Scudder
Large Company Growth Fund
Annual Report
October 31, 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 [IMAGE]
<PAGE>
In Brief
o For the twelve-month period ended October 31, 1997, Scudder Large Company
Growth Fund returned 28.84%, nearly in keeping with the 30.46% return of the
unmanaged Russell 1000 Growth Index.
o The Fund's focus continued to remain on individual stock selection rather than
sector weightings.
o While earnings growth rates may decelerate at some large companies, we believe
that the best performing stocks will be those with growing shares in expanding
markets, with secure franchises, and skilled management teams.
Table of Contents
3 Letter from the Fund's President
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
9 Glossary of Investment Terms
10 Investment Portfolio
14 Financial Statements
17 Financial Highlights
18 Notes to Financial Statements
21 Report of Independent Accountants
22 Tax Information
22 Officers and Trustees
23 Shareholder Meeting Results
25 Investment Products and Services
26 Scudder Solutions
2 -- Scudder Large Company Growth Fund
<PAGE>
Letter from the Fund's President
Dear Shareholders,
We are pleased to present the annual report for Scudder Large Company
Growth Fund, formerly Scudder Quality Growth Fund, for the twelve-month period
ended October 31, 1997.
For the third year in a row the Fund provided returns above the long run
average performance of stocks, despite an increased level of market volatility.
Towards the end of the period, the sustainability of earnings growth rates at
some large multinational companies became less certain, as the ripple effects
from the currency crisis in Southeast Asia were felt across the globe and U.S.
stocks declined. While we continue to remain confident about the prospects for
many multinational companies held by the Fund, the events served as reminders of
the truly global dependency of the investment markets and the price volatility
which can result. The good news, we believe, is that U.S. businesses and the
economy are still healthy. In this context, volatility can provide opportunities
to purchase quality companies at favorable valuations. (A detailed discussion of
the Fund's activities begins on page 6.)
We believe a sound investment approach that is designed to weather a range
of market conditions is based on careful diversification. To that end, an
investor's portfolio should include exposure to small-cap, foreign, emerging
market, and fixed income securities, in addition to large-cap U.S. stocks.
Scudder Large Company Growth Fund can serve as an important core holding in this
type of diversified portfolio, which, when combined with a habit of investing
regularly and a long-term perspective, can help many investors meet their
investing goals.
For those of you who are interested in new Scudder products, we recently
introduced Scudder International Growth and Income Fund, which pursues a
yield-oriented approach to investing in international equities. The Fund seeks
to provide long-term growth of capital plus current income. Investors who desire
international exposure but wish to take a more conservative approach may
appreciate the Fund's emphasis on dividend-paying stocks of established
companies listed on foreign exchanges. For further information on this new fund,
please turn to page 27.
Thank you for your investment in Scudder Large Company Growth Fund. If you
have any questions about your Fund, please call Scudder Investor Relations at
1-800-225-2470, or visit our Internet Web site at http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
Chairman,
Scudder Large Company Growth Fund
3 -- Scudder Large Company Growth Fund
<PAGE>
PERFORMANCE UPDATE as of October 31, 1997
- ----------------------------------------------------------------
FUND INDEX COMPARISONS
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/97 $10,000 Cumulative Annual
- --------------------------------------------
SCUDDER LARGE COMPANY GROWTH FUND
- --------------------------------------------
1 Year $ 12,884 28.84% 28.84%
5 year $ 20,562 105.62% 15.51%
Life of Fund* $ 26,305 163.05% 16.13%
- --------------------------------------------
RUSSELL 1000 GROWTH INDEX
- --------------------------------------------
1 Year $ 13.046 30.46% 30.46%
5 Year $ 23,276 132.76% 18.40%
Life of Fund* $ 26,696 166.96% 16.51%
- --------------------------------------------
*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
10/91 $10,894
10/92 $12,252
10/93 $13,169
10/94 $13,220
10/95 $16,364
10/96 $19,553
10/97 $25,192
RUSSELL 1000 GROWTH INDEX
Year Amount
- ----------------------
5/91* $10,000
10/91 $10,350
10/92 $11,469
10/93 $11,308
10/94 $12,974
10/95 $16,768
10/96 $20,463
10/97 $26,696
YEARLY PERIODS ENDED OCTOBER 31
The Russell 1000 Growth Index is an unmanaged capitalization-weighted price
index of the 1000 largest U.S. growth companies traded on the NYSE, AMEX and
Nasdaq. Index returns assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees or expenses.
