SCUDDER
INVESTMENTS(SM)
[LOGO]
--------------------------------------------------------------------------------
EQUITY/GLOBAL
--------------------------------------------------------------------------------
Scudder Greater
Europe Growth Fund
Fund #077
Semiannual Report
April 30, 2000
The fund seeks to provide long-term growth of capital.
A no-load fund with no commissions to buy, sell, or exchange shares.
<PAGE>
Contents
--------------------------------------------------------------------------------
4 Letter from the Fund's President
6 Performance Update
8 Portfolio Summary
10 Portfolio Management Discussion
15 Glossary of Investment Terms
16 Investment Portfolio
21 Financial Statements
24 Financial Highlights
25 Notes to Financial Statements
29 Officers and Directors
30 Investment Products and Services
32 Scudder Solutions
2 | Scudder Greater Europe Growth Fund
<PAGE>
Scudder Greater Europe Growth Fund
--------------------------------------------------------------------------------
ticker symbol SCGEX fund number 077
--------------------------------------------------------------------------------
Date of o European stocks provided strong performance over the
Inception: full period, despite a slump in global equities during
10/10/94 March and April.
Total Net o The fund, which has a track record of strong,
Assets as of consistent performance, has received a five-star
4/30/00: overall Morningstar(TM) rating^1 as of April 30, 2000.
$1.5 billion
o Although the region's markets are experiencing high
levels of volatility, management is positive on the
long-term outlook for European equities.
^1 Morningstar proprietary rankings reflect historical risk-adjusted
performance as of April 30, 2000. The ratings are subject to change every
month. Morningstar ratings are calculated from the funds' 3-, 5-, and
10-year average annual returns in excess of 90-day Treasury bill returns
with appropriate fee adjustments, and a risk factor that reflects fund
performance below 90-day T-bill returns. Past performance is no guarantee
of future results. Scudder Greater Europe Growth Fund received 5 stars for
the 3- and 5-year periods. The top 10% of funds in a broad asset class
receive 5 stars, the next 22.5% receive 4 stars, and the next 35% receive 3
stars. Scudder Greater Europe Growth Fund was rated among 1138 and 687
international funds for the 3- and 5-year periods, respectively, in its
broad asset class. Not all Scudder Funds receive 4 and 5 star ratings.
Ratings are subject to change.
3 | Scudder Greater Europe Growth Fund
<PAGE>
Letter from the Fund's President
--------------------------------------------------------------------------------
Dear Shareholders,
During the past six months, the global market environment has been characterized
by unusually high levels of volatility. Sparked by the large fluctuations of
technology stocks in the United States, daily moves of 2-3% in the international
indices have become increasingly commonplace. Amid the clamor that surrounds
extreme market fluctuations, it can be easy to lose track of what should really
matter for long-term investors: fundamentals. In Europe, we are seeing the
emergence of several long-term trends that we believe should provide a positive
backdrop to the region's markets for years to come. For example, merger and
acquisition activity is increasing, governments intervention in the free markets
is declining, and there has been an explosion of innovation at the individual
company level. In addition, economic growth is expected to remain strong despite
rising interest rates. We remain optimistic that investors will be rewarded by
the fruits of these changes, providing that they can stay focused on the
region's positive long-term trends during periods when stock prices are falling.
The Scudder Greater Europe Growth Fund, whose management team focuses on stocks
that they believe will capitalize on these positive fundamental changes, has
been well-positioned for the recent market environment. In addition to having
been awarded a 5-star overall rating from Morningstar,(TM) the fund is ranked in
the top 30% of European region funds for the one-year period, and in
4 | Scudder Greater Europe Growth Fund
<PAGE>
the top 10% for the three- and five-year periods, according to Lipper Analytical
Services.1 For more information on how the fund's management team has taken
advantage of the changes unfolding in Europe, please turn to the Portfolio
Management Discussion that begins on page 10.
Thank you for your continued investment in Scudder Greater Europe Growth Fund.
For current information on the fund or your account, visit our Web site at
www.scudder.com. There you will find a wealth of information, including fund
performance, the most recent news on Scudder products and services, and the
opportunity to perform account transactions. You can also speak with one of our
representatives by calling 1-800-SCUDDER (1-800-728-3337).
Sincerely,
/s/Nicholas Bratt
Nicholas Bratt
President,
Scudder Greater Europe Growth Fund
^1 Source: Lipper Analytical Services, Inc., an independent analyst of
investment performance. Performance includes reinvestment of dividends and
capital gains. For the periods ended April 30, 2000 Scudder Greater Europe
Growth Fund's Lipper ranking was 40 out of 151 funds for the one-year period, 7
out of 75 funds for the three-year period, and 3 out of 38 for the five-year
period. Past performance is no guarantee of future results.
5 | Scudder Greater Europe Growth Fund
<PAGE>
Performance Update
--------------------------------------------------------------------------------
April 30, 2000
--------------------------------------------------------------------------------
Growth of a $10,000 Investment
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
LINE CHART DATA:
Yearly periods ended April 30
Scudder Greater Morgan Stanley Capital
Europe Growth Fund International (MSCI) Europe Index*
'94** 10000 10000
'95 11679 11321
'96 14611 13298
'97 18186 16754
'98 22674 20618
'99 26383 23201
'00 32731 25130
--------------------------------------------------------------------------------
Fund Index Comparison
--------------------------------------------------------------------------------
Total Return
Growth of Average
Period ended 4/30/2000 $10,000 Cumulative Annual
--------------------------------------------------------------------------------
Scudder Greater Europe Growth Fund
--------------------------------------------------------------------------------
1 year $ 13,125 31.25% 31.25%
--------------------------------------------------------------------------------
5 year $ 31,093 210.93% 25.47%
--------------------------------------------------------------------------------
Life of Fund** $ 32,731 227.31% 23.80%
--------------------------------------------------------------------------------
Morgan Stanley Capital International (MSCI) Europe Index*
--------------------------------------------------------------------------------
1 year $ 10,999 9.99% 9.99%
--------------------------------------------------------------------------------
5 year $ 23,711 137.11% 18.83%
--------------------------------------------------------------------------------
Life of Fund** $ 25,130 151.30% 18.23%
--------------------------------------------------------------------------------
* The Morgan Stanley Capital International (MSCI) Europe Index is an unmanaged
capitalization-weighted measure of 14 stock markets in Europe. Index returns
assume dividends reinvested net of withholding tax and, unlike Fund returns,
do not reflect any fees or expenses.
