Scudder
Large Company Growth Fund
Semiannual Report
April 30, 1997
Pure No-Load(TM) Funds
A fund seeking long-term growth of capital through investment primarily in the
equity securities of large U.S. growth companies.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER
[LOGO]
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Fund's President
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
8 Investment Portfolio
12 Financial Statements
15 Financial Highlights
16 Notes to Financial Statements
20 Officers and Trustees
21 Investment Products and Services
22 Scudder Solutions
In Brief
o Scudder Large Company Growth Fund changed its name from Scudder Quality Growth
Fund on March 1, 1997.
o Your fund provided solid performance during a volatile six months, ending the
six-month period ended April 30, 1997, with a 10.52% total return.
o The Federal Reserve raised short term interest rates one quarter of one
percentage point on March 25th, leading to an unmanaged Standard & Poor's 500
Index drop of roughly 10%. Stocks bounced back shortly thereafter, with both the
S&P 500 and the Dow Jones Industrial Average rising to record highs.
o The Fund's largest sector weightings are consumer staples, healthcare, and
technology; each making up about 20% of the portfolio.
2-Scudder Large Company Growth Fund
<PAGE>
Letter from the Fund's President
Dear Shareholders,
The U.S. financial markets have been making headlines in recent months, and
many investors have experienced more turbulence than they ever expected. March
was a particularly difficult month for investors uncomfortable with stock market
swings, as stocks were hit hard by the Federal Reserve's interest rate hike,
only to rise to record levels shortly thereafter.
Scudder Large Company Growth Fund fared well during these volatile times,
turning in a 10.52% total return for the six-month period ended April 30. By
comparison, the 799 growth funds tracked by Lipper Analytical Services provided
an average total return of 7.15%. The Fund's strategy of building its portfolio
stock by stock, focusing on individual corporate success, has helped to achieve
continued strong performance.
On March 1, 1997, Scudder Large Company Growth Fund changed its name from
Scudder Quality Growth Fund. The name change does not reflect a change in the
Fund's strategy, but is intended to reflect the Fund's investment style more
closely. We remain committed to our pursuit of the best growth companies we can
find.
It is important to revisit your investment goals during volatile periods
like these, and rethink your investment strategies if you find yourself
uncomfortable with market swings. For long-term investors, keeping market
movements in perspective and sticking to a plan is the best course of action.
Thank you for your investment in Scudder Large Company Growth Fund. If you
would like to speak to a Scudder Investor Relations representative about your
investment plan, or would like more information on Scudder Fund products and
services, please call us at 1-800-225-2470, or visit our Internet Web site at
http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Large Company Growth Fund
3-Scudder Large Company Growth Fund
<PAGE>
PERFORMANCE UPDATE as of April 30, 1997
- ----------------------------------------------------------------
FUND INDEX COMPARISONS
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
4/30/97 $10,000 Cumulative Annual
- --------------------------------------------
SCUDDER LARGE COMPANY GROWTH FUND
- --------------------------------------------
1 Year $ 11,768 17.68% 17.68%
5 year $ 19,206 92.06% 13.94%
Life of Fund* $ 22,563 125.63% 14.62%
- --------------------------------------------
RUSSELL 1000 GROWTH INDEX
- --------------------------------------------
1 Year $ 12,205 22.05% 22.05%
5 Year $ 20,980 109.80% 15.96%
Life of Fund* $ 23,123 131.23% 15.21%
- --------------------------------------------
*The Fund commenced operations on May 15, 1991. Index
comparisons begin on May 31, 1991.
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
SCUDDER LARGE COMPANY GROWTH FUND
Year Amount
- ----------------------
5/91* $10,000
4/92 $11,251
4/93 $12,094
4/94 $12,590
4/95 $14,092
4/96 $18,362
4/97 $21,609
RUSSELL 1000 GROWTH INDEX
Year Amount
- ----------------------
5/91* $10,000
4/92 $11,022
4/93 $11,508
4/94 $11,948
4/95 $14,292
4/96 $18,946
4/97 $23,123
YEARLY PERIODS ENDED APRIL 30
The Russell 1000 Growth Index is an unmanaged capitalization-weighted price
index of the 1000 largest U.S. growth companies traded on the NYSE, AMEX and
NASDAQ. Index returns assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees or expenses.
