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Deutsche Investment Trust – ‘N-30D’ for 9/30/02

On:  Tuesday, 11/26/02, at 10:07am ET   ·   Effective:  11/26/02   ·   For:  9/30/02   ·   Accession #:  88053-2-1180   ·   File #:  811-00043

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

11/26/02  Deutsche Investment Trust         N-30D       9/30/02    1:191K                                   Deutsche Int’l Fd, Inc.

Document/Exhibit                   Description                      Pages   Size 

 1: N-30D       Annual Report                                       HTML    182K 

[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.

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,

Autumn has historically been an unsettling, uncertain season for investors. This fall seems especially unnerving given the US economy's mixed progress toward recovery, continued threats to America's security and ongoing revelations of accounting abuse in telecom, media, energy and other industries.

We applaud your patience and commitment at this exceptionally difficult time. Stories of executive malfeasance, depressed corporate earnings, anemic business demand for new technology and election year rhetoric can make it challenging for investors to separate fact from fiction.

In our view, the rebuilding of confidence in the domestic equity market will be a gradual, long-term process. While these are tough times, the fact that the US economy is in fundamentally much better shape than it was during much of the 1970s - the last time stocks had a prolonged slump - gives us confidence that a new era of growth will likely emerge. In our view, mutual funds, such as Scudder Capital Growth Fund, a relatively conservative large-cap equity fund, provide a good cornerstone for an equity portfolio.

We believe that a disciplined, systematic investment strategy can be an effective approach for today's emotional market conditions. We are continually fine-tuning the fund's portfolio through our investment management process to address changing markets and investor needs.

As you review your personal investment goals, we believe you will continue to see the merits of entrusting us with your investment dollars. As your needs evolve over time, we encourage you to examine our entire expanding lineup of opportunities to maintain a well-diversified portfolio.

Sincerely,

William F. Glavin, Jr.
President, Scudder Capital Growth Fund

Sources: Lipper, Inc. and Deutsche Asset Management

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

Source: Lipper, Inc.

Growth of an Assumed $10,000 Investment

[] Scudder Capital Growth Fund - Class AARP [] S&P 500 Index+ [] Russell 1000 Growth Index++

Yearly periods ended September 30

The growth of $10,000 is cumulative.

Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

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.

Scudder Capital Growth Fund: A Team Approach to Investing

Deutsche Investment Management Americas Inc. ("DeIM" or the "Advisor"), which is part of Deutsche Asset Management, is the investment advisor for Scudder Capital Growth Fund. DeIM and its predecessors have more than 80 years of experience managing mutual funds and DeIM provides a full range of investment advisory services to institutional and retail clients. DeIM is also responsible for selecting brokers and dealers and for negotiating brokerage commissions and dealer charges.

Deutsche Asset Management is a global asset management organization that offers a wide range of investing expertise and resources. This well-resourced global investment platform brings together a wide variety of experience and investment insight across industries, regions, asset classes and investing styles.

DeIM is an indirect, wholly-owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is engaged in a wide range of financial services, including investment management, mutual funds, retail, private and commercial banking, investment banking and insurance.

Portfolio Management Team

In the following interview, William F. Gadsden, portfolio co-manager of Scudder Capital Growth Fund, discusses market conditions and the fund's investment strategy during the 12-month period ended September 30, 2002.

Q: How would you describe the environment for the market and the fund during the past 12 months?

A: The market environment over the past year was very difficult. The period started out fairly well as the stock market rebounded from the huge declines following the September 11, 2001 attacks. However, that recovery, which took place in the last three months of 2001, was not sustained. In early 2002, the market declined as investors sold stocks to lock in their fourth quarter profits. After that, a lack of confidence dominated the markets. Continued reports of improper accounting practices and the downturn in corporate earnings plus the threat of war with Iraq kept a turnaround at bay. In spite of this difficult and volatile environment, we began to see some positive signs for the markets and the fund later in the period. After more than a year of underperformance, growth stocks began to outperform value stocks in the final three months of the reporting period. Also, large-cap stocks began outperforming small-cap stocks.

Q: How did the fund perform in this environment?

A: For the 12 months ended September 30, 2002, the fund's Class AARP shares posted a total return of -22.85 percent, compared with a -20.49 percent total return by its benchmark, the S&P 500 Index. The S&P 500 Index is an unmanaged group of stocks generally representative of the US stock market. During the period, growth stocks generally lagged the S&P 500 Index, which is made up of both growth and value stocks. The Russell 1000 Growth Index fell posting a -22.51 percent total return during the period. The Russell 1000 Growth Index measures the performance of large companies with greater-than-average growth orientation compared with the overall market. (See page 4 for standardized performance.)For the 12 months ended September 30, 2002, the fund's Class A shares (unadjusted for sales charges) posted a total return of -23.04 percent, compared with a -20.49 percent total return by its benchmark, the S&P 500 Index. The S&P 500 Index is an unmanaged group of stocks generally representative of the US stock market. During the period, growth stocks generally lagged the S&P 500 Index, which is made up of both growth and value stocks. The Russell 1000 Growth Index posting a -22.51 percent total return during the period. The Russell 1000 Growth Index measures the performance of large companies with greater-than-average growth orientation compared with the overall market. (See page 4 for standardized performance.)

