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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 1:220K Deutsche Int’l Fd, Inc. |
Document/Exhibit Description Pages Size 1: N-30D Annual or Semi-Annual Report Mailed to HTML 210K Shareholders
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1 | 1st Page - Filing Submission | ||||
" | Click Here |
Zurich Scudder Investments |
[Scudder Investments logo]
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Classes A, B, C, I and Institutional |
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Annual Report |
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September 30, 2002 |
Contents |
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<Click Here> Performance Summary <Click Here> Economic Overview <Click Here> Portfolio Management Review <Click Here> Portfolio Summary <Click Here> Investment Portfolio <Click Here> Financial Statements <Click Here> Financial Highlights <Click Here> Notes to Financial Statements <Click Here> Report of Independent Accountants <Click Here> Tax Information <Click Here> Trustees and Officers <Click Here> Investment Products and Services <Click Here> Account Management Resources |
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Scudder Capital Growth Fund |
Nasdaq Symbol |
CUSIP Number |
Class A
|
SDGAX |
|
Class B
|
SDGBX |
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Class C
|
SDGCX |
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Institutional Class
|
SDGTX |
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 scudder.com, talk to your financial representative or call Shareholder Services at (800) 621-1048. 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.
Performance Summary September 30, 2002 |
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Average Annual Total Returns (Unadjusted for Sales Charge) |
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Scudder Capital Growth Fund |
1-Year |
3-Year |
5-Year |
10-Year |
Class A(a)
|
-23.04% |
-16.02% |
-4.88% |
6.71% |
Class B(a)
|
-23.64% |
-16.69% |
-5.64% |
5.86% |
Class C(a)
|
-23.64% |
-16.67% |
-5.62% |
5.89% |
S&P 500 Index+ |
-20.49% |
-12.89% |
-1.63% |
9.00% |
Russell 1000 Growth Index++ |
-22.51% |
-19.59% |
-4.87% |
6.68% |
Sources: Lipper, Inc. and Deutsche Asset Management
Net Asset Value and Distribution Information |
|
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|
Class A |
Class B |
Class C |
Institutional Class |
Net Asset Value:
9/30/02 |
$ 30.56 | $ 30.25 | $ 30.26 | $ 30.66 |
9/30/01 (Class A, B and C
net asset value) and
8/19/02 (inception date
of Institutional Class
shares) |
$ 39.71 | $ 39.63 | $ 39.63 | $ 35.71 |
Distribution
Information:
Capital Gains Distributions |
$ .02 | $ .02 | $ .02 | $ .02 |
Class A Lipper Rankings - Large-Cap Growth Funds Category |
||||
Period |
Rank |
|
Number of Funds Tracked |
Percentile Ranking |
1-Year |
371 |
of |
683 |
55 |
Rankings are historical and do not guarantee future results. Rankings are based on total return unadjusted for sales charges with distributions reinvested. If sales charges had been included, results might have been less favorable.
Source: Lipper, Inc.
Growth of an Assumed $10,000 Investment(b) (Adjusted for Sales Charge) |
[] Scudder Capital Growth Fund - Class A [] S&P 500 Index+[] Russell 1000 Growth Index++ |
Yearly periods ended September 30 |
Comparative Results (Adjusted for Sales Charge) |
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Scudder Capital Growth Fund |
1-Year |
3-Year |
5-Year |
10-Year |
|
Class A(c) |
Growth of $10,000 |
$7,253 |
$5,581 |
$7,337 |
$18,044 |
Average annual total return |
-27.47% |
-17.67% |
-6.00% |
6.08% |
|
Class B(c) |
Growth of $10,000 |
$7,407 |
$5,687 |
$7,430 |
$17,675 |
Average annual total return |
-25.93% |
-17.15% |
-5.77% |
5.86% |
|
Class C(c) |
Growth of $10,000 |
$7,636 |
$5,786 |
$7,489 |
$17,717 |
Average annual total return |
-23.64% |
-16.67% |
-5.62% |
5.89% |
|
S&P 500 Index+
|
Growth of $10,000 |
$7,951 |
$6,610 |
$9,212 |
$23,666 |
Average annual total return |
-20.49% |
-12.89% |
-1.63% |
9.00% |
|
Russell 1000
Growth Index++
|
Growth of $10,000 |
$7,749 |
$5,199 |
$7,790 |
$19,099 |
Average annual total return |
-22.51% |
-19.59% |
-4.87% |
6.68% |
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 a fund distributions or the redemption of fund shares. Returns and rankings may differ by share class.
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) 621-1048 for the fund's most up-to-date performance.
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Dear Shareholder:
The economy remains caught in a tug of war between powerful opposing forces that make neither a sharp acceleration nor a relapse into recession likely. Instead, we'll probably see a continued moderate recovery.
Several things are slowing down the economy right now. The economic boom of the late 1990s left stocks overvalued, and their prices have been coming back down. It left companies with more capital than they needed and they had to lay off workers to stay profitable. And it left individuals without enough savings - which means they were reluctant to spend money. Political uncertainty around the world, corporate accounting scandals, and sluggish growth abroad are also making people and businesses less willing to forge ahead.
But there are also several factors supporting economic activity. The government is keeping the economy on track with tax relief and interest rate cuts. Tax relief and interest rate cuts put more money back into the hands of individuals and businesses. And individuals and businesses are starting to spend that money. That's good, because spending - whether it's individuals buying cars and homes or businesses buying equipment - stimulates the economy.
