Supplement to currently effective Prospectus of each of the listed funds
Scudder Balanced Fund
Scudder California Tax Free Fund
Scudder California Tax Free Money Fund
Scudder Cash Investment Trust
Scudder Development Fund
Scudder Emerging Markets Growth Fund
Scudder Emerging Markets Income Fund
Scudder Global Bond Fund
Scudder Global Discovery Fund
Scudder Global Fund
Scudder GNMA Fund
Scudder Gold Fund
Scudder Government Money Market Series
Scudder Greater Europe Growth Fund
Scudder Growth and Income Fund
Scudder High Yield Bond Fund
Scudder High Yield Tax Free Fund
Scudder Income Fund
Scudder International Bond Fund
Scudder International Fund
Scudder International Growth and Income Fund
Scudder Large Company Growth Fund
Scudder Large Company Value Fund
Scudder Latin America Fund
Scudder Limited Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder Massachusetts Limited Term Tax Free Fund
Scudder Massachusetts Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Money Market Series
Scudder New York Tax Free Fund
Scudder New York Tax Free Money Fund
Scudder Ohio Tax Free Fund
Scudder Pacific Opportunities Fund
Scudder Pathway Series:
Balanced Portfolio
Conservative Portfolio
Growth Portfolio
International Portfolio
Scudder Pennsylvania Tax Free Fund
Scudder Short Term Bond Fund
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series
Scudder U.S. Treasury Money Fund
Scudder Value Fund
Scudder Zero Coupon 2000 Fund
("Zurich"), an international insurance and financial services organization, have
formed a new global investment organization by combining Scudder's business with
that of Zurich's subsidiary, Zurich Kemper Investments, Inc. ("Zurich Kemper"),
and Scudder has changed its name to Scudder Kemper Investments, Inc. ("Scudder
Kemper" or the "Adviser"). As a result of the transaction, Zurich owns
approximately 70% of Scudder Kemper, with the balance owned by Scudder Kemper's
officers and employees. Scudder Kemper now manages in excess of $200 billion in
assets.
Following the transaction, the Scudder Family of Funds will continue to be pure
no load. The Scudder Family of Funds consists of those Funds or classes of Funds
advised by Scudder Kemper which are offered without commissions to purchase or
redeem shares or to exchange from one Fund to another.
The transaction between Scudder and Zurich resulted in the termination of each
Fund's investment management agreement with Scudder. However, new investment
management agreements between each Fund and Scudder Kemper were approved by each
Fund's Board of Directors or Trustees. A special meeting of shareholders (the
"Special Meeting") of each Fund was held in October, 1997, at which time the
shareholders also approved the new investment management agreements. The new
investment management agreements (each an "Investment Management Agreement" and,
collectively, the "Investment Management Agreements") are all effective as of
December 31, 1997 and each will be in effect for an initial term ending on the
same date as would the corresponding previous investment management agreement.
Each Fund's Investment Management Agreement is the same in all material respects
as the corresponding previous investment management agreement, except that
Scudder Kemper is the new investment adviser to each Fund.