- -----------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
YEARLY PERIODS ENDED APRIL 30
1992* 1993 1994 1995 1996 1997
---------------------------------------------------------
NET ASSET VALUE... $ 14.05 $ 15.08 $ 15.40 $ 15.88 $ 19.89 $ 21.53
INCOME DIVIDENDS.. $ .03 $ .03 $ .07 $ .15 $ .14 $ -
CAPITAL GAINS
DISTRIBUTIONS..... $ .02 $ - $ .24 $ 1.09 $ .60 $ 1.77
FUND TOTAL
RETURN (%)........ 17.48 7.50 4.10 11.93 30.30 17.68
INDEX TOTAL
RETURN (%)........ 10.22 4.40 3.82 19.62 32.56 22.05
On March 1, 1997, the Fund adopted its current name. Prior to that date,
the Fund was known as the Scudder Quality Growth Fund. All performance is
historical, assumes reinvestment of all dividends and capital gains, and is not
indicative of future results. Investment return and principal value will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than when purchased. If the Adviser had not maintained the Fund's expenses,
the total returns for the one year, five year and life of Fund would have been
lower.
4 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
PORTFOLIO SUMMARY as of April 30, 1997
- ---------------------------------------------------------------------------
ASSET ALLOCATION
- ---------------------------------------------------------------------------
Equity Holdings 98%
Cash Equivalents 2%
- --------------------------------------
100%
- --------------------------------------
The Fund is essentially fully
invested in the stocks of
companies that we believe
possess strong fundamentals.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
SECTORS
(Excludes 2% Cash Equivalents)
- --------------------------------------------------------------------------
Consumer Staples 23%
Health 19%
Technology 17%
Manufacturing 12%
Consumer Discretionary 9%
Media 6%
Service Industries 5%
Financial 5%
Durables 4%
- --------------------------------------
100%
- --------------------------------------
The Fund's focus on individual
stock selection has led to
significant weightings in the
consumer staples, healthcare, and
technology sectors.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
(34% of Portfolio)
- --------------------------------------------------------------------------
1. COCA-COLA CO., INC.
International soft drink company
2. GENERAL ELECTRIC CO.
Leading producer of electrical equipment
3. PHILIP MORRIS COMPANIES INC.
Tobacco, food products and brewing
4. MICROSOFT CORP.
Computer operating systems software
5. MERCK & CO. INC.
Leading ethical drug manufacturer
6. COLGATE-PALMOLIVE CO.
Manufacturer of household and personal care
products
7. PROCTER & GAMBLE CO.
Diversified manufacturer of consumer
products
8. AMERICAN INTERNATIONAL GROUP, INC.
Major international insurance holding
company
9. GILLETTE CO.
Shaving and personal care products
10. JOHNSON & JOHNSON
Healthcare products
Large consumer staples holdings
Philip Morris and Proctor &
Gamble contributed significantly
to Fund performance over the six
month period.
For more complete details about the Fund's Investment Portfolio, see page 8.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings are
available upon request.
5 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
The six month period ended April 30, 1997 brought both dramatic stock market
highs and lows. The Dow Jones Industrial Average (DJIA) and the Standard &
Poor's 500 Index have risen to record levels in 1997. Yet after the Federal
Reserve's interest rate hike of one quarter of one percentage point on March
25th, the DJIA dropped almost 10%.
Despite the market volatility, Scudder Large Company Growth Fund provided solid
performance, ending the semiannual period with a 10.52% total return. The Fund's
benchmark, the unmanaged Russell 1000 Growth Index, provided a 13.00% total
return for the same period. The 799 growth funds tracked by Lipper Analytical
Services provided an average total return of 7.15% for the period.
The outperformance of the benchmark index reflects the strong price performance
of the very largest stocks. This made it difficult for funds in search of
undiscovered companies, which are usually not the largest, to outperform market
averages. Investors' fears that the strengthening dollar might impact the
earnings of large, multinational companies also had a negative effect on many of
the Fund's holdings. In addition, several high quality companies in the
portfolio experienced earnings disappointments during the period.
