SCUDDER
INVESTMENTS(SM)
[LOGO]
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EQUITY/GROWTH
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Scudder Large Company Growth Fund
Fund #060
Semiannual Report
January 31, 2000
A fund seeking long-term growth of capital by investing at least 65% of its net
assets in large U.S. companies (those with a market value of $1 billion or
more).
A no-load fund with no commissions to buy, sell, or exchange shares.
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Contents
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4 Letter from the Fund's President
6 Performance Update
8 Portfolio Summary
10 Portfolio Management Discussion
14 Glossary of Investment Terms
15 Investment Portfolio
19 Financial Statements
22 Financial Highlights
24 Notes to Financial Statements
29 Officers and Trustees
30 Investment Products and Services
32 Scudder Solutions
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Scudder Large Company Growth Fund
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ticker symbol SCQGX fund number 060
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Date of o The fund, which invests primarily in fast-growing,
Inception: large-cap companies, was ideally positioned to benefit
5/15/91 from the favorable market environment of the last six
months.
Total Net
Assets as of o Strong stock selection, particularly in the technology
1/31/00: sector, enabled the fund to beat the return of its
$1.2 billion benchmark -- the Russell 1000 Growth Index -- for the
period.
o Scudder Large Company Growth Fund received a four-star
overall ranking from Morningstar(TM) for the period
ended January 31, 2000,^1 and was ranked in the top
half of its peer group for the one-, three-, and
five-year periods ended on the same date, as calculated
by Lipper Analytical Services.^2
^1 Morningstar proprietary rankings reflect historical risk-adjusted
performance as of January 31, 2000. The ratings are subject to change every
month. Morningstar ratings are calculated from the fund's 3- and 5-year
average annual returns in excess of 90-day Treasury bill returns with
appropriate fee adjustments, and a risk factor that reflects fund
performance below 90-day T-bill returns. Past performance is no guarantee
of future results. Scudder Large Company Growth Fund received 4 stars for
the 3- and 5-year periods. The top 10% of funds in a broad asset class
receive 5 stars, the next 22.5% receive 4 stars, and the next 35% receive 3
stars. Scudder Large Company Growth Fund was rated among 3533 and 2215
domestic growth funds for the 3- and 5-year periods, respectively, in its
broad asset class. Not all Scudder Funds receive 4- and 5-star ratings.
Ratings are subject to change.
^2 Source: Lipper Analytical Services, Inc., is an independent analyst of
investment performance. Performance includes reinvestment of dividends and
capital gains. For the period ended January 31, 2000, Scudder Large Company
Growth Fund's Lipper ranking was 202 out of 428 funds for the one-year
period, 102 out of 270 funds for the three-year period, and 75 out of 175
for the five-year period.
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Letter from the Fund's President
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Dear Shareholders,
During a period in which the stock prices of countless companies have soared on
the basis of pure expectation or simply a good "story," it is easy to forget
that over the long term, earnings growth is the fundamental driver of stock
price performance. Although the growing popularity of day trading and the
media's minute-by-minute coverage of the markets has given rise to a short-term
mentality among investors, it is important to remember that to purchase stock is
to gain actual ownership of a company. Since a firm's profits are ultimately the
source of its intrinsic worth, companies with suspect earnings will often lose
value even if they are one of the market's "hot" stocks at a given point in
time. However, those that produce strong, steady earnings quarter after quarter
often evolve into the market's top performers.
For that reason, the management team of Scudder Large Company Growth Fund seeks
to invest in companies whose strong franchises or dominant market shares should
facilitate powerful earnings growth over time. While growth stocks won't always
lead the market by as wide of a margin as they have during the past two years,
we believe that the sector will remain a critical component of a long-term
investment plan.
Over the most recent six-month period, Scudder Large Company Growth Fund again
outperformed both its benchmark and its peers. For a detailed discussion of
management's investment
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strategy and portfolio positioning, please turn to the
Portfolio Management Discussion with Valerie Malter and George Fraise that
begins on page 10.
Thank you for your continued investment in Scudder Large Company Growth Fund.
For current information on the fund or your account, visit our Internet Web site
at www.scudder.com. There you'll find a wealth of information, including the
most recent fund performance, the most recent news on Scudder products and
services, and the opportunity to perform account transactions. You can also
speak with the one of our representatives by calling 1-800-SCUDDER
(1-800-728-3337).
Sincerely,
/s/Lynn S. Birdsong
Lynn S. Birdsong
President,
Scudder Large Company Growth Fund
5
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Performance Update
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January 31, 2000
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Growth of a $10,000 Investment
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THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
Scudder Large Company
Growth Fund -- Scudder Shares Russel 1000 Growth Index*
5/91** 10000 10000
92 11811 11233
93 12993 11949
94 13400 12726
95 13152 13042
96 17642 18105
97 21549 23080
98 27156 28984
99 37702 41326
00 46282 49534
Yearly periods ended January 31
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Fund Index Comparison
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Total Return
Growth of Average
Period ended 1/31/2000 $10,000 Cumulative Annual
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Scudder Large Company Growth Fund -- Scudder Shares
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1 year $ 12,276 22.76% 22.76%
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5 year $ 35,191 251.91% 28.61%
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Life of Fund** $ 48,326 383.26% 19.80%
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Russell 1000 Growth Index*
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1 year $ 11,986 19.86% 19.86%
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5 year $ 37,980 279.80% 30.57%
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Life of Fund** $ 49,534 395.34% 20.25%
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* The Russell 1000 Growth Index consists of those stocks in the Russell 1000
Index that have greater-than-average growth orientation. Index returns
assume reinvestment of dividends and, unlike Fund returns, do not reflect
any fees or expenses.