Each Fund's fundamental policies have been amended by a vote of shareholders at
each Fund's respective Special Meeting. Following is a list of each Fund's
amended and restated fundamental policies. As a matter of fundamental policy,
each Fund will not:
o borrow money, except as permitted under the Investment Company Act of 1940,
as amended, and as interpreted or modified by regulatory authority having
jurisdiction, from time to time;
o issue senior securities, except as permitted under the Investment Company
Act of 1940, as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time;
o For all Funds except Scudder Gold Fund: concentrate its investments in a
particular industry, as that term is used in the Investment Company Act of
1940, as amended, and as interpreted or modified by regulatory authority
having jurisdiction, from time to time (except that Scudder Cash Investment
Trust and Scudder New York Tax Free Money Fund each reserves the freedom of
action to concentrate its investments in instruments issued by domestic
banks and except that Scudder Pathway Series may concentrate in an
underlying Fund. However, each underlying Scudder Fund in which each
Pathway Portfolio will invest may concentrate its investments in a
particular industry);
o For Scudder Gold Fund: concentrate its investments in a particular
industry, as that term is used in the Investment Company Act of 1940, as
amended, and as interpreted or modified by regulatory authority having
jurisdiction, from time to time, except that the Fund may concentrate in
securities issued by wholly owned subsidiaries of Scudder Mutual Funds,
Inc. and securities of companies that are primarily engaged in the
exploration, mining, fabrication, processing or distribution of gold and
other precious metals and in gold, silver, platinum and palladium bullion
and coins;
o For all Funds: engage in the business of underwriting securities issued by
others, except to the extent that the Fund (or Portfolio, in the case of
Scudder Pathway Series) may be deemed to be an underwriter in connection
with the disposition of portfolio securities;
o purchase or sell real estate, which term does not include securities of
companies which deal in real estate or mortgages or investments secured by
real estate or interests therein, except that the Fund (or Portfolio, in
the case of Scudder Pathway Series) reserves freedom of action to hold and
to sell real estate acquired as a result of the Fund's (or Portfolio's, in
the case of Scudder Pathway Series) ownership of securities;
o For all Funds except Scudder Gold Fund: purchase physical commodities or
contracts relating to physical commodities;
o For Scudder Gold Fund: purchase or sell physical commodities or contracts
relating to physical commodities, except for contracts for the future
delivery of gold, silver, platinum and palladium and gold, silver, platinum
and palladium bullion and coins;
o For all Funds: make loans to other persons, except (i) loans of portfolio
securities, and (ii) to the extent that entry into repurchase agreements
and the purchase of debt instruments or interests in indebtedness in
accordance with the Fund's (or Portfolio's, in the case of Scudder Pathway
Series) investment objective and policies may be deemed to be loans.
In addition, the following Funds also include the following fundamental
policies.
o For Scudder California Tax Free Fund and Scudder California Tax Free Money
Fund: each will have at least 80% of its net assets invested in California
municipal securities during periods of normal market conditions.
o For Scudder Government Money Market Series, Scudder Money Market Series and
Scudder Tax Free Money Market Series: each may not invest an amount equal
to 10% or more of the current value of such Fund's total assets in
investments that are not readily marketable, including securities
restricted as to disposition under the Securities Act of 1933, repurchase
agreements having maturities of more than seven days, and, in the case of
Scudder Money Market Series, fixed time deposits subject to withdrawal
penalties having maturities of more than seven calendar days.
o For Scudder High Yield Tax Free Fund, Scudder Managed Municipal Bonds,
Scudder Medium Term Tax Free Fund and Scudder Limited Term Tax Free Fund:
each will have at least 80% of its net assets invested in municipal
securities during periods of normal market conditions.
o For Scudder Massachusetts Limited Term Tax Free Fund and Scudder
Massachusetts Tax Free Fund: each will have at least 80% of its net assets
invested in municipal securities of issuers located in Massachusetts and
other qualifying issuers (including Puerto Rico, the U.S. Virgin Islands
and Guam) during periods of normal market conditions.
o For Scudder New York Tax Free Fund and Scudder New York Tax Free Money
Fund: each will have at least 80% of its net assets invested in New York
municipal securities during periods of normal market conditions.
o For Scudder Ohio Tax Free Fund: will have at least 80% of its net assets
invested in Ohio municipal securities during periods of normal market
conditions. H For Scudder Pennsylvania Tax Free Fund: will have at least
80% of its net assets invested in Pennsylvania municipal securities during
periods of normal market conditions.
o For Scudder Tax Free Money Fund: will have at least 80% of its net assets
invested in short-term municipal securities during periods of normal market
conditions.
o For Scudder Tax Free Money Market Series: under ordinary market conditions,
the Fund will maintain at least 80% of the value of its total assets in
obligations that are exempt from federal income taxes and are not subject
to the alternative minimum tax.
