SCUDDER
INVESTMENTS(SM)
[LOGO]
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EQUITY/GLOBAL
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Scudder
Latin America Fund
Fund #074
Annual Report
October 31, 1999
The fund seeks long-term capital appreciation.
A no-load fund with no commissions to buy, sell, or exchange shares.
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Contents
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4 Letter from the Fund's President
6 Performance Update
8 Portfolio Summary
10 Portfolio Management Discussion
16 Glossary of Investment Terms
17 Investment Portfolio
20 Financial Statements
23 Financial Highlights
24 Notes to Financial Statements
29 Report of Independent Accountants
30 Tax Information
31 Officers and Directors
32 Investment Products and Services
34 Scudder Solutions
2 SCUDDER LATIN AMERICA FUND
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Scudder Latin America Fund
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ticker symbol SLAFX fund number 074
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Date of Inception:
12/8/92
o Latin American stock markets have risen in the past year
on the strength of an improved growth outlook,
lower-than- expected inflation, and falling interest
rates. However, ongoing concerns over potential problems
in the political and economic realms put a damper on
returns in recent months.
Total Net Assets as of 10/31/99:
$449 million
o Fund management continues to focus on established
companies with reliable cash flows, strong balance
sheets, and skilled management teams. Although companies
that fit these criteria generally underperformed during
the period, the fund's investment discipline remains
unchanged.
o Management has maintained the fund's weighting in
consumer stocks and fixed-line telecommunications
companies, but has sharply reduced its position in
utilities.
SCUDDER LATIN AMERICA FUND 3
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Letter from the Fund's President
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[PHOTO]
Nicholas Bratt,
President,
Scudder Latin America
Fund
Dear Shareholders,
Over the past year, the overseas equity markets have staged a powerful
resurgence off of last autumn's lows. Stocks in Latin America have participated
in this rally, but a variety of region-specific concerns have limited the extent
to which the markets have rebounded. Elections, continued sluggishness in the
regional economy, and Brazil's ongoing deficit problem have all weighed on the
markets at different points during the year. In our view, these difficulties
have presented attractive investment opportunities by preventing value from
being recognized on the individual company level. The management of Scudder
Latin America Fund seeks to capitalize on these opportunities by investing in
companies with stable cash flows, favorable growth prospects, and management
teams that have demonstrated the ability to grow profits even in times of
crisis.
Over time, this strategy has served the fund well. During the three years ended
October 31, the fund was ranked in the upper 23rd percentile of Latin America
funds, according to Lipper Analytical Services. Over the five years ended on the
same date, the fund was ranked in the top 30th percentile.(1) Although the fund
has underperformed this year, we believe that the longer term numbers are a
result of management's focus on the highest quality companies in the Latin
markets. For more information on the recent market environment and the fund's
investment strategy,
4 SCUDDER LATIN AMERICA FUND
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please turn to the letter from the portfolio management team that begins on page
10.
Finally, it should be noted that Daniel Pierce retired in June of this year as
President of Scudder Latin America Fund, at which time I assumed that role and
its responsibilities. We are fortunate that Dan's longstanding affiliation with
Scudder is ongoing, and that we will continue to benefit from his counsel going
forward. I am pleased to join the Latin America Fund's team in this capacity,
and look forward to serving your interests.
Thank you for your continued investment in Scudder Latin America Fund. If you
have any questions about your investment, please call Scudder Investor
Information at 1-800-SCUDDER (1-800-728-3337), or visit our website at
www.scudder.com.
Sincerely,
Nicholas Bratt
President,
Scudder Latin America Fund
(1) Source: Lipper Analytical Services, Inc. Lipper Analytical Services, Inc.,
is an independent analyst of investment performance. Performance includes
reinvestment of dividends and capital gains. For the period ended October 31,
1999, Scudder Latin America Fund's Lipper ranking was 32 out of 49 Latin
American funds for the one-year period, 8 out of 35 funds for the three-year
period, 6 out of 19 for the five-year period.
SCUDDER LATIN AMERICA FUND 5
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Performance Update
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October 31, 1999
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Growth of a $10,000 Investment
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THE PRINTED DOCUMENT CONTAINS A LINE CHART HERE.
LINE CHART DATA:
Scudder IFC Latin America
Latin America Investable Total Return
Fund Index*
12/92** 10000 10000
'93 14728 13041
'94 19651 18352
'95 13567 11480
'96 17407 13691
'97 21455 16796
'98 17114 11700
'99 18992 14403
Yearly Periods ended October 31
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Fund Index Comparison
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Total Return
Growth of Average
Period ended 10/31/1999 $10,000 Cumulative Annual
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Scudder Latin America Fund
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1 year $ 11,097 10.97% 10.97%
5 year $ 9,664 -3.36% -0.68%
Life of Fund** $ 19,783 97.83% 10.40%
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IFC Latin America Investable Total Return Index*
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1 year $ 12,310 23.10% 23.10%
5 year $ 7,848 -21.52% -4.73%
Life of Fund** $ 14,403 44.03% 5.48%
* The IFC Latin America Investable Total Return Index is prepared by
International Finance Corporation. It is an unmanaged, market
capitalization-weighted representation of stock performance in seven Latin
American markets, and measures the returns of stocks that are legally and
practically available to investors. Unlike Fund returns, Index returns do
not reflect fees or expenses.
** The Fund commenced operations on December 8, 1992. Index comparisons begin
December 31, 1992.
6 SCUDDER LATIN AMERICA FUND
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Returns Per Share Information
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Yearly Periods ended October 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE, ILLUSTRATING
THE FUND TOTAL RETURN AND INDEX TOTAL RETURN* BELOW.
