-----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, Ade9RSU3Hl8EG2vgkCuj7IW8KUnWMAOJuEJZgOFN1Ni/YmTonpEWw/uQzGno4+bZ JI7z4kKphvzvQ4p2qwWouQ== 0000088053-97-000079.txt : 19971016 0000088053-97-000079.hdr.sgml : 19971016 ACCESSION NUMBER: 0000088053-97-000079 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970831 FILED AS OF DATE: 19971015 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCUDDER INVESTMENT TRUST CENTRAL INDEX KEY: 0000088064 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042212654 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-00043 FILM NUMBER: 97695652 BUSINESS ADDRESS: STREET 1: 160 FEDERAL ST CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173305590 FORMER COMPANY: FORMER CONFORMED NAME: SCUDDER GROWTH & INCOME FUND DATE OF NAME CHANGE: 19910402 FORMER COMPANY: FORMER CONFORMED NAME: SCUDDER COMMON STOCK FUND INC DATE OF NAME CHANGE: 19841125 FORMER COMPANY: FORMER CONFORMED NAME: SCUDDER COMMON STOCK FUND DATE OF NAME CHANGE: 19790501 N-30D 1 ANNUAL REPORT - SCUDDER CLASSIC GROWTH FUND Scudder Classic Growth Fund Annual Report August 31, 1997 Pure No-Load(TM) Funds A fund seeking long-term growth of capital with reduced share price volatility compared to other growth mutual funds. A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares. SCUDDER (logo) In Brief o Scudder Classic Growth Fund provided a total return of 45.20% for the slightly less than twelve month period (September 9, 1996 to August 31, 1997). This return compares very favorably to the 38.08% total return performance of the unmanaged S&P 500 Index for the same period. o U.S. stocks provided outstanding performance as robust economic growth, strong corporate earnings, and benign inflation created an ideal environment for high quality, large company stocks -- the Fund's primary area of emphasis. o Overweight positions in selected technology and finance issues -- two strong performing stock sectors during the period -- were significant contributors to the Fund's favorable performance, especially considering its relatively conservative approach. Table of Contents 3 Letter from the Fund's President 18 Financial Highlights 4 Performance Update 19 Notes to Financial Statements 5 Portfolio Summary 22 Report of Independent Accountants 6 Portfolio Management Discussion 24 Officers and Trustees 10 Glossary of Investment Terms 25 Investment Products and Services 11 Investment Portfolio 26 Scudder Solutions 15 Financial Statements 2 - Scudder Classic Growth Fund Letter From the Fund's President Dear Shareholders, We are pleased to present Scudder Classic Growth Fund's first annual report to shareholders for the abbreviated fiscal period from September 9, 1996 to August 31, 1997. Your Fund has made a solid start during its roughly 11-1/2 months of operation, as it significantly outperformed the unmanaged S&P 500 Index and comparable growth funds. This is gratifying considering the Fund's relatively conservative approach to investing in America's leading growth companies. A complete discussion of your Fund's activities begins on page 6. On the heels of several back-to-back years of strong performance by the U.S. stock market, another year of outstanding performance is almost hard to believe. Recent returns have exceeded by a wide margin the approximately 10% long run average for U.S. stocks. Considering the recent strength of the market, we believe it is especially important for investors to have realistic expectations for stocks. While we expect the environment that has contributed to the stock market's good performance to continue, double-digit returns may not be repeated in 1998. Part of a sound approach is an adequately diversified portfolio with exposure to small-cap, foreign, emerging market, and fixed income securities in addition to large-cap U.S. stocks. Our representatives can assist you with assessing your needs and determining the next steps to achieving your long-term goals. Please feel free to give them a call toll-free at 1-800-225-2470. For those of you who are interested in new Scudder products, we recently introduced Scudder International Growth and Income Fund, which pursues a yield-oriented approach to investing in international equities. The Fund seeks to provide long-term growth of capital plus current income. Investors who desire international exposure but wish to take a more conservative approach may appreciate the Fund's emphasis on dividend-paying stocks of established companies listed on foreign exchanges. For further information on this new fund, please turn to page 25. Thank you for your continued investment in Scudder Classic Growth Fund. Sincerely, /s/Daniel Pierce Daniel Pierce President, Scudder Classic Growth Fund 3 - Scudder Classic Growth Fund Performance Update as of August 31, 1997 - ------------------------------------------- Fund Index Comparisons - ------------------------------------------- Total Return - ------------------------------------------- Period Ended Growth of Average 8/31/97 $10,000 Cumulative Annual - ------------------------------------------- Scudder Classic Growth Fund Ticker Symbol: SCCGX - ------------------------------------------- Life of Fund** $14,520 45.20% 45.20% - ------------------------------------------- S&P 500 Index - ------------------------------------------- Life of Fund** $13,808 38.08% 38.08% - ------------------------------------------- - ------------------------------------------- Growth of a $10,000 Investment - ------------------------------------------- A chart in the form of a line graph appears here, illustrating the Growth of a $10,000 Investment. The data points from the graph are as follows: S&P 500 Index Year Amount - ---------------------- 9/96* $10,000 10/96 $10,276 11/96 $11,052 12/96 $10,833 1/97 $11,510 2/97 $11,600 3/97 $11,123 4/97 $11,788 5/97 $12,505 6/97 $13,067 7/97 $14,106 8/97 $13,316 Scudder Classic Growth Fund Year Amount - ---------------------- 9/96* $10,000 10/96 $10,159 11/96 $10,928 12/96 $10,646 1/97 $11,433 2/97 $11,361 3/97 $10,892 4/97 $11,632 5/97 $12,419 6/97 $13,150 7/97 $14,422 8/97 $13,818 The Standard & Poor's (S&P) 500 Index is an unmanaged capitalization-weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange, and Nasdaq Stock Market. Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees or expenses. * The Fund commenced operations on September 9, 1996. The graphed index comparison begins September 30, 1996. - ----------------------------------------------------------------- Returns and Per Share Information - ----------------------------------------------------------------- A chart in the form of a bar graph appears here, illustrating the Fund Total Return (%) and Index Total Return (%) with the exact data points listed in the table below. Yearly periods ended August 31 1997** - -------------------------------------------------------------------------------- Net Asset Value $17.38 - -------------------------------------------------------------------------------- Income Dividends $ .04 - -------------------------------------------------------------------------------- Fund Total Return (%) 45.20 - -------------------------------------------------------------------------------- Index Total Return (%) 38.08 - -------------------------------------------------------------------------------- Performance is historical and assumes reinvestment of all dividends and capital gains and is not indicative of future results. Total return and principal value will fluctuate, so an investor's shares, when redeemed, may be worth more or less than when purchased. If the Adviser had not maintained the Fund's expenses, the total return for the life of Fund period would have been lower. ** The Fund commenced operations on September 9, 1996. 