SCUDDER
INVESTMENTS(SM)
[LOGO]
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EQUITY/DOMESTIC
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Scudder S&P 500
Index Fund
Fund #301
Semiannual Report
June 30, 2000
For investors seeking 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.
A no-load fund with no commissions to buy, sell, or exchange shares.
<PAGE>
Contents
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4 Letter from the Fund's President
6 Performance Update
8 Portfolio Summary
10 Portfolio Management Discussion
12 Glossary of Investment Terms
Scudder S&P 500 Index Fund
13 Financial Statements
16 Financial Highlights
17 Notes to Financial Statements
21 Shareholder Meeting Results
22 Officers and Trustees
Equity 500 Index Portfolio
23 Statement of Net Assets
37 Financial Statements
40 Financial Highlights
41 Notes to Financial Statements
44 Investment Products and Services
46 Account Management Resources
2
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Scudder S&P 500 Index Fund
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ticker symbol SCPIX fund number 301
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Date of o For its most recent semiannual period ended June 30,
Inception: 2000, Scudder S&P 500 Index Fund posted a -0.70% total
8/29/97 return, in keeping with the -0.43% return of the
S&P 500 Index.
o Over the period equity markets struggled, weighed down
Total Net by fears of economic overheating and higher interest
Assets as rates and by concerns over profit growth.
of 6/30/00:
$326 million o We are hopeful that an economic "soft landing," should
it occur, would expand investor interest in
high-quality domestic stocks.
3
<PAGE>
Letter from the Fund's President
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Dear Shareholders,
We are pleased to present the semiannual report for Scudder S&P 500 Index Fund
for its most recent six-month period ended June 30, 2000.
After experiencing one of the most dramatic run-ups in its history during the
winter of 1999/2000, the stock market came back to Earth during the second
quarter of 2000. Just as enthusiasm for stocks reached a high point in early
March -- culminating in high trading volumes, enormous inflows of new cash to
mutual funds, and dramatic moves in hundreds of individual stocks -- the market
changed direction: When the Federal Reserve began to raise interest rates in May
1999 in response to strengthening global growth, market reaction was muted due
to the widespread belief that only a few quarter-point interest rate increases
would be necessary to restore equilibrium to the economy. But as the Fed
continued its gradual rate increases over the 12-month period beginning May
1999, the economy showed no sign of cooling, raising the threat that the Fed
would be forced to make several larger moves through the summer. Thus, the
euphoria that propelled the markets in the early part of the year quickly
evaporated, prompting investors to sell technology stocks and other holdings
perceived as richly valued.
4
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Over the six months ended June 30, Scudder S&P 500 Index Fund posted a -0.70%
total return, in keeping with the -0.43% return of the S&P 500 Index over the
same period. We are hopeful that over the coming months, economic statistics
that have recently pointed to a "soft landing" for the U.S. economy will bear
fruit, and that the Federal Reserve will able to change course and refrain from
raising interest rates further. When investors perceive that such a shift has
taken place, we believe U.S. stocks should benefit. For additional details
concerning the Index, the equity markets, and your manager's outlook for the
coming months, please turn to the portfolio management discussion that begins on
page 10.
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/Lin Coughlin
Linda C. Coughlin
President,
Scudder S&P 500 Index Fund
5
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Performance Update
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June 30, 2000
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Growth of a $10,000 Investment
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Scudder S&P 500
Index Fund S&P 500 Index*
8/97** 10000 10000
12/97 10834 10851
6/98 12715 12773
12/98 13899 13953
6/99 15563 15681
12/99 16730 16889
6/00 16614 16819
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Fund Index Comparison
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Total Return
Growth of Average
Period ended 6/30/2000 $10,000 Cumulative Annual
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Scudder S&P 500 Index Fund
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1 year $ 10,675 6.75% 6.75%
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Life of Fund** $ 16,614 66.14% 19.58%
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S&P 500 Index*
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1 year $ 10,726 7.26% 7.26%
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Life of Fund** $ 16,819 68.19% 20.15%
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* 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.
** The Fund commenced operations on August 29, 1997. Index comparisons
begin August 31, 1997.
6
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Returns and Per Share Information
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SCUDDER S&P 500 INDEX FUND
S&P 500 INDEX*
Yearly periods ended June 30
1998** 1999 2000
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Fund Total
Return (%) 27.15 22.40 6.75
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Index Total
Return (%) 27.73 22.76 7.26
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Net Asset
Value ($) 15.11 18.33 19.38
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Income
Dividends
($) .14 .16 .17
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Capital
Gains
Distributions
($) -- -- --
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* 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.
** The Fund commenced operations on August 29, 1997. Index comparisons
begin August 31, 1997.
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.
7
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Portfolio Summary
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June 30, 2000
Equity 500 Index Portfolio
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Asset Allocation
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A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Common Stocks 98% The portfolio is
Cash Equivalents 2% essentially fully
------------------------------------ invested in common
100% stocks that make up the
------------------------------------ S&P 500 Index.
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Sector Diversification
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A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Technology 19% Technology remained the
Financials 13% largest weighting within
Capital Goods 12% the S&P 500 Index over
Health Care 10% the period.
Consumer Cyclicals 10%
Consumer Staples 10%
Utilities 7%
Communication Services 6%
Energy 5%
Other 8%
------------------------------------
100%
------------------------------------
8
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Ten Largest Equity Holdings
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(26% of Portfolio) The Portfolio's top
holdings reflect the mainly
1. General Electric Co. large-capitalization
Producer of electrical equipment composition of the
S&P 500 Index.
2. Intel Corp.
Manufacturer and distributor of microprocessors
3. Cisco Systems, Inc.
Supplier of data networking products
4. Microsoft Corp.
Developer and manufacturer of software
5. Pfizer, Inc.
International pharmaceutical company
6. Exxon Mobil Corp.
Exploration and production of petroleum
7. Wal-Mart Stores, Inc.
Operator of discount stores
8. Oracle Corp.
Database management software
9. Citigroup, Inc.
Diversified financial services holding company
10. Nortel Networks Corp.
Provider of Internet solutions
For more complete details about the Fund's investment portfolio, see page 23. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
9
<PAGE>
Portfolio Management Discussion
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June 30, 2000
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, 2000, Scudder S&P 500 Index
Fund provided an -0.70% total return, closely tracking the -0.43% return of the
S&P 500 Index over the same period.
Market Review
The S&P 500 Index turned in a virtually flat performance for the first six
months of 2000. Equity markets struggled, weighed down by fears of economic
overheating and higher interest rates and then by concerns over profit growth in
a slowing economic environment. Throughout the period, the market remained
extremely narrow, but interestingly, Microsoft alone more than accounted for the
largely flat return. As has been the case for the past several years, large-cap
growth-oriented stocks outperformed their value counterparts for the semiannual
period. Large capitalization stocks underperformed small- and mid-cap stocks.
Volatility was high during the first quarter of 2000. The technology sector
dominated the Index, although within the sector, the disparity in returns was
significant. Intel and Cisco were the top contributors on a capitalization
basis, while Microsoft, Lucent Technologies, Yahoo!, and America Online were
among the largest negative contributors. Other sectors posting strong results
were utilities and financials.
The S&P Index posted a decline for the second quarter as virtually all major
U.S. equity indices were down dramatically due to the Nasdaq Composite
correction that began in March and April and more aggressive interest rate hikes
by the Fed during the quarter. Health care was the best performing sector for
the quarter. Also turning in good performance were consumer staples and
utilities. Technology, communication services, and consumer cyclicals were among
the weaker sectors.
10
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Manager Outlook
Going forward, we continue to view the most likely outcome for the U.S. economy
to be a "soft landing." That is, we still expect that a combination of higher
interest rates relative to a year ago, moderating equity markets, and higher oil
prices may bring demand more in line with the economy's supply potential by late
2000 or early 2001, thus keeping inflation pressures from becoming too
entrenched.
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/James Creighton
James Creighton
Portfolio Manager
11
<PAGE>
Glossary of Investment Terms
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Index Fund A mutual fund that seeks to replicate the performance of a
securities market index. These funds are usually passively
managed, employing popular benchmarks such as the S&P 500,
Russell 2000 (small-caps), or Lehman Aggregate Bond Index.
Because an index fund essentially "buys the market," its
performance tends to closely track both increases and
decreases in the respective index.
Market The value of a company's outstanding shares of common stock,
Capitalization determined by multiplying the number of shares outstanding
by the share price (shares x price = market capitalization).
