-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TVuhred3B4bKUxWeDlMMQXewLPTr/Uu9qTFbwb+7kjoU+P5tDqL/6hHRPR/dG5op jDKdnQxtioQoxWli4sQu8w== 0000088053-05-001096.txt : 20050901 0000088053-05-001096.hdr.sgml : 20050901 20050901113618 ACCESSION NUMBER: 0000088053-05-001096 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050901 DATE AS OF CHANGE: 20050901 EFFECTIVENESS DATE: 20050901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCUDDER ADVISOR FUNDS CENTRAL INDEX KEY: 0000797657 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04760 FILM NUMBER: 051063655 BUSINESS ADDRESS: STREET 1: ONE SOUTH STREET CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 412881401 MAIL ADDRESS: STREET 1: ONE SOUTH STREET STREET 2: XX CITY: BALTIMORE STATE: MD ZIP: 21202 FORMER COMPANY: FORMER CONFORMED NAME: BT INVESTMENT FUNDS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: BT TAX FREE INVESTMENT TRUST DATE OF NAME CHANGE: 19880530 N-CSRS 1 b54671zcorresp.htm SEMIANNUAL REPORT corresp 

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                   FORM N-CSRS

Investment Company Act file number 811-04760

                             SCUDDER ADVISOR FUNDS
                        --------------------------------
               (Exact Name of Registrant as Specified in Charter)

                   One South Street, Baltimore, Maryland 21202
                 ----------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

        Registrant's Telephone Number, including Area Code: (212) 454-7190
                                                            --------------

                                  Paul Schubert
                                 345 Park Avenue
                               New York, NY 10154
                     ---------------------------------------
                     (Name and Address of Agent for Service)

Date of fiscal year end:        12/31

Date of reporting period:       06/30/2005



ITEM 1.  REPORT TO STOCKHOLDERS
Table of Contents

NY Tax Free Money Fund Investment
Tax Free Money Fund Investment
Semiannual Report
to Shareholders
June 30, 2005

LOGO

(DEUTSCHE ASSET MANAGEMENT LOGO)

Contents
     
3
   Information About Each Fund’s Expenses
6
   Portfolio Summary
7
   Investment Portfolios
17
   Financial Statements
21
   Financial Highlights
23
   Notes to Financial Statements
27
   Account Management Resources
28
   Privacy Statement

This report must be preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the funds’ objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the funds. Please read the prospectus carefully before you invest.

An investment in these funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the funds. Please read each fund’s prospectus for specific details regarding its risk profile.

Deutsche Asset Management is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Investment Management Americas Inc., Deutsche Asset Management Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Bank Trust Company Americas and Scudder Trust Company.

Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.

 
 
2   Investment Funds

Table of Contents

Information About Each Fund’s Expenses

As an investor, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees and other Fund expenses. Examples of transaction costs include sales charges (loads), redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in each Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, each Fund limited these expenses; had it not done so, expenses would have been higher. The tables are based on an investment of $1,000 made at the beginning of the six-month period ended June 30, 2005.

The tables illustrate each Fund’s expenses in two ways:

 
n Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund’s actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Expenses Paid per $1,000” line under the share class you hold.
 
n Hypothetical 5% Fund Return. This helps you to compare your Fund’s ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund’s actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.

Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The “Expenses Paid per $1,000” line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.

 
Investment Funds    3

Table of Contents

             
NY Tax Free Money Fund Investment
 Expenses and Value of a $1,000 Investment
 for the six months ended June 30, 2005
Actual Fund Return            
Beginning Account Value 1/1/05   $ 1,000.00      
Ending Account Value 6/30/05   $ 1,007.30      
Expenses Paid per $1,000*   $ 3.73      
 
Hypothetical 5% Fund Return            
Beginning Account Value 1/1/05   $ 1,000.00      
Ending Account Value 6/30/05   $ 1,021.08      
Expenses Paid per $1,000*   $ 3.76      
 
* Expenses are equal to the Fund’s annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
             
Annualized Expense Ratio            
NY Tax Free Money Fund Investment     0.75%      

For more information, please refer to the Fund’s prospectus.

 
4   Investment Funds

Table of Contents

             
Tax Free Money Fund Investment
 Expenses and Value of a $1,000 Investment
 for the six months ended June 30, 2005
Actual Fund Return            
Beginning Account Value 1/1/05   $ 1,000.00      
Ending Account Value 6/30/05   $ 1,007.30      
Expenses Paid per $1,000*   $ 3.73      
 
Hypothetical 5% Fund Return            
Beginning Account Value 1/1/05   $ 1,000.00      
Ending Account Value 6/30/05   $ 1,021.08      
Expenses Paid per $1,000*   $ 3.76      
 
* Expenses are equal to the Fund’s annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.
             
Annualized Expense Ratio            
Tax Free Money Fund Investment     0.75%      

For more information, please refer to the Fund’s prospectus.

 
Investment Funds    5

Table of Contents

Portfolio Summary

NY Tax Free Money Fund Investment

                     
 Asset Allocation 6/30/05 12/31/04
 
Municipal Investments
    100%       100%      

Weighted Average Maturity

                     
NY Tax Free Money Fund Investment
    31 days       9 days      
iMoneyNet State Specific Retail Money Funds Average**
    23 days       31 days      
 
** Category consists of only retail state tax-free and municipal money market funds.

Asset allocation is subject to change. For more complete details about the Fund’s holdings, see page 7. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to scudder.com on the 15th of the following month.

Tax Free Money Fund Investment

                     
 Asset Allocation 6/30/05 12/31/04
 
Municipal Investments
    100%       100%      

Weighted Average Maturity

                     
Tax Free Money Fund Investment
    26 days       28 days      
iMoneyNet National Retail Tax Free Money Funds Average*
    24 days       34 days      
 
* Category consists of all national tax-free and municipal retail funds. Portfolio holdings of tax-free funds include Rated and Unrated Demand Notes, Rated and Unrated General Market Notes, Commercial Paper, Put Bonds — 6 months & less, Put Bonds — over 6 months, AMT Paper, and Other Tax-Free holdings.

Asset allocation is subject to change. For more complete details about the Fund’s holdings, see page 11. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to scudder.com on the 15th of the following month.

Following the Fund’s fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC’s Web site at www.sec.gov, and it also may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the SEC’s Public Reference Room may be obtained by calling (800) SEC-0330.

