objective to provide long-term
capital appreciation, the Fund normally invests at least 65% of its total assets
in equity securities. For purposes of this prospectus, Latin America is defined
as Mexico, Central America, South America and the Spanish-speaking islands of
the Caribbean. The Fund defines securities of Latin American issuers as follows:

o Securities of companies organized under the laws of a Latin American
country or for which the principal securities trading market is in Latin
America;

o Securities issued or guaranteed by the government of a country in Latin
America, its agencies or instrumentalities, political subdivisions or the
central bank of such country;

o Securities of companies, wherever organized, when at least 50% of an
issuer's non-current assets, capitalization, gross revenue or profit in any
one of the two most recent fiscal years represents (directly or indirectly
through subsidiaries) assets or activities located in Latin America; or

o Securities of Latin American issuers, as defined above, in the form of
depositary shares.

Although the Fund may participate in markets throughout Latin America, under
present conditions the Fund expects to focus its investments in Argentina,
Brazil, Chile, Colombia, Mexico and Peru. In the opinion of the Adviser, these
six countries offer the most developed capital markets in Latin America. The
Fund may invest in other countries in Latin America when the Adviser deems it
appropriate. The Fund intends to allocate investments among at least three
countries at all times and does not expect to concentrate investments in any
particular industry.

The Fund's equity investments are common stock, preferred stock (either
convertible or non-convertible), depositary receipts and warrants. These may be
illiquid securities and may also be purchased through rights. Securities may be
listed on securities exchanges, traded over-the-counter, or have no organized
market.

The Fund may invest in debt securities when management anticipates that the
potential for capital appreciation is likely to equal or exceed that of equity
securities. Capital appreciation in debt securities may arise from a favorable
change in relative foreign exchange rates, in relative interest rate levels, or
in the creditworthiness of issuers. Receipt of income from such debt securities
is incidental to the Fund's objective of long-term capital appreciation. Most
debt securities in which the Fund invests are not rated. When debt securities
are rated, it is expected that such ratings will generally be below investment
grade; that is, rated below Baa by Moody's or below BBB by S&P. For more
information about the debt securities in which the Fund may invest, including
risks, please see "Additional information about policies and investments."

The Fund may invest up to 35% of its total assets in the equity securities of
U.S. and other non-Latin American issuers. In evaluating non-Latin American
investments, the Adviser seeks investments where an issuer's Latin American
business activities and the impact of developments in Latin America may have a
positive effect on the issuer's business results.

In selecting companies for investment, the Fund typically evaluates industry
trends, a company's financial strength, its competitive position in domestic and
export markets, technology, recent developments and profitability, together with
overall growth prospects. Other considerations generally include quality and
depth of management, government regulation, and availability and cost of labor
and raw materials. Investment decisions are made without regard to

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<PAGE>

arbitrary criteria as to minimum asset size, debt-equity ratios or dividend
history of portfolio companies.

The allocation between equity and debt, and among countries in Latin America,
varies based on a number of factors, including?: expected rates of economic and
corporate profit growth; past performance and current and comparative valuations
in Latin American capital markets; the level and anticipated direction of
interest rates; changes or anticipated changes in Latin American government
policy; and the condition of the balance of payments and changes in the terms of
trade. The Fund, in seeking undervalued markets or individual securities, also
considers the effects of past economic crises or ongoing financial and political
uncertainties.

To provide for redemptions, or in anticipation of investment in Latin American
securities, the Fund may hold cash or cash equivalents (in U.S. dollars or
foreign currencies) and other short-term securities, including money market
securities denominated in U.S. dollars or foreign currencies. The Fund may
assume a defensive position when, due to political or other factors, the Adviser
determines that opportunities for capital appreciation in Latin American markets
would be significantly limited over an extended period or that investing in
those markets poses undue risk to investors. The Fund may, for temporary
defensive purposes, invest without limit in cash or cash equivalents and money
market instruments or invest all or a portion of its assets in securities of
U.S. or other non-Latin American issuers when the Adviser deems such a position
advisable in light of economic or market conditions. It is impossible to
accurately predict how long such alternative strategies may be utilized. The
Fund may also invest in closed-end investment companies investing primarily in
Latin America. In addition, the Fund may invest in loan participations and
assignments, when-issued securities, convertible securities, illiquid and
restricted securities, repurchase agreements and reverse repurchase agreements,
and may engage in strategic transactions, including derivatives. See "Additional
information about policies and investments" for more information about these
investment techniques.

Why invest in the Fund?

The Fund seeks to take advantage of evolving economic and political trends in
Latin America. These trends are largely a result of efforts by Latin American
governments to institute democratic and market-oriented economic reforms.

Although the pace and success in accomplishing these objectives vary
significantly throughout Latin America, there has been a general trend in recent
years towards reducing government's role in economic affairs and creating a
business environment conducive to investment and growth. To take better
advantage of Latin America's abundant natural resources and other strengths,
many countries in the region have established policies to control inflation,
reduce government deficits and external debt, stabilize currency exchange rates,
reduce taxes and interest rates, and modernize and open securities markets.
Governments have also privatized state-owned enterprises, including telephone
companies, utilities, banks, petrochemical concerns and railroads, and are
beginning to invest heavily in infrastructure, which is necessary for a strong
economy. In some Latin American countries these initiatives have already led to
more stable economic conditions, stronger economic growth, reduction of capital
outflows, and increased interest by foreign investors in Latin America, all of
which have helped boost capital market returns in recent years.

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<PAGE>

long-term investment horizon, the Fund offers the potential for substantial
capital appreciation over time. See "Additional information about policies and
investments--Risk factors."

The Fund is the first pure no-load fund to invest in Latin America.

Scudder Pacific Opportunities Fund

Investment objective and policies

Scudder Pacific Opportunities Fund, a non-diversified series of Scudder
International Fund, Inc., seeks long-term growth of capital through investment
primarily in the equity securities of Pacific Basin companies, excluding Japan.
The Fund's investment program focuses on the smaller, emerging markets in this
region of the world. The Fund is appropriate for no-load investors seeking to
benefit from economic growth in the Pacific Basin, but who do not want direct
exposure to the Japanese market. An investment in the Fund entails above-average
investment risk.

Investments

The Fund invests, under normal market conditions, at least 65% of its total
assets in the equity securities of Pacific Basin companies. Pacific Basin
countries include Australia, the Peoples Republic of China, India, Indonesia,
Malaysia, New Zealand, the Philippines, Sri Lanka, Pakistan and Thailand, as
well as Hong Kong, Singapore, South Korea and Taiwan--the so-called "four
tigers." The Fund may invest in other countries in the Pacific Basin when their
markets become sufficiently developed. The Fund will not, however, invest in
Japanese securities. The Fund intends to allocate investments among at least
three countries at all times.

The Fund defines securities of Pacific Basin companies as follows:

o Securities of companies organized under the laws of a Pacific Basin country
or for which the principal securities trading market is in the Pacific
Basin; or

o Securities of companies, wherever organized, when at least 50% of a
company's non-current assets, capitalization, gross revenue or profit in
any one of the two most recent fiscal years represents (directly or
indirectly through subsidiaries) assets or activities located in the
Pacific Basin.

The Fund's equity investments are common stock, preferred stock (either
convertible or non-convertible), depositary receipts and warrants. These may be
illiquid securities. Equity securities may also be purchased through rights.
Securities may be listed on securities exchanges, traded over-the-counter or
have no organized market.

The Fund may invest up to 35% of its total assets in foreign and domestic debt
securities if the Adviser determines that the capital appreciation of debt
securities is likely to equal or exceed the capital appreciation of equity
securities. The Fund may purchase bonds rated Aaa, Aa or A by Moody's, or AAA,
AA or A by S&P or, if unrated, of equivalent quality as determined by the
Adviser. Should the rating of a security in the Fund's portfolio be downgraded,
the Adviser will determine whether it is in the best interest of the Fund to
retain or dispose of such security.

Under normal market conditions, the Fund may invest up to 35% of its assets in
equity securities of U.S. and other non-Pacific Basin issuers (excluding Japan).
In evaluating non-Pacific Basin investments, the Adviser seeks investments where
an issuer's Pacific Basin business activities and the impact of developments in
the Pacific Basin may have a positive effect on the issuer's business results.
The Fund may also purchase shares of closed-end investment companies that invest
primarily in the Pacific Basin. In addition, the Fund may invest in when-issued
securities, convertible securities, illiquid and restricted securities and
reverse repurchase agreements, and may engage in strategic transactions,

14
<PAGE>

including derivatives. For temporary defensive purposes, the Fund may hold
without limit debt instruments as well as cash and cash equivalents, including
foreign and domestic money market instruments, short-term government and
corporate obligations, and repurchase agreements when the Adviser deems such a
position advisable in light of economic or market conditions. It is impossible
to accurately predict how long such alternative strategies may be utilized. More
information about investment techniques is provided under "Additional
information about policies and investments."

Investment strategy

The Adviser seeks to identify companies with favorable potential for
appreciation through growing earnings or market recognition over time. While
these companies may be among the largest in their local markets, they may be
small by the standards of U.S. market capitalization.

The Adviser evaluates investments for the Fund from both a macroeconomic and a
microeconomic perspective, using extensive field research. Macroeconomic
research includes a study of the economic fundamentals of each country and an
examination of regional themes such as growing trade, increases in direct
foreign investment and deregulation of capital markets. Understanding regional
themes allows the Adviser to identify the industries and sectors most likely to
benefit from the political, social and economic changes taking place across the
Pacific Basin. Microeconomic analysis identifies individual companies with
exceptional business prospects, which may be due to market dominance, unique
franchises, high growth potential, or innovative services, products or
technologies.

Why invest in the Fund?

The Fund is designed for investors wishing to participate in the investment
opportunities afforded by the Asian markets in the Pacific Basin. The Adviser
believes that the economies of the Pacific Basin, although experiencing many
economic challenges currently, could return to above-average rates of economic
growth within a few years. These economies are generally characterized by large,
hard-working labor pools, a well-educated and growing middle class, high savings
rates and a diverse group of entrepreneur companies. The Adviser will look for
companies with sound balance sheets, low cost structures, healthy cash flow,
U.S. dollar earnings, and strong competitive positions.