** The Fund commenced operations on May 15, 1991. Index comparisons begin May
31, 1991.
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Returns and Per Share Information
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THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
Yearly periods ended January 31
Scudder Large Company
Growth Fund -- Scudder Shares Russell 1000 Growth Index*
1992** 23.33 12.33
1993 10.00 6.37
1994 3.13 6.50
1995 -1.85 2.48
1996 34.14 38.82
1997 22.15 27.48
1998 26.03 25.58
1999 38.83 42.58
2000 22.76 19.86
1992** 1993 1994 1995 1996 1997 1998 1999 2000
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Fund Total
Return (%) 23.33 10.00 3.13 -1.85 34.14 22.15 26.03 38.83 22.76
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Index Total
Return (%) 12.33 6.37 6.50 2.48 38.82 27.48 25.58 42.58 19.86
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Net Asset
Value ($) 14.75 16.20 16.39 14.82 19.11 21.47 25.54 33.65 40.71
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Income
Dividends ($) 0.03 0.03 0.08 0.15 0.14 -- -- -- --
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Capital Gains
Distributions($)0.02 -- 0.24 1.09 0.60 1.77 1.46 1.71 0.59
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* The Russell 1000 Growth Index consists of those stocks in the Russell 1000
Index that have greater-than-average growth orientation. Index returns
assume reinvestment of dividends and, unlike Fund returns, do not reflect
any fees or expenses.
** The Fund commenced operations on May 15, 1991. Index comparisons begin May
31, 1991.
On March 1, 1997, the Fund adopted its current name. Prior to that date,
the Fund was known as Scudder Quality Growth Fund. All performance is
historical, assumes reinvestment of all dividends and capital gains, and is
not indicative of future results. Investment return and principal value
will fluctuate, so an investor's shares, when redeemed, may be worth more
or less than when purchased. If the Adviser had not maintained the Fund's
expenses, the total returns for the life of Fund would have been lower.
7
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Portfolio Summary
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January 31, 2000
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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.
CommonMStock] 95%
Cash Equivalents 5%
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100%
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Management seeks to remain as close to fully invested in equities as possible.
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Sectors
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(Excludes 5% Cash Equivalents)
A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Technology 37%
Health 16%
Consumer Discretionary 10%
Consumer Staples 8%
Media 8%
Manufacturing 7%
Service Industries 6%
Financial 4%
Communications 3%
Energy 1%
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100%
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The fund's position in technology stocks was an important element of its strong
performance.
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Ten Largest Equity Holdings
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(37% of Portfolio)
Top holdings reflect a focus on stocks that have produced strong, steady
earnings quarter after quarter.
1. Cisco Systems, Inc.
Manufacturer of computer network products
2. Microsoft Corp.
Developer of computer software
3. Intel Corp.
Producer of semiconductor memory circuits
4. Sun Microsystems, Inc.
Manufacturer of high-performance workstations, servers,
and software
5. General Electric Co.
Producer of electrical equipment
6. Pfizer, Inc.
International pharmaceutical company
7. Home Depot, Inc.
Building materials and home improvement stores
8. Medtronic, Inc.
Manufacturer of cardiac pacemakers
9. EMC Corp.
Manufacturer of enhancement products for computer systems
10. Merck & Co., Inc.
Drug manufacturer
For more complete details about the Fund's investment portfolio, see page 15. A
quarterly Fund Summary and Portfolio Holdings are available upon request.
9
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Portfolio Management Discussion
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January 31, 2000
In the following interview, Valerie F. Malter and George P. Fraise, portfolio
managers of Scudder Large Company Growth Fund, discuss the recent market
environment and the fund's current investment strategy.
Q: Growth stocks provided impressive performance again over the past year,
particularly in the fourth quarter of 1999. Could you put this move in
perspective?
A: This has been an incredible period for growth stocks, in terms of both their
performance and their volatility. Rarely have there been such extreme rotations
from growth to value and from large caps to small caps, and rarely have so many
large cap stocks provided such spectacular performance. In 1999, 35 stocks in
the Russell 1000 Growth Index appreciated more than 300%, and that figure
doesn't even include the initial public offerings that came to market after the
first of the year. Six appreciated more than ten times, with QUALCOMM leading
the pack with gains of over 2400%, the best twelve-month performance of a
large-cap stock in recent history. This trend has cooled somewhat in 2000, with
large caps posting more muted returns in relation to selected small cap growth
stocks.
The upward bias of the growth segment has been a function of the stable economic
backdrop and the market-friendly policies of the Federal Reserve. While the
market did have to absorb four quarter-point interest rate hikes over the course
of the period, the level of interest rates remains relatively low, economic
growth is still at manageable levels, and despite the lowest level of
unemployment in thirty years, inflation remains under control. Another key
driver of the market has been the strong cash inflows from individuals and
401(k) plans.
In many cases, growth companies have fundamentally outperformed expectations,
and their stock prices have reflected it. In other cases, there has appeared to
be something of a "tulip bulb" craze going on, with some stocks posting
incredible performance for no obvious analytical reason. Many Internet and
networking start-ups,
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without much to speak of in the way of revenues and profits, have come to market
commanding huge -- and in our opinion, unreasonable -- multiples. For those of
us who prefer to invest in companies with tangible profit or free cash flow,
this new age is truly a wonder.
Q: How has the fund performed over the period?
A: For the twelve-month period ended January 31, 2000, the fund returned 22.76%,
which compares favorably with the 19.86% return of its unmanaged benchmark, the
Russell 1000 Growth Index, as well as the 10.34% return of the S&P 500 Index.
