Scudder
S&P 500 Index
Fund
Semiannual Report
June 30, 1998
Pure No-Load(TM) Funds
A pure no-load(TM) (no sales charges) mutual fund seeking to provide investment
results that, before expenses, correspond to the total return of common stocks
publicly traded in the United States, as represented by the Standard & Poor's
500 Composite Stock Price Index.
SCUDDER (logo)
<PAGE>
Scudder S&P 500 Index Fund
- --------------------------------------------------------------------------------
Date of Inception: 8/29/97 Total Net Assets as of Ticker Symbol: SCPIX
6/30/98: $52.1 million
- --------------------------------------------------------------------------------
o For the six-month period ended June 30, 1998, the Fund returned 17.36%,
compared to the 17.71% return of the S&P 500 Index during the same period.
o The S&P 500 Index reached record highs during the first half of 1998, despite
increased volatility in the second quarter.
o We believe that, for the near term, solid growth, low inflation, and stable
interest rates should provide support for the U.S. equity markets.
Table of Contents
3 Letter from the Fund's President Equity 500 Index Portfolio
4 Performance Update
5 Portfolio Summary 16 Statement of Net Assets
6 Portfolio Management Discussion 26 Financial Statements
8 Glossary of Investment Terms 28 Financial Highlights
29 Notes to Financial Statements
Scudder S&P 500 Index Fund
9 Financial Statements 33 Investment Products and Services
12 Financial Highlights 34 Scudder Solutions
13 Notes to Financial Statements
15 Officers and Trustees
2 - Scudder S&P 500 Index Fund
<PAGE>
Letter from the Fund's President
Dear Shareholders,
We are pleased to present the semiannual report for Scudder S&P 500 Index
Fund for the six months ended June 30, 1998.
During the period covered by this report, the U.S. economy enjoyed ongoing
strength, including a still-climbing stock market, a strong dollar, high
consumer confidence, and low unemployment. Earlier this year the Federal Reserve
worried that the U.S. economy was growing too rapidly, but so far the Fed has
left rates unchanged. Bond prices generally rose during the period and the
30-year Treasury bond yield declined to a new low.
For its most recent semiannual period ended June 30, 1998, the Fund
provided a positive total return of 17.36%. For more detail on the events of the
past six months and your managers' outlook for the months ahead, please turn to
the discussion beginning on page 6.
For those of you interested in new Scudder products and services, we would
like to take this opportunity to highlight two upcoming additions to our
international category, both of which are scheduled to begin operations on
September 1st. Scudder International Growth Fund will seek long-term capital
appreciation by investing primarily in the equity securities of non-U.S.
companies with high growth potential, and Scudder International Value Fund will
seek long-term capital appreciation by investing primarily in undervalued
foreign equity securities. For further information on these new funds, please
call 1-800-225-2470.
Thank you for choosing Scudder S&P 500 Index Fund to help meet your
investment needs. If you should have any questions regarding your investment, or
any of the Scudder Funds, please do not hesitate to call us at the number above,
or visit our Web site at http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder S&P 500 Index Fund
3 - Scudder S&P 500 Index Fund
<PAGE>
PERFORMANCE UPDATE as of June 30, 1998
- -----------------------------------------------------------------
FUND INDEX COMPARISONS
- -----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
6/30/98 $10,000 Cumulative Annual
- ---------------------------------------------------
SCUDDER S&P 500 INDEX FUND
- ---------------------------------------------------
Life of Fund* $ 12,715 27.15% --
- ---------------------------------------------------
S&P 500 INDEX
- ---------------------------------------------------
Life of Fund* $ 12,773 27.73% --
- ---------------------------------------------------
* The Fund commenced operations on August 29, 1997.
Index comparisons begin August 31, 1997
- -----------------------------------------------------------------
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 S&P 500 INDEX FUND
Year Amount
- ---------------------------
8/97* $10,000
9/97 $10,542
10/97 $10,192
11/97 $10,650
12/97 $10,834
1/98 $10,951
2/98 $11,730
3/98 $12,325
4/98 $12,442
5/98 $12,216
6/98 $12,715
S&P 500 INDEX
Year Amount
- ---------------------------
8/97* $10,000
9/97 $10,548
10/97 $11,196
11/97 $10,668
12/97 $10,851
1/98 $10,972
2/98 $11,763
3/98 $12,365
4/98 $12,490
5/98 $12,275
6/98 $12,773
The Standard & Poor's (S&P) 500 Index is an unmanaged capitalization-weighted
measure of 500 widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange, and Nasdaq Stock Market. 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.
Period ended June 30
1988*
------------
NET ASSET VALUE.... $ 15.11
INCOME DIVIDENDS... $ .14
CAPITAL GAINS
DIVIDENDS......... $ --
FUND TOTAL
RETURN (%)........ 27.15
INDEX TOTAL
RETURN (%)........ 27.73
Performance is historical, assumes reinvestment of all dividends and capital
gains and is not indicative of future results. Total 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 return for the life of Fund period would have been lower.
4 - Scudder S&P 500 Index Fund
<PAGE>
PORTFOLIO SUMMARY as of June 30, 1998
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ASSET ALLOCATION
- ---------------------------------------------------------------------------
Common Stocks 97%
Cash Equivalents 3%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Portfolio is essentially fully
invested in common stocks that
are part of the S&P 500 Index.
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SECTOR DIVERSIFICATION
(Excludes 3% Cash Equivalents)
- --------------------------------------------------------------------------
Financial 18%
Consumer Discretionary 17%
Consumer Staples 14%
Health 12%
Capital Goods 11%
Technology 8%
Energy 7%
Utilities 7%
Durables 5%
Transportation 1%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
During the period, the financial
sector remained the largest
weighting in the S&P 500 Index.
- --------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
(19% OF PORTFOLIO)
- --------------------------------------------------------------------------
1. GENERAL ELECTRIC CO.
Producer of electrical equipment
2. MICROSOFT CORP.
Computer operating systems software
3. COCA-COLA CO.
International soft drink company
4. EXXON CORP.
International oil and gas company
5. MERCK & CO.
Leading ethical drug manufacturer
6. PFIZER, INC.
International pharmaceutical company
7. WAL-MART STORES, INC.
Discount stores
8. ROYAL DUTCH PETROLEUM CO.
Diversified petroleum company
9. INTEL CORP.
Semiconductor memory circuits
10. PROCTER & GAMBLE CO.
Diversified manufacturer of consumer products
The Portfolio's top holdings
reflect the mainly large-
capitalization composition of
the S&P 500 Index.
For more complete details about the Fund's investment portfolio,
see page 16. A monthly Investment Portfolio Summary and quarterly Portfolio
Holdings are available upon request.
5 - Equity 500 Index Portfolio
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
For the six-month period ended June 30, 1998, Scudder S&P 500 Index Fund
provided a total return of 17.36%, closely tracking the 17.71% return of the S&P
500 Index over the same period.
Market Activity
As the U.S. economic expansion embarked on its seventh straight year, most of
the major equity market indices posted positive gains for the first half of
1998.
Stocks climbed through the first quarter despite concerns of an imminent market
correction. The S&P 500 Index crossed the 1,000 mark for the first time in
February 1998, and the Dow Jones Industrial Average neared a new milestone
toward the end of March. Despite negative news for technology stocks, stronger
than anticipated earnings for Microsoft helped to carry this sector to a solid
finish for the quarter.
Volatility increased in the second quarter, although the equity indices
continued to reach record highs. Having broken the 8,000 barrier in July 1997,
the Dow Jones Industrial Average hit the 9,000 milestone in early April 1998.
The S&P 500 Index continued to climb as well. Toward the end of April, fears of
a tightening by the Federal Reserve Board sparked a huge drop in the market.
But, a lower than expected Employment Cost Index helped stocks rebound on April
30. Equities were then down again in May, primarily due to volatility in the
technology sector. Stocks rebounded quickly again, as the General Motors strike
helped calm expectations of a Fed tightening at the end of June. Finally, having
spent the greater portion of the second quarter above the 9,000 mark, the Dow
Jones lost steam and finished off the semiannual period below that level, based
largely on warnings about corporate profits. The Federal Reserve Board refrained
from raising interest rates throughout.
Overall, large-capitalization stocks significantly outperformed small-cap stocks
for the period. In contrast to the previous period, growth stocks outperformed
value stocks within the large-cap sector throughout these six months.
Technology, consumer cyclical, and health care were the leading groups for the
period. The weakest performing sectors included basic materials, utilities, and
transportation, all of which still produced positive returns.
Manager Outlook
With the Federal Reserve Board on hold, stable interest rates should provide
some support for U.S. equities. However, there are a few long-term factors that
may impact the market. First of all, we believe that stocks face the prospect of
more moderate earnings growth, as the economy inevitably slows from its first
quarter gross domestic product growth rate of more than 5% and as rising labor
costs squeeze corporate profit margins. Another factor is that the financial
turmoil in Asia and questions about Japan getting its economy back on track will
continue to dominate financial markets around the globe. And lastly, once the
perception of the Asian crisis shifts to a more positive note, the U.S. stock
market could face tougher sledding, as investors begin to weigh the likelihood
of a shift to tighter monetary policy by the Federal Reserve Board. Still, for
6 - Scudder S&P 500 Index Fund
<PAGE>
the near term, solid growth, low inflation, and accommodative interest rates
should continue to form an almost ideal backdrop for the U.S. equity markets.
