Scudder
S&P 500 Index
Fund
Semiannual Report
June 30, 1999
No-Load Funds
A no-load (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
<PAGE>
Scudder S&P 500 Index Fund
- --------------------------------------------------------------------------------
Date of Inception: 8/29/97 Total Net Assets as of Ticker Symbol: SCPIX
6/30/99: $273.8 million
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o For its most recent semiannual period ended June 30, 1999, Scudder S&P 500
Index Fund posted an 11.97% total return, in keeping with the 12.39% return of
the unmanaged S&P 500 Index over the same period.^1
o The domestic equity stock market experienced significant volatility during the
period, as out-of-favor sectors and asset classes produced strong returns.
o Our long-term outlook for S&P 500 stocks remains positive, given continued low
inflation, favorable consumer fundamentals, and low interest rates.
Table of Contents
3 Letter from the Fund's President Equity 500 Index Portfolio
4 Performance Update 15 Statement of Net Assets
5 Portfolio Summary 23 Financial Statements
6 Portfolio Management Discussion 25 Financial Highlights
26 Notes to Financial Statements
Scudder S&P 500 Index Fund
8 Financial Statements
11 Financial Highlights 29 Investment Products and Services
12 Notes to Financial Statements 30 Scudder Solutions
14 Officers and Trustees
^1 "Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500," and
"500" are trademarks of The McGraw-Hill Companies, Inc., and have been
licensed for use by Scudder Kemper Investments, Inc. The Scudder S&P 500 Index
Fund is not sponsored, endorsed, sold or promoted by Standard & Poor's, and
Standard & Poor's makes no representation regarding the advisability of
investing in the fund.
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-month period ended June 30, 1999.
Over the past two years, concerns over the direction of the global economy
have boosted the performance of the large capitalization stocks that make up the
S&P 500 Index. Recently, however, continued economic strength in the U.S. and
signs of a recovery overseas have made it increasingly apparent that global
economic growth is on the upswing. While this development would seem to be good
news for S&P 500 stocks, which are primarily multinational companies whose sales
tend to be boosted by stronger global growth, we are cautious near term. Market
participants, who have been using large-caps as a "safe haven" to seek shelter
from the uncertain earnings outlook of recent years, have begun to look for new
opportunities in out-of-favor sectors that stand to benefit from a stronger
economy. Nevertheless, we remain optimistic concerning the long-term growth
prospects for U.S. stocks and the Fund, given low inflation, favorable consumer
fundamentals, and low interest rates. For more information about the Fund's
market environment and outlook, please see the Portfolio Management Discussion
that begins on page 6.
For those interested in new Scudder products, we are pleased to introduce
Scudder Select 500 Fund and Scudder Select 1000 Growth Fund. Both funds are
managed with the goal of providing long-term outperformance compared to their
benchmark indices, the S&P 500 Index and the Russell 1000 Growth Index,
respectively. For more information on either Select fund, please call us at the
number below.
If you have any questions regarding Scudder S&P 500 Index Fund or any other
Scudder fund, please call Investor Relations at 1-800-SCUDDER. Or visit
Scudder's Web site at www.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, 1999
- -----------------------------
Fund Index Comparison
- -----------------------------
Total Return
- --------------------------------------------
Period
Ended Growth of Average
6/30/1999 $10,000 Cumulative Annual
- ---------------------------------------------
Scudder S&P 500 Index Fund
- --------------------------------------------
1 Year $ 12,240 22.40% 22.40%
Life of
Fund* $ 15,563 55.63% 27.25%
- ---------------------------------------------
S&P 500 Index
- ---------------------------------------------
1 Year $ 12,276 22.76% 22.76%
Life of
Fund* $ 15,681 56.81% 27.87%
- ---------------------------------------------
* The Fund commenced operations on August 29, 1997. Index comparisons begin
August 31, 1997.
- ----------------------------------
Growth of a $10,000 Investment
- ----------------------------------
THE PRINTED DOCUMENT CONTAINS
A LINE CHART HERE
CHART DATA:
S&P 500 Index Scudder S&P 500 Index Fund
8/97* 10000 10000
9/97 10548 10542
12/97 10851 10834
3/98 12365 12325
6/98 12773 12715
9/98 11502 11460
12/98 13953 13899
3/99 14647 14558
6/99 15681 15563
The Standard & Poor's 500 Index is a capitalization-weighted index of 500
stocks. The index is designed to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks representing
all major industries. Index returns assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees or expenses.
- -------------------------------------
Returns and Per Share Information
- -------------------------------------
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
ILLUSTRATING THE FUND TOTAL RETURN (%) AND
INDEX TOTAL RETURN (%)
CHART DATA:
Years ended June 30
1998* 1999
- --------------------------------------------------------------------------------
Net Asset Value $ 15.11 $ 18.33
- --------------------------------------------------------------------------------
Income Dividends $ .14 $ .16
- --------------------------------------------------------------------------------
Capital Gains Distributions $ -- $ --
- --------------------------------------------------------------------------------
Fund Total Return (%) 27.15 22.40
- --------------------------------------------------------------------------------
Index Total Return (%) 27.73 22.76
- --------------------------------------------------------------------------------
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 returns would have been lower for the one year and life of Fund
period.
4 - Scudder S&P 500 Index Fund
<PAGE>
Portfolio Summary as of June 30, 1999
Equity 500 Index Portfolio
- -----------------------
Asset Allocation
- -----------------------
A graph in the form of a pie chart appears here, illustrating the exact data
points in the table below.
Common Stocks 98%
Cash Equivalents 2%
- ------------------------------------
100%
- ------------------------------------
The Portfolio is essentially fully invested in common stocks that make up the
S&P 500 Index.
- ------------------------------------
Sector Diversification
(Excludes 2% Cash Equivalents)
- ------------------------------------
A graph in the form of a pie chart appears here, illustrating the exact data
points in the table below.
Financial 16%
Consumer Staples 13%
Capital Goods 12%
Technology 12%
Health 11%
Consumer Discretionary 10%
Utilities 8%
Energy 6%
Communications 6%
Other 6%
- ------------------------------------
100%
- ------------------------------------
The financial sector continued to be the largest weighting in the S&P 500
Index during the period.
- ----------------------------------
Ten Largest Equity Holdings
(22% of Portfolio)
- ----------------------------------
1. Microsoft Corp.
Developer of computer operating
systems software
2. General Electric Co.
Producer of electrical equipment
3. International Business Machines
Corp.
Manufacturer and servicer of
business and computing machines
4. Wal-Mart Stores, Inc.
Operator of discount stores
5. Cisco Systems, Inc.
Manufacturer of computer network
products
6. Lucent Technologies, Inc.
Designer, developer and
manufacturer of communication
systems software and products
7. Intel Corp.
Manufacturer and distributor of
microprocessors
8. Exxon Corp.
International oil and gas company
9. AT&T Corp.
Telecommunication services
10. Merck & Co., Inc.
Pharmaceutical company
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 15. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
5 - Scudder S&P 500 Index Fund
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Scudder S&P 500 Index Fund seeks to match the performance, before expenses, of
common stocks publicly traded in the U.S., as represented by the S&P 500 Index.
For its most recent semiannual period ended June 30, 1999, Scudder S&P 500 Index
Fund provided an 11.97% total return, closely tracking the 12.39% return of the
unmanaged S&P 500 Index over the same period. Over the 12 months ended June 30,
Scudder S&P 500 Index Fund returned 22.40%, compared with the 22.76% total
return of the unmanaged S&P 500 Index.