 
6   Investment Funds

Table of Contents

 Investment Portfolios as of June 30, 2005 (Unaudited)
                         
Principal
NY Tax Free Money Fund Investment Amount ($) Value ($)
 Municipal Bonds and Notes 103.4%
New York 99.5%
                    
Albany, NY, Industrial Development Agency, Civic Facilities Revenue, University of Albany Foundation, Series A, 2.32%*, 11/1/2032 (b)
    285,000       285,000      
Erie County, NY, Industrial Development Agency, Civic Facilities Revenue, Subordinate Adult Services, 2.37%*, 6/1/2022, KeyBank NA (c)
    4,020,000       4,020,000      
Islip, NY, Union Free School District 002, Tax Anticipation Notes, 3.5%, 6/29/2006
    3,250,000       3,274,895      
Long Beach, NY, Public Improvement, Series A, 3.0%, 7/15/2005 (b)
    1,470,000       1,470,508      
Long Island, NY, Power Authority, Electric System Revenue:
                   
 
Series 2A, 2.2%*, 5/1/2033, WestLB AG (c)
    1,000,000       1,000,000      
 
Series D, 2.23%*, 12/1/2029 (b)
    1,500,000       1,500,000      
 
2.68%, 8/5/2005
    3,000,000       3,000,000      
Nassau, NY, Health Care Corp., Revenue Bond, Series 2004-C2, 2.46%*, 8/1/2029 (b)
    1,350,000       1,350,000      
New York, Jay Street Development Corp., Centers Facilities Lease Revenue, Series A-1, 2.24%*, 5/1/2022,
Depfa Bank PLC (c)
    2,000,000       2,000,000      
New York, Jay Street Development Corp., Centers Facility Lease Revenue, Series A-2, 2.23%*, 5/1/2022, Depfa Bank PLC (c)
    3,000,000       3,000,000      
New York, Metropolitan Transportation Authority Revenue:
                   
 
Series 848-D, 144A, 2.3%*, 11/15/2021 (b)
    2,500,000       2,500,000      
 
Series PA-1083, 144A, 2.31%*, 5/15/2010 (b)
    1,450,000       1,450,000      
 
Series 1040, 144A, 2.31%*, 11/15/2020 (b)
    1,100,000       1,100,000      
 
Series G-1, 2.5%*, 11/1/2026 (b)
    400,000       400,000      
New York, State Dormitory Authority Revenue:
                   
 
Series B09, 144A, 2.31%*, 3/15/2023 (b)
    350,000       350,000      
 
Series 1997, 2.5%, 9/8/2005
    1,685,000       1,685,000      
 
Series 1997, 2.59%, 9/9/2005
    500,000       500,000      
 
Series A-09, 144A, 2.78%*, 5/15/2031 (b)
    2,000,000       2,000,000      
New York, State Dormitory Authority Revenue, Columbia University, Series A-1, 3.0%, 7/1/2005
    2,800,000       2,800,000      
New York, State Dormitory Authority Revenue, Cornell University:
                   
   
Series A, 2.18%*, 7/1/2029
    1,455,000       1,455,000      
   
Series B, 2.18%*, 7/1/2030
    1,370,000       1,370,000      
   
Series B, 2.26%*, 7/1/2025
    800,000       800,000      
New York, State Dormitory Authority Revenue, Mental Health Services:
                   
   
Series D-2A, 2.25%*, 2/15/2031 (b)
    900,000       900,000      
   
Series D-2B, 2.26%*, 2/15/2031 (b)
    2,000,000       2,000,000      
New York, State Environment, Series 1997-A, 2.6%, 9/7/2005
    2,700,000       2,700,000      
New York, State General Obligation, Series B, 1.58%*, 3/15/2030, Dexia Credit Local France (c)
    870,000       870,000      
 
The accompanying notes are an integral part of the financial statements.

Investment Funds    7

Table of Contents

                         
Principal
NY Tax Free Money Fund Investment Amount ($) Value ($)
New York, State Housing Finance Agency Revenue, Historic Front Street, Series A, 2.27%*, 11/1/2036, Bank of New York (c)
    2,000,000       2,000,000      
New York, State Housing Finance Agency Revenue, Normandie Court I Project, 2.2%*, 5/15/2015, Landesbank Hessen-Thuringen (c)
    350,000       350,000      
New York, State Housing Finance Agency, Service Contract Revenue, Series D, 2.23%*, 3/15/2026, State Street Bank & Trust Co. (c)
    1,600,000       1,600,000      
New York, State Local Government Assistance Corp.:
                   
 
Series A-BV, 2.16%*, 4/1/2021 (b)
    1,190,000       1,190,000      
 
Series F, 2.18%*, 4/1/2025, Societe Generale (c)
    1,300,000       1,300,000      
 
Series 3-V, 2.31%*, 4/1/2024 (b)
    700,000       700,000      
New York, State Power Authority Revenue & General Purpose, 2.15%, 3/1/2016
    1,000,000       1,000,000      
New York, Tobacco Settlement Financing Corp.:
                   
 
Series R-2003, 144A, 2.32%*, 6/1/2021 (b)
    1,975,000       1,975,000      
 
Series R-6500, 144A, 2.32%*, 6/1/2021 (b)
    2,245,000       2,245,000      
New York City, NY, Housing Development Corp., Mortgage Revenue, Multi-Family Columbus Apartments, Series A, 2.2%*, 3/15/2025
    1,000,000       1,000,000      
New York City, NY, Industrial Development Agency, Civic Facility Revenue, Abraham Joshua Heschel Project, 2.35%*, 4/1/2032, Allied Irish Bank PLC (c)
    1,505,000       1,505,000      
New York City, NY, Industrial Development Agency, Civic Facility Revenue, Peninsula Hospital Center Project, 2.36%*, 12/1/2013, JPMorgan Chase Bank (c)
    830,000       830,000      
New York City, NY, Municipal Water Finance Authority, Water & Sewer System Revenue, Series PT-2114, 144A, 2.31%*, 12/15/2011
    600,000       600,000      
New York City, NY, Municipal Water Finance Authority, Water & Sewer System Revenue, Fiscal 2003, Series C-2, 2.22%*, 6/15/2018
    1,950,000       1,950,000      
New York City, NY, Transitional Finance Authority Revenue, Series A-40, 144A, 2.31%*, 11/1/2026 (b)
    975,000       975,000      
New York City, NY, Transitional Finance Authority Revenue, Future Tax Secured:
                   
   
Series A-1, 2.35%*, 11/15/2022
    45,000       45,000      
   
Series A, 2.35%*, 2/15/2030
    745,000       745,000      
New York City, NY, Transitional Finance Authority Revenue, NYC Recovery:
                   
   
Series 3G, 2.18%*, 11/1/2022
    1,215,000       1,215,000      
   
Series 3C, 2.23%*, 11/1/2022
    200,000       200,000      
   
Series 3F, 2.26%*, 11/1/2022
    300,000       300,000      
   
Series 1B, 2.35%*, 11/1/2022
    1,000,000       1,000,000      
New York City, NY, Transitional Finance Authority, Star Certificate:
                   
   
Series 2003-7, 144A, 2.31%*, 2/1/2009
    3,425,000       3,425,000      
New York City, NY, Trust For Cultural Resources Revenue, Asia Society, 2.19%*, 4/1/2030, The Chase Manhattan Bank (c)
    875,000       875,000      
 
The accompanying notes are an integral part of the financial statements.