- -----------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
YEARLY PERIODS ENDED OCTOBER 31
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
1991* 1992 1993 1994 1995 1996 1997
------------------------------------------------------------------
NET ASSET VALUE... $ 13.65 $ 15.30 $ 16.42 $ 16.17 $ 18.44 $ 21.19 $25.10
INCOME DIVIDENDS.. $ -- $ .03 $ .03 $ .08 $ .15 $ .14 $ --
CAPITAL GAINS
DISTRIBUTIONS..... $ -- $ .02 $ -- $ .24 $ 1.09 $ .60 $ 1.77
FUND TOTAL
RETURN (%)........ 13.75 12.47 7.49 .39 23.78 19.49 28.84
INDEX TOTAL
RETURN (%)........ 8.66 10.82 7.31 5.40 29.23 22.05 30.46
</TABLE>
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 life of Fund would have been lower.
4 -- Scudder Large Company Growth Fund
<PAGE>
PORTFOLIO SUMMARY as of October 31, 1997
- ---------------------------------------------------------------------------
ASSET ALLOCATION
- ---------------------------------------------------------------------------
Equity Holdings 97%
Cash Equivalents 3%
- --------------------------------------
100%
- --------------------------------------
The Fund pursued a fully invested
approach throughout the fiscal
period as stocks of large companies
led the markets for much of the year.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
SECTORS
(Excludes 3% Cash Equivalents)
- --------------------------------------------------------------------------
Health 23%
Consumer Staples 22%
Technology 17%
Consumer Discretionary 11%
Manufacturing 8%
Financial 6%
Media 6%
Durables 4%
Service Industries 3%
- --------------------------------------
100%
- --------------------------------------
Sector weightings changed slightly
over the twelve months, reflecting
our focus on individual stock selection.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
(35% of Portfolio)
- --------------------------------------------------------------------------
1. GENERAL ELECTRIC CO.
Leading producer of electrical equipment
2. PFIZER, INC.
International pharmaceutical company
3. PROCTER & GAMBLE CO.
Diversified manufacturer of consumer
products
4. COCA-COLA CO., INC.
International soft drink company
5. MICROSOFT CORP.
Computer operating systems software
6. ELI LILLY & CO.
Leading pharmaceutical company
7. MERCK & CO. INC.
Leading ethical drug manufacturer
8. HOME DEPOT, INC.
Building materials and home improvement
products
9. AMERICAN INTERNATIONAL GROUP, INC.
Major international insurance holding
company
10. PHILIP MORRIS COMPANIES INC.
Tobacco, food products and brewing
Holdings of Eli Lily and Microsoft
were among the portfolio's top
performers.
For more complete details about the Fund's Investment Portfolio, see page 10.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings are
available upon request.
5 -- Scudder Large Company Growth Fund
<PAGE>
Portfolio Management Discussion
We asked Valerie F. Malter and George P. Fraise, portfolio managers of Scudder
Large Company Growth Fund, to discuss the market environment and their current
investment strategy for the Fund.
Q. How did the Fund perform for the trailing twelve-month period ended October
31, 1997?
A. The Fund provided strong returns, reflecting the positive performance of
growth stocks and our disciplined approach. For the period, the Fund returned
28.84%, essentially in keeping with the 30.46% return of the unmanaged Russell
1000 Growth Index (an index of large U.S. growth stocks) and the 32.13% return
of the unmanaged S&P 500 Index. On a year-to-date basis, the Fund returned
25.25% through October 31, exceeding the 23.77% return of the Russell 1000
Growth Index for the same period.
Q. Why did the S&P 500 Index outperform the Russell 1000 Growth Index during the
period?
A. To beat the S&P 500 for the fiscal year you basically needed representation
in the two industry sectors that exceeded the Index's 32.10% return: technology
and finance. While the Russell 1000 Growth Index (and the Fund) is adequately
represented in the technology area at 20% (and 17%) of assets compared to an S&P
weight of 12%, the S&P 500 finance weighting is more than double that of the
Russell 1000 Growth Index -- 15% v. 6%. In managing the Fund, we attempt to
select the best stocks on a company-by-company basis, rather than trying to make
industry sector selections. We believe this approach can lead to more consistent
and less volatile returns over the long term.
Q. Although volatility increased during the period, it was generally a favorable
environment for equity investors. Why?