The Fund involves above-average risk. It is designed as a long-term investment
and not for short-term trading purposes, and should not be considered a complete
investment program. However, movements in the Fund's share price may have a low
correlation with movements in the U.S. markets, so adding shares of the Fund to
an investor's portfolio may increase the investor's portfolio diversification,
and moderate overall portfolio risk.

Investing directly in foreign securities is usually impractical for individual
investors. Investors frequently find it difficult to arrange purchases and
sales, obtain current market, industry or corporate information, hold securities
for safekeeping and convert profits from foreign currencies to U.S. dollars. The
Fund manages these tasks for the investor. The Adviser has had many years of
experience in dealing in foreign markets and believes the Fund affords a
convenient and cost-effective method of investing in the more dynamic,
developing countries in the Pacific Basin region. See "Additional information
about policies and investments--Risk factors."

Scudder Emerging Markets Income Fund

Investment objectives and policies

Scudder Emerging Markets Income Fund, a non-diversified series of Scudder Global
Fund, Inc., has dual investment objectives. The Fund's primary investment
objective is to provide investors with high current income. As a secondary

15
<PAGE>

objective, the Fund seeks long-term capital appreciation. In pursuing these
goals, the Fund invests primarily in high-yielding debt securities issued by
governments and corporations in emerging markets. Many developing regions of the
world have undertaken sweeping political and economic changes that favor
increased business activity and demand for capital. In the opinion of the
Adviser, these changes present attractive investment opportunities, both in
terms of income and appreciation potential, for long-term investors.

Special investment considerations

The Fund involves above-average bond fund risk and can invest entirely in high
yield/high risk bonds. It is designed as a long-term investment and not for
short-term trading purposes, and should not be considered a complete investment
program. While designed to provide a high level of current income, the Fund may
not be appropriate for all income investors. The Fund should not be viewed as a
substitute for a money market or short-term bond fund. The Fund invests in lower
quality securities of emerging market issuers, some of which have in the past
defaulted on certain of their financial obligations. Investments in emerging
markets can be volatile. The Fund's share price and yield can fluctuate daily in
response to political events, changes in the perceived creditworthiness of
emerging nations, fluctuations in interest rates and, to a certain extent,
movements in foreign currencies. Please refer to "Special risk considerations"
for further information.

Investment policies

In seeking high current income and, secondarily, long-term capital appreciation,
the Fund invests, under normal market conditions, at least 65% of its total
assets in debt securities issued by governments, government-related entities and
corporations in emerging markets, or the return on which is derived primarily
from emerging markets. The Fund considers "emerging markets" to include any
country that is defined as an emerging or developing economy by any one of the
following: the International Bank for Reconstruction and Development (i.e., the
World Bank), the International Finance Corporation or the United Nations or its
authorities.

The Fund takes a global approach to portfolio management. The Adviser currently
weights its investments toward countries in Latin America, which has offered the
largest and most liquid debt markets of the emerging nations around the globe in
the past few years. However, the Adviser may pursue investment opportunities in
Asia, Africa, the Middle East and the developing countries of Europe, primarily
in Eastern Europe. The Fund deems an issuer to be located in an emerging market
if:

o the issuer is organized under the laws of an emerging market country;

o the issuer's principal securities trading market is in an emerging market;
or

o at least 50% of the issuer's non-current assets, capitalization, gross
revenue or profit in any one of the two most recent fiscal years is derived
from (directly or indirectly from subsidiaries) assets or activities
located in emerging markets.

Although the Fund may invest in a wide variety of high-yielding debt
obligations, under normal conditions it must invest at least 50% of its total
assets in sovereign debt securities issued or guaranteed by governments,
government-related entities and central banks based in emerging markets
(including participations in and assignments of portions of loans between
governments and financial institutions); government owned, controlled or
sponsored entities located in emerging markets; entities organized and operated
for the purpose of restructuring investment characteristics of instruments
issued by government or government-related entities in emerging markets; and
debt obligations issued by supranational organizations such as the Asian

16
<PAGE>

Development Bank and the Inter-American Development Bank, among others.

The Fund may also consider for purchase any debt securities issued by commercial
banks and companies in emerging markets. The Fund may invest in both fixed- and
floating-rate issues. Debt instruments held by the Fund take the form of bonds,
notes, bills, debentures, convertible securities, warrants, bank obligations,
short-term paper, loan participations, loan assignments and trust interests. The
Fund may invest regularly in "Brady Bonds," which are debt securities issued
under the framework of the Brady Plan as a mechanism for debtor countries to
restructure their outstanding bank loans. Most "Brady Bonds" have their
principal collaterized by zero coupon U.S. Treasury bonds.

To reduce currency risk, the Fund invests at least 65% of its total assets in
U.S. dollar-denominated debt securities. Therefore, no more than 35% of the
Fund's total assets may be invested in debt securities denominated in foreign
currencies.

The Fund is not restricted by limits on weighted average portfolio maturity or
the maturity of an individual issue. Debt securities in which the Fund may
invest may have stated maturities from overnight to 30 years or longer. The
weighted average maturity of the Fund's portfolio is actively managed and will
vary from period to period based upon the Adviser's assessment of economic and
market conditions, taking into account the Fund's investment objectives.

In addition to maturity, the Fund's investments are actively managed in terms of
geographic, industry and currency allocation. In managing the Fund's portfolio,
the Adviser takes into account such factors as the credit quality of issuers,
changes in and levels of interest rates, projected economic growth rates,
capital flows, debt levels, trends in inflation, anticipated movements in
foreign currencies and government initiatives.

While the Fund is not "diversified" for purposes of the Investment Company Act
of 1940, (the "1940 Act") it intends to invest in a minimum of three countries
at any one time and will not commit more than 40% of its total assets to issuers
in a single country.

By focusing on fixed-income instruments issued in emerging markets, the Fund
invests predominantly in debt securities that are rated below investment-grade,
or unrated but equivalent to those rated below investment-grade by
internationally recognized rating agencies such as S&P or Moody's. Debt
securities rated below BBB by S&P or below Baa by Moody's are considered to be
below investment-grade. These types of high yield/high risk debt obligations
(commonly referred to as "junk bonds") are predominantly speculative with
respect to the capacity to pay interest and repay principal in accordance with
their terms and generally involve a greater risk of default and more volatility
in price than securities in higher rating categories, such as investment-grade
U.S. bonds. On occasion, the Fund may invest up to 5% of its net assets in
non-performing securities whose quality is comparable to securities rated as low
as D by S&P or C by Moody's. During the fiscal year ended October 31, 1997, the
average monthly dollar-weighted market value of the bonds in the Fund's
portfolio was rated as follows: 1.48% A-1+, 12.72% BB+, 35.99% BB, 10.00% BB-,
10.62%B+ and 17.22% not rated. The bonds are rated by Moody's or S&P, or of
equivalent quality as determined by the Adviser. A large portion of the Fund's
bond holdings may trade at substantial discounts from face value. Please refer
to "Special risk considerations--High yield/high risk securities" for more
information.

The Fund may invest up to 35% of its total assets in securities other than debt
obligations issued in emerging markets. These holdings include debt securities
and money market instruments issued by corporations and governments based in
developed markets, including up to 20% of total assets in U.S. fixed-income
instruments.

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<PAGE>

However, for temporary, defensive or emergency purposes, the Fund may invest
without limit in U.S. debt securities, including short-term money market
securities. It is impossible to predict for how long such alternative strategies
will be utilized. In addition, the Fund may engage in strategic transactions,
including derivatives.

The Fund may also acquire shares of closed-end investment companies that invest
primarily in emerging market debt securities. To the extent the Fund invests in
such closed-end investment companies, shareholders will incur certain
duplicative fees and expenses, including investment advisory fees.

Why invest in the Fund?

The Fund is designed as a convenient, relatively low cost way for investors to
participate in an actively managed portfolio of high-yielding emerging market
debt securities. The Adviser believes that emerging bond markets will continue
to expand with the economic growth in Latin America and other developing
regions, and that securities in these markets will continue to provide an
attractive combination of high current income and appreciation potential for the
long-term investor.

In recent years, many emerging markets around the world have reduced
government's role in economic and personal affairs and instituted other changes
to stimulate business investment and growth. Autocratic political regimes have,
in many cases, been replaced by more democratic institutions. Centrally
controlled economies have given way, in whole or significant part, to
free-market systems. In support of these changes, countries in Latin America and
elsewhere have reduced tax rates and budget deficits, made strides in getting
inflation under control and stabilizing exchange rates, and have eliminated or
reduced trade barriers. Added to these important steps, developing economies
have improved communications and transportation systems; liberalized capital
markets; and privatized utilities, oil companies, banks and other state-owned
industries. Although the pace and success in accomplishing these objectives vary
significantly from country to country, these reforms have, in general, helped to
reverse flight of capital, build confidence among both local and foreign
investors, and stimulate economic expansion.

The Adviser believes that for these favorable trends to continue, however, the
emerging economies of Latin America, Asia, Africa, the Middle East and Europe
will need a steady flow of capital to continue to build infrastructure,
complement domestic savings, support currency reserves, expand plant and
equipment, and maintain competitiveness on a global basis. Much of this capital
should come from the public and private debt markets. The world fixed-income
markets are vital to the future growth of emerging economies. These markets can
present attractive opportunities for investors in the form of high yields, which
emerging economies need to offer to attract capital, and the potential for
capital appreciation, which can result from improving creditworthiness of
emerging market issuers, declining interest rates and other factors.

In addition to an attractive return potential, the Fund can provide diversity to
a domestic investment portfolio because the emerging debt markets do not always
move in the same manner as U.S. stock and bond markets. The Fund can also
provide a way to benefit from the growth and improving economic fundamentals of
developing nations for those investors who cannot tolerate the degree of
volatility associated with emerging market common stocks.

Direct investment in foreign securities, especially the emerging markets, is
usually impractical for an individual investor. Investors, on their own, may
find it difficult to analyze investment opportunities abroad as well as trade
and hold foreign securities. The Fund offers professional management and
administrative convenience to shareholders wishing to participate in this
relatively new asset class.

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Investment experience

The Adviser has been a leader in international investment management for over 40
years. Scudder International Fund was initially incorporated in Canada in 1953
as the first foreign investment company registered with the United States
Securities and Exchange Commission.

