This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder Balanced Fund
Annual Report
December 31, 1994
* A fund that seeks a balance of growth and income, as well as long-term
preservation of capital, from a diversified portfolio of equity and
fixed-income securities.
* A pure no-load(tm) fund with no commissions to buy, sell, or exchange
shares.
CONTENTS
2 Highlights
3 Letter from the Fund's President
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
9 Investment Portfolio
17 Financial Statements
20 Financial Highlights
21 Notes to Financial Statements
25 Report of Independent Accountants
26 Tax Information
29 Officers and Trustees
30 Investment Products and Services
31 How to Contact Scudder
HIGHLIGHTS
* Reflecting 1994's challenging environment for stocks and bonds,
Scudder Balanced Fund's net asset value declined. The Fund provided a
total return of -2.39% for the year ended December 31, 1994,
reflecting the price change and income distributions of $0.31 per
share.
* Stock holdings accounted for 63% of the Fund's assets on December 31,
while fixed-income securities and cash equivalents equaled 37%.
* The strong performance of select healthcare stocks benefited the Fund
during the year.
* The Fund's telecommunications holdings, including cellular telephone,
cable television, and broadcasting companies, benefited from the
continuing growth potential of this industry.
* The Fund remained focused on globally positioned companies, including
Duracell and PepsiCo in the consumer area and Intel and Microsoft in
the global technology arena.
LETTER FROM THE FUND'S PRESIDENT
Dear Shareholders,
The world's financial markets were shaken repeatedly in 1994 by a
variety of events. Rising global interest rates, losses for investors in
highly leveraged derivatives, and unsettling developments around the world
combined to create a challenging environment for stock and bond investors.
Masking the market volatility, however, many broad indexes ended the year
little changed.
The events of the past year have put a new face on an old challenge
for stock and bond funds: to provide shareholders with long-term returns
that compensate for the risks inherent in these investments. At times like
these, it is useful to remember that stocks historically have outperformed
income investments over longer periods. Bonds in turn have outpaced
short-term investments such as money market funds -- a trend not likely
altered by one year of poor performance.
In the coming year, we expect a combination of factors, including
central bank tightening efforts, to keep the world economy and inflation on
a moderate course. Meanwhile, corporate profits continue to grow and
business investment is at an all-time high, which should translate into
expanded economic capacity down the road. These developments ultimately
should be viewed as favorable for the financial markets, and we expect
investors to begin focusing on positive long-term fundamentals rather than
short-term uncertainties.
The team responsible for managing your Fund's investment portfolio has
recently changed. Bruce F. Beaty, who has played a key role in managing
your Fund since its inception, assumed responsibility for the Fund's
day-to-day management and investment strategies in January 1995. William M.
Hutchinson, who has also been with the Fund since its introduction,
continues to head up the Fund's fixed-income strategy and security
selection. Howard Ward, formerly lead portfolio manager of your Fund, has
left Scudder. We thank him for his contributions and wish him well in the
future.
If you have questions about your Fund or your investments, please
contact a Scudder Investor Relations representative at 1-800-225-2470. Page
31 provides more information on how to contact Scudder. Thank you for
choosing Scudder Balanced Fund to help meet your investment needs.
Sincerely
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Balanced Fund
<PAGE>
Scudder Balanced Fund
Performance Update as of December 31, 1994
- -----------------------------------------------------------------
Growth of a $10,000 Investment
- -----------------------------------------------------------------
Scudder Balanced Fund
- ----------------------------------------
Total Return
Period Growth -------------
Ended of Average
12/31/94 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $ 9,761 -2.39% -2.39%
Life of
Fund* $10,164 1.64% .82%
S&P 500 Index (60%) and LBAB Index (40%)
- ----------------------------------------
Total Return
Period Growth -------------
Ended of Average
12/31/94 $10,000 Cumulative Annual
- --------- ------- ---------- -------
1 Year $ 9,997 -.03% -.03%
Life of
Fund* $10,865 8.65% 4.44%
*The Fund commenced operations on January 4, 1993.
Index comparisons begin January 31, 1993.
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
Scudder Balanced Fund
Year Amount
- ----------------------
1/31/93 10000
6/93 9876
12/93 10395
6/94 9823
12/94 10147
S&P 500 Index
Year Amount
- ----------------------
1/31/93 10000
6/93 10401
12/93 10916
6/94 10547
12/94 11061
LBAB Index
Year Amount
- ----------------------
1/31/93 10000
6/93 10488
12/93 10768
6/94 10352
12/94 10454
The Standard & Poor's (S&P) 500 Index is a capitalization-
weighted measure of 500 widely held common stocks listed on the New
York Stock Exchange, American Stock Exchange, and Over-The-Counter
market and The Lehman Brothers Aggregate Bond (LBAB) Index is a market
value-weighted measure of treasury issues, agency issues, corporate bond
issues and mortgage securities. Index returns assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees or expenses.
- -------------------------------------------------------------------
Returns and Per Share Information
- -------------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
<TABLE>
<S> <C> <C>
1993* 1994
---------------
Net Asset Value... $12.23 $11.63
Income Dividends.. $ .26 $ .31
Fund Total
Return (%)........ 4.12 -2.39
Index Total
Return (%)........ 8.56 -.03
</TABLE>
Performance is historical and 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 average annual
total return for the 1 Year and Life of Fund would have been lower.
Portfolio Summary as of December 31, 1994
- ---------------------------------------------------------------------------
Diversification
- ---------------------------------------------------------------------------
Common Stocks 63%
Fixed Income Holdings 25% The Fund focused on companies likely to
Cash Equivalents 12% benefit from growth in capital spending,
---- the primary catalyst of the current
100% economic expansion.