** The Fund commenced operations on October 10, 1994. Index comparisons begin
October 31, 1994.
6 | Scudder Greater Europe Growth Fund
<PAGE>
--------------------------------------------------------------------------------
Returns and Per Share Information
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
Yearly periods ended April 30
Scudder Greater Morgan Stanley Capital
Europe Growth Fund International (MSCI) Europe Index*
1995** 5.27 5.97
1996 25.16 15.95
1997 21.47 20.96
1998 54.25 45.49
1999 1.02 5.65
2000 31.25 9.99
1995** 1996 1997 1998 1999 2000
--------------------------------------------------------------------------------
Fund Total
Return (%) 5.27 25.16 21.47 54.25 1.02 31.25
--------------------------------------------------------------------------------
Index Total
Return (%) 5.97 15.95 20.96 45.49 5.65 9.99
--------------------------------------------------------------------------------
Net Asset
Value ($) 12.61 15.50 18.63 26.37 26.59 34.72
--------------------------------------------------------------------------------
Income
Dividends ($) .02 .22 .06 .54 .06 .08
--------------------------------------------------------------------------------
Capital Gains
Distributions ($) -- .14 .14 1.30 -- .10
--------------------------------------------------------------------------------
* The Morgan Stanley Capital International (MSCI) Europe Index is an
unmanaged capitalization-weighted measure of 14 stock markets in Europe.
Index returns assume dividends reinvested net of withholding tax and,
unlike Fund returns, do not reflect any fees or expenses.
** The Fund commenced operations on October 10, 1994. Index comparisons begin
October 31, 1994.
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results. Investment return
and principal value will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. If the Adviser had not
maintained the Fund's expenses, the total returns for the life of Fund
period would have been lower.
7 | Scudder Greater Europe Growth Fund
<PAGE>
Portfolio Summary
--------------------------------------------------------------------------------
April 30, 2000
--------------------------------------------------------------------------------
Geographical
--------------------------------------------------------------------------------
(Excludes 9% Cash Equivalents) declined.
A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
France 23% The fund's positions in
United Kingdom 21% France and Germany
Germany 18% increased, while its
Netherlands 9% weighting in the U.K.
Italy 8% declined.
Finland 7%
Spain 6%
Switzerland 4%
Sweden 2%
Other 2%
----------------------------------------------------------
100%
----------------------------------------------------------
--------------------------------------------------------------------------------
Sectors
--------------------------------------------------------------------------------
(Excludes 9% Cash Equivalents)
A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Financial 17% Holdings in the
Manufacturing 16% communications,
Communications 14% technology, and media
Technology 9% sectors helped
Service Industries 8% performance over
Media 7% the full period.
Energy 7%
Durables 5%
Consumer Discretionary 4%
Other 13%
----------------------------------------------------------
100%
----------------------------------------------------------
8 | Scudder Greater Europe Growth Fund
<PAGE>
--------------------------------------------------------------------------------
Ten Largest Equity Holdings
--------------------------------------------------------------------------------
(23% of Portfolio)
<TABLE>
<S> <C>
1. Nokia Oyj The fund's top holdings
International telecommunications company in Finland reflect management's
emphasis on growing
2. Marschollek, Lautenschlaeger und Partner AG companies that are
Independent life insurance company in Germany undergoing positive
fundamental change.
3. Total FINA ELF S.A.
Explorer, developer, producer, transporter and marketer
of oil and natural gas in France
4. Vodafone AirTouch PLC
Provider of mobile telecommunication services in the
United Kingdom
5. Siemens AG
Electrical engineering and electronics company
in Germany
6. Telefonica SA
Provider of telecommunication services in Spain
7. Telefonektiebolaget LM Ericsson AB
Manufacturer of telecommunication equipment in Sweden
8. Epcos AG
Producer of electronic components and integrated
circuits in Germany
9. Royal Dutch Petroleum Co.
Petroleum company in the Netherlands
10. Koniklijke Philips Electronics N.V.
Diversifed manufacturer in the Netherlands
</TABLE>
For more complete details about the Fund's investment portfolio, see page 16. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
9 | Scudder Greater Europe Growth Fund
<PAGE>
Portfolio Management Discussion
--------------------------------------------------------------------------------
April 30, 2000
Dear Shareholders,
The European stock markets have generally provided strong performance over the
past six months, with the best returns coming in the period from November
through February. Although volatility increased significantly in March and
April, the fund was nevertheless able to outperform its unmanaged benchmark by a
wide margin. During the six months ended April 30, 2000, the fund produced a
total return of 24.06%, compared to a return of 8.31% for the MSCI Europe Index.
The fund has also performed well against its peers, finishing in the top third
of European region funds over the one-year period, and in the top 10% of
comparable funds over the three- and five-year periods, according to Lipper
Analytical Services. We attribute the fund's outperformance during the most
recent period to strong performance from its holdings in telecommunications,
media, and technology stocks.
Economic Backdrop Continues
To Improve
We are encouraged by the positive developments taking place in the economies of
the Eurozone. Business and consumer confidence levels are higher than they have
been in many years, and export growth is responding to the stimulus of a
competitive currency and favorable economic conditions worldwide. Unemployment,
a perennial problem in Europe, is declining thanks to robust economic growth,
increasing flexibility in the European labor markets, and the growth of new
industries and services. We expect European growth to exceed 3% in 2000, up from
2.2% in 1999, but inflation is not likely to be a problem due to deregulation,
restructuring, and the continued availability of excess capacity. Monetary
policy will likely become tighter in the months ahead, but we do not expect that
rise in rates to derail the growth train for the foreseeable future.
10 | Scudder Greater Europe Growth Fund
<PAGE>
Ongoing Change on the Corporate Level
Bodes Well for the Region
The shaky performance of the European stock markets during the final six weeks
of the period obscured the wealth of positive changes that continue to take
place in the region. The European investment universe is being redefined and
expanded, leading roles are now being played by the capital markets instead of
governments and banks, and corporate objectives are changing from employment,
size, profitability, and market share to global competitiveness and shareholder
return. Europe is changing fundamentally. It is innovating as it develops a new
political framework and new capital markets, and introduces a new common
currency, the euro. All of this is good news for equity investors in Europe.