4 - Scudder Classic Growth Fund Portfolio Summary as of August 31, 1997 - ------------------------------- Asset Allocation - ------------------------------- Equity Holdings 97% Cash Equivalents 3% - ------------------------------- 100% - ------------------------------- The Fund maintains a fully invested approach in quality growth stocks. A graph in the form of a pie chart appears here, illustrating the exact data points in the above table. - ------------------------------ Sector Diversification (Excludes 3% Cash Equivalents) - ------------------------------ Financial 20% Technology 18% Energy 13% Manufacturing 13% Health 10% Consumer Discretionary 10% Consumer Staples 5% Service Industries 4% Durables 4% Other 3% - ------------------------------ 100% - ------------------------------ As overweighting in technology and finance--the two strongest performing industry sectors--contributed to the Fund's superior return. A graph in the form of a pie chart appears here, illustrating the exact data points in the above table. - ------------------------------- Ten Largest Equity Holdings (23% of Portfolio) - ------------------------------- 1. Compaq Computer Corp. Leading manufacturer of personal computers 2. American Express Credit Corp. Travel and investment services, insurance, banking 3. Intel Corp. Semiconductor microprocessors 4. EXEL, Ltd. (ADR) Provider of liability insurance 5. Royal Dutch Petroleum Co. International energy company 6. American International Group, Inc. Major international insurance holding company 7. Applied Materials, Inc. Leading semi-conductor capital equipment manufacturer 8. Home Depot, Inc. Building supply/home improvement stores 9. BankAmerica Corp. Commercial banking in California 10. Exxon Corp. International energy company Many of the Fund's top holdings were among its strongest performers, an important contributor to its outperformance. For more complete details about the Fund's investment portfolio, see page 11. A monthly Investment Portfolio Summary and quarterly Portfolio Holdings are available upon request. 5 - Scudder Classic Growth Fund Portfolio Management Discussion In the following interview, William F. Gadsden and Bruce Beaty, portfolio managers of Scudder Classic Growth Fund, discuss the Fund's strategy and market environment during the fiscal period. Q: How did Scudder Classic Growth Fund perform for the abbreviated annual report period? A: For the period from the Fund's inception on September 9, 1996 to August 31, 1997, the Fund's net asset value per share increased from $12.00 to $17.38 for a total return of 45.20%. This return compares very favorably to the 38.08% total return performance of the unmanaged S&P 500 Index for the same period. On a month-end basis, the S&P 500 returned 40.66% for the full twelve-month period ended August 31, 1997. We were pleased with the Fund's performance, especially considering its relatively conservative approach to investing for growth. Q: What is responsible for the Fund's strong performance? A: This has been an ideal environment for the Fund's introduction. Stocks continued to rally, especially large company stocks, which provided excellent results. The Fund benefited from its core emphasis on high quality, large company stocks, and from overweightings in strong performing sectors, namely technology and finance. Q: How do you manage the Fund? A: Scudder Classic Growth Fund is different in that it seeks long-term growth of capital with lower volatility than the average growth fund. In pursuing this goal, we target seasoned companies with strong competitive positions. In particular, we seek to avoid stocks with unreasonably high expectations, which typically trade at high prices relative to their earnings, sales, or revenues. We prefer to pay for earnings that we believe are sustainable. Our investment focus is on stocks with consistent earnings growth rates that we believe are reasonably valued. Q: How do you execute this investment approach? A: We employ both fundamental and quantitative techniques in selecting stocks for the portfolio. The investment process begins with narrowing a universe of growth stocks by screening out companies with weaker competitive positions and financials. Then we assign a rating to each stock based on valuation factors. Through this process we attempt to identify stocks with the best potential performance. Q: The U.S. stock market turned in top performance during the period. What contributed to this favorable environment? A: Stocks were propelled higher by robust economic growth, solid corporate earnings, and relatively benign inflation. The U.S. economy has remained resilient, despite expectations that growth would decelerate to more sustainable levels. Productivity has continued to improve and consumer confidence reached record highs. Corporate profits, which were expected to moderate as the labor market tightened and wages rose, continued to climb, albeit at a slower pace. While these conditions provided a nearly ideal environment for equity investors, concerns over the prospect of accelerating inflation and accompanying higher 6 - Scudder Classic Growth Fund interest rates contributed to an environment of increased market volatility. Illustrative of these market jitters was an increase in the number of days with 100 point swings in the Dow Jones Industrial Average during the period. While 100 points has become less significant in percentage terms as the market has risen over the last few years, overall price volatility has increased on a relative basis. Nevertheless, stocks provided outstanding returns to investors for the fiscal period. Q: Why were large-cap U.S. stocks among the best performers? A: Investors favored large-cap stocks for several reasons, including their ability to meet earnings expectations and provide excellent market liquidity. Strong earnings at many large companies propelled stocks higher. Many of these companies have been able to leverage their substantial global presence and vast distribution networks. Large companies have also continued to focus on productivity improvement and acquisitions to increase revenues. Technology companies have been notable beneficiaries of the productivity drive, as other companies have purchased technology products to improve efficiency and lower costs. The benefits of technology are magnified at many large companies where even small improvements in productivity can have an exponential benefit when applied on a large scale. These companies have been investing heavily in hardware, software, networks, and training during the 1980s and 1990s. We believe that these substantial investments are beginning to provide significant dividends. Technological improvement is a long-term secular trend that should provide continuing benefits to many of the established companies which typify the Fund's holdings. Q: What changes have you made to the portfolio? A: From the Fund's inception on September 9, 1996, we have continued to pursue a disciplined strategy in selecting stocks. This approach has resulted in few significant portfolio changes, with the Fund's sector diversification and largest holdings looking similar to those of six months ago. At 18% of assets, the technology sector continues to be overweighted in the portfolio, and several of our holdings there experienced spectacular returns. From the date of initial purchase, Compaq Computer rose more than 180%, Intel was up more than 130%, and Applied Materials more than tripled its value through August 31, 1997. Applied Materials is the leading global semiconductor capital equipment manufacturer. They make equipment that semiconductor manufacturers use to make computer chips. Chip makers, such as Intel, can use Applied's equipment to turn raw silicon wafers into microprocessors. As better manufacturing techniques are developed to make smaller and faster processors, firms such as Applied Materials benefit directly. We believe Applied's long-term growth rate is above 20%. 