The fund also performed well against its peers, finishing in the top 32% of
growth funds, as calculated by Lipper Analytical Services. We have also
outperformed the group median over the one-, three-, and five-year periods. In
addition, the fund has been awarded a four-star overall ranking from
Morningstar(TM). We believe that the fund's performance can be attributed to
strong stock selection across all sectors of the market.
Q: What sectors provided the biggest boost to performance?
A: Fund returns were boosted by our overweight position in technology stocks,
particularly those in the networking and communications areas. Our top holdings
in this sector include such star performers as QUALCOMM, JDS Uniphase, Cisco
Systems, Sun Microsystems, EMC, America Online, and Motorola. All were up well
in excess of the benchmark and were unbelievable performers. We continue to
utilize a strategy of buying and holding the highest quality companies we can
find within each subsector of the technology group. Since we implemented this
strategy in June of 1998, our technology holdings have been positive
contributors to portfolio outperformance in every quarter. The fund's position
in the media and broadcasting group has also done extremely well behind the
strong gains in Liberty Media, Clear Channel Communications, Univision, and
Omnicom.
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Performance was also boosted by the fund's investments in the top companies in
sectors that did not participate in the market's rally in 1999. For instance,
retailers were mixed, but our two largest positions in the sector were in Home
Depot and Wal-Mart, two companies that rose on the strength of outstanding
operating results. The fund's largest position in the lagging consumer staples
sector was Colgate-Palmolive, one of the few stocks in the group that
outperformed. In fact, it was the only stock among the 35 in the sector to
outperform the Russell 1000 Growth Index during 1999. We feel that this
illustrates the fact that you can even find winning stocks in weak sectors if
you focus on companies with steady earnings growth.
On the down side, health care stocks performed poorly as a group, particularly
the large pharmaceutical stocks. Fears that the presidential candidates will
make health care reform a key issue in the 2000 election combined with slowing
growth rates, fewer takeovers, and the expirations of key patents to depress the
sector. In August, we elected to cut back on the fund's exposure to
pharmaceuticals (by selling Smith Kline Beecham and Eli Lilly) and add to our
holdings in biotechnology (through our purchases of Medimmune and Immunex).
Since then, the drug stocks have been flat while the biotech sector has soared.
The fund is currently underweight in pharmaceuticals and intends to remain so
for the time being.
Q: What is your outlook for the market from here?
A: As in every investment environment, there appear to be both positive and
negative forces at work that could influence the movement of stock prices over
the near term. On the positive side, the economy is strong and consumer
confidence is high. This dynamic creates a positive demand picture, which bodes
well for the revenue growth of our fund holdings. The global economies are also
in recovery mode, which at some point should greatly aid the consumer and
industrial multinational companies dependent on strength in those markets.
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On the other hand, there are several reasons to be concerned about the outlook
for growth stocks. First, the Federal Reserve is expected to raise rates several
times in the coming months, which will be a significant negative for high P/E
stocks. The higher rates go, the less attractive "expensive" stocks become, even
if they had strong underlying fundamentals. Second, while we have never believed
that valuation alone can be a catalyst for determining whether an investment
style will outperform, we can't help but notice the incredible valuation
dispersion between growth and value stocks. In an environment of rising interest
rates, richly valued stocks become more vulnerable.
As a result, we do not expect another year of 30%+ gains, and we anticipate more
of the same in terms of volatility. None of these expectations have caused us to
revisit our investment strategy, however. We will continue to do what we have
always done -- invest stock by stock with an eye toward risk control.
As we have discussed in previous reports, our process and discipline are geared
toward making sure the portfolio holds the top growth companies available in the
market today. We will not time the market or change our style as a result of
shifts in the external market environment. While we are aware of the risks
involved with managing the portfolio in this manner, we are confident that our
approach to selecting growth stocks will allow the fund to outperform over the
long term.
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Glossary of Investment Terms
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Consumer Products bought by consumers that are expected to last
Non-durables less than three years, such as food and drugs. Sales of
non-durables generally tend to be less sensitive to
economic fluctuations.
Consumer Products purchased by consumers on a regular basis, such
Staples as food, beverages, alcohol, and tobacco. In the
aggregate, sales of consumer staples tend to be steady and
less sensitive to economic fluctuations.
Growth Stock Stock of a company that has displayed above average
earnings growth and is expected to continue to increase
profits faster than the overall market. Stocks of such
companies usually trade at higher valuations and
experience more price volatility than the market as a
whole. Distinct from value stock.
Price/Earnings A widely used gauge of a stock's valuation that indicates
Ratio (also what investors are paying for a company's earning power at
"earnings the current stock price. A P/E ratio may be based on a
multiple") company's projected earnings for the coming 12 months. A
higher "earnings multiple" indicates higher expected
earnings growth, along with greater risk of earnings
disappointment.
Weighting Refers to the allocation of assets -- usually in terms of
(over/under) sectors, industries, or countries -- within a portfolio
relative to the portfolio's benchmark index or investment
universe.