The universe of publicly traded companies is frequently
divided into large-, mid-, and small-capitalizations.
"Large-cap" stocks tend to be more liquid and less volatile,
while "small-cap" stocks have greater potential earnings
growth and are typically more volatile.
Passive Management An investment approach that typically selects investments
based on non-fundamental criteria, often by seeking to
mirror the performance of a securities market index. This is
in contrast to active management in which an investment
manager attempts to select the most promising investments by
analyzing company financial statements, market conditions,
and industry trends.
Standard & Poor's A broad-based measurement of changes in stock market
Composite Index of conditions based on the average performance of 500 widely
500 Stocks held common stocks. The index is comprised of 400 industrial
(S&P 500) company stocks, 20 transportation company stocks, 40
financial company stocks, and 40 public utility stocks. The
stocks which comprise the S&P 500 represent some of the
largest companies in terms of market capitalization.
Standard & Poor's A subsidiary of McGraw-Hill, Inc. that provides a broad
Corporation range of investment services, including rating commercial
paper, compiling the Standard & Poor's Composite Index of
500 Stocks, the Standard & Poor's 400 Industrial Index, and
the Standard & Poor's 100 Index, among other indices. The
company also provides a wide variety of statistical
materials, investment advisory reports, and other financial
information.
(Source: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
12
<PAGE>
Financial Statements
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Scudder S&P 500 Index Fund
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Statement of Assets and Liabilities as of June 30, 2000 (Unaudited)
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<TABLE>
<CAPTION>
Assets
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<S> <C>
Investments in Equity 500 Index Portfolio, at value .................... $326,620,389
Receivable for Fund shares sold ........................................ 371,995
Deferred organization expenses ......................................... 700
Due from Adviser ....................................................... 14,753
Other assets ........................................................... 12,425
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Total assets ........................................................... 327,020,262
Liabilities
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Payable for Fund shares redeemed ....................................... 186,176
Accrued Trustees' fees and expenses .................................... 28,671
Other accrued expenses and payables .................................... 673,244
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Total liabilities ...................................................... 888,091
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Net assets, at value $326,132,171
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Net Assets
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Net assets consist of:
Undistributed net investment income .................................... 19
Net unrealized appreciation (depreciation) on:
Investments and futures transactions ................................. 21,349,200
Accumulated net realized gain (loss) from:
Investments and futures transactions ................................. 30,312,474
Paid-in capital ........................................................ 274,470,478
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Net assets, at value $326,132,171
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Net Asset Value
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NetAsset Value, offering and redemption price per share ($326,132,171 /
16,824,544 outstanding shares of beneficial interest, $.01 par value,
unlimited number of shares authorized) .............................. $ 19.38
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
Scudder S&P 500 Index Fund
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Statement of Operations for the six months ended June 30, 2000 (Unaudited)
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Investment Income
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Income:
Income allocated from Equity 500 Index Portfolio, net .......... $ 1,866,798
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Expenses:
Administration fee ............................................. 154,991
Services to shareholders ....................................... 566,276
Custodian and accounting fees .................................. 8,466
Auditing ....................................................... 10,254
Legal .......................................................... 38,827
Trustees' fees and expenses .................................... 43,600
Reports to shareholders ........................................ 35,323
Amortization of organization expenses .......................... 2,819
Other .......................................................... 10,025
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Total expenses, before expense reductions ...................... 870,581
Expense reductions ............................................. (334,584)
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Total expenses, after expense reductions ....................... 535,997
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Net investment income (loss) 1,330,801
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Realized and unrealized gain (loss) on investment transactions
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Net realized gain (loss) from:
Investments .................................................... 35,577,832
Futures ........................................................ (391,190)
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35,186,642
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Net unrealized appreciation (depreciation) during the period on:
Investments and futures transactions ........................... (39,168,374)
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Net gain (loss) on investment transactions (3,981,732)
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Net increase (decrease) in net assets resulting from operations $ (2,650,931)
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The accompanying notes are an integral part of the financial statements.
14
<PAGE>
Scudder S&P 500 Index Fund
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Statements of Changes in Net Assets
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<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended
2000 December 31,
Increase (Decrease) in Net Assets (Unaudited) 1999
------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) ...................... $ 1,330,801 $ 2,625,969
Net realized gain (loss) on investment transactions 35,186,642 (680,969)
Net unrealized appreciation (depreciation) on
investment transactions during the period ...... (39,168,374) 45,696,637
--------------- ---------------
Net increase (decrease) in net assets resulting ... (2,650,931) 47,641,637
from operations
--------------- ---------------
Distributions to shareholders from:
Net investment income ............................. (1,396,900) (2,581,948)
--------------- ---------------
Fund share transactions:
Proceeds from shares sold ......................... 67,236,444 274,881,345
Reinvestment of distributions ..................... 1,362,983 2,515,698
Cost of shares redeemed ........................... (66,787,521) (122,369,588)
--------------- ---------------
Net increase (decrease) in net assets from Fund ... 1,811,906 155,027,455
share transactions
--------------- ---------------
Increase (decrease) in net assets ................. (2,235,925) 200,087,144
Net assets at beginning of period ................. 328,368,096 128,280,952
Net assets at end of period (including
undistributed net investment income of $19 and
$66,118, respectively) ......................... $ 326,132,171 $ 328,368,096
Other Information
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Shares outstanding at beginning of period ......... 16,751,366 7,804,119
--------------- ---------------
Shares sold ....................................... 4,562,112 15,703,484
Shares issued to shareholders in reinvestment of
distributions .................................. 68,966 140,202
Shares redeemed ................................... (4,557,900) (6,896,439)
--------------- ---------------
Net increase (decrease) in Fund shares ............ 73,178 8,947,247
Shares outstanding at end of period ............... 16,824,544 16,751,366
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
Financial Highlights
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Scudder S&P 500 Index Fund
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
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Years Ended December 31, 2000(f) 1999 1998 1997(b)
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<S> <C> <C> <C> <C>
Net asset value, beginning of period $19.60 $16.44 $12.94 $12.00
-----------------------------------
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Income (loss) from investment operations:
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Net investment income (loss) (a) .08 .19 .17 .05
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Net realized and unrealized gain (loss) on
investment transactions (.21) 3.14 3.48 .95
-----------------------------------
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Total from investment operations (.13) 3.33 3.65 1.00
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Less distributions from:
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Net investment income (.09) (.17) (.15) (.06)
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Net asset value, end of period $19.38 $19.60 $16.44 $12.94
-----------------------------------
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Total Return (%) (c) (.70)** 20.37 28.29 8.34**
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Ratios to Average Net Assets and Supplemental Data
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Net assets, end of period ($ millions) 326 328 128 17
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Ratio of expenses before expense reductions (%)
(c) (d) .55(g)* .58 1.01(e) 4.42*
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Ratio of expenses after expense reductions (%)
(c) (d) .42(g)* .40 .40 .40*
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Ratio of net investment income (loss) (%) .87* 1.05 1.18 1.35*
------------------------------------------------------------------------------------
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) For the period August 29, 1997 (commencement of operations) to December
31, 1997.
(c) Total return would have been lower had certain expenses not been
reduced.
(d) Includes expenses of the Equity 500 Index Portfolio.
(e) Effective May 6, 1998, Bankers Trust contractually agreed to receive
fees from the portfolio only to the extent of the lesser of 0.005% or
the amount that brings the total annual operating expenses as a
percentage of the portfolio's average daily net assets up to 0.08%.
(f) For the six months ended June 30, 2000 (Unaudited).
(g) The ratios of operating expenses excluding costs incurred with the
reorganization before and after expense reductions were .54% and .40%,
respectively.
* Annualized
** Not annualized
16
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Notes to Financial Statements (Unaudited)
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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"), an indirect wholly owned
subsidiary of Deutsche Bank AG, which has the same investment objective as the
Fund. At June 30, 2000, the Fund's investment in the Portfolio was approximately
4.5% of the Portfolio's total assets.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States 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, 1999, the Fund had a net tax basis capital loss carryforward of
approximately $4,700,000, which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until December 31,
2007, the expiration date.
In addition, from November 1, 1999 through December 31, 1999, the Fund incurred
approximately $33,000 of net realized capital losses. As permitted by
17
<PAGE>
tax regulations, the Fund intends to elect to defer these losses and treat them
as arising in the fiscal year ended December 31, 2000.
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 accounting principles generally accepted in the United
States. 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.