The end result: We expect the economic recovery to persist-but slowly. The economy will only pick up when the factors slowing the economy diminish, and individuals and businesses become more confident. For that to happen, the government policies now in effect - such as low interest rates - will have to remain in effect well into 2003. Fortunately, we expect that to happen. We believe that the Federal Reserve Board is very sensitive to any signs that the economic recovery is faltering - and if it sees those signs, will cut interest rates even more.
One warning, however: A recovery depends on the absence of any adverse shocks to the system. For example, if developments in the Middle East don't go smoothly, the recovery could be disrupted.
Economic Guideposts Data as of 9/30/02 |
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[] 2 years ago [] 1 year ago [] 6 months ago [] Now |
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Inflation Rate (a) |
US Unemployment Rate (b) |
Federal Funds Rate (c) |
Industrial Production (d) |
Growth Rate of Personal Income (e) |
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(a) The year-over-year percentage change in US consumer prices. (b) The percentage of adults out of work and looking for a job. (c) The interest rate banks charge each other for overnight loans. (d) Year-over-year percentage change. (e) Growth rate of individual income from all sources. Source: Deutsche Asset Management |
How will these developments affect the markets? In the equity markets, prices are more reasonable - but returns are still unlikely to come close to those we saw in the late 1990s. And if the moderate recovery persists, as we expect, fixed-income markets will likely give up some of their recent gains. That's because higher interest rates typically result in declines in bond prices. However, we expect that this decline will be limited until the recovery strengthens more and the Fed seems more likely to raise interest rates.
Deutsche Investment Management Americas Inc.
The sources, opinions and forecasts expressed are those of the economic advisors of Deutsche Investment Management Americas Inc. as of October 17, 2002, and may not actually come to pass.
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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
William Gadsden CFA, Managing Director of Deutsche Asset Management and Co-Manager of the fund. Joined Deutsche Asset Management in 1983. Joined the fund in 1999. Over 21 years of investment industry experience. MBA, Wharton Business School, University of Pennsylvania. Jesse Stuart Director of Deutsche Asset Management and Co-Manager of the fund. Joined Deutsche Asset Management in 1996. Joined the fund in 2001. Over 6 years of investment industry experience. BA, Brown University. |
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 3 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 3 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.
* Source: Deutsche Asset ManagementHowever, 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.
1 The P/E ratio is the price of a stock divided by its earnings per share. It is a widely used gauge of a stock's valuation that indicates what investors are paying for a company's earnings on a per share basis. A higher earnings multiple indicates higher investor expectations or a higher growth rate, as well as the potential for greater price fluctuations.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.
Portfolio Summary September 30, 2002 |
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Asset Allocation |
9/30/02 |
9/30/01 |
|
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Common Stocks
|
97% |
97% |
Cash Equivalents
|
3% |
3% |
|
100% |
100% |
Sector Diversification (Excludes Cash Equivalents) |
9/30/02 |
9/30/01 |
|
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Health Care
|
26% |
24% |
Information Technology
|
19% |
23% |
Consumer Discretionary
|
18% |
17% |
Financials
|
13% |
13% |
Consumer Staples
|
9% |
7% |
Energy
|
8% |
6% |
Industrials
|
7% |
8% |
Other
|
- |
2% |
|
100% |
100% |
Asset allocation and sector diversification are subject to change.
Ten Largest Equity Holdings at September 30, 2002 (32.9% of Portfolio) |
|
1. Microsoft Corp.
Developer of computer software |
4.5% |
2. Pfizer, Inc.
Manufacturer of prescription pharmaceuticals and non-prescription self-medications |
3.9% |
3. Johnson & Johnson
Provider of health care products |
3.8% |
4. General Electric Co.
Industrial conglomerate |
3.5% |
5. Tenet Healthcare Corp.
Operator of specialty and general hospitals |
3.4% |
6. Wal-Mart Stores, Inc.
Operator of discount stores |
3.2% |
7. Colgate-Palmolive Co.
Manufacturer of household and personal care products |
2.9% |
8. International Business Machines Corp.
Manufacturer of computers and provider of information processing services |
2.6% |
9. Intel Corp.
Designer, manufacturer and seller of computer components and related products |
2.6% |
10. Abbott Laboratories
Developer of health care products |
2.5% |
For more complete details about the fund's investment portfolio, see page 15. A quarterly Fund Summary and Portfolio Holdings are available upon request.
Investment Portfolio as of September 30, 2002 |
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Shares |
Value ($) |
Common Stocks 96.8% |
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Consumer Discretionary 17.4%
|
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Automobiles 1.5% |
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Harley-Davidson, Inc.
|
354,200 |
16,452,590 |
Hotel Restaurants & Leisure 1.0% |
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International Game Technology*
|
155,200 |
10,730,528 |
Media 6.3% |
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AOL Time Warner, Inc.*
|
966,600 |
11,309,220 |
Comcast Corp. "A"*
|
861,400 |
17,968,804 |
Omnicom Group, Inc.
|
333,500 |
18,569,280 |
Viacom, Inc. "B"*
|
532,800 |
21,605,040 |
|
69,452,344 |
|
Multiline Retail 6.2% |
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Kohl's Corp.*
|
114,000 |
6,932,340 |
Target Corp.
|
881,300 |
26,015,976 |
Wal-Mart Stores, Inc.
|
731,000 |
35,994,440 |
|
68,942,756 |
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Specialty Retail 2.4% |
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Home Depot, Inc.
|
769,000 |
20,070,900 |
Staples, Inc.*
|
501,100 |
6,409,069 |
|
26,479,969 |
|
Consumer Staples 8.9%
|
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Beverages 3.8% |
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Coca-Cola Co.
