SCUDDER
INVESTMENTS (SM)
[LOGO]
--------------------------------------------------------------------------------
EQUITY/GLOBAL
--------------------------------------------------------------------------------
Scudder
Latin America Fund
Fund #074
Semiannual Report
April 30, 2000
The fund seeks long-term capital appreciation.
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 Investment Portfolio
18 Financial Statements
21 Financial Highlights
22 Notes to Financial Statements
27 Officers and Directors
28 Investment Products and Services
30 Scudder Solutions
2
<PAGE>
Scudder Latin America Fund
--------------------------------------------------------------------------------
ticker symbol SLAFX fund number 074
--------------------------------------------------------------------------------
Date of Inception: o Stocks in Latin America generally performed well over
12/8/92 the full six-month period, but volatility in the
global equity markets sparked a downturn during late
March and April.
Total Net Assets as
of 4/30/00: o Management believes that the recent sell-off has
$475 million created extremely attractive valuations in the region,
which offers strong economic fundamentals and a wealth
of well-managed companies.
o The fund is concentrated in companies with strong cash
flows and the ability to perform well in both good
times and bad. Although this focus led to
underperformance during the most recent period, when
speculative stocks in the technology and
telecommunications sectors gained the most attention,
it has worked well over the long term. Over the five
years ended April 30, 2000, the fund is ranked in the
top 18% of Latin America funds, according to Lipper
Analytical Services.^1
^1 Source: Lipper Analytical Services, Inc., an independent analyst of
investment performance. Performance includes reinvestment of dividends and
capital gains. For the period ended April 30, 2000, Scudder Latin America
Fund's Lipper ranking was 49 out of 50 funds for the one-year period, 7 out
of 27 funds for the three-year period, and 4 out of 22 for the five-year
period. Past performance is no guarantee of future results.
3
<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
markets 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 Latin America, we are
encouraged by the strengthening investment backdrop and the attractive
valuations of many of the region's best companies. Mexico's economy continues to
gain steam as it grows increasingly intertwined with that of the United States,
while Brazil has emerged stronger after its devaluation of January 1999. The
region is devoid of major military conflicts or significant political strife,
and both inflation and currency exchange rates have generally been stable. For
these reasons, the fund's management team holds an optimistic view on the
region's markets. Stock prices are depressed due to external factors -- namely,
rising interest rates in the U.S. and financial market volatility worldwide --
rather than causes specific to Latin America. Once it becomes apparent that the
Federal Reserve is finished raising interest rates, it is likely that investors
will be better able to focus on the strong earnings and attractive fundamentals
of companies in the region.
4
<PAGE>
We recognize that volatility is always disturbing to investors, even when it
occurs in asset classes that are known for their sharp fluctuations, such as
Latin American equities. Despite the recent declines in the region's stock
markets, we believe that the investment picture remains attractive for those who
are using the fund as a long-term investment vehicle. Although there will always
be times when the Latin markets will experience rapid declines, it is important
to keep in mind that the direction of the region's fundamentals is increasingly
positive. For more information on how the fund's management team seeks to
capitalize on the changes taking place in Latin America, please turn to the
Portfolio Management Discussion that begins on page 10.