The evidence of these important changes is abundant. First, consider the rise of
merger and acquisition (M&A) activity in Europe. In 1999, M&A activity in Europe
rose 50% to 1.2 trillion dollars. Corporate deals in Europe, relative to the
value of their stock markets, exceeded those in America. The most significant
change, other than the overall size of these transactions, has been the element
of hostility. Old taboos have been broken and governments have stepped aside to
allow actions such as Vodafone's bid for Mannesman. This key event highlighted
the prospects for consolidation and demonstrated that hostile cross-border
takeovers are possible today in Europe. The transaction confirms that
shareholders -- not unions or governments -- now have the decisive vote. This is
a new phenomenon in Europe, and in our view, we are still only at the very
beginning of the transformation of the corporate landscape.
A second important development is that European governments are finally
beginning to make the reforms necessary to stimulate growth. In December, the
Schroder government of Germany proposed the largest tax reform and tax reduction
that Germany has ever had. Corporate tax rates in Germany would go from among
the highest in
11 | Scudder Greater Europe Growth Fund
<PAGE>
Europe to among the lowest if this legislation is passed, which we think is
likely. This move will increase pressure on other European governments to be
more competitive with respect to their tax policies. The German government also
proposed the elimination of capital gains taxes on the sales of corporate cross
shareholdings, a move which will facilitate industry consolidation and promote
the more efficient allocation of capital since corporate assets will no longer
be tied up in unrelated, low-yielding holdings.
A third key change is the extent to which innovation is changing the face of
Europe. Although risk capital for small, innovative growth companies has not
been plentiful in the past, this is no longer the case. We have seen a rise in
the number of new companies coming to the equity markets since the early
nineties, as well as a surge in growth sectors -- such as technology -- that had
been absent from Europe before. There are now special segments for small- to
medium-sized growth companies on all the major national stock exchanges in
Europe. Thus far, the key player has been the Neuer Markt of the Frankfurt Stock
Exchange. Since trading began on March 10, 1997, the number of companies listed
there has risen from 2 to 245, and its market capitalization has risen from 3.2
billion euros to 195 billion euros, which already, in three short years,
represents some 21% of the value of the blue chip German DAX Index.
In combination, these important changes create an enormously positive backdrop
for European equities. Although external factors -- such as a downturn in the
Nasdaq average in the United States -- can have a negative impact in the short
term, we believe that these factors will contribute to an upward bias in stock
prices over time.
Fund Strategy
As always, our strategy remains focused on identifying companies in Europe that
we believe are poised for growth on the basis of effective positioning in new or
growing markets, as well as companies that are restructuring or displaying an
interest in the enhancement of shareholder
12 | Scudder Greater Europe Growth Fund
<PAGE>
value. In recent months, we increased our exposure to German financials with
purchases of Hypovereinsbank, Deutsche Bank, and Allianz. Given our expectation
of an increasingly tight balance of supply and demand for oil, we increased our
exposure to the energy sector through Royal Dutch Petroleum, BP Amoco, and Total
FINA.
Near the end of March we initiated a position in Credit Suisse, which is
well-positioned in private banking, investment banking, retail banking, and
insurance in Switzerland. The company, which has gone through important
restructuring, has a capable management team that is addressing the Internet
challenge to its various businesses. The firm is focused on leveraging its
sizeable insurance customer base via cost-efficient digital distribution, and is
committed to efficient capital allocation and shareholder value. These additions
brought our still-underweight position in financials up to 16.90% by the end of
the period.
We also added to our utilities weighting with purchases in French-based multi
utility Suez Lyonnaise des Eaux and National Power in the United Kingdom. Suez
has world-leading positions in water supply, waste management, and independent
power production, businesses that generate powerful cash flows. Growth prospects
are bright with tightening environmental regulations prompting municipalities
and industrial companies to outsource these activities. National Power, an
attractively valued stock, is a power generation company that was privatized by
the British government in 1991. The company is restructuring and de-merging its
integrated U.K. energy business from its rapidly growing international power
business, and management is taking steps to realize the value of these
businesses for shareholders.
Funds for these purchases came largely from sales in media stocks, a sector in
which our overweight stance has benefited fund performance. We took partial
profits in L'espresso, Mediaset, Publicis and Class Editori and Taylor Nelson,
and exited profitably from TF1, Flextech, and
13 | Scudder Greater Europe Growth Fund
<PAGE>
WPP. We remain overweight in the sector, which constitutes 8.5% of the
portfolio. Sector fundamentals are solid and many company managements are
aggressively exploiting the current opportunities created by booming advertising
demand, media convergence potential, and sector consolidation.
Summary
The European backdrop is positively backed by stronger economic growth, falling
unemployment, increased investment and innovation, heightened attention to
shareholder concerns, and progress on structural economic reforms. However,
investors should be aware of the potential short-term risks of investing in
European equities. Valuations are not as attractive as they have been, and
considerable short-term volatility has made the investment landscape
increasingly complicated. While we have seen important advances in structural
reform recently, investors may be disappointed by future setbacks. Furthermore,
the European markets are easily rattled by volatility in the United States.
Given these potential roadblocks, we believe that shareholders should be
prepared for continued volatility in the months ahead. However, we urge
long-term investors to look past the day-to-day "noise" in the markets, and
focus instead on the wealth of important long-term trends that are emerging in
Europe.
Sincerely,
Your Portfolio Management Team
/s/Carol L. Franklin /s/Joan R. Gregory
Carol L. Franklin Joan R. Gregory
/s/Nicholas Bratt
Nicholas Bratt
14 | Scudder Greater Europe Growth Fund
<PAGE>
Glossary of Investment Terms
--------------------------------------------------------------------------------
Consolidation The reduction in the number of companies in a
particular industry, brought about by merger and
acquisition activity.
Market The market value of a company's outstanding shares of
Capitalization common stock, determined by multiplying the number of
shares outstanding by the share price (shares x price
= market capitalization). The universe of publicly
traded companies is frequently divided into large-,
mid-, and small-capitalization. "Large-cap" stocks
tend to be more liquid.
Monetary The decision of a central bank to control the level
Policy of economic activity by either supplying credit
through lower interest rates or open market
purchases, or by restricting credit through higher
rates or open market sales. Looser credit tends to
stimulate the economy, while tighter credit tends to
calm inflationary forces.