8   Investment Funds

Table of Contents

                       
Principal
NY Tax Free Money Fund Investment Amount ($) Value ($)
New York City, NY, Trust For Cultural Resources Revenue, Museum of Broadcasting, 2.2%*, 5/1/2014, KBC Bank NV (c)
    710,000       710,000      
New York, NY, General Obligation, Series H-6, 2.2%*, 3/1/2034, Fleet National Bank (c)
    600,000       600,000      
New York, NY, State General Obligation:
                   
 
Series H-1, 2.17%*, 3/1/2034, Bank of New York (c)
    400,000       400,000      
 
Series A-6, 2.22%*, 8/1/2031, Landesbank Baden-Wurttemberg (c)
    1,800,000       1,800,000      
 
Series A-3, 2.23%*, 8/1/2031, BNP Paribas (c)
    1,465,000       1,465,000      
 
Series H-4, 2.3%*, 8/1/2015 (b)
    900,000       900,000      
New York, NY, Triborough Bridge & Tunnel Authority Revenue:
                   
 
Series A, 2.23%*, 1/1/2031 (b)
    305,000       305,000      
 
Series B-13, 144A, 2.31%*, 11/15/2021 (b)
    2,080,000       2,080,000      
 
Series R-2013, 144A, 2.31%*, 11/15/2021 (b)
    300,000       300,000      
Oneida Indian Nation, NY, County General Obligation, Revenue Bond, 2.28%*, 10/1/2032, Bank of America NA (c)
    2,245,000       2,245,000      
Onondaga County, NY, Industrial Development Agency, Civic Facility Revenue, YMCA of Greater Syracuse, Series A, 2.37%*, 11/1/2025, HSBC Bank PLC (c)
    3,700,000       3,700,000      
Otsego County, NY, Industrial Development Agency, Civic Facility Revenue, Noonan Community Service Corp. Project, Series A, 2.35%*, 3/1/2025, Wilber National Bank (c)
    1,435,000       1,435,000      
Schenectady County, NY, Industrial Development Agency, Civic Facilities Revenue, Sunnyview, Series B, 2.32%*, 8/1/2033, KeyBank NA (c)
    2,390,000       2,390,000      
Schoharie County, NY, Industrial Development Agency, Civic Facility Revenue, Bassett Hospital Project, Series A, 144A, 2.37%*, 2/1/2021, KeyBank NA (c)
    210,000       210,000      
Yonkers, NY, Industrial Development Agency, Civic Facilities Revenue, 2.35%*, 7/1/2021, Bank of New York (c)
    1,000,000       1,000,000      
         
     
              90,345,403      
  
                   
Multi-State 2.9%
                    
ABN AMRO Munitops, Certificates Trust,
Series 2000-17, 144A, 2.29%*, 10/1/2008
    2,650,000       2,650,000      
  
                   
Puerto Rico 1.0%
                    
Commonwealth of Puerto Rico, General Obligation,
Series 813-D, 144A, 2.3%*, 7/1/2020 (b)
    875,000       875,000      
 
  
                   
 
The accompanying notes are an integral part of the financial statements.

Investment Funds    9

Table of Contents

                     
% of
Net Assets Value ($)
Total Investment Portfolio            
(Cost $93,870,403) (a)
    103.4       93,870,403      
Other Assets and Liabilities, Net
     (3.4 )     (3,049,399 )    
Net Assets
     100.0       90,821,004      
 
 
* Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of June 30, 2005.
 
(a) The cost for federal income tax purposes was $93,870,403.
 
(b) Bond is insured by one of these companies:
             
As a % of Total
Insurance Coverage Investment Portfolio
Ambac Financial Group
    8.6      
Financial Guaranty Insurance Company
    6.2      
Financial Security Assurance Inc.
    8.6      
MBIA Corporation
    5.2      
 
(c) Security incorporates a letter of credit or line of credit from a major bank.

144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

 
The accompanying notes are an integral part of the financial statements.

10   Investment Funds

Table of Contents

                       
Principal
Tax Free Money Fund Investment Amount ($) Value ($)
 Municipal Bonds and Notes 103.7%
California 2.9%
                    
California, Community College Financing Authority, Series A, 4.0%, 6/30/2006 (b)
    1,000,000       1,013,410      
California, School Cash Reserve Program Authority, Series A, 4.0%, 7/6/2006
    1,500,000       1,520,460      
Los Angeles County, CA, Tax & Revenue Anticipation Notes, Series A, 4.0%, 6/30/2006
    2,000,000       2,028,380      
         
              4,562,250      
  
                   
Colorado 10.2%
                    
Adams & Weld Counties, CO, Brighton School District No. 27J, Series RR-II-R-6514, 144A, 2.32%*, 12/1/2024 (b)
    1,995,000       1,995,000      
Colorado, Health Facilities Authority Revenue, Adventist Health, Sunbelt, Series B, 2.29%*, 11/15/2034, SunTrust Bank (c)
    5,000,000       5,000,000      
Colorado, State Education Loan Program, Tax & Revenue Anticipation Notes, Series A, 3.5%, 8/9/2005
    6,215,000       6,219,776      
Denver, CO, City & County Economic Development Revenue, Western Stock Show Project, 2.45%*, 7/1/2029, Bank One Colorado NA (c)
    2,615,000       2,615,000      
         
              15,829,776      
  
                   
District of Columbia 5.3%
                    
District of Columbia, General Obligation, Core City:
                   
 
2.35%*, 3/1/2028, Bank of America NA (c)
    1,670,000       1,670,000      
 
Series A, 2.4%*, 6/1/2015 (b)
    2,500,000       2,500,000      
District of Columbia, Tax & Revenue Anticipation Notes, 3.5%, 9/30/2005
    4,000,000       4,009,551      
         
              8,179,551      
  
                   
Florida 3.9%
                    
Jacksonville, FL, Capital Project Revenue, Series 1, 2.23%*, 10/1/2017 (b)
    620,000       620,000      
Lee County, FL, Airport Revenue, AMT, Series 811-X, 144A, 2.36%*, 10/1/2029 (b)
    150,000       150,000      
Pasco County, FL, School Board Certificates of Participation, 2.28%*, 8/1/2026 (b)
    375,000       375,000      
Reedy Creek, FL, Improvement District Florida Utilities Revenue, Series 986, 144A, 2.31%*, 10/1/2012 (b)
    3,850,000       3,850,000      
Tampa, FL, Health Care Facilities Revenue, Lifelink Foundation, Inc. Project, 2.29%*, 8/1/2022, SunTrust Bank (c)
    1,000,000       1,000,000      
         
              5,995,000      
  
                   
 
The accompanying notes are an integral part of the financial statements.