Additional information about policies and investments

Investment restrictions

Each Fund has certain investment restrictions which are designed to reduce a
Fund's investment risk. Fundamental investment restrictions may not be changed
without a vote of shareholders; non-fundamental investment restrictions may be
changed by a vote of a Fund's Board of Directors.

As a matter of fundamental policy, each Fund may not borrow money, except as
permitted under Federal law. Further, as a matter of non-fundamental policy,
each Fund may not borrow money in an amount greater than 5% of total assets,
except for temporary or emergency purposes, although each Fund may engage up to
5% of total assets in reverse repurchase agreements or dollar rolls.

As a matter of fundamental policy, each Fund may not make loans except through
the lending of portfolio securities, the purchase of debt securities or
interests in indebtedness, or through repurchase agreements. Each Fund has
adopted a non-fundamental policy restricting the lending of portfolio securities
to no more than 5% of total assets.

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

Other Funds may invest to a limited extent in the investments described below,
please refer to each Fund's "Investment objective(s) and policies" section above
for additional information.

Common stocks

Under normal circumstances, Scudder Emerging Markets Growth Fund, Scudder Latin
America Fund and Scudder Pacific Opportunities Fund invest primarily in common
stocks. Common stock is issued by companies to raise cash for business purposes
and represents a proportionate interest in the issuing companies. Therefore,
each such Fund participates in the success or failure of any company in which it
holds stock. The market values of common stock can fluctuate significantly,
reflecting the business performance of the issuing company, investor perception
and general economic or financial market movements. Smaller companies are
especially sensitive to these factors and may even become valueless. Despite the
risk of price volatility, however, common stocks also offer the greatest
potential for gain on investment, compared to other classes of financial assets
such as bonds or cash equivalents.

Convertible securities

Convertible securities in which each Fund may invest include bonds, notes,
debentures, preferred stocks and other securities convertible into common
stocks. Prior to their conversion, convertible securities may have
characteristics similar to both nonconvertible debt securities and equity
securities. In addition, convertible securities in which Scudder Latin America
Fund may invest include fixed-income or zero coupon debt securities which may be
converted or exchanged at a stated or determinable exchange ratio into
underlying shares of common stock. Scudder Emerging Markets Income Fund may be
required to permit the issuer of a convertible security to redeem the security,
convert it into the underlying common stock or sell it to a third party. Thus,
Scudder Emerging Markets Income Fund may not be able to control whether the

<PAGE>
issuer of a convertible security chooses to convert that security. If the issuer
choose to do so, this action could have an adverse effect on the Fund's ability
to achieve its investment objectives.

Repurchase agreements

As a means of earning income for periods as short as overnight, each Fund may
enter into repurchase agreements with selected banks and broker/dealers. Under a
repurchase agreement, each Fund acquires securities, subject to the seller's
agreement to repurchase them at a specified time and price. If the seller under
a repurchase agreement becomes insolvent, the Funds' right to dispose of the
securities might be restricted, or the value of the securities may decline
before each Fund is able to dispose of them. In the event of the commencement of
bankruptcy or insolvency proceedings with respect to the seller of the
securities before repurchase under a repurchase agreement, a Fund may encounter
delay and incur costs, including a decline in the value of the securities,
before being able to sell the securities.

Scudder Emerging Markets Income Fund may enter into repurchase agreements with
any party deemed creditworthy by the Adviser, including foreign banks and
broker/dealers, if the transaction is entered into for investment purposes and
the counterparty's creditworthiness is at least equal to that of issuers of
securities which the Fund may purchase. Scudder Latin America Fund and Scudder
Emerging Markets Growth Fund may also enter into repurchase commitments for
investment purposes for periods of 30 days or more. Such commitments involve
investment risk similar to that of debt securities. Please see "Risk factors -
Repurchase agreements" for more information.

Synthetic investments

Under certain circumstances, Scudder Emerging Markets Income Fund may wish to
obtain the price performance of a security without actually purchasing the
security in circumstances where, for example, the security is illiquid, or is
unavailable for direct investment or available only on less attractive
investments. In such circumstances, the Fund may invest in synthetic or
derivative alternative investments ("synthetic investments") that are based upon
or otherwise relate to the economic performance of the underlying securities.
Synthetic investments may include swap transactions, notes or units with
variable redemption amounts, and other similar instruments and contracts.
Synthetic investments typically do not represent beneficial ownership of the
underlying security, usually are not collateralized or otherwise secured by the
counterparty and may or may not have any credit enhancements attached to them.
Accordingly, synthetic investments involve exposure not only to the
creditworthiness of the issuer of the underlying security, changes in exchange
rates and future governmental actions taken by the jurisdiction in which the
underlying security is issued but also to the creditworthiness and legal
standing of the counterparties involved. In addition, Synthetic investments
typically are illiquid. As such, investments in the securities will be limited
to the fund's policy of investing in illiquid securities.

Reverse repurchase agreements

Scudder Emerging Markets Income Fund may enter into "reverse repurchase
agreements," which are repurchase agreements in which the Fund, as the seller of
the securities, agrees to repurchase them at an agreed time and price. The Fund
maintains a segregated account in connection with outstanding reverse repurchase
agreements. The Fund will enter into reverse repurchase agreements only when the
Adviser believes that the interest income to be earned from the investment of
the proceeds of the transaction will be greater than the interest expense of the
transaction.

Indexed securities

Scudder Emerging Markets Income Fund may invest in indexed securities, the value

20
<PAGE>
of which is linked to currencies, interest rates, commodities, indices or other
financial indicators ("reference instruments"). The interest rate or (unlike
most fixed-income securities) the principal amount payable at maturity of an
indexed security may be increased or decreased, depending on changes in the
value of the reference instrument.

When-issued securities

Each Fund may purchase securities on a when-issued or forward delivery basis,
for payment and delivery at a later date. The price and yield are generally
fixed on the date of commitment to purchase. During the period between purchase
and settlement, no interest accrues to a Fund. At the time of settlement, the
market value of the security may be more or less than the purchase price.

Brady Bonds

Scudder Emerging Markets Income Fund may invest in Brady Bonds, which are
securities created through the exchange of existing commercial bank loans to
public and private entities in certain emerging markets for new bonds in
connection with debt restructurings under a debt restructuring plan introduced
by former U.S. Secretary of the Treasury, Nicholas F. Brady (the "Brady Plan").
Brady Plan debt restructurings have been implemented to date in Argentina,
Bulgaria, Brazil, Costa Rica, Ecuador, Jordan, Mexico, Morocco, Nigeria, the
Philippines, Poland, the Dominican Republic and Uruguay.

Brady Bonds have been issued only recently, and for that reason do not have a
long payment history. Brady Bonds may be collateralized or uncollateralized, are
issued in various currencies (but primarily the dollar) and are actively traded
in over-the-counter secondary markets. Dollar-denominated, collateralized Brady
Bonds, which may be fixed-rate bonds or floating-rate bonds, are generally
collateralized in full as to principal by U.S. Treasury zero coupon bonds having
the same maturity as the bonds.

Brady Bonds are often viewed as having three or four valuation components: the
collateralized repayment of principal at final maturity; the collateralized
interest payments; the uncollateralized interest payments; and any
uncollateralized repayment of principal at maturity, (these uncollateralized
amounts constituting the "residual risk"). In light of the residual risk of
Brady Bonds and the history of defaults of countries issuing Brady Bonds with
respect to commercial bank loans by public and private entities, investments in
Brady Bonds may be viewed as speculative.

Illiquid securities

Each Fund may invest a portion of its assets in securities for which there is
not an active trading market, or which have resale restrictions. Such securities
may have been acquired through private placements (transactions in which the
securities acquired have not been registered with the Securities and Exchange
Commission, the "SEC"). These illiquid securities generally offer a higher
return than more readily marketable securities, but carry the risk that the Fund
may not be able to dispose of them at an advantageous time or price. Some
restricted securities purchased by a Fund, however, may be considered liquid
despite resale restrictions.

Scudder Emerging Markets Growth Fund's and Scudder Emerging Market Income Fund's
Boards of Directors has delegated to the Adviser the authority to determine the
liquidity of restricted securities that can be resold to institutional investors
("Rule 144A Securities") and privately placed commercial paper pursuant to
guidelines approved by each Fund's Board of Directors.

Loan participations and assignments

Scudder Latin America Fund and Scudder Emerging Markets Income Fund may invest
in fixed and floating rate loans arranged through private negotiations between
an issuer of emerging market debt instruments and one or more financial
institutions ("lenders"). Generally, each Fund's investments in loans are

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expected to take the form of loan participations and assignments of portions of
loans from third parties.

When investing in a participation, a Fund will typically have the right to
receive payments only from the lender to the extent the lender receives payments
from the borrower, and not from the borrower itself. Likewise, a Fund typically
will be able to enforce its rights only through the lender, and not directly
against the borrower. As a result, a Fund will assume the credit risk of both
the borrower and the lender that is selling the participation.

When a Fund purchases assignments from lenders, it will acquire direct rights
against the borrower, but these rights and the Fund's obligations may differ
from, and be more limited than those held by the assigning lender.

Loan participations and assignments may be illiquid. Please refer to "Risk
factors--Illiquid securities" for more information.

Portfolio turnover rate

Recent economic and market conditions have necessitated more active trading,
resulting in a higher portfolio turnover rate for Scudder Emerging Markets
Income Fund. A higher rate involves greater transaction costs to the Fund and
may result in the realization of net capital gains, which would be taxable to
shareholders when distributed. For more information, see the "Taxes" and
"Portfolio Transactions" sections of the Fund's Statement of Additional
Information.

Strategic Transactions and derivatives

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

In the course of pursuing these investment strategies, each Fund may purchase
and sell exchange-listed and over-the-counter put and call options on
securities, equity and fixed-income indices and other financial instruments,
purchase and sell financial futures contracts and options thereon, enter into
various interest rate transactions such as swaps, caps, floors or collars and
enter into various currency transactions such as currency forward contracts,
currency futures contracts, currency swaps or options on currencies or currency
futures (collectively, all the above are called "Strategic Transactions"). In
addition, Scudder Emerging Markets Growth may engage in equity swaps.