|
413,100 |
19,812,276 |
PepsiCo, Inc.
|
597,600 |
22,081,320 |
|
41,893,596 |
|
Household Products 5.1% |
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Colgate-Palmolive Co.
|
589,200 |
31,787,340 |
Procter & Gamble Co.
|
272,600 |
24,364,988 |
|
56,152,328 |
|
Energy 7.3%
|
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Energy Equipment & Services 4.1% |
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Nabors Industries Ltd.*
|
703,900 |
23,052,725 |
Schlumberger Ltd.
|
587,200 |
22,583,712 |
|
45,636,437 |
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Oil & Gas 3.2% |
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Anadarko Petroleum Corp.
|
447,500 |
19,931,650 |
EOG Resources, Inc.
|
429,200 |
15,434,032 |
|
35,365,682 |
|
Financials 13.0%
|
||
Diversified Financials 9.8% |
||
American Express Co.
|
531,700 |
16,578,406 |
Citigroup, Inc.
|
729,466 |
21,628,667 |
Fannie Mae
|
456,400 |
27,174,056 |
Franklin Resources, Inc.
|
324,800 |
10,101,280 |
Merrill Lynch & Co., Inc.
|
464,900 |
15,318,455 |
State Street Corp.
|
472,300 |
18,249,672 |
|
109,050,536 |
|
Insurance 3.2% |
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American International Group, Inc.
|
422,130 |
23,090,511 |
Marsh & McLennan Companies, Inc.
|
296,500 |
12,346,260 |
|
35,436,771 |
|
Health Care 25.2%
|
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Biotechnology 1.9% |
||
Genentech, Inc.*
|
392,900 |
12,820,327 |
Gilead Sciences, Inc.*
|
258,400 |
8,664,152 |
|
21,484,479 |
|
Health Care Equipment & Supplies 4.2% |
||
Baxter International, Inc.
|
451,600 |
13,796,380 |
Medtronic, Inc.
|
331,300 |
13,954,356 |
Zimmer Holdings, Inc.*
|
490,030 |
18,787,750 |
|
46,538,486 |
|
Health Care Providers & Services 5.1% |
||
Laboratory Corp. of America Holdings*
|
571,800 |
19,315,404 |
Tenet Healthcare Corp.*
|
761,550 |
37,696,725 |
|
57,012,129 |
|
Pharmaceuticals 14.0% |
||
Abbott Laboratories
|
683,000 |
27,593,200 |
Eli Lilly & Co.
|
393,100 |
21,754,154 |
Johnson & Johnson
|
783,200 |
42,355,456 |
Merck & Co., Inc.
|
250,600 |
11,454,926 |
Pfizer, Inc.
|
1,503,125 |
43,620,688 |
Wyeth
|
255,600 |
8,128,080 |
|
154,906,504 |
|
Industrials 6.7%
|
||
Aerospace & Defense 1.8% |
||
United Technologies Corp.
|
361,800 |
20,438,082 |
Commercial Services & Supplies 0.5% |
||
Concord EFS, Inc.*
|
298,900 |
4,746,532 |
Industrial Conglomerates 4.4% |
||
General Electric Co.
|
1,576,500 |
38,860,725 |
Tyco International Ltd.
|
715,200 |
10,084,320 |
|
48,945,045 |
|
Information Technology 17.9%
|
||
Communications Equipment 1.7% |
||
Cisco Systems, Inc.*
|
1,804,800 |
18,914,304 |
Computers & Peripherals 3.2% |
||
EMC Corp.*
|
1,341,100 |
6,128,827 |
International Business Machines Corp.
|
501,400 |
29,276,746 |
|
35,405,573 |
|
IT Consulting & Services 0.4% |
||
Electronic Data Systems Corp.
|
341,300 |
4,771,374 |
Semiconductor Equipment & Products 6.3% |
||
Applied Materials, Inc.*
|
1,565,400 |
18,080,370 |
Intel Corp.
|
2,039,280 |
28,325,599 |
Linear Technology Corp.
|
461,200 |
9,556,064 |
Texas Instruments, Inc.
|
908,100 |
13,412,637 |
|
69,374,670 |
|
Software 6.3% |
||
Acclaim Entertainment, Inc. (Warrant)*
|
20,568 |
31 |
Microsoft Corp.*
|
1,130,100 |
49,374,069 |
Oracle Corp.*
|
1,723,400 |
13,545,924 |
PeopleSoft, Inc.*
|
318,700 |
3,942,319 |
VERITAS Software Corp.*
|
233,600 |
3,436,256 |
|
70,298,599 |
|
Telecommunication Services 0.4%
|
||
Wireless Telecommunication Services |
||
AT&T Wireless Services, Inc.*
|
1,027,300 |
4,232,476 |
Total Common Stocks (Cost $1,337,920,473)
|
1,072,661,790 |
|
|
||
Cash Equivalents 3.2% |
||
Scudder Cash Management QP Trust, 1.90% (b)
(Cost $35,118,206)
|
35,118,206 |
35,118,206 |
Total Investment Portfolio - 100.0% (Cost $1,373,038,679) (a)
|
1,107,779,996 |
The accompanying notes are an integral part of the financial statements.