(Source: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
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Investment Portfolio as of January 31, 2000 (Unaudited)
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Principal
Amount ($) Value ($)
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Repurchase Agreements 4.7%
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Donaldson, Lufkin and Jenrette, 5.7%, to be
repurchased at $57,078,036 on 2/1/2000,
(Cost $57,069,000)** ...................... 57,069,000 57,069,000
Shares
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Common Stocks 95.3%
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Consumer Discretionary 9.5%
Department & Chain Stores 8.1%
Costco Wholesale Corp.* .................... 358,000 17,519,625
Gap, Inc. .................................. 229,550 10,258,016
Home Depot, Inc. ........................... 542,825 30,737,466
Target Corp. ............................... 196,250 12,927,969
Wal-Mart Stores, Inc. ...................... 480,550 26,310,113
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97,753,189
Recreational Products 0.6% ----------
Premier Parks, Inc.* ....................... 261,000 7,324,313
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Specialty Retail 0.8%
Circuit City Stores, Inc. .................. 261,000 10,048,500
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Consumer Staples 7.4%
Food & Beverage 2.1%
Bestfoods .................................. 223,950 9,741,825
PepsiCo, Inc. .............................. 463,140 15,804,653
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25,546,478
Package Goods/Cosmetics 5.3% ----------
Colgate-Palmolive Co. ...................... 277,450 16,438,913
Estee Lauder Companies "A" ................. 305,700 15,628,913
Gillette Co. ............................... 287,800 10,828,475
Procter & Gamble Co. ....................... 204,850 20,664,244
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63,560,545
Health 15.0% ----------
Biotechnology 2.5%
Biogen, Inc.* .............................. 81,700 7,046,625
Immunex Corp.* ............................. 89,000 11,636,750
The accompanying notes are an integral part of the financial statements.
15
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Shares Value ($)
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MedImmune, Inc.* ............................... 81,650 11,920,900
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30,604,275
Medical Supply & Specialty 2.5% -----------
Medtronic, Inc. ................................ 659,688 30,180,726
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Pharmaceuticals 10.0%
Allergan, Inc. ................................. 209,500 11,941,495
Bristol-Myers Squibb Co. ....................... 172,800 11,404,800
Johnson & Johnson .............................. 197,200 16,971,525
Merck & Co., Inc. .............................. 343,100 27,040,569
Pfizer, Inc. ................................... 884,350 32,168,231
Warner-Lambert Co. ............................. 224,000 21,266,000
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120,792,620
Communications 2.8% -----------
Telephone/Communications 2.3%
JDS Uniphase Corp.* ............................ 102,050 20,811,822
MCI WorldCom, Inc.* ............................ 142,775 6,558,727
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27,370,549
Miscellaneous 0.5% -----------
American Tower Systems Corp. Class "A"* ........ 182,100 6,487,313
Financial 3.5%
Insurance 1.9%
American International Group, Inc. ............. 225,258 23,454,989
Consumer Finance 1.6%
American Express Co. ........................... 67,200 11,075,400
Capital One Finance Corp. ...................... 200,550 8,222,550
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19,297,950
Media 7.6% -----------
Advertising 1.4%
Omnicom Group, Inc. ............................ 188,050 17,617,934
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Broadcasting & Entertainment 4.4%
Clear Channel Communications, Inc.* ............ 284,200 24,547,775
Infinity Broadcasting Corp.* ................... 425,596 13,831,870
Univision Communication, Inc.* ................. 135,550 14,520,794
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52,900,439
Cable Television 1.8% -----------
AT&T Corp-- Liberty Media Group* ............... 275,400 14,079,825
The accompanying notes are an integral part of the financial statements.
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Shares Value ($)
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EchoStar Communications Corp. "A"* ............. 93,200 7,589,975
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21,669,800
Service Industries 5.7% -----------
EDP Services 3.4%
Electronic Data Systems Corp. .................. 352,450 23,834,431
PSINet, Inc.* .................................. 220,550 17,616,431
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41,450,862
Investment 1.8% -----------
Charles Schwab Corp. ........................... 217,400 7,839,988
Morgan Stanley Dean Witter & Co. ............... 205,000 13,581,250
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21,421,238
Miscellaneous Consumer Services 0.5% -----------
eBay, Inc.* .................................... 40,450 6,070,028
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Manufacturing 6.9%
Diversified Manufacturing 1.6%
Honeywell International, Inc. .................. 189,600 9,100,800
Textron, Inc. .................................. 174,200 10,397,563
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19,498,363
Electrical Products 4.0% -----------
General Electric Co. ........................... 358,300 47,788,263
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Industrial Specialty 1.3%
QUALCOMM Inc.* ................................. 122,850 15,601,950
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Technology 35.8%
Computer Software 9.2%
America Online, Inc.* .......................... 468,150 26,655,290
Computer Associates International, Inc. ........ 172,300 11,834,856
Microsoft Corp.* ............................... 647,400 63,364,275
Oracle Corp.* .................................. 203,900 10,185,442
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112,039,863
Diverse Electronic Products 4.2% -----------
Applied Materials, Inc.* ....................... 152,650 20,951,213
Motorola, Inc. ................................. 107,200 14,659,600
Teradyne, Inc.* ................................ 235,200 15,229,200
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50,840,013
EDP Peripherals 3.4% -----------
Ariba, Inc.* ................................... 71,400 11,611,425
EMC Corp.* ..................................... 278,750 29,686,875
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41,298,300
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The accompanying notes are an integral part of the financial statements.
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Shares Value ($)
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Electronic Components/Distributors 6.6%
Cisco Systems, Inc.* ........................... 728,400 79,759,800
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Electronic Data Processing 5.2%
International Business Machines Corp. .......... 115,900 13,002,531
Sun Microsystems, Inc.* ........................ 629,900 49,486,519
----------
62,489,050
Semiconductors 7.2% ----------
Intel Corp. .................................... 613,550 60,703,103
Linear Technology Corp. ........................ 159,100 15,064,781
Vitesse Semiconductor Corp.* ................... 257,450 11,199,075
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86,966,959
Energy 1.1% ----------
Oilfield Services/Equipment
Schlumberger Ltd. .............................. 209,500 12,792,594
----------
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Total Common Stocks (Cost $719,747,907) 1,152,626,903
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Total Investment Portfolio-- 100.0% (Cost $776,816,907) (a) 1,209,695,903
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* Non-income producing security.
** Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
(a) The cost for federal income tax purposes was $798,186,209. At January 31,
2000, net unrealized appreciation for all securities based on tax cost was
$411,509,694. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of value over tax cost of
$430,820,658 and aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over value of $19,310,964.
The accompanying notes are an integral part of the financial statements.
18
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Financial Statements
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Statement of Assets and Liabilities as of January 31, 2000 (Unaudited)
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Assets
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Investments in securities, at value
(cost $776,816,907) .................................... $ 1,209,695,903
Receivable for investments sold ......................... 565,362
Receivable for Fund shares sold ......................... 179,665
Dividends receivable .................................... 225,135
Other assets ............................................ 1,405
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Total assets ............................................ 1,210,667,470
Liabilities
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Due to custodian bank ................................... 14,817
Accrued management fee .................................. 719,524
Other accrued expenses and payables ..................... 1,356,601
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Total liabilities ....................................... 2,090,942
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Net assets, at value $ 1,208,576,528
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Net Assets
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Net assets consist of:
Accumulated net investment loss ......................... (2,589,129)
Net unrealized appreciation (depreciation)
on investments ......................................... 432,878,996
Accumulated net realized gain (loss) .................... 16,694,803
Paid-in capital ......................................... 761,591,858
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Net assets, at value $ 1,208,576,528
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Net Asset Value
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Scudder Shares
Net asset value, offering and redemption price per share
($1,168,293,746 / 28,697,839 outstanding shares of
beneficial interest, $.01 par value, unlimited number ---------------
of shares authorized)................................... $ $40.71
Class R Shares ---------------
Net asset value, offering and redemption price per share
($40,282,782 / 990,856 outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares ---------------
authorized) ............................................ $ $40.65
---------------
The accompanying notes are an integral part of the financial statements.
19
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Statement of Operations for the six months January 31, 2000 (Unaudited)
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Investment Income
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Dividends ................................................. $ 2,031,311
Interest .................................................. 1,286,193
-----------
Total income .............................................. 3,317,504
-----------
Expenses:
Management fee ............................................ 3,506,008
Services to shareholders .................................. 2,138,623
Custodian and accounting fees ............................. 73,419
Administrative services fees .............................. 17,006
Trustees' fees and expenses ............................... 25,867
Auditing .................................................. 22,057
Reports to shareholders ................................... 68,833
Legal ..................................................... 12,546
Registration fees ......................................... 53,474
Other expenses ............................................ 2,580
-----------
Total expenses, before expense reductions ................. 5,920,413
Expense reductions ........................................ (13,780)
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Total expenses, after expense reductions .................. 5,906,633
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Net investment income (loss) (2,589,129)
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Realized and unrealized gain (loss) on investment transactions
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Net realized gain (loss) from investments ................. 19,681,785
Net unrealized appreciation (depreciation) during the period
on investments ........................................... 193,959,778
- --------------------------------------------------------------------------------
Net gain (loss) on investment transactions 213,641,563
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 211,052,434
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------------------
Six Months
Ended
January 31, Nine Months Year Ended
Increase (Decrease) in Net 2000 Ended July 31, October 31,
Assets (Unaudited) 1999 (Note A) 1998
- -------------------------------------------------------------------------------------------
Operations:
<S> <C> <C> <C>
Net investment income (loss) .... $ (2,589,129) $ (2,513,387) $ (213,021)
Net realized gain (loss) on
investment transactions ........ 19,681,785 16,822,623 31,321,568
Net unrealized appreciation
(depreciation) on investment
transactions during the period . 193,959,778 116,057,567 35,342,915
--------------- --------------- ---------------
Net increase (decrease) in net
assets resulting from operations 211,052,434 130,366,803 66,451,462
--------------- --------------- ---------------
Distributions to shareholders:
From net realized gains:
Scudder Shares .................. (15,765,609) (32,234,768) (16,858,738)
--------------- --------------- ---------------
Class R Shares .................. (293,253) -- --
--------------- --------------- ---------------
Fund share transactions:
Proceeds from shares sold ....... 374,896,357 476,042,466 297,954,229
Reinvestment of distributions ... 15,734,790 31,494,884 16,409,785
Cost of shares redeemed ......... (206,362,638) (278,510,744) (149,865,907)
--------------- --------------- ---------------
Net increase (decrease) in net
assets from Fund share
transactions ................... 184,268,509 229,026,606 164,498,107
--------------- --------------- ---------------
Increase (decrease) in net assets 379,262,081 327,158,641 214,090,831
Net assets at beginning of period 829,314,447 502,155,806 288,064,975
Net assets at end of period
(including accumulated net
realized loss of $2,589,129 at --------------- --------------- ---------------
January 31, 2000) .............. $ 1,208,576,528 $ 829,314,447 $ 502,155,806
--------------- --------------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
2000(a)(b1999(a)(c)1998(a)(d1997(a)(d)1996(a)(d1995(d) 1994(d)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $33.35 $28.17 $25.10 $21.19 $18.44 $16.17 $16.42
--------------------------------------------------------------
Income (loss) from
investment operations:
Net investment
income (loss) (.10) (.11) (.02) (.01) .08 .11 .16
Net realized and
unrealized gain
(loss) on investment
transactions 7.85 7.00 4.55 5.69 3.41 3.40 (.09)
--------------------------------------------------------------
Total from
investment operations 7.95 6.89 4.53 5.68 3.49 3.51 .07
Less distributions:
From net investment
income -- -- -- -- (.14) (.15) (.08)
From net realized
gains on investment
transactions (.59) (1.71) (1.46) (1.77) (.60) (1.09) (.24)
--------------------------------------------------------------
Total distributions (.59) (1.71) (1.46) (1.77) (.74) (1.24) (.32)
Net asset value, end
of period $40.71 $33.35 $28.17 $25.10 $21.19 $18.44 $16.17
--------------------------------------------------------------
Total Return (%) 23.82** 24.83** 18.86 28.84 19.49 23.78 .39
Ratios to average net assets and supplemental data
- ------------------------------------------------------------------------------------
Net assets, end of
period ($ millions) 1,168 829 502 288 221 173 113
Ratio of expenses (%) 1.18* 1.23* 1.19 1.21 1.07 1.17 1.25
Ratio of net
investment income
(loss) (%) (.51)* (.46)* (.06) (.05) .41 .71 .96
Portfolio turnover
rate (%) 55* 63* 54 68 69 92 120
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) For the six months ended January 31, 2000 (Unaudited).