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

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ability of a Fund to utilize these Strategic Transactions successfully will
depend on the Adviser's ability to predict pertinent market movements, which
cannot be assured. Each Fund will comply with applicable regulatory requirements
when implementing these strategies, techniques and instruments. Strategic
Transactions involving financial futures and options thereon will be purchased,
sold or entered into only for bona fide hedging, risk management or portfolio
management purposes and not to create leveraged exposure. Please refer to "Risk
factors--Strategic Transactions and derivatives" for more information.

Risk factors

Each Fund's risks are determined by the nature of the securities held and the
portfolio management strategies used by the Adviser. The following are
descriptions of certain risks related to the investments and techniques that
each Fund may use from time to time. A complete description of these and other
risk factors can be found in each Fund's Statement of Additional Information.
Other Funds may invest to a limited extent in the investments described below,
please refer to each Fund's "Investment objective(s) and policies" section above
for additional information.

Foreign securities. Each Fund may invest in foreign securities. Investments in
foreign securities involve special considerations, due to more limited
information, higher brokerage costs, different accounting standards, thinner
trading markets and the likely impact of foreign taxes on the yield from debt
securities. They may also entail certain other risks, such as the possibility of
one or more of the following: imposition of dividend or interest withholding or
confiscatory taxes; currency blockages or transfer restrictions; expropriation,
nationalization, military coups or other adverse political or economic
developments; less government supervision and regulation of securities
exchanges, brokers and listed companies; and the difficulty of enforcing
obligations in other countries. Further, it may be more difficult for each
Fund's agents to keep currently informed about corporate actions which may
affect the prices of portfolio securities. Communications between the U.S. and
foreign countries may be less reliable than within the U.S., increasing the risk
of delayed settlements of portfolio transactions or loss of certificates for
portfolio securities. Certain markets may require payment for securities before
delivery. Each Fund's ability and decisions to purchase and sell portfolio
securities may be affected by laws or regulations relating to the convertibility
of currencies and repatriation of assets. Each Fund's ability and decisions to
purchase and sell portfolio securities may be affected by laws or regulations
relating to the convertibility of currencies and repatriation of assets. Some
countries restrict the extent to which foreigners may invest in their securities
markets.

Each Fund invests in securities denominated in currencies of foreign countries.
Accordingly, changes in the value of these currencies against the U.S. dollar
will result in corresponding changes in the U.S. dollar value of each Fund's
assets denominated in those currencies.

Some foreign countries also may have managed currencies, which are not free
floating against the U.S. dollar. In addition, there is risk that certain
foreign countries may restrict the free conversion of their currencies into
other currencies. Further, it generally will not be possible to reduce the
Fund's foreign currency risk through hedging. Any devaluations in the currencies
in which each Fund's portfolio securities are denominated may have a detrimental
impact on each Fund's net asset value.

Investing in emerging markets. Scudder Emerging Markets Growth Fund and Scudder
Emerging Markets Income Fund may invest in emerging markets. Securities of many
issuers in emerging markets may be less liquid and more volatile than securities
of comparable domestic issuers. Emerging markets also have different clearance

23
<PAGE>
and settlement procedures, and in certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when a portion of the assets of a
Fund is uninvested and no return is earned thereon. The inability of a Fund to
make intended security purchases due to settlement problems could cause a Fund
to miss attractive investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result either in losses to a Fund
due to subsequent declines in value of the portfolio security or, if a Fund has
entered into a contract to sell the security, in possible liability to the
purchaser. Costs associated with transactions in foreign securities are
generally higher than costs associated with transactions in U.S. securities.
Such transactions also involve additional costs for the purchase or sale of
foreign currency.

Foreign investment in certain emerging market debt obligations is restricted or
controlled to varying degrees. These restrictions or controls may at times limit
or preclude foreign investment in certain emerging market debt obligations and
increase the costs and expenses of a Fund. Certain emerging markets require
prior governmental approval of investments by foreign persons, and/or impose
additional taxes on foreign investors. These markets may also restrict
investment opportunities in issuers in industries deemed important to national
interests.

Certain emerging markets may require governmental approval for the repatriation
of investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if a deterioration occurs in an emerging market's
balance of payments or for other reasons, a country could impose temporary
restrictions on foreign capital remittances. A Fund could be adversely affected
by delays in, or a refusal to grant, any required governmental approval for
repatriation of capital, as well as by the application to a Fund of any
restrictions on investments.

Throughout the last decade many emerging markets have experienced, and continue
to experience, high rates of inflation. In certain countries inflation has at
times accelerated rapidly to hyperinflationary levels, creating a negative
interest rate environment and sharply eroding the value of outstanding financial
assets in those countries. Increases in inflation could have an adverse effect
on a Fund's non-dollar denominated securities and on the issuers of debt
obligations generally.

Individual foreign economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate of inflation,
capital reinvestment, resources, self-sufficiency and balance of payments
position. The securities markets, values of securities, yields and risks
associated with securities markets in different countries may change
independently of each other.

Investment in sovereign debt can involve a high degree of risk. Holders of
sovereign debt (including each Fund) may be requested to participate in the
rescheduling of such debt and to extend further loans to governmental entities.
There is no bankruptcy proceeding by which sovereign debt on which governmental
entities have defaulted may be collected in whole or in part. Securities traded
in certain emerging European securities markets may be subject to risks due to
the inexperience of financial intermediaries, the lack of modern technology and
the lack of a sufficient capital base to expand business operations.
Additionally, former Communist regimes of a number of Eastern European countries
had expropriated a large amount of property, the claims on which have not been
entirely settled. There can be no assurance that a Fund's investments in Eastern
Europe would not also be expropriated,

24
<PAGE>
nationalized or otherwise confiscated. Finally, any change in the leadership or
policies of Eastern European countries, or the countries that exercise a
significant influence over those countries, may halt the expansion of or reverse
the liberalization of foreign investment policies now occurring and adversely
affect existing investment opportunities. For a more complete description of the
risks of investing in emerging markets, please refer to each Fund's Statement of
Additional Information.

Investing in Latin America. Scudder Latin America Fund invests 65% of its total
assets in the securities of Latin American issuers, and 50% of the Fund's total
assets will be invested in Latin American equity securities.

The Adviser believes that investment opportunities may result from recent trends
in Latin America encouraging greater market orientation and less governmental
intervention in economic affairs. Investors, however, should be aware that the
Latin American economies have experienced considerable difficulties in the past
decade. Although there have been significant improvements in recent years, the
Latin American economies continue to experience challenging problems, including
high inflation rates and high interest rates relative to the U.S. The emergence
of the Latin American economies and securities markets will require continued
economic and fiscal discipline which has been lacking at times in the past, as
well as stable political and social conditions. Recovery may also be influenced
by international economic conditions, particularly those in the U.S., and by
world prices for oil and other commodities. There is no assurance that recent
economic initiatives will be successful.

Certain risks associated with international investments and investing in
smaller, developing capital markets are heightened for investments in Latin
American countries. For example, some of the currencies of Latin American
countries have experienced steady devaluations relative to the U.S. dollar, and
major adjustments have been made in certain of these currencies periodically. In
addition, although there is a trend toward less government involvement in
commerce, governments of many Latin American countries have exercised and
continue to exercise substantial influence over many aspects of the private
sector. In certain cases, the government still owns or controls many companies,
including some of the largest in the country. Accordingly, government actions in
the future could have a significant effect on economic conditions in Latin
American countries, which could affect private sector companies and the Fund, as
well as the value of securities in the Fund's portfolio.

Most Latin American countries have experienced substantial, and in some periods,
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain Latin American
countries.

Certain Latin American countries are among the largest debtors to commercial
banks and foreign governments. Some of these countries have in the past
defaulted on their sovereign debt. Holders of sovereign debt (including Scudder
Latin America Fund) may be requested to participate in the rescheduling of such
debt and to extend further loans to governmental entities. There is no
bankruptcy proceeding by which sovereign debt on which governmental entities
have defaulted may be collected in whole or in part.

The limited size of many Latin American securities markets and limited trading
volume in issuers compared to the volume of trading in U.S. securities could
cause prices to be erratic for reasons apart from factors that affect the
quality of securities.

The portion of Scudder Latin America Fund's assets invested directly in Chile
may be less than the portions invested in other countries in Latin America
because, at present, capital invested

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in Chile normally cannot be repatriated for as long as five years.

Investing in the Pacific Basin. Scudder Pacific Opportunities Fund is
susceptible to political and economic factors affecting issuers in Pacific Basin
countries. Although the Fund will not invest in Japanese companies, some Pacific
Basin economies are directly affected by Japanese capital investment in the
region and by Japanese consumer demands. Many of the countries of the Pacific
Basin are developing both economically and politically. Pacific Basin countries
may have relatively unstable governments, economies based on only a few
commodities or industries, and securities markets trading infrequently or in low
volumes. Some Pacific Basin countries restrict the extent to which foreigners
may invest in their securities markets. Securities of issuers located in some
Pacific Basin countries tend to have volatile prices and may offer significant
potential for loss as well as gain. Further, certain companies in the Pacific
Basin may not have firmly established product markets, may lack depth of
management, or may be more vulnerable to political or economic developments such
as nationalization of their own industries.

Repurchase agreements. Each Fund may utilize repurchase agreements. If the
seller under a repurchase agreement becomes insolvent, a Fund's right to dispose
of a security may be restricted, or the value of the securities may decline
before a Fund is able to dispose of them. In the event of the commencement of
bankruptcy or insolvency proceedings with respect to the seller of the
securities before repurchase of the securities under a repurchase agreement, a
Fund may encounter delay and incur costs, including a decline in the value of
the securities, before being able to sell the securities. Repurchase commitment
transactions may not provide a Fund with collateral marked-to-market during the
term of the commitment.

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

Convertible securities. While convertible securities generally offer lower yield
than nonconvertible debt securities of similar quality, their prices may reflect
changes in the value of the underlying common stock. Convertible securities
entail less credit risk than the issuer's common stock.

Borrowing. Although the principal of each Fund's borrowing will be fixed, a
Fund's assets may change in value during the time a borrowing is outstanding,
increasing exposure to capital risk.

Non-diversified investment company. Each Fund is classified as a non-diversified
investment company under the 1940 Act, which means that these Funds are not
limited by the 1940 Act in the proportion of their assets that they may invest
in the obligations of a single issuer. The investment of a large percentage of a
Fund's assets in the securities of a small number of issuers may cause the a
Fund's share price to fluctuate more than that of a diversified investment
company.