|
Statement of Assets and Liabilities as of September 30, 2002 |
|
Assets
|
|
Investments in securities, at value (cost $1,373,038,679) |
$ 1,107,779,996 |
Cash |
10,000 |
Dividends receivable |
817,324 |
Interest receivable |
220 |
Receivable for Fund shares sold |
377,114 |
Total assets |
1,108,984,654 |
Liabilities
|
|
Payable for Fund shares redeemed |
1,284,623 |
Accrued management fee |
564,760 |
Other accrued expenses and payables |
345,293 |
Total liabilities |
2,194,676 |
Net assets, at value
|
$ 1,106,789,978 |
Net Assets
|
|
Net assets consist of: Net unrealized appreciation (depreciation) on investments |
(265,258,683) |
Accumulated net realized gain (loss) |
(405,863,632) |
Paid-in capital |
1,777,912,293 |
Net assets, at value
|
$ 1,106,789,978 |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of September 30, 2002 (continued) |
|
Net Asset Value
|
|
Class AARP Net Asset Value, offering and redemption price per share ($839,763,275 / 27,389,718 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) |
$ 30.66 |
Class S Net Asset Value, offering and redemption price per share ($128,086,105 / 4,176,456 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) |
$ 30.67 |
Class A Net Asset Value and redemption price per share ($77,450,879 / 2,534,537 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) |
$ 30.56 |
Maximum offering price per share (100 / 94.25 of $30.56) |
$ 32.42 |
Class B Net Asset Value, offering and redemption price (subject to contingent deferred sales charge) per share ($42,740,017 / 1,412,660 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) |
$ 30.25 |
Class C Net Asset Value, offering and redemption price (subject to contingent deferred sales charge) per share ($14,729,708 / 486,806 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) |
$ 30.26 |
Class I Net Asset Value, offering and redemption price per share ($4,019,136 / 130,747 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) |
$ 30.74 |
Institutional Class Net Asset Value, offering and redemption price per share ($858 / 27.98 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) |
$ 30.66 |
The accompanying notes are an integral part of the financial statements.
Statement of Operations for the year ended September 30, 2002 |
|
Investment Income
|
|
Income: Dividends |
$ 12,477,711 |
Interest |
646,181 |
Total Income |
13,123,892 |
Expenses: Management fee |
9,200,982 |
Administrative fee |
4,908,696 |
Distribution service fees |
1,090,241 |
Trustees' fees and expenses |
39,380 |
Total expenses, before expense reductions |
15,239,299 |
Expense reductions |
(245) |
Total expenses, after expense reductions |
15,239,054 |
Net investment income (loss)
|
(2,115,162) |
Realized and Unrealized Gain (Loss) on Investment Transactions
|
|
Net realized gain (loss) from investments |
(286,124,024) |
Net unrealized appreciation (depreciation) during the period on
investments |
(45,686,659) |
Net gain (loss) on investment transactions
|
(331,810,683) |
Net increase (decrease) in net assets resulting from operations
|
$ (333,925,845) |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets |
|
|
Increase (Decrease) in Net Assets
|
Years Ended September 30, |
|
2001 |
||
Operations: Net investment income (loss) |
$ (2,115,162) | $ (3,107,970) |
Net realized gain (loss) on investment transactions |
(286,124,024) | (89,141,229) |
Net unrealized appreciation (depreciation) on
investment transactions during the period |
(45,686,659) | (911,441,189) |
Net increase (decrease) in net assets resulting from
operations |
(333,925,845) | (1,003,690,388) |
Distributions to shareholders from: Net realized gains: Class AARP |
(472,139) | (252,440,953) |
Class S
|
(71,177) | (3,773,140) |
Class A
|
(39,000) | - |
Class B
|
(24,881) | - |
Class C
|
(7,471) | - |
Class I
|
(2,044) | - |
Fund share transactions: Proceeds from shares sold |
179,648,515 | 287,037,818 |
Net assets acquired in tax-free reorganization |
- | 473,803,952 |
Reinvestment of distributions |
586,689 | 242,240,639 |
Cost of shares redeemed |
(410,609,653) | (528,798,353) |
Net increase (decrease) in net assets from Fund share
transactions |
(230,374,449) | 474,284,056 |
Increase (decrease) in net assets
|
(564,917,006) | (785,620,425) |
Net assets at beginning of period |
1,671,706,984 | 2,457,327,409 |
Net assets at end of period |
$ 1,106,789,978 |
$ 1,671,706,984 |
The accompanying notes are an integral part of the financial statements.