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Principal
Tax Free Money Fund Investment Amount ($) Value ($)
Georgia 1.6%
                    
Fayette County, GA, Development Authority Educational Facilities Revenue, Catholic School Properties, Inc., Project, 2.29%*, 4/1/2024, Wachovia Bank (c)
    100,000       100,000      
La Grange, GA, Development Authority Revenue, La Grange College Project, 2.29%*, 6/1/2031, SunTrust Bank (c)
    1,105,000       1,105,000      
Roswell, GA, Housing Authority, Multi-Family Revenue, Post Canyon Project, 2.29%*, 6/1/2025
    1,300,000       1,300,000      
         
              2,505,000      
  
                   
Hawaii 7.1%
                    
ABN AMRO Munitops, Certificates Trust, Series 2004-16, 144A, 2.33%*, 7/1/2012 (b)
    4,000,000       4,000,000      
Honolulu, HI, City & County, General Obligation, 2.5%, 8/16/2005
    7,000,000       7,000,000      
         
              11,000,000      
  
                   
Illinois 10.1%
                    
Illinois, Development Finance Authority Revenue, Chicago Symphony Orchestra, 2.22%*, 12/1/2028, Northern Trust Company (c)
    5,000,000       5,000,000      
Illinois, Development Finance Authority Revenue, Goodman Theatre Project, 2.35%*, 12/1/2033, Bank One NA (c)
    675,000       675,000      
Illinois, Educational Facilities Authority Revenue, Shedd Aquarium Society, 2.1%, 7/11/2005
    3,000,000       3,000,000      
Illinois, Finance Authority Revenue, Series PA-1286, 144A, 2.31%*, 11/15/2023 (b)
    3,500,000       3,500,000      
Illinois, Health Facilities Authority Revenue, The Carle Foundation, Series B, 2.28%*, 7/1/2028 (b)
    1,600,000       1,600,000      
Will & Kendall Counties, IL, Community School District No. 202, Series RR-II-R 4031, 144A, 2.32%*, 1/1/2023 (b)
    1,930,000       1,930,000      
         
              15,705,000      
  
                   
Indiana 6.2%
                    
ABN AMRO Munitops, Certificates Trust, Series 2003-32, 144A, 2.33%*, 1/15/2012 (b)
    3,000,000       3,000,000      
Indiana, Health Facility Financing Authority Revenue, Ascension Health Credit, Series B, 2.18%*, 11/15/2039
    3,600,000       3,600,000      
Indiana, Transportation Finance Authority Highway Revenue:
                   
 
Series 853, 144A, 2.31%*, 6/1/2017 (b)
    900,000       900,000      
 
Series B-21, 144A, 2.32%*, 12/1/2022 (b)
    2,090,000       2,090,000      
         
              9,590,000      
  
                   
Iowa 1.4%
                    
Iowa, Finance Authority Hospital Facility Revenue, Iowa Health Systems, Series B, 2.28%*, 7/1/2015 (b)
    2,100,000       2,100,000      
  
                   
 
The accompanying notes are an integral part of the financial statements.

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Principal
Tax Free Money Fund Investment Amount ($) Value ($)
Kentucky 7.5%
                    
Boone County, KY, Pollution Control Revenue, Cincinnati Gas & Electric Co., Series A, 2.85%*, 8/1/2013, Credit Lyonnais (c)
    1,800,000       1,800,000      
Pendleton, KY, County Lease:
                   
 
2.85%, 8/5/2005
    2,000,000       2,000,000      
 
2.9%, 9/7/2005
    5,000,000       5,000,000      
Somerset, KY, Blakley Family YMCA, Inc., Project, 2.34%*, 4/1/2015, Fifth Third Bank (c)
    2,770,000       2,770,000      
         
              11,570,000      
  
                   
Maryland 3.0%
                    
Gaithersburg, MD, Economic Development Revenue, Asbury Methodist Village, 2.32%*, 1/1/2034, KBC Bank NV (c)
    3,600,000       3,600,000      
Montgomery County, MD, Economic Development Revenue, Howard Hughes Medical Facility, Series A, 2.32%*, 10/15/2020
    1,000,000       1,000,000      
         
              4,600,000      
  
                   
Massachusetts 1.9%
                    
Massachusetts, Development Finance Agency, Industrial Development Revenue, North Shore YMCA Project, 2.37%*, 11/1/2022, KeyBank NA (c)
    2,895,000       2,895,000      
  
                   
Michigan 2.3%
                    
Detroit, MI, City School District, Series PT-1844, 144A, 2.31%*, 5/1/2011 (b)
    1,535,000       1,535,000      
Michigan, University of Michigan Hospital Revenue, Series A, 2.25%*, 12/1/2019
    1,360,000       1,360,000      
Oakland University, MI, Michigan Revenue Bond, 2.4%*, 3/1/2031 (b)
    625,000       625,000      
         
              3,520,000      
  
                   
New Jersey 0.6%
                    
Salem County, NJ, Industrial Pollution Control, Financing Authority Revenue, E.I. Du Pont de Nemours and Co., 2.8%*, 3/1/2012
    1,000,000       1,000,000      
  
                   
New York 1.9%
                    
New York City, NY, Transitional Finance Authority Revenue, Future Tax Secured, Series A, 2.35%*, 2/15/2030
    3,000,000       3,000,000      
  
                   
 
The accompanying notes are an integral part of the financial statements.

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Principal
Tax Free Money Fund Investment Amount ($) Value ($)
North Carolina 2.1%
                    
North Carolina, Medical Care Community, Retirement Facilities Revenue, 1st Mortgage, United Methodist:
                   
 
Series B, 2.3%*, 10/1/2008, Branch Banking & Trust (c)
    2,300,000       2,300,000      
 
Series B, 2.3%*, 10/1/2035, Branch Banking & Trust (c)
    1,000,000       1,000,000      
         
              3,300,000      
  
                   
Ohio 1.2%
                    
Ohio, State Higher Educational Facility Community Revenue, Pooled Program:
                   
 
Series A, 2.37%*, 9/1/2020, Fifth Third Bank (c)
    645,000       645,000      
 
Series C, 2.37%*, 9/1/2025, Fifth Third Bank (c)
    1,250,000       1,250,000      
         
              1,895,000      
  
                   
Pennsylvania 4.9%
                    
Allegheny County, PA, Hospital Development Authority Revenue, UPMC Senior Living Corp., 2.28%*, 7/15/2028
    2,075,000       2,075,000      
Latrobe, PA, Industrial Development Authority Revenue, Greensburg Diocese, 2.35%*, 6/1/2033, Allied Irish Bank PLC (c)
    2,310,000       2,310,000      
Lehigh County, PA, Industrial Development Authority, Pollution Control Revenue, 2.85%*, 6/1/2014, Rabobank Nederland (c)
    180,000       180,000      
Pennsylvania, PA, State Higher Educational Facilities Authority Revenue, Drexel University, Series B, 2.28%*, 5/1/2033, Allied Irish Bank PLC (c)
    50,000       50,000      
Pennsylvania, PA, State Higher Educational Facilities Authority Revenue, University Properties, Student Housing, Series A, 2.3%*, 8/1/2035, Citizens Bank of PA (c)
    2,765,000       2,765,000      
Pennsylvania, PA, State School District Revenue Lease, Public School Building Authority, Series A42, 144A, 1.8%*, 6/1/2028 (b)
    300,000       300,000      
         
              7,680,000      
  
                   
South Carolina 1.5%
                    
South Carolina, Educational Facilities Authority for Private Nonprofit Institutions, Coker College, 2.34%*, 6/1/2019, Wachovia Bank NA (c)
    2,275,000       2,275,000      
  
                   
Tennessee 2.1%
                    
Clarksville, TN, Public Building Authority Revenue, Pooled Financing, Municipal Bond Fund, 2.28%*, 7/1/2034, Bank of America NA (c)
    2,700,000       2,700,000      
Montgomery County, TN, Public Building Authority, Pooled Financing Revenue, Tennessee County Loan Pool, 2.28%*, 7/1/2034, Bank of America NA (c)
    500,000       500,000      
         
              3,200,000      
  
                   
 
The accompanying notes are an integral part of the financial statements.