We remain committed to our pursuit of the best growth companies, and have a high
degree of confidence in both the short- and long-term fundamentals of the stocks
in your Fund's portfolio. In fact, we have already seen some of the
underperforming stocks rebound nicely since the end of the semiannual period.
Volatile Markets
Last year was a banner year for the U.S. equity markets, with the trend
continuing into 1997. The markets responded well to strong corporate profits
growth, low interest rates, and low inflation. These factors contributed to
strong employment and income growth, causing the Federal Reserve to take a hard
look at the economy and the potential for accelerating inflation. The Federal
Reserve eventually raised short-term interest rates one quarter of one
percentage point on March 25th, 1997, and the markets reeled. The fallout from
the rate hike caused an S&P 500 Index drop of roughly 10%, erasing most of
1997's gains. But stocks bounced back shortly thereafter, with both the S&P 500
and the Dow Jones Industrial Average recovering toward the end of the period.
Although additional interest rate increases would not be a surprise, we find
little evidence that the economy will do anything more than stay on its current
path of benign inflation. And while the stock market expansion is in its seventh
year, we have not been able to identify any of the factors that typically lead
to a significant correction.
6-Scudder Large Company Growth Fund
<PAGE>
Staying On Course
We continue to focus on individual companies, building your Fund's portfolio
stock by stock. Some strong performers during the period were Wal-Mart, Costco,
Avon, Philip Morris, and Proctor & Gamble, all returning between 10% and 26%. A
few financial stocks provided notable performance during the period, including
NationsBank, State Street Boston Corp., and MBIA Corp. We also reaped the
benefits of some high performers in the technology sector, including Intel,
Microsoft, and 3Com.
In recent months, we have seen a decline in the performance of growth stocks.
Large capitalization stocks fared the best over the six-month period, turning in
a 14.72% return as measured by the unmanaged Standard & Poor's 500 Index. As
this trend developed, we began increasing your Fund's weighted average market
capitalization, reducing exposure to the risks associated with smaller
capitalization stocks. In addition, we began to increase the concentration of
fund assets in select individual holdings to enhance the contributions to
performance of those companies in which we have the most confidence.
The Fund's largest sector weightings at the close of the period were consumer
staples, healthcare, and technology; each of which made up about 20% of the
portfolio. In our opinion, these areas represent fertile territory for
successful growth companies. These three sectors made up the largest weightings
in the portfolio one year ago as well, in keeping with our conviction that
enhancing returns through sector rotation is an extremely difficult endeavor, at
best. We have been decreasing our exposure to the finance sector, reflecting our
concern that rising interest rates could severely depress the growth of
financial stocks.
Outlook
Further interest rate hikes could be forthcoming if economic indicators continue
to point to strong growth. A more likely risk, though, appears to be economic
slowing, which could have a positive impact on growth companies capable of
delivering consistent growth. In any case, we expect continued volatility in the
equity markets in the coming months.
We believe the positioning of the portfolio at the present time is well-suited
to current conditions, and remain focused on our pursuit of the best growth
companies we can find. We believe Scudder Large Company Growth Fund will
continue to benefit over time from the strong performance of our high quality
growth companies, regardless of what the stock market or the economy brings.