Debt securities. High quality bonds (rated AAA or AA by S&P or Aaa or Aa by
Moody's) characteristically have strong capacity to pay interest and repay
principal. Medium-grade bonds (rated A or BBB by S&P or A or Baa by Moody's) are
defined as having adequate capacity to pay interest and repay principal. Moody's
considers bonds it rates Baa to have speculative elements as well as
investment-grade characteristics.

Securities rated BBB or Baa are neither highly protected nor poorly secured.
These securities normally pay higher yield but involve potentially greater price
variability than higher quality securities. They are regarded as having adequate
capacity to repay principal and pay interest, although adverse economic

26
<PAGE>
conditions or changing circumstances are more likely to lead to a weakened
capacity to do so.

Debt securities rated below BBB by S&P or below Baa by Moody's (commonly
referred to as "junk bonds") are considered to be below investment grade. The
lower the ratings of such debt securities, the greater their risks render them
like equity securities. These types of high yield/high risk debt obligations are
predominantly speculative with respect to the capacity to pay interest and repay
principal in accordance with their terms and generally involve a greater risk of
default and more volatility in price than securities in higher rating
categories, such as investment-grade U.S. bonds. The market price of such lower
rated debt securities may decline significantly in periods of general economic
difficulty. The trading market for these securities is generally less liquid
than for higher rated securities making it more difficult for a Fund to obtain
accurate market quotations for purposes of valuing its portfolio and calculating
its net asset value, and a Fund may have difficulty disposing of these
securities at the time it wishes to do so. Securities rated D by S&P, or of
equivalent quality if unrated, may be in default with respect to payment of
principal or interest. Also, longer maturity bonds tend to fluctuate more in
price as interest rates change than do short-term bonds, providing both
opportunity and risk.

Scudder Emerging Markets Growth Fund may invest in debt securities with varying
degrees of credit quality. The Fund may invest in securities whose quality is
comparable to securities rated as low as C by Moody's or D by S&P.

Scudder Latin America Fund may invest in debt securities which are unrated,
rated or the equivalent of those rated below investment grade. In addition,
Scudder Latin America Fund will invest no more than 10% of its net assets in
securities rated B or lower by Moody's or S&P, and may invest in securities
rated C by Moody's or D by S&P.

High yield/high risk securities. Scudder Emerging Markets Income Fund may invest
in debt securities which are rated below investment-grade (hereinafter referred
to as "lower rated securities") or which are unrated, but deemed equivalent to
those rated below investment-grade by the Adviser. The lower the ratings of such
debt securities, the greater their risks. These debt instruments generally offer
a higher current yield than that available from higher grade issues, but
typically involve greater risk. The yields on high yield/high risk bonds will
fluctuate over time. In general, prices of all bonds rise when interest rates
fall and fall when interest rates rise. Lower rated and unrated securities are
especially subject to adverse changes in general economic conditions and to
changes in the financial condition of their issuers. During periods of economic
downturn or rising interest rates, issuers of these instruments may experience
financial stress that could adversely affect their ability to make payments of
principal and interest and increase the possibility of default.

Adverse publicity and investor perceptions, whether or not based on fundamental
analysis, may also decrease the values and liquidity of these securities
especially in a market characterized by only a small amount of trading.

In cases where market quotations are not available, lower rated securities are
valued using guidelines established by the Fund's Board of Directors. Perceived
credit quality in this market can change suddenly and unexpectedly, and may not
fully reflect the actual risk posed by a particular lower rated or unrated
security.

Please refer to the attached "Appendix" for further information concerning debt
securities ratings. For a more complete description of the risks of high
yield/high risk securities, please refer to the Fund's Statement of Additional
Information.

Indexed securities. Scudder Emerging Markets Income Fund may invest in indexed
securities.

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Indexed securities may be positively or negatively indexed, so that appreciation
of the reference instrument may produce an increase or a decrease in the
interest rate or value of the security at maturity. In addition, the change in
the interest rate or value of the security at maturity may be some multiple of
the change in the value of the reference instrument. Thus, in addition to the
credit risk of the security's issuer, the Fund will bear the market risk of the
reference instrument.

Strategic Transactions and derivatives. Each Fund may invest in strategic
transactions and derivatives. Strategic Transactions, including derivative
contracts, have risks associated with them including possible default by the
other party to the transaction, illiquidity and, to the extent the Adviser's
view as to certain market movements is incorrect, the risk that the use of such
Strategic Transactions could result in losses greater than if they had not been
used. Use of put and call options may result in losses to a Fund, force the sale
or purchase of portfolio securities at inopportune times or for prices higher
than (in the case of put options) or lower than (in the case of call options)
current market values, limit the amount of appreciation a Fund can realize on
its investments or cause a Fund to hold a security it might otherwise sell.

The use of currency transactions can result in a Fund incurring losses as a
result of a number of factors including the imposition of exchange controls,
suspension of settlements, or the inability to deliver or receive a specified
currency. The use of options and futures transactions entails certain other
risks. In particular, the variable degree of correlation between price movements
of futures contracts and price movements in the related portfolio position of a
Fund creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the Fund's position. In addition, futures and
options markets may not be liquid in all circumstances and certain
over-the-counter options may have no markets. As a result, in certain markets, a
Fund might not be able to close out a transaction without incurring substantial
losses, if at all. Although the use of futures contracts and options
transactions for hedging should tend to minimize the risk of loss due to a
decline in the value of the hedged position, at the same time they tend to limit
any potential gain which might result from an increase in value of such
position. Finally, the daily variation margin requirements for futures contracts
would create a greater ongoing potential financial risk than would purchases of
options, where the exposure is limited to the cost of the initial premium.
Losses resulting from the use of Strategic Transactions would reduce net asset
value, and possibly income, and such losses can be greater than if the Strategic
Transactions had not been utilized. The Strategic Transactions that a Fund may
use and some of their risks are described more fully in each Fund's respective
Statement of Additional Information.

Distribution and performance information

Dividends and capital gains distributions

Scudder Emerging Markets Growth Fund, Scudder Latin America Fund and Scudder
Pacific Opportunities Fund each intend to distribute any dividends from net
investment income and any net realized capital gains after utilization of
capital loss carryforwards, if any, in December to prevent application of
federal excise tax. Scudder Emerging Markets Income Fund intends to distribute
dividends from its net investment income quarterly in March, June, September and
December. Scudder Emerging Markets Income Fund intends to distribute any
realized capital gains after utilization of capital loss carryforwards, if any,
in December. Each Fund may make an additional distribution, if necessary.

For all Funds, any dividends or capital gains distributions declared in October,
November or

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December with a record date in such a month and paid during the following
January will be treated by shareholders for federal income purposes as if
received on December 31 of the calendar year declared. According to preference,
shareholders may receive distributions in cash or have them reinvested in
additional shares of a Fund. If an investment is in the form of a retirement
plan, all dividends and capital gains distributions must be reinvested in the
shareholder's account.

For all Funds, generally dividends from net investment income are taxable to
shareholders as ordinary income. Long-term capital gains distributions, if any,
are taxable to individual shareholders at a maximum 20% or 28% capital gains
rate (depending on a Fund's holding period for the assets giving rise to the
gain), regardless of the length of time shareholders have owned their shares.
Short-term capital gains and any other taxable income distributions are taxable
as ordinary income. A portion of dividends from net investment income may
qualify for the dividends-received deduction for corporations.

For Scudder Emerging Markets Income Fund, certain realized gains or losses on
the sale or retirement of foreign bonds held by the Fund, to the extent
attributable to exchange rate fluctuations, must be treated as ordinary income
or loss. Such income or loss may increase or decrease the Fund's income
available for distribution to shareholders. If, under the rules governing the
tax treatment of foreign currency gains or losses, the Fund's income available
for distribution is decreased, a portion of the dividends declared by the Fund
may be treated for federal income tax purposes as a nontaxable return of capital
distribution. Generally, a shareholder's tax basis in Fund shares will be
reduced to the extent that an amount distributed to the shareholder is treated
as a return of capital.

For Scudder Emerging Markets Growth Fund, Scudder Latin America Fund and Scudder
Pacific Opportunities Fund shareholders may be able to claim a credit or
deduction on their income tax returns for their pro rata portion of qualified
taxes paid by each Fund to foreign countries.

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

For Scudder Emerging Markets Growth Fund, distributions are not subject to the
2% redemption fee, whether paid in cash or reinvested. If the investment is in
the form of a retirement plan, all dividends and capital gains distributions
must be reinvested into the shareholder's account.

For Scudder Emerging Markets Growth Fund, under normal investment conditions, it
is anticipated that the Fund's portfolio turnover rate will not exceed 100% per
year. However, economic and market conditions may necessitate more active
trading, resulting in a higher portfolio turnover rate. A higher rate involves
greater brokerage expenses to the Fund and may result in the realization of net
capital gains, which would be taxable to shareholders when distributed.

Performance information

From time to time, quotations of the Funds' performance may be included in
advertisements, sales literature or shareholder reports. All performance figures
are historical, show the performance of a hypothetical investment and are not
intended to indicate future performance.

"Total return" is the change in value of an investment in a Fund for a specified
period.

"Average annual total return" of a Fund is the average annual compound rate of
return of an investment in a Fund assuming the investment has been held for one
year, five years and ten years as of a stated ending date. (If a Fund has not
been in operation for at least ten years, the life of the Fund will be used
where applicable.)

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<PAGE>

"Cumulative total return" represents the cumulative change in value of an
investment in a Fund for various periods.

All types of total return calculations assume that all dividends and capital
gains distributions during the period were reinvested in shares of a Fund.

For Scudder Emerging Markets Income Fund, the "SEC yield" of the Fund is an
annualized expression of the net income generated by the Fund over a specified
30-day (one month) period as a percentage of the Fund's share price on the last
day of that period. The yield is calculated according to methods required by the
SEC, and therefore may not equate to the level of income paid to shareholders.
Yield is expressed as an annualized percentage.

Performance for any of the Funds will vary based upon, among other things,
changes in market conditions and the level of a Fund's expenses.