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Principal
Tax Free Money Fund Investment Amount ($) Value ($)
Texas 23.7%
                    
Arlington, TX, General Obligation, Series 760, 144A, 2.32%*, 2/15/2013 (b)
    3,000,000       3,000,000      
Austin, TX, Higher Education Authority Inc., University Revenue, Concordia University at Austin, 2.3%*, 4/1/2025, Wachovia Bank NA (c)
    2,200,000       2,200,000      
Corpus Christi, TX, Utility Systems Revenue, Series PT-1816, 144A, 2.33%*, 7/15/2010 (b)
    2,305,000       2,305,000      
Cypress-FairBanks, TX, Independent School District, Series PT-2512, 144A, 2.31%*, 2/15/2022
    6,700,000       6,700,000      
Galena Park, TX, Independent School District, Series SG-153, 144A, 2.31%*, 8/15/2023
    3,000,000       3,000,000      
Houston, TX, Tax & Revenue Anticipation Notes, 3.0%, 6/30/2005
    1,800,000       1,800,000      
Houston, TX, Water & Sewer Systems Revenue, Star Certificates, Series 2003-14, 144A, 2.31%*, 6/1/2026 (b)
    495,000       495,000      
North Texas, North Dallas Thruway System Authority Revenue, Series 05-8, 144A, 2.57%*, 7/1/2012 (b)
    3,375,000       3,375,000      
Texas, A & M University Revenue, Series 945, 144A, 2.32%*, 5/15/2013
    1,460,000       1,460,000      
Texas, Lower Colorado River Authority:
                   
 
2.5%, 8/5/2005
    4,000,000       4,000,000      
 
2.78%, 8/4/2005
    2,500,000       2,500,000      
Texas, Tax & Revenue Anticipation Notes, 3.0%, 8/31/2005
    5,900,000       5,909,332      
         
              36,744,332      
  
                   
Washington 2.3%
                    
Port Tacoma, WA, State General Obligation, Core City, Series R-4036, 144A, 2.32%*, 12/1/2025 (b)
    495,000       495,000      
Spokane, WA, Public Facilities District Hotel, Motel & Sales Use Tax, Series R-2041, 144A, 1.7%*, 12/1/2023 (b)
    3,150,000       3,150,000      
         
              3,645,000      
  
                   
                     
% of
Net Assets Value ($)
Total Investment Portfolio (Cost $160,790,909) (a)
    103.7       160,790,909      
Other Assets and Liabilities, Net
     (3.7 )     (5,726,142 )    
Net Assets
     100.0       155,064,767      
 
 
* Variable Rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of June 30, 2005.
 
(a) The cost for federal income tax purposes was $160,790,909.
 
The accompanying notes are an integral part of the financial statements.

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(b) Bond is insured by one of these companies:
         
As a % of Total
Insurance Coverage Investment Portfolio
Ambac Financial Group
    5.4  
Financial Guaranty Insurance Company
    7.0  
Financial Security Assurance Inc.
    8.7  
MBIA Corporation
    6.8  
 
(c) Security incorporates a letter of credit or line of credit from a major bank.

144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

 
The accompanying notes are an integral part of the financial statements.

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Financial Statements

Statements of Assets and Liabilities as of June 30, 2005 (Unaudited)

                     
NY Tax Free Tax Free
Money Fund Money Fund
Assets Investment Investment
Investments in securities, at amortized cost   $ 93,870,403     $ 160,790,909      
Cash     1,098       —      
Receivable for Investments sold     70,250       —      
Interest receivable     316,231       975,125      
Other assets     13,001       16,254      
Total assets     94,270,983       161,782,288      
 
Liabilities                    
Due to custodian bank     —       266,735      
Payable for investments purchased     3,274,895       6,152,250      
Dividends payable     87,451       170,911      
Administration and service fee payable     44,129       79,594      
Other accrued expenses and payables     43,504       48,031      
Total liabilities     3,449,979       6,717,521      
Net assets, at value   $ 90,821,004     $ 155,064,767      
 
Net Assets                    
Net assets consist of:                    
Undistributed net investment income and distributions in excess of net investment income, respectively     25,571       (9 )    
Accumulated net realized gain (loss)     (604 )     526      
Paid-in capital     90,796,037       155,064,250      
Net assets, at value   $ 90,821,004     $ 155,064,767      
 
Net Asset Value                    
Net assets applicable to shares outstanding   $ 90,821,004     $ 155,064,767      
Shares outstanding, ($.001 par value per share, unlimited number of shares authorized)     90,818,501       155,063,712      
Net Asset Value, offering and redemption price per share (net assets divided by shares outstanding)   $ 1.00     $ 1.00      
 
The accompanying notes are an integral part of the financial statements.

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Statements of Operations for the six months ended June 30, 2005 (Unaudited)

                     
NY Tax Free Tax Free
Money Money
Fund Fund
Investment Income Investment Investment
Income:                    
Interest   $ 1,069,778     $ 1,719,791      
Expenses:                    
Administration and service fees     294,765       462,222      
Advisory fee     73,691       115,556      
Auditing     17,889       18,514      
Legal     21,218       17,323      
Trustees’ fees and expenses     4,779       3,616      
Reports to shareholders
    6,575       11,388      
Registration fees
    9,732       10,666      
Other
    3,776       3,180      
Total expenses, before expense reductions
    432,425       642,465      
Expense reductions
    (65,277 )     (66,193 )    
Total expenses, after expense reductions
    367,148       576,272      
Net investment income
     702,630       1,143,519      
Net realized gain (loss) on investment transactions
    7       (2,053 )    
Net increase (decrease) in net assets resulting from operations   $ 702,637     $ 1,141,466      
 
The accompanying notes are an integral part of the financial statements.