Restructuring The general term for major corporate changes aimed at
greater efficiency and adaptation to changing
markets. Cost-cutting initiatives, debt retirement,
management realignments, and the sale of non-core
businesses are all developments frequently associated
with corporate restructuring.
Weighting Refers to the allocation of assets -- usually in
(over/under) terms of sectors, industries, or countries -- within
a portfolio relative to the portfolio's benchmark
index or investment universe.
(Source: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
15 | Scudder Greater Europe Growth Fund
<PAGE>
Investment Portfolio as of April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
Principal
Amount ($) Value ($)
------------------------------------------------------------------------------------
<S> <C> <C>
------------------------------------------------------------------------------------
Repurchase Agreements 3.9%
------------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette, 5.68%, to be repurchased at ----------
$60,028,400 on 5/1/2000*** (Cost $60,000,000) ........ 60,000,000 60,000,000
----------
------------------------------------------------------------------------------------
Commercial Paper 4.5%
------------------------------------------------------------------------------------
United States
Deutsche Bank Financial, Inc., 6.1%**, 5/31/2000 ........ 30,000,000 29,847,500
GTE Funding Corp., 6.05%**, 5/31/2000 ................... 40,000,000 39,798,333
------------------------------------------------------------------------------------
Total Commercial Paper (Cost $69,645,833) 69,645,833
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Convertible Bonds 0.3%
------------------------------------------------------------------------------------
Spain
Amadeus Global Travel Distribution S.A.* (Operator of a ----------
travel reservation system) (Cost $5,434,273) ......... 453,841 5,587,655
----------
</TABLE>
<TABLE>
<CAPTION>
Shares
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Common Stocks 91.3%
------------------------------------------------------------------------------------
<S> <C> <C>
Denmark 0.1%
Infineon Technologies AG* (Manufacturer and marketer of
semiconductors) ..................................... 29,371 2,023,059
----------
Finland 6.1%
JOT Automation Group Oyj (Manufacturer of high
technology production automation systems and
equipment) .......................................... 1,316,200 9,514,725
Nokia Oyj (International telecommunications company) ... 975,300 55,959,625
Sonera Oyj (Provider of telecommunication services) .... 364,013 20,025,321
Tietoenator Oyj (Information technology service company) 184,000 8,867,494
----------
94,367,165
----------
France 20.7%
Accor S.A. (Operator of hotels, travel agencies and
restaurants) ........................................ 225,000 8,357,604
Alcatel S.A. (Manufacturer of transportation,
telecommunication and energy equipment) ............. 107,500 24,926,188
Altran Technologies S.A. (Provider of engineering and
consulting services) ................................ 76,873 15,713,660
Aventis S.A. (Manufacture life science products) ....... 330,200 18,165,178
Banque Nationale de Paris (Bank) ....................... 165,900 13,410,821
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 | Scudder Greater Europe Growth Fund
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Shares Value ($)
--------------------------------------------------------------------------------------
<S> <C> <C>
Bouygues S.A. (Conglomerate: public works, real estate
and industrial development, engineering services,
television and motion pictures) ...................... 24,600 15,702,884
Cap Gemini S.A.* (Provider of computer consulting
services) ............................................ 32,987 6,478,937
Etablissements Economiques du Casino
Guichard-Perrachon S.A. (Operator of supermarkets
and convenience stores) .............................. 100,000 9,129,372
Galeries Lafayette (Department store chain) ............. 115,600 19,667,033
Havas Advertising S.A. (Advertising firm) ............... 19,078 9,523,847
Lagardere S.A. (Holding company with interests in
publishing, defense, audiovisual production and
services, telecommunications and media) .............. 166,300 11,265,637
Publicis S.A. (International advertising company) ....... 46,300 22,481,716
STMicroelectronics N.V. (Manufacturer of semiconductor
integrated circuits) ................................. 135,757 25,910,863
Schneider Electric S.A. (Manufacturer of electronic
components and automated manufacturing systems) ...... 318,500 20,852,069
Societe Television Francaise 1 (Television broadcasting) 24,980 17,103,879
Suez Lyonnaise des Eaux S.A. (Water and electric utility) 117,400 18,414,690
Thomson Multimedia* (Manufacturer of consumer
electronic products) ................................. 10,072 989,115
Total FINA ELF S.A. "B" (Explorer, developer, producer,
transporter and marketer of oil and natural gas) ..... 253,287 38,439,388
Usinor S.A. (Producer of flat steel and stainless steel
sheets) .............................................. 513,700 6,749,702
Vivendi S.A. (Provider of industrial services) .......... 179,700 17,778,053
-----------
321,060,636
-----------
Germany 16.1%
Allianz AG (Multi-line insurance company) ............... 60,232 23,194,655
BASF AG (International chemical producer) ............... 390,400 16,879,810
Bayer AG (Chemical producer) ............................ 394,300 16,331,361
Commerzbank AG (Provider of banking services) ........... 273,800 10,357,000
Deutsche Bank AG (Provider of financial services) ....... 188,700 12,680,126
Deutsche Telekom AG (Telecommunication services) ........ 172,600 11,064,636
Dresdner Bank AG (Provider of banking services) ......... 77,739 3,223,376
Epcos AG* (Producer of electronic components and
integrated circuits) ................................. 215,309 30,443,865
HypoVereinsbank (Bank) .................................. 249,100 15,425,102
Marschollek, Lautenschlaeger und Partner AG (pfd.)
(Independent life insurance company) ................. 76,050 40,246,620
SAP AG (Manufacturer of computer software) .............. 12,100 5,677,306
SAP AG (pfd.) ........................................... 24,180 14,225,508
Schering AG (Pharmaceutical and chemical producer) ...... 51,800 7,324,321
</TABLE>
The accompanying notes are an integral part of the financial statements.
