Scudder
Tax Managed
Growth Fund
Semiannual Report
April 30, 1999
No-Load Funds
A no-load mutual fund which seeks long-term growth of capital on an after-tax
basis through investment in equity securities of established, medium- to
large-sized U.S. companies.
SCUDDER
<PAGE>
Scudder Tax Managed Growth Fund
- --------------------------------------------------------------------------------
Date of Inception: 9/18/98 Total Net Assets as of 4/30/99: $3.93 million
- --------------------------------------------------------------------------------
o Scudder Tax Managed Growth Fund posted a 12.43% total return for its most
recent semiannual period ended April 30, 1999. Over the same period, the S&P 500
Index returned 22.32%
o The Fund is broadly diversified, with 138 separate holdings and no position
greater than 2% of portfolio assets. At the close of the period, the Fund's
median market cap was $4 billion, compared with the $8.4 billion market cap of
the S&P 500 Index.
o Management follows a disciplined approach to selecting attractive growth
stocks and managing a tax-efficient portfolio, as it pursues its goal of seeking
long-term growth of capital on an after-tax basis from large-cap stocks with
above-average return potential.
Table of Contents
3 Letter from the Fund's President 19 Financial Highlights
4 Performance Update 20 Notes to Financial Statements
5 Portfolio Summary 22 Shareholder Meeting Results
6 Portfolio Management Discussion 24 Trustees and Officers
8 Glossary of Investment Terms 25 Investment Products and Services
9 Investment Portfolio 26 Scudder Solutions
16 Financial Statements
2 - Scudder Tax Managed Growth Fund
<PAGE>
Letter from the Fund's President
Dear Shareholders,
We are pleased to report to you the results of Scudder Tax Managed Growth
Fund's first full semiannual period ended April 30, 1999. The Fund posted a
12.43% return over the period, compared with the 22.32% return of the S&P 500
Index. Much of the market's progress over the latter part of 1998 through March
1999 was driven by the outperformance of a small number of Internet stocks with
little or no earnings, and extremely high market capitalizations and price
multiples. Although the Fund's return fell substantively short of its benchmark,
we are hopeful that April's results, where the Fund outperformed the S&P 500
Index by almost two percentage points, indicates the start of a much broader
market rally.
In the interview that begins on page 6, the Fund's managers describe how
their investment process is designed to maximize shareholders' after-tax returns
by systematically analyzing each stock's potential return on an after-tax basis.
They also describe their use of a quantitative valuation model that takes into
account several key investment characteristics in selecting securities for the
portfolio and their approach to risk control.
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 pursuing 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 Tax Managed Growth Fund or any
other Scudder fund, please call Investor Relations at 1-800-225-2470. Or visit
Scudder's Web site at www.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Tax Managed Growth Fund
3 - Scudder Tax Managed Growth Fund
<PAGE>
Performance Update as of April 30, 1999
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Fund Index Comparison
-------------------------------------------------------------------------------
Total Return
-------------------------------------------------------------------------------
<S> <C> <C>
Period Ended Growth of
4/30/1999 $ 10,000 Cumulative
-------------------------------------------------------------------------------
Tax Managed Growth Fund
Life of Fund* $ 11,927 19.27%
-------------------------------------------------------------------------------
S&P 500 Index
Life of Fund* $ 13,237 32.37%
-------------------------------------------------------------------------------
* The Fund commenced operations on September 18, 1998.
Index comparisons begin September 30, 1998.
</TABLE>
- -----------------------------------
Growth of a $10,000 Investment
- -----------------------------------
THE PRINTED DOCUMENT CONTAINS A LINE CHART HERE
CHART DATA:
Scudder Tax
S&P 500 Index Managed Growth Fund
9/98* 10000 10000
10/98 10813 10617
11/98 11468 11259
12/98 12129 11811
1/99 12636 11401
2/99 12243 11141
3/99 12733 11300
4/99 13225 11937
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 reinvested dividends and, unlike Fund
returns, do not reflect any fees or expenses.