Q: How did you manage the fund during the period?

A: We use a method known as GARP, which stands for "growth at a reasonable price." We believe this approach will allow the fund to outperform on a long-term basis. The approach helps the fund participate in broad advances. It also limits portfolio volatility and risk versus other growth funds in market downturns. We look for good companies that offer superior long-term growth characteristics and the strength of competitive franchises to sustain them. We value such stocks more than those of other less reliable companies that we believe are "cheap" for a reason. During this period, there were some trends in place that favored our discipline and contributed to performance. The fund's focus on higher-quality companies with better earnings growth than the broad market helped as these types of stocks outperformed value stocks in the last three months of the period.

Q: What stocks or industries helped performance?

A: In late 2001, technology and energy added to performance as the market rallied. During 2002, however, the technology sector underperformed. This was due to some high-profile technology companies not achieving their earnings estimates. In the meantime, the fund's exposures to the health care and consumer discretionary sectors began performing well. The fund holds a large position in health care relative to the S&P 500 Index. This overweight helped relative performance as the sector held up better than most others over the last three months. The fund also benefited from our strategy to further diversify health care holdings. Companies such as Johnson & Johnson, Zimmer Holdings and Tenet Healthcare all posted positive returns over the past several months. These companies outperformed their peers in the sector as well as the overall market by a large margin.

Q: What holdings detracted from performance?

A: The fund's overweight in technology hurt results as these stocks demonstrated broad weakness. Technology stocks were weak throughout 2002. The fund's emphasis on quality, industry-leading companies did not help in this area. That was because holdings such as Microsoft, Intel and Applied Materials all declined, along with almost all other companies in the sector.

Q: What changes, if any, are you making to the portfolio?

A: We are making very few changes. It has been our experience that actions based on fear and emotion, have proven costly over the long term. We continued to further diversify the fund's health care holdings. Where possible, we've used weakness in the market to add higher-quality holdings and upgrade the portfolio. The fund's purchases included new positions in Gilead Sciences, International Game Technology and Kohl's. We have trimmed the fund's positions in Citigroup, Merck and Wal-Mart Stores. Wal-Mart Stores has been a great relative performer and grew to be a large position. Overall, we keep the fund focused on higher-quality, growth-oriented companies with secure competitive positions.

Q: What is your outlook for the coming months?

A: We are now in the second worst bear market in US post-World War II history. The S&P 500 Index has declined about 46 percent from its peak in March of 2000.* Only the 1973-74 bear market was worse, when the S&P declined slightly more than 50 percent in the span of about 18 months.^* However, the current bear market has been longer in duration. The economic recovery seen in the first half of 2002 seems to have stalled recently. At the moment, it appears that economic growth for the remainder of the year will be more muted than originally anticipated. Consumer confidence and capital spending by businesses have yet to fully recover.

However, we believe there are some encouraging signs for investors. The severe headwind that the fund's investment style faced throughout the first half of the year has subsided. We believe the outperformance of growth stocks over the past few months may indicate a turn in relative strength. Also, valuations are lower. The price-to-earnings (P/E) ratio¹ of the S&P 500 Index is low. Inflation and interest rates are also low, and it does not seem likely that the Federal Reserve Board will raise interest rates anytime soon. Historically, these factors have provided a favorable backdrop for the stock market.

The views expressed in this report reflect those of the portfolio manager only through the end of the period of the report as stated on the cover. The managers' 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 13. 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 Capital Growth Fund (the "Fund") is a diversified series of 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 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 within one year of purchase. Class C shares do not convert into another class. On August 19, 2002, the Fund commenced offering Institutional Class shares. Class I shares and Institutional Class 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 Class S shares are not subject to initial or contingent deferred sales charges. Certain detailed information for Class A, B, C and I shares and Institutional Class shares is provided separately and is available upon request.Certain detailed information for 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 (U.S. 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.

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 provision was required.

At September 30, 2002, the Fund had a net tax basis capital loss carryforward of approximately $150,104,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until September 30, 2009 ($15,353,000) and September 30, 2010 ($134,751,000), the respective expiration dates, whichever occurs first.

In addition, from November 1, 2001 through September 30, 2002, the Fund incurred approximately $253,537,000 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 September 30, 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 net investment losses incurred by the Fund and 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 September 30, 2002, the Fund's components of distributable earnings (accumulated losses) on a tax-basis are as follows:

In addition, during the year ended September 30, 2002, the tax character of distributions paid to shareholders by the Fund are summarized as follows:

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 year ended September 30, 2002, purchases and sales of investment securities (excluding short-term investments) aggregated $195,935,370 and $424,697,994, respectively.

