SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

Deutsche Investment Trust – ‘N-30D’ for 1/31/03

On:  Friday, 3/28/03, at 4:03pm ET   ·   Effective:  3/28/03   ·   For:  1/31/03   ·   Accession #:  88053-3-397   ·   File #:  811-00043

Previous ‘N-30D’:  ‘N-30D’ on 2/28/03 for 12/31/02   ·   Next:  ‘N-30D’ on 3/28/03 for 1/31/03   ·   Latest:  ‘N-30D’ on 5/28/03 for 3/31/03

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/28/03  Deutsche Investment Trust         N-30D       1/31/03    1:164K                                   Deutsche Int’l Fd, Inc.

Document/Exhibit                   Description                      Pages   Size 

 1: N-30D       Semiannual Report                                   HTML    157K 

[Scudder Investments logo]

Scudder Investments is part of Deutsche Asset Management, which 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 Bank Securities Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Bank Trust Company Americas and Scudder Trust Company.

This report must be preceded or accompanied by a prospectus.

Please see the fund's prospectus for more complete information, including a complete description of the fund's investment policies. To obtain a prospectus, download one from aarp.scudder.com (Class AARP) or myScudder.com (Class S), talk to your financial representative or call Shareholder Services at 1-800-253-2277 (Class AARP) or 1-800-SCUDDER (Class S). The prospectus contains more complete information, including management fees and expenses. Please read it carefully before you invest or send money.

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.

Dear Shareholder,

The US stock market remains mired in a slump that is now almost three years old. This downturn, one of the worst in market history, is among the longest since the early days of World War II. Undoubtedly, this has been a frustrating time for mutual fund investors, particularly for those who got started in the late 1990s and missed the benefit of stocks' long run-up during the previous decade.

As a result, many investors are likely asking themselves, "What should I do next?" At times such as these, your natural reaction may be to sell your stock funds and seek safer investments. However, it is important to remember that it is often when the market outlook appears to be most bleak that opportunities may in fact be most attractive. This is because investor anxiety drives down the prices of many companies, in some cases despite their fundamental strengths. We encourage investors who have held their equity investments through the down market to keep this in mind when deciding how best to cope with slumping stock prices.

Risks remain, of course. Most notably, the economy remains sluggish and geopolitical tensions are high. It is therefore likely that short-term market downturns will be commonplace in the months ahead. Nevertheless, we believe that stocks remain the best option for patient investors who seek long-term growth of assets. We encourage you to maintain a long-term focus regardless of what direction the stock market takes in the months ahead, so you will be able to reap the benefits when it ultimately begins to recover.

Sincerely,

President
Scudder Large Company Growth Fund

Sources: Lipper, Inc. and Deutsche Asset Management

Rankings are historical and do not guarantee future results. Rankings are based on total returns with distributions reinvested.

Source: Lipper, Inc.

Growth of an Assumed $10,000 Investment

[] Scudder Large Company Growth Fund - Class S [] Russell 1000 Growth Index+

Yearly periods ended January 31

The growth of $10,000 is cumulative.

All performance is historical, assumes reinvestment of all dividends and capital gains, and is not indicative of future results. Investment return and principal value will fluctuate, so an investor's shares, when redeemed, may be worth more or less than when purchased. Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance of the classes may vary, expense ratios are the same.

Investments in funds involve risk. Some funds have more risk than others. These include funds that allow exposure to or otherwise concentrate investments in certain sectors, geographic regions, security types, market capitalization or foreign securities (e.g., political or economic instability, which can be accentuated in emerging market countries). Please read this fund's prospectus for specific details regarding its investments and risk profile.

Please call (800) 728-3337 for the fund's most up-to-date performance.

In December 2002, a new investment team - Julie M. Van Cleave, Jack A. Zehner and Thomas J. Schmid - assumed management of Scudder Large Company Growth Fund. Most recently, the group managed Mason Street Growth Stock Fund for Mason Street Advisors, a wholly owned subsidiary of Northwestern Mutual Life Insurance Company.

In the following interview, Van Cleave discusses the market environment, the fund's performance and what changes she and her team have made to the fund since assuming management a little over two months ago.

Q: Will you comment on the market environment?