- ------------------------------------------
Returns and Per Share Information
- ------------------------------------------
Period ended April 30
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
ILLUSTRATING THE FUND TOTAL RETURN (%) AND
INDEX TOTAL RETURN (%)
CHART DATA:
1999*
- -------------------------------------------------------------------------------
Net Asset Value $ 14.25
- -------------------------------------------------------------------------------
Income Dividends $ .06
- -------------------------------------------------------------------------------
Capital Gains Distributions $ --
- -------------------------------------------------------------------------------
Fund Total Return (%) 19.27
- -------------------------------------------------------------------------------
Index Total Return (%) 32.27
- -------------------------------------------------------------------------------
Performance is historical and 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 Tax Managed Growth Fund
<PAGE>
Portfolio Summary as of April 30, 1999
- -------------------------------------------------------
Diversification
- -------------------------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the table below.
Common Stock 100%
--------------------------------------
100%
--------------------------------------
The Fund pursues a fully invested approach to seeking long-term growth of
capital from mid- and large-cap stocks on an after-tax basis.
- -------------------------------------------------------
Sectors
- -------------------------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the table below.
Financial 20%
Consumer Discretionary 14%
Manufacturing 14%
Technology 9%
Durables 7%
Health 7%
Service Industries 6%
Utilities 6%
Communications 4%
Other 13%
--------------------------------------
100%
--------------------------------------
The Fund's sector allocations are the result of individual stock selections,
rather than bets on specific industry sectors.
- -------------------------------------------------------
Ten Largest Equity Holdings
(14% of Portfolio)
- -------------------------------------------------------
1. Chevron Corp.
International energy company
2. Comverse Technologies Inc.
Designs, manufactures, markets
and supports various software for
multimedia communications
3. Ford Motor Co.
Leading automobile manufacturer
4. SBC Communications, Inc.
Telecommunication company
5. Hewlett-Packard Co.
Measurement and test instruments,
computer systems
6. Wal-Mart Stores Inc.
Operator of discount stores
7. Charles Schwab Corp.
Discount brokerage services
8. BellSouth Corp.
Telecommunications services
9. General Motors Corp.
Leading automotive manufacturer
10. Dow Chemical Co.
Chemical producer
The Fund's top holdings are the result of a proprietary, quantitative approach
to identifying attractively valued growth stocks with above-average return
potential.
For more complete details about the Fund's investment portfolio, see page 9. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
5 - Scudder Tax Managed Growth Fund
<PAGE>
Portfolio Management Discussion
In the following interview, Portfolio Managers Robert Tymoczko and Philip
Fortuna discuss the Fund's market environment and strategy for the six-month
period ended April 30, 1999.
Q: How did Scudder Tax Managed Growth Fund perform over the past six months?
A: The Fund posted a 12.43% total return over its most recent semiannual period,
compared with the 22.32% return of the S&P 500 Index.
Q: Why did the Fund underperform the S&P 500 Index over the period?
A: Much of the shortfall comes from the fact that during most of the period,
especially in large cap stocks, the market was led by about 20 names that
largely drove the indices. As part of its investment process, the Fund invests
in a much larger pool of more attractively valued stocks that tend to have a
lower market capitalization. That made the biggest difference in performance
over this period. We believe that the market rally, in order to go forward, has
to expand leadership. For the first time since the Fund's inception, that
expansion finally took place in April, when the Fund outperformed the S&P 500 by
almost two percentage points.
Q: Does the Fund have a value bias, despite its large cap growth orientation?
A: The investment strategies that we use aren't necessarily biased toward value
stocks, but when you have such overvaluation within the growth stocks, that
tends to make it look like our investment strategy is more value oriented than
it really is. We think you're going to see a lot more of a push towards value in
the current market environment. In another market environment where there's
broader participation among the growth and value stocks, the Fund won't display
a bias towards one or the other. What we're doing now is avoiding overvalued
growth stocks rather than actively pursuing value stocks.
Q: Within the Fund's universe of 1,000 mid- and large-cap stocks, how does
the Fund assess each stock's return potential?
A: We rely on a proprietary, quantitative screening process to identify
attractively valued stocks with above-average capital appreciation potential. We
consider three primary factors: valuation, trends in sales and earnings, and
price momentum. Our valuation measures tell us how inexpensive the security is
relative to the overall growth stock universe. Sales and earnings trends suggest
whether the company's fundamentals are stable, improving, or deteriorating.
Price momentum allows us to assess how the market is responding to these
fundamentals. Each company is then ranked based on its relative attractiveness.
