497 1 ss-020604mega.txt SUPPLEMENT TO SAI'S (MEGA) Supplement to the currently effective Statement of Additional Information of each of the listed funds: Cash Account Trust -- Government Securities Portfolio -- Money Market Portfolio -- Tax-Exempt Portfolio Cash Equivalent Fund -- Government Securities Portfolio -- Money Market Portfolio -- Tax-Exempt Portfolio Cash Management Fund Investment Investors Cash Trust -- Government Securities Portfolio -- Treasury Portfolio Investors Municipal Cash Fund -- Investors Florida Municipal Cash Fund -- Investors Michigan Municipal Cash Fund -- Investors New Jersey Municipal Cash Fund -- Investors Pennsylvania Municipal Cash Fund -- Tax-Exempt New York Money Market Fund Scudder 21st Century Growth Fund Scudder Aggressive Growth Fund Scudder Advisor Funds -- Cash Management -- New York Tax Free Money -- Tax-Free Money -- Treasury Money Scudder Advisor Funds III -- Money Market Scudder Balanced Fund Scudder California Tax-Free Income Fund Scudder Capital Growth Fund Scudder Cash Investment Trust Scudder Cash Management Portfolio Scudder Cash Reserves Fund Scudder Contrarian Fund Scudder-Dreman Financial Services Fund Scudder-Dreman High Return Equity Fund Scudder Dreman-Small Cap Value Fund Scudder Development Fund Scudder Dynamic Growth Fund Scudder EAFE Equity Index Fund Scudder Emerging Markets Debt Fund Scudder Emerging Markets Growth Fund Scudder Emerging Markets Income Fund Scudder Equity 500 Index Fund Scudder European Equity Fund Scudder Flag Investors Communications Fund Scudder Flag Investors Equity Partners Fund Scudder Flag Investors Value Builder Fund Scudder Florida Tax-Free Income Fund Scudder Focus Value Plus Growth Fund Scudder Global Biotechnology Fund Scudder Global Bond Fund Scudder Global Discovery Fund Scudder Global Fund Scudder GNMA Fund Scudder Gold and Precious Metals Fund Scudder Greater Europe Growth Fund Scudder Growth Fund Scudder Health Care Fund Scudder High Income Opportunity Fund Scudder High Yield Tax-Free Fund Scudder Income Fund Scudder Institutional Funds -- Cash Management Fund -- Cash Reserves Fund -- Scudder International Equity Fund -- Scudder Equity 500 Index Fund -- Liquid Assets Fund -- Daily Assets Fund -- Treasury Money Fund -- Treasury and Agency Fund Scudder Intermediate Tax/AMT Free Fund Scudder International Equity Fund Scudder International Fund Scudder International Select Equity Fund Scudder Japanese Equity Fund Scudder Large Company Growth Fund Scudder Large Company Value Fund Scudder Latin America Fund Scudder Lifecycle Long Range Fund Scudder Lifecycle Mid Range Fund Scudder Lifecycle Short Range Fund Scudder Managed Municipal Bond Fund Scudder Massachusetts Tax-Free Fund Scudder Money Market Funds -- Scudder Government Money Fund -- Scudder Money Market Fund -- Scudder Tax-Exempt Money Fund Scudder Money Market Series Scudder Municipal Bond Fund Scudder New Europe Fund Scudder New York Tax-Free Income Fund Scudder Pacific Opportunities Fund Scudder Pathway Series: Conservative Portfolio Scudder Pathway Series: Growth Portfolio Scudder Pathway Series: Moderate Portfolio Scudder Retirement Fund -- Series V Scudder Retirement Fund -- Series VI Scudder Retirement Fund -- Series VII Scudder RREEF Real Estate Securities Fund Scudder S&P 500 Index Fund Scudder S&P 500 Stock Fund Scudder Select 500 Fund Scudder Short-Term Bond Fund Scudder Short-Term Municipal Bond Fund Scudder Small Cap Index Fund Scudder Small Company Stock Fund Scudder Small Company Value Fund Scudder Strategic Growth Fund Scudder Target 2010 Fund Scudder Target 2011 Fund Scudder Target 2012 Fund Scudder Target 2013 Fund Scudder Tax Advantaged Dividend Fund Scudder Tax Free Money Fund Scudder Technology Fund Scudder Technology Innovation Fund Scudder Top 50 US Fund Scudder Total Return Bond Fund Scudder Total Return Fund Scudder Treasury Money Portfolio Scudder US Bond Index Fund Scudder US Treasury Money Fund Scudder Worldwide 2004 Fund Scudder Yieldwise Funds -- Scudder Yieldwise Government Money Fund -- Scudder Yieldwise Money Fund -- Scudder Yieldwise Municipal Money Fund Tax Free Money Fund Investment Treasury Money Fund Investment Scudder Investments VIT Funds -- Scudder EAFE Equity Index Fund -- Scudder Equity Index 500 Fund -- Scudder Global Biotechnology Fund -- Scudder Real Estate Securities Portfolio -- Scudder Small Cap Index Fund Scudder Variable Series I -- Scudder Bond Portfolio -- Scudder Balanced Portfolio -- Scudder Growth and Income Portfolio -- Scudder Capital Growth Portfolio -- Scudder 21st Century Growth Portfolio -- Scudder Global Discovery Portfolio -- Scudder International Portfolio -- Scudder Health Sciences Portfolio -- Money Market Portfolio Scudder Variable Series II -- Scudder Aggressive Growth Portfolio -- Scudder Blue Chip Portfolio -- Scudder Contrarian Value Portfolio -- SVS Davis Venture Value Portfolio -- SVS Dreman Financial Services Portfolio -- SVS Dreman High Return Equity Portfolio -- SVS Dreman Small Cap Value Portfolio -- SVS Eagle Focused Large Cap Growth Portfolio -- SVS Focus Value+Growth Portfolio -- SVS Index 500 Portfolio -- SVS Invesco Dynamic Growth Portfolio -- SVS Janus Growth and Income Portfolio -- SVS Janus Growth Opportunities Portfolio -- SVS MFS Strategic Value Portfolio -- SVS Turner Mid Cap Growth Portfolio -- SVS Oak Strategic Equity Portfolio -- Scudder Fixed Income Portfolio -- Scudder Global Blue Chip Portfolio -- Scudder Government