Sincerely,
/s/Valerie F. Malter
Valerie F. Malter
Portfolio Manager
7-Scudder Large Company Growth Fund
<PAGE>
Investment Portfolio as of April 30, 1997 (Unaudited)
Principal Market
Amount ($) Value ($)
- --------------------------------------------------------------------------------
Repurchase Agreements 2.4%
- --------------------------------------------------------------------------------
Repurchase Agreement with State Street
Bank & Trust Company dated 4/30/97 at
5.36%, to be repurchased at $5,550,826 on
5/1/97, collateralized by a $5,170,000
U.S. Treasury Bond, 8.375%, 8/15/08 -----------
(Cost $5,550,000) ............................... 5,550,000 5,550,000
-----------
Shares
- --------------------------------------------------------------------------------
Common Stocks 97.6%
- --------------------------------------------------------------------------------
Consumer Discretionary 8.7%
Department & Chain Stores 6.7%
Federated Department Stores, Inc.* .............. 61,200 2,080,800
Home Depot, Inc. ................................ 91,000 5,278,000
Price/Costco, Inc.* ............................. 126,900 3,664,238
Wal-Mart Stores Inc. ............................ 163,700 4,624,525
-----------
15,647,563
-----------
Hotels & Casinos 1.3%
Host Marriott Corp.* ............................ 170,000 2,953,750
-----------
Specialty Retail 0.7%
Corporate Express, Inc. ......................... 173,200 1,732,000
-----------
Consumer Staples 22.3%
Alcohol & Tobacco 4.0%
Philip Morris Companies Inc. .................... 236,700 9,320,063
-----------
Food & Beverage 6.2%
Coca-Cola Co., Inc. ............................. 181,500 11,547,938
Interstate Bakeries Corp. ....................... 57,800 2,998,375
-----------
14,546,313
-----------
Package Goods/Cosmetics 12.1%
Avon Products Inc. .............................. 84,000 5,176,500
Colgate-Palmolive Co. ........................... 62,400 6,926,400
Gillette Co. .................................... 74,219 6,308,615
Procter & Gamble Co. ............................ 53,300 6,702,475
Revlon, Inc. "A"* ............................... 92,000 3,381,000
-----------
28,494,990
-----------
Health 18.8%
Biotechnology 1.5%
Guidant Corp. ................................... 50,300 3,432,975
-----------
Health Industry Services 1.0%
HBO & Company, Inc. ............................. 42,800 2,289,800
-----------
The accompanying notes are an integral part of the financial statements.
8 -- SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Market
Shares Value ($)
- --------------------------------------------------------------------------------
Hospital Management 0.9%
Tenet Healthcare Corp.* ......................... 85,800 2,230,800
-----------
Medical Supply & Specialty 0.9%
Boston Scientific Corp.* ........................ 44,200 2,132,650
-----------
Pharmaceuticals 14.5%
Eli Lilly & Co. ................................. 60,749 5,338,318
Johnson & Johnson ............................... 97,800 5,990,250
Merck & Co. Inc. ................................ 87,700 7,936,850
Pfizer, Inc. .................................... 48,900 4,694,400
SmithKline Beecham PLC (ADR) .................... 72,200 5,821,125
Warner-Lambert Co. .............................. 44,200 4,331,600
-----------
34,112,543
-----------
Financial 5.0%
Banks 1.2%
NationsBank Corp. ............................... 48,500 2,928,188
-----------
Insurance 2.7%
American International Group, Inc. .............. 49,550 6,367,175
-----------
Other Financial Companies 1.1%
Federal National Mortgage Association ........... 63,600 2,615,550
-----------
Media 5.4%
Advertising 2.3%
Interpublic Group of Companies Inc. ............. 94,500 5,351,063
-----------
Broadcasting & Entertainment 3.1%
Clear Channel Communications, Inc.* ............. 94,900 4,602,650
Walt Disney Co. ................................. 32,200 2,640,400
-----------
7,243,050
-----------
Service Industries 5.3%
EDP Services 1.7%
Electronic Data Systems Corp. ................... 120,000 4,005,000
-----------
Miscellaneous Consumer Services 2.3%
CUC International Inc.* ......................... 97,550 2,060,740
Service Corp. International ..................... 100,500 3,442,125
-----------
5,502,865
-----------
Printing/Publishing 1.3%
Reuters Holdings PLC "B" (ADR) .................. 48,000 2,958,000
-----------
The accompanying notes are an integral part of the financial statements.