Q: How are these rankings used to manage a tax-efficient portfolio?
A: First, we build a diversified portfolio of attractively rated companies.
To limit individual security risk and provide trading flexibility, we typically
hold more than 125 securities. On an ongoing basis, we then use a tax-aware
portfolio optimization process to determine which securities should be replaced
due to diminishing growth prospects, while creating the lowest tax impact for
shareholders. The process allows us to keep the portfolio focused on
attractively rated companies,
6 - Scudder Tax Managed Growth Fund
<PAGE>
while managing overall portfolio risk and the tax consequences of portfolio
turnover.
Q: Do you make adjustments to the Fund's investment model?
A: In using a model to help select investments, there are different
approaches that are used in the industry. Some funds try to dynamically adjust
their model based on the latest market environment. This is another form of a
market timing strategy, and not one that we follow. Our approach is to attempt
to incrementally improve the models that we're using over time. Any changes to
the model are infrequent and very gradual in nature. These might include seeking
out an additional data source, or refining the way we calculate factors such as
a company's cash flow or normalized earnings. They are fine tuning adjustments
that would be hard to detect looking at the Fund's portfolio characteristics but
are meant to ensure that each factor included in the model is working as
intended. If there are new factors that we've identified through our experience
or research, we try to incorporate that into the process.
Q: What is your outlook for the Fund?
A: Scudder Tax Managed Growth Fund has a much lower weighted market
capitalization than its benchmark. This reflects our belief that the most
attractively valued stocks with the best fundamentals are not necessarily to be
found in the S&P 500's largest 20 stocks. We believe that there are many
attractively valued companies in the mid-cap range, and we're hopeful that the
broadening of the market that we spoke of earlier will continue. We believe the
Fund continues to be an appropriate vehicle for investors seeking long-term
growth of capital on an after-tax basis.
7 - Scudder Tax Managed Growth Fund
<PAGE>
Glossary of Investment Terms
GROWTH STOCK Stock of a company that has displayed greater than
average earnings growth and is expected to continue
to increase profits rapidly going forward. Stocks of
such companies usually trade at higher price
relative to earnings (higher P/E) and can exhibit
greater price volatility.
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.
OVER/UNDER WEIGHTING Refers to the allocation of assets -- usually by
sector, industry, or country -- within a
portfolio relative to a benchmark index, (e.g., the
Russell 1000 Index) or an investment universe.
PRICE/EARNINGS RATIO A widely used gauge of a stock's valuation that
(P/E) (also "earnings indicates what investors are paying for a company's
multiple") earnings on a per share basis. A higher "earnings
multiple" indicates a higher expected growth rate and
the potential for greater price fluctuations.
QUANTITATIVE MODEL A systematic approach to evaluating a security based
on its financial characteristics.
STANDARD DEVIATION A statistical measure of the degree to which an
investment's return tends to vary from the
mean return. Frequently used in portfolio management
to measure the variability of past returns and to
gauge the likely range of possible future returns.
TAX BASIS The price paid by an investor for a stock or
bond plus any out-of-pocket expenses such as
brokerage commissions. A security's basis is used to
determine capital gains or losses for tax purposes
when the stock is sold.