1993*** 1994 1995 1996 1997 1998 1999
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Fund Total
Return (%) 53.42*** 33.43 -30.96 28.31 23.25 -20.23 10.97
Index Total
Return (%) 28.72 48.17 -37.44 19.26 22.68 -30.34 23.10
Net Asset
Value ($) 18.41 24.44 16.22 20.63 25.12 19.02 19.95
Income
Dividends ($) -- .06 -- .15 .26 .25 .37
Capital Gains
Distributions ($) -- .06 .73 -- -- 1.14 .64
* The IFC Latin America Investable Total Return Index is prepared by
International Finance Corporation. It is an unmanaged, market
capitalization-weighted representation of stock performance in seven Latin
American markets, and measures the returns of stocks that are legally and
practically available to investors. Unlike Fund returns, Index returns do
not reflect fees or expenses.
** The Fund commenced operations on December 8, 1992. Index comparisons begin
December 31, 1992.
*** Total return does not reflect the effect to the shareholder of the
applicable redemption fees.
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results. Investment return
and principal value will fluctuate, so an investor's shares, when
redeemed, may be worth more or less than when purchased. If the Adviser
had not maintained the Fund's expenses, the five year and life of Fund
total returns would have been lower.
SCUDDER LATIN AMERICA FUND 7
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Portfolio Summary
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October 31, 1999
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Geographical
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We found a number of attractive investment opportunities in Mexico, which posted
the best economic performance of any country in Latin America.
[PIE CHART]
(Excludes 8% Cash Equivalents)
Mexico 49%
Brazil 38%
Argentina 6%
Chile 3%
Peru 2%
Other 2%
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100%
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Sectors
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Our focus on companies with high levels of free cash flow is the reason for the
fund's large weighting in the consumer staples and communications sectors.
[PIE CHART]
(Excludes 8% Cash Equivalents)
Consumer Staples 29%
Communications 25%
Financial 15%
Energy 14%
Manufacturing 10%
Consumer Discretionary 5%
Metals & Minerals 2%
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100%
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8 SCUDDER LATIN AMERICA FUND
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Ten Largest Equity Holdings
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(63% of Portfolio) The fund's top holdings
reflect our emphasis on
1. Petroleo Brasileiro S.A. well-managed companies
Petroleum company in Brazil with strong brand
franchises and stable
2. Telefonos de Mexico S.A. de C.V. rates of earnings growth.
Telecommunication services in Mexico
3. Banco Itau S.A.
Bank in Brazil
4. Kimberly Clark de Mexico S.A. de C.V.
Producer of consumer paper products in Mexico
5. Fomento Economico Mexicano S.A. de C.V.
Producer of beer, soft drinks and mineral water in Mexico
6. CIFRA S.A. de C.V.
Discount retailer in Mexico
7. Grupo Financiero Inbursa S.A. de C.V. "B"
Brokerage, insurance, banking and leasing services in Mexico
8. Companhia Cervejaria Brahma
Beer producer and distributor in Brazil
9. Tele Centro Sul Participacoes S.A.
Provider of local telecommunication services in Brazil
10. Grupo Continental S.A.
Producer and distributor of soft drinks, sugar and mineral
water in Mexico
For more complete details about the Fund's investment portfolio, see page 17. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
SCUDDER LATIN AMERICA FUND 9
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Portfolio Management Discussion
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October 31, 1999
Dear Shareholders,
Over the past fiscal year, stock markets in Latin America posted modest gains,
albeit with exceptionally high levels of volatility. Stocks plunged last fall in
anticipation of a devaluation of the Brazilian real, then staged a massive rally
once it became evident that the drop in the currency's value was not causing the
disruptions that the market had long feared. The Latin markets rose through
mid-May, but a series of unfavorable developments confined the region's major
markets to a trading range throughout the final five months of the period.
Investors were discouraged by the fact that the region's economy continued to
languish, with five of the seven major economies in the midst of a recession as
of the end of October. In addition, political noise in Mexico and Chile,
concerns about Argentina's dollar peg, and Ecuador's debt default rattled the
markets. The nervousness surrounding the U.S. Federal Reserve's interest rate
policy and the threat of Y2K also raised the risk premium on equities in Latin
America. Stock market liquidity declined through much of the summer and fall as
a result, with trading volumes in the major markets stagnant at roughly half of
their normal levels.
Against this backdrop, Scudder Latin America Fund returned 10.97% over the
twelve-month period ended October 31, 1999, trailing the 23.10% return of its
unmanaged benchmark, the IFC Latin America Investable Index. The primary reason
for the fund's underperformance was our strategy of focusing on quality names at
a time when stocks of lesser quality provided the strongest performance. This
phenomenon has occurred not just in Latin America, but in all of the emerging
markets. Take Mexico, for instance, where we avoided many of the stocks that
provided the biggest boost to the index. We had no investments in the leading
banks because our fundamental research indicated that they possessed weak
balance sheets, and suffered from lingering problems with non-performing loans.
Besides the banks, several highly indebted conglomerates helped propel the IFC
Index.
10 SCUDDER LATIN AMERICA FUND
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Although our strategy of avoiding such companies hurt our relative performance
in the short term, we have little doubt that a focus on quality companies will
produce superior returns in the future as it has in the past. Investment
Environment
Investment Environment
Almost a year after Brazil's devaluation, Latin America continues to offer a
mixed picture for investors. On the positive side, we are seeing a bottom
forming in the economic cycle and are expecting an improvement in growth across
the region in the year 2000. A key factor in this process is the pickup in
commodity prices, which helps increase exports and alleviate the financing
burdens of the region's governments. The trend is especially meaningful for
Mexico, a large exporter of oil. In Brazil, GDP is expected to contract by less
than 1% in 1999, which is well above initial expectations. Inflation, which is
running at 8-9%, has not been the problem that was originally anticipated, and
interest rates have fallen accordingly. In addition, both Mexico and Brazil have
benefited from increasing levels of foreign direct investment. We are also
seeing an improvement in consumer spending across the region, a trend that
should prove beneficial for the fund's overweight position in consumer stocks.
Another distinct positive has been the lack of turmoil surrounding the region's
recent elections. Political transitions in Latin America are often chaotic, and
have frequently been the source of disruptions in the financial markets.
However, neither the Argentine presidential elections nor the Mexican
presidential primary produced rhetoric that would indicate that either
government is likely to derail the economic reform efforts. The improvements in
the region's economic and political environment could have important long-term
ramifications for the markets, since local pension funds currently hold a record
low percentage of their total assets in equities. With local interest rates
falling, many institutional investors are already beginning to reposition their
portfolios into equities.