Fund organization

Each Fund is a series of a Corporation which is an open-end management
investment company registered under the 1940 Act.

The activities of the Funds are supervised by their respective Boards of
Directors. Shareholders have one vote for each share held on matters on which
they are entitled to vote. The Corporations are not required to and have no
current intention of holding annual shareholder meetings, although special
meetings may be called for purposes such as electing or removing Directors,
changing fundamental investment policies or approving an investment management
agreement. Shareholders will be assisted in communicating with other
shareholders in connection with removing a Director as if Section 16(c) of the
1940 Act were applicable.

The prospectuses of each of the four Funds are combined in this prospectus. Each
Fund offers only its own shares, yet it is possible that a Fund might become
liable for a misstatement or omission regarding another Fund. The Directors of
each Corporation have considered this and approved the use of a combined
prospectus.

Scudder International Fund, Inc. was organized as a Maryland corporation in July
1975, its predecessor was organized in 1953.

Scudder Global Fund, Inc. was organized as a Maryland corporation in May 1986.

Investment adviser

Each Fund retains the investment management firm of Scudder Kemper Investments,
Inc., a Delaware corporation formerly known as Scudder, Stevens & Clark, Inc.,
to manage its daily investment and business affairs subject to the policies
established by the Board of Directors. The Directors have overall responsibility
for the management of each Fund under Maryland law.

Scudder, Stevens & Clark, Inc. ("Scudder"), and Zurich Insurance Company
("Zurich"), an international insurance and financial services organization, have
formed a new global investment organization by combining Scudder's business with
that of Zurich's subsidiary, Zurich Kemper Investments, Inc. and Scudder has
changed its name to Scudder Kemper Investments, Inc. As a result of the
transaction, Zurich owns approximately 70% of the Adviser, with the balance
owned by the Adviser's officers and employees.

Scudder Emerging Markets Growth Fund, Scudder Pacific Opportunities Fund and
Scudder Emerging Markets Income Fund each pay the Adviser an annual fee of
1.25%, 1.10% and 1.00%, respectively, of each Fund's average daily net assets.
The Adviser had agreed to maintain the annualized expenses of Scudder Emerging
Markets Income Fund at not more than 1.50% of the average daily net assets until
February 29, 1996. Accordingly, the Adviser received an investment management
fee of 0.99% of Scudder Emerging Markets Income Fund's average daily net assets.

Scudder Latin America Fund pays the Adviser an annual fee of 1.25% of the first
$1 billion and 1.15% of such assets in excess of $1 billion of the Fund's
average daily net assets.

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The investment management fee for each Fund is higher than that charged by many
funds which invest primarily in U.S. securities, though it is not necessarily
higher than fees charged to funds with similar investment objectives.

The management fees are payable monthly, provided that each Fund will make such
interim payments as may be requested by the Adviser not to exceed 75% of the
amount of the fee then accrued on the books of the Fund and unpaid.

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

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

Transfer agent

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

Underwriter

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

Fund accounting agent

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

Custodian

Brown Brothers Harriman & Co. is the custodian for each Fund.

Transaction information

Purchasing shares

Purchases are executed at the next calculated net asset value per share after
the Funds' transfer agent receives the purchase request in good order. Purchases
are made in full and fractional shares. (See "Share price.")

By check. If you purchase shares with a check that does not clear, your purchase
will be canceled and you will be subject to any losses or fees incurred in the
transaction. Checks must be drawn on or payable through a U.S. bank. If you
purchase shares by check and redeem them within seven business days of purchase,
the Fund may hold redemption proceeds until the purchase check has cleared. If
you purchase shares by federal funds wire, you may avoid this delay. Redemption
requests by telephone prior to the expiration of the seven-day period will not
be accepted.

By wire. To open a new account by wire, first call Scudder at 1-800-225-5163 to
obtain an account number. A representative will instruct you to send a
completed, signed application to the transfer agent. Accounts cannot be opened
without a completed, signed application and a Scudder fund account number.
Contact your bank to arrange a wire transfer to:

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

Your wire instructions must also include:
-- the name of the fund in which the money is to be invested,
-- the account number of the fund, and
-- the name(s) of the account holder(s).

The account will be established once the application and money order are
received in good order.

31
<PAGE>

You may also make additional investments of $100 or more to your existing
account by wire.

By telephone order. Existing shareholders may purchase shares at a certain day's
price by calling 1-800-225-5163 before the close of regular trading on the New
York Stock Exchange (the "Exchange"), normally 4 p.m. eastern time, on that day.
Orders must be for $10,000 or more and cannot be for an amount greater than four
times the value of your account at the time the order is placed. A confirmation
with complete purchase information is sent shortly after your order is received.
You must include with your payment the order number given at the time the order
is placed. If payment by check or wire is not received within three business
days, the order is subject to cancellation and the shareholder will be
responsible for any loss to the Fund resulting from this cancellation. Telephone
orders are not available for shares held in Scudder IRA accounts and most other
Scudder retirement plan accounts.

By "QuickBuy." If you elected "QuickBuy" for your account, you can call
toll-free to purchase shares. The money will be automatically transferred from
your predesignated bank checking account. Your bank must be a member of the
Automated Clearing House for you to use this service. If you did not elect
"QuickBuy," call 1-800-225-5163 for more information.

To purchase additional shares, call 1-800-225-5163. Purchases may not be for
more than $250,000. Proceeds in the amount of your purchase will be transferred
from your bank checking account in two or three business days following your
call. For requests received by the close of regular trading on the Exchange,
shares will be purchased at the net asset value per share calculated at the
close of trading on the day of your call. "QuickBuy" requests received after the
close of regular trading on the Exchange will begin their processing and be
purchased at the net asset value calculated the following business day.

If you purchase shares by "QuickBuy" and redeem them within seven days of the
purchase, the Fund may hold the redemption proceeds for a period of up to seven
business days. If you purchase shares and there are insufficient funds in your
bank account, the purchase will be canceled and you will be subject to any
losses or fees incurred in the transaction. "QuickBuy" transactions are not
available for most retirement plan accounts. However, "QuickBuy" transactions
are available for Scudder IRA accounts.

By exchange. Your new account will have the same registration and address as
your existing account. The exchange requirements for corporations, other
organizations, trusts, fiduciaries, agents, institutional investors and
retirement plans may be different from those for regular accounts. Please call
1-800-225-5163 for more information, including information about the transfer of
special account features.

You can also make exchanges among your Scudder fund accounts on SAIL, the
Scudder Automated Information Line, by calling 1-800-343-2890.

Redeeming shares

The Funds allow you to redeem shares (i.e., sell them back to a Fund) without
redemption fees, with the exception of Scudder Emerging Markets Growth Fund.
Scudder Emerging Markets Growth Fund charges a 2% fee upon the redemption or
exchange of shares held less than one year. (Please see "Redeeming shares --
Exchanging and redeeming shares from Scudder Emerging Markets Growth Fund" for
complete information.)

By telephone. This is the quickest and easiest way to sell Fund shares. If you
provided your banking information on your application, you can call to request
that federal funds be sent to your authorized bank account. If you did not
include your banking information on your application, call 1-800-225-5163 for
more information.

32
<PAGE>

Redemption proceeds will be wired to your bank unless otherwise requested. If
your bank cannot receive federal reserve wires, redemption proceeds will be
mailed to your bank. There will be a $5 charge for all wire redemptions.

You can also make redemptions from your Scudder fund account on SAIL by calling
1-800-343-2890.

If you open an account by wire, you cannot redeem shares by telephone until the
Fund's transfer agent has received your completed and signed application.
Telephone redemption is not available for shares held in Scudder IRA accounts
and most other Scudder retirement plan accounts.

In the event that you are unable to reach the Fund by telephone, you should
write to the Fund; see "How to contact Scudder" for the address.

By "QuickSell." If you elected "QuickSell" for your account, you can call
toll-free to redeem shares. The money will be automatically transferred to your
predesignated bank checking account. Your bank must be a member of the Automated
Clearing House for you to use this service. If you did not elect "QuickSell,"
call 1-800-225-5163 for more information.

To redeem shares, call 1-800-225-5163. Redemptions must be for at least $250.
Proceeds in the amount of your redemption will be transferred to your bank
checking account in two or three business days following your call. For requests
received by the close of regular trading on the Exchange, shares will be
redeemed at the net asset value per share calculated at the close of trading on
the day of your call. "QuickSell" requests received after the close of regular
trading on the Exchange will begin their processing and be redeemed at the net
asset value calculated the following business day.

"QuickSell" transactions are not available for Scudder IRA accounts and most
other retirement plan accounts.

Exchanging and redeeming shares from Scudder Emerging Markets Growth Fund

Upon the redemption or exchange of shares of Scudder Emerging Markets Growth
Fund held 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 fee is waived for all shares purchased through
certain retirement plans, including 401(k) plans, 403(b) plans, 457 plans, Keogh
accounts, and Profit Sharing and Money Purchase Pension Plans. However, if such
shares are purchased through a broker, financial institution or recordkeeper
maintaining an omnibus account for the shares, such waiver may not apply.
(Before purchasing shares, please check with your account representative
concerning the availability of the fee waiver.) In addition, this fee waiver
does not apply to IRA and SEP-IRA accounts. This fee is intended to encourage
long-term investment in the Fund, to avoid transaction and other expenses caused
by early redemptions, and to facilitate portfolio management. The fee is not a
deferred sales charge, is not a commission paid to the Adviser or its
subsidiaries, and does not benefit the Adviser in any way. The Fund reserves the
right to modify the terms of or terminate their fees at any time. The fee
applies to redemptions from the Fund and exchanges to other Scudder funds, but
not to dividend or capital gains distributions which have been automatically
reinvested in the Fund. The fee is applied to the shares being redeemed or
exchanged in the order in which they were purchased. See "Exchanges and
Redemptions" in the Fund's Statement of Additional Information for a more
detailed description of the redemption fee.

Signature guarantees. For your protection and to prevent fraudulent redemptions,
on written redemption requests in excess of $100,000 we require an original
signature and an original signature guarantee for each person in whose name the
account is registered. (Each Fund

33
<PAGE>
reserves the right, however, to require a signature guarantee for all
redemptions.) You can obtain a signature guarantee from most banks, credit
unions or savings associations, or from broker/dealers, municipal securities
broker/dealers, government securities broker/dealers, national securities
exchanges, registered securities associations, or clearing agencies deemed
eligible by the SEC. Signature guarantees by notaries public are not acceptable.
Redemption requirements for corporations, other organizations, trusts,
fiduciaries, agents, institutional investors and retirement plans may be
different from those for regular accounts. For more information, please call
1-800-225-5163.