(Sources: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
8 - Scudder Tax Managed Growth Fund
<PAGE>
Investment Portfolio as of April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Market
Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks 100.0%
- --------------------------------------------------------------------------------------------------
Consumer Discretionary 13.6%
Apparel & Shoes 0.9%
Jones Apparel Group, Inc.* ........ 600 19,800
Liz Claiborne Inc. ................ 400 13,225
-------
33,025
-------
Department & Chain Stores 7.9%
Best Buy Co., Inc.* ............... 600 28,650
Federated Department Stores, Inc.* 700 32,681
Gap Inc. .......................... 450 29,953
Home Depot, Inc. .................. 800 47,950
Kmart Corp. ....................... 600 8,925
Neiman Marcus Group, Inc. ......... 600 14,438
Ross Stores, Inc. ................. 600 27,563
Saks Incorporated* ................ 600 16,988
TJX Companies, Inc. (New) ......... 500 16,656
The Limited, Inc. ................. 600 26,250
Wal-Mart Stores Inc. .............. 1,200 55,185
-------
305,239
-------
Home Furnishings 1.3%
Furniture Brands International Inc. 500 12,531
Mohawk Industries Inc.* ........... 600 19,350
Newell Rubbermaid Inc. ............ 400 18,975
-------
50,856
-------
Hotels & Casinos 0.3%
Harrah's Entertainment, Inc. ...... 600 13,200
-------
Recreational Products 1.2%
Electronic Arts Inc.* ............. 600 30,488
Harley-Davidson Inc. .............. 300 17,888
-------
48,376
-------
Restaurants 1.6%
Brinker International Inc.* ....... 700 19,338
Outback Steakhouse Inc.* .......... 1,200 42,975
-------
62,313
-------
Specialty Retail 0.4%
Family Dollar Stores Inc. ......... 600 14,475
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 - Scudder Tax Managed Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Staples 2.5%
Alcohol & Tobacco 0.4%
Philip Morris Companies, Inc. ..... 400 14,025
-------
Consumer Specialties 0.5%
American Greeting Corp., "A" 18,331 700 18,331
-------
Food & Beverage 0.8%
IBP, Inc. ......................... 800 16,200
Interstate Bakeries Corp. ......... 600 13,350
-------
29,550
-------
Textiles 0.8%
VF Corporation .................... 600 30,900
-------
Health 7.3%
Biotechnology 0.7%
Biogen Inc.* ...................... 300 28,519
-------
Health Industry Services 1.1%
Shared Medical Systems Corp. ...... 400 21,725
Wellpoint Health Networks Inc. .... 300 21,075
-------
42,800
-------
Hospital Management 1.5%
Health Management Associates Inc.* 600 9,375
Trigon Healthcare, Inc.* .......... 900 28,575
Universal Health Services, Inc. ... 400 20,725
-------
58,675
-------
Medical Supply & Specialty 0.5%
Lincare Holdings Inc.* ............ 600 17,775
-------
Pharmaceuticals 3.5%
Bristol-Myers Squibb Co. .......... 800 50,850
Eli Lilly & Co. ................... 600 44,175
Merck & Co., Inc. ................. 600 42,150
-------
137,175
-------
Communications 3.9%
Cellular Telephone 0.0%
Leap Wireless International, Inc.* 75 1,369
-------
Telephone/Communications 3.9%
Alltel Corp. ...................... 600 40,463
BellSouth Corp. ................... 1,200 53,700
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder Tax Managed Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
SBC Communicatons, Inc. ............. 1,000 56,000
--------
150,163
--------
Financial 20.1%
Banks 4.5%
Bank United Corp. ................... 300 12,113
Bank of America Corp. ............... 700 50,400
Chase Manhattan Corp. ............... 600 49,650
Commerce Bankshares Inc. ............ 525 21,492
U.S. Trust Corporation .............. 200 18,275
Washington Federal, Inc. ............ 1,100 24,338
--------
176,268
--------
Insurance 8.8%
AFLAC, Inc. ......................... 500 27,125
Aetna Inc. .......................... 300 26,306
American National Insurance Co. ..... 500 34,688
Fremont General Corp. ............... 1,200 24,000
Jefferson Pilot Corp. ............... 600 40,425
Mercury General Corp. ............... 400 14,450
Ohio Casualty Corp. ................. 400 14,863
PMI Group, Inc. ..................... 500 27,906
Progressive Corp. ................... 200 28,700
ReliaStar Financial Corp ............ 500 18,375
Transamerica Corp. .................. 600 42,750
Unitrin, Inc. ....................... 1,200 41,550
--------
341,138
--------
Consumer Finance 0.7%
SLM Holding Corp. ................... 600 25,613
--------
Other Financial Companies 5.4%
Bear Stearns Companies, Inc. ........ 630 29,374
CIT Group, Inc. ..................... 700 22,750
Edwards (A.G.) Inc. ................. 600 21,000
Federal National Mortgage Association 700 49,656
GreenPoint Financial Corp. .......... 600 21,000
Legg Mason Inc. ..................... 1,100 38,363
TCF Financial Corporation ........... 900 26,100
--------
208,243
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder Tax Managed Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Real Estate 0.7%
Catellus Development Corp.* ................. 900 13,838
Orion Capital Corp. ......................... 500 14,719
--------
28,557
--------
Media 1.9%
Broadcasting & Entertainment 0.4%
King World Productions, Inc. ................ 400 14,100
--------
Cable Television 0.4%