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Equity Holdings
- --------------------------------------------------------------------------
Consumer Staples 15% Five Largest Equity Holdings
Financial 12% -----------------------------------------
Health 11% 1. American Telephone & Telegraph Co.
Technology 10% Telecommunication services and
Manufacturing 10% business systems
Durables 9% 2. General Electric Co. Leading producer
Energy 8% of electrical equipment
Other 25% 3. Mellon Bank Corp. Multi-bank holding
---- company
100% 4. PepsiCo Inc. Soft drinks, snack foods,
==== and food services
5. Eli Lilly Co. Leading pharmaceutical
company
We increased the Fund's exposure to healthcare stocks that we believed were
well-positioned and represented good value.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Fixed Income Holdings (Excludes Cash Equivalents)
- --------------------------------------------------------------------------
Type Quality
- ----------------------------------- ---------------------------
U.S. Gov't & Agencies 50% AAA 71%
Corporate Bonds 25% AA 6%
U.S. Gov't Mortgages 18% A 15%
Foreign - U.S. $ Denominated 4% BBB 8%
Asset-Backed Securities 3% ----
---- 100%
100% ====
====
As rising interest rates slowed mortgage refinancings, income from
mortgage-backed securities became more stable and the portion of these
securities in the Fund was increased.
For more complete details about the Fund's Investment Portfolio,
see page 9.
A monthly investment portfolio summary is available upon request.
<PAGE>
SCUDDER BALANCED FUND
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
For investors in the United States and abroad, 1994 was one of the
most challenging years in over a decade. A nearly year-long pattern of
globally rising interest rates helped push U.S. and many foreign bond
prices down across all maturities, while most stock markets remained
volatile throughout the year.
Scudder Balanced Fund closed the year with a net asset value of $11.63
per share, down from $12.23 on December 31, 1993. Offsetting the decline
somewhat, the Fund paid shareholders a total of $0.31 per share in income
during the period. The price change and distribution generated a -2.39%
total return for the year. By comparison, the unmanaged Standard & Poor's
500 Index and the unmanaged Lehman Brothers Aggregate Bond Index posted
returns of 1.32% and -2.92%, respectively.
Scudder Balanced Fund is designed to invest between 50% and 75% of
its assets in common stocks to offer investors participation in quality
companies with long-term growth potential. The remainder of the Fund's net
assets are generally invested in fixed-income securities. The Fund's
investment parameters reflect the fact that, historically, stocks have
provided higher returns over the long term than bonds and cash equivalents
and, moreover, have generated returns greater than the inflation rate.
Equity Strategy Focused on Earnings Growth
Our equity strategy includes taking positions in financially strong
companies with a history of rising earnings. At the same time, we invest in
smaller companies that we believe offer the potential for above-average
earnings growth and price appreciation. As of December 31, 63% of the
portfolio was invested in stocks.
One of the major investment themes in 1994 centered on healthcare.
Although efforts to pass new federal healthcare legislation in 1994 failed,
many healthcare companies took action on their own to improve their
competitive positions by way of alliances, acquisitions, and
restructurings. We increased the Fund's exposure to healthcare stocks that
we believed were well positioned and represented good value.
Better-than-expected earnings reports from holdings such as
Schering-Plough, Baxter International, and United Healthcare benefited the
Fund during the year through stock price appreciation. Also, the
acquisition of American Cyanamid by American Home Products and the purchase
of McKesson's PCS division by Eli Lilly boosted Fund returns, as we held
shares of both American Cyanamid and McKesson.
Another major theme was the continuing growth potential of the
telecommunications industry, including cellular telephone, cable
television, and broadcasting companies. During the year the Fund benefited
from such holdings as Motorola and Nokia in cellular communications; CBS
and Capital Cities in broadcasting; and Viacom, Time Warner, and Disney in
diversified entertainment. Additionally, holdings in Sprint and MCI were
sold as price competition for long-distance service reduced earnings.
The portfolio also focused during the period on companies likely to
benefit from growth in capital spending, which has been the primary
catalyst of the current economic expansion. Manufacturing capacity is
strained in many countries, and both domestic and foreign companies are
building new facilities to meet the burgeoning demand for capital
equipment. The Fund's recent investments in this sector include new
positions or increased holdings in General Electric, Emerson Electric,
Minnesota Mining and Manufacturing, and Dover Corp.
Although historically the Fund's stock holdings have been largely
domestic, it has the flexibility to invest without limit abroad to ensure
an adequate level of diversification. This diversification proved helpful
in early 1994. The portfolio benefited from its holdings in foreign
companies, reflecting investor interest in emerging markets. As the year
progressed, however, positions in some of these stocks were sold as they
became fully valued and as the near-term outlook for certain emerging
markets became less sanguine. Positions in Compania de Telefonos de Chile,
Telefonos de Mexico, and Hong Kong Telephone, for example, were all sold
completely and at a profit. At the same time, the Fund remained focused on
larger multinationals including Duracell, Gillette, McDonald's, and
PepsiCo, as well as such global technology companies as Intel, Microsoft,
Texas Instruments, and Oracle Systems.
Emphasis on High-Quality Fixed-Income Securities
The Fund invests under normal circumstances between 25% and 50% of its
net assets in fixed-income securities. Because of the Fund's overall
quality emphasis, we do not invest in "junk" bonds. As of December 31,
1994, approximately 32% of the Fund's assets were invested primarily in
U.S. government and agency securities and corporate bonds.
We continued to concentrate holdings in both short and long maturities
throughout 1994. In an environment where short-term interest rates were
rising faster than long-term rates, this strategy benefited the Fund by
exposing it to the relatively higher income of long-term bonds and the
relatively higher price stability provided by short-term securities. On
December 31, 55% of the fixed-income portion of the portfolio was invested
in bonds with less than five years to maturity, while 22% was invested in
bonds with effective maturities of more than 15 years. As an added
defensive measure, we reduced the portfolio's average effective maturity
from approximately 13 years at the start of the year to approximately nine
years on December 31, 1994.