A: Over the past six months, we have seen a continuation of the extended bear market that began in March 2000. While volatility is par for the course in investing, the stock market has recently experienced dramatic swings on both the upside and downside. At the start of the period, stocks were beginning to gain ground after having suffered a steep decline in late July. Investors looking for bargains helped bid up stock prices, and, as a result, the market posted positive returns in August. In September and early October, the market gave back those gains, and the Standard & Poor's 500 index¹ (S&P 500) dropped below its July levels. After this brief decline, many stocks, including technology and telecommunications issues - two of the worst performers in this bear market - rallied through the end of 2002. This rally moved the prices of stocks temporarily higher. Investors selling stocks to lock in recent profits caused stocks to decline again in January on news of disappointing economic data and fears of a war with Iraq.

¹ The Standard & Poor's 500 index is an unmanaged group of large-company stocks that are generally representative of the US stock market.

Q: How did the fund perform?

A: The fund, like the broad market, lost ground. Class S shares posted a total return of -5.86% for the six months ended January 31, 2003. This return was slightly better than the -6.01% return by the Russell 1000 Growth Index, the fund's benchmark.² The fund also outperformed the average return of -6.68% by its peers in the Lipper Large-Cap Growth Funds category.³The fund, like the broad market, lost ground. Class A shares (unadjusted for sales charges) posted a total return of -5.95% for the six months ended January 31, 2003. This return was slightly better than the -6.01% return of the Russell 1000 Growth Index, the fund's benchmark.²The fund also outperformed the average return of -6.68% by its peers in the Lipper Large-Cap Growth Funds category.³

Q: Which sectors or stocks added to fund performance?

A: The fund's performance relative to its benchmark was helped by individual stocks in health care. It was also helped by its underweight position (smaller position than the Russell 1000 Growth Index) in General Electric Company (GE).

1. Health care. The fund's holdings in medical device companies such as Medtronic and Zimmer Holdings and pharmaceutical companies such as Teva Pharmaceutical Industries and Johnson & Johnson all contributed positively to returns. Pharmaceutical and medical device companies have led the health care sector over the past six months. Investor optimism about the successful releases of new and innovative products from these companies drove up their stock prices.

2. GE. The fund benefited by its underweight position in GE relative to that of the Russell 1000 Growth Index benchmark. In the market's October plummet, GE's share price was cut by more than half of what it had been a year ago. The stock declined as a result of investor concern about performance in GE's industrial segments and large write-offs that the company's insurance segments took due to claims involving the September 11, 2001 terrorist attacks. Upon assuming management of the fund we cut exposure to the stock even further, which has helped as the stock continued to struggle. While we expect that GE will eventually rebound, we plan to keep an underweight position in this stock.

Q: What hurt performance during the period?

A: While select pharmaceutical and medical device stocks helped relative performance this period, the fund was hurt by its overweight position in health care service provider stocks. These stocks added to performance in the last reporting period, but they performed poorly during this six-month period. The most severe loss came from Tenet Healthcare Corp. Tenet plummeted in October amid allegations of unnecessary surgical procedures, fraudulent billings and senior executive departures. HCA Inc., a hospital management company, declined on the heels of Tenet as investors feared that similar problems could surface at HCA. We eliminated the Tenet and HCA positions after assuming management of the portfolio. The fund was also hurt by its position in McKesson Corp., a health care distributor, which has also been eliminated from the portfolio.

Q: Will you tell us about your investment process?

A: Our investment discipline starts with a thorough analysis of economic trends. This helps us to determine industries that we believe are currently or will be the strongest drivers of growth. That process is combined with in-depth company research to narrow the field of investment candidates. We work closely with Scudder's research analysts to identify companies within those industries that we believe offer the best potential for delivering strong and sustainable earnings growth. Stocks are chosen based on a thorough evaluation of each company's management and strategy.

Q: How have you positioned the fund relative to its benchmark?

A: The fund's benchmark is the Russell 1000 Growth Index. We are managing the fund to have a reasonable and conservative relationship with that index. We are also cognizant of the broader market, as represented by the S&P 500. The growth index can sometimes become skewed in one sector or in certain stocks, and its sector weightings can swing based on market momentum. So, we don't want to mimic the Russell 1000 Growth Index so closely that the fund's sector positions become tremendously different from those of the broader market. For example, the S&P 500 has a heavier weighting in financials than the Russell 1000 Growth Index - 20% for the S&P 500, as compared with 10% for the Russell 1000 Growth Index. Accordingly, if we were positive about financials, we might put 15% to 20% of the fund's assets into financials, knowing that it would be overweight vs. the Russell 1000 Growth Index but in line with the broader market. This enables us to invest based on our conviction and, at the same time, keeps us from straying too far from our benchmark.