Cablevision Systems Corp. "A"* .............. 200 15,475
--------
Print Media 1.1%
Knight-Ridder, Inc. ......................... 800 43,050
--------
Service Industries 6.4%
EDP Services 2.1%
Affiliated Computer Services* ............... 1,100 42,075
Fiserv Inc.* ................................ 300 17,569
SunGard Data Systems* ....................... 700 22,356
--------
82,000
--------
Environmental Services 0.7%
Waste Management, Inc. ...................... 500 28,250
--------
Investment 3.0%
Charles Schwab Corp. ........................ 500 54,875
Donaldson, Lufkin & Jenrette Securities Corp. 500 34,969
Paine Webber Group, Inc. .................... 600 28,163
--------
118,007
--------
Miscellaneous Commercial Services 0.6%
Kelly Services, Inc. "A" .................... 900 22,781
--------
Durables 7.2%
Aerospace 1.4%
Northrop Grumman Corp. ...................... 300 19,181
Sundstrand Corp. ............................ 500 35,875
--------
55,056
--------
Automobiles 4.0%
Ford Motor Co. .............................. 900 57,544
General Motors Corp. ........................ 600 53,363
Genuine Parts Co. ........................... 400 12,000
Navistar International Corp.* ............... 600 31,388
--------
154,295
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 - Scudder Tax Managed Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Construction/Agricultural Equipment 0.6%
PACCAR, Inc. ........................... 400 22,400
-------
Leasing Companies 0.6%
Hertz Corp. ............................ 400 23,875
-------
Telecommunications Equipment 0.6%
Scientific-Atlanta, Inc. ............... 700 22,225
-------
Manufacturing 13.9%
Chemicals 2.0%
Dow Chemical Co. ....................... 400 52,475
Rohm & Haas Co. ........................ 600 26,888
-------
79,363
-------
Diversified Manufacturing 3.5%
Cooper Industries, Inc. ................ 500 24,188
Hillenbrand Industries, Inc. ........... 1,000 46,938
Loews Corp. ............................ 300 21,956
Pentair, Inc. .......................... 500 23,500
Tyco International Ltd. (New) .......... 228 18,525
-------
135,107
-------
Electrical Products 0.7%
Thomas & Betts Corp. ................... 600 25,200
-------
Industrial Specialty 5.5%
Carlisle Companies Inc. ................ 600 29,400
Centex Corp. ........................... 800 29,250
Clayton Homes Inc. ..................... 1,000 11,125
Cordant Technologies Inc. .............. 800 36,900
Fleetwood Enterprises .................. 600 14,813
Johns Manville Corp. ................... 600 8,063
Johnson Controls Inc. .................. 600 43,763
Sherwin-Williams Co. ................... 500 15,563
Teleflex Incorporated .................. 600 26,138
-------
215,015
-------
Machinery/Components/Controls 1.2%
Ingersoll-Rand Co. ..................... 700 48,431
-------
Specialty Chemicals 1.0%
Air Products & Chemicals, Inc. ......... 800 37,600
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 - Scudder Tax Managed Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Technology 9.1%
Computer Software 3.7%
Adobe Systems Inc. ............. 600 38,025
Compuware Corp.* ............... 800 19,500
Comverse Technologies Inc.* .... 900 57,713
Synopsys Inc.* ................. 600 28,275
-------
143,513
-------
Diverse Electronic Products 0.8%
Solectron Corp.* ............... 600 29,100
-------
Electronic Data Processing 1.4%
Hewlett-Packard Co. ............ 700 55,213
-------
Military Electronics 1.1%
Litton Industries Inc. ......... 700 43,838
-------
Semiconductors 2.1%
Intel Corp. .................... 800 48,950
Sanmina Corp.* ................. 200 13,275
Xilinx Inc.* ................... 400 18,250
-------
80,475
-------
Energy 2.9%
Oil Companies 1.5%
Chevron Corp. .................. 600 59,850
-------
Oil/Gas Transmission 0.7%
El Paso Energy Corporation ..... 700 25,725
-------
Miscellaneous 0.7%
Ipalco Enerprises Inc. ......... 1,200 27,675
-------
Construction 2.1%
Building Materials 1.6%
LaFarge Corp. .................. 500 16,906
Vulcan Materials Co. ........... 900 42,975
-------
59,881
-------
Building Products 0.5%
Masco Corp. .................... 700 20,563
-------
Transportation 2.7%
Airlines 1.7%
Comair ......................... 750 16,547
Delta Air Lines, Inc. .......... 500 31,719
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - Scudder Tax Managed Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market
Shares Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Southwest Airlines Co. .................................. 600 19,538
-------
67,804
-------
Railroads 1.0%
Burlington Northern Santa Fe Corp. ...................... 500 18,313
Trinity Industries, Inc. ................................ 600 20,888
-------
39,201
-------
Utilities 6.4%
Electric Utilities 5.5%
AES Corp. ............................................... 300 15,000
Allegheny Energy, Inc. .................................. 1,300 44,281
CINergy Corp. ........................................... 1,100 32,794
Carolina Power & Light Co. .............................. 1,000 40,313
Consolidated Edison Inc. ................................ 400 18,175
DTE Energy Co. .......................................... 500 20,406
Florida Progress Corp. .................................. 200 7,700