|
Class A |
||
Years Ended September 30, |
2001a |
|
Selected Per Share Data
|
||
Net asset value, beginning of period
|
$ 39.71 |
$ 50.11 |
Income (loss) from investment operations: Net investment income (loss)b |
(.13) | (.07) |
Net realized and unrealized gain (loss) on investment transactions
|
(9.00) | (10.33) |
Total from investment operations |
(9.13) | (10.40) |
Less distributions from: Net realized gain on investment transactions |
(.02) | - |
Net asset value, end of period
|
$ 30.56 |
$ 39.71 |
Total Return (%)c |
(23.04) | (20.75)** |
Ratios to Average Net Assets and Supplemental Data
|
||
Net assets, end of period ($ millions) |
77 | 101 |
Ratio of expenses (%) |
1.13d | 1.16* |
Ratio of net investment income (loss) (%) |
(.32) | (.44)* |
Portfolio turnover rate (%) |
13 | 35 |
a For the period from June 25, 2001 (commencement of sales of Class A shares) to
September 30, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d The ratio of operating expenses includes a one-time reduction in certain liabilities of an acquired fund (Classic Growth Fund). The ratio without the reduction was 1.14%. * Annualized ** Not annualized |
|
||
Class B |
||
Years Ended August 31, |
2001a |
|
Selected Per Share Data
|
||
Net asset value, beginning of period
|
$ 39.63 |
$ 50.11 |
Income (loss) from investment operations: Net investment income (loss)b |
(.45) | (.19) |
Net realized and unrealized gain (loss) on investment transactions
|
(8.91) | (10.29) |
Total from investment operations |
(9.36) | (10.48) |
Less distributions from: Net realized gain on investment transactions |
(.02) | - |
Net asset value, end of period
|
$ 30.25 |
$ 39.63 |
Total Return (%)c |
(23.64) | (20.91)** |
Ratios to Average Net Assets and Supplemental Data
|
||
Net assets, end of period ($ millions) |
43 | 65 |
Ratio of expenses (%) |
1.93d | 1.96* |
Ratio of net investment income (loss) (%) |
(1.12) | (1.24)* |
Portfolio turnover rate (%) |
13 | 35 |
a For the period from June 25, 2001 (commencement of sales of Class B shares) to
September 30, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d The ratio of operating expenses includes a one-time reduction in certain liabilities of an acquired fund (Classic Growth Fund). The ratio without the reduction was 1.94%. * Annualized ** Not annualized |
|
||
Class C |
||
Years Ended August 31, |
2001a |
|
Selected Per Share Data
|
||
Net asset value, beginning of period
|
$ 39.63 |
$ 50.11 |
Income (loss) from investment operations: Net investment income (loss)b |
(.44) | (.19) |
Net realized and unrealized gain (loss) on investment transactions
|
(8.91) | (10.29) |
Total from investment operations |
(9.35) | (10.48) |
Less distributions from: Net realized gain on investment transactions |
(.02) | - |
Net asset value, end of period
|
$ 30.26 |
$ 39.63 |
Total Return (%)c |
(23.64) | (20.91)** |
Ratios to Average Net Assets and Supplemental Data
|
||
Net assets, end of period ($ millions) |
15 | 19 |
Ratio of expenses (%) |
1.90d | 1.94* |
Ratio of net investment income (loss) (%) |
(1.09) | (1.22)* |
Portfolio turnover rate (%) |
13 | 35 |
a For the period from June 25, 2001 (commencement of sales of Class C shares) to
September 30, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d The ratio of operating expenses includes a one-time reduction in certain liabilities of an acquired fund (Classic Growth Fund). The ratio without the reduction was 1.92%. * Annualized ** Not annualized |
|
||
Class I |
||
Years Ended August 31, |
2001a |
|
Selected Per Share Data
|
||
Net asset value, beginning of period
|
$ 39.76 |
$ 50.11 |
Income (loss) from investment operations: Net investment income (loss)b |
.06 | -c |
Net realized and unrealized gain (loss) on investment transactions
|
(9.06) | (10.35) |
Total from investment operations |
(9.00) | (10.35) |
Less distributions from: Net realized gain on investment transactions |
(.02) | - |
Net asset value, end of period
|
$ 30.74 |
$ 39.76 |
Total Return (%) |
(22.69) | (20.65)** |
Ratios to Average Net Assets and Supplemental Data
|
||
Net assets, end of period ($ millions) |
4 | 5 |
Ratio of expenses (%) |
.67 | .69* |
Ratio of net investment income (loss) (%) |
.14 | .04* |
Portfolio turnover rate (%) |
13 | 35 |
a For the period from June 25, 2001 (commencement of sales of Class I shares) to
September 30, 2001. b Based on average shares outstanding during the period. c Amount is less than $.005. * Annualized ** Not annualized |
|
|
Institutional Class |
|
|
2002a |
Selected Per Share Data
|
|
Net asset value, beginning of period
|
$ 35.71 |
Income (loss) from investment operations: Net investment income (loss)b |
(.01) |
Net realized and unrealized gain (loss) on investment transactions
|
(5.04) |
Total from investment operations |
(5.05) |
Net asset value, end of period