Of course, it is important to reiterate that as an index fund, designed to
replicate the broad diversification and returns of the S&P 500 Index, we neither
evaluate short-term fluctuations in the Fund's performance nor manage according
to a given outlook for the equity markets or the economy in general. Still, we
will continue monitoring economic conditions and how they affect the financial
markets, as we seek to closely track the performance of the stock market.
Sincerely,
/s/Frank Salerno
Frank Salerno
Portfolio Manager
7 - Scudder S&P 500 Index Fund
<PAGE>
Glossary of Investment Terms
INDEX FUND A mutual fund that seeks to replicate the
performance of a securities market index.
These funds are usually passively managed,
employing popular benchmarks such as the S&P
500, Russell 2000 (small-caps), or Lehman
Aggregate Bond Index. Because an index fund
essentially "buys the market," its
performance tends to closely track both
increases and decreases in the respective
index.
LIQUIDITY A characteristic of an investment or an asset
referring to the ease of convertibility into
cash within a reasonably short period of
time.
MARKET CAPITALIZATION The value of a company's outstanding shares
of common stock, determined 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.
"Large-cap" stocks tend to be more liquid and
less volatile, while "small-cap" stocks have
greater potential earnings growth and are
typically more volatile.
PASSIVE MANAGEMENT An investment approach that typically selects
investments based on non-fundamental
criteria, often by seeking to mirror the
performance of a securities market index.
This is in contrast to active management in
which an investment manager attempts to
select the most promising investments by
analyzing company financial statements,
market conditions, and industry trends.
STANDARD & POOR'S A broad-based measurement of changes in stock
COMPOSITE INDEX OF 500 market conditions based on the average
STOCKS (S&P 500) performance of 500 widely held common stocks.
The index is comprised of 400 industrial
company stocks, 20 transportation company
stocks, 40 financial company stocks, and 40
public utilities. The stocks which comprise
the S&P 500 represent some of the largest
companies in terms of market capitalization.
STANDARD & POOR'S CORPORATION A subsidiary of McGraw-Hill, Inc. that
provides a broad range of investment
services, including rating commercial paper,
compiling the Standard & Poor's Composite
Index of 500 Stocks, the Standard & Poor's
400 Industrial Index, and the Standard &
Poor's 100 Index, among other indexes. The
company also provides a wide variety of
statistical materials, investment advisory
reports, and other financial information.
(Sources: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
8 - Scudder S&P 500 Index Fund
<PAGE>
Financial Statements
Scudder S&P 500 Index Fund
Statement of Assets and Liabilities
as of June 30, 1998 (Unaudited)
<TABLE>
<S> <C> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investment in Equity 500 Index Portfolio, at market ................... $ 51,650,302
Receivable for Fund shares sold ....................................... 642,062
Deferred organization expenses ........................................ 23,767
Reimbursement due from Manager ........................................ 33,864
----------------
Total assets .......................................................... 52,349,995
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed ...................................... 220,701
Other payables and accrued expenses ................................... 33,224
----------------
Total liabilities ..................................................... 253,925
-------------------------------------------------------------------------------------------
Net assets, at market value $ 52,096,070
-------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated distributions in excess of net investment income .......... (9,584)
Unrealized appreciation on investments and futures transactions ....... 4,736,210
Accumulated net realized gain from investments and futures
transactions ........................................................ 390,341
Paid-in capital ....................................................... 46,979,103
-------------------------------------------------------------------------------------------
Net assets, at market value $ 52,096,070
-------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($52,096,070 / 3,446,826 outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares ----------------
authorized) ......................................................... $15.11
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 - Scudder S&P 500 Index Fund
<PAGE>
Scudder S&P 500 Index Fund
Statement of Operations
six months ended June 30, 1998 (Unaudited)
<TABLE>
<S> <C> <C>
Investment Income
- ----------------------------------------------------------------------------------------------------------------------------
Income:
Income allocated from Equity 500 Index Portfolio, net ............... $ 252,402
----------------
Expenses:
Administration fee .................................................. 16,597
Services to shareholders ............................................ 98,237
Custodian and accounting fee ........................................ 7,387
Trustees' fees and expenses ......................................... 14,418
Auditing ............................................................ 14,731
Registration fees ................................................... 17,158
Reports to shareholders ............................................. 12,793
Legal ............................................................... 7,461
Amortization of organization expense ................................ 2,766
Other ............................................................... 1,842
----------------
Total expenses before reductions .................................... 193,390
Expense reductions .................................................. (140,087)
----------------
Expenses, net ....................................................... 53,303
-------------------------------------------------------------------------------------------
Net investment income 199,099
-------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ......................................................... 239,224
Futures contracts ................................................... 8,275
----------------
247,499
----------------
Net unrealized appreciation (depreciation) during the period on
investments and futures contracts ................................. 4,471,342
-------------------------------------------------------------------------------------------
Net gain (loss) on investment transactions 4,718,841
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 4,917,940
-------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder S&P 500 Index Fund
<PAGE>
Scudder S&P 500 Index Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the Period
August 29,
Six Months 1997 (com-
Ended mencement of
June 30, operations) to
1998 December 31,
Increase (Decrease) in Net Assets (Unaudited) 1997
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income ..................................... $ 199,099 $ 39,647
Net realized gain (loss) from investment transactions ..... 247,499 142,842
Net unrealized appreciation (depreciation) on
investment transactions during the period ............... 4,471,342 264,868
---------------- ----------------
Net increase (decrease) in net assets resulting from
operations .............................................. 4,917,940 447,357
---------------- ----------------
Distributions to shareholders from net investment
income .................................................. (209,729) (74,511)
---------------- ----------------
Fund share transactions:
Proceeds from shares sold ................................. 41,292,564 18,098,523
Net asset value of shares issued to shareholders in
reinvestment of distributions ........................... 201,413 72,136
Cost of shares redeemed ................................... (11,018,394) (1,632,429)
---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions ............................................ 30,475,583 16,538,230
---------------- ----------------
Increase (decrease) in net assets ......................... 35,183,794 16,911,076
Net assets at beginning of period ......................... 16,912,276 1,200
Net assets at end of period (including accumulated
distributions in excess of net investment income
of $9,584 and undistributed net investment income ---------------- ----------------
of $1,046, respectively) ................................ $ 52,096,070 $ 16,912,276
---------------- ----------------
Other Information
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ................. 1,307,405 100
---------------- ----------------
Shares sold ............................................... 2,900,975 1,431,700
Shares issued to shareholders in reinvestment of
distributions ........................................... 13,541 5,676
Shares redeemed ........................................... (775,095) (130,071)
---------------- ----------------
Net increase in Fund shares ............................... 2,139,421 1,307,305
---------------- ----------------
Shares outstanding at end of period ....................... 3,446,826 1,307,405
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder S&P 500 Index Fund
<PAGE>
Financial Highlights
Scudder S&P 500 Index Fund
The following table includes selected data for a share outstanding (a)
throughout each period and other performance information derived from the
financial statements.
<TABLE>
<CAPTION>
For the Period
August 29,
1997
Six Months (commencement
Ended June 30, of operations) to
1998 December 31,
(Unaudited) 1997
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
---------------------------------
Net asset value, beginning of period ................................................. $ 12.94 $ 12.00
---------------------------------
Income from investment operations:
Net investment income ................................................................ .08 .05
Net realized and unrealized gain (loss) on investment transactions ................... 2.17 .95
---------------------------------
Total from investment operations ..................................................... 2.25 1.00
---------------------------------
Less distributions from net investment income ........................................ (.08) (.06)
---------------------------------
Net asset value, end of period ....................................................... $ 15.11 $ 12.94
---------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (%) (b) ................................................................. 17.36** 8.34**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ............................................... 52 17
Ratio of operating expenses, net to average daily net assets (%) (c) ................. .40* .40*
Ratio of operating expenses before expense reductions, to average daily net
assets (%) (c) ..................................................................... 1.32* 4.42*
Ratio of net investment income to average daily net assets (%) ....................... 1.21* 1.35*
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) Total return would have been lower had certain expenses not been reduced.
(c) Includes expenses of the Equity 500 Index Portfolio.
* Annualized
** Not annualized
12 - Scudder S&P 500 Index Fund
<PAGE>
Notes to Financial Statements (Unaudited)
Scudder S&P 500 Index Fund
A. Significant Accounting Policies
Scudder S&P 500 Index Fund (the "Fund") is a diversified series of the
Investment Trust (the "Trust", formerly Scudder Investment 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 seeks to achieve its investment
objective by investing substantially all of its assets in the Equity 500 Index
Portfolio (the "Portfolio"), an open-end management investment company advised
by Bankers Trust Company ("Bankers Trust") which has the same investment
objective as the Fund. At June 30, 1998, the Fund's investment in the Portfolio
was approximately 1.3% of the Portfolio's total assets.