During the year, we maintained the Fund's emphasis on corporate
non-callable bonds (bonds that cannot be redeemed at the option of the
issuer) to sustain the Fund's income stream and provide a measure of
portfolio stability. Although non-callable bonds offer somewhat lower
income than callable bonds, they help us regulate the Fund's overall income
level, since they have no chance of being redeemed prior to maturity.
Lastly, we all but eliminated the Fund's mortgage-backed securities in
the first half of the year in favor of 10-year Treasuries. However, we
brought mortgage-backed securities back into the portfolio in the final
months of 1994 as rising interest rates slowed refinancings by homeowners,
making the higher income from these securities more stable.
Looking Ahead
For the equity portion of Scudder Balanced Fund, we believe low
relative inflation, a moderately expanding global economy, and stronger
corporate profits should help support stock prices in the coming months. At
Scudder, we remain committed to our quality-growth philosophy, which has
historically provided attractive returns to investors over time. As for the
income portion of the portfolio, we believe the events of the past year
have produced some attractive values in bonds. Still, the risk of
additional volatility in stocks and bonds remains, especially if global
competition continues to raise inflationary fears and the pressure on
interest rates remains upward. We believe Scudder Balanced Fund is well
positioned to achieve a positive total return over the long haul and
weather the interim volatility in the financial markets.
Sincerely,
Your Portfolio Management Team
/s/Bruce F. Beaty /s/William M. Hutchinson
Bruce F. Beaty William M. Hutchinson
Scudder Balanced Fund:
A Team Approach to Investing
Scudder Balanced Fund is managed by a team of Scudder investment
professionals who each play an important role in the Fund's management
process. Team members work together to develop investment strategies and
select securities for the Fund's portfolio. They are supported by Scudder's
large staff of economists, research analysts, traders, and other investment
specialists who work in Scudder's offices across the United States and
abroad. We believe our team approach benefits Fund investors by bringing
together many disciplines and leveraging Scudder's extensive resources.
Lead Portfolio Manager Bruce F. Beaty assumed responsibility for the
Fund's day-to-day management and investment strategies in January 1995.
Bruce, who has been a portfolio manager at Scudder since joining the firm
in 1991, specializes in the quality growth discipline of equity investing.
Prior to joining Scudder in 1991, Bruce spent 11 years in the securities
brokerage business. Portfolio Manager William M. Hutchinson heads up the
Fund's fixed-income investment strategy and security selection. Bill, who
has been with the Fund since its introduction and Scudder since 1986, has
over 20 years of investment experience.
<PAGE>
<PAGE>
INVESTMENT PORTFOLIO as of December 31, 1994
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
% of Principal Market
Portfolio Amount ($) Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
3.6% REPURCHASE AGREEMENTS
2,429,000 Repurchase Agreement with Donaldson, Lufkin
and Jenrette dated 12/30/94 at 5.875% to
be repurchased at $2,430,586 on
1/3/95, collateralized by a $2,447,000
U.S. Treasury Note, 4.25%, 7/31/95
(Cost $2,429,000)................................... 2,429,000
---------
8.7% SHORT-TERM NOTES
3,800,000 Federal Home Loan Mortgage Corp. Discount
Note, 5.85%, 1/4/95................................. 3,798,147
2,000,000 Federal Home Loan Mortgage Corp. Discount
Note, 5.75%, 1/31/95................................ 1,990,417
---------
TOTAL SHORT-TERM NOTES (Cost $5,788,564)............. 5,788,564
---------
12.4% U.S. GOVERNMENT & AGENCIES
500,000 U.S. Treasury Bond, 7.875%, 2/15/21.................. 493,750
1,000,000 U.S. Treasury Note, 5.125%, 11/15/95................. 982,970
250,000 U.S. Treasury Note, 8%, 10/15/96..................... 251,328
250,000 U.S. Treasury Note, 8.5%, 4/15/97.................... 253,750
1,250,000 U.S. Treasury Note, 5.5%, 9/30/97.................... 1,179,888
500,000 U.S. Treasury Note, 5.125%, 4/30/98.................. 460,780
500,000 U.S. Treasury Note, 6.375%, 1/15/99.................. 474,685
2,000,000 U.S. Treasury Note, 6.875%, 7/31/99.................. 1,925,000
600,000 U.S. Treasury Note, 5.75%, 8/15/03................... 521,436
3,200,000 U.S. Treasury Separate Trading Registered
Interest and Principal, 5/15/09 (8.026% (b))........ 1,032,736
700,000 U.S. Treasury Separate Trading Registered
Interest and Principal, 11/15/10 (8.051% (b))....... 199,983
1,000,000 U.S. Treasury Separate Trading Registered
Interest and Principal, 8/15/14 (8.078% (b))........ 211,430
2,000,000 U.S. Treasury Separate Trading Registered
Interest and Principal, 8/15/18 (8.073% (b))........ 308,380
---------
TOTAL U.S. GOVERNMENT & AGENCIES
(Cost $8,758,045)................................... 8,296,116
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
SCUDDER BALANCED FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
% of Principal Market
Portfolio Amount ($) Value ($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1.5% U.S. GOV'T GUARANTEED MORTGAGES
1,001,172 Government National Mortgage Association
Pass-thru, 8%, 6/15/24 (d).......................... 957,050
29,886 Government National Mortgage Association
Pass-thru, 9.5%, 8/15/19............................ 30,861
---------
TOTAL U.S. GOV'T GUARANTEED MORTGAGES
(Cost $1,006,682)................................... 987,911
---------
2.9% U.S. GOVERNMENT AGENCY PASS-THRUS
1,000,000 Federal National Mortgage Association,
9%, 1/1/99 (c)...................................... 1,005,000
995,267 Federal National Mortgage Association,
7.5%, 10/1/24 (d)................................... 929,330
---------
TOTAL U.S. GOVERNMENT AGENCY PASS-THRUS
(Cost $1,957,219)................................... 1,934,330
---------
0.9% FOREIGN BONDS-- U.S. $ DENOMINATED
661,000 United Mexican States Tesobonos,
U.S. Dollar Linked, 8/17/95 (Cost $633,296)......... 606,269
---------
0.7% ASSET-BACKED SECURITIES
AUTOMOBILE RECEIVABLES
500,000 Capital Automobile Receivable Asset Trust,
Series A6, 4.9%, 2/15/98 (Cost $499,848)............ 491,875
---------
6.1% CORPORATE BONDS
FINANCIAL 1.4%
250,000 American General Finance Corp.