Q: How have you altered the portfolio?

A: Since assuming management, we have increased the number of fund holdings. Previously, there were approximately 60 holdings. It is our goal, over the next few months, to increase portfolio holdings to between 70 and 90 stocks. We've also begun to work on lessening stock-specific risk by reducing the size of some of the fund's top holdings. Some larger holdings in the fund represented about 4% to 6% of the fund's total market value, which, in some cases, is more exposure than we're comfortable with. Ideally, we'd like top holdings in the fund to average about 2% to 4% of market value, and most other holdings to average about 1.4% of assets. We believe this will reduce daily volatility, and help fund performance in the long run.

Q: Have you changed the fund's sector composition?

A: The fund was already diversified across most market sectors, and we plan to keep that broad diversification. However, we're focusing investments in sectors that we believe offer the strongest long-term growth potential. So far, we've increased the fund's position in the consumer discretionary sector by initiating a position in Harley-Davidson. Consumer staples and energy stocks are two other areas that we've increased. We're also making changes to the holdings within each market sector to add exposure to cyclical stocks. The performance of cyclical stocks is tied to the economy. Such companies offer products or services that consumers (individuals and companies) perceive as discretionary and buy less of during a weak economy. Historically, these stocks have rebounded strongly when economic indicators begin to improve. We're adding cyclical exposure because we expect to see some economic improvement in 2003 and want to make sure the fund is positioned to take advantage of a positive movement. See examples of cyclical stocks we've added in our following discussion of new stocks we've added to the portfolio.

Q: Have you eliminated many holdings?

A: The portfolio held many stocks that we like. We've held on to those issues, but in many cases we've adjusted the fund's weighting in them to better reflect our style. We eliminated some poorly performing stocks and reallocated assets to stocks that we believe are more likely to support performance.

Q: What new stocks did you add to the portfolio?

A: In keeping with our goal to add cyclical exposure, we invested in Minnesota Mining and Manufacturing (3M), an industrial company; Kohl's Corp., a discount department store chain; and Morgan Stanley, an investment banking and brokerage firm. As the economy improves, we expect these stocks to benefit. But just as important, we've added stocks that aren't heavily tied to the economy yet have strong growth prospects just the same. These include Fiserv, Inc., a data and transaction processing company; Ecolab Inc., a producer of commercial cleaning and repair products; and Walgreen, a national drug store chain. While we've followed many of these stocks for years ourselves, we collaborate with Scudder's global research staff on all purchases and liquidations. This collaboration has helped us make decisions quickly and with strong conviction.

Q: What are your performance goals for the fund?

A: While no one can guarantee future performance, our goal is to generate returns above the fund's Russell 1000 Growth Index benchmark on a long-term basis. We believe that our investment discipline has the potential to help us achieve that goal.

Q: What is your outlook for the markets, generally, and the fund in particular?

A: The economy and markets are continuing to struggle. However, we are cautiously optimistic that we may see some improvement in 2003. The attention that companies have given to their bottom lines in recent years should put them in a good position to ramp up employment and spending when the economy improves. We expect that we'll see a muted but broad economic recovery over the next couple of years. The markets should benefit from this type of growth scenario but are unlikely to post the kind of large double-digit gains to which investors became accustomed in the late 1990s. The primary risk to our assumption is the impact that a war with Iraq may have. Predicting the geopolitical outcome is virtually impossible, so we'll stick to our investment discipline and build a portfolio of companies that have the potential to perform well relative to the benchmark and the overall market in any environment.

The views expressed in this report reflect those of the portfolio managers only through the end of the period of the report as stated on the cover. The manager's views are subject to change at any time, based on market and other conditions and should not be construed as a recommendation.

Asset allocation and sector diversification are subject to change.

For more complete details about the fund's investment portfolio, see page 15. A quarterly Fund Summary and Portfolio Holdings are available upon request.