Telephone transactions

Shareholders automatically receive the ability to exchange by telephone and the
right to redeem by telephone up to $100,000 to their address of record.
Shareholders also may, by telephone, request that redemption proceeds be sent to
a predesignated bank account. Each Fund uses procedures designed to give
reasonable assurance that telephone instructions are genuine, including
recording telephone calls, testing a caller's identity and sending written
confirmation of telephone transactions. If a Fund does not follow such
procedures, it may be liable for losses due to unauthorized or fraudulent
telephone instructions. Each Fund will not be liable for acting upon
instructions communicated by telephone that it reasonably believes to be
genuine.

Share price

Purchases and redemptions, including exchanges, are made at net asset value.
There is a 2% fee payable to Scudder Emerging Markets Growth Fund for exchanges
or redemptions of shares held less than one year. Scudder Fund Accounting
Corporation determines net asset value per share as of the close of regular
trading on the Exchange, normally 4 p.m. eastern time, on each day the Exchange
is open for trading, for all Funds. Net asset value per share is calculated by
dividing the value of total Fund assets, less all liabilities, by the total
number of shares outstanding.

Trading in securities on foreign securities exchanges is normally completed
before the close of regular trading on the Exchange. Trading on these foreign
exchanges may not take place on all days on which there is regular trading on
the Exchange, or may take place on days on which there is no regular trading on
the Exchange. If events materially affecting the value of a Fund's portfolio
securities occur between the time when these foreign exchanges close and the
time when the Fund's net asset value is calculated, such securities will be
valued at fair value as determined by each Board of Directors.

Processing time

All purchase and redemption requests must be received in good order by the
Funds' transfer agent.

Those requests received by the close of regular trading on the Exchange are
executed at the net asset value per share calculated at the close of regular
trading that day. Those requests received after the close of regular trading on
the Exchange will be executed the following business day.

If you wish to make a purchase of $500,000 or more you should notify the Funds'
transfer agent of such a purchase by calling 1-800-225-5163.

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

Purchase restrictions

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

34
<PAGE>

Tax information

A redemption of shares, including an exchange into another Scudder fund, is a
sale of shares and may result in a gain or loss for income tax purposes.

Tax identification number

Be sure to complete the Tax Identification Number section of each Fund's
application when you open an account. Federal tax law requires these Funds to
withhold 31% of taxable dividends, capital gains distributions from accounts
(other than those of certain exempt payees) without a correct certified Social
Security or tax identification number and certain other certified information or
upon notification from the IRS or a broker that withholding is required. The
Funds reserve the right to reject new account applications without a correct
certified Social Security or tax identification number. The Funds also reserve
the right, following 30 days' notice to shareholders, to redeem all shares in
accounts without a correct certified Social Security or tax identification
number. A shareholder may avoid involuntary redemption by providing the Fund
with a tax identification number during the 30-day notice period. Redemptions
for failure to provide a tax identification number are not subject to the 2%
redemption fee on Scudder Emerging Markets Growth Fund.

Minimum balances

Shareholders should maintain a share balance worth at least $2,500, which amount
may be changed by a Fund's Board of Directors. Scudder retirement plans and
certain other accounts have similar or lower minimum balance requirements. The
initial investment and minimum account balance for fiduciary accounts such as
IRAs is $1,000 per fund account, while the subsequent minimum investment is $50.
A shareholder may open a regular account with a minimum of $1,000, if an
investment program of at least $100 per month is established.

Shareholders with non-fiduciary accounts who maintain an account balance of less
than $2,500 in a Fund without establishing a regular investment program may be
assessed an annual $10.00 per fund charge with the fee to be paid to a Fund. The
$10.00 charge will not apply to shareholders with a combined household account
balance (same surname, same address) in any of the Scudder Funds of $25,000 or
more. Each Fund reserves the right, following 60 days' written notice to
shareholders, to redeem all shares in accounts below $250, where a reduction in
value has occurred due to a redemption or exchange out of the account. The
shareholder may restore the share balance to $250 or more during the 60-day
notice period and must maintain it at no lower than that minimum to avoid an
involuntary redemption. A Fund will mail the proceeds of the redeemed account to
the shareholder. Reductions in value that result solely from market activity
will not trigger an involuntary redemption. Retirement accounts and certain
other accounts will not be assessed the $10.00 charge or be subject to automatic
liquidation. Please refer to "Exchanges and Redemptions -- Other information" in
each Fund's Statement of Additional Information.

Third party transactions

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

Redemption-in-kind

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

If payment is made in securities, a shareholder may incur transaction expenses
in converting these securities to cash. Each Corporation has

35
<PAGE>
elected, however, to be governed by Rule 18f-1 under the 1940 Act, as a result
of which a Fund is obligated to redeem shares, with respect to any one
shareholder during any 90-day period, solely in cash up to the lesser of
$250,000 or 1% of the net asset value of each Fund at the beginning of the
period.

Shareholder benefits

Experienced professional management

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

A team approach to investing

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

Scudder Emerging Markets Growth Fund. Joyce E. Cornell, Lead Portfolio Manager,
has responsibility for the Fund's day-to-day management and investment
strategies. Ms. Cornell has been a portfolio manager at Scudder since 1993, and
joined the firm in 1991 after eight years of investment experience as a research
analyst. Elizabeth Allan, Portfolio Manager, helps set the Fund's general
investment strategies. Ms. Allan joined the Adviser in 1987, and has numerous
years of Pacific Basin research and investing experience. Tara C. Kenney,
Portfolio Manager, assists with the Fund's research and investment strategy by
focusing on the Latin American securities in the portfolio. Ms. Kenney joined
the Adviser in 1995 and has ten years of financial industry experience. Ms.
Kenney was a vice president of corporate finance for an investment banking firm
for seven years, and most recently, a portfolio manager for two years.

Elizabeth Allan, Portfolio Manager, helps set the Fund's general investment
strategies. Ms. Allan joined the Adviser in 1987, and has numerous years of
Pacific Basin research and investing experience.

Andre J. DeSimone, Portfolio Manager, assists in investment selection. Mr.
DeSimone joined the Adviser in 1997 after three years as Chief Executive Officer
of a stock brokerage company in Kenya. Mr. DeSimone also has six years of
experience in investment banking.

Scudder Latin America Fund. Lead Portfolio Manager Edmund B. Games, Jr. has set
the Fund's investment strategy and overseen its daily operation since the Fund
was introduced in 1992. Mr. Games joined the Adviser's equity research area in
1960 and has focused on Latin American stocks since 1988. Tara C. Kenney,
Portfolio Manager, assists with the Fund's research and investment strategy
since joining the Fund's team in 1996. Ms. Kenney joined the Adviser in 1995,
has ten years of financial industry experience. Ms. Kenney was a vice president
of corporate finance for an investment banking firm for seven years, and most
recently, a portfolio manager for two years. Paul Rogers, Portfolio Manager,
also joined the Fund's team in 1996 and is primarily responsible for research on
Latin American corporations. Mr. Rogers joined Scudder in 1994 and has over ten
years of investment experience.

Scudder Pacific Opportunities Fund. Co-Lead Portfolio Manager Elizabeth J. Allan
assumed responsibility for the Fund's day-to-day management and investment
strategies in February 1994. Ms. Allan joined the Adviser in 1987 as a member of

36
<PAGE>
the portfolio management team of a closed-end mutual fund concentrating its
investments in Asia. Co-Lead Portfolio Manager Theresa Gusman joined the team in
1997 and shares responsibility with Ms. Allan in the Fund's day-to-day
management and investment strategies. Ms. Gusman joined the Adviser in 1995
after three years as a Pacific Basin analyst. Ms. Gusman has 14 years of
experience in international investments. 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.

Scudder Emerging Markets Income Fund. Lead Portfolio Manager Susan E. Dahl
assumed responsibility for the Fund's investment strategies and day-to-day
management in 1996. Ms. Dahl, who has over seven years of investment experience
in emerging markets, joined the Fund's team in 1994 and has worked at Scudder
since 1987. Ms. Dahl is the market strategist and a senior portfolio manager for
the Adviser's Emerging Markets/High Yield Bond Group. Prior to assuming these
responsibilities, Ms. Dahl headed the Emerging Markets fixed income trading and
managed several Emerging Markets fixed income and balanced portfolios. M. Isabel
Saltzman, Portfolio Manager, assists with the development and execution of
investment strategy. Ms. Saltzman, who joined Scudder in 1990 as a portfolio
manager, has been involved in credit analysis, corporate finance, and foreign
finance and investing since 1979 and contributes special expertise in Latin
America.

SAIL(TM)--Scudder Automated Information Line

For personalized account information including fund prices, yields and account
balances, to perform transactions in existing Scudder fund accounts, or to
obtain information on any Scudder fund, shareholders can call Scudder's
Automated Information Line (SAIL) at 1-800-343-2890, 24 hours a day. During
periods of extreme economic or market changes, or other conditions, it may be
difficult for you to effect telephone transactions in your account. In such an
event you should write to the Fund; please see "How to contact Scudder" for the
address.

Investment flexibility

Scudder offers toll-free telephone exchange between funds at current net asset
value. You can move your investments among money market, income, growth,
tax-free and growth and income funds with a simple toll-free call or, if you
prefer, by sending your instructions through the mail or by fax. (The exchange
privilege may not be available for certain Scudder funds or classes thereof. For
more information, please call 1-800-225-5163.) Telephone and fax redemptions and
exchanges are subject to termination and their terms are subject to change at
any time by the Fund or the transfer agent. In some cases, the transfer agent or
Scudder Investor Services, Inc. may impose additional conditions on telephone
transactions.