Market Review
Over the past two years, investors have become accustomed to the tendency of
large-cap growth names as represented in the S&P 500 Index to outperform in both
up and down markets. This trend was the result of several important factors: low
interest rates, the strong earnings growth of many large caps, and the
popularity of indexing and momentum-based investing. In 1998, fears that the
global economy was about to enter a period of recession and possible deflation
caused investors to focus on stocks they believed would have the most
sustainable growth characteristics in the face of global economic woes.
More recently, there has been a distinct shift in the investment backdrop. As
the U.S. economy has picked up steam, investors have become less worried about
the possibility of a recession. In addition, growing evidence of a rebound in
Asia has lessened fears that a lack of demand in that region would act as a drag
on the global economy. The improved outlook has sparked a rotation into cyclical
stocks and smaller companies, attracting investment capital away from larger-cap
stocks.
Low level inflation has provided enormous support for the bull market in U.S.
stocks during the 1990s by facilitating a steady decline in interest rates.
While there is no evidence that inflation has reignited, the strength of real
estate prices and a tight labor market have put investors on the lookout for
imbalances in the economy. Consequently, as it became increasingly apparent that
the economies of Asia and Europe were beginning to strengthen, the importance of
reports on wage and price trends was magnified. Stock market volatility
increased significantly, and leadership oscillated between growth stocks and
value stocks.
Manager Outlook
Looking ahead to the remainder of the year, it is reasonable to expect that
volatility in the financial markets will persist. Valuations in the U.S. stock
market remain strained, and the financial markets remain vulnerable to inflation
fears. Though the U.S. stock market faces significant challenges over the coming
months, we believe that an emphasis on diversification and long-term performance
will continue to prove successful over time.
6 - Scudder S&P 500 Index Fund
<PAGE>
It's also important to remember that as managers of 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 to monitor economic conditions as well as 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>
Financial Statements
Scudder S&P 500 Index Fund
Statement of Assets and Liabilities
as of June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Assets
- -------------------------------------------------------------------------------------------------
<S> <C>
Investment in Equity 500 Index Portfolio, at market ........... $ 274,019,399
Receivable for Fund shares sold ............................... 723,590
Deferred organization expenses ................................ 18,095
-------------
Total assets .................................................. 274,761,084
Liabilities
- -------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed .............................. 691,913
Other payables and accrued expenses ........................... 234,385
-------------
Total liabilities ............................................. 926,298
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Net assets, at market value $ 273,834,786
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Net Assets
- -------------------------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income ........................... 163,152
Unrealized appreciation on investments and futures transactions 38,144,824
Accumulated net realized loss from investments and futures
transactions ................................................ (4,726,481)
Paid-in capital ............................................... 240,253,291
-------------------------------------------------------------------------------
Net assets, at market value $ 273,834,786
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Net Asset Value
- -------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($273,834,786 / 14,938,214 outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares -------------
authorized) ................................................. $ 18.33
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8 - Scudder S&P 500 Index Fund
<PAGE>
Scudder S&P 500 Index Fund
Statement of Operations
six months ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Investment Income
- ------------------------------------------------------------------------------------------------
<S> <C>
Income:
Dividends ..................................................... $ 1,633,775
------------
Expenses:
Administration fee ............................................ 104,881
Services to shareholders ...................................... 449,753
Custodian and accounting fee .................................. 12,871
Auditing ...................................................... 7,464
Trustees' fees and expenses ................................... 12,631
Registration fees ............................................. 23,006
Reports to shareholders ....................................... 15,418
Legal ......................................................... 5,241
Amortization of organization expense .......................... 2,804
Other ......................................................... 1,511
------------
Total expenses before reductions .............................. 635,580
Expense reductions ............................................ (299,976)
------------
Expenses, net ................................................. 335,604
------------------------------------------------------------------------------
Net investment income 1,298,171
------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ................................................... (343,375)
Futures contracts ............................................. 250,539
------------
(92,836)
------------
Net unrealized appreciation (depreciation) during the period on
investments and futures contracts ........................... 23,323,887
------------------------------------------------------------------------------
Net gain (loss) on investment transactions 23,231,051
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 24,529,222
------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 - Scudder S&P 500 Index Fund
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, 1999 December 31,
Increase (Decrease) in Net Assets (Unaudited) 1998
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ............................................. $ 1,298,171 $ 657,974
Net realized gain (loss) from investment transactions ............. (92,836) 541,865
Net unrealized appreciation (depreciation) on investment
transactions during the period ................................. 23,323,887 14,556,069
------------- -------------
Net increase (decrease) in net assets resulting from operations ... 24,529,222 15,755,908
------------- -------------
Distributions to shareholders from net investment income .......... (1,163,536) (631,197)
------------- -------------
Fund share transactions:
Proceeds from shares sold ......................................... 178,392,614 139,576,614
Net asset value of shares issued to shareholders in reinvestment of
distributions .................................................. 482,783 610,116
Cost of shares redeemed ........................................... (56,687,249) (43,942,765)
------------- -------------
Net increase (decrease) in net assets from Fund share transactions 122,188,148 96,243,965
------------- -------------
Increase (decrease) in net assets ................................. 145,553,834 111,368,676
Net assets at beginning of period ................................. 128,280,952 16,912,276
Net assets at end of period (including undistributed net investment ------------- -------------
income of $163,152 and $28,517, respectively) .................. $ 273,834,786 $ 128,280,952
Other Information ------------- -------------
- ----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ......................... 7,804,119 1,307,405
------------- -------------
Shares sold ....................................................... 10,342,958 9,484,616
Shares issued to shareholders in reinvestment of distributions .... 64,192 40,297
Shares redeemed ................................................... (3,273,055) (3,028,199)
------------- -------------
Net increase in Fund shares ....................................... 7,134,095 6,496,714
------------- -------------
Shares outstanding at end of period ............................... 14,938,214 7,804,119
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - 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 Ended Year ended (commencement of
June 30, 1999 December 31, operations) to
(Unaudited) 1998 December 31, 1997
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period .................................. $ 16.44 $ 12.94 $12.00
Income from investment operations: --------------------------------------------------
Net investment income ................................................. .11 .17 .05
Net realized and unrealized gain (loss) on investment transactions .... 1.87 3.48 .95
--------------------------------------------------
Total from investment operations ...................................... 1.98 3.65 1.00
--------------------------------------------------
Less distributions from net investment income ......................... (.09) (.15) (.06)
--------------------------------------------------
Net asset value, end of period ........................................ $ 18.33 $ 16.44 $12.94
--------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (%) (b) .................................................. 11.97** 28.29 8.34**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ................................ 274 128 17
Ratio of operating expenses, net to average daily net assets (%) (c) .. .40* .40 .40*
Ratio of operating expenses before expense reductions, to average
daily net assets (%) (c) ............................................ .69* 1.01 4.42*
Ratio of net investment income to average daily net assets (%) ........ 1.24* 1.18 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
11 - 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 which is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company
organized as a Massachusetts business trust. 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, 1999, the Fund's investment in the Portfolio
was approximately 3.8% 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 investments 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 the 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. Accordingly, the Fund paid no federal income taxes and no federal
income tax provision was required.
At December 31, 1998, the Fund had a net tax basis capital loss carryforward of
approximately $4,632,000, which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until December 31,
2005 ($216,000) and December 31, 2006 ($4,416,000), the respective expiration
dates, whichever occurs first.