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

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

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

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

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

A. Significant Accounting Policies

Scudder Large Company Growth Fund (the "Fund") is a diversified series of the Investment Trust (the "Trust") which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust.

The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are offered to investors subject to an initial sales charge. Class B shares are offered without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class B shares automatically convert to Class A shares six years after issuance. Class C shares are offered to investors subject to a 1% initial sales charge and are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. Prior to February 3, 2003 Class C shares were offered without an initial sales charge. Class C shares do not convert into another class. Class I shares are offered to a limited group of investors, are not subject to initial or contingent deferred sales charges and have lower ongoing expenses than other classes. Shares of Class AARP are designed for members of AARP. Class S shares of the Fund are generally not available to new investors. Class AARP and S shares are not subject to initial or contingent deferred sales charges. Certain detailed information for the Class A, B, C and I shares is provided separately and is available upon request.Certain detailed information for the Class AARP and S shares is provided separately and is available upon request.

Investment income, realized and unrealized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares except that each class bears certain expenses unique to that class such as distribution service fees, administrative fees and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Fund have equal rights with respect to voting subject to class-specific arrangements.

The 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 Fund in the preparation of its financial statements.

Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading. Equity securities are valued at the most recent sale price reported on the exchange (US or foreign) or over-the-counter market on which the security is traded most extensively. Securities for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation.

Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost. Investments in open-end investment companies and Scudder Cash Management QP Trust are valued at their net asset value each business day.

Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Trustees.

Foreign Currency Translations. The books and records of the Fund are maintained in US dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into US dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into US dollars at the prevailing exchange rates on the respective dates of the transactions.

Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, the disposition of forward foreign currency exchange contracts and foreign currencies, and the difference between the amount of net investment income accrued and the US dollar amount actually received. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed but is included with net realized and unrealized gains and losses on investment transactions.

Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, 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 provisions was required.

At July 31, 2002, the Fund had a net tax basis capital loss carryforward of approximately $279,767,000, which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until July 31, 2009 ($8,462,000) and July 31, 2010 ($271,305,000), the respective expiration dates, whichever occurs first.

In addition, from November 1, 2001 through July 31, 2002, the Fund incurred approximately $67,537,000 of net realized capital losses. As permitted by tax regulations, the Fund intends to elect to defer these losses and treat them as arising in the fiscal year ending July 31, 2003.

Distribution of Income and Gains. Distributions of net investment income, if any, are made annually. 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 at least annually.

The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to certain securities sold at a loss. 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.

At July 31, 2002, the Fund's components of distributable earnings (accumulated losses) on a tax-basis are as follows:

In addition, during the year ended July 31, 2002 the tax character of distributions paid to shareholders by the Fund is summarized as follows:

For tax purposes short-term capital gains distributions are considered ordinary income distributions.

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

Other. Investment transactions are accounted for on the trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Certain dividends from foreign securities may be recorded subsequent to the ex-dividend date as soon as the Fund is informed of such dividends. Realized gains and losses from investment transactions are recorded on an identified cost basis.

B. Purchases and Sales of Securities

During the six months ended January 31, 2003, purchases and sales of investment securities (excluding short-term investments) aggregated $135,143,653 and $185,931,568, respectively.

C. Related Parties

Management Agreement. Under the Management Agreement (the "Management Agreement") with Deutsche Investment Management Americas Inc. ("DEIM" or the "Advisor"), the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor 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 Advisor provides certain administrative services in accordance with the Management Agreement. The management fee payable under the Management Agreement is equal to an annual rate of 0.70% of the first $1,500,000,000 of the Fund's average daily net assets, 0.65% of the next $500,000,000 of such net assets and 0.60% of such net assets in excess of $2,000,000,000, computed and accrued daily and payable monthly.

Accordingly, for the six months ended January 31, 2003, the fee pursuant to the Management Agreement was equivalent to an annualized effective rate of 0.70% of the Fund's average daily net assets.

Administrative Fee. Under the Administrative Agreement (the "Administrative Agreement"), the Advisor provides or pays others to provide substantially all of the administrative services required by the Fund (other than those provided by the Advisor under its Management Agreement with the Fund, as described above) in exchange for the payment by each class of the Fund of an administrative services fee (the "Administrative Fee") of 0.30%, 0.30%, 0.325%, 0.375%, 0.35% and 0.10% of daily net assets for Class AARP, S, A, B, C and I shares, respectively, computed and accrued daily and payable monthly.