9 -- SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Market
Shares Value ($)
- --------------------------------------------------------------------------------
Durables 4.2%
Aerospace 0.9%
AlliedSignal Inc. ............................... 30,300 2,189,175
-----------
Telecommunications Equipment 3.3%
Ascend Communications, Inc.* .................... 88,900 4,067,175
Nokia AB Oy (ADR) ............................... 55,200 3,567,300
-----------
7,634,475
-----------
Manufacturing 11.6%
Chemicals 1.9%
Monsanto Co. .................................... 104,400 4,463,100
-----------
Diversified Manufacturing 5.5%
General Electric Co. ............................ 92,000 10,200,500
Honeywell, Inc. ................................. 36,700 2,591,938
-----------
12,792,438
-----------
Electrical Products 2.2%
Emerson Electric Co. ............................ 103,700 5,262,775
-----------
Office Equipment/Supplies 2.0%
Xerox Corp. ..................................... 76,500 4,704,750
-----------
Technology 16.3%
Computer Software 5.6%
Computer Associates International, Inc. ......... 50,800 2,641,600
Microsoft Corp. ................................. 68,300 8,298,450
PeopleSoft Inc. ................................. 52,700 2,187,050
-----------
13,127,100
-----------
Diverse Electronic Products 2.5%
Applied Materials, Inc.* ........................ 60,400 3,314,450
Teradyne Inc.* .................................. 76,000 2,489,000
-----------
5,803,450
-----------
Electronic Data Processing 2.0%
Ceridian Corp.* ................................. 65,600 2,189,400
Compaq Computer Corp.* .......................... 29,900 2,552,713
-----------
4,742,113
-----------
Office/Plant Automation 1.8%
3Com Corp.* ..................................... 65,300 1,893,700
Cisco Systems, Inc.* ............................ 46,700 2,416,725
-----------
4,310,425
-----------
The accompanying notes are an integral part of the financial statements.
10 -- SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Market
Shares Value ($)
- --------------------------------------------------------------------------------
Semiconductors 4.4%
Advanced Micro Devices Inc.* .................... 79,900 3,395,750
Intel Corp. ..................................... 26,300 4,027,188
National Semiconductor Corp.* ................... 111,800 2,795,000
-----------
10,217,938
- --------------------------------------------------------------------------------
Total Common Stocks (Cost $169,947,506) 229,112,077
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investment Portfolio - 100.0%
(Cost $175,497,506)(a) 234,662,077
- --------------------------------------------------------------------------------
* Non-income producing security.
(a) The cost for federal income tax purposes was $175,718,623. At April 30,
1997, net unrealized appreciation for all securities based on tax cost was
$58,943,454. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $64,522,315 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$5,578,861.
The accompanying notes are an integral part of the financial statements.
11 -- SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of April 30, 1997 (Unaudited)
Assets
- --------------------------------------------------------------------------------
Investments, at market (identified cost
$175,497,506) ................................. $ 234,662,077
Cash ............................................ 607
Receivable for Fund shares sold ................. 1,760,851
Dividends and interest receivable ............... 186,328
Foreign taxes recoverable ....................... 3,329
Other assets .................................... 4,134
-------------
Total assets .................................... 236,617,326
Liabilities
- --------------------------------------------------------------------------------
Payable for Fund shares redeemed ................ 169,383
Accrued management fee .......................... 129,195
Other payables and accrued expenses ............. 128,116
-------------
Total liabilities ............................... 426,694
-------------------------------------------------------------------
Net assets, at market value $ 236,190,632
-------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income ............. 598,320
Unrealized appreciation on investments .......... 59,164,571
Accumulated net realized gain ................... 8,807,930
Paid-in capital ................................. 167,619,811
-------------------------------------------------------------------
Net assets, at market value $ 236,190,632
-------------------------------------------------------------------
Net Asset Value
- --------------------------------------------------------------------------------
Net Asset Value, offering and redemption price
per share ($236,190,632/10,970,252 outstanding
shares of beneficial interest, $.01 par value, -------------
unlimited Number of shares authorized) .......... $21.53
-------------
The accompanying notes are an integral part of the financial statements.