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Statement of Changes in Net Assets — NY Tax Free Money Fund Investment

                     
Six months
ended June 30, Year ended
2005 December 31,
Increase (Decrease) in Net Assets (Unaudited) 2004
Operations:                    
Net investment income   $ 702,630     $ 436,636      
Net realized gain (loss) on investment transactions     7       9,183      
Net increase (decrease) in net assets resulting from operations     702,637       445,819      
Distributions to shareholders from:                    
Net investment income     (702,636 )     (436,714 )    
Fund share transactions:
                   
Proceeds from shares sold     127,321,859       477,073,897      
Reinvestment of distributions     204,362       137,967      
Cost of shares redeemed     (146,915,519 )     (455,652,178 )    
Net increase (decrease) in net assets from Fund share transactions     (19,389,298 )     21,559,686      
Increase (decrease) in net assets     (19,389,297 )     21,568,791      
Net assets at beginning of period     110,210,301       88,641,510      
Net assets at end of period (including undistributed net investment income of $25,571 and $25,577, respectively)   $ 90,821,004     $ 110,210,301      
 
Other Information                    
Shares outstanding at beginning of period     110,207,798       88,648,139      
Shares sold     127,321,859       477,073,897      
Shares issued to shareholders in reinvestment of distributions     204,362       137,967      
Shares redeemed     (146,915,518 )     (455,652,205 )    
Net increase (decrease) in Fund shares     (19,389,297 )     21,559,659      
Shares outstanding at end of period     90,818,501       110,207,798      
 
The accompanying notes are an integral part of the financial statements.

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Statement of Changes in Net Assets — Tax Free Money Fund Investment

                     
Six months
ended June 30, Year ended
2005 December 31,
Increase (Decrease) in Net Assets (Unaudited) 2004
Operations:                    
Net investment income   $ 1,143,519     $ 690,126      
Net realized gain (loss) on investment transactions     (2,053 )     24,554      
Net increase (decrease) in net assets resulting from operations     1,141,466       714,680      
Distributions to shareholders from:                    
Net investment income     (1,143,528 )     (690,126 )    
Fund share transactions:                    
Proceeds from shares sold     412,766,350       741,308,274      
Reinvestment of distributions     237,078       165,273      
Cost of shares redeemed     (392,758,755 )     (774,896,049 )    
Net increase (decrease) in net assets from Fund share transactions     20,244,673       (33,422,502 )    
Increase (decrease) in net assets     20,242,611       (33,397,948 )    
Net assets at beginning of period     134,822,156       168,220,104      
Net assets at end of period (including distributions in excess of net investment income of $9 at June 30, 2005)   $ 155,064,767     $ 134,822,156      
 
Other Information                    
Shares outstanding at beginning of period     134,819,039       168,241,303      
Shares sold     412,766,350       741,308,274      
Shares issued to shareholders in reinvestment of distributions     237,078       165,273      
Shares redeemed     (392,758,755 )     (774,895,811 )    
Net increase (decrease) in Fund shares     20,244,673       (33,422,264 )    
Shares outstanding at end of period     155,063,712       134,819,039      
 
The accompanying notes are an integral part of the financial statements.

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Financial Highlights

NY Tax Free Money Fund Investment

                                                       
 Years Ended December 31, 2005a 2004 2003 2002 2001b 2000b
 
Selected Per Share Data                                                    
Net asset value, beginning of period   $ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00      
Income from investment operations:                                                    
  Net investment income     .007       .005       .003       .006       .02       .03      
  Net realized and unrealized gain (loss) on investment transactionsc     —       —       —       —       —       —      
  Total from investment operations     .007       .005       .003       .006       .02       .03      
Less distributions from:                                                    
  Net investment income     (.007 )     (.005 )     (.003 )     (.006 )     (.02 )     (.03 )    
Net asset value, end of period   $ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00      
Total Return (%)d     .73 **     .47       .32       .65       1.89       3.23      
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)     91       110       89       113       110       86      
Ratio of expenses before expense reductions (%)     .88 *     .88       .83       .82       .80e       .86e      
Ratio of expenses after expense reductions (%)     .75 *     .75       .75       .75       .75e       .75e      
Ratio of net investment income (%)     1.43 *     .49       .33       .65       1.86       3.19      
 
a For the six months ended June 30, 2005 (Unaudited).
 
b The Financial Highlights prior to April 27, 2001 include the Fund’s information as a feeder fund to the NY Tax Free Money Portfolio for the respective periods.
 
c Amount is less than $.0005 per share.
 
d Total return would have been lower had certain expenses not been reduced.
 
e Includes expenses of the NY Tax Free Money Portfolio.
 
* Annualized
 
** Not annualized
 
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Financial Highlights

Tax Free Money Fund Investment

                                                       
 Years Ended December 31, 2005a 2004 2003 2002 2001b 2000b
 
Selected Per Share Data                                                    
Net asset value, beginning of period   $ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00      
Income from investment operations:                                                    
  Net investment income     .007       .005       .003       .007       .02       .03      
  Net realized and unrealized gain (loss) on investment transactionsc     —       —       —       —       —       —      
  Total from investment operations     .007       .005       .003       .007       .02       .03      
Less distributions from:                                                    
  Net investment income     (.007 )     (.005 )     (.003 )     (.007 )     (.02 )     (.03 )    
Net asset value, end of period   $ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00      
Total Return (%)d     .73 **     .49       .33       .72       2.08       3.35      
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)     155       135       168       166       164       222      
Ratio of expenses before expense reductions (%)     .83 *     .84       .80       .80       .79 e     .82 e    
Ratio of expenses after expense reductions (%)     .75 *     .75       .75       .75       .75 e     .75 e    
Ratio of net investment income (loss) (%)     1.48 *     .46       .32       .72       2.11       3.30      
 
a For the six months ended June 30, 2005 (Unaudited).
 
b The Financial Highlights prior to April 27, 2001 include the Fund’s information as a feeder fund to the Tax Free Money Portfolio for the respective periods.
 
c Amount is less than $.005 per share.
 
d Total return would have been lower had certain expenses not been reduced.
 
e Includes expenses of the Tax Free Money Portfolio.
 
* Annualized
 
** Not annualized
 
22   Investment Funds

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 Notes to Financial Statements            

Note 1—Organization and Significant Accounting Policies

A. Organization

Scudder Advisor Funds (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end, diversified management investment company organized as a Massachusetts business trust. NY Tax Free Money Fund Investment and Tax Free Money Fund Investment (each a “Fund,” and collectively, the “Funds”) are two of the funds the Trust offers to investors.

Each Fund’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Funds in the preparation of their financial statements.

B. Security Valuation

Portfolio securities are valued utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium.

C. Federal Income Taxes

Each Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable and tax-exempt income to its shareholders. Accordingly, the Funds paid no federal income taxes and no federal income tax provisions were required.

D. Distributions of Income

The net investment income of each Fund is declared as a daily dividend and is distributed to shareholders monthly.

Permanent book and tax differences relating to shareholder distributions will result in reclassifications to paid-in capital. Temporary book and tax differences will reverse in a subsequent period. There were no significant book to tax differences for the Funds.

The tax character of current year distributions, if any, will be determined at the end of current fiscal year.

 
Investment Funds    23

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E. Contingencies

In the normal course of business, the Funds may enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet been made. However, based on experience, the Funds expect the risk of loss to be remote.