Distribution of Income and Gains. Distributions of net investment income, if
any, are made quarterly. Net realized gains from investment transactions, in
excess of available capital loss carryforwards, would be taxable to the Fund if
not distributed, and, therefore, will be distributed to shareholders at least
annually.
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 (loss) and net realized gain (loss) on investment transactions
for a reporting period may differ significantly from distributions during such
period. Accordingly, the Fund may periodically make reclassifications among
certain of its capital accounts without impacting the net asset value of the
Fund.
Investment Transactions and Investment Income. 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.
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.
12 - Scudder S&P 500 Index Fund
<PAGE>
B. Related Parties
Under the 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 receives 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 six months ended June 30, 1999, the Manager did not impose any of its
fee, which amounted to $104,881.
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, 1999, SSC did not impose a portion of its fee, which
amounted to $185,332. The amount imposed aggregated $21,925, all of which is
unpaid at June 30, 1999.
Scudder Trust Company ("STC"), a subsidiary of the Manager, provides
recordkeeping and other services in connection with certain retirement and
employee benefits plans invested in the Fund. For the six months ended June 30,
1999, STC did not impose a portion of its fee, which amounted to $9,754. The
amount imposed aggregated $2,128, all of which is unpaid at June 30, 1999.
The Fund pays each Trustee not affiliated with the Manager an annual retainer.
For the six months ended June 30, 1999, Trustees' fees aggregated $12,631.
C. Line of Credit
The Fund and several Scudder Funds (the "Participants") share in a $850 million
revolving credit facility for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated pro rata among each of the Participants. Interest is
calculated based on the market rates at the time of the borrowing. The Fund may
borrow up to a maximum of 33 percent of its net assets under the agreement.
13 - Scudder S&P 500 Index Fund
<PAGE>
8.Officers and Trustees
Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General Manager,
WGBH Educational Foundation
Dawn-Marie Driscoll
Trustee; President, Driscoll Associates;
Executive Fellow, Center for Business
Ethics, Bentley College
Peter B. Freeman
Trustee, Corporate Director
George M. Lovejoy, Jr.
Trustee; President and Director,
Fifty Associates
Wesley W. Marple, Jr.
Trustee; Professor of Business
Administration, Northeastern University
Kathryn L. Quirk*
Trustee, Vice President and
Assistant Secretary
Jean C. Tempel
Trustee; Venture Partner,
Venture Capital Group
Bruce F. Beaty*
Vice President
Jennifer P. Carter*
Vice President
Philip S. Fortuna*
Vice President
William F. Gadsden*
Vice President
Robert T. Hoffman*
Vice President
Thomas W. Joseph*
Vice President
Valerie F. Malter*
Vice President
Ann M. McCreary*
Vice President
John Millette*
Vice President and Secretary
John R. Hebble*
Treasurer
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, Inc.
14 - Scudder S&P 500 Index Fund
<PAGE>
Statement of Net Assets as of June 30, 1999
Equity 500 Index Portfolio
Principal Market
Amount ($) Value ($)
- ----------------------------------------------------------------------------
Short-Term Instruments 2.2%
- ----------------------------------------------------------------------------
Mutual Fund 2.0%
BT Institutional Cash Management
Fund, 4.8%, 7/1/1999 ......................... 149,053,427 149,053,427
------------
U.S. Treasury Bills 0.2%
4.24%, 7/22/1999 (a) ........................... 11,500,000 11,471,187
4.957%, 7/22/1999 (a) .......................... 1,075,000 1,072,429
------------
12,543,616
- ----------------------------------------------------------------------------
Total Short-Term Instruments (Cost $161,597,043) 161,597,043
- ----------------------------------------------------------------------------
Shares
- ----------------------------------------------------------------------------
Common Stock 97.8%
- ----------------------------------------------------------------------------
3Com Corp.* .................................... 226,000 6,031,375
Abbott Laboratories ............................ 970,744 44,168,852
Adobe Systems, Inc. ............................ 39,000 3,204,096
Adolph Coors Co.-- Class B ..................... 23,368 1,156,716
Advanced Micro Devices, Inc.* .................. 90,941 1,642,622
AES Corp.* ..................................... 130,000 7,556,250
Aetna, Inc ..................................... 92,059 8,233,527
Aflac, Inc.* ................................... 170,100 8,143,537
Air Products and Chemicals, Inc. ............... 147,908 5,953,297
Alberto-Culver Co.-- Class B ................... 18,398 489,847
Albertson's, Inc. .............................. 275,323 14,196,351
Alcan Aluminium Ltd. ........................... 139,736 4,462,818
Alcoa, Inc. .................................... 237,500 14,695,312
Allegheny Teledyne, Inc. ....................... 129,494 2,929,802
Allergan, Inc. ................................. 45,201 5,017,311
AlliedSignal, Inc. ............................. 357,212 22,504,356
Allstate Corp. ................................. 517,698 18,572,416
Alltel Corp. ................................... 177,900 12,719,850
ALZA Corp.* .................................... 64,034 3,257,730
Amerada Hess Corp. ............................. 62,493 3,718,333
Ameren Corp. ................................... 84,620 3,247,292
America Online, Inc.* .......................... 693,400 76,620,700
Market
Shares Value ($)
- -------------------------------------------------------------
American Electric Power Co. ..... 132,910 4,992,432
American Express Co. ............ 290,216 37,764,357
American General Corp. .......... 161,637 12,183,389
American Greetings Corp. --
Class A ....................... 57,314 1,726,584
American Home Products Corp. .... 859,192 49,403,540
American International
Group, Inc. ................... 794,405 92,995,035
Ameritech Corp. ................. 711,904 52,324,944
Amgen, Inc.* .................... 326,380 19,868,382
AMR Corp.* ...................... 98,404 6,716,073
Amsouth Bancorporation .......... 114,450 2,653,809
Anadarko Petroleum Corp. ........ 81,100 2,985,494
Andrew Corp.* ................... 51,376 972,933
Anheuser Busch Companies, Inc. .. 306,480 21,740,925
AON Corp. ....................... 157,875 6,512,344
Apache Corp. .................... 63,300 2,468,700
Apple Computer, Inc. ............ 89,642 4,151,545
Applied Materials, Inc.* ........ 237,200 17,523,150
Archer-Daniels-Midland Co. ...... 419,647 6,478,301
Armstrong World Industries, Inc. 26,783 1,548,392
Asarco, Inc. .................... 20,849 392,222
Ashland, Inc. ................... 32,987 1,323,603
Associates First Capital Corp. --
Class A ....................... 457,422 20,269,512
AT&T Corp. ...................... 2,040,706 113,896,904
Atlantic Richfield Co. .......... 209,250 17,485,453
Autodesk, Inc. .................. 35,814 1,058,751
Automatic Data Processing, Inc. . 403,524 17,755,056
Autozone, Inc.* ................. 87,800 2,644,975
Avery Dennison Corp. ............ 74,530 4,499,749
Avon Products, Inc. ............. 171,356 9,510,258
Baker Hughes, Inc. .............. 209,713 7,025,385
Ball Corp. ...................... 18,754 792,356
Bank Of America Corp. ........... 1,109,639 81,350,409
The accompanying notes are an integral part of the financial statements.