Senior Note, 8.375%, 1/15/95........................ 250,098
200,000 Norwest Financial Inc. Senior Note,
8.875%, 7/1/96...................................... 202,502
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
INVESTMENT PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
% of Principal Market
Portfolio Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
500,000 World Savings & Loan Association of Oakland,
CA, Medium Term Note, 5.25%, 2/15/96................ 488,685
---------
941,285
---------
MEDIA 1.2%
375,000 News America Holdings Inc., 9.25%, 2/1/13............ 364,789
500,000 Time Warner Inc., 9.125%, 1/15/13.................... 450,470
---------
815,259
---------
DURABLES 1.4%
250,000 Boeing Co., 6.875%, 10/15/43......................... 196,755
500,000 Ford Motor Co., 8.875%, 1/15/22...................... 504,950
250,000 Ford Motor Credit Co., 6.25%, 2/26/98................ 235,508
---------
937,213
---------
MANUFACTURING 1.4%
500,000 Dow Chemical Co., 9%, 4/1/21......................... 505,010
500,000 Nova Corp. of Alberta, 7.875%, 4/1/23................ 453,475
---------
958,485
---------
TECHNOLOGY 0.7%
500,000 Loral Corp., 8.375%, 6/15/24......................... 462,140
---------
TOTAL CORPORATE BONDS (Cost $4,513,966).............. 4,114,382
---------
63.2% COMMON STOCKS
Shares
----------------------------------------------------------------------------
CONSUMER DISCRETIONARY 4.0%
Department &
Chain Stores 3.1% 16,366 Home Depot, Inc. .................................... 752,828
6,000 J.C. Penney Inc. .................................... 267,750
30,200 Wal-Mart Stores Inc. ................................ 641,750
10,200 Walgreen Co. ........................................ 446,250
---------
2,108,578
---------
Restaurants 0.6% 13,300 McDonald's Corp. .................................... 389,025
---------
Specialty Retail 0.3% 6,800 Toys "R" Us Inc.*.................................... 207,400
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
SCUDDER BALANCED FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
% of Market
Portfolio Shares Value ($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONSUMER STAPLES 9.8%
Consumer Electronic &
Photographic Products 0.8% 5,400 Duracell International Inc. ......................... 234,225
5,700 Whirlpool Corp. ..................................... 289,275
---------
523,500
---------
Food & Beverage 6.6% 10,800 Albertson's Inc. .................................... 313,200
15,500 CPC International Inc. .............................. 825,375
14,500 ConAgra Inc. ........................................ 453,125
12,400 General Mills, Inc. ................................. 706,800
5,500 Kellogg Co. ......................................... 319,688
32,700 PepsiCo Inc. ........................................ 1,185,375
24,300 Sara Lee Corp. ...................................... 613,575
---------
4,417,138
---------
Package Goods/
Cosmetics 2.4% 6,000 Colgate-Palmolive Co. ............................... 380,250
4,500 Gillette Co. ........................................ 336,375
14,300 Procter & Gamble Co. ................................ 886,600
---------
1,603,225
---------
HEALTH 7.2%
Health Industry Services 0.8% 6,000 U.S. HealthCare, Inc. ............................... 247,500
6,000 United Healthcare Corp. ............................. 270,750
---------
518,250
---------
Hospital Management 1.0% 18,000 Columbia/HCA Healthcare Corp. ....................... 657,000
---------
Pharmaceuticals 5.4% 8,600 Abbott Laboratories.................................. 280,575
16,500 Baxter International Inc. ........................... 466,125
17,200 Eli Lilly Co. ....................................... 1,128,750
4,000 Johnson & Johnson.................................... 219,000
10,700 Schering-Plough Corp. ............................... 791,800
9,800 Warner-Lambert Co. .................................. 754,600
---------
3,640,850
---------
COMMUNICATIONS 2.4%
Cellular Telephone 0.3% 6,200 AirTouch Communications.............................. 180,575
---------
Telephone/
Communications 2.1% 28,300 American Telephone & Telegraph Co. .................. 1,422,075
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
INVESTMENT PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
% of Market
Portfolio Shares Value ($)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FINANCIAL 7.4%
Banks 4.0% 11,717 Banc One Corp. ...................................... 297,319
42,200 Mellon Bank Corp. ................................... 1,292,375
24,400 Norwest Corp. ....................................... 570,350
19,800 State Street Boston Corp. ........................... 566,775
---------
2,726,819
---------
Insurance 2.3% 8,400 American International Group, Inc. .................. 823,200
8,500 EXEL, Ltd. .......................................... 335,750
6,500 MBIA Inc. ........................................... 364,813
---------
1,523,763
---------
Other Financial
Companies 1.1% 10,000 Federal National Mortgage Association................ 728,750
---------
MEDIA 5.1%
Advertising 0.5% 11,400 Interpublic Group of Companies Inc. ................. 366,225
---------
Broadcasting &
Entertainment 3.7% 7,500 CBS Inc. ............................................ 415,313
4,700 Capital Cities/ABC Inc. ............................. 400,675
13,500 Time Warner Inc. .................................... 474,188
10,200 Turner Broadcasting System Inc. "B".................. 167,025
10,300 Viacom Inc. "B"*..................................... 418,438