Thank you for your continued investment in Scudder Latin America Fund. For
current information on the fund or your account, visit our Web site at
www.scudder.com. There you'll 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/Linda C. Coughlin
Linda C. Coughlin
President,
Scudder Latin America Fund
5
<PAGE>
Performance Update
--------------------------------------------------------------------------------
April 30, 2000
--------------------------------------------------------------------------------
Growth of a $10,000 Investment
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
IFC Latin America Investable
Scudder Latin America Fund Total Return Index*
12/92** 10000 10000
'93 10560 10047
'94 16604 15042
'95 13558 11760
'96 16623 13412
'97 21907 16928
'98 24114 17894
'99 20980 15263
'00 22481 17895
Yearly periods ended April 30
--------------------------------------------------------------------------------
Fund Index Comparison
--------------------------------------------------------------------------------
Total Return
Growth of Average
Period ended 4/30/2000 $10,000 Cumulative Annual
--------------------------------------------------------------------------------
Scudder Latin America Fund
--------------------------------------------------------------------------------
1 year $ 10,715 7.15% 7.15%
--------------------------------------------------------------------------------
5 year $ 16,581 65.81% 10.64%
--------------------------------------------------------------------------------
Life of Fund** $ 23,417 134.17% 12.20%
--------------------------------------------------------------------------------
IFC Latin America Investable Total Return Index*
--------------------------------------------------------------------------------
1 year $ 11,724 17.24% 17.24%
--------------------------------------------------------------------------------
5 year $ 15,217 52.17% 8.75%
--------------------------------------------------------------------------------
Life of Fund** $ 17,895 78.95% 8.26%
--------------------------------------------------------------------------------
* 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
<PAGE>
--------------------------------------------------------------------------------
Returns and Per Share Information
--------------------------------------------------------------------------------
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE ILLUSTRATING THE SCUDDER LATIN
AMERICA FUND TOTAL RETURN (%) AND IFC LATIN AMERICA INVESTABLE INDEX TOTAL
RETURN (%)
BAR CHART DATA:
Yearly periods ended April 30
1993** 1994 1995 1996 1997 1998 1999 2000
--------------------------------------------------------------------------------
Fund Total
Return (%) 10.00*** 57.23 -18.34 22.60 31.79 10.08 -13.00 7.15
--------------------------------------------------------------------------------
Index Total
Return (%) .47 49.71 -21.85 14.04 26.20 5.71 -14.70 17.24
--------------------------------------------------------------------------------
Net Asset Value
($) 13.20 20.65 16.21 19.70 25.65 26.80 22.06 23.58
--------------------------------------------------------------------------------
Income
Dividends ($) -- .06 -- .15 .26 .25 .37 .05
--------------------------------------------------------------------------------
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.
7
<PAGE>
Portfolio Summary
--------------------------------------------------------------------------------
April 30, 2000
--------------------------------------------------------------------------------
Geographical
--------------------------------------------------------------------------------
(Excludes 5% Cash Equivalents) The fund's weighting in
Mexico has risen from
49% of net assets on
October 31, 1999.
A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA POINTS IN THE TABLE BELOW.
Mexico 56%
Brazil 35%
Argentina 4%
Chile 3%
Panama 1%
Other 1%
------------------------------------
100%
------------------------------------
--------------------------------------------------------------------------------
Sectors
--------------------------------------------------------------------------------
(Excludes 5% Cash Equivalents) Management's focus on
companies with strong
cash flow
characteristics has led
it to maintain a
substantial weighting in
the consumer staples and
communications sectors.
A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA POINTS IN THE TABLE BELOW.
Consumer Staples 27%
Communications 26%
Financial 14%
Energy 11%
Manufacturing 6%
Construction 5%
Consumer Discretionary 4%
Media 4%
Metals & Minerals 3%
------------------------------------
100%
------------------------------------
8
<PAGE>
--------------------------------------------------------------------------------
Ten Largest Equity Holdings
--------------------------------------------------------------------------------
(63% of Portfolio) The fund's top holdings
reflect management's
emphasis on well-managed
companies with strong
franchises and steady
earnings growth.