|
$ 30.66 |
Total Return (%) |
(14.14)** |
Ratios to Average Net Assets and Supplemental Data
|
|
Net assets, end of period ($ thousands) |
.858 |
Ratio of expenses (%) |
.85* |
Ratio of net investment income (loss) (%) |
(.05)* |
Portfolio turnover rate (%) |
13 |
a For the period from August 19, 2002, (commencement of sales of Institutional Class shares) to
September 30, 2002. b Based on average shares outstanding during the period. * Annualized ** Not annualized |
|
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:
Undistributed ordinary income* |
$ - |
Undistributed net long-term capital gains |
- |
Capital loss carryforwards |
(150,104,000) |
Net unrealized appreciation (depreciation) on investments |
(267,482,214) |
In addition, during the year ended September 30, 2002, the tax character of distributions paid to shareholders by the Fund are summarized as follows:
Distributions from long-term capital gains |
$ (616,712) |
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:
Administrative Fee |
Total Aggregated |
Unpaid at September 30, 2002 |
Class AARP |
$ 3,715,766 | $ 201,840 |
Class S |
561,899 | 32,131 |
Class A |
336,519 | 21,024 |
Class B |
238,905 | 13,429 |
Class C |
70,901 | 4,307 |
Class I |
5,741 | 353 |
Institutional Class** |
1 | 1 |
|
$ 4,929,732 |
$ 273,085 |
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:
Distribution Fee
|
Total Aggregated |
Unpaid at September 30, 2002 |
Class B |
$ 477,808 | $ 29,749 |
Class C |
151,931 | 10,070 |
|
$ 629,739 |
$ 39,819 |
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:
Service Fee
|
Total Aggregated |
Unpaid at September 30, 2002 |
Effective Rate |
Class A |
$ 253,787 | $ 17,012 | 0.25% |
Class B |
156,238 | 8,948 | 0.25% |
Class C |
50,477 | 3,690 | 0.25% |
|
$ 460,502 |
$ 29,650 |
|
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:
|
Year Ended September 30, 2002 |
Year Ended September 30, 2001 |
||
|
Shares |
Dollars |
Shares |
Dollars |
Shares sold
|
||||
Class AARP |
1,432,547 | $ 59,740,922 | 3,328,188 | $ 195,588,661 |
Class S |
1,215,603 | 50,601,789 | 1,155,313 | 65,822,945 |
Class A |
1,126,043 | 45,171,718 | 261,543 | 11,969,573* |
Class B |
360,158 | 14,702,221 | 82,845 | 3,753,752* |
Class C |
194,904 | 7,897,495 | 58,044 | 2,621,994* |
Class I |
36,822 | 1,533,370 | 145,527 | 7,280,893* |
Institutional Class** |
28 | 1,000 | - | - |
|
|
$ 179,648,515 |
|
$ 287,037,818 |
Shares issued in tax-free reorganization
|
||||
Class S |
- | - | 4,748,391 | $ 237,940,428 |
Class A |
- | - | 2,524,437 | 126,499,777 |
Class B |
- | - | 1,711,234 | 85,750,902 |
Class C |
- | - | 471,227 | 23,612,845 |
|
|
- |
|
$ 473,803,952 |
Shares issued to shareholders in reinvestment of distributions
|
||||
Class AARP |
9,827 | $ 445,630 | 4,144,131 | $ 238,470,293 |
Class S |
1,552 | 70,389 | 65,526 | 3,770,346 |
Class A |
840 | 38,152 | - | - |
Class B |
512 | 23,169 | - | - |
Class C |
162 | 7,305 | - | - |
Class I |
45 | 2,044 | - | - |
|
|
$ 586,689 |
|
$ 242,240,639 |
Shares redeemed
|
||||
Class AARP |
(6,235,589) | $ (245,401,215) | (8,668,860) | $ (465,700,006) |
Class S |
(2,130,626) | (86,794,487) | (974,558) | (42,917,133) |
Class A |
(1,123,077) | (45,537,725) | (255,249) | (11,317,883)* |
Class B |
(593,379) | (23,517,908) | (148,710) | (6,595,406)* |
Class C |
(198,531) | (7,803,357) | (39,000) | (1,764,491)* |
Class I |
(40,265) | (1,554,961) | (11,382) | (503,434)* |
|
|
$ (410,609,653) |
|
$ (528,798,353) |
Net increase (decrease)
|
||||
Class AARP |
(4,793,215) | $ (185,214,663) | (1,196,541) | $ (31,641,052) |
Class S |
(913,471) | (36,122,309) | 4,994,672 | 264,616,586 |
Class A |
3,806 | (327,855) | 2,530,731 | 127,151,467* |
Class B |
(232,709) | (8,792,518) | 1,645,369 | 82,909,248* |
Class C |
(3,465) | 101,443 | 490,271 | 24,470,348* |
Class I |
(3,398) | (19,547) | 134,145 | 6,777,459* |
Institutional Class** |
28 | 1,000 | - | - |
|
|
$ (230,374,449) |
|
$ 474,284,056 |
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.
|
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.
Boston, Massachusetts |
PricewaterhouseCoopers LLP |
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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.
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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.
Non-Interested Trustees |
||
Name, Age,
Position(s) Held
with the Fund
and Length of
Time Served1
|
Principal Occupation(s) During Past 5 Years and Other Directorships Held |
Number
of Funds
in Fund
Complex
Overseen
|
Henry P. Becton,
Jr. (58) Trustee, 1990-present |
President, WGBH Educational Foundation; Directorships:
American Public Television; New England Aquarium; Becton
Dickinson and Company (medical technology company); Mass
Corporation for Educational Telecommunications; The A.H.