B. Related Parties
Under the Investment Management Agreement (the "Agreement") with Scudder Kemper
Investments, Inc. ("Scudder Kemper" or the "Manager"), the Manager monitors the
Fund's investments in the Portfolio. Scudder Kemper currently 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 contractually agreed to maintain
expenses of the Fund through April 30, 2001 to the extent
18
<PAGE>
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 contractually agreed through
April 30, 2001 to waive expenses of the Portfolio to the extent necessary to
limit the expenses of the Portfolio to 0.05% of its annual average net assets.
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, 2000, SSC did not impose a portion of its fee, which
amounted to $170,890. The amount imposed aggregated $266,446, of which $88,814
is unpaid at June 30, 2000.
Scudder Trust Company ("STC"), a subsidiary of the Manager, provides
record-keeping and other services in connection with certain retirement and
employee benefits plans invested in the Fund. For the six months ended June 30,
2000, STC did not impose a portion of its fee, which amounted to $5,164. The
amount imposed aggregated $18,770, of which $6,256 is unpaid at June 30, 2000.
The Fund pays each Trustee not affiliated with the Manager an annual retainer.
For the six months ended June 30, 2000, Trustees' fees aggregated $14,094. In
addition, a one-time fee of $29,506 was accrued for payment to those Trustees
not affiliated with the Adviser who are not standing for re-election, under the
reorganization discussed in Note D. Inasmuch as the Adviser will also benefit
from administrative efficiencies of a consolidated Board, the Adviser has agreed
to bear $14,753 of such costs.
C. Line of Credit
The Fund and several Scudder Funds (the "Participants") share in a $1 billion
revolving credit facility with Chase Manhattan Bank 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 based upon net assets, 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.
19
<PAGE>
D. Reorganization
In early 2000, Scudder Kemper initiated a restructuring program for most of its
Scudder no-load open-end funds in response to changing industry conditions and
investor needs. The program proposes to streamline the management and operations
of most of the no-load open-end funds Scudder Kemper advises principally through
the liquidation of several small funds, mergers of certain funds with similar
investment objectives, the creation of one Board of Directors/Trustees and the
adoption of an administrative fee covering the provision of most of the services
currently paid for by the affected funds. Costs incurred in connection with this
restructuring initiative are being borne jointly by Scudder Kemper and certain
of the affected funds.
20
<PAGE>
Shareholder Meeting Results (Unaudited)
--------------------------------------------------------------------------------
A Special Meeting of Shareholders (the "Meeting") of Scudder S&P 500 Index Fund
(the "fund") was held on July 13, 2000, 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 elect Trustees of the fund.
Number of Votes:
Trustee For Withheld
--------------------------------------------------------------------------------
Henry P. Becton, Jr. 6,655,075 328,237
Linda C. Coughlin 6,658,170 325,142
Dawn-Marie Driscoll 6,664,029 319,283
Edgar R. Fiedler 6,644,272 339,040
Keith R. Fox 6,661,527 321,786
Joan E. Spero 6,647,558 335,755
Jean Gleason Stromberg 6,654,276 329,036
Jean C. Tempel 6,651,943 331,369
Steven Zaleznick 6,652,775 330,537
--------------------------------------------------------------------------------
2. To ratify the selection of PricewaterhouseCoopers LLP as the independent
accountants for the fund for the current fiscal year.
Number of Votes:
Broker
For Against Abstain Non-Votes*
--------------------------------------------------------------------------------
6,649,688 148,124 185,501 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.
21
<PAGE>
Officers and Trustees
--------------------------------------------------------------------------------
Linda C. Coughlin* Bruce F. Beaty*
o President and Trustee o Vice President
Henry P. Becton, Jr. Jennifer P. Carter*
o Trustee; President and o Vice President
General Manager, WGBH
Educational Foundation James M. Eysenbach*
o Vice President
Dawn-Marie Driscoll
o Trustee; President, Driscoll William F. Gadsden*
Associates; Executive Fellow, o Vice President
Center for Business Ethics,
Bentley College Valerie F. Malter*
o Vice President
Peter B. Freeman
o Trustee, Corporate Director Ann M. McCreary*
o Vice President
George M. Lovejoy, Jr.
o Trustee; President and Kathleen T. Millard*
Director, Fifty Associates o Vice President
Wesley W. Marple, Jr. Robert D. Tymoczko*
o Trustee; Professor of o Vice President
Business Administration,
Northeastern University John Millette*
o Vice President and Secretary
Kathryn L. Quirk*
o Trustee, Vice President John R. Hebble*
and Assistant Secretary o Treasurer
Jean C. Tempel Caroline Pearson*
o Trustee; Managing Director, o Assistant Secretary
First Light Capital
*Scudder Kemper Investments, Inc.
22
<PAGE>
Statement of Net Assets as of June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Principal
Amount ($) Value ($)
----------------------------------------------------------------------------
Equity 500 Index Portfolio
----------------------------------------------------------------------------
Short-Term Instruments 2.1%
----------------------------------------------------------------------------
Mutual Fund 2.0%
Cash Management Fund .......................... 141,630,208 141,630,208
U.S. Treasury Bills 0.1%
5.61%, 9/7/00 (a) ............................. 11,550,000 11,430,365
----------------------------------------------------------------------------
Total Short-Term Instruments (Cost $153,059,511) 153,060,573
----------------------------------------------------------------------------
Shares
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Common Stocks 98.4%
----------------------------------------------------------------------------
3Com Corp.* ................................... 196,505 11,323,601
Abbott Laboratories ........................... 871,006 38,814,205
Adaptec, Inc.* ................................ 59,216 1,347,164
ADC Telecommunications, Inc.* ................. 169,919 14,251,956
Adobe Systems, Inc. ........................... 70,090 9,111,700
Adolph Coors Co.-- Class B .................... 20,818 1,259,489
Advanced Micro Devices, Inc.* ................. 83,341 6,438,092
AES Corp.* .................................... 258,282 11,784,116
Aetna, Inc. ................................... 80,969 5,197,198
AFLAC, Inc. ................................... 150,684 6,922,046
Agilent Technologies* ......................... 256,065 18,884,794
Air Products and Chemicals, Inc. .............. 129,942 4,003,838
Alberto-Culver Co.-- Class B .................. 32,025 978,764
Albertson's, Inc. ............................. 247,048 8,214,346
Alcan Aluminium Ltd. .......................... 123,929 3,841,799
Alcoa, Inc. ................................... 488,392 14,163,368
Allegheny Technologies ........................ 57,678 1,038,204
Allergan, Inc. ................................ 74,938 5,582,881
Allied Waste Industries, Inc.* ................ 95,669 956,690
Allstate Corp. ................................ 421,779 9,384,583
Alltel Corp. .................................. 179,979 11,147,449
Altera Corp.* ................................. 112,800 11,498,550
ALZA Corp.* ................................... 57,850 3,420,381
Amerada Hess Corp. ............................ 52,862 3,264,228
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
Shares Value ($)
-------------------------------------------------------------------
Ameren Corp. ........................... 71,679 2,419,166
America Online, Inc.* .................. 1,310,906 69,150,291
American Electric Power Co.* ........... 193,318 5,727,046
American Express Co. ................... 757,320 39,475,305
American General Corp. ................. 140,044 8,542,684
American Greetings Corp.-- Class A ..... 43,077 818,463
American Home Products Corp. ........... 739,011 43,416,896
American International Group, Inc. ..... 875,888 102,916,840
American Power Conversion Corp.* ....... 95,400 3,893,512
Amgen, Inc.* ........................... 578,021 40,605,975
AMR Corp.* ............................. 83,807 2,215,648
Amsouth Bancorp ........................ 219,143 3,451,502
Anadarko Petroleum Corp. ............... 72,119 3,556,368
Analog Devices, Inc.* .................. 197,222 14,988,872
Andrew Corp.* .......................... 52,910 1,775,792
Anheuser Busch Cos., Inc. .............. 255,875 19,110,664
AON Corp. .............................. 146,820 4,560,596
Apache Corp. ........................... 67,465 3,967,785
Apple Computer, Inc.* .................. 183,194 9,594,786
Applied Materials, Inc.* ............... 463,982 42,048,369