C. Related Parties

On April 5, 2002, 100% of Zurich Scudder Investments, Inc. ("ZSI") was acquired by Deutsche Bank AG with the exception of Threadneedle Investments in the U.K. Upon the closing of this transaction, ZSI became part of Deutsche Asset Management and changed its name to Deutsche Investment Management Americas Inc. ("DeIM" or the "Advisor"). Effective April 5, 2002, the investment management agreement with ZSI was terminated and DeIM became the investment advisor for the Fund. The management fee rate paid by the Fund under the new Investment Management Agreement (the "Management Agreement") is the same as the previous investment management agreement.

Management Agreement. Under the Management Agreement, 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 0.58% of the first $3,000,000,000 of the Fund's average daily net assets, 0.555% of the next $1,000,000,000 of such net assets and 0.53% of such net assets in excess of $4,000,000,000, computed and accrued daily and payable monthly.

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%, 0.350%, 0.10% and 0.275% of the average daily net assets for Class AARP, S, A, B, C, I and Institutional Class 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, I and Institutional Class 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 Independent Trustees (including the fees and expenses of their independent counsel). For the year ended September 30, 2002, the Administrative Fee was as follows:

In addition, the Administrative Fee expense on the Statement of Operations includes ($21,036) of changes in estimates relating to fund and class-level expenses recorded prior to the adoption of the Administrative Agreement.

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 Class 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 year ended September 30, 2002, 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 year ended September 30, 2002, the Service Fee was as follows:

Underwriting Agreement and Contingent Deferred Sales Charge. SDI is the principal underwriter for Class A, B and C shares. Underwriting commissions paid in connection with the distribution of Class A shares for the year ended September 30, 2002 aggregated $20,091.

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 year ended September 30, 2002 the CDSC for Class B and C shares aggregated $195,671 and $331, respectively.

Trustees' Fees and Expenses. The Trust 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 year ended September 30, 2002, totaled $646,181 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% of the first $6,000,000,000 of net assets, 0.06% of 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 Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's custodian expenses. During the year ended September 30, 2002, pursuant to the Administrative Agreement, the Administrative Fee was reduced by $245 for custodian credits earned.

E. Line of Credit

The Fund and several other 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:

G. Acquisition of Assets

On June 22, 2001, the Fund acquired all of the net assets of Classic Growth Fund pursuant to a plan of reorganization approved by shareholders on May 24, 2001. The acquisition was accomplished by a tax-free exchange of 2,524,437 Class A shares, 1,711,234 Class B shares, 471,227 Class C shares and 4,748,391 Class S shares of the Fund, respectively, for 6,487,487 Class A shares, 4,533,197 Class B shares, 1,256,287 Class C shares and 12,264,414 Class S shares of Classic Growth Fund, respectively, outstanding on June 22, 2001. Classic Growth Fund's net assets at that date ($473,803,952), including $47,311,596 of net unrealized depreciation, were combined with those of the Fund. The aggregate net assets of the Fund immediately before the acquisition were $1,761,773,495. The combined net assets of the Fund immediately following the acquisition were $2,235,577,447.

To the Trustees of Investment Trust and the Shareholders of Scudder Capital Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights included herein, present fairly, in all material respects, the financial position of Scudder Capital Growth Fund (the "Fund") at September 30, 2002, and the results of its operations, the changes in its net assets and the financial highlights of the classes presented for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights presented (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 2002 by correspondence with the custodian, provide a reasonable basis for our opinion.

The Fund paid distributions of $0.0150 per share from net long-term capital gains during its year ended September 30, 2002, of which 100% represents 20% rate gains.

Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call 1-800-SCUDDER.

The following table presents certain information regarding the Trustees and Officers of the fund as of September 30, 2002. Each individual's age is set forth in parentheses after his or her name. Unless otherwise noted, (i) each individual has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity, and (ii) the address of each individual is c/o Deutsche Asset Management, Two International Place, Boston, Massachusetts 02110-4103.

The fund's Statement of Additional Information ("SAI") includes additional information about the Trustees. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: 1-800-SCUDDER.

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

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘N-30D’ Filing		Date		Other Filings
		9/30/10		24F-2NT,  N-CSR,  N-Q,  NSAR-B
		9/30/09		24F-2NT,  N-CSR,  N-Q,  NSAR-B
		9/30/03		24F-2NT,  N-CSR,  NSAR-B
Filed on / Effective on:		11/26/02		N-30D
		11/11/02
		10/7/02
For Period End:		9/30/02		24F-2NT,  N-30D,  NSAR-B
		8/20/02
		8/19/02		485BPOS
		4/5/02		NSAR-A,  NSAR-B
		11/1/01
		9/30/01		24F-2NT,  N-30D,  NSAR-B
		9/11/01
		6/25/01
		6/22/01		497
		5/24/01
		9/30/00		24F-2NT,  N-30D,  NSAR-B,  NT-NSAR
		7/31/00		24F-2NT,  485APOS,  N-30D,  NSAR-B
		7/17/00		485BPOS
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