Texas Utilities Co., Inc. ............................... 900 35,775
-------
214,444
-------
Natural Gas Distribution 0.9%
NICOR, Inc. ............................................. 1,000 36,375
- --------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $3,400,871) 3,882,472
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $3,400,871) (a) 3,882,472
- --------------------------------------------------------------------------------------------------
(a) The cost for federal income tax purposes was $3,400,871. At April 30, 1999, net unrealized appreciation for all
securities based on tax cost was $481,601. This consisted of aggregate gross unrealized appreciation for all securities
in which there was an excess of market value over tax cost of $627,708 and aggregate gross unrealized depreciation for
all securities in which there was an excess of tax cost over market value of $146,107.
* Non-income producing security.
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - Scudder Tax Managed Growth Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Assets
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at market (identified cost $3,400,871) ........... $ 3,882,472
Cash .......................................................... 93,274
Dividends receivable .......................................... 3,443
Receivable for Fund shares sold ............................... 1,000
Reimbursement from Adviser .................................... 44,367
Other assets .................................................. 165
-----------
Total assets .................................................. 4,024,721
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------
Other payables and accrued expenses ........................... 92,879
-----------
Total liabilities ............................................. 92,879
-------------------------------------------------------------------------------
Net assets, at market value $ 3,931,842
-------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated distributions in excess of net investment income .. (2,198)
Unrealized appreciation (depreciation) on investment securities 481,601
Accumulated net realized gain (loss) .......................... 13,948
Paid-in capital ............................................... 3,438,491
-------------------------------------------------------------------------------
Net assets, at market value $ 3,931,842
-------------------------------------------------------------------------------
Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($3,931,842 /275,838 outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares -------
authorized)................................................. $14.25
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - Scudder Tax Managed Growth Fund
<PAGE>
Statement of Operations
six months ended April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Income:
Dividends ..................................................... $ 23,746
Interest ...................................................... 2,522
---------
26,268
Expenses:
Management fee ................................................ 12,485
Services to shareholders ...................................... 3,805
Custodian and accounting fees ................................. 21,196
Trustees' fees and expenses ................................... 18,993
Auditing ...................................................... 5,359
Registration fees ............................................. 17,185
Reports to shareholders ....................................... 6,341
Legal ......................................................... 8,430
Other ......................................................... 3,977
---------
Total expenses before reductions .............................. 97,771
Expense reductions ............................................ (77,905)
---------
Expenses, net ................................................. 19,866
------------------------------------------------------------------------------
Net investment income (loss) ................................... 6,402
------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from investments ..................... 13,948
Net unrealized appreciation (depreciation) during the period on
investments.................................................. 328,590
------------------------------------------------------------------------------
Net gain (loss) on investment transactions .................... 342,538
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 348,940
------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17 - Scudder Tax Managed Growth Fund
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the Period
Six Months September 18,
Ended 1998
April 30, (commencement of
1999 operations) to
Increase (Decrease) in Net Assets (Unaudited) October 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income ............................... $ 6,402 $ 836
Net realized gain (loss) from investment transactions 13,948 --
Net unrealized appreciation (depreciation) on
investment transactions during the period ........ 328,590 153,011
----------- -----------
Net increase (decrease) in net assets resulting from