Belo Company (media company); Committee for Economic
Development; Concord Academy; Public Broadcasting Service;
Boston Museum of Science |
48 |
Dawn-Marie
Driscoll (55) Trustee, 1987-present |
President, Driscoll Associates (consulting firm); Executive
Fellow, Center for Business Ethics, Bentley College; Partner,
Palmer & Dodge (1988-1990); Vice President of Corporate
Affairs and General Counsel, Filene's (1978-1988);
Directorships: CRS Technology (technology service company);
Advisory Board, Center for Business Ethics, Bentley College;
Board of Governors, Investment Company Institute; Chairman,
ICI Directors Services Committee |
48 |
Edgar R. Fiedler
(73) Trustee, 1995-present |
Senior Fellow and Economic Counsellor, The Conference Board,
Inc. (not-for-profit business research organization);
Directorships: The Harris Insight Funds (registered investment
companies; 22 funds overseen) |
48 |
Keith R. Fox (48) Trustee, 1996-present |
Managing Partner, Exeter Capital Partners (private equity
funds); Directorships: Facts on File (school and library
publisher); Progressive Holding Corporation (kitchen importer
and distributor) |
48 |
Louis E. Levy (69) Trustee, 2002-present |
Chairman of the Quality Control Inquiry Committee, American
Institute of Certified Public Accountants (1992-1998);
Directorships: Household International (banking and finance);
ISI Family of Funds (registered investment companies; 3 funds
overseen); Kimberly-Clark Corporation (personal consumer
products) |
48 |
Jean Gleason
Stromberg (58) Trustee, 1999-present |
Consultant (1997-present); formerly, Director, U.S. General
Accounting Office (1996-1997); Partner, Fulbright & Jaworski,
L.L.P. (law firm) (1978-1996); Directorships: The William and
Flora Hewlett Foundation |
48 |
Jean C. Tempel
(59) Trustee, 1994-present |
Managing Partner, First Light Capital (venture capital group)
(2000-present); formerly, Venture Partner, Internet Capital
Group (network of internet partnership companies)
(1993-2000); Directorships: United Way of Mass Bay; Sonesta
International Hotels, Inc.; Labnetics, Inc. (medical equipment
company); Metatomix, Inc. (database management); Aberdeen
Group (technology research); Northeastern University Funds
and Endowment Committee; Connecticut College Finance
Committee; Commonwealth Institute (not-for-profit start-up
for women's enterprises); The Reference, Inc. (IT consulting for
financial services) |
48 |
Carl W. Vogt (66) Trustee, 2002-present |
Senior Partner, Fulbright & Jaworski, L.L.P (law firm); formerly,
President (interim) of Williams College (1999-2000); formerly,
President, certain funds in the Deutsche Asset Management
Family of Funds (formerly, Flag Investors Family of Funds)
(registered investment companies) (1999-2000); Directorships:
Yellow Corporation (trucking); American Science & Engineering
(x-ray detection equipment); ISI Family of Funds (registered
investment companies; 3 funds overseen); National Railroad
Passenger Corporation (Amtrak); formerly, Chairman and
Member, National Transportation Safety Board |
48 |
Interested Trustees and Officers |
||
Name, Age, Position(s)
Held with the Fund
and Length of Time
Served
|
Principal Occupation(s) During Past 5 Years and Other Directorships Held |
Number
of Funds
in Fund
Complex
Overseen
|
Richard T. Hale1,2,4 (57) Chairman, Trustee and Vice President, 2002-present |
Managing Director, Deutsche Bank Securities Inc.
(formerly Deutsche Banc Alex. Brown Inc.) and Deutsche
Asset Management (1999 to present); Director and
President, Investment Company Capital Corp. (registered
investment advisor) (1996 to present); Director, Deutsche
Global Funds, Ltd. (2000 to present), CABEI Fund (2000 to
present), North American Income Fund (2000 to present)
(registered investment companies); President, DB Hedge
Strategies Fund LLC (June 2002 to present), Montgomery
Street Securities, Inc. (2002 to present) (registered
investment companies); Vice President, Deutsche Asset
Management, Inc. (2000 to present); formerly, Director, ISI
Family of Funds (registered investment company; 4 funds
overseen) (1992-1999). |
203 |
William F. Glavin, Jr.3
(44) President, 2000-present |
Managing Director of Deutsche Asset Management;
Trustee, Crossroads for Kids, Inc. (serves at-risk children) |
n/a |
Joshua Feuerman (37) Vice President, 2002-present |
Managing Director of Deutsche Asset Management
(1999 to present); prior thereto, head of international
strategies, State Street Global Advisors |
n/a |
William F. Gadsden (47) Vice President, 1996-present |
Managing Director of Deutsche Asset Management |
n/a |
Daniel O. Hirsch4 (48) Vice President and Assistant Secretary, 2002-present |
Managing Director, Deutsche Asset Management
(2002-present) and Director, Deutsche Global Funds Ltd.
(2002-present); formerly, Director, Deutsche Asset
Management (1999-2002), Principal, BT Alex. Brown
Incorporated (now Deutsche Bank Securities Inc.)
(1998-1999); Assistant General Counsel, United States
Securities and Exchange Commission (1993-1998) |
n/a |
Kathleen T. Millard
(41) Vice President, 1999-present |
Managing Director of Deutsche Asset Management |
n/a |
John Millette (40) Vice President and Secretary, 1999-present |
Vice President of Deutsche Asset Management |
n/a |
Kenneth Murphy (38) Vice President, 2002-present |
Vice President of Deutsche Asset Management
(2001-present); formerly, Director, John Hancock
Signature Services (1992-2001); Senior Manager,
Prudential Mutual Fund Services (1987-1992) |
n/a |
Jesse Stuart (36) Vice President, 2002-present |
Director of Deutsche Asset Management |
n/a |
Gary L. French (51) Treasurer, 2002-present |
Managing Director of Deutsche Asset Management
(2001-present); formerly, President of UAM Fund
Services, Inc. |
n/a |
John R. Hebble (44) Assistant Treasurer, 1998-present |
Senior Vice President of Deutsche Asset Management |
n/a |
Brenda Lyons (40) Assistant Treasurer, 2000-present |
Senior Vice President of Deutsche Asset Management |
n/a |
Charles A. Rizzo5 (45) Assistant Treasurer, 2002-present |
Senior Vice President of Deutsche Asset Management |
n/a |
Caroline Pearson (40) Assistant Secretary, 1997-present |
Managing Director of Deutsche Asset Management
(1997-present); formerly, Associate, Dechert (law firm)
(1989-1997) |
n/a |
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.