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. The financial statements of the
Portfolio, including the Schedule of Investments, are contained elsewhere in
this report and should be read in conjunction with the Fund's financial
statements.
Security Valuation. The Fund records its investment in the Portfolio at value,
which reflects its proportionate interest in the net assets of the Portfolio.
Valuation of the securities held by the Portfolio is discussed in the notes to
the Portfolio's financial statements included elsewhere in this report.
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. The Fund accordingly paid no federal income taxes and no provision
for federal income taxes was required. At December 31, 1997, the Fund had a net
tax basis capital loss carryforward of approximately $216,000, which may be
applied against any realized net taxable capital gains of each succeeding year
until fully utilized or until December 31, 2005, whichever occurs first. In
addition, from November 1 through December 31, 1997, the Fund incurred
approximately $137,000 of realized long-term capital losses. As permitted by tax
regulations, the Fund intends to elect to defer these losses and treat them as
arising in the year ending December 31, 1998.
Distribution of Income and Gains. Distributions of net investment income are
made quarterly. During any particular year, the Fund's pro rata share of the
Portfolio's realized gains from security transactions, in excess of available
capital loss carryforwards, would be taxable to the Fund if not distributed and,
therefore, will be distributed to shareholders. An additional distribution may
be made to the extent necessary to avoid the payment of a four percent federal
excise tax.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. As a result, net
investment income 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.
Organization Costs. Costs incurred by the Fund in connection with its
organization have been deferred and are being amortized on a straight-line basis
over a five-year period.
13 - Scudder S&P 500 Index Fund
<PAGE>
Other. The Fund records daily its pro rata share of the Portfolio's income,
expenses, and realized and unrealized gains and losses. In addition, the Fund
accrues its own expenses.
B. Related Parties
Under the Investment Management Agreement (the "Agreement") with Scudder Kemper
Investments, Inc. ("Scudder Kemper" or the "Manager"), the Manager monitors the
Fund's investments in the Portfolio. Scudder Kemper recieves no fee for
providing these monitoring services. In the event the Board of Trustees
determines it is in the best interest of the Fund's shareholders to withdraw its
investment in the Portfolio, Scudder Kemper would become responsible for
directly managing the assets of the Fund. In such event, the Fund would pay the
Manager an annual fee of 0.15% of the Fund's average daily net assets, accrued
daily and paid monthly.
The Fund also has an Administrative Services Agreement with the Manager, under
which the Manager provides shareholder and administrative services to the Fund.
Scudder Kemper receives a fee of 0.10% of the Fund's average daily net assets,
accrued daily and paid monthly. The Manager has voluntarily agreed to maintain
expenses of the Fund to the extent necessary to limit the expenses of the Fund
to 0.40% of its annual average daily net assets (including the Fund's pro rata
share of the expenses of the Portfolio). Under the terms of a Third Party Feeder
Agreement between the Fund, the Manager and Bankers Trust, Bankers Trust has
voluntarily agreed to waive expenses of the Portfolio to the extent necessary to
limit the expenses of the Portfolio to 0.08% of its annual average net assets.
For the period ended June 30, 1998, the Manager did not impose any of its fee,
which amounted to $16,597. Further, due to the limitations of such Agreement,
the Manager's reimbursement to the Fund for the period ended June 30, 1998,
amounted to $33,864.
Scudder Service Corporation ("SSC"), a subsidiary of the Manager, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended June 30, 1998, SSC did not impose any of its fee, which
amounted to $88,004.
The Fund pays each Trustee not affiliated with the Manager an annual retainer.
For the six months ended June 30, 1998, Trustees' fees aggregated $1,075.
14 - Scudder S&P 500 Index Fund
<PAGE>
Officers and Trustees
Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General
Manager, WGBH Educational
Foundation
Dawn-Marie Driscoll
Trustee; President, Driscoll
Associates; Executive Fellow,
Center for Business Ethics,
Bentley College
Peter B. Freeman
Trustee; Corporate Director
George M. Lovejoy, Jr.
Trustee; President and Director,
Fifty Associates
Wesley W. Marple, Jr.
Trustee; Professor of Business
Administration, Northeastern
University
Kathryn L. Quirk*
Trustee, Vice President and
Assistant Secretary
Jean C. Tempel
Trustee; Managing Partner,
Technology Equity Partners
Bruce F. Beaty*
Vice President
Philip S. Fortuna*
Vice President
William F. Gadsden*
Vice President
Jerard K. Hartman*
Vice President
Robert T. Hoffman*
Vice President
Thomas W. Joseph*
Vice President
Valerie F. Malter*
Vice President
Thomas F. McDonough*
Vice President, Secretary and
Treasurer
John R. Hebble*
Assistant Treasurer
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, Inc.
15 - Scudder S&P 500 Index Fund
<PAGE>
Statement of Net Assets as of June 30, 1998 (Unaudited)
Equity 500 Index Portfolio
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ----------------------------------------------------------------------------------------
Short-Term Instruments 2.9%
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Mutual Funds 2.8%
BT Institutional Cash ------------
Management Fund .......................................... 113,526,530 113,526,530
------------
U.S. Treasury Bill 0.1%
5.005%, 10/01/1998 (a) ..................................... 2,870,000 2,833,694
- ----------------------------------------------------------------------------------------
Total Short-Term Instruments (Cost $116,360,531) ........... 116,360,224
- ----------------------------------------------------------------------------------------
<CAPTION>
Shares
- ----------------------------------------------------------------------------------------
Common Stocks 97.7%
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Advertising 0.1%
Omnicom Group, Inc. ........................................ 75,000 3,740,625
Aerospace 1.4%
Boeing Co. ................................................. 450,246 20,064,087
General Dynamics Corp. ..................................... 55,444 2,578,146
Lockheed Martin Corp. ...................................... 87,245 9,237,064
Northrop Grumman Corp. ..................................... 29,779 3,070,959
Raytheon Co.-- Class B ..................................... 158,414 9,366,228
Rockwell International Corp. ............................... 89,124 4,283,522
United Technologies Corp. .................................. 106,312 9,833,860
------------
58,433,866
------------
Airlines 0.4%
AMR Corp.* ................................................. 80,104 6,668,658
Delta Air Lines, Inc. ...................................... 35,049 4,530,083
Southwest Airlines Co. ..................................... 97,800 2,897,325
U.S. Air, Inc.* ............................................ 41,915 3,321,764
------------
17,417,830
------------
Apparel, Textiles 0.4%
Corning Inc. ............................................... 101,814 3,538,036
Fruit of the Loom, Inc.-- Class A* ......................... 30,200 1,002,262
Liz Claiborne, Inc. ........................................ 28,903 1,510,182
Nike, Inc.-- Class B ....................................... 84,948 4,135,906
Reebok International Ltd.* ................................. 21,129 585,009
Russell Corp. .............................................. 15,811 477,295
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Springs Industries, Inc.-- Class A ......................... 5,504 253,872
V.F. Corp. ................................................. 53,330 2,746,495
------------
14,249,057
------------
Auto Related 2.0%
AutoZone, Inc.* ............................................ 66,900 2,136,619
Chrysler Corp. ............................................. 292,302 16,478,525
Cummins Engine Co., Inc. ................................... 18,634 954,992
Dana Corp. ................................................. 53,774 2,876,909
Eaton Corp. ................................................ 31,282 2,432,176
Echlin, Inc. ............................................... 29,244 1,434,784
Ford Motor Co. ............................................. 503,864 29,727,976
General Motors Corp. ....................................... 292,984 19,574,993
Genuine Parts Co. .......................................... 73,726 2,548,155
Meritor Automotive, Inc. ................................... 1 24
PACCAR Inc. ................................................ 34,180 1,785,905
Parker Hannifin Corp. ...................................... 46,414 1,769,534
Timken Co. ................................................. 24,196 745,539
------------
82,466,131
------------
Banks 8.1%
Ahmanson (H.F.) & Co. ...................................... 48,834 3,467,214
Banc One Corp. ............................................. 319,507 17,832,484
Bank of New York Company, Inc. ............................. 172,100 10,444,319
BankAmerica Corp. .......................................... 308,672 26,680,836
BankBoston Corp. ........................................... 137,134 7,628,079
BB&T Corp. ................................................. 55,600 3,759,950
Chase Manhattan Corp. ...................................... 373,604 28,207,102
Citicorp ................................................... 198,966 29,695,676
Comerica, Inc. ............................................. 73,300 4,856,125
Fifth Third Bancorp ........................................ 110,825 6,981,975