(c) For the nine months ended July 31, 1999. On August 10, 1998, the Trustees
of the Fund changed the fiscal year end from October 31 to July 31.
(d) For the year ended October 31.
* Annualized
** Not annualized
22
<PAGE>
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the financial
statements.
Class R Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
1999(b)
- ------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $33.27
----------
Income (loss) from investment operations:
Net investment income (loss) (a) (.14)
Net realized and unrealized gain (loss) on investment transactions 7.83
----------
Total from investment operations 7.97
Less distributions from:
Net investment income --
Net realized gains on investment transactions (.59)
----------
Total distributions (.59)
Net asset value, end of period $40.65
----------
Total Return (%) 23.98**
Ratios to Average Net Assets and Supplemental Data
- --------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 40
Ratio of expenses (%) 1.39*
Ratio of net investment income (loss) (%) (.74)*
Portfolio turnover rate (%) 55*
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) For the period August 2, 1999 (commencement of Class R Shares) to January
31, 2000 (Unaudited).
* Annualized
** Not annualized
23
<PAGE>
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
A. Significant Accounting Policies
Scudder Large Company Growth Fund (the "Fund") is a diversified series of
Investment Trust (the "Trust") which is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end management investment
company and is organized as a Massachusetts business trust.
On August 10, 1998, the Trustees of the Fund changed the fiscal year end from
October 31 to July 31.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Effective August 2, 1999, the Fund offers two classes of shares: Scudder Shares
and Class R shares. Class R Shares are available for purchase by participants of
certain employer-sponsored retirement plans.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses and expense reductions, if any, are borne pro rata on the
basis of relative net assets by the holders of all classes of shares except that
each class bears certain expenses unique to that class such as shareholder
services, administrative services, and certain other class specific expenses.
Differences in class expenses may result in payment of different per share
dividends by class. All shares of the Fund have equal rights with respect to
voting subject to class specific arrangements.
Security Valuation. Investments are stated at value determined as of the close
of regular trading on the New York Stock Exchange. Securities which are traded
on U.S. or foreign stock exchanges are valued at the most recent sale price
reported on the exchange on which the security is traded most extensively. If no
sale occurred, the security is then valued at the calculated mean between the
most recent bid and asked quotations. If there are no such bid and asked
quotations, the most recent bid quotation is used. Securities quoted on the
Nasdaq Stock Market ("Nasdaq"), for which there have been sales, are valued at
the most recent sale price reported. If there are no such sales, the value is
the most recent bid quotation. Securities which are not quoted on Nasdaq but are
traded in another over-the-counter market are valued at the most recent sale
price, or if no sale occurred, at the calculated mean between the most recent
bid and asked quotations on such market. If
24
<PAGE>
there are no such bid and asked quotations, the most recent bid quotation shall
be used.
Portfolio debt securities purchased with an original maturity greater than sixty
days are valued by pricing agents approved by the officers of the Trust, whose
quotations reflect broker/dealer-supplied valuations and electronic data
processing techniques. If the pricing agents are unable to provide such
quotations, the most recent bid quotation supplied by a bona fide market maker
shall be used. Money market instruments purchased with an original maturity of
sixty days or less are valued at amortized cost.
All other securities are valued at their fair value as determined in good faith
by the Valuation Committee of the Board of Trustees.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, receives delivery of the underlying securities, the amount
of which at the time of purchase and each subsequent business day is required to
be maintained at such a level that the market value is equal to at least the
principal amount of the repurchase price plus accrued interest.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code, as amended, which are applicable to regulated
investment companies, and to distribute all of its taxable income to its
shareholders. Accordingly, the Fund paid no federal income taxes and no federal
income tax provision was required.
Distribution of Income and Gains. Distributions of net investment income, if
any, are made annually. Net realized gains from investment transactions, in
excess of available capital loss carryforwards, would be taxable to the Fund if
not distributed, and, therefore, will be distributed to shareholders at least
annually.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. These
differences primarily relate to investments in certain securities sold at a
loss. As a result, net investment income (loss) and net realized gain (loss) on
investment transactions for a reporting period may differ significantly from
distributions during such period. Accordingly, the Fund may periodically make
reclassifications among certain of its capital accounts without impacting the
net asset value of the Fund.
25
<PAGE>
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date. Realized gains and
losses from investment transactions are recorded on an identified cost basis.
B. Purchases and Sales of Securities
For the six months ended January 31, 2000, purchases and sales of investment
securities (excluding short-term investments) aggregated $413,844,864 and
$260,467,809, respectively.
C. Related Parties
Under the Investment Management Agreement (the "Agreement") with Scudder Kemper
Investments, Inc. (the "Adviser") the Adviser directs the investments of the
Fund in accordance with its investment objective, policies, and restrictions.