Various third-party service providers, some of which are affiliated with the Advisor, provide certain services to the Fund under the Administrative Agreement. Scudder Fund Accounting Corporation, a subsidiary of the Advisor, computes the net asset value for the Fund and maintains the accounting records of the Fund. Scudder Investments Service Company, an affiliate of the Advisor, is the transfer, shareholder service and dividend-paying agent for Class A, B, C and I shares of the Fund. Scudder Service Corporation, also a subsidiary of the Advisor, is the transfer, shareholder service and dividend-paying agent for Class AARP and S shares of the Fund. Scudder Trust Company, also an affiliate of the Advisor, provides subaccounting and recordkeeping services for shareholders in certain retirement and employee benefit plans. In addition, other service providers, not affiliated with the Advisor, provide certain services (i.e., custody, legal and audit) to the Fund under the Administrative Agreement. The Advisor pays the service providers for the provision of their services to the Fund and pays other Fund expenses, including insurance, registration, printing, postage and other costs. Certain expenses of the Fund will not be borne by the Advisor under the Administrative Agreement, such as taxes, brokerage, interest and extraordinary expenses, and the fees and expenses of the Independent Trustees (including the fees and expenses of their independent counsel). For the six months ended January 31, 2003, the Administrative Fee was as follows:

The Administrative Services Agreement between the Advisor and the Fund will terminate effective September 30, 2003. Effective October 1, 2003 through September 30, 2005, the Advisor has agreed to contractually waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Fund to the extent necessary to maintain operating expenses of each class at 1.05% (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest, Rule 12b-1 and/or service fees, trustee and trustee counsel fees).

Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, Scudder Distributors, Inc., ("SDI"), a subsidiary of the Advisor, receives a fee ("Distribution Fee") of 0.75% of average daily net assets of Classes B and C shares. Pursuant to the agreement, SDI enters into related selling group agreements with various firms at various rates for sales of Class B and C shares. For the six months ended January 31, 2003, the Distribution Fee was as follows:

In addition, SDI provides information and administrative services ("Service Fee") to Class A, B and C shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. SDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder accounts the firms service. For the six months ended January 31, 2003, the Service Fee was as follows:

Underwriting Agreement and Contingent Deferred Sales Charge. SDI is the principal underwriter for Classes A, B and C shares. Underwriting commissions paid in connection with the distribution of Class A shares for the six months ended January 31, 2003 aggregated $2,078.

In addition, SDI receives any contingent deferred sales charge ("CDSC") from Class B share redemptions occurring within six years of purchase and Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates, ranging from 4% to 1% for Class B and 1% for Class C, of the value of the shares redeemed. For the six months ended January 31, 2003, the CDSC for Class B and C shares aggregated $2,850 and $2,873, respectively.

Trustees' Fees and Expenses. The Fund pays each Trustee not affiliated with the Advisor retainer fees plus specified amounts for attended board and committee meetings.

Scudder Cash Management QP Trust. Pursuant to an Exemptive Order issued by the SEC, the Fund may invest in the Scudder Cash Management QP Trust (the "QP Trust"), formerly Zurich Scudder Cash Management QP Trust, and other affiliated funds managed by the Advisor. The QP Trust seeks to provide as high a level of current income as is consistent with the preservation of capital and the maintenance of liquidity. The QP Trust does not pay the Advisor a management fee for the affiliated funds' investments in the QP Trust. Distributions from the QP Trust to the Fund for the six months ended January 31, 2003, totaled $97,703 and are reflected as interest income on the statement of operations.

Other Related Parties. AARP through its affiliates monitors and approves the AARP Investment Program from the Advisor. The Advisor has agreed to pay a fee to AARP and/or its affiliates in return for the use of the AARP trademark and services relating to investments by AARP members in Class AARP shares of the Fund. This fee is calculated on a daily basis as a percentage of the combined net assets of the AARP classes of all funds managed by the Advisor. The fee rates, which decrease as the aggregate net assets of the AARP classes become larger, are as follows: 0.07% for the first $6,000,000,000 of net assets, 0.06% for the next $10,000,000,000 of such net assets and 0.05% of such net assets thereafter. These amounts are used for the general purposes of AARP and its members.