First Chicago NBD Corp. .................................... 133,136 11,799,177
First Union Corp. .......................................... 438,453 25,539,887
Golden West Financial Corp. ................................ 18,917 2,011,114
Huntington Bancshares, Inc. ................................ 73,700 2,468,950
KeyCorp .................................................... 208,000 7,410,000
Mellon Bank Corp. .......................................... 118,924 8,280,084
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - Equity 500 Index Portfolio
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Mercantile Bancorp, Inc. ................................... 58,900 2,967,087
Morgan (J.P.) & Company, Inc. .............................. 82,560 9,669,840
National City Corp. ........................................ 150,200 10,664,200
NationsBank Corp. .......................................... 432,103 33,055,880
Northern Trust Corp. ....................................... 53,800 4,102,250
Norwest Corp. .............................................. 349,016 13,044,473
Republic New York Corp. .................................... 47,400 2,983,237
Summit Bancorp ............................................. 86,600 4,113,500
SunTrust Banks, Inc. ....................................... 97,460 7,924,716
U.S. Bancorp ............................................... 325,897 14,013,571
Wachovia Corp. ............................................. 91,500 7,731,750
Washington Mutual, Inc. .................................... 175,577 7,626,626
Wells Fargo & Co. .......................................... 38,770 14,306,130
------------
329,266,232
------------
Beverages 3.6%
Anheuser-Busch Companies, Inc. ............................. 216,180 10,200,994
Brown-Forman, Inc.-- Class B ............................... 17,719 1,138,446
Coca-Cola Co. .............................................. 1,094,322 93,564,531
Coors (Adolph) Co.-- Class B ............................... 15,768 536,112
PepsiCo, Inc. .............................................. 672,194 27,685,990
Seagram Ltd. ............................................... 162,537 6,653,858
------------
139,779,931
------------
Building and Construction 0.9%
Armstrong World Industries, Inc. ........................... 17,483 1,177,917
Centex Corp. ............................................... 28,080 1,060,020
Crane Co. .................................................. 19,966 969,599
Fleetwood Enterprises, Inc. ................................ 8,506 340,240
Home Depot, Inc. ........................................... 327,726 27,221,741
Masco Corp. ................................................ 74,411 4,501,866
Owens Corning .............................................. 22,350 912,159
Stanley Works .............................................. 38,530 1,601,403
------------
37,784,945
------------
Building, Forest Products 0.3%
Boise Cascade Corp. ........................................ 24,003 786,097
Champion International Corp. ............................... 46,128 2,268,921
Georgia-Pacific Corp. ...................................... 41,801 2,463,646
Johnson Controls, Inc. ..................................... 34,654 1,981,776
Kaufman & Broad Home Corp. ................................. 17,145 544,354
Louisiana-Pacific Corp. .................................... 46,658 851,509
Potlatch Corp. ............................................. 13,101 550,242
Weyerhaeuser Co. ........................................... 87,294 4,031,892
------------
13,478,437
------------
Chemicals and Toxic Waste 2.4%
Air Products & Chemical, Inc. .............................. 102,708 4,108,320
Amgen, Inc.* ............................................... 118,040 7,716,865
Dow Chemical Co. ........................................... 104,676 10,120,861
Du Pont (E.I.) de Nemours & Co. ............................ 499,692 37,289,516
Eastman Chemical Co. ....................................... 32,581 2,028,167
FMC Corp.* ................................................. 17,350 1,183,053
Grace (W. R.) & Co.* ....................................... 34,949 596,317
Great Lakes Chemical Corp. ................................. 25,796 1,017,330
Hercules, Inc. ............................................. 42,014 1,727,826
Mallinckrodt, Inc. ......................................... 32,702 970,841
Monsanto Co. ............................................... 272,620 15,232,643
Morton International, Inc. ................................. 64,306 1,607,650
Nalco Chemical Co. ......................................... 16,325 766,603
PPG Industries, Inc. ....................................... 79,342 5,519,227
Raychem Corp. .............................................. 42,576 1,258,653
Rohm & Haas Co. ............................................ 26,059 2,708,507
Sigma-Aldrich Corp. ........................................ 44,200 1,552,525
Union Carbide Corp. ........................................ 67,152 3,584,238
------------
98,989,142
------------
Computer Services 1.6%
3Com Corp.* ................................................ 154,100 4,728,944
Adobe Systems, Inc. ........................................ 33,100 1,404,681
Automatic Data Processing, Inc. ............................ 128,512 9,365,312
Cabletron Systems, Inc.* ................................... 68,400 919,125
Cendant Corp.* ............................................. 363,234 7,582,510
Dell Computer Corp.* ....................................... 283,400 26,303,063
EMC Corp.* ................................................. 226,000 10,127,625
</TABLE>
The accompanying notes are an integral part of the financial statements.
17 - Equity 500 Index Portfolio
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Parametric Technology Co.* ................................. 128,400 3,482,850
Silicon Graphics, Inc.* .................................... 83,515 1,012,619
------------
64,926,729
------------
Computer Software 4.6%
Cisco Systems, Inc.* ....................................... 463,950 42,712,397
Computer Associates
International, Inc. ...................................... 240,675 13,372,505
Microsoft Corp.* ........................................... 1,090,000 118,128,750
Oracle Corp.* .............................................. 442,256 10,862,913
Seagate Technology, Inc.* .................................. 106,500 2,536,031
------------
187,612,596
------------
Containers 0.3%
Avery Dennison Corp. ....................................... 44,230 2,377,363
Ball Corp. ................................................. 7,854 315,632
Crown Cork & Seal
Company, Inc. ............................................ 58,950 2,800,125
Owens-Illinois, Inc.* ...................................... 65,200 2,917,700
Sealed Air Corp.* .......................................... 36,505 1,341,559
Stone Container Corp. ...................................... 39,849 622,641
Temple-Inland, Inc. ........................................ 24,922 1,342,672
------------
11,717,692
------------
Cosmetics and Toiletries 0.9%
Alberto-Culver Co.-- Class B ............................... 8,898 258,042
Avon Products, Inc. ........................................ 63,728 4,938,920
Gillette Co. ............................................... 491,916 27,885,488
International Flavors &
Fragrances, Inc. ......................................... 53,887 2,340,717
------------
35,423,167
------------
Diversified 0.9%
Allegheny Teledyne Inc. .................................... 76,169 1,742,366
Ceridian Corp.* ............................................ 31,702 1,862,493
Loews Corp. ................................................ 49,400 4,303,975
Minnesota Mining &
Manufacturing Co. ........................................ 181,578 14,923,442
NACCO Industries,
Inc.-- Class A ........................................... 3,527 455,865
Pall Corp. ................................................. 54,464 1,116,512
Praxair, Inc. .............................................. 72,815 3,408,652
SUPERVALU, Inc. ............................................ 31,220 1,385,387
Textron, Inc. .............................................. 59,706 5,140,424
------------
34,339,116
------------
Drugs 7.4%
American Home Products Corp. ............................... 579,232 29,975,256
Bristol-Myers Squibb Co. ................................... 446,378 51,305,571
Lilly (Eli) & Co. .......................................... 496,640 32,809,280
Merck & Company, Inc. ...................................... 527,197 70,512,599
Pfizer, Inc. ............................................... 576,608 62,670,082
Schering-Plough Corp. ...................................... 321,216 29,431,416
Warner-Lambert Co. ......................................... 359,158 24,916,586
------------
301,620,790
------------
Electrical Equipment 4.5%
General Electric Co. ....................................... 1,440,444 131,080,404
General Signal Corp. ....................................... 23,072 830,592
Grainger (W.W.), Inc. ...................................... 40,530 2,018,901
Hewlett-Packard Co. ........................................ 466,940 27,958,032
ITT Industries, Inc. ....................................... 51,223 1,914,460
Tyco International Ltd. .................................... 264,264 16,648,632
------------
180,451,021
------------
Electronics 3.5%
Advanced Micro Devices, Inc.* .............................. 55,041 939,137
Aeroquip-Vickers, Inc. ..................................... 12,327 719,589
AlliedSignal, Inc. ......................................... 248,212 11,014,407
AMP, Inc. .................................................. 104,173 3,580,947
Applied Materials, Inc.* ................................... 162,600 4,796,700
Emerson Electric Co. ....................................... 193,800 11,700,675
Harris Corp. ............................................... 34,942 1,561,471
Intel Corp. ................................................ 748,928 55,514,288
