UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM N-CSRS Investment Company Act file number 811-04760 SCUDDER ADVISOR FUNDS -------------------------------- (Exact Name of Registrant as Specified in Charter) One South Street, Baltimore, Maryland 21202 ---------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code: (212) 454-7190 -------------- Paul Schubert 345 Park Avenue New York, NY 10154 --------------------------------------- (Name and Address of Agent for Service) Date of fiscal year end: 12/31 Date of reporting period: 06/30/2005ITEM 1. REPORT TO STOCKHOLDERS
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Tax Free Money Fund Investment
Contents |
This report must be preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the funds’ objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the funds. Please read the prospectus carefully before you invest.
An investment in these funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the funds. Please read each fund’s prospectus for specific details regarding its risk profile.
Deutsche Asset Management 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 Asset Management Investment Services Ltd., Deutsche Bank Trust Company Americas and Scudder Trust Company.
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.
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Information About Each Fund’s Expenses |
As an investor, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees and other Fund expenses. Examples of transaction costs include sales charges (loads), redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in each Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, each Fund limited these expenses; had it not done so, expenses would have been higher. The tables are based on an investment of $1,000 made at the beginning of the six-month period ended June 30, 2005.
The tables illustrate each Fund’s expenses in two ways:
n | Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund’s actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Expenses Paid per $1,000” line under the share class you hold. | |
n | Hypothetical 5% Fund Return. This helps you to compare your Fund’s ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund’s actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. |
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The “Expenses Paid per $1,000” line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
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NY Tax Free Money Fund Investment | ||||||
Expenses and Value of a $1,000 Investment for the six months ended June 30, 2005 | ||||||
Actual Fund Return | ||||||
Beginning Account Value 1/1/05 | $ | 1,000.00 | ||||
Ending Account Value 6/30/05 | $ | 1,007.30 | ||||
Expenses Paid per $1,000* | $ | 3.73 | ||||
Hypothetical 5% Fund Return | ||||||
Beginning Account Value 1/1/05 | $ | 1,000.00 | ||||
Ending Account Value 6/30/05 | $ | 1,021.08 | ||||
Expenses Paid per $1,000* | $ | 3.76 | ||||
* | Expenses are equal to the Fund’s annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365. |
Annualized Expense Ratio | ||||||
NY Tax Free Money Fund Investment | 0.75% | |||||
For more information, please refer to the Fund’s prospectus.
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Tax Free Money Fund Investment | ||||||
Expenses and Value of a $1,000 Investment for the six months ended June 30, 2005 | ||||||
Actual Fund Return | ||||||
Beginning Account Value 1/1/05 | $ | 1,000.00 | ||||
Ending Account Value 6/30/05 | $ | 1,007.30 | ||||
Expenses Paid per $1,000* | $ | 3.73 | ||||
Hypothetical 5% Fund Return | ||||||
Beginning Account Value 1/1/05 | $ | 1,000.00 | ||||
Ending Account Value 6/30/05 | $ | 1,021.08 | ||||
Expenses Paid per $1,000* | $ | 3.76 | ||||
* | Expenses are equal to the Fund’s annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365. |
Annualized Expense Ratio | ||||||
Tax Free Money Fund Investment | 0.75% | |||||
For more information, please refer to the Fund’s prospectus.
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Portfolio Summary |
NY Tax Free Money Fund Investment
Asset Allocation | 6/30/05 | 12/31/04 | ||||||||
Municipal Investments | 100% | 100% | ||||||||
Weighted Average Maturity
NY Tax Free Money Fund Investment | 31 days | 9 days | ||||||||
iMoneyNet State Specific Retail Money Funds Average** | 23 days | 31 days | ||||||||
** | Category consists of only retail state tax-free and municipal money market funds. |
Asset allocation is subject to change. For more complete details about the Fund’s holdings, see page 7. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to scudder.com on the 15th of the following month.