Securities Portfolio -- Scudder Growth Portfolio -- Scudder High Income Portfolio -- Scudder International Select Equity Portfolio -- Scudder Money Market Portfolio -- Scudder Small Cap Growth Portfolio -- Scudder Strategic Income Portfolio -- Scudder Technology Growth Portfolio -- Scudder Total Return Portfolio The following information is added to or amends each Fund's Statement of Additional Information: PROXY VOTING GUIDELINES The Fund has delegated proxy voting responsibilities to its investment advisor, subject to the Board's general oversight. The Fund has delegated proxy voting to the Advisor with the direction that proxies should be voted consistent with the Fund's best economic interests. The Advisor has adopted its own Proxy Voting Policies and Procedures ("Policies"), and Proxy Voting Guidelines ("Guidelines") for this purpose. The Policies address, among other things, conflicts of interest that may arise between the interests of the Fund, and the interests of the Advisor and its affiliates, including the Fund's principal underwriter. The Guidelines set forth the Advisor's general position on various proposals, such as: o Shareholder Rights -- The Advisor generally votes against proposals that restrict shareholder rights. o Corporate Governance -- The Advisor generally votes for confidential and cumulative voting and against supermajority voting requirements for charter and bylaw amendments. o Anti-Takeover Matters -- The Advisor generally votes for proposals that require shareholder ratification of poison pills or that request boards to redeem poison pills, and votes against the adoption of poison pills if they are submitted for shareholder ratification. The Advisor generally votes for fair price proposals. o Compensation Matters -- The Advisor generally votes for executive cash compensation proposals, unless they are unreasonably excessive. The Advisor generally votes against stock option plans that do not meet the Advisor's criteria. o Routine Matters -- The Advisor generally votes for the ratification of auditors, procedural matters related to the annual meeting and changes in company name, and against bundled proposals and adjournment. The general provisions described above do not apply to investment companies. The Advisor generally votes proxies solicited by investment companies in accordance with the recommendations of an independent third party, except for proxies solicited by or with respect to investment companies for which the Advisor or an affiliate serves as investment advisor or principal underwriter ("affiliated investment companies"). The Advisor votes affiliated investment company proxies in the same proportion as the vote of the investment company's other shareholders (sometimes called "mirror" or "echo" voting). Master fund proxies solicited from feeder funds are voted in accordance with applicable requirements of the Investment Company Act of 1940. Although the Guidelines set forth the Advisor's general voting positions on various proposals, the Advisor may, consistent with the Fund's best interests, determine under some circumstances to vote contrary to those positions. The Guidelines on a particular issue may or may not reflect the view of individual members of the Board or of a majority of the Board. In addition, the Guidelines may reflect a voting position that differs from the actual practices of the public companies within the Deutsche Bank organization or of the investment companies for which the Advisor or an affiliate serves as investment advisor or sponsor. The Advisor may consider the views of a portfolio company's management in deciding how to vote a proxy or in establishing general voting positions for the Guidelines, but management's views are not determinative. As mentioned above, the Policies describe the way in which the Advisor resolves conflicts of interest. To resolve conflicts, the advisor, under normal circumstances, votes proxies in accordance with its Guidelines. If the Advisor departs from the Guidelines with respect to a particular proxy or if the Guidelines do not specifically address a certain proxy proposal, a proxy voting committee established by the advisor will vote the proxy. Before voting any such proxy, however, the Advisor's conflicts review committee will conduct an investigation to determine whether any potential conflicts of interest exist in connection with the particular proxy proposal. If the conflicts review committee determines that the Advisor has a material conflict of interest, or certain individuals on the proxy voting committee should be recused from participating in a particular proxy vote, it will inform the proxy voting committee. If notified that the Advisor has a material conflict, or fewer than three voting members are eligible to participate in the proxy vote, typically the Advisor will engage an independent third party to vote the proxy or follow the proxy voting recommendations of an independent third party. Under certain circumstances, the Advisor may not be able to vote proxies or the Advisor may find that the expected economic costs from voting outweigh the benefits associated with voting. For example, the Advisor may not vote proxies on certain foreign securities due to local restrictions or customs. The Advisor generally does not vote proxies on securities subject to share blocking restrictions. PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE February 6, 2004