KLA Instruments Corp.* ..................................... 35,400 980,138
LSI Logic Corp.* ........................................... 57,500 1,326,094
Micron Technology, Inc.* ................................... 93,500 2,319,969
Motorola, Inc. ............................................. 261,742 13,757,814
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 - Equity 500 Index Portfolio
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
National Semiconductor Corp.* .............................. 75,626 997,317
Northern Telecom Ltd. ...................................... 225,402 12,791,564
Perkin-Elmer Corp. ......................................... 22,625 1,406,992
Scientific-Atlanta, Inc. ................................... 35,638 904,314
Tektronix, Inc. ............................................ 22,307 789,110
Texas Instruments, Inc. .................................... 173,656 10,126,316
Thermo Electron Corp.* ..................................... 64,400 2,201,675
Thomas & Betts Corp. ....................................... 21,100 1,039,175
Western Atlas, Inc.* ....................................... 25,859 2,194,782
------------
140,662,474
------------
Environmental Control 0.3%
Browning-Ferris Industries, Inc. ........................... 80,635 2,802,066
Laidlaw, Inc.-- Class B .................................... 115,600 1,408,875
Waste Management, Inc. ..................................... 200,358 7,012,530
------------
11,223,471
------------
Financial Services 5.8%
American Express Co. ....................................... 200,966 22,910,124
Associates First Capital
Corp.-- Class A .......................................... 158,061 12,150,939
Bear Stearns Companies, Inc. ............................... 48,400 2,752,750
Beneficial Corp. ........................................... 26,352 4,036,797
Capital One Financial Corp. ................................ 27,800 3,452,413
Charles Schwab Corp. ....................................... 116,900 3,799,250
Cincinnati Financial Corp. ................................. 73,200 2,809,050
Countrywide Credit Industries .............................. 50,500 2,562,875
Equifax .................................................... 66,700 2,422,044
Fannie Mae ................................................. 462,864 28,118,987
First Data Corp. ........................................... 196,100 6,532,581
Fleet Financial Group, Inc. ................................ 131,844 11,008,974
Franklin Resources, Inc. ................................... 110,700 5,977,800
Freddie Mac ................................................ 298,824 14,063,405
Green Tree Financial Corp. ................................. 60,600 2,594,438
Hartford Financial Services
Group .................................................... 53,723 6,144,568
Household International, Inc. .............................. 150,274 7,476,132
Lehman Brothers Holdings Inc. .............................. 52,200 4,048,762
MBNA Corp. ................................................. 220,225 7,267,425
Merrill Lynch & Co., Inc. .................................. 151,476 13,973,661
Morgan Stanley, Dean Witter,
Discover & Co. ........................................... 260,393 23,793,410
PNC Banc Corp. ............................................. 138,433 7,449,426
SLM Holding Corp. .......................................... 71,800 3,518,200
State Street Corp. ......................................... 67,800 4,712,100
Synovus Financial Corp. .................................... 103,650 2,461,688
Travelers Group, Inc. ...................................... 509,821 30,907,898
------------
236,945,697
------------
Food Services/Lodging 0.6%
Darden Restaurants, Inc. ................................... 62,419 990,902
McDonald's Corp. ........................................... 308,214 21,266,765
Tricon Global Restaurants, Inc.* ........................... 67,099 2,126,200
Wendy's International, Inc. ................................ 56,562 1,329,207
------------
25,713,074
------------
Foods 2.7%
Archer-Daniels-Midland Co. ................................. 269,417 5,219,954
Bestfoods .................................................. 126,760 7,360,003
Campbell Soup Co. .......................................... 198,854 10,564,119
ConAgra, Inc. .............................................. 210,932 6,683,908
General Mills, Inc. ........................................ 76,319 5,218,312
Heinz (H.J.) Co. ........................................... 160,075 8,984,209
Hershey Foods Corp. ........................................ 49,594 3,421,986
Kellogg Co. ................................................ 169,714 6,374,882
Pioneer Hi-Bred
International, Inc. ...................................... 99,420 4,113,503
Quaker Oats Co. ............................................ 63,484 3,487,652
Ralston-Purina Group ....................................... 47,805 5,584,222
Sara Lee Corp. ............................................. 206,687 11,561,554
Sysco Corp. ................................................ 148,020 3,793,012
Unilever N.V ............................................... 277,768 21,926,312
Wrigley (WM) Jr. Co. ....................................... 40,592 3,978,016
------------
108,271,644
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19 - Equity 500 Index Portfolio
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Forest Products and Paper 0.0%
Willamette Industries, Inc. ................................ 42,900 1,372,800
------------
Healthcare 0.9%
Abbott Laboratories ........................................ 686,344 28,054,311
Columbia/HCA
Healthcare Corp. ......................................... 272,822 7,945,941
------------
36,000,252
------------
Hospital Supplies and Healthcare 2.9%
Allergan, Inc. ............................................. 27,501 1,275,359
Alza Corp.* ................................................ 40,234 1,740,121
Bard (C.R.), Inc. .......................................... 25,277 962,106
Bausch & Lomb, Inc. ........................................ 24,323 1,219,190
Baxter International Inc. .................................. 124,863 6,719,190
Becton, Dickinson & Co. .................................... 53,932 4,186,472
Biomet, Inc. ............................................... 52,050 1,720,903
Boston Scientific Corp.* ................................... 86,400 6,188,400
Cardinal Health, Inc. ...................................... 52,800 4,950,000
Guidant Corp. .............................................. 68,200 4,863,513
HBO & Co. .................................................. 199,500 7,032,375
HEALTHSOUTH Corp.* ......................................... 171,900 4,587,581
Humana, Inc.* .............................................. 81,900 2,554,256
Johnson & Johnson .......................................... 603,296 44,493,080
Manor Care, Inc. ........................................... 23,660 909,431
Medtronic, Inc. ............................................ 214,304 13,661,880
Shared Medical Systems Corp. ............................... 10,774 791,216
St. Jude Medical, Inc.* .................................... 36,688 1,350,577
Tenet Healthcare Corp.* .................................... 134,510 4,203,437
United Healthcare Corp. .................................... 86,400 5,486,400
U.S. Surgical Corp. ........................................ 27,848 1,270,565
------------
120,166,052
------------
Hotel/Motel 0.2%
Hilton Hotels Corp. ........................................ 112,041 3,193,169
Marriott International, Inc. ............................... 104,980 3,398,727
------------
6,591,896
------------
Household Furnishings 0.2%
Maytag Corp. ............................................... 44,612 2,202,717
Newell Co. ................................................. 69,858 3,479,802
Whirlpool Corp. ............................................ 32,739 2,250,806
------------
7,933,325
------------
Household Products 1.8%
Clorox Co. ................................................. 50,604 4,826,357
Colgate-Palmolive Co. ...................................... 129,602 11,404,976
Procter & Gamble Co. ....................................... 593,640 54,058,342
Rubbermaid, Inc. ........................................... 76,702 2,545,548
Tupperware Corp. ........................................... 26,796 753,637
------------
73,588,860
------------
Insurance 3.7%
Aetna, Inc. ................................................ 63,759 4,853,654
Allstate Corp. ............................................. 192,150 17,593,734
American General Corp. ..................................... 111,037 7,904,446
American International
Group, Inc. .............................................. 306,900 44,807,400
Aon Corp. .................................................. 73,950 5,194,988
Chubb Corp. ................................................ 73,672 5,921,387
CIGNA Corp. ................................................ 96,799 6,679,131
Conseco, Inc. .............................................. 82,000 3,833,500
General Re Corp. ........................................... 33,778 8,562,723
Jefferson-Pilot Corp. ...................................... 46,865 2,715,241
Lincoln National Corp. ..................................... 43,910 4,012,276
Marsh & McLennan
Companies, Inc. .......................................... 112,986 6,828,591
MBIA, Inc. ................................................. 39,200 2,935,100
MGIC Investment Corp. ...................................... 56,700 3,235,444
Progressive Corp. .......................................... 31,900 4,497,900
Providian Financial ........................................ 44,098 3,464,449
SAFECO Corp. ............................................... 73,002 3,317,028
St. Paul Companies, Inc. ................................... 103,928 4,371,472
SunAmerica, Inc. ........................................... 78,400 4,503,100
</TABLE>
The accompanying notes are an integral part of the financial statements.