A. The market continued its upward momentum for most of the period, driven by a
continuation of the moderate growth, low inflation environment that has been a
staple of our economy for a number of years. This momentum has been supported by
the Federal Reserve's status quo approach to interest rates. Throughout the
period, solid corporate earnings reports did little to temper investor
enthusiasm. It is worth noting that despite what may have seemed like a torrent
of negative earnings pre-releases in the last few months of the period, the
actual number of disappointments was down significantly from the same period in
1996.
Q. Toward the end of the period, concern about the impact a strong dollar would
have on the earnings of large multinational companies put pressure on a number
of stocks, particularly those in the consumer staples and pharmaceutical areas.
How did this affect the Fund's holdings?
A. The Fund is heavily weighted in these major, global companies, and was
negatively affected. In addition, profit warnings from Coca Cola, Gillette, and
Avon Products, and fears of slowing exports in the wake of currency devaluations
in Southeast Asia, exacerbated the decline. While issues such as the rising
dollar will come up from time to time, we strongly believe that the fluctuation
in the U.S. dollar is not a reason to alter our approach. The Fund's portfolio
is constructed stock-by-stock with a focus on high quality companies which have
solid long-term franchises, outstanding management teams, and sustainable
above-average earnings
6 -- Scudder Large Company Growth Fund
<PAGE>
growth potential. As long as we remain confident in a company's ability to meet
its growth projections, we will continue to hold the stock. It's worth noting
that as the currency fears abated somewhat toward the end of the period, the
performance of many of these stocks improved markedly.
Q. How did you manage the Fund's sector allocations during the period?
A. Our focus has been, and continues to be, on individual stock selection -- an
area we feel we can add the most value for investors. As a result, the Fund's
sector allocations are the bottom up result of this activity, and not the result
of under- or overweighting specific industry sectors. Overall, our sector
allocations remain generally in line with the Russell 1000 Growth Index, with
the largest weightings in the healthcare, consumer staples, and technology
areas.
Q. What were some of the noteworthy performers over the twelve-month period?
A. A number of the pharmaceutical stocks that we hold were stellar performers
during the period. Warner Lambert was up 127%, driven by the phenomenal success
of its cholesterol-reducing drug Lipitor and by Rezulin, its drug for Diabetes.
Eli Lilly was up an impressive 92% during the period, driven by a very strong
pipeline of new products (such as its osteoporosis drug Evista and its
schizophrenia drug Zyprexa), which are expected to contribute to an acceleration
of the company's earnings growth over the next few years. Microsoft, one of the
Fund's largest holdings, was up 89% during the period, as strong PC demand from
both households and corporations fueled growth of its
7 -- Scudder Large Company Growth Fund
<PAGE>
software platforms. Finally, on the retail side, Costco was a real standout, up
94% during the period, as strong same-store sales and continued penetration of
undervalued markets led to earnings upside surprises.
Q. Did you have some disappointments, too?
A. Yes we did. EDS was one we held too long. The company reported back-to-back
earnings disappointments as costs rose faster than revenues. Despite impressive
market share in a growing industry, we grew increasingly concerned about
management's ability to maintain a consistent earnings growth rate and we sold
the stock. AMD was another example of a stock we sold after the company
announced they were having difficulty producing K-6 microprocessors, a
competitive alternative to Intel's Pentium. Since we sold AMD, it has lost more
than 25% of its value.
Q. What is your strategy going forward?
A. We continue to believe the best strategy for the Fund is to focus on
individual stock selection. In our opinion, the best performing stocks will be
those of companies able to meet or exceed growth expectations through these
choppy times. We don't plan to change our current sector weightings, as we
believe any attempt to enhance portfolio returns through sector rotation would
be extremely difficult. Any changes to the Fund will be made in an effort to
ensure that the portfolio is comprised of companies that, in our estimation,
have the best long-term fundamentals -- those with growing shares in expanding
markets, secure franchises, the ability to deliver consistent earnings quarter
after quarter, and skilled management teams.
8 -- Scudder Large Company Growth Fund
<PAGE>
Glossary of Investment Terms
FUNDAMENTAL RESEARCH Analysis of companies based on the projected
impact of management, products, sales, and
earnings on balance sheets and income statements.
Distinct from technical analysis, which evaluates
the attractiveness of a stock based on historical
price and trading volume movements, rather than
the financial results of the underlying company.