15 - Equity 500 Index Portfolio
<PAGE>
Market
Shares Value ($)
- ----------------------------------------------------------
Bank of New York Co., Inc. ..... 487,800 17,896,162
Bank One Corp .................. 767,348 45,705,165
BankBoston Corp. ............... 190,034 9,715,488
Barrick Gold Corp. ............. 275,500 5,337,812
Battle Mountain Gold Co.* ...... 162,300 395,606
Bausch & Lomb, Inc ............. 36,123 2,763,409
Baxter International, Inc. ..... 183,463 11,122,444
BB&T Corp. ..................... 176,900 6,490,019
Bear Stearns Companies, Inc. ... 71,795 3,356,416
Becton, Dickinson & Co. ........ 165,164 4,954,920
Bell Atlantic Corp. ............ 995,280 65,066,430
BellSouth Corp. ................ 1,214,464 56,928,000
Bemis Co., Inc. ................ 25,431 1,010,882
Best Buy Inc.* ................. 129,700 8,754,750
Bestfoods ...................... 186,860 9,249,570
Bethlehem Steel Corp.* ......... 89,049 684,564
Biomet, Inc.* .................. 72,150 2,867,962
Black & Decker Corp. ........... 57,571 3,634,169
BMC Software, Inc.* ............ 138,400 7,473,600
Boeing Co. ..................... 613,946 27,128,739
Boise Cascade Corp. ............ 38,403 1,646,529
Boston Scientific Corp.* ....... 250,700 11,015,131
Bp Amoco Plc --
Sponsored ADR ................ 25 2,713
Briggs & Stratton Corp. ........ 15,582 899,860
Bristol-Myers Squibb Co. ....... 1,274,456 89,769,494
Brown-Forman Corp. -- Class B .. 30,019 1,956,864
Browning-Ferris Industries, Inc. 105,235 4,525,105
Brunswick Corp. ................ 58,842 1,640,221
Burlington Northern Santa Fe
Corp ......................... 303,536 9,409,616
Burlington Resources, Inc ...... 120,039 5,191,687
C.r. Bard, Inc. ................ 34,577 1,653,213
Cabletron Systems, Inc.* ....... 110,600 1,437,800
Campbell Soup Co. .............. 270,454 12,542,304
Market
Shares Value ($)
- ---------------------------------------------------------
Capital One Financial Corp. . 126,100 7,022,194
Cardinal Health, Inc. ....... 169,997 10,901,058
Carnival Corp.-- Class A .... 390,500 18,939,250
Carolina Power & Light Co. .. 77,628 3,323,449
Case Corp. .................. 47,400 2,281,125
Caterpillar, Inc. ........... 237,964 14,277,840
CBS Corp.* .................. 452,810 19,668,934
Cendant Corp.* .............. 503,534 10,322,447
Centex Corp ................. 38,180 1,434,136
Central & South West Corp. .. 136,630 3,193,726
Centurytel, Inc. ............ 95,000 3,776,250
Ceridian Corp. .............. 88,104 2,879,899
Champion International Corp. 65,028 3,113,215
Charles Schwab Corp. ........ 252,050 27,693,994
Chase Manhattan Corp. ....... 546,464 47,337,444
Chevron Corp. ............... 418,566 39,842,251
Chubb Corp. ................. 108,572 7,545,754
CIGNA Corp. ................. 132,399 11,783,511
Cincinnati Financial Corp. .. 96,700 3,632,294
Cinergy Corp. ............... 105,122 3,363,904
Circuit City Stores, Inc. ... 66,846 6,216,678
Cisco Systems, Inc.* ........ 2,059,050 132,808,725
Citigroup ................... 2,163,924 102,786,390
Clear Channel Communications,
Inc.* ..................... 199,100 13,725,456
Clorox Co. .................. 75,204 8,032,727
CMS Corp. ................... 74,300 3,111,312
Coastal Corp. ............... 149,432 5,977,280
Coca-Cola Co. ............... 1,581,442 98,840,125
Coca-Cola Enterprises, Inc. . 264,300 7,862,925
Colgate-Palmolive Co. ....... 187,702 18,535,572
Columbia Energy Group ....... 53,502 3,353,907
Columbia/HCA Healthcare
Corp ...................... 368,122 8,397,783
The accompanying notes are an integral part of the financial statements.
16 - Equity 500 Index Portfolio
<PAGE>
Market
Shares Value ($)
- ----------------------------------------------------------
Comcast Corp. -- Special
Class A ...................... 488,824 18,789,172
Comerica, Inc. ................. 99,660 5,923,541
Compaq Computer Corp. .......... 1,075,984 25,487,371
Computer Associates
International, Inc. .......... 350,875 19,298,125
Computer Sciences Corp.* ....... 101,872 7,048,269
Compuware Corp.* ............... 238,300 7,580,919
ConAgra, Inc. .................. 308,832 8,222,652
Conseco, Inc. .................. 203,468 6,193,057
Consolidated Edison, Inc. ...... 149,736 6,775,554
Consolidated Natural Gas Co. ... 61,405 3,730,354
Consolidated Stores Corp.* ..... 70,600 1,906,200
Constellation Energy Group, Inc. 88,825 2,631,441
Cooper Industries, Inc. ........ 61,248 3,184,896
Cooper Tire & Rubber Co. ....... 53,951 1,274,592
Corning, Inc. .................. 156,514 10,975,544
Costco Companies, Inc.* ........ 139,899 11,200,664
Countrywide Credit Industries,
Inc .......................... 72,900 3,116,475
Crane Co. ...................... 42,449 1,334,490
Crown Cork & Seal Co., Inc. .... 81,650 2,327,025
CSX Corp. ...................... 155,232 7,033,950
Cummins Engine Co., Inc. ....... 20,334 1,161,580
CVS Corp. ...................... 248,588 12,615,841
Cyprus Amax Minerals Co. ....... 66,894 1,015,953
Dana Corp. ..................... 107,147 4,935,459
Danaher Corp. .................. 94,700 5,504,437
Darden Restaurants, Inc. ....... 88,319 1,926,458
Data General Corp.* ............ 23,045 335,593
Dayton Hudson Corp. ............ 282,616 18,370,040
Deere & Co. .................... 153,923 6,099,199
Dell Computer Corp.* ........... 1,643,900 60,824,300
Delphi Automotive Systems ...... 349,125 6,480,633
Delta Air Lines, Inc. .......... 90,798 5,232,235
Market
Shares Value ($)
- --------------------------------------------------------------
Deluxe Corp. ..................... 51,591 2,008,825
Dillard Department Stores, Inc. --
Class A ........................ 64,997 2,283,020
Dollar General Corp. ............. 151,406 4,390,774
Dominion Resources, Inc. ......... 125,206 5,422,985
Dover Corp. ...................... 144,008 5,040,280
Dow Chemical Co. ................. 145,076 18,406,517
Dow Jones & Co., Inc. ............ 48,172 2,556,127
DTE Energy Co. ................... 104,876 4,195,040
Du Pont (E.I.) de Nemours
& Co. .......................... 726,492 49,628,485
Duke Power Co. ................... 232,295 12,631,041
Dun & Bradstreet Corp. ........... 105,979 3,755,631
Eastern Enterprises .............. 15,642 621,769
Eastman Chemical Co. ............. 62,781 3,248,917
Eastman Kodak Co. ................ 208,826 14,147,961
Eaton Corp. ...................... 52,382 4,819,144
Ecolab, Inc. ..................... 73,800 3,219,525
Edison International, Inc. ....... 226,470 6,058,072
EG & G, Inc. ..................... 31,125 1,108,828
Electronic Data Systems Corp. .... 316,000 17,873,750
Elf Aquitaine-Sponsored ADR ...... 89 6,547
Eli Lilly & Co. .................. 705,140 50,505,652
EMC Corp.* ....................... 643,680 35,402,400
Emerson Electric Co. ............. 298,000 18,736,750
Engelhard Corp. .................. 84,308 1,907,468
Enron Corp. ...................... 219,066 17,908,645
Entergy Corp. .................... 158,407 4,950,219
Equifax, Inc. .................... 90,800 3,240,425
Exxon Corp. ...................... 1,559,034 120,240,497
Fannie Mae ....................... 672,114 45,955,795
FDX Corp.* ....................... 189,710 10,291,767
Federated Department Stores,
Inc.* .......................... 141,100 7,469,481
Fifth Third Bancorp .............. 170,567 11,353,366
The accompanying notes are an integral part of the financial statements.