20 - Equity 500 Index Portfolio
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Torchmark Corp. ............................................ 62,168 2,844,186
UNUM Corp. ................................................. 60,500 3,357,750
------------
151,433,500
------------
Leisure Related 1.4%
American Greetings
Corp.-- Class A .......................................... 37,414 1,905,776
Brunswick Corp. ............................................ 46,542 1,151,915
CBS Corp. .................................................. 321,810 10,217,467
Disney (Walt) Co. .......................................... 299,557 31,472,207
Harcourt General, Inc. ..................................... 22,339 1,329,171
Harrah's Entertainment, Inc.* .............................. 46,015 1,069,849
Hasbro, Inc. ............................................... 58,087 2,283,545
Jostens, Inc. .............................................. 7,539 181,877
Mattel, Inc. ............................................... 128,565 5,439,907
Mirage Resorts, Inc.* ...................................... 79,100 1,685,819
------------
56,737,533
------------
Machinery 1.1%
Black & Decker Corp. ....................................... 41,671 2,541,931
Briggs & Stratton Corp. .................................... 11,982 448,576
Case Corp. ................................................. 32,900 1,587,425
Caterpillar Inc. ........................................... 168,064 8,886,384
Cincinnati Milacron, Inc. .................................. 13,447 326,930
Cooper Industries, Inc. .................................... 52,948 2,908,831
Deere & Co. ................................................ 116,623 6,166,441
Dover Corp. ................................................ 97,708 3,346,499
Dresser Industries, Inc. ................................... 77,182 3,400,832
Harnischfeger Industries, Inc. ............................. 19,322 547,054
Illinois Tool Works, Inc. .................................. 109,692 7,315,085
Ingersoll-Rand Co. ......................................... 72,796 3,207,574
Millipore Corp. ............................................ 19,292 525,707
Navistar International Corp.* .............................. 22,558 651,362
Snap-On, Inc. .............................................. 30,594 1,109,033
TRW Inc. ................................................... 53,672 2,931,833
------------
45,901,497
------------
Marketing 0.00%
ACNielsen Corp.* ........................................... 1 25
Metals 0.7%
Alcan Aluminium Ltd. ....................................... 82,336 2,274,532
Aluminum Company of America ................................ 71,700 4,727,719
Armco, Inc.* ............................................... 59,635 380,173
Asarco, Inc. ............................................... 20,049 446,090
Barrick Gold Corp. ......................................... 165,500 3,175,531
Battle Mountain Gold Co. ................................... 58,100 344,969
Bethlehem Steel Corp.* ..................................... 56,249 699,597
Cyprus Amax Minerals Co. ................................... 43,894 581,596
Engelhard Corp. ............................................ 62,308 1,261,737
Freeport-McMoRan Copper &
Gold, Inc.-- Class B ..................................... 58,700 891,506
Homestake Mining Co. ....................................... 92,443 959,096
Inco Ltd. .................................................. 73,766 1,005,062
Newmont Mining Corp. ....................................... 68,610 1,620,911
Nucor Corp. ................................................ 36,494 1,678,724
Phelps Dodge Corp. ......................................... 25,908 1,481,614
Placer Dome, Inc. .......................................... 104,304 1,225,572
Reynolds Metals Co. ........................................ 34,149 1,910,210
USX-U.S. Steel Group, Inc. ................................. 46,677 1,540,341
Worthington Industries, Inc. ............................... 30,679 462,102
------------
26,667,082
------------
Miscellaneous 0.1%
Cognizant Corp. ............................................ 77,979 4,912,677
------------
Office Equipment and Computers 2.9%
Apple Computer, Inc.* ...................................... 58,542 1,679,424
Autodesk, Inc. ............................................. 26,914 1,039,553
Compaq Computer Corp. ...................................... 724,384 20,554,396
Computer Sciences Corp.* ................................... 71,572 4,580,608
Data General Corp.* ........................................ 21,045 314,360
Gateway 2000, Inc.* ........................................ 68,600 3,472,875
Honeywell, Inc. ............................................ 60,719 5,073,831
Ikon Office Solutions, Inc. ................................ 60,462 880,478
</TABLE>
The accompanying notes are an integral part of the financial statements.
21 - Equity 500 Index Portfolio
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
International Business
Machines Corp. ........................................... 414,782 47,622,158
Moore Corp. Ltd. ........................................... 24,579 325,672
Novell, Inc.* .............................................. 172,792 2,203,098
Pitney Bowes, Inc. ......................................... 120,196 5,784,433
Sun Microsystems, Inc.* .................................... 170,256 7,395,495
Unisys Corp.* .............................................. 110,399 3,118,772
Xerox Corp. ................................................ 149,735 15,216,819
------------
119,261,972
------------
Oil Related 7.2%
Amerada Hess Corp. ......................................... 43,393 2,356,782
Amoco Corp. ................................................ 420,104 17,486,829
Anadarko Petroleum ......................................... 26,500 1,780,469
Apache Corp. ............................................... 43,600 1,373,400
Ashland Inc. ............................................... 24,587 1,269,304
Atlantic Richfield Co. ..................................... 140,450 10,972,656
Baker Hughes, Inc. ......................................... 70,944 2,452,002
Burlington Resources, Inc. ................................. 79,839 3,438,067
Chevron Corp. .............................................. 286,366 23,786,276
Exxon Corp. ................................................ 1,078,714 76,925,792
Fluor Corp. ................................................ 34,381 1,753,431
Foster Wheeler Corp. ....................................... 25,538 547,471
Halliburton Co. ............................................ 124,280 5,538,228
Helmerich & Payne, Inc. .................................... 27,416 610,006
Kerr-McGee Corp. ........................................... 20,832 1,205,652
McDermott International, Inc. .............................. 25,387 874,265
Mobil Corp. ................................................ 345,742 26,492,481
Occidental Petroleum Corp. ................................. 160,214 4,325,778
Oryx Energy Co.* ........................................... 47,397 1,048,260
Pennzoil Co. ............................................... 20,954 1,060,796
Phillips Petroleum Co. ..................................... 114,406 5,512,939
Rowan Companies, Inc.* ..................................... 38,300 744,455
Royal Dutch Petroleum Co. .................................. 961,504 52,702,438
Schlumberger Ltd. .......................................... 218,862 14,951,010
Sun Co, Inc. ............................................... 35,145 1,364,065
Tenneco, Inc. .............................................. 79,034 3,008,232
Texaco, Inc. ............................................... 249,322 14,881,407
Union Pacific Resources
Group Inc. ............................................... 117,848 2,069,706
Unocal Corp. ............................................... 109,337 3,908,798
USX-Marathon Group ......................................... 126,764 4,349,590
Williams Companies, Inc. ................................... 188,636 6,366,465
------------
295,157,050
------------
Paper 0.7%
Bemis Company, Inc. ........................................ 15,631 638,917
Fort James Corp. ........................................... 95,035 4,229,058
International Paper Co. .................................... 134,944 5,802,592
Kimberly-Clark Corp. ....................................... 256,430 11,763,726
Mead Corp. ................................................. 50,702 1,609,789
Union Camp Corp. ........................................... 32,103 1,593,111
Westvaco Corp. ............................................. 39,160 1,106,270
------------
26,743,463
------------
Pharmaceuticals 0.3%
Pharmacia & Upjohn, Inc. ................................... 233,532 10,771,664
------------
Photography and Optical 0.3%
Eastman Kodak Co. .......................................... 141,726 10,354,856
Polaroid Corp. ............................................. 19,982 710,610
------------
11,065,466
------------
Printing and Publishing 1.3%
Deluxe Corp. ............................................... 42,691 1,528,871
Donnelley (R.R.) & Sons Co. ................................ 62,252 2,848,029
Dow Jones & Co, Inc. ....................................... 31,072 1,732,264
Dun & Bradstreet Corp. ..................................... 75,379 2,723,066
Gannett Co., Inc. .......................................... 124,492 8,846,713
Knight-Ridder, Inc. ........................................ 40,926 2,253,488
McGraw-Hill Companies, Inc. ................................ 50,130 4,088,728
Meredith Corp. ............................................. 18,472 867,030
New York Times Co.-- Class A ............................... 39,684 3,144,957
Time Warner, Inc. .......................................... 233,215 19,925,307
</TABLE>
The accompanying notes are an integral part of the financial statements.
22 - Equity 500 Index Portfolio
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Times Mirror Co.-- Class A ................................. 27,929 1,756,036
Tribune Co. ................................................ 52,496 3,612,381
------------
53,326,870
------------
Professional Services 0.4%
Block (H&R), Inc. .......................................... 45,835 1,930,799
Ecolab, Inc. ............................................... 45,600 1,413,600
EG&G, Inc. ................................................. 30,425 912,750
Interpublic Group of
Companies, Inc. .......................................... 53,660 3,256,491
National Service Industries ................................ 20,326 1,034,085
Service Corporation International .......................... 112,692 4,831,670
Transamerica Corp. ......................................... 27,643 3,182,400
------------
16,561,795
------------
Railroads 0.5%
Burlington Northern
Santa Fe Corp. ........................................... 70,462 6,918,488
CSX Corp. .................................................. 95,932 4,364,906
Norfolk Southern Corp. ..................................... 166,653 4,968,343
Union Pacific Corp. ........................................ 108,347 4,780,811
------------
21,032,548
------------
Real Estate 0.0%
Pulte Corp. ................................................ 20,332 607,419
------------
Retail 4.8%
Abercrombie & Fitch Company* ............................... 74 3,256
Albertson's, Inc. .......................................... 108,602 5,626,941
American Stores Co. ........................................ 120,336 2,910,627
Circuit City Stores, Inc. .................................. 43,546 2,041,219
Consolidated Stores Corp.* ................................. 49,500 1,794,375
Costco Companies, Inc.* .................................... 100,899 6,362,943
CVS Corp. .................................................. 168,338 6,554,661
Dayton Hudson Corp. ........................................ 192,416 9,332,176
Dillard Department Stores,
Inc.-- Class A ........................................... 46,897 1,943,294
Federated Department
Stores, Inc.* ............................................ 92,500 4,977,656
Gap, Inc. .................................................. 179,071 11,035,250
Giant Food, Inc.-- Class A ................................. 17,093 736,067
Great Atlantic & Pacific Tea
Co., Inc. ................................................ 16,825 556,277
Kmart Corp.* ............................................... 216,203 4,161,908
Kroger Co.* ................................................ 114,220 4,897,183
Limited, Inc. .............................................. 97,960 3,244,911
Longs Drug Stores, Inc. .................................... 17,726 511,838
Lowe's Companies, Inc. ..................................... 162,588 6,594,976
May Department Stores Co. .................................. 101,098 6,621,919
Mercantile Stores Company, Inc. ............................ 19,230 1,517,968
Nordstrom, Inc. ............................................ 34,929 2,698,265
Penney (J.C.) Co., Inc. .................................... 114,750 8,297,859
Pep Boys-- Manny, Moe & Jack ............................... 26,112 494,496
Rite Aid Corp. ............................................. 113,602 4,267,175
Sears, Roebuck & Co. ....................................... 171,609 10,478,875
Sherwin-Williams Co. ....................................... 76,274 2,526,576
Tandy Corp. ................................................ 48,066 2,550,502
TJX Companies, Inc. ........................................ 143,216 3,455,086
Toys 'R' Us, Inc.* ......................................... 126,318 2,976,368
Venator Group, Inc. ........................................ 59,622 1,140,271
Walgreen Co. ............................................... 213,068 8,802,372
Wal-Mart Stores, Inc. ...................................... 986,348 59,920,641
Winn-Dixie Stores, Inc. .................................... 65,180 3,336,401
------------
192,370,332
------------
Telecommunications 5.1%
360 Communications Co.* .................................... 1 32
Airtouch Communications, Inc.* ............................. 250,735 14,652,327
Alltel Corp. ............................................... 110,900 5,156,850
Ameritech Corp. ............................................ 498,004 22,347,930
Andrew Corp.* .............................................. 40,376 729,292
Ascend Communications, Inc.* ............................... 79,800 3,955,087
Bay Networks, Inc.* ........................................ 91,700 2,957,325
Clear Channel
Communications, Inc.* .................................... 56,400 6,154,650
</TABLE>
The accompanying notes are an integral part of the financial statements.