Archer Daniels Midland Co. ............. 340,637 3,342,501
Armstrong Holdings ..................... 23,346 357,486
Ashland, Inc. .......................... 40,281 1,412,353
Associates First Capital Corp.-- Class A 410,788 9,165,707
AT&T Corp. ............................. 1,795,922 56,796,033
Autodesk, Inc. ......................... 34,662 1,202,338
Automatic Data Processing, Inc. ........ 357,270 19,136,274
Autozone, Inc.* ........................ 79,388 1,746,536
Avery Dennison Corp. ................... 63,889 4,288,549
Avon Products, Inc. .................... 137,543 6,120,663
Baker Hughes, Inc. ..................... 188,254 6,024,128
Ball Corp. ............................. 15,877 511,041
Bank of America Corp. .................. 938,793 40,368,099
Bank of New York Co., Inc. ............. 416,400 19,362,600
Bank One Corp. ......................... 648,820 17,234,281
Barrick Gold Corp. ..................... 224,106 4,075,928
Bausch & Lomb, Inc. .................... 34,058 2,635,238
Baxter International, Inc. ............. 164,948 11,597,906
BB&T Corp. ............................. 195,415 4,665,533
Bear Stearns Cos., Inc. ................ 64,384 2,679,984
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
Shares Value ($)
------------------------------------------------------------
Becton, Dickinson & Co. .......... 142,484 4,087,510
Bed, Bath & Beyond, Inc.* ........ 80,170 2,906,162
Bell Atlantic Corp.* ............. 879,005 44,664,442
BellSouth Corp. .................. 1,065,531 45,418,259
Bemis Co., Inc. .................. 26,944 905,992
Best Buy, Inc.* .................. 115,836 7,326,627
Bestfoods ........................ 159,396 11,038,173
Bethlehem Steel Corp.* ........... 75,283 268,196
Biogen, Inc.* .................... 84,812 5,470,374
Biomet, Inc. ..................... 63,910 2,456,541
Black & Decker Corp. ............. 48,925 1,923,364
BMC Software, Inc.* .............. 137,387 5,012,479
Boeing Co. ....................... 491,453 20,548,879
Boise Cascade Corp. .............. 32,436 839,281
Boston Scientific Corp.* ......... 237,089 5,201,140
Briggs & Stratton Corp. .......... 13,176 451,278
Bristol-Myers Squibb Co. ......... 1,123,136 65,422,672
Broadcom Corp.-- Class A* ........ 120,000 26,272,500
Brown-Forman Corp.-- Class B ..... 25,298 1,359,767
Brunswick Corp. .................. 50,216 831,702
Burlington Northern Santa Fe Corp. 242,597 5,564,569
Burlington Resources, Inc. ....... 120,425 4,606,256
C P & L Energy ................... 74,378 2,375,447
C.R. Bard, Inc. .................. 28,986 1,394,951
Cabletron Systems, Inc.* ......... 103,435 2,611,734
Campbell Soup Co. ................ 239,297 6,969,525
Capital One Financial Corp. ...... 107,603 4,801,784
Cardinal Health, Inc. ............ 158,539 11,731,886
Carnival Corp.-- Class A ......... 342,413 6,677,053
Caterpillar, Inc. ................ 200,712 6,799,119
Cendant Corp.* ................... 399,406 5,591,684
Centex Corp.* .................... 34,221 804,193
Centurytel, Inc. ................. 80,169 2,304,859
Ceridian Corp.* .................. 82,393 1,982,582
Charles Schwab Corp. ............. 755,010 25,387,211
Charter One Financial, Inc. ...... 118,700 2,730,100
Chase Manhattan Corp. ............ 700,086 32,247,711
Chevron Corp. .................... 370,939 31,460,264
Chubb Corp. ...................... 96,689 5,946,373
CIGNA Corp. ...................... 95,456 8,925,136
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
Shares Value ($)
-----------------------------------------------------------------
Cincinnati Financial Corp. ............ 88,268 2,774,925
Cinergy Corp. ......................... 94,369 2,400,511
Circuit City Stores, Inc. ............. 115,320 3,827,182
Cisco Systems, Inc.* .................. 3,955,648 251,430,876
Citigroup ............................. 1,901,058 114,538,744
Citrix Systems, Inc.* ................. 122,330 2,316,624
Clear Channel Communications, Inc.* ... 191,179 14,338,425
Clorox Co. ............................ 134,271 6,017,019
CMS Energy ............................ 62,772 1,388,830
Coastal Corp. ......................... 122,002 7,426,872
Coca-Cola Co. ......................... 1,398,103 80,303,541
Coca-Cola Enterprises, Inc. ........... 245,233 4,000,363
Colgate-Palmolive Co. ................. 330,277 19,775,335
Columbia Energy Group ................. 45,733 3,001,228
Comcast Corp.-- Special Class A* ...... 508,458 20,592,549
Comerica, Inc. ........................ 87,697 3,935,403
Compaq Computer Corp. ................. 959,909 24,537,674
Computer Associates International, Inc. 330,471 16,915,984
Computer Sciences Corp.* .............. 94,950 7,091,578
Compuware Corp.* ...................... 202,958 2,105,689
Comverse Technology* .................. 86,122 8,009,346
ConAgra, Inc. ......................... 288,537 5,500,237
Conexant Systems* ..................... 119,900 5,830,137
Conoco, Inc.-- Class B ................ 356,702 8,761,493
Conseco, Inc. ......................... 184,500 1,798,875
Consolidated Edison, Inc. ............. 126,736 3,754,554
Consolidated Stores Corp.* ............ 63,351 760,212
Constellation Energy Group, Inc. ...... 75,134 2,446,551
Convergys Corp.* ...................... 84,700 4,393,812
Cooper Industries, Inc. ............... 57,832 1,883,154
Cooper Tire & Rubber Co. .............. 45,660 507,967
Corning, Inc. ......................... 158,822 42,862,087
Costco Wholesale Corp.* ............... 251,705 8,306,265
Countrywide Credit Industries, Inc. ... 63,361 1,920,630
Crane Co. ............................. 36,617 890,251
Crown Cork & Seal Co., Inc. ........... 90,446 1,356,690
CSX Corp. ............................. 125,521 2,659,476
Cummins Engine Co., Inc. .............. 27,803 757,632
CVS Corp. ............................. 222,184 8,887,360
Dana Corp. ............................ 90,717 1,922,066
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
Shares Value ($)
--------------------------------------------------------------------
Danaher Corp. ........................... 80,080 3,958,955
Darden Restaurants, Inc. ................ 74,654 1,213,127
Deere & Co. ............................. 133,475 4,938,575
Dell Computer Corp.* .................... 1,453,350 71,668,322
Delphi Automotive Systems ............... 318,938 4,644,535
Delta Air Lines, Inc. ................... 73,039 3,693,034
Deluxe Corp. ............................ 43,490 1,024,733
Dillard Department Stores, Inc.-- Class A 58,534 717,041
Dollar General Corp. .................... 187,486 3,655,977
Dominion Resources, Inc. ................ 134,617 5,771,704
Dover Corp. ............................. 115,237 4,674,301
Dow Chemical Co. ........................ 372,807 11,254,111
Dow Jones & Co., Inc. ................... 49,036 3,591,887
DTE Energy Co. .......................... 80,967 2,474,554
Du Pont (E.I.) de Nemours & Co. ......... 592,965 25,942,219
Duke Power Co. .......................... 206,885 11,663,142
Dun & Bradstreet Corp. .................. 91,434 2,617,298
Eastern Enterprises ..................... 14,652 923,076
Eastman Chemical Co. .................... 50,300 2,401,825
Eastman Kodak Co. ....................... 178,212 10,603,614
Eaton Corp. ............................. 43,982 2,946,794
Ecolab, Inc. ............................ 73,428 2,868,281
Edison International, Inc. .............. 193,084 3,958,222
El Paso Energy Corp. .................... 128,540 6,547,506
Electronic Data Systems Corp. ........... 284,418 11,732,242
Eli Lilly & Co. ......................... 628,982 62,819,577
EMC Corp.* .............................. 1,229,740 94,613,121
Emerson Electric Co. .................... 246,970 14,910,814
Engelhard Corp. ......................... 71,421 1,218,621
Enron Corp. ............................. 403,847 26,048,131
Entergy Corp. ........................... 134,112 3,646,170
Equifax, Inc. ........................... 76,876 2,017,995
Exxon Mobil Corp. ....................... 1,985,363 155,850,995
Fannie Mae .............................. 570,689 29,782,832
Federated Department Stores, Inc.* ...... 119,255 4,024,856
Fedex Corp.* ............................ 170,726 6,487,588
Fifth Third Bancorp ..................... 170,726 11,051,293
First Data Corp. ........................ 237,707 11,796,210
First Union Corp. ....................... 558,808 13,865,423
Firstar Corp. ........................... 560,374 11,802,877
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
Shares Value ($)
-------------------------------------------------------------------------
FirstEnergy Corp. ............................. 129,033 3,016,146
Fleet Boston Financial Corp. .................. 510,532 17,358,088
Florida Progress Corp. ........................ 53,100 2,489,062
Fluor Corp. ................................... 43,490 1,375,371
FMC Corp.* .................................... 17,575 1,019,350
Ford Motor Co. ................................ 683,364 29,384,652
