This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder
Quality Growth
Fund
Annual Report
October 31, 1995
* A fund seeking long-term growth of capital through investment primarily in
the equity securities of seasoned, financially strong U.S. growth
companies.
* A pure no-load(TM) fund with no commissions to buy, sell, or exchange
shares.
<PAGE>
SCUDDER QUALITY GROWTH FUND
- --------------------------------------------------------------------------------
CONTENTS
2 In Brief
3 Letter from the Fund's President
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
9 Investment Portfolio
13 Financial Statements
16 Financial Highlights
17 Notes to Financial Statements
20 Report of Independent Accountants
21 Tax Information
21 Officers and Trustees
22 Investment Products
and Services
23 How to Contact
Scudder
IN BRIEF
* Scudder Quality Growth Fund provided shareholders with a total return of
23.78% for the 12 months ended October 31, 1995, including reinvested
capital gain and income distributions. The Fund's performance outpaced that
of the average growth fund tracked by Lipper Analytical Services, which
returned 22.14%.
* Earnings surprises on the upside were the rule rather than the exception
for much of the Fund's fiscal period: During the third quarter of 1995, 60%
of S&P 500 companies met or exceeded analysts' earnings expectations.
Several of the year's stronger-performing sectors were well-represented in
the portfolio, including technology, healthcare, consumer staples, and
financial services.
* In a slowing economic environment, we believe investors will pay a premium
for stable earnings growth. Accordingly, the Fund's heaviest weighting is
in consumer staples (19% of the portfolio), represented by such holdings as
tobacco and food products market leader Philip Morris and diversified
consumer products manufacturer Procter & Gamble. Healthcare continues to be
heavily represented in the portfolio as well, with five of the top ten
portfolio holdings drawn from that sector.
2
<PAGE>
LETTER FROM THE FUND'S PRESIDENT
- --------------------------------------------------------------------------------
Dear Shareholders,
Stock prices rallied sharply in 1995 after a lackluster 1994, propelled by
a confluence of positive economic and market-related factors. Moreover, stock
market corrections over this period have been few and unusually mild. Scudder
Quality Growth Fund had a solid fiscal year, providing shareholders with a total
return of 23.78% for the 12 months ended October 31, 1995.
After such impressive stock market gains--and given the late stage of the
economic cycle--some market correction would not be surprising. This might be
precipitated by growing investor recognition that a mild slowdown in economic
activity next year, resulting from a lack of corporate pricing power and a
reduction in consumer spending, is likely. With its focus on consistency of
earnings, Scudder Quality Growth Fund may serve as an appropriate vehicle for
maintaining equity exposure in such an environment. Despite near-term market
uncertainties, it is important to keep in mind that the longer-term outlook for
U.S. equities is favorable, given our expectations for continued low inflation,
low interest rates, and strong long-term profit growth.
You will notice we have added the Russell 1000 Growth Index to the
performance comparisons on page 4. This index more closely represents the
large-capitalization stocks that Scudder Quality Growth Fund invests in. We
intend to drop the S&P 500 Index from future reports.
We would also like to take this opportunity to announce that on October 6,
1995, we introduced another U.S. stock fund to the Scudder family: Scudder Small
Company Value Fund. The new fund uses a proprietary quantitative discipline to
identify undervalued stocks of small companies. For more information on Scudder
Small Company Value Fund and other investment products and services, see page
22. If you have any questions about Scudder Quality Growth Fund, please call a
Scudder Investor Relations representative at 1-800-225-2470.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Quality Growth Fund
3
<PAGE>
SCUDDER QUALITY GROWTH FUND
PERFORMANCE UPDATE as of October 31, 1995
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
SCUDDER QUALITY GROWTH FUND
- ----------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $12,378 23.78% 23.78%
Life of
Fund* $17,087 70.87% 12.75%
RUSSELL 1000 GROWTH INDEX
- --------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $12,923 29.23% 29.23%
Life of
Fund* $16,766 67.66% 12.41%
S&P 500 INDEX
- ----------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $12,644 26.44% 26.44%
Life of
Fund* $16,909 69.09% 12.63%
* The Fund commenced operations on May 15, 1991.
Index comparisons begin May 31, 1991.
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 Quality Growth Fund
Year Amount
- ----------------------
5/91* $10,000
10/91 $10,894
4/92 $11,251
10/92 $12,252
4/93 $12,094
10/93 $13,169
4/94 $12,590
10/94 $13,220
4/95 $14,092
10/95 $16,364
Russell 1000 Growth Index
Year Amount
- ----------------------
5/91* $10,000
10/91 $10,350
4/92 $11,022
10/92 $11,470
4/93 $11,507
10/93 $12,308
4/94 $11,947
10/94 $12,973
4/95 $14,291
10/95 $16,766
S&P 500 Index
Year Amount
- ----------------------
5/91* $10,000
10/91 $10,187
4/92 $10,932
10/92 $11,201
4/93 $11,941
10/93 $12,875
4/94 $12,577
10/94 $13,373
4/95 $14,773
10/95 $16,909
The Russell 1000 Growth Index is an unmanaged capitalization-weighted,
price index of the 1000 largest U.S. growth companies traded on the
NYSE, AMEX, and NASDAQ. 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.