GROWTH STOCK Stock of a company that has displayed above-
average earnings growth and is expected to
continue to increase profits rapidly going
forward. Stocks of such companies usually trade at
a higher price relative to earnings and exhibit
greater price volatility.
LIQUIDITY A stock that is liquid has enough shares
outstanding and a substantial enough market
capitalization to allow large purchases and sales
to occur without causing a significant change in
its market price.
MARKET CAPITALIZATION The value of a company's outstanding shares of
common stock, calculated by multiplying the number
of shares outstanding by the share price (Shares x
Price = Market Capitalization). The universe of
publicly traded companies is frequently divided
into large-, mid-, and small-capitalizations. In
general, "large-cap" stocks tend to be more liquid
than "small-cap" stocks.
OVER/UNDER WEIGHTING Refers to the allocation of assets -- usually by
sector, industry, or country -- within a portfolio
relative to a benchmark index, (i.e. the Russell
1000 Value Index) or an investment universe.
PRICE-EARNINGS RATIO (P-E) A widely used gauge of a stock's valuation that
(also "earnings multiple") indicates what investors are paying for a
company's earnings on a per share basis. Typically
based on a company's projected earnings for the
next 12 months, a higher "earnings multiple"
indicates a higher expected growth rate and the
potential for greater price fluctuations.
VALUE STOCK A company whose stock price does not fully
reflect its intrinsic value, as indicated by
price-earnings ratio, price-book value ratio,
dividend yield, or some other valuation measure,
relative to its industry or the market overall.
Value stocks tend to display less price
volatility and may carry higher dividend yields.
(Sources: Scudder; Barron's Dictionary of Finance and Investment Terms)
9 -- Scudder Large Company Growth Fund
<PAGE>
Investment Portfolio as of October 31, 1997
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements 2.9%
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 10/31/97 at 5.7%, to be
repurchased at $8,252,918 on 11/3/97, collateralized by a $6,337,000 U.S. Treasury
Bond, 8.75%, 8/15/20 (Cost $8,249,000) ............................................ 8,249,000 8,249,000
Shares
- ------------------------------------------------------------------------------------------------------------------------------
Common Stocks 97.1%
- ------------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary 10.4%
Department & Chain Stores 7.5%
Costco Companies, Inc.* ............................................................. 93,800 3,611,300
Home Depot, Inc. .................................................................... 147,500 8,204,688
Nordstrom, Inc. ..................................................................... 55,300 3,387,125
Wal-Mart Stores, Inc. ............................................................... 176,800 6,210,100
------------
21,413,213
------------
Hotels & Casinos 1.3%
Host Marriott Corp. * ............................................................... 177,800 3,711,575
------------
Specialty Retail 1.6%
Corporate Express, Inc.* ............................................................ 167,100 2,454,281
Pier 1 Imports, Inc. ................................................................ 124,000 2,263,000
------------
4,717,281
------------
Consumer Staples 21.3%
Alcohol & Tobacco 2.6%
Philip Morris Companies, Inc. ....................................................... 188,100 7,453,463
------------
Consumer Specialties 1.3%
Samsonite Corp.* .................................................................... 78,700 3,649,713
------------
Food & Beverage 8.4%
Coca-Cola Co., Inc. ................................................................. 196,100 11,079,650
H.J. Heinz Co. ...................................................................... 131,300 6,097,244
Interstate Bakeries Corp. ........................................................... 60,400 3,858,050
Suiza Foods Corp. * ................................................................. 57,000 2,871,375
------------
23,906,319
------------
Package Goods / Cosmetics 9.0%
Colgate-Palmolive Co. ............................................................... 106,400 6,889,400
Gillette Co. ........................................................................ 80,219 7,144,505
Procter & Gamble Co. ................................................................ 165,000 11,220,000
Revlon, Inc. "A" * .................................................................. 17,000 624,750
------------
25,878,655
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder Large Company Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Health 21.8%
Biotechnology 1.8%
Guidant Corp. ....................................................................... 87,400 5,025,500
------------
Health Industry Services 2.3%
HBO & Company, Inc. ................................................................. 73,800 3,210,300
Total Renal Care Holdings, Inc.* .................................................... 110,500 3,404,781
------------
6,615,081
------------
Hospital Management 1.0%