23 - Equity 500 Index Portfolio
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Comcast Corp.-- Class A .................................... 152,462 6,189,004
DSC Communications Corp.* .................................. 53,490 1,604,700
Frontier Corp. ............................................. 75,200 2,368,800
General Instrument Corp.* .................................. 66,400 1,805,250
GTE Corp. .................................................. 421,936 23,470,190
King World Productions, Inc. ............................... 32,212 821,406
Lucent Technologies, Inc. .................................. 585,882 48,738,059
MCI Communications Corp. ................................... 310,220 18,031,537
Nextel Communications, Inc. ................................ 119,200 2,965,100
Tele-Communications,
Inc.-- Class A* .......................................... 207,360 7,970,400
Tellabs, Inc.* ............................................. 82,100 5,880,412
Viacom, Inc.-- Class B* .................................... 125,549 7,313,229
WorldCom, Inc.* ............................................ 449,300 21,762,969
------------
204,874,549
------------
Tire and Rubber 0.2%
Cooper Tire & Rubber Co. ................................... 35,151 724,989
Goodrich (B.F.) Co. ........................................ 31,952 1,585,618
Goodyear Tire & Rubber Co. ................................. 68,836 4,435,620
------------
6,746,227
------------
Tobacco 1.2%
Fortune Brands, Inc. ....................................... 68,074 2,616,594
Philip Morris Companies, Inc. .............................. 1,084,998 42,721,796
UST, Inc. .................................................. 85,807 2,316,789
------------
47,655,179
------------
Trucking, Shipping 0.1%
FDX Corp.* ................................................. 71,655 4,496,351
Ryder System, Inc. ......................................... 33,317 1,051,568
------------
5,547,919
------------
Utilities 7.0%
Ameren Corp. ............................................... 60,120 2,389,770
American Electric Power Co. ................................ 83,310 3,780,191
AT&T Corp. ................................................. 711,606 40,650,493
Baltimore Gas & Electric Co. ............................... 59,425 1,845,889
Bell Atlantic Corp. ........................................ 680,036 31,026,643
BellSouth Corp. ............................................ 446,132 29,946,611
Carolina Power & Light Co. ................................. 53,028 2,300,090
Central & South West Corp. ................................. 106,930 2,873,744
CINergy Corp. .............................................. 61,522 2,153,270
Coastal Corp. .............................................. 46,566 3,250,889
Columbia Gas System, Inc. .................................. 37,102 2,063,799
Consolidated Edison Company of
New York, Inc. ........................................... 103,136 4,750,702
Consolidated Natural Gas Co. ............................... 44,005 2,590,794
Dominion Resources, Inc. ................................... 86,056 3,525,120
DTE Energy Co. ............................................. 72,176 2,914,106
Duke Energy Co. ............................................ 157,795 9,349,354
Eastern Enterprises ........................................ 9,142 391,963
Edison International ....................................... 159,270 4,708,419
Enron Corp. ................................................ 136,666 7,388,506
Entergy Corp. .............................................. 121,707 3,499,076
FirstEnergy Corp.* ......................................... 92,884 2,856,182
FPL Group, Inc. ............................................ 79,994 5,039,622
GPU, Inc. .................................................. 56,500 2,136,406
Houston Industries, Inc. ................................... 125,392 3,871,478
MediaOne Group, Inc.* ...................................... 266,828 11,723,755
Niagara Mohawk Power Corp.* ................................ 53,142 793,809
NICOR, Inc. ................................................ 21,069 845,394
Northern States Power Co. .................................. 44,988 1,287,782
ONEOK, Inc. ................................................ 13,791 549,916
PacifiCorp ................................................. 130,889 2,961,364
PECO Energy Co. ............................................ 102,784 3,000,007
People's Energy Corp. ...................................... 16,855 651,024
PG&E Corp. ................................................. 186,305 5,880,252
PP&L Resources, Inc. ....................................... 73,300 1,662,994
Public Service Enterprise
Group, Inc. .............................................. 112,094 3,860,237
SBC Communications, Inc. ................................... 805,128 32,205,120
Sempra Energy* ............................................. 92,364 2,487,224
Sonat, Inc. ................................................ 47,210 1,823,486
</TABLE>
The accompanying notes are an integral part of the financial statements.
24 - Equity 500 Index Portfolio
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Southern Co. ............................................... 304,458 8,429,681
Sprint Corp. ............................................... 158,682 11,187,081
Texas Utilities Co. ........................................ 121,927 5,075,211
Unicom Corp. ............................................... 94,925 3,328,307
U.S. West, Inc. --
Communications Group ..................................... 224,855 10,568,185
------------
283,623,946
- -----------------------------------------------------------------------------------------
Total Common Stocks (Cost $2,475,377,707) 3,961,165,565
- -----------------------------------------------------------------------------------------
<CAPTION>
% of
Net Assets
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Total Investment Portfolio
(Cost $2,591,738,238) .................................... 100.6% 4,077,525,789
Other Assets Less Liabilities .............................. (0.6)% (24,794,022)
------- --------------
Net Assets ................................................. 100.0% 4,052,731,767
======= ==============
</TABLE>
* Non-income producing security.
(a) Held as collateral for futures contracts.
The accompanying notes are an integral part of the financial statements.
25 - Equity 500 Index Portfolio
<PAGE>
Financial Statements
Equity 500 Index Portfolio
Statement of Operations
for the six months ended June 30, 1998 (Unaudited)
<TABLE>
Investment Income
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Income:
Dividends (net of foreign withholding tax of $156,829) ..................... $ 26,845,061
Interest* .................................................................. 123,941
----------------
Total investment income .................................................... 26,969,002
Expenses:
Advisory fees .............................................................. 1,524,644
Administration and services fees ........................................... 846,656
Professional fees .......................................................... 11,756
Trustees' fee .............................................................. 3,499
Miscellaneous .............................................................. 447
----------------
Total expenses ............................................................. 2,387,002
Less: Expenses absorbed by Bankers Trust ................................... (1,032,352)
----------------
Net expenses ............................................................... 1,354,650
-------------------------------------------------------------------------------------------------
Net investment income 25,614,352
-------------------------------------------------------------------------------------------------
Realized and Unrealized Gain on Investments and Futures Contracts
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain from investment transactions ............................. 21,556,558
Net realized gain from futures transactions ................................ 2,045,391
Net change in unrealized appreciation on investments ....................... 478,378,615
Net change in unrealized appreciation on futures contracts ................. 294,781
----------------
Net realized and unrealized gain on investments and futures contracts ...... 502,275,345
-------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 527,889,697
-------------------------------------------------------------------------------------------------
* Includes $2,082,691 from the Portfolio's investment in the BT
Institutional Cash Management Fund.
</TABLE>
The accompanying notes are an integral part of the financial statements.
26 - Scudder S&P 500 Index Fund
<PAGE>
Equity 500 Index Portfolio
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended
June 30, Year Ended
1998 December 31,
Increase in Net Assets from: (Unaudited) 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .................................... $ 25,614,352 $ 42,706,376
Net realized gain from investments and futures
transactions ........................................... 23,601,949 95,286,448
Net change in unrealized appreciation on investments
and futures contracts .................................. 478,673,396 528,775,836
----------------- -----------------
Net increase in net assets from operations ............... 527,889,697 666,768,660
----------------- -----------------
Capital Transactions:
Proceeds from capital invested ........................... 1,386,506,855 1,462,422,481
Value of capital withdrawn ............................... (664,751,256) (1,251,328,236)
----------------- -----------------
Net increase in net assets from capital transactions ..... 721,755,599 211,094,245
----------------- -----------------
Total increase in net assets ............................. 1,249,645,296 877,862,905
Net assets at beginning of year .......................... 2,803,086,471 1,925,223,566
----------------- -----------------
Net assets at end of year ................................ $ 4,052,731,767 $ 2,803,086,471
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
27 - Scudder S&P 500 Index Fund
<PAGE>
Financial Highlights
Equity 500 Index Portfolio
Contained below are selected supplemental data and ratios to average net assets
for the periods indicated for the Equity 500 Index Portfolio.