7 - Scudder Classic Growth Fund Q: Financial stocks constituted 20% of assets at the end of the period. What's going on in this sector? A: The Fund's financial stocks were strong contributors to performance. The banking sector rose on the long-term trends of restructuring and consolidation. Financial stocks were well represented in the Fund's top ten holdings, including American Express, Exel, American International Group, and BankAmerica. The strong bull market has been good for earnings at Franklin Resources, which is continuing to benefit from the mutual fund industry's strong cash flows and investors' focus on saving and investing for retirement. Q: Were there any other standouts? A: Warner-Lambert is one holding worth noting in the health care sector. The firm received approval for two major drugs in the cholesterol and diabetes areas. The two drugs are expected to increase sales by $2 billion over the next few years, doubling Warner-Lambert's current pharmaceutical sales base. Once investors realized the potential of these drugs, the stock rose sharply, increasing more than 120% for the period. Q: Were there any disappointments? A: Every stock in a portfolio cannot always be a winner, no matter how good the fundamentals, and we would be remiss if we did not mention a few holdings that disappointed us. Our holding of the national health care provider Columbia/HCA illustrates this point. While we still believe that the company has solid investment fundamentals, the federal investigation into Medicare reimbursement fraud and other allegations has created a cloud of uncertainty from which we see no relief in the near future. This has made it difficult for a firm that is relying on an acquisition strategy, hurting earnings in the short run. We completed our liquidation of Columbia/HCA in early September 1997. Another disappointment was Ascend Communications in the technology area. Ascend makes remote access communications equipment for personal computers, and has been in the midst of rolling out a new product. Such product transitions can be difficult as customers sometimes wait for bugs to be worked out and price reductions. However, we still believe in the long-term prospects for remote access and continue to hold a position as of the end of the fiscal period. Q: Are there any new themes in the portfolio? A: A new area for the Fund over the last six months is oil field services. This is one of the few industries where we see good pricing and strong demand for services. Companies in this sector provide many services to the oil industry, including seismic analysis, field testing, drilling equipment, and distribution. After decade-long attrition, downsizing, and restructuring, we expect oil field service companies to exhibit strong earnings as demand remains firm and productivity enhancement filters down to the bottom line. For example, oil companies are now able to drill deeper wells with a higher success rate because of the improved technology provided by oil field services companies. This is significant because it has effectively lowered the high cost of drilling these wells. At the close of the period, the Fund had oil field service holdings in Schlumberger and Santa Fe International. 8 - Scudder Classic Growth Fund Q: What is your outlook for the market and the Fund? A: We avoid making predictions about the market and prefer to focus on picking quality stocks that meet our investment requirements. Nevertheless, we think the favorable investment environment of 1997 should continue into 1998. Economic growth should remain healthy, but slow to more sustainable levels, reflecting the strong U.S. dollar and a challenging environment for most companies to raise prices. Company fundamentals remain positive: there is ample global liquidity, growth is firm, inflation is low, and productivity continues to improve at many companies. We believe that leading American companies -- the primary focus for your Fund's investments -- will continue to provide some of the best opportunities in this environment. Scudder Classic Growth Fund: A Team Approach to Investing Scudder Classic Growth Fund is managed by a team of Scudder investment professionals who each play an important role in the Fund's management process. Team members work together to develop investment strategies and select securities for the Fund's portfolio. They are supported by Scudder's large staff of economists, research analysts, traders and other investment specialists who work in Scudder's offices across the United States and abroad. Scudder believes its team approach benefits Fund investors by bringing together many disciplines and leveraging Scudder's extensive resources. Lead Portfolio Manager William F. Gadsden, who joined Scudder in 1983, focuses on overall investment strategy and has 15 years of investment industry experience. Bruce F. Beaty, Portfolio Manager, focuses on securities selection and assists with the creation and implementation of investment strategy for the Fund. He joined Scudder in 1991 and has 16 years of investment industry experience. 9 - Scudder Classic Growth Fund Glossary of Investment Terms FUNDAMENTAL RESEARCH Analysis of companies based on the projected impact of management, products, sales, and earnings on balance sheets and income statements. Distinct from technical analysis, which evaluates the attractiveness of a stock based on historical price and trading volume movements, rather than the financial results of the underlying company. GROWTH STOCK Stock of a company that has displayed above average earnings growth and is expected to continue to increase profits going forward. LIQUIDITY A stock that is liquid has enough shares outstanding and a substantial enough market capitalization to allow large purchases and sales to occur without causing a significant change in its market price. MARKET CAPITALIZATION The value of a company's outstanding shares of common stock, determined by the number of shares outstanding multiplied by the share price (Shares x Price = Market Capitalization). The universe of publicly traded companies is frequently divided into large-, mid-, and small-capitalizations. In general, "large-cap" stocks tend to be more liquid than "small-cap" stocks. OVER/UNDER WEIGHTING Refers to the allocation of assets -- usually by sector, industry, or country -- within a portfolio relative to a benchmark index, (i.e. the S&P 500) or an investment universe. PRICE-EARNINGS RATIO (P-E) A widely used gauge of a stock's valuation that (also "earnings multiple") indicates what investors are paying for a company's earnings on a per share basis. Typically based on a company's projected earnings for the next 12 months, a higher "earnings multiple" indicates a higher expected growth rate and the potential for greater price fluctuations. VALUE STOCK A company whose stock price does not fully reflect its intrinsic value, as indicated by price-earnings ratio, price-book value ratio, dividend yield, or some other valuation measure, relative to its industry or the market overall. (Sources: Scudder; Barron's Dictionary of Finance and Investment Terms) 10 - Scudder Classic Growth Fund Investment Portfolio as of August 31, 1997
Principal Market Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------ Repurchase Agreements 3.1% - ------------------------------------------------------------------------------------------------------------------------------ Repurchase Agreement with State Street Bank and Trust Company dated 8/29/97 at 5.45%, to be repurchased at $1,647,997 on 9/2/97, collateralized by a ----------- $1,180,000 U.S. Treasury Bond, 12%, 8/15/13 (Cost $1,647,000) ......................... 1,647,000 1,647,000 ----------- Shares - ------------------------------------------------------------------------------------------------------------------------------ Common Stocks 96.9% - ------------------------------------------------------------------------------------------------------------------------------ Consumer Discretionary 9.3% Apparel & Shoes 1.2% Nike, Inc. "B" .......................................................................... 12,400 661,850 ----------- Department & Chain Stores 5.8% Gap Inc. ................................................................................ 14,800 657,675 Home Depot, Inc. ........................................................................ 24,300 1,146,656 Price/Costco Inc.* ...................................................................... 18,800 677,975 Walgreen Co. ............................................................................ 22,000 592,625 ----------- 3,074,931 ----------- Hotels & Casinos 0.9% Mirage Resorts Inc.* .................................................................... 18,200 487,988 ----------- Specialty Retail 1.4% Tiffany & Co. ........................................................................... 16,100 728,525 ----------- Consumer Staples 4.5% Alcohol & Tobacco 1.2% Anheuser-Busch Companies, Inc. .......................................................... 14,400 613,800 ----------- Food & Beverage 1.9% H.J. Heinz Co. .......................................................................... 13,400 557,775 Sara Lee Corp. .......................................................................... 11,550 464,888 ----------- 1,022,663 ----------- Package Goods/Cosmetics 1.4% Procter & Gamble Co. .................................................................... 5,800 771,763 ----------- Health 10.0% Hospital Management 1.0% Columbia/HCA Healthcare Corp. ........................................................... 16,500 520,781 ----------- Medical Supply & Specialty 1.2% Becton, Dickinson & Co. ................................................................. 13,800 661,538 ----------- Pharmaceuticals 7.8% American Home Products Corp. ............................................................ 6,200 446,400 Johnson & Johnson ....................................................................... 7,900 447,831 Merck & Co. Inc. ........................................................................ 5,200 477,425