13,300 Walt Disney Co. ..................................... 613,463
---------
2,489,102
---------
Cable Television 0.7% 8,800 Comcast Corp. "A".................................... 138,050
15,000 Tele-Communications Inc. "A"*........................ 326,250
---------
464,300
---------
Print Media 0.2% 2,300 News Corp. Ltd. (ADR)................................ 31,913
4,600 News Corp. Ltd. (New) (ADR)*......................... 71,875
---------
103,788
---------
SERVICE INDUSTRIES 2.0%
EDP Services 1.5% 7,800 Automatic Data Processing, Inc. ..................... 456,300
5,900 First Data Corp. .................................... 279,513
6,100 General Motors Corp. "E"............................. 234,850
---------
970,663
---------
Miscellaneous Commercial
Services 0.3% 8,500 Sysco Corp. ......................................... 218,875
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
SCUDDER BALANCED FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
% of Market
Portfolio Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Printing/Publishing 0.2% 3,400 Reuters Holdings PLC "B" (ADR)....................... 149,175
---------
DURABLES 5.7%
Aerospace 0.5% 6,600 Boeing Co. .......................................... 308,550
---------
Automobiles 1.8% 9,600 Chrysler Corp. ...................................... 470,400
14,600 Ford Motor Co. ...................................... 408,800
8,100 Magna International, Inc. "A"........................ 310,838
---------
1,190,038
---------
Construction/
Agricultural Equipment 1.2% 9,200 Caterpillar Inc. .................................... 507,150
5,000 Deere & Co. ......................................... 331,250
---------
838,400
---------
Telecommunications
Equipment 1.8% 8,000 L.M. Ericsson Telephone Co. "B" (ADR)................ 441,000
10,200 Nokia Corp. (ADR)*................................... 765,000
---------
1,206,000
---------
Tires 0.4% 10,400 Cooper Tire & Rubber Co.............................. 245,700
---------
MANUFACTURING 6.5%
Diversified Manufacturing 4.0% 4,400 Dover Corp........................................... 227,150
27,700 General Electric Co.................................. 1,412,700
15,900 Minnesota Mining & Manufacturing Co.................. 848,663
3,000 TRW Inc.............................................. 198,000
---------
2,686,513
---------
Electrical Products 1.7% 5,200 ASEA AB (ADR)* ...................................... 375,050
12,500 Emerson Electric Co.................................. 781,250
---------
1,156,300
---------
Machinery/Components/
Controls 0.8% 10,900 Parker-Hannifin Group................................ 495,950
---------
TECHNOLOGY 6.4%
Computer Software 1.0% 6,600 Microsoft Corp.* .................................... 403,425
3,400 Oracle Systems Corp.*................................ 150,025
2,200 Sybase Inc.* ........................................ 114,400
---------
667,850
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
INVESTMENT PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
% of Market
Portfolio Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Diverse Electronic
Products 2.5% 19,300 General Motors Corp. "H"..................... 673,088
17,000 Motorola Inc................................. 983,875
----------
1,656,963
----------
Electronic Components/
Distributors 0.2% 5,000 Molex Inc. "A" .............................. 155,000
----------
Electronic Data Processing 1.2% 8,300 Compaq Computers Corp.*...................... 327,850
5,000 Hewlett-Packard Co. ......................... 499,375
----------
827,225
----------
Office/Plant Automation 0.3% 5,200 Cisco Systems, Inc.*......................... 182,650
----------
Semiconductors 1.2% 4,800 Intel Corp. ................................. 306,600
6,100 Texas Instruments Inc. ...................... 456,738
----------
763,338
----------
ENERGY 5.3%
Engineering 1.4% 12,500 Fluor Corp. ................................. 539,063
12,700 Foster Wheeler Corp. ........................ 377,825
----------
916,888
----------
Oil Companies 2.9% 9,000 Chevron Corp. ............................... 401,625
7,000 Exxon Corp. ................................. 425,250
6,000 Mobil Corp. ................................. 505,500
3,900 Royal Dutch Petroleum Co. ................... 419,250
8,000 Unocal Corp.................................. 218,000
----------
1,969,625
----------
Oil/Gas Transmission 1.0% 22,600 Enron Corp. ................................. 689,300
----------
METALS AND MINERALS 0.9%
Steel & Metals 10,000 Allegheny Ludlum Corp. ...................... 187,500
7,900 Nucor Corp. ................................. 438,450
----------
625,950
CONSTRUCTION 0.5% ----------
Forest Products 12,000 Louisiana Pacific Corp. ..................... 327,000
----------
TOTAL COMMON STOCKS (Cost $42,606,139) ...... 42,318,316
----------
- ------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0%
(Cost $68,192,759)(a)....................... 66,966,763
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
SCUDDER BALANCED FUND
- --------------------------------------------------------------------------------
(a) The cost for federal income tax purposes was $68,349,729. At December
31, 1994, net unrealized depreciation for all securities based on tax
cost was $1,382,966. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of market
value over tax cost of $1,835,372 and aggregate gross unrealized
depreciation for all securities in which there was an excess tax cost
over market value of $3,218,338.