<TABLE>
<CAPTION>
Six Months
Ended
June 30,
1998 For the Year Ended December 31,
(Unaudited) 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Supplemental Data and Ratios
Net assets, end of period (000s omitted) ................ $4,052,732 $2,803,086 $1,925,224 $1,080,736 $559,772 $151,805
Ratios to average net assets:
Net investment income (%) ............................... 1.55* 1.76 2.20 2.52 2.84 2.67
Expenses (%) ............................................ 0.08* 0.08 0.10 0.10 0.10 0.10
Decrease reflected in above expense ratio due
to absorption of expenses by Bankers Trust (%) ........ 0.06* 0.07 0.05 0.05 0.06 0.10
Portfolio turnover rate (%) ............................. 2 19 15 6 21 31
</TABLE>
* Annualized
28 - Equity 500 Index Portfolio
<PAGE>
Notes to Financial Statements (Unaudited)
Equity 500 Index Portfolio
Note 1-Organization and Significant Accounting Policies
A. Organization
The Equity 500 Index Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on December 11, 1991
as an unincorporated trust under the laws of New York and commenced operations
on December 31, 1992. The Declaration of Trust permits the Board of Trustees
(the "Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
The Portfolio's investments are valued each business day by an independent
pricing service approved by the Trustees. Securities traded on national
exchanges or traded in the NASDAQ National Market System are valued at the last
sales prices reported at the close of business each day. Over-the-counter
securities not included in the NASDAQ National Market System and listed
securities for which no sale was reported are valued at the mean of the bid and
asked prices. Short-term obligations with remaining maturities of 60 days or
less are valued at amortized cost that, with accrued interest, approximates
value. Securities for which quotations are not available are stated at fair
value as determined by the Trustees.
C. Security Transactions and Interest Income
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on the accrual
basis and includes amortization of premium and discount on investments. Realized
gains and losses from securities transactions are recorded on the identified
cost basis.
All of the net investment income and realized and unrealized gains and losses
from the security transactions of the Portfolio are allocated pro rata among the
investors in the Portfolio at the time of such determination.
D. Futures Contracts
The Portfolio may enter into financial futures contracts that are contracts to
buy a standard quantity of securities at a specified price on a future date. The
Portfolio is required to deposit either in cash or securities an amount equal to
a certain percentage of the contract amount. Subsequent payments are made or
received by the Portfolio each day, dependent on the daily fluctuations in the
value of the underlying security, and are recorded for financial statement
purposes as unrealized gains or losses by the Portfolio.
Futures contracts are valued at the settlement price established each day by the
board of trade or exchange on which they are traded.
E. Federal Income Taxes
It is in the Portfolio's policy to comply with the requirements of the Internal
Revenue Code. Therefore, no federal income tax provision is required.
29 - Equity 500 Index Portfolio
<PAGE>
F. Other
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements. Actual results could
differ from those estimates.
Note 2-Fees and Transactions with Affiliates
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of .05% of the Portfolio's average daily net
assets. At June 30, 1998, amounts owed under the Administration and Services
Agreement amounted to $78,558, net of waived expenses of $80,412.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at an annual rate of .075% of the Portfolio's
average daily net assets. For the period January 1, 1998 to April 30, 1998 the
Advisory fee was .10%. At June 30, 1998, amounts owed under the Advisory
Agreement amounted to $173,136, net of waived expenses of $144,804.
Bankers Trust has voluntarily undertaken to waive its fees and reimburse
expenses of the Portfolio, to the extent necessary, to limit all expenses to
.08% of the average daily net assets of the Portfolio. For the six month period
ended June 30, 1998, expenses of the Portfolio have been reduced by $1,032,352.
The Portfolio may invest in the BT Institutional Cash Management Fund (the
"Fund"), an open-end management investment company managed by Bankers Trust
Company (the "Company"). The Fund is offered as a cash management option to the
Portfolio and other accounts managed by the Company. Distributions from the Fund
to the Portfolio as of June 30, 1998 amounted to $2,082,691 and are included in
dividend income.
The Portfolio is a participant with other affiliated entities in a revolving
credit facility ("the revolver") and a discretionary demand line of credit
facility ("collectively the credit facilities") in the amounts of $50,000,000
and $100,000,000, respectively. A commitment fee of .07% per annum on the
average daily amount of the available commitment is payable on a quarterly basis
and apportioned equally among all participants. Amounts borrowed under the
credit facilities will bear interest at a rate per annum equal to the Federal
Funds Rate plus .45%. No amounts were drawn down or outstanding under the credit
facilities as of and for the period ended June 30, 1998.
On September 30, 1996, the Trust entered into a Distribution Agreement with
Edgewood Services, Inc. ("Edgewood"). Effective August 11, 1998, ICC
Distributors, Inc. will replace Edgewood as distributor of the Trust.
Certain officers of the Portfolio are also directors, officers and employees of
Edgewood. None of the officers so affiliated received compensation for services
as officers of the Portfolio.
For the six month period ended June 30, 1998, the Equity 500 Index Portfolio
paid brokerage commissions of $226,179.
30 - Equity 500 Index Portfolio
<PAGE>
Note 3-Purchases and Sales of Investment Securities
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the six month period ended June 30, 1998, were
$754,650,857 and $58,371,306, respectively. For federal income tax purposes, the
tax basis of investments held at June 30, 1998 was $2,602,421,738. The aggregate
gross unrealized appreciation was $1,514,149,698, and the aggregate gross
unrealized depreciation was $28,362,147 for all investments as of June 30, 1998.
Payable for securities purchased at June 30, 1998 amounted to $66,583,078.
Note 4-Futures Contracts
A summary of obligations under these financial instruments at June 30, 1998 is
as follows:
<TABLE>
<CAPTION>
Unrealized
Type of Future Expiration Contracts Position Market Value ($) Appreciation ($)
- -------------- ---------- --------- -------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
S&P 500 Index Futures Sept. 1998 348 Long 99,441,000 906,869
</TABLE>
At June 30, 1998, the Portfolio segregated $2,833,694 to cover margin
requirements on open futures contracts.
Note 5-Net Assets
Paid-in capital $ 2,516,821,046
Undistributed net investment income 25,614,352
Accumulated realized gain on investments 21,556,558
Accumulated realized gain on futures transactions 2,952,260
Unrealized appreciation on investments 1,485,787,551
------------------
Total net assets $ 4,052,731,767
==================
31 - Equity 500 Index Portfolio
<PAGE>
This Page
intentionally
left blank.
32 - Scudder S&P 500 Index 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 Dividend & Growth Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment 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 Equity
- -------------
Worldwide
Scudder Global Fund
Scudder International Value Fund
Scudder International Growth and Income Fund
Scudder International Fund++
Scudder International Growth 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.
Industry Sector Funds
- ---------------------
Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan**+++ +++
(a variable annuity)
Education Accounts
- ------------------
Education IRA
UGMA/UTMA
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal Fund, Inc.
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed in order from
expected least risk to most risk. Certain Scudder funds may not be available for
purchase or exchange. +A portion of the income from the tax-free funds may be
subject to federal, state, and local taxes. *A class of shares of the Fund.
**Not available in all states. ***Only the Scudder Shares of the Fund are part
of the Scudder Family of Funds. ++Only the International Shares of the Fund are
part of the Scudder Family of Funds. +++ +++A no-load variable annuity contract
provided by Charter National Life Insurance Company and its affiliate, offered
by Scudder's insurance agencies, 1-800-225-2470. #These funds, advised by
Scudder Kemper Investments, Inc., are traded on the New York Stock Exchange and,
in some cases, on various other stock exchanges.
33 - Scudder S&P 500 Index 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 money is Lets you purchase Scudder fund shares
electronically debited from your bank account monthly to electronically, avoiding potential mailing delays;
regularly purchase fund shares and "dollar cost average" money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from a previously designated bank
fewer when it's higher, which can reduce your average account.
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:
- ------------------------------------------------------------------------------------------------------------------------------
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 previously designated.
Distributions Direct
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
- ------------------------------------------------------------------------------------------------------------------------------
34 - Scudder S&P 500 Index 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 8,000 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 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
</TABLE>
35 - Scudder S&P 500 Index Fund
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc., is one of the largest and most experienced
investment management oganizations worldwide, managing more than $200 billion in
assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts. It is one of the ten largest mutual fund companies in the
United States.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 79
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Group. As a result, Zurich's subsidiary, Zurich Kemper Investments,
Inc., with 50 years of mutual fund and investment management experience, was
combined with Scudder. Headquartered in New York, Scudder Kemper Investments
offers a full range of investment counsel and asset management capabilities,
based on a combination of proprietary research and disciplined, long-term
investment strategies. With its global investment resources and perspective,
the firm seeks opportunities in markets throughout the world to meet the needs
of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Group. The Zurich Group is an internationally recognized leader in
financial services, including property/casualty and life insurance, reinsurance,
and asset management.
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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