YEARLY PERIODS ENDED OCTOBER 31
1991* 1992 1993 1994 1995
----------------------------------------
NET ASSET VALUE... $13.65 $15.30 $16.42 $16.17 $18.44
INCOME DIVIDENDS.. $ -- $ .03 $ .03 $ .08 $ .15
CAPITAL GAINS
DISTRIBUTIONS..... $ -- $ .02 $ -- $ .24 $ 1.09
FUND TOTAL
RETURN (%)........ 13.75 12.47 7.49 .39 23.78
INDEX TOTAL
RETURN (%)........ 8.66 10.82 7.31 5.40 29.23
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 average annual
total return for the life of Fund would have been lower.
4
<PAGE>
PORTFOLIO SUMMARY as of October 31, 1995
- ---------------------------------------------------------------------------
DIVERSIFICATION
- ---------------------------------------------------------------------------
Equity Securities 94% The Fund remains nearly fully
Cash Equivalents 6% invested, principally in stocks
---- of fundamentally strong companies
100% with consistent earnings growth
==== and low debt.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
SECTORS (Excludes 6% Cash Equivalents)
- --------------------------------------------------------------------------
Consumer Staples 19%
Health 17%
Technology 14% The Fund has focused on sectors
Consumer Discretionary 10% such as Consumer Staples, where
Financial 8% earnings stability should be
Service Industries 8% attractive to investors as the
Manufacturing 7% economy slows.
Media 6%
Durables 5%
Other 6%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
- --------------------------------------------------------------------------
1. PHILIP MORRIS COMPANIES INC.
Tobacco, food products and brewing
2. COLUMBIA/HCA HEALTHCARE CORP.
Leading hospital management company
3. PROCTER & GAMBLE CO.
Diversified manufacturer of consumer products
4. MERCK & CO. INC.
Leading ethical drug manufacturer
5. AMERICAN INTERNATIONAL GROUP, INC.
Major international insurance holding company
6. PEPSICO INC.
Soft drinks, snack foods and food services
7. JOHNSON & JOHNSON
Health care products
8. SCHERING-PLOUGH CORP.
Pharmaceutical and consumer products
9. GENERAL MOTORS CORP. "E"
Business information services
10. BECTON, DICKINSON & CO.
Manufacturer and marketer of medical and diagnostic products
We continue to feel that many healthcare companies are undervalued,
as negative sentiment surrounding reform prospects for the industry
prevail.
- --------------------------------------------------------------------------
For more complete details about the Fund's Investment Portfolio,
see page 9.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings
are available upon request.
5
<PAGE>
SCUDDER QUALITY GROWTH FUND
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Dear Shareholders,
Scudder Quality Growth Fund provided shareholders with a total return of
23.78% for the 12 months ended October 31, 1995. This return includes reinvested
distributions of $1.24, of which $1.09 was capital gain and $0.15 was in the
form of income. The Fund's performance modestly lagged the 29.23% return of the
unmanaged Russell 1000 Growth Index but outpaced that of the average long-term
growth fund tracked by Lipper Analytical Services, which returned 22.14%.
Scudder Quality Growth Fund follows a disciplined approach to stock
selection, investing primarily in financially solid U.S. companies with leading
market positions and prospects for above-average growth. In selecting these
companies, we employ both quantitative and qualitative techniques that take into
account such factors as consistency of earnings growth, financial strength,
management ability, and valuation.
Strong Earnings Environment
Over the past year, the U.S. stock market has been the beneficiary of low
inflation, falling interest rates, and strong earnings--a nearly ideal scenario
that few economic prognosticators hoped for. Investors perceive that inflation
has all but disappeared as a threat to the financial markets, with indicators
such as producer price increases hovering near zero the past several months. The
bond market rally of the past year brought the yield on long-term Treasuries
down to approximately 6.3% at the end of October, making stocks more attractive
relative to bonds. Earnings surprises on the upside have been the rule rather
than the exception: During the third quarter of 1995, 60% of S&P 500 companies
met or exceeded analysts' earnings expectations. A very strong correlation
exists between positive earnings surprises for companies and stock price
increases. Finally, demand factors were positive as well, as money flowed into
pension plans and mutual funds.
Several of the year's stronger-performing sectors were well-represented in
the portfolio, including technology, healthcare, consumer staples, and financial
services. Financial stocks contributed to the Fund's performance, as many stocks
in that group benefited from increased earnings driven by falling interest
rates. One of the Fund's largest financial holdings, Federal National Mortgage
Association, rose more than 50% over the first ten months of 1995. Within the
6
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
healthcare group, Johnson & Johnson and pharmaceutical companies Merck and
Schering-Plough were especially good performers.