(b) Bond equivalent yield to maturity; not a coupon rate.
(c) Mortgage Dollar Roll (See Note A in Notes to Financial Statements).
(d) At December 31, 1994, these pools in whole or in part have been
segregated to cover Mortgage Dollar Rolls (See Note A in Notes to
Financial Statements).
* Non-income producing security.
The accompanying notes are an integral part of the financial statements.
<PAGE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
- -----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $68,192,759)
(Note A) ............................................. $ 66,966,763
Other receivables:
Fund shares sold ..................................... 8,235
Dividends and interest ............................... 339,719
Deferred organization expenses (Note A).................. 28,875
------------
Total assets ......................................... 67,343,592
LIABILITIES
Payables:
Investments purchased ................................ $ 96,120
Investments purchased-mortgage dollar rolls (Note A).. 1,010,938
Fund shares redeemed ................................. 132,401
Accrued management fee (Note C)....................... 21,309
Other accrued expenses (Note C)....................... 50,573
----------
Total liabilities..................................... 1,311,341
------------
Net assets, at market value.............................. $ 66,032,251
============
NET ASSETS
Net assets consist of:
Accumulated net investment loss ...................... $ (11,510)
Accumulated net realized loss......................... (613,801)
Unrealized depreciation on investments................ (1,225,996)
Shares of beneficial interest......................... 56,801
Additional paid-in capital............................ 67,826,757
------------
Net assets, at market value $ 66,032,251
NET ASSET VALUE, offering and redemption price per ============
share ($66,032,251 -:- 5,680,135 outstanding
shares of beneficial interest, $.01 par value,
unlimited number of shares authorized)................ $11.63
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
SCUDDER BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994
- ----------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest ............................................. $ 1,435,109
Dividends (net of withholding taxes of $9,111)........ 938,465
-----------
2,373,574
Expenses:
Management fee (Note C)............................... $ 152,798
Services to shareholders (Note C)..................... 259,463
Trustees' fees (Note C)............................... 38,952
Custodian fees........................................ 88,094
Auditing.............................................. 23,081
Legal................................................. 16,626
Reports to shareholders............................... 36,326
State registration.................................... 15,127
Federal registration.................................. 3,227
Amortization of organization expense (Note A)......... 10,260
Other................................................. 5,263 649,217
-------------------------------
Net investment income................................. 1,724,357
-----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENT
TRANSACTIONS
Net realized loss from:
Investments........................................ (377,447)
Foreign currency related transactions.............. (23,729) (401,176)
-----------
Net unrealized depreciation during the period on:
Investments........................................ (2,936,953)
Foreign currency related transactions.............. (264) (2,937,217)
----------- -----------
Net loss on investment transactions................... (3,338,393)
-----------
$(1,614,036)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS.. ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 4, 1993
YEAR (COMMENCEMENT
ENDED OF OPERATIONS)
DECEMBER 31, TO DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1994 1993
- ------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income............................. $ 1,724,357 $ 1,237,191
Net realized loss from investment
transactions................................... (401,176) (277,196)
Net unrealized appreciation (depreciation) on
investment transactions during the period...... (2,937,217) 1,711,221
------------ ------------
Net increase (decrease) in net assets
resulting from operations...................... (1,614,036) 2,671,216
------------ ------------
Distributions to shareholders from net
investment income ($.31 and $.26 per
share, respectively)........................... (1,678,241) (1,231,250)
------------ ------------
Fund share transactions:
Proceeds from shares sold......................... 23,615,096 82,201,024
Net asset value of shares issued to
shareholders in reinvestment of distributions.. 1,621,585 1,195,922
Cost of shares redeemed........................... (19,948,276) (20,801,989)
------------ ------------
Net increase in net assets from Fund share
transactions................................... 5,288,405 62,594,957
------------ ------------
INCREASE IN NET ASSETS............................ 1,996,128 64,034,923
Net assets at beginning of period................. 64,036,123 1,200
------------ ------------
NET ASSETS AT END OF PERIOD (including
accumulated net investment loss
of $11,510 at December 31, 1994)............... $ 66,032,251 $ 64,036,123
============ ============
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period......... 5,235,193 100
------------ ------------
Shares sold....................................... 1,976,188 6,881,770
Shares issued to shareholders in
reinvestment of distributions.................. 139,036 99,389
Shares redeemed................................... (1,670,282) (1,746,066)
------------ ------------
Net increase in Fund shares....................... 444,942 5,235,093
------------ ------------
Shares outstanding at end of period............... 5,680,135 5,235,193
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
SCUDDER BALANCED FUND
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>
FOR THE PERIOD
JANUARY 4, 1993
YEAR (COMMENCEMENT
ENDED OF OPERATIONS) TO
DECEMBER 31, DECEMBER 31,
1994 1993
------------ -----------------
<S> <C> <C>
Net asset value, beginning of period .................................... $12.23 $12.00
------ ------
Income from investment operations:
Net investment income(a) .............................................. .31 .26
Net realized and unrealized gain (loss) on investment transactions..... (.60) .23
------ ------
Total from investment operations ........................................ (.29) .49
------ ------
Less distributions from net investment income ........................... (.31) (.26)
------ ------
Net asset value, end of period .......................................... $11.63 $12.23
====== ======
TOTAL RETURN (%) (2.39) 4.12*
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions) .................................. 66 64
Ratio of operating expenses, net to average daily net assets (%)(a) ..... 1.00 1.00
Ratio of net investment income to average daily net assets (%) .......... 2.66 2.43
Portfolio turnover rate (%) ............................................. 105.4 99.3
(a) Reflects a per share amount of management fee not imposed
by the Adviser of ................................................... $ .06 $ .06
Operating expense ratio including management fee not imposed (%)..... 1.47 1.53
* Not annualized
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
Scudder Balanced Fund (the "Fund") is a diversified series of Scudder Portfolio
Trust (the "Trust"). The Trust is organized as a Massachusetts business trust
and is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The policies described
below are followed by the Fund in the preparation of its financial statements in
conformity with generally accepted accounting principles.