The Adviser determines the securities, instruments, and other contracts relating
to investments to be purchased, sold or entered into by the Fund. In addition to
portfolio management services, the Adviser provides certain administrative
services in accordance with the Agreement. The management fee payable under the
Agreement is equal to an annual rate of 0.70% of the Fund's average daily net
assets computed and accrued daily and payable monthly. For the six months ended
January 31, 2000, the fee pursuant to the Agreement amounted to $3,506,008.
Administrative Services Fees. Kemper Distributors, Inc. ("KDI"), an affiliate of
the Adviser, provides information and administrative services to Class R
Shareholders at an annual rate of up to 0.25% of average daily net assets for
the class. KDI in turn has various agreements with financial services firms that
provide these services and pays these firms based on assets of shareholder
accounts the firms service. For the period August 2, 1999 through January 31,
2000, the Administrative Services Fee was as follows:
Unpaid at
Total Fees Waived January 31,
Administrative Services Fees Aggregated by KDI 2000
- --------------------------------------------------------------------------------
Class R .................... $ 17,006 -- $ 17,006
Shareholder Services Fees. Kemper Service Company ("KSC"), an affiliate of the
Adviser, is the transfer, dividend-paying and shareholder service agent for the
Fund's Class R Shares. During the first year of operations for Class R shares,
shareholder services fees will be accrued at a rate of 0.35%. For the
26
<PAGE>
period August 2, 1999 through January 31, 2000, the amount charged to Class R
Shares aggregated $23,782 of which $22,441 is unpaid at January 31, 2000.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Scudder Shares
of the Fund. For the six months ended January 31, 2000, the amount charged to
the Scudder Shares of the Fund by SSC aggregated $569,536, of which $320,511 is
unpaid at January 31, 2000.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six months ended January
31, 2000, the amount charged to the Fund by STC aggregated $1,065,272, of which
$566,338 was unpaid at January 31, 2000.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six months
ended January 31, 2000, the amount charged to the Fund by SFAC aggregated
$64,091, of which $12,814 was unpaid at January 31, 2000.
The Fund is one of several Scudder Funds (the "Underlying Funds") in which the
Scudder Pathway Series Portfolios (the "Portfolios") invest. In accordance with
the Special Servicing Agreement entered into by the Adviser, the Portfolios, the
Underlying Funds, SSC, SFAC, STC, and Scudder Investor Services, Inc., expenses
from the operation of the Portfolios are borne by the Scudder class of the
underlying Funds based on each Underlying Funds' proportionate share of assets
owned by the Portfolios. No Underlying Funds will be charged expenses that
exceed the estimated savings to such Scudder class of the underlying Fund. These
estimated savings result from the elimination of separate shareholder accounts
which either currently are or have potential to be invested in the Scudder class
of underlying Funds. For the six months ended January 31, 2000, the Special
Servicing Agreement expense charged to the Fund amounted to $216,660.
The Trust pays each of its Trustees not affiliated with the Adviser an annual
retainer plus specified amounts for attended board and committee meetings. For
the six months ended January 31, 2000, Trustees fees and expenses for the Trust
aggregated $25,867.
D. Expense Off-Set Arrangements
The Fund has entered into arrangements with its custodian and transfer agent
whereby credits realized as a result of uninvested cash balances were used to
27
<PAGE>
reduce a portion of the Fund's expenses. For the six months ended the Fund's
custodian and transfer agent fees were reduced by $1,279 and $12,501,
respectively, under these arrangements.
E. Share Transactions
<TABLE>
<CAPTION>
Six Months Ended Nine Months Ended
January 31, 2000 July 31, 1999
---------------------------------- --------------------------------
Shares Dollars Shares Dollars
Shares sold
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Scudder Shares ..... 8,649,898 $ 327,124,951 14,423,168 $ 476,042,466
Class R* ........... 1,250,950 47,771,406 -- --
$ 374,896,357 $ 476,042,466
Shares issued to shareholders in reinvestment of distributions
- ----------------------------------------------------------------------------------------
Scudder Shares ..... 384,213 $ 15,441,549 989,473 $ 31,494,884
Class R* ........... 7,304 293,241 -- --
$ 15,734,790 $ 31,494,884
Shares redeemed
- ----------------------------------------------------------------------------------------
Scudder Shares ..... (5,199,953) $(196,117,977) (8,377,733) $(278,510,744)
Class R* ........... (267,398) (10,244,661) -- --
$(206,362,638) $(278,510,744)
Net increase (decrease)
- ----------------------------------------------------------------------------------------
Scudder Shares 3,834,158 $ 146,448,523 7,034,908 $ 229,026,606
Class R* 990,856 37,819,986 -- --
$ 184,268,509 $ 229,026,606
</TABLE>
* For the period August 2, 1999 (commencement of sale of Class R Shares) to
January 31, 2000.
F. Line of Credit
The Fund and several Scudder Funds (the "Participants") share in a $1 billion
revolving credit facility for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 33 percent of its net assets under the agreement.