The technology sector merits special discussion, as returns in that group
were exceptional over most of the Fund's fiscal year, although some gains were
given up in the last three months of this period. While we maintained
significant exposure to technology stocks, the Fund's sector limit guidelines in
effect preclude our assuming a substantially overweighted position in such a
volatile industry. Our approach to this sector is to emphasize fundamental
research, and to avoid stocks of companies with deteriorating fundamentals or
those reporting quarterly earnings shortfalls--two factors that have
historically led to significant disappointments. We have reduced several
technology holdings during the year, including semiconductor manufacturer Texas
Instruments because of concerns over soft computer memory pricing, and cellular
telephone and equipment manufacturer Nokia. At the same time, we have
diversified the Fund's exposure within this group, adding to or initiating
positions in Applied Materials (semiconductor capital equipment) and 3Com
(networking).
Looking Ahead
Our strategy will continue to focus on identifying companies that exhibit
above-average earnings growth. Stable growth companies remain at the core of the
portfolio and are characterized by sustainable, consistent and above-average
rates of earnings growth. These companies tend to have commanding market shares
and high unit growth rates, and participate in markets that are expanding.
On a macroeconomic level, the major issue we face in the months ahead is
whether the U.S. economy is about to turn down or is experiencing a prolonged
business cycle that will yield continued strong earnings, underpinning a further
surge in stock prices. We believe it is more likely that the U.S. economy is
near the end of its four-year expansion, and we are forecasting slower economic
growth over the next year, perhaps closer to 1% than 3%. Inflation should remain
benign, but the flip side of low inflation is the inability of businesses to
increase profits by raising prices. High levels of installment debt are likely
to leave the consumer without much discretionary income, which could impact
corporate profitability. Moreover, the earnings of many companies have been
7
<PAGE>
SCUDDER QUALITY GROWTH FUND
- --------------------------------------------------------------------------------
bolstered by a weak dollar, which promoted exports and made it more difficult
for importers to price their goods advantageously versus competing goods made
here at home. In recent months, the dollar has recovered somewhat and may head
further upward.
In this slowing economic environment, we believe investors will pay a
premium for stable earnings growth. Accordingly, the Fund's heaviest weighting
is in consumer staples (19% of the portfolio), represented by such holdings as
tobacco and food products market leader Philip Morris and diversified consumer
products manufacturer Procter & Gamble. Healthcare continues to be heavily
represented in the portfolio, with five of the top ten portfolio holdings drawn
from that sector. The Fund's energy group holdings have been scaled back, and
several economically sensitive growth companies have been eliminated from the
portfolio, including Cooper Tire & Rubber, diversified manufacturer TRW, and
specialty steel producer Nucor.
U.S. equity valuations, while not extreme, are at much higher levels than a
year ago and therefore warrant a degree of caution going forward. While the
economic and market climate will influence stock selection for the Fund, we do
not believe that attempting to time the market is a worthwhile endeavor, and we
strive to remain fully invested. The Fund's focus on quality companies with
reasonable valuations and prospects for above-average earnings growth should
reward investors seeking capital appreciation over the long-term. We believe
Scudder Quality Growth Fund will remain an excellent vehicle for stock investors
seeking core exposure to the U.S. equity markets.
Sincerely,
Your Portfolio Management Team
/s/Valerie F. Malter /s/Bruce F. Beaty
Valerie F. Malter Bruce F. Beaty
/s/Michael K. Shields
Michael K. Shields
Scudder Quality Growth Fund:
A Team Approach to Investing
Scudder Quality Growth 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 Valerie F. Malter joined Scudder in 1995 and is
responsible for Scudder Quality Growth Fund's investment strategy and daily
operation. Valerie has 10 years of experience as an analyst covering a wide
range of industries, and three years of portfolio management experience focusing
on the stocks of companies with medium- to large-sized market capitalizations.
Bruce F. Beaty, Portfolio Manager, contributes expertise in technology, a role
he has filled since the Fund's inception. Bruce joined Scudder in 1991 and has
14 years of investing experience. Michael K. Shields, Portfolio Manager, focuses
on the Fund's healthcare stocks. Mike joined the Fund and Scudder in 1992 and
has 12 years of experience in the financial industry.
8
<PAGE>
INVESTMENT PORTFOLIO AS OF OCTOBER 31, 1995
<TABLE>
<CAPTION>
% of Principal Market
Portfolio Amount ($) Value ($)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
4.8% REPURCHASE AGREEMENT
8,243,000 Repurchase Agreement with State Street
Bank and Trust dated 10/31/95 at 5.85%,
to be repurchased at $8,244,339 on 11/1/95,
collateralized by a $8,600,000 U.S. Treasury
Bill, 3/28/96 (Cost $8,243,000). . . . . . . . 8,243,000
----------
1.3% SHORT TERM NOTES
2,290,000 Federal Home Loan Mortgage Corp.