F. Other

Investment transactions are accounted for on a trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All discounts and premiums are accreted/amortized for both tax and financial reporting purposes. Expenses directly attributed to a fund are charged to that fund, while expenses which are attributed to the Trust are allocated among the funds in the Trust on the basis of relative net assets.

Note 2—Fees and Transactions with Affiliates

Deutsche Asset Management, Inc. (“DeAM, Inc.” or the “Advisor”) is the Advisor for each Fund and Investment Company Capital Corp. (“ICCC” or the “Administrator”) is the Administrator for each Fund, both an indirect, wholly owned subsidiary of Deutsche Bank AG. Under the Advisory Agreement, each Fund pays the Advisor an annual fee based on its average daily net assets which is calculated daily and paid monthly at the annual rate of 0.15%.

For the six months ended June 30, 2005, the Advisor and Administrator contractually agreed to waive their fees and/or reimburse expenses of each Fund, to the extent necessary, to limit expenses to 0.75% of the average daily net assets of each Fund. Accordingly, for the six months ended June 30, 2005 each Fund did not impose a portion of its Advisory fee as follows:

                             
Advisory Amount Annualized
Fee Waived Effective Rate
NY Tax Free Money Fund Investment   $ 73,691     $ 63,970       0.02%      
Tax Free Money Fund Investment   $ 115,556     $ 64,688       0.07%      

ICCC serves as Administrator and receives a fee based on each Fund’s average daily net assets which is calculated daily and paid monthly at the annualized rate of 0.60%.

Typesetting and Filing Service Fees. Under an agreement with Deutsche Investment Management Americas Inc. “DeIM”), an indirect, wholly owned subsidiary of Deutsche Bank AG, DeIM is compensated for providing typesetting

 
24   Investment Funds

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and regulatory filing services to the Funds. For the six months ended June 30, 2005, the amount charged to each Fund by DeIM included in the reports to shareholders are as follows:

                     
Total Unpaid at
Aggregated June 30, 2005
NY Tax Free Money Fund Investment   $ 7,560     $ 2,640      
Tax Free Money Fund Investment   $ 7,560     $ 2,640      

Trustees’ Fees and Expenses. As compensation for his or her services, each Independent Trustee receives an aggregate annual fee, plus a fee for each meeting attended (plus reimbursement for reasonable out-of-pocket expenses incurred in connection with his or her attendance at board and committee meetings) from each Fund in the Fund Complex for which he or she serves. In addition, the Chairman of the Fund Complex’s Audit Committee receives an annual fee for his services. Payment of such fees and expenses is allocated among all such Funds described above in direct proportion to their relative net assets.

Note 3—Expense Reductions

For the six months ended June 30, 2005, the Advisor agreed to reimburse NY Tax Free Money Fund $1,307 and Tax Free Money Fund Investment $1,505, which represents a portion of the fee savings expected to be realized by the Advisor related to the outsourcing by the Advisor of certain administrative services to an unaffiliated service provider.

Note 4—Concentration of Ownership

From time to time each Fund may have a concentration of several shareholders holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on each Fund.

For the six months ended June 30, 2005, there was one shareholder who held approximately 14% of the outstanding shares of Tax Free Money Fund Investment.

Note 5—Line of Credit Agreement

The Funds and several other affiliated funds (the “Participants”) share in a $1.1 billion revolving credit facility administered by J.P. Morgan Chase Bank for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, based upon net assets,

 
Investment Funds    25

Table of Contents

among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. Each Fund may borrow up to a maximum of 5 percent of its net assets under this agreement.

Note 6—Regulatory Matters and Litigation

Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations (“inquiries”) into the mutual fund industry, and have requested information from numerous mutual fund companies, including Scudder Investments. It is not possible to determine what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the Scudder funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain Scudder funds, the funds’ investment advisors and their affiliates, certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each Scudder fund’s investment advisor has agreed to indemnify the applicable Scudder funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. Based on currently available information, the funds’ investment advisors believe the likelihood that the pending lawsuits will have a material adverse financial impact on a Scudder fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the Scudder funds.

 
26   Investment Funds

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Account Management Resources
             
Automated
Information Lines		   Institutional Investor Services  (800) 730-1313

Personalized account information, information on other DeAm funds and services via touchtone telephone and the ability to exchange or redeem shares. 		   
For More
Information		   (800) 730-1313, option 1

To speak with a fund service representative. 		   
Written
Correspondence		   Deutsche Asset Management

PO Box 219210
Kansas City, MO
64121-9210 		   
Proxy Voting   A description of the fund’s policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 is available on our Web site — scudder.com (type ‘proxy voting‘ in the search field) — or on the SEC’s Web site — www.sec.gov. To obtain a written copy of the fund’s policies and procedures without charge, upon request, call us toll free at (800) 621-1048.    
Principal
Underwriter		   If you have questions, comments or complaints, contact:

Scudder Distributors, Inc.

222 South Riverside Plaza
Chicago, IL 60606-5808
(800) 621-1148 		   
             
    NY Tax Free Money Fund
Investment		   Tax Free Money Fund
Investment		    
Nasdaq Symbol   BNYXX   BTXXX    
CUSIP Number   81111R 304   81111R 205    
Fund Number   844   839    
 
Investment Funds    27

Table of Contents

Privacy Statement

This privacy statement is issued by Deutsche Investment Management Americas Inc., Deutsche Asset Management, Inc., Scudder Distributors, Inc., Scudder Investor Services, Inc., Scudder Trust Company and Deutsche Asset Management mutual funds.

We never sell customer lists or individual client information. We consider privacy fundamental to our client relationships and adhere to the policies and practices described below to protect current and former clients’ information. Internal policies are in place to protect confidentiality, while allowing client needs to be served. Only individuals who need to do so in carrying out their job responsibilities may access client information. We maintain physical, electronic and procedural safeguards that comply with federal and state standards to protect confidentiality. These safeguards extend to all forms of interaction with us, including the Internet.

In the normal course of business, clients give us nonpublic personal information on applications and other forms, on our websites, and through transactions with us or our affiliates. Examples of the nonpublic personal information collected are name, address, Social Security number and transaction and balance information. To be able to serve our clients, certain of this client information is shared with affiliated and nonaffiliated third party service providers such as transfer agents, custodians, and broker-dealers to assist us in processing transactions and servicing your account with us. In addition, we may disclose all of the information we collect to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements. The organizations described above that receive client information may only use it for the purpose designated by the Scudder Companies listed above.

We may also disclose nonpublic personal information about you to other parties as required or permitted by law. For example, we are required or we may provide information to government entities or regulatory bodies in response to requests for information or subpoenas, to private litigants in certain circumstances, to law enforcement authorities, or any time we believe it necessary to protect the firm.