17 - Equity 500 Index Portfolio
<PAGE>
Market
Shares Value ($)
- -------------------------------------------------------
First Data Corp. .......... 283,900 13,893,356
First Union Corp. ......... 623,085 29,284,995
Firstar Corp. ............. 442,400 12,387,200
FirstEnergy Corp. ......... 152,384 4,723,904
Fleet Financial Group, Inc. 394,888 17,523,155
Fleetwood Enterprises, Inc. 22,406 592,359
Florida Progress Corp. .... 62,700 2,590,294
Fluor Corp. ............... 47,681 1,931,080
FMC Corp.* ................ 20,850 1,424,316
Ford Motor Co. ............ 782,644 44,170,471
Fort James Corp. .......... 138,985 5,264,057
Fortune Brands, Inc. ...... 111,574 4,616,374
Foster Wheeler Corp. ...... 30,738 434,174
FPL Group, Inc. ........... 117,794 6,434,497
Franklin Resources, Inc. .. 172,120 6,992,375
Freddie Mac ............... 435,714 25,271,412
Freeport-McMoRan Copper &
Gold, Inc. -- Class B* 79,700 1,429,619
Frontier Corp. ............ 114,100 6,731,900
Fruit of The Loom, Inc. --
Class A* ................ 46,300 451,425
Gannett Company, Inc. ..... 180,592 12,889,754
Gap, Inc. ................. 548,334 27,622,325
Gateway, Inc.* ............ 89,200 5,262,800
General Dynamics Corp. .... 81,744 5,599,464
General Electric Co. ...... 2,101,744 237,497,072
General Instrument Corp.* . 103,100 4,381,750
General Mills, Inc. ....... 98,269 7,898,371
General Motors Corp. ...... 419,634 27,695,844
Genuine Parts Co. ......... 115,226 4,032,910
Georgia-Pacific Corp. ..... 112,802 5,343,995
Gillette Co. .............. 711,316 29,163,956
Golden West Financial Corp. 37,317 3,657,066
Goodrich (B.F.) Co. ....... 47,752 2,029,460
Goodyear Tire & Rubber Co. 100,136 5,889,248
Market
Shares Value ($)
- --------------------------------------------------------------
GPU, Inc. ........................ 64,400 2,716,875
Great Atlantic & Pacific Tea Co.,
Inc ............................ 24,525 829,252
Great Lakes Chemical Corp. ....... 37,796 1,740,978
GTE Corp. ........................ 623,636 47,240,427
Guidant Corp.* ................... 204,400 10,513,825
H & R Block, Inc. ................ 69,735 3,486,750
H.J. Heinz Co. ................... 259,525 13,008,691
Halliburton Company .............. 281,962 12,758,780
Harcourt General, Inc. ........... 38,839 2,002,636
Harrah's Entertainment, Inc.* .... 58,815 1,293,930
Harris Corp. ..................... 55,742 2,184,390
Hartford Financial Services Group,
Inc ............................ 146,546 8,545,464
Hasbro, Inc. ..................... 123,470 3,449,443
HCR Manor Care, Inc.* ............ 68,900 1,666,519
HEALTHSOUTH Corp.* ............... 252,500 3,771,719
Helmerich and Payne .............. 31,616 752,856
Hercules, Inc. ................... 70,514 2,772,082
Hershey Foods Corp. .............. 81,894 4,862,456
Hewlett-Packard Co. .............. 650,840 65,409,420
Hilton Hotels Corp. .............. 166,541 2,362,800
Home Depot, Inc. ................. 953,152 61,418,732
Homestake Mining Co. ............. 149,343 1,222,746
Honeywell, Inc. .................. 83,119 9,631,414
Household International, Inc. .... 309,585 14,666,589
Humana, Inc.* .................... 105,000 1,358,437
Huntington Bancshares, Inc. ...... 135,070 4,727,450
Ikon Office Solutions, Inc. ...... 81,162 1,217,430
Illinois Tool Works, Inc. ........ 151,192 12,397,744
IMS Health, Inc. ................. 220,858 6,901,812
Inco, Ltd.* ...................... 80,266 1,444,788
Ingersoll-Rand Co. ............... 105,946 6,846,760
Intel Corp. ...................... 2,133,956 126,970,382
The accompanying notes are an integral part of the financial statements.
18 - Equity 500 Index Portfolio
<PAGE>
Market
Shares Value ($)
- ---------------------------------------------------------------
International Business Machines
Corp ............................ 1,163,764 150,416,497
International Flavors & Fragrances,
Inc ............................. 65,287 2,897,111
International Paper Co. ........... 265,474 13,406,437
Interpublic Group of Companies,
Inc ............................. 83,360 7,221,060
ITT Industries .................... 59,423 2,265,502
J.C. Penney Co., Inc. ............. 169,550 8,233,772
Jefferson-Pilot Corp. ............. 67,965 4,498,433
Johnson & Johnson ................. 862,396 84,514,808
Johnson Controls, Inc. ............ 47,154 3,268,362
Jostens, Inc. ..................... 7,839 165,109
Kansas City Southern Inds ......... 70,400 4,492,400
Kaufman & Broad Home Corp. ........ 29,045 722,494
Kellogg Co. ....................... 252,314 8,326,362
Kerr-McGee Corp. .................. 60,831 3,052,956
KeyCorp ........................... 319,000 10,247,875
Kimberly Clark Corp. .............. 347,406 19,802,142
King World Productions, Inc.* ..... 47,512 1,654,011
KLA/Tencor Corp.* ................. 58,800 3,814,650
Kmart Corp.* ...................... 315,503 5,186,081
Knight-Ridder, Inc. ............... 58,826 3,231,753
Kohls Corp.* ...................... 98,800 7,626,125
Kroger Co. ........................ 513,740 14,352,611
Laidlaw, Inc. ..................... 153,900 1,135,012
Lehman Brothers, Inc. ............. 75,700 4,712,325
Limited, Inc. ..................... 133,741 6,068,498
Lincoln National Corp. ............ 138,020 7,220,171
Liz Claiborne, Inc. ............... 44,403 1,620,709
Lockheed Martin Corp. ............. 251,610 9,372,472
Loews Corp. ....................... 63,300 5,008,612
Longs Drug Stores, Inc. ........... 24,926 861,505
Louisiana-Pacific Corp. ........... 74,958 1,780,252
Lowe's Companies, Inc. ............ 236,688 13,417,251
Market
Shares Value ($)
- -----------------------------------------------------------
LSI Logic Corp.* .............. 85,000 3,920,625
Lucent Technologies, Inc. ..... 1,924,322 129,771,431
Lyondell Chemical Co. ......... 38 784
Mallinckrodt Group, Inc. ...... 49,702 1,807,910
Marriott International ........ 155,680 5,818,540
Marsh and McLennan ............ 179,286 13,536,093
Masco Corp. ................... 225,022 6,497,510
Mattel, Inc. .................. 267,265 7,065,818
May Department Stores Co. ..... 216,447 8,847,271
Maytag Corp. .................. 58,812 4,098,461
MBIA, Inc. .................... 63,700 4,124,575
MBNA Corp. .................... 514,137 15,745,446
McDermott International, Inc. . 37,087 1,047,708
McDonald's Corp. .............. 867,728 35,848,013
McGraw-Hill, Inc. ............. 137,960 7,441,217
MCI WorldCom, Inc.* ........... 1,193,213 102,914,621
Mckesson Hboc, Inc. ........... 178,773 5,743,083
Mead Corp. .................... 65,902 2,751,408
MediaOne Group* ............... 389,228 28,948,832
Medtronic, Inc. ............... 374,704 29,180,074
Mellon Bank Corp. ............. 334,848 12,180,096
Mercantile Bancorporation, Inc. 101,000 5,769,625
Merck & Co., Inc. ............. 1,513,794 112,020,756
Meredith Corp. ................ 33,372 1,155,505
Meritor Automotive ............ 66 1,683
Merrill Lynch & Co., Inc. ..... 228,976 18,303,769
MGIC Investment Corp. ......... 75,300 3,661,462
Micron Technology, Inc. ....... 152,700 6,155,719
Microsoft Corp.* .............. 3,263,800 294,353,962
Milacron, Inc. ................ 19,447 359,769
Millipore Corp. ............... 28,492 1,155,707
Minnesota Mining &
Manufacturing Co. ........... 258,178 22,445,350
Mirage Resorts, Inc.* ......... 126,100 2,112,175
Mobil Corp. ................... 508,642 50,355,558
The accompanying notes are an integral part of the financial statements.