Discount Note, 11/1/95 (Cost $2,290,000) . . . 2,290,000
----------
0.9% PREFERRED STOCKS
Shares
---------------------------------------------------------------------
TECHNOLOGY
COMPUTER SOFTWARE 10,500 SAP AG (Cost $1,563,993). . . . . . . . . . . . 1,611,139
----------
93.0% COMMON STOCKS
CONSUMER DISCRETIONARY 9.1%
DEPARTMENT &
CHAIN STORES 4.4% 38,300 May Department Stores . . . . . . . . . . . . . 1,503,275
85,800 Rite Aid Corp.. . . . . . . . . . . . . . . . . 2,316,600
91,200 Wal-Mart Stores Inc.. . . . . . . . . . . . . . 1,972,200
61,200 Walgreen Co.. . . . . . . . . . . . . . . . . . 1,744,200
----------
7,536,275
----------
HOTELS & CASINOS 1.0% 78,100 Carnival Corp., Class A . . . . . . . . . . . . 1,815,825
----------
RESTAURANTS 1.4% 59,100 McDonald's Corp.. . . . . . . . . . . . . . . . 2,423,100
----------
SPECIALTY RETAIL 2.3% 77,600 Corporate Express, Inc.*. . . . . . . . . . . . 2,027,300
111,100 Intimate Brands, Inc.*. . . . . . . . . . . . . 1,860,925
----------
3,888,225
----------
CONSUMER STAPLES 18.1%
ALCOHOL & TOBACCO 3.0% 60,100 Philip Morris Companies Inc.. . . . . . . . . . 5,078,450
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
----
9
<PAGE>
SCUDDER QUALITY GROWTH FUND
<TABLE>
<CAPTION>
% of Market
Portfolio Shares Value ($)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSUMER ELECTRONIC &
PHOTOGRAPHIC PRODUCTS 1.1% 36,000 Duracell International Inc. . . . . . . . 1,885,500
------------
FOOD & BEVERAGE 8.9% 90,100 Albertson's Inc.. . . . . . . . . . . . . 2,995,825
25,600 CPC International Inc.. . . . . . . . . . 1,699,200
61,500 ConAgra Inc.. . . . . . . . . . . . . . . 2,375,438
20,400 General Mills, Inc. . . . . . . . . . . . 1,170,450
72,900 PepsiCo Inc.. . . . . . . . . . . . . . . 3,845,475
109,700 Sara Lee Corp.. . . . . . . . . . . . . . 3,222,438
------------
15,308,826
------------
PACKAGE GOODS/COSMETICS 5.1% 17,100 Clorox Co.. . . . . . . . . . . . . . . . 1,226,925
24,400 Colgate-Palmolive Co. . . . . . . . . . . 1,689,700
36,100 Gillette Co.. . . . . . . . . . . . . . . 1,746,338
51,400 Procter & Gamble Co.. . . . . . . . . . . 4,163,400
------------
8,826,363
------------
HEALTH 15.5%
BIOTECHNOLOGY 1.0% 54,908 Guidant Corp. . . . . . . . . . . . . . . 1,757,056
------------
HOSPITAL MANAGEMENT 2.8% 98,900 Columbia/HCA Healthcare Corp. . . . . . . 4,858,463
------------
MEDICAL SUPPLY
& SPECIALTY 2.0% 51,500 Becton, Dickinson & Co. . . . . . . . . . 3,347,500
------------
PHARMACEUTICALS 9.7% 20,300 American Home Products Corp.. . . . . . . 1,799,088
31,067 Eli Lilly Co. . . . . . . . . . . . . . . 3,001,841
44,000 Johnson & Johnson . . . . . . . . . . . . 3,586,000
69,400 Merck & Co. Inc.. . . . . . . . . . . . . 3,990,500
21,400 Sandoz Ltd. AG (ADR). . . . . . . . . . . 885,425
62,800 Schering-Plough Corp. . . . . . . . . . . 3,367,650
------------
16,630,504
------------
COMMUNICATIONS 2.6%
CELLULAR TELEPHONE 0.9% 51,700 AirTouch Communications, Inc.*. . . . . . 1,473,450
------------
TELEPHONE/
COMMUNICATIONS 1.7% 46,900 American Telephone & Telegraph Co.. . . . 3,001,600
------------
FINANCIAL 7.8%
BANKS 1.6% 68,600 State Street Boston Corp. . . . . . . . . 2,666,825
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- ----
10
<PAGE>
INVESTMENT PORTFOLIO
<TABLE>
<CAPTION>
% of Market
Portfolio Shares Value ($)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURANCE 4.3% 45,650 American International Group, Inc.. . . . 3,851,719
31,100 EXEL, Ltd.. . . . . . . . . . . . . . . . 1,663,850
27,500 MBIA Inc. . . . . . . . . . . . . . . . . 1,914,688
------------
7,430,257
------------
OTHER FINANCIAL