The accompanying notes are an integral part of the financial statements. 11 - Scudder Classic Growth Fund
Market Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------ Novartis AG (ADR) ....................................................................... 9,300 664,950 Pfizer, Inc. ............................................................................ 12,500 692,188 Schering-Plough Corp. ................................................................... 10,400 499,200 Warner-Lambert Co. ...................................................................... 7,100 902,144 ----------- 4,130,138 ----------- Financial 19.9% Banks 4.4% BankAmerica Corp. ....................................................................... 16,400 1,079,325 Citicorp ................................................................................ 7,000 893,375 J.P. Morgan & Co., Inc. ................................................................. 3,600 386,100 ----------- 2,358,800 ----------- Insurance 8.2% American International Group, Inc. ...................................................... 12,400 1,170,250 Conseco Inc. ............................................................................ 18,400 791,200 EXEL, Ltd. (ADR) ........................................................................ 24,000 1,317,000 Hartford Life, Inc. "A" ................................................................. 15,100 563,419 MBIA Inc. ............................................................................... 4,700 532,275 ----------- 4,374,144 ----------- Consumer Finance 1.5% Associates First Capital Corp. .......................................................... 13,300 772,231 ----------- Other Financial Companies 5.8% American Express Credit Corp. ........................................................... 18,700 1,453,925 Federal National Mortgage Association ................................................... 18,200 800,800 Travelers Group, Inc. ................................................................... 12,700 806,450 ----------- 3,061,175 ----------- Media 2.2% Advertising 1.2% Omnicom Group, Inc. ..................................................................... 9,500 643,625 ----------- Cable Television 1.0% Tele-Comm Liberty Media Group "A"* ...................................................... 20,100 530,138 ----------- Service Industries 4.2% Investment 3.2% Franklin Resources Inc. ................................................................. 12,700 982,663 Merrill Lynch & Co., Inc. ............................................................... 11,600 713,400 ----------- 1,696,063 ----------- Miscellaneous Commercial Services 1.0% Manpower, Inc. .......................................................................... 12,900 550,669 -----------
The accompanying notes are an integral part of the financial statements. 12 - Scudder Classic Growth Fund
Market Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------ Durables 3.4% Aerospace 2.8% Rockwell International Corp. ............................................................ 10,500 630,000 United Technologies Corp. ............................................................... 11,000 858,688 ----------- 1,488,688 ----------- Telecommunications Equipment 0.6% Ascend Communications, Inc.* ............................................................ 7,300 309,785 ----------- Manufacturing 12.4% Chemicals 3.2% E.I. du Pont de Nemours & Co. ........................................................... 12,300 766,444 Praxair Inc. ............................................................................ 9,400 502,313 Sigma-Aldrich Corp. ..................................................................... 13,200 430,650 ----------- 1,699,407 ----------- Diversified Manufacturing 4.6% Dresser Industries Inc. ................................................................. 16,000 668,000 General Electric Co. .................................................................... 8,400 525,000 TRW Inc. ................................................................................ 11,100 578,588 Textron, Inc. ........................................................................... 11,100 691,669 ----------- 2,463,257 ----------- Electrical Products 1.7% ABB AB (ADR) ............................................................................ 3,400 496,400 Emerson Electric Co. .................................................................... 7,400 404,688 ----------- 901,088 ----------- Machinery/Components/Controls 2.9% Ingersoll-Rand Co. ...................................................................... 10,100 607,263 Parker-Hannifin Group ................................................................... 14,800 951,825 ----------- 1,559,088 ----------- Technology 17.3% Diverse Electronic Products 6.4% Applied Materials, Inc.* ................................................................ 12,200 1,151,375 General Motors Corp. "H" ................................................................ 15,900 1,010,644 KLA Instruments Corp.* .................................................................. 8,300 588,263 Teradyne Inc.* .......................................................................... 11,550 643,191 ----------- 3,393,473 ----------- Electronic Data Processing 7.6% Compaq Computer Corp.* .................................................................. 23,300 1,526,150 Hewlett-Packard Co. ..................................................................... 12,300 754,144 International Business Machines Corp. ................................................... 7,700 776,738
The accompanying notes are an integral part of the financial statements. 13 - Scudder Classic Growth Fund
Market Shares Value ($) - ------------------------------------------------------------------------------------------------------------------------------ Sun Microsystems, Inc.* ................................................................. 21,100 1,012,800 ----------- 4,069,832 ----------- Office/Plant Automation 0.7% Cisco Systems, Inc.* .................................................................... 4,800 361,800 ----------- Semiconductors 2.6% Intel Corp. ............................................................................. 14,800 1,363,450 ----------- Energy 12.6% Oil Companies 8.5% Amoco Corp. ............................................................................. 6,000 567,375 Atlantic Richfield Co. .................................................................. 9,400 705,000 Exxon Corp. ............................................................................. 16,800 1,027,950 Mobil Corp. ............................................................................. 8,300 603,825 Repsol SA (ADR) ......................................................................... 11,200 441,000 Royal Dutch Petroleum Co. (New York shares) ............................................. 23,200 1,177,400 ----------- 4,522,550 ----------- Oil/Gas Transmission 1.3% Enron Corp. ............................................................................. 9,800 377,913 Williams Cos., Inc. ..................................................................... 6,600 307,313 ----------- 685,226 ----------- Oilfield Services/Equipment 2.8% Santa Fe International Corp.* ........................................................... 15,600 698,100 Schlumberger Ltd. ....................................................................... 10,700 815,206 ----------- 1,513,306 ----------- Transportation 1.1% Airlines AMR Corp.* .............................................................................. 5,800 584,350 - ------------------------------------------------------------------------------------------------------------------------------ Total Common Stocks (Cost $44,720,306) 51,576,122 - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ Total Investment Portfolio -- 100.0% (Cost $46,367,306) (a) 53,223,122 - ------------------------------------------------------------------------------------------------------------------------------