SCUDDER LATIN AMERICA FUND 11
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Despite the presence of these positive factors, several problems continue to
affect the region. The most significant imbalances continue to exist in Brazil.
The government took the necessary steps to navigate the economy through its
exchange rate crisis, but its failure to address Brazil's fundamental structural
difficulties has left the country vulnerable to the so-called "twin deficits."
The January devaluation of the real has not brought about a significant
improvement in the trade deficit, and its Congress has been unwilling to accept
short-term pain to address the growing budget deficit. Since the country's
savings rate is too low to make up this shortfall, the economy must turn to
external sources to finance growth. Many Brazilian companies are dependent on
the willingness of capital markets to roll over maturing debt and/or provide
additional funds. This dynamic puts pressure on exchange rates and leaves highly
leveraged companies extremely vulnerable to shifts in sentiment. Investment
Strategy
Investment Strategy
Our strategy is designed to mitigate the effects of these vulnerabilities, and
at the same time position the portfolio to capitalize on an upturn in growth.
The most important trait we look for in selecting companies is their ability to
finance growth internally. Companies that can generate strong, consistent cash
flows are not hostage to capital markets during crisis periods. Reflecting this
strategy, our holdings in Brazil are concentrated in Petrobras, Banco Itau, and
Brahma. For the same reason, telecommunications stocks are also heavily weighted
in the portfolio. We've traditionally favored this industry, which stands to
benefit from the trend toward privatization and the pent-up demand for telephone
systems in the region. We prefer the large, fixed-line names, since they operate
in a more favorable competitive environment and have a lower degree of leverage
than Brazilian cellular companies. Conversely, we eliminated holdings in the
electric utility sectors due to concerns that they were excessively leveraged in
relation to their cash flows.
12 SCUDDER LATIN AMERICA FUND
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We have also increased the fund's weighting in Mexico, which in our view
possesses the strongest underlying economic fundamentals of any country in the
region. During the third calendar quarter, we put the majority of the new cash
that flowed into the fund in mexican equities. We reestablished an investment in
Apasco, the country's second largest cement producer, and added to existing
investments in Grupo Carso and Femsa.
Outlook
Looking ahead, we believe that Latin America offers attractive value and
favorable growth prospects. Current price levels reflect much of the uncertainty
surrounding the political cycle, and we believe that there is room on the upside
given the improvement in growth that we see in the year ahead. While concerns
about a global credit squeeze remain in place, we feel that the region is in
much better shape to withstand an external shock than it was a year ago. In
addition, the companies we hold in the portfolio have been battle-tested and
have generally emerged stronger than before.
We will continue to concentrate on finding long-term investment opportunities in
well-managed companies with steady cash flows. The earnings power of Latin
American companies has increased over time, but that fact is often lost on the
international investment community due to the ongoing problems in the public
sector. As a result, companies with strong fundamentals generally are not
afforded the valuations of similar companies in other regions solely because of
their address. We believe this anomaly represents an opportunity to build
positions in the companies that have demonstrated the ability to manage these
risks of location. Although many quality stocks have underperformed in 1999, we
are confident that a focus on companies with superior management, excellent
returns on capital, balance sheet integrity, and established brand franchises
will continue to produce competitive investment returns in the future.
SCUDDER LATIN AMERICA FUND 13
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Sincerely,
Your Portfolio Management Team
/s/ Edmund B. Games, Jr. /s/ Tara C. Kenney
Edmund B. Games, Jr. Tara C. Kenney
/s/ Paul H. Rogers
Paul H. Rogers
14 SCUDDER LATIN AMERICA FUND
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Scudder Latin America Fund:
A Team Approach to Investing
Scudder Latin America Fund is managed by a team of Scudder Kemper Investments,
Inc. (the "Adviser") professionals, each of whom plays 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 our offices across the United States and
abroad. We believe our team approach benefits fund investors by bringing
together many disciplines and leveraging our extensive resources.
[PHOTO]
Edmund B. Games, Jr.
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.
[PHOTO]
Tara C. Kenney
Portfolio manager Tara C. Kenney assists with the fund's research and investment
strategy. Ms. Kenney, who joined the fund's team in 1996, has 11 years of
financial industry experience.
[PHOTO]
Paul H. Rogers
Portfolio manager Paul H. Rogers also joined the fund's team in 1996 and is
primarily responsible for research on Latin American corporations. Mr. Rogers
joined the Adviser in 1994 and has over 11 years of investment experience.
SCUDDER LATIN AMERICA FUND 15
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Glossary of Investment Terms
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Currency Devaluation
A significant decline of a currency's value relative to other currencies -- such
as the U.S. dollar -- typically resulting from the cessation of a country's
central bank intervention in the currency markets. For U.S. investors who are
investing overseas, a devaluation of a foreign currency can reduce the total
return of their investment.
Fiscal Deficit
The difference between a country's income and its expenditures. Governments
generally issue debt to finance this shortfall. A low rate of savings in a
debtor nation means that investment from foreign sources will be required.
Fundamental Research
Analysis of companies based on the projected impact of management, products,
sales, and earnings on their balance sheets and income statements. Distinct from
technical analysis, which evaluates the attractiveness of a stock based on
historical price and trading volume movements, rather than the financial results
of the underlying company.
Liquidity
A characteristic of an investment or an asset referring to the ease of
convertibility into cash within a reasonably short period of time. A stock that
is liquid has enough shares outstanding and a substantial enough market
capitalization to allow large purchases and sales to occur without causing a
significant move in its market price as a result.
Trade Deficit
The difference between the value of goods and services a country imports and the
value of goods and services it exports. A deficit exists when the value of
imports is greater than the value of exports. Such a condition is often
considered to be a negative factor for the strength of the currency, since a
deficit implies weaker demand for the currency of the country in question
relative to its trading partners.