17 | Scudder Greater Europe Growth Fund
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
Shares Value ($)
-------------------------------------------------------------------------------------------
<S> <C> <C>
Siemens AG (Electrical engineering and electronics
company) .................................................. 228,500 33,721,892
Thyssen Krupp AG (Manufacturer of building and
industrial steel materials) ............................... 424,500 8,877,951
-----------
249,673,529
-----------
Greece 0.9%
Alpha Credit Bank A.E. (Commercial bank) ..................... 139,950 7,718,611
National Bank of Greece S.A. (Bank) .......................... 152,519 6,517,298
-----------
14,235,909
-----------
Ireland 0.3%
Irish Permanent plc (Retail financial services group) ........ 576,156 4,767,478
-----------
Italy 7.5%
Assicurazioni Generali (Multi-line insurance and
financial services company) ............................... 362,800 10,325,684
Banco Intesa SpA (Bank) ...................................... 3,921,000 14,439,730
Bipop-Carire SpA (Cooperative bank) .......................... 259,600 23,605,429
ENI SpA (Explorer and distributor of petroleum products) ..... 2,144,000 10,663,980
Finmeccanica SpA* (Manufacturer of aircraft, air defense
systems and traffic control equipment) .................... 5,954,500 9,366,959
Gruppo Editoriale L'Espresso SpA (Publisher) ................. 1,230,326 17,340,400
Mediaset SpA* (Broadcasting and television networks) ......... 439,000 7,125,412
Seat Pagine Gialle SpA (Publisher of telecommunications
directories) .............................................. 5,122,200 22,496,289
-----------
115,363,883
-----------
Luxembourg 0.2%
Carrier 1 International S.A.* (Provider of voice, Internet and
related telecommunications services) ...................... 32,009 2,634,074
-----------
Netherlands 8.2%
Akzo Nobel N.V. (Producer and marketer of health care
products, coatings, chemicals and fibers) ................. 428,400 17,541,173
Equant N.V.* (Provider of international data network
services) ................................................. 111,200 8,609,871
Getronics N.V. (Provider of computer installation and
maintenance services) ..................................... 181,200 10,808,595
Koninklijke KPN N.V. (Provider of telecommunication
services) ................................................. 65,500 6,602,132
Koninklijke Philips Electronics N.V. (Diversified
manufacturer) ............................................. 584,208 26,066,983
Laurus N.V. (International food retailer) .................... 399,020 4,263,240
Qiagen N.V.* (Biopharmaceutical company) ..................... 24,100 3,497,513
Royal Dutch Petroleum Co. (Petroleum company) ................ 505,300 29,130,355
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 | Scudder Greater Europe Growth Fund
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Shares Value ($)
--------------------------------------------------------------------------------------
<S> <C> <C>
United Pan-Europe Communications N.V.* (Owner and
operator of broadband communications networks) ...... 348,019 12,667,641
VNU N.V. (International publishing company) ............ 144,900 7,753,933
-----------
126,941,436
-----------
Norway 0.6%
Norsk Hydro AS (Conglomerate: producer of fertilizers,
oil and gas, aluminum) .............................. 229,300 8,398,892
-----------
Spain 5.5%
Acerinox SA (Manufactures and distributes flat stainless
steel products) ..................................... 231,800 9,168,745
Cortefiel SA (Owner and operator of various retail
clothing stores) .................................... 416,000 8,741,792
Repsol SA (Manufacturer of crude oil and natural gas) .. 367,000 7,508,545
Sogecable SA* (Provider of cable television) ........... 108,766 4,490,102
Telefonica Publicidad e Informacion, SA (Publisher of
telephone directories) .............................. 175,205 6,930,155
Telefonica SA (Provider of telecommunication services) . 1,421,255 31,636,660
Union Electrica Fenosa SA (Producer and distributor of
electrical energy) .................................. 885,453 16,964,352
-----------
85,440,351
-----------
Sweden 2.0%
Telefonektiebolaget LM Ericsson AB "B" (Manufacturer of
telecommunications equipment) ....................... 353,900 31,576,282
-----------
Switzerland 4.0%
ABB, Ltd. (Bearer) (Manufacturer of equipment for power
generation and distribution) ........................ 118,098 13,259,814
Credit Suisse Group (Registered) (Provider of universal
banking and financial services) ..................... 60,100 10,862,916
Nestle SA (Registered) (Food manufacturer) ............. 12,210 21,537,890
Roche Holdings AG (PC)* (Develops and manufactures
pharmaceutical and chemical products) ............... 1,620 16,929,442
-----------
62,590,062
-----------
United Kingdom 18.9%
ARM Holdings plc* (Designer of RISC microprocessors
and related technology) ............................. 294,500 2,971,681
Aegis Group plc (Independent media services group) ..... 4,752,900 12,912,201
BOC Group plc (Diversified chemical company) ........... 1,391,700 22,836,217
BP Amoco plc (Integrated world oil company) ............ 2,126,600 18,305,893
Barclays plc (Commercial and investment banking,
insurance and other financial services) ............. 783,800 19,991,546
</TABLE>
The accompanying notes are an integral part of the financial statements.
19 | Scudder Greater Europe Growth Fund
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Shares Value ($)
------------------------------------------------------------------------------------
<S> <C> <C>
Billiton plc (Resource group that explores, produces
and markets aluminum and other metal products) ...... 2,125,900 7,887,589
British Aerospace plc (Producer of military aircraft) . 2,272,007 13,931,899
British Telecom plc (Provider of telecommunication
services) .......................................... 931,300 16,626,123
Cable and Wireless plc (International telecommunication
services in the United Kingdom and Hong Kong) ...... 350,500 5,800,278
Capital Radio plc (Radio broadcasting) ................ 214,849 4,919,590
Compass Group plc (International catering group) ...... 931,900 13,381,802
Glaxo Wellcome plc (Pharmaceutical company) ........... 452,267 13,936,668
Granada Group plc (Provider of television programs and
broadcasting services) ............................. 1,288,400 12,600,704
J Sainsbury plc (Retail distributor of food through
supermarkets) ...................................... 1,278,700 6,649,929
National Power plc (Electricity generation company) ... 3,319,600 15,060,654
Prudential Corp. plc (Provider of a broad range of
financial services) ................................ 1,109,100 16,959,400
Reuters Group plc (International news and information
agency) ............................................ 493,400 8,816,131
Rio Tinto plc (Mining company) ........................ 529,200 8,215,299
Royal & Sun Alliance Insurance Group plc (Insurance
company) ........................................... 2,005,408 11,207,501
SmithKline Beecham plc (Manufacturer of ethical drugs
and health care products) .......................... 1,190,532 16,263,997
Vodafone AirTouch plc (Provider of mobile
telecommunication services) ........................ 7,966,910 36,361,416
Zeneca Group plc (Manufacturer of pharmaceutical and
agrochemical products and specialty chemicals) ..... 169,700 7,094,499
-----------
292,731,017
-----------
United States 0.2%
OpenTV Corp.* (Developer of interactive television
software) .......................................... 28,699 2,349,731
-----------
------------------------------------------------------------------------------------
Total Common Stocks (Cost $1,111,647,818) 1,414,153,504
------------------------------------------------------------------------------------
Total Investment Portfolio-- 100.0% (Cost $1,246,727,924) (a) 1,549,386,992
------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
** Annualized yield at time of purchase; not a coupon rate.
*** Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
(a) The cost for federal income tax purposes was $1,249,950,326. At April
30, 2000, net unrealized appreciation for all securities based on tax
cost was $299,436,666. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of value
over tax cost of $372,128,093 and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax
cost over value of $72,691,427.