Tenet Healthcare Corp.* ............................................................. 89,700 2,741,456
------------
Pharmaceuticals 16.7%
Eli Lilly & Co. ..................................................................... 131,298 8,780,554
Johnson & Johnson ................................................................... 105,700 6,064,538
Merck & Co., Inc. ................................................................... 94,800 8,460,900
Pfizer, Inc. ........................................................................ 172,300 12,190,225
SmithKline Beecham PLC (ADR) ........................................................ 115,000 5,476,875
Warner-Lambert Co. .................................................................. 47,700 6,830,044
------------
47,803,136
------------
Financial 6.1%
Banks 2.0%
First Union Corp. ................................................................... 57,300 2,811,281
NationsBank Corp. ................................................................... 50,700 3,035,663
------------
5,846,944
------------
Insurance 4.1%
American International Group, Inc. .................................................. 80,325 8,198,170
Conseco, Inc. ....................................................................... 79,500 3,468,188
------------
11,666,358
------------
Media 5.7%
Advertising 2.8%
Interpublic Group of Companies, Inc. ................................................ 90,350 4,291,625
Outdoor Systems, Inc.* .............................................................. 123,350 3,793,013
------------
8,084,638
------------
Broadcasting & Entertainment 2.9%
Clear Channel Communications, Inc.* ................................................. 82,300 5,431,800
Walt Disney Co. ..................................................................... 33,700 2,771,825
------------
8,203,625
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Service Industries 3.3%
Miscellaneous Consumer Services 2.1%
CUC Internationa,l Inc.* ............................................................ 99,550 2,936,722
Service Corp. International ......................................................... 105,100 3,198,981
------------
6,135,703
------------
Printing/Publishing 1.2%
Reuters Holdings PLC "B" (ADR) ...................................................... 50,200 3,300,650
------------
Durables 4.4%
Aerospace 1.4%
AlliedSignal, Inc. .................................................................. 110,600 3,981,600
------------
Telecommunications Equipment 3.0%
CIENA Corp.* ........................................................................ 60,000 3,300,000
Nokia AB Oy "A" (ADR) ............................................................... 59,700 5,268,525
------------
8,568,525
------------
Manufacturing 8.0%
Chemicals 1.1%
Monsanto Co. ........................................................................ 76,800 3,283,200
------------
Diversified Manufacturing 6.9%
General Electric Co. ................................................................ 221,100 14,274,769
Textron, Inc. ....................................................................... 93,700 5,417,031
------------
19,691,800
------------
Technology 16.1%
Computer Software 6.2%
Computer Associates International, Inc. ............................................. 55,600 4,145,675
Microsoft Corp.* .................................................................... 77,200 10,036,000
PeopleSoft, Inc.* ................................................................... 57,600 3,621,600
------------
17,803,275
------------
Diverse Electronic Products 1.1%
Teradyne, Inc.* ..................................................................... 83,200 3,114,800
------------
Electronic Data Processing 1.8%
Compaq Computer Corp. ............................................................... 81,600 5,202,000
------------
Office/Plant Automation 1.9%
3Com Corp.* ......................................................................... 54,800 2,270,775
Cisco Systems, Inc.* ................................................................ 37,100 3,043,359
------------
5,314,134
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Semiconductors 5.1%
Intel Corp. ......................................................................... 93,300 7,184,100
Linear Technology Corp. ............................................................. 15,500 974,563
National Semiconductor Corp. * ...................................................... 122,400 4,406,400
Taiwan Semiconductor Manufacturing Co.* ............................................. 109,300 2,165,506
------------
14,730,569
- ------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $190,324,477) 277,843,213
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio - 100.0% (Cost $198,573,477) (a) 286,092,213
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
(a) The cost for federal income tax purposes was $198,796,382. At October 31,
1997, net unrealized appreciation for all securities based on tax cost was
$87,295,831. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $89,063,690 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$1,767,859.
The accompanying notes are an integral part of the financial statements.