(Source: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
16 SCUDDER LATIN AMERICA FUND
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Investment Portfolio as of October 31, 1999
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Principal Market
Amount ($) Value ($)
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Repurchase Agreements 3.8%
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Repurchase Agreement with Donaldson, Lufkin & Jenrette
dated 10/29/1999 at 5.2%, to be repurchased at
$17,232,464 on 11/1/1999, collateralized by a
$17,242,000 U.S. Treasury Inflationary Index Note, -----------
3.625%, 1/15/2008 (Cost $17,225,000) ................ 17,225,000 17,225,000
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Short-Term Notes 4.4%
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Federal Home Loan Bank, 5.234%**, 11/1/1999 -----------
(Cost $20,000,000) .................................. 20,000,000 20,000,000
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Shares
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Common Stocks 91.8%
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Argentina 5.5%
BI S.A. "A" (Venture capital company) (b) ............ 3,000,000 2,250,000
Nobleza Piccardo S.A. (Tobacco company) .............. 977,177 1,857,491
Quilmes Industrial S.A. (Leading beer distributor) ... 922,443 7,494,849
Telecom Argentina S.A. "B" (ADR) (Telecommunication
services) ......................................... 300,000 8,250,000
Telefonica de Argentina S.A. "B" (ADR)
(Telecommunication services) ...................... 200,000 5,125,000
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24,977,340
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Brazil 34.6%
Banco Itau S.A. (pfd.) (Bank) ........................ 560,046,000 32,199,770
Companhia Cervejaria Brahma (pfd.) (ADR)
(Beer producer and distributor) ................... 50,000 625,000
Companhia Cervejaria Brahma (pfd.) ................... 30,014,569 19,182,823
Companhia Siderurgica Nacional (ADR) (Manufacturer
and distributor of steel and tin mill products) ... 60,800 1,615,000
Companhia Vale do Rio Doce (pfd.) (ADR) (Mining, rail
transportation, and mineral sales in iron ore,
aluminum, manganese, titanium, gold, & copper) .... 150,000 2,985,938
Lojas Americanas S.A.(Discount department
store chain) ...................................... 268,156,807 272,562
Perdigao S.A. (pfd.) (Producer of meat products) .....2,000,650,000 2,772,975
Petrobras Distribuidora S.A. (pfd.) (Distributor
of petroleum derivatives, natural gas
and alcohol) ...................................... 300,200,000 2,724,608
Petroleo Brasileiro S.A. (pfd.) (Petroleum company) .. 342,000,000 54,512,834
Sadia S.A. (pfd.) (Producer of meat products) ........ 4,003,770 2,630,814
The accompanying notes are an integral part of the financial statements.
SCUDDER LATIN AMERICA FUND 17
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Market
Shares Value ($)
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Sao Carlos Empreendimentos* (Real estate developer) .. 370,256,807 571,161
Souza Cruz S.A. (Holding company for cigarettes and
tobacco products) ................................. 450,200 2,576,863
Tele Centro Sul Participacoes S.A. (pfd.) (ADR)
(Provider of local telecommunication services) .... 265,000 15,833,750
Tele Norte Leste Participacoes S.A. (pfd.) (ADR)
(Provider of local telecommunication services) .... 670,000 11,306,250
Telecomunicacoes do Parana S.A. (pfd.)
(Telecommunication services) ...................... 30,004,986 6,084,173
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155,894,521
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Chile 2.5%
Companhia Cervecerias Unidas S.A.(ADR) (Bottler
and distributor of beer, soft drinks, wine,
and mineral water) ................................ 353,400 7,708,538
Compania de Telecomunicaciones de Chile, S.A. "A"
(ADR) (New) (Telecommunication services) .......... 100,541 1,677,778
Embotelladora Andina S.A. "B" (ADR) (Distributor
of Coca-Cola soft drinks) ......................... 43,400 558,775
Santa Isabel S.A. (ADR)* (Supermarket chain) ......... 185,200 1,481,600
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11,426,691
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Colombia 1.0%
Bavaria S.A. (Beer producer and distributor) ......... 1,065,736 3,537,578
Colombiana de Tabaco S.A. (Tobacco producer) ......... 907,271 967,019
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4,504,597
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Mexico 45.0%
Apasco, S.A. de C.V. (Cement producer) ............... 264,000 1,401,770
CIFRA S.A. de C.V. "C"* (Discount retailer) .......... 15,004,000 22,962,915
Fomento Economico Mexicano S.A. de C.V. (ADR)
(Producer of beer, soft drinks and mineral water) . 700,000 22,968,750
Grupo Azucarero Mexico S.A de C.V.* (Processor and
refiner of cane sugar and molasses) ............... 2,164,015 197,138
Grupo Carso S.A. de C.V. "A"* (Diversified
industrial group) ................................. 3,007,000 12,616,564
Grupo Continental S.A. (Producer and distributor
of soft drinks, sugar and mineral water) .......... 13,293,500 14,947,402
Grupo Embotelladora Unidas S.A. de C.V. "B"
(Soft drink producer and marketer) (b) ............ 1,919,134 2,593,478
Grupo Financiero Inbursa S.A. de C.V. "O"
(Brokerage, insurance, banking, and leasing
services) ......................................... 6,200,000 21,495,055
Grupo Industrial Bimbo S.A. de C.V. "A" (Producer
of bread and other baked goods) ................... 3,888,000 7,140,481
Grupo Industrial Maseca S.A. de C.V. (ADR) (Food
producer) ......................................... 1,100,200 7,563,874
Grupo Industrial Saltillo S.A. de C.V. "B"
(Manufacturer of steel products and auto parts) ... 48,000 125,185
The accompanying notes are an integral part of the financial statements.
