SCUDDER PATHWAY SERIES
SUPPLEMENT TO THE STATEMENT OF
ADDITIONAL INFORMATION DATED JANUARY 1, 1999
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The following text replaces the disclosure in the section entitled "The
Underlying Scudder Funds" regarding Scudder Development Fund on page 9:
Scudder Development Fund seeks long-term capital appreciation by investing
primarily in U.S. companies with the potential for above-average growth. The
Fund generally invests in equity securities, including common stocks and
convertible securities, of companies that the Adviser believes have the
potential for above-average revenue, earnings, business value and/or cash flow
growth. To help reduce risk, the Fund allocates its investments among many
companies. In selecting industries and companies for investment, the Adviser may
consider many factors, including overall growth prospects, financial condition,
competitive position, technology, research and development, productivity, labor
costs, raw material costs and sources, profit margins, return on investment,
structural changes in local economies, capital resources, the degree of
governmental regulation or deregulation, management and other factors. While the
Fund generally emphasizes investments in companies domiciled in the U.S., it may
invest in listed and unlisted foreign securities that meet the same criteria as
the Fund's domestic holdings when the anticipated performance of foreign
securities is believed by the Adviser to offer more potential than domestic
alternatives in keeping with the investment objective of the Fund. However, the
Fund has no current intention of investing more than 20% of its net assets in
foreign securities.
Scudder Development Fund may for temporary defensive purposes invest
without limit in cash and may invest in high quality debt securities without
equity features, U.S. Government securities and money market instruments which
are rated in the two highest categories by Moody's Investor Services, Inc.
("Moody's") or Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. ("S&P"), or, if unrated, are deemed by the Adviser
to be of equivalent quality. It is impossible to accurately predict how long
such alternative strategies may be utilized. In addition, the Fund may invest in
warrants, convertible bonds, preferred stocks, illiquid securities, reverse
repurchase agreements and repurchase agreements and may engage in securities
lending and strategic transactions including derivatives.
The following text replaces the disclosure in the section entitled "The
Underlying Scudder Funds" regarding Value Fund - Scudder Shares on page 15:
Value Fund - Scudder Shares seeks to provide long-term growth of capital through
investment in undervalued equity securities. The Fund invests primarily in
common stocks of larger, established domestic companies with market
capitalizations of at least $1 billion that the Fund's portfolio management team
believes are undervalued in the marketplace. The Fund invests at least 80% of
its assets in equity securities consisting of common stocks, preferred stocks,
securities convertible into common stocks, rights and warrants. The Fund may
invest up to 20% of its total assets in debt obligations, including zero coupon
securities, may enter into repurchase agreements and reverse repurchase
agreements, and may engage in strategic transactions including derivatives for
hedging purposes and to seek to increase gain. The debt securities in which the
Fund may be invested may be rated below investment-grade, although the Fund will
invest no more than 10% of its net assets in securities rated B or lower by S&P
or Moody's, and may not invest more than 5% of its net assets in securities
rated C by Moody's or D by S&P.
Value Fund -- Scudder Shares may for temporary defensive purposes
invest without limit in cash and cash equivalents. It is impossible to
accurately predict how long such alternative strategies may be utilized. In
addition, the Fund may invest in illiquid securities and may engage in
securities lending.
July 26, 1999