13 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of October 31, 1997
<TABLE>
<CAPTION>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investments, at market (identified cost $198,573,477) .............. $ 286,092,213
Cash ............................................................... 934
Receivable for investments sold .................................... 3,549,754
Receivable for Fund shares sold .................................... 125,793
Dividends and interest receivable .................................. 309,239
Other assets ....................................................... 3,878
----------------
Total assets ....................................................... 290,081,811
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased .................................. 1,242,114
Payable for Fund shares redeemed ................................... 335,010
Accrued management fee ............................................. 176,228
Other payables and accrued expenses ................................ 263,484
----------------
Total liabilities .................................................. 2,016,836
--------------------------------------------------------------------------------------------
Net assets, at market value $ 288,064,975
--------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Unrealized appreciation on investments ............................. 87,518,736
Accumulated net realized gain ...................................... 19,034,583
Paid-in capital .................................................... 181,511,656
--------------------------------------------------------------------------------------------
Net assets, at market value $ 288,064,975
--------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($288,064,975 / 11,477,024 outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares ----------------
authorized) ...................................................... $25.10
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Statement of Operations
year ended October 31, 1997
<TABLE>
<CAPTION>
Investment Income
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Income:
Dividends (net of foreign taxes withheld of $25,213) ............... $ 2,489,818
Interest ........................................................... 487,089
-----------------
2,976,907
Expenses:
Management fee ..................................................... 1,790,426
Services to shareholders ........................................... 1,026,553
Custodian and accounting fees ...................................... 92,333
Trustees' fees and expenses ........................................ 35,178
Reports to shareholders ............................................ 68,465
Auditing ........................................................... 31,689
Legal .............................................................. 13,544
Registration fees .................................................. 36,705
Other .............................................................. 7,581
-----------------
3,102,474
--------------------------------------------------------------------------------------------
Net investment loss (125,567)
--------------------------------------------------------------------------------------------
Realized and unrealized gain on investment transactions
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments ................................. 19,434,917
Net unrealized appreciation on investments during the period ....... 42,639,713
--------------------------------------------------------------------------------------------
Net gain on investments 62,074,630
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 61,949,063
--------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Years Ended October 31,
Increase (Decrease) in Net Assets 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income (loss) ............................ $ (125,567) $ 846,986
Net realized gain on investments ........................ 19,434,917 19,474,609
Net unrealized appreciation on investments during
the period ........................................... 42,639,713 15,602,000
--------------- ---------------
Net increase in net assets resulting from operations .... 61,949,063 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 ............................... 131,500,078 75,627,033
Net asset value of shares issued to shareholders in
reinvestment of distributions ........................ 17,272,174 6,992,173
Cost of shares redeemed ................................. (126,119,027) (63,602,914)
--------------- ---------------
Net increase in net assets from Fund share
transactions ......................................... 22,653,225 19,016,292
--------------- ---------------
Increase (decrease) in net assets ....................... 66,811,342 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 $459,505 --------------- ---------------
on October 31, 1996) ................................. $288,064,975 $221,253,633
--------------- ---------------
Other Information
- -------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ............... 10,441,357 9,409,227
--------------- ---------------
Shares sold ............................................. 5,688,934 3,829,796
Shares issued to shareholders in reinvestment of
distributions ........................................ 850,846 380,630
Shares redeemed ......................................... (5,504,113) (3,178,296)
--------------- ---------------
Net increase in Fund shares ............................. 1,035,667 1,032,130
--------------- ---------------
Shares outstanding at end of period ..................... 11,477,024 10,441,357
--------------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - 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
May 15, 1991
(commencement
of operations)
Years Ended October 31, to October 31,
1997 (a) 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 (loss) ....... (.01) .08 .11 .16 .06 .02 .03
Net realized and unrealized gain
(loss) on investments ........... 5.69 3.41 3.40 (.09) 1.09 1.68 1.62
----------------------------------------------------------------------------------
Total from investment operations ... 5.68 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 ..... $25.10 $21.19 $18.44 $16.17 $16.42 $15.30 $13.65
- -----------------------------------------------------------------------------------------------------------------------
Total Return (%) ................... 28.84 19.49 23.78 .39 7.49 12.47 13.75**
Ratios and Supplemental Data
Net assets, end of period
($ millions) ...................... 288 221 173 113 126 101 30
Ratio of operating expenses net,
to average daily net
assets (%) ...................... 1.21 1.07 1.17 1.25 1.20 1.25 1.25*
Ratio of operating expenses before
expense reductions, to average
daily net assets (%) ............ 1.21 1.07 1.17 1.25 1.20 1.40 2.67*
Ratio of net investment income
(loss) to average daily
net assets (%) .................. (.05) .41 .71 .96 .39 .24 .83*
Portfolio turnover rate (%) ........ 67.9 68.8 91.6 119.7 111.4 27.4 11.5*
Average commission rate paid (b) ... $.0546 $.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
17 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Notes to Financial Statements
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 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 most recent 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. Money market
instruments purchased with an original maturity of sixty days or less are valued
at amortized cost. All other securities are valued at their fair value as
determined in good faith by the Valuation Committee of the Board of Trustees.