19 - Equity 500 Index Portfolio
<PAGE>
Market
Shares Value ($)
- -----------------------------------------------------------
Momentum Business
Applications* ................. 52 367
Monsanto Co. .................... 398,620 15,720,576
Morgan Stanley Dean Witter
Discover & Co. .............. 370,433 37,969,382
Morgan, (J.P.) & Co., Inc. ...... 112,960 15,870,880
Motorola, Inc. .................. 384,842 36,463,780
Nabisco Group Holdings .......... 211,000 4,127,688
NACCO Industries, Inc. --
Class A ....................... 3,827 281,285
Nalco Chemical Company .......... 41,925 2,174,859
National City Corp. ............. 210,600 13,794,300
National Semiconductor Corp.* ... 106,826 2,704,033
National Service Industries, Inc. 31,826 1,145,736
Navistar International Corp. .... 39,758 1,987,900
Network Appliance, Inc.* ........ 46,700 2,609,363
New Century Energies, Inc. ...... 71,000 2,755,688
New York Times Co. -- Class A ... 123,468 4,545,166
Newell Rubbermaid Inc ........... 183,096 8,513,964
Newmont Mining Corp. ............ 118,810 2,361,349
Nextel Communications, Inc. --
Class A* ...................... 184,500 9,259,594
Niagara Mohawk Power Corp. ...... 78,242 1,256,762
NICOR, Inc. ..................... 35,869 1,365,264
Nike, Inc. ...................... 179,348 11,354,970
Nordstrom, Inc. ................. 94,558 3,167,693
Norfolk Southern Corp. .......... 243,453 7,334,022
Nortel Networks Corporation ..... 431,662 37,473,657
Northern States Power Co. ....... 77,088 1,864,566
Northern Trust Corp. ............ 73,500 7,129,500
Northrop Grumman Corp. .......... 55,579 3,685,582
Novell, Inc.* ................... 222,092 5,885,438
Nucor Corp. ..................... 57,094 2,708,397
Occidental Petroleum Corp. ...... 221,814 4,685,821
Office Depot, Inc.* ............. 232,300 5,125,119
Market
Shares Value ($)
- ---------------------------------------------------------
Omnicom Group, Inc. ........... 112,500 9,000,000
Oneok, Inc. ................... 17,791 564,864
Oracle Corp.* ................. 935,084 34,714,994
Owens Corning ................. 34,750 1,194,531
Owens-Illinois, Inc.* ......... 97,500 3,187,031
P P & L Resources ............. 83,307 2,561,690
Paccar, Inc. .................. 63,980 3,414,933
Pacificorp .................... 253,389 4,656,023
Paine Webber Group, Inc. ...... 89,900 4,202,825
Pall Corp. .................... 80,664 1,789,733
Parametric Technology Corp.* .. 187,000 2,594,625
Parker-Hannifin Corp. ......... 84,414 3,861,941
Paychex, Inc. ................. 165,150 5,264,156
Pe Corp. -- Pe Biosystems Group 32,225 3,697,819
PECO Energy ................... 126,384 5,292,330
People's Energy Corp. ......... 22,655 853,810
Peoplesoft, Inc.* ............. 149,300 2,575,425
Pep Boys (Manny Moe & Jack) ... 33,612 726,860
PepsiCo, Inc. ................. 941,994 36,443,393
Pfizer, Inc. .................. 832,228 91,337,023
PG&E Corp. .................... 257,305 8,362,413
Pharmacia & Upjohn, Inc. ...... 325,732 18,505,649
Phelps Dodge Corp. ............ 37,108 2,298,377
Philip Morris Companies ....... 1,558,198 62,620,082
Phillips Petroleum Co. ........ 162,006 8,150,927
Pioneer Hi-Bred International,
Inc. ........................ 153,520 5,977,685
Pitney Bowes, Inc. ............ 174,796 11,230,643
Placer Dome, Inc. ............. 151,104 1,784,916
PNC Bank Corp. ................ 194,133 11,186,914
Polaroid Corp. ................ 33,582 927,703
Potlatch ...................... 18,501 812,888
PPG Industries, Inc. .......... 112,342 6,635,199
Praxair, Inc. ................. 101,115 4,948,315
Procter & Gamble Co. .......... 851,240 75,973,170
The accompanying notes are an integral part of the financial statements.