12 -- SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Statement of Operations
six months ended April 30, 1997 (Unaudited)
Investment Income
- --------------------------------------------------------------------------------
Income:
Dividends (net of foreign taxes withheld
of $19,048).................................... $ 1,338,073
Interest ........................................ 183,422
-------------
1,521,495
Expenses:
Management fee .................................. 791,534
Services to shareholders ........................ 444,840
Custodian and accounting fees ................... 48,724
Trustees' fees and expenses ..................... 13,875
Reports to shareholders ......................... 35,740
Auditing ........................................ 15,050
Legal ........................................... 4,047
Registration fees ............................... 26,096
Other ........................................... 2,774
-------------
1,382,680
-------------------------------------------------------------------
Net investment income 138,815
-------------------------------------------------------------------
Realized and unrealized gain on investment transactions
- --------------------------------------------------------------------------------
Net realized gain from investments .............. 7,510,012
Net unrealized appreciation on investments
during the period .............................. 14,285,548
-------------------------------------------------------------------
Net gain on investments 21,795,560
-------------------------------------------------------------------
-------------------------------------------------------------------
Net increase in net assets resulting from
operations $ 21,934,375
-------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
13 -- SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended Year
April 30, Ended
1997 October 31,
Increase (Decrease) in Net Assets (Unaudited) 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ........................ $ 138,815 $ 846,986
Net realized gain on investments ............. 7,510,012 19,474,609
Net unrealized appreciation on
investments during the period ............... 14,285,548 15,602,000
------------- -------------
Net increase in net assets resulting
from operations ............................. 21,934,375 35,923,595
------------- -------------
Distributions to shareholders from:
Net investment income ........................ -- (1,354,259)
------------- -------------
Net realized gains from investment
transactions ............................... (17,790,946) (5,803,710)
------------- -------------
Fund share transactions:
Proceeds from shares sold .................... 53,377,778 75,627,033
Net asset value of shares issued to
shareholders in reinvestment of
distributions ............................... 17,272,173 6,992,173
Cost of shares redeemed ...................... (59,856,381) (63,602,914)
------------- -------------
Net increase in net assets from Fund
share transactions .......................... 10,793,570 19,016,292
------------- -------------
Increase (decrease) in net assets ............ 14,936,999 47,781,918
Net assets at beginning of period ............ 221,253,633 173,471,715
------------- -------------
Net assets at end of period (including
undistributed net investment income ------------- -------------
of $598,320 and $459,505, respectively)...... $ 236,190,632 $ 221,253,633
------------- -------------
Other Information
- ---------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period .... 10,441,357 9,409,227
------------- -------------
Shares sold .................................. 2,520,145 3,829,796
Shares issued to shareholders in
reinvestment of distributions ............... 850,846 380,630
Shares redeemed .............................. (2,842,096) (3,178,296)
------------- -------------
Net increase in Fund shares .................. 528,895 1,032,130
------------- -------------
Shares outstanding at end of period .......... 10,970,252 10,441,357
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 -- SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
For the Period
Six Months May 15, 1991
Ended (commencement
April 30, of operations)
1997(a) Years Ended October 31, to October 31,
(Unaudited) 1996(a) 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------
Net asset value, beginning of period . $21.19 $18.44 $16.17 $16.42 $15.30 $13.65 $12.00
-----------------------------------------------------------------------
Income from investment operations:
Net investment income ................ .01 .08 .11 .16 .06 .02 .03
Net realized and unrealized gain
(loss) on investments .............. 2.10 3.41 3.40 (.09) 1.09 1.68 1.62
-----------------------------------------------------------------------
Total from investment operations ..... 2.11 3.49 3.51 .07 1.15 1.70 1.65
-----------------------------------------------------------------------
Less distributions from:
Net investment income ................ -- (.14) (.15) (.08) (.03) (.03) --
Net realized gains on investment
transactions ....................... (1.77) (.60) (1.09) (.24) -- (.02) --
-----------------------------------------------------------------------
Total distributions .................. (1.77) (.74) (1.24) (.32) (.03) (.05) --
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Net asset value, end of period ....... $21.53 $21.19 $18.44 $16.17 $16.42 $15.30 $13.65
-----------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Total Return (%) ..................... 10.52** 19.49 23.78 .39 7.49 12.47 13.75**
Ratios and Supplemental Data
Net assets, end of period
($ millions) ....................... 236 221 173 113 126 101 30
Ratio of operating expenses net, to
average daily net assets (%) ....... 1.23* 1.07 1.17 1.25 1.20 1.25 1.25*
Ratio of operating expenses before
expense reductions, to average
daily net assets (%) ............... 1.23* 1.07 1.17 1.25 1.20 1.40 2.67*
Ratio of net investment income to
average daily net assets (%) ....... .12* .41 .71 .96 .39 .24 .83*
Portfolio turnover rate (%) .......... 76.9* 68.8 91.6 119.7 111.4 27.4 11.5*
Average commission rate paid (b) ..... $.0554 $.0551 $ -- $ -- $ -- $ -- $ --
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal years beginning on or after September 1, 1995.