SECURITY VALUATION. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the National Association of
Securities Dealers Automatic Quotation ("NASDAQ") System, for which there have
been sales, are valued at the most recent sale price reported on such system. If
there are no such sales, the value is the high or "inside" bid quotation.
Securities which are not quoted on the NASDAQ System but are traded in another
over-the- counter market are valued at the most recent sale price on such
market. If no sale occurred, the security is then valued at the calculated
mean between the most recent bid and asked quotations. If there are no such bid
and asked quotations, the most recent bid quotation shall be used.
Portfolio debt securities with remaining maturities greater than sixty days are
valued by pricing agents approved by the officers of the Fund, which quotations
reflect broker/dealer-supplied valuations and electronic data processing
techniques. If the pricing agents are unable to provide such quotations, the
most recent bid quotation supplied by a bona fide market maker shall be used.
Short-term investments having a 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 Trustees.
<PAGE>
SCUDDER BALANCED FUND
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement and the underlying collateral, is equal to at least 100.5% of the
resale price.
MORTGAGE DOLLAR ROLLS. The Fund may enter into mortgage dollar rolls in which
the Fund sells mortgage securities for delivery in the current month and
simultaneously contracts to repurchase similar, but not identical, securities
at the same price on a fixed date. The Fund receives compensation as
consideration for entering into the commitment to repurchase.
The compensation is recorded as deferred income and amortized to income over the
roll period. The counterparty receives all principal and inter- est payments,
including prepayments, made in respect of the security while it is the holder.
Mortgage dollar rolls may be renewed with a new purchase and repurchase price
fixed and a cash settlement made at each renewal without physical delivery of
the securities subject to the contract.
FEDERAL INCOME TAXES. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. The Fund
accordingly paid no federal income taxes and no provision for federal income
taxes was required.
At December 31, 1994, the Fund had a net tax basis capital loss carryforward
of approximately $127,000 which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until December 31,
2001, the expiration date. In addition, from November 1, 1994 through December
31, 1994, the Fund incurred approximately $330,000 of net realized capital
losses. As permitted by tax regulations, the Fund intends to elect to defer
these losses and treat them as arising in the fiscal year ended December 31,
1995.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DISTRIBUTION OF INCOME AND GAINS. Distributions of net investment income are
made quarterly. During any particular year, net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed and, therefore, will be distributed to
shareholders. An additional distribution may be made to the extent necessary to
avoid the payment of a four percent federal excise tax.
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 relate primarily to investments in foreign denominated investments
and certain securities sold at a loss. As a result, net investment income (loss)
and net realized gain (loss) on investment transactions for a reporting period
may differ significantly from distributions during such period. Accordingly, the
Fund may periodically make reclassifications among certain of its capital
accounts without impacting the net asset value of the Fund.
The Fund uses the specific identified cost method for determining realized gain
or loss on investments for both financial and federal income tax reporting
purposes.
ORGANIZATION COST. Costs incurred by the Fund in connection with its
organization and initial registration of shares have been deferred and are being
amortized on a straight-line basis over a five-year period.
OTHER. Investment security transactions are accounted for on a trade date basis.
Dividend income and distributions to shareholders are recorded on the ex-
dividend date. Interest income is recorded on the accrual basis.
B. PURCHASES AND SALES OF SECURITIES
- --------------------------------------------------------------------------------
For the year ended December 31, 1994, purchases and sales of investment
securities (excluding short-term investments and U.S. Government obligations)
aggregated $58,015,007 and $56,776,065, respectively. Purchases and sales of
U.S. Government obligations aggregated $7,466,449 and $6,080,563, respectively.
<PAGE>
SCUDDER BALANCED FUND
- --------------------------------------------------------------------------------
C. RELATED PARTIES
- --------------------------------------------------------------------------------
Under the Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (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 0.70% of the Fund's
average daily nets assets, computed and accrued daily and payable monthly. The
Agreement also provides that if the Fund's expenses exceed specified limits,
such excess, up to the amount of the management fee, will be paid by the
Adviser. In addition, the Adviser has agreed not to impose all or a portion of
its management fee until April 30, 1995 to maintain the annualized expenses of
the Fund at not more than 1.00% of average daily net assets. For the year ended
December 31, 1994, the Adviser imposed fees amounting to $152,798 and the
portion not imposed amounted to $303,520.
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of the Adviser,
is the transfer, dividend paying and shareholder service agent for the Fund. For
the year ended December 31, 1994, the amount charged to the Fund by SSC
aggregated $228,361, of which $21,196 is unpaid at December 31, 1994.
The Fund pays each Trustee not affiliated with the Adviser $4,000 annually, plus
specified amounts for attended board and committee meetings. For the year ended
December 31, 1994, Trustees' fees aggregated $38,952.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE TRUSTEES OF SCUDDER PORTFOLIO TRUST AND SHAREHOLDERS OF SCUDDER BALANCED
FUND:
We have audited the accompanying statement of assets and liabilities of Scudder
Balanced Fund including the investment portfolio, as of December 31, 1994, and
the related statements of operations for the year then ended, and changes in net
assets for the year then ended and for the period January 4, 1993 (commencement
of operations) to December 31, 1993, and the financial highlights for the year
then ended and for the period January 4, 1993 (commencement of operations) to
December 31, 1993. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Balanced Fund as of December 31, 1994, the results of its operations for
the year then ended, the changes in its net assets for the year then ended and
for the period January 4, 1993 (commencement of operations) to December 31,
1993, and the financial highlights for the year then ended and for the period
January 4, 1993 (commencement of operations) to December 31, 1993 in conformity
with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
February 3, 1995
<PAGE>
SCUDDER BALANCED FUND
TAX INFORMATION
- --------------------------------------------------------------------------------
By now shareholders to which year-end tax reporting is required by the IRS
should have received their Form 1099-DIV and tax information letter from the
Fund. For corporate shareholders, 51.9% of the income dividends paid during the
Fund's fiscal year ended December 31, 1994 qualified for the dividends received
deduction.