The accompanying notes are an integral part of the financial statements.
20 | Scudder Greater Europe Growth Fund
<PAGE>
Financial Statements
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Statement of Assets and Liabilities as of April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
Investments in securities, at value (cost $1,246,727,924) $ 1,549,386,992
Cash .................................................... 5,360,777
Receivable for investments sold ......................... 3,380,645
Dividends receivable .................................... 3,189,994
Interest receivable ..................................... 28,400
Receivable for Fund shares sold ......................... 20,312,272
Foreign taxes recoverable ............................... 1,267,084
Other assets ............................................ 6,117
---------------
Total assets ............................................ 1,582,932,281
Liabilities
--------------------------------------------------------------------------------
Payable for investments purchased ....................... 16,505,629
Payable for Fund shares redeemed ........................ 16,956,299
Accrued management fee .................................. 1,239,516
Accrued reorganization costs ............................ 331,858
Accrued Directors' fees and expenses .................... 49,341
Other accrued expenses and payables ..................... 1,057,381
---------------
Total liabilities ....................................... 36,140,024
--------------------------------------------------------------------------------
Net assets, at value .................................... $ 1,546,792,257
--------------------------------------------------------------------------------
Net Assets
--------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income (loss) .............. $ (2,090,866)
Net unrealized appreciation (depreciation) on:
Investments ........................................... 302,659,068
Foreign curency related transactions .................. (188,828)
Accumulated net realized gain (loss) .................... 117,541,227
Paid-in capital ......................................... 1,128,871,656
--------------------------------------------------------------------------------
Net assets, at value .................................... $ 1,546,792,257
--------------------------------------------------------------------------------
Net Asset Value
--------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($1,546,792,257 / 44,550,732 shares of capital stock
outstanding, $.01 par value, 100,000,000 ---------------
shares authorized).................................... $ 34.72
---------------
The accompanying notes are an integral part of the financial statements.
21 | Scudder Greater Europe Growth Fund
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations for the six months ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
--------------------------------------------------------------------------------
Income:
Dividends (net of foreign taxes withheld of $1,013,400) ........ $ 6,268,073
Interest ....................................................... 2,318,463
-------------
Total income ................................................... 8,586,536
-------------
Expenses:
Management fee ................................................. 7,129,351
Services to shareholders ....................................... 1,980,985
Custodian and accounting fees .................................. 701,235
Auditing ....................................................... 41,053
Legal .......................................................... 1,191
Directors' fees and expenses ................................... 83,984
Reports to shareholders ........................................ 67,444
Registration fees .............................................. 101,615
Reorganization ................................................. 362,234
Other .......................................................... 21,460
-------------
Total expenses, before expense reductions ...................... 10,490,552
Expense reductions ............................................. (32,505)
-------------
Total expenses, after expense reductions ....................... 10,458,047
-------------
--------------------------------------------------------------------------------
Net investment income (loss) (1,871,511)
--------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
--------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments .................................................... 121,381,361
Foreign currency related transactions .......................... (453,722)
-------------
120,927,639
-------------
Net unrealized appreciation (depreciation) during the period on:
Investments .................................................... 126,748,478
Foreign currency related transactions .......................... (220,378)
-------------
126,528,100
--------------------------------------------------------------------------------
Net gain (loss) on investment transactions ..................... 247,455,739
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 245,584,228
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
22 | Scudder Greater Europe Growth Fund
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
April 30, 2000 October 31,
Increase (Decrease) in Net Assets (Unaudited) 1999
------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) ....................... $ (1,871,511) $ 4,225,178
Net realized gain (loss) on investment transactions 120,927,639 60,708,531
Net unrealized appreciation (depreciation) on
investment transactions during the period ....... 126,528,100 106,957,885
------------------------------
Net increase (decrease) in net assets resulting
from operations.................................. 245,584,228 171,891,594
------------------------------
Distributions to shareholders from:
Net investment income .............................. (3,041,501) (2,849,719)
------------------------------
Net realized gains ................................. (3,789,535) --
------------------------------
Fund share transactions:
Proceeds from shares sold .......................... 1,539,628,546 1,875,696,213
Reinvestment of distributions ...................... 6,504,230 2,719,498
Cost of shares redeemed ............................ (1,273,460,979)(2,144,456,345)
------------------------------
Net increase (decrease) in net assets from Fund
share transactions............................... 272,671,797 (266,040,634)
------------------------------
Increase (decrease) in net assets .................. 511,424,989 (96,998,759)
Net assets at beginning of period .................. 1,035,367,268 1,132,366,027
Net assets at end of period (including
undistributed net investment income (loss) of ------------------------------
($2,090,866) and $2,822,146, respectively)....... $1,546,792,257 $1,035,367,268
------------------------------
Other Information
------------------------------------------------------------------------------------
Shares outstanding at beginning of period .......... 36,803,269 46,726,102
------------------------------
Shares sold 43,350,526 70,803,786
Shares issued to shareholders in reinvestment of
distributions ................................... 186,154 102,622
Shares redeemed .................................... (35,789,217) (80,829,241)
------------------------------
Net increase (decrease) in Fund shares ............. 7,747,463 (9,922,833)
------------------------------
Shares outstanding at end of period ................ 44,550,732 36,803,269
------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
23 | Scudder Greater Europe Growth 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, 2000(a) 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $28.13 $24.23 $21.17 $17.20 $13.99 $12.18
-----------------------------------------------------
----------------------------------------------------------------------------------
Income (loss) from investment
operations:
----------------------------------------------------------------------------------
Net investment income
(loss) (b) (.05) .10(c) .16 .03 .13 .13
----------------------------------------------------------------------------------
Net realized and
unrealized gain (loss) on
investment transactions 6.82 3.86 4.74 4.14 3.33 1.70
-----------------------------------------------------
----------------------------------------------------------------------------------
Total from investment
operations 6.77 3.96 4.90 4.17 3.46 1.83
----------------------------------------------------------------------------------
Less distributions from:
----------------------------------------------------------------------------------
Net investment income (.08) (.06) (.54) (.06) (.11) (.02)
----------------------------------------------------------------------------------
Net realized gains on
investment transactions (.10) -- (1.30) (.14) (.14) --
-----------------------------------------------------
----------------------------------------------------------------------------------
Total distributions (.18) (.06) (1.84) (.20) (.25) (.02)
----------------------------------------------------------------------------------
Net asset value, end
of period $34.72 $28.13 $24.23 $21.17 $17.20 $13.99
-----------------------------------------------------
----------------------------------------------------------------------------------
Total Return (%) 24.06** 16.36 24.68 24.47(d)25.11(d) 15.06(d)
----------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
----------------------------------------------------------------------------------
Net assets, end of period 1,547 1,035 1,132 196 120 41
($ millions)
----------------------------------------------------------------------------------
Ratio of expenses before
expense reductions (%) 1.46(e)* 1.46 1.48 1.72 1.97 2.74
----------------------------------------------------------------------------------
Ratio of expenses after
expense reductions (%) 1.46(e)* 1.46 1.48 1.66 1.50 1.50
----------------------------------------------------------------------------------
Ratio of net investment
income (loss) (%) (.13)(f)** .37 .63 .16 .82 1.25
----------------------------------------------------------------------------------
Portfolio turnover rate (%) 64* 83 93 89 39 28
----------------------------------------------------------------------------------
</TABLE>
(a) For the six month period ended April 30, 2000 (Unaudited).