COMPANIES 1.9% 30,900 Federal National Mortgage Association . . 3,240,638
------------
MEDIA 6.0%
ADVERTISING 0.9% 40,900 Interpublic Group of Companies Inc. . . . 1,584,875
------------
Broadcasting &
Entertainment 5.1% 16,800 Capital Cities/ABC Inc. . . . . . . . . . 1,992,900
70,500 Time Warner Inc.. . . . . . . . . . . . . 2,573,250
50,500 Viacom Inc. "B"*. . . . . . . . . . . . . 2,525,000
28,400 Walt Disney Co. . . . . . . . . . . . . . 1,636,550
------------
8,727,700
------------
SERVICE INDUSTRIES 7.8%
EDP SERVICES 3.6% 42,700 First Data Corp.. . . . . . . . . . . . . 2,823,538
71,400 General Motors Corp. "E". . . . . . . . . 3,364,725
------------
6,188,263
------------
INVESTMENT 1.3% 44,700 Dean Witter, Discover & Co. . . . . . . . 2,223,825
------------
MISCELLANEOUS
COMMERCIAL SERVICES 1.1% 57,500 Sysco Corp. . . . . . . . . . . . . . . . 1,746,563
------------
MISCELLANEOUS
CONSUMER SERVICES 0.8% 34,300 Service Corp. International . . . . . . . 1,376,288
------------
PRINTING/PUBLISHING 1.0% 32,200 Reuters Holdings PLC "B" (ADR). . . . . . 1,787,100
------------
DURABLES 4.6%
AEROSPACE 1.9% 49,200 Boeing Co.. . . . . . . . . . . . . . . . 3,228,750
------------
TELECOMMUNICATIONS
EQUIPMENT 2.7% 27,400 DSC Communications Corp.* . . . . . . . . 1,013,800
108,000 L.M. Ericsson Telephone Co. "B" (ADR) . . 2,306,812
23,400 Nokia AB Oy (ADR) . . . . . . . . . . . . 1,304,550
------------
4,625,162
------------
MANUFACTURING 6.9%
CHEMICALS 1.5% 54,275 Sigma-Aldrich Corp. . . . . . . . . . . . 2,578,063
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
----
11
<PAGE>
SCUDDER QUALITY GROWTH FUND
<TABLE>
<CAPTION>
% of Market
Portfolio Shares Value ($)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DIVERSIFIED MANUFACTURING 3.5% 38,800 Dover Corp. . . . . . . . . . . . . . . . 1,532,600
50,400 General Electric Co.. . . . . . . . . . . 3,187,800
26,800 Thermo Electron Corp.*. . . . . . . . . . 1,232,800
------------
5,953,200
------------
ELECTRICAL PRODUCTS 1.9% 17,400 ASEA AB (ADR) . . . . . . . . . . . . . . 1,705,200
23,000 Emerson Electric Co.. . . . . . . . . . . 1,638,750
------------
3,343,950
------------
TECHNOLOGY 12.4%
COMPUTER SOFTWARE 1.2% 20,000 Microsoft Corp.*. . . . . . . . . . . . . 2,000,000
------------
DIVERSE ELECTRONIC
PRODUCTS 2.5% 32,400 Applied Materials, Inc.*. . . . . . . . . 1,624,050
40,300 Motorola Inc. . . . . . . . . . . . . . . 2,644,688
------------
4,268,738
------------
ELECTRONIC DATA PROCESSING 3.4% 32,100 Ceridian Corp.* . . . . . . . . . . . . . 1,396,350
32,700 Hewlett-Packard Co. . . . . . . . . . . . 3,028,838
44,300 Silicon Graphics Inc.*. . . . . . . . . . 1,472,975
------------
5,898,163
------------
MILITARY ELECTRONICS 1.5% 88,600 Loral Corp. . . . . . . . . . . . . . . . 2,624,775
------------
OFFICE/PLANT AUTOMATION 1.9% 32,900 3Com Corp.* . . . . . . . . . . . . . . . 1,546,300
22,100 Cisco Systems, Inc.*. . . . . . . . . . . 1,712,750
------------
3,259,050
------------
SEMICONDUCTORS 1.9% 42,900 Intel Corp. . . . . . . . . . . . . . . . 2,997,638
2,400 Texas Instruments Inc.. . . . . . . . . . 163,800
------------
3,161,438
------------
ENERGY 2.2%
ENGINEERING 1.1% 31,500 Fluor Corp. . . . . . . . . . . . . . . . 1,779,750
------------
OIL/GAS TRANSMISSION 1.1% 56,100 Enron Corp. . . . . . . . . . . . . . . . 1,928,438
------------
TOTAL COMMON STOCKS (Cost $130,223,071) . 159,452,948
------------
- --------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0%
(Cost $142,320,064) (a). . . . . . . . . 171,597,087
------------
------------
</TABLE>
* Non-income producing security.
(a) The cost for federal income tax purposes was $142,674,052. At October
31, 1995, net unrealized appreciation for all securities based on tax
cost was $28,923,035. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of market
value over tax cost of $30,371,401 and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax
cost over market value of $1,448,366.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- ----
12
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
October 31, 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $142,320,064)
(Note A). . . . . . . . . . . . . . . . . . . . . . . . . . . $ 171,597,087
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544
Receivables:
Investments sold. . . . . . . . . . . . . . . . . . . . . . . 3,008,465
Fund shares sold. . . . . . . . . . . . . . . . . . . . . . . 1,560,107
Dividends and interest. . . . . . . . . . . . . . . . . . . . 115,188
Deferred organization expenses (Note A) . . . . . . . . . . . . . 6,174
------------
Total assets . . . . . . . . . . . . . . . . . . . . . . 176,287,565
LIABILITIES
Payables:
Investments purchased . . . . . . . . . . . . . . . . . . . . $ 2,298,001
Fund shares redeemed. . . . . . . . . . . . . . . . . . . . . 314,092
Accrued management fee (Note C) . . . . . . . . . . . . . . . 99,885
Other accrued expenses (Note C) . . . . . . . . . . . . . . . 103,872
------------
Total liabilities. . . . . . . . . . . . . . . . . . . . 2,815,850
-------------
Net assets, at market value . . . . . . . . . . . . . . . . . . . $ 173,471,715
=============
NET ASSETS
Net assets consist of:
Undistributed net investment income . . . . . . . . . . . . . $ 966,778
Unrealized appreciation on investments. . . . . . . . . . . . 29,277,023
Accumulated net realized gain . . . . . . . . . . . . . . . . 5,417,965
Shares of beneficial interest . . . . . . . . . . . . . . . . 94,092
Additional paid-in capital. . . . . . . . . . . . . . . . . . 137,715,857
-------------
Net assets, at market value . . . . . . . . . . . . . . . . . . . $ 173,471,715
=============
Net asset value, offering and redemption price per
share ($173,471,715 DIVIDED BY 9,409,227 outstanding
shares of beneficial interest, $.01 par value,
unlimited number of shares authorized). . . . . . . . . . . . $18.44
======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
----
13
<PAGE>
SCUDDER QUALITY GROWTH FUND
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended October 31, 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends (net of foreign taxes withheld of $19,678). . . . . . . $ 2,234,790
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331,505
------------
2,566,295
Expenses:
Management fee (Note C) . . . . . . . . . . . . . . . . . . . . . $ 953,916
Services to shareholders (Note C) . . . . . . . . . . . . . . . . 352,368
Custodian and accounting fees (Note C). . . . . . . . . . . . . . 82,528
Trustees' fees (Note C) . . . . . . . . . . . . . . . . . . . . . 35,519
Reports to shareholders . . . . . . . . . . . . . . . . . . . . . 68,694
Auditing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,625
Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,872
Federal registration. . . . . . . . . . . . . . . . . . . . . . . 10,398
State registration. . . . . . . . . . . . . . . . . . . . . . . . 19,486
Amortization of organization expense (Note A) . . . . . . . . . . 9,946
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,192 1,599,544
--------- ------------
Net investment income . . . . . . . . . . . . . . . . . . . . . . 966,751
------------
Net realized and unrealized gain on investments
Net realized gain from investments. . . . . . . . . . . . . . . . 5,911,775
Net unrealized appreciation on investments
during the period . . . . . . . . . . . . . . . . . . . . . . . . 23,228,314
------------
Net gain on investments . . . . . . . . . . . . . . . . . . . . . 29,140,089
------------
Net increase in net assets resulting from operations. . . . . . . $ 30,106,840
============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- ----
14
<PAGE>
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended October 31,
-----------------------------
INCREASE (DECREASE) IN NET ASSETS 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income. . . . . . . . . . . . . . . $ 966,751 $ 1,114,659
Net realized gain on investments . . . . . . . . . 5,911,775 7,612,915
Net unrealized appreciation (depreciation)
on investments during the period . . . . . . . 23,228,314 (8,282,506)
------------- -------------
Net increase in net assets
resulting from operations. . . . . . . . . . . 30,106,840 445,068
------------- -------------
Distributions to shareholders from:
Net investment income ($.15 and $.08
per share, respectively) (1,069,236) (573,627)
------------- -------------
Net realized gains from investment
transactions ($1.09 and $.24 per share,
respectively). . . . . . . . . . . . . . . . . (7,769,783) (1,793,533)
------------- -------------
Fund share transactions:
Proceeds from shares sold. . . . . . . . . . . . . 62,792,871 30,065,461
Net asset value of shares issued to
shareholders in reinvestment of
distributions. . . . . . . . . . . . . . . . . 8,642,766 2,309,792
Cost of shares redeemed. . . . . . . . . . . . . . (32,495,742) (43,432,867)
------------- -------------
Net increase (decrease) in net assets from
Fund share transactions. . . . . . . . . . . . 38,939,895 (11,057,614)
------------- -------------
Increase (decrease) in net assets. . . . . . . . . 60,207,716 (12,979,706)
Net assets at beginning of period. . . . . . . . . 113,263,999 126,243,705
------------- -------------
Net assets at end of period (including
undistributed net investment income
of $966,778 and $919,547, respectively). . . . $ 173,471,715 $ 113,263,999
============= =============
Other Information
Increase (decrease) in Fund shares
Shares outstanding at beginning of period. . . . . 7,006,138 7,689,455
------------- -------------
Shares sold. . . . . . . . . . . . . . . . . . . . 3,794,148 1,895,781
Shares issued to shareholders in reinvestment
of distributions . . . . . . . . . . . . . . . 595,642 144,448
Shares redeemed. . . . . . . . . . . . . . . . . . (1,986,701) (2,723,546)
------------- -------------
Net increase (decrease) in Fund shares . . . . . . 2,403,089 (683,317)
------------- -------------
Shares outstanding at end of period. . . . . . . . 9,409,227 7,006,138
============= =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
----
15
<PAGE>
SCUDDER QUALITY GROWTH 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
May 15, 1991
(commencement
Years Ended October 31, of operations)
----------------------------------- to October 31,
1995 1994 1993 1992 1991
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period. . . . . . . . . $16.17 $16.42 $15.30 $13.65 $12.00
------ ------ ------ ------ ------
Income from investment operations:
Net investment income (a). . . . . . . . . . . . . . .11 .16 .06 .02 .03
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . . . . . 3.40 (.09) 1.09 1.68 1.62
------ ------ ------ ------ ------
Total from investment operations. . . . . . . . . . . 3.51 .07 1.15 1.70 1.65
------ ------ ------ ------ ------
Less distributions from:
Net investment income. . . . . . . . . . . . . . . . (.15) (.08) (.03) (.03) --
Net realized gains on investment transactions. . . . (1.09) (.24) -- (.02) --
------ ------ ------ ------ ------
Total distributions . . . . . . . . . . . . . . . . . (1.24) (.32) (.03) (.05) --
------ ------ ------ ------ ------
Net asset value, end of period. . . . . . . . . . . . $18.44 $16.17 $16.42 $15.30 $13.65
====== ====== ====== ====== ======
Total Return (%). . . . . . . . . . . . . . . . . . . 23.78 .39 7.49 12.47 13.75**
Ratios and Supplemental Data
Net assets, end of period ($ millions). . . . . . . . 173 113 126 101 30
Ratio of operating expenses net, to average daily
net assets (%) (a) . . . . . . . . . . . . . . . . . 1.17 1.25 1.20 1.25 1.25*
Ratio of net investment income to average daily
net assets (%) . . . . . . . . . . . . . . . . . . . .71 .96 .39 .24 .83*
Portfolio turnover rate (%) . . . . . . . . . . . . . 91.6 119.7 111.4 27.4 11.5*
(a) Reflects a per share amount of expenses,
exclusive of management fees, reimbursed
by the Adviser of . . . . . . . . . . . . . . . $ -- $ -- $ -- $ -- $ .01
Reflects a per share amount of management
fee not imposed by the Adviser of . . . . . . . $ -- $ -- $ -- $ .01 $ .02
Operating expense ratio including expenses
reimbursed, management fee and other
expenses not imposed (%). . . . . . . . . . . . -- -- -- 1.40 2.67*
</TABLE>
* Annualized
** Not annualized
- ----
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
A. SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
Scudder Quality Growth Fund (the "Fund") is a diversified series of Scudder
Investment 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 consistently 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. Short-term investments having a maturity of
sixty days or less are valued at amortized cost.
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.
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
----
17
<PAGE>
SCUDDER QUALITY GROWTH FUND
income to its shareholders. Accordingly, the Fund paid no federal income
taxes and no federal income tax provision was required.
DISTRIBUTION OF INCOME AND GAINS. Distributions of net investment income are
made annually. 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 annually. 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.
The differences primarily relate to investments in certain securities sold at
a loss. As a result, net investment income (loss) and net realized gain
(loss) on investment transactions for a reporting period may differ
significantly from distributions during such period. Accordingly, the Fund
may periodically make reclassifications among certain of its capital accounts
without impacting the net asset value of the Fund.
The Fund uses the identified cost method for determining realized gain or
loss on investments for both financial and federal income tax reporting
purposes.
ORGANIZATION COSTS. 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 October 31, 1995, purchases and sales of investment
securities (excluding short-term investments) aggregated $140,424,234 and
$120,765,280, respectively.
C. RELATED PARTIES
- -------------------------------------------------------------------------------
Under the Fund's Investment Management Agreement (the "Agreement") with
Scudder, Stevens & Clark, Inc. (the "Adviser"), the Fund pays the Adviser a
fee equal to an annual rate of 0.70% of the
- ----
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Fund's average daily net assets, computed and accrued daily and payable
monthly. As manager of the assets of the Fund, 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 Agreement provides that if the Fund's expenses,
exclusive of taxes, interest, and extraordinary 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 February 29, 1996 in order to maintain
the annualized expenses of the Fund at not more than 1.25% of average daily
net assets. For the year ended October 31, 1995, the fee pursuant to the
Agreement amounted to $953,916.
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 October 31, 1995, the amount charged by SSC
aggregated $306,800, of which $36,234 is unpaid at October 31, 1995.
Scudder Fund Accounting Corporation ("SFAC"), a wholly-owned subsidiary of
the Adviser, is responsible for determining the daily net asset value per
share and maintaining the portfolio and general accounting records of the
Fund. For the year ended October 31, 1995, the amount charged to the Fund by
SFAC aggregated $52,477, of which $4,436 is unpaid at October 31, 1995.
The Fund pays each of its Trustees not affiliated with the Adviser $4,000
annually plus specified amounts for attended board and committee meetings.
For the year ended October 31, 1995, Trustees fees aggregated $35,519.
----
19
<PAGE>
SCUDDER QUALITY GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF SCUDDER INVESTMENT TRUST AND THE SHAREHOLDERS OF SCUDDER
QUALITY GROWTH FUND:
We have audited the accompanying statement of assets and liabilities of
Scudder Quality Growth Fund including the investment portfolio, as of October
31, 1995, and the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the four years in
the period then ended, and for the period May 15, 1991 (commencement of
operations) to October 31, 1991. 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 October 31, 1995, 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 Quality Growth Fund as of October 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each
of the four years in the period then ended, and for the period May 15, 1991
(commencement of operations) to October 31, 1991 in conformity with generally
accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
December 13, 1995
- ----
20
<PAGE>
TAX INFORMATION
- --------------------------------------------------------------------------------
The Fund will mail shareholders IRS Form 1099-Div in late January,
summarizing ALL taxable distributions paid for 1995.
Pursuant to section 852 of the Internal Revenue Code, the Fund designates
$3,087,104 as capital gain dividends for the year ended October 31, 1995.
Pursuant to section 854 of the Internal Revenue Code, the Fund designates
$2,247,158 as dividends eligible for the dividends received deduction for
corporations for the year ended October 31, 1995.
OFFICERS AND TRUSTEES
- --------------------------------------------------------------------------------
Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General Manager, WGBH Educational Foundation
Dudley H. Ladd*
Trustee
George M. Lovejoy, Jr.
Trustee; President and Director, Fifty Associates
Wesley W. Marple, Jr.
Trustee; Professor of Business Administration, Northeastern University
Juris Padegs*
Trustee
Jean C. Tempel
Trustee; General Partner,
TL Ventures
Bruce F. Beaty*
Vice President
Jerard K. Hartman*
Vice President
Robert T. Hoffman*
Vice President
Thomas W. Joseph*
Vice President
David S. Lee*
Vice President
Douglas M. Loudon*
Vice President
Valerie F. Malter*
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.
21
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<S> <C>
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder GNMA Fund
Tax Free Money Market+ Scudder Income Fund
Scudder Tax Free Money Fund Scudder International Bond Fund
Scudder California Tax Free Money Fund* Scudder Short Term Bond Fund
Scudder New York Tax Free Money Fund* Scudder Short Term Global Income Fund
Tax Free+ Scudder Zero Coupon 2000 Fund
Scudder California Tax Free Fund* Growth
Scudder High Yield Tax Free Fund Scudder Capital Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Managed Municipal Bonds Scudder Global Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Global Small Company Fund
Scudder Massachusetts Tax Free Fund* Scudder Gold Fund
Scudder Medium Term Tax Free Fund Scudder Greater Europe Growth Fund
Scudder New York Tax Free Fund* Scudder International Fund
Scudder Ohio Tax Free Fund* Scudder Latin America Fund
Scudder Pennsylvania Tax Free Fund* Scudder Pacific Opportunities Fund
Growth and Income Scudder Quality Growth Fund
Scudder Balanced Fund Scudder Small Company Value Fund
Scudder Growth and Income Fund Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
-----------------------------------------------------------------------------------------------------------------
IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
-----------------------------------------------------------------------------------------------------------------
The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
-----------------------------------------------------------------------------------------------------------------
Scudder Institutional Fund, Inc. Scudder Treasurers Trust(TM)++
Scudder Fund, Inc.
-----------------------------------------------------------------------------------------------------------------
For complete information on any of the above Scudder funds, including management fees and expenses, call or
write for a free prospectus. Read it carefully before you invest or send money. +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.
</TABLE>
22
<PAGE>
HOW TO CONTACT SCUDDER
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Account Service and Information
-------------------------------------------------------------------------------------------------------------
For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For personalized information about your Scudder accounts;
exchanges and redemptions; or information on any Scudder fund
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 New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
-------------------------------------------------------------------------------------------------------------
For information on Scudder For information on Scudder
Treasurers Trust,(TM) an institutional Institutional Funds,* funds
cash management service for designed to meet the broad
corporations, non-profit investment management and
organizations and trusts that uses service needs of banks and
certain portfolios of Scudder Fund, other institutions, call
Inc.* ($100,000 minimum), call 1-800-854-8525.
1-800-541-7703.
-------------------------------------------------------------------------------------------------------------
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.
</TABLE>
23
<PAGE>
Celebrating Over 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 37 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 us 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 long-standing
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.