* Non-income producing security. (a) The cost for federal income tax purposes was $46,379,390. At August 31, 1997, net unrealized appreciation for all securities based on tax cost was $6,843,732. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of market value over tax cost of $7,295,181 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over market value of $451,449. The accompanying notes are an integral part of the financial statements. 14 - Scudder Classic Growth Fund Financial Statements Statement of Assets and Liabilities as of August 31, 1997 Assets - ---------------------------------------------------------------------------------------------------------------------------- Investments, at market (identified cost $46,367,306) ................. $ 53,223,122 Cash ................................................................. 131 Receivable for Fund shares sold ...................................... 157,623 Dividends and interest receivable .................................... 80,293 Deferred organization expenses ....................................... 6,401 Other assets ......................................................... 793 ---------------- Total assets ......................................................... 53,468,363 Liabilities - ---------------------------------------------------------------------------------------------------------------------------- Payable for Fund shares redeemed ..................................... 68,960 Other payables and accrued expenses .................................. 173,620 ---------------- Total liabilities .................................................... 242,580 -------------------------------------------------------------------------------------------- Net assets, at market value $ 53,225,783 -------------------------------------------------------------------------------------------- Net Assets - ---------------------------------------------------------------------------------------------------------------------------- Net assets consist of: Undistributed net investment income .................................. 90,326 Unrealized appreciation on investments ............................... 6,855,816 Accumulated net realized gain ........................................ 1,068,807 Paid-in capital ...................................................... 45,210,834 -------------------------------------------------------------------------------------------- Net assets, at market value $ 53,225,783 -------------------------------------------------------------------------------------------- Net Asset Value - ---------------------------------------------------------------------------------------------------------------------------- Net Asset Value, offering and redemption price per share ($53,225,783 / 3,062,114 outstanding shares of beneficial ---------------- interest, $.01 par value, unlimited number of shares authorized) .. $17.38 ----------------
The accompanying notes are an integral part of the financial statements. 15 - Scudder Classic Growth Fund Statement of Operations for the period September 9, 1996 (commencement of operations) to August 31, 1997 Investment Income - ------------------------------------------------------------------------------------------------------------------------------ Income: Dividends (net of foreign taxes withheld of $4,375) .................. $ 322,628 Interest ............................................................. 72,315 ----------------- 394,943 Expenses: Management fee ....................................................... 164,645 Services to shareholders ............................................. 156,626 Custodian and accounting fees ........................................ 69,293 Trustees' fees and expenses .......................................... 25,558 Auditing ............................................................. 19,115 Registration fees .................................................... 57,511 Reports to shareholders .............................................. 17,069 Legal ................................................................ 8,887 Amortization of organization expense ................................. 5,035 Other ................................................................ 6,021 ----------------- Total expenses before reductions ..................................... 529,760 Expense reductions ................................................... (235,924) ----------------- Expenses, net ........................................................ 293,836 --------------------------------------------------------------------------------------------- Net investment income 101,107 --------------------------------------------------------------------------------------------- Realized and unrealized gain on investment transactions - ------------------------------------------------------------------------------------------------------------------------------ Net realized gain from: Investments .......................................................... 1,068,807 Net unrealized appreciation during the period on investments ......... 6,855,816 --------------------------------------------------------------------------------------------- Net gain on investment transactions 7,924,623 --------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $ 8,025,730 ---------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 16 - Scudder Classic Growth Fund Statement of Changes in Net Assets
For the Period September 9, 1996 (commencement of operations) to Increase (Decrease) in Net Assets August 31, 1997 - ------------------------------------------------------------------------------------------------------------------------------ Operations: Net investment income ............................................. $ 101,107 Net realized gain on investments .................................. 1,068,807 Net unrealized appreciation on investment transactions during the period ...................................................... 6,855,816 --------------------- Net increase in net assets resulting from operations .............. 8,025,730 --------------------- Distributions to shareholders from net investment income .......... (43,257) --------------------- Fund share transactions: Proceeds from shares sold ......................................... 70,958,470 Net asset value of shares issued to shareholders in reinvestment of distributions ................................... 42,483 Cost of shares redeemed ........................................... (25,758,843) --------------------- Net increase in net assets from Fund share transactions ........... 45,242,110 --------------------- Increase in net assets ............................................ 53,224,583 Net assets at beginning of period ................................. 1,200 Net assets at end of period (including undistributed net --------------------- investment income of $90,326) ................................... $53,225,783 --------------------- Other Information - ------------------------------------------------------------------------------------------------------------------------------ Increase (decrease) in Fund shares Shares outstanding at beginning of period ......................... 100 --------------------- Shares sold ....................................................... 4,715,920 Shares issued to shareholders in reinvestment of distributions .... 3,115 Shares redeemed ................................................... (1,657,021) --------------------- Net increase in Fund shares ....................................... 3,062,014 --------------------- Shares outstanding at end of period ............................... 3,062,114 ---------------------
The accompanying notes are an integral part of the financial statements. 17 - Scudder Classic Growth Fund Financial Highlights The following table includes selected data for a share outstanding throughout the period (a) and other performance information derived from the financial statements.