1. Telefonos de Mexico S.A. de C.V.
Provider of telecommunication services in Mexico
2. Petroleo Brasileiro S.A.
Petroleum company in Brazil
3. Fomento Economico Mexicano S.A. de C.V.
Producer of beer, soft drinks and mineral water in Mexico
4. Banco Itau S.A.
Commercial bank in Brazil
5. Kimberly Clark de Mexico S.A. de C.V.
Producer of consumer paper products in Mexico
6. Tele Centro Sul Participacoes S.A.
Provider of local telecommunication services in Brazil
7. Grupo Financiero Inbursa S.A. de C.V.
Provider of financial services in Mexico
8. Tele Norte Leste Participacoes S.A.
Provider of local telecommunication services in Brazil
9. CIFRA S.A. de C.V.
Discount retailer in Mexico
10. Grupo Televisa S.A. de C.V.
Media company in Mexico
For more complete details about the Fund's investment portfolio, see page 15. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
9
<PAGE>
Portfolio Management Discussion
--------------------------------------------------------------------------------
April 30, 2000
Dear Shareholders,
Stock markets in Latin America have experienced significant volatility in the
past six months, obscuring what we believe to be the strong fundamentals and
attractive valuations that the region currently has to offer. The Latin markets
performed well over the first four months of the period, as favorable liquidity
conditions, improving global growth, and a powerful rally in the U.S. technology
sector provided a positive backdrop for the developing countries. Although the
region initially held up well when the U.S. market first began to tumble, the
sharp downturn in the Nasdaq average during the final week of March and the
first half of April sparked a sell-off in the Latin markets. Although this rapid
downturn has undoubtedly proven unsettling to fund shareholders, we believe that
it has created the opportunity to buy some of the region's best companies at
very attractive prices.
Fund Performance
For the six-month period ended April 30, 2000, Scudder Latin America Fund
produced a total return of 18.37%, which trailed the 24.24% return of its
unmanaged benchmark, the IFC Latin America Index. The most important factor in
the fund's underperformance was its underweight position in telecommunications
stocks relative to the benchmark. While the IFC Index holds a 35% weighting in
telecoms, the fund, by prospectus, can not add to its position in a security
which it already holds 25% of net assets. The fund also holds a more limited
position in cellular companies, many of which performed well despite the absence
of the strong cash flow characteristics that we require in order to purchase a
stock. Although our underweight position in telecoms caused the fund to
underperform as the Latin markets were rising, it contributed to stronger
relative performance once the sector began to weaken. During this time, we also
benefited from our holdings in more conservative sectors such as energy and
consumer staples. We believe that it is more important to stick to our
investment discipline,
10
<PAGE>
which has added significant value for fund shareholders over the seven-plus
years since the fund was opened, than to try to chase the "hot" sectors of the
market. Momentum is ephemeral, but companies with strong business models and
effective, battle-tested management teams tend to outperform over the long term.
This approach has served the fund well over time: according to Lipper Analytical
Services, the fund ranks in the top 18% of Latin America funds over the
five-year period ended April 30, 2000.
Investment Environment
The recent downturn in the Latin markets belies the strong fundamentals in the
region. It is important to note that in the past, most of the sell-offs in Latin
America were caused by events with a direct impact on the region -- such as the
Mexican peso devaluation of 1994 -- or problems in other areas that had
important implications for the Latin economies, such as the Asian currency
crisis of 1997. In recent months, however, stock prices have fallen despite the
lack of a meaningful fundamental catalyst. The primary issue has been the
deteriorating interest rate environment in the U.S., where concerns about
inflation have forced the Federal Reserve to raise short-term interest rates
several times over the past year. While the Latin markets have traditionally
been vulnerable to rate fears in the U.S., we believe that the Fed's current
tightening cycle will not have a significant impact on the Latin markets since
real interest rates are already high by historical standards. Further, it is
important to note that the region's economies are on a strong growth track, and
we do not believe that any slowdown that occurs in the U.S. will be powerful
enough to bring about a significant downturn in Latin America. In fact, the
economic backdrop in the region is highly positive -- after treading water for
most of 1999, most countries are expected to grow at 3% or more in 2000. The
currencies have been stable, inflation is tame, interest rates are coming down
in most countries, and foreign direct investment (FDI) has been strong. In our
view, the region is as stable as it has been for years.
11
<PAGE>
The investment picture in Mexico, where we hold 56% of fund assets, has been
particularly positive. The consumer sector has staged a vigorous recovery, and
is healthier today than it was before the 1994 devaluation. First quarter
earnings were strong, supporting the view that Mexico is an area of opportunity
that is being buoyed by its convergence with the United States. Market
participants are looking ahead to the July presidential election, since
political transitions in Mexico have traditionally been accompanied by turmoil.
However, both major parties are promoting market-friendly policies, and it
appears that this time the elections will not lead to instability. While stock
market valuations are already discounting these developments to a large degree,
we continue to hold a positive long-term view on Mexico's long-term prospects.