In many states the amount of income you received from obligations of the U.S.
Government is exempt from your state income taxes. The percentage of the Fund's
1994 income which was derived from direct obligations of the U.S. Government was
21.3%.
Please consult a tax adviser if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your Scudder Fund account, please call a Scudder Investor Relations
Representative at 1-800-225-5163.
<PAGE>
OFFICERS AND TRUSTEES
Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General Manager, WGBH Educational Foundation
Dudley H. Ladd*
Trustee
David S. Lee*
Vice President and Trustee
George M. Lovejoy, Jr.
Trustee; Chairman Emeritus, Meredith & Grew, Incorporated
Wesley W. Marple, Jr.
Trustee; Professor of Business Administration, Northeastern University
Jean C. Tempel
Trustee; Director, Executive Vice President and Manager, Safeguard
Scientifics, Inc.
Jerard K. Hartman*
Vice President
William M. Hutchinson*
Vice President
Thomas W. Joseph*
Vice President
Thomas F. McDonough*
Vice President, Secretary and Assistant Treasurer
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
INVESTMENT PRODUCTS AND SERVICES
The Scudder Family of Funds
Money market
Scudder Cash Investment Trust
Scudder U.S. Treasury Money Fund
Tax free money market+
Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax free+
Scudder California Tax Free Fund*
Scudder High Yield Tax Free Fund
Scudder Limited Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder Massachusetts Limited Term Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder Medium Term Tax Free Fund
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
Growth and Income
Scudder Balanced Fund
Scudder Growth and Income Fund
Income
Scudder Emerging Markets Income Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder International Bond Fund
Scudder Short Term Bond Fund
Scudder Short Term Global Income Fund
Scudder Zero Coupon 2000 Fund
Growth
Scudder Capital Growth Fund
Scudder Development Fund
Scudder Global Fund
Scudder Global Small Company Fund
Scudder Gold Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Latin America Fund
Scudder Pacific Opportunities Fund
Scudder Quality Growth Fund
Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
IRAs
Keogh Plans
Scudder Horizon Plan+++* (a variable annuity)
401(k) Plans
403(b) Plans
SEP-IRAs
Profit Sharing and Money Purchase Pension Plans
Closed-end Funds#
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities Fund, Inc.
Institutional Cash Management
Scudder Institutional Fund, Inc.
Scudder Fund, Inc.
Scudder Treasurers Trust(tm)++
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. +A portion of the income from
the tax-free funds may be subject to federal, state and local taxes. *Not
available in all states. +++A no-load variable annuity contract provided by
Charter National Life Insurance Company and its affiliate, offered by
Scudder's insurance agencies, 1-800-225-2470. #These funds, advised by
Scudder, Stevens & Clark, Inc., are traded on various stock exchanges.
++For information on Scudder Treasurers Trust(tm), an institutional cash
management service that utilizes certain portfolios of Scudder Fund, Inc.
($100,000 minimum), call: 1-800-541-7703.
HOW TO CONTACT SCUDDER
Account Service and Information
For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For account updates, prices, yields, exchanges and redemptions
SCUDDER AUTOMATED INFORMATION LINE (SAIL)
1-800-343-2890
Investment Information
To receive information about the Scudder funds, for additional
applications and prospectuses, or for investment questions
SCUDDER INVESTOR RELATIONS
1-800-225-2470
For establishing 401(k) and 403(b) plans
SCUDDER DEFINED CONTRIBUTION SERVICES
1-800-323-6105
Please address all correspondence to
THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Or stop by a Scudder Funds Center
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you_they can be
found in the following cities:
Boca Raton
Boston
Chicago
Cincinnati
Los Angeles
New York
Portland, OR
San Diego
San Francisco
Scottsdale
For information on Scudder Treasurers Trust(tm), an institutional cash
management service for corporations, non-profit organizations and trusts
which utilizes certain portfolios of Scudder Fund, Inc.* ($100,000
minimum), call: 1-800-541-7703.
For information on Scudder Institutional Funds,* funds designed to meet the
broad investment management and service needs of banks and other
institutions, call: 1-800-854-8525.
Scudder Investor Relations and Scudder Funds Centers are services
provided through Scudder Investor Services, Inc., Distributor.
* Contact Scudder Investor Services, Inc., Distributor, to receive a
prospectus with more complete information, including management fees
and expenses. Please read it carefully before you invest or send
money.
Celebrating 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven
Clark, Scudder, Stevens & Clark was the first independent investment
counsel firm in the United States. Since its birth, Scudder's pioneering
spirit and commitment to professional long-term investment management have
helped shape the investment industry. In 1928, we introduced the nation's
first no-load mutual fund. Today we offer 36 pure no load(tm) funds,
including the first international mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication
to research and fundamental investment disciplines have helped Scudder
become one of the largest and most respected investment managers in the
world. Though times have changed since our beginnings, we remain committed
to our longstanding principles: managing money with integrity and
distinction, keeping the interests of our clients first; providing access
to investments and markets that may not be easily available to individuals;
and making investing as simple and convenient as possible through friendly,
comprehensive service.
</TABLE>