Fort James Corp. .............................. 122,666 2,836,651
Fortune Brands, Inc. .......................... 93,442 2,155,006
FPL Group, Inc. ............................... 100,924 4,995,738
Franklin Resources, Inc. ...................... 142,247 4,320,753
Freddie Mac ................................... 389,746 15,784,713
Freeport-McMoRan Copper & Gold, Inc.-- Class B* 67,666 625,910
Gannett Co., Inc. ............................. 150,928 9,027,381
Gap, Inc. ..................................... 479,922 14,997,562
Gateway Inc.* ................................. 179,389 10,180,326
General Dynamics Corp. ........................ 113,563 5,933,667
General Electric Co. .......................... 5,589,127 296,223,731
General Mills, Inc. ........................... 170,376 6,516,882
General Motors Corp. .......................... 303,042 17,595,376
Genuine Parts Co. ............................. 99,650 1,993,000
Georgia-Pacific Corp. ......................... 96,799 2,540,974
Gillette Co. .................................. 591,285 20,658,020
Global Crossing Ltd.* ......................... 510,370 13,429,111
Golden West Financial Corp. ................... 94,009 3,836,742
Goodrich (B.F.) Co. ........................... 56,401 1,921,159
Goodyear Tire & Rubber Co. .................... 88,573 1,771,460
GPU, Inc. ..................................... 68,803 1,861,981
Great Atlantic & Pacific Tea Co., Inc. ........ 20,881 347,147
Great Lakes Chemical Corp. .................... 32,530 1,024,695
GTE Corp. ..................................... 549,894 34,230,901
Guidant Corp.* ................................ 174,252 8,625,474
H & R Block, Inc. ............................. 57,534 1,862,663
H.J. Heinz Co. ................................ 205,385 8,985,594
Halliburton Co. ............................... 251,861 11,884,691
Harcourt General, Inc. ........................ 43,229 2,350,577
Harley-Davidson, Inc. ......................... 170,632 6,569,332
Harrah's Entertainment, Inc.* ................. 71,139 1,489,473
Hartford Financial Services Group, Inc. ....... 123,849 6,927,803
Hasbro, Inc. .................................. 109,470 1,648,892
HCA Healthcare Co. ............................ 319,016 9,690,111
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
Shares Value ($)
-----------------------------------------------------------------------
HEALTHSOUTH Corp.* ......................... 218,473 1,570,275
Hercules, Inc. ............................. 60,147 845,817
Hershey Foods Corp. ........................ 76,958 3,732,463
Hewlett-Packard Co. ........................ 569,391 71,102,701
Hilton Hotels Corp. ........................ 204,943 1,921,341
Home Depot, Inc. ........................... 1,319,456 65,890,334
Homestake Mining Co. ....................... 126,503 869,708
Honeywell International, Inc. .............. 450,710 15,183,293
Household International, Inc. .............. 267,100 11,101,344
Humana, Inc.* .............................. 94,682 461,575
Huntington Bancshares, Inc. ................ 127,713 2,019,462
Huttig Building Products, Inc.* ............ 2 8
Illinois Tool Works, Inc. .................. 169,816 9,679,512
IMS Health, Inc. ........................... 175,012 3,150,216
Inco, Ltd.* ................................ 98,148 1,509,025
Ingersoll-Rand Co. ......................... 92,312 3,715,558
Intel Corp. ................................ 1,906,165 254,830,433
International Business Machines Corp. ...... 1,008,007 110,439,767
International Flavors & Fragrances, Inc. ... 59,815 1,805,665
International Paper Co. .................... 274,349 8,179,030
Interpublic Group of Cos., Inc. ............ 159,163 6,844,009
ITT Industries ............................. 50,281 1,527,285
J.C. Penney Co., Inc. ...................... 148,110 2,730,778
Jefferson-Pilot Corp. ...................... 57,492 3,244,705
Johnson & Johnson .......................... 788,360 80,314,175
Johnson Controls, Inc. ..................... 44,502 2,283,509
Kansas City Southern Industries ............ 62,850 5,574,009
Kaufman & Broad Home Corp. ................. 27,739 549,579
Kellogg Co. ................................ 227,265 6,761,134
Kerr-McGee Corp. ........................... 52,314 3,083,256
KeyCorp .................................... 246,722 4,348,475
Kimberly Clark Corp. ....................... 314,323 18,034,282
KLA/Tencor Corp.* .......................... 104,333 6,110,001
Kmart Corp.* ............................... 275,414 1,876,258
Knight-Ridder, Inc. ........................ 49,668 2,641,717
Kohls Corp.* ............................... 184,528 10,264,370
Kroger Co.* ................................ 472,029 10,414,140
Leggett & Platt, Inc. ...................... 110,600 1,824,900
Lehman Brothers, Inc. ...................... 68,289 6,457,579
Lexmark International Group, Inc.-- Class A* 72,420 4,870,245
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
Shares Value ($)
--------------------------------------------------------------
Limited, Inc. ...................... 236,832 5,121,492
Lincoln National Corp. ............. 110,716 3,999,616
Linear Technology Corp. ............ 181,700 11,617,444
Liz Claiborne, Inc. ................ 39,344 1,386,876
Lockheed Martin Corp. .............. 219,223 5,439,471
Loews Corp. ........................ 56,632 3,397,920
Longs Drug Stores, Inc. ............ 22,586 491,246
Louisiana-Pacific Corp. ............ 63,392 689,388
Lowe's Cos., Inc. .................. 216,745 8,900,092
LSI Logic Corp.* ................... 166,812 9,028,700
Lucent Technologies, Inc. .......... 1,851,883 109,724,068
Mallinckrodt Group, Inc. ........... 41,785 1,815,036
Manor Care, Inc.* .................. 58,220 407,540
Marriott International ............. 139,893 5,044,891
Marsh & McLennan Cos., Inc. ........ 151,073 15,777,686
Masco Corp. ........................ 253,943 4,586,845
Mattel, Inc. ....................... 235,579 3,106,698
Maxim Integrated Products, Inc.* ... 157,900 10,727,331
May Department Stores Co. .......... 188,608 4,526,592
Maytag Corp. ....................... 49,756 1,834,753
MBIA, Inc. ......................... 54,006 2,602,414
MBNA Corp. ......................... 455,003 12,341,956
McDermott International, Inc. ...... 37,330 328,971
McDonald's Corp. ................... 766,043 25,231,541
McGraw-Hill, Inc. .................. 112,459 6,072,786
McKesson HBOC, Inc. ................ 157,720 3,302,263
Mead Corp. ......................... 55,820 1,409,455
MediaOne Group* .................... 346,221 23,123,668
MedImmune Inc.* .................... 124,700 9,227,800
Medtronic, Inc. .................... 676,677 33,706,973
Mellon Financial Corp. ............. 278,220 10,137,641
Merck & Co., Inc. .................. 1,302,515 99,805,212
Mercury Interactive Corp.* ......... 39,700 3,840,975
Meredith Corp. ..................... 31,782 1,072,643
Merrill Lynch & Co., Inc. .......... 210,086 24,159,890
MGIC Investment Corp. .............. 66,131 3,008,961
Micron Technology, Inc.* ........... 316,798 27,898,024
Microsoft Corp.* ................... 2,978,519 238,281,520
Millipore Corp. .................... 25,176 1,897,641
Minnesota Mining & Manufacturing Co. 226,013 18,646,073
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
Shares Value ($)
--------------------------------------------------------------------
Molex, Inc. ............................. 110,498 5,317,716
Morgan Stanley Dean Witter Discover & Co. 641,103 53,371,825
Morgan, (J.P.) & Co., Inc. .............. 91,965 10,127,646
Motorola, Inc. .......................... 1,204,548 35,007,176
Nabisco Group Holdings .................. 180,329 4,677,283
National City Corp. ..................... 356,312 6,079,574
National Semiconductor Corp.* ........... 97,225 5,517,519
National Service Industries, Inc. ....... 23,892 465,894
Navistar International Corp.* ........... 36,217 1,124,991
NCR Corp.* .............................. 54,393 2,117,927
Network Appliance, Inc.* ................ 177,416 14,281,988
New Century Energies, Inc. .............. 60,071 1,802,130
New York Times Co.-- Class A ............ 97,966 3,869,657
Newell Rubbermaid, Inc. ................. 160,245 4,126,309
Newmont Mining Corp. .................... 97,393 2,106,124
Nextel Communications, Inc.-- Class A* .. 439,360 26,883,340
Niagara Mohawk Power Corp.* ............. 127,105 1,771,526
NICOR, Inc. ............................. 26,461 863,290
Nike, Inc. .............................. 157,489 6,270,031
Nordstrom, Inc. ......................... 77,922 1,879,868
Norfolk Southern Corp. .................. 213,203 3,171,395
Nortel Networks Corp. ................... 1,689,028 115,276,161
Northern States Power Co. ............... 65,419 1,320,646
Northern Trust Corp. .................... 125,907 8,191,824
Northrop Grumman Corp. .................. 39,562 2,620,983
Novell, Inc.* ........................... 183,949 1,701,528
Novellus Systems, Inc.* ................. 65,101 3,682,275
Nucor Corp. ............................. 54,749 1,816,982