18 SCUDDER LATIN AMERICA FUND
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Market
Shares Value ($)
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Kimberly Clark de Mexico S.A. de C.V. "A"
(Producer of consumer paper products) ............. 8,200,000 26,294,638
Panamerican Beverages Inc. "A" (Soft drink
bottler) .......................................... 225,800 3,626,913
Pepsi-Gemex S.A. "B"* (Soft drink bottler) (b) ....... 6,544,500 1,762,461
Telefonos de Mexico S.A. de C.V. "L" (ADR)
(Telecommunication services) ...................... 615,000 52,582,500
Tubos de Acero de Mexico S.A. (ADR) (Manufacturer
of various types of pipes, casings and tubing) .... 410,800 4,493,125
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202,772,249
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Panama 1.4%
Banco Latinoamericano de Exportaciones S.A. "E"
(ADR) (Bank) ...................................... 255,700 6,120,819
-----------
Peru 1.8%
Embotellador Latinoamericana S.A. "T" (Soft drink
bottler and distributor) .......................... 3,108,898 704,541
Telefonica del Peru S.A. "B" (ADR)
(Telecommunication services) ...................... 130,000 1,503,125
Union de Cervecerias Backus & Johnston S.A. "T"
(Beer producer) ................................... 16,392,499 6,066,071
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8,273,737
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Total Common Stocks (Cost $401,556,247) 413,969,954
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Total Investment Portfolio-- 100.0% (Cost $438,781,247) (a) 451,194,954
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* Non-income producing security.
** Annualized yield at time of purchase, not a coupon rate.
(a) The cost for federal income tax purposes was $439,737,061. At October 31,
1999, net unrealized appreciation for all securities based on tax cost was
$11,457,893. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $62,307,783 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$50,849,890.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $6,605,939 (1.47% of net assets).
Their values have been estimated by the Valuation Committee in the absence
of readily ascertainable market values. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the difference could be material. The cost of
these securities at October 31, 1999 aggregated $17,036,370. These
securities may also have certain restrictions as to resale.
The accompanying notes are an integral part of the financial statements.
SCUDDER LATIN AMERICA FUND 19
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Financial Statements
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities as of October 31, 1999
- --------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------
Investments, at market (identified cost $438,781,247) .. $ 451,194,954
Cash ................................................... 839
Foreign currency holdings, at market
(identified cost $168,363) ........................... 168,227
Receivable for investments sold ........................ 1,268,745
Receivable for Fund shares sold ........................ 548,001
Dividends and interest receivable ...................... 2,442,382
Other assets ........................................... 3,170
--------------
Total assets ........................................... 455,626,318
Liabilities
- --------------------------------------------------------------------------------
Payable for investments purchased ...................... 4,752,924
Payable for Fund shares redeemed ....................... 713,619
Accrued management fee ................................. 467,063
Other payables and accrued expenses .................... 730,915
--------------
Total liabilities ...................................... 6,664,521
- --------------------------------------------------------------------------------
Net assets, at market value $ 448,961,797
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income .................... 585,628
Net unrealized appreciation (depreciation) on:
Investments .......................................... 12,413,707
Foreign currency related transactions ................ (665,772)
Accumulated net realized gain (loss) ................... (29,528,958)
Paid-in capital ........................................ 466,157,192
- --------------------------------------------------------------------------------
Net assets, at market value ............................ $ 448,961,797
- --------------------------------------------------------------------------------
Net Asset Value
- --------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($448,961,797 / 22,499,642 shares of capital stock
outstanding, $.01 par value, 100,000,000 shares --------------
authorized) ......................................... $ 19.95
--------------
The accompanying notes are an integral part of the financial statements.
20 SCUDDER LATIN AMERICA FUND
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Statement of Operations for the year ended October 31, 1999
- --------------------------------------------------------------------------------
Investment Income (Loss)
- --------------------------------------------------------------------------------
Income:
Dividends (net of foreign taxes withheld
of $1,261,139) ......................................... $ 15,871,274
Interest ............................................... 1,308,745
--------------
17,180,019
--------------
Expenses:
Management fee ......................................... 6,006,448
Services to shareholders ............................... 1,987,774
Custodian and accounting fees .......................... 1,015,777
Directors' fees and expenses ........................... 49,568
Reports to shareholders ................................ 136,076
Auditing ............................................... 97,351
Legal .................................................. 18,634
Registration fees ...................................... 64,976
Other .................................................. 54,979
--------------
9,431,583
- -------------------------------------------------------------------------------
Net investment income (loss) 7,748,436
- -------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- -------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ............................................ (26,494,627)
Foreign currency related transactions
(including CPMF tax of $403,992) .................... (4,212,767)
--------------
(30,707,394)
--------------
Net unrealized appreciation (depreciation)
during the period on:
Investments ............................................ 69,345,257
Foreign currency related transactions .................. (626,800)
--------------
68,718,457
- --------------------------------------------------------------------------------
Net gain (loss) on investment transactions 38,011,063
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 45,759,499
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
SCUDDER LATIN AMERICA FUND 21
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended October 31,
Increase (Decrease) in Net Assets 1999 1998
- ------------------------------------------------------------------------------------
Operations:
<S> <C> <C>
Net investment income ............................ $ 7,748,436 $ 10,839,107
Net realized gain (loss) from investment
transactions .................................. (30,707,394) 14,336,304
Net unrealized appreciation (depreciation) on
investment transactions during the period ..... 68,718,457 (162,701,347)
-------------- --------------
Net increase (decrease) in net assets resulting
from operations ............................... 45,759,499 (137,525,936)
-------------- --------------
Distributions to shareholders from:
Net investment income ............................ (9,206,695) (8,553,580)
-------------- --------------
Net realized gains ............................... (15,934,116) (39,004,290)
-------------- --------------
Fund share transactions:
Proceeds from shares sold ........................ 264,196,798 312,261,907
Net asset value of shares issued to shareholders
in reinvestment of distributions .............. 23,977,201 45,271,596
Cost of shares redeemed .......................... (363,449,884) (551,385,752)
