497 1 ss-mega_trade.txt Supplement to the currently effective Statement of Additional Information of each of the listed funds: Scudder 21st Century Growth Fund Scudder Aggressive Growth Fund Scudder Balanced Fund Scudder Blue Chip Fund Scudder California Tax-Free Income Fund Scudder Capital Growth Fund Scudder Contrarian Fund Scudder Development Fund Scudder-Dreman Financial Services Fund Scudder-Dreman High Return Equity Fund Scudder-Dreman Small Cap Value Fund Scudder Dynamic Growth Fund Scudder Emerging Markets Growth Fund Scudder Emerging Markets Income Fund Scudder Florida Tax-Free Income Fund Scudder Focus Value+Growth Fund Scudder Global Bond Fund Scudder Global Discovery Fund Scudder Global Fund Scudder GNMA Fund Scudder Gold & Precious Metals Fund Scudder Greater Europe Growth Fund Scudder Growth and Income Fund Scudder Growth Fund Scudder Health Care Fund Scudder High Income Fund Scudder High Income Opportunity Fund Scudder High Yield Tax-Free Fund Scudder Income Fund Scudder International Fund Scudder Large Company Growth Fund Scudder Large Company Value Fund Scudder Latin America Fund Scudder Managed Municipal Bond Fund Scudder Massachusetts Tax-Free Fund Scudder Medium Term Tax-Free 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 IV 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 Small Company Stock Fund Scudder Small Company Value Fund Scudder Strategic Income Fund Scudder Target 2010 Fund Scudder Target 2011 Fund Scudder Target 2012 Fund Scudder Technology Fund Scudder Technology Innovation Fund Scudder Total Return Fund Scudder US Government Securities 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 Scudder Variable Series II Scudder Aggressive Growth Portfolio Scudder Blue Chip Portfolio Scudder Contrarian Value Portfolio Scudder Global Blue Chip Portfolio Scudder Government Securities Portfolio Scudder Growth Portfolio Scudder High Income Portfolio Scudder International Select Equity Portfolio Scudder Investment Grade Bond Portfolio Scudder Small Cap Growth Portfolio Scudder Strategic Income Portfolio Scudder Technology Growth Portfolio Scudder Total Return 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 Oak Strategic Equity Portfolio SVS Turner Mid Cap Growth Portfolio Scudder Worldwide 2004 Fund The following information replaces related information included in each fund's currently effective SAI under the section describing portfolio and brokerage transactions: Portfolio Transactions The Advisor is responsible for placing the orders for the purchase and sale of portfolio securities, including the allocation of brokerage. The primary objective of the Advisor in placing orders for the purchase and sale of securities for a Fund is to obtain the most favorable net results, taking into account such factors, among others, as price, commission (where applicable), size of order, difficulty of execution and skill required of the executing broker-dealer. The Advisor seeks to evaluate the overall reasonableness of brokerage commissions paid with commissions charged on comparable transactions, as well as by comparing commissions paid by a Fund to reported commissions paid by others. The Advisor routinely reviews commission rates, execution and settlement services performed and makes internal and external comparisons. A Fund's purchases and sales of fixed-income securities are generally placed by the Advisor with primary market makers for these securities on a net basis, without any brokerage commission being paid by a Fund. Trading does, however, involve transaction costs. Transactions with dealers serving as primary market makers reflect the spread between the bid and asked prices. Purchases of underwritten issues may be made, which will include an underwriting fee paid to the underwriter. In effecting transactions in over-the-counter securities, orders are placed with the principal market makers for the security being traded unless, after exercising care, it appears that more favorable results are available elsewhere. When it can be done consistently with the policy of obtaining the most favorable net results, the Advisor may place such orders with broker-dealers who supply research services to the Advisor or a Fund. The term "research services", may include, but is not limited to, advice as to the value of securities; the advisability of investing in, purchasing or selling securities; the availability of securities or purchasers or sellers of securities; and analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy and the performance of accounts. The Advisor is authorized when placing portfolio transactions, if applicable, for a Fund to pay a brokerage commission in excess of that which another broker-dealer might charge for executing the same transaction on account of execution services and the receipt of research services. The Advisor has negotiated arrangements, which are not applicable to most fixed income transactions, with certain broker-dealers pursuant to which a broker-dealer will provide research services to the Advisor in exchange for the direction by the Advisor of brokerage transactions to the broker-dealer. These arrangements regarding receipt of research services generally apply to equity security transactions. Although certain research services from broker-dealers may be useful to a Fund and to the Advisor, it is the opinion of the Advisor that such information only supplements its own research effort since the information must still be analyzed, weighed and reviewed by the Advisor's staff. Such information may be useful to the Advisor in providing services to clients other than a Fund and not all such information is used by the Advisor in connection with a Fund. Conversely, such information provided to the Advisor by broker-dealers through whom other clients of the Advisor effect securities transactions may be useful to the Advisor in providing services to a Fund. When selecting a broker-dealer to effect portfolio transactions on behalf of a Fund, the Advisor may, provided that it can be done consistently with the policy of obtaining the most favorable net results, consider the activities of the broker-dealer in selling shares of any Scudder-branded (funds marketed with the Scudder name), open-end investment company. The Advisor has informed the Board of each Scudder-branded, open-end investment company of these practices and has undertaken to provide to the Boards regular reports about its selection of broker-dealers to effect portfolio transactions. The Advisor believes that these reports are important because it recognizes that it or its affiliates may derive some benefit from these practices. The Advisor and its affiliates expect that each of the Funds will benefit by the direction of orders of the Funds to broker-dealers in consideration of those broker-dealers' sales of the Scudder-branded, open-end funds in general. March 26, 2003