For the Period September 9, 1996 (commencement of operations) to August 31, 1997 - ---------------------------------------------------------------------------------------------------------------- ----------------- Net asset value, beginning of period ............................................... $12.00 ----------------- Income from investment operations: Net investment income .............................................................. .06 Net realized and unrealized gain on investments .................................... 5.36 ----------------- Total from investment operations ................................................... 5.42 ----------------- Less distributions from net investment income ...................................... (.04) ----------------- Net asset value, end of period ..................................................... $17.38 ----------------- - ---------------------------------------------------------------------------------------------------------------- Total Return (%) (b) ............................................................... 45.20** Ratios and Supplemental Data Net assets, end of period ($ millions) ............................................. 53.2 Ratio of operating expenses, net to average daily net assets (%) ................... 1.25* Ratio of operating expenses before expense reductions, to average daily net assets (%) ...................................................................... 2.25* Ratio of net investment income to average daily net assets (%) ..................... .43* Portfolio turnover rate (%) ........................................................ 27.4* Average commission rate paid ....................................................... $.0378
(a) Based on monthly average shares outstanding during the period. (b) Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized 18 - Scudder Classic Growth Fund Notes to Financial Statements A. Significant Accounting Policies Scudder Classic Growth Fund (the "Fund") is a diversified series of Scudder Investment Trust, a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Fund's financial statements are prepared in accordance with generally accepted accounting principles which require the use of management estimates. The policies described below are followed by the Fund in the preparation of its financial statements. Security Valuation. Portfolio securities which are traded on U.S. or foreign stock exchanges are valued at the most recent sale price reported on the exchange on which the security is traded most extensively. If no sale occurred, the security is then valued at the calculated mean between the most recent bid and asked quotations. If there are no such bid and asked quotations, the most recent bid quotation is used. Securities quoted on the Nasdaq System, for which there have been sales, are valued at the most recent sale price reported on such system. If there are no such sales, the value is the high or "inside" bid quotation. Securities which are not quoted on the Nasdaq System but are traded in another over-the-counter market are valued at the most recent sale price on such market. If no sale occurred, the security is then valued at the calculated mean between the most recent bid and asked quotations. If there are no such bid and asked quotations the most recent bid quotation shall be used. Short-term investments having a maturity of sixty days or less are valued at amortized cost. All other securities are valued at their fair value as determined in good faith by the Valuation Committee of the Board of Trustees. Repurchase Agreements. The Fund may enter into repurchase agreements with certain banks and broker/dealers whereby the Fund, through its custodian, receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value, depending on the maturity of the repurchase agreement, is equal to at least 100.5% of the repurchase price. Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code which are applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required. Distribution of Income and Gains. Distributions of net investment income, if any, are made annually. During any particular year net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed and, therefore, will be distributed to shareholders annually. An additional distribution may be made to the extent necessary to avoid the payment of a four percent federal excise tax. The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from generally accepted accounting principles. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund. The Fund uses the identified cost method for determining realized gain or loss on investments for both financial and federal income tax reporting purposes. 19 - Scudder Classic Growth Fund Organization Costs. Costs incurred by the Fund in connection with its organization have been deferred and are being amortized on a straight-line basis over a five-year period. Other. Investment security transactions are accounted for on a trade-date basis. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Interest income is recorded on the accrual basis. B. Purchases and Sales of Securities During the period September 9, 1996 (commencement of operations) to August 31, 1997, purchases and sales of investment securities (excluding short-term investments) aggregated $50,251,899 and $6,600,428, respectively. C. Related Parties Under the Fund's Investment Management Agreement (the "Agreement") with Scudder, Stevens & Clark, Inc. (the "Adviser"), the Fund pays the Adviser a fee equal to an annual rate of 0.70% of the Fund's average daily net assets, computed and accrued daily and payable monthly. As manager of the assets of the Fund, the Adviser directs the investments of the Fund in accordance with its investment objective, policies, and restrictions. The Adviser determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund. In addition to portfolio management services, the Adviser provides certain administrative services in accordance with the Agreement. The Agreement also provides that if the Fund's expenses, exclusive of taxes, interest, and extraordinary expenses, exceed specified limits, such excess, up to the amount of the management fee, will be paid by the Adviser. In addition, the Adviser has agreed not to impose all or a portion of its management fee until December 31, 1997 in order to maintain the annualized expenses of the Fund at not more than 1.25% of average daily net assets. For the period September 9, 1996 (commencement of operations) to August 31, 1997, the Adviser did not impose any portion of its management fee, which amounted to $164,645. On June 26, 1997, the Adviser entered into an agreement with The Zurich Insurance Company ("Zurich"), an international insurance and financial services organization, pursuant to which Zurich will acquire a majority interest in the Adviser, and the Adviser will form a new global investment organization by combining with Zurich's subsidiary, Zurich Kemper Investments, Inc. and change its name to Scudder Kemper Investments, Inc. Subject to the receipt of the required regulatory and shareholder approvals, the transaction is expected to close in the fourth quarter of 1997. Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the transfer, dividend paying and shareholder service agent for the Fund. For the period September 9, 1996 (commencement of operations) to August 31, 1997, SSC aggregated $47,914, of which $37,902 was not imposed and $10,012 is unpaid at August 31, 1997. Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides recordkeeping and other services in connection with certain retirement and employee benefit plans invested in the Fund. For the period September 9, 1996 (commencement of operations) to August 31, 1997, STC aggregated $2,315, of which $1,831 was not imposed and $484 is unpaid at August 31, 1997. The Fund is one of several Scudder Funds (the "Underlying Funds") in which the Scudder Pathway Series Portfolios (the "Portfolios") invest. In accordance with the Special Servicing Agreement entered into by the Adviser, the Portfolios, the Underlying Funds, SSC, SFAC, STC, and Scudder Investor Services, Inc., expenses from the operation of the Portfolios are borne by the Underlying Funds based on each Underlying Fund's proportionate share of assets owned by the Portfolios. No 20 - Scudder Classic Growth Fund Underlying Funds will be charged expenses that exceed the estimated savings to each respective Underlying Fund. These estimated savings result from the elimination of separate shareholder accounts which either currently are or have potential to be invested in the Underlying Funds. At August 31, 1997, the Special Servicing Agreement expense charged to the Fund amounted to $98,711. Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is responsible for determining the daily net asset value per share and maintaining the portfolio and general accounting records of the Fund. For the period September 9, 1996 (commencement of operations) to August 31, 1997, SFAC aggregated $39,879, of which $31,546 was not imposed and $8,333 is unpaid at August 31, 1997. The Fund pays each of its Trustees not affiliated with the Adviser $4,000 annually plus specified amounts for attended board and committee meetings. For the period September 9, 1996 (commencement of operations) to August 31, 1997, the Trustees fees and expenses aggregated $25,558. 21 - Scudder Classic Growth Fund Report of Independent Accountants To the Trustees of Scudder Investment Trust and the Shareholders of Scudder Classic Growth Fund: We have audited the accompanying statement of assets and liabilities of Scudder Classic Growth Fund, including the investment portfolio, as of August 31, 1997, and the related statement of operations, the statement of changes in net assets, and the financial highlights for the period September 9, 1996 (commencement of operations) to August 31, 1997. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 1997 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Scudder Classic Growth Fund as of August 31, 1997, the results of its operations, the changes in its net assets and the financial highlights for the period September 9, 1996 (commencement of operations) to August 31, 1997, in conformity with generally accepted accounting principles. Boston, Massachusetts COOPERS & LYBRAND L.L.P. October 2, 1997 22 - Scudder Classic Growth Fund This Page intentionally left blank. 23 - Scudder Classic Growth Fund Officers and Trustees Daniel Pierce* President and Trustee Henry P. Becton, Jr. Trustee; President and General Manager, WGBH Educational Foundation George M. Lovejoy, Jr. Trustee; President and Director, Fifty Associates Wesley W. Marple, Jr. Trustee; Professor of Business Administration, Northeastern University, College of Business Administration Kathryn L Quirk* Trustee Jean C. Tempel Trustee; Managing Partner, Technology Equity Partners Bruce F. Beaty* Vice President William F. Gadsden* Vice President Jerard K. Hartman* Vice President Robert T. Hoffman* Vice President Thomas W. Joseph* Vice President David S. Lee* Vice President Valerie F. Malter* Vice President Thomas F. McDonough* Vice President, Secretary and Assistant Treasurer Pamela A. McGrath* Vice President and Treasurer Edward J. O'Connell* Vice President and Assistant Treasurer *Scudder, Stevens & Clark, Inc. 24 - Scudder Classic Growth Fund Investment Products and Services The Scudder Family of Funds+++ - -------------------------------------------------------------------------------- Money Market - ------------ Scudder U.S. Treasury Money Fund Scudder Cash Investment Trust Scudder Money Market Series -- Premium Shares* Managed Shares* Scudder Government Money Market Series -- Managed Shares* Tax Free Money Market+ - ---------------------- Scudder Tax Free Money Fund Scudder Tax Free Money Market Series-- Managed Shares* Scudder California Tax Free Money Fund** Scudder New York Tax Free Money Fund** Tax Free+ - --------- Scudder Limited Term Tax Free Fund Scudder Medium Term Tax Free Fund Scudder Managed Municipal Bonds Scudder High Yield Tax Free Fund Scudder California Tax Free Fund** Scudder Massachusetts Limited Term Tax Free Fund** Scudder Massachusetts Tax Free Fund** Scudder New York Tax Free Fund** Scudder Ohio Tax Free Fund** Scudder Pennsylvania Tax Free Fund** U.S. Income - ----------- Scudder Short Term Bond Fund Scudder Zero Coupon 2000 Fund Scudder GNMA Fund Scudder Income Fund Scudder High Yield Bond Fund Global Income - ------------- Scudder Global Bond Fund Scudder International Bond Fund Scudder Emerging Markets Income Fund Asset Allocation - ---------------- Scudder Pathway Conservative Portfolio Scudder Pathway Balanced Portfolio Scudder Pathway Growth Portfolio Scudder Pathway International Portfolio U.S. Growth and Income - ---------------------- Scudder Balanced Fund Scudder Growth and Income Fund Scudder S&P 500 Index Fund U.S. Growth - ----------- Value Scudder Large Company Value Fund Scudder Value Fund Scudder Small Company Value Fund Scudder Micro Cap Fund Growth Scudder Classic Growth Fund Scudder Large Company Growth Fund Scudder Development Fund Scudder 21st Century Growth Fund Global Growth - ------------- Worldwide Scudder Global Fund Scudder International Growth and Income Fund Scudder International Fund Scudder Global Discovery Fund Scudder Emerging Markets Growth Fund Scudder Gold Fund Regional Scudder Greater Europe Growth Fund Scudder Pacific Opportunities Fund Scudder Latin America Fund The Japan Fund, Inc. Retirement Programs - ------------------- IRA SEP IRA Keogh Plan 401(k), 403(b) Plans Scudder Horizon Plan**+++ +++ (a variable annuity) Closed-End Funds# - -------------------------------------------------------------------------------- The Argentina Fund, Inc. The Brazil Fund, Inc. The Korea Fund, Inc. The Latin America Dollar Income Fund, Inc. Montgomery Street Income Securities, Inc. Scudder New Asia Fund, Inc. Scudder New Europe Fund, Inc. Scudder Spain and Portugal Fund, Inc. Scudder World Income Opportunities Fund, Inc. For complete information on any of the above Scudder funds, including management fees and expenses, call or write for a free prospectus. Read it carefully before you invest or send money. +++Funds within categories are listed in order from expected least risk to most risk. Certain Scudder funds may not be available for purchase or exchange. +A portion of the income from the tax-free funds may be subject to federal, state, and local taxes. *A class of shares of the Fund. **Not available in all states. +++ +++A no-load variable annuity contract provided by Charter National Life Insurance Company and its affiliate, offered by Scudder's insurance agencies, 1-800-225-2470. #These funds, advised by Scudder, Stevens & Clark, Inc., are traded on various stock exchanges. 25 - Scudder Classic Growth Fund Scudder Solutions