Brazil has presented more of a mixed picture over the past year, but it appears
to have come through the 1999 currency devaluation more strongly than we
expected. While ordinarily sharp declines in a country's exchange rate will
result in runaway inflation, the fact that the devaluation occurred following a
period of deep recession -- meaning that there was enough production capacity
and available labor to absorb stronger growth -- has allowed prices to remain
relatively stable. Going forward, we believe that price levels will remain
steady due to the combination of stabilized oil import prices, market
deregulation and competition, and the still-sizable economic output gap.
Meanwhile, the current account deficit has been expanding at a slower rate, and
is fully covered by FDI and privatization inflows. If oil prices remain stable
and soft commodity prices (e.g., soy and coffee) rebound from their historic
lows, the trade account should improve as well. While all of these factors are
positives, the most important development, in our view, has been the
government's effectiveness in coping with adversity. President Cardoso's
lobbying aided the passage of minimum wage legislation and the Fiscal
Responsibility Law, which in our view demonstrates that he is growing stronger
politically. While there will be no quick fixes to
12
<PAGE>
Brazil's remaining difficulties, we are encouraged by the steady progress that
is being made by its government.
Investment Strategy
Despite the rapidly shifting market conditions that have characterized the
global investment environment over the past year, we continue to employ the same
strategy that we always have. Since the economies of Latin America have
traditionally been volatile, we look for companies that we believe will be
positioned to prosper in both good times and bad. Such firms tend to have solid
brand names, dominant franchises, and the ability to generate consistent cash
flows. In addition, we only invest in companies with low debt levels and the
ability to finance growth through internally generated cash flows rather than
external financing. Both characteristics tend to make companies less vulnerable
to rising interest rates.
This strategy has led us to build up large positions in stocks in the consumer,
food, beverage, and retail sectors. We also have significant holdings in
financial companies with large profit margins, strong capital positions, and a
history of prudent lending. Telecommunications stocks, particularly the
fixed-line operators, continue to make up a large percentage of the portfolio.
Although our approach has produced a mixed performance over the most recent
reporting period, we believe that we are well-positioned for the remainder of
2000 and beyond. The companies we own have made it through economic, social, and
political crises, and have come through stronger than before. In our view, it is
unlikely that they will encounter difficulties in the next 6-18 months that will
be more challenging than what they have been through already. We are confident
in the long-term prospects of the companies we hold in the portfolio, and we
intend to stick to our strategy in all market conditions.
Outlook
We believe that the primary difficulty facing companies in Latin America right
now is their location. Fundamentals have never been better, and it is global
financial market
13
<PAGE>
volatility -- rather than economic weakness -- that has been causing the decline
in stock prices. Once we get beyond the Fed's rate hikes, volatility should calm
down and investors will be able to return their focus to earnings and
valuations. Stocks in Latin America are trading at price-to-earnings ratios that
are roughly half that of the U.S., while price-to-book ratios are less than a
quarter that of the U.S. market. While we don't feel that the valuations of the
two areas should be equal, we do believe that the large spread is discounting a
level of risk far above that which actually exists. There are a wealth of
companies in Latin America with strong returns on capital, high growth rates,
capable management teams, and the demonstrated ability to grow their businesses
through reinvestment. While it is impossible to say when these fundamentals will
translate into higher stock prices, we are confident that over time, an
investment in the top companies in Latin America will prove rewarding for fund
shareholders.