(b) Based on monthly average shares outstanding during the period.
(c) Net investment income per share includes non-recurring dividend income
amounting to $0.08 per share.
(d) Total returns would have been lower had certain expenses not been
reduced.
(e) The ratio of operating expenses excluding costs incurred in connection
with the reorganization was 1.43%.
(f) The ratio for the six months ended April 30, 2000 has not been
annualized since the Fund believes it would not be appropriate because
the Fund's dividend income is not earned notably throughout the fiscal
year.
* Annualized
** Not annualized
24 | Scudder Greater Europe Growth Fund
<PAGE>
Notes to Financial Statements (Unaudited)
--------------------------------------------------------------------------------
A. Significant Accounting Policies
Scudder Greater Europe Growth 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.
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
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.
25 | Scudder Greater Europe Growth Fund
<PAGE>
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.
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.
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 foreign denominated investments and certain
securities sold at a loss. As a result, net investment income (loss) and net
realized gain (loss) on investment transactions for a reporting period may
differ significantly from distributions during such period. Accordingly, the
Fund may periodically make reclassifications among certain of its capital
accounts without impacting the net asset value of the Fund.
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
26 | Scudder Greater Europe Growth Fund
<PAGE>
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.
Original issue discounts are accreted for both tax and financial reporting
purposes.
B. Purchases and Sales of Securities
For the six months ended April 30, 2000, purchases and sales of investment
securities (excluding short-term investments) aggregated $646,738,583 and
$421,176,694, respectively.
C. Related Parties
Under the Investment Management Agreement (the "Agreement") with Scudder Kemper
Investments, Inc. ("Scudder Kemper" or the "Adviser"), the Adviser directs the
investments of the Fund in accordance with its investment objectives, policies
and restrictions. The Adviser determines the securities, instruments and other
contracts relating to investments to be purchased, sold or entered into by the
Fund. In addition to portfolio management services, the Adviser provides certain
administrative services in accordance with the Agreement. The management fee
payable under the Agreement is equal to an annual rate of 1.00% of the first
$1,000,000,000 of average daily net assets, and 0.90% of such net assets in
excess of $1,000,000,000, computed and accrued daily and payable monthly. For
the six months ended April 30, 2000, the fees pursuant to the Agreement amounted
to $7,129,351. This was equivalent to an annualized effective rate of 1.01% of
the Fund's average daily net assets.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended April 30, 2000, the amount charged by SSC aggregated $774,298,
of which $61,918 was unpaid at April 30, 2000.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six months ended April 30,
2000, the amount charged by STC aggregated $38,099, of which $68,867 was unpaid
at April 30, 2000.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and
27 | Scudder Greater Europe Growth Fund
<PAGE>
maintaining the portfolio and general accounting records for the Fund. For the
six months ended April 30, 2000, the amount charged by SFAC aggregated $194,694,
of which $32,833 was unpaid at April 30, 2000.
The Fund pays each Director not affiliated with the Adviser an annual retainer,
plus specified amounts for attended board and committee meetings. For the six
months ended April 30, 2000, Directors' fees and expenses aggregated $18,975. In
addition, a one-time fee of $65,009 was accrued for payment to those Directors
not affiliated with the Adviser who are not standing for re-election, under the
reorganization discussed in Note E. Inasmuch as the Adviser will also benefit
from administrative efficiencies of a consolidated Board, the Adviser has agreed
to bear $32,505 of such costs.
D. Line of Credit
The Fund and several Scudder Funds (the "Participants") share in a $1 billion
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, based upon net assets, 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 33 percent of its net
assets under the agreement.
E. Reorganization
In early 2000, Scudder Kemper initiated a restructuring program for most of its
Scudder no-load open-end funds in response to changing industry conditions and
investor needs. The program proposes to streamline the management and operations
of most of the no-load open-end funds Scudder Kemper advises principally through
the liquidation of several small funds, mergers of certain funds with similar
investment objectives, the creation of one Board of Directors/Trustees and the
adoption of an administrative fee covering the provision of most of the services
currently paid for by the affected funds. Costs incurred in connection with this
restructuring initiative are being borne jointly by Scudder Kemper and certain
of the affected funds.