20 - Equity 500 Index Portfolio
<PAGE>
Market
Shares Value ($)
- ---------------------------------------------------------
Progressive Corporation of Ohio 46,450 6,735,250
Prologis Trust ................ 62 1,256
Provident Companies, Inc. ..... 85,800 3,432,000
Providian Financial Corp. ..... 90,797 8,489,520
Public Service Enterprise Group 143,294 5,857,142
Pulte Corp. ................... 29,832 688,001
Quaker Oats Co. ............... 94,184 6,251,463
R.R. Donnelley & Sons Co. ..... 86,052 3,189,302
Ralston Purina Group .......... 207,815 6,325,369
Raychem Corp. ................. 51,976 1,923,112
Raytheon Co. -- Class B ....... 217,114 15,279,398
Reebok International Ltd.* .... 35,129 654,278
Regions Financial Corp. ....... 136,170 5,234,034
Reliant Energy ................ 169,592 4,684,979
Republic New York Corp. ....... 76,600 5,223,163
Reynolds Metals Co. ........... 49,249 2,905,691
Rite Aid Corp. ................ 183,502 4,518,737
Rj Reynolds Tobacco Hldgs ..... 66 2,079
Rockwell International Corp. .. 135,424 8,227,008
Rohm & Haas Co. ............... 134,492 5,766,330
Rowan Companies, Inc.* ........ 51,700 953,219
Royal Dutch Petroleum Co. ..... 1,363,504 82,151,116
Russell Corp. ................. 23,111 450,665
Ryder Systems, Inc. ........... 46,017 1,196,442
Safeco ........................ 93,902 4,143,426
Safeway, Inc.* ................ 326,500 16,161,750
Sara Lee Corp. ................ 583,554 13,239,381
SBC Communications, Inc. ...... 1,254,428 72,756,824
Schering-Plough Corp. ......... 942,432 49,948,896
Schlumberger Ltd. ............. 352,562 22,453,792
Scientific-Atlanta, Inc. ...... 48,438 1,743,768
Seagate Technology, Inc.* ..... 156,400 4,007,750
Seagram Co. Ltd. .............. 286,737 14,444,376
Sealed Air Corp.* ............. 53,605 3,477,624
Sears, Roebuck & Co. .......... 245,609 10,944,951
Market
Shares Value ($)
- ------------------------------------------------------
Sempra Energy .............. 132,514 2,998,129
Service Corp. International 175,992 3,387,846
Shared Medical Systems Corp. 17,074 1,114,079
Sherwin-Williams Co. ....... 115,474 3,204,404
Sigma Aldrich Corp. ........ 65,600 2,259,100
Silicon Graphics, Inc.* .... 119,215 1,952,146
SLM Holding Corp. .......... 106,200 4,865,288
Snap-On Tools Corp. ........ 41,094 1,487,089
Solectron Corp.* ........... 161,500 10,770,031
Sonat, Inc. ................ 68,910 2,282,644
Southern Co. ............... 447,458 11,857,637
Southtrust Corp ............ 118,200 4,535,925
Southwest Airlines Co. ..... 215,800 6,716,775
Springs Industries, Inc. --
Class A .................. 7,104 309,912
Sprint Corp. ............... 583,064 30,793,068
Sprint PCS* ................ 278,791 15,925,936
St. Jude Medical, Inc. ..... 50,588 1,802,198
St. Paul Companies, Inc. ... 151,228 4,810,941
Stanley Works .............. 54,830 1,764,841
Staples, Inc.* ............. 314,200 9,720,563
State Street Corp. ......... 102,700 8,768,013
Summit Bancorp ............. 119,100 4,979,869
Sun Microsystems, Inc.* .... 499,912 34,431,439
Sunoco, Inc. ............... 62,745 1,894,115
Suntrust Banks, Inc. ....... 205,460 14,266,629
SuperValu, Inc. ............ 73,940 1,899,334
Synovus Financial Corp. .... 146,950 2,920,631
Sysco Corp. ................ 213,420 6,362,584
Tandy Corp. ................ 126,932 6,203,802
Tektronix, Inc. ............ 30,207 911,874
Tellabs, Inc.* ............. 249,150 16,833,197
Temple Inland, Inc. ........ 41,122 2,806,577
Tenet Healthcare Corp.* .... 193,410 3,590,173
Tenneco, Inc. .............. 118,234 2,822,837
The accompanying notes are an integral part of the financial statements.
21 - Equity 500 Index Portfolio
<PAGE>
Market
Shares Value ($)
- ----------------------------------------------------------
Texaco, Inc. ................... 361,622 22,601,375
Texas Instruments, Inc. ........ 248,756 36,069,620
Texas Utilities Co. ............ 182,127 7,512,739
Textron, Inc. .................. 97,606 8,034,194
Thermo Electron Corp.* ......... 96,300 1,932,019
Thomas & Betts Corp. ........... 39,400 1,861,650
Time Warner, Inc. .............. 755,830 55,553,505
Times Mirror Co. -- Class A .... 46,329 2,744,993
Timken Co. ..................... 35,396 690,222
TJX Companies, Inc. ............ 215,816 7,189,371
Torchmark Corp. ................ 87,068 2,971,196
Toys 'R' Us, Inc.* ............. 168,118 3,477,941
Transamerica Corp. ............. 80,786 6,058,950
Tribune Co. .................... 76,096 6,629,864
Tricon Global Restaurants, Inc.* 98,899 5,352,908
TRW, Inc. ...................... 76,772 4,212,864
Tupperware Corp. ............... 36,896 940,848
Tyco International Ltd. ........ 516,606 48,948,419
U.S. Bancorp ................... 476,637 16,205,658
U.S. West, Inc. ................ 322,755 18,961,856
Unicom Corp. ................... 170,225 6,564,302
Unilever NV .................... 351,346 24,506,384
Union Carbide Corp. ............ 85,152 4,151,160
Union Pacific Corp. ............ 158,747 9,256,934
Union Pacific Resources Group,
Inc .......................... 160,948 2,625,464
Union Planters Corp. ........... 83,200 3,718,000
Unisys Corp.* .................. 160,499 6,249,430
United Healthcare Corp. ........ 119,500 7,483,688
United Technologies Corp. ...... 310,324 22,246,352
Unocal Corp. ................... 154,737 6,131,454
UNUM Corp. ..................... 89,800 4,916,550
US Airways Group, Inc.* ........ 48,715 2,122,147
UST, Inc. ...................... 123,407 3,609,655
USX -- U.S. Steel Group ........ 62,377 1,684,179
Market
Shares Value ($)
- -------------------------------------------------------------------------
USX Marathon Group ...................... 193,064 6,286,647
V.F. Corp. .............................. 76,930 3,288,758
Viacom, Inc.-- Class B* ................. 450,898 19,839,512
Vulcan Materials Co. .................... 65,100 3,141,075
W.R. Grace & Co.* ....................... 47,049 864,525
W.W. Grainger, Inc. ..................... 61,530 3,311,083
Wachovia Corp. .......................... 125,710 10,756,062
Wal-Mart Stores, Inc. ................... 2,837,496 136,909,182
Walgreen Co. ............................ 626,136 18,392,745
Walt Disney Co. ......................... 1,318,271 40,619,225
Warner-Lambert Co. ...................... 544,358 37,764,836
Washington Mutual, Inc. ................. 379,172 13,413,210
Waste Management, Inc. .................. 390,151 20,970,616
Watson Pharmaceuticals* ................. 58,600 2,054,663
Wellpoint Health Networks* .............. 40,400 3,428,950
Wells Fargo Company ..................... 1,054,236 45,068,589
Wendy's International, Inc. ............. 84,662 2,396,993
Westvaco Corp. .......................... 62,760 1,820,040
Weyerhaeuser Co. ........................ 128,594 8,840,838
Whirlpool Corp. ......................... 49,839 3,688,086
Willamette Industries, Inc. ............. 65,100 2,998,669
Williams Companies, Inc. ................ 301,036 12,812,845
Winn Dixie Stores, Inc. ................. 76,880 2,839,755
Wm. Wrigley, Jr. Co. .................... 74,392 6,695,280
Worthington Industries, Inc. ............ 56,579 930,017
Xerox Corp. ............................. 420,470 24,834,009
- -------------------------------------------------------------------------
Total Common Stocks (Cost $4,624,473,581) 7,219,251,149
- -------------------------------------------------------------------------
% of
Net Assets
- -------------------------------------------------------------------------
Total Investment Portfolio
(Cost $4,786,070,624) ..... 103.6% 7,380,848,192
Other Assets Less Liabilities (3.6)% (253,903,135)
----- --------------
Net Assets .................. 100.0% 7,126,945,057
===== ==============
* Non-income producing security.
(a) Held as collateral for futures contracts.
The accompanying notes are an integral part of the financial statements.