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
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio as of April 30, 2000 (Unaudited)
----------------------------------------------------------------------------------------------
Principal
Amount ($) Value ($)
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Repurchase Agreements 4.8%
----------------------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette, 5.68%, to be repurchased at ------------
$22,411,603 on 5/1/2000** (Cost $22,401,000) ................ 22,401,000 22,401,000
-----------
Shares
----------------------------------------------------------------------------------------------
Common Stocks 95.2%
----------------------------------------------------------------------------------------------
<S> <C> <C>
Argentina 3.7%
BI S.A. "A" (Venture capital company) (b) ...................... 3,000,000 2,250,000
Banco de Galicia y Buenos Aires (ADR) (Commercial and
private bank) ............................................... 200,000 3,462,500
PC Holdings S.A. (Investment company) .......................... 224,945 3,444,465
Quilmes Industrial S.A. (Leading beer distributor) ............. 672,443 5,463,599
Telecom Argentina S.A. "B" (ADR) (Provider of
telecommunication services) ................................. 100,000 2,793,750
-----------
17,414,314
-----------
Brazil 32.9%
Aracruz Celulose S.A. (ADR) (Producer of eucalyptus
kraft pulp) ................................................. 255,000 4,765,313
Banco Itau S.A. (pfd.) (Commercial bank) ....................... 366,383,400 27,372,307
Companhia Cervejaria Brahma (pfd.) (Beer producer and
distributor) ................................................ 10,000,001 7,249,586
Companhia Vale do Rio Doce (pfd.) (ADR) (Diverse mining
and industrial complex) ..................................... 500,000 12,468,750
Embratel Participacoes S.A. (ADR) (Provider of
telecommunication services) ................................. 100,000 2,250,000
Petrobras Distribuidora S.A. (pfd.) (Distributor of petroleum
and natural gas) ............................................ 400,200,000 4,655,343
Petroleo Brasileiro S.A. (pfd.) (Petroleum company) ............ 185,240,000 44,090,605
Souza Cruz S.A. (Holding company for cigarettes,
tobacco and fiber cellulose) ................................ 500,200 3,044,936
Tele Centro Sul Participacoes S.A. (pfd.) (ADR) (Provider of
local telecommunication services) ........................... 320,000 20,400,000
Tele Norte Leste Participacoes S.A. (pfd.) (ADR) (Provider
of local telecommunication services) ........................ 1,027,722 18,306,298
Telecomunicacoes do Parana S.A. (pfd.) (Provider of
telecommunication services) ................................. 30,004,986 10,394,644
-----------
154,997,782
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<TABLE>
<CAPTION>
Shares Value ($)
-------------------------------------------------------------------------------------
<S> <C> <C>
Chile 2.5%
Companhia Cervecerias Unidas S.A. (ADR) (Bottler and
distributor of beer, soft drinks and mineral water). 460,000 10,263,750
Embotelladora Andina S.A. "B" (ADR) (Distributor of
Coca-Cola soft drinks) ............................. 130,000 1,332,500
Santa Isabel S.A. (ADR) (Supermarket chain) ........... 21,100 179,350
-----------
11,775,600
-----------
Colombia 0.8%
Bavaria S.A. (Beer producer and distributor) .......... 950,520 3,942,456
-----------
Mexico 53.2%
Apasco, S.A. de C.V. (Cement producer) ................ 1,752,000 10,629,484
CIFRA S.A. de C.V. "C"* (Discount retailer) ........... 8,500,000 18,139,968
Cemex S.A. de C.V. (Producer of concrete and cement) .. 300,000 6,562,500
Coca-Cola FEMSA, S.A. de C.V. "L" (ADR) (Bottler and
distributor of soft drinks) ........................ 300,000 5,568,750
Fomento Economico Mexicano S.A. de C.V. (ADR)
(Producer of beer, soft drinks and mineral water) .. 1,000,000 41,250,000
Grupo Continental S.A. (Producer and distributor of soft
drinks, sugar and mineral water) ................... 13,618,500 16,234,933
Grupo Embotelladora Unidas S.A. de C.V. "B" (Soft drink
producer and marketer) ............................. 1,919,134 2,594,252
Grupo Financiero Inbursa S.A. de C.V. "O"* (Provider of
financial services) ................................ 4,557,000 18,528,728
Grupo Industrial Bimbo S.A. de C.V. "A" (Producer of
bread and other baked goods) ....................... 3,600,000 4,667,163
Grupo Industrial Maseca S.A. de C.V. (ADR) (Food
producer) .......................................... 938,400 6,686,100
Grupo Modelo S.A. "C" (Brewery) ....................... 100,000 212,879
Grupo Televisa S.A. de C.V. (GDR)* (Media company) .... 275,000 17,445,313
Kimberly Clark de Mexico S.A. de C.V. "A" (Producer of
consumer paper products) ........................... 8,000,000 25,800,958
Organizacion Soriana S.A. de C.V. "A"* (Retailer) ..... 400,000 1,596,594
Panamerican Beverages Inc. "A" (Bottler of soft drinks) 500,800 8,231,900
Pepsi-Gemex S.A. "B"* (Soft drink bottler) (b) ........ 6,544,500 2,001,546
Telefonos de Mexico S.A. de C.V. "L" (ADR) (Provider of
telecommunication services) ........................ 1,100,000 64,693,751
-----------
250,844,819
-----------
Panama 1.3%
Banco Latinoamericano de Exportaciones S.A. "E"
(ADR) (Bank) ....................................... 255,700 6,312,594
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
Shares Value ($)
---------------------------------------------------------------------------------------
<S> <C> <C>
Peru 0.8%
Union de Cervecerias Backus & Johnston S.A. "T" (Producer
of malted, nonalcoholic and carbonated drinks) ........ 10,595,459 3,810,220
-----------
---------------------------------------------------------------------------------------
Total Common Stocks (Cost $391,137,856) 449,097,785
---------------------------------------------------------------------------------------