Tax Free Money Fund Investment
Asset Allocation | 6/30/05 | 12/31/04 | ||||||||
Municipal Investments | 100% | 100% | ||||||||
Weighted Average Maturity
Tax Free Money Fund Investment | 26 days | 28 days | ||||||||
iMoneyNet National Retail Tax Free Money Funds Average* | 24 days | 34 days | ||||||||
* | Category consists of all national tax-free and municipal retail funds. Portfolio holdings of tax-free funds include Rated and Unrated Demand Notes, Rated and Unrated General Market Notes, Commercial Paper, Put Bonds — 6 months & less, Put Bonds — over 6 months, AMT Paper, and Other Tax-Free holdings. |
Asset allocation is subject to change. For more complete details about the Fund’s holdings, see page 11. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to scudder.com on the 15th of the following month.
Following the Fund’s fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC’s Web site at www.sec.gov, and it also may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the SEC’s Public Reference Room may be obtained by calling (800) SEC-0330.
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Investment Portfolios | as of June 30, 2005 (Unaudited) |
Principal | ||||||||||||
NY Tax Free Money Fund Investment | Amount ($) | Value ($) | ||||||||||
Municipal Bonds and Notes 103.4% | ||||||||||||
New York 99.5% | ||||||||||||
Albany, NY, Industrial Development Agency, Civic Facilities Revenue, University of Albany Foundation, Series A, 2.32%*, 11/1/2032 (b) | 285,000 | 285,000 | ||||||||||
Erie County, NY, Industrial Development Agency, Civic Facilities Revenue, Subordinate Adult Services, 2.37%*, 6/1/2022, KeyBank NA (c) | 4,020,000 | 4,020,000 | ||||||||||
Islip, NY, Union Free School District 002, Tax Anticipation Notes, 3.5%, 6/29/2006 | 3,250,000 | 3,274,895 | ||||||||||
Long Beach, NY, Public Improvement, Series A, 3.0%, 7/15/2005 (b) | 1,470,000 | 1,470,508 | ||||||||||
Long Island, NY, Power Authority, Electric System Revenue: | ||||||||||||
Series 2A, 2.2%*, 5/1/2033, WestLB AG (c) | 1,000,000 | 1,000,000 | ||||||||||
Series D, 2.23%*, 12/1/2029 (b) | 1,500,000 | 1,500,000 | ||||||||||
2.68%, 8/5/2005 | 3,000,000 | 3,000,000 | ||||||||||
Nassau, NY, Health Care Corp., Revenue Bond, Series 2004-C2, 2.46%*, 8/1/2029 (b) | 1,350,000 | 1,350,000 | ||||||||||
New York, Jay Street Development Corp., Centers Facilities Lease Revenue, Series A-1, 2.24%*, 5/1/2022, Depfa Bank PLC (c) | 2,000,000 | 2,000,000 | ||||||||||
New York, Jay Street Development Corp., Centers Facility Lease Revenue, Series A-2, 2.23%*, 5/1/2022, Depfa Bank PLC (c) | 3,000,000 | 3,000,000 | ||||||||||
New York, Metropolitan Transportation Authority Revenue: | ||||||||||||
Series 848-D, 144A, 2.3%*, 11/15/2021 (b) | 2,500,000 | 2,500,000 | ||||||||||
Series PA-1083, 144A, 2.31%*, 5/15/2010 (b) | 1,450,000 | 1,450,000 | ||||||||||
Series 1040, 144A, 2.31%*, 11/15/2020 (b) | 1,100,000 | 1,100,000 | ||||||||||
Series G-1, 2.5%*, 11/1/2026 (b) | 400,000 | 400,000 | ||||||||||
New York, State Dormitory Authority Revenue: | ||||||||||||
Series B09, 144A, 2.31%*, 3/15/2023 (b) | 350,000 | 350,000 | ||||||||||
Series 1997, 2.5%, 9/8/2005 | 1,685,000 | 1,685,000 | ||||||||||
Series 1997, 2.59%, 9/9/2005 | 500,000 | 500,000 | ||||||||||
Series A-09, 144A, 2.78%*, 5/15/2031 (b) | 2,000,000 | 2,000,000 | ||||||||||