Questions on this policy may be sent to:

Deutsche Asset Management

Attention: Correspondence
P.O. Box 219415
Kansas City, MO 64121-9415

September 2004

 
28   Investment Funds

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Notes

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Notes

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Notes

Table of Contents

(DEUTSCHE ASSET MANAGEMENT LOGO)
222 South Riverside Plaza
Chicago, IL 60606-5808

NTXMFREESA

39194 (8/05) 

ITEM 2.         CODE OF ETHICS.

                Not applicable.

ITEM 3.         AUDIT COMMITTEE FINANCIAL EXPERT.

                Not applicable.

ITEM 4.         PRINCIPAL ACCOUNTANT FEES AND SERVICES.

                Not applicable.

ITEM 5.         AUDIT COMMITTEE OF LISTED REGISTRANTS

                Not Applicable

ITEM 6.         SCHEDULE OF INVESTMENTS

                Not Applicable

ITEM 7.         DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
                CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

                Not applicable.

ITEM 8.         PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

                Not applicable.

ITEM 9.         PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
                INVESTMENT COMPANY AND AFFILIATED PURCHASERS

                Not Applicable.

ITEM 10.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Nominating and Governance Committee evaluates and nominates Board member
candidates. Fund shareholders may also submit nominees that will be considered
by the Committee when a Board vacancy occurs. Submissions should be mailed to
the attention of the Secretary of the Fund, One South Street, Baltimore, MD
21202.

ITEM 11.        CONTROLS AND PROCEDURES.

(a) The Chief Executive and Financial Officers concluded that the Registrant's
Disclosure Controls and Procedures are effective based on the evaluation of the
Disclosure Controls and Procedures as of a date within 90 days of the filing
date of this report.

(b) There have been no changes in the registrant's internal control over
financial reporting that occurred during the registrant's last half-year (the
registrant's second fiscal half-year in the case of the annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal controls over financial reporting.

ITEM 12.        EXHIBITS.

(a)(1)   Certification  pursuant to Rule 30a-2(a) under the  Investment  Company
         Act of 1940 (17 CFR  270.30a-2(a))  is filed  and  attached  hereto  as
         Exhibit 99.CERT.

(b)      Certification  pursuant to Rule 30a-2(b) under the  Investment  Company
         Act of 1940 (17 CFR  270.30a-2(b))  is furnished and attached hereto as
         Exhibit 99.906CERT.




Form N-CSR Item F

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Registrant:                         NY Tax Free Money Fund Investment and Tax
                                    Free Money Fund Investment, a series of
                                    Scudder Advisor Funds


By:                                 /s/ Julian Sluyters
                                    ---------------------------
                                    Julian Sluyters
                                    Chief Executive Officer

Date:                               August 26, 2005


Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Registrant:                         NY Tax Free Money Fund Investment and Tax
                                    Free Money Fund Investment, a series of
                                    Scudder Advisor Funds


By:                                 /s/ Julian Sluyters
                                    ---------------------------
                                    Julian Sluyters
                                    Chief Executive Officer

Date:                               August 26, 2005



By:                                 /s/ Paul Schubert
                                    ---------------------------
                                    Paul Schubert
                                    Chief Financial Officer

Date:                               August 26, 2005
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MH^BA.\GJZ)D??1[DF%,..^S36EIYCCW"=;OIM.]>I%WA!2_5\,$3J-U5LI9Z M_/)@H08Z\]!'+_WTU%=O_?789Z_]]D&=QY?FWJ]E?.>'_WZ05!69;Y#WZA>T MNH"13;IF_((OYD^RE^2Z3TI+65RH!P$4W#A+0>IJ3G][X9U/P M0U=EVG.@Z:6I-V+B%K':LI?JE"A)LTJ2\ZJS%9H8C2W_VXNAA%,G8G$*0P># M6^#"I*+/")"!\9->E)#40A6*B88,?)#SD0"VP6-]#(@@,R%30O6@<*FH,3G# M80.#.*`@>D5K#.P3$.&DM>NQT"UMJB*ZTA1%,;Z0C(7QT@T]ID8,T2B(<"*4 MUNJ&H0PR,(5?O%I3+P^A<(K44R*$OL?T"CTK$^-+&BI*1IO E2C2 EX-99.CERT 5 cert.txt CERTIFICATION Deutsche Asset Management [LOGO] A Member of the Deutsche Bank Group Chief Executive Officer Form N-CSR Certification under Sarbanes Oxley Act I, Julian Sluyters, certify that: 1. I have reviewed this report, filed on behalf of NY Tax Free Money Fund Investment and Tax Free Money Fund Investment, a series of Scudder Advisor Funds, on Form N-CSR; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. August 26, 2005 /s/ Julian Sluyters Julian Sluyters Chief Executive Officer NY Tax Free Money Fund Investment and Tax Free Money Fund Investment, a series of Scudder Advisor Funds Deutsche Asset Management [LOGO] A Member of the Deutsche Bank Group Chief Financial Officer Form N-CSR Certification under Sarbanes Oxley Act I, Paul Schubert, certify that: 1. I have reviewed this report, filed on behalf of NY Tax Free Money Fund Investment and Tax Free Money Fund Investment, a series of Scudder Advisor Funds, on Form N-CSR; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. August 26, 2005 /s/ Paul Schubert Paul Schubert Chief Financial Officer NY Tax Free Money Fund Investment and Tax Free Money Fund Investment, a series of Scudder Advisor Funds EX-99.906CERT 6 cert906.txt 906 CERTIFICATION Deutsche Asset Management [LOGO] A Member of the Deutsche Bank Group Chief Executive Officer Section 906 Certification under Sarbanes Oxley Act I, Julian Sluyters, certify that: 1. I have reviewed this report, filed on behalf NY Tax Free Money Fund Investment and Tax Free Money Fund Investment, a series of Scudder Advisor Funds, on Form N-CSR; 2. Based on my knowledge and pursuant to 18 U.S.C. ss. 1350, the periodic report on Form N-CSR (the "Report") fully complies with the requirements of ss. 13 (a) or ss.15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. August 26, 2005 /s/ Julian Sluyters Julian Sluyters Chief Executive Officer NY Tax Free Money Fund Investment and Tax Free Money Fund Investment, a series of Scudder Advisor Funds Deutsche Asset Management [LOGO] A Member of the Deutsche Bank Group Chief Financial Officer Section 906 Certification under Sarbanes Oxley Act I, Paul Schubert, certify that: 1. I have reviewed this report, filed on behalf of NY Tax Free Money Fund Investment and Tax Free Money Fund Investment, a series of Scudder Advisor Funds, on Form N-CSR; 2. Based on my knowledge and pursuant to 18 U.S.C. ss. 1350, the periodic report on Form N-CSR (the "Report") fully complies with the requirements of ss. 13 (a) or ss. 15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. August 26, 2005 /s/ Paul Schubert Paul Schubert Chief Financial Officer NY Tax Free Money Fund Investment and Tax Free Money Fund Investment, a series of Scudder Advisor Funds -----END PRIVACY-ENHANCED MESSAGE-----