Convenient ways to invest, quickly and reliably: - ------------------------------------------------------------------------------------------------------------------------------ Automatic Investment Plan QuickBuy A convenient investment program in which you designate Lets you purchase Scudder fund shares the purchase details and the bank account, and money is electronically, avoiding potential mailing delays; electronically debited from that account monthly to designate a bank account and the transaction regularly purchase fund shares and "dollar cost average" details, and money for each of your transactions is -- buy more shares when the fund's price is lower and electronically debited from that account. fewer when it's higher, which can reduce your average purchase price over time. Automatic Dividend Transfer Payroll Deduction and Direct Deposit The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at fund to purchase shares in another, automatically one time. (accounts with identical registrations or the same social security or tax identification number). Dollar cost averaging involves continuous investment in securities regardless of price fluctuations and does not assure a profit or protect against loss in declining markets. Investors should consider their ability to continue such a plan through periods of low price levels. Around-the-clock electronic account service and information, including some transactions: - ------------------------------------------------------------------------------------------------------------------------------ Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- http://funds.scudder.com 1-800-343-2890 Scudder Electronic Account Services: Offering Personalized account information, the ability to account information and transactions, interactive exchange or redeem shares, and information on other worksheets, prospectuses and applications for all Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation, whenever you need them. Scudder's Site also provides news about Scudder funds, retirement planning information, and more. Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient, timely, and reliable automated withdrawal programs: - ------------------------------------------------------------------------------------------------------------------------------ Automatic Withdrawal Plan QuickSell You designate the bank account, determine the schedule Provides speedy access to your money by (as frequently as once a month) and amount of the electronically crediting your redemption proceeds redemptions, and Scudder does the rest. to the bank account you designate. DistributionsDirect Automatically deposits your fund distributions into the bank account you designate within three business days after each distribution is paid. For more information about these services, call a Scudder representative at 1-800-225-5163 - ------------------------------------------------------------------------------------------------------------------------------ 26 - Scudder Classic Growth Fund Mutual Funds and More -- Brokerage and Guidance Services: - ------------------------------------------------------------------------------------------------------------------------------ Scudder Brokerage Services Scudder Portfolio Builder Offers you access to a world of investments, A free service designed to help suggest ways investors like including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global, over 6,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds, fund companies. And Scudder Fund Folio(SM) provides using Scudder funds. investors with access to a marketplace of more than 500 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM) transaction fees or commissions. Scudder shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load Brokerage account already reserved for them, with Scudder funds but want ongoing professional assistance in no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for individuals investing $100,000 or more. Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy shares directly from the fund itself or its principal underwriter or distributor without paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061. Member SIPC. Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a program offered by Scudder Investor Services, Inc., Adviser. For more information about these services, call a Scudder representative at 1-800-225-5163 - ------------------------------------------------------------------------------------------------------------------------------ Additional Information on How to Contact Scudder: - ------------------------------------------------------------------------------------------------------------------------------ For existing account services and transactions Please address all written correspondence to Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds P.O. Box 2291 For establishing 401(k) and 403(b) plans Boston, Massachusetts Scudder Defined Contribution Services -- 02107-2291 1-800-323-6105 Or Stop by a Scudder Investor Center For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of additional applications and prospectuses, or for the Scudder Investor Centers. Check for an Investor Center near answers to investment questions you -- they can be found in the following cities: Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco Investor.Relations@scudder.com Boston New York - ------------------------------------------------------------------------------------------------------------------------------ New From Scudder: Scudder International Growth and Income Fund Scudder International Growth and Income Fund takes a yield-oriented approach to investing in international equities. The Fund seeks to provide long-term growth of capital plus current income. Investors who desire international exposure but who wish to take a more conservative approach may appreciate the Fund's emphasis on the dividend paying stocks of well-established companies outside the United States. - ------------------------------------------------------------------------------------------------------------------------------ The share price of Scudder International Growth and Income Fund will fluctuate. International investing involves special risks including currency fluctuation and political instability. Contact Scudder Investor Services, Inc., Distributor, for a prospectus which contains more complete information, including management fees and other expenses. Please read it carefully before you invest or send money.
27 - Scudder Classic Growth Fund Celebrating Over 75 Years of Serving Investors Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark, Scudder, Stevens & Clark was the first independent investment counsel firm in the United States. Since its birth, Scudder's pioneering spirit and commitment to professional long-term investment management have helped shape the investment industry. In 1928, we introduced the nation's first no-load mutual fund. Today we offer over 40 pure no load(TM) funds, including the first international mutual fund offered to U.S. investors. Over the years, Scudder's global investment perspective and dedication to research and fundamental investment disciplines have helped us become one of the largest and most respected investment managers in the world. Though times have changed since our beginnings, we remain committed to our long-standing principles: managing money with integrity and distinction; keeping the interests of our clients first; providing access to investments and markets that may not be easily available to individuals; and making investing as simple and convenient as possible through friendly, comprehensive service. This information must be preceded or accompanied by a current prospectus. Portfolio changes should not be considered recommendations for action by individual investors. SCUDDER [LOGO] -----END PRIVACY-ENHANCED MESSAGE-----