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Scudder Funds |
Growth Funds Scudder 21st Century Growth Fund Scudder Aggressive Growth Fund Scudder Blue Chip Fund Scudder Capital Growth Fund Scudder Dynamic Growth Fund Scudder Flag Investors Communications Fund* Scudder Global Biotechnology Fund* Scudder Growth Fund Scudder Health Care Fund Scudder Large Company Growth Fund Scudder Micro Cap Fund* Scudder Mid Cap Fund* Scudder Small Cap Fund* Scudder Technology Fund Scudder Technology Innovation Fund Scudder Top 50 US Fund* Value Funds Scudder Contrarian Fund Scudder-Dreman Financial Services Fund Scudder-Dreman High Return Equity Fund Scudder-Dreman Small Cap Value Fund Scudder Flag Investors Equity Partners Fund* Scudder Gold & Precious Metals Fund Scudder Growth and Income Fund Scudder Large Company Value Fund Scudder-RREEF Real Estate Securities Fund Scudder Small Company Stock Fund Scudder Small Company Value Fund Multicategory/Asset Allocation Funds Scudder Asset Management Fund* Scudder Flag Investors Value Builder Fund* Scudder Focus Value+Growth Fund Scudder Lifecycle Mid Range Fund* Scudder Lifecycle Long Range Fund* Scudder Lifecycle Short Range Fund* Scudder Pathway Conservative Portfolio Scudder Pathway Growth Portfolio Scudder Pathway Moderate Portfolio Scudder Target 2012 Fund Scudder Total Return Fund International/Global Funds Scudder Emerging Markets Growth Fund Scudder Emerging Markets Income Fund Scudder European Equity Fund* Scudder Global Fund Scudder Global Bond Fund Scudder Global Discovery Fund Scudder Greater Europe Growth Fund Scudder International Fund Scudder International Equity Fund* Scudder International Select Equity Fund* Scudder Japanese Equity Fund* Scudder Latin America Fund Scudder New Europe Fund Scudder Pacific Opportunities Fund Income Funds Scudder Cash Reserves Fund Scudder Fixed Income Fund* Scudder High Income Plus Fund*,** Scudder High Income Fund*** Scudder High Income Opportunity Fund**** Scudder Income Fund Scudder PreservationPlus Fund* Scudder PreservationPlus Income Fund* Scudder Short-Term Bond Fund Scudder Short-Term Fixed Income Fund* Scudder Strategic Income Fund Scudder U.S. Government Securities Fund |
Scudder Funds (continued) |
Tax-Free Income Funds Scudder California Tax-Free Income Fund Scudder Florida Tax-Free Income Fund Scudder High Yield Tax-Free Fund Scudder Managed Municipal Bond Fund Scudder Massachusetts Tax-Free Fund Scudder Medium-Term Tax-Free Fund Scudder Municipal Bond Fund* Scudder New York Tax-Free Income Fund Scudder Short-Term Municipal Bond Fund* Index-Related Funds Scudder EAFE ® Equity Index Fund* Scudder Equity 500 Index Fund* Scudder Quantitative Equity Fund* Scudder S&P 500 Stock Fund Scudder Select 500 Fund Scudder Select 1000 Growth Fund+ Scudder US Bond Index Fund* |
Retirement Programs and Education Accounts |
Retirement Programs Traditional IRA Roth IRA SEP-IRA Inherited IRA Keogh Plan 401(k), 403(b) Plans Variable Annuities Education Accounts Education IRA UGMA/UTMA IRA for Minors |
Closed-End Funds |
The Brazil Fund, Inc.
The Korea Fund, Inc. Montgomery Street Income Securities, Inc. Scudder Global High Income Fund, Inc. Scudder New Asia Fund, Inc. Scudder High Income Trust Scudder Intermediate Government Trust Scudder Multi-Market Income Trust Scudder Municipal Income Trust Scudder RREEF Real Estate Fund, Inc. Scudder Strategic Income Trust Scudder Strategic Municipal Income Trust The Germany Fund The New Germany Fund The Central European Equity Fund |
Note: Not all funds are available in all share classes. Consult your advisor for details.
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.
|
Legal Counsel |
Dechert |
Shareholder Service Agent and Transfer Agent |
Scudder Investments Service CompanyP.O. Box 219151 |
Custodian |
State Street Bank and Trust Company |
Independent Accountants |
PricewaterhouseCoopers LLP |
Principal Underwriter |
Scudder Distributors, Inc.222 South Riverside Plaza |
Notes |
|
Notes |
|
Notes |
|
Performance Summary September 30, 2002 |
|
Average Annual Total Returns* |
||
|
1-Year |
Life of Class** |
Scudder Capital Growth Fund - Class I Shares
|
-22.69% |
-31.88% |
S&P 500 Index+ |
-20.49% |
-26.68% |
Russell 1000 Growth Index++ |
-22.51% |
-31.38% |
Performance is historical and includes reinvestment of dividends and capital gains. Investment return and principal value will fluctuate with changing market conditions, so that when redeemed shares may be worth more or less than their original cost.
Growth of a $10,000 Investment |
[] Scudder Capital Growth Fund - Class I Shares
[] S&P 500 Index+ [] Russell 1000 Growth Index++ |
|
Dividend Review |
|
During the year, Scudder Capital Growth Fund - Class I shares paid the following dividends: |
|
Capital Gains Distributions |
$ .02 |
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.
Investment Manager
Deutsche Investment Management Americas Inc.
Principal Underwriter
Scudder Distributors, Inc.
This report is not to be distributed unless preceded or accompanied by a Scudder Capital Growth Fund prospectus and the 2002 Semiannual Report for Scudder Capital Growth Fund.
(SCG-ISUP)
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 | ||||
10/17/02 | ||||
10/7/02 | ||||
For Period End: | 9/30/02 | 24F-2NT, N-30D, NSAR-B | ||
8/31/02 | ||||
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 | ||||
6/30/01 | N-30D, NSAR-A, NT-NSAR | |||
6/25/01 | ||||
6/22/01 | 497 | |||
5/24/01 | ||||
List all Filings |