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, as amended, which are applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, the Fund paid no federal income taxes and no federal
income tax provision was required.
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. Earnings
and profits distributed to shareholders on redemption of Fund shares ("tax
equalization") may be utilized by the Fund, to the extent permissible, as part
of the Fund's dividends paid deduction on its federal income tax return.
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.
18 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
Other. Investment security transactions are accounted for on a trade date basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis.
B. Purchases and Sales of Securities
For the year ended October 31, 1997, purchases and sales of investment
securities (excluding short-term investments) aggregated $170,986,599 and
$164,405,224, 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 year ended October 31, 1997, the fee pursuant to the Agreement amounted to
$1,790,426.
On June 26, 1997, the Adviser entered into an agreement with The Zurich
Insurance Company ("Zurich"), an international insurance and financial services
organization, pursuant to which Zurich will acquire a majority interest in the
Adviser, and the Adviser will form a new global investment organization by
combining with Zurich's subsidiary, Zurich Kemper Investments, Inc. and change
its name to Scudder Kemper Investments, Inc. Subject to the receipt of the
required regulatory and shareholder approvals, the transaction is expected to
close by the end of the fourth quarter of 1997.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
year ended October 31, 1997, the amount charged to the Fund by SSC aggregated
$525,877, of which $45,637 was unpaid at October 31, 1997.
The Fund is one of several Scudder Funds (the "Underlying Funds") in which the
Scudder Pathway Series Portfolios (the "Portfolios") invest. In accordance with
the Special Servicing Agreement entered into by the Adviser, the Portfolios, the
Underlying Funds, SSC, SFAC, STC, and Scudder Investor Services, Inc., expenses
from the operation of the Portfolios are borne by the Underlying Funds based on
each Underlying Fund's proportionate share of assets owned by the Portfolios. No
Underlying Funds will be charged expenses that exceed the estimated savings to
each respective Underlying Fund. These estimated savings result from the
elimination of separate shareholder accounts which either currently are or have
potential to be invested in the Underlying Funds. At September 30, 1997, the
Special Servicing Agreement expense charged to the Fund amounted to $101,973.
19 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
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 year ended October 31,
1997, the amount charged to the Fund by STC aggregated $320,268, of which
$29,827 was unpaid at October 31, 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 year ended
October 31, 1997, the amount charged to the Fund by SFAC aggregated $57,787, of
which $9,565 was unpaid at October 31, 1997.
The Fund pays each of its Trustees not affiliated with the Adviser $4,800
annually plus specified amounts for attended board and committee meetings. For
the year ended October 31, 1997, Trustees fees and expenses aggregated $35,178.
20 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Report of Independent Accountants
To the Trustees of Scudder Investment Trust and the Shareholders of Scudder
Large Company Growth Fund:
We have audited the accompanying statement of assets and liabilities of Scudder
Large Company Growth Fund (formerly Scudder Quality Growth Fund), including the
investment portfolio, as of October 31, 1997, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the six years in the period then ended, and for the period May 15, 1991
(commencement of operations) to October 31, 1991. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Large Company Growth Fund (formerly Scudder Quality Growth Fund) as of
October 31, 1997, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the six years in the period then ended,
and for the period May 15, 1991 (commencement of operations) to October 31, 1991
in conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
December 2, 1997
21 - SCUDDER LARGE COMPANY GROWTH FUND
<PAGE>
Tax Information
The Fund will mail shareholders IRS Form 1099-Div in late January, summarizing
all taxable distributions paid for 1997.
The Fund paid distributions of $1.77 per share from net long-term capital gains
during its fiscal year ended October 31, 1997. Pursuant to section 852 of the
Internal Revenue Code, the Fund designates $14,214,222 as capital gain dividends
for the year ended October 31, 1997.
Officers and Trustees
Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General Manager, WGBH Educational Foundation
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.
22 -- Scudder Large Company Growth Fund
<PAGE>
Shareholder Meeting Results
A Special Meeting of Shareholders (the "Meeting") of Scudder Large Company
Growth Fund (the "Fund") was held on October 24, 1997, at the offices of
Scudder, Stevens & Clark, Inc., Two International Place, Boston, Massachusetts
02110. At the Meeting, as adjourned and reconvened, the following matters were
voted upon by the shareholders (the resulting votes for each matter are
presented below). With regard to certain proposals, it was recommended that the
Meeting be reconvened in order to provide shareholders with an additional
opportunity to return their proxies. The date of the reconvened meeting at which
the matters were decided is noted after the proposed matter.