-------------- --------------
Net increase (decrease) in net assets from Fund
share transactions ............................ (75,275,885) (193,852,249)
-------------- --------------
Increase (decrease) in net assets ................ (54,657,197) (378,936,055)
Net assets at beginning of period ................ 503,618,994 882,555,049
Net assets at end of period (including
undistributed net investment income of -------------- --------------
$585,628 and $6,245,279, respectively) ........ $ 448,961,797 $ 503,618,994
-------------- --------------
Other Information
- ------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ........ 26,476,730 35,131,733
-------------- --------------
Shares sold ...................................... 13,356,309 13,655,806
Shares issued to shareholders in reinvestment of
distributions ................................. 1,363,891 1,743,227
Shares redeemed .................................. (18,697,288) (24,054,036)
-------------- --------------
Net increase (decrease) in Fund shares ........... (3,977,088) (8,655,003)
-------------- --------------
Shares outstanding at end of period .............. 22,499,642 26,476,730
-------------- --------------
</TABLE>
The accompanying notes are an integral part of the financial statements
22 SCUDDER LATIN AMERICA FUND
<PAGE>
Financial Highlights
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Years Ended October 31, 1999(a) 1998(a) 1997(a) 1996(a) 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $19.02 $25.12 $20.63 $16.22 $24.44
-------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .31 .34 .26 .25 .09
Net realized and unrealized gain
(loss) on investment transactions 1.63 (5.05) 4.49 4.30 (7.62)
-------------------------------------------------------------
Total from investment operations 1.94 (4.71) 4.75 4.55 (7.53)
Less distributions from:
Net investment income (.37) (.25) (.26) (.15) --
Net realized gains on investment
transactions (.64) (1.14) -- -- (.73)
-------------------------------------------------------------
Total distributions (1.01) (1.39) (.26) (.15) (.73)
Redemption fees (b) -- -- -- .01 .04
Net asset value, end of period $19.95 $19.02 $25.12 $20.63 $16.22
=============================================================
Total Return (%) 10.97 (20.23) 23.25 28.31(c) (30.96)(c)(d)
Ratios and Supplemental Data
- ----------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 449 504 883 622 519
Ratio of operating expenses, net, to
average daily net assets (%) 1.96 1.87 1.89 1.96 2.08
Ratio of operating expenses, before
expense reductions, to average daily
net assets (%) 1.96 1.87 1.89 1.96 2.11
Ratio of net investment income to
average daily net assets (%) 1.61 1.45 .98 1.32 .52
Portfolio turnover rate (%) 48.4 43.6 41.8 22.4 39.5
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) 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.
(c) Shareholders redeeming shares held less than one year will have a lower
total return due to the effect of the 2% redemption fee.
(d) Total returns would have been lower had certain expenses not been reduced.
SCUDDER LATIN AMERICA FUND 23
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
October 31, 1999
A. Significant Accounting Policies
Scudder Latin America Fund (the "Fund") is a non-diversified series of Scudder
International Fund, Inc. (the "Corporation") which is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company organized as a Maryland Corporation.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. Investments are stated at value determined as of the close
of regular trading on the New York Stock Exchange. Securities which are traded
on U.S. or foreign stock exchanges are valued at the most recent sale price
reported on the exchange on which the security is traded most extensively. If no
sale occurred, the security is then valued at the calculated mean between the
most recent bid and asked quotations. If there are no such bid and asked
quotations, the most recent bid quotation is used. Securities quoted on the
Nasdaq Stock Market ("Nasdaq"), for which there have been sales, are valued at
the most recent sale price reported. If there are no such sales, the value is
the most recent bid quotation. Securities which are not quoted on Nasdaq but are
traded in another over-the-counter market are valued at the most recent sale
price, or if no sale occurred, at the calculated mean between the most recent
bid and asked quotations on such market. If there are no such bid and asked
quotations, the most recent bid quotation shall be used.
Portfolio debt securities purchased with an original maturity greater than sixty
days are valued by pricing agents, approved by the officers of the Fund, whose
quotations reflect broker/dealer-supplied valuations and electronic data
processing techniques. If the pricing agents are unable to provide such
quotations, the most recent bid quotation supplied by a bona fide market maker
shall be used. Money market instruments purchased with an original maturity of
sixty days or less are valued at amortized cost.
All other securities are valued at their fair value as determined in good faith
by the Valuation Committee of the Board of Directors.
Foreign Currency Translations. The books and records of the Fund are maintained
in U.S. dollars. Investment securities and other assets and liabilities
24 SCUDDER LATIN AMERICA FUND
<PAGE>
- --------------------------------------------------------------------------------
denominated in a foreign currency are translated into U.S. dollars at the
prevailing exchange rates at period end. Purchases and sales of investment
securities, income and expenses are translated into U.S. dollars at the
prevailing exchange rates on the respective dates of the transactions.
Net realized and unrealized gains and losses on foreign currency transactions
represent net gains and losses between trade and settlement dates on securities
transactions, the disposition of forward foreign currency exchange contracts and
foreign currencies, and the difference between the amount of net investment
income accrued and the U.S. dollar amount actually received. That portion of
both realized and unrealized gains and losses on investments that results from
fluctuations in foreign currency exchange rates is not separately disclosed but
is included with net realized and unrealized gains and losses on investment
securities.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, receives delivery of the underlying securities, the amount
of which at the time of purchase and each subsequent business day is required to
be maintained at such a level that the market value is equal to at least the
principal amount of the repurchase price plus accrued interest.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code, as amended, which are applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, the Fund paid no federal income taxes and no federal
income tax provision was required.
At October 31, 1999, the Fund had a net tax basis capital loss carryforward of
approximately $28,573,000, which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until October 31,
2007.
The Fund is subject to a .38% Contribuicao Provisoria sobre Movimentacoes
Financieras (CPMF) tax which is applied to foreign exchange transactions
representing capital inflows or outflows to the Brazilian market.
Distribution of Income and Gains. Distributions of net investment income, if
any, are made annually. Net realized gains from investment transactions, in
excess of available capital loss carryforwards, would be taxable to the Fund if
not distributed, and, therefore, will be distributed to shareholders at least
annually.
SCUDDER LATIN AMERICA FUND 25
<PAGE>
- --------------------------------------------------------------------------------
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. These
differences primarily relate to investments in passive foreign investment
companies and investments in certain securities sold at a loss. As a result, net
investment income (loss) and net realized gain (loss) on investment transactions
for a reporting period may differ significantly from distributions during such
period. Accordingly, the Fund may periodically make reclassifications among
certain of its capital accounts without impacting the net asset value of the
Fund.