Occidental Petroleum Corp. .............. 209,111 4,404,400
Office Depot, Inc.* ..................... 187,041 1,169,006
Old Kent Financial Corp. ................ 77,574 2,075,105
Omnicom Group, Inc. ..................... 100,623 8,961,736
Oneok, Inc. ............................. 16,020 415,519
Oracle Corp.* ........................... 1,616,366 135,875,767
Owens Corning ........................... 31,773 293,900
Owens-Illinois, Inc.* ................... 82,512 964,359
Paccar, Inc. ............................ 43,399 1,722,398
Pactiv Corp.* ........................... 100,032 787,752
Paine Webber Group, Inc. ................ 80,981 3,684,636
Pall Corp. .............................. 68,970 1,275,945
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
Shares Value ($)
--------------------------------------------------------------------
Parametric Technology Corp.* ............ 154,897 1,703,867
Parker-Hannifin Corp. ................... 63,370 2,170,423
Paychex, Inc. ........................... 210,381 8,836,002
PE Corp.-PE Biosystems Group ............ 116,640 7,683,660
PECO Energy ............................. 104,041 4,194,153
People's Energy Corp. ................... 19,200 621,600
Peoplesoft, Inc.* ....................... 151,094 2,530,825
PepsiCo, Inc. ........................... 823,624 36,599,792
Perkin Elmer, Inc. ...................... 26,313 1,739,947
Pfizer, Inc. ............................ 3,579,682 171,824,736
PG&E Corp. .............................. 231,869 5,709,774
Pharmacia Corp. ......................... 708,252 36,607,775
Phelps Dodge Corp. ...................... 42,295 1,572,845
Philip Morris Cos ....................... 1,309,236 34,776,581
Phillips Petroleum Co. .................. 141,138 7,153,932
Pinnacle West Capital Corp. ............. 48,045 1,627,524
Pitney Bowes, Inc. ...................... 150,276 6,011,040
Placer Dome, Inc. ....................... 165,830 1,585,749
PNC Bank Corp. .......................... 166,431 7,801,453
Polaroid Corp. .......................... 24,963 450,894
Potlatch Corp. .......................... 15,619 517,379
PPG Industries, Inc. .................... 98,450 4,362,566
PPL Corp. ............................... 70,992 1,557,387
Praxair, Inc. ........................... 90,062 3,371,696
Procter & Gamble Co. .................... 745,693 42,690,924
Progressive Corporation of Ohio ......... 39,448 2,919,152
Providian Financial Corp. ............... 79,675 7,170,750
Public Service Enterprise Group ......... 122,784 4,251,396
Pulte Corp. ............................. 25,108 542,961
Quaker Oats Co. ......................... 74,929 5,629,041
Qualcomm, Inc.* ......................... 417,788 25,067,280
Quintiles Transnational Corp.* .......... 72,068 1,017,961
Qwest Communications International, Inc.* 15,052 747,896
R.R. Donnelley & Sons Co. ............... 72,667 1,639,549
Radioshack Corp. ........................ 109,619 5,193,200
Ralston Purina Group .................... 171,658 3,422,431
Raytheon Co.-- Class B .................. 192,893 3,713,190
Reebok International Ltd.* .............. 29,758 474,268
Regions Financial Corp. ................. 122,161 2,427,950
Reliant Energy .......................... 145,196 4,292,357
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
Shares Value ($)
------------------------------------------------------------
Rite Aid Corp. ................... 153,057 1,004,437
Rockwell International Corp. ..... 111,499 3,512,219
Rohm & Haas Co. .................. 129,983 4,484,414
Rowan Cos., Inc.* ................ 47,276 1,436,009
Royal Dutch Petroleum Co. ........ 1,212,939 74,671,557
Russell Corp. .................... 19,646 392,920
Ryder Systems, Inc. .............. 38,979 738,165
Sabre Group Holdings, Inc. ....... 68,960 1,965,360
Safeco Corp. ..................... 72,432 1,439,586
Safeway, Inc.* ................... 281,173 12,687,932
Sanmina Corp.* ................... 72,900 6,232,950
Sapient Corp.* ................... 32,700 3,496,856
Sara Lee Corp. ................... 492,555 9,512,468
SBC Communications, Inc. ......... 1,931,765 83,548,836
Schering-Plough Corp. ............ 831,316 41,981,458
Schlumberger Ltd. ................ 314,302 23,454,787
Scientific-Atlanta, Inc. ......... 89,116 6,639,142
Seagate Technology, Inc.* ........ 122,249 6,723,695
Seagram Co. Ltd. ................. 245,303 14,227,574
Sealed Air Corp.* ................ 47,345 2,479,694
Sears, Roebuck & Co. ............. 200,049 6,526,599
Sempra Energy .................... 138,396 2,352,732
Shared Medical Systems ........... 17,384 1,267,946
Sherwin-Williams Co. ............. 97,650 2,068,959
Siebel Systems, Inc.* ............ 115,700 18,924,181
Sigma Aldrich Corp. .............. 58,611 1,714,372
SLM Holding Corp. ................ 91,748 3,434,816
Snap-On Tools Corp. .............. 33,332 887,465
Solectron Corp.* ................. 334,986 14,027,539
Southern Co. ..................... 367,400 8,565,013
Southtrust Corp. ................. 99,984 2,262,138
Southwest Airlines Co. ........... 285,555 5,407,698
Springs Industries, Inc.-- Class A 6,077 195,603
Sprint Corp. ..................... 493,014 25,143,714
Sprint PCS* ...................... 515,393 30,665,884
St. Jude Medical, Inc.* .......... 47,631 2,185,072
St. Paul Cos., Inc. .............. 120,154 4,100,255
Stanley Works .................... 49,794 1,182,608
Staples, Inc.* ................... 266,592 4,098,852
Starbucks Corp.* ................. 100,800 3,849,300
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
Shares Value ($)
--------------------------------------------------------
State Street Corp. ............. 90,452 9,593,565
Summit Bancorp ................. 100,812 2,482,496
Sun Microsystems, Inc.* ........ 894,387 81,333,318
Sunoco, Inc. ................... 53,113 1,563,514
Suntrust Banks, Inc. ........... 171,263 7,824,578
SUPERVALU, INC ................. 83,909 1,599,515
Synovus Financial Corp. ........ 156,590 2,759,899
Sysco Corp. .................... 189,462 7,981,087
T. Rowe Price Associates, Inc. . 67,887 2,885,198
Target Corp. ................... 248,111 14,390,438
Tektronix, Inc. ................ 26,199 1,938,726
Tellabs, Inc.* ................. 227,589 15,575,622
Temple Inland, Inc. ............ 31,050 1,304,100
Tenet Healthcare Corp. ......... 176,578 4,767,606
Teradyne, Inc.* ................ 96,497 7,092,530
Texaco, Inc. ................... 314,175 16,729,819
Texas Instruments, Inc. ........ 926,358 63,629,215
Textron, Inc. .................. 83,912 4,557,471
Thermo Electron Corp.* ......... 89,545 1,886,042
Thomas & Betts Corp. ........... 37,736 721,701
Tiffany & Co. .................. 34,100 2,301,750
Time Warner, Inc. .............. 734,771 55,842,596
Times Mirror Co.-- Class A ..... 32,700 2,963,438
Timken Co. ..................... 33,548 624,832
TJX Cos., Inc. ................. 177,279 3,323,981
Torchmark Corp. ................ 74,504 1,839,318
Tosco Corp. .................... 81,486 2,307,072
Toys `R' Us, Inc.* ............. 138,115 2,011,300
Transocean Sedco ............... 116,142 6,206,338
Tribune Co. .................... 133,460 5,274,707
Tricon Global Restaurants, Inc.* 86,324 2,438,653
TRW, Inc. ...................... 65,667 2,848,306
Tupperware Corp. ............... 33,231 731,082
TXU Corp. ...................... 149,653 4,414,764
Tyco International Ltd. ........ 957,517 45,362,368
U.S. Bancorp ................... 426,201 8,204,369
U.S. West, Inc. ................ 295,513 25,340,240
Unicom Corp. ................... 100,711 3,896,257
Unilever NV .................... 322,974 13,887,882
Union Carbide Corp. ............ 75,897 3,756,902
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
Shares Value ($)
--------------------------------------------------------------
Union Pacific Corp. ............... 139,560 5,189,888
Union Pacific Resources Group, Inc. 153,275 3,372,050
Union Planters Corp. .............. 78,574 2,195,161
Unisys Corp.* ..................... 174,861 2,546,413
United Technologies Corp. ......... 268,674 15,818,182
Unitedhealth Group, Inc. .......... 96,091 8,239,803
Unocal Corp. ...................... 133,824 4,432,920
UnumProvident Corp. ............... 135,912 2,726,735
US Airways Group, Inc.* ........... 40,406 1,575,834
UST, Inc. ......................... 92,004 1,351,309
USX-- U.S. Steel Group ............ 49,537 919,531
USX Marathon Group ................ 177,930 4,459,371
V.F. Corp. ........................ 65,111 1,550,456
VERITAS Software Corp.* ........... 223,300 25,236,389
Viacom, Inc.-- Class B* ........... 877,806 59,855,397
Visteon Corp. ..................... 89,475 1,084,883
Vulcan Materials Co. .............. 56,708 2,420,723
W.R. Grace & Co.* ................. 40,741 493,985
W.W. Grainger, Inc. ............... 52,610 1,621,046
Wachovia Corp. .................... 114,236 6,197,303
Wal-Mart Stores, Inc. ............. 2,544,723 146,639,663
Walgreen Co. ...................... 570,324 18,357,304
Walt Disney Co. ................... 1,197,872 46,492,407