Personal Counsel(SM) -- A Managed Fund Portfolio Program

If you would like to receive direct guidance and management of your overall
mutual fund portfolio to help you pursue your investment goals, you may be
interested in Personal Counsel from Scudder. Personal Counsel, a program of
Scudder Investor Services, Inc., a registered investment adviser and a
subsidiary of Scudder Kemper Investments, Inc., combines the benefits of a
customized portfolio of pure no-load Scudder Funds with ongoing portfolio
monitoring and individualized service, for an annual fee of generally 1% or less
of assets (with a $1,000 minimum). In addition, it draws upon the Adviser's more
than 75-year heritage of providing investment counsel to large corporate and
private clients. If you have $100,000 or more to invest initially and would like
more information about Personal Counsel, please call 1-800-700-0183.

Dividend reinvestment plan

You may have dividends and distributions automatically reinvested in additional
Fund

37
<PAGE>
shares. Please call 1-800-225-5163 to request this feature.

Shareholder statements

You will receive a detailed statement summarizing account activity, including
dividend and capital gain reinvestment, purchases and redemptions. All of your
statements should be retained to help you keep track of account activity and the
cost of shares for tax purposes.

Shareholder reports

In addition to account statements, you receive periodic shareholder reports
highlighting relevant information, including investment results and a review of
portfolio changes.

To reduce the volume of mail you receive, only one copy of most Fund reports,
such as the Fund's Annual Report, may be mailed to your household (same surname,
same address). Please call 1-800-225-5163 if you wish to receive additional
shareholder reports.

Newsletters

Four times a year, Scudder sends you Perspectives, an informative newsletter
covering economic and investment developments, service enhancements and other
topics of interest to Scudder fund investors.

Scudder Investor Centers

As a convenience to shareholders who like to conduct business in person, Scudder
Investor Services, Inc. maintains Investor Centers in Boca Raton, Boston,
Chicago, New York and San Francisco.

T.D.D. service for the hearing impaired

Scudder's full range of investor information and shareholder services is
available to hearing impaired investors through a toll-free T.D.D. (Telephone
Device for the Deaf) service. If you have access to a T.D.D., call
1-800-543-7916 for investment information or specific account questions and
transactions.

38
<PAGE>

Purchases

<TABLE>
<CAPTION>
Opening Minimum initial investment: $2,500; IRAs $1,000
an account Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums.
See appropriate plan literature.

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

The Scudder Funds The Scudder Funds
P.O. Box 2291 66 Brooks Drive
Boston, MA Braintree, MA 02184
02107-2291

o By Wire Please see Transaction information--Purchasing shares--
By wire for details, including the ABA wire transfer number.
Then call 1-800-225-5163 for instructions.

o In Person Visit one of our Investor Centers to complete your application
with the help of a Scudder representative. Investor Center
locations are listed under Shareholder benefits.
-----------------------------------------------------------------------------------------------------------------------

Purchasing Minimum additional investment: $100; IRAs $50
additional Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums.
shares See appropriate plan literature.

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

o By Wire Please see Transaction information--Purchasing shares--
By wire for details, including the ABA wire transfer number.

o In Person Visit one of our Investor Centers to make an additional
investment in your Scudder fund account. Investor Center
locations are listed under Shareholder benefits.

o By Telephone Please see Transaction information--Purchasing shares--
By QuickBuy or By telephone order for more details.

o By Automatic You may arrange to make investments on a regular basis
Investment Plan through automatic deductions from your bank checking
($50 minimum) account. Please call 1-800-225-5163 for more information and an
enrollment form.
</TABLE>

<PAGE>

Exchanges and redemptions

<TABLE>
<CAPTION>
Exchanging Minimum investments: $2,500 to establish a new account;
shares $100 to exchange among existing accounts

<S> <C> <C>
o By Telephone To speak with a service representative, call 1-800-225-5163 from
8 a.m. to 8 p.m. eastern time or to access SAIL(TM), Scudder's Automated
Information Line, call 1-800-343-2890 (24 hours a day).

o By Mail Print or type your instructions and include:
or Fax the name of the Fund and the account number you are exchanging from;
your name(s) and address as they appear on your account;
the dollar amount or number of shares you wish to exchange;
the name of the Fund you are exchanging into;
your signature(s) as it appears on your account; and
a daytime telephone number.

Send your instructions

by regular mail to: or by express, registered, or by fax to:
or certified mail to:

The Scudder Funds The Scudder Funds 1-800-821-6234
P.O. Box 2291 66 Brooks Drive
Boston, MA 02107-2291 Braintree, MA 02184
-----------------------------------------------------------------------------------------------------------------------
Redeeming o By Telephone To speak with a service representative, call 1-800-225-5163 from
shares 8 a.m. to 8 p.m. eastern time or to access SAIL(TM), Scudder's Automated
Information Line, call 1-800-343-2890 (24 hours a day). You may have
redemption proceeds sent to your predesignated bank account, or
redemption proceeds of up to $100,000 sent to your address of record.

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

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

o By Automatic You may arrange to receive automatic cash payments periodically.
Withdrawal Call 1-800-225-5163 for more information and an enrollment form.
Plan
</TABLE>

<PAGE>

Scudder tax-advantaged retirement plans

Scudder offers a variety of tax-advantaged retirement plans for individuals,
businesses and non-profit organizations. These flexible plans are designed for
use with the Scudder Family of Funds (except Scudder tax-free funds, which are
inappropriate for such plans). Scudder Funds offer a broad range of investment
objectives and can be used to seek almost any investment goal. Using Scudder's
retirement plans can help shareholders save on current taxes while building
their retirement savings.

o Scudder No-Fee IRAs. These retirement plans allow a maximum annual
contribution of up to $2,000 per person for anyone with earned income (up
to $2,000 per individual for married couples filing jointly, even if only
one spouse has earned income). Many people can deduct all or part of their
contributions from their taxable income, and all investment earnings accrue
on a tax-deferred basis. The Scudder No-Fee IRA charges you no annual
custodial fee.

o Scudder Roth No-Fee IRAs. Similar to the traditional IRA in many respects,
these retirement plans provide a unique opportunity for qualifying
individuals to accumulate investment earnings tax free. Unlike a
traditional IRA, with a Roth IRA, if you meet the distribution
requirements, you can withdraw your money without paying any taxes on the
earnings. No tax deduction is allowed for contributions to a Roth IRA. The
Scudder Roth IRA charges you no annual custodial fee.

o 401(k) Plans. 401(k) plans allow employers and employees to make
tax-deductible retirement contributions. Scudder offers a full service
program that includes recordkeeping, prototype plan, employee
communications and trustee services, as well as investment options.

o Profit Sharing and Money Purchase Pension Plans. These plans allow
corporations, partnerships and people who are self-employed to make annual,
tax-deductible contributions of up to $30,000 for each person covered by
the plans. Plans may be adopted individually or paired to maximize
contributions. These are sometimes known as Keogh plans.

o 403(b) Plans. Retirement plans for tax-exempt organizations and school
systems to which employers and employees may both contribute.

o SEP-IRAs. Easily administered retirement plans for small businesses and
self-employed individuals. The maximum annual contribution to SEP-IRA
accounts is adjusted each year for inflation. The Scudder SEP-IRA charges
you no annual custodial fee.

o Scudder Horizon Plan. A no-load variable annuity that lets you build assets
by deferring taxes on your investment earnings. You can start with $2,500
or more.

Scudder Trust Company (an affiliate of the Adviser) is Trustee or Custodian for
some of these plans and is paid an annual fee for some of the above retirement
plans. For information about establishing a Scudder No-Fee IRA, SEP-IRA, Profit
Sharing Plan, Money Purchase Pension Plan or a Scudder Horizon Plan, please call
1-800-225-2470. For information about 401(k)s or 403(b)s please call
1-800-323-6105. To effect transactions in existing IRA, SEP-IRA and most Profit
Sharing or Pension Plan accounts, call 1-800-225-5163.

The variable annuity contract is provided by Charter National Life Insurance
Company (in New York State, Intramerica Life Insurance Company [S 1802]). The
contract is offered by Scudder Insurance Agency, Inc. (in New York State, Nevada
and Montana, Scudder Insurance Agency of New York, Inc.). CNL, Inc. is the
Principal Underwriter. Scudder Horizon Plan is not available in all states.

Scudder Investor Relations is a service provided through Scudder Investor
Services, Inc., Distributor.

<PAGE>

Appendix

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

S&P:

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

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

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

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

Moody's:

Bonds which are rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the

<PAGE>

fundamentally strong position of such issues. Bonds which are rated Aa are
judged to be of high quality by all standards. Together with the Aaa group they
comprise what are generally known as high grade bonds. They are rated lower than
the best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long term risks appear
somewhat larger than in Aaa securities. Bonds which are rated A possess many
favorable investment attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future.

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

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

<PAGE>

Investment products and services

The Scudder Family of Funds+++
- --------------------------------------------------------------------------------

Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series--
Premium Shares*
Managed Shares*
Scudder Government Money Market
Series--Managed Shares*

Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market
Series--Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**

Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited
Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**

U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund

Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund

Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio

U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund

U.S. Growth
- -----------

Value
Scudder Large Company Value Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund

Growth
Scudder Classic Growth Fund
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund

Global Growth
- -------------

Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Emerging Markets Growth Fund
Scudder Gold Fund

Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.

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 or classes thereof may
not be available for purchase or exchange. +A portion of the income from the
tax-free funds may be subject to federal, state, and local taxes. *A class of
shares of the Fund. **Not available in all states. +++ +++A no-load variable
annuity contract provided by Charter National Life Insurance Company and its
affiliate, offered by Scudder's insurance agencies, 1-800-225-2470. #These
funds, advised by Scudder Kemper Investments, Inc., are traded on the New York
Stock Exchange and, in some cases, on various foreign stock exchanges.

<PAGE>

How to contact Scudder

Account Service and Information:

For existing account service 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 personalized 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

Personal Counsel(SM) -- A Managed Fund Portfolio Program:

To receive information about this mutual fund portfolio guidance and
management program

Personal Counsel from Scudder -- 1-800-700-0183

Please address all correspondence to:

The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291

Or Stop by a Scudder Investor Center:

Many shareholders enjoy the personal, one-on-one service of the Scudder Investor
Centers. Check for an Investor Center near you--they can be found in the
following cities:

Boca Raton Chicago San Francisco
Boston New York

Scudder Investor Relations and Scudder Investor Centers are services provided
through Scudder Investor Services, Inc., Distributor.

* Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA
02061--Member NASD/SIPC.