* Annualized
** Not annualized
15 -- SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Notes to Financial Statements (Unaudited)
A. Significant Accounting Policies
Scudder Large Company Growth Fund (formerly Quality Growth Fund) (the "Fund") is
a diversified series of Scudder Investment Trust (the "Trust"). The Trust is
organized as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the National Association of
Securities Dealers Automatic Quotation ("NASDAQ") System, for which there have
been sales, are valued at the most recent sale price reported on such system. If
there are no such sales, the value is the high or "inside" bid quotation.
Securities which are not quoted on the NASDAQ System but are traded in another
over-the-counter market are valued at the most recent sale price on such market.
If no sale occurred, the security is then valued at the calculated mean between
the most recent bid and asked quotations. If there are no such bid and asked
quotations, the most recent bid quotation shall be used. Short-term investments
having a maturity of sixty days or less are valued at amortized cost.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement, is equal to at least 100.5% of the repurchase price.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. Accordingly,
the Fund paid no federal income taxes and no federal income tax provision was
required.
Distribution of Income and Gains. Distributions of net investment income are
made annually. During any particular year net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed and, therefore, will be distributed to
shareholders annually. An additional distribution may be made to the extent
necessary to avoid the payment of a four percent federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. The differences
primarily relate to investments in certain securities sold at a loss. As a
result, net investment income (loss) and net realized gain (loss) on investment
transactions for a reporting period may differ significantly from distributions
during such period. Accordingly, the Fund may periodically make
reclassifications among certain of its capital accounts without impacting the
net asset value of the Fund.
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
16 -- SCUDDER LARGE COMPANY GROWTH FUND
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Other. Investment security transactions are accounted for on a trade date basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis.
B. Purchases and Sales of Securities
For the six months ended April 30, 1997, purchases and sales of investment
securities (excluding short-term investments) aggregated $84,356,411 and
$87,525,020, respectively.
C. Related Parties
Under the Fund's Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund pays the Adviser a fee equal to
an annual rate of 0.70% of the Fund's average daily net assets, computed and
accrued daily and payable monthly. As manager of the assets of the Fund, the
Adviser directs the investments of the Fund in accordance with its investment
objectives, policies, and restrictions. The Adviser determines the securities,
instruments, and other contracts relating to investments to be purchased, sold
or entered into by the Fund. In addition to portfolio management services, the
Adviser provides certain administrative services in accordance with the
Agreement. The Agreement provides that if the Fund's expenses, exclusive of
taxes, interest, and extraordinary expenses, exceed specified limits, such
excess, up to the amount of the management fee, will be paid by the Adviser. For
the six months ended April 30, 1997, the fee pursuant to the Agreement amounted
to $791,534.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended April 30, 1997, the amount charged to the Fund by SSC
aggregated $261,747, of which $42,416 is unpaid at April 30, 1997.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six months ended April 30,
1997, the amount charged to the Fund by STC aggregated $148,410, of which
$26,890 is unpaid at April 30, 1997.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six months
ended April 30, 1997, the amount charged to the Fund by SFAC aggregated $28,608,
of which $4,135 is unpaid at April 30, 1997.
The Fund pays each of its Trustees not affiliated with the Adviser $4,000
annually plus specified amounts for attended board and committee meetings. For
the six months ended April 30, 1997, Trustees fees and expenses aggregated
$13,875.
17 -- SCUDDER LARGE COMPANY GROWTH FUND
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18-Scudder Large Company Growth Fund
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19-Scudder Large Company Growth Fund
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Officers and Trustees
Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General Manager, WGBH Educational Foundation
Dudley H. Ladd*
Trustee
George M. Lovejoy, Jr.
Trustee; President and Director, Fifty Associates
Wesley W. Marple, Jr.