1. To approve the new Investment Management Agreement between the Fund and
Scudder Kemper Investments, Inc.
Number of Votes:
----------------
For Against Abstain Broker Non-votes*
--- ------- ------- -----------------
5,880,091 198,391 169,084 172,054
2. To elect Trustees.
Number of Votes:
----------------
Trustee For Withheld
------- --- --------
Henry P. Becton, Jr. 6,084,489 163,077
Dawn-Marie Driscoll 6,074,203 173,363
Peter B. Freeman 6,078,846 168,720
George M. Lovejoy, Jr. 6,077,990 169,576
Dr. Wesley W. Marple, Jr. 6,075,270 172,296
Daniel Pierce 6,081,149 166,417
Kathryn L. Quirk 6,078,235 169,331
Jean C. Tempel 6,083,331 164,235
3. To approve the Board's discretionary authority to convert the Fund to a
master/feeder fund structure through a sale or transfer of assets or
otherwise. (Approved on December 2, 1997.)
Number of Votes:
----------------
For Against Abstain Broker Non-votes*
--- ------- ------- -----------------
6,348,596 386,514 278,752 139,422
23 -- Scudder Large Company Growth Fund
<PAGE>
4. To approve certain amendments to the Declaration of Trust. Sufficient
proxies had not been received by December 2, 1997 to approve the
amendments to the Declaration of Trust. Management has determined not to
continue to seek shareholder approval for this item.
Number of Votes:
----------------
For Against Abstain Broker Non-votes*
--- ------- ------- -----------------
6,424,302 303,062 286,498 139,422
5. To approve the revision of certain fundamental investment policies.
<TABLE>
<S> <C> <C> <C> <C> <C>
<CAPTION>
Number of Votes:
----------------
Broker
Fundamental Policies For Against Abstain Non-votes*
-------------------- --- ------- ------- ----------
5.1 Diversification 5,550,329 282,759 242,424 172,054
5.2 Borrowing 5,532,774 300,395 242,343 172,054
5.3 Senior securities 5,546,264 284,771 244,477 172,054
5.4 Concentration 5,547,582 285,514 242,416 172,054
5.5 Underwriting of securities 5,549,600 238,165 287,747 172,054
5.6 Investment in real estate 5,542,541 245,560 287,411 172,054
5.7 Purchase of physical 5,537,426 249,784 288,302 172,054
commodities
5.8 Lending 5,545,934 241,677 287,901 172,054
</TABLE>
6. To ratify the selection of Coopers & Lybrand L.L.P. as the Fund's
independent accountants.
Number of Votes:
----------------
For Against Abstain
--- ------- -------
5,909,213 119,231 219,122
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary
power to vote on a particular matter.
24 -- Scudder Large Company Growth Fund
<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
- -------------------
IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan**+++ +++
(a variable annuity)
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil 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 Spain and Portugal 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. 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, Stevens & Clark, Inc., are traded on various stock exchanges.
25 -- Scudder Large Company Growth Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
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:
- ------------------------------------------------------------------------------------------------------------------------------
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:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
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
- ------------------------------------------------------------------------------------------------------------------------------
26 -- Scudder Large Company Growth Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
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
shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load
Brokerage account already reserved for them, with Scudder funds but want ongoing professional assistance in
no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly
Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for
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
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
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 Investor 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 Investor Centers. Check for an Investor 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
- ------------------------------------------------------------------------------------------------------------------------------
New From Scudder: Scudder International Growth and Income Fund
Scudder International Growth and Income Fund takes a yield-oriented approach to investing in international equities. The
Fund seeks to provide long-term growth of capital plus current income. Investors who desire international exposure but
who wish to take a more conservative approach may appreciate the Fund's emphasis on the dividend paying stocks of
well-established companies outside the United States.
- ------------------------------------------------------------------------------------------------------------------------------
The share price of Scudder International Growth and Income Fund will fluctuate. International investing involves special
risks including currency fluctuation and political instability. 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.
</TABLE>
27 -- Scudder Large Company Growth Fund
<PAGE>
Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark,
Scudder, Stevens & Clark was the first independent investment counsel firm in
the United States. Since its birth, Scudder's pioneering spirit and commitment
to professional long-term investment management have helped shape the investment
industry. In 1928, we introduced the nation's first no-load mutual fund. Today
we offer 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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