Total Investment Portfolio-- 100.0% (Cost $413,538,856) (a) 471,498,785
---------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
** Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
(a) The cost for federal income tax purposes was $414,494,670. At April 30,
2000, net unrealized appreciation for all securities based on tax cost was
$57,004,115. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $97,810,926 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$40,806,811.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $4,251,546 (0.89% of net assets). Their
values have been estimated by the Valuation Committee in the absence of
readily ascertainable market values. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the difference could be material. The cost of these
securities at April 30, 2000 aggregated $12,104,393. These securities may
also have certain restrictions as to resale.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
Financial Statements
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Statement of Assets and Liabilities as of April 30, 2000 (Unaudited)
-----------------------------------------------------------------------------------------------
Assets
-----------------------------------------------------------------------------------------------
<S> <C>
Investments in securities, at value (cost $413,538,856) ........................ $471,498,785
Cash ........................................................................... 52
Foreign currency, at value (cost $410,764) ..................................... 410,880
Receivable for investments sold ................................................ 2,649,372
Dividends receivable ........................................................... 2,376,782
Interest receivable ............................................................ 10,603
Receivable for Fund shares sold ................................................ 173,882
Other assets ................................................................... 165
------------
Total assets ................................................................... 477,120,521
Liabilities
-----------------------------------------------------------------------------------------------
Payable for investments purchased .............................................. 556,228
Payable for Fund shares redeemed ............................................... 192,532
Accrued management fee ......................................................... 538,970
Accrued Directors' fees and expenses ........................................... 56,029
Other accrued expenses and payables ............................................ 390,326
------------
Total liabilities .............................................................. 1,734,085
-----------------------------------------------------------------------------------------------
Net assets, at value $475,386,436
-----------------------------------------------------------------------------------------------
Net Assets
-----------------------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income (loss) ..................................... 2,067,351
Net unrealized appreciation (depreciation) on:
Investments .................................................................. 57,959,929
Foreign currency related transactions ........................................ 1,201
Accumulated net realized gain (loss) ........................................... 8,627,675
Paid-in capital ................................................................ 406,730,280
-----------------------------------------------------------------------------------------------
Net assets, at value $475,386,436
-----------------------------------------------------------------------------------------------
Net Asset Value
-----------------------------------------------------------------------------------------------
NetAsset Value, offering and redemption price per share ($475,386,436 /
20,159,041 shares of capital stock outstanding, $.01 par value, 100,000,000 ------------
shares authorized) .......................................................... $ 23.58
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Statement of Operations for the six months ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
--------------------------------------------------------------------------------
Income:
Dividends (net of foreign taxes withheld of $464,004) .......... $ 6,606,014
Interest ....................................................... 841,327
------------
Total income ................................................... 7,447,341
------------
Expenses:
Management fee ................................................. 3,367,292
Services to shareholders ....................................... 810,243
Custodian and accounting fees .................................. 467,315
Auditing ....................................................... 32,774
Legal .......................................................... 11,375
Directors' fees and expenses ................................... 87,121
Reports to shareholders ........................................ 66,261
Registration fees .............................................. 10,880
Other .......................................................... 36,323
------------
Total expenses, before expense reductions ...................... 4,889,584
Expense reductions ............................................. (32,505)
------------
Total expenses, after expense reductions ....................... 4,857,079
--------------------------------------------------------------------------------
Net investment income (loss) 2,590,262
--------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
--------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments .................................................... 38,865,226