28
<PAGE>
Officers and Trustees
- --------------------------------------------------------------------------------
Lynn S. Birdsong*
o President and Trustee
Henry P. Becton, Jr.
o Trustee; President and General
Manager, WGBH Educational
Foundation
Dawn-Marie Driscoll
o Trustee; Executive Fellow, Center
for Business Ethics, Bentley
College; President, Driscoll
Associates
Peter B. Freeman
o Trustee; Corporate Director and
Trustee
George M. Lovejoy, Jr.
o Trustee; President and Director,
Fifty Associates
Wesley W. Marple, Jr.
o Trustee; Professor of Business
Administration, Northeastern
University
Kathryn L. Quirk*
o Trustee, Vice President and
Assistant Secretary
Jean C. Tempel
o Trustee; Venture Partner,
Internet Capital Group
Bruce F. Beaty*
o Vice President
Jennifer P. Carter*
o Vice President
James M. Eysenbach*
o Vice President
William F. Gadsden*
o Vice President
Valerie F. Malter*
o Vice President
Ann M. McCreary*
o Vice President
Kathleen T. Millard*
o Vice President
Robert C. Peck*
o Vice President
Robert Tymoczko*
o Vice President
John Millette*
o Vice President and Secretary
John R. Hebble*
o Treasurer
Caroline Pearson*
o Assistant Secretary
*Scudder Kemper Investments, Inc.
29
<PAGE>
Investment Products and Services
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
<S> <C>
Money Market U.S. Growth and Income
Scudder U.S. Treasury Money Fund Scudder Balanced Fund
Scudder Cash Investment Trust Scudder Dividend & Growth Fund
Scudder Money Market Series -- Scudder Growth and Income Fund
Prime Reserve Shares* Scudder Select 500 Fund
Premium Shares* Scudder S&P 500 Index Fund
Managed Shares* Scudder Real Estate Investment Fund
Scudder Government Money Market
Series -- Managed Shares* U.S. Growth
Value
Tax Free Money Market+ Scudder Large Company Value Fund
Scudder Tax Free Money Fund Scudder Value Fund***
Scudder Tax Free Money Market Scudder Small Company Value Fund
Series -- Managed Shares* Scudder Micro Cap Fund
Scudder California Tax Free Money Fund** Growth
Scudder New York Tax Free Money Fund** Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Tax Free+ Scudder Select 1000 Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Medium Term Tax Free Fund Scudder 21st Century Growth Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund Global Equity
Scudder California Tax Free Fund** Worldwide
Scudder Massachusetts Limited Term Scudder Global Fund
Tax Free Fund** Scudder International Value Fund
Scudder Massachusetts Tax Free Fund** Scudder International Growth and
Scudder New York Tax Free Fund** Income Fund
Scudder Ohio Tax Free Fund** Scudder International Fund++
Scudder International Growth Fund
U.S. Income Scudder Global Discovery Fund***
Scudder Short Term Bond Fund Scudder Emerging Markets Growth Fund
Scudder GNMA Fund Scudder Gold Fund
Scudder Income Fund Regional
Scudder Corporate Bond Fund Scudder Greater Europe Growth Fund
Scudder High Yield Bond Fund Scudder Pacific Opportunities Fund
Scudder Latin America Fund
Global Income The Japan Fund, Inc.
Scudder Global Bond Fund
Scudder International Bond Fund Industry Sector Funds
Scudder Emerging Markets Income Fund Choice Series
Scudder Financial Services Fund
Asset Allocation Scudder Heath Care Fund
Scudder Pathway Conservative Portfolio Scudder Technology Fund
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio Preferred Series
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small Company Fund
</TABLE>
30
<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
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Closed-End Funds#
- -----------------------------------------------------------------------------------------
<S> <C>
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.
</TABLE>
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money.
+++ Funds within categories are listed in order from expected least
risk to most risk. Certain Scudder funds or classes thereof may
not be available for purchase or exchange.
+ A portion of the income from the tax-free funds may be subject to
federal, state, and local taxes.
* A class of shares of the fund.
** Not available in all states.
*** Only the Scudder Shares of the fund are part of the Scudder Family
of Funds.
++ Only the International Shares of the fund are part of the Scudder
Family of Funds.
+++ +++ A no-load variable annuity contract provided by Charter National
Life Insurance Company and its affiliate, offered by Scudder's
insurance agencies, 1-800-225-2470.
+++ +++ +++ A no-load variable annuity contract issued by Glenbrook Life and
Annuity Company and underwritten by Allstate Financial Services,
Inc., sold by Scudder's insurance agencies, 1-800-225-2470.
# These funds, advised by Scudder Kemper Investments, Inc., are
traded on the New York Stock Exchange and, in some cases, on
various other stock exchanges.
31
<PAGE>
Scudder Solutions
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
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- Scudder Automated Information Line: SAIL(TM) --
clock electronic 1-800-343-2890
account
service and Personalized account information, the ability to exchange
information, or redeem shares, and information on other Scudder funds
including some and services via touchtone telephone.
transactions
Scudder's Web Site -- www.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 your need them. Scudder's site also
provides news about Scudder funds, retirement planning
information, and more.
32
<PAGE>
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Retirees and Automatic Withdrawal Plan
those who 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 after
withdrawal 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 Call a Scudder representative at
information about 1-800-SCUDDER
these services
Or visit our Web site at
www.scudder.com
Please address The Scudder Funds
all written PO Box 2291
correspondence Boston, Massachusetts
to 02107-2291
33
<PAGE>
Notes
- --------------------------------------------------------------------------------
<PAGE>
Notes
- --------------------------------------------------------------------------------
<PAGE>
Notes
- --------------------------------------------------------------------------------
<PAGE>
Notes
- --------------------------------------------------------------------------------
<PAGE>
Notes
- --------------------------------------------------------------------------------
<PAGE>
Notes
- --------------------------------------------------------------------------------
<PAGE>
About the Fund's Adviser
SCUDDER
INVESTMENTS(SM)
[LOGO]
PO Box 2291
Boston, MA 02107-2291
1-800-SCUDDER
www.scudder.com
A member of the [LOGO] Zurich Financial Group
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.
RT060100
60-6-10
PO Box 2291
Boston, MA 02107-2291
1-800-SCUDDER
www.scudder.com