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date. Certain dividends
from foreign securities may be recorded subsequent to the ex-dividend date as
soon as the Fund is informed of such dividends. Realized gains and losses from
investment transactions are recorded on an identified cost basis.
All premiums and original issue discounts are amortized/accreted for both tax
and financial reporting purposes.
B. Purchases and Sales of Securities
During the year ended October 31, 1999, purchases and sales of investment
securities (excluding short-term investments) aggregated $217,536,998 and
$313,908,898, respectively.
C. Related Parties
Under the Investment Management Agreement (the "Agreement") with Scudder Kemper
Investments, Inc. (the "Adviser"), the Adviser directs the investments of the
Fund in accordance with its investment objective, policies, and restrictions.
The Adviser determines the securities, instruments and other contracts relating
to investments to be purchased, sold or entered into by the Fund. In addition to
portfolio management services, the Adviser provides certain administrative
services in accordance with the Agreement. The management fee payable under the
Agreement is equal to an annual rate of 1.25% of the first $1 billion of the
Fund's average daily net assets and 1.15% of such assets in excess of $1
billion, computed and accrued daily and payable monthly. For the year ended
October 31, 1999, the fee pursuant to this Agreement aggregated $6,006,448,
which was equivalent to an annual effective rate of 1.25% of the Fund's average
daily net assets.
26 SCUDDER LATIN AMERICA FUND
<PAGE>
- --------------------------------------------------------------------------------
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
year ended October 31, 1999, the amount charged to the Fund by SSC aggregated
$1,561,096, of which $231,752 is unpaid at October 31, 1999.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the year ended October 31,
1999, the amount charged to the Fund by STC aggregated $41,868, of which $10,485
is unpaid at October 31, 1999.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
October 31, 1999, the amount charged to the Fund by SFAC aggregated $263,036, of
which $40,302 is unpaid at October 31, 1999.
The Fund pays each of its Directors not affiliated with the Adviser an annual
retainer, plus specified amounts for attended board and committee meetings. For
the year ended October 31, 1999, Directors' fees and expenses aggregated
$49,568.
The Fund is one of several Scudder Funds (the "Underlying Funds") in which the
Scudder Pathway Series Portfolios (the "Portfolios") invest. In accordance with
the Special Servicing Agreement entered into by the Adviser, the Portfolios, the
Underlying Funds, SSC, SFAC, STC, and Scudder Investor Services, Inc., expenses
from the operation of the Portfolios are borne by the Underlying Funds based on
each Underlying Fund's proportionate share of assets owned by the Portfolios. No
Underlying Funds will be charged expenses that exceed the estimated savings to
each respective Underlying Fund. These estimated savings result from the
elimination of separate shareholder accounts which either currently are or have
potential to be invested in the Underlying Funds. For the year ended October 31,
1999, the Special Servicing Agreement expense charged to the Fund amounted to
$272.
D. Investing in Emerging Markets
Investing in emerging markets may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currencies, high rates of inflation, repatriation restrictions on
income and capital, and future adverse political and economic developments.
Moreover, securities issued in these markets may be less liquid, subject to
SCUDDER LATIN AMERICA FUND 27
<PAGE>
- --------------------------------------------------------------------------------
government ownership controls, delayed settlements, and their prices more
volatile than those of comparable securities in the United States.
E. Line of Credit
The Fund and several affiliated Funds (the "Participants") share in a $850
million revolving credit facility for temporary or emergency purposes, including
the meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated pro rata among each of the Participants. Interest is
calculated based on the market rates at the time of the borrowing. The Fund may
borrow up to a maximum of 25 percent of its net assets under the agreement.
28 SCUDDER LATIN AMERICA FUND
<PAGE>
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Board of Directors of Scudder International Fund, Inc. and the
Shareholders of Scudder Latin America Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Scudder Latin America Fund (the
"Fund") at October 31, 1999, the results of its operations, the changes in its
net assets, and the financial highlights for the periods indicated therein, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
Boston, Massachusetts PricewaterhouseCoopers LLP
December 10, 1999
SCUDDER LATIN AMERICA FUND 29
<PAGE>
Tax Information
- --------------------------------------------------------------------------------
October 31, 1999
The Fund paid distributions of $0.64 per share from net long-term capital gains
during its year ended October 31, 1999, of which 100% represents 20% rate gains.
The Fund paid foreign taxes of $1,261,139 and earned $9,173,760 of foreign
source income during the year ended October 31, 1999. Pursuant to section 853 of
the Internal Revenue Code, the Fund designates $0.06 per share as foreign taxes
paid and $0.41 per share as income earned from foreign sources for the year
ended October 31, 1999.
Please consult a tax adviser if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your account, please call 1-800-SCUDDER.
30 SCUDDER LATIN AMERICA FUND
<PAGE>
Officers and Directors
- --------------------------------------------------------------------------------
Nicholas Bratt*
o President
Sheryle J. Bolton
o Director; Chief Executive Officer,
Scientific Learning Corporation
William T. Burgin
o Director; General Partner,
Bessemer Venture Partners
Keith R. Fox
o Director; Private Equity
Investor
William H. Luers
o Director; Chairman and President,
U.N. Association of America
Kathryn L. Quirk*
o Director, Vice President and
Assistant Secretary
Joan E. Spero
o Director; President, Doris Duke
Charitable Foundation
Thomas J. Devine
o Honorary Director; Consultant
William H. Gleysteen, Jr.
o Honorary Director; Consultant;
Guest Scholar, Brookings
Institution
Wilson Nolen
o Honorary Director; Consultant
Robert G. Stone, Jr.
o Honorary Director;
Chairman Emeritus and Director, Kirby
Corporation
Elizabeth J. Allan*
o Vice President
Irene T. Cheng*
o Vice President
Joyce E. Cornell*
o Vice President
Susan E. Dahl*
o Vice President
Philip S. Fortuna*
o Vice President
Carol L. Franklin*
o Vice President
Edmund B. Games, Jr.*
o Vice President
Theresa Gusman*
o Vice President
Ann M. McCreary*
o Vice President
Sheridan P. Reilly*
o Vice President
Shahram Tajbakhsh*
o Vice President
John Millette*
o Vice President and Secretary
John R. Hebble*
o Treasurer
Richard W. Desmond*
o Assistant Secretary
Caroline Pearson*
o Assistant Secretary
*Scudder Kemper Investments, Inc.