22 - Equity 500 Index Portfolio
<PAGE>
Financial Statements
Equity 500 Index Portfolio
Statement of Operations
for the six months ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Investment Income
- ---------------------------------------------------------------------------------------------
<S> <C>
Income:
Dividends (net of foreign withholding tax of $853,040) .... $ 50,446,337
Interest* ................................................. 230,889
-------------
Total investment income ................................... 50,677,226
Expenses:
Advisory fees ............................................. 2,388,171
Administration and services fees .......................... 139,626
Professional fees ......................................... 17,157
Trustees' fees ............................................ 1,613
Miscellaneous ............................................. 815
-------------
2,547,382
---------------------------------------------------------------------------
Net investment income 48,129,844
---------------------------------------------------------------------------
Realized and Unrealized Gain on Investments and Futures Contracts
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) from investment transactions ..... (20,205,629)
Net realized gain from futures transactions ............... 7,878,722
Net change in unrealized appreciation on investments ...... 692,807,362
Net change in unrealized appreciation on futures contracts 4,463,160
-------------
Net realized and unrealized gain on investments and futures
contracts ............................................... 684,943,615
---------------------------------------------------------------------------
Net increase in net assets from operations $ 733,073,459
---------------------------------------------------------------------------
</TABLE>
* Includes $3,787,178 from the Portfolio's investment in the
BT Institutional Cash Management Fund.
The accompanying notes are an integral part of the financial statements.
23 - Equity 500 Index Portfolio
<PAGE>
Equity 500 Index Portfolio
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended Years Ended
June 30, 1999 December 31,
Increase (Decrease) in Net Assets (Unaudited) 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ............. $ 48,129,844 $ 58,364,731
Net realized gain (loss) from
investments and futures
transactions .................... (12,326,907) 35,274,688
Net change in unrealized
appreciation on investments and
futures contracts .............. 697,270,522 895,089,518
--------------- ---------------
Net increase in net assets from
operations ...................... 733,073,459 988,728,937
--------------- ---------------
Capital Transactions:
Proceeds from capital invested .... 2,666,490,800 2,853,940,069
Value of capital withdrawn ........ (1,473,123,612) (1,445,251,067)
--------------- ---------------
Net increase in net assets from
capital transactions ............ 1,193,367,188 1,408,689,002
--------------- ---------------
Total increase in net assets ...... 1,926,440,647 2,397,417,939
Net assets at beginning of year ... 5,200,504,410 2,803,086,471
---------------- ----------------
Net assets at end of year ......... $ 7,126,945,057 $ 5,200,504,410
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
24 - Equity 500 Index Portfolio
<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, 1999 For the Year Ended December 31,
(Unaudited) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Supplemental Data and Ratios
Net assets, end of period (000s omitted) ................ $7,126,945 $5,200,504 $2,803,086 $1,925,224 $1,080,736 $559,772
Ratios to average net assets:
Net investment income (%) ............................... 1.51* 1.50 1.76 2.20 2.52 2.84
Expenses (%) ............................................ 0.08* 0.08 0.08 0.10 0.10 0.10
Decrease reflected in above expense ratio due to expenses
reimbursed and or fees waived by Bankers Trust (%) .... -- 0.02 0.07 0.05 0.05 0.06
Portfolio turnover rate (%) ............................. 10 4 19 15 6 21
</TABLE>
* Annualized
25 - Equity 500 Index Portfolio
<PAGE>
Notes to Financial Statements
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 accretion of 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 which are contracts to
buy a standard quantity of securities at a specified price on a future date. The
Portfolio is required to deposit either cash or securities in an amount equal to
a certain percentage of the contract amount. Variation margin 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
The Portfolio is considered a partnership under the Internal Revenue Code.
Therefore, no federal income tax provision is required.
26 - 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"). The Administration and Services
Agreement provides for the Portfolio to pay the Adviser a fee, accrued daily and
paid monthly, computed as a percentage of the average daily net assets of the
Portfolio which on an annual basis is equal to the lesser of (1) 0.005% or (2)
the amount that brings the total annual operating expenses as a percentage of
the Portfolio's average daily net assets up to 0.08%. For the period January 1,
1998 to May 6, 1998, the Administration and Services Fee was 0.05% on an accrual
basis. For the six months ended June 30, 1999, Administration and Services Fees
amounted to $139,626.
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 May 6, 1998 the
Advisory fee was .10%. For the six months ended June 30, 1999, Advisor Fees
amounted to $2,388,171, of which $267,757 was payable at the end of the period.
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.
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, 1999 amounted to $3,787,178 and are included in
dividend income.
The Portfolio is a participant with other affiliated entities in a revolving
credit facility in the amount of $100,000,000, which expires April 29, 2000. A
commitment fee of .10% 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 facility will bear interest at a
rate per annum equal to the Federal Funds Rate plus .50%. No amounts were drawn
down or outstanding under the credit facility as of and for the six months ended
June 30, 1999.
For the six months ended June 30, 1999, the Portfolio paid affiliated brokerage
commissions of $16,526.
Bankers Trust Company is a wholly owned subsidiary of Bankers Trust Corporation.
In November 1998 Bankers Trust Corporation ("BT Corp.") and, Deutsche Bank AG
("Deutsche Bank") and Circle Acquisition Corporation ("Circle") entered into an
Agreement and Plan of Merger which was consummated on June 4, 1999. As a result
of the transaction, BT Corp. became a wholly-owned subsidiary of Deutsche Bank.
27 - 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 months ended June 30, 1999, were
$1,976,610,265 and $615,765,892, respectively. For federal income tax purposes,
the tax basis of investments held at June 30, 1999 was $4,804,171,277. The
aggregate gross unrealized appreciation was $2,665,663,652, and the aggregate
gross unrealized depreciation was $88,986,737 for all investments as of June 30,
1999. Payable for securities purchased at June 30, 1999 amounted to
$318,781,154.
Note 4 - Futures Contracts
A summary of obligations under these financial instruments at June 30, 1999 is
as follows:
<TABLE>
<CAPTION>
Unrealized
Type of Future Expiration Contracts Position Market Value ($) Appreciation ($)
- -------------- ---------- --------- -------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
S&P 500 Index Futures September 1999 592 Long 204,491,600 5,603,496
</TABLE>
At June 30, 1999, the Portfolio segregated approximately $12,540,000 to cover
margin requirements on open futures contracts.
Note 5 - Net Assets
Paid-in capital ...................................... $4,526,563,993
Net unrealized appreciation on investments and futures 2,600,381,064
--------------
Total net assets ..................................... $7,126,945,057
==============
28 - Equity 500 Index Portfolio
<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 --
Prime Reserve Shares*
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 GNMA Fund
Scudder Income Fund
Scudder Corporate Bond 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 Select 500 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 Select 1000 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
Preferred Series
- ----------------
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small
Company Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
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.
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 or classes thereof 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. +++
+++ +++A no-load variable annuity contract issued by Glenbrook Life and Annuity
Company and underwritten by Allstate Financial Services, Inc., sold 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.
29 - 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:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- www.scudder.com
1-800-343-2890
Personal Investment Organizer: 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
- ------------------------------------------------------------------------------------------------------------------------------
30 - 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
800 no-load funds from well-known companies--with no
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder
Brokerage account already reserved for them, with
no minimum investment. For information about
Scudder Brokerage Services, call 1-800-700-0820.
Fund Folio funds held less than six months will be charged a transaction fee. 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.
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>
31 - 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 organizations worldwide, managing more than $280 billion
in assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 80
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Financial Services 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 Financial Services Group. The Zurich Financial Services 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