Foreign currency related transactions (including CPMF tax -------------
of $270,820) ................................................ (708,593)
------------
38,156,633
------------
Net unrealized appreciation (depreciation) during the period on:
Investments .................................................... 45,546,222
Foreign currency related transactions .......................... 666,973
------------
46,213,195
--------------------------------------------------------------------------------
Net gain (loss) on investment transactions 84,369,828
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 86,960,090
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
19
<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) ...................... $ 2,590,262 $ 7,748,436
Net realized gain (loss) on investment transactions 38,156,633 (30,707,394)
Net unrealized appreciation (depreciation) on
investment transactions during the period ...... 46,213,195 68,718,457
------------- -------------
Net increase (decrease) in net assets resulting
from operations ................................ 86,960,090 45,759,499
------------- -------------
Distributions to shareholders from:
Net investment income ............................. (1,108,539) (9,206,695)
------------- -------------
Net realized gains ................................ -- (15,934,116)
------------- -------------
Fund share transactions:
Proceeds from shares sold ......................... 147,667,030 264,196,798
Reinvestment of distributions ..................... 1,045,235 23,977,201
Cost of shares redeemed ........................... (208,139,177) (363,449,884)
------------- -------------
Net increase (decrease) in net assets from Fund
share transactions ............................. (59,426,912) (75,275,885)
------------- -------------
Increase (decrease) in net assets ................. 26,424,639 (54,657,197)
Net assets at beginning of period ................. 448,961,797 503,618,994
Net assets at end of period (including
undistributed net investment income (loss) of ------------- -------------
$2,067,351 and $585,628, respectively) ......... $ 475,386,436 $ 448,961,797
------------- -------------
Other Information
--------------------------------------------------------------------------------
Shares outstanding at beginning of period ......... 22,499,642 26,476,730
------------- -------------
Shares sold ....................................... 6,050,102 13,356,309
Shares issued to shareholders in reinvestment of
distributions .................................. 41,379 1,363,891
Shares redeemed ................................... (8,432,082) (18,697,288)
------------- -------------
Net increase (decrease) in Fund shares ............ (2,340,601) (3,977,088)
------------- -------------
Shares outstanding at end of period ............... 20,159,041 22,499,642
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<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)(b) 1999(a) 1998(a) 1997(a) 1996(a) 1995
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $19.95 $19.02 $25.12 $20.63 $16.22 $24.44
-----------------------------------------------------------------------------------------
Income (loss) from investment operations:
-----------------------------------------------------------------------------------------
Net investment income
(loss) .12 .31 .34 .26 .25 .09
-----------------------------------------------------------------------------------------
Net realized and
unrealized gain (loss) on
investment transactions 3.56 1.63 (5.05) 4.49 4.30 (7.62)
------------------------------------------------------------
-----------------------------------------------------------------------------------------
Total from investment
operations 3.68 1.94 (4.71) 4.75 4.55 (7.53)
-----------------------------------------------------------------------------------------
Less distributions from:
Net investment income (.05) (.37) (.25) (.26) (.15) --
-----------------------------------------------------------------------------------------
Net realized gains on
investment transactions -- (.64) (1.14) -- -- (.73)
------------------------------------------------------------
-----------------------------------------------------------------------------------------
Total distributions (.05) (1.01) (1.39) (.26) (.15) (.73)
-----------------------------------------------------------------------------------------
Redemption fees (c) -- -- -- -- .01 .04
-----------------------------------------------------------------------------------------
Net asset value, end
of period $23.58 $19.95 $19.02 $25.12 $20.63 $16.22
------------------------------------------------------------
-----------------------------------------------------------------------------------------
Total Return (%) 18.37(e)** 10.97 (20.23) 23.25 28.31(d) (30.96)(d)(e)
-----------------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
-----------------------------------------------------------------------------------------
Net assets, end of period
($ millions) 475 449 504 883 622 519
-----------------------------------------------------------------------------------------
Ratio of expenses before
expense reductions (%) 1.82(f)* 1.96 1.87 1.89 1.96 2.11
-----------------------------------------------------------------------------------------
Ratio of expenses after
expense reductions (%) 1.82(f)* 1.96 1.87 1.89 1.96 2.08
-----------------------------------------------------------------------------------------
Ratio of net investment
income (loss) (%) .97* 1.61 1.45 .98 1.32 .52
-----------------------------------------------------------------------------------------
Portfolio turnover rate (%) 75* 48 44 42 22 40
-----------------------------------------------------------------------------------------
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) For the six months ended April 30, 2000 (Unaudited).