operations........................................ 348,940 153,847
----------- -----------
Distributions to shareholders from net investment
income ............................................ (12,914) --
----------- -----------
Fund share transactions:
Proceeds from shares sold ........................... 1,429,448 2,134,072
Reinvestment of distributions ....................... 12,056 --
Cost of shares redeemed ............................. (137,552) --
Redemption fees ..................................... 2,745 --
----------- -----------
Net increase (decrease) in net assets from Fund share
transactions...................................... 1,306,697 2,134,072
----------- -----------
Increase (decrease) in net assets ................... 1,642,723 2,287,919
Net assets at beginning of period ................... 2,289,119 1,200
Net assets at end of period (including accumulated
distributions in excess of net investment income of
$2,198 and undistributed net investment income of ----------- -----------
$4,314, respectively) ............................. $ 3,931,842 $ 2,289,119
----------- -----------
Other Information
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ........... 179,789 100
----------- -----------
Shares sold ......................................... 105,302 179,689
Shares issued to shareholders in reinvestment of
distributions .................................... 874 --
Shares redeemed...................................... (10,127) --
----------- -----------
Net increase in Fund Shares ......................... 96,049 179,689
----------- -----------
Shares outstanding at end of period ................. 275,838 179,789
----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 - Scudder Tax Managed Growth Fund
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
the period (a) and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
For the Period
September 18,
1998
Six Months Ended (commencement of
April 30, operations) to
1999 (Unaudited) October 31, 1998
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period ................. $ 12.73 $ 12.00
------- -------
Income from investment operations:
Net investment income ................................ .03 .01
Net realized and unrealized gain (loss) on investments 1.50 .72
------- -------
Total from investment operations ..................... 1.53 .73
------- -------
Redemption fee ....................................... (.01) --
------- -------
Net asset value, end of period ....................... $ 14.25 $ 12.73
- -----------------------------------------------------------------------------------------------------------------------------
Total Return (%) (b) ................................. 12.43** 6.08(c)**
Ratios and Supplemental Data
Net assets, end of period ($ millions)................ 3.93 2.29
Ratio of operating expenses, net to average daily
net assets (%)...................................... 1.25* 1.25*
Ratio of operating expenses, before expense reductions,
to average daily net assets (%)..................... 6.15* 25.9*
Ratio of net investment income to average daily net
assets (%).......................................... .40* .42*
Portfolio turnover rate (%)........................... 27.6* --
(a) Based on monthly average shares outstanding during the period.
(b) Total return would have been lower had certain expenses not been reduced.
(c) Total return does not reflect the effect to the shareholder of the 2%
redemption fee on shares held less than one year.
* Annualized
** Not annualized
</TABLE>
19 - Scudder Tax Managed Growth Fund
<PAGE>
Notes to Financial Statements (Unaudited)
A. Significant Accounting Policies
Scudder Tax Managed Growth Fund (the "Fund") is a diversified series of
Investment Trust (the "Trust"). The Trust is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the Nasdaq Stock Market, Inc.
("Nasdaq"), for which there have been sales, are valued at the most recent sale
price reported on such system. If there are no such sales, the value is the most
recent bid quotation. Securities which are not quoted on Nasdaq but are traded
in another over-the-counter market are valued at the most recent sale price on
such market. If no sale occurred, the security is then valued at the calculated
mean between the most recent bid and asked quotations. If there are no such bid
and asked quotations, the most recent bid quotation shall be used.
Portfolio debt securities other than money market securities with an original
maturity of over sixty days are valued by pricing agents approved by the
officers of the Fund, whose quotations reflect broker/dealer-supplied valuations
and electronic data processing techniques. If the pricing agents are unable to
provide such quotations, the most recent bid quotation supplied by a bona fide
market maker shall be used. Money market instruments purchased with an original
maturity of sixty days or less are valued at amortized cost. All other
securities are valued at their fair value as determined in good faith by the
Valuation Committee of the Board of Trustees.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code of 1986, 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.