D. Expense Off-Set Arrangements

The Fund has entered into arrangements with its custodian and transfer agent whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's expenses. During the six months ended January 31, 2003, pursuant to the Administrative Agreement, the Administrative Fee was reduced by $9 and $1,941 for custodian credits and transfer agent credits earned, respectively.

E. Line of Credit

The Fund and several affiliated funds (the "Participants") share in a $1.3 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, pro rata based upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.

F. Share Transactions

The following table summarizes share and dollar activity in the Fund:

Scudder open-end funds are offered by prospectus only. For more complete information on any fund or variable annuity registered in your state, including information about a fund's objectives, strategies, risks, advisory fees, distribution charges, and other expenses, please order a free prospectus. Read the prospectus before investing in any fund to ensure the fund is appropriate for your goals and risk tolerance. There is no assurance that the objective of any fund will be achieved, and fund returns and net asset values fluctuate. Shares are redeemable at current net asset value, which may be more or less than their original cost.

A money market mutual fund investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market mutual fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.

The services and products described should not be considered a solicitation to buy or an offer to sell a security to any person in any jurisdiction where such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.

For shareholders of Scudder funds including those in the AARP Investment Program

This privacy statement is issued by Scudder Distributors, Inc., Scudder Financial Services, Inc., Scudder Investor Services, Inc., Scudder Trust Company and the Scudder Funds. We consider privacy fundamental to our client relationships and adhere to the policies and practices described below to protect current and former clients' information.

We never sell customer lists or individual client 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 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 Web sites, and through transactions with us or our affiliates. To be able to serve our clients, information is shared with affiliates and other companies. Specifically, we disclose client information to parties that perform various services for us, such as transfer agents, custodians, and broker-dealers. Limited information also may be shared with affiliates, with companies with which we have joint marketing agreements, or with other parties as required by law. Any organization receiving client information may only use it for the purpose designated by the entities listed above.

Certain investors in the AARP Investment Program are advised that limited nonpublic personal information is shared with AARP and its subsidiary AARP Services Inc. (ASI). This includes an investor's status as a current or former Program participant, name, address, and type of account maintained (i.e. IRA or non-IRA). This information must be shared so that ASI can provide quality control services, such as monitoring satisfaction with the Program. However, AARP and ASI may also use this information for other purposes such as member research, and may share this information with other AARP providers to inform members of AARP benefits and services. Shareholders residing in states with certain state specific privacy restrictions are excluded from this information sharing. All other shareholders may instruct us in writing not to share information regarding themselves or joint account holders with AARP or ASI for any purposes unrelated to the AARP Investment Program. To request the appropriate form, call 1-800-253-2277. With respect to accounts that are jointly held, an opt-out form received from any of the joint account holders will be applied to the entire account.

Questions on this policy may be sent to:
For Class AARP: AARP Investment Program, Attention: Correspondence,
P.O. Box 219735, Kansas City, MO 64121-9735

For Class S: Scudder Investments, Attention: Correspondence,
P.O. Box 219669, Kansas City, MO 64121-9669

July 2002

---

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘N-30D’ Filing		Date		Other Filings
		7/31/10		24F-2NT,  N-CSR,  NSAR-B
		7/31/09		24F-2NT,  N-CSR,  NSAR-B
		9/30/05		24F-2NT,  N-CSR,  N-Q,  NSAR-B
		10/1/03		485BPOS,  497
		9/30/03		24F-2NT,  N-CSR,  NSAR-B
		7/31/03		24F-2NT,  N-CSR,  NSAR-B
Filed on / Effective on:		3/28/03		N-30D
		2/3/03		497
For Period End:		1/31/03		485BPOS,  N-30D,  NSAR-A
		8/19/02		485BPOS
		7/31/02		24F-2NT,  N-30D,  NSAR-B
		11/1/01
		9/11/01
		7/31/01		24F-2NT,  N-30D,  NT-NSAR
		10/2/00
		9/30/00		24F-2NT,  N-30D,  NSAR-B,  NT-NSAR
		7/31/99		24F-2NT,  N-30D,  NSAR-BT
		8/10/98
				List all Filings

↑Top

---

Filing Submission 0000088053-03-000397   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

---

---

Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help — Fri., Apr. 19, 3:05:36.3pm ET