New York, State Dormitory Authority Revenue, Columbia University, Series A-1, 3.0%, 7/1/2005 | 2,800,000 | 2,800,000 | ||||||||||
New York, State Dormitory Authority Revenue, Cornell University: | ||||||||||||
Series A, 2.18%*, 7/1/2029 | 1,455,000 | 1,455,000 | ||||||||||
Series B, 2.18%*, 7/1/2030 | 1,370,000 | 1,370,000 | ||||||||||
Series B, 2.26%*, 7/1/2025 | 800,000 | 800,000 | ||||||||||
New York, State Dormitory Authority Revenue, Mental Health Services: | ||||||||||||
Series D-2A, 2.25%*, 2/15/2031 (b) | 900,000 | 900,000 | ||||||||||
Series D-2B, 2.26%*, 2/15/2031 (b) | 2,000,000 | 2,000,000 | ||||||||||
New York, State Environment, Series 1997-A, 2.6%, 9/7/2005 | 2,700,000 | 2,700,000 | ||||||||||
New York, State General Obligation, Series B, 1.58%*, 3/15/2030, Dexia Credit Local France (c) | 870,000 | 870,000 |
Investment Funds 7
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Principal | ||||||||||||
NY Tax Free Money Fund Investment | Amount ($) | Value ($) | ||||||||||
New York, State Housing Finance Agency Revenue, Historic Front Street, Series A, 2.27%*, 11/1/2036, Bank of New York (c) | 2,000,000 | 2,000,000 | ||||||||||
New York, State Housing Finance Agency Revenue, Normandie Court I Project, 2.2%*, 5/15/2015, Landesbank Hessen-Thuringen (c) | 350,000 | 350,000 | ||||||||||
New York, State Housing Finance Agency, Service Contract Revenue, Series D, 2.23%*, 3/15/2026, State Street Bank & Trust Co. (c) | 1,600,000 | 1,600,000 | ||||||||||
New York, State Local Government Assistance Corp.: | ||||||||||||
Series A-BV, 2.16%*, 4/1/2021 (b) | 1,190,000 | 1,190,000 | ||||||||||
Series F, 2.18%*, 4/1/2025, Societe Generale (c) | 1,300,000 | 1,300,000 | ||||||||||
Series 3-V, 2.31%*, 4/1/2024 (b) | 700,000 | 700,000 | ||||||||||
New York, State Power Authority Revenue & General Purpose, 2.15%, 3/1/2016 | 1,000,000 | 1,000,000 | ||||||||||
New York, Tobacco Settlement Financing Corp.: | ||||||||||||
Series R-2003, 144A, 2.32%*, 6/1/2021 (b) | 1,975,000 | 1,975,000 | ||||||||||
Series R-6500, 144A, 2.32%*, 6/1/2021 (b) | 2,245,000 | 2,245,000 | ||||||||||
New York City, NY, Housing Development Corp., Mortgage Revenue, Multi-Family Columbus Apartments, Series A, 2.2%*, 3/15/2025 | 1,000,000 | 1,000,000 | ||||||||||
New York City, NY, Industrial Development Agency, Civic Facility Revenue, Abraham Joshua Heschel Project, 2.35%*, 4/1/2032, Allied Irish Bank PLC (c) | 1,505,000 | 1,505,000 | ||||||||||
New York City, NY, Industrial Development Agency, Civic Facility Revenue, Peninsula Hospital Center Project, 2.36%*, 12/1/2013, JPMorgan Chase Bank (c) | 830,000 | 830,000 | ||||||||||
New York City, NY, Municipal Water Finance Authority, Water & Sewer System Revenue, Series PT-2114, 144A, 2.31%*, 12/15/2011 | 600,000 | 600,000 | ||||||||||
New York City, NY, Municipal Water Finance Authority, Water & Sewer System Revenue, Fiscal 2003, Series C-2, 2.22%*, 6/15/2018 | 1,950,000 | 1,950,000 | ||||||||||
New York City, NY, Transitional Finance Authority Revenue, Series A-40, 144A, 2.31%*, 11/1/2026 (b) | 975,000 | 975,000 | ||||||||||
New York City, NY, Transitional Finance Authority Revenue, Future Tax Secured: | ||||||||||||
Series A-1, 2.35%*, 11/15/2022 | 45,000 | 45,000 | ||||||||||
Series A, 2.35%*, 2/15/2030 | 745,000 | 745,000 | ||||||||||
New York City, NY, Transitional Finance Authority Revