SCUDDER INVESTMENT TRUST, 485BPOS, 1997-12-30

SCUDDER INVESTMENT TRUST
485BPOS, 1997-12-30

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Filed electronically with the Securities and Exchange Commission on
December 30, 1997.
File No. 2-13628
File No. 811-43
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.
Post-Effective Amendment No. 87

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 39

Scudder Investment Trust
(Exact Name of Registrant as Specified in Charter)

Two International Place, Boston, MA 02110
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (617) 295-2567

Thomas F. McDonough
Scudder, Stevens & Clark, Inc.
Two International Place, Boston, MA 02110
(Name and Address of Agent for Service)

It is proposed that this filing will become effective

immediately upon filing pursuant to paragraph (b)

X on January 1, 1998 pursuant to paragraph (b)

60 days after filing pursuant to paragraph (a)(i)

on _______________ pursuant to paragraph (a)(i)

75 days after filing pursuant to paragraph (a)(ii)

on _______________ pursuant to paragraph (a)(ii) of Rule 485.

<PAGE>

SCUDDER INVESTMENT TRUST
SCUDDER GROWTH AND INCOME FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A
PART A

Item No. Item Caption Prospectus Caption

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed FINANCIAL HIGHLIGHTS
Financial
Information

4. General INVESTMENT OBJECTIVE AND POLICIES
Description of WHY INVEST IN THE FUND?
Registrant ADDITIONAL INFORMATION ABOUT POLICIES
AND INVESTMENTS
FUND ORGANIZATION

5. Management of A MESSAGE FROM SCUDDER'S CHAIRMAN
the Fund FUND ORGANIZATION-Investment adviser
and Transfer agent
TRUSTEES AND OFFICERS
SHAREHOLDER BENEFITS-A team approach
to investing

5A. Management NOT APPLICABLE
Discussion of
Fund
Performance

6. Capital Stock DISTRIBUTION AND PERFORMANCE
and Other INFORMATION- Dividends and capital
Securities gains distributions
FUND ORGANIZATION
TRANSACTION INFORMATION-Tax
Information
SHAREHOLDER BENEFITS-SAILT-Scudder
Automated Information Line,
Dividend reinvestment plan,
T.D.D. service for the hearing
impaired
HOW TO CONTACT SCUDDER

7. Purchase of PURCHASES
Securities FUND ORGANIZATION-Underwriter
Being Offered TRANSACTION INFORMATION-Purchasing
shares, Share price, Processing
time, Minimum balances, Third
party transactions
SHAREHOLDER BENEFITS-Dividend
reinvestment plan
SCUDDER TAX-ADVANTAGED RETIREMENT
PLANS

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification
number, Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 1
<PAGE>

SCUDDER GROWTH AND INCOME FUND
CROSS-REFERENCE SHEET
(continued)
PART B

Caption in Statement of
Item No. Item Caption Additional Information

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUND'S INVESTMENT OBJECTIVE AND
Objectives and POLICIES
Policies PORTFOLIO TRANSACTIONS-Portfolio
turnover

14. Management of the INVESTMENT ADVISER
Fund TRUSTEES AND OFFICERS
REMUNERATION

15. Control Persons TRUSTEES AND OFFICERS
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER
Advisory and DISTRIBUTOR
Other Services ADDITIONAL INFORMATION-Experts and
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage,
Allocation and Portfolio Turnover
Other Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

19. Purchase, PURCHASES
Redemption and EXCHANGES AND REDEMPTIONS
Pricing of FEATURES AND SERVICES OFFERED BY
Securities Being THE FUND-Dividend and Capital
Offered Gain Distribution Options
SPECIAL PLAN ACCOUNTS
NET ASSET VALUE

20. Tax Status DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference - Page 2
<PAGE>

SCUDDER INVESTMENT TRUST
SCUDDER LARGE COMPANY GROWTH FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A
PART A

Item No. Item Caption Prospectus Caption

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed FINANCIAL HIGHLIGHTS
Financial DISTRIBUTION AND FINANCIAL
Information INFORMATION

4. General INVESTMENT OBJECTIVE AND POLICIES
Description of WHY INVEST IN THE FUND?
Registrant ADDITIONAL INFORMATION ABOUT POLICIES
AND INVESTMENTS
FUND ORGANIZATION

5. Management of FINANCIAL HIGHLIGHTS
the Fund A MESSAGE FROM SCUDDER'S CHAIRMAN
FUND ORGANIZATION-Investment adviser
and Transfer agent
TRUSTEES AND OFFICERS

5A. Management SHAREHOLDER BENEFITS-A team approach
Discussion of to investing
Fund
Performance

6. Capital Stock DISTRIBUTION AND PERFORMANCE
and Other INFORMATION- Dividends and
Securities capital gains distributions
FUND ORGANIZATION
TRANSACTION INFORMATION-Tax
information
SHAREHOLDER BENEFITS-SAILT-Scudder
Automated Information Line,
Dividend reinvestment plan,
T.D.D. service for the hearing
impaired
HOW TO CONTACT SCUDDER

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification
number and Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 3
<PAGE>

SCUDDER LARGE COMPANY GROWTH FUND
CROSS-REFERENCE SHEET
(continued)

PART B
Caption in Statement of
Item No. Item Caption Additional Information

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUND'S INVESTMENT OBJECTIVE AND
Objectives and POLICIES
Policies PORTFOLIO TRANSACTIONS-Portfolio
turnover

14. Management of the INVESTMENT ADVISER
Fund TRUSTEES AND OFFICERS
REMUNERATION

15. Control Persons TRUSTEES AND OFFICERS
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER
Advisory and DISTRIBUTOR
Other Services ADDITIONAL INFORMATION-Experts and
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage
Allocation and commissions
Other Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS

19. Purchase, PURCHASES
Redemption and EXCHANGES AND REDEMPTIONS
Pricing of FEATURES AND SERVICES OFFERED BY
Securities Being THE FUND- Dividend and Capital
Offered Gain Distribution Options
SPECIAL PLAN ACCOUNTS
NET ASSET VALUE

20. Tax Status DIVIDENDS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference - Page 4
<PAGE>

SCUDDER INVESTMENT TRUST
SCUDDER CLASSIC GROWTH FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A
PART A

Item No. Item Caption Prospectus Caption

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed FINANCIAL HIGHLIGHTS
Financial
Information

4. General INVESTMENT OBJECTIVES AND POLICIES
Description of WHY INVEST IN THE FUND?
Registrant ADDITIONAL INFORMATION ABOUT POLICIES
AND INVESTMENTS
FUND ORGANIZATION

5. Management of A MESSAGE FROM SCUDDER'S CHAIRMAN
the Fund FUND ORGANIZATION-Investment adviser
and Transfer agent
TRUSTEES AND OFFICERS
SHAREHOLDER BENEFITS-A team approach
to investing

5A. Management NOT APPLICABLE
Discussion of
Fund
Performance

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification
number, Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 5
<PAGE>

SCUDDER CLASSIC GROWTH FUND
CROSS-REFERENCE SHEET
(continued)

PART B
Caption in Statement of
Item No. Item Caption Additional Information

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUND'S INVESTMENT OBJECTIVE AND
Objectives and POLICIES
Policies PORTFOLIO TRANSACTIONS-Portfolio
turnover

14. Management of the INVESTMENT ADVISER
Fund TRUSTEES AND OFFICERS
REMUNERATION

15. Control Persons TRUSTEES AND OFFICERS
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER
Advisory and DISTRIBUTOR
Other Services ADDITIONAL INFORMATION-Experts and
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage,
Allocation and Portfolio Turnover
Other Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS

19. Purchase, PURCHASES
Redemption and EXCHANGES AND REDEMPTIONS
Pricing of FEATURES AND SERVICES OFFERED BY
Securities Being THE FUND- Dividend and Capital
Offered Gain Distribution Options
SPECIAL PLAN ACCOUNTS
NET ASSET VALUE

20. Tax Status DIVIDENDS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference - Page 6
<PAGE>

SCUDDER INVESTMENT TRUST
SCUDDER S&P 500 INDEX FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A
PART A

Item No. Item Caption Prospectus Caption

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed FINANCIAL HIGHLIGHTS
Financial
Information

4. General INVESTMENT OBJECTIVES AND POLICIES
Description of WHY INVEST IN THE FUND?
Registrant ADDITIONAL INFORMATION ABOUT POLICIES
AND INVESTMENTS
FUND AND PORTFOLIO ORGANIZATION

5. Management of A MESSAGE FROM SCUDDER'S CHAIRMAN
the Fund FUND AND PORTFOLIO
ORGANIZATION-Investment adviser
and Transfer agent
TRUSTEES AND OFFICERS OF THE FUND
SHAREHOLDER BENEFITS-A team approach
to investing

5A. Management NOT APPLICABLE
Discussion of
Fund
Performance

6. Capital Stock DISTRIBUTION AND PERFORMANCE
and Other INFORMATION- Dividends and
Securities capital gains distributions
FUND AND PORTFOLIO ORGANIZATION
TRANSACTION INFORMATION-Tax
information
SHAREHOLDER BENEFITS-SAILT-Scudder
Automated Information Line,
Dividend reinvestment plan,
T.D.D. service for the hearing
impaired
HOW TO CONTACT SCUDDER

7. Purchase of PURCHASES
Securities FUND AND PORTFOLIO
Being Offered ORGANIZATION-Underwriter
TRANSACTION INFORMATION-Purchasing
shares, Share price, Processing
time, Minimum balances, Third
party transactions
SHAREHOLDER BENEFITS-Dividend
reinvestment plan
SCUDDER TAX-ADVANTAGED RETIREMENT
PLANS

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification
number, Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 7
<PAGE>

SCUDDER S&P 500 INDEX FUND
CROSS-REFERENCE SHEET
(continued)

PART B
Caption in Statement of
Item No. Item Caption Additional Information

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUND'S INVESTMENT OBJECTIVE AND
Objectives and POLICIES
Policies PORTFOLIO TRANSACTIONS-Portfolio
turnover

14. Management of the INVESTMENT ADVISER AND
Fund ADMINISTRATOR
INVESTMENT MANAGER AND
ADMINISTRATOR
TRUSTEES AND OFFICERS OF THE FUND
REMUNERATION

15. Control Persons TRUSTEES AND OFFICERS OF THE FUND
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER AND
Advisory and ADMINISTRATOR
Other Services INVESTMENT MANAGER AND
ADMINISTRATOR
DISTRIBUTOR
ADDITIONAL INFORMATION-Experts and
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage,
Allocation and Portfolio Turnover
Other Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS

19. Purchase, PURCHASES
Redemption and EXCHANGES AND REDEMPTIONS
Pricing of FEATURES AND SERVICES OFFERED BY
Securities Being THE FUND- Dividend and Capital
Offered Gain Distribution Options
SPECIAL PLAN ACCOUNTS
NET ASSET VALUE

20. Tax Status DIVIDENDS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference - Page 8
<PAGE>

SCUDDER INVESTMENT TRUST
SCUDDER REAL ESTATE INVESTMENT FUND
CROSS-REFERENCE SHEET

Items Required By Form N-1A
PART A

Item No. Item Caption Prospectus Caption

1. Cover Page COVER PAGE

2. Synopsis EXPENSE INFORMATION

3. Condensed FINANCIAL HIGHLIGHTS
Financial
Information

4. General INVESTMENT OBJECTIVES AND POLICIES
Description of WHY INVEST IN THE FUND?
Registrant ADDITIONAL INFORMATION ABOUT POLICIES
AND INVESTMENTS
FUND ORGANIZATION

5. Management of A MESSAGE FROM SCUDDER'S CHAIRMAN
the Fund FUND ORGANIZATION-Investment adviser
and Transfer agent
TRUSTEES AND OFFICERS
SHAREHOLDER BENEFITS-A team approach
to investing

5A. Management NOT APPLICABLE
Discussion of
Fund
Performance

8. Redemption or EXCHANGES AND REDEMPTIONS
Repurchase TRANSACTION INFORMATION-Redeeming
shares, Tax identification
number, Minimum balances

9. Pending Legal NOT APPLICABLE
Proceedings

Cross Reference - Page 9
<PAGE>

SCUDDER REAL ESTATE INVESTMENT FUND
CROSS-REFERENCE SHEET
(continued)

PART B
Caption in Statement of
Item No. Item Caption Additional Information

10. Cover Page COVER PAGE

11. Table of Contents TABLE OF CONTENTS

12. General FUND ORGANIZATION
Information and
History

13. Investment THE FUND'S INVESTMENT OBJECTIVE AND
Objectives and POLICIES
Policies PORTFOLIO TRANSACTIONS-Portfolio
turnover

14. Management of the INVESTMENT ADVISER
Fund TRUSTEES AND OFFICERS
REMUNERATION

15. Control Persons TRUSTEES AND OFFICERS
and Principal
Holders of
Securities

16. Investment INVESTMENT ADVISER
Advisory and DISTRIBUTOR
Other Services ADDITIONAL INFORMATION-Experts and
Other Information

17. Brokerage PORTFOLIO TRANSACTIONS-Brokerage,
Allocation and Portfolio Turnover
Other Practices

18. Capital Stock and FUND ORGANIZATION
Other Securities DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS

19. Purchase, PURCHASES
Redemption and EXCHANGES AND REDEMPTIONS
Pricing of FEATURES AND SERVICES OFFERED BY
Securities Being THE FUND- Dividend and Capital
Offered Gain Distribution Options
SPECIAL PLAN ACCOUNTS
NET ASSET VALUE

20. Tax Status DIVIDENDS
TAXES

21. Underwriters DISTRIBUTOR

22. Calculation of PERFORMANCE INFORMATION
Performance Data

23. Financial FINANCIAL STATEMENTS
Statements

Cross Reference- Page 10
<PAGE>

[Image] Scudder Classic Growth Fund Profile [Image]
- ---------------------------------------------------------------------------

The fund profile, a supplement to the full prospectus, is designed as
an easy-to-read summary of fund risks, fees, and objectives. You can
click on any question to link to the Fund's prospectus and get more
information on that topic. Or, if you wish, you can proceed directly
to the Fund's prospectus. Once you have read the prospectus and
considered your investment goals, you can proceed to a Scudder Funds
application.
----------------------------------------------------------------------

Fund Profile
November 1, 1997

----------------------------------------------------------------------

1. What Are The Fund's Objectives?

Scudder Classic Growth Fund seeks to provide long-term growth of
capital and to keep the value of its shares more stable than other
growth mutual funds.

2. What Does The Fund Invest In?

Under normal market conditions, the Fund invests primarily in a
diversified portfolio of common stocks which the Fund's investment
adviser, Scudder, Stevens & Clark, Inc., believes offers above-average
appreciation potential yet, as a portfolio, offers the potential for
less share price volatility than other growth mutual funds. The
adviser focuses its investments in high quality, medium- to
large-sized U.S. companies with leading competitive positions. While
the Fund emphasizes U.S. investments, it can commit a portion of its
assets to equity securities of foreign growth companies that meet the
criteria applicable to domestic investments. Using in-depth
fundamental company research, along with proprietary financial
quality, stock rating and risk measures, the adviser looks for
companies with strong and sustainable earnings growth, a proven
ability to add value over time, and reasonable stock market
valuations.

The Fund may also purchase other types of equity securities including
securities convertible into common stocks, preferred stocks, rights
and warrants. In addition, the Fund may invest in foreign securities
that meet the same criteria as its domestic holdings. In addition, the
Fund may invest up to 20% of its assets in debt securities when the
adviser anticipates that the capital appreciation on debt securities
is likely to equal or exceed the capital appreciation on common stocks
over a selected time.

3. What Are The Risks Of Investing In The Fund?

While the Fund is broadly diversified and conservatively managed, with
attention paid to stock valuation and risk, the Fund's share price
will move up and down with changes in the general level of the
financial markets. While the Fund emphasizes U.S. investments, foreign
securities in which the Fund may invest often have less publicly
available information and are subject to different regulations than
domestic securities. Political events, changes in the perceived
creditworthiness of issuers, higher brokerage costs, fluctuating
national interest rates, foreign taxes and movements in foreign
currencies will affect the value of the Fund's foreign holdings which
determine the Fund's share price. You incur principal risk when you
invest because your shares, when sold, may be worth more or less than
what you paid for them.

4. For Whom Is This Fund Appropriate?

You may wish to consider this Fund if you are seeking capital growth
and less share price volatility than other growth mutual funds, and :

o plan to hold your investment for the long-term (at least 5 years
or more),
o can tolerate fluctuations in share price,
o have or plan to have other investments for the benefit of
diversification, and
o understand the risks of stock market investing.

5. What Are The Fund's Expenses And Fees?

There are two kinds of expenses that a shareholder may incur, directly
or indirectly, by investing in a mutual fund. These types of expenses,
as they relate to Scudder Classic Growth Fund are:

Shareholder transaction expenses --
Expenses charged directly to your account for various transactions.
Please note that there is a $5 service fee if you request redemption
proceeds via wire.

Sales Commission None

Commissions to Reinvest Dividends None

Redemption Fee None

Exchange Fee None

Annual Fund operating expenses (after expense maintenance) --
Expenses paid by the Fund before it distributes its net investment
income, expressed as a percentage of the Fund's average daily net
assets. Figures below have been estimated for the initial fiscal
year during which Scudder has agreed to maintain the total
annualized expenses of the Fund at not more than 1.25% of average
daily net assets. Had Scudder not done so, it is estimated that the
total operating expenses would have amounted to 2.15%, including
0.70% for management fees. Scudder will continue this expense
maintenance until December 31, 1997.

Investment management fee (after waiver) 0.00%

12b-1 fees None

Other expenses (after waiver) 1.25%
------

Total Fund operating expenses (after waiver) 1.25%
====

Example:
Assuming a 5% annual return and redemption at the end of each
period, the total expenses relating to a $1,000 investment would be:

1 Year 3 Years

$13 $40

This example assumes reinvestment of all dividends and distributions
and that the total Fund operating expenses listed above remain the
same each year. This example should not be considered a representation
of past or future expenses or return. Actual Fund expenses and return
vary from year to year and may be higher or lower than those shown.

6. How Has The Fund Performed Historically?

This chart shows how the Fund has performed since it commenced
operations on September 9, 1996, assuming reinvestment of all
distributions. Performance is historical and is no guarantee of future
results. Total return and principal value will fluctuate.
[Image]

* Not annualized. If the adviser had not maintained the Fund's
expenses, total return would have been lower.

7. Who Manages The Fund?

The Fund's investment adviser is Scudder, Stevens & Clark, Inc., a
leading provider of U.S. and international investment management for
clients throughout the world. The Fund is managed by a team of Scudder
investment professionals who each play an important role in the Fund's
investment process.

Lead Portfolio Manager William F. Gadsden focuses on overall
investment strategy and has 14 years of investment industry experience
and joined Scudder in 1983. Bruce F. Beaty, Portfolio Manager, focuses
on securities selection and assists with the creation and
implementation of investment strategy for the Fund. He has 15 years of
investment industry experience and joined Scudder in 1991.

8. How Can I Invest?

To make it easy for you to open an account, you may invest by mail,
phone, fax, or in person. The minimum initial investment is $2,500,
except that shareholders may open an account with at least $1,000 if
an automatic investment plan of $100/month is established. Scudder
retirement plans and certain other accounts have similar or lower
minimum share balance requirements. A shareholder who maintains a
nonfiduciary account balance of less than $2,500 without establishing
an automatic investment plan, will be assessed an annual fee of
$10.00, payable to the Fund. Retirement accounts and certain other
accounts will not be assessed the $10.00 charge. You may also exchange
Fund shares free of charge within the Scudder Family of Funds.

9. How Can I Redeem Shares?

You may redeem shares at the current share price on any business day
by telephone, fax, or mail.

10. When Are Distributions Made?

The Fund typically makes distributions in November or December. You
may elect to receive distributions in cash or have them reinvested in
additional shares of the Fund.

Generally, dividends from net investment income are taxable to
shareholders as ordinary income. Long-term capital gains
distributions, if any, are taxable as long-term capital gains
regardless of the length of time shareholders have owned their shares.
Short-term capital gains and any other taxable income distributions
are taxable as ordinary income. A portion of dividends from net
investment income may qualify for the dividends-received deduction for
corporations.

11. What Services Does Scudder Provide?

As a shareholder, you'll enjoy:

o professional service from representatives who can answer your
questions and execute your transactions
o automated toll-free touchtone access to account information,
share prices and yields, and to perform transactions
o Scudder's quarterly shareholder newsletter, Scudder Perspectives
o regular, informative reports about the performance of your Fund

[Image]

----------------------------------------------------------------------
[Image]Scudder wants you to make informed investment decisions. This
Fund Profile contains key information about the Fund. If you would
like more information before you invest, please consult the Fund's
accompanying prospectus. For details about the Fund's holdings or
recent investment strategies, please review the Fund's most recent
annual or semiannual report. The reports are free and may be ordered
by calling 1-800-225-2470.

----------------------------------------------------------------------
Contact Scudder

<PAGE>

This prospectus sets forth concisely the information about Scudder Classic
Growth Fund, a diversified series of Scudder Investment Trust, an open-end
management investment company, that a prospective investor should know before
investing. Please retain it for future reference.

If you require more detailed information, a Statement of Additional Information
dated January 1, 1998, as amended from time to time, may be obtained without
charge by writing Scudder Investor Services, Inc., Two International Place,
Boston, MA 02110-4103 or calling 1-800-225-2470. The Statement, which is
incorporated by reference into this prospectus, has been filed with the
Securities and Exchange Commission and is available along with other related
materials on the SEC's Internet Web site (http://www.sec.gov).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Contents--see page 4.

NOT FDIC-INSURED

MAY LOSE VALUE NO BANK GUARANTEE

Scudder
Classic
Growth Fund

Prospectus
January 1, 1998

A pure no-load(TM) (no sales charges) mutual fund which seeks long-term growth
of capital with reduced share price volatility compared to other growth mutual
funds.

<PAGE>
Expense information

How to compare a Scudder Family of Funds pure no-load(TM) fund

This information is designed to help you understand the various costs and
expenses of investing in Scudder Classic Growth Fund (the "Fund"). By reviewing
this table and those in other mutual funds' prospectuses, you can compare the
Fund's fees and expenses with those of other funds. With Scudder's pure
no-load(TM) funds, you pay no commissions to purchase or redeem shares, or to
exchange from one fund to another. As a result, all of your investment goes to
work for you.

1) Shareholder transaction expenses: Expenses charged directly to your
individual account in the Fund for various transactions.

Sales commissions to purchase shares (sales load) NONE
Commissions to reinvest dividends NONE
Redemption fees NONE*
Fees to exchange shares NONE

2) Annual Fund operating expenses: Expenses paid by the Fund before it
distributes its net investment income, expressed as a percentage of the
Fund's average daily net assets for the fiscal period September 9, 1996
(commencement of operations) to August 31, 1997.

Investment management fee (after waiver) 0.00%**
12b-1 fees NONE
Other expenses (after reimbursements) 1.25%**
-----
Total Fund operating expenses (after waiver and reimbursements) 1.25%**
=====

Example

Based on the level of total Fund operating expenses listed above, the total
expenses relating to a $1,000 investment, assuming a 5% annual return and
redemption at the end of each period, are listed below. Investors do not pay
these expenses directly; they are paid by the Fund before it distributes its net
investment income to shareholders. (As noted above, the Fund has no redemption
fees of any kind.)

1 Year 3 Years 5 Years 10 Years
- ------ ------- ------- --------
$13 $40 $69 $151

See "Fund organization--Investment adviser" for further information about the
investment management fee. This example assumes reinvestment of all dividends
and distributions and that the percentage amounts listed under "Annual Fund
operating expenses" remain the same each year. This example should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than those
shown.

* You may redeem by writing or calling the Fund. If you wish to receive your
redemption proceeds via wire, there is a $5 wire service fee. For
additional information, please refer to "Transaction information--Redeeming
shares."

** Until April 15, 1998, the Adviser and certain of its subsidiaries have
agreed to waive and/or reimburse all or portions of their fees and expenses
payable by the Fund to the extent necessary so that the total annualized
expenses of the Fund do not exceed 1.25% of average daily net assets. If
the Adviser and its subsidiaries had not agreed to waive and reimburse all
or portions of their fees and expenses, Fund expenses would have been:
investment management fee 0.70%, other expenses 1.55% and total operating
expenses 2.25% for the fiscal period ended August 31, 1997.
- -------------------------------------------------------------------------------

2
<PAGE>

Financial highlights

The following table includes selected data for a share outstanding throughout
the period (a) and other performance information derived from the audited
financial statements.

If you would like more detailed information concerning the Fund's performance, a
complete portfolio listing and audited financial statements are available in the
Fund's Annual Report dated August 31, 1997 and may be obtained without charge by
writing or calling Scudder Investor Services, Inc.

<TABLE>
<CAPTION>
For the Period
September 9, 1996
(commencement
of operations) to
August 31, 1997
- ----------------------------------------------------------------------------------------------------------------
<S> <C>
-----------------
Net asset value, beginning of period ............................................... $12.00
-----------------
Income from investment operations:
Net investment income .............................................................. .06
Net realized and unrealized gain on investments .................................... 5.36
-----------------
Total from investment operations ................................................... 5.42
-----------------
Less distributions from net investment income ...................................... (.04)
-----------------
Net asset value, end of period ..................................................... $17.38
-----------------
- ----------------------------------------------------------------------------------------------------------------
Total Return (%) (b) ............................................................... 45.20**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ............................................. 53.2
Ratio of operating expenses, net to average daily net assets (%) ................... 1.25*
Ratio of operating expenses before expense reductions, to average daily net
assets (%) ...................................................................... 2.25*

Ratio of net investment income to average daily net assets (%) ..................... .43*
Portfolio turnover rate (%) ........................................................ 27.4*
Average commission rate paid ....................................................... $.0378
</TABLE>

(a) Based on monthly average shares outstanding during the period.
(b) Total return would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized

3
<PAGE>

A message from the President

Scudder Kemper Investments, Inc., investment adviser to the Scudder Family of
Funds, is one of the largest and most experienced investment management
organizations worldwide, managing more than $200 billion in assets globally for
mutual fund investors, retirement and pension plans, institutional and corporate
clients, and private family and individual accounts. It is one of the ten
largest mutual fund companies in the U.S.

We offered America's first no-load mutual fund in 1928, and today the Scudder
Family of Funds includes over 45 no-load mutual fund portfolios. We also manage
the mutual funds in a special program for the American Association of Retired
Persons, as well as the fund options available through Scudder Horizon Plan, a
tax-advantaged variable annuity. We also advise The Japan Fund, and numerous
other open and closed-end funds that invest in this country and other countries
around the world.

The Scudder Family of Funds is designed to make investing easy and less costly.
It includes money market, tax free, income and growth funds as well as IRAs,
401(k)s, Keoghs and other retirement plans.

Services available to shareholders include toll-free access to the professional
service representatives of Scudder Investor Relations, easy exchange among
funds, shareholder reports, informative newsletters and the walk-in convenience
of Scudder Investor Centers.

The Scudder Family of Funds includes those Funds, or classes of Funds, advised
by Scudder Kemper Investments, Inc., that are offered without commissions to
purchase or redeem shares or to exchange from one fund to another. There are no
12b-1 fees either, which many other funds now charge to support their marketing
efforts. All of your investment goes to work for you. We look forward to
welcoming you as a shareholder.

/s/Edmond D. Villani

o Scudder Classic Growth Fund

Investment objectives

o long-term growth of capital

o reduced share price volatility compared to other growth mutual funds

Investment characteristics

o an actively managed portfolio consisting primarily of common stocks of
medium- to large-sized U.S. companies

o focus on high quality companies with strong competitive positions

o broadly diversified by industry and company

o no sales or marketing charges for purchasing, holding or redeeming shares

Contents

Investment objectives and policies 5
Why invest in the Fund? 6
Additional information about policies
and investments 6
Distribution and performance information 9
Fund organization 10
Transaction information 11
Shareholder benefits 15
Purchases 17
Exchanges and redemptions 18
Trustees and Officers 20
Investment products and services 21
How to contact Scudder 22

4
<PAGE>

Investment objectives and policies

The Scudder Classic Growth Fund (the "Fund"), a series of Scudder Investment
Trust (the "Trust"), seeks to provide long-term growth of capital with reduced
share price volatility compared to other growth mutual funds. This diversified
equity fund is designed for investors looking to grow their investment principal
over time for retirement and other long-term needs. While current income is not
a stated objective of the Fund, many of the Fund's securities may provide
regular dividends, which are also expected to grow over time.

While the Fund is broadly diversified and conservatively managed, with attention
paid to stock valuation and risk, its share price will move up and down with
changes in the general level of the financial markets. Accordingly, shareholders
should be comfortable with stock market risk and view the Fund as a long-term
investment.

Except as otherwise indicated, the Fund's investment objectives and policies are
not fundamental and may be changed without a vote of shareholders. If there is a
change in a Fund's investment objective, shareholders should consider whether
that Fund remains an appropriate investment in light of their then current
financial position and needs.
There can be no assurance that the Fund's objectives will be met.

Investments

Under normal market conditions, the Fund invests primarily in a diversified
portfolio of common stocks which the Fund's investment adviser, Scudder Kemper
Investments, Inc. (the "Adviser"), believes offers above-average appreciation
potential yet, as a portfolio, offers the potential for less share price
volatility than other growth mutual funds.

In seeking such investments, the Adviser focuses

its investment in high quality, medium- to large-
sized U.S. companies with leading competitive positions. Using in-depth
fundamental company research, along with proprietary financial quality, stock
rating and risk measures, the Adviser looks for companies with strong and
sustainable earnings growth, a proven ability to add value over time, and
reasonable stock market valuations. These companies often have important
business franchises, leading products, services or technologies, or dominant
marketing and distribution systems.

The Fund allocates its investments among different industries and companies, and
adjusts its portfolio securities based on long-term investment considerations as
opposed to short-term trading. While the Fund emphasizes U.S. investments, it
can commit a portion of its assets to the equity securities of foreign growth
companies that meet the criteria applicable to domestic investments.

While the Fund invests primarily in common stocks, it can purchase other types
of equity securities including securities convertible into common stocks,
preferred stocks, rights and warrants. The Fund's policy is to remain
substantially invested in these securities, which may be listed on national
securities exchanges or, less commonly, traded over-the-counter. Also, the Fund
may enter into repurchase agreements, reverse repurchase agreements, invest in
illiquid and restricted securities and engage in strategic transactions.

For temporary defensive purposes, the Fund may invest without limit in high
quality money market securities, including U.S. Treasury bills, repurchase
agreements, commercial paper, certificates of deposit issued by domestic and
foreign branches of U.S. banks, bankers' acceptances, and other debt securities,
such as U.S. Government obligations and corporate debt instruments when the
Adviser deems such a position advisable in light of economic or market
conditions. It is impossible to predict accurately how long such alternate

5
<PAGE>

strategies may be utilized. The Fund may invest up to 20% of its net assets in
debt securities when the Adviser anticipates that the capital appreciation on
debt securities is likely to equal or exceed the capital appreciation on common
stocks over a selected time, such as during periods of unusually high interest
rates. As interest rates fall, the prices of debt securities tend to rise. The
Fund may also invest in money market securities in anticipation of meeting
redemptions or paying Fund expenses. More information about investment
techniques is provided under "Additional information about policies and
investments."

Why invest in the Fund?

Scudder Classic Growth Fund invests principally in the common stock of seasoned,
financially- sound, medium- to large-sized U.S. companies with strong
competitive positions in their industries. This broadly diversified portfolio
seeks to take advantage of the Adviser's extensive research capabilities to
locate companies displaying the potential for continuing strong growth in
earnings, yet with common stocks available at reasonable prices. The Fund uses
an investment style that was originally designed for individual clients of the
Adviser who wanted long-term growth of capital without the volatility of more
aggressive growth funds. Rooted in the investment practices and accumulated
experience of the Adviser's 75+ years of investing, this investment approach to
growth stock investing seeks out companies which, in the opinion of the Adviser,
have a history of, and the potential for, consistent and strong corporate
earnings, and whose future growth will be supported by quality management, a
differentiated business franchise, and competitive strength. This Fund will
pursue long-term growth opportunities while seeking to reduce the overall impact
of fluctuations in the stock market and individual security price volatility.
Indeed, one of the Fund's objectives is to keep its share price more stable than
that of other growth funds.

The Fund is intended to be a core equity component of a long-term portfolio and,
as such, can be an excellent retirement investment vehicle. As part of an
investment plan geared towards retirement or long-term investment, the Fund can
complement an individual portfolio consisting of more or less aggressive funds,
considering individual timeframes and tolerance for risk. As an investment for
those already in their retirement years, this Fund seeks long-term growth, but
with less share price volatility than other growth funds.

Additional information about policies and investments

Investment restrictions

The Fund has certain investment restrictions which are designed to reduce the
Fund's investment risk. Fundamental investment restrictions may not be changed
without a vote of shareholders; non-fundamental investment restrictions may be
changed by a vote of the Fund's Board of Trustees. A complete listing of
investment restrictions is contained under "Investment Restrictions" in the
Fund's Statement of Additional Information.

As a matter of fundamental policy, the Fund may not borrow money, except as
permitted under Federal law. Further, as a matter of non-fundamental policy, the
Fund may not borrow money in an amount greater than 5% of total assets, except
for temporary or emergency purposes, although the Fund may engage up to 5% of
total assets in reverse repurchase agreements or dollar rolls.

As a matter of fundamental policy, the Fund may not make loans except through
the lending of portfolio securities, the purchase of debt securities or through
repurchase agreements. The Fund has adopted a non-fundamental policy restricting
the lending of portfolio securities to no more than 5% of total assets.

6
<PAGE>

A complete description of these and other policies and restrictions is contained
under "Investment Restrictions" in the Fund's Statement of Additional
Information.

Common stocks

Under normal circumstances, the Fund invests primarily in common stocks. Common
stock is issued by companies to raise cash for business purposes and represents
a proportionate interest in the issuing companies. Therefore, the Fund
participates in the success or failure of any company in which it holds stock.
The market values of common stock can fluctuate significantly, reflecting the
business performance of the issuing company, investor perception and general
economic or financial market movements. Smaller companies are especially
sensitive to these factors and may even become valueless. Despite the risk of
price volatility, however, common stocks also offer the greatest potential for
gain on investment, compared to other classes of financial assets such as bonds
or cash equivalents.

Debt securities

The Fund may purchase investment-grade debt securities, which are those rated
Aaa, Aa, A or Baa by Moody's Investor Services, Inc. ("Moody's"), or AAA, AA, A
or BBB by Standard & Poor's Corporation ("S&P") or, if unrated, of equivalent
quality as determined by the Adviser.

Repurchase agreements

As a means of earning income for periods as short as overnight, the Fund may
enter into repurchase agreements with selected banks and broker/dealers. Under a
repurchase agreement, the Fund acquires securities, subject to the seller's
agreement to repurchase at a specified time and price.

Convertible securities

The convertible securities in which the Fund may invest consist of bonds, notes,
debentures and preferred stocks which may be converted or exchanged at a stated
or determinable exchange ratio into underlying shares of common stock.

Prior to their conversion, convertible securities may have characteristics
similar to nonconvertible securities of the same type.

Foreign securities

In addition to investments in companies domiciled in the U.S., the Fund may
invest up to 25% of the Fund's assets in listed and unlisted foreign securities
that meet the same criteria as the Fund's domestic holdings. The Fund may invest
in foreign securities when the anticipated performance of foreign securities is
believed by the Adviser to offer more return potential than domestic
alternatives in keeping with the investment objectives of the Fund.

Illiquid securities

The Fund may invest in securities for which there is not an active trading
market, or which have resale restrictions. These types of securities generally
offer a higher return than more readily marketable securities, but carry the
risk that the Fund may not be able to dispose of them at an advantageous time or
price.

Strategic Transactions and derivatives

The Fund may, but is not required to, utilize various other investment
strategies as described below to hedge various market risks (such as interest
rates, currency exchange rates, and broad or specific equity or fixed-income
market movements), to manage the effective maturity or duration of fixed-income
securities in the Fund's portfolio or to enhance potential gain. These
strategies may be executed through the use of derivative contracts. Such
strategies are generally accepted as a part of modern portfolio management and
are regularly utilized by many mutual funds and other institutional investors.
Techniques and instruments may change over time as new instruments and
strategies are developed or regulatory changes occur.

7
<PAGE>

sell financial futures contracts and options thereon, enter into various
interest rate transactions such as swaps, caps, floors or collars, and enter
into various currency transactions such as currency forward contracts, currency
futures contracts, currency swaps or options on currencies or currency futures
(collectively, all the above are called "Strategic Transactions").

Strategic Transactions may be used without limit to attempt to protect against
possible changes in the market value of securities held in or to be purchased
for the Fund's portfolio resulting from securities markets or currency exchange
rate fluctuations, to protect the Fund's unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes, to manage the effective maturity or duration of fixed-income
securities in the Fund's portfolio, or to establish a position in the
derivatives markets as a temporary substitute for purchasing or selling
particular securities. Some Strategic Transactions may also be used to enhance
potential gain although no more than 5% of the Fund's assets will be committed
to Strategic Transactions entered into for non-hedging purposes. Any or all of
these investment techniques may be used at any time and in any combination, and
there is no particular strategy that dictates the use of one technique rather
than another, as use of any Strategic Transaction is a function of numerous
variables including market conditions. The ability of the Fund to utilize these
Strategic Transactions successfully will depend on the Adviser's ability to
predict pertinent market movements, which cannot be assured. The Fund will
comply with applicable regulatory requirements when implementing these
strategies, techniques and instruments. Strategic Transactions involving
financial futures and options thereon will be purchased, sold or entered into
only for bona fide hedging, risk management or portfolio management purposes and
not for speculative purposes. Please refer to "Risk factors--Strategic
Transactions and derivatives" for more information.

Risk factors

The Fund's risks are determined by the nature of the securities held and the
portfolio management strategies used by the Adviser. The following are
descriptions of certain risks related to the investments and techniques that the
Fund may use from time to time.

Debt securities. Securities rated BBB by S&P or Baa by Moody's are neither
highly protected nor poorly secured. These securities normally pay higher yields
but involve potentially greater price variability than higher-quality
securities. These securities are regarded as having adequate capacity to repay
principal and pay interest, although adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to do so. Moody's
considers bonds it rates Baa to have speculative elements as well as
investment-grade characteristics.

Repurchase agreements. If the seller under a repurchase agreement becomes
insolvent, the Fund's right to dispose of the securities may be restricted, or
the value of the securities may decline before a Fund is able to dispose of
them. In the event of the commencement of bankruptcy or insolvency proceedings
of the seller of the securities before repurchase of the securities under a
repurchase agreement, the Fund may encounter delay and incur costs, including a
decline in value of the securities, before being able to sell the securities.

Convertible securities. While convertible securities generally offer lower
yields than nonconvertible debt securities of similar quality, their prices may
reflect changes in the value of the underlying common stock. Convertible
securities entail less credit risk than the issuer's common stock.

Foreign securities. Investments in foreign securities involve special
considerations, due to more limited information, higher brokerage costs and

8
<PAGE>

different accounting standards. They may also entail certain risks, such as
possible imposition of dividend or interest withholding or confiscatory taxes,
possible currency blockages or transfer restrictions, expropriation,
nationalization or other adverse political or economic developments and the
difficulty of enforcing obligations in other countries. Foreign securities may
be less liquid and more volatile than comparable domestic securities, and there
is less government regulation of stock exchanges, brokers, listed companies and
banks than in the U.S. Purchases of foreign securities are usually made in
foreign currencies and, as a result, the Fund may incur currency conversion
costs and may be affected favorably or unfavorably by changes in the value of
foreign currencies against the U.S. dollar.

Illiquid securities. The absence of a trading market can make it difficult to
ascertain a market value for these investments. Disposing of illiquid
investments may involve time-consuming negotiation and legal expenses, and it
may be difficult or impossible for the Fund to sell them promptly at an
acceptable price.

Strategic Transactions and derivatives. Strategic Transactions, including
derivative contracts, have risks associated with them including possible default
by the other party to the transaction, illiquidity and, to the extent the
Adviser's view as to certain market movements is incorrect, the risk that the
use of such Strategic Transactions could result in losses greater than if they
had not been used. Use of put and call options may result in losses to the Fund,
force the sale or purchase of portfolio securities at inopportune times or for
prices higher than (in the case of put options) or lower than (in the case of
call options) current market values, limit the amount of appreciation the Fund
can realize on its investments or cause the Fund to hold a security it might
otherwise sell. The use of currency transactions can result in the Fund
incurring losses as a result of a number of factors including the imposition of
exchange controls, suspension of settlements or the inability to deliver or
receive a specified currency. The use of options and futures transactions
entails certain other risks. In particular, the variable degree of correlation
between price movements of futures contracts and price movements in the related
portfolio position of the Fund creates the possibility that losses on the
hedging instrument may be greater than gains in the value of the Fund's
position. In addition, futures and options markets may not be liquid in all
circumstances and certain over-the-counter options may have no markets. As a
result, in certain markets, the Fund might not be able to close out a
transaction without incurring substantial losses, if at all. Although the use of
futures contracts and options transactions for hedging should tend to minimize
the risk of loss due to a decline in the value of the hedged position, at the
same time they tend to limit any potential gain which might result from an
increase in value of such position.

Finally, the daily variation margin requirements for futures contracts would
create a greater ongoing potential financial risk than would purchases of
options, where the exposure is limited to the cost of the initial premium.
Losses resulting from the use of Strategic Transactions would reduce net asset
value, and possibly income, and such losses can be greater than if the Strategic
Transactions had not been utilized. The Strategic Transactions that the Fund may
use and some of their risks are described more fully in the Fund's combined
Statement of Additional Information.

Distribution and performance information

Dividends and capital gains distributions

The Fund intends to distribute any dividends from its net investment income and
net realized capital gains after utilization of capital loss carryforwards, if
any, in November or December, although an additional distribution may be made if
necessary. Any dividends or capital gains distributions declared in October,
November or December with a record date in such month and paid the following

9
<PAGE>

January will be treated by shareholders for federal income tax purposes as if
received on December 31 of the calendar year declared. According to preference,
shareholders may receive distributions in cash or have them reinvested in
additional shares of the Fund. If an investment is in the form of a retirement
plan, all dividends and capital gains distributions must be reinvested into the
shareholder's account.

Generally, dividends from net investment income are taxable to shareholders as
ordinary income. Long-term capital gains distributions, if any, are taxable as
long-term capital gains regardless of the length of time shareholders have owned
their shares. Short-term capital gains and any other taxable income
distributions are taxable as ordinary income. A portion of such dividends from
net investment income may qualify for the dividends-received deduction for
corporations.

The Fund sends detailed tax information to shareholders about the amount and
type of its distributions by January 31 of the following year.

Performance information

From time to time, quotations of the Fund's performance may be included in
advertisements, sales literature or shareholder reports. All performance figures
are historical, show the performance of a hypothetical investment and are not
intended to indicate future performance. "Total return" is the change in value
of an investment in the Fund for a specified period. The "average annual total
return" of the Fund is the average annual compound rate of return of an
investment in the Fund assuming the investment has been held for the life of the
Fund as of a stated ending date. "Cumulative total return" represents the
cumulative change in value of an investment in the Fund for various periods. All
types of total return calculations assume that all dividends and capital gains
distributions during the period were reinvested in shares of the Fund.
Performance will vary based upon, among other things, changes in market
conditions and the level of the Fund's expenses.

Fund organization

Scudder Classic Growth Fund is a diversified series of Scudder Investment Trust
(the "Trust"), an open-end management investment company registered under the
Investment Company Act of 1940 (the "1940 Act"). The Trust, formerly known as
Scudder Growth and Income Fund, was organized as a Massachusetts business trust
in September 1984.

The Fund's activities are supervised by the Trust's Board of Trustees.
Shareholders have one vote for each share held on matters on which they are
entitled to vote. The Trust is not required to hold and has no current intention
of holding annual shareholder meetings, although special meetings may be called
for purposes such as electing or removing Trustees, changing fundamental
investment policies or approving an investment management agreement.
Shareholders will be assisted in communicating with other shareholders in
connection with removing a Trustee as if Section 16(c) of the 1940 Act were
applicable.

Investment adviser

The Fund retains the investment management firm of Scudder Kemper Investments,
Inc., a Delaware corporation formerly known as Scudder, Stevens & Clark, Inc.,
to manage its daily investment and business affairs subject to the policies
established by the Board of Trustees. The Trustees have overall responsibility
for the management of the Fund under Massachusetts law.

Scudder, Stevens & Clark, Inc. ("Scudder"), and Zurich Insurance Company
("Zurich"), an international insurance and financial services organization, have
formed a new global investment organization by combining Scudder's business with

10
<PAGE>

that of Zurich's subsidiary, Zurich Kemper Investments, Inc. and Scudder has
changed its name to Scudder Kemper Investments, Inc. As a result of the
transaction, Zurich owns approximately 70% of the Adviser, with the balance
owned by the Adviser's officers and employees.

The Fund pays the Adviser an annual fee of 0.70% of the Fund's average daily net
assets. The fee is payable monthly, provided that the Fund will make such
interim payments as may be requested by the Adviser not to exceed 75% of the
amount of the fee then accrued on the books of the Fund and unpaid.

The Adviser has agreed to maintain the annualized expenses of the Fund at no
more than 1.25% of the average daily net assets of the Fund until April 15,
1998. For the fiscal period ended August 31, 1997, the Adviser took action to
reduce the Fund's total expenses and as a result did not receive an investment
management fee.

All of the Fund's expenses are paid out of gross investment income. Shareholders
pay no direct charges or fees for investment or administrative services.

Scudder Kemper Investments, Inc. is located at
Two International Place, Boston, Massachusetts.

Transfer agent

Scudder Service Corporation, P.O. Box 2291, Boston, Massachusetts 02107-2291, a
subsidiary of the Adviser, is the transfer, shareholder servicing and
dividend-paying agent for the Fund.

Underwriter

Scudder Investor Services, Inc., a subsidiary of the Adviser, is the Fund's
principal underwriter. Scudder Investor Services, Inc. confirms, as agent, all
purchases of shares of the Fund. Scudder Investor Relations is a telephone
information service provided by Scudder Investor Services, Inc.

Fund accounting agent

Scudder Fund Accounting Corporation, a subsidiary of the Adviser, is responsible
for determining the daily net asset value per share and maintaining the general
accounting records of the Fund.

Custodian

State Street Bank and Trust Company is the Fund's custodian.

Transaction information

Purchasing shares

Purchases are executed at the next calculated net asset value per share after
the Fund's transfer agent receives the purchase request in good order. Purchases
are made in full and fractional shares. (See "Share price.")

By check. If you purchase shares with a check that does not clear, your purchase
will be canceled and you will be subject to any losses or fees incurred in the
transaction. Checks must be drawn on or payable through a U.S. bank. If you
purchase shares by check and redeem them within seven business days of purchase,
the Fund may hold redemption proceeds until the purchase check has cleared. If
you purchase shares by federal funds wire, you may avoid this delay. Redemption
requests by telephone prior to the expiration of the seven-day period will not
be accepted.

By wire. To open a new account by wire, first call Scudder at 1-800-225-5163 to
obtain an account number. A representative will instruct you to send a
completed, signed application to the transfer agent. Accounts cannot be opened
without a completed, signed application and a Scudder fund account number.
Contact your bank to arrange a wire transfer to:

The Scudder Funds
State Street Bank and Trust Company
Boston, MA 02101
ABA Number 011000028
DDA Account 9903-5552

Your wire instructions must also include:
- -- the name of the fund in which the money is to be invested,

11
<PAGE>

- -- the account number of the fund, and
- -- the name(s) of the account holder(s).

The account will be established once the application and money order are
received in good order.

You may also make additional investments of $100 or more to your existing
account by wire.

By telephone order. Existing shareholders may purchase shares at a certain day's
price by calling 1-800-225-5163 before the close of regular trading on the New
York Stock Exchange (the "Exchange"), normally 4 p.m. eastern time, on that day.
Orders must be for $10,000 or more and cannot be for an amount greater than four
times the value of your account at the time the order is placed. A confirmation
with complete purchase information is sent shortly after your order is received.
You must include with your payment the order number given at the time the order
is placed. If payment by check or wire is not received within three business
days, the order is subject to cancellation and the shareholder will be
responsible for any loss to the Fund resulting from this cancellation. Telephone
orders are not available for shares held in Scudder IRA accounts and most other
Scudder retirement plan accounts.

By "QuickBuy." If you elected "QuickBuy" for your account, you can call
toll-free to purchase shares. The money will be automatically transferred from
your predesignated bank checking account. Your bank must be a member of the
Automated Clearing House for you to use this service. If you did not elect
"QuickBuy," call 1-800-225-5163 for more information.

To purchase additional shares, call 1-800-225-5163. Purchases may not be for
more than $250,000. Proceeds in the amount of your purchase will be transferred
from your bank checking account in two or three business days following your
call. For requests received by the close of regular trading on the Exchange,
shares will be purchased at the net asset value per share calculated at the
close of trading on the day of your call. "QuickBuy" requests received after the
close of regular trading on the Exchange will begin their processing and be
purchased at the net asset value calculated the following business day.

If you purchase shares by "QuickBuy" and redeem them within seven days of the
purchase, the Fund may hold the redemption proceeds for a period of up to seven
business days. If you purchase shares and there are insufficient funds in your
bank account, the purchase will be canceled and you will be subject to any
losses or fees incurred in the transaction. "QuickBuy" transactions are not
available for most retirement plan accounts. However, "QuickBuy" transactions
are available for Scudder IRA accounts.

By exchange. The Fund may be exchanged for shares of other funds in the Scudder
Family of Funds unless otherwise determined by the Board of Trustees. Your new
account will have the same registration and address as your existing account.

The exchange requirements for corporations, other organizations, trusts,
fiduciaries, agents, institutional investors and retirement plans may be
different from those for regular accounts. Please call 1-800-225-5163 for more
information, including information about the transfer of special account
features.

You can also make exchanges among your Scudder fund accounts on SAIL, the
Scudder Automated Information Line, by calling 1-800-343-2890.

Redeeming shares

The Fund allows you to redeem shares (i.e., sell them back to the Fund) without
redemption fees.

By telephone. This is the quickest and easiest way to sell Fund shares. If you
provided your banking information on your application, you can call to request
that federal funds be sent to your authorized bank account. If you did not
include your banking information on your application, call 1-800-225-5163 for
more information.

Redemption proceeds will be wired to your bank unless otherwise requested. If
your bank cannot receive federal reserve wires, redemption proceeds will be

12
<PAGE>

mailed to your bank. There will be a $5 charge for all wire redemptions.

You can also make redemptions from your Scudder fund account on SAIL by calling
1-800-343-2890.

If you open an account by wire, you cannot redeem shares by telephone until the
Fund's transfer agent has received your completed and signed application.
Telephone redemption is not available for shares held in Scudder IRA accounts
and most other Scudder retirement plan accounts.

In the event that you are unable to reach the Fund by telephone, you should
write to the Fund; see "How to contact Scudder" for the address.

By "QuickSell." If you elected "QuickSell" for your account, you can call
toll-free to redeem shares. The money will be automatically transferred to your
predesignated bank checking account. Your bank must be a member of the Automated
Clearing House for you to use this service. If you did not elect "QuickSell,"
call 1-800-225-5163 for more information.

To redeem shares, call 1-800-225-5163. Redemptions must be for at least $250.
Proceeds in the amount of your redemption will be transferred to your bank
checking account in two or three business days following your call. For requests
received by the close of regular trading on the Exchange, shares will be
redeemed at the net asset value per share calculated at the close of trading on
the day of your call. "QuickSell" requests received after the close of regular
trading on the Exchange will begin their processing and be redeemed at the net
asset value calculated the following business day.

"QuickSell" transactions are not available for Scudder IRA accounts and most
other retirement plan accounts.

Signature guarantees. For your protection and to prevent fraudulent redemptions,
on written redemption requests in excess of $100,000 we require an original
signature and an original signature guarantee for each person in whose name the
account is registered. (The Fund reserves the right, however, to require a
signature guarantee for all redemptions.) You can obtain a signature guarantee
from most banks, credit unions or savings associations, or from broker/dealers,
municipal securities broker/dealers, government securities broker/dealers,
national securities exchanges, registered securities associations or clearing
agencies deemed eligible by the Securities and Exchange Commission. Signature
guarantees by notaries public are not acceptable. Redemption requirements for
corporations, other organizations, trusts, fiduciaries, agents, institutional
investors and retirement plans may be different from those for regular accounts.
For more information, please call 1-800-225-5163.

Telephone transactions

Shareholders automatically receive the ability to exchange by telephone and the
right to redeem by telephone up to $100,000 to their address of record.
Shareholders also may, by telephone, request that redemption proceeds be sent to
a predesignated bank account. The Fund uses procedures designed to give
reasonable assurance that telephone instructions are genuine, including
recording telephone calls, testing a caller's identity and sending written
confirmation of telephone transactions. If the Fund does not follow such
procedures, it may be liable for losses due to unauthorized or fraudulent
telephone instructions. The Fund will not be liable for acting upon instructions
communicated by telephone that it reasonably believes to be genuine.

Share price

Purchases and redemptions, including exchanges, are made at net asset value.
Scudder Fund Accounting Corporation determines net asset value per share as of
the close of regular trading on the Exchange, normally 4 p.m. eastern time, on
each day the Exchange is open for trading. Net asset value per share is
calculated by dividing the value of total Fund assets, less all liabilities, by

13
<PAGE>

the total number of shares outstanding.

Processing time

All purchase and redemption requests must be received in good order by the
Fund's transfer agent. Those requests received by the close of regular trading
on the Exchange are executed at the net asset value per share calculated at the
close of regular trading that day.

Purchase and redemption requests received after the close of regular trading on
the Exchange will be executed the following business day.

If you wish to make a purchase of $500,000 or more, you should notify Scudder
Investor Relations by calling 1-800-225-5163.

The Fund will normally send your redemption proceeds within one business day
following the redemption request, but may take up to seven business days (or
longer in the case of shares recently purchased by check).

Purchase restrictions

Purchases and sales should be made for long-term investment purposes only. The
Fund and Scudder Investor Services, Inc. each reserves the right to reject
purchases of Fund shares (including exchanges) for any reason including when a
pattern of frequent purchases and sales made in response to short-term
fluctuations in the Fund's share price appears evident.

Tax information

A redemption of shares, including an exchange into another Scudder fund, is a
sale of shares and may result in a gain or loss for income tax purposes.

Tax identification number

Be sure to complete the Tax Identification Number section of the Fund's
application when you open an account. Federal tax law requires the Fund to
withhold 31% of taxable dividends[, capital gains distributions and redemption
and exchange proceeds] from accounts (other than those of certain exempt payees)
without a correct certified Social Security or tax identification number and
certain other certified information or upon notification from the IRS or a
broker that withholding is required. The Fund reserves the right to reject new
account applications without a correct certified Social Security or tax
identification number. The Fund also reserves the right, following 30 days'
notice, to redeem all shares in accounts without a correct certified Social
Security or tax identification number. A shareholder may avoid involuntary
redemption by providing the Fund with a tax identification number during the
30-day notice period.

Minimum balances

Shareholders should maintain a share balance worth at least $2,500, which amount
may be changed by the Board of Trustees. Scudder retirement plans and certain
other accounts have similar or lower minimum balance requirements. A shareholder
may open an account with at least $1,000, if an automatic investment plan of
$100/month is established.

Shareholders who maintain a non-fiduciary account balance of less than $2,500 in
the Fund, without establishing an automatic investment plan, will be assessed an
annual $10.00 per fund charge with the fee to be paid to the Fund. The $10.00
charge will not apply to shareholders with a combined household account balance
in any of the Scudder Funds of $25,000 or more. The Fund reserves the right,
following 60 days' written notice to shareholders, to redeem all shares in
accounts below $250, including accounts of new investors, where a reduction in
value has occurred due to a redemption or exchange out of the account. The Fund
will mail the proceeds of the redeemed account to the shareholder. Reductions in
value that result solely from market activity will not trigger an involuntary
redemption. Retirement accounts and certain other accounts will not be assessed
the $10.00 charge or be subject to automatic liquidation. Please refer to
"Exchanges and Redemptions--Other information" in the Fund's Statement of
Additional Information for more information.

14
<PAGE>

Third party transactions

If purchases and redemptions of Fund shares are arranged and settlement is made
at an investor's election through a member of the National Association of
Securities Dealers, Inc., other than Scudder Investor Services, Inc., that
member may, at its discretion, charge a fee for that service.

Redemption-in-kind

The Fund reserves the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption or repurchase order by making
payment in whole or in part in readily marketable securities chosen by the Fund
and valued as they are for purposes of computing the Fund's net asset value (a
redemption-in-kind). If payment is made in securities, a shareholder may incur
transaction expenses in converting these securities to cash. The Trust has
elected, however, to be governed by Rule 18f-1 under the 1940 Act, as a result
of which the Fund is obligated to redeem shares, with respect to any one
shareholder during any 90-day period, solely in cash up to the lesser of
$250,000 or 1% of the net asset value of the Fund at the beginning of the
period.

Shareholder benefits

Experienced professional management

Scudder Kemper Investments, Inc., one of the nation's most experienced
investment management firms, actively manages your Scudder fund investment.
Professional management is an important advantage for investors who do not have
the time or expertise to invest directly in individual securities.

A team approach to investing

Scudder Classic Growth Fund is managed by a team of Scudder Kemper 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 the Adviser's large
staff of economists, research analysts, traders and other investment specialists
who work in the Adviser's offices across the United States and abroad. Scudder
Kemper believes its team approach benefits Fund investors by bringing together
many disciplines and leveraging its extensive resources.

Lead Portfolio Manager William F. Gadsden focuses on overall investment strategy
and has 15 years of investment industry experience and joined the Adviser in
1983. Bruce F. Beaty, Portfolio Manager, focuses on securities selection and
assists with the creation and implementation of investment strategy for the
Fund. He has 16 years of investment industry experience and joined the Adviser
in 1991.

SAIL(TM)--Scudder Automated Information Line

For personalized account information including fund prices, yields and account
balances, to perform transactions in existing Scudder fund accounts, or to
obtain information on any Scudder fund, shareholders can call Scudder's
Automated Information Line (SAIL) at 1-800-343-2890, 24 hours a day. During
periods of extreme economic or market changes, or other conditions, it may be
difficult for you to effect telephone transactions in your account. In such an
event you should write to the Fund; please see "How to contact Scudder" for the
address.

Investment flexibility

Scudder offers toll-free telephone exchange between funds at current net asset
value. You can move your investments among money market, income, growth,
tax-free and growth and income funds with a simple toll-free call or, if you
prefer, by sending your instructions through the mail or by fax. (The exchange
privilege may not be available for certain Scudder funds. For more information,
please call 1-800-225-5163.) Telephone and fax redemptions and exchanges are
subject to termination and their terms are subject to change at any time by the
Fund or the transfer agent. In some cases, the transfer agent or Scudder

15
<PAGE>

Investor Services, Inc. may impose additional conditions on telephone
transactions.

Personal CounselSM -- A Managed Fund Portfolio Program

If you would like to receive direct guidance and management of your overall
mutual fund portfolio to help you pursue your investment goals, you may be
interested in Personal Counsel from Scudder. Personal Counsel, a program of
Scudder Investor Services, Inc., a registered investment adviser and a
subsidiary of Scudder Kemper Investments, Inc., combines the benefits of a
customized portfolio of pure no-load Scudder Funds with ongoing portfolio
monitoring and individualized service, for an annual fee of generally 1% or less
of assets (with a $1,000 minimum). In addition, it draws upon the Adviser's more
than 75-year heritage of providing investment counsel to large corporate and
private clients. If you have $100,000 or more to invest initially and would like
more information about Personal Counsel, please call 1-800-700-0183.

Dividend reinvestment plan

You may have dividends and distributions automatically reinvested in additional
Fund shares. Please call 1-800-225-5163 to request this feature.

Shareholder statements

You receive a detailed account statement every time you purchase or redeem
shares. All of your statements should be retained to help you keep track of
account activity and the cost of shares for tax purposes.

Shareholder reports

In addition to account statements, you receive periodic shareholder reports
highlighting relevant information, including investment results and a review of
portfolio changes.

To reduce the volume of mail you receive, only one copy of most Fund reports,
such as the Fund's Annual Report, may be mailed to your household (same surname,
same address). Please call 1-800-225-5163 if you wish to receive additional
shareholder reports.

Newsletters

Four times a year, Scudder sends you Perspectives, an informative newsletter
covering economic and investment developments, service enhancements and other
topics of interest to Scudder fund investors.

Scudder Investor Centers

As a convenience to shareholders who like to conduct business in person, Scudder
Investor Services, Inc. maintains Investor Centers in Boca Raton, Boston,
Chicago, New York and San Francisco.

T.D.D. service for the hearing impaired

Scudder's full range of investor information and shareholder services is
available to hearing impaired investors through a toll-free T.D.D. (Telephone
Device for the Deaf) service. If you have access to a T.D.D., call
1-800-543-7916 for investment information or specific account questions and
transactions.

16
<PAGE>

Purchases
<TABLE>
<CAPTION>
<S> <C>
Opening
an account Minimum initial investment: $2,500; IRAs $1,000
Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums.
See appropriate plan literature.

o By Mail Send your completed and signed application and check
Make checks
payable to "The
Scudder Funds."
by regular mail or by express, registered,
to: or certified mail to:
The Scudder Funds Scudder Shareholder
P.O. Box 2291 Service Center
Boston, MA 42 Longwater Drive
02107-2291 Norwell, MA
02061-1612
o By Wire Please see Transaction
information--Purchasing shares-- By
wire for details, including the ABA
wire transfer number. Then call
1-800-225-5163 for instructions.
o In Person Visit one of our Investor Centers to complete your application with the
help of a Scudder representative. Investor Center locations are listed
under Shareholder benefits.
-----------------------------------------------------------------------------------------------------------------------

Purchasing
additional shares Minimum additional investment: $100; IRAs $50
Group retirement plans (401(k), 403(b), etc.) have similar or lower minimums.
See appropriate plan literature.

Make checks o By Mail Send a check with a Scudder investment slip, or with a letter of
payable to "The instruction including your account number and the complete Fund name, to
Scudder Funds." the appropriate address listed above.

o By Wire Please see Transaction information--Purchasing shares-- By
wire for details, including the ABA wire transfer number.

o In Person Visit one of our Investor Centers to make an additional
investment in your Scudder fund account. Investor Center locations
are listed under Shareholder benefits.

o By Telephone Please see Transaction information--Purchasing shares-- By
QuickBuy or By telephone order for more details.

o By Automatic You may arrange to make investments on a regular basis
through automatic Investment Plan deductions from your bank checking
account. Please call 1-800-225-5163 ($50 minimum) for more information and an
enrollment form.

17
<PAGE>

Exchanges and redemptions

Exchanging
shares Minimum investments: $2,500 to establish a new account;
$100 to exchange among existing accounts

o By Telephone To speak with a service representative, call 1-800-225-5163 from
8 a.m. to 8 p.m. eastern time or to access SAIL(TM), Scudder's Automated
Information Line, call 1-800-343-2890 (24 hours a day).

o By Mail Print or type your instructions and include:
or Fax - the name of the Fund and the account number you are exchanging from;
- your name(s) and address as they appear on your account;
- the dollar amount or number of shares you wish to exchange;
- the name of the Fund you are exchanging into;
- your signature(s) as it appears on your account; and
- a daytime telephone number.

Send your instructions
by regular mail to: or by express, registered, or by fax to:
or certified mail to:
The Scudder Funds Scudder Shareholder 1-800-821-6234
P.O. Box 2291 Service Center
Boston, MA 02107-2291 42 Longwater Drive
Norwell, MA
02061-1612

Redeeming shares o By Telephone To speak with a service representative, call 1-800-225-5163 from 8 a.m. to 8 p.m.
eastern time or to access SAIL(TM), Scudder's Automated Information Line, call
1-800-343-2890 (24 hours a day). You may have redemption proceeds sent to your
predesignated bank account, or redemption proceeds of up to $100,000 sent to your
address of record.

o By Mail Send your instructions for redemption to the appropriate address or fax number
or Fax above and include:

- the name of the Fund and account number you are redeeming from;
- your name(s) and address as they appear on your account;
- the dollar amount or number of shares you wish to redeem;
- your signature(s) as it appears on your account; and
- a daytime telephone number.

A signature guarantee is required for redemptions over $100,000. See Transaction
information--Redeeming shares.

o By Automatic You may arrange to receive automatic cash payments periodically. Call
Withdrawal Plan 1-800-225-5163 for more information and an enrollment form.

</TABLE>

18
<PAGE>

Scudder Kemper tax-advantaged retirement plans

Scudder Kemper offers a variety of tax-advantaged retirement plans for
individuals, businesses and non-profit organizations. These flexible plans are
designed for use with the Scudder Family of Funds (except Scudder tax-free
funds, which are inappropriate for such plans). Scudder Funds offer a broad
range of investment objectives and can be used to seek almost any investment
goal. Using Scudder's retirement plans can help shareholders save on current
taxes while building their retirement savings.

o Scudder No-Fee IRAs. These retirement plans allow a maximum annual
contribution of up to $2,000 per person for anyone with earned income (up
to $2,000 per individual for married couples if only one spouse has earned
income). Many people can deduct all or part of their contributions from
their taxable income, and all investment earnings accrue on a tax-deferred
basis. The Scudder No-Fee IRA charges you no annual custodial fee.

o Scudder Roth No-Fee IRAs. Similar to the traditional IRA in many respects,
these retirement plans provide a unique opportunity for qualifying
individuals to accumulate investment earnings tax free. Unlike a
traditional IRA, with a Roth IRA, if you meet the distribution
requirements, you can withdraw your money without paying any taxes on the
earnings. The Scudder Roth IRA charges you no annual custodial fee.

o 401(k) Plans. 401(k) plans allow employers and employees to make
tax-deductible retirement contributions. Scudder offers a full service
program that includes recordkeeping, prototype plan, employee
communications and trustee services, as well as investment options.

o Profit Sharing and Money Purchase Pension Plans. These plans allow
corporations, partnerships and people who are self-employed to make annual,
tax-deductible contributions of up to $30,000 for each person covered by
the plans. Plans may be adopted individually or paired to maximize
contributions. These are sometimes known as Keogh plans. The Scudder Keogh
charges you no annual custodial fee.

o 403(b) Plans. Retirement plans for tax-exempt organizations and school
systems to which employers and employees may both contribute.

o SEP-IRAs. Easily administered retirement plans for small businesses and
self-employed individuals. The maximum annual contribution to SEP-IRA
accounts is adjusted each year for inflation. The Scudder SEP-IRA charges
you no annual custodial fee.

o Scudder Horizon Plan. A no-load variable annuity that lets you build assets
by deferring taxes on your investment earnings. You can start with $2,500
or more.

Scudder Trust Company (an affiliate of the Adviser) is Trustee or Custodian for
some of these plans and is paid an annual fee for some of the above retirement
plans. For information about establishing a Scudder No-Fee IRA, SEP-IRA, Profit
Sharing Plan, Money Purchase Pension Plan or a Scudder Horizon Plan, please call
1-800-225-2470. For information about 401(k)s or 403(b)s please call
1-800-323-6105. To effect transactions in existing IRA, SEP-IRA, Profit Sharing
or Pension Plan accounts, call 1-800-225-5163.

The variable annuity contract is provided by Charter National Life Insurance
Company (in New York State, Intramerica Life Insurance Company [S 1802]). The
contract is offered by Scudder Insurance Agency, Inc. (in New York State, Nevada
and Montana, Scudder Insurance Agency of New York, Inc.). CNL, Inc. is the
Principal Underwriter. Scudder Horizon Plan is not available in all states.

Scudder Investor Relations is a service provided through Scudder Investor
Services, Inc., Distributor.

19
<PAGE>

Trustees and Officers

Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General Manager,
WGBH Educational Foundation
Dawn-Marie Driscoll
Trustee; Executive Fellow, Center for Business Ethics, Bentley College
Peter B. Freeman
Trustee; Director, The A. H. Belo Company
George M. Lovejoy, Jr.
Trustee; President and Director,
Fifty Associates
Wesley W. Marple, Jr.
Trustee; Professor of Business Administration, Northeastern University
Kathryn L. Quirk*
Trustee, Vice President and Assistant Secretary
Jean C. Tempel
Trustee; Managing Partner,
Technology Equity Partners
Bruce F. Beaty*
Vice President
Philip S. Fortuna*
Vice President
William F. Gadsden*
Vice President
Jerard K. Hartman*
Vice President
Robert T. Hoffman*
Vice President
Thomas W. Joseph*
Vice President
Valerie F. Malter*
Vice President
Thomas F. McDonough*
Vice President, Secretary and
Assistant Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Caroline Pearson*
Assistant Secretary

*Scudder Kemper Investments, Inc.

20
<PAGE>

Investment products and services

The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series--
Premium Shares*
Managed Shares*
Scudder Government Money Market Series--
Managed Shares*

Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--
Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**

Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**

U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund

Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund

Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio

U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund

U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund

Growth
Scudder Classic Growth Fund
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund

Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Emerging Markets Growth Fund
Scudder Gold Fund

Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.

Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP-IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan **+++ +++
(a variable annuity)

Education Accounts
- ------------------
Education IRA
UGMA/UTMA

Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal Fund, Inc.

For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed in order from
expected least risk to most risk. Certain Scudder funds may not be available for
purchase or exchange. +A portion of the income from the tax-free funds may be
subject to federal, state, and local taxes. *A class of shares of the Fund.
**Not available in all states. +++ +++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 Kemper Investments, Inc., are traded on the New York Stock Exchange and,
in some cases, on various foreign stock exchanges.

21
<PAGE>

How to contact Scudder

Account Service and Information:
<S> <C>

For existing account service and transactions
Scudder Investor Relations -- 1-800-225-5163

For 24 hour account information, fund information, exchanges, and an
overview of all the services available to you

Scudder Electronic Account Services -- http://funds.scudder.com

For personalized information about your Scudder accounts, exchanges and redemptions

Scudder Automated Information Line (SAIL) -- 1-800-343-2890

Investment Information:

For information about the Scudder funds, including additional
applications and prospectuses, or for answers to investment questions

Scudder Investor Relations -- 1-800-225-2470
[email protected]

Scudder's World Wide Web Site -- http://funds.scudder.com

For establishing 401(k) and 403(b) plans

Scudder Defined Contribution Services -- 1-800-323-6105

Scudder Brokerage Services:

To receive information about this discount brokerage service and to obtain an application

Scudder Brokerage Services* -- 1-800-700-0820

Personal Counsel(SM) -- A Managed Fund Portfolio Program:

To receive information about this mutual fund portfolio guidance and management program

Personal Counsel from Scudder -- 1-800-700-0183

Please address all correspondence to:

The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291

Or Stop by a Scudder Investor Center:

Many shareholders enjoy the personal, one-on-one service of the Scudder
Investor Centers. Check for an Investor Center near you--they can be
found in the following cities:

Boca Raton Chicago San Francisco
Boston New York

Scudder Investor Relations and Scudder Investor Centers are services provided
through Scudder Investor Services, Inc., Distributor.
</TABLE>
* Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA
02061--Member NASD/SIPC.

22
<PAGE>

SCUDDER CLASSIC GROWTH FUND

A Pure No-Load(TM) (No Sales Charges) Mutual Fund Seeking
Long-Term Growth of Capital with Reduced Share Price
Volatility Compared to Other Capital Growth Mutual Funds

- --------------------------------------------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION

January 1, 1998

- --------------------------------------------------------------------------------

This Statement of Additional Information is not a prospectus and should be
read in conjunction with the prospectus of Scudder Classic Growth Fund dated
January 1, 1998, as amended from time to time, copies of which may be obtained
without charge by writing to Scudder Investor Services, Inc., Two International
Place, Boston, Massachusetts 02110-4103.
<PAGE>

TABLE OF CONTENTS
Page

THE FUND'S INVESTMENT OBJECTIVES AND POLICIES .............................. 1
General Investment Objectives and Policies ........................... 1
Master/feeder structure .............................................. 2
Specialized Investment Techniques .................................... 2
Investment Restrictions .............................................. 13

PURCHASES .................................................................. 14
Additional Information About Opening An Account ...................... 14
Additional Information About Making Subsequent Investments ........... 14
Additional Information About Making Subsequent
Investments by QuickBuy ........................................... 15
Checks ............................................................... 15
Wire Transfer of Federal Funds ....................................... 15
Share Price .......................................................... 16
Share Certificates ................................................... 16
Other Information .................................................... 16

EXCHANGES AND REDEMPTIONS .................................................. 16
Exchanges ............................................................ 16
Redemption by Telephone .............................................. 17
Redemption by QuickSell .............................................. 18
Redemption by Mail or Fax ............................................ 18
Redemption-in-Kind ................................................... 19
Other Information .................................................... 19

FEATURES AND SERVICES OFFERED BY THE FUND .................................. 20
The Pure No-Load(TM) Concept ......................................... 20
Internet access ...................................................... 21
Dividend and Capital Gain Distribution Options ....................... 22
Scudder Investor Centers ............................................. 22
Reports to Shareholders .............................................. 22
Transaction Summaries ................................................ 22

THE SCUDDER FAMILY OF FUNDS ................................................ 23

SPECIAL PLAN ACCOUNTS ...................................................... 27
Scudder Retirement Plans: Profit-Sharing and Money Purchase
Pension Plans for Corporations and Self-Employed Individuals ...... 28
Scudder 401(k): Cash or Deferred Profit-Sharing Plan for
Corporations and Self-Employed Individuals ........................ 28
Scudder IRA: Individual Retirement Account .......................... 28
Scudder Roth IRA: Individual Retirement Account ..................... 29
Scudder 403(b) Plan .................................................. 30
Automatic Withdrawal Plan ............................................ 30
Group or Salary Deduction Plan ....................................... 30
Automatic Investment Plan ............................................ 30
Uniform Transfers/Gifts to Minors Act ................................ 31

DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS .................................. 31

PERFORMANCE INFORMATION .................................................... 32
Average Annual Total Return .......................................... 32
Cumulative Total Return .............................................. 32
Total Return ......................................................... 32
Comparison of Fund Performance ....................................... 32

i
<PAGE>

TABLE OF CONTENTS (continued)
Page

ORGANIZATION OF THE FUND ................................................... 36

INVESTMENT ADVISER ......................................................... 37
Personal Investments by Employees of the Adviser ..................... 40

TRUSTEES AND OFFICERS ...................................................... 40

REMUNERATION ............................................................... 42
Responsibilities of the Board--Board and Committee Meetings .......... 42
Compensation of Officers and Trustees of the Fund .................... 43

DISTRIBUTOR ................................................................ 44

TAXES ...................................................................... 44

PORTFOLIO TRANSACTIONS ..................................................... 48
Brokerage Commissions ................................................ 48
Portfolio Turnover ................................................... 49

NET ASSET VALUE ............................................................ 50

ADDITIONAL INFORMATION ..................................................... 50
Experts .............................................................. 50
Other Information .................................................... 51

FINANCIAL STATEMENTS ....................................................... 52

ii
<PAGE>

THE FUND'S INVESTMENT OBJECTIVES AND POLICIES

(See "Investment objective and policies" in the Fund's prospectus.)

Scudder Classic Growth Fund (the "Fund") is a diversified, pure
no-load(TM) series of Scudder Investment Trust (the "Trust"), an open-end
management investment company which continuously offers and redeems shares at
net asset value. The Fund is a company of the type commonly known as a mutual
fund.

General Investment Objectives and Policies

The Scudder Classic Growth Fund (the "Fund"), a series of Scudder
Investment Trust (the "Trust"), seeks to provide long-term growth of capital
with reduced share price volatility compared to other growth mutual funds. This
diversified equity fund is designed for investors looking to grow their
investment principal over time for retirement and other long-term needs. While
current income is not a stated objective of the Fund, many of the Fund's
securities may provide regular dividends, which are also expected to grow over
time.

While the Fund is broadly diversified and conservatively managed, with
attention paid to stock valuation and risk, its share price will move up and
down with changes in the general level of the financial markets. Accordingly,
shareholders should be comfortable with stock market risk and view the Fund as a
long-term investment.

Except as otherwise indicated, the Fund's investment objectives and
policies are not fundamental and may be changed without a vote of shareholders.
If there is a change in a Fund's investment objective, shareholders should
consider whether the Fund remains an appropriate investment in light of their
then current financial position and needs. There can be no assurance that the
Fund's objectives will be met.

Under normal market conditions, the Fund invests primarily in a
diversified portfolio of common stocks which the Fund's investment adviser,
Scudder Kemper Investments, Inc. (the "Adviser"), believes offers above-average
appreciation potential yet, as a portfolio, offers the potential for less share
price volatility than other growth mutual funds.

In seeking such investments, the Adviser focuses its investment in high
quality, medium- to large-sized U.S. companies with leading competitive
positions. Using in-depth fundamental company research, along with proprietary
financial quality, stock rating and risk measures, the Adviser looks for
companies with strong and sustainable earnings growth, a proven ability to add
value over time, and reasonable stock market valuations. These companies often
have important business franchises, leading products, services or technologies,
or dominant marketing and distribution systems.

The Fund allocates its investments among different industries and
companies, and adjusts its portfolio securities based on long-term investment
considerations as opposed to short-term trading. While the Fund emphasizes U.S.
investments, it can commit a portion of its assets to the equity securities of
foreign growth companies that meet the criteria applicable to domestic
investments.

While the Fund invests primarily in common stocks, it can purchase other
types of equity securities including securities convertible into common stocks,
preferred stocks, rights, illiquid and restricted securities and warrants. The
Fund's policy is to remain substantially invested in these securities, which may
be listed on national securities exchanges or, less commonly, traded
over-the-counter. Also, the Fund may enter into repurchase agreements, reverse
repurchase agreements and engage in strategic transactions.

For temporary defensive purposes, the Fund may invest without limit in
high quality money market securities, including U.S. Treasury bills, repurchase
agreements, commercial paper, certificates of deposit issued by domestic and
foreign branches of U.S. banks, bankers' acceptances, and other debt securities,
such as U.S. Government obligations and corporate debt instruments when the
Adviser deems such a position advisable in light of economic or market
conditions. It is impossible to predict accurately how long such alternate
strategies may be utilized. The Fund may invest up to 20% of its net assets in
debt securities when the Adviser anticipates that the capital appreciation on
debt
<PAGE>

securities is likely to equal or exceed the capital appreciation on common
stocks over a selected time, such as during periods of unusually high interest
rates. As interest rates fall, the prices of debt securities tend to rise. The
Fund may also invest in money market securities in anticipation of meeting
redemptions or paying Fund expenses.

Master/feeder Structure

The Board of Trustees has the discretion to retain the current
distribution arrangement for the Fund while investing in a master fund in a
master/feeder structure as described below.

A master/feeder fund structure is one in which a fund (a "feeder fund"),
instead of investing directly in a portfolio of securities, invests most or all
of its investment assets in a separate registered investment company (the
"master fund") with substantially the same investment objective and policies as
the feeder fund. Such a structure permits the pooling of assets of two or more
feeder funds, preserving separate identities or distribution channels at the
feeder fund level. Based on the premise that certain of the expenses of
operating an investment portfolio are relatively fixed, a larger investment
portfolio may eventually achieve a lower ratio of operating expenses to average
net assets. An existing investment company is able to convert to a feeder fund
by selling all of its investments, which involves brokerage and other
transaction costs and realization of a taxable gain or loss, or by contributing
its assets to the master fund and avoiding transaction costs and, if proper
procedures are followed, the realization of taxable gain or loss.

Specialized Investment Techniques

Debt Securities. When the Adviser believes that it is appropriate to do so in
order to achieve the Fund's objective of long-term capital appreciation, the
Fund may invest in debt securities including bonds of private issuers and
supranational organizations. Portfolio debt investments will be selected on the
basis of, among other things, credit quality, and the fundamental outlooks for
currency, economic and interest rate trends, taking into account the ability to
hedge a degree of currency or local bond price risk. The Fund may purchase
"investment-grade" bonds, rated Aaa, Aa, A or Baa by Moody's Investor Services,
Inc. ("Moody's") or AAA, AA, A or BBB by Standard & Poor's Corporation ("S&P")
or, if unrated, judged to be of equivalent quality as determined by the Adviser.

Convertible Securities. The Fund may invest in convertible securities which are
bonds, notes, debentures, preferred stocks, and other securities which are
convertible into common stocks. Investments in convertible securities can
provide income through interest and dividend payments and/or an opportunity for
capital appreciation by virtue of their conversion or exchange features.

The convertible securities in which the Fund may invest may be converted
or exchanged at a stated or determinable exchange ratio into underlying shares
of common stock. The exchange ratio for any particular convertible security may
be adjusted from time to time due to stock splits, dividends, spin-offs, other
corporate distributions, or scheduled changes in the exchange ratio. Convertible
debt securities and convertible preferred stocks, until converted, have general
characteristics similar to both debt and equity securities. Although to a lesser
extent than with debt securities generally, the market value of convertible
securities tends to decline as interest rates increase and, conversely, tends to
increase as interest rates decline. In addition, because of the conversion or
exchange feature, the market value of convertible securities typically changes
as the market value of the underlying common stocks changes, and, therefore,
also tends to follow movements in the general market for equity securities. A
unique feature of convertible securities is that as the market price of the
underlying common stock declines, convertible securities tend to trade
increasingly on a yield basis and so may not experience market value declines to
the same extent as the underlying common stock. When the market price of the
underlying common stock increases, the prices of the convertible securities tend
to rise as a reflection of the value of the underlying common stock, although
typically not as much as the underlying common stock. While no securities
investments are without risk, investments in convertible securities generally
entail less risk than investments in common stock of the same issuer.

As fixed income securities, convertible securities are investments which
provide for a stream of income (or in the case of zero coupon securities,
accretion of income) with generally higher yields than common stocks. Of course,
like all fixed income securities, there can be no assurance of income or
principal payments because the issuers of the

2
<PAGE>

convertible securities may default on their obligations. Convertible securities
generally offer lower yields than non-convertible securities of similar quality
because of their conversion or exchange features.

Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock, of the
same issuer. However, because of the subordination feature, convertible bonds
and convertible preferred stock typically have lower ratings than similar
non-convertible securities.

Convertible securities may be issued as fixed income obligations that pay
current income or as zero coupon notes and bonds, including Liquid Yield Option
Notes (LYONs). Zero coupon securities pay no cash income and are sold at
substantial discounts from their value at maturity. When held to maturity, their
entire income, which consists of accretion of discount, comes from the
difference between the purchase price and their value at maturity. Zero coupon
convertible securities offer the opportunity for capital appreciation as
increases (or decreases) in market value of such securities closely follow the
movements in the market value of the underlying common stock. Zero coupon
convertible securities generally are expected to be less volatile than the
underlying common stocks as they usually are issued with shorter maturities (15
years or less) and are issued with options and/or redemption features
exercisable by the holder of the obligation entitling the holder to redeem the
obligation and receive a defined cash payment.

Repurchase Agreements. The Fund may enter into repurchase agreements with member
banks of the Federal Reserve System, any foreign bank or with any domestic or
foreign broker-dealer which is recognized as a reporting government securities
dealer if the creditworthiness of the bank or broker-dealer has been determined
by the Adviser to be at least as high as that of other obligations the Fund may
purchase.

A repurchase agreement provides a means for the Fund to earn income on
funds for periods as short as overnight. It is an arrangement under which the
purchaser (i.e., the Fund) acquires a security ("Obligation") and the seller
agrees, at the time of sale, to repurchase the Obligation at a specified time
and price. Securities subject to a repurchase agreement are held in a segregated
account and the value of such securities kept at least equal to the repurchase
price on a daily basis. The repurchase price may be higher than the purchase
price, the difference being income to the Fund, or the purchase and repurchase
prices may be the same, with interest at a stated rate due to the Fund together
with the repurchase price upon repurchase. In either case, the income to the
Fund is unrelated to the interest rate on the Obligation itself. Obligations
will be held by the Custodian or in the Federal Reserve Book Entry system.

For purposes of the Investment Company Act of 1940, as amended (the "1940
Act"), a repurchase agreement is deemed to be a loan from the Fund to the seller
of the Obligation subject to the repurchase agreement and is therefore subject
to the Fund's investment restriction applicable to loans. It is not clear
whether a court would consider the Obligation purchased by the Fund subject to a
repurchase agreement as being owned by the Fund or as being collateral for a
loan by the Fund to the seller. In the event of the commencement of bankruptcy
or insolvency proceedings with respect to the seller of the Obligation before
repurchase of the Obligation under a repurchase agreement, the Fund may
encounter delay and incur costs before being able to sell the security. Delays
may involve loss of interest or decline in price of the Obligation. If the court
characterizes the transaction as a loan and the Fund has not perfected a
security interest in the Obligation, the Fund may be required to return the
Obligation to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, the Fund would be at risk of losing some or
all of the principal and income involved in the transaction. As with any
unsecured debt instrument purchased for the Fund, the Adviser seeks to minimize
the risk of loss through repurchase agreements by analyzing the creditworthiness
of the obligor, in this case the seller of the Obligation. Apart from the risk
of bankruptcy or insolvency proceedings, there is also the risk that the seller
may fail to repurchase the Obligation, in which case the Fund may incur a loss
if the proceeds to the Fund of the sale to a third party are less than the
repurchase price. However, if the market value of the Obligation subject to the
repurchase agreement becomes less than the repurchase price (including
interest), the Fund will direct the seller of the Obligation to deliver
additional securities so that the market value of all securities subject to the
repurchase agreement will equal or exceed the repurchase price. It is possible
that the Fund will be unsuccessful in seeking to enforce the seller's
contractual obligation to deliver additional securities. A repurchase agreement
with

3
<PAGE>

foreign banks may be available with respect to government securities of the
particular foreign jurisdiction, and such repurchase agreements involve risks
similar to repurchase agreements with U.S. entities.

Reverse Repurchase Agreements. In a reverse repurchase agreement, the Fund sells
a portfolio instrument to another party, such as a bank or broker-dealer, in
return for cash and agrees to repurchase the instrument at a particular price
and time. While a reverse repurchase agreement is outstanding, the Fund will
maintain liquid assets in a segregated custodial account to cover its obligation
under the agreement. The Fund will enter into reverse repurchase agreements only
with parties whose creditworthiness has been found satisfactory by the Adviser.
Such transactions may increase fluctuations in the market value of the fund's
assets and may be viewed as a form of leverage.

Investing in Foreign Securities. The Fund may invest up to 25% of the Fund's
assets in listed and unlisted foreign securities. Investors should recognize
that investing in foreign securities involves certain special considerations,
including those set forth below, which are not typically associated with
investing in United States securities and which may favorably or unfavorably
affect the Fund's performance. As foreign companies are not generally subject to
uniform accounting and auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic companies, there may be
less publicly available information about a foreign company than about a
domestic company. Many foreign stock markets, while growing in volume of trading
activity, have substantially less volume than the New York Stock Exchange (the
"Exchange"), and securities of some foreign companies are less liquid and more
volatile than securities of domestic companies. Similarly, volume and liquidity
in most foreign markets are less than the volume and liquidity in the United
States and at times, volatility of price can be greater than in the United
States. Further, foreign markets have different clearance and settlement
procedures and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when assets of the Fund are uninvested and no return is earned
thereon. The inability of the Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems either could result in losses to the Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser. Payment
for securities without delivery may be required in certain foreign markets.
Fixed commissions on some foreign stock exchanges are generally higher than
negotiated commissions on U.S. exchanges, although the Fund will endeavor to
achieve the most favorable net results on its portfolio transactions. Further,
the Fund may encounter difficulties or be unable to pursue legal remedies and
obtain judgments in foreign courts. There is generally less government
supervision and regulation of business and industry practices, stock exchanges,
brokers and listed companies than in the United States. It may be more difficult
for the Fund's agents to keep currently informed about corporate actions such as
stock dividends or other matters which may affect the prices of portfolio
securities. Communications between the United States and foreign countries may
be less reliable than within the United States, thus increasing the risk of
delayed settlements of portfolio transactions or loss of certificates for
portfolio securities. In addition, with respect to certain foreign countries,
there is the possibility of nationalization, expropriation, the imposition of
withholding or confiscatory taxes, political, social, or economic instability,
or diplomatic developments which could affect United States investments in those
countries. Investments in foreign securities may also entail certain risks, such
as possible currency blockages or transfer restrictions, and the difficulty of
enforcing rights in other countries. Moreover, individual foreign economies may
differ favorably or unfavorably from the United States economy in such respects
as growth of gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position.

These considerations generally are more of a concern in developing
countries. For example, the possibility of revolution and the dependence on
foreign economic assistance may be greater in these countries than in developed
countries. The management of the Fund seeks to mitigate the risks associated
with these considerations through diversification and active professional
management. Although investments in companies domiciled in developing countries
may be subject to potentially greater risks than investments in developed
countries, the Fund will not invest in any securities of issuers located in
developing countries if the securities, in the judgment of the Adviser, are
speculative.

Foreign Currencies. The Fund may invest in foreign securities. Because
investments in foreign securities usually will involve currencies of foreign
countries, and because the Fund may hold foreign currencies and forward
contracts,

4
<PAGE>

futures contracts and options on futures contracts on foreign currencies, the
value of the assets of the Fund as measured in U.S. dollars may be affected
favorably or unfavorably by changes in foreign currency exchange rates and
exchange control regulations, and the Fund may incur costs in connection with
conversions between various currencies. Although the Fund values its assets
daily in terms of U.S. dollars, it does not intend to convert its holdings of
foreign currencies into U.S. dollars on a daily basis. It will do so from time
to time, and investors should be aware of the costs of currency conversion.
Although foreign exchange dealers do not charge a fee for conversion, they do
realize a profit based on the difference (the "spread") between the prices at
which they are buying and selling various currencies. Thus, a dealer may offer
to sell a foreign currency to the Fund at one rate, while offering a lesser rate
of exchange should the Fund desire to resell that currency to the dealer. The
Fund will conduct its foreign currency exchange transactions either on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange
market, or through entering into forward or futures contracts to purchase or
sell foreign currencies.

Depositary Receipts. The Fund may invest indirectly in securities of emerging
country issuers through sponsored or unsponsored American Depositary Receipts
("ADRs"), Global Depositary Receipts ("GDRs"), International Depositary Receipts
("IDRs") and other types of Depositary Receipts (which, together with ADRs, GDRs
and IDRs are hereinafter referred to as "Depositary Receipts"). Depositary
Receipts may not necessarily be denominated in the same currency as the
underlying securities into which they may be converted. In addition, the issuers
of the stock of unsponsored Depositary Receipts are not obligated to disclose
material information in the United States and, therefore, there may not be a
correlation between such information and the market value of the Depositary
Receipts. ADRs are Depositary Receipts typically issued by a U.S. bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation. GDRs, IDRs and other types of Depositary Receipts are typically
issued by foreign banks or trust companies, although they also may be issued by
United States banks or trust companies, and evidence ownership of underlying
securities issued by either a foreign or a United States corporation. Generally,
Depositary Receipts in registered form are designed for use in the United States
securities markets and Depositary Receipts in bearer form are designed for use
in securities markets outside the United States. For purposes of the Fund's
investment policies, the Fund's investments in ADRs, GDRs and other types of
Depositary Receipts will be deemed to be investments in the underlying
securities. Depositary Receipts other than those denominated in U.S. dollars
will be subject to foreign currency exchange rate risk. Certain Depositary
Receipts may not be listed on an exchange and therefore may be illiquid
securities.

Borrowing. As a matter of fundamental policy, the Fund will not borrow money,
except as permitted under the 1940 Act, as amended, and as interpreted or
modified by regulatory authority having jurisdiction, from time to time. While
the Trustees do not currently intend to borrow for investment leverage purposes,
if such a strategy were implemented in the future it would increase the Fund's
volatility and the risk of loss in a declining market. Borrowing by the Fund
will involve special risk considerations. Although the principal of the Fund's
borrowings will be fixed, the Fund's assets may change in value during the time
a borrowing is outstanding, thus increasing exposure to capital risk.

Strategic Transactions and Derivatives. The Fund may, but is not required to,
utilize various other investment strategies as described below to hedge various
market risks (such as interest rates, currency exchange rates, and broad or
specific equity or fixed-income market movements), to manage the effective
maturity or duration of the fixed-income securities in the Fund's portfolio, or
to enhance potential gain. These strategies may be executed through the use of
derivative contracts. Such strategies are generally accepted as a part of modern
portfolio management and are regularly utilized by many mutual funds and other
institutional investors. Techniques and instruments may change over time as new
instruments and strategies are developed or regulatory changes occur.

In the course of pursuing these investment strategies, the Fund may
purchase and sell exchange-listed and over-the-counter put and call options on
securities, equity and fixed-income indices and other financial instruments,
purchase and sell financial futures contracts and options thereon, enter into
various interest rate transactions such as swaps, caps, floors or collars, and
enter into various currency transactions such as currency forward contracts,
currency futures contracts, currency swaps or options on currencies or currency
futures (collectively, all the above are called "Strategic Transactions").
Strategic Transactions may be used without limit to attempt to protect against
possible changes in the market value of securities held in or to be purchased
for the Fund's portfolio resulting from securities markets or currency exchange
rate fluctuations, to protect the Fund's unrealized gains in the value of its
portfolio

5
<PAGE>

securities, to facilitate the sale of such securities for investment purposes,
to manage the effective maturity or duration of the fixed-income securities in
the Fund's portfolio, or to establish a position in the derivatives markets as a
temporary substitute for purchasing or selling particular securities. Some
Strategic Transactions may also be used to enhance potential gain although no
more than 5% of the Fund's assets will be committed to Strategic Transactions
entered into for non-hedging purposes. Any or all of these investment techniques
may be used at any time and in any combination, and there is no particular
strategy that dictates the use of one technique rather than another, as use of
any Strategic Transaction is a function of numerous variables including market
conditions. The ability of the Fund to utilize these Strategic Transactions
successfully will depend on the Adviser's ability to predict pertinent market
movements, which cannot be assured. The Fund will comply with applicable
regulatory requirements when implementing these strategies, techniques and
instruments. Strategic Transactions involving financial futures and options
thereon will be purchased, sold or entered into only for bona fide hedging, risk
management or portfolio management purposes and not for speculative purposes.

Strategic Transactions, including derivative contracts, have risks
associated with them including possible default by the other party to the
transaction, illiquidity and, to the extent the Adviser's view as to certain
market movements is incorrect, the risk that the use of such Strategic
Transactions could result in losses greater than if they had not been used. Use
of put and call options may result in losses to the Fund, force the sale or
purchase of portfolio securities at inopportune times or for prices higher than
(in the case of put options) or lower than (in the case of call options) current
market values, limit the amount of appreciation the Fund can realize on its
investments or cause the Fund to hold a security it might otherwise sell. The
use of currency transactions can result in the Fund incurring losses as a result
of a number of factors including the imposition of exchange controls, suspension
of settlements, or the inability to deliver or receive a specified currency. The
use of options and futures transactions entails certain other risks. In
particular, the variable degree of correlation between price movements of
futures contracts and price movements in the related portfolio position of the
Fund creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the Fund's position. In addition, futures and
options markets may not be liquid in all circumstances and certain
over-the-counter options may have no markets. As a result, in certain markets,
the Fund might not be able to close out a transaction without incurring
substantial losses, if at all. Although the use of futures and options
transactions for hedging should tend to minimize the risk of loss due to a
decline in the value of the hedged position, at the same time they tend to limit
any potential gain which might result from an increase in value of such
position. Finally, the daily variation margin requirements for futures contracts
would create a greater ongoing potential financial risk than would purchases of
options, where the exposure is limited to the cost of the initial premium.
Losses resulting from the use of Strategic Transactions would reduce net asset
value, and possibly income, and such losses can be greater than if the Strategic
Transactions had not been utilized.

General Characteristics of Options. Put options and call options typically have
similar structural characteristics and operational mechanics regardless of the
underlying instrument on which they are purchased or sold. Thus, the following
general discussion relates to each of the particular types of options discussed
in greater detail below. In addition, many Strategic Transactions involving
options require segregation of Fund assets in special accounts, as described
below under "Use of Segregated and Other Special Accounts."

A put option gives the purchaser of the option, upon payment of a premium,
the right to sell, and the writer the obligation to buy, the underlying
security, commodity, index, currency or other instrument at the exercise price.
For instance, the Fund's purchase of a put option on a security might be
designed to protect its holdings in the underlying instrument (or, in some
cases, a similar instrument) against a substantial decline in the market value
by giving the Fund the right to sell such instrument at the option exercise
price. A call option, upon payment of a premium, gives the purchaser of the
option the right to buy, and the seller the obligation to sell, the underlying
instrument at the exercise price. The Fund's purchase of a call option on a
security, financial future, index, currency or other instrument might be
intended to protect the Fund against an increase in the price of the underlying
instrument that it intends to purchase in the future by fixing the price at
which it may purchase such instrument. An American style put or call option may
be exercised at any time during the option period while a European style put or
call option may be exercised only upon expiration or during a fixed period prior
thereto. The Fund is authorized to purchase and sell exchange listed options and
over-the-counter options ("OTC options"). Exchange listed options are issued by
a regulated intermediary such as the Options Clearing Corporation ("OCC"), which
guarantees the performance of the obligations

6
<PAGE>

of the parties to such options. The discussion below uses the OCC as an example,
but is also applicable to other financial intermediaries.

With certain exceptions, OCC issued and exchange listed options generally
settle by physical delivery of the underlying security or currency, although in
the future cash settlement may become available. Index options and Eurodollar
instruments are cash settled for the net amount, if any, by which the option is
"in-the-money" (i.e., where the value of the underlying instrument exceeds, in
the case of a call option, or is less than, in the case of a put option, the
exercise price of the option) at the time the option is exercised. Frequently,
rather than taking or making delivery of the underlying instrument through the
process of exercising the option, listed options are closed by entering into
offsetting purchase or sale transactions that do not result in ownership of the
new option.

The Fund's ability to close out its position as a purchaser or seller of
an OCC or exchange listed put or call option is dependent, in part, upon the
liquidity of the option market. Among the possible reasons for the absence of a
liquid option market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange; (iii)
trading halts, suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities including
reaching daily price limits; (iv) interruption of the normal operations of the
OCC or an exchange; (v) inadequacy of the facilities of an exchange or OCC to
handle current trading volume; or (vi) a decision by one or more exchanges to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms.

The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the option markets.

OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. The
Fund will only sell OTC options (other than OTC currency options) that are
subject to a buy-back provision permitting the Fund to require the Counterparty
to sell the option back to the Fund at a formula price within seven days. The
Fund expects generally to enter into OTC options that have cash settlement
provisions, although they are not required to do so.

Unless the parties provide for it, there is no central clearing or
guaranty function in an OTC option. As a result, if the Counterparty fails to
make or take delivery of the security, currency or other instrument underlying
an OTC option it has entered into with the Fund or fails to make a cash
settlement payment due in accordance with the terms of that option, the Fund
will lose any premium it paid for the option as well as any anticipated benefit
of the transaction. Accordingly, the Adviser must assess the creditworthiness of
each such Counterparty or any guarantor or credit enhancement of the
Counterparty's credit to determine the likelihood that the terms of the OTC
option will be satisfied. The Fund will engage in OTC option transactions only
with U.S. government securities dealers recognized by the Federal Reserve Bank
of New York as "primary dealers" or broker/dealers, domestic or foreign banks or
other financial institutions which have received (or the guarantors of the
obligation of which have received) a short-term credit rating of A-1 from S&P or
P-1 from Moody's or an equivalent rating from any nationally recognized
statistical rating organization ("NRSRO") or are determined to be of equivalent
credit quality by the Adviser. The staff of the Securities and Exchange
Commission (the "SEC") currently takes the position that OTC options purchased
by the Fund, and portfolio securities "covering" the amount of the Fund's
obligation pursuant to an OTC option sold by it (the cost of the sell-back plus
the in-the-money amount, if any) are illiquid, and are subject to the Fund's
limitation on investing its assets in illiquid securities. The Fund can invest
no more than 15% of its net assets in illiquid securities.

7
<PAGE>

If the Fund sells a call option, the premium that it receives may serve as
a partial hedge, to the extent of the option premium, against a decrease in the
value of the underlying securities or instruments in its portfolio or will
increase the Fund's income. The sale of put options can also provide income.

The Fund may purchase and sell call options on securities including U.S.
Treasury and agency securities, mortgage-backed securities, corporate debt
securities, equity securities (including convertible securities) and Eurodollar
instruments that are traded on U.S. and foreign securities exchanges and in the
over-the-counter markets, and on securities indices, currencies and futures
contracts. All calls sold by the Fund must be "covered" (i.e., the Fund must own
the securities or futures contract subject to the call) or must meet the asset
segregation requirements described below as long as the call is outstanding.
Even though the Fund will receive the option premium to help protect it against
loss, a call sold by the Fund exposes the Fund during the term of the option to
possible loss of opportunity to realize appreciation in the market price of the
underlying security or instrument and may require the Fund to hold a security or
instrument which it might otherwise have sold.

The Fund may purchase and sell put options on securities including U.S.
Treasury and agency securities, mortgage-backed securities, corporate debt
securities, equity securities (including convertible securities), and on
securities indices and futures contracts other than futures on individual
corporate debt and individual equity securities. The Fund may also purchase and
sell put options in foreign sovereign debt, Eurodollar instruments and
currencies. The Fund will not sell put options if, as a result, more than 50% of
the Fund's assets would be required to be segregated to cover its potential
obligations under such put options other than those with respect to futures and
options thereon. In selling put options, there is a risk that the Fund may be
required to buy the underlying security at a disadvantageous price above the
market price.

General Characteristics of Futures. The Fund may enter into financial futures
contracts or purchase or sell put and call options on such futures as a hedge
against anticipated interest rate or equity market changes, for duration
management and for risk management purposes. In addition, the Fund may enter
into financial futures contracts or purchase or sell put and call options on
such futures as a hedge against anticipated currency market changes. Futures are
generally bought and sold on the commodities exchanges where they are listed
with payment of initial and variation margin as described below. The sale of a
futures contract creates a firm obligation by the Fund, as seller, to deliver to
the buyer the specific type of financial instrument called for in the contract
at a specific future time for a specified price (or, with respect to index
futures and Eurodollar instruments, the net cash amount). Options on futures
contracts are similar to options on securities except that an option on a
futures contract gives the purchaser the right in return for the premium paid to
assume a position in a futures contract and obligates the seller to deliver such
position.

The Fund's use of financial futures and options thereon will in all cases
be consistent with applicable regulatory requirements and in particular the
rules and regulations of the Commodity Futures Trading Commission and will be
entered into only for bona fide hedging, risk management (including duration
management) or other portfolio management purposes. Typically, maintaining a
futures contract or selling an option thereon requires the Fund to deposit with
a financial intermediary as security for its obligations an amount of cash or
other specified assets (initial margin) which initially is typically 1% to 10%
of the face amount of the contract (but may be higher in some circumstances).
Additional cash or assets (variation margin) may be required to be deposited
thereafter on a daily basis as the mark to market value of the contract
fluctuates. The purchase of an option on financial futures involves payment of a
premium for the option without any further obligation on the part of the Fund.
If the Fund exercises an option on a futures contract it will be obligated to
post initial margin (and potential subsequent variation margin) for the
resulting futures position just as it would for any position. Futures contracts
and options thereon are generally settled by entering into an offsetting
transaction but there can be no assurance that the position can be offset prior
to settlement at an advantageous price, nor that delivery will occur.

The Fund will not enter into a futures contract or related option (except
for closing transactions) if, immediately thereafter, the sum of the amount of
its initial margin and premiums on open futures contracts and options thereon
would exceed 5% of the Fund's total assets (taken at current value); however, in
the case of an option that is in-the-money at the time of the purchase, the
in-the-money amount may be excluded in calculating the 5% limitation. The
segregation requirements with respect to futures contracts and options thereon
are described below.

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<PAGE>

Options on Securities Indices and Other Financial Indices. The Fund also may
purchase and sell call and put options on securities indices and other financial
indices and in so doing can achieve many of the same objectives it would achieve
through the sale or purchase of options on individual securities or other
instruments. Options on securities indices and other financial indices are
similar to options on a security or other instrument except that, rather than
settling by physical delivery of the underlying instrument, they settle by cash
settlement, i.e., an option on an index gives the holder the right to receive,
upon exercise of the option, an amount of cash if the closing level of the index
upon which the option is based exceeds, in the case of a call, or is less than,
in the case of a put, the exercise price of the option (except if, in the case
of an OTC option, physical delivery is specified). This amount of cash is equal
to the excess of the closing price of the index over the exercise price of the
option, which also may be multiplied by a formula value. The seller of the
option is obligated, in return for the premium received, to make delivery of
this amount. The gain or loss on an option on an index depends on price
movements in the instruments making up the market, market segment, industry or
other composite on which the underlying index is based, rather than price
movements in individual securities, as is the case with respect to options on
securities.

Currency Transactions. The Fund may engage in currency transactions with
Counterparties in order to hedge the value of portfolio holdings denominated in
particular currencies against fluctuations in relative value. Currency
transactions include forward currency contracts, exchange listed currency
futures, exchange listed and OTC options on currencies, and currency swaps. A
forward currency contract involves a privately negotiated obligation to purchase
or sell (with delivery generally required) a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. A currency swap is
an agreement to exchange cash flows based on the notional difference among two
or more currencies and operates similarly to an interest rate swap, which is
described below. The Fund may enter into currency transactions with
Counterparties which have received (or the guarantors of the obligations which
have received) a credit rating of A-1 or P-1 by S&P or Moody's, respectively, or
that have an equivalent rating from a NRSRO or (except for OTC currency options)
are determined to be of equivalent credit quality by the Adviser.

The Fund's dealings in forward currency contracts and other currency
transactions such as futures, options, options on futures and swaps will be
limited to hedging involving either specific transactions or portfolio
positions. Transaction hedging is entering into a currency transaction with
respect to specific assets or liabilities of the Fund, which will generally
arise in connection with the purchase or sale of its portfolio securities or the
receipt of income therefrom. Position hedging is entering into a currency
transaction with respect to portfolio security positions denominated or
generally quoted in that currency.

The Fund will not enter into a transaction to hedge currency exposure to
an extent greater, after netting all transactions intended wholly or partially
to offset other transactions, than the aggregate market value (at the time of
entering into the transaction) of the securities held in its portfolio that are
denominated or generally quoted in or currently convertible into such currency,
other than with respect to proxy hedging as described below.

The Fund may also cross-hedge currencies by entering into transactions to
purchase or sell one or more currencies that are expected to decline in value
relative to other currencies to which the Fund has or in which the Fund expects
to have portfolio exposure.

To reduce the effect of currency fluctuations on the value of existing or
anticipated holdings of portfolio securities, the Fund may also engage in proxy
hedging. Proxy hedging is often used when the currency to which the Fund's
portfolio is exposed is difficult to hedge or to hedge against the dollar. Proxy
hedging entails entering into a commitment or option to sell a currency whose
changes in value are generally considered to be correlated to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, in exchange for U.S. dollars. The amount of the
commitment or option would not exceed the value of the Fund's securities
denominated in correlated currencies. For example, if the Adviser considers that
the Austrian schilling is correlated to the German deutschemark (the "D-mark"),
the Fund holds securities denominated in schillings and the Adviser believes
that the value of schillings will decline against the U.S. dollar, the Adviser
may enter into a commitment or option to sell D-marks and buy dollars. Currency
hedging involves some of the same risks and considerations as other

9
<PAGE>

transactions with similar instruments. Currency transactions can result in
losses to the Fund if the currency being hedged fluctuates in value to a degree
or in a direction that is not anticipated. Further, there is the risk that the
perceived correlation between various currencies may not be present or may not
be present during the particular time that the Fund is engaging in proxy
hedging. If the Fund enters into a currency hedging transaction, the Fund will
comply with the asset segregation requirements described below.

Risks of Currency Transactions. The Fund is subject to currency transactions
risks different from those of other portfolio transactions. Because currency
control is of great importance to the issuing governments and influences
economic planning and policy, purchases and sales of currency and related
instruments can be negatively affected by government exchange controls,
blockages, and manipulations or exchange restrictions imposed by governments.
These can result in losses to the Fund if it is unable to deliver or receive
currency or funds in settlement of obligations and could also cause hedges it
has entered into to be rendered useless, resulting in full currency exposure as
well as incurring transaction costs. Buyers and sellers of currency futures are
subject to the same risks that apply to the use of futures generally. Further,
settlement of a currency futures contract for the purchase of most currencies
must occur at a bank based in the issuing nation. Trading options on currency
futures is relatively new, and the ability to establish and close out positions
on such options is subject to the maintenance of a liquid market which may not
always be available. Currency exchange rates may fluctuate based on factors
extrinsic to that country's economy.

Combined Transactions. The Fund may enter into multiple transactions, including
multiple options transactions, multiple futures transactions, multiple currency
transactions (including forward currency contracts) and multiple interest rate
transactions and any combination of futures, options, currency and interest rate
transactions ("component" transactions), instead of a single Strategic
Transaction, as part of a single or combined strategy when, in the opinion of
the Adviser, it is in the best interests of the Fund to do so. A combined
transaction will usually contain elements of risk that are present in each of
its component transactions. Although combined transactions are normally entered
into based on the Adviser's judgment that the combined strategies will reduce
risk or otherwise more effectively achieve the desired portfolio management
goal, it is possible that the combination will instead increase such risks or
hinder achievement of the portfolio management objective.

Swaps, Caps, Floors and Collars. Among the Strategic Transactions into which the
Fund may enter are interest rate, currency and index swaps and the purchase or
sale of related caps, floors and collars. The Fund expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
duration management technique or to protect against any increase in the price of
securities the Fund anticipates purchasing at a later date. The Fund intends to
use these transactions as hedges and not as speculative investments and will not
sell interest rate caps or floors where they do not own securities or other
instruments providing the income stream the Fund may be obligated to pay.
Interest rate swaps involve the exchange by the Fund with another party of their
respective commitments to pay or receive interest, e.g., an exchange of floating
rate payments for fixed rate payments with respect to a notional amount of
principal. A currency swap is an agreement to exchange cash flows on a notional
amount of two or more currencies based on the relative value differential among
them and an index swap is an agreement to swap cash flows on a notional amount
based on changes in the values of the reference indices. The purchase of a cap
entitles the purchaser to receive payments on a notional principal amount from
the party selling such cap to the extent that a specified index exceeds a
predetermined interest rate or amount. The purchase of a floor entitles the
purchaser to receive payments on a notional principal amount from the party
selling such floor to the extent that a specified index falls below a
predetermined interest rate or amount. A collar is a combination of a cap and a
floor that preserves a certain return within a predetermined range of interest
rates or values.

The Fund will usually enter into swaps on a net basis, i.e., the two
payment streams are netted out in a cash settlement on the payment date or dates
specified in the instrument, with the Fund receiving or paying, as the case may
be, only the net amount of the two payments. Inasmuch as these swaps, caps,
floors and collars are entered into for good faith hedging purposes, the Adviser
and the Fund believe such obligations do not constitute senior securities under
the Investment Company Act of 1940 (the "1940 Act") and, accordingly, will not
treat them as being subject to its borrowing restrictions. The Fund will not
enter into any swap, cap, floor or collar transaction unless, at the time of
entering into such transaction, the unsecured long-term debt of the
Counterparty, combined with any credit enhancements, is rated at least A by S&P
or Moody's or has an equivalent rating from a NRSRO or is determined to be

10
<PAGE>

of equivalent credit quality by the Adviser. If there is a default by the
Counterparty, the Fund may have contractual remedies pursuant to the agreements
related to the transaction. The swap market has grown substantially in recent
years with a large number of banks and investment banking firms acting both as
principals and as agents utilizing standardized swap documentation. As a result,
the swap market has become relatively liquid. Caps, floors and collars are more
recent innovations for which standardized documentation has not yet been fully
developed and, accordingly, they are less liquid than swaps.

Eurodollar Instruments. The Fund may make investments in Eurodollar instruments.
Eurodollar instruments are U.S. dollar-denominated futures contracts or options
thereon which are linked to the London Interbank Offered Rate ("LIBOR"),
although foreign currency-denominated instruments are available from time to
time. Eurodollar futures contracts enable purchasers to obtain a fixed rate for
the lending of funds and sellers to obtain a fixed rate for borrowings. The Fund
might use Eurodollar futures contracts and options thereon to hedge against
changes in LIBOR, to which many interest rate swaps and fixed income instruments
are linked.

Risks of Strategic Transactions Outside the U.S. When conducted outside the
U.S., Strategic Transactions may not be regulated as rigorously as in the U.S.,
may not involve a clearing mechanism and related guarantees, and are subject to
the risk of governmental actions affecting trading in, or the prices of, foreign
securities, currencies and other instruments. The value of such positions also
could be adversely affected by: (i) other complex foreign political, legal and
economic factors, (ii) lesser availability than in the U.S. of data on which to
make trading decisions, (iii) delays in the Fund's ability to act upon economic
events occurring in foreign markets during non-business hours in the U.S., (iv)
the imposition of different exercise and settlement terms and procedures and
margin requirements than in the U.S., and (v) lower trading volume and
liquidity.

Use of Segregated and Other Special Accounts. Many Strategic Transactions, in
addition to other requirements, require that the Fund segregate cash or liquid
assets with its custodian, State Street Bank and Trust Company (the "Custodian")
to the extent Fund obligations are not otherwise "covered" through ownership of
the underlying security, financial instrument or currency. In general, either
the full amount of any obligation by the Fund to pay or deliver securities or
assets must be covered at all times by the securities, instruments or currency
required to be delivered, or, subject to any regulatory restrictions, an amount
of cash or liquid securities at least equal to the current amount of the
obligation must be segregated with the custodian. The segregated assets cannot
be sold or transferred unless equivalent assets are substituted in their place
or it is no longer necessary to segregate them. For example, a call option
written by the Fund will require the Fund to hold the securities subject to the
call (or securities convertible into the needed securities without additional
consideration) or to segregate cash or liquid securities sufficient to purchase
and deliver the securities if the call is exercised. A call option sold by the
Fund on an index will require the Fund to own portfolio securities which
correlate with the index or to segregate cash or liquid assets equal to the
excess of the index value over the exercise price on a current basis. A put
option written by the Fund requires the Fund to segregate cash or liquid assets
equal to the exercise price.

Except when the Fund enters into a forward contract for the purchase or
sale of a security denominated in a particular currency, which requires no
segregation, a currency contract which obligates the Fund to buy or sell
currency will generally require the Fund to hold an amount of that currency or
liquid securities denominated in that currency equal to the Fund's obligations
or to segregate cash or liquid assets equal to the amount of the Fund's
obligation.

OTC options entered into by the Fund, including those on securities,
currency, financial instruments or indices and OCC issued and exchange listed
index options, will generally provide for cash settlement. As a result, when the
Fund sells these instruments it will only segregate an amount of assets equal to
its accrued net obligations, as there is no requirement for payment or delivery
of amounts in excess of the net amount. These amounts will equal 100% of the
exercise price in the case of a non cash-settled put, the same as an OCC
guaranteed listed option sold by the Fund, or the in-the-money amount plus any
sell-back formula amount in the case of a cash-settled put or call. In addition,
when the Fund sells a call option on an index at a time when the in-the-money
amount exceeds the exercise price, the Fund will segregate, until the option
expires or is closed out, cash or cash equivalents equal in value to such
excess. OCC issued and exchange listed options sold by the Fund other than those
above generally settle with physical delivery, and the Fund will segregate an
amount of assets equal to the full value of the option. OTC options settling
with physical

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<PAGE>

delivery, or with an election of either physical delivery or cash settlement
will be treated the same as other options settling with physical delivery.

In the case of a futures contract or an option thereon, the Fund must
deposit initial margin and possible daily variation margin in addition to
segregating assets sufficient to meet its obligation to purchase or provide
securities or currencies, or to pay the amount owed at the expiration of an
index-based futures contract. Such assets may consist of cash, cash equivalents,
liquid debt or equity securities or other acceptable assets.

With respect to swaps, the Fund will accrue the net amount of the excess,
if any, of its obligations over its entitlements with respect to each swap on a
daily basis and will segregate an amount of cash or liquid high grade securities
having a value equal to the accrued excess. Caps, floors and collars require
segregation of assets with a value equal to the Fund's net obligation, if any.

Strategic Transactions may be covered by other means when consistent with
applicable regulatory policies. The Fund may also enter into offsetting
transactions so that its combined position, coupled with any segregated assets,
equals its net outstanding obligation in related options and Strategic
Transactions. For example, the Fund could purchase a put option if the strike
price of that option is the same or higher than the strike price of a put option
sold by the Fund. Moreover, instead of segregating assets if the Fund held a
futures or forward contract, it could purchase a put option on the same futures
or forward contract with a strike price as high or higher than the price of the
contract held. Other Strategic Transactions may also be offset in combinations.
If the offsetting transaction terminates at the time of or after the primary
transaction no segregation is required, but if it terminates prior to such time,
assets equal to any remaining obligation would need to be segregated.

The Fund's activities involving Strategic Transactions may be limited by
the requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), for qualification as a regulated investment company. (See
"TAXES.")

Illiquid Securities. The Fund may occasionally purchase securities other than in
the open market. While such purchases may often offer attractive opportunities
for investment not otherwise available on the open market, the securities so
purchased are often "restricted securities" or "not readily marketable," i.e.,
securities which cannot be sold to the public without registration under the
Securities Act of 1933 or the availability of an exemption from registration
(such as Rules 144 or 144A) or because they are subject to other legal or
contractual delays in or restrictions on resale.

Generally speaking, restricted securities may be sold only to qualified
institutional buyers, or in a privately negotiated transaction to a limited
number of purchasers, or in limited quantities after they have been held for a
specified period of time and other conditions are met pursuant to an exemption
from registration, or in a public offering for which a registration statement is
in effect under the Securities Act of 1933. The Fund may be deemed to be an
"underwriter" for purposes of the Securities Act of 1933 when selling restricted
securities to the public, and in such event the Fund may be liable to purchasers
of such securities if such sale is made in violation of the 1933 Act or if the
registration statement prepared by the issuer, or the prospectus forming a part
of it, is materially inaccurate or misleading.

Lending of Portfolio Securities. The Fund may seek to increase its return by
lending portfolio securities. Under present regulatory policies, including those
of the Board of Governors of the Federal Reserve System and the SEC, such loans
may be made to member firms of the Exchange, and would be required to be secured
continuously by collateral in cash, U.S. Government securities or other high
grade debt obligations maintained on a current basis at an amount at least equal
to the market value and accrued interest of the securities loaned. The Fund
would have the right to call a loan and obtain the securities loaned on no more
than five days' notice. During the existence of a loan, the Fund would continue
to receive the equivalent of the interest paid by the issuer on the securities
loaned and would also receive compensation based on investment of the
collateral. As with other extensions of credit there are risks of delay in
recovery or even loss of rights in the collateral should the borrower of the
securities fail financially. However, the loans would be made only to firms
deemed by the Adviser to be of good standing, and when, in the judgment of the
Adviser, the consideration which can be earned currently from securities loans
of this type justifies the attendant risk. If the

12
<PAGE>

Fund determines to make securities loans, the value of the securities loaned
will not exceed 30% of the value of the Fund's total assets at the time any loan
is made.

Investment Restrictions

Unless specified to the contrary, the following fundamental policies may
not be changed without the approval of a majority of the outstanding voting
securities of the Fund which, under the 1940 Act and the rules thereunder and as
used in this Statement of Additional Information, means the lesser of (1) 67% or
more of the voting securities present at such meeting, if the holders of more
than 50% of the outstanding voting securities of the Fund are present or
represented by proxy, or (2) more than 50% of the outstanding voting securities
of the Fund.

Any investment restrictions herein which involve a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the percentage occurs immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, the Fund.

The Fund has elected to be classified as a diversified series of an
open-end investment company.

In addition, as a matter of fundamental policy, the Fund may not:

(1) borrow money, except as permitted under the 1940 Act, as amended,
and as interpreted or modified by regulatory authority having
jurisdiction, from time to time;

(2) issue senior securities, except as permitted under the 1940 Act, as
amended, and as interpreted or modified by regulatory authority
having jurisdiction, from time to time;

(3) concentrate its investments in a particular industry, as that term
is used in the 1940 Act, as amended, and as interpreted or modified
by regulatory authority having jurisdiction, from time to time;

(4) engage in the business of underwriting securities issued by others,
except to the extent that the Fund may be deemed to be an
underwriter in connection with the disposition of portfolio
securities;

(5) purchase or sell real estate, which term does not include securities
of companies which deal in real estate or mortgages or investments
secured by real estate or interests therein, except that the Fund
reserves freedom of action to hold and to sell real estate acquired
as a result of the Fund's ownership of securities;

(6) purchase physical commodities or contracts relating to physical
commodities; or

(7) make loans to other persons, except (i) loans of portfolio
securities, and (ii) to the extent that entry into repurchase
agreements and the purchase of debt instruments or interests in
indebtedness in accordance with the Fund's objective and policies
may be deemed to be loans.

Nonfundamental policies may be changed without shareholder approval. As a
matter of nonfundamental policy, the Fund may not:

(1) borrow money in an amount greater than 5% of its total assets,
except (i) for temporary or emergency purposes and (ii) by engaging
in reverse repurchase agreements, dollar rolls, or other investments
or transactions described in the Fund's registration statement which
may be deemed to be borrowings;

(2) enter into either of reverse repurchase agreements or dollar rolls
in an amount greater than 5% of its total assets;

13
<PAGE>

(3) purchase securities on margin or make short sales, except (i) short
sales against the box, (ii) in connection with arbitrage
transactions, (iii) for margin deposits in connection with futures
contracts, options or other permitted investments, (iv) that
transactions in futures contracts and options shall not be deemed to
constitute selling securities short, and (v) that the Fund may
obtain such short-term credits as may be necessary for the clearance
of securities transactions;

(4) purchase options, unless the aggregate premiums paid on all such
options held by the Fund at any time do not exceed 20% of its total
assets; or sell put options, if as a result, the aggregate value of
the obligations underlying such put options would exceed 50% of its
total assets;

(5) enter into futures contracts or purchase options thereon unless
immediately after the purchase, the value of the aggregate initial
margin with respect to such futures contracts entered into on behalf
of the Fund and the premiums paid for such options on futures
contracts does not exceed 5% of the fair market value of the Fund's
total assets; provided that in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be
excluded in computing the 5% limit;

(6) purchase warrants if as a result, such securities, taken at the
lower of cost or market value, would represent more than 5% of the
value of the Fund's total assets (for this purpose, warrants
acquired in units or attached to securities will be deemed to have
no value); and

(7) lend portfolio securities in an amount greater than 5% of its total
assets.

PURCHASES

(See "Purchases" and "Transaction information" in the Fund's prospectus.)

Additional Information About Opening An Account

Clients having a regular investment counsel account with the Adviser or
its affiliates and members of their immediate families, officers and employees
of the Adviser or of any affiliated organization and their immediate families,
members of the National Association of Securities Dealers, Inc. ("NASD") and
banks may, if they prefer, subscribe initially for at least $2,500 of Fund
shares through Scudder Investor Services, Inc. by letter, fax, TWX, or
telephone.

Shareholders of other Scudder funds who have submitted an account
application and have certified a Tax Identification Number, clients having a
regular investment counsel account with the Adviser or its affiliates and
members of their immediate families, officers and employees of the Adviser or of
any affiliated organization and their immediate families, members of the NASD,
and banks may open an account by wire. These investors must call 1-800-225-5163
to get an account number. During the call the investor will be asked to indicate
the Fund name, amount to be wired ($2,500 minimum), name of bank or trust
company from which the wire will be sent, the exact registration of the new
account, the tax identification or social security number, address and telephone
number. The investor must then call the bank to arrange a wire transfer to The
Scudder Funds, Boston, MA 02110, ABA Number 011000028, DDA Account Number
9903-5552. The investor must give the Scudder fund name, account name and the
new account number. Finally, the investor must send the completed and signed
application to the Fund promptly.

The minimum initial purchase amount is less than $2,500 under certain
special plan accounts.

Additional Information About Making Subsequent Investments

Subsequent purchase orders for $10,000 or more and for an amount not
greater than four times the value of the shareholder's account may be placed by
telephone, fax, etc. by established shareholders (except by Scudder Individual
Retirement Account (IRA), Scudder pension and profit sharing, Scudder 401(k) and
Scudder 403(b) Plan holders), members of the NASD, and banks. Orders placed in
this manner may be directed to any Scudder Investor Services, Inc. office listed
in the Fund's prospectus. A two-part invoice of the purchase will be mailed out
promptly following

14
<PAGE>

receipt of a request to buy. Payment should be attached to a copy of the invoice
for proper identification. Federal regulations require that payment be received
within three business days. If payment is not received within that time, the
shares may be canceled. In the event of such cancellation or cancellation at the
purchaser's request, the purchaser will be responsible for any loss incurred by
the Fund or the principal underwriter by reason of such cancellation. If the
purchaser is a shareholder, the Fund shall have the authority, as agent of the
shareholder, to redeem shares in the account in order to reimburse the Fund or
the principal underwriter for the loss incurred. Net losses on such transactions
which are not recovered from the purchaser will be absorbed by the principal
underwriter. Any net profit on the liquidation of unpaid shares will accrue to
the Fund.

Additional Information About Making Subsequent Investments by QuickBuy

Shareholders, whose predesignated bank account of record is a member of
the Automated Clearing House Network (ACH) and who have elected to participate
in the QuickBuy program, may purchase shares of the Fund by telephone. Through
this service shareholders may purchase up to $250,000. To purchase shares by
QuickBuy, shareholders should call before 4 p.m. eastern time. Proceeds in the
amount of your purchase will be transferred from your bank checking account two
or three business days following your call. For requests received by the close
of regular trading on the Exchange, shares will be purchased at the net asset
value per share calculated at the close of trading on the day of your call.
QuickBuy requests received after the close of regular trading on the Exchange
will begin their processing and be purchased at the net asset value calculated
the following business day. If you purchase shares by QuickBuy and redeem them
within seven days of the purchase, the Fund may hold the redemption proceeds for
a period of up to seven business days. If you purchase shares and there are
insufficient funds in your bank account the purchase will be canceled and you
will be subject to any losses or fees incurred in the transaction. QuickBuy
transactions are not available for most retirement plan accounts. However,
QuickBuy transactions are available for Scudder IRA accounts.

In order to request purchases by QuickBuy, shareholders must have
completed and returned to the Transfer Agent the application, including the
designation of a bank account from which the purchase payment will be debited.
New investors wishing to establish QuickBuy may so indicate on the application.
Existing shareholders who wish to add QuickBuy to their account may do so by
completing an QuickBuy Enrollment Form. After sending in an enrollment form
shareholders should allow for 15 days for this service to be available.

The Fund employs procedures, including recording telephone calls, testing
a caller's identity, and sending written confirmation of telephone transactions,
designed to give reasonable assurance that instructions communicated by
telephone are genuine, and to discourage fraud. To the extent that the Fund does
not follow such procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions. The Fund will not be liable for acting upon
instructions communicated by telephone that it reasonably believes to be
genuine.

Checks

A certified check is not necessary, but checks are only accepted subject
to collection at full face value in U.S. funds and must be drawn on, or payable
through, a U.S. bank.

If shares of the Fund are purchased by a check which proves to be
uncollectible, the Fund reserves the right to cancel the purchase immediately
and the purchaser will be responsible for any loss incurred by the Fund or the
principal underwriter by reason of such cancellation. If the purchaser is a
shareholder, the Fund shall have the authority, as agent of the shareholder, to
redeem shares in the account in order to reimburse the Fund or the principal
underwriter for the loss incurred. Investors whose orders have been canceled may
be prohibited from or restricted in placing future orders in any of the Scudder
funds.

Wire Transfer of Federal Funds

To obtain the net asset value determined as of the close of regular
trading on the Exchange, on a selected day, your bank must forward federal funds
by wire transfer and provide the required account information so as to be
available to the Fund prior to the close of regular trading on the Exchange
(normally 4 p.m. eastern time).

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<PAGE>

The bank sending an investor's federal funds by bank wire may charge for
the service. Presently, the Distributor pays a fee for receipt by the Custodian
of "wired funds," but the right to charge investors for this service is
reserved.

Boston banks are closed on certain local holidays although the Exchange
may be open. These holidays include Martin Luther King, Jr. Day (the 3rd Monday
in January), Columbus Day (the 2nd Monday in October) and Veterans Day (November
11). Investors are not able to purchase shares by wiring federal funds on such
holidays because the Custodian is not open to receive such funds on behalf of
the Fund.

Share Price

Purchases will be filled without sales charge at the net asset value next
computed after receipt of the application in good order. Net asset value
normally will be computed as of the close of regular trading on each day the
Exchange is open for trading. Orders received after the close of regular trading
on the Exchange will be executed at the next business day's net asset value. If
the order has been placed by a member of the NASD, other than the Distributor,
it is the responsibility of that member broker, rather than the Fund, to forward
the purchase order to Scudder Service Corporation (the "Transfer Agent") in
Boston by the close of regular trading on the Exchange.

Share Certificates

Due to the desire of Fund management to afford ease of redemption,
certificates will not be issued to indicate ownership in the Fund.

Other Information

If purchases or redemptions of the Fund's shares are arranged and
settlement is made at an investor's election through a member of the NASD, other
than the Distributor, that member may, at its discretion, charge a fee for that
service. The Board of Trustees and the Distributor, also the Fund's principal
underwriter, each has the right to limit the amount of purchases by, and to
refuse to sell to, any person. The Trustees and the Distributor may suspend or
terminate the offering of shares of the Fund at any time for any reason.

The Tax Identification Number section of the application must be completed
when opening an account. Applications and purchase orders without a correct
certified tax identification number and certain other certified information
(e.g., certification of exempt status from exempt investors), will be returned
to the investor.

The Fund may issue shares at net asset value in connection with any merger
or consolidation with, or acquisition of the assets of, any investment company
or personal holding company, subject to the requirements of the 1940 Act.

EXCHANGES AND REDEMPTIONS

(See "Exchanges and redemptions" and "Transaction
information" in the Fund's prospectus.)

Exchanges

Exchanges are comprised of a redemption from one Scudder fund and a
purchase into another Scudder fund. The purchase side of the exchange either may
be an additional investment into an existing account or may involve opening a
new account in the other fund. When an exchange involves a new account, the new
account will be established with the same registration, tax identification
number, address, telephone redemption option, "Scudder Automated Information
Line" (SAIL) transaction authorization and dividend option as the existing
account. Other features will not carry over automatically to the new account.
Exchanges to a new fund account must be for a minimum of $2,500. When an
exchange represents an additional investment into an existing account, the
account receiving the exchange proceeds must have identical registration,
address, and account options/features as the account of origin. Exchanges into
an existing account must be for $100 or more. If the account receiving the
exchange

16
<PAGE>

proceeds is to be different in any respect, the exchange request must be in
writing and must contain an original signature guarantee as described under
"Transaction Information--Redeeming shares--Signature guarantees" in the Fund's
prospectus.

Exchange orders received before the close of regular trading on the
Exchange on any business day ordinarily will be executed at the net asset value
determined on that day. Exchange orders received after the close of regular
trading on the Exchange will be executed on the following business day.

Investors may also request, at no extra charge, to have exchanges
automatically executed on a predetermined schedule from one Scudder fund to an
existing account in another Scudder fund at current net asset value through
Scudder's Automatic Exchange Program. Exchanges must be for a minimum of $50.
Shareholders may add this free feature over the phone or in writing. Automatic
exchanges will continue until the shareholder requests by phone or in writing to
have the feature removed, or until the originating account is depleted. The
Trust and the Transfer Agent each reserve the right to suspend or terminate the
privilege of the Automatic Exchange Program at any time.

There is no charge to the shareholder for any exchange described above. An
exchange into another Scudder fund is a redemption of shares, and therefore may
result in tax consequences (gain or loss) to the shareholder, and the proceeds
of such an exchange may be subject to backup withholding. (See "TAXES.")

Investors currently receive the exchange privilege, including exchange by
telephone, automatically without having to elect it. The Fund employs
procedures, including recording telephone calls, testing a caller's identity,
and sending written confirmation of telephone transactions, designed to give
reasonable assurance that instructions communicated by telephone are genuine,
and to discourage fraud. To the extent that the Fund does not follow such
procedures, it may be liable for losses due to unauthorized or fraudulent
telephone instructions. The Fund will not be liable for acting upon instructions
communicated by telephone that they reasonably believe to be genuine. The Fund
and the Transfer Agent each reserve the right to suspend or terminate the
privilege of exchanging by telephone or fax at any time.

The Scudder funds into which investors may make an exchange are listed
under "THE SCUDDER FAMILY OF FUNDS" herein. Before making an exchange,
shareholders should obtain from the Distributor a prospectus of the Scudder fund
into which the exchange is being contemplated. The exchange privilege may not be
available for certain Scudder Funds. For more information, please call
1-800-225-5163.

Scudder retirement plans may have different exchange requirements. Please
refer to appropriate plan literature.

Redemption by Telephone

Shareholders currently receive the right, automatically without having to
elect it, to redeem by telephone up to $100,000 and have the proceeds mailed to
their address of record. Shareholders may request to have the proceeds mailed or
wired to their predesignated bank account. In order to request redemptions by
telephone, shareholders must have completed and returned to the Transfer Agent
the application, including the designation of a bank account to which the
redemption proceeds are to be sent.

(a) NEW INVESTORS wishing to establish telephone redemption to a
predesignated bank account must complete the appropriate section on
the application.

(b) EXISTING SHAREHOLDERS (except those who are Scudder IRA, Scudder
Pension and Profit-Sharing, Scudder 401(k) and Scudder 403(b)
Planholders) who wish to establish telephone redemption to a
predesignated bank account or who want to change the bank account
previously designated to receive redemption proceeds should either
return a Telephone Redemption Option Form (available upon request)
or send a letter identifying the account and specifying the exact
information to be changed. The letter must be signed exactly as the
shareholder's name(s) appears on the account.

17
<PAGE>

An original signature and an original signature guarantee are
required for each person in whose name the account is registered.

If a request for redemption to a shareholder's bank account is made by
telephone or fax, payment will be by Federal Reserve bank wire to the bank
account designated on the application, unless a request is made that the
redemption check be mailed to the designated bank account. There will be a $5
charge for all wire redemptions.

Note: Investors designating a savings bank to receive their telephone redemption
proceeds are advised that if the savings bank is not a participant in the
Federal Reserve System, redemption proceeds must be wired through a commercial
bank which is a correspondent of the savings bank. As this may delay receipt by
the shareholder's account, it is suggested that investors wishing to use a
savings bank discuss wire procedures with their bank and submit any special wire
transfer information with the telephone redemption authorization. If appropriate
wire information is not supplied, redemption proceeds will be mailed to the
designated bank.

Redemption requests by telephone (technically a repurchase by agreement
between the Fund and the shareholder) of shares purchased by check will not be
accepted until the purchase check has cleared which may take up to seven
business days.

Redemption by QuickSell

Shareholders, whose predesignated bank account of record is a member of
the Automated Clearing House Network (ACH) and who have elected to participate
in the QuickSell program may sell shares of the Fund by telephone. To sell
shares by QuickSell, shareholders should call before 4 p.m. eastern time.
Redemptions must be for at least $250. Proceeds in the amount of your redemption
will be transferred to your bank checking account two or three business days
following your call. For requests received by the close of regular trading on
the Exchange, shares will be redeemed at the net asset value per share
calculated at the close of trading on the day of your call. QuickSell requests
received after the close of regular trading on the Exchange will begin their
processing and be redeemed at the net asset value calculated the following
business day. QuickSell transactions are not available for Scudder IRA accounts
and most other retirement plan accounts.

In order to request redemptions by QuickSell, shareholders must have
completed and returned to the Transfer Agent the application, including the
designation of a bank account to which the redemption proceeds will be credited.
New investors wishing to establish QuickSell may so indicate on the application.
Existing shareholders who wish to add QuickSell to their account may do so by
completing a QuickSell Enrollment Form. After sending in an enrollment form,
shareholders should allow for 15 days for this service to be available.

Redemption by Mail or Fax

In order to ensure proper authorization before redeeming shares, the
Transfer Agent may request documents such as, but not restricted to, stock
powers, trust instruments, certificates of death, appointments as executor,
certificates of corporate authority and waivers of tax required in some states
when settling estates.

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<PAGE>

It is suggested that shareholders holding shares registered in other than
individual names contact the Transfer Agent prior to any redemptions to ensure
that all necessary documents accompany the request. When shares are held in the
name of a corporation, trust, fiduciary agent, attorney or partnership, the
Transfer Agent requires, in addition to the stock power, certified evidence of
authority to sign. These procedures are for the protection of shareholders and
should be followed to ensure prompt payment. Redemption requests must not be
conditional as to date or price of the redemption. Proceeds of a redemption will
be sent within seven business days after receipt by the Transfer Agent of a
request for redemption that complies with the above requirements. Delays of more
than seven days of payment for shares tendered for repurchase or redemption may
result, but only until the purchase check has cleared.

The requirements for IRA redemptions are different from those for regular
accounts. For more information call 1-800-225-5163.

Redemption-in-Kind

The Trust reserves the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption or repurchase order by making
payment in whole or in part in readily marketable securities chosen by the Fund
and valued as they are for purposes of computing the Fund's net asset value (a
redemption-in-kind). If payment is made in securities, a shareholder may incur
transaction expenses in converting these securities into cash. The Trust has
elected, however, to be governed by Rule 18f-1 under the 1940 Act as a result of
which the Fund is obligated to redeem shares, with respect to any one
shareholder during any 90 day period, solely in cash up to the lesser of
$250,000 or 1% of the net asset value of the Fund at the beginning of the
period.

Other Information

Clients, officers or employees of the Adviser or of an affiliated
organization, and members of such clients', officers' or employees' immediate
families, banks and members of the NASD may direct repurchase requests to the
Fund through Scudder Investor Services, Inc. at Two International Place, Boston,
Massachusetts 02110-4103 by letter, fax, TWX, or telephone. A two-part
confirmation will be mailed out promptly after receipt of the repurchase
request. A written request in good order with a proper original signature
guarantee, as described in the Fund's prospectus under "Transaction
information--Signature guarantees," should be sent with a copy of the invoice to
Scudder Funds, c/o Scudder Confirmed Processing, Two International Place,
Boston, Massachusetts 02110-4103. Failure to deliver shares or required
documents (see above) by the settlement date may result in cancellation of the
trade and the shareholder will be responsible for any loss incurred by the Fund
or the principal underwriter by reason of such cancellation. Net losses on such
transactions which are not recovered from the shareholder will be absorbed by
the principal underwriter. Any net gains so resulting will accrue to the Fund.
For this group, repurchases will be carried out at the net asset value next
computed after such repurchase requests have been received. The arrangements
described in this paragraph for repurchasing shares are discretionary and may be
discontinued at any time.

If a shareholder redeems all shares in the account after the record date
of a dividend, the shareholder receives in addition to the net asset value
thereof, all declared but unpaid dividends thereon. The value of shares redeemed
or repurchased may be more or less than the shareholder's cost depending on the
net asset value at the time of redemption or repurchase. The Fund does not
impose a repurchase charge, although a wire charge may be applicable for
redemption proceeds wired to an investor's bank account. Redemption of shares,
including redemptions undertaken to effect an exchange for shares of another
Scudder fund, may result in tax consequences (gain or loss) to the shareholder
and the proceeds of such redemptions may be subject to backup withholding. (See
"TAXES.")

Shareholders who wish to redeem shares from Special Plan Accounts should
contact the employer, trustee or custodian of the Plan for the requirements.

The determination of net asset value and a shareholder's right to redeem
shares and to receive payment may be suspended at times (a) during which the
Exchange is closed, other than customary weekend and holiday closings, (b)
during which trading on the Exchange is restricted for any reason, (c) during
which an emergency exists as a result of which disposal by the Fund of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets, or (d)
during which the SEC by order permits a suspension of

19
<PAGE>

the right of redemption or a postponement of the date of payment or of
redemption; provided that applicable rules and regulations of the SEC (or any
succeeding governmental authority) shall govern as to whether the conditions
prescribed in (b), (c) or (d) exist.

Shareholders should maintain a share balance worth at least $2,500 ($1,000
for IRAs, Uniform Gift to Minor Act, and Uniform Trust to Minor Act accounts),
which amount may be changed by the Board of Trustees. Scudder retirement plans
have similar or lower minimum balance requirements. A shareholder may open an
account with at least $1,000 ($500 for an UGMA, UTMA, IRA and other retirement
accounts), if an automatic investment plan (AIP) of $100/month ($50/month for an
UGMA, UTMA, IRA and other retirement accounts) is established.

Shareholders who maintain a non-fiduciary account balance of less than
$2,500 in the Fund, without establishing an AIP, will be assessed an annual
$10.00 per fund charge with the fee to be reinvested in the Fund. The $10.00
charge will not apply to shareholders with a combined household account balance
in any of the Scudder Funds of $25,000 or more. The Fund reserves the right,
following 60 days' written notice to shareholders, to redeem all shares in
accounts below $250, including accounts of new investors, where a reduction in
value has occurred due to a redemption or exchange out of the account. The Fund
will mail the proceeds of the redeemed account to the shareholder at the address
of record. Reductions in value that result solely from market activity will not
trigger an involuntary redemption. UGMA, UTMA, IRA and other retirement accounts
will not be assessed the $10.00 charge or be subject to automatic liquidation.

FEATURES AND SERVICES OFFERED BY THE FUND

(See "Shareholder benefits" in the Fund's prospectus.)

The Pure No-Load(TM) Concept

Investors are encouraged to be aware of the full ramifications of mutual
fund fee structures, and of how Scudder distinguishes its Scudder Family of
Funds from the vast majority of mutual funds available today. The primary
distinction is between load and no-load funds.

Load funds generally are defined as mutual funds that charge a fee for the
sale and distribution of fund shares. There are three types of loads: front-end
loads, back-end loads, and asset-based Rule 12b-1 fees. 12b-1 fees are
distribution-related fees charged against fund assets and are distinct from
service fees, which are charged for personal services and/or maintenance of
shareholder accounts. Asset-based sales charges and service fees are typically
paid pursuant to distribution plans adopted under 12b-1 under the 1940 Act.

A front-end load is a sales charge, which can be as high as 8.50% of the
amount invested. A back-end load is a contingent deferred sales charge, which
can be as high as 8.50% of either the amount invested or redeemed. The maximum
front-end or back-end load varies, and depends upon whether or not a fund also
charges a 12b-1 fee and/or a service fee or offers investors various
sales-related services such as dividend reinvestment. The maximum charge for a
12b-1 fee is 0.75% of a fund's average annual net assets, and the maximum charge
for a service fee is 0.25% of a fund's average annual net assets.

A no-load fund does not charge a front-end or back-end load, but can
charge a small 12b-1 fee and/or service fee against fund assets. Under the
National Association of Securities Dealers Conduct Rules, a mutual fund can call
itself a "no-load" fund only if the 12b-1 fee and/or service fee does not exceed
0.25% of a fund's average annual net assets.

Because funds in the Scudder Family of Funds do not pay any asset-based
sales charges or service fees, Scudder developed and trademarked the phrase pure
no-load(TM) to distinguish funds in the Scudder Family of Funds from other
no-load mutual funds. Scudder pioneered the no-load concept when it created the
nation's first no-load fund in 1928, and later developed the nation's first
family of no-load mutual funds.

20
<PAGE>

The following chart shows the potential long-term advantage of investing
$10,000 in a Scudder Family of Funds pure no-load fund over investing the same
amount in a load fund that collects an 8.50% front-end load, a load fund that
collects only a 0.75% 12b-1 and/or service fee, and a no-load fund charging only
a 0.25% 12b-1 and/or service fee. The hypothetical figures in the chart show the
value of an account assuming a constant 10% rate of return over the time periods
indicated and reinvestment of dividends and distributions.

================================================================================
Scudder No-Load Fund
YEARS Pure No-Load(TM) 8.50% Load Load Fund with with 0.25%
Fund Fund 0.75% 12b-1 Fee 12b-1 Fee
- --------------------------------------------------------------------------------
10 $25,937 $23,733 $24,222 $25,354
- --------------------------------------------------------------------------------
15 41,772 38,222 37,698 40,371
- --------------------------------------------------------------------------------
20 67,275 61,557 58,672 64,282
================================================================================

Investors are encouraged to review the fee tables on page 2 of the Fund's
prospectus for more specific information about the rates at which management
fees and other expenses are assessed.

Internet access

World Wide Web Site -- The address of the Scudder Funds site is
http://funds.scudder.com. The site offers guidance on global investing and
developing strategies to help meet financial goals and provides access to the
Scudder investor relations department via e-mail. The site also enables users to
access or view fund prospectuses and profiles with links between summary
information in Profiles and details in the Prospectus. Users can fill out new
account forms on-line, order free software, and request literature on funds.

The site is designed for interactivity, simplicity and maneuverability. A
section entitled "Planning Resources" provides information on asset allocation,
tuition, and retirement planning to users who fill out interactive "worksheets."
Investors can easily establish a "Personal Page," that presents price
information, updated daily, on funds they're interested in following. The
"Personal Page" also offers easy navigation to other parts of the site. Fund
performance data from both Scudder and Lipper Analytical Services, Inc. are
available on the site. Also offered on the site is a news feature, which
provides timely and topical material on the Scudder Funds.

Scudder has communicated with shareholders and other interested parties on
Prodigy since 1988 and has participated since 1994 in GALT's Networth "financial
marketplace" site on the Internet. The firm made Scudder Funds information
available on America Online in early 1996.

Account Access -- Scudder is among the first mutual fund families to allow
shareholders to manage their fund accounts through the World Wide Web. Scudder
Fund shareholders can view a snapshot of current holdings, review account
activity and move assets between Scudder Fund accounts.

Scudder's personal portfolio capabilities -- known as SEAS (Scudder
Electronic Account Services) -- are accessible only by current Scudder Fund
shareholders who have set up a Personal Page on Scudder's Web site. Using a
secure Web browser, shareholders sign on to their account with their Social
Security number and their SAIL password. As an additional security measure,
users can change their current password or disable access to their portfolio
through the World Wide Web.

An Account Activity option reveals a financial history of transactions for
an account, with trade dates, type and amount of transaction, share price and
number of shares traded. For users who wish to trade shares between

21
<PAGE>

Scudder Funds, the Fund Exchange option provides a step-by-step procedure to
exchange shares among existing fund accounts or to new Scudder Fund accounts.

A Call Me(TM) feature enables users to speak with a Scudder Investor
Relations telephone representative while viewing their account on the Web site.
In order to use the Call Me(TM) feature, an individual must have two phone lines
and enter on the screen the phone number that is not being used to connect to
the Internet. They are connected to the next available Scudder Investor
Relations representative from 8 a.m. to 8 p.m. eastern time.

Dividend and Capital Gain Distribution Options

Investors have freedom to choose whether to receive cash or to reinvest
any dividends from net investment income or distributions from realized capital
gains in additional shares of the Fund. A change of instructions for the method
of payment must be given to the Transfer Agent in writing at least five days
prior to a dividend record date. Shareholders may change their dividend option
by calling 1-800-225-5163 or by sending written instructions to the Transfer
Agent. Please include your account number with your written request. See "How to
Contact Scudder" in the Fund's prospectus for the address.

Reinvestment is usually made at the closing net asset value determined on
the business day following the record date. Investors may leave standing
instructions with the Transfer Agent designating their option for either
reinvestment or cash distribution of any income dividends or capital gains
distributions. If no election is made, dividends and distributions will be
invested in additional shares of the Fund.

Investors may also have dividends and distributions automatically
deposited in their predesignated bank account through Scudder's
DistributionsDirect Program. Shareholders who elect to participate in the
DistributionsDirect Program, and whose predesignated checking account of record
is with a member bank of the Automated Clearing House Network (ACH) can have
income and capital gain distributions automatically deposited to their personal
bank account usually within three business days after the Fund pays its
distribution. A DistributionsDirect request form can be obtained by calling
1-800-225-5163. Confirmation statements will be mailed to shareholders as
notification that distributions have been deposited.

Investors choosing to participate in Scudder's Automatic Withdrawal Plan
must reinvest any dividends or capital gains. For most retirement plan accounts,
the reinvestment of dividends and capital gains is also required.

Scudder Investor Centers

Investors may visit any of the Centers maintained by the Distributor
listed in the Fund's prospectus. The Centers are designed to provide individuals
with services during any business day. Investors may pick up literature or find
assistance with opening an account, adding monies or special options to existing
accounts, making exchanges within the Scudder Family of Funds, redeeming shares
or opening retirement plans. Checks should not be mailed to the Centers but
should be mailed to "The Scudder Funds" at the address listed under "How to
contact Scudder" in the prospectus.

Reports to Shareholders

The Fund issues to its shareholders unaudited semiannual financial
statements and annual financial statements audited by independent accountants,
including a list of investments held and statements of assets and liabilities,
operations, changes in net assets and financial highlights. Each distribution
will be accompanied by a brief explanation of the source of the distribution.

Transaction Summaries

Annual summaries of all transactions in each Fund account are available to
shareholders. The summaries may be obtained by calling 1-800-225-5163.

22
<PAGE>

THE SCUDDER FAMILY OF FUNDS

(See "Investment products and services" in the Funds' prospectuses.)

The Scudder Family of Funds is America's first family of mutual funds and
the nation's oldest family of no-load mutual funds. To assist investors in
choosing a Scudder fund, descriptions of the Scudder funds' objectives follow.

MONEY MARKET

Scudder U.S. Treasury Money Fund seeks to provide safety, liquidity and
stability of capital and, consistent therewith, to provide current income.
The Fund seeks to maintain a constant net asset value of $1.00 per share,
although in certain circumstances this may not be possible, and declares
dividends daily.

Scudder Cash Investment Trust ("SCIT") seeks to maintain the stability of
capital and, consistent therewith, to maintain the liquidity of capital
and to provide current income. SCIT seeks to maintain a constant net asset
value of $1.00 per share, although in certain circumstances this may not
be possible, and declares dividends daily.

Scudder Money Market Series seeks to provide investors with as high a
level of current income as is consistent with its investment polices and
with preservation of capital and liquidity. The Fund seeks to maintain a
constant net asset value of $1.00 per share, but there is no assurance
that it will be able to do so. The institutional class of shares of this
Fund is not within the Scudder Family of Funds.

Scudder Government Money Market Series seeks to provide investors with as
high a level of current income as is consistent with its investment
polices and with preservation of capital and liquidity. The Fund seeks to
maintain a constant net asset value of $1.00 per share, but there is no
assurance that it will be able to do so. The institutional class of shares
of this Fund is not within the Scudder Family of Funds.

TAX FREE MONEY MARKET

Scudder Tax Free Money Fund ("STFMF") seeks to provide income exempt from
regular federal income tax and stability of principal through investments
primarily in municipal securities. STFMF seeks to maintain a constant net
asset value of $1.00 per share, although in extreme circumstances this may
not be possible.

Scudder Tax Free Money Market Series seeks to provide investors with as
high a level of current income that cannot be subjected to federal income
tax by reason of federal law as is consistent with its investment policies
and with preservation of capital and liquidity. The Fund seeks to maintain
a constant net asset value of $1.00 per share, but there is no assurance
that it will be able to do so. The institutional class of shares of this
Fund is not within the Scudder Family of Funds.

Scudder California Tax Free Money Fund* seeks stability of capital and the
maintenance of a constant net asset value of $1.00 per share while
providing California taxpayers income exempt from both California State
personal and regular federal income taxes. The Fund is a professionally
managed portfolio of high quality, short-term California municipal
securities. There can be no assurance that the stable net asset value will
be maintained.

- ----------
* These funds are not available for sale in all states. For information,
contact Scudder Investor Services, Inc.

23
<PAGE>

Scudder New York Tax Free Money Fund* seeks stability of capital and the
maintenance of a constant net asset value of $1.00 per share, while
providing New York taxpayers income exempt from New York State and New
York City personal income taxes and regular federal income tax. There can
be no assurance that the stable net asset value will be maintained.

TAX FREE

Scudder Limited Term Tax Free Fund seeks to provide as high a level of
income exempt from regular federal income tax as is consistent with a high
degree of principal stability.

Scudder Medium Term Tax Free Fund seeks to provide a high level of income
free from regular federal income taxes and to limit principal fluctuation.
The Fund will invest primarily in high-grade, intermediate-term bonds.

Scudder Managed Municipal Bonds seeks to provide income exempt from
regular federal income tax primarily through investments in high-grade,
long-term municipal securities.

Scudder High Yield Tax Free Fund seeks to provide a high level of interest
income, exempt from regular federal income tax, from an actively managed
portfolio consisting primarily of investment-grade municipal securities.

Scudder California Tax Free Fund* seeks to provide California taxpayers
with income exempt from both California State personal income and regular
federal income tax. The Fund is a professionally managed portfolio
consisting primarily of California municipal securities.

Scudder Massachusetts Limited Term Tax Free Fund* seeks to provide
Massachusetts taxpayers with as high a level of income exempt from
Massachusetts personal income tax and regular federal income tax, as is
consistent with a high degree of price stability, through a professionally
managed portfolio consisting primarily of investment-grade municipal
securities.

Scudder Massachusetts Tax Free Fund* seeks to provide Massachusetts
taxpayers with income exempt from both Massachusetts personal income tax
and regular federal income tax. The Fund is a professionally managed
portfolio consisting primarily of investment-grade municipal securities.

Scudder New York Tax Free Fund* seeks to provide New York taxpayers with
income exempt from New York State and New York City personal income taxes
and regular federal income tax. The Fund is a professionally managed
portfolio consisting primarily of New York municipal securities.

Scudder Ohio Tax Free Fund* seeks to provide Ohio taxpayers with income
exempt from both Ohio personal income tax and regular federal income tax.
The Fund is a professionally managed portfolio consisting primarily of
investment-grade municipal securities.

Scudder Pennsylvania Tax Free Fund* seeks to provide Pennsylvania
taxpayers with income exempt from both Pennsylvania personal income tax
and regular federal income tax. The Fund is a professionally managed
portfolio consisting primarily of investment-grade municipal securities.

U.S. INCOME

Scudder Short Term Bond Fund seeks to provide a high level of income
consistent with a high degree of principal stability by investing
primarily in high quality short-term bonds.

- ----------
* These funds are not available for sale in all states. For information,
contact Scudder Investor Services, Inc.

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<PAGE>

Scudder Zero Coupon 2000 Fund seeks to provide as high an investment
return over a selected period as is consistent with investment in U.S.
Government securities and the minimization of reinvestment risk.

Scudder GNMA Fund seeks to provide high current income primarily from U.S.
Government guaranteed mortgage-backed (Ginnie Mae) securities.

Scudder Income Fund seeks a high level of income, consistent with the
prudent investment of capital, through a flexible investment program
emphasizing high-grade bonds.

Scudder High Yield Bond Fund seeks a high level of current income and,
secondarily, capital appreciation through investment primarily in below
investment-grade domestic debt securities.

GLOBAL INCOME

Scudder Global Bond Fund seeks to provide total return with an emphasis on
current income by investing primarily in high-grade bonds denominated in
foreign currencies and the U.S. dollar. As a secondary objective, the Fund
will seek capital appreciation.

Scudder International Bond Fund seeks to provide income primarily by
investing in a managed portfolio of high-grade international bonds. As a
secondary objective, the Fund seeks protection and possible enhancement of
principal value by actively managing currency, bond market and maturity
exposure and by security selection.

Scudder Emerging Markets Income Fund seeks to provide high current income
and, secondarily, long-term capital appreciation through investments
primarily in high-yielding debt securities issued by governments and
corporations in emerging markets.

ASSET ALLOCATION

Scudder Pathway Series: Conservative Portfolio seeks primarily current
income and secondarily long-term growth of capital. In pursuing these
objectives, the Portfolio, under normal market conditions, will invest
substantially in a select mix of Scudder bond mutual funds, but will have
some exposure to Scudder equity mutual funds.

Scudder Pathway Series: Balanced Portfolio seeks to provide investors with
a balance of growth and income by investing in a select mix of Scudder
money market, bond and equity mutual funds.

Scudder Pathway Series: Growth Portfolio seeks to provide investors with
long-term growth of capital. In pursuing this objective, the Portfolio
will, under normal market conditions, invest predominantly in a select mix
of Scudder equity mutual funds designed to provide long-term growth.

Scudder Pathway Series: International Portfolio seeks maximum total return
for investors. Total return consists of any capital appreciation plus
dividend income and interest. To achieve this objective, the Portfolio
invests in a select mix of established international and global Scudder
funds.

U.S. GROWTH AND INCOME

Scudder Balanced Fund seeks a balance of growth and income from a
diversified portfolio of equity and fixed-income securities. The Fund also
seeks long-term preservation of capital through a quality-oriented
approach that is designed to reduce risk.

Scudder Growth and Income Fund seeks long-term growth of capital, current
income, and growth of income.

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<PAGE>

Scudder S&P 500 Index Fund seeks to provide investment results that,
before expenses, correspond to the total return of common stocks publicly
traded in the United States, as represented by the Standard & Poor's 500
Composite Stock Price Index.

U.S. GROWTH

Value

Scudder Large Company Value Fund seeks to maximize long-term capital
appreciation through a value-driven investment program.

Scudder Value Fund seeks long-term growth of capital through investment in
undervalued equity securities.

Scudder Small Company Value Fund invests for long-term growth of capital
by seeking out undervalued stocks of small U.S. companies.

Scudder Micro Cap Fund seeks long-term growth of capital by investing
primarily in a diversified portfolio of U.S. micro-capitalization
("micro-cap") common stocks.

Growth

Scudder Classic Growth Fund seeks to provide long-term growth of capital
with reduced share price volatility compared to other growth mutual funds.

Scudder Large Company Growth Fund seeks to provide long-term growth of
capital through investment primarily in the equity securities of seasoned,
financially strong U.S. growth companies.

Scudder Development Fund seeks long-term growth of capital by investing
primarily in securities of small and medium-size growth companies.

Scudder 21st Century Growth Fund seeks long-term growth of capital by
investing primarily in the securities of emerging growth companies poised
to be leaders in the 21st century.

GLOBAL GROWTH

Worldwide

Scudder Global Fund seeks long-term growth of capital through a
diversified portfolio of marketable securities, primarily equity
securities, including common stocks, preferred stocks and debt securities
convertible into common stocks.

Scudder International Growth and Income Fund seeks long-term growth of
capital and current income primarily from foreign equity securities.

Scudder International Fund seeks long-term growth of capital primarily
through a diversified portfolio of marketable foreign equity securities.

Scudder Global Discovery Fund seeks above-average capital appreciation
over the long term by investing primarily in the equity securities of
small companies located throughout the world.

Scudder Emerging Markets Growth Fund seeks long-term growth of capital
primarily through equity investment in emerging markets around the globe.

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<PAGE>

Scudder Gold Fund seeks maximum return (principal change and income)
consistent with investing in a portfolio of gold-related equity securities
and gold.

Regional

Scudder Greater Europe Growth Fund seeks long-term growth of capital
through investments primarily in the equity securities of European
companies.

Scudder Pacific Opportunities Fund seeks long-term growth of capital
through investment primarily in the equity securities of Pacific Basin
companies, excluding Japan.

Scudder Latin America Fund seeks to provide long-term capital appreciation
through investment primarily in the securities of Latin American issuers.

The Japan Fund, Inc. seeks long-term capital appreciation by investing
primarily in equity securities (including American Depository Receipts) of
Japanese companies.

The net asset values of most Scudder funds can be found daily in the
"Mutual Funds" section of The Wall Street Journal under "Scudder Funds," and in
other leading newspapers throughout the country. Investors will notice the net
asset value and offering price are the same, reflecting the fact that no sales
commission or "load" is charged on the sale of shares of the Scudder funds. The
latest seven-day yields for the money-market funds can be found every Monday and
Thursday in the "Money-Market Funds" section of The Wall Street Journal. This
information also may be obtained by calling the Scudder Automated Information
Line (SAIL) at 1-800-343-2890.

The Scudder Family of Funds offers many conveniences and services,
including: active professional investment management; broad and diversified
investment portfolios; pure no-load funds with no commissions to purchase or
redeem shares or Rule 12b-1 distribution fees; individual attention from a
service representative of Scudder Investor Relations; and easy telephone
exchanges into other Scudder funds. Certain Scudder funds may not be available
for purchase or exchange. For more information, please call 1-800-225-5163.

SPECIAL PLAN ACCOUNTS

(See "Scudder tax-advantaged retirement plans," "Purchases--By Automatic
Investment Plan" and "Exchanges and redemptions--By Automatic Withdrawal Plan"
in the Fund's prospectus.)

Detailed information on any Scudder investment plan, including the
applicable charges, minimum investment requirements and disclosures made
pursuant to Internal Revenue Service (the "IRS") requirements, may be obtained
by contacting Scudder Investor Services, Inc., Two International Place, Boston,
Massachusetts 02110-4103 or by calling toll free, 1-800-225-2470. It is
advisable for an investor considering the funding of the investment plans
described below to consult with an attorney or other investment or tax adviser
with respect to the suitability requirements and tax aspects thereof.

Shares of the Fund may also be a permitted investment under profit sharing
and pension plans and IRA's other than those offered by the Fund's distributor
depending on the provisions of the relevant plan or IRA.

None of the plans assures a profit or guarantees protection against
depreciation, especially in declining markets.

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<PAGE>

Scudder Retirement Plans: Profit-Sharing and Money Purchase
Pension Plans for Corporations and Self-Employed Individuals

Shares of the Fund may be purchased as the investment medium under a plan
in the form of a Scudder Profit-Sharing Plan (including a version of the Plan
which includes a cash-or-deferred feature) or a Scudder Money Purchase Pension
Plan (jointly referred to as the Scudder Retirement Plans) adopted by a
corporation, a self-employed individual or a group of self-employed individuals
(including sole proprietorships and partnerships), or other qualifying
organization. Each of these forms was approved by the IRS as a prototype. The
IRS's approval of an employer's plan under Section 401(a) of the Internal
Revenue Code will be greatly facilitated if it is in such approved form. Under
certain circumstances, the IRS will assume that a plan, adopted in this form,
after special notice to any employees, meets the requirements of Section 401(a)
of the Internal Revenue Code.

Scudder 401(k): Cash or Deferred Profit-Sharing Plan
for Corporations and Self-Employed Individuals

Shares of the Fund may be purchased as the investment medium under a plan
in the form of a Scudder 401(k) Plan adopted by a corporation, a self-employed
individual or a group of self-employed individuals (including sole proprietors
and partnerships), or other qualifying organization. This plan has been approved
as a prototype by the IRS.

Scudder IRA: Individual Retirement Account

Shares of the Fund may be purchased as the underlying investment for an
Individual Retirement Account which meets the requirements of Section 408(a) of
the Internal Revenue Code.

A single individual who is not an active participant in an
employer-maintained retirement plan, a simplified employee pension plan, or a
tax-deferred annuity program (a "qualified plan"), and a married individual who
is not an active participant in a qualified plan and whose spouse is also not an
active participant in a qualified plan, are eligible to make tax deductible
contributions of up to $2,000 to an IRA prior to the year such individual
attains age 70 1/2. In addition, certain individuals who are active participants
in qualified plans (or who have spouses who are active participants) are also
eligible to make tax-deductible contributions to an IRA; the annual amount, if
any, of the contribution which such an individual will be eligible to deduct
will be determined by the amount of his, her, or their adjusted gross income for
the year. Whenever the adjusted gross income limitation prohibits an individual
from contributing what would otherwise be the maximum tax-deductible
contribution he or she could make, the individual will be eligible to contribute
the difference to an IRA in the form of nondeductible contributions.

An eligible individual may contribute as much as $2,000 of qualified
income (earned income or, under certain circumstances, alimony) to an IRA each
year (up to $2,000 per individual for married couples if only one spouse has
earned income). All income and capital gains derived from IRA investments are
reinvested and compound tax-deferred until distributed. Such tax-deferred
compounding can lead to substantial retirement savings.

The table below shows how much individuals would accumulate in a fully
tax-deductible IRA by age 65 (before any distributions) if they contribute
$2,000 at the beginning of each year, assuming average annual returns of 5, 10,
and 15%. (At withdrawal, accumulations in this table will be taxable.)

28
<PAGE>

Value of IRA at Age 65
Assuming $2,000 Deductible Annual Contribution

- --------------------------------------------------------------------------------
Starting Annual Rate of Return
Age of -------------------------------------------------------------
Contributions 5% 10% 15%
- --------------------------------------------------------------------------------
25 $253,680 $973,704 $4,091,908
35 139,522 361,887 999,914
45 69,439 126,005 235,620
55 26,414 35,062 46,699

This next table shows how much individuals would accumulate in non-IRA
accounts by age 65 if they start with $2,000 in pretax earned income at the
beginning of each year (which is $1,380 after taxes are paid), assuming average
annual returns of 5, 10 and 15%. (At withdrawal, a portion of the accumulation
in this table will be taxable.)

Value of a Non-IRA Account at
Age 65 Assuming $1,380 Annual Contributions
(post tax, $2,000 pretax) and a 31% Tax Bracket

- --------------------------------------------------------------------------------
Starting Annual Rate of Return
Age of -------------------------------------------------------------
Contributions 5% 10% 15%
- --------------------------------------------------------------------------------
25 $119,318 $287,021 $741,431
35 73,094 136,868 267,697
45 40,166 59,821 90,764
55 16,709 20,286 24,681

Scudder Roth IRA: Individual Retirement Account

Shares of the Fund(s) may be purchased as the underlying investment for an
individual Retirement Account which meets the requirements of Section 408A of
the Internal Revenue Code.

A single individual earning below $95,000 can contribute up to $2,000 per
year to a Roth IRA. The maximum contribution amount diminishes and gradually
falls to zero for single filers with adjusted gross incomes ranging from $95,000
to $110,000. Married couples earning less than $150,000 combined, and filing
jointly, can contribute a full $4,000 per year ($2,000 per IRA). The maximum
contribution amount for married couples filing jointly phases out from $150,000
to $160,000.

An eligible individual can contribute money to a traditional IRA and a
Roth IRA as long as the total contribution to all IRAs does not exceed $2,000.
No tax deduction is allowed under Section 219 of the Internal Revenue Code for
contributions to a Roth IRA. Contributions to a Roth IRA may be made even after
the individual for whom the account is maintained has attained age 70 1/2.

All income and capital gains derived from Roth IRA investments are
reinvested and compounded tax-free. Such tax-free compounding can lead to
substantial retirement savings. No distributions are required to be taken prior
to the death of the original account holder. If a Roth IRA has been established
for a minimum of five years, distributions can be taken tax-free after reaching
age 59 1/2, for a first-time home purchase ($10,000 maximum, one-time use) or
upon death or disability. All other distributions from a Roth IRA are taxable
and subject to a 10% tax penalty unless an exception applies. Exceptions to the
10% penalty include: disability, excess medical expenses, the purchase of health
insurance for an unemployed individual and education expenses.

An individual with an income of less than $100,000 (who is not married
filing separately) can roll his or her existing IRA into a Roth IRA. However,
the individual must pay taxes on the taxable amount in his or her traditional

29
<PAGE>

IRA. Individuals who complete the rollover in 1998 will be allowed to spread the
tax payments over a four-year period. After 1998, all taxes on such a rollover
will have to be paid in the tax year in which the rollover is made.

Scudder 403(b) Plan

Shares of the Fund may also be purchased as the underlying investment for
tax sheltered annuity plans under the provisions of Section 403(b)(7) of the
Internal Revenue Code. In general, employees of tax-exempt organizations
described in Section 501(c)(3) of the Internal Revenue Code (such as hospitals,
churches, religious, scientific, or literary organizations and educational
institutions) or a public school system are eligible to participate in a 403(b)
plan.

Automatic Withdrawal Plan

Non-retirement plan shareholders may establish an Automatic Withdrawal
Plan to receive monthly, quarterly or periodic redemptions from his or her
account for any designated amount of $50 or more. Shareholders may designate
which day they want the automatic withdrawal to be processed. The check amounts
may be based on the redemption of a fixed dollar amount, fixed share amount,
percent of account value or declining balance. The Plan provides for income
dividends and capital gains distributions, if any, to be reinvested in
additional shares. Shares are then liquidated as necessary to provide for
withdrawal payments. Since the withdrawals are in amounts selected by the
investor and have no relationship to yield or income, payments received cannot
be considered as yield or income on the investment and the resulting
liquidations may deplete or possibly extinguish the initial investment and any
reinvested dividends and capital gains distributions. Requests for increases in
withdrawal amounts or to change the payee must be submitted in writing, signed
exactly as the account is registered, and contain signature guarantee(s) as
described under "Transaction information--Redeeming shares--Signature
guarantees" in the Fund's prospectus. Any such requests must be received by the
Fund's transfer agent ten days prior to the date of the first automatic
withdrawal. An Automatic Withdrawal Plan may be terminated at any time by the
shareholder, the Trust or its agent on written notice, and will be terminated
when all shares of the Fund under the Plan have been liquidated or upon receipt
by the Trust of notice of death of the shareholder.

An Automatic Withdrawal Plan request form can be obtained by calling
1-800-225-5163.

Group or Salary Deduction Plan

An investor may join a Group or Salary Deduction Plan where satisfactory
arrangements have been made with Scudder Investor Services, Inc. for forwarding
regular investments through a single source. The minimum annual investment is
$240 per investor which may be made in monthly, quarterly, semiannual or annual
payments. The minimum monthly deposit per investor is $20. Except for trustees
or custodian fees for certain retirement plans, at present there is no separate
charge for maintaining group or salary deduction plans; however, the Trust and
its agents reserve the right to establish a maintenance charge in the future
depending on the services required by the investor.

The Trust reserves the right, after notice has been given to the
shareholder, to redeem and close a shareholder's account in the event that the
shareholder ceases participating in the group plan prior to investment of $1,000
per individual or in the event of a redemption which occurs prior to the
accumulation of that amount or which reduces the account value to less than
$1,000 and the account value is not increased to $1,000 within a reasonable time
after notification. An investor in a plan who has not purchased shares for six
months shall be presumed to have stopped making payments under the plan.

Automatic Investment Plan

Shareholders may arrange to make periodic investments through automatic
deductions from checking accounts by completing the appropriate form and
providing the necessary documentation to establish this service. The minimum
investment is $50.

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<PAGE>

The Automatic Investment Plan involves an investment strategy called
dollar cost averaging. Dollar cost averaging is a method of investing whereby a
specific dollar amount is invested at regular intervals. By investing the same
dollar amount each period, when shares are priced low the investor will purchase
more shares than when the share price is higher. Over a period of time this
investment approach may allow the investor to reduce the average price of the
shares purchased. However, this investment approach does not assure a profit or
protect against loss. This type of regular investment program may be suitable
for various investment goals such as, but not limited to, college planning or
saving for a home.

Uniform Transfers/Gifts to Minors Act

Grandparents, parents or other donors may set up custodian accounts for
minors. The minimum initial investment is $1,000 unless the donor agrees to
continue to make regular share purchases for the account through Scudder's
Automatic Investment Plan (AIP). In this case, the minimum initial investment is
$500.

The Trust reserves the right, after notice has been given to the
shareholder and custodian, to redeem and close a shareholder's account in the
event that regular investments to the account cease before the $1,000 minimum is
reached.

DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

(See "Distribution and performance information--Dividends and capital
gains distributions" in the Fund's prospectus.)

The Fund intends to follow the practice of distributing all of its
investment company taxable income, which includes any excess of net realized
short-term capital gains over net realized long-term capital losses. The Fund
may follow the practice of distributing the entire excess of net realized
long-term capital gains over net realized short-term capital losses. However,
the Fund may retain all or part of such gain for reinvestment after paying the
related federal income taxes for which the shareholders may then be asked to
claim a credit against their federal income tax liability. (See "TAXES.")

If the Fund does not distribute an amount of capital gain and/or ordinary
income required to be distributed by an excise tax provision of the Code, it may
be subject to such tax. (See "TAXES.") In certain circumstances, the Fund may
determine that it is in the interest of shareholders to distribute less than
such an amount.

Earnings and profits distributed to shareholders on redemptions of Fund
shares may be utilized by the Fund, to the extent permissible, as part of the
Fund's dividend paid deduction on its federal tax return.

The Trust intends to distribute the Fund's investment company taxable
income and any net realized capital gains in November or December to avoid
federal excise tax, although an additional distribution may be made if
necessary. Both types of distributions will be made in shares of the Fund and
confirmations will be mailed to each shareholder unless a shareholder has
elected to receive cash, in which case a check will be sent. Distributions of
investment company taxable income and net realized capital gains are taxable
(See "TAXES"), whether made in shares or cash.

Each distribution is accompanied by a brief explanation of the form and
character of the distribution. The characterization of distributions on such
correspondence may differ from the characterization for federal tax purposes. In
January of each year the Fund issues to each shareholder a statement of the
federal income tax status of all distributions in the prior calendar year.

31
<PAGE>

PERFORMANCE INFORMATION

(See "Distribution and performance information--
Performance information" in the Fund's prospectus.)

From time to time, quotations of the Fund's performance may be included in
advertisements, sales literature or reports to shareholders or prospective
investors. These performance figures will be calculated in the following manner:

Average Annual Total Return

Average annual total return is the average annual compound rate of return
for the periods of one year and the life of the Fund, ended on the last day of a
recent calendar quarter. Average annual total return quotations reflect changes
in the price of the Fund's shares and assume that all dividends and capital
gains distributions during the respective periods were reinvested in Fund
shares. Average annual total return is calculated by finding the average annual
compound rates of return of a hypothetical investment over such periods,
according to the following formula (average annual total return is then
expressed as a percentage):

T = (ERV/P)^(1/n) - 1
Where:

T = Average Annual Total Return
P = a hypothetical initial payment of $1,000
n = number of years
ERV = ending redeemable value: ERV is the value, at the end
of the applicable period, of a hypothetical $1,000
investment made at the beginning of the applicable
period.

Cumulative Total Return

Cumulative total return is the compound rate of return on a hypothetical
initial investment of $1,000 for a specified period. Cumulative total return
quotations reflect changes in the price of the Fund's shares and assume that all
dividends and capital gains distributions during the period were reinvested in
Fund shares. Cumulative total return is calculated by finding the cumulative
rate of return of a hypothetical investment over such periods, according to the
following formula (cumulative total return is then expressed as a percentage):

C = (ERV/P) -1
Where:

C = Cumulative Total Return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: ERV is the value, at the end
of the applicable period, of a hypothetical $1,000
investment made at the beginning of the applicable
period.

The Fund's Cumulative Total Return for the period September 9, 1996
(commencement of operations) to August 31, 1997 was 45.20%. If the Adviser had
not maintained certain Fund expenses cumulative total return would have been
approximately 44.20%

Total Return

Total return is the rate of return on an investment for a specified period
of time calculated in the same manner as cumulative total return.

Comparison of Fund Performance

A comparison of the quoted non-standard performance offered for various
investments is valid only if performance is calculated in the same manner. Since
there are different methods of calculating performance, investors

32
<PAGE>

should consider the effects of the methods used to calculate performance when
comparing performance of the Fund with performance quoted with respect to other
investment companies or types of investments.

In connection with communicating its performance to current or prospective
shareholders, the Fund also may compare these figures to the performance of
unmanaged indices which may assume reinvestment of dividends or interest but
generally do not reflect deductions for administrative and management costs.
Examples include, but are not limited to the Dow Jones Industrial Average, the
Consumer Price Index, Standard & Poor's 500 Composite Stock Price Index (S&P
500), the Nasdaq OTC Composite Index, the Nasdaq Industrials Index, the Russell
2000 Index, and statistics published by the Small Business Administration.

From time to time, in advertising and marketing literature, this Fund's
performance may be compared to the performance of broad groups of mutual funds
with similar investment goals, as tracked by independent organizations such as,
Investment Company Data, Inc. ("ICD"), Lipper Analytical Services, Inc.
("Lipper"), CDA Investment Technologies, Inc. ("CDA"), Morningstar, Inc., Value
Line Mutual Fund Survey and other independent organizations. When these
organizations' tracking results are used, the Fund will be compared to the
appropriate fund category, that is, by fund objective and portfolio holdings, or
to the appropriate volatility grouping, where volatility is a measure of a
fund's risk. For instance, a Scudder growth fund will be compared to funds in
the growth fund category; a Scudder income fund will be compared to funds in the
income fund category; and so on. Scudder funds (except for money market funds)
may also be compared to funds with similar volatility, as measured statistically
by independent organizations.

From time to time, in marketing and other Fund literature, Trustees and
officers of the Fund, the Fund's portfolio manager, or members of the portfolio
management team may be depicted and quoted to give prospective and current
shareholders a better sense of the outlook and approach of those who manage the
Fund. In addition, the amount of assets that the Adviser has under management in
various geographical areas may be quoted in advertising and marketing materials.

The Fund may be advertised as an investment choice in Scudder's college
planning program. The description may contain illustrations of projected future
college costs based on assumed rates of inflation and examples of hypothetical
fund performance, calculated as described above.

Statistical and other information, as provided by the Social Security
Administration, may be used in marketing materials pertaining to retirement
planning in order to estimate future payouts of social security benefits.
Estimates may be used on demographic and economic data.

Marketing and other Fund literature may include a description of the
potential risks and rewards associated with an investment in the Fund. The
description may include a "risk/return spectrum" which compares the Fund to
other Scudder funds or broad categories of funds, such as money market, bond or
equity funds, in terms of potential risks and returns. Money market funds are
designed to maintain a constant $1.00 share price and have a fluctuating yield.
Share price, yield and total return of a bond fund will fluctuate. The share
price and return of an equity fund also will fluctuate. The description may also
compare the Fund to bank products, such as certificates of deposit. Unlike
mutual funds, certificates of deposit are insured up to $100,000 by the U.S.
government and offer a fixed rate of return.

Because bank products guarantee the principal value of an investment and
money market funds seek stability of principal, these investments are considered
to be less risky than investments in either bond or equity funds, which may
involve the loss of principal. However, all long-term investments, including
investments in bank products, may be subject to inflation risk, which is the
risk of erosion of the value of an investment as prices increase over a long
time period. The risks/returns associated with an investment in bond or equity
funds depend upon many factors. For bond funds these factors include, but are
not limited to, a fund's overall investment objective, the average portfolio
maturity, credit quality of the securities held, and interest rate movements.
For equity funds, factors include a fund's overall investment objective, the
types of equity securities held and the financial position of the issuers of the
securities. The risks/returns associated with an investment in international
bond or equity funds also will depend upon currency exchange rate fluctuation.

33
<PAGE>

A risk/return spectrum generally will position the various investment
categories in the following order: bank products, money market funds, bond funds
and equity funds. Shorter-term bond funds generally are considered less risky
and offer the potential for less return than longer-term bond funds. The same is
true of domestic bond funds relative to international bond funds, and bond funds
that purchase higher quality securities relative to bond funds that purchase
lower quality securities. Growth and income equity funds are generally
considered to be less risky and offer the potential for less return than growth
funds. In addition, international equity funds usually are considered more risky
than domestic equity funds but generally offer the potential for greater return.

Risk/return spectrums also may depict funds that invest in both domestic
and foreign securities or a combination of bond and equity securities.

Evaluation of Fund performance or other relevant statistical information
made by independent sources may also be used in advertisements concerning the
Fund, including reprints of, or selections from, editorials or articles about
this Fund. Sources for Fund performance information and articles about the Fund
include the following:

American Association of Individual Investors' Journal, a monthly publication of
the AAII that includes articles on investment analysis techniques.

Asian Wall Street Journal, a weekly Asian newspaper that often reviews U.S.
mutual funds investing internationally.

Banxquote, an on-line source of national averages for leading money market and
bank CD interest rates, published on a weekly basis by Masterfund, Inc. of
Wilmington, Delaware.

Barron's, a Dow Jones and Company, Inc. business and financial weekly that
periodically reviews mutual fund performance data.

Business Week, a national business weekly that periodically reports the
performance rankings and ratings of a variety of mutual funds investing abroad.

CDA Investment Technologies, Inc., an organization which provides performance
and ranking information through examining the dollar results of hypothetical
mutual fund investments and comparing these results against appropriate market
indices.

Consumer Digest, a monthly business/financial magazine that includes a "Money
Watch" section featuring financial news.

Financial Times, Europe's business newspaper, which features from time to time
articles on international or country-specific funds.

Financial World, a general business/financial magazine that includes a "Market
Watch" department reporting on activities in the mutual fund industry.

Forbes, a national business publication that from time to time reports the
performance of specific investment companies in the mutual fund industry.

Fortune, a national business publication that periodically rates the performance
of a variety of mutual funds.

The Frank Russell Company, a West-Coast investment management firm that
periodically evaluates international stock markets and compares foreign equity
market performance to U.S. stock market performance.

Global Investor, a European publication that periodically reviews the
performance of U.S. mutual funds investing internationally.

34
<PAGE>

IBC Money Fund Report, a weekly publication of IBC Financial Data, Inc.,
reporting on the performance of the nation's money market funds, summarizing
money market fund activity and including certain averages as performance
benchmarks, specifically "IBC's Money Fund Average," and "IBC's Government Money
Fund Average."

Ibbotson Associates, Inc., a company specializing in investment research and
data.

Investment Company Data, Inc., an independent organization which provides
performance ranking information for broad classes of mutual funds.

Investor's Business Daily, a daily newspaper that features financial, economic,
and business news.

Kiplinger's Personal Finance Magazine, a monthly investment advisory publication
that periodically features the performance of a variety of securities.

Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis, a weekly
publication of industry-wide mutual fund averages by type of fund.

Money, a monthly magazine that from time to time features both specific funds
and the mutual fund industry as a whole.

Morgan Stanley International, an integrated investment banking firm that
compiles statistical information.

Mutual Fund Values, a biweekly Morningstar, Inc. publication that provides
ratings of mutual funds based on fund performance, risk and portfolio
characteristics.

The New York Times, a nationally distributed newspaper which regularly covers
financial news.

The No-Load Fund Investor, a monthly newsletter, published by Sheldon Jacobs,
that includes mutual fund performance data and recommendations for the mutual
fund investor.

No-Load Fund*X, a monthly newsletter, published by DAL Investment Company, Inc.,
that reports on mutual fund performance, rates funds and discusses investment
strategies for the mutual fund investor.

Personal Investing News, a monthly news publication that often reports on
investment opportunities and market conditions.

Personal Investor, a monthly investment advisory publication that includes a
"Mutual Funds Outlook" section reporting on mutual fund performance measures,
yields, indices and portfolio holdings.

SmartMoney, a national personal finance magazine published monthly by Dow Jones
and Company, Inc. and The Hearst Corporation. Focus is placed on ideas for
investing, spending and saving.

Success, a monthly magazine targeted to the world of entrepreneurs and growing
business, often featuring mutual fund performance data.

United Mutual Fund Selector, a semi-monthly investment newsletter, published by
Babson United Investment Advisors, that includes mutual fund performance data
and reviews of mutual fund portfolios and investment strategies.

USA Today, a leading national daily newspaper.

U.S. News and World Report, a national news weekly that periodically reports
mutual fund performance data.

Value Line Mutual Fund Survey, an independent organization that provides
biweekly performance and other information on mutual funds.

35
<PAGE>

The Wall Street Journal, a Dow Jones and Company, Inc. newspaper which regularly
covers financial news.

Wiesenberger Investment Companies Services, an annual compendium of information
about mutual funds and other investment companies, including comparative data on
funds' backgrounds, management policies, salient features, management results,
income and dividend records and price ranges.

Working Woman, a monthly publication that features a "Financial Workshop"
section reporting on the mutual fund/financial industry.

Worth, a national publication issued 10 times per year by Capital Publishing
Company, a subsidiary of Fidelity Investments. Focus is placed on personal
financial journalism.

ORGANIZATION OF THE FUND

(See "Fund organization" in the Fund's prospectus.)

The Fund is a series of Scudder Investment Trust, a Massachusetts business
trust established under a Declaration of Trust dated September 20, 1984, as
amended. The name of the Trust was changed, effective May 15, 1991, from Scudder
Growth and Income Fund. The Trust's authorized capital consists of an unlimited
number of shares of beneficial interest, par value $0.01 per share. The Trust's
shares are currently divided into five series, Scudder Growth and Income Fund,
Scudder Large Company Growth Fund, Scudder Classic Growth Fund, Scudder S&P 500
Index Fund and Scudder Real Estate Investment Fund. Scudder Real Estate
Investment Fund is expected to be effective March 2, 1998.

The Trustees have the authority to issue additional series of shares and
to designate the relative rights and preferences as between the different
series. Each share of the Fund has equal rights with each other share of the
Fund as to voting, dividends and liquidation. All shares issued and outstanding
will be fully paid and nonassessable by the Trust, and redeemable as described
in this Statement of Additional Information and in the Fund's prospectus.

The assets of the Trust received for the issue or sale of the shares of
each series and all income, earnings, profits and proceeds thereof, subject only
to the rights of creditors, are specifically allocated to such series and
constitute the underlying assets of such series. The underlying assets of each
series are segregated on the books of account, and are to be charged with the
liabilities in respect to such series and with a proportionate share of the
general liabilities of the Trust. If a series were unable to meet its
obligations, the assets of all other series may in some circumstances be
available to creditors for that purpose, in which case the assets of such other
series could be used to meet liabilities which are not otherwise properly
chargeable to them. Expenses with respect to any two or more series are to be
allocated in proportion to the asset value of the respective series except where
allocations of direct expenses can otherwise be fairly made. The officers of the
Trust, subject to the general supervision of the Trustees, have the power to
determine which liabilities are allocable to a given series, or which are
general or allocable to two or more series. In the event of the dissolution or
liquidation of the Trust or any series, the holders of the shares of any series
are entitled to receive as a class the underlying assets of such shares
available for distribution to shareholders.

Shares of the Trust entitle their holders to one vote per share; however,
separate votes are taken by each series on matters affecting that individual
series. For example, a change in investment policy for a series would be voted
upon only by shareholders of the series involved. Additionally, approval of the
investment advisory agreement is a matter to be determined separately by each
series.

The Trustees, in their discretion, may authorize the division of shares of
the Fund (or shares of a series) into different classes, permitting shares of
different classes to be distributed by different methods. Although shareholders
of different classes of a series would have an interest in the same portfolio of
assets, shareholders of different classes may bear different expenses in
connection with different methods of distribution.

36
<PAGE>

The Declaration of Trust provides that obligations of the Fund are not
binding upon the Trustees individually but only upon the property of the Fund,
that the Trustees and officers will not be liable for errors of judgment or
mistakes of fact or law and that the Fund will indemnify its Trustees and
officers against liabilities and expenses incurred in connection with litigation
in which they may be involved because of their offices with the Fund, except if
it is determined in the manner provided in the Declaration of Trust that they
have not acted in good faith in the reasonable belief that their actions were in
the best interests of the Fund. Nothing in the Declaration of Trust, however,
protects or indemnifies a Trustee or officer against any liability to which that
person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
that person's office.

INVESTMENT ADVISER

(See "Fund organization--Investment adviser" in the Fund's prospectus.)

Scudder Kemper Investments, Inc. (the "Adviser"), an investment counsel
firm, acts as investment adviser to the Fund. This organization, the predecessor
of which is Scudder, Stevens & Clark, Inc., is one of the most experienced
investment counsel firms in the U. S. It was established as a partnership in
1919 and pioneered the practice of providing investment counsel to individual
clients on a fee basis. In 1928 it introduced the first no-load mutual fund to
the public. In 1953 the Adviser introduced Scudder International Fund, Inc., the
first mutual fund available in the U.S. investing internationally in securities
of issuers in several foreign countries. The predecessor firm reorganized from a
partnership to a corporation on June 28, 1985. On June 26, 1997, Scudder,
Stevens & Clark, Inc. ("Scudder") entered into an agreement with Zurich
Insurance Company ("Zurich") pursuant to which Scudder and Zurich agreed to form
an alliance. On December 31, 1997, Zurich acquired a majority interest in
Scudder, and Zurich Kemper Investments, Inc., a Zurich subsidiary, became part
of Scudder. Scudder's name has been changed to Scudder Kemper Investments, Inc.

Founded in 1872, Zurich is a multinational, public corporation organized
under the laws of Switzerland. Its home office is located at Mythenquai 2, 8002
Zurich, Switzerland. Historically, Zurich's earnings have resulted from its
operations as an insurer as well as from its ownership of its subsidiaries and
affiliated companies (the "Zurich Insurance Group"). Zurich and the Zurich
Insurance Group provide an extensive range of insurance products and services
and have branch offices and subsidiaries in more than 40 countries throughout
the world.

The principal source of the Adviser's income is professional fees received
from providing continuous investment advice, and the firm derives no income from
brokerage or underwriting of securities. Today, it provides investment counsel
for many individuals and institutions, including insurance companies, colleges,
industrial corporations, and financial and banking organizations. In addition,
it manages Montgomery Street Income Securities, Inc., Scudder California Tax
Free Trust, Scudder Cash Investment Trust, Scudder Equity Trust, Scudder Fund,
Inc., Scudder Funds Trust, Scudder Global Fund, Inc., Scudder Global High Income
Fund, Inc., Scudder GNMA Fund, Scudder Portfolio Trust, Scudder Institutional
Fund, Inc., Scudder International Fund, Inc., Scudder Investment Trust, Scudder
Municipal Trust, Scudder Mutual Funds, Inc., Scudder New Asia Fund, Inc.,
Scudder New Europe Fund, Inc., Scudder Pathway Series, Scudder Securities Trust,
Scudder State Tax Free Trust, Scudder Tax Free Money Fund, Scudder Tax Free
Trust, Scudder U.S. Treasury Money Fund, Scudder Variable Life Investment Fund,
The Argentina Fund, Inc., The Brazil Fund, Inc., The Korea Fund, Inc., The Japan
Fund, Inc., and Scudder Spain and Portugal Fund, Inc. Some of the foregoing
companies or trusts have two or more series.

The Adviser also provides investment advisory services to the mutual funds
which comprise the AARP Investment Program from Scudder. The AARP Investment
Program from Scudder has assets over $13 billion and includes the AARP Growth
Trust, AARP Income Trust, AARP Tax Free Income Trust, AARP Managed Investment
Portfolios Trust and AARP Cash Investment Funds.

Pursuant to an Agreement between Scudder Kemper Investments, Inc. and AMA
Solutions, Inc., a subsidiary of the American Medical Association (the "AMA"),
dated May 9, 1997, Scudder has agreed, subject to applicable state regulations,
to pay AMA Solutions, Inc. royalties in an amount equal to 5% of the management
fee received by Scudder with respect to assets invested by AMA members in
Scudder funds in connection

37
<PAGE>

with the AMA InvestmentLink(SM) Program. Scudder will also pay AMA Solutions,
Inc. a general monthly fee, currently in the amount of $833. The AMA and AMA
Solutions, Inc. are not engaged in the business of providing investment advice
and neither is registered as an investment adviser or broker/dealer under
federal securities laws. Any person who participates in the AMA
InvestmentLink(SM) Program will be a customer of Scudder (or of a subsidiary
thereof) and not the AMA or AMA Solutions, Inc. AMA InvestmentLink(SM) is a
service mark of AMA Solutions, Inc.

The Adviser maintains a large research department, which conducts
continuous studies of the factors that affect the position of various
industries, companies and individual securities. The Adviser receives published
reports and statistical compilations from issuers and other sources, as well as
analyses from brokers and dealers who may execute portfolio transactions for the
Adviser's clients. However, the Adviser regards this information and material as
an adjunct to its own research activities. Scudder's international investment
management team travels the world, researching hundreds of companies. In
selecting the securities in which the Fund may invest, the conclusions and
investment decisions of the Adviser with respect to the Fund are based primarily
on the analyses of its own research department.

Certain investments may be appropriate for the Fund and also for other
clients advised by the Adviser. Investment decisions for the Fund and other
clients are made with a view to achieving their respective investment objectives
and after consideration of such factors as their current holdings, availability
of cash for investment and the size of their investments generally. Frequently,
a particular security may be bought or sold for only one client or in different
amounts and at different times for more than one but less than all clients.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In addition, purchases or sales
of the same security may be made for two or more clients on the same day. In
such event, such transactions will be allocated among the clients in a manner
believed by the Adviser to be equitable to each. In some cases, this procedure
could have an adverse effect on the price or amount of the securities purchased
or sold by the Fund. Purchase and sale orders for the Fund may be combined with
those of other clients of the Adviser in the interest of achieving the most
favorable net results to the Fund.

The transaction between Scudder and Zurich resulted in the assignment of
the Fund's investment management agreement with Scudder, that agreement
automatically terminated at the consummation of the transaction. In anticipation
of the transaction, however, a new investment management agreement between the
Fund and the Adviser was approved by the Fund's Trustees on August 14, 1997. At
the special meeting of the Fund's stockholders held on October 24, 1997, the
stockholders also approved the new investment management agreement. The new
investment management agreement (the "Agreement") became effective as of
December 31, 1997 and will be in effect for an initial term ending on September
30, 1998. The Agreement is in all material respects on the same terms as the
previous investment management agreement which it supersedes. The Agreement
incorporates conforming changes which promote consistency among all of the funds
advised by the Adviser and which permit ease of administration. The Agreement
will continue in effect from year to year thereafter only if its continuance is
approved annually by the vote of a majority of those Trustees who are not
parties to the Agreement or interested persons of the Adviser or the Trust, cast
in person at a meeting called for the purpose of voting on such approval, and
either by a vote of the Trust's Trustees on behalf of the Fund or of a majority
of the outstanding voting securities of the Fund. The Agreement may be
terminated at any time without payment of penalty by either party on sixty days'
written notice and automatically terminates in the event of its assignment.

Under the Agreement, the Adviser regularly provides the Fund with
continuing investment management for the Fund's portfolio consistent with the
Fund's investment objective, policies and restrictions and determines what
securities shall be purchased, held or sold and what portion of the Fund's
assets shall be held uninvested, subject to the Trust's Declaration of Trust,
By-Laws, the 1940 Act, the Code and to the Fund's investment objective, policies
and restrictions, and subject, further, to such policies and instructions as the
Board of Trustees of the Trust may from time to time establish. The Adviser also
advises and assists the officers of the Trust in taking such steps as are
necessary or appropriate to carry out the decisions of its Trustees and the
appropriate committees of the Trustees regarding the conduct of the business of
the Fund.

38
<PAGE>

Under the Agreement, the Adviser renders significant administrative
services (not otherwise provided by third parties) necessary for the Fund's
operations as an open-end investment company including, but not limited to,
preparing reports and notices to the Trustees and shareholders; supervising,
negotiating contractual arrangements with, and monitoring various third-party
service providers to the Fund (such as the Fund's transfer agent, pricing
agents, Custodian, accountants and others); preparing and making filings with
the SEC and other regulatory agencies; assisting in the preparation and filing
of the Fund's federal, state and local tax returns; preparing and filing the
Fund's federal excise tax returns; assisting with investor and public relations
matters; monitoring the valuation of securities and the calculation of net asset
value; monitoring the registration of shares of the Fund under applicable
federal and state securities laws; maintaining the Fund's books and records to
the extent not otherwise maintained by a third party; assisting in establishing
accounting policies of the Fund; assisting in the resolution of accounting and
legal issues; establishing and monitoring the Fund's operating budget;
processing the payment of the Fund's bills; assisting the Fund in, and otherwise
arranging for, the payment of distributions and dividends and otherwise
assisting the Fund in the conduct of its business, subject to the direction and
control of the Trustees.

The Adviser pays the compensation and expenses of all Trustees, officers
and executive employees (except expenses incurred attending Board and committee
meetings outside New York, New York or Boston, Massachusetts) of the Trust
affiliated with the Adviser and makes available, without expense to the Fund,
the services of such Trustees, officers and employees of the Adviser as may duly
be elected officers of the Trust, subject to their individual consent to serve
and to any limitations imposed by law, and provides the Fund's office space and
facilities.

For these services, the Fund will pay the Adviser an annual fee equal to
0.70% of the Fund's average daily net assets, payable monthly, provided the Fund
will make such interim payments as may be requested by the Adviser not to exceed
75% of the amount of the fee then accrued on the books of the Fund and unpaid.
The Adviser has agreed until April 15, 1998 to maintain the total annualized
expenses of the Fund at no more than 1.25% of the average daily net assets of
the Fund. For the fiscal period September 9, 1996 (commencement of operations)
to August 31, 1997, the Adviser did not impose any portion of its management fee
amounting to $164,645.

Under the Agreement the Fund is responsible for all of its other expenses
including: organizational costs, fees and expenses incurred in connection with
membership in investment company organizations; fees and expenses of the Fund's
accounting agent; brokers' commissions; legal, auditing and accounting expenses;
taxes and governmental fees; the fees and expenses of the Transfer Agent; any
other expenses of issue, sale, underwriting, distribution, redemption or
repurchase of shares; the expenses of and the fees for registering or qualifying
securities for sale; the fees and expenses of Trustees, officers and employees
of the Fund who are not affiliated with the Adviser; the cost of printing and
distributing reports and notices to stockholders; and the fees and disbursements
of custodians. The Fund may arrange to have third parties assume all or part of
the expenses of sale, underwriting and distribution of shares of the Fund. The
Fund is also responsible for its expenses of shareholders' meetings, the cost of
responding to shareholders' inquiries, and its expenses incurred in connection
with litigation, proceedings and claims and the legal obligation it may have to
indemnify its officers and Trustees of the Fund with respect thereto.

The Agreement identifies the Adviser as the exclusive licensee of the
rights to use and sublicense the names "Scudder," "Scudder Kemper Investments,
Inc." and "Scudder, Stevens and Clark, Inc." (together, the "Scudder Marks").
Under this license, the Trust, with respect to the Fund, has the non-exclusive
right to use and sublicense the Scudder name and marks as part of its name, and
to use the Scudder Marks in the Trust's investment products and services.

In reviewing the terms of the Agreement and in discussions with the
Adviser concerning such Agreement, the Trustees of the Trust who are not
"interested persons" of the Adviser are represented by independent counsel at
the Fund's expense.

The Agreement provides that the Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with matters to which the Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the Adviser in
the performance of its duties or from reckless disregard by the Adviser of its
obligations and duties under the Agreement.

39
<PAGE>

Officers and employees of the Adviser from time to time may have
transactions with various banks, including the Fund's custodian bank. It is the
Adviser's opinion that the terms and conditions of those transactions which have
occurred were not influenced by existing or potential custodial or other Fund
relationships.

The Adviser may serve as adviser to other funds with investment objectives
and policies similar to those of the Funds that may have different distribution
arrangements or expenses, which may affect performance.

None of the officers or Trustees of the Trust may have dealings with the
Fund as principals in the purchase or sale of securities, except as individual
subscribers to or holders of shares of the Fund.

Personal Investments by Employees of the Adviser

Employees of the Adviser are permitted to make personal securities
transactions, subject to requirements and restrictions set forth in the
Adviser's Code of Ethics. The Code of Ethics contains provisions and
requirements designed to identify and address certain conflicts of interest
between personal investment activities and the interests of investment advisory
clients such as the Fund. Among other things, the Code of Ethics, which
generally complies with standards recommended by the Investment Company
Institute's Advisory Group on Personal Investing, prohibits certain types of
transactions absent prior approval, imposes time periods during which personal
transactions may not be made in certain securities, and requires the submission
of duplicate broker confirmations and monthly reporting of securities
transactions. Additional restrictions apply to portfolio managers, traders,
research analysts and others involved in the investment advisory process.
Exceptions to these and other provisions of the Code of Ethics may be granted in
particular circumstances after review by appropriate personnel.

TRUSTEES AND OFFICERS

<TABLE>
<CAPTION>
Position with
Underwriter,
Name, Age Position Scudder Investor
and Address with Trust Principal Occupation** Services, Inc.
- ----------- ---------- ---------------------- --------------

<S> <C> <C> <C>
Daniel Pierce (63)+*= President and Trustee Chairman of the Board and Vice President, Director
Managing Director of Scudder and Assistant Treasurer
Kemper Investments, Inc.

Henry P. Becton, Jr. (53) Trustee President and General Manager, --
125 Western Avenue WGBH Educational Foundation
Allston, MA 02134

Dawn-Marie Driscoll (50) Trustee Executive Fellow, Center for --
4909 SW 9th Place Business Ethics, Bentley
Cape Coral, FL 33914 College; President, Driscoll
Associates

Peter B. Freeman (65) Trustee Director, The A.H. Belo --
100 Alumni Avenue Company; Trustee, Eastern
Providence, RI 02906 Utilities Associates (public
utility holding company);
Director, AMICA Life Insurance
Co.; Director, AMICA Insurance
Co.
</TABLE>

40
<PAGE>

<S> <C> <C> <C>
George M. Lovejoy, Jr. (67)= Trustee President and Director, Fifty --
50 Congress Street Associates (real estate
Suite 543 investment trust)
Boston, MA 02109

Wesley W. Marple, Jr. (65)= Trustee Professor of Business --
413 Hayden Hall Administration, Northeastern
360 Huntington Ave. University, College of Business
Boston, MA 02115 Administration

Kathryn L. Quirk (44)++*= Trustee, Vice President Managing Director of Scudder Senior Vice President
and Assistant Secretary Kemper Investments, Inc. and Director

Jean C. Tempel (54) Trustee Managing Partner, --
Ten Post Office Square Technology Equity Partners
Suite 1325
Boston, MA 02109

Bruce F. Beaty (38)++ Vice President Principal of Scudder Kemper --
Investments, Inc.

Philip S. Fortuna (39)@ Vice President Managing Director of Scudder --
Kemper Investments, Inc.

William F. Gadsden (42)++ Vice President Managing Director of Scudder --
Kemper Investments, Inc.

Jerard K. Hartman (64)++ Vice President Managing Director of Scudder --
Kemper Investments, Inc.

Robert T. Hoffman (38)++ Vice President Managing Director of Scudder --
Kemper Investments, Inc.

Thomas W. Joseph (58)+ Vice President Principal of Scudder Kemper Vice President,
Investments, Inc. Director, Treasurer and
Assistant Clerk

Valerie F. Malter (39)++ Vice President Principal of Scudder Kemper --
Investments, Inc.

Thomas F. McDonough (50)+ Vice President, Principal of Scudder Kemper Clerk
Secretary and Investments, Inc.
Assistant Treasurer

Edward J. O'Connell (52)++ Vice President and Principal of Scudder Kemper Assistant Treasurer
Assistant Treasurer Investments, Inc.
</TABLE>

41
<PAGE>

Caroline Pearson (35 )+ Assistant Secretary Director Mutual Fund --
Administration, Scudder Kemper
Investments, Inc.

</TABLE>

* Mr. Pierce and Ms. Quirk are considered by the Fund and counsel to be
persons who are "interested persons" of the Adviser or of the Fund, within
the meaning of the Investment Company Act of 1940, as amended.
** Unless otherwise stated, all the Trustees and officers have been
associated with their respective companies for more than five years, but
not necessarily in the same capacity.
= Messrs. Lovejoy, Pierce Marple and Ms. Quirk are members of
the Executive Committee for Investment Trust, which has the power to
declare dividends from ordinary income and distributions of realized
capital gains to the same extent as the Board is so empowered.
+ Address: Two International Place, Boston, Massachusetts
++ Address: 345 Park Avenue, New York, New York
@ Address: 101 California Street, Suite 4100, San Francisco, California

The Trustees and officers of the Trust also serve in similar capacities
with other Scudder Funds.

To the knowledge of the Trust, as of November 30, 1997, all Trustees and
officers of the Trust as a group owned beneficially (as that term is defined
under Section 13(d) of the Securities Exchange Act of 1934) 164,189 shares, or
4.39% of the shares of the Fund outstanding on such date.

As of November 30, 1997, 1,746,353 shares in the aggregate, 46.70% of the
outstanding shares of Scudder Classic Growth Fund, were held in the name of
State Street Bank and Trust Co., Custodian for the Scudder Pathway Series
Balanced Portfolio, One Heritage Drive, Quincy, MA 02171, who may be deemed to
be the beneficial owner of certain of these shares, but disclaims any beneficial
ownership therein.

To the knowledge of the Trust, as of November 30, 1997, no person owned
beneficially more than 5% of the Fund's outstanding shares, except as stated
above.

REMUNERATION

Responsibilities of the Board--Board and Committee Meetings

The Board of Trustees of the Trust is responsible for the general
oversight of the Fund's business. A majority of the Board's members are not
affiliated with Scudder Kemper Investments, Inc. These "Independent Trustees"
have primary responsibility for assuring that the Fund is managed in the best
interests of its shareholders.

The Board of Trustees meets at least quarterly to review the investment
performance of each Fund of the Trust and other operational matters, including
policies and procedures designated to assure compliance with various regulatory
requirements. At least annually, the Independent Trustees review the fees paid
to Scudder and its affiliates for investment advisory services and other
administrative and shareholder services. In this regard, they evaluate, among
other things, the quality and efficiency of the various other services provided,
costs incurred by Scudder and its affiliates, and comparative information
regarding fees and expenses of competitive funds. They are assisted in this
process by the Fund's independent public accountants and by independent legal
counsel selected by the Independent Trustees.

42
<PAGE>

All of the Independent Trustees serve on the Committee of Independent
Trustees, which nominates Independent Trustees and considers other related
matters, and the Audit Committee, which selects the Fund's independent public
accountants and reviews accounting policies and controls. In addition,
Independent Trustees from time to time have established and served on task
forces and subcommittees focusing on particular matters such as investment,
accounting and shareholder service issues.

Compensation of Officers and Trustees of the Fund

The Independent Trustees receive the following compensation from the Funds
of Scudder Investment Trust: an annual trustee's fee of $2,400 for a Fund in
which assets do not exceed $100 million, $4,800 for assets which exceed $100
million, but not exceeding $1 billion, and $7,200 if assets exceed $1 billion; a
fee of $150 for attendance at each board meeting, audit committee meeting, or
other meeting held for the purposes of considering arrangements between the
Trust for the Fund and Scudder or any affiliate of Scudder; $75 for any other
committee meeting (although in some cases the Independent Trustees have waived
committee meeting fees); and reimbursement of expenses incurred for travel to
and from Board Meetings. No additional compensation is paid to any Independent
Trustee for travel time to meetings, attendance at directors' educational
seminars or conferences, service on industry or association committees,
participation as speakers at directors' conferences, service on special trustee
task forces or subcommittees or service as lead or liaison trustee. Independent
Trustees do not receive any employee benefits such as pension, retirement or
health insurance.

The Independent Trustees also serve in the same capacity for other funds
managed by Scudder. These funds differ broadly in type an complexity and in some
cases have substantially different Trustee fee schedules. The following table
shows the aggregate compensation received by each Independent Trustee during
1996 from the Trust and from all of Scudder funds as a group.

Scudder
Name Investment Trust* All Scudder Funds
---- ----------------- -----------------

Henry P. Becton, Jr. $ 17,800 $ 91,012 (16 funds)
Trustee

Dawn-Marie Driscoll** - $103,000 (16 Funds)
Trustee

Peter B. Freeman** - $131,734 (33 Funds)
Trustee

George M. Lovejoy, Jr. $ 19,300 $124,512 (13 funds)
Trustee

Wesley W. Marple, Jr. $ 19,300 $106,812 (16 funds)
Trustee

Jean C. Tempel $ 18,400 $102,895 (16 funds)
Trustee

* In 1996, Scudder Investment Trust consisted of three funds: Scudder Growth
and Income Fund, Scudder Large Company Growth Fund and Scudder Classic
Growth Fund. Scudder Classic Growth Fund commenced operations on September
9, 1996. Scudder S&P 500 Index Fund commenced operations on August 29,
1997 and Scudder Real Estate Investment Fund is expected to be effective
March 2, 1998.
** Elected as Trustee to the Trust October 24, 1997.

43
<PAGE>

DISTRIBUTOR

The Trust has an underwriting agreement with Scudder Investor Services,
Inc. (the "Distributor"), a Massachusetts corporation, which is a subsidiary of
the Adviser, a Delaware corporation. The Trust's underwriting agreement dated
September 10, 1985 will remain in effect until September 30, 1998 and from year
to year thereafter only if its continuance is approved annually by a majority of
the members of the Board of Trustees who are not parties to such agreement or
interested persons of any such party and either by vote of a majority of the
Board of Trustees or a majority of the outstanding voting securities of the
Fund. The underwriting agreement was last approved by the Trustees on August 14,
1997.

Under the underwriting agreement, the Fund is responsible for: the payment
of all fees and expenses in connection with the preparation and filing with the
SEC of its registration statement and prospectus and any amendments and
supplements thereto; the registration and qualification of shares for sale in
the various states, including registering the Fund as a broker or dealer in
various states, as required; the fees and expenses of preparing, printing and
mailing prospectuses annually to existing shareholders (see below for expenses
relating to prospectuses paid by the Distributor); notices, proxy statements,
reports or other communications to shareholders of the Fund; the cost of
printing and mailing confirmations of purchases of shares and any prospectuses
accompanying such confirmations; any issuance taxes and/or any initial transfer
taxes; a portion of shareholder toll-free telephone charges and expenses of
shareholder service representatives; the cost of wiring funds for share
purchases and redemptions (unless paid by the shareholder who initiates the
transaction); the cost of printing and postage of business reply envelopes; and
a portion of the cost of computer terminals used by both the Fund and the
Distributor.

The Distributor will pay for printing and distributing prospectuses or
reports prepared for its use in connection with the offering of the Fund's
shares to the public and preparing, printing and mailing any other literature or
advertising in connection with the offering of shares of the Fund to the public.
The Distributor will pay all fees and expenses in connection with its
qualification and registration as a broker or dealer under federal and state
laws, a portion of the cost of toll-free telephone service and expenses of
shareholder service representatives, a portion of the cost of computer
terminals, and expenses of any activity which is primarily intended to result in
the sale of shares issued by the Fund, unless a Rule 12b-1 Plan is in effect
which provides that the Fund shall bear some or all of such expenses.

Note: Although the Fund does not currently have a 12b-1 Plan, and the
Trustees have no current intention of adopting one, the Fund would also
pay those fees and expenses permitted to be paid or assumed by the Fund
pursuant to a 12b-1 Plan, if any, were adopted by the Fund,
notwithstanding any other provision to the contrary in the underwriting
agreement.

As agent, the Distributor currently offers shares of the Fund on a
continuous basis to investors in all states in which shares of the Fund may from
time to time be registered or where permitted by applicable law. The
underwriting agreement provides that the Distributor accepts orders for shares
at net asset value as no sales commission or load is charged to the investor.
The Distributor has made no firm commitment to acquire shares of the Fund.

TAXES

(See "Distribution and performance information--Dividends and capital
gains distributions" and "Transaction information--Tax information,
Tax identification number" in the Fund's prospectus.)

The Fund has elected to be treated as a regulated investment company under
Subchapter M of the Code, or a predecessor statute and has qualified as such
since its inception. It intends to continue to qualify for such treatment. Such
qualification does not involve governmental supervision or management of
investment practices or policy.

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<PAGE>

A regulated investment company qualifying under Subchapter M of the Code
is required to distribute to its shareholders at least 90 percent of its
investment company taxable income (including net short-term capital gain) and
generally is not subject to federal income tax to the extent that it distributes
annually its investment company taxable income and net realized capital gains in
the manner required under the Code.

The Fund is subject to a 4% nondeductible excise tax on amounts required
to be but not distributed under a prescribed formula. The formula requires
payment to shareholders during a calendar year of distributions representing at
least 98% of the Fund's ordinary income for the calendar year, at least 98% of
the excess of its capital gains over capital losses (adjusted for certain
ordinary losses) realized during the one-year period ending October 31 during
such year, and all ordinary income and capital gains for prior years that were
not previously distributed.

Investment company taxable income generally is made up of dividends,
interest and net short-term capital gains in excess of net long-term capital
losses, less expenses. Net realized capital gains for a fiscal year are computed
by taking into account any capital loss carryforward of the Fund.

If any net realized long-term capital gains in excess of net realized
short-term capital losses are retained by the Fund for reinvestment, requiring
federal income taxes to be paid thereon by the Fund, the Fund intends to elect
to treat such capital gains as having been distributed to shareholders. As a
result, each shareholder will report such capital gains as long-term capital
gains, will be able to claim a proportionate share of federal income taxes paid
by the Fund on such gains as a credit against the shareholder's federal income
tax liability, and will be entitled to increase the adjusted tax basis of the
shareholder's Fund shares by the difference between the shareholder's pro rata
share of such gains and the shareholder's tax credit. If the Fund makes such an
election, it may not be treated as having met the excise tax distribution
requirement.

Distributions of investment company taxable income are taxable to
shareholders as ordinary income.

Dividends from domestic corporations are not expected to comprise a
substantial part of the Fund's gross income. If any such dividends constitute a
portion of the Fund's gross income, a portion of the income distributions of the
Fund may be eligible for the 70% deduction for dividends received by
corporations. Shareholders will be informed of the portion of dividends which so
qualify. The dividends-received deduction is reduced to the extent the shares of
the Fund with respect to which the dividends are received are treated as
debt-financed under federal income tax law and is eliminated if the shares are
deemed to have been held for less than 46 days during the 90-day period
beginning 45 days before the shares become ex-dividend.

Properly designated distributions of the excess of net long-term capital
gain over net short-term capital loss are taxable to shareholders as long-term
capital gain, regardless of the length of time the shares of the Fund have been
held by such shareholders. Such distributions are not eligible for the
dividends-received deduction. Any loss realized upon the redemption of shares
held at the time of redemption for six months or less will be treated as a
long-term capital loss to the extent of any amounts treated as distributions of
long-term capital gain during such six-month period.

Distributions of investment company taxable income and net realized
capital gains will be taxable as described above, whether received in shares or
in cash. Shareholders electing to receive distributions in the form of
additional shares will have a cost basis for federal income tax purposes in each
share so received equal to the net asset value of a share on the reinvestment
date.

All distributions of investment company taxable income and net realized
capital gain, whether received in shares or in cash, must be reported by each
shareholder on his or her federal income tax return. Dividends declared in
October, November or December with a record date in such a month will be deemed
to have been received by shareholders on December 31, if paid during January of
the following year. Redemptions of shares, including exchanges for shares of
another Scudder fund, may result in tax consequences (gain or loss) to the
shareholder and are also subject to these reporting requirements.

An individual may make a deductible IRA contribution of up to $2,000 or,
if less, the amount of the individual's earned income for any taxable year only
if (i) neither the individual nor his or her spouse (unless filing

45
<PAGE>

separate returns) is an active participant in an employer's retirement plan, or
(ii) the individual (and his or her spouse, if applicable) has an adjusted gross
income below a certain level ($40,050 for married individuals filing a joint
return, with a phase-out of the deduction for adjusted gross income between
$40,050 and $50,000; $25,050 for a single individual, with a phase-out for
adjusted gross income between $25,050 and $35,000). However, an individual not
permitted to make a deductible contribution to an IRA for any such taxable year
may nonetheless make nondeductible contributions up to $2,000 to an IRA ($2,000
per individual for married couples if only one spouse has earned income) for
that year. There are special rules for determining how withdrawals are to be
taxed if an IRA contains both deductible and nondeductible amounts. In general,
a proportionate amount of each withdrawal will be deemed to be made from
nondeductible contributions; amounts treated as a return of nondeductible
contributions will not be taxable. Also, annual contributions may be made to a
spousal IRA even if the spouse has earnings in a given year if the spouse elects
to be treated as having no earnings (for IRA contribution purposes) for the
year.

Distributions by the Fund result in a reduction in the net asset value of
the Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above, even though,
from an investment standpoint, it may constitute a partial return of capital. In
particular, investors should consider the tax implications of buying shares just
prior to a distribution. The price of shares purchased at that time includes the
amount of the forthcoming distribution. Those purchasing just prior to a
distribution will then receive a partial return of capital upon the
distribution, which will nevertheless be taxable to them.

The Fund intends to qualify for and may make the election permitted under
Section 853 of the Code so that shareholders may (subject to limitations) be
able to claim a credit or deduction on their federal income tax returns for, and
will be required to treat as part of the amounts distributed to them, their pro
rata portion of qualified taxes paid by the Fund to foreign countries (which
taxes relate primarily to investment income). The Fund may make an election
under Section 853 of the Code, provided that more than 50% of the value of the
total assets of the Fund at the close of the taxable year consists of securities
in foreign corporations. The foreign tax credit available to shareholders is
subject to certain limitations imposed by the Code.

If the Fund does not make the election permitted under section 853 any
foreign taxes paid or accrued will represent an expense to the Fund which will
reduce its investment company taxable income. Absent this election, shareholders
will not be able to claim either a credit or a deduction for their pro rata
portion of such taxes paid by the Fund, nor will shareholders be required to
treat as part of the amounts distributed to them their pro rata portion of such
taxes paid.

Equity options (including covered call options written on portfolio stock)
and over-the-counter options on debt securities written or purchased by the Fund
will be subject to tax under Section 1234 of the Code. In general, no loss will
be recognized by the Fund upon payment of a premium in connection with the
purchase of a put or call option. The character of any gain or loss recognized
(i.e. long-term or short-term) will generally depend, in the case of a lapse or
sale of the option, on the Fund's holding period for the option, and in the case
of the exercise of a put option, on the Fund's holding period for the underlying
property. The purchase of a put option may constitute a short sale for federal
income tax purposes, causing an adjustment in the holding period of any property
in the Fund's portfolio similar to the property underlying the put option. If
the Fund writes an option, no gain is recognized upon its receipt of a premium.
If the option lapses or is closed out, any gain or loss is treated as short-term
capital gain or loss. If the option is exercised, the character of the gain or
loss depends on the holding period of the underlying stock.

Positions of the Fund which consist of at least one stock and at least one
stock option or other position with respect to a related security which
substantially diminishes the Fund's risk of loss with respect to such stock
could be treated as a "straddle" which is governed by Section 1092 of the Code,
the operation of which may cause deferral of losses, adjustments in the holding
periods of stocks or securities and conversion of short-term capital losses into
long-term capital losses. An exception to these straddle rules exists for
certain "qualified covered call options" on stock written by the Fund.

Many futures and forward contracts entered into by the Fund and listed
nonequity options written or purchased by the Fund (including options on debt
securities, options on futures contracts, options on securities indices and
options

46
<PAGE>

on currencies), will be governed by Section 1256 of the Code. Absent a tax
election to the contrary, gain or loss attributable to the lapse, exercise or
closing out of any such position generally will be treated as 60% long-term and
40% short-term capital gain or loss, and on the last trading day of the Fund's
fiscal year, all outstanding Section 1256 positions will be marked to market
(i.e., treated as if such positions were closed out at their closing price on
such day), with any resulting gain or loss recognized as 60% long-term and 40%
short-term capital gain or loss. Under Section 988 of the Code, discussed below,
foreign currency gain or loss from foreign currency-related forward contracts,
certain futures and options and similar financial instruments entered into or
acquired by the Fund will be treated as ordinary income or loss.

Subchapter M of the Code requires the Fund to realize less than 30% of its
annual gross income from the sale or other disposition of stock, securities and
certain options, futures and forward contracts held for less than three months.
The Fund's options, futures and forward transactions may increase the amount of
gains realized by the Fund that are subject to this 30% limitation. Accordingly,
the amount of such transactions that the Fund may undertake may be limited.

Positions of the Fund which consist of at least one position not governed
by Section 1256 and at least one futures or forward contract or nonequity option
or other position governed by Section 1256 which substantially diminishes the
Fund's risk of loss with respect to such other position will be treated as a
"mixed straddle." Although mixed straddles are subject to the straddle rules of
Section 1092 of the Code, the operation of which may cause deferral of losses,
adjustments in the holding periods of securities and conversion of short-term
capital losses into long-term capital losses, certain tax elections exist for
them which reduce or eliminate the operation of these rules. The Fund will
monitor its transactions in options, foreign currency futures and forward
contracts and may make certain tax elections in connection with these
investments.

Notwithstanding any of the foregoing, recent tax law changes may require
the Fund to recognize gain (but not loss) from a constructive sale of certain
"appreciated financial positions" if the Fund enters into a short sale,
offsetting material principal contract, futures or forward contract transaction
with respect to the appreciated position or substantially identical property.
Appreciated financial positions subject to this constructive sale treatment are
interests including options, futures and forward contracts and short sales in
stock, partnership interests, certain actively traded trust instruments and
certain debt instruments. Constructive sale treatment of appreciated financial
positions does not apply to certain transactions closed in the 90-day period
ending with the 30th day after the close of the Fund's taxable year, if certain
conditions are met.

Similarly, if a Fund enters into a short sale of property that becomes
substantially worthless, the Fund will be required to recognize gain at that
time as though it had closed the short sale. Future regulations may apply
similar treatment to other strategic transactions with respect to property that
becomes substantially worthless.

Under the Code, gains or losses attributable to fluctuations in exchange
rates which occur between the time the Fund accrues interest or other
receivables or accrues expenses or other liabilities denominated in a foreign
currency and the time the Fund actually collects such receivables or pays such
liabilities generally are treated as ordinary income or ordinary loss.
Similarly, on disposition of debt securities denominated in a foreign currency
and on disposition of certain options, futures and forward contracts, gains or
losses attributable to fluctuations in the value of foreign currency between the
date of acquisition of the security or contract and the date of disposition are
also treated as ordinary gain or loss. These gains or losses, referred to under
the Code as "Section 988" gains or losses, may increase or decrease the amount
of the Fund's investment company taxable income to be distributed to its
shareholders as ordinary income.

If the Fund invests in stock of certain foreign investment companies, the
Fund may be subject to U.S. federal income taxation on a portion of any "excess
distribution" with respect to, or gain from the disposition of, such stock. The
tax would be determined by allocating such distribution or gain ratably to each
day of the Fund's holding period for the stock. The distribution or gain so
allocated to any taxable year of the Fund, other than the taxable year of the
excess distribution or disposition, would be taxed to the Fund at the highest
ordinary income rate in effect for such year, and the tax would be further
increased by an interest charge to reflect the value of the tax deferral deemed
to have resulted from the ownership of the foreign company's stock. Any amount
of distribution or gain allocated to the taxable year of

47
<PAGE>

the distribution or disposition would be included in the Fund's investment
company taxable income and, accordingly, would not be taxable to the Fund to the
extent distributed by the Fund as a dividend to its shareholders.

The Fund may be able to make an election, in lieu of being taxable in the
manner described above, to include annually in income its pro rata share of the
ordinary earnings and net capital gain of the foreign investment company,
regardless of whether it actually received any distributions from the foreign
company. These amounts would be included in the Fund's investment company
taxable income and net capital gain which, to the extent distributed by the Fund
as ordinary or capital gain dividends, as the case may be, would not be taxable
to the Fund. In order to make this election, the Fund would be required to
obtain certain annual information from the foreign investment companies in which
it invests, which in many cases may be difficult to obtain. The Fund may make an
election with respect to those foreign investment companies which provide the
Fund with the required information.

If the Fund invests in certain high yield original issue discount
obligations issued by corporations, a portion of the original issue discount
accruing on the obligation may be eligible for the deduction for dividends
received by corporations. In such event, dividends of investment company taxable
income received from the Fund by its corporate shareholders, to the extent
attributable to such portion of accrued original issue discount, may be eligible
for this deduction for dividends received by corporations if so designated by
the Fund in a written notice to shareholders.

The Fund will be required to report to the Internal Revenue Service (the
"IRS") all distributions of investment company taxable income and capital gains
as well as gross proceeds from the redemption or exchange of Fund shares, except
in the case of certain exempt shareholders. Under the backup withholding
provisions of Section 3406 of the Code, distributions of investment company
taxable income and capital gains and proceeds from the redemption or exchange of
the shares of a regulated investment company may be subject to withholding of
federal income tax at the rate of 31% in the case of non-exempt shareholders who
fail to furnish the investment company with their taxpayer identification
numbers and with required certifications regarding their status under the
federal income tax law. Withholding may also be required if the Fund is notified
by the IRS or a broker that the taxpayer identification number furnished by the
shareholder is incorrect or that the shareholder has previously failed to report
interest or dividend income. If the withholding provisions are applicable, any
such distributions and proceeds, whether taken in cash or reinvested in
additional shares, will be reduced by the amounts required to be withheld.

Shareholders of the Fund may be subject to state and local taxes on
distributions received from the Fund and on redemptions of the Fund's shares.

The foregoing discussion of U.S. federal income tax law relates solely to
the application of that law to U.S. persons, i.e., U.S. citizens and residents
and U.S. corporations, partnerships, trusts and estates. Each shareholder who
is not a U.S. person should consider the U.S. and foreign tax consequences of
ownership of shares of the Fund, including the possibility that such a
shareholder may be subject to a U.S. withholding tax at a rate of 30% (or at a
lower rate under an applicable income tax treaty) on amounts constituting
ordinary income received by him or her, where such amounts are treated as income
from U.S. sources under the Code.

Shareholders should consult their tax advisers about the application of
the provisions of tax law described in this statement of additional information
in light of their particular tax situations.

PORTFOLIO TRANSACTIONS

Brokerage Commissions

To the maximum extent feasible, the Adviser places orders for portfolio
transactions for the Fund through the Distributor which in turn places orders on
behalf of the Fund with issuers, underwriters or other brokers and dealers. The
Distributor receives no commissions, fees or other remuneration from the Fund
for this service. Allocation of brokerage is supervised by the Adviser.

The primary objective of the Adviser in placing orders for the purchase
and sale of securities for the Fund's portfolio is to obtain the most favorable
net results taking into account such factors as price, commission where

48
<PAGE>

applicable (negotiable in the case of U.S. national securities exchange
transactions but which is generally fixed in the case of foreign exchange
transactions) size of order, difficulty of execution and skill required of the
executing broker/dealer. The Adviser seeks to evaluate the overall
reasonableness of brokerage commissions paid (to the extent applicable) through
the familiarity of the Distributor with commissions charged on comparable
transactions, as well as by comparing commissions paid by the Fund to reported
commissions paid by others. The Adviser reviews on a routine basis commission
rates, execution and settlement services performed, making internal and external
comparisons.

When it can be done consistently with the policy of obtaining the most
favorable net results, it is the Adviser's practice to place such orders with
brokers and dealers who supply market quotations to Scudder Fund Accounting
Corporation for appraisal purposes, or who supply research, market and
statistical information to the Funds. The term "research, market and statistical
information" includes advice as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities or purchasers or sellers of securities; and analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts. The Adviser is not
authorized when placing portfolio transactions for the Fund to pay a brokerage
commission (to the extent applicable) in excess of that which another broker
might have charged for executing the same transaction solely on account of the
receipt of research, market or statistical information. The Adviser will not
place orders with brokers or dealers on the basis that the broker or dealer has
or has not sold shares of the Fund. Except for implementing the policy stated
above, there is no intention to place portfolio transactions with particular
brokers or dealers or groups thereof. In effecting transactions in
over-the-counter securities, orders are placed with the principal market makers
for the security being traded unless, after exercising care, it appears that
more favorable results are available otherwise.

The Fund's purchases of securities which are traded in the
over-the-counter market are generally placed by the Adviser with primary market
makers for these securities on a net basis, without any brokerage commission
being paid by the Fund. Such trading does, however, involve transaction costs.
Transactions with dealers serving as primary market makers reflect the spread
between the bid and asked prices. Purchases of underwritten issues may be made
which will include an underwriting fee paid to the underwriter.

Although certain research, market and statistical information from brokers
and dealers can be useful to the Fund and to the Adviser, it is the opinion of
the Adviser that such information will only supplement the Adviser's own
research effort since the information must still be analyzed, weighed, and
reviewed by the Adviser's staff. Such information may be useful to the Adviser
in providing services to clients other than the Fund, and not all such
information will be used by the Adviser in connection with the Fund. Conversely,
such information provided to the Adviser by brokers and dealers through whom
other clients of the Adviser effect securities transactions may be useful to the
Adviser in providing services to the Fund.

In the fiscal period ended August 31, 1997, the Fund paid brokerage
commissions of $31,968. For the fiscal period ended August 31, 1997, $14,199
(44.4% of the total brokerage commissions paid) resulted from orders placed,
consistent with the policy of obtaining the most favorable net results, with
brokers and dealers who provided supplementary research information to the Fund
or the Adviser. The amount of such transactions aggregated $65,963,799 (19.3% of
all transactions).

The Trustees intend to review from time to time whether the recapture for
the benefit of the Fund of some portion of the brokerage commissions or similar
fees paid by the Fund on portfolio transactions is legally permissible and
advisable.

Portfolio Turnover

The portfolio turnover rates (defined by the SEC as the ratio of the
lesser of sales or purchases to the monthly average value of such securities
owned during the year, excluding all securities whose remaining maturities at
the time of acquisition were one year or less) for the fiscal period ended
August 31, 1997 was 27.4%.

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<PAGE>

NET ASSET VALUE

The net asset value of shares of the Fund is computed as of the close of
regular trading on the Exchange on each day the Exchange is open for trading.
The Exchange is scheduled to be closed on the following holidays: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. Net asset value per
share is determined by dividing the value of the total assets of the Fund, less
all liabilities, by the total number of shares outstanding.

An exchange-traded equity security is valued at its most recent sale
price. Lacking any sales, the security is valued at the calculated mean between
the most recent bid quotation and the most recent asked quotation (the
"Calculated Mean"). Lacking a Calculated Mean, the security is valued at the
most recent bid quotation. An equity security which is traded on the Nasdaq
Stock Market ("Nasdaq") system is valued at its most recent sale price. Lacking
any sales, the security is valued at the most recent bid quotation. The value of
an equity security not quoted on the Nasdaq System, but traded in another
over-the-counter market, is its most recent sale price. Lacking any sales, the
security is valued at the Calculated Mean. Lacking a Calculated Mean, the
security is valued at the most recent bid quotation.

Debt securities, other than short-term securities, are valued at prices
supplied by the Fund's pricing agent(s) which reflect broker/dealer supplied
valuations and electronic data processing techniques. Short-term securities
purchased with remaining maturities of sixty days or less shall be valued by the
amortized cost method, which the Board believes approximates market value. If it
is not possible to value a particular debt security pursuant to these valuation
methods, the value of such security is the most recent bid quotation supplied by
a bona fide marketmaker. If it is not possible to value a particular debt
security pursuant to the above methods, the Adviser may calculate the price of
that debt security, subject to limitations established by the Board.

An exchange traded options contract on securities, currencies, futures and
other financial instruments is valued at its most recent sale price on such
exchange. Lacking any sales, the options contract is valued at the Calculated
Mean. Lacking any Calculated Mean, the options contract is valued at the most
recent bid quotation in the case of a purchased options contract, or the most
recent asked quotation in the case of a written options contract. An options
contract on securities, currencies and other financial instruments traded
over-the-counter is valued at the most recent bid quotation in the case of a
purchased options contract and at the most recent asked quotation in the case of
a written options contract. Futures contracts are valued at the most recent
settlement price. Foreign currency exchange forward contracts are valued at the
value of the underlying currency at the prevailing exchange rate.

If a security is traded on more than one exchange, or upon one or more
exchanges and in the over-the-counter market, quotations are taken from the
market in which the security is traded most extensively.

If, in the opinion of the Fund's Valuation Committee, the value of a
portfolio asset as determined in accordance with these procedures does not
represent the fair market value of the portfolio asset, the value of the
portfolio asset is taken to be an amount which, in the opinion of the Valuation
Committee, represents fair market value on the basis of all available
information. The value of other portfolio holdings owned by the Fund is
determined in a manner which, in the discretion of the Valuation Committee most
fairly reflects fair market value of the property on the valuation date.

Following the valuations of securities or other portfolio assets in terms
of the currency in which the market quotation used is expressed ("Local
Currency"), the value of these portfolio assets in terms of U.S. dollars is
calculated by converting the Local Currency into U.S. dollars at the prevailing
currency exchange rate on the valuation date.

ADDITIONAL INFORMATION

Experts

The Financial Highlights of the Fund included in the Fund's prospectus,
and the Financial Statements incorporated by reference in this Statement of
Additional Information have been so included or incorporated by

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<PAGE>

reference in reliance on the report of Coopers & Lybrand, L.L.P., One Post
Office Square, Boston, Massachusetts 02109, independent accountants, and given
on the authority of that firm as experts in accounting and auditing. Coopers &
Lybrand L.L.P. is responsible for performing annual (semi annual) audits of the
financial statements and financial highlights of the Fund in accordance with
Generally Accepted Auditing Standards, and the preparation of Federal tax
returns.

Other Information

Many of the investment changes in the Fund will be made at prices
different from those prevailing at the time they may be reflected in a regular
report to shareholders of the Fund. These transactions will reflect investment
decisions made by the Adviser in the light of its other portfolio holdings and
tax considerations and should not be construed as recommendations for similar
action by other investors.

The CUSIP number of Scudder Growth Fund is: 811167 30 3.

The Fund has a fiscal year end of August 31.

The firm of Dechert Price & Rhoads is counsel to the Fund.

The Fund employs State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110 as Custodian.

Costs of $11,434 incurred by Scudder Classic Growth Fund in conjunction
with its organization are amortized on a straight line basis over a five year
period beginning September 9, 1996.

Scudder Service Corporation ("Service Corporation"), P.O. Box 2291,
Boston, Massachusetts 02107-2291, a subsidiary of the Adviser, is the transfer
and dividend disbursing agent for the Fund. Service Corporation also serves as
shareholder service agent and provides subaccounting and recordkeeping services
for shareholder accounts in certain retirement and employee benefit plans. The
Fund pays Service Corporation an annual fee for each account maintained for a
participant. The fee incurred by the Fund for the fiscal period September 9,
1996 (commencement of operations) to August 31, 1997 amounted to $47,914 of
which $37,902 was not imposed and $10,012 was unpaid at August 31, 1997.

The Fund, or the Adviser (including any affiliate of the Adviser), or
both, may pay unaffiliated third parties for providing recordkeeping and other
administrative services with respect to accounts of participants in retirement
plans or other beneficial owners of Fund shares whose interests are held in an
omnibus account.

Annual service fees are paid by the Fund to Scudder Trust Company, Two
International Place, Boston, Massachusetts 02110-4103, an affiliate of the
Adviser, for certain retirement plan accounts. For the period September 9, 1996
(commencement of operations) to August 31, 1997, STC aggregated $2,315, of which
$1,831 was not imposed and $484 is unpaid at August 31, 1997.

Scudder Fund Accounting Corporation, Two International Place, Boston,
Massachusetts 02110-4103, a subsidiary of the Adviser, computes net asset values
for the Fund. The Fund pays Scudder Fund Accounting Corporation an annual fee
equal to 0.065% of the first $150 million of average daily net assets, 0.04% of
such assets in excess of $150 million and 0.02% of such assets in excess of $1
billion, plus holding and transaction charges for this service. For the period
September 9, 1996 (commencement of operations) to August 31, 1997, SFAC
aggregated $39,879, of which $31,546 was not imposed and $8,333 is unpaid at
August 31, 1997.

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<PAGE>

The Fund's prospectus and this Statement of Additional Information omit
certain information contained in the Registration Statement which the Fund has
filed with the SEC under the Securities Act of 1933 and reference is hereby made
to the Registration Statement for further information with respect to the Fund
and the securities offered hereby. This Registration Statement and its
amendments are available for inspection by the public at the SEC in Washington,
D.C.

FINANCIAL STATEMENTS

The financial statements, including the investment portfolio, of Scudder
Classic Growth Fund, together with the Report of Independent Accountants,
Financial Highlights and notes to financial statements in the Annual Report to
the Shareholders of the Fund dated August 31, 1997, are incorporated herein by
reference, and are hereby deemed to be a part of this Statement of Additional
Information.

<PAGE>

SCUDDER INVESTMENT TRUST

PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits

a. Financial Statements

Included in Part A:

For Scudder Growth and Income Fund:
Financial highlights for the ten fiscal years
ended December 31, 1995
(Incorporated by reference to Post-Effective
Amendment No. 75 to the Registration
Statement.)

For Scudder Large Company Growth Fund:
Financial Highlights for the period May 15,
1991 (commencement of operations) to October
31, 1991 and for the five fiscal years ended
October 31, 1996
(Incorporated by reference to Post-Effective
Amendment No. 79 to the Registration
Statement.)

For Scudder Classic Growth Fund:
Financial Highlights for the period September
9, 1996 (commencement of operations) to August
31, 1997 is filed herein.

Included in Part B:

For Scudder Growth and Income Fund:
Investment Portfolio as of December 31, 1995
Statement of Assets and Liabilities as of
December 31, 1995
Statement of Operations for the year ended
December 31, 1995
Statements of Changes in Net Assets for the two
fiscal years
ended December 31, 1995
Financial Highlights for the ten fiscal years
ended December 31, 1995
Notes to Financial Statements
Report of Independent Accountants
(Incorporated by reference to Post-Effective
Amendment No. 75 to the Registration
Statement.)

For Scudder Large Company Growth Fund:
Investment Portfolio as of October 31, 1996
Statement of Assets and Liabilities as of
October 31, 1996
Statement of Operations for the fiscal year
ended October 31, 1996
Statements of Changes in Net Assets for the
three fiscal years
ended October 31, 1996
Financial Highlights for the period May 15,
1991 (commencement of operations) to October
31, 1991 and for the five fiscal years ended
October 31, 1996
Notes to Financial Statements
Report of Independent Accountants
(Incorporated by reference to Post-Effective
Amendment No. 79 to the Registration
Statement.)

For Scudder Classic Growth Fund:
Investment Portfolio as of August 31, 1997

Part C - Page 1
<PAGE>

Statement of Assets and Liabilities as of
August 31, 1997
Statement of Operations for the period
September 9, 1996 (commencement of operations)
to August 31, 1997
Statement of Changes in Net Assets for the
period September 9, 1996 (commencement of
operations) to August 31, 1997
Financial Highlights for the period September
9, 1996 (commencement of operations) to August
31, 1997
Notes to Financial Statements
Report of Independent Accountants are
incorporated by reference into Part B.

For Scudder S&P 500 Index Fund:
Audited Financial Statements for the Equity 500
Index Portfolio
Investment Portfolio as of December 31, 1996
Statement of Assets and Liabilities for the
fiscal year ended December 31, 1996
Statement of Operations for the fiscal year
ended December 31, 1996
Statement of Changes in Net Assets for the
fiscal year ended December 31, 1996
Financial Highlights for the fiscal year ended
December 31, 1996
Notes to Financial Statements
Report of Independent Accountants
(Incorporated by reference to Post-Effective
Amendment No. 82 to the Registration
Statement.)
Statement of Assets and Liabilities as of
August 26, 1997.
(Incorporated by reference to Post-Effective
Amendment No. 84 to the Registration
Statement.)

Statements, schedules and historical information
other than those listed above have been omitted
since they are either not applicable or are not
required.

b. Exhibits
:

All references are to the Registrant's
Registration Statement on Form N-1A
filed with the Securities and Exchange
Commission. File Nos. 2-13628 and 811-
43. ("Registration Statement").

1. (a) Amended and Restated Declaration of
(1) Trust dated November 4, 1987 is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(a) Amendment to Amended and Restated
(2) Declaration of Trust dated November
14, 1990 is incorporated by reference
to Post-Effective Amendment No. 78 to
the Registration Statement ("Post-
Effective Amendment No. 78").

(a) Certificate of Amendment of
(3) Declaration of Trust dated February
12, 1991 is incorporated by reference
to Post-Effective Amendment No. 78 to
the Registration Statement ("Post-
Effective Amendment No. 78").

(b) Establishment and Designation of
(1) Series of Shares of Beneficial
Interest, $0.01 par value, with
respect to Scudder Growth and Income
Fund and Scudder Quality Growth Fund
is incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

Part C - Page 2
<PAGE>

(b) Establishment and Designation of
(2) Series of Shares of Beneficial
Interest, $0.01 par value, with
respect to Scudder Classic Growth Fund
is incorporated by reference to Post-
Effective Amendment No. 76 to the
Registration Statement ("Post-
Effective Amendment No. 76").

(b) Establishment and Designation of
(3) Series of Shares of Beneficial
Interest, $0.01 par value, with
respect to Scudder Growth and Income
Fund, Scudder Large Company Growth
Fund, and Scudder Classic Growth Fund
is incorporated by reference to Post-
Effective Amendment No. 81 to the
Registration Statement ("Post-
Effective Amendment No. 81").

(b) Establishment and Designation of
(4) Series of Beneficial Interest, $0.01
par value, dated June 24, 1997, with
respect to Scudder S&P 500 Index Fund
is filed herein.

(b) Establishment and Designation of
(5) Series of Beneficial Interest, $0.01
par value, dated December 9, 1997,
with respect to the Scudder Real
Estate Investment Fund is filed
herein.

2. (a) By-Laws of the Registrant dated
September 20, 1984 are incorporated by
reference to Post-Effective Amendment
No. 78 to the Registration Statement
("Post-Effective Amendment No. 78").

(b) Amendment to By-Laws of the Registrant
dated August 13, 1991 is incorporated
by reference to Post-Effective
Amendment No. 78 to the Registration
Statement ("Post-Effective Amendment
No. 78").

(c) Amendment to By-Laws of the Registrant
dated November 12, 1991 is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

3. Inapplicable.

4. Specimen certificate representing
shares of beneficial interest with
$0.01 par value of Scudder Growth and
Income Fund is incorporated by
reference to Post-Effective Amendment
No. 59 to the Registration Statement
("Post-Effective Amendment No. 59").

5. (a) Investment Management Agreement
between the Registrant (on behalf of
Scudder Growth and Income Fund) and
Scudder, Stevens & Clark, Inc.
("Scudder") dated November 14, 1990 is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(b) Investment Management Agreement
between the Registrant (on behalf of
Scudder Quality Growth Fund) and
Scudder dated May 9, 1991 is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

Part C - Page 3
<PAGE>

(c) Investment Management Agreement
between the Registrant (on behalf of
Scudder Growth and Income Fund) and
Scudder dated August 10, 1993 is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(d) Investment Management Agreement
between the Registrant (on behalf of
Scudder Growth and Income Fund) and
Scudder dated August 8, 1995 is
incorporated by reference to Post-
Effective Amendment No. 75 to the
Registration Statement ("Post-
Effective Amendment No. 75").

(e) Investment Management Agreement
between the Registrant, on behalf of
Scudder Classic Growth Fund, and
Scudder, Stevens & Clark, Inc. dated
August 13, 1996 is incorporated by
reference to Post-Effective Amendment
No. 81 to the Registration Statement
("Post-Effective Amendment No. 81")

(f) Investment Management Agreement
between the Registrant, on behalf of
Scudder Growth and Income Fund, and
Scudder, Stevens & Clark, Inc. dated
May 1, 1997 is incorporated by
reference to Post-Effective Amendment
No. 84 to the Registration Statement.

(g) Investment Management Agreement
between the Registrant, on behalf of
Scudder S&P 500 Index Fund and
Scudder, Stevens & Clark, Inc. dated
August 29, 1997, is filed herein.

(h) Investment Management Agreement
between the Registrant, on behalf of
Scudder Real Estate Investment Fund
and Scudder Kemper Investments, Inc.,
to be filed by amendment.

(i) Form of Investment Management
Agreement between the Registrant, on
behalf of Scudder Classic Growth Fund,
and Scudder Kemper Investments, Inc.
dated December 31, 1997 is filed
herein.

(j) Investment Management Agreement
between the Registrant, on behalf of
Scudder S&P 500 Index Fund and Scudder
Kemper Investments, Inc. dated
December 31, 1997 to be filed by
amendment.

6. (a) Underwriting Agreement between the
Registrant and Scudder Investor
Services, Inc., formerly Scudder Fund
Distributors, Inc., dated September
10, 1985 is incorporated by reference
to Post-Effective Amendment No. 78 to
the Registration Statement ("Post-
Effective Amendment No. 78").

7. Inapplicable.

8. (a) Custodian Agreement between the
(1) Registrant (on behalf of Scudder
Growth and Income Fund) and State
Street Bank and Trust Company ("State
Street Bank") dated December 31, 1984
is incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

Part C - Page 4
<PAGE>

(a) Amendment dated April 1, 1985 to the
(2) Custodian Agreement between the
Registrant and State Street Bank is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(a) Amendment dated August 8, 1987 to the
(3) Custodian Agreement between the
Registrant and State Street Bank is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(a) Amendment dated August 9, 1988 to the
(4) Custodian Agreement between the
Registrant and State Street Bank is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(a) Amendment dated July 29, 1991 to the
(5) Custodian Agreement between the
Registrant and State Street Bank is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(a) Custodian fee schedule for Scudder
(6) Growth and Income Fund is incorporated
by reference to Post-Effective
Amendment No. 78 to the Registration
Statement ("Post-Effective Amendment
No. 78").

(a) Custodian fee schedule for Scudder
(7) Quality Growth Fund is incorporated by
reference to Post-Effective Amendment
No. 78 to the Registration Statement
("Post-Effective Amendment No. 78").

(a) Custodian fee schedule for Scudder S&P
(8) 500 Index Fund is incorporated by
reference to Post-Effective Amendment
No. 84 to the Registration Statement.

(b) Subcustodian Agreement with fee
(1) schedule between State Street Bank and
The Bank of New York, London office,
dated December 31, 1978 is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(c) Subcustodian Agreement between State
(1) Street Bank and The Chase Manhattan
Bank, N.A. dated September 1, 1986 is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(d) Custodian fee schedule for Scudder
Quality Growth Fund and Scudder Growth
and Income Fund is incorporated by
reference to Post-Effective Amendment
No. 72 to the Registration Statement
("Post-Effective Amendment No. 72").

(e) Form of Custodian fee schedule for
Scudder Classic Growth Fund is
incorporated by reference to Post-
Effective Amendment No. 77 to the
Registration Statement ("Post-
Effective Amendment No. 77").

Part C - Page 5
<PAGE>

9. (a) Transfer Agency and Service Agreement
(1) with fee schedule between the
Registrant and Scudder Service
Corporation dated October 2, 1989 is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(a) Revised fee schedule dated October 6,
(2) 1995 for Exhibit 9(a)(1) is
incorporated by reference to Post-
Effective Amendment No. 76 ("Post-
Effective Amendment No. 76").

(a) Form of revised fee schedule for
(3) Exhibit 9(a)(1) dated October 1, 1996
is incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(b) COMPASS Service Agreement and fee
(1) schedule with Scudder Trust Company
dated January 1, 1990 is incorporated
by reference to Post-Effective
Amendment No. 78 to the Registration
Statement ("Post-Effective Amendment
No. 78").

(b) COMPASS and TRAK 2000 Service
(2) Agreement between Scudder Trust
Company and the Registrant dated
October 1, 1995 is incorporated by
reference to Post-Effective Amendment
No. 74 ("Post-Effective Amendment No.
74").

(b) Form of revised fee schedule for
(3) Exhibit 9(b)(1) dated October 1, 1996
is incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(c) Fund Accounting Services Agreement
between the Registrant, on behalf of
Scudder Quality Growth Fund and
Scudder Fund Accounting Corporation
dated November 1, 1994 is incorporated
by reference to Post-Effective
Amendment No. 72.

(d) Fund Accounting Services Agreement
between the Registrant, on behalf of
Scudder Growth and Income Fund and
Scudder Fund Accounting Corporation
dated October 17, 1994 is incorporated
by reference to Post-Effective
Amendment No. 73.

(e) Fund Accounting Services Agreement
between the Registrant, on behalf of
Scudder Classic Growth Fund, and
Scudder Fund Accounting Corporation is
filed herein.

(f) Shareholder Services Agreement between
(1) the Registrant and Charles Schwab &
Co., Inc. dated June 1, 1990 is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(f) Service Agreement between Copeland
(2) Associates, Inc. and Scudder Service
Corporation (on behalf of Scudder
Quality Growth Fund and Scudder Growth
and Income Fund) dated June 8, 1995 is
incorporated by reference to Post-
Effective Amendment No. 74 ("Post-
Effective Amendment No. 74").

Part C - Page 6
<PAGE>

(g) Administration Agreement between the
Registrant, on behalf of Scudder S&P
500 Index Fund and Scudder, Stevens &
Clark, Inc. dated August 29, 1997.

(h) License Agreement between Standard &
Poor's, a division of the McGraw-Hill
Companies, Inc. ("S&P") and Scudder,
Stevens & Clark, Inc. dated August 29,
1997.

(i) Third Party Feeder Fund Agreement
among Scudder, Stevens & Clark, Inc.,
Scudder Investment Trust, Equity 500
Index Portfolio and Bankers Trust
Company dated August 28, 1997.

(j) Investment Accounting Agreement
between the Registrant on behalf of
Scudder S&P 500 Index Fund and Bankers
Trust Company dated August 28, 1997.

10. Inapplicable.

11. Consent of Independent Accountants is
filed herein.

12. Inapplicable.

13. Inapplicable.

14. (a) Scudder Flexi-Plan for Corporations
and Self-Employed Individuals is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(b) Scudder Individual Retirement Plan is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(c) SEP-IRA is incorporated by reference
to Post-Effective Amendment No. 78 to
the Registration Statement ("Post-
Effective Amendment No. 78").

(d) Scudder Funds 403(b) Plan is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(e) Scudder Cash or Deferred Profit
Sharing Plan under Section 401(k) is
incorporated by reference to Post-
Effective Amendment No. 78 to the
Registration Statement ("Post-
Effective Amendment No. 78").

(f) Scudder Roth IRA Plan to be filed by
amendment.

15. Inapplicable.

16. Schedule for Computation of
Performance Quotation is filed herein.
Power of Attorney is incorporated by
reference to Post-Effective Amendment
No. 78 to the Registration Statement
("Post-Effective Amendment No. 78").

17. Financial Data Schedule for Scudder
Classic Growth Fund is filed herein.

Part C - Page 7
<PAGE>

Item 25. Persons Controlled by or under Common Control with
Registrant.

None

Item 26. Number of Holders of Securities (as of December 10,
1997).

(1) (2)
Title of Class Number of Record
Shareholders

Shares of beneficial
interest
($0.01 par value):

Scudder Growth and Income 326,034
Fund
Scudder Large Company 16,522
Growth Fund
Scudder Classic Growth 3,033
Fund
Scudder S&P 500 Index Fund 1,708
Scudder Real Estate N/A
Investment Fund

Item 27. Indemnification.

A policy of insurance covering Scudder, Stevens & Clark,
Inc. its subsidiaries including Scudder Investor
Services, Inc., and all of the registered investment
companies advised by Scudder, Stevens & Clark, Inc.
insures the Registrant's Trustees and officers and others
against liability arising by reason of an alleged breach
of duty caused by any negligent act, error or accidental
omission in the scope of their duties.

Article IV, Sections 4.1-4.3 of Registrant's Declaration
of Trust provide as follows:

Section 4.1. No Personal Liability of Shareholders,
Trustees, etc. No Shareholder shall be subject to
any personal liability whatsoever to any Person in
connection with Trust Property or the acts,
obligations or affairs of the Trust. No Trustee,
officer, employee or agent of the Trust shall be
subject to any personal liability whatsoever to any
Person, other than to the Trust or its Shareholders,
in connection with Trust Property or the affairs of
the Trust, save only that arising from bad faith,
willful misfeasance, gross negligence or reckless
disregard of his duties with respect to such Person;
and all such Persons shall look solely to the Trust
Property for satisfaction of claims of any nature
arising in connection with the affairs of the Trust.
If any Shareholder, Trustee, officer, employee, or
agent, as such, of the Trust, is made a party to any
suit or proceeding to enforce any such liability of
the Trust, he shall not, on account thereof, be held
to any personal liability. The Trust shall
indemnify and hold each Shareholder harmless from
and against all claims and liabilities, to which
such Shareholder may become subject by reason of his
being or having been a Shareholder, and shall
reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection
with any such claim or liability. The
indemnification and reimbursement required by the
preceding sentence shall be made only out of the
assets of the one or more series of which the
shareholder who is entitled to indemnification or
reimbursement was a Shareholder at the time the act
or event occurred which gave rise to the claim
against or liability of said shareholder. The
rights accruing to a Shareholder under this Section
4.1 shall not impair any other right to which such
Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the
Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically
provided herein.

Section 4.2. Non-Liability of Trustees, etc. No
Trustee, officer, employee or agent of the Trust
shall be liable to the Trust, its Shareholders, or
to any Shareholder, Trustee, officer, employee, or
agent thereof for any action or failure to act
(including without limitation the failure to compel

Part C - Page 8
<PAGE>

in any way any former or acting Trustee to redress
any breach of trust) except for his own bad faith,
willful misfeasance, gross negligence or reckless
disregard of the duties involved in the conduct of
his office.

Section 4.3 Mandatory Indemnification. (a) Subject
to the exceptions and limitations contained in
paragraph (b) below:

(i) every person who is, or has been, a Trustee
or officer of the Trust shall be indemnified by
the Trust to the fullest extent permitted by
law against all liability and against all
expenses reasonably incurred or paid by him in
connection with any claim, action, suit or
proceeding in which he becomes involved as a
party or otherwise by virtue of his being or
having been a Trustee or officer and against
amounts paid or incurred by him in the
settlement thereof;

(ii) the words "claim," "action," "suit," or
"proceeding" shall apply to all claims,
actions, suits or proceedings (civil, criminal,
administrative, or other, including appeals),
actual or threatened; and the words "liability"
and "expenses" shall include, without
limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties
and other liabilities.

(b) No indemnification shall be provided hereunder
to a Trustee or officer:

(i) against any liability to the Trust, a
Series thereof, or the Shareholders by reason
of a final adjudication by a court or other
body before which a proceeding was brought that
he engaged in willful misfeasance, bad faith,
gross negligence or reckless disregard of the
duties involved in the conduct of his office;

(ii) with respect to any matter as to which he
shall have been finally adjudicated not to have
acted in good faith in the reasonable belief
that his action was in the best interest of the
Trust;

(iii) in the event of a settlement or other
disposition not involving a final adjudication
as provided in paragraph (b)(i) or (b)(ii)
resulting in a payment by a Trustee or officer,
unless there has been a determination that such
Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in
the conduct of his office;

(A) by the court or other body approving
the settlement or other disposition; or

(B) based upon a review of readily
available facts (as opposed to a full
trial-type inquiry) by (x) vote of a
majority of the Disinterested Trustees
acting on the matter (provided that a
majority of the Disinterested Trustees
then in office act on the matter) or (y)
written opinion of independent legal
counsel.

(c) The rights of indemnification herein provided
may be insured against by policies maintained by the
Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now
or hereafter be entitled, shall continue as to a
person who has ceased to be such Trustee or officer
and shall inure to the benefit of the heirs,
executors, administrators and assigns of such a
person. Nothing contained herein shall affect any
rights to indemnification to which personnel of the
Trust other than Trustees and officers may be
entitled by contract or otherwise under law.

Part C - Page 9
<PAGE>

(d) Expenses of preparation and presentation of a
defense to any claim, action, suit, or proceeding of
the character described in paragraph (a) of this
Section 4.3 may be advanced by the Trust prior to
final disposition thereof upon receipt of an
undertaking by or on behalf of the recipient, to
repay such amount if it is ultimately determined
that he is not entitled to indemnification under
this Section 4.3, provided that either:

(i) such undertaking is secured by a surety
bond or some other appropriate security
provided by the recipient, or the Trust shall
be insured against losses arising out of any
such advances; or

(ii) a majority of the Disinterested Trustees
acting on the matter (provided that a majority
of the Disinterested Trustees act on the
matter) or an independent legal counsel in a
written opinion shall determine, based upon a
review of readily available facts (as opposed
to a full trial-type inquiry), that there is
reason to believe that the recipient ultimately
will be found entitled to indemnification.

As used in this Section 4.3, a "Disinterested
Trustee" is one who is not (i) an "Interested
Person" of the Trust (including anyone who has
been exempted from being an "Interested Person"
by any rule, regulation or order of the
Commission), or (ii) involved in the claim,
action, suit or proceeding.

Item 28. Business or Other Connections of Investment Adviser

The Adviser has stockholders and employees who are
denominated officers but do not as such have corporation-
wide responsibilities. Such persons are not considered
officers for the purpose of this Item 28.

Business and Other Connections of Board
Name of Directors of Registrant's Adviser

Stephen R. Director, Vice President, Treasurer, Chief
Beckwith Operating Officer & Chief Financial Officer,
Scudder, Stevens & Clark, Inc. (investment
adviser)**

Lynn S. Director, Scudder, Stevens & Clark, Inc.
Birdsong (investment adviser)**
President & Director, The Latin America Dollar
Income Fund, Inc. (investment company)'em
President & Director, Scudder World Income
Opportunities Fund, Inc. (investment
company)'em
President, The Japan Fund, Inc. (investment
company)'em
Supervisory Director, The Latin America Income
and Appreciation Fund N.V. (investment
company) +
Supervisory Director, The Venezuela High Income
Fund N.V. (investment company) xx
Supervisory Director, Scudder Mortgage Fund
(investment company)+
Supervisory Director, Scudder Floating Rate
Funds for Fannie Mae Mortgage Securities I &
II (investment company) +
Director, Canadian High Income Fund (investment
company)#
Director, Hot Growth Companies Fund (investment
company)#
Director, Sovereign High Yield Investment
Company (investment company)+
Director, Scudder, Stevens & Clark (Luxembourg)
S.A. (investment manager) #

Nicholas Bratt Director, Scudder, Stevens & Clark, Inc.
(investment adviser)**
President & Director, Scudder New Europe Fund,
Inc. (investment company)**
President & Director, The Brazil Fund, Inc.
(investment company)**
President & Director, The First Iberian Fund,
Inc. (investment company)**
President & Director, Scudder International
Fund, Inc. (investment company)**

Part C - Page 10
<PAGE>

President & Director, Scudder Global Fund, Inc.
(President on all series except Scudder
Global Fund) (investment company)**
President & Director, The Korea Fund, Inc.
(investment company)**
President & Director, Scudder New Asia Fund,
Inc. (investment company)**
President, The Argentina Fund, Inc. (investment
company)**
Vice President, Scudder, Stevens & Clark
Corporation (Delaware) (investment adviser)**
Vice President, Scudder, Stevens & Clark Japan,
Inc. (investment adviser)###
Vice President, Scudder, Stevens & Clark of
Canada Ltd. (Canadian investment adviser)
Toronto, Ontario, Canada
Vice President, Scudder, Stevens & Clark
Overseas Corporationoo

E. Michael Director, Chief Administrative Officer, Scudder,
Brown Stevens & Clark, Inc. (investment adviser)**
Trustee, Scudder GNMA Fund (investment company)*
Trustee, Scudder Portfolio Trust (investment
company)*
Trustee, Scudder U.S. Treasury Fund (investment
company)*
Trustee, Scudder Tax Free Money Fund (investment
company)*
Trustee, Scudder State Tax Free Trust
(investment company)*
Trustee, Scudder Cash Investment Trust
(investment company)*
Assistant Treasurer, Scudder Investor Services,
Inc. (broker/dealer)*
Director & President, Scudder Realty Holding
Corporation (a real estate holding company)*
Director & President, Scudder Trust Company (a
trust company)+++
Director, Scudder Trust (Cayman) Ltd.

Mark S. Casady Director, Scudder, Stevens & Clark, Inc.
(investment adviser)**
Director & Vice President, Scudder Investor
Services, Inc. (broker/dealer)*
Director & Vice President, Scudder Service
Corporation (in-house transfer agent)*
Director, SFA, Inc. (advertising agency)*

Linda C. Director, Scudder, Stevens & Clark, Inc.
Coughlin (investment adviser)**
Chairman & Trustee, AARP Cash Investment Funds
(investment company)**
Chairman & Trustee, AARP Growth Trust
(investment company)**
Chairman & Trustee, AARP Income Trust
(investment company)**
Chairman & Trustee, AARP Tax Free Income Trust
(investment company)**
Chairman & Trustee, AARP Managed Investment
Portfolios Trust (investment company)**
Director & Senior Vice President, Scudder
Investor Services, Inc. (broker/dealer)*
Director, SFA, Inc. (advertising agency)*

Margaret D. Director, Scudder, Stevens & Clark, Inc.
Hadzima (investment adviser)**
Assistant Treasurer, Scudder Investor Services,
Inc. (broker/dealer)*

Jerard K. Director, Scudder, Stevens & Clark, Inc.
Hartman (investment adviser)**
Vice President, Scudder California Tax Free
Trust (investment company)*
Vice President, Scudder Equity Trust (investment
company)**
Vice President, Scudder Cash Investment Trust
(investment company)*
Vice President, Scudder Fund, Inc. (investment
company)**
Vice President, Scudder Global Fund, Inc.
(investment company)**
Vice President, Scudder GNMA Fund (investment
company)*
Vice President, Scudder Portfolio Trust
(investment company)*
Vice President, Scudder Institutional Fund, Inc.
(investment company)**
Vice President, Scudder International Fund, Inc.
(investment company)**
Vice President, Scudder Investment Trust
(investment company)*

Part C - Page 11
<PAGE>

Vice President, Scudder Municipal Trust
(investment company)*
Vice President, Scudder Mutual Funds, Inc.
(investment company)**
Vice President, Scudder New Asia Fund, Inc.
(investment company)**
Vice President, Scudder New Europe Fund, Inc.
(investment company)**
Vice President, Scudder Securities Trust
(investment company)*
Vice President, Scudder State Tax Free Trust
(investment company)*
Vice President, Scudder Funds Trust (investment
company)**
Vice President, Scudder Tax Free Money Fund
(investment company)*
Vice President, Scudder Tax Free Trust
(investment company)*
Vice President, Scudder U.S. Treasury Money Fund
(investment company)*
Vice President, Scudder Pathway Series
(investment company)*
Vice President, Scudder Variable Life Investment
Fund (investment company)*
Vice President, The Brazil Fund, Inc.
(investment company)**
Vice President, The Korea Fund, Inc. (investment
company)**
Vice President, The Argentina Fund, Inc.
(investment company)**
Vice President & Director, Scudder, Stevens &
Clark of Canada, Ltd. (Canadian investment
adviser) Toronto, Ontario, Canada
Vice President, The First Iberian Fund, Inc.
(investment company)**
Vice President, The Latin America Dollar Income
Fund, Inc. (investment company)**
Vice President, Scudder World Income
Opportunities Fund, Inc. (investment
company)**

Richard A. Director, Scudder, Stevens & Clark, Inc.
Holt (investment adviser)**
Vice President, Scudder Variable Life Investment
Fund (investment company)*

John T. Director, Scudder, Stevens & Clark, Inc.
Packard (investment adviser)**
President, Montgomery Street Income Securities,
Inc. (investment company) o
Chairman, Scudder Realty Advisors, Inc. (realty
investment adviser) x

Daniel Pierce Chairman & Director, Scudder, Stevens & Clark,
Inc. (investment adviser)**
Chairman, Vice President & Director, Scudder
Global Fund, Inc. (investment company)**
Chairman & Director, Scudder New Europe Fund,
Inc. (investment company)**
Chairman & Director, The First Iberian Fund,
Inc. (investment company)**
Chairman & Director, Scudder International Fund,
Inc. (investment company)**
Chairman & Director, Scudder New Asia Fund, Inc.
(investment company)**
President & Trustee, Scudder Equity Trust
(investment company)**
President & Trustee, Scudder GNMA Fund
(investment company)*
President & Trustee, Scudder Portfolio Trust
(investment company)*
President & Trustee, Scudder Funds Trust
(investment company)**
President & Trustee, Scudder Securities Trust
(investment company)*
President & Trustee, Scudder Investment Trust
(investment company)*
President & Director, Scudder Institutional
Fund, Inc. (investment company)**
President & Director, Scudder Fund, Inc.
(investment company)**
President & Director, Scudder Mutual Funds, Inc.
(investment company)**
Vice President & Trustee, Scudder Municipal
Trust (investment company)*
Vice President & Trustee, Scudder Variable Life
Investment Fund (investment company)*
Vice President & Trustee, Scudder Pathway Series
(investment company)*
Trustee, Scudder California Tax Free Trust
(investment company)*
Trustee, Scudder State Tax Free Trust
(investment company)*
Vice President, Montgomery Street Income
Securities, Inc. (investment company)o
Chairman & President, Scudder, Stevens & Clark
of Canada, Ltd. (Canadian investment
adviser), Toronto, Ontario, Canada

Part C - Page 12
<PAGE>

Chairman & Director, Scudder Global
Opportunities Funds (investment company)
Luxembourg
Chairman, Scudder, Stevens & Clark, Ltd.
(investment adviser) London, England
President & Director, Scudder Precious Metals,
Inc. xxx
Vice President, Director & Assistant Secretary,
Scudder Realty Holdings Corporation
(a real estate holding company)*
Vice President, Director & Assistant Treasurer,
Scudder Investor Services, Inc.
(broker/dealer)*
Director, Scudder Latin America Investment Trust
PLC (investment company)@
Director, Fiduciary Trust Company (banking &
trust company) Boston, MA
Director, Fiduciary Company Incorporated
(banking & trust company) Boston, MA
Trustee, New England Aquarium, Boston, MA
Incorporator, Scudder Trust Company (a trust
company)+++

Kathryn L. Director, Chief Legal Officer, Chief Compliance
Quirk Officer and Secretary, Scudder, Stevens &
Clark, Inc. (investment adviser)**
Director, Vice President & Assistant Secretary,
The Argentina Fund, Inc. (investment
company)**
Director, Vice President & Assistant Secretary,
Scudder International Fund, Inc. (investment
company)**
Director, Vice President & Assistant Secretary,
Scudder New Asia Fund (investment company)**
Director, Vice President & Assistant Secretary,
Scudder Global Fund, Inc. (investment
company)**
Trustee, Vice President & Assistant Secretary,
Scudder Equity Trust (investment company)**
Trustee, Vice President & Assistant Secretary,
Scudder Securities Trust (investment
company)*
Trustee, Vice President & Assistant Secretary,
Scudder Funds Trust (investment company)**
Trustee, Scudder Investment Trust (investment
company)*
Trustee, Scudder Municipal Trust (investment
company)*
Vice President & Trustee, Scudder Cash
Investment Trust (investment company)*
Vice President & Trustee, Scudder Tax Free Money
Fund (investment company)*
Vice President & Trustee, Scudder Tax Free Trust
(investment company)*
Vice President & Secretary, AARP Growth Trust
(investment company)**
Vice President & Secretary, AARP Income Trust
(investment company)**
Vice President & Secretary, AARP Tax Free Income
Trust (investment company)**
Vice President & Secretary, AARP Cash Investment
Funds (investment company)**
Vice President & Secretary, AARP Managed
Investment Portfolios Trust (investment
company)**
Vice President & Secretary, The Japan Fund, Inc.
(investment company)**
Vice President & Assistant Secretary, Scudder
World Income Opportunities Fund, Inc.
(investment company)**
Vice President & Assistant Secretary, The Korea
Fund, Inc. (investment company)**
Vice President & Assistant Secretary, The Brazil
Fund, Inc. (investment company)**
Vice President & Assistant Secretary, Montgomery
Street Income Securities, Inc. (investment
company)o
Vice President & Assistant Secretary, Scudder
Mutual Funds, Inc. (investment company)**
Vice President & Assistant Secretary, Scudder
Pathway Series (investment company)*
Vice President & Assistant Secretary, Scudder
New Europe Fund, Inc. (investment company)**
Vice President & Assistant Secretary, Scudder
Variable Life Investment Fund (investment
company)*

Part C - Page 13
<PAGE>

Vice President & Assistant Secretary, The First
Iberian Fund, Inc. (investment company)**
Vice President & Assistant Secretary, The Latin
America Dollar Income Fund, Inc. (investment
company)**
Vice President, Scudder Fund, Inc. (investment
company)**
Vice President, Scudder Institutional Fund, Inc.
(investment company)**
Vice President, Scudder GNMA Fund (investment
company)*
Director, Senior Vice President & Clerk, Scudder
Investor Services, Inc. (broker/dealer)*
Director, Vice President & Secretary, Scudder
Fund Accounting Corporation (in-house fund
accounting agent)*
Director, Vice President & Secretary, Scudder
Realty Holdings Corporation (a real estate
holding company)*
Director & Clerk, Scudder Service Corporation
(in-house transfer agent)*
Director, SFA, Inc. (advertising agency)*
Vice President, Director & Assistant Secretary,
Scudder Precious Metals, Inc. xxx

Cornelia M. Director, Scudder, Stevens & Clark, Inc.
Small (investment adviser)**
President, AARP Cash Investment Funds
(investment company)**
President, AARP Growth Trust (investment
company)**
President, AARP Income Trust (investment
company)**
President, AARP Tax Free Income Trust
(investment company)**
President, AARP Managed Investment Portfolio
Trust (investment company)**

Edmond D. Director, President & Chief Executive Officer,
Villani Scudder, Stevens & Clark, Inc. (investment
adviser)**
Chairman & Director, The Argentina Fund, Inc.
(investment company)**
Chairman & Director, The Latin America Dollar
Income Fund, Inc. (investment company)**
Chairman & Director, Scudder World Income
Opportunities Fund, Inc. (investment
company)**
Supervisory Director, Scudder Mortgage Fund
(investment company) +
Supervisory Director, Scudder Floating Rate
Funds for Fannie Mae Mortgage Securities I &
II (investment company)+
Director, Scudder, Stevens & Clark Japan, Inc.
(investment adviser)###
Director, The Brazil Fund, Inc. (investment
company)**
Director, Indosuez High Yield Bond Fund
(investment company) Luxembourg
President & Director, Scudder, Stevens & Clark
Overseas Corporationoo
President & Director, Scudder, Stevens & Clark
Corporation (Delaware) (investment adviser)**
Director, Scudder Realty Advisors, Inc. (realty
investment adviser) x
Director, IBJ Global Investment Management S.A.,
(Luxembourg investment management company)
Luxembourg, Grand-Duchy of Luxembourg

Stephen A. Director, Scudder, Stevens & Clark, Inc.
Wohler (investment adviser)**
Vice President, Montgomery Street Income
Securities, Inc. (investment company)o

* Two International Place, Boston, MA
x 333 South Hope Street, Los Angeles, CA
** 345 Park Avenue, New York, NY
++ Two Prudential Plaza, 180 N. Stetson Avenue,
Chicago, IL
+++ 5 Industrial Way, Salem, NH
o 101 California Street, San Francisco, CA
# Societe Anonyme, 47, Boulevard Royal, L-2449
Luxembourg, R.C. Luxembourg B 34.564

Part C - Page 14
<PAGE>

+ John B. Gorsiraweg 6, Willemstad Curacao,
Netherlands Antilles
xx De Ruyterkade 62, P.O. Box 812, Willemstad
Curacao, Netherlands Antilles
## 2 Boulevard Royal, Luxembourg
*** B1 2F3F 248 Section 3, Nan King East Road, Taipei,
Taiwan
xxx Grand Cayman, Cayman Islands, British West Indies
oo 20-5, Ichibancho, Chiyoda-ku, Tokyo, Japan
### 1-7, Kojimachi, Chiyoda-ku, Tokyo, Japan
@ c/o Sinclair Hendersen Limited, 23 Cathedral Yard,
Exeter, Devon, U.K.

Item 29. Principal Underwriters.

(a) Scudder California Tax Free Trust
Scudder Cash Investment Trust
Scudder Equity Trust
Scudder Fund, Inc.
Scudder Funds Trust
Scudder Global Fund, Inc.
Scudder GNMA Fund
Scudder Institutional Fund, Inc.
Scudder International Fund, Inc.
Scudder Investment Trust
Scudder Municipal Trust
Scudder Mutual Funds, Inc.
Scudder Pathway Series
Scudder Portfolio Trust
Scudder Securities Trust
Scudder State Tax Free Trust
Scudder Tax Free Money Fund
Scudder Tax Free Trust
Scudder U.S. Treasury Money Fund
Scudder Variable Life Investment
Fund
AARP Cash Investment Funds
AARP Growth Trust
AARP Income Trust
AARP Tax Free Income Trust
AARP Managed Investment Portfolios
Trust
The Japan Fund, Inc.

(b)

(1) (2) (3)

Name and Position and Offices Positions and
Principal with Offices with
Business Scudder Investor Registrant
Address Services, Inc.

Lynn S. Birdsong Senior Vice President None
345 Park Avenue
New York, NY
10154

E. Michael Brown Assistant Treasurer None
Two International
Place
Boston, MA 02110

Part C - Page 15
<PAGE>
Name and Position and Offices Positions and
Principal with Offices with
Business Scudder Investor Registrant
Address Services, Inc.

Mark S. Casady Director and Vice None
Two International President
Place
Boston, MA 02110

Linda Coughlin Director and Senior None
Two International Vice President
Place
Boston, MA 02110

Richard W. Vice President None
Desmond
345 Park Avenue
New York, NY
10154

Paul J. Elmlinger Senior Vice President None
345 Park Avenue and Assistant Clerk
New York, NY
10154

Margaret D. Assistant Treasurer None
Hadzima
Two International
Place
Boston, MA 02110

Thomas W. Joseph Director, Vice Vice
Two International President, President
Place Treasurer and
Boston, MA 02110 Assistant Clerk

David S. Lee Director, President None
Two International and Assistant
Place Treasurer
Boston, MA 02110

Thomas F. Clerk Vice
McDonough President,
Two International Secretary and
Place Assistant
Boston, MA 02110 Treasurer

Thomas H. O'Brien Assistant Treasurer None
345 Park Avenue
New York, NY
10154

Edward J. Assistant Treasurer Vice
O'Connell President and
345 Park Avenue Assistant
New York, NY Treasurer
10154

Daniel Pierce Director, Vice President and
Two International President Trustee
Place and Assistant
Boston, MA 02110 Treasurer

Kathryn L. Quirk Director, Senior Vice Trustee, Vice
345 Park Avenue President and President and
New York, NY Assistant Clerk Assistant
10154 Secretary

Part C - Page 16
<PAGE>
Name and Position and Offices Positions and
Principal with Offices with
Business Scudder Investor Registrant
Address Services, Inc.

Robert A. Rudell Vice President None
Two International
Place
Boston, MA 02110

Edmund J. Thimme Vice President None
345 Park Avenue
New York, NY
10154

Benjamin Vice President None
Thorndike
Two International
Place
Boston, MA 02110

Sydney S. Tucker Vice President None
Two International
Place
Boston, MA 02110

David B. Watts Assistant Treasurer None
Two International
Place
Boston, MA 02110

Linda J. Wondrack Vice President None
Two International
Place
Boston, MA 02110

The Underwriter has employees who are denominated officers of
an operational area. Such persons do not have corporation-
wide responsibilities and are not considered officers for the
purpose of this Item 29.

(c)

(1) (2) (3) (4) (5)
Net Compensati
Name of Underwrit on on Brokerage Other
Principal ing Redemption Commissio Compensat
Underwriter Discounts s ns ion
and and
Commissio Repurchase
ns s

Scudder Investor None None None None
Services, Inc.

Item 30. Location of Accounts and Records.

Certain accounts, books and other documents required to
be maintained by Section 31(a) of the 1940 Act and the
Rules promulgated thereunder are maintained by Scudder,
Stevens & Clark, Two International Place, Boston, MA
02110. Records relating to the duties of the
Registrant's custodian are maintained by State Street
Bank and Trust Company, Heritage Drive, North Quincy,
Massachusetts. Records relating to the duties of the
Registrant's transfer agent are maintained by Scudder
Service Corporation, Two International Place, Boston,
Massachusetts.

Part C - Page 17
<PAGE>

Item 31. Management Services.

Inapplicable.

Item 32. Undertakings.

Inapplicable.

Part C - Page 18
<PAGE>
File No. 2-13628
File No. 811-43

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

EXHIBITS

FORM N-1A

POST-EFFECTIVE AMENDMENT NO. 87

TO REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

AND

AMENDMENT NO. 39

TO REGISTRATION STATEMENT

UNDER

THE INVESTMENT COMPANY ACT OF 1940

<PAGE>

SCUDDER INVESTMENT TRUST
SCUDDER INVESTMENT TRUST

EXHIBIT INDEX

Exhibit (1)(b)(4)
Exhibit (1)(b)(5)
Exhibit 5(g)
Exhibit 5(i)
Exhibit 11
Exhibit 17
Exhibit 9(e)
Exhibit 9(g)
Exhibit 9(h)
Exhibit 9(i)
Exhibit 9(j)

SCUDDER INVESTMENT TRUST

Establishment and Designation of Series
of Beneficial Interest, $.01 Par Value

The undersigned, being a majority of the duly elected and qualified
Trustees of Scudder Investment Trust, a Massachusetts business trust (the
"Trust"), acting pursuant to Section 5.11 of the Amended and Restated
Declaration of Trust dated November 3, 1987, as amended (the "Declaration of
Trust"), hereby divide the shares of beneficial interest of the Trust into four
separate series (each individually a "Fund" or collectively the "Funds"), each
Fund to have the following special and relative rights:

1. The Funds shall be designated as follows:

Scudder Growth and Income Fund
Scudder Large Company Growth Fund
Scudder Classic Growth Fund
Scudder S&P 500 Index Fund

2. Each Fund shall be authorized to hold cash and invest in
securities and instruments and use investment techniques as
described in the Trust's registration statement under the
Securities Act of 1933, as amended from time to time. Each share
of beneficial interest of each Fund ("share") shall be redeemable
as provided in the Declaration of Trust, shall be entitled to one
vote (or fraction thereof in respect of a fractional share) on
matters on which shares of that Fund shall be entitled to vote and
shall represent a pro rata beneficial interest in the assets
allocated to that Fund. The proceeds of sales of shares of a Fund,
together with any income and gain thereon, less any diminution or
expenses thereof, shall irrevocably belong to that Fund, unless
otherwise required by law. Each share of a Fund shall be entitled
to receive its pro rata share of net assets of that Fund upon
liquidation of that Fund.

3. Shareholders of each Fund shall vote separately as a class on
any matter to the extent required by, and any matter shall be
deemed to have been effectively acted upon with respect to that
Fund as provided in, Rule 18f-2, as from time to time in effect,
under the Investment Company Act of 1940, as amended, or any
successor rule.

4. The shares of beneficial interest of the Trust outstanding on
the date hereof shall be deemed to be shares of Scudder Growth and
Income Fund, Scudder Large Company Growth Fund and Scudder Classic
Growth Fund.
<PAGE>

5. The assets and liabilities of the Trust existing on the date
hereof shall, except as provided below, be allocated to Scudder
Growth and Income Fund, Scudder Large Company Growth Fund and
Scudder Classic Growth Fund and, hereafter, the assets and
liabilities of the Trust shall be allocated among the Funds as set
forth in Section 5.11 of the Declaration of Trust, except as
provided below.

(a) Costs incurred in connection with the organization and
registration of shares of Scudder S&P 500 Index Fund shall
be amortized by such Fund over the five-year period
beginning with the month the Fund commences operations.

(b) The liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to
any particular Fund shall be allocated among the Funds on
the basis of their relative average daily net assets.

(c) The Trustees may from time to time in particular cases
make specific allocations of assets or liabilities among the
Funds.

6. The Trustees (including any successor Trustees) shall have
the right at any time and from time to time to reallocate assets
and expenses or to change the designation of any Fund now or
hereafter created, or to otherwise change the special and relative
rights of any such Fund provided that such change shall not
adversely affect the rights of shareholders of a Fund.

The foregoing shall be effective upon execution.

/s/Henry P. Becton, Jr.
- -----------------------------------
Henry P. Becton, Jr., as Trustee

/s/Dudley H. Ladd,
- -----------------------------------
Dudley H. Ladd, as Trustee

/s/George M. Lovejoy, Jr.
- -----------------------------------
George M. Lovejoy, Jr., as Trustee

/s/Wesley W. Marple, Jr.
- ----------------------------------
Wesley W. Marple, Jr., as Trustee

2
<PAGE>

/s/Daniel Pierce
- ----------------------------------
Daniel Pierce, as Trustee

/s/Kathryn L. Quirk
- ----------------------------------
Kathryn L. Quirk

/s/Jean C. Tempel
- ----------------------------------
Jean C. Tempel

Dated: June 11, 1997

SCUDDER INVESTMENT TRUST

Amended and Restated
Establishment and Designation of Series
of Shares of Beneficial Interest, $.01 Par Value Per Share

The undersigned, being a majority of the duly elected and qualified
Trustees of Scudder Investment Trust, a Massachusetts business trust (the
"Trust"), acting pursuant to Section 5.11 of the Amended and Restated
Declaration of Trust dated November 3, 1987, as amended (the "Declaration of
Trust"), having heretofore divided the shares of beneficial interest, $.01 par
value per share, of the Trust ("Shares") into separate series (each individually
a "Fund" or collectively the "Funds"), hereby establish and designate one or
more additional Funds, each Fund to have the following designations and special
and relative rights:

1. The Funds heretofore designated are as follows:

Scudder Growth and Income Fund
Scudder Large Company Growth Fund
Scudder Classic Growth Fund
Scudder S&P 500 Index Fund

2. The additional Fund designated hereby is as follows:

Scudder Real Estate Investment Fund

3. Each Fund shall consist of an unlimited number of Shares. Each Fund
shall be authorized to hold cash and invest in securities and instruments and
use investment techniques as described in the Trust's registration statement
under the Securities Act of 1933, as amended from time to time. Each Share of
each Fund shall be redeemable as provided in the Declaration of Trust, shall be
entitled to one vote (or fraction thereof in respect of a fractional share) on
matters on which shares of that Fund shall be entitled to vote and shall
represent a pro rata beneficial interest in the assets allocated to that Fund.
The proceeds of sales of Shares of a Fund, together with any income and gain
thereon, less any diminution or expenses thereof, shall irrevocably belong to
that Fund, unless otherwise required by law. Each Share of a Fund shall be
entitled to receive its pro rata share of the net assets of that Fund upon
liquidation of that Fund. Upon redemption of a Shareholder's Shares or
indemnification for liabilities incurred by reason of a Shareholder's being or
having been a shareholder of the Fund, or the entry of a final judgment in favor
of a Shareholder by reason of being or having been a Shareholder of the Fund,
such Shareholder shall be paid solely out of the property of the Fund.

4. Shareholders of the Trust shall vote together on any matter, except to
the extent otherwise required by the Investment Company Act of 1940, as amended
(the "1940 Act"), or when the Trustees have determined that the matter affects
only the interest of Shareholders of one or more Funds, in which case only the
Shareholders of such Fund or Funds shall be entitled to vote thereon. Unless
otherwise determined by the Trustees, any matter shall be deemed to have been
effectively acted upon with respect to the Fund if acted upon as provided in
Rule 18f-2 under the 1940 Act or any successor rule and in the Declaration of
<PAGE>

Trust. The Trustees may, in conjunction with the establishment of any additional
series or class of shares of the Trust, establish or reserve the right to
establish conditions under which the several series or classes shall have
separate voting rights or no voting rights.

5. The Shares of the various Funds outstanding, and the assets and
liabilities of such Funds shown on the books of the Trust, as of the close of
business on the date hereof shall be unaffected by this instrument.

6. After the close of business on the date hereof, the assets and
liabilities of the Trust shall be allocated among the Funds as set forth in
Section 5.11 of the Declaration of Trust, except as provided below.

(a) Costs incurred by the Trust on behalf of Scudder Real Estate
Investment Fund in connection with the organization and
registration of shares of such Fund shall be amortized by such
Fund over the five-year period beginning with the month the Fund
commences operations, unless otherwise required by applicable law
or generally accepted accounting principles.

(b) The liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any
particular Fund shall be allocated among the Funds on the basis
of their relative average daily net assets.

(c) The Trustees may from time to time in particular cases make
specific allocations of assets or liabilities among the Funds.

7. The Trustees (including any successor Trustees) shall have the right at
any time and from time to time to reallocate assets and expenses or to change
the designation of any Fund now or hereafter created, or to otherwise change the
special and relative rights of any such Fund provided that such change shall not
adversely affect the rights of Shareholders of a Fund.

The foregoing shall be effective upon execution.

/s/Henry P. Becton, Jr.
- -----------------------------------
Henry P. Becton, Jr., as Trustee

/s/Dawn-Marie Driscoll
- ----------------------------------
Dawn-Marie Driscoll, as Trustee

/s/Peter B. Freeman
- ----------------------------------
Peter B. Freeman, as Trustee

2
<PAGE>

/s/George M. Lovejoy, Jr.
- ----------------------------------
George M. Lovejoy, Jr., as Trustee

/s/Wesley W. Marple, Jr.
- ----------------------------------
Wesley W. Marple, Jr., as Trustee

/s/Daniel Pierce
- ---------------------------------
Daniel Pierce, as Trustee

/s/Kathryn L. Quirk
- --------------------------------
Kathryn L. Quirk, as Trustee

/s/Jean C. Tempel
- --------------------------------
Jean C. Tempel, as Trustee

Dated: December 9, 1997

SCUDDER INVESTMENT TRUST
Two International Place
Boston, Massachusetts 02110

August 29, 1997

Scudder, Stevens & Clark, Inc.
345 Park Avenue
New York, New York 10154

Investment Management Agreement
Scudder S&P 500 Index Fund

Ladies and Gentlemen:

Scudder Investment Trust (the "Trust"), has been established as a
Massachusetts business Trust to engage in the business of an investment company.
Pursuant to the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees has divided the Trust's shares of
beneficial interest, par value $.01 per share, (the "Shares") into separate
series, or funds, including Scudder S&P 500 Index Fund (the "Fund"). Series may
be abolished and dissolved, and additional series established, from time to time
by action of the Trustees.

The Trust, on behalf of the Fund, has selected you to act as the sole
investment manager of the Fund and to provide certain other services, as more
fully set forth below, and you have indicated that you are willing to act as
such investment manager and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Trust on behalf of the Fund
agrees with you as follows:

1. Delivery of Documents. The Trust engages in the business of investing and
reinvesting the assets of the Fund in the manner and in accordance with the
investment objectives, policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of Additional Information
(the "SAI") relating to the Fund included in the Trust's Registration Statement
on Form N-1A, as amended from time to time, (the "Registration Statement") filed
by the Trust under the Investment Company Act of 1940, as amended, (the "1940
Act") and the Securities Act of 1933, as amended. Copies of the documents
referred to in the preceding sentence have been furnished to you by the Trust.
The Trust has also furnished you with copies properly certified or authenticated
of each of the following additional documents related to the Trust and the Fund:

(a) The Declaration dated November 3, 1997, as amended to date.

(b) By-Laws of the Trust as in effect on the date hereof (the "By-Laws").
<PAGE>

(c) Resolutions of the Trustees of the Trust [and the shareholders of the
Fund] selecting you as investment manager and approving the form of
this Agreement.

(d) Establishment and Designation of Series of Shares of Beneficial
Interest dated June 10, 1997 relating to the Fund.

The Trust will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements, if any, to the
foregoing, including the Prospectus, the SAI and the Registration Statement.

2. Sublicense to Use the Scudder Trademarks. As exclusive licensee of the rights
to use and sublicense the use of the "Scudder" and "Scudder, Stevens & Clark,"
trademarks (together, the "Scudder Marks"), you hereby grant the Trust a
nonexclusive right and sublicense to use (i) the "Scudder" name and mark as part
of the Trust's name (the "Fund Name"), and (ii) the Scudder Marks in connection
with the Trust's investment products and services, in each case only for so long
as this Agreement, any other investment management agreement between you and the
Trust, or any extension, renewal or amendment hereof or thereof remains in
effect, and only for so long as you are a licensee of the Scudder Marks,
provided however, that you agree to use your best efforts to maintain your
license to use and sublicense the Scudder Marks. The Trust agrees that it shall
have no right to sublicense or assign rights to use the Scudder Marks, shall
acquire no interest in the Scudder Marks other than the rights granted herein,
that all of the Trust's uses of the Scudder Marks shall inure to the benefit of
Scudder Trust Company as owner and licensor of the Scudder Marks (the "Trademark
Owner"), and that the Trust shall not challenge the validity of the Scudder
Marks or the Trademark Owner's ownership thereof. The Trust further agrees that
all services and products it offers in connection with the Scudder Marks shall
meet commercially reasonable standards of quality, as may be determined by you
or the Trademark Owner from time to time, provided that you acknowledge that the
services and products the Trust rendered during the one- year period preceding
the date of this Agreement are acceptable. At your reasonable request, the Trust
shall cooperate with you and the Trademark Owner and shall execute and deliver
any and all documents necessary to maintain and protect (including but not
limited to in connection with any trademark infringement action) the Scudder
Marks and/or enter the Trust as a registered user thereof. At such time as this
Agreement or any other investment management agreement shall no longer be in
effect between you (or your successor) and the Trust, or you no longer are a
licensee of the Scudder Marks, the Trust shall (to the extent that, and as soon
as, it lawfully can) cease to use the Fund Name or any other name indicating
that it is advised by, managed by or otherwise connected with you (or any
organization which shall have succeeded to your business as investment manager)
or the Trademark Owner. In no event shall the Trust use the Scudder Marks or any

2
<PAGE>

other name or mark confusingly similar thereto (including, but not limited to,
any name or mark that includes the name "Scudder") if this Agreement or any
other investment advisory agreement between you (or your successor) and the Fund
is terminated.

3. Portfolio Management Services. As manager of the assets of the Fund, you
shall provide continuing investment management of the assets of the Fund in
accordance with the investment objectives, policies and restrictions set forth
in the Prospectus and SAI; the applicable provisions of the 1940 Act and the
Internal Revenue Code of 1986, as amended, (the "Code") relating to regulated
investment companies and all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which you have knowledge;
subject always to policies and instructions adopted by the Trust's Board of
Trustees. In connection therewith, you shall use reasonable efforts to manage
the Fund so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Fund shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
policy generally available to your investment advisory clients. In managing the
Fund in accordance with the requirements set forth in this section 3, you shall
be entitled to receive and act upon advice of counsel to the Trust or counsel to
you. You shall also make available to the Trust promptly upon request all of the
Fund's investment records and ledgers as are necessary to assist the Trust to
comply with the requirements of the 1940 Act and other applicable laws. To the
extent required by law, you shall furnish to regulatory authorities having the
requisite authority any information or reports in connection with the services
provided pursuant to this Agreement which may be requested in order to ascertain
whether the operations of the Trust are being conducted in a manner consistent
with applicable laws and regulations.

You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Fund and place orders
with broker-dealers, foreign currency dealers, futures commission merchants or
others pursuant to your determinations and all in accordance with Fund policies
as expressed in the Registration Statement. You shall determine what portion of
the Fund's portfolio shall be invested in securities and other assets and what
portion, if any, should be held uninvested.

You shall furnish to the Trust's Board of Trustees periodic reports on the
investment performance of the Fund and on the performance of your obligations
pursuant to this Agreement, and you shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.

3
<PAGE>

4. Allocation of Charges and Expenses. Except as otherwise specifically provided
in this section 4, you shall pay the compensation and expenses of all Trustees,
officers and executive employees of the Trust (including the Fund's share of
payroll taxes) who are affiliated persons of you, and you shall make available,
without expense to the Fund, the services of such of your directors, officers
and employees as may duly be elected officers of the Trust, subject to their
individual consent to serve and to any limitations imposed by law. You shall
provide at your expense the portfolio management services described in section 3
hereof.

You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 4. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Fund's Trustees and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of the Fund: organization expenses of the
Fund (including out-of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Fund's custodian or
other agents of the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent, custodians,
subcustodians, transfer agents, dividend disbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses of preparing share
certificates and, except as provided below in this section 4, other expenses in
connection with the issuance, offering, distribution, sale, redemption or
repurchase of securities issued by the Fund; expenses relating to investor and
public relations; expenses and fees of registering or qualifying Shares of the
Fund for sale; interest charges, bond premiums and other insurance expense;
freight, insurance and other charges in connection with the shipment of the
Fund's portfolio securities; the compensation and all expenses (specifically
including travel expenses relating to Trust business) of Trustees, officers and
employees of the Trust who are not affiliated persons of you; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
of the Fund; expenses of printing and distributing reports, notices and
dividends to shareholders; expenses of printing and mailing Prospectuses and
SAIs of the Fund and supplements thereto; costs of stationery; any litigation
expenses; indemnification of Trustees and officers of the Trust; costs of
shareholders' and other meetings; and travel expenses (or an appropriate portion
thereof) of Trustees and officers of the Trust who are directors, officers or
employees of you to the extent that such expenses relate to attendance at

4
<PAGE>

meetings of the Board of Trustees of the Trust or any committees thereof or
advisors thereto held outside of Boston, Massachusetts or New York, New York.

You shall not be required to pay expenses of any activity which is
primarily intended to result in sales of Shares of the Fund if and to the extent
that (i) such expenses are required to be borne by a principal underwriter which
acts as the distributor of the Fund's Shares pursuant to an underwriting
agreement which provides that the underwriter shall assume some or all of such
expenses, or (ii) the Trust on behalf of the Fund shall have adopted a plan in
conformity with Rule 12b-1 under the 1940 Act providing that the Fund (or some
other party) shall assume some or all of such expenses. You shall be required to
pay such of the foregoing sales expenses as are not required to be paid by the
principal underwriter pursuant to the underwriting agreement or are not
permitted to be paid by the Fund (or some other party) pursuant to such a plan.

5. Management Fee. Except as provided below in this section 5, for all services
to be rendered, payments to be made and costs to be assumed by you as provided
in sections 3 and 4 hereof, the Trust on behalf of the Fund shall pay you in
United States Dollars on the last day of each month the unpaid balance of a fee
equal to the excess of (a) 1/12 of 0.15 of 1 percent of the average daily net
assets as defined below of the Fund for such month; over any compensation waived
by you from time to time (as more fully described below). You shall be entitled
to receive during any month such interim payments of your fee hereunder as you
shall request, provided that no such payment shall exceed 75 percent of the
amount of your fee then accrued on the books of the Fund and unpaid.

The "average daily net assets" of the Fund shall mean the average of the values
placed on the Fund's net assets as of 4:00 p.m. (New York time) on each day on
which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If the determination of net asset value does not take place for any
particular day, then for the purposes of this section 5, the value of the net
assets of the Fund as last determined shall be deemed to be the value of its net
assets as of 4:00 p.m. (New York time), or as of such other time as the value of
the net assets of the Fund's portfolio may be lawfully determined on that day.
If the Fund determines the value of the net assets of its portfolio more than
once on any day, then the last such determination thereof on that day shall be
deemed to be the sole determination thereof on that day for the purposes of this
section 5.

5
<PAGE>

You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services. You
shall be contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Fund's expenses, as if such waiver
or limitation were fully set forth herein.

No fee shall be due under this Agreement if the Trustees invest
substantially all of the Fund's investment assets in a registered investment
company which operates as a "master portfolio."

6. Avoidance of Inconsistent Position; Services Not Exclusive. In connection
with purchases or sales of portfolio securities and other investments for the
account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.

Your services to the Fund pursuant to this Agreement are not to be deemed
to be exclusive and it is understood that you may render investment advice,
management and services to others. In acting under this Agreement, you shall be
an independent contractor and not an agent of the Trust. Whenever the Fund and
one or more other accounts or investment companies advised by the Manager have
available funds for investment, investments suitable and appropriate for each
shall be allocated in accordance with procedures believed by the Manager to be
equitable to each entity. Similarly, opportunities to sell securities shall be
allocated in a manner believed by the Manager to be equitable. The Fund
recognizes that in some cases this procedure may adversely affect the size of
the position that may be acquired or disposed of for the Fund.

7. Limitation of Liability of Manager. As an inducement to your undertaking to
render services pursuant to this Agreement, the Trust agrees that you shall not
be liable under this Agreement for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters to which this
Agreement relates, provided that nothing in this Agreement shall be deemed to
protect or purport to protect you against any liability to the Trust, the Fund
or its shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties, or
by reason of your reckless disregard of your obligations and duties hereunder.
Any person, even though also employed by you, who may be or become an employee

6
<PAGE>

of and paid by the Fund shall be deemed, when acting within the scope of his or
her employment by the Fund, to be acting in such employment solely for the Fund
and not as your employee or agent.

8. Duration and Termination of This Agreement. This Agreement remain in force
and effect until September 30, 1998, and continue in force from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Fund. The aforesaid requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the 1940 Act and the rules and regulations
thereunder and any applicable SEC exemptive order therefrom.

This Agreement may be terminated with respect to the Fund at any time,
without the payment of any penalty, by the vote of a majority of the outstanding
voting securities of the Fund or by the Trust's Board of Trustees on 60 days'
written notice to you, or by you on 60 days' written notice to the Trust. This
Agreement shall terminate automatically in the event of its assignment.

9. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.

10. Limitation of Liability for Claims. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Scudder Investment
Trust" refers to the Trustees under the Declaration collectively as Trustees and
not as individuals or personally, and that no shareholder of the Fund, or
Trustee, officer, employee or agent of the Trust, shall be subject to claims
against or obligations of the Trust or of the Fund to any extent whatsoever, but
that the Trust estate only shall be liable.

You are hereby expressly put on notice of the limitation of liability as
set forth in the Declaration and you agree that the obligations assumed by the
Trust on behalf of the Fund pursuant to this Agreement shall be limited in all
cases to the Fund and its assets, and you shall not seek satisfaction of any
such obligation from the shareholders or any shareholder of the Fund or any
other series of the Trust, or from any Trustee, officer, employee or agent of
the Trust. You understand that the rights and obligations of each Fund, or

7
<PAGE>

series, under the Declaration are separate and distinct from those of any and
all other series.

11. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

In interpreting the provisions of this Agreement, the definitions contained
in Section 2(a) of the 1940 Act (particularly the definitions of "affiliated
person," "assignment" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.

This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause the
Fund to fail to comply with the requirements of Subchapter M of the Code.

This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Trust on behalf of the Fund.

If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.

Yours very truly,

SCUDDER INVESTMENT TRUST,
on behalf of Scudder S&P 500
Index Fund

By:/s/Daniel Pierce
----------------------------
President

The foregoing Agreement is hereby accepted as of the date
thereof.

SCUDDER, STEVENS & CLARK, INC.

By:/s/David S. Lee
---------------------------
Managing Director

Scudder Investment Trust
Two International Place
Boston, Massachusetts 02110

December 31, 1997

Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154

Investment Management Agreement
Scudder Classic Growth Fund

Ladies and Gentlemen:

Scudder Investment Trust (the "Trust") has been established as a
Massachusetts business trust to engage in the business of an investment company.
Pursuant to the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees has divided the Trust's shares of
beneficial interest, par value $.01 per share, (the "Shares") into separate
series, or funds, including Scudder Classic Growth Fund (the "Fund"). Series may
be abolished and dissolved, and additional series established, from time to time
by action of the Trustees.

1. Delivery of Documents. The Trust engages in the business of investing
and reinvesting the assets of the Fund in the manner and in accordance with the
investment objectives, policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of Additional Information
(the "SAI") relating to the Fund included in the Trust's Registration Statement
on Form N-1A, as amended from time to time, (the "Registration Statement") filed
by the Trust under the Investment Company Act of 1940, as amended, (the "1940
Act") and the Securities Act of 1933, as amended. Copies of the documents
referred to in the preceding sentence have been furnished to you by the Trust.
The Trust has also furnished you with copies properly certified or authenticated
of each of the following additional documents related to the Trust and the Fund:

(a) The Declaration dated November 3, 1987, as amended to date.

(b) By-Laws of the Trust as in effect on the date hereof (the "By- Laws").

(c) Resolutions of the Trustees of the Trust and the shareholders of the Fund
selecting you as investment manager and approving the form of this Agreement.
<PAGE>

(d) Establishment and Designation of Series of Shares of Beneficial
Interest dated June 7, 1996.

2. Sublicense to Use the Scudder Trademarks. As exclusive licensee of the
rights to use and sublicense the use of the "Scudder," "Scudder Kemper
Investments, Inc." and "Scudder, Stevens & Clark, Inc." trademarks (together,
the "Scudder Marks"), you hereby grant the Trust a nonexclusive right and
sublicense to use (i) the "Scudder" name and mark as part of the Trust's name
(the "Fund Name"), and (ii) the Scudder Marks in connection with the Trust's
investment products and services, in each case only for so long as this
Agreement, any other investment management agreement between you and the Trust,
or any extension, renewal or amendment hereof or thereof remains in effect, and
only for so long as you are a licensee of the Scudder Marks, provided however,
that you agree to use your best efforts to maintain your license to use and
sublicense the Scudder Marks. The Trust agrees that it shall have no right to
sublicense or assign rights to use the Scudder Marks, shall acquire no interest
in the Scudder Marks other than the rights granted herein, that all of the
Trust's uses of the Scudder Marks shall inure to the benefit of Scudder Trust
Company as owner and licensor of the Scudder Marks (the "Trademark Owner"), and
that the Trust shall not challenge the validity of the Scudder Marks or the
Trademark Owner's ownership thereof. The Trust further agrees that all services
and products it offers in connection with the Scudder Marks shall meet
commercially reasonable standards of quality, as may be determined by you or the
Trademark Owner from time to time, provided that you acknowledge that the
services and products the Trust rendered during the one-year period preceding
the date of this Agreement are acceptable. At your reasonable request, the Trust
shall cooperate with you and the Trademark Owner and shall execute and deliver
any and all documents necessary to maintain and protect (including but not
limited to in connection with any trademark infringement action) the Scudder
Marks and/or enter the Trust as a registered user thereof. At such time as this
Agreement or any other investment management agreement shall no longer be in
effect between you (or your successor) and the Trust, or you no longer are a
licensee of the Scudder Marks, the Trust shall (to the extent that, and as soon
as, it lawfully can) cease to use the Fund Name or any other name indicating
that it is advised by, managed by or otherwise connected with you (or any
organization which shall have succeeded to your business as investment manager)
or the Trademark Owner. In no event shall the Trust use the Scudder Marks or any
other name or mark confusingly similar thereto (including, but not limited to,
any name or mark that includes the name "Scudder") if this Agreement or any
other investment advisory agreement between you (or your successor) and the Fund
is terminated.

3. Portfolio Management Services. As manager of the assets of the Fund, you
shall provide continuing investment management of the assets of the Fund in
accordance with the investment objectives, policies and restrictions set forth
in the Prospectus and SAI; the applicable provisions of the 1940 Act and the
Internal Revenue Code of 1986, as amended, (the "Code") relating to regulated
investment companies and all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which you have knowledge;
subject always to policies and instructions adopted by the Trust's Board of
Trustees. In connection therewith, you shall use reasonable efforts to manage
the Fund so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Fund shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
policy generally available to your investment advisory clients. In managing the
Fund in accordance with the requirements set forth in this section 3, you shall
be entitled to receive and act upon advice of counsel to the Trust or counsel to
you. You shall also make available to the Trust promptly upon request all of the
Fund's investment records and ledgers as are necessary to assist the Trust in
complying with the requirements of the 1940 Act and other applicable laws. To

2
<PAGE>

the extent required by law, you shall furnish to regulatory authorities having
the requisite authority any information or reports in connection with the
services provided pursuant to this Agreement which may be requested in order to
ascertain whether the operations of the Trust are being conducted in a manner
consistent with applicable laws and regulations.

4. Administrative Services. In addition to the portfolio management
services specified above in section 3, you shall furnish at your expense for the
use of the Fund such office space and facilities in the United States as the
Fund may require for its reasonable needs, and you (or one or more of your
affiliates designated by you) shall render to the Trust administrative services
on behalf of the Fund necessary for operating as an open- end investment company
and not provided by persons not parties to this Agreement including, but not
limited to, preparing reports to and meeting materials for the Trust's Board of
Trustees and reports and notices to Fund shareholders; supervising, negotiating
contractual arrangements with, to the extent appropriate, and monitoring the
performance of, accounting agents, custodians, depositories, transfer agents and
pricing agents, accountants, attorneys, printers, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be necessary or
desirable to Fund operations; preparing and making filings with the Securities
and Exchange Commission (the "SEC") and other regulatory and self-regulatory
organizations, including, but not limited to, preliminary and definitive proxy
materials, post-effective amendments to the Registration Statement, semi-annual
reports on Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act;
overseeing the tabulation of proxies by the Fund's transfer agent; assisting in
the preparation and filing of the Fund's federal, state and local tax returns;
preparing and filing the Fund's federal excise tax return pursuant to Section
4982 of the Code; providing assistance with investor and public relations
matters; monitoring the valuation of portfolio securities and the calculation of
net asset value; monitoring the registration of Shares of the Fund under
applicable federal and state securities laws; maintaining or causing to be
maintained for the Fund all books, records and reports and any other information
required under the 1940 Act, to the extent that such books, records and reports
and other information are not maintained by the Fund's custodian or other agents
of the Fund; assisting in establishing the accounting policies of the Fund;
assisting in the resolution of accounting issues that may arise with respect to
the Fund's operations and consulting with the Fund's independent accountants,
legal counsel and the Fund's other agents as necessary in connection therewith;
establishing and monitoring the Fund's operating expense budgets; reviewing the
Fund's bills; processing the payment of bills that have been approved by an
authorized person; assisting the Fund in determining the amount of dividends and
distributions available to be paid by the Fund to its shareholders, preparing
and arranging for the printing of dividend notices to shareholders, and
providing the transfer and dividend paying agent, the custodian, and the
accounting agent with such information as is required for such parties to effect
the payment of dividends and distributions; and otherwise assisting the Trust as
it may reasonably request in the conduct of the Fund's business, subject to the
direction and control of the Trust's Board of Trustees. Nothing in this

3
<PAGE>

Agreement shall be deemed to shift to you or to diminish the obligations of any
agent of the Fund or any other person not a party to this Agreement which is
obligated to provide services to the Fund.

5. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 5, you shall pay the compensation and expenses of all
Trustees, officers and executive employees of the Trust (including the Fund's
share of payroll taxes) who are affiliated persons of you, and you shall make
available, without expense to the Fund, the services of such of your directors,
officers and employees as may duly be elected officers of the Trust, subject to
their individual consent to serve and to any limitations imposed by law. You
shall provide at your expense the portfolio management services described in
section 3 hereof and the administrative services described in section 4 hereof.

You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 5. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Fund's Trustees and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of the Fund: organization expenses of the
Fund (including out-of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Fund's custodian or
other agents of the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent, custodians,
subcustodians, transfer agents, dividend disbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses of preparing share
certificates and, except as provided below in this section 5, other expenses in
connection with the issuance, offering, distribution, sale, redemption or
repurchase of securities issued by the Fund; expenses relating to investor and
public relations; expenses and fees of registering or qualifying Shares of the
Fund for sale; interest charges, bond premiums and other insurance expense;
freight, insurance and other charges in connection with the shipment of the
Fund's portfolio securities; the compensation and all expenses (specifically
including travel expenses relating to Trust business) of Trustees, officers and
employees of the Trust who are not affiliated persons of you; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
of the Fund; expenses of printing and distributing reports, notices and
dividends to shareholders; expenses of printing and mailing Prospectuses and
SAIs of the Fund and supplements thereto; costs of stationery; any litigation
expenses; indemnification of Trustees and officers of the Trust; costs of
shareholders' and other meetings; and travel expenses (or an appropriate portion
thereof) of Trustees and officers of the Trust who are directors, officers or
employees of you to the extent that such expenses relate to attendance at
meetings of the Board of Trustees of the Trust or any committees thereof or
advisors thereto held outside of Boston, Massachusetts or New York, New York.

4
<PAGE>

6. Management Fee. For all services to be rendered, payments to be made and
costs to be assumed by you as provided in sections 3, 4 and 5 hereof, the Trust
on behalf of the Fund shall pay you in United States Dollars on the last day of
each month the unpaid balance of a fee equal to the excess of 1/12 of 0.70 of 1
percent of the average daily net assets as defined below of the Fund for such
month over any compensation waived by you from time to time (as more fully
described below). You shall be entitled to receive during any month such interim
payments of your fee hereunder as you shall request, provided that no such
payment shall exceed 75 percent of the amount of your fee then accrued on the
books of the Fund and unpaid.

The "average daily net assets" of the Fund shall mean the average of the
values placed on the Fund's net assets as of 4:00 p.m. (New York time) on each
day on which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c- 1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If the determination of net asset value does not take place for any
particular day, then for the purposes of this section 6, the value of the net
assets of the Fund as last determined shall be deemed to be the value of its net
assets as of 4:00 p.m. (New York time), or as of such other time as the value of
the net assets of the Fund's portfolio may be lawfully determined on that day.
If the Fund determines the value of the net assets of its portfolio more than
once on any day, then the last such determination thereof on that day shall be
deemed to be the sole determination thereof on that day for the purposes of this
section 6.

7. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other investments
for the account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.

5
<PAGE>

8. Limitation of Liability of Manager. As an inducement to your undertaking
to render services pursuant to this Agreement, the Trust agrees that you shall
not be liable under this Agreement for any error of judgment or mistake of law
or for any loss suffered by the Fund in connection with the matters to which
this Agreement relates, provided that nothing in this Agreement shall be deemed
to protect or purport to protect you against any liability to the Trust, the
Fund or its shareholders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of your
duties, or by reason of your reckless disregard of your obligations and duties
hereunder. Any person, even though also employed by you, who may be or become an
employee of and paid by the Fund shall be deemed, when acting within the scope
of his or her employment by the Fund, to be acting in such employment solely for
the Fund and not as your employee or agent.

9. Duration and Termination of This Agreement. This Agreement shall remain
in force until September 30, 1998, and continue in force from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Fund. The aforesaid requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the 1940 Act and the rules and regulations
thereunder and any applicable SEC exemptive order therefrom.

10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.

11. Limitation of Liability for Claims. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Scudder Investment
Trust" refers to the Trustees under the Declaration collectively as Trustees and
not as individuals or personally, and that no shareholder of the Fund, or
Trustee, officer, employee or agent of the Trust, shall be subject to claims
against or obligations of the Trust or of the Fund to any extent whatsoever, but
that the Trust estate only shall be liable.

6
<PAGE>

12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Trust on behalf of the Fund.

Yours very truly,

SCUDDER INVESTMENT TRUST, on
behalf of

Scudder Classic Growth Fund

By:
______________________________
President

The foregoing Agreement is hereby accepted as of the date
hereof.

SCUDDER KEMPER INVESTMENTS,
INC.

By:
______________________________
Managing Director

7
<PAGE>

Consent of Independent Accoutants

To the Trustees of Scudder Investment Trust:

We consent to the incorporation by reference in Post-Effective Amendment No. 87
to the Registration Statement of Scudder Investment Trust on Form N-1A of our
report dated October 2, 1997 on our audit of the financial statements and
financial highlights of Scudder Classic Growth Fund, which report is included
in the Annual Report to Shareholders for the period September 9, 1996
(commencement of operations) to August 31, 1997, which is incorporated by
reference in the Post-Effective Amendment to the Registration Statement.

We also consent to the reference to our Firm under the caption, "Experts."

/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
December 29, 1997

FUND ACCOUNTING SERVICES AGREEMENT

THIS AGREEMENT is made on the 9th day of September, 1996 between Scudder
Investment Trust (the "Fund"), on behalf of Scudder Classic Growth Fund
(hereinafter called the "Portfolio"), a registered open-end management
investment company with its principal place of business in Boston, Massachusetts
and Scudder Fund Accounting Corporation, with its principal place of business in
Boston, Massachusetts (hereinafter called "FUND ACCOUNTING").

WHEREAS, the Portfolio has need for certain accounting services which FUND
ACCOUNTING is willing and able to provide;

NOW THEREFORE in consideration of the mutual promises herein made, the Fund and
FUND ACCOUNTING agree as follows:

Section 1. Duties of FUND ACCOUNTING - General

FUND ACCOUNTING is authorized to act under the terms of this Agreement as
the Portfolio's fund accounting agent, and as such FUND ACCOUNTING shall:

a. Maintain and preserve all accounts, books, financial records and other
documents as are required of the Fund under Section 31 of the
Investment Company Act of 1940 (the "1940 Act") and Rules 31a-1, 31a-2
and 31a-3 thereunder, applicable federal and state laws and any other
law or administrative rules or procedures which may be applicable to
the Fund on behalf of the Portfolio, other than those accounts, books
andh financial records required to be maintained by the Fund's
custodian or transfer agent and/or books and records maintained by all
other service providers necessary for the Fund to conduct its business
as a registered open-end management investment company. All such books
and records shall be the property of the Fund and shall at all times
during regular business hours be open for inspection by, and shall be
surrendered promptly upon request of, duly authorized officers of the
Fund. All such books and records shall at all times during regular
business hours be open for inspection, upon request of duly authorized
officers of the Fund, by employees or agents of the Fund and employees
and agents of the Securities and Exchange Commission.

b. Record the current day's trading activity and such other proper
bookkeeping entries as are necessary for determining that day's net
asset value and net income.

c. Render statements or copies of records as from time to time are
reasonably requested by the Fund.

d. Facilitate audits of accounts by the Fund's independent public
accountants or by any other auditors employed or engaged by the Fund
or by any regulatory body with jurisdiction over the Fund.

e. Compute the Portfolio's net asset value per share, and, if applicable,
its public offering price and/or its daily dividend rates and money
market yields, in accordance with Section 3 of the Agreement and
notify the Fund and such other persons as the Fund may reasonably
request of the net asset value per share, the public offering price
and/or its daily dividend rates and money market yields.
<PAGE>

Section 2. Valuation of Securities

Securities shall be valued in accordance with (a) the Fund's Registration
Statement, as amended or supplemented from time to time (hereinafter
referred to as the "Registration Statement"); (b) the resolutions of the
Board of Trustees of the Fund at the time in force and applicable, as they
may from time to time be delivered to FUND ACCOUNTING, and (c) Proper
Instructions from such officers of the Fund or other persons as are from
time to time authorized by the Board of Trustees of the Fund to give
instructions with respect to computation and determination of the net asset
value. FUND ACCOUNTING may use one or more external pricing services,
including broker-dealers, provided that an appropriate officer of the Fund
shall have approved such use in advance.

Section 3. Computation of Net Asset Value, Public Offering Price, Daily
Dividend Rates and Yields

FUND ACCOUNTING shall compute the Portfolio's net asset value, including
net income, in a manner consistent with the specific provisions of the
Registration Statement. Such computation shall be made as of the time or
times specified in the Registration Statement.

FUND ACCOUNTING shall compute the daily dividend rates and money market
yields, if applicable, in accordance with the methodology set forth in the
Registration Statement.

Section 4. FUND ACCOUNTING's Reliance on Instructions and Advice

In maintaining the Portfolio's books of account and making the necessary
computations FUND ACCOUNTING shall be entitled to receive, and may rely
upon, information furnished it by means of Proper Instructions, including
but not limited to:

a. The manner and amount of accrual of expenses to be recorded on the
books of the Portfolio;

b. The source of quotations to be used for such securities as may not be
available through FUND ACCOUNTING's normal pricing services;

c. The value to be assigned to any asset for which no price quotations
are readily available;

d. If applicable, the manner of computation of the public offering price
and such other computations as may be necessary;

e. Transactions in portfolio securities;

f. Transactions in shares of beneficial interest.

FUND ACCOUNTING shall be entitled to receive, and shall be entitled to rely
upon, as conclusive proof of any fact or matter required to be ascertained
by it hereunder, a certificate, letter or other instrument signed by an
authorized officer of the Fund or any other person authorized by the Fund's
Board of Trustees.

2
<PAGE>

FUND ACCOUNTING shall be entitled to receive and act upon advice of Counsel
(which may be Counsel for the Fund) at the reasonable expense of the
Portfolio and shall be without liability for any action taken or thing done
in good faith in reliance upon such advice.

FUND ACCOUNTING shall be entitled to receive, and may rely upon,
information received from the Transfer Agent.

Section 5. Proper Instructions

"Proper Instructions" as used herein means any certificate, letter or other
instrument or telephone call reasonably believed by FUND ACCOUNTING to be
genuine and to have been properly made or signed by any authorized officer
of the Fund or person certified to FUND ACCOUNTING as being authorized by
the Board of Trustees. The Fund, on behalf of the Portfolio, shall cause
oral instructions to be confirmed in writing. Proper Instructions may
include communications effected directly between electro-mechanical or
electronic devices as from time to time agreed to by an authorized officer
of the Fund and FUND ACCOUNTING.

The Fund, on behalf of the Portfolio, agrees to furnish to the appropriate
person(s) within FUND ACCOUNTING a copy of the Registration Statement as in
effect from time to time. FUND ACCOUNTING may conclusively rely on the
Fund's most recently delivered Registration Statement for all purposes
under this Agreement and shall not be liable to the Portfolio or the Fund
in acting in reliance thereon.

Section 6. Standard of Care and Indemnification

FUND ACCOUNTING shall exercise reasonable care and diligence in the
performance of its duties hereunder. The Fund agrees that FUND ACCOUNTING
shall not be liable under this Agreement for any error of judgment or
mistake of law made in good faith and consistent with the foregoing
standard of care, provided that nothing in this Agreement shall be deemed
to protect or purport to protect FUND ACCOUNTING against any liability to
the Fund, the Portfolio or its shareholders to which FUND ACCOUNTING would
otherwise be subject by reason of willful misfeasance, bad faith or
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties hereunder.

The Fund agrees, on behalf of the Portfolio, to indemnify and hold harmless
FUND ACCOUNTING and its employees, agents and nominees from all taxes,
charges, expenses, assessments, claims and liabilities (including
reasonable attorneys' fees) incurred or assessed against them in connection
with the performance of this Agreement, except such as may arise from their
own negligent action, negligent failure to act or willful misconduct. The
foregoing notwithstanding, FUND ACCOUNTING will in no event be liable for
any loss resulting from the acts, omissions, lack of financial
responsibility, or failure to perform the obligations of any person or
organization designated by the Fund to be the authorized agent of the
Portfolio as a party to any transactions.

3
<PAGE>

FUND ACCOUNTING's responsibility for damage or loss with respect to the
Portfolio's records arising from fire, flood, Acts of God, military power,
war, insurrection or nuclear fission, fusion or radioactivity shall be
limited to the use of FUND ACCOUNTING's best efforts to recover the
Portfolio's records determined to be lost, missing or destroyed.

Section 7. Compensation and FUND ACCOUNTING Expenses

FUND ACCOUNTING shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing by the two parties. FUND ACCOUNTING shall be entitled to recover
its reasonable telephone, courier or delivery service, and all other
reasonable out-of-pocket, expenses as incurred, including, without
limitation, reasonable attorneys' fees and reasonable fees for pricing
services.

Section 8. Amendment and Termination

This Agreement shall continue in full force and effect until terminated as
hereinafter provided, may be amended at any time by mutual agreement of the
parties hereto and may be terminated by an instrument in writing delivered
or mailed to the other party. Such termination shall take effect not sooner
than ninety (90) days after the date of delivery or mailing of such notice
of termination. Any termination date is to be no earlier than four months
from the effective date hereof. Upon termination, FUND ACCOUNTING will turn
over to the Fund or its designee and cease to retain in FUND ACCOUNTING
files, records of the calculations of net asset value and all other records
pertaining to its services hereunder; provided, however, FUND ACCOUNTING in
its discretion may make and retain copies of any and all such records and
documents which it determines appropriate or for its protection.

Section 9. Services Not Exclusive

FUND ACCOUNTING's services pursuant to this Agreement are not to be deemed
to be exclusive, and it is understood that FUND ACCOUNTING may perform fund
accounting services for others. In acting under this Agreement, FUND
ACCOUNTING shall be an independent contractor and not an agent of the Fund
or the Portfolio.

Section 10. Limitation of Liability for Claims

The Fund's Amended and Restated Declaration of Trust, dated November 3,
1987, as amended to date (the "Declaration"), a copy of which, together
with all amendments thereto, is on file in the Office of the Secretary of
State of the Commonwealth of Massachusetts, provides that the name "Scudder
Investment Trust" refers to the Trustees under the Declaration collectively
as trustees and not as individuals or personally, and that no shareholder
of the Fund or the Portfolio, or Trustee, officer, employee or agent of the
Fund shall be subject to claims against or obligations of the Trust or of
the Portfolio to any extent whatsoever, but that the Trust estate only
shall be liable.

4
<PAGE>

FUND ACCOUNTING is expressly put on notice of the limitation of liability
as set forth in the Declaration and FUND ACCOUNTING agrees that the
obligations assumed by the Fund and/or the Portfolio under this Agreement
shall be limited in all cases to the Portfolio and its assets, and FUND
ACCOUNTING shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Fund or the Portfolio or any other
series of the Fund, or from any Trustee, officer, employee or agent of the
Fund. FUND ACCOUNTING understands that the rights and obligations of the
Portfolio under the Declaration are separate and distinct from those of any
and all other series of the Fund.

Section 11. Notices

Any notice shall be sufficiently given when delivered or mailed to the
other party at the address of such party set forth below or to such other
person or at such other address as such party may from time to time specify
in writing to the other party.

If to FUND ACCOUNTING: Scudder Fund Accounting Corporation

Two International Place
Boston, Massachusetts 02110
Attn: Vice President

If to the Fund - Portfolio: Scudder Investment Trust -
Scudder Classic Growth Fund
Two International Place
Boston, Massachusetts 02110
Attn: President, Secretary or Treasurer

Section 12. Miscellaneous

This Agreement may not be assigned by FUND ACCOUNTING without the consent
of the Fund as authorized or approved by resolution of its Board of
Trustees.

In connection with the operation of this Agreement, the Fund and FUND
ACCOUNTING may agree from time to time on such provisions interpretive of
or in addition to the provisions of this Agreement as in their joint
opinions may be consistent with this Agreement. Any such interpretive or
additional provisions shall be in writing, signed by both parties and
annexed hereto, but no such provisions shall be deemed to be an amendment
of this Agreement.

This Agreement shall be governed and construed in accordance with the laws
of the Commonwealth of Massachusetts.

5
<PAGE>

This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes any and all prior
understandings.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized and its seal to be
hereunder affixed as of the date first written above.

[SEAL] SCUDDER INVESTMENT TRUST, on behalf of
Scudder Classic Growth Fund

By:/s/Daniel Pierce
------------------------------------------
President

[SEAL] SCUDDER FUND ACCOUNTING CORPORATION

By:/s/Pamela A. McGrath
------------------------------------------
Vice President

SCUDDER INVESTMENT TRUST
Scudder S&P 500 Index Fund

ADMINISTRATION AGREEMENT

ADMINISTRATION AGREEMENT, made as of this 29th day of August, 1997 between
Scudder Investment Trust, a Massachusetts business Trust (the "Trust"), on
behalf of Scudder S&P 500 Index Fund, (the "Fund"), and SCUDDER, STEVENS &
CLARK, INC., a Delaware corporation or its successors and/or assigns, (the
"Administrator").

W I T N E S S E T H:

WHEREAS, the Trust has been established as a Massachusetts business Trust
to engage in the business of an investment company, and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act");

WHEREAS, the Fund desires to retain the Administrator for certain
administrative services, and the Administrator is willing to furnish such
administrative services on the terms and conditions hereinafter set forth, and

WHEREAS, the Board of Trustees of the Trust has determined that retaining
the Administrator pursuant to this Agreement is in the best interests of the
Fund, that the fee to be paid by the Fund to the Administrator pursuant to this
Agreement is fair and reasonable and that the services to be provided by the
Administrator pursuant to this Agreement are comparable to those that could have
been provided by other parties and reasonable in relation to the fee to be paid
by the Fund.

NOW, THEREFORE, the parties agree as follows:

1. The Fund hereby appoints the Administrator to provide the services set forth
below, subject to the overall supervision of the Board of Trustees of the Trust
for the period and on the terms set forth in this Agreement. The Administrator
hereby accepts such appointment and agrees during such period to render the
services herein described and to assume the obligations set forth herein, for
the compensation herein provided.

2. Subject to the supervision of the Board of Trustees and officers of the
Trust, the Administrator shall furnish at its expense for the use of the Fund
such office space and facilities in the United States as the Fund may require
for its reasonable needs, shall render to the Fund administrative services
necessary for operating as an open-end investment company and not provided by
persons not parties to this Agreement including, but not limited to:

a) oversee the maintenance of the books, records and reports of the Fund
required under the 1940 Act, and maintain such books, records and
<PAGE>

reports to the extent that such books, records and reports and other
information are not maintained by the Fund's custodian or other agents
of the Fund;

b) assist in the preparation and filing of the Fund's federal, state and
local income tax returns pursuant to Section 4982 of the Internal
Revenue Code of 1986, as amended;

c) prepare reports to and meeting materials for the Trust's Board of
Trustees and the financial information for the Fund's proxy statements
and periodic reports and notices to shareholders;

d) oversee the tabulation of proxies by the Fund's transfer agent;

e) prepare the Fund's periodic financial reports to the Securities and
Exchange Commission and other regulatory and self-regulatory
organizations, including, but not limited to, preliminary and
definitive proxy materials, post-effective amendments to the
Registration Statement, semi-annual reports on Form N-SAR and notices
pursuant to Rule 24f-2 under the 1940 Act;

f) provide assistance with investor and public relations matters;

g) review the Fund's bills and processing the payment of bills that have
been approved by an authorized person;

h) assist the Fund in determining the amount of dividends and
distributions available to be paid by the Fund to its shareholders,
preparing and arranging for the printing of dividend notices to
shareholders, and providing the transfer and dividend paying agent,
the custodian, and the accounting agent with such information as is
required for such parties to effect the payment of dividends and
distributions;

i) respond to or refer to the Fund's officers or transfer agent,
shareholder inquiries relating to the Fund;

j) supervise, negotiate contractual arrangements with, to the extent
appropriate, and monitor the performance of, accounting agents,
custodians, depositories, transfer agents and pricing agents,
accountants, attorneys, printers, underwriters, brokers and dealers,
insurers and other persons in any capacity deemed to be necessary or
desirable to Fund operations;

2
<PAGE>

k) monitor the registration of shares of the Fund under applicable
federal and state securities laws;

l) assist in establishing the accounting policies of the Fund;

m) assist in the resolution of accounting issues that may arise with
respect to the Fund's operations and consult with the Fund's
independent accountants, legal counsel and the Fund's other agents as
necessary in connection therewith;

n) establish and monitor the Fund's operating expense budgets; and

o) otherwise assist the Trust as it may reasonably request in the conduct
of the Fund's business, subject to the direction and control of the
Trust's Board of Trustees.

All services to be furnished by the Administrator may be provided through
the medium of any directors, officers or employees, or any other agents, of the
Administrator.

Nothing in this Agreement shall be deemed diminish the obligations of any
agent of the Fund or any other person not a party to this Agreement which is
obligated to provide services to the Fund.

Each party shall bear all its own expenses incurred in connection with this
Agreement.

3. The Fund will pay the Administrator a monthly fee at the annual rate of 0.10
percent of the Fund's average net assets, based on the net asset value on the
last business day of each week.

4. The Administrator assumes no responsibility under this Agreement other than
to render the services called for hereunder, and specifically assumes no
responsibilities for investment advice or the investment or reinvestment of the
Fund's assets.

5. The Administrator shall not be liable for any error of judgment or for any
loss suffered by the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of, or from reckless disregard by it
of its obligations and duties under, this Agreement.

6. This Agreement shall become effective as of the date first above written, and
shall thereafter continue in effect unless terminated as herein provided. This
Agreement may be terminated by either party hereto (without penalty) at any time
upon not less than 60 days' prior written notice to the other party hereto.

3
<PAGE>

7. The services of the Administrator to the Fund hereunder are not exclusive and
nothing in this Agreement shall limit or restrict the right of the
Administrator, or of and director, officer or employee of the Administrator, to
engage in any other business, whether similar or dissimilar in nature, or to
render services of any kind to any other corporation, firm, individual or
association. The Administrator and its directors, officers and employees shall
be deemed to be independent contractors and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Fund in
any way or otherwise be deemed agents of the Fund.

8. During the term of this Agreement, the Fund agrees to furnish the
Administrator at the principal office of the Administrator prior to use thereof
all prospectuses, proxy statements, reports to shareholders, sales literature,
or other material prepared for distribution to shareholders of the Fund or the
public that refer in any way to the Administrator and not to use such material
if the Administrator reasonably objects in writing within five business days (or
such other time as may be mutually agreed) after receipt thereof, unless prior
to such use such material shall have been modified in a manner reasonably
satisfactory to the Administrator. In the event of termination of this
Agreement, the Fund will continue to furnish to the Administrator copies of any
of the above- mentioned materials that refer in any way to the Administrator.
The Fund shall furnish or otherwise make available to the Administrator such
other information relating to the business affairs of the Fund as the
Administrator at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder.

9. This Agreement may be amended by mutual written consent of the parties
hereto.

10. Any notice or other communication required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (1) to the Administrator at 345 Park Avenue, New York, New York
10154, Attn.: Legal Department or (2) to the Fund at Two International Place,
Boston, Massachusetts 02110, Attention: Secretary.

11. This Agreement solely sets forth the agreement and understanding of the
parties hereto with respect to the matters covered hereby and the relationship
between the Fund and the Administrator. Nothing in this Agreement shall govern,
restrict or limit in any way the other business dealings between the parties
hereto other than as expressly provided herein.

12. This Agreement shall be governed by and construed in accordance with the
laws of Commonwealth of Massachusetts.

4
<PAGE>

13. This Agreement may be assigned to a successor in interest of Scudder,
Stevens & Clark, Inc. resulting from a transaction described in the Fund's
Registration Statement.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.

SCUDDER INVESTMENT TRUST,
on behalf of
Scudder S&P 500 Index Fund

By/s/Daniel Pierce
----------------------------
President

SCUDDER, STEVENS & CLARK, INC.

By /s/David S. Lee
----------------------------
Managing Director

LICENSE AGREEMENT

LICENSE AGREEMENT, dated as of August 29, 1997 (the "Commencement Date")
by and between STANDARD & POOR'S, a division of The McGraw-Hill Companies, Inc.
("S&P"), a New York corporation, having an office at 25 Broadway, New York, New
York 10004, and SCUDDER, STEVENS & CLARK, INC. ("Licensee"), having an office at
345 Park Avenue, New York, New York 10154.

WHEREAS, S&P compiles, calculates, maintains and owns rights in and to
the S&P 500 Composite Stock Price Index and to the proprietary data therein
contained (such rights being hereinafter individually and collectively referred
to as the "S&P 500 Index"); and

WHEREAS, S&P uses in commerce and has trade name and trademark rights to
the designations "Standard & Poor's(R)", "S&P(R)", "Standard & Poor's 500", "S&P
500(R)" and "500", in connection with the S&P 500 Index (such rights being
hereinafter individually and collectively referred to as the "S&P Marks"); and

WHEREAS, Licensee wishes to use the S&P 500 Index as a component of the
product or products described in Exhibit A attached hereto and made a part
hereof (the "Product"); and

WHEREAS, Licensee wishes to use the S&P Marks in connection with the
marketing and/or promotion of the Product and in connection with making
disclosure about the Product under applicable law, rules and regulations in
order to indicate that S&P is the source of the S&P 500 Index; and

WHEREAS, Licensee wishes to obtain S&P's authorization to use the S&P 500
Index and the S&P Marks in connection with the Product pursuant to the terms and
conditions hereinafter set forth.
<PAGE>

NOW, THEREFORE, the parties hereto agree as follows:

1. Grant of License.

(a) Subject to the terms and conditions of this Agreement, S&P
hereby grants to Licensee a non-transferable, non-exclusive license (i) to use
the S&P 500 Index as a component of the Product to be marketed and/or promoted
by Licensee and (ii) to use and refer to the S&P Marks in connection with the
distribution, marketing and promotion of the Product (including in the name of
the Product) and in connection with making such disclosure about the Product as
Licensee deems necessary or desirable under any applicable law, rules,
regulations or provisions of this Agreement, but, in each case, only to the
extent necessary to indicate the source of the S&P 500 Index. It is expressly
agreed and understood by Licensee that no rights to use the S&P 500 Index and
the S&P Marks are granted hereunder other than those specifically described and
expressly granted herein.

(b) S&P agrees that no person or entity (other than the Licensee)
shall need to obtain a license from S&P with respect to the Product.

2. Term.

The term of this Agreement shall commence on the Commencement Date
and shall continue in effect thereafter until it is terminated in accordance
with its terms.

3. License Fees.

(a) Licensee shall pay to S&P the license fees ("License Fees")
specified and provide the data called for in Exhibit B, attached hereto and made
a part hereof
<PAGE>

(b) During the term of this Agreement and for a period of one (1)
year after its termination, S&P shall have the right, during normal business
hours and upon reasonable notice to Licensee, to audit on a confidential basis
the relevant books and records of Licensee to determine that License Fees have
been accurately determined. The costs of such audit shall be borne by S&P unless
it determines that it has been underpaid by five percent (5%) or more; in such
case, costs of the audit shall be paid by Licensee.

4. Termination.

(a) At any time during the term of this Agreement, either party may
give the other party sixty (60) days prior written notice of termination if the
terminating party believes in good faith that material damage or harm is
occurring to the reputation or goodwill of that party by reason of its continued
performance hereunder, and such notice shall be effective on the date specified
therein of such termination, unless the other party shall correct the condition
causing such damage or harm within the notice period.

(b) In the case of breach of any of the material terms or conditions
of this Agreement by either party, the other party may terminate this Agreement
by giving sixty (60) days prior written notice of its intent to terminate, and
such notice shall be effective on the date specified therein for such
termination unless the breaching party shall correct such breach within the
notice period.

(c) S&P shall have the right, in its sole discretion, to cease
compilation and publication of the S&P 500 Index and, in such event, to
terminate this Agreement if S&P does not offer a replacement or substitute
index, In the event that S&P intends to discontinue the S&P 500 Index, S&P shall
give Licensee at least one (1) year's written notice prior to such
discontinuance, which notice shall specify whether a replacement or substitute
index will be
<PAGE>

made available. Licensee shall have the option hereunder within sixty (60) days
after receiving such written notice from S&P to notify S&P in writing of its
intent to use the replacement or substitute index, if any, under the terms of
this Agreement. In the event that Licensee does not exercise such option or no
substitute or replacement index is made available, this Agreement shall be
terminated as of the date specified in the S&P notice and the License Fees to
the date of such termination shall be computed as provided in Subsection 4(f).

(d) Licensee may terminate this Agreement upon ninety (90) days
prior written notice to S&P if (i) Licensee is informed of the final adoption of
any legislation or regulation or the issuance of any interpretation that in
Licensee's reasonable judgment materially impairs Licensee's ability to market
and/or promote the Product; (ii) any material litigation or regulatory
proceeding regarding the Product is threatened or commenced; or (iii) Licensee
elects to terminate the public offering or other distribution of the Product, as
may be applicable, In such event the License Fees to the date of such
termination shall be computed as provided in Subsection 4(f).

(e) S&P may terminate this Agreement upon ninety (90) days (or upon
such lesser period of time if required pursuant to a court order) prior written
notice to Licensee if (i) S&P is informed of the final adoption of any
legislation or regulation or the issuance of any interpretation that in S&P's
reasonable judgment materially impairs S&P's ability to license and provide the
S&P 500 Index and S&P Marks under this Agreement in connection with such
Product; or (ii) any litigation or proceeding is threatened or commenced and S&P
reasonably believes that such litigation or proceeding would have a material and
adverse effect upon the S&P Marks and/or the S&P 500 Index or upon the ability
of S&P to perform under this Agreement. In such event the License Fees to the
date of such termination shall be computed as provided in Subsection 4(f).
<PAGE>

(f) In the event of termination of this Agreement as provided in
Subsections 4(a), (b), (c), (d) or (e), the License Fees to the date of such
termination shall be computed by prorating the amount of the applicable annual
License Fees shown in Exhibit B on the basis of the number of elapsed days in
the current term. Any excess License Fees amount paid by Licensee for the
current term shall be refunded by S&P.

(g) Upon termination of this Agreement. Licensee shall cease to use
the S&P 500 Index and the S&P Marks in connection with the Product; provided
that Licensee may continue to utilize any previously printed materials which
contain the S&P Marks for a period of ninety (90) days following such
termination.

5. S&P's Obligations.

(a) It is the policy of S&P to prohibit its employees who are
directly responsible for changes in the components of the S&P 500 Index from
purchasing or beneficially owning any interest in the Product and S&P believes
that its employees comply with such policy. Licensee shall have no
responsibility for ensuring that such S&P employees comply with such S&P policy
and shall have no duty to inquire whether any purchasers or sellers of the
Product are such S&P employees. S&P shall have no liability to the Licensee with
respect to its employees' adherence or failure to adhere to such policy.

(b) S&P shall not and is in no way obliged to engage in any
marketing or promotional activities in connection with the Product or in making
any representation or statement to investors or prospective investors in
connection with the promotion by Licensee of the Product.
<PAGE>

(c) S&P agrees to provide reasonable support for Licensee's
development and educational efforts with respect to the Product as follows: (i)
S&P shall provide Licensee, upon request but subject to any agreements of
confidentiality with respect thereto, copies of the results of any marketing
research conducted by or on behalf of S&P with respect to the S&P 500 Index; and
(ii) S&P shall respond in a timely fashion to any reasonable requests for
information by Licensee regarding the S&P 500 Index.

(d) S&P or its agent shall calculate and disseminate the S&P 500
Index at least once each fifteen (15) seconds in accordance with its current
procedures, which procedures may be modified by S&P.

(e) S&P shall promptly correct or instruct its agent to correct any
mathematical errors made in S&P's computations of the S&P 500 Index which are
brought to S&P's attention by Licensee, provided that nothing in this Section 5
shall give Licensee the right to exercise any judgment or require any changes
with respect to S&P's method of composing, calculating or determining the S&P
500 Index; and, provided further, that nothing herein shall be deemed to modify
the provisions of Section 9 of this Agreement.

6. Informational Materials Review.

Licensee shall use its best efforts to protect the goodwill and
reputation of S&P and of the S&P Marks in connection with its use of the S&P
Marks under this Agreement. Licensee shall submit to S&P for its review and
approval all informational materials pertaining to and to be used in connection
with the Product, including, where applicable, all prospectuses, plans,
registration statements, advertisements, brochures and promotional and any other
similar informational materials (including documents required to be filed with
governmental or regulatory agencies) that in any way use or refer to S&P, the
S&P 500 Index, or the S&P Marks
<PAGE>

(the "Informational Materials"). S&P's approval shall be required with respect
to the use of and description of S&P, the S&P Marks and the S&P 500 Index and
shall not be unreasonably withheld or delayed by S&P. Specifically, S&P shall
notify Licensee of its approval or disapproval of any Informational Materials
within forty-eight (48) hours (excluding Saturday, Sunday and New York Stock
Exchange Holidays) following receipt thereof from Licensee. Any disapproval
shall state S&P's reasons therefor. Any failure by S&P to respond within such
forty-eight (48) hour period shall be deemed to constitute a waiver of S&P's
right to review such Informational Materials. Informational Materials shall be
addressed to S&P, c/o William Jordan, Account Executive, Index Services, at the
address specified in Subsection 12(d). Once Informational Materials have been
approved by S&P, subsequent Informational Materials which do not alter the use
or description of S&P, the S&P Marks or the S&P 500 Index need not be submitted
for review and approval by S&P.

7. Protection of Value of License.

(a) During the term of this Agreement, S&P shall use its best
efforts to maintain in full force and effect federal registrations for "Standard
& Poor's(R)", "S&P(R)", and "S&P 500(R)". S&P shall at S&P's own expense and
sole discretion exercise S&P's common law and statutory rights against
infringement of the S&P Marks, copyrights and other proprietary rights.

(b) Licensee shall cooperate with S&P in the maintenance of such
rights and registrations and shall take such actions and execute such
instruments as S&P may from time to time reasonably request, and shall use the
following notice when referring to the S&P 500 Index or the S&P Marks in any
Informational Material:

"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's
500", and "500" are trademarks of The McGraw-Hill Companies, Inc.
and have been licensed for use by Scudder, Stevens & Clark, Inc. The
Product is
<PAGE>

not sponsored, endorsed, sold or promoted by Standard & Poor's and
Standard & Poor's makes no representation regarding the advisability
of investing in the Product.

or such similar language as may be approved in advance by S&P, it being
understood that such notice need only refer to the specific S&P Marks referred
to in the Informational Material.

8. Proprietary Rights.

(a) Licensee acknowledges that the S&P 500 Index is selected,
coordinated, arranged and prepared by S&P through the application of methods and
standards of judgment used and developed through the expenditure of considerable
work, time and money by S&P. Licensee also acknowledges that the S&P 500 Index
and the S&P Marks are the exclusive property of S&P, that S&P has and retains
all proprietary rights therein (including, but not limited to trademarks and
copyrights) and that the S&P 500 Index and its compilation and composition and
changes therein are in the control and discretion of S&P.

(b) S&P reserves all rights with respect to the S&P 500 Index and
the S&P Marks except those expressly licensed to Licensee hereunder.

(c) Each party shall treat as confidential and shall not disclose or
transmit to any third party any documentation or other written materials that
are marked as "Confidential and Proprietary" by the providing party
("Confidential Information"). Confidential Information shall not include (i) any
information that is available to the public or to the receiving party hereunder
from sources other than the providing party (provided that such source is not
subject to a confidentiality agreement with regard to such information) or (ii)
any information that is independently developed by the receiving party without
use of or reference to information from the providing party. Notwithstanding the
<PAGE>

foregoing, either party may reveal Confidential Information to any regulatory
agency or court of competent jurisdiction if such information to be disclosed is
(a) approved in writing by the other party for disclosure or (b) required by
law, regulatory agency or court order to be disclosed by a party, provided, if
permitted by law, that prior written notice of such required disclosure is given
to the other party and provided further that the providing party shall cooperate
with the other party to limit the extent of such disclosure. The provisions of
this Subsection 8(c) shall survive any termination of this Agreement for a
period of five (5) years from disclosure by either party to the other of the
last item of such Confidential Information.

9. Warranties: Disclaimers.

(a) S&P represents and warrants that S&P has the right to grant the
rights granted to Licensee herein and that, subject to the terms and conditions
of this Agreement, the license granted herein shall not infringe any trademark,
copyright or other proprietary right of any person not a party to this
Agreement.

(b) Licensee agrees expressly to be bound itself by and furthermore
to include all of the following disclaimers and limitations in each prospectus
relating to the Product and upon request to furnish a copy thereof to S&P:

The Product is not sponsored, endorsed, sold or promoted by Standard
& Poor's ("S&P"). S&P makes no representation or warranty, express or implied,
to the owners of the Product or any member of the public regarding the
advisability of investing in securities generally or in the Product particularly
or the ability of the S&P 500 Index to track general stock market performance.
S&P's only relationship to the Licensee is the licensing of certain trademarks
and trade names of S&P and of the S&P 500 Index which is
<PAGE>

determined, composed and calculated by S&P without regard to the Licensee or the
Product. S&P has no obligation to take the needs of the Licensee or the owners
of the Product into consideration in determining, composing or calculating the
S&P 500 Index. S&P is not responsible for and has not participated in the
determination of the prices and amount of the Product or the timing of the
issuance or sale of the Product or in the determination or calculation of the
equation by which the Product is to be converted into cash. S&P has no
obligation or liability in connection with the administration, marketing or
trading of the Product.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
S&P 500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR
ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS
OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT, OR
ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA
INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

Any changes in the foregoing disclaimers and limitations must be approved
in advance in writing by S&P.
<PAGE>

(c) Each party represents and warrants to the other that it has the
authority to enter into this Agreement according to its terms and that its
performance does not violate any laws, regulations or agreements applicable to
it.

(d) Licensee represents and warrants to S&P that the Product shall
at all times comply with the description in Exhibit A.

(e) Licensee represents and warrants to S&P that the Product shall
not violate any applicable law, including but not limited to banking,
commodities and securities laws.

(f) Neither party shall have any liability for lost profits or
indirect, punitive, special, or consequential damages arising out of this
Agreement, even if notified of the possibility of such damages. Without
diminishing the disclaimers and limitations set forth in Subsection 9(b), in no
event shall the cumulative liability of S&P to Licensee exceed the average
annual License Fees actually paid to S&P hereunder.

(g) Use of any marks by Licensee in connection with its Product
(including in the name of such Product) which are not the S&P Marks is at
Licensee's sole risk.

(h) The provisions of this Section 9 shall survive any termination
of this Agreement.
<PAGE>

10. Indemnification.

(a) Licensee shall indemnify and hold harmless S&P, its affiliates
and their officers, directors, employees and agents against any and all
judgments, damages, costs or losses of any kind (including reasonable attorneys'
and experts' fees) as a result of any claim, action or proceeding that arises
out of or relates to (a) this Agreement, except insofar as it relates to a
breach by S&P of its representations or warranties hereunder, or (b) the
Product; provided, however, that S&P notifies Licensee promptly of any such
claim, action or proceeding. Licensee shall periodically reimburse S&P for its
reasonable expenses incurred under this Subsection 10(a). S&P shall have the
right, at its own expense, to participate in the defense of any claim, action or
proceeding against which it is indemnified hereunder; provided, however, it
shall have no right to control the defense, consent to judgment, or agree to
settle any such claim, action or proceeding without the written consent of
Licensee without waiving the indemnity hereunder. Licensee, in the defense of
any such claim, action or proceeding except with the written consent of S&P,
shall not consent to entry of any judgment or enter into any settlement which
either (a) does not include, as an unconditional term, the grant by the claimant
to S&P of a release of all liabilities in respect of such claims or (b)
otherwise adversely affects the rights of S&P. This provision shall survive the
termination or expiration of this Agreement.

(b) S&P shall indemnify and hold harmless Licensee, its affiliates
and their officers, directors, employees and agents against any and all
judgments, damages, costs or losses of any kind (including reasonable attorneys'
and experts' fees) as a result of any claim, action, or proceeding that arises
out of or relates to any breach by S&P of its representations or warranties
under this Agreement; provided, however, that (a) Licensee notifies S&P promptly
of any such claim, action or proceeding; (b) Licensee grants S&P control of its
defense and/or settlement; and (c) Licensee cooperates with S&P in the
<PAGE>

defense thereof. S&P shall periodically reimburse Licensee for its reasonable
expenses incurred under this Subsection 10(b). Licensee shall have the right, at
its own expense, to participate in the defense of any claim, action or
proceeding against which it is indemnified hereunder; provided, however, it
shall have no right to control the defense, consent to judgment, or agree to
settle any such claim, action or proceeding without the written consent of S&P
without waiving the indemnity hereunder. S&P, in the defense of any such claim,
action or proceeding, except with the written consent of Licensee, shall not
consent to entry of any judgment or enter into any settlement which either (a)
does not include, as an unconditional term, the grant by the claimant to
Licensee of a release of all liabilities in respect of such claims or (b)
otherwise adversely affects the rights of Licensee. This provision shall survive
the termination or expiration of this Agreement.

11. Suspension of Performance.

Neither S&P nor Licensee shall bear responsibility or liability for
any losses arising out of any delay in or interruptions of their respective
performance of their obligations under this Agreement due to any act of God, act
of governmental authority, act of the public enemy or due to war, the outbreak
or escalation of hostilities, riot, fire, flood, civil commotion, insurrection,
labor difficulty (including, without limitation, any strike, or other work
stoppage or slow down), severe or adverse weather conditions, communications
line failure, or other similar cause beyond the reasonable control of the party
so affected.

12. Other Matters.

(a) This Agreement is solely and exclusively between the parties
hereto and shall not be assigned or transferred by either party, without the
prior written consent of the other party, and any attempt to so assign or
transfer this Agreement without such written consent shall be null and void.
<PAGE>

(b) This Agreement constitutes the entire agreement of the parties
hereto with respect to its subject matter and may be amended or modified only by
a writing signed by duly authorized officers of both parties. This Agreement
supersedes all previous agreements between the parties with respect to the
subject matter of this Agreement. There are no oral or written collateral
representations, agreements, or understandings except as provided herein.

(c) No breach, default, or threatened breach of this Agreement by
either party shall relieve the other party of its obligations or liabilities
under this Agreement with respect to the protection of the property or
proprietary nature of any property which is the subject of this Agreement.

(d) Except as set forth in Section 6 hereof with respect to
Informational Materials, all notices and other communications under this
Agreement shall be (i) in writing, (ii) delivered by hand, by registered or
certified mail, return receipt requested, or by facsimile transmission to the
address or facsimile number set forth below or such address or facsimile number
as either party shall specify by a written notice to the other and (iii) deemed
given upon receipt.

Notice to S&P: Standard & Poor's
25 Broadway
New York, New York 10004
Attn: Elliott Shurgin, Vice President, Index
Services
Fax#: (212)208-8911

Notice to Licensee: Scudder, Stevens & Clark, Inc.
345 Park Avenue
New York, New York 10154
Attn: Paula Gaccione
Fax#: (212)233-3127
<PAGE>

(e) This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of New York.

(f) Each party agrees that in connection with any legal action or
proceeding arising with respect to this Agreement, they will bring such action
or proceeding only in the United States District Court for the Southern District
of New York or in the Supreme Court of the State of New York in and for the
First Judicial Department and each party agrees to submit to the jurisdiction of
such court and venue in such court and to waive any claim that such court is an
inconvenient forum.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first set forth above.

SCUDDER, STEVENS & CLARK, INC. STANDARD & POOR'S, a division of
The McGraw-Hill Companies, Inc.

BY: /s/ [Illegible] BY: /s/ Elliott Shurgin
------------------------ ------------------------

Elliot Shurgin
TITLE: Managing Director TITLE: Vice President and General Manager
------------------------ ------------------------

<PAGE>

EXHIBIT A

PRODUCT

Product: Scudder S&P 500 Index Fund is a publicly offered mutual fund whose
investment objective is to track the price and yield performance of
publicly-traded common stocks of companies as represented by the
S&P 500 Index.
<PAGE>

EXHIBIT B

LICENSE FEES

With respect to the Product issued pursuant to this Agreement, Licensee shall
pay S&P License Fees computed as follows:

The annual License Fee shall be $1 for such period of time as (i) 100% of the
assets of the Product are invested in the "Equity 500 Index Portfolio" managed
by Bankers Trust Company or (ii) Bankers Trust Company acts as sole investment
advisor to Scudder, Stevens & Clark, Inc. for the purpose of managing the
portfolio of the Product. Otherwise, effective on the date, if any, that both
(i) and (ii) above no longer applies, the annual License Fee shall be the
greater of $10,000 (the "Minimum Annual Fee") or one (1) basis point (.0001) of
the average daily net assets of the Product computed quarterly. The Minimum
Annual Fee shall be payable on the Commencement Date and on each one year
anniversary thereof. With respect to such Product, amounts in excess of the
Minimum Annual Fee shall be paid to S&P within thirty (30) days after the close
of each calendar quarter in which they are incurred; each such payment shall be
accompanied by a statement setting forth the basis for its calculation.

Exhibit 9(i)

THIRD PARTY FEEDER FUND

AGREEMENT AMONG

SCUDDER, STEVENS & CLARK, INC.

SCUDDER INVESTMENT TRUST

EQUITY 500 INDEX PORTFOLIO

AND

BANKERS TRUST COMPANY

dated as of
August 28, 1997
<PAGE>

AGREEMENT

THIS ("Agreement") is made and entered into as of the 28th day of August,
1997, by and among SCUDDER, STEVENS & CLARK, INC. ("SCUDDER"), SCUDDER
INVESTMENT TRUST (the "Company"), a Massachusetts business trust, in respect of
SCUDDER S&P 500 INDEX FUND, a series thereof (the "Fund"), EQUITY 500 INDEX
PORTFOLIO, a trust organized under the common law of the State of New York (the
"Portfolio"), and BANKERS TRUST COMPANY, a New York banking corporation (the
"Adviser"), with respect to the proposed investment by the Fund in the
Portfolio.

WITNESSETH

WHEREAS, the Company and the Portfolio are each open-end management
investment companies and the Fund and the Portfolio have the same investment
objectives and substantively the same investment policies;

WHEREAS, the Adviser currently serves as the investment adviser of the
Portfolio;

WHEREAS, Scudder Investor Services, Inc. (the "Distributor") currently
serves as the principal underwriter and SCUDDER serves as manager of the Fund;

WHEREAS, the Company desires to invest all of the Fund's investable assets
in the Portfolio in exchange for a beneficial interest in the Portfolio (the
"Investment") on the terms and conditions set forth in this Agreement; and

WHEREAS, the Portfolio believes that accepting the Investment is in the
best interests of the Portfolio and that the interests of existing investors in
the Portfolio will not be diluted as a result of its accepting the Investment;

NOW, THEREFORE, in consideration of the foregoing, the mutual promises
herein made and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

- --------------------------------------------------------------------------------
1
<PAGE>

THE INVESTMENT

1.1 Agreement to Effect the Investment. The Company agrees to assign, transfer
and deliver all of the Fund's investable assets (the "Assets") to the Portfolio
at each Closing (as hereinafter defined). The Portfolio agrees in exchange
therefor to issue to the Fund a beneficial interest (the "Interest") in the
Portfolio equal in value to the net asset value of the Assets of the Fund
conveyed to the Portfolio on that date of Closing.

CLOSING AND CLOSING DATE

2.1 Time of Closing. The conveyance of the Assets in exchange for the Interest,
as described in Article I, together with related acts necessary to consummate
such transactions, shall occur initially on the date the Company commences its
offering of shares of the Fund to the public and at each subsequent date on
which the Company desires to make a further Investment in the Portfolio (each, a
"Closing"). All acts occurring at any Closing shall be deemed to occur
simultaneously as of the last daily determination of the Portfolio's net asset
value on the date of Closing.

2.2 Related Closing Matters. On each date of Closing, the Company, on behalf of
the Fund, shall authorize the Fund's custodian to deliver all of the Assets held
by such custodian to the Portfolio's custodian. The Fund's and the Portfolio's
custodians shall each acknowledge, in a form acceptable to the other party, its
respective delivery and acceptance of the Assets. The Portfolio shall deliver to
the Company acceptable evidence of the Fund's ownership of the Interest. In
addition, each party shall deliver to each other party such bills of sale,
checks, assignments, securities instruments, receipts or other documents as such
other party or its counsel may reasonably request. Each of the representations
and warranties set forth in Article III shall be deemed to have been made anew
on each date of Closing.

III

REPRESENTATIONS AND WARRANTIES

3.1 The Company. The Company represents and warrants to the Portfolio and the
Adviser that:

(a) Organization. The Company is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts, the Fund is a duly and validly designated series of the Company,
and the Company and the Fund have the requisite power and authority to own their
property and conduct their business as now being conducted and as proposed to be
conducted pursuant to this Agreement.

(b) Authorization of Agreement. The execution and delivery of this
Agreement by the Company and the consummation of the transactions contemplated
hereby have been duly

- --------------------------------------------------------------------------------
2
<PAGE>

authorized by all necessary action on the part of the Company and no other
action or proceeding is necessary for the execution and delivery of this
Agreement by the Company, the performance by the Company of its obligations
hereunder and the consummation by the Company of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company in respect of
the Fund, enforceable against them in accordance with its terms, except as may
be limited by or subject to any bankruptcy, insolvency, reorganization,
moratorium or other similar law affecting the enforcement of creditors' rights
generally, and subject to general principles of equity.

(c) Authorization of Investment. The Investment has been duly authorized
by all necessary action on the part of the Board of Trustees of the Company.

(d) No Bankruptcy Proceedings. Neither the Company nor the Fund is under
the jurisdiction of a court in a proceeding under Title 11 of the United States
Code (the "Bankruptcy Code") or similar case within the meaning of Section
368(a)(3)(A) of the Bankruptcy Code.

(e) Fund Assets. The Fund's Assets will, at the initial Closing, consist
solely of cash.

(f) Fiscal Year. The fiscal year end for the Fund is December 31.

(g) Auditors. The Company has appointed Coopers & Lybrand LLP as the
Fund's independent public accountants to certify the Fund's financial statements
in accordance with Section 32 of the Investment Company Act of 1940, as amended
("1940 Act").

(h) Registration Statement. The Company has reviewed the Portfolio's
registration statement on Form N-lA, as filed with the Securities and Exchange
Commission ("SEC"), and understands and agrees to the Portfolio's policies and
methods of operation as described therein.

(i) Errors and Omissions Insurance Policy. SCUDDER currently has in force
errors and omissions liability insurance policies, issued by multiple carriers,
insuring the Fund (together with other SCUDDER affiliates) against loss of up to
an aggregate of $50 million for negligence or wrongful acts.

(j) SEC Filings. The Company has duly filed all forms, reports, proxy
statements and other documents (collectively, the "SEC Filings") required to be
filed under the Securities Act of 1933, as amended (the "1933 Act"), the
Securities Exchange Act of 1934 (the "1934 Act") and the 1940 Act (collectively,
the "Securities Laws") in connection with the registration of its shares, any
meetings of its shareholders and its registration as an investment company. The
SEC filings were prepared in accordance with the requirements of the Securities
Laws, as applicable, and the rules and regulations of the SEC thereunder, and do
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

(k) 1940 Act Registration. The Company is duly registered as an open-end
management investment company under the 1940 Act and the Fund and its shares are
registered or qualified in

- --------------------------------------------------------------------------------
3
<PAGE>

any states where such registration or qualification is necessary and such
registrations or qualifications are in full force and effect.

(1) Principal Underwriter. The Distributor serves as the Fund's principal
underwriter and is duly registered as a broker-dealer under the 1934 Act.

3.2 The Portfolio. The Portfolio represents and warrants to the Company and
SCUDDER that:

(a) Organization. The Portfolio is a trust duly organized and validly
existing under the common law of the State of New York and has the requisite
power and authority to own its property and conduct its business as now being
conducted and as proposed to be conducted pursuant to this Agreement.

(b) Authorization of Agreement. The execution and delivery of this
Agreement by the Portfolio and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of the
Portfolio by its Board of Trustees and no other action or proceeding is
necessary for the execution and delivery of this Agreement by the Portfolio, the
performance by the Portfolio of its obligations hereunder and the consummation
by the Portfolio of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Portfolio and constitutes a legal, valid
and binding obligation of the Portfolio, enforceable against it in accordance
with its terms, except as may be limited by or subject to any bankruptcy,
insolvency, reorganization, moratorium or other similar law affecting the
enforcement of creditors' rights generally, and subject to general principles of
equity.

(c) Authorization of Issuance of Interest. The issuance by the Portfolio
of the Interest in exchange for the Investment by the Fund of its Assets has
been duly authorized by all necessary action on the part of the Board of
Trustees of the Portfolio. When issued in accordance with the terms of this
Agreement, the Interest will be validly issued, fully paid and non-assessable by
the Portfolio.

(d) No Bankruptcy Proceedings. The Portfolio is not under the jurisdiction
of a court in a proceeding under Title 11 of the Bankruptcy Code or similar case
within the meaning of Section 368(a)(3)(A) of the Bankruptcy Code.

(e) Fiscal Year. The fiscal year end of the Portfolio is December 31.

(f) Auditors. The Portfolio has appointed Coopers & Lybrand LLP as the
Portfolio's independent public accountants to certify the Portfolio's financial
statements in accordance with Section 32 of the 1940 Act.

(g) Registration Statement. The Portfolio has reviewed the Company's
registration statement on Form N-lA, which pertain to the Fund and filed with
the SEC, and understands and agrees to the Fund's policies and methods of
operation as described therein.

- --------------------------------------------------------------------------------
4
<PAGE>

(h) Errors and Omissions Insurance Policy. The Portfolio has in force an
errors and omissions liability insurance policy insuring the Portfolio against
loss of up to $10 million for negligence or wrongful acts.

(i) SEC Filings. The Portfolio has duly filed all SEC Filings required to
be filed with the SEC pursuant to the Securities Laws in connection with any
meetings of its investors and its registration as an investment company.
Beneficial interests in the Portfolio are not required to be registered under
the 1933 Act because such interests are offered solely in private placement
transactions that do not involve any `public offering' within the meaning of
Section 4(2) of the 1933 Act. The SEC Filings were prepared in accordance with
the requirements of the Securities Laws, as applicable, and the rules and
regulations of the SEC thereunder, and do not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

(j) 1940 Act Registration. The Portfolio is duly registered as an open-end
management investment company under the 1940 Act and such registration is in
full force and effect.

(k) Tax Status. The Portfolio is taxable as a partnership under the
Internal Revenue Code of 1986, as amended (the "Code").

3.3 The Adviser. The Adviser represents and warrants to the Company and SCUDDER
that:

(a) Organization. The Adviser is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and has the requisite power and authority to conduct its business as
now being conducted.

(b) Authorization of Agreement. The execution and delivery of this
Agreement by the Adviser have been duly authorized by all necessary action on
the part of the Adviser and no other action or proceeding is necessary for the
execution and delivery of this Agreement by the Adviser. This Agreement has been
duly executed and delivered by the Adviser and constitutes a legal, valid and
binding obligation of the Adviser, enforceable against it in accordance with its
terms, except as may be limited by or subject to any bankruptcy, insolvency,
reorganization, moratorium or other similar law affecting the enforcement of
creditors' rights generally, and subject to general principles of equity.

(c) Advisers Act. The Adviser is exempt from the definition of an
investment adviser under the Investment Advisers Act of 1940, as amended the
("Advisers Act"), and is not required to register under that Act.

(d) To the best of its knowledge, after due diligence and inquiry, the
Portfolio's representations in 3.2(c)-(k) above are true and correct.

(e) Agents. To the extent agents perform services under this Agreement
that are the responsibility of the Adviser, the Adviser shall be responsible
for, and assume all liability for

- --------------------------------------------------------------------------------
5
<PAGE>

(including any obligation for indemnification), the actions and inactions of
such agents as if such services had been provided by the Adviser.

3.4 SCUDDER. SCUDDER represents and warrants to the Portfolio and the Adviser
that:

(a) Organization. SCUDDER is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite power and authority to conduct its business as now being
conducted.

(b) Authorization of Agreement. The execution and delivery of this
Agreement by SCUDDER have been duly authorized by all necessary action on the
part of SCUDDER and no other action or proceeding is necessary for the execution
and delivery of this Agreement by SCUDDER. This Agreement has been duly executed
and delivered by SCUDDER and constitutes a legal, valid and binding obligation
of SCUDDER, enforceable against it in accordance with its terms, except as may
be limited by or subject to any bankruptcy, insolvency, reorganization,
moratorium or other similar law affecting the enforcement of creditors' rights
generally, and subject to general principles of equity.

(c) Investment Manager. SCUDDER serves as the Fund's manager and is duly
registered as an investment adviser under the Advisers Act.

(d) To the best of its knowledge, after due diligence and inquiry, the
Company's representations in 3.1 (c)-(l) above are true and correct.

COVENANTS

4.1 The Company. The Company covenants that:

(a) Advance Review of Certain Documents. The Company will furnish the
Portfolio and the Adviser, at least 10 business days prior to filing or first
use, as the case may be, with drafts of its registration statement on Form N-lA
(including amendments) and prospectus supplements or amendments relating to the
Fund. The Company will furnish the Portfolio and the Adviser with any proposed
advertising or sales literature relating to the Fund at least 2 business days
prior to filing or first use. The Company agrees that it will include in all
material respects in such Fund documents any disclosures that may be required by
applicable law, particularly those requested by the Adviser relating to the
Adviser's status as a bank, and it will include in all such Fund documents any
material comments reasonably made by the Adviser or Portfolio. The Portfolio and
Adviser will, however, in no way be liable for any errors or omissions in such
documents, whether or not they make any objection thereto, except to the extent
such errors or omissions result from information provided (or omitted to be
provided) by the Adviser or the Portfolio. The Exclusive Placement Agent for the
Portfolio (the "Placement Agent") will in no way be liable for any errors or
omissions in such documents. The Company will not make any other written or oral
representation about the Portfolio or the Adviser without the prior written
consent of the affected party.

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6
<PAGE>

(b) Tax Status. The Fund will qualify for treatment as a regulated
investment company under Subchapter M of the Code for all periods during which
this Agreement is in effect, except the Fund shall not be responsible for such
nonqualification to the extent a failure to so qualify may result from any
action or omission of the Portfolio or the Adviser.

(d) Proxy Voting. If requested to vote as a shareholder on matters
pertaining to the Portfolio (other than a vote by the Company to continue the
operation of the Portfolio upon the withdrawal of another investor in the
Portfolio), the Company will (i) call a meeting of shareholders of the Fund for
the purpose of seeking instructions from shareholders regarding such matters,
(ii) vote the Fund's Interest proportionally as instructed by Fund shareholders,
and (iii) vote the Fund's Interest with respect to the shares held by Fund
shareholders who do not give voting instructions in the same proportion as the
shares of Fund shareholders who do give voting instructions. The Company will
hold each such meeting of Fund shareholders in accordance with a timetable
reasonably established by the Portfolio.

(e) Insurance. The Company shall at all times maintain errors and
omissions liability insurance with respect to the Fund covering losses for
negligence and wrongful acts in an amount not less than $5 million.

(f) Auditors. In the event the Fund's independent public accountants
differ from those of the Portfolio, the Fund shall be responsible for any
reasonable costs and expenses associated with the need for the Portfolio's
independent public accountants to provide information to the Fund's independent
public accountants.

4.2 Indemnification by the Fund.

(a) The Fund will indemnify and hold harmless the Portfolio, the Adviser,
and their respective trustees, directors, officers and employees and each other
person who controls the Portfolio or the Adviser, as the case may be, within the
meaning of Section 15 of the 1933 Act (each, a "Covered Person" and
collectively, "Covered Persons"), against any and all losses, claims, demands,
damages, liabilities and expenses (each, a "Liability" and collectively, the
"Liabilities") (including, unless the Fund elects to assume the defense pursuant
to paragraph (b), the reasonable cost of investigating and defending against any
claims therefor and any counsel fees incurred in connection therewith), joint or
several, which

(i) arise out of or are based upon any of the Securities Laws, any other
statute or common law or are incurred in connection with or as a result of any
formal or informal administrative proceeding or investigation by a regulatory
agency, in each case applicable to the Fund, insofar as such Liabilities arise
out of or are based upon the ground or alleged ground that any direct or
indirect omission or act by the Company or the Fund (either during the course of
its daily activities or in connection with the accuracy of its representations
or its warranties in this Agreement) caused or continues to cause the Portfolio
to violate any federal or state securities

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7
<PAGE>

laws or regulations or any other applicable domestic or foreign law or
regulations or common law duties or obligations, but only to the extent that
such Liabilities do not arise out of or are not based upon an omission or act of
the Portfolio or Adviser;

(ii) arise out of the Fund having caused the Portfolio to be an
association taxable as a corporation rather than a partnership;

(iii) arise out of any misstatement of a material fact or an omission of a
material fact in the Company's registration statement (including amendments
thereto) or included in Fund advertising or sales literature, other than
information provided by the Portfolio or the Adviser (including information
contained in the Portfolio's registration statement) or included in Fund
advertising or sales literature at the request of the Portfolio or the Adviser;

(iv) result from the failure of any representation or warranty made by the
Company or the Fund to be accurate when made or the failure of the Company or
the Fund to perform any covenant contained herein or to otherwise comply with
the terms of this Agreement;

(v) arise out of any unlawful or negligent act of the Company, the Fund or
any director, officer, employee or agent of the Company or the Fund, whether
such act was committed against the Company, the Portfolio, the Adviser or any
third party;

(vi) arise out of any claim that the use of the names "Standard & Poor's,"
"S&P," "Standard & Poor's 500" or "500" by the Company violates any license or
infringes upon any trademark; or

(vii) result from any action of the Fund which causes the Portfolio a
Liability, except as expressly provided under this Agreement; provided, however,
that in no case shall the Fund be liable with respect to any claim made against
any Covered Person unless the Covered Person shall have notified the Fund in
writing of the nature of the claim within a reasonable time after the summons,
other first legal process or formal or informal initiation of a regulatory
investigation or proceeding shall have been served upon or provided to a Covered
Person, or any federal, state or local tax deficiency has come to the attention
of the Adviser, the Portfolio or a Covered Person. Failure to notify the Fund of
such claim shall not relieve it from any liability that it may have to any
Covered Person otherwise than on account of the indemnification contained in
this Section.

(b) The Fund will be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any such Liability, but, if the Fund elects to assume the defense, such
defense shall be conducted by counsel chosen by the Fund. In the event the Fund
elects to assume the defense of any such suit and retain such counsel, each
Covered Person and any other defendant or defendants may retain additional
counsel, but shall bear the fees and expenses of such counsel unless the parties
to such suit include any Covered Person and the Fund and any such Covered Person
has been advised by counsel that one or more legal defenses may be available to
it that may not be available to the Fund in which case the Fund shall not be
entitled to assume the defense of such suit notwithstanding its obligation to
bear the fees and expenses of such counsel. The Fund shall not be liable to
indemnify any

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8
<PAGE>

Covered Person for any settlement of any claim affected without the Fund's
written consent, which consent shall not be unreasonably withheld or delayed.
The indemnities set forth in paragraph (a) of Section 4.2 will be in addition to
any liability that the Company in respect of the Fund might otherwise have to a
Covered Person.

(c) Nothing in this Section 4.2(c) shall be construed to provide for
indemnification in violation of Section 17(i) of the 1940 Act or any other
applicable federal securities laws. In the event that any court determines that,
notwithstanding the foregoing, any particular indemnification sought hereunder
violates the aforesaid Section 17(i) (or other applicable provisions of the
federal securities laws), it is the intent of the parties hereto that any court
shall have the power to reform or construe such provisions in such manner as to
render the same enforceable, or, alternatively, substitute other provisions
(including, without limitation, provisions regarding contribution or other
sharing of liability by indemnified and indemnifying parties) so as to give the
parties hereto, to the maximum extent permitted by law, the intended benefits of
this Section 4.2(c).

4.3 Indemnification by SCUDDER

(a) SCUDDER will indemnify and hold harmless the Portfolio, the Adviser,
and their respective trustees, directors, officers and employees and each other
person who controls the Portfolio or the Adviser, as the case may be, within the
meaning of Section 15 of the 1933 Act (each, a "Covered Person" and
collectively, "Covered Persons"), against any and all losses, claims, demands,
damages, liabilities and expenses (each, a "Liability" and collectively, the
"Liabilities") (including, unless SCUDDER elects to assume the defense pursuant
to paragraph (b), the reasonable cost of investigating and defending against any
claims therefor and any counsel fees incurred in connection therewith), joint or
several, which

(i) arise out of or are based upon any of the Securities Laws, any other
statute or common law or are incurred in connection with or as a result of any
formal or informal administrative proceeding or investigation by a regulatory
agency, in each case applicable to SCUDDER, insofar as such Liabilities arise
out of or are based upon the ground or alleged ground that any direct or
indirect omission or act by SCUDDER (either during the course of its daily
activities or in connection with the accuracy of its representations or its
warranties in this Agreement) caused or continues to cause the Portfolio to
violate any federal or state securities laws or regulations or any other
applicable domestic or foreign law or regulations or common law duties or
obligations, but only to the extent that such Liabilities do not arise out of or
are not based upon an omission or act of the Portfolio or Adviser;

(ii) arise out of SCUDDER's having caused the Portfolio to be an
association taxable as a corporation rather than a partnership;

- --------------------------------------------------------------------------------
9
<PAGE>

(iv) result from the failure of any representation or warranty made by the
Company or SCUDDER to be accurate when made or the failure of the Company or
SCUDDER to perform any covenant contained herein or to otherwise comply with the
terms of this Agreement;

(v) arise out of any unlawful or negligent act of the Company, SCUDDER or
any director, officer, employee or agent of the Company or SCUDDER, whether such
act was committed against the Company, the Portfolio, the Adviser or any third
party;

(vi) arise out of any claim that the use of the names "Standard & Poor's,"
"S&P," "Standard & Poor's 500" or "500" by the Company violates any license or
infringes upon any trademark; or

(vii) result from any action of the Fund which causes the Portfolio a
liability, except as expressly provided under this Agreement; provided, however,
that in no case shall SCUDDER be liable with respect to any claim made against
any Covered Person unless the Covered Person shall have notified SCUDDER in
writing of the nature of the claim within a reasonable time after the summons,
other first legal process or formal or informal initiation of a regulatory
investigation or proceeding shall have been served upon or provided to a Covered
Person, or any federal, state or local tax deficiency has come to the attention
of the Adviser, the Portfolio or a Covered Person. Failure to notify SCUDDER of
such claim shall not relieve it from any liability that it may have to any
Covered Person otherwise than on account of the indemnification contained in
this Section 4.3(a)(vii).

(b) SCUDDER will be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any such Liability, but, if SCUDDER elects to assume the defense, such
defense shall be conducted by counsel chosen by SCUDDER. In the event SCUDDER
elects to assume the defense of any such suit and retain such counsel, each
Covered Person and any other defendant or defendants may retain additional
counsel, but shall bear the fees and expenses of such counsel unless the parties
to such suit include any Covered Person and SCUDDER, and any such Covered Person
has been advised by counsel that one or more legal defenses may be available to
it that may not be available to SCUDDER, in which case SCUDDER shall not be
entitled to assume the defense of such suit notwithstanding its obligation to
bear the fees and expenses of such counsel. SCUDDER shall not be liable to
indemnify any Covered Person for any settlement of any claim affected without
SCUDDER's written consent, which consent shall not be unreasonably withheld or
delayed. The indemnities set forth in paragraph (a) of Section 4.3 will be in
addition to any liability that the Company in respect of the Fund might
otherwise have to a Covered Person.

(c) Nothing in this Section 4.3(c) shall be construed to provide for
indemnification in violation of Section 17(i) of the 1940 Act or any other
applicable federal securities laws. In the event that any court determines that,
notwithstanding the foregoing, any particular indemnification sought hereunder
violates the aforesaid Section 17(i) (or other applicable provisions of the
federal securities laws), it is the intent of the parties hereto that any court
shall have the power to reform or construe such provisions in such manner as to
render the same enforceable, or, alternatively, substitute other provisions
(including, without limitation,

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10
<PAGE>

provisions regarding contribution or other sharing of liability by indemnified
and indemnifying parties) so as to give the parties hereto, to the maximum
extent permitted by law, the intended benefits of this Section 4.3(c).

4.4 The Portfolio. The Portfolio covenants that:

(a) Advance Review of Certain Documents. The Portfolio will furnish the
Company and SCUDDER, at least 10 business days prior to filing or first use, as
the case may be, with drafts of its registration statement on Form N-IA
(including amendments). The Portfolio and the Adviser each agree that it will
include in all material respects in such Portfolio documents any disclosures
that may be required by applicable law, particularly those requested by the
Company relating to the Company's or the Fund's status as a registered
investment company, and it will include in all such Portfolio documents any
material comments reasonably made by the Company or SCUDDER. The Company and
SCUDDER will, however, in no way be liable for any errors or omissions in such
documents, whether or not they make any objection thereto, except to the extent
such errors or omissions result from information provided by or (omitted to be
provided) by the Company or SCUDDER. The Portfolio will not make any written or
oral representation about the Company, the Fund or SCUDDER without the prior
written consent of the affected party.

(b) Tax Status. The Portfolio will qualify to be taxable as a partnership
under the Code for all periods during which this Agreement is in effect, except
to the extent that the failure to so qualify results from any action or omission
of the Fund.

(c) Insurance. The Portfolio shall at all times maintain errors and
omissions liability insurance covering losses for negligence and wrongful acts
in an amount not less than $5 million.

(d) Availability of Interests. Conditional upon the Company complying with
the terms of this Agreement, the Portfolio shall permit the Fund to make
additional Investments in the Portfolio on each business day on which shares of
the Fund are sold to the public; provided, however, that the Portfolio may
refuse to permit the Fund to make additional Investments in the Portfolio on any
day on which (i) the Portfolio has refused to permit all other investors in the
Portfolio to make additional Investments in the Portfolio or (ii) the Trustees
of the Portfolio have reasonably determined that permitting additional
Investments by the Fund in the Portfolio would constitute a breach of their
fiduciary duties to the Portfolio.

4.5 Indemnification by the Portfolio and the Adviser.

(a) The Portfolio and the Adviser each will indemnify and hold harmless
the Company, SCUDDER, their respective trustees, directors, officers and
employees and each other person who controls the Company, the Fund or SCUDDER,
as the case may be, within the meaning of Section 15 of the 1933 Act (each, a
"Covered Person" and collectively, "Covered Persons"), against any and all
losses, claims, demands, damages, liabilities and expenses (each, a "Liability"
and collectively, the "Liabilities") (including, unless the Adviser or the
Portfolio elects to assume the defense pursuant to paragraph (b), the reasonable
costs of investigating and defending against any claims therefor and any counsel
fees incurred in connection therewith), joint or several,

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11
<PAGE>

whether incurred directly by the Company or SCUDDER or indirectly by the Company
or SCUDDER through the Company's Investment in the Portfolio, which

(i) arise out of or are based upon any of the Securities Laws, any other
statute or common law or are incurred in connection with or as a result of any
formal or informal administrative proceeding or investigation by a regulatory
agency, insofar as such Liabilities arise out of or are based upon the ground or
alleged ground that any direct or indirect omission or commission by the
Portfolio or the Adviser (either during the course of its daily activities or in
connection with the accuracy of its representations or its warranties in this
Agreement) caused or continues to cause the Company to violate any federal or
state securities laws or regulations or any other applicable domestic or foreign
law or regulations or common law duties or obligations, but only to the extent
that such Liabilities do not arise out of and are not based upon an omission or
commission of the Company or SCUDDER;

(ii) arise out of or are based upon an inaccurate calculation of the
Portfolio's net asset value (whether by the Portfolio, the Adviser or any party
retained for that purpose);

(iii) arise out of (A) any misstatement of a material fact or an omission
of a material fact in the Portfolio's registration statement (including
amendments thereto) or included at the Adviser's or Portfolio's request in
advertising or sales literature used by the Fund, or (B) any misstatement of a
material fact or an omission of a material fact in the registration statement or
advertising or sales literature of any investor in the Portfolio, other than the
Fund (unless such omission or misstatement in the Fund's materials was caused by
the Portfolio or the Adviser);

(iv) arise out of the Portfolio's or the Adviser's having caused the Fund
to fail to qualify as a regulated investment company under the Code;

(v) result from the failure of any representation or warranty made by the
Portfolio or Adviser to be accurate when made or the failure of the Portfolio or
Adviser to perform any covenant contained herein or to otherwise comply with the
terms of this Agreement;

(vi) arise out of any unlawful or negligent act by the Portfolio, the
Adviser or any director, trustee, officer, employee or agent of the Portfolio or
Adviser, whether such act was committed against the Portfolio, the Company,
SCUDDER or any third party;

(vii) arise out of any claim that the systems, methodologies, or
technology used in connection with operating the Portfolio, including the
technologies associated with maintaining the master-feeder structure of the
Portfolio, violates any license or infringes upon any patent or trademark;

(viii) arise out of any claim that the use of the names "Standard &
Poor's," "S&P," "Standard & Poor's 500," "S&P 500" or "500" by the Portfolio
violates any license or infringes upon any trademark; or

(ix) result from any Liability of the Portfolio or any investor in the
Portfolio (or shareholder thereof other than the Fund and its shareholders),
except as expressly provided under

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12
<PAGE>

this Agreement; provided, however, that in no case shall the Portfolio or the
Adviser be liable with respect to any claim made against any such Covered Person
unless such Covered Person shall have notified the Portfolio or the Adviser in
writing of the nature of the claim within a reasonable time after the summons,
other first legal process or formal or informal initiation of a regulatory
investigation or proceeding shall have been served upon or provided to a Covered
Person or any federal, state or local tax deficiency has come to the attention
of the Company, SCUDDER or a Covered Person. Failure to notify the Portfolio or
the Adviser of such claim shall not relieve it from any liability that it may
have to any Covered Person otherwise than on account of the indemnification
contained in this paragraph.

(b) The Adviser or the Portfolio will be entitled to participate at its
own expense in the defense or, if it so elects to assume the defense of any suit
brought to enforce any such liability, but, if the Adviser or the Portfolio
elects to assume the defense, such defense shall be conducted by counsel chosen
by the Adviser or the Portfolio, as the case may be. In the event the Adviser or
the Portfolio elects to assume the defense of any such suit and retain such
counsel, each Covered Person and any other defendant or defendants in the suit
may retain additional counsel but shall bear the fees and expenses of such
counsel unless (A) the Adviser or the Portfolio, as the case may be, shall have
specifically authorized the retaining of such counsel or (B) the parties to such
suit include any Covered Person and the Adviser or the Portfolio, and any such
Covered Person has been advised by counsel that one or more legal defenses may
be available to it that may not be available to the Adviser or the Portfolio, as
the case may be, in which case the Adviser or the Portfolio shall not be
entitled to assume the defense of such suit notwithstanding the obligation to
bear the fees and expenses of such counsel. Neither the Adviser nor the
Portfolio shall be liable to indemnify any Covered Person for any settlement of
any such claim effected without the Adviser's or the Portfolio's written
consent, as the case may be, which content shall not be unreasonably withheld or
delayed. The indemnities set forth in paragraph (a) will be in addition to any
liability that the Adviser or the Portfolio might otherwise have to a Covered
Person.

(c) Nothing in this Section 4.5(c) shall be construed to provide for
indemnification in violation of Section 17(i) of the 1940 Act or any other
applicable federal securities laws. In the event that any court determines that,
notwithstanding the foregoing, any particular indemnification sought hereunder
violates the aforesaid Section 17(i) (or other applicable provisions of the
federal securities laws), it is the intent of the parties hereto that any court
shall have the power to reform or construe such provisions in such manner as to
render the same enforceable, or, alternatively, substitute other provisions
(including, without limitation, provisions regarding contribution or other
sharing of liability by indemnified and indemnifying parties) so as to give the
parties hereto, to the maximum extent permitted by law, the intended benefits of
this Section 4.5(c).

4.6 Scope of Agreement. Nothing contained herein shall be construed to protect
any person against any liability to which such person would otherwise be subject
by reason of willful misfeasance, bad faith, or negligence, in the performance
of such person's duties, or by reason of such person's reckless disregard of
such person's obligations and duties under such contract or agreement.

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13
<PAGE>

4.7 In-Kind Redemption. In the event the Company desires to withdraw or redeem
all of the Fund's Interests in the Portfolio, unless otherwise agreed to by the
parties, the Portfolio will effect such redemption 'in kind' and in such a
manner that the securities delivered to the Fund's custodian for the account of
the Fund will mirror, as closely as practicable, the composition of the
Portfolio immediately prior to such redemption. No other withdrawal or
redemption of any Interest in the Portfolio will be satisfied by means of an "in
kind" redemption except in compliance with Rule 18f- 1 under the 1940 Act,
provided, however, that for purposes of determining compliance with Rule I 8f-
1, each shareholder of the Fund redeeming shares of the Fund on a particular day
will be treated as a direct holder of an Interest in the Portfolio being
redeemed that day.

4.8 Reasonable Actions. Each party covenants that it will, subject to the
provisions of this Agreement, from time to time, as and when requested by
another party or in its own discretion, as the case may be, execute and deliver
or cause to be executed and delivered all such assignments and other
instruments, take or cause to be taken such actions, and do or cause to be done
all things reasonably necessary, proper or advisable in order to consummate the
transactions contemplated by this Agreement and to carry out its intent and
purpose.

CONDITIONS PRECEDENT

The obligations of each party to consummate the transactions provided for
herein shall be subject to (a) performance by the other parties of all the
obligations to be performed by the other parties hereunder on or before each
Closing, (b) all representations and warranties of the other parties contained
in this Agreement being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of each date of Closing, with the same force and effect as if
made on and as of the time of such Closing, and (c) the following further
conditions that shall be fulfilled on or before each Closing:

5.1 Regulatory Status. All necessary filings shall have been made with the SEC
and state securities authorities, and no order or directive shall have been
received that any other or further action is required to permit the parties to
carry out the transactions contemplated hereby.

5.2 Approval of Auditors. Unless precluded by applicable fiduciary duties or the
failure of the Fund's shareholders to provide necessary ratification, the
trustees of the Company that are not "interested persons" of the Company, as
defined in the 1940 Act, shall have selected as the independent certified public
accountants for the Fund the independent certified public accountants selected
and ratified for the Portfolio.

5.3 Investment Objective/Restrictions. The Fund shall have the same investment
objective and substantively the same investment restrictions as the Portfolio.

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14

<PAGE>

ADDITIONAL AGREEMENTS

6.1 Notification of Certain Matters. Each party will give prompt notice to the
other parties of:

(a) the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would be likely to cause either (i) any representation
or warranty contained in this Agreement to be untrue or inaccurate, or (ii) any
condition precedent set forth in Article V thereof to be unsatisfied in any
material respect at the time of any Closing and

(b) any material failure of a party or any trustee, director, officer,
employee or agent thereof to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by such person hereunder; provided,
however, that the delivery of any notice pursuant to this Section 6.1 shall not
limit or otherwise affect the remedies available, hereunder or otherwise, to the
party receiving such notice.

6.2 Access to Information. The Portfolio and the Company shall afford each other
reasonable access at all reasonable times to such party's officers, employees,
agents and offices and to all its relevant books and records and shall furnish
each other party with all relevant financial and other data and information as
requested; provided, however, that nothing contained herein shall obligate the
Company to provide the Portfolio with access to the books and records of the
Company relating to any series of the Company other than the Fund, nor shall
anything contained herein obligate the Company to furnish the Portfolio with the
Fund's shareholder list, except as may be required to comply with applicable law
or any provision of this Agreement.

6.3 Confidentiality. Each party agrees that it shall hold in strict confidence
all data and information obtained from another party (unless such information is
or becomes readily ascertainable from public or published information or trade
sources) and shall ensure that its officers, employees and authorized
representatives do not disclose such information to others without the prior
written consent of the party from whom it was obtained, except if disclosure is
required by the SEC, any other regulatory body or the Fund's or Portfolio's
respective auditors, or in the opinion of counsel such disclosure is required by
law, and then only with as much prior written notice to the other party as is
practical under the circumstances.

6.4 Public Announcements. No party shall issue any press release or otherwise
make any public statements with respect to the matters covered by this Agreement
without the prior consent of the other parties hereto, which consent shall not
be unreasonably withheld; provided, however, that consent shall not be required
if, in the opinion of counsel, such disclosure is required by law, provided
further, however, that the party making such disclosure shall provide the other
parties hereto with as much prior written notice of such disclosure as is
practical under the circumstances.

6.5 Accounting Services. The Company on behalf of the Fund, agrees to appoint
the Advisor as Fund accounting agent pursuant to the attached Investment
Accounting Agreement. The Company may alter its recommendation to its Board
regarding such appointment at any time.

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15
<PAGE>

VII

TERMINATION, AMENDMENT AND WAIVER

7.1 Termination.

(a) This Agreement may be terminated by the mutual agreement of all
parties.

(b) This Agreement may be terminated at any time by the Company by
withdrawing all of the Fund's Interest in the Portfolio.

(c) This Agreement may be terminated on not less than 120 days prior
written notice by the Portfolio to the Company and SCUDDER.

(d) This Agreement shall terminate automatically with respect to SCUDDER
upon the effective date of termination by the Company and this Agreement shall
terminate automatically with respect to the Adviser upon the effective date of
termination by the Portfolio.

(e) This Agreement may be terminated at any time immediately upon written
notice to the other parties in the event that formal proceedings are instituted
against another party to this Agreement by the SEC or any other regulatory body,
provided that the terminating party has a reasonable belief that the institution
of the proceeding is not without foundation and will have a material adverse
impact on the terminating party's ability to perform its obligations hereunder.

(f) The indemnification obligations of the parties set forth in Article
IV, shall survive the termination of this Agreement.

7.2 Amendment. This Agreement may be amended, modified or supplemented at any
time in such manner as may be mutually agreed upon in writing by the parties.

7.3 Waiver. At any time prior to any Closing, any party may:

(a) extend the time for the performance of any of the obligations or other
acts of the other parties hereto,

(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and

(d) Any such waiver will not serve to waive such waiving party's rights
with respect to any representation, warranty, agreement or condition that occurs
thereafter.

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<PAGE>

VIII

DAMAGES

8.1 The parties agree that, in the event of a breach of this Agreement, the
remedy of money damages would not be adequate and agree that injunctive relief
would be an appropriate additional relief.

GENERAL PROVISIONS

9.1 Notices. All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made on the
earlier of (i) when actually received in person or by fax, or (ii) three days
after being sent by certified or registered United States mail, return receipt
requested, postage prepaid, addressed as follows:

If to SCUDDER: Scudder Stevens & Clark, Inc.
345 Park Avenue
New York, NY 10154-0010
Attn: Mr. Daniel Pierce
Fax:617-295-4010

with a copy to:
Mr. Daniel Gross
Fax: 617-295-4023

If to the Adviser: Bankers Trust Company
4 Albany Street, 2nd Floor
Mailstop 5021
New York, New York 10006
Attn: Mr. Brian W. Wixted
Fax: (212)250-6449

If to the Portfolio: (BT) Equity 500 Index Portfolio
c/o Federated Investors
Federated Towers
1001 Liberty Avenue
Pittsburgh, PA 15222-3775
Attn: Jay Neuman, Secretary

Fax: 412-288-8141

If to the Company: Scudder Investment Trust
c/o Scudder Stevens & Clark, Inc.
Two International Place
Boston, MA 02110-4103
Attn: Thomas McDonough, Secretary
Fax:617-443-7059

Any party to this Agreement may change the identity of the person to receive
notice by providing written notice thereof to all other parties to the
Agreement.

- --------------------------------------------------------------------------------
17
<PAGE>

9.2 Expenses. All costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.

9.3 Headings. The headings and captions contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

9.4 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

9.5 Entire Agreement. This Agreement sets forth the entire understanding between
the parties concerning the subject matter of this Agreement and incorporates or
supersedes all prior negotiations and understandings. There are no covenants,
promises, agreements, conditions or understandings, either oral or written,
between them relating to the subject matter of this Agreement other than those
set forth herein. No representation or warranty has been made by or on behalf of
any party to this Agreement (or any officer, director, trustee, employee or
agent thereof) to induce any other party to enter into this Agreement or to
abide by or consummate any transactions contemplated by any terms of this
Agreement, except representations and warranties expressly set forth herein.

9.6 Successors and Assignments. Each and all of the provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and, except
as otherwise specifically provided in this Agreement, their respective
successors and assigns. Notwithstanding the foregoing, no party shall make any
assignment of this Agreement or any rights or obligations hereunder without the
written consent of all other parties. As used herein, the term "assignment"
shall have the meaning ascribed thereto in the 1940 Act. The parties hereby
consent to the acquisition of a majority interest in SCUDDER by Zurich Insurance
Company and the acquisition of Alex Brown & Co. by the Adviser.

9.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
choice of law or conflicts of law provisions thereof.

9.8 Counterparts. This Agreement may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Agreement by signing one or more counterparts.

9.9 Third Parties. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person, other than the parties hereto and
their successors or assigns, any rights or remedies under or by reason of this
Agreement.

- --------------------------------------------------------------------------------
18
<PAGE>

9.10 Interpretation. Any uncertainty or ambiguity existing herein shall not
presumptively be interpreted against any party, but shall be interpreted
according to the application of the rules of interpretation for arm's length
agreements.

9.11 Limitation of Liability.

(a) The parties hereby acknowledge that the Company has entered into this
Agreement solely on behalf of the Fund and that no other series of the Company
shall have any obligation hereunder with respect to any liability of the Company
arising hereunder. In recognition that the Fund is a business trust, it is
understood and expressly stipulated that none of the trustees, officers, agents
or shareholders of the Fund shall be personally liable hereunder. It is
understood and acknowledged that all persons dealing with the Fund must look
solely to the property of such party for the enforcement of any claims against
such party, as neither the trustees, officers, agents nor shareholders assume
any personal liability for obligations entered into on behalf of the Fund.

(b) Notice is hereby given that this Agreement is made and executed on
behalf of the Portfolio and not by the Trustees or officers of the Portfolio
individually, and each party hereby acknowledges that the obligations of or
arising out of this Agreement are not binding upon the Trustees, officers of, or
investors in, the Portfolio individually but any such obligations of the
Portfolio are binding only upon the assets and property of the Portfolio.

- --------------------------------------------------------------------------------
19
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers, thereunto duly authorized, as of the date first
written above.

SCUDDER, STEVENS & CLARK, INC.

By: /s/ Christopher L. Gootkind
-----------------------
Name: Christopher L. Gootkind
Title: Managing Director

SCUDDER INVESTMENT TRUST, on behalf of itself and the SCUDDER S&P 500 INDEX
FUND, a series thereof

By: /s/ Thomas F. McDonough
-----------------------
Name: Thomas F. McDonough
Title: Vice President, Secretary and Assistant Treasurer

EQUITY 500 INDEX PORTFOLIO

By: /s/ Jay S. Neuman
-----------------------
Name: Jay S. Neuman
Title: Secretary

BANKERS TRUST COMPANY

By: /s/ Brian Wixted
-----------------------
Name: Brian Wixted
Title: Vice President

- --------------------------------------------------------------------------------
20

INVESTMENT ACCOUNTING AGREEMENT

THIS AGREEMENT made and effective as of this 28 day of August, 1997, by
and between SCUDDER INVESTMENT TRUST, ("Trust") a Massachusetts business trust,
having its principal place of business at Two International Place, Boston, MA
02110-4103 on behalf of the SCUDDER S&P 500 INDEX FUND, ("Fund"), a series of
the Trust, and BANKERS TRUST COMPANY, a New York banking corporation, having its
principal place of business at 130 Liberty Street, New York, NY 10006
("Bankers").

WHEREAS, Trust is registered as an "investment company" under the
Investment Company Act of 1940, as amended (the "1940 Act") and Fund is a duly
authorized series of the Trust; and

WHEREAS, Bankers performs certain investment accounting and recordkeeping
services or may sub-contract with a third party to perform certain investment
accounting and recordkeeping services in connection with maintaining certain
accounting records of Fund; and

WHEREAS, such third party sub-contractor may perform certain investment
accounting and recordkeeping services on a computerized accounting system (the
"Portfolio Accounting System" or "PAS"); and

WHEREAS, Fund desires to appoint Bankers as investment accounting and
recordkeeping agent for Fund, and Bankers is willing to accept such appointment;

NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto, intending to be legally bound, mutually covenant and agree
as follows:

1. Appointment of Recordkeeping Agent. Fund hereby constitutes and appoints
Bankers as investment accounting and recordkeeping agent for Fund to
perform accounting and recordkeeping functions related to portfolio
transactions required of Fund under Rule 31a-1 of the 1940 Act and to
calculate the net asset value of the Fund.

2. Representations and Warranties. Trust hereby represents, warrants and
acknowledges to Bankers:

A. That it is a trust duly organized and existing and in good standing
under the laws of Massachusetts, and that it is registered under the
1940 Act;

B. That it has the requisite power and authority under applicable law,
its charter or declaration of trust and its bylaws to enter into
this Agreement; that it has taken all requisite action necessary to
appoint Bankers as investment accounting and recordkeeping agent for
Fund; that this Agreement has been duly executed and delivered by
the Trust on behalf of the Fund; and that this Agreement constitutes
a legal, valid and binding obligation of Fund, enforceable in
accordance with its terms, except as may be limited by or subject to
any bankruptcy, insolvency, reorganization, moratorium or other
similar law affecting the enforcement of creditors' rights
generally, and subject to general principles of equity; and

1
<PAGE>

C. That it has determined to its satisfaction that the Portfolio
Accounting System is appropriate and suitable for its needs.

3. Representations and Warranties of Bankers. Bankers hereby represents,
warrants and acknowledges to Fund:

A. That it is a New York banking corporation duly organized and
existing and in good standing under the laws of the State of New
York;

B. That it has the requisite power and authority under applicable law,
its charter and its bylaws to enter into and perform this Agreement;
that this Agreement has been duly executed and delivered by Bankers;
and that this Agreement constitutes a legal, valid and binding
obligation of Bankers, enforceable in accordance with its terms,
except as may be limited by or subject to any bankruptcy,
insolvency, reorganization, moratorium or other similar law
affecting the enforcement of creditors' rights generally, and
subject to general principles of equity; and

C. That the accounts and records maintained and preserved by Bankers
shall be the property of Fund and that it will not use any
information made available to it by reason of the relationship
created hereby for any purpose other than complying with its duties
and responsibilities hereunder or as specifically authorized by Fund
in writing.

D. Bankers and its designated contractor shall comply in all material
respects with all applicable laws pertaining to its duties
hereunder.

4. Duties and Responsibilities of Fund.

A. Fund shall turn over to Bankers and/or its designated sub-contractor
all of Fund's accounts and records previously maintained, if any.

B. Fund shall provide to Bankers and/or the designated sub-contractor
the information necessary to perform Bankers' duties and
responsibilities hereunder in writing or its electronic or digital
equivalent prior to the close of the New York Stock Exchange on each
day on which Bankers prices the Funds' securities and foreign
currency holdings.

C. Fund shall furnish Bankers and/or its designated sub-contractor with
the declaration, record and payment dates and amounts of any
dividends or income and any other special actions required
concerning the securities in the portfolio when such information is
not readily available from generally accepted securities industry
services or publications.

D. Fund shall pay to Bankers such compensation at such time as may from
time to time be agreed upon in writing by Bankers and Fund. The
initial compensation schedule is attached as Exhibit A. Fund shall
also reimburse Bankers on demand for all reasonable out-of-pocket
disbursements, cost and expenses incurred by Bankers

2
<PAGE>

and/or its designated sub-contractor in connection with services
performed pursuant to this Agreement.

E. Fund shall provide to Bankers, as conclusive proof of any fact or
matter required to be ascertained from Fund as reasonably determined
by Bankers, a certificate signed by Fund's president or other
officer of Fund, or other authorized individual, as reasonably
requested by Bankers. Fund shall also provide to Bankers
instructions with respect to any matter concerning this Agreement
requested by Bankers. Bankers and/or its designated sub-contractor
may rely upon any instruction or information furnished by any person
reasonably believed by it to be an officer or agent of Fund, and
shall not be held to have notice of any change of authority of any
such person until receipt of written notice thereof from Fund.

F. Fund shall preserve the confidentiality of the Portfolio Accounting
System and the tapes, books, reference manuals, instructions,
records, programs, documentation and information of, and other
materials related to PAS and provided by Bankers or its
subcontractor, the Portfolio Accounting System and the business of
Bankers and/or its designated sub-contractor ("Confidential
Information"). Fund shall not voluntarily disclose such Confidential
Information to any other person other than its own employees or
agents who reasonably have a need to know such information pursuant
to this Agreement or in order to comply with law or requests of
regulatory authorities. Fund shall return all such Confidential
Information to Bankers upon termination or expiration of this
Agreement. Confidential Information shall not include information
that becomes known in the public through no fault of the Fund or
Trust.

G. Fund has been informed that PAS is licensed for use by Bankers'
designated subcontractor from DST Systems, Inc. ("Licensor"), and
Fund acknowledges that such designated sub-contractor and Licensor
have proprietary rights in and to PAS and all other sub-contractor
or Licensor programs, code, techniques, know-how, data bases,
supporting documentation, data formats and procedures, including
without limitation any changes or modifications made at the request
or expense or both of Fund (collectively, the "Protected
Information"). Fund acknowledges that the Protected Information
constitutes confidential material and trade secrets of such
designated subcontractor and Licensor. Fund shall preserve the
confidentiality of the Protected Information, and Fund hereby
acknowledges that any unauthorized use, misuse, disclosure or taking
of Protected Information, residing or existing internal or external
to a computer, computer system, or computer network, or the knowing
and unauthorized accessing or causing to be accessed of any
computer, computer system, or computer network, may be subject to
civil liabilities and criminal penalties under applicable law. Fund
shall so inform employees and agents who have access to the
Protected Information or to any computer equipment capable of
accessing the same. Licensor and Bankers' designated sub-contractor
are intended to be and shall be third party beneficiaries of the
Fund's obligations and undertakings contained in this paragraph.
Protected information shall not include information that becomes
known in the public through no fault of the Fund or Trust.

3
<PAGE>

H. If Bankers and/or its designated sub-contractor shall provide Fund
direct access to the computerized recordkeeping and reporting system
used hereunder or if Bankers and/or its designated sub-contractor
and Fund shall agree to utilize any electronic system of
communication, Fund shall be fully responsible for any and all
consequences of the use or misuse by Fund of the terminal device,
passwords, access instructions and other means of access to such
system(s) which are utilized by, assigned to or otherwise made
available to the Fund. Fund agrees to implement and enforce
appropriate security policies and procedures to prevent unauthorized
or improper access to or use of such system(s). Bankers and its
designated sub-contractor shall be fully protected in acting
hereunder upon any instructions, communications, data or other
information received by Bankers or its designated sub-contractor by
such means as fully and to the same extent as if delivered to
Bankers or its designated subcontractor by written instrument signed
by the requisite authorized representative(s) of the Fund.

5. Duties and Responsibilities of Bankers.

A. Bankers or its designated sub-contractor shall calculate Fund's net
asset value, in accordance with Fund's prospectus. Bankers or its
designated sub-contractor will price the securities of the Fund for
which market quotations are available by the use of outside services
designated by Fund which are normally used and contracted with for
this purpose; all other securities will be priced in accordance with
Fund's instructions.

B. Bankers or its designated sub-contractor shall prepare and maintain,
with the direction and as interpreted by Fund or Fund's accountants
and/or other advisors, in complete, accurate, and current form, all
accounts and records needed to be maintained as a basis for
calculation of Fund's net asset value, and as further agreed upon by
the parties in writing, and shall preserve such records in the
manner and for the periods required by law or for such longer period
as the parties may agree upon in writing. To the extent required
under the 1940 Act and rules thereunder, Bankers or its designated
sub-contractor agrees that such records maintained by it hereunder
will be preserved, maintained and made available in accordance with
the provisions of the 1940 Act and rules thereunder, and copies or,
if required, originals will be surrendered promptly to the Fund on
and in accordance with its request.

C. Bankers or its designated sub-contractor shall make available to
Fund for inspection or reproduction within a reasonable time, upon
demand, all accounts and records of Fund maintained and preserved by
Bankers or its designated sub-contractor.

D. Bankers or its designated sub-contractor shall be entitled to rely
conclusively on the completeness and correctness of any and all
accounts and records turned over to it by Fund.

E. Bankers or its designated sub-contractor shall assist Fund's
independent accountants, or upon approval of Fund or upon demand,
any regulatory body, in any requested review of Fund's accounts and
records maintained by Bankers but shall be reimbursed

4
<PAGE>

by Fund for all reasonable out-of-pocket expenses invested in any
such review outside of routine and normal periodic reviews.

F. Upon receipt from Fund of any necessary information or instructions,
Bankers or its designated sub-contractor shall provide information
from the books and records it maintains for Fund that Fund needs for
tax returns, questionnaires, or periodic reports to shareholders and
such other reports and information requests as Fund and Bankers or
its designated sub-contractor shall agree upon from time to time.

G. Subject to the provisions of any custody agreement to which Bankers
and the Fund are parties, neither Bankers nor any designated
sub-contractor shall have any responsibility hereunder to Fund,
Fund's shareowners or any other person or entity for moneys or
securities of Fund, whether held by Fund or custodians of Fund.

H. Subject to the provisions of this Agreement, to the extent agents
perform services under this Agreement that are the responsibility of
Bankers, Bankers shall be responsible for, and assume all liability
for (including any obligation for indemnification), the actions and
inactions of such agents as if such services had been provided by
Bankers.

I. Bankers or its designated sub-contractor shall maintain or provide
commercially reasonable redundant facilities and shall maintain or
provide for backup files of its records maintained hereunder and
shall store such back-up files in a secure off-premises location, in
order to reasonably minimize the impact of an event such as a power
failure or other interruption of whatever cause at the location of
its records.

6. Indemnification.

A. Fund shall indemnify and hold Bankers harmless from and against any
and all costs, expenses, losses, damages, charges, reasonable
counsel fees, payments and liabilities which may be asserted against
or incurred by Bankers, or for which it maybe liable, arising out of
or attributable to any of the following, in each case except for any
loss or damage arising from any negligent act or wilful misconduct
of Bankers or a designated subcontractor:

1. Bankers' and/or Bankers' designated sub-contractor's action or
omission to act in each case in accordance with its
obligations hereunder.

2. Bankers' and/or Bankers' designated sub-contractor's payment
of money as requested by Fund, or the taking of any action
which might make Bankers or its designated sub-contractor
liable for payment of money; provided, however, that neither
Bankers nor its designated sub-contractor shall be obligated
to expend its own moneys or to take any such action except in
Bankers' or its designated sub-contractor's sole discretion.

5
<PAGE>

3. Bankers' and/or Bankers' designated sub-contractor's action or
omission to act hereunder in accordance with any instructions,
advice, notice, request, consent, certificate or other
instrument or paper appearing to it to be genuine and to have
been properly executed by an authorized person of Fund.

4. Bankers' and/or Bankers' designated sub-contractor's action or
omission to act in good faith reliance on the opinion of
outside counsel acceptable to both parties hereto.

5. Bankers and/or its designated sub-contractor's action or
omission to act in good faith reliance on and in accordance
with statements of counsel to the Fund, the Fund's independent
accountants, and the Fund's officers or other authorized
individuals provided by Fund resolution.

6. The legality of the issue, sale or purchase of any shares of
the Fund, the sufficiency of the purchase or sale price, or
the declaration of any dividend by the Fund, whether paid in
cash or stock.

7. Any error, omission, inaccuracy or other deficiency in Fund's
accounts and records or other information, in each case
provided by or on behalf of Fund to Bankers or its designated
sub-contractor, or the failure of the Fund to provide, or
provide in a timely manner, the information needed by Bankers
or its designated sub-contractor to perform its functions as
specified in Section 4.C. hereunder.

8. The Fund's refusal or failure to materially comply with the
terms of this Agreement, the Fund's negligence or willful
misconduct in connection with the performance of its duties
hereunder, or the failure of any representation of the Fund
hereunder to be and remain true and correct in all material
respects at all times.

9. The use or misuse, whether authorized or unauthorized, of the
Portfolio Accounting System or other computerized
recordkeeping and reporting system to which Bankers or its
designated sub-contractor provides Fund direct access
hereunder or of any other electronic system of communication
used hereunder by Fund or by any person who acquires access to
such system(s) through the terminal device, passwords, access
instruction or other means of access to such system(s) which
are utilized by, assigned to or otherwise made available to
the Fund.

Nothing contained here shall be construed to protect any person
against any liability to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, or negligence,
in the performance of such person's duties, or by reason of such
person's reckless disregard of such person's obligations and duties
under this agreement.

6
<PAGE>

B. Bankers or its designated sub-contractor shall indemnify and hold
Fund harmless from and against any and all costs, expenses, losses,
damages, charges, reasonable counsel fees, payments and liabilities
which may be asserted against or incurred by Fund or for which it
may be liable, arising out our or attributable to any of the
following, in each case except for any loss or damages arising from
any negligent act or wilful misconduct of Trust.

1. Bankers' refusal or failure to comply with the terms of this
Agreement or the failure of any representation or warranty of
Bankers hereunder to be and remain true and correct in all
material respects at all times.

2. Any negligent or willful misconduct of Bankers or its
designated subcontractor.

3. The failure of Bankers or its designated sub-contractor to
materially comply with applicable law in connection with the
performance of its duties hereunder.

4. Fund's action or omission to act in good faith reliance on the
opinion of outside counsel acceptable to both parties hereto.

In no event shall Bankers, its designated sub-contractor, or Fund be
liable for consequential, special or punitive damages.

7. Force Majeure. Neither Bankers nor its designated sub-contractor shall be
responsible or liable for its failure or delay in performance of its
obligations under this Agreement arising out of or caused, directly or
indirectly, by circumstances beyond its reasonable control, including,
without limitation: any interruption, loss or malfunction of any utility,
transportation, computer (hardware or software) or communication service;
inability to obtain labor, material, equipment or transportation, or a
delay in mails; governmental or exchange action, statute, ordinance,
rulings, regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes, freezes,
floods, fires, tornadoes, acts of God or public enemy, revolutions, or
insurrection.

8. Procedures. Bankers and Fund may from time to time adopt procedures as
they agree upon, and Bankers or its designated sub-contractor may
conclusively assume that any procedure approved in writing or directed by
Fund or its accountants or other advisors does not conflict with or
violate any requirements of Fund's prospectus, charter or declaration of
trust, bylaws, any applicable law, rule or regulation, or any order,
decree or agreement by which the Fund may be bound.

9. Term and Termination. The initial term of this Agreement shall be a period
of one year commencing on the effective date hereof. This Agreement shall
continue thereafter until terminated by either party by notice in writing
received by the other party not less than ninety (90) days prior to the
date upon which such termination shall take effect. Notwithstanding any
other provisions of this section 9, (1) the Fund shall have the right to
immediately terminate this Agreement, in the event the Third Party Feeder
Agreement dated August ___,

7
<PAGE>

1997, by and among Scudder, Stevens & Clark, Inc., the Trust, Equity 500
Index Portfolio and Bankers should terminate, and (2) Bankers shall have
the right to immediately terminate this Agreement in the event the Fund
Accounting Agreement between Bankers and Investors Fiduciary Trust Company
dated December 31, 1996 shall terminate. Upon termination of this
Agreement:

A. Fund shall pay to Bankers its fees and compensation due hereunder.

B. Fund shall designate a successor (which may be Fund) by notice in
writing to Bankers on or before the termination date.

C. Bankers shall deliver to the successor, or if none has been
designated, to Fund, at Bankers' office, all records, funds and
other proportions of Fund deposited with or held by Bankers
hereunder. In the event that neither a successor nor Fund takes
delivery of all records, funds and other properties of Fund by the
termination date, Bankers' sole obligation with respect thereto from
the termination date until delivery to a successor or Fund shall be
to exercise reasonable care to hold the same in custody in its form
and condition as of the termination date, and Bankers shall be
entitled to reasonable compensation therefor, including but not
limited to all of its out-of-pocket costs and expenses incurred in
connection therewith.

10. Notices. Notices, requests, instructions and other writings addressed to
Fund at Two International Place, Boston, Massachusetts 02110-4103
Attention: John Hebble, carbon copy to Brenda Lyons, or at such address as
Fund may have designated to Bankers in writing, shall be deemed to have
been properly given to Fund hereunder; and notices, requests, instructions
and other writings addressed to Bankers Trust Company at its offices at 4
Albany Street, New York, NY 10006, Attention: Brian W. Wixted, or to such
other address as it may have designated to Fund in writing, shall be
deemed to have been properly given to Bankers hereunder.

11. Miscellaneous.

A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of
the State of New York, without reference to the choice of laws
principles thereof.

B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.

C. The representations, warranties, and indemnifications extended
hereunder, and the provisions of Section 4.G. and 4.H. are intended
to and shall continue after and survive the expiration, termination
or cancellation of this Agreement.

D. No provisions of the Agreement may be amended or modified in any
manner except by a written agreement properly authorized and
executed by each party hereto.

8
<PAGE>

E. The failure of either party to insist upon the performance of any
terms or conditions of this Agreement or to enforce any rights
resulting from any breach of any of the terms or conditions of this
Agreement, including the payment of damages, shall not be construed
as a continuing or permanent waiver of any such terms, conditions,
rights or privileges, but the same shall continue and remain in full
force and effect as if no such forbearance or waiver had occurred.

F. The captions in this Agreement are included for convenience of
reference only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.

G. This Agreement may be executed in two or more separate counterparts,
each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.

H. If any provision of this Agreement shall be determined to be invalid
or unenforceable, the remaining provisions of this Agreement shall
not be affected thereby, and every provision of this Agreement shall
remain in full force and effect and shall remain enforceable to the
fullest extent permitted by applicable law.

I. This Agreement may not be assigned by either party hereto without
the prior written consent of the other.

J. Neither the execution nor performance of this Agreement shall be
deemed to create a partnership or joint venture by and between Fund
and Bankers.

K. Except as specifically provided herein, this Agreement does not in
any way affect any other agreements entered into among the parties
hereto and any actions taken or omitted by any party.

L. The parties hereto acknowledge that any desginated sub-contractor of
Bankers shall be a third party beneficiary of this Agreement.

M. Notice is hereby given that a copy of Trust's declaration of trust
and all amendments thereto is on file with the Secretary of State of
the state of its organization; that this Agreement has been executed
on behalf of Fund by the undersigned duly authorized representative
of Fund in his/her capacity as such and not individually, and that
in recognition that the Fund is a Massachusetts business trust, it
is understood and expressly stipulated that none of the trustees,
officers, agents, or shareholders of the Fund shall be personally
liable hereunder. It is understood and acknowledged that all persons
dealing with the Fund must look solely to the property of such party
for the enforcement of any claims against such party, as neither the
trustees, officers, agents nor shareholders assume any personal
liability for obligations entered into on behalf of the Fund.

9
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective and duly authorized officers, to be effective as of the day
and year first above written.

Bankers Trust Company

By: /s/ [Illegible]
--------------------------
Title: Vice President

Scudder Investment Trust___________ on behalf of
Scudder S&P 500 Index Fund

By: /s/ [Illegible]
--------------------------
Title: Secretary

10
<PAGE>

EXHIBIT A

Annual Investment Accounting fee shall equal $10,000.

11
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE>6
<LEGEND>
This schedule contains summary financial information extracted from the Classic
Growth Fund Annual Report for the fiscal year ended 8/31/97 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> Classic Growth Fund

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> AUG-31-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 46,367,306
<INVESTMENTS-AT-VALUE> 53,223,122
<RECEIVABLES> 238,459
<ASSETS-OTHER> 6,782
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 53,468,363
<PAYABLE-FOR-SECURITIES> 0
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</TABLE>