Washington Mutual, Inc. ........... 310,224 8,957,718
Waste Management, Inc. ............ 365,375 6,942,125
Watson Pharmaceuticals* ........... 55,191 2,966,516
Wellpoint Health Networks, Inc.* .. 35,959 2,604,780
Wells Fargo Co. ................... 912,626 35,364,258
Wendy's International, Inc. ....... 71,649 1,276,248
Westvaco Corp. .................... 53,569 1,329,181
Weyerhaeuser Co. .................. 135,051 5,807,193
Whirlpool Corp. ................... 41,942 1,955,546
Willamette Industries, Inc. ....... 60,554 1,650,097
Williams Cos., Inc. ............... 245,907 10,251,248
Winn Dixie Stores, Inc. ........... 65,185 932,960
Wm. Wrigley Jr. Co. ............... 64,764 5,193,263
Worldcom, Inc.* ................... 1,623,131 74,461,135
Worthington Industries, Inc. ...... 47,942 503,391
Xerox Corp. ....................... 376,376 7,809,802
Xilinx, Inc.* ..................... 181,299 14,968,499
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
Shares Value ($)
-------------------------------------------------------------------------------
Yahoo! Inc.* ........................... 305,545 37,849,387
Young & Rubicam ........................ 41,584 2,378,085
-------------------------------------------------------------------------------
Total Common Stocks (Cost $4,923,424,736) 7,128,372,492
-------------------------------------------------------------------------------
% of
Net Assets
------------------------------------------------------------------------------
Total Portfolio (Cost $5,076,484,247) .. 100.5% 7,281,433,065
Other Assets and Liabilities, Net ...... (0.5)% (37,447,720)
-------------------------------------------------------------------------------
Net Assets 100.0% 7,243,985,345
-------------------------------------------------------------------------------
* Non-income producing security.
(a) Held as collateral for futures contracts.
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
Financial Statements
--------------------------------------------------------------------------------
Equity 500 Index Portfolio
--------------------------------------------------------------------------------
Statement of Assets and Liabilities as of June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
Investments in securities, at value (Cost of $5,076,484,247) $7,281,433,065
Cash ....................................................... 3,087,847
Receivable for shares of beneficial interest subscribed .... 3,163,942
Receivable for securities sold ............................. 11,239,840
Variation margin receivable ................................ 1,206,852
Dividends and interest receivable .......................... 6,355,111
Other assets ............................................... 100,566
---------------
Total assets ............................................... 7,306,587,223
Liabilities
-----------------------------------------------------------------------------
Payable for securities purchased ........................... 3,749,598
Payable for shares of beneficial interest redeemed ......... 58,556,607
Due to Bankers Trust ....................................... 295,673
---------------
Total liabilities .......................................... 62,601,878
------------------------------------------------------------------------------
Net assets, at value $7,243,985,345
------------------------------------------------------------------------------
Net Assets
-----------------------------------------------------------------------------
Net assets consist of:
Net unrealized appreciation (depreciation) on:
Investments and futures transactions ..................... 2,204,052,919
Paid-in capital ............................................ 5,039,932,426
-----------------------------------------------------------------------------
Net assets, at value $7,243,985,345
-----------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
Equity 500 Index Portfolio
--------------------------------------------------------------------------------
Statement of Operations for the six months ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment Income
------------------------------------------------------------------------------------
<S> <C>
Dividends (net of foreign withholding tax of $335,264) ........... $ 46,366,945
Interest ......................................................... 337,405
---------------
Total investment income .......................................... 46,704,350
---------------
Expenses:
Advisory fees .................................................... 2,348,749
Administration and services fees ................................. 98,084
Professional fees ................................................ 17,252
Trustees' fees ................................................... 1,622
Miscellaneous .................................................... 819
---------------
Total expenses ................................................... 2,466,526
----------------------------------------------------------------------------------
Net investment income 44,237,824
----------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments and
Futures Contracts
----------------------------------------------------------------------------------
Net realized gain (loss) from investment transactions ............ 828,725,066
Net realized gain (loss) from futures transactions ............... (9,545,343)
Net change in unrealized appreciation (depreciation) on
investments and
future contracts .............................................. (944,339,124)
---------------
Net realized and unrealized gain (loss) on investments and futures
contracts ..................................................... (125,159,401)
----------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ (80,921,577)
----------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
--------------------------------------------------------------------------------
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended
2000 December 31,
Increase (Decrease) in Net Assets (Unaudited) 1999
---------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ............................ $ 44,237,824 $ 92,907,589
Net realized gain (loss) from investments and
futures transactions .......................... 819,179,723 (26,748,772)
Net change in unrealized appreciation
(depreciation) on investments and futures
contracts ..................................... (944,339,124) 1,245,281,501
--------------- ---------------
Net increase (decrease) in net assets resulting
from operations ............................... (80,921,577) 1,311,440,318
--------------- ---------------
Capital Transactions:
Proceeds from capital invested ................... 2,113,458,132 4,399,103,297
Value of capital withdrawn ....................... (2,953,648,092) (2,745,951,143)
--------------- ---------------
Net increase (decrease) in net assets from capital (840,189,960) 1,653,152,154
transactions
--------------- ---------------
Total increase (decrease) in net assets .......... (921,111,537) 2,964,592,472
Net assets at beginning of period ................ 8,165,096,882 5,200,504,410
Net assets at end of period ...................... $ 7,243,985,345 $ 8,165,096,882
</TABLE>
The accompanying notes are an integral part of the financial statements.
39
<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>
-----------------------------------------------------------------------------------------------
Years Ended
December 31, 2000(c) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------
Supplemental Data and Ratios
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of
period (000s omitted) $7,243,985 $8,165,097 $5,200,504 $2,803,086 $1,925,224 $1,080,736
-----------------------------------------------------------------------------------------------
Ratio to average
daily net assets:
Net investment
income (%) 1.18* 1.35 1.50 1.76 2.20 2.52
-----------------------------------------------------------------------------------------------
Expenses before
waivers (%) .065(d)* .08 .10 .15 .15 .15
-----------------------------------------------------------------------------------------------
Expenses after
waivers (%) .065(d)* .08 .08(a) .08 .10 .10
-----------------------------------------------------------------------------------------------
Decrease reflected in
above expense ratios
due to fee waivers
or expense
reimbursements (%) .00(b) .00(b) .02 .07 .05 .05
-----------------------------------------------------------------------------------------------
Portfolio turnover
rate (%) 11 13 4 19 15 6
-----------------------------------------------------------------------------------------------
</TABLE>
(a) Effective May 6, 1998, Bankers Trust contractually agreed to limit its
fees from the portfolio only to the extent of the lesser of 0.005% or
the amount that brings the total annual operating expenses as a
percentage of the portfolio's average daily net assets up to 0.08%.