(c) Until September 5, 1996, upon the redemption or exchange of shares held by
shareholders for less than one year, a fee of 2% was assessed and retained
by the Fund for the benefit of the remaining shareholders.
(d) Shareholders redeeming shares held less than one year will have a lower
total return due to the effect of the 2% redemption fee.
(e) Total returns would have been lower had certain expenses not been reduced.
(f) The ratios of operating expenses excluding costs incurred in connection
with the reorganization before and after expense reductions were 1.81% and
1.81%, respectively.
* Annualized
** Not annualized
21
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
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.
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.
22
<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.
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 0.38% 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.
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
23
<PAGE>
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.
B. Purchases and Sales of Securities
During the six months ended April 30, 2000, purchases and sales of investment
securities (excluding short-term investments) aggregated $132,859,255 and
$182,142,874, 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 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 net assets in
excess of $1 billion, computed and accrued daily and payable monthly. For the
six months ended April 30, 2000, the fee pursuant to this Agreement aggregated
$3,367,292, which was equivalent to an annualized effective rate of 1.25% 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 to the Fund by SSC
aggregated $671,027, of which $309,889 is 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
24
<PAGE>
employee benefit plans invested in the Fund. For the six months ended April 30,
2000, the amount charged to the Fund by STC aggregated $22,241, of which $3,387
is 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 maintaining
the portfolio and general accounting records of the Fund. For the six months
ended April 30, 2000, the amount charged to the Fund by SFAC aggregated
$142,168, of which $22,651 is unpaid at April 30, 2000.
The Fund is one of several Scudder Funds (the "Underlying Funds") in which the
Scudder Pathway Series Portfolios (the "Portfolios") invest. In accordance with
the Special Servicing Agreement entered into by the Adviser, the Portfolios, the
Underlying Funds, SSC, SFAC, STC, and Scudder Investor Services, Inc., expenses
from the operation of the Portfolios are borne by the Underlying Funds based on
each Underlying Fund's proportionate share of assets owned by the Portfolios. No
Underlying Funds will be charged expenses that exceed the estimated savings to
each respective Underlying Fund. These estimated savings result from the
elimination of separate shareholder accounts which either currently are or have
potential to be invested in the Underlying Funds. For the six months ended April
30, 2000, the Special Servicing Agreement expense charged to the Fund amounted
to $173.
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 six months ended April 30, 2000, Directors' fees and expenses aggregated
$22,112. 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 F. 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. Investing in Emerging Markets
Investing in emerging markets may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currencies, high rates of inflation, repatriation restrictions on
income and capital, and future adverse political and economic developments.
Moreover, securities issued in these markets may be less liquid, subject to
government ownership controls, delayed settlements, and their prices more
volatile than those of comparable securities in the United States.
25
<PAGE>
E. Line of Credit
The Fund and several affiliated 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.
F. 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.
26
<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; General Partner,
The Exeter Group of Funds
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
Paul Bancroft III
o Honorary Director; Consultant
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
Irene T. Cheng*
o Vice President
Joyce E. Cornell*
o Vice President
Carol L. Franklin*
o Vice President
Edmund B. Games, Jr.*
o Vice President
Joan R. Gregory*
o Vice President
Ann M. McCreary*
o Vice President
Sheridan P. Reilly*
o Vice President
Tien-Yu Sieh*
o Vice President
Shahram Tajbakhsh*
o Vice President
John Millette*
o Vice President and Secretary
John R. Hebble*
o Treasurer
Caroline Pearson*
o Assistant Secretary
*Scudder Kemper Investments, Inc.
27
<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>
28
<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.
29
<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.
30
<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
31
<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 [LOGO] Zurich Financial Services Group