28 | Scudder Greater Europe Growth Fund
<PAGE>
Officers and Directors
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Nicholas Bratt* Irene T. Cheng*
o President o Vice President
Sheryle J. Bolton Joyce E. Cornell*
o Director; Chief Executive Officer, o Vice President
Scientific Learning Corporation
Carol L. Franklin*
William T. Burgin o Vice President
o Director; General Partner,
Bessemer Venture Partners Edmund B. Games, Jr.*
o Vice President
Keith R. Fox
o Director; General Partner, Joan R. Gregory*
The Exeter Group of Funds o Vice President
William H. Luers Ann M. McCreary*
o Director; Chairman and President, o Vice President
U.N. Association of America
Sheridan P. Reilly*
Kathryn L. Quirk* o Vice President
o Director, Vice President and
Assistant Secretary Tien-Yu Sieh*
o Vice President
Joan E. Spero
o Director; President, Doris Duke Shahram Tajbakhsh*
Charitable Foundation o Vice President
Paul Bancroft III John Millette*
o Honorary Director; Consultant o Vice President and Secretary
Thomas J. Devine John R. Hebble*
o Honorary Director; Consultant o Treasurer
William H. Gleysteen, Jr. Caroline Pearson*
o Honorary Director; Consultant; o Assistant Secretary
Guest Scholar, Brookings Institution
Wilson Nolen
o Honorary Director; Consultant
Robert G. Stone, Jr.
o Honorary Director; Chairman
Emeritus and Director, Kirby Corporation
</TABLE>
*Scudder Kemper Investments, Inc.
29 | Scudder Greater Europe Growth Fund
<PAGE>
Investment Products and Services
--------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
The Scudder Family of Funds+++
--------------------------------------------------------------------------------
<S> <C>
Money Market U.S. Growth
Scudder U.S. Treasury Money Fund Value
Scudder Cash Investment Trust Scudder Large Company Value Fund
Scudder Money Market Series -- Scudder Value Fund***
Prime Reserve Shares* Scudder Small Company Value Fund
Premium Shares* Scudder Micro Cap Fund
Managed Shares*
Growth
Tax Free Money Market+ Scudder Classic Growth Fund***
Scudder Tax Free Money Fund Scudder Large Company Growth Fund***
Scudder California Tax Free Money Fund** Scudder Select 1000 Growth Fund
Scudder New York Tax Free Money Fund** Scudder Development Fund
Scudder 21st Century Growth Fund
Tax Free+
Scudder Limited Term Tax Free Fund Global Equity
Scudder Medium Term Tax Free Fund Worldwide
Scudder Managed Municipal Bonds Scudder Global Fund
Scudder High Yield Tax Free Fund Scudder International Value Fund
Scudder California Tax Free Fund** Scudder International Growth and
Scudder Massachusetts Limited Term Income Fund
Tax Free Fund** Scudder International Fund++
Scudder Massachusetts Tax Free Fund** Scudder International Growth Fund
Scudder New York Tax Free Fund** Scudder Global Discovery Fund***
Scudder Ohio Tax Free Fund** Scudder Emerging Markets Growth Fund
Scudder Gold Fund
U.S. Income
Scudder Short Term Bond Fund Regional
Scudder GNMA Fund Scudder Greater Europe Growth Fund
Scudder Income Fund Scudder Pacific Opportunities Fund
Scudder Corporate Bond Fund Scudder Latin America Fund
Scudder High Yield Bond Fund The Japan Fund, Inc.
Global Income Industry Sector Funds
Scudder Global Bond Fund Choice Series
Scudder International Bond Fund Scudder Financial Services Fund
Scudder Emerging Markets Income Fund Scudder Health Care Fund
Scudder Technology Fund
Asset Allocation
Scudder Pathway Conservative Portfolio Preferred Series
Scudder Pathway Balanced Portfolio Scudder Tax Managed Growth Fund
Scudder Pathway Growth Portfolio Scudder Tax Managed Small Company Fund
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
</TABLE>
30 | Scudder Greater Europe Growth Fund
<PAGE>
--------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
--------------------------------------------------------------------------------
Retirement Programs and Education Accounts
--------------------------------------------------------------------------------
Retirement Programs Education Accounts
Traditional IRA Education IRA
Roth IRA UGMA/UTMA
SEP-IRA IRA for Minors
Inherited IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Closed-End Funds#
-----------------------------------------------------------------------------------------
<S> <C>
The Argentina Fund, Inc. Montgomery Street Income Securities, Inc.
The Brazil Fund, Inc. Scudder Global High Income Fund, Inc.
The Korea Fund, Inc. Scudder New Asia Fund, Inc.
</TABLE>
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
Kemper Investment'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 Kemper Investment'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.
31 | Scudder Greater Europe Growth Fund
<PAGE>
Scudder Solutions
--------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Convenient Automatic Investment Plan
ways to invest,
quickly and A convenient investment program in which money is
reliably 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- Scudder Automated Information Line: SAIL(TM) --
clock electronic 1-800-343-2890
account
service and Personalized account information, the ability to exchange
information, or redeem shares, and information on other Scudder funds
including some and services via touchtone telephone.
transactions
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.
32 | Scudder Greater Europe Growth Fund
<PAGE>
--------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Retirees and Automatic Withdrawal Plan
those who depend
on investment You designate the bank account, determine the schedule (as
proceeds for frequently as once a month) and amount of the redemptions,
living expenses and Scudder does the rest.
can enjoy these
convenient, Distributions Direct
timely, and
reliable Automatically deposits your fund distributions into the
automated bank account you designate within three business days after
withdrawal each distribution is paid.
programs
QuickSell
Provides speedy access to your money by electronically
crediting your redemption proceeds to the bank account you
previously designated.
For more Call a Scudder representative at
information about 1-800-SCUDDER
these services
Or visit our Web site at
www.scudder.com
Please address The Scudder Funds
all written PO Box 2291
correspondence Boston, Massachusetts
to 02107-2291
33 | Scudder Greater Europe Growth Fund
<PAGE>
Notes
--------------------------------------------------------------------------------
<PAGE>
Notes
--------------------------------------------------------------------------------
<PAGE>
Notes
--------------------------------------------------------------------------------
<PAGE>
Notes
--------------------------------------------------------------------------------
<PAGE>
Notes
--------------------------------------------------------------------------------
<PAGE>
Notes
--------------------------------------------------------------------------------
<PAGE>
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.
SCUDDER
INVESTMENTS(SM)
[LOGO]
PO Box 2291
Boston, MA 02107-2291
1-800-SCUDDER
www.scudder.com
A member of the [ZURICH LOGO] Zurich Financial Services Group