Redemption Fees. In general, shares of the Fund may be redeemed at net asset
value. However, upon the redemption or exchange of shares held by shareholders
for less than one year, a fee of 2% of the current net asset value of the shares
will be assessed and retained by the Fund for the benefit of the remaining
shareholders. The redemption fee is accounted for as an addition to paid-in
capital.
Distribution of Income and Gains. Distributions of net investment income are
made annually. During any particular year, net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed and, therefore, will be distributed to
shareholders. 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.
20 - Scudder Tax Managed Growth Fund
<PAGE>
Accordingly, the Fund may periodically make reclassifications among certain of
its capital accounts without impacting the net asset value of the Fund.
The Fund uses the specific identified cost method for determining realized gain
or loss on investments for both financial and federal income tax reporting
purposes.
Other. Investment security transactions are accounted for on a trade date
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis.
B. Purchases and Sales of Securities
For the six months ended April 30, 1999, purchases and sales of investment
securities (excluding short-term investments) aggregated $1,728,415 and
$427,015, respectively.
C. Related Parties
Under the Investment Management Agreement (the "Management Agreement") with
Scudder Kemper Investments, Inc. (the "Adviser"), the Adviser directs the
investments of the Fund in accordance with its investment objectives, policies
and restrictions. The Adviser determines the securities, instruments and other
contracts relating to investments to be purchased, sold or entered into by the
Fund. In addition to portfolio management services, the Adviser provides certain
administrative services in accordance with the Management Agreement. The
management fee payable under the Management Agreement is equal to an annual rate
of 0.80% of the Fund's average daily net assets, computed and accrued daily and
payable monthly. In addition, the Adviser has agreed not to impose all or a
portion of its management fee until February 28, 2000 in order to maintain the
annualized expenses of the Fund at not more than 1.25% of average daily net
assets. Accordingly, for the six months ended April 30, 1999, the Adviser did
not impose any of its fee amounting to $12,485. Further, due to the limitations
of such Agreement, the Adviser's reimbursement payable to the Fund for the six
months ended April 30, 1999, amounted to $44,367.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended April 30, 1999, SSC did not impose any of its fee, which
amounted to $2,303.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six months
ended April 30, 1999, SFAC did not impose any of its fee, which amounted to
$18,750.
The Fund pays each of its Trustees not affiliated with the Adviser an annual
retainer, plus specified amounts for attended board and committee meetings. For
the six months ended April 30, 1999, Trustees' fees and expenses aggregated
$18,993.
D. 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 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.
21 - Scudder Tax Managed Growth Fund
<PAGE>
Shareholder Meeting Results
A Special Meeting of Shareholders (the "Meeting") of Scudder Tax Managed Growth
Fund (the "Fund") was held on December 15, 1998, at the office of Scudder Kemper
Investments, Inc., Two International Place, Boston, Massachusetts 02110. At the
Meeting the following matters were voted upon by the shareholders (the resulting
votes for each matter are presented below).
1. To approve a new Investment Management Agreement for the Fund with Scudder
Kemper Investments, Inc.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
129,032 829 833 0
2. To approve the revision of the Fund's fundamental lending policy.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
123,199 4,995 2,500 0
- --------------------------------------------------------------------------------
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary power
to vote on a particular matter.
22 - Scudder Tax Managed Growth Fund
<PAGE>
This Page
intentionally
left blank.
23 - Scudder Tax Managed Growth Fund
<PAGE>
Trustees and Officers
Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General
Manager, WGBH Educational
Foundation
Dawn-Marie Driscoll
Trustee; Executive Fellow, Center
for Business Ethics, Bentley
College; President, Driscoll
Associates
Peter B. Freeman
Trustee; Corporate Director and
Trustee
George M. Lovejoy, Jr.
Trustee; President and Director,
Fifty Associates
Wesley W. Marple, Jr.
Trustee; Professor of Business
Administration, Northeastern
University
Kathryn L. Quirk*
Trustee, 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.
24 - Scudder Tax Managed Growth Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series --
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.
25 - Scudder Tax Managed Growth Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
A convenient investment program in which 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
- ------------------------------------------------------------------------------------------------------------------------------
26 - Scudder Tax Managed Growth Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 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>
27 - Scudder Tax Managed Growth 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 $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