(b) Less than 0.01%.
(c) For the six months ended June 30, 2000 (Unaudited).
(d) Effective March 15, 2000, Bankers Trust contractually agreed to limit
the annual operating expenses for the portfolio to 0.05% of the
portfolio's average daily net assets.
* Annualized
40
<PAGE>
Notes to Financial Statements (Unaudited)
--------------------------------------------------------------------------------
Equity 500 Index Portfolio
Note 1 -- Organization and Significant Accounting Policies
A. Organization
The Equity 500 Index Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on December 11, 1991
as an unincorporated trust under the laws of New York and began 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
41
<PAGE>
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.
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"), an indirect wholly owned subsidiary of
Deutsche Bank AG. The agreement provides for the Portfolio to pay Bankers Trust
a fee, accrued daily and paid monthly, computed as a percentage of the average
daily net assets of the Portfolio. Effective March 15, 2000, Bankers Trust
agreed to limit the total amount of annual operating expenses after the
Portfolio to 0.05% under the agreement. Under this agreement, the investment
advisory fee and the administration and services fee have been reduced to 0.05%
and 0.08%, respectively, of the Portfolio's average daily net assets.
The Portfolio may invest in the BT Institutional Cash Management Fund (the "Cash
Management Fund"), an open-end management investment company managed by Bankers
Trust Company. The Cash Management Fund is offered as a cash management option
to the Portfolio and other accounts managed by Bankers Trust. Distributions from
the Cash Management Fund to the Portfolio for the six months ended June 30, 2000
amounted to $4,482,789 and are included in dividend income.
At June 30, 2000, the Portfolio was a participant with other affiliated entities
in a revolving credit facility in the amount of $200,000,000, which expires
42
<PAGE>
April 29, 2001. A commitment fee of 0.10% per annum on the average daily amount
of the available commitment is payable on a quarterly basis and apportioned
equally among all participants. No amounts were drawn down or outstanding for
this fund under the credit facility for the six months ended June 30, 2000.
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, 2000, were
$831,032,886 and $1,545,748,872, respectively.
For federal income tax purposes, the tax basis of investments held at June 30,
2000 was $5,076,484,247. The aggregate gross unrealized appreciation was
$2,591,087,303, and the aggregate gross unrealized depreciation was $386,138,485
for all investments as of June 30, 2000.
Note 4 -- Futures Contracts
A summary of obligations under these financial instruments at June 30, 2000 is
as follows:
Unrealized
Type of Future Expiration Contracts Position Value ($) Depreciation ($)
--------------------------------------------------------------------------------
S&P Index Futures September 165 Long 60,559,125 (895,899)
2000
At June 30, 2000, the Portfolio segregated securities with a value of
approximately $11,430,365 to cover margin requirements on open futures
contracts.
43
<PAGE>
Investment Products and Services
--------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
--------------------------------------------------------------------------------
The Scudder Family of Funds@
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Money Market U.S. Growth
Scudder U.S. Treasury Money Fund Value
Scudder Cash Investment Trust Scudder Large Company Value Fund
Scudder Money Market Series -- Scudder Value Fund***
Prime Reserve Shares* Scudder Small Company Value Fund
Premium Shares*
Managed Shares* Growth
Scudder Tax Free Money Fund+ Scudder Classic Growth Fund***
Scudder Capital Growth Fund***
Tax Free+ Scudder Large Company Growth Fund***
Scudder Medium Term Tax Free Fund Scudder Select 1000 Growth Fund
Scudder Managed Municipal Bonds Scudder Development Fund
Scudder High Yield Tax Free Fund*** Scudder Small Company Stock Fund***
Scudder California Tax Free Fund** Scudder 21st Century Growth Fund***
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund** Global Equity
Worldwide
U.S. Income Scudder Global Fund
Scudder Short Term Bond Fund Scudder International Fund++
Scudder GNMA Fund*** Scudder Global Discovery Fund***
Scudder Income Fund Scudder Emerging Markets Growth Fund
Scudder Corporate Bond Fund Scudder Gold Fund
Scudder High Yield Bond Fund
Regional
Global Income Scudder Greater Europe Growth Fund
Scudder Global Bond Fund Scudder Pacific Opportunities Fund
Scudder Emerging Markets Income Fund Scudder Latin America Fund
The Japan Fund, Inc.***
Asset Allocation
Scudder Pathway Conservative Portfolio Industry Sector Funds
Scudder Pathway Balanced Portfolio Choice Series
Scudder Pathway Growth Portfolio Scudder Health Care Fund
Scudder Technology Fund
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
</TABLE>
44
<PAGE>
--------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
--------------------------------------------------------------------------------
Retirement Programs and Education Accounts
--------------------------------------------------------------------------------
Retirement Programs Education Accounts
Traditional IRA Education IRA
Roth IRA UGMA/UTMA
SEP-IRA IRA for Minors
Inherited IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**@@
Scudder Horizon Advantage**@@@
--------------------------------------------------------------------------------
Closed-End Funds#
--------------------------------------------------------------------------------
The Argentina Fund, Inc. Montgomery Street Income Securities, Inc.
The Brazil Fund, Inc. Scudder Global High Income Fund, Inc.
The Korea Fund, Inc. Scudder New Asia 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 Class S 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 Kemper Investments'
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 Kemper Investments' 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.
45
<PAGE>
Account Management Resources
--------------------------------------------------------------------------------
For shareholders of Scudder funds including those in the AARP Investment Program
Convenient Automatic Investment Plan
ways to invest,
quickly and A convenient investment program in which money is
reliably electronically debited from your bank account monthly to
regularly purchase fund shares and "dollar cost average"
-- buy more shares when the fund's price is lower and
fewer when it's higher, which can reduce your average
purchase price over time.*
Automatic Dividend Transfer
The most timely, reliable, and convenient way to purchase
shares -- use distributions from one Scudder fund to
purchase shares in another, automatically (accounts with
identical registrations or the same social security or tax
identification number).
QuickBuy
Lets you purchase Scudder fund shares electronically,
avoiding potential mailing delays; money for each of your
transactions is electronically debited from a previously
designated bank account.
Payroll Deduction and Direct Deposit
Have all or part of your paycheck -- even government
checks -- invested in up to four Scudder funds at one
time.
* 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- Automated Information Lines
clock electronic
account Scudder Class S Shareholders:
service and Call SAIL(TM) -- 1-800-343-2890
information,
including some AARP Investment Program Shareholders:
transactions Call Easy-Access Line -- 1-800-631-4636
Personalized account information, the ability to exchange
or redeem shares, and information on other Scudder funds
and services via touchtone telephone.
Web Site
Scudder Class S Shareholders --
www.scudder.com
AARP Investment Program Shareholders --
aarp.scudder.com
Personal Investment Organizer: Offering account
information and transactions, interactive worksheets,
prospectuses and applications for all 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.
46
<PAGE>
Those who Automatic Withdrawal Plan
depend on
investment You designate the bank account, determine the schedule (as
proceeds for frequently as once a month) and amount of the redemptions,
living expenses and Scudder does the rest.
can enjoy these
convenient, Distributions Direct
timely, and
reliable Automatically deposits your fund distributions into the
automated bank account you designate within three business days
withdrawal after each distribution is paid.
programs
QuickSell
Provides speedy access to your money by electronically
crediting your redemption proceeds to the bank account you
previously designated.
For more Scudder Class S Shareholders:
information Call a Scudder representative at
about these 1-800-SCUDDER
services
AARP Investment Program Shareholders:
Call an AARP Investment Program representative at
1-800-253-2277
Please address For Scudder Class S Shareholders:
all written
correspondence The Scudder Funds
to PO Box 2291
Boston, Massachusetts
02107-2291
For AARP Investment Program Shareholders:
AARP Investment Program from Scudder
PO Box 2540
Boston, Massachusetts
02208-2540
47
<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 $290 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 over 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
INVESTMENTS(SM)
[LOGO]
PO Box 2291
Boston, MA 02107-2291
1-800-SCUDDER
www.scudder.com
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