SCUDDER LATIN AMERICA FUND 31
<PAGE>
Investment Products and Services
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
- --------------------------------------------------------------------------------
The Scudder Family of Funds[
- --------------------------------------------------------------------------------
Money Market
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series --
Prime Reserve Shares*
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**
U.S. Income
Scudder Short Term Bond Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder Corporate Bond 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
U.S. Growth and Income
Scudder Balanced Fund
Scudder Dividend & Growth Fund
Scudder Growth and Income Fund
Scudder Select 500 Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment Fund
U.S. Growth
Value
Scudder Large Company Value Fund
Scudder Value Fund***
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Scudder Select 1000 Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Equity
Worldwide
Scudder Global Fund
Scudder International Value Fund
Scudder International Growth and
Income Fund
Scudder International Fund++
Scudder International Growth 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 Heath Care Fund
Scudder Technology Fund
Preferred Series
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small Company Fund
32 SCUDDER LATIN AMERICA FUND
<PAGE>
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
- --------------------------------------------------------------------------------
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
Traditional IRA
Roth IRA
SEP-IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**[[
Scudder Horizon Advantage**[[[
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.
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.
*** Only the Scudder Shares of the fund are part of the Scudder Family of
Funds.
++ Only the International Shares of the fund are part of the Scudder Family
of Funds.
[[ A no-load variable annuity contract provided by Charter National Life
Insurance Company and its affiliate, offered by Scudder's insurance
agencies, 1-800-225-2470.
[[[ A no-load variable annuity contract issued by Glenbrook Life and Annuity
Company and underwritten by Allstate Financial Services, Inc., sold by
Scudder's insurance agencies, 1-800-225-2470.
# These funds, advised by Scudder Kemper Investments, Inc., are traded on
the New York Stock Exchange and, in some cases, on various other stock
exchanges.
SCUDDER LATIN AMERICA FUND 33
<PAGE>
Scudder Solutions
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Convenient ways to invest, quickly and reliably
Automatic Investment Plan
A convenient investment program in which money is electronically debited
from your bank account monthly to regularly purchase fund shares and
"dollar cost average" -- buy more shares when the fund's price is lower
and fewer when it's higher, which can reduce your average purchase price
over time.*
Automatic Dividend Transfer
The most timely, reliable, and convenient way to purchase shares -- use
distributions from one Scudder fund to purchase shares in another,
automatically (accounts with identical registrations or the same social
security or tax identification number).
QuickBuy
Lets you purchase Scudder fund shares electronically, avoiding potential
mailing delays; money for each of your transactions is electronically
debited from a previously designated bank account.
Payroll Deduction and Direct Deposit
Have all or part of your paycheck -- even government checks -- invested in
up to four Scudder funds at one time.
* Dollar cost averaging involves continuous investment in securities
regardless of price fluctuations and does not assure a profit or
protect against loss in declining markets. Investors should consider
their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some
transactions
Scudder Automated Information Line: SAIL(TM) -- 1-800-343-2890
Personalized account information, the ability to exchange or redeem
shares, and information on other Scudder funds and services via touchtone
telephone.
Scudder's Web Site -- www.scudder.com
Personal Investment Organizer: Offering account information and
transactions, interactive worksheets, prospectuses and applications for
all Scudder funds, plus your current asset allocation, whenever your need
them. Scudder's site also provides news about Scudder funds, retirement
planning information, and more.
34 SCUDDER LATIN AMERICA FUND
<PAGE>
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Retirees and those who depend on investment proceeds bank for living expenses
each can enjoy these convenient, timely, andreliable automated withdrawal
programs
Automatic Withdrawal Plan
You designate the bank account, determine the schedule (as frequently as
once a month) and amount of the redemptions, and Scudder does the rest.
Distributions Direct
Automatically deposits your fund distributions into the account you
designate within three business days after distribution is paid.
QuickSell
Provides speedy access to your money by electronically crediting your
redemption proceeds to the bank account you previously designated.
For more information about these services
Call a Scudder representative at
1-800-SCUDDER
Or visit our Web site at
www.scudder.com
Please address all written correspondence to
The Scudder Funds
PO Box 2291
Boston, Massachusetts
02107-2291
SCUDDER LATIN AMERICA FUND 35
<PAGE>
SCUDDER
INVESTMENTS(SM)
[LOGO]
PO Box 2291
Boston, MA 02107-2291
1-800-SCUDDER
www.scudder.com
A member of the [LOGO] Zurich Financial Services Group
About the Fund's Adviser
Scudder Kemper Investments, Inc. is one of the largest and most
experienced investment management organizations worldwide, managing more
than $290 billion in assets globally for mutual fund investors, retirement
and pension plans, institutional and corporate clients, insurance
companies, and private family and individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity,
and client-focused service. In 1997, Scudder, Stevens & Clark, Inc.,
founded over 80 years ago as one of the nation's first investment counsel
organizations, joined the Zurich Financial Services Group. As a result,
Zurich's subsidiary, Zurich Kemper Investments, Inc., with 50 years of
mutual fund and investment management experience, was combined with
Scudder. Headquartered in New York, Scudder Kemper Investments offers a
full range of investment counsel and asset management capabilities, based
on a combination of proprietary research and disciplined, long-term
investment strategies. With its global investment resources and
perspective, the firm seeks opportunities in markets throughout the world
to meet the needs of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a
member of the Zurich Financial Services Group. The Zurich Financial
Services Group is an internationally recognized leader in financial
services, including property/casualty and life insurance, reinsurance, and
asset management.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