Each Fund's non-fundamental borrowing and lending policies have been amended by
each Fund's respective Board of Directors or Trustees as follows: H For Scudder
California Tax Free Fund, Scudder California Tax Free Money Fund, Scudder Cash
Investment Trust, Scudder Government Money Market Series, Scudder High Yield Tax
Free Fund, Scudder Limited Term Tax Free Fund, Scudder Managed Municipal Bonds,
Scudder Massachusetts Limited Term Tax Free Fund, Scudder Massachusetts Tax Free
Fund, Scudder Medium Term Tax Free Fund, Scudder Money Market Series, Scudder
New York Tax Free Fund, Scudder New York Tax Free Money Fund, Scudder Ohio Tax
Free Fund, Scudder Pennsylvania Tax Free Fund, Scudder Tax Free Money Fund,
Scudder Tax Free Money Market Series and Scudder U.S. Treasury Money Fund: the
Fund does not currently intend to borrow money in an amount greater than 5% of
its total assets, except for temporary or emergency purposes. H For all other
Funds: the Fund does not currently intend to borrow money in an amount greater
than 5% of its total assets, except (i) for temporary or emergency purposes and
(ii) by engaging in reverse repurchase agreements, dollar rolls, or other
investments or transactions described in the Fund's registration statement which
may be deemed to be borrowings. H For Scudder Growth and Income Fund: the Fund
currently does not intend to lend portfolio securities in an amount greater than
30% of its total assets. H For all other Funds (except Scudder Pathway Series):
the Fund currently does not intend to lend portfolio securities in an amount
greater than 5% of its total assets.
On January 1, 1998, the following lead portfolio managers will assume
responsibility for each listed fund's day-to-day operations and overall
investment strategy. This list reflects only new lead portfolio management
responsibilities; these individuals may also serve as lead portfolio managers on
additional funds.
Frank J. Rachwalski, Jr.'s fund management responsibilities include Scudder
California Tax Free Money Fund, Scudder Cash Investment Trust, Scudder
Government Money Market Series, Scudder Money Market Series, Scudder New York
Tax Free Money Fund, Scudder Tax Free Money Fund, Scudder Tax Free Money Market
Series and Scudder U. S. Treasury Money Fund. Mr. Rachwalski joined Zurich
Kemper in 1973. Mr. Rachwalski has more than 20 years of experience managing
money market portfolios.
Philip G. Condon's fund management responsibilities include Scudder Managed
Municipal Bonds and Scudder Pennsylvania Tax Free Fund. Mr. Condon joined the
Adviser in 1983 and has more than 17 years of experience in municipal investing
and portfolio management. Mr. Condon has served as a portfolio manager on this
team since 1988.
Christopher J. Mier's fund management responsibilities include Scudder Ohio Tax
Free Fund. Mr. Mier joined Zurich Kemper in 1986. Mr. Mier has more than five
years of experience in municipal investing and portfolio management.
M. Ashton Patton's fund management responsibilities include Scudder Medium Term
Tax Free Fund. Ms. Patton joined the Adviser in 1986 and has been a portfolio
manager for this Fund since 1990.
Stephen A. Wohler's fund management responsibilities include Scudder Income
Fund, Scudder Short Term Bond Fund and Scudder Zero Coupon 2000 Fund. Mr. Wohler
has over 17 years of experience managing fixed-income investments and has been
with the Adviser since 1979. Mr. Wohler has been a portfolio manager for Scudder
Income Fund and Scudder Zero Coupon 2000 Fund since 1994.
Richard L. Vandenberg's fund management responsibilities include Scudder GNMA
Fund. Mr. Vandenberg has been a portfolio manager for Zurich Kemper since 1996
when he joined the firm. Prior to 1996, Mr. Vandenberg had been a portfolio
manager for several investment management firms for over 22 years. In addition
to being a portfolio manager, Mr. Vandenberg was the head of the taxable
fixed-income department at Voyageur Asset Management.
December 31, 1997