Trustee; Professor of Business Administration, Northeastern University
Kathryn L. Quirk*
Trustee
Jean C. Tempel
Trustee; General Partner,TL Ventures
Bruce F. Beaty*
Vice President
William F. Gadsden*
Vice President
Jerard K. Hartman*
Vice President
Robert T. Hoffman*
Vice President
Thomas W. Joseph*
Vice President
David S. Lee*
Vice President
Valerie F. Malter*
Vice President
Thomas F. McDonough*
Vice President, Secretary and Assistant Treasurer
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
*Scudder, Stevens & Clark, Inc.
20-Scudder Large Company Growth Fund
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Investment Products and Services
The Scudder Family of Funds+++
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Money Market
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Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Tax Free Money Market+
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Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax Free+
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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
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Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund
Global Income
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Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
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Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
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Scudder Balanced Fund
Scudder Growth and Income Fund
U.S. Growth
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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
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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
Retirement Programs
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IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan*+++ +++
(a variable annuity)
Closed-End Funds#
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The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities Fund, Inc.
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. +A portion of the income from the tax-free
funds may be subject to federal, state, and local taxes. *Not available in all
states. +++ +++A no-load variable annuity contract provided by Charter National
Life Insurance Company and its affiliate, offered by Scudder's insurance
agencies, 1-800-225-2470. #These funds, advised by Scudder, Stevens & Clark,
Inc., are traded on various stock exchanges.
21-Scudder Large Company Growth Fund
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Scudder Solutions
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Convenient ways to invest, quickly and reliably:
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<S> <C> <C>
Automatic Investment Plan AutoBuy
A convenient investment program in which you designate Lets you purchase Scudder fund shares
the purchase details and the bank account, and money is electronically, avoiding potential mailing delays;
electronically debited from that account monthly to designate a bank account and the transaction
regularly purchase fund shares and "dollar cost average" details, and money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from that account.
fewer when it's higher, which can reduce your average
purchase price over time.
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
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Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- http://funds.scudder.com
1-800-343-2890 Scudder Electronic Account Services: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
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Automatic Withdrawal Plan AutoSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you designate.
DistributionsDirect
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
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22-Scudder Large Company Growth Fund
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Mutual Funds and More -- Brokerage and Guidance Services:
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Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 6,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
500 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM)
transaction fees or commissions. Scudder Developed for investors who prefer the benefits of no-load
shareholders can take advantage of a Scudder Scudder funds but want ongoing professional assistance in
Brokerage account already reserved for them, with managing a portfolio. Personal Counsel(SM) is a highly
no minimum investment. For information about customized, fee-based asset management service for
Scudder Brokerage Services, call 1-800-700-0820. individuals investing $100,000 or more.
Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a
program offered by Scudder Investor Services, Inc., Adviser.
For more information about these services, call a Scudder representative at 1-800-225-5163
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Additional Information on How to Contact Scudder:
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For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Funds Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Funds Centers. Check for a Funds Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
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New From Scudder: Pathway Series
In a complex financial world, Scudder Pathway Series is a refreshingly simple concept. With one
investment, Pathway gives you instant access to broad diversification in U.S. markets and
across the globe. Select from four Portfolios -- Conservative, Balanced, Growth, or
International -- each with a distinct investment objective that can match your goals. Each
Portfolio, rather than investing in individual securities, invests in carefully selected
Scudder mutual funds.
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The share price of each Pathway Series portfolio will fluctuate and the risk associated with
each portfolio is determined by the securities held in each underlying Scudder fund. Contact
Scudder Investor Services, Inc., Distributor, for a prospectus which contains more complete
information, including management fees and other expenses. Please read it carefully before you
invest or send money.
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23-Scudder Large Company Growth Fund
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Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark,
Scudder, Stevens & Clark was the first independent investment counsel firm in
the United States. Since its birth, Scudder's pioneering spirit and commitment
to professional long-term investment management have helped shape the investment
industry. In 1928, we introduced the nation's first no-load mutual fund. Today
we offer over 40 pure no load(TM) funds, including the first international
mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
This information must be preceded or accompanied by a
current prospectus.
Portfolio changes should not be considered recommendations
for action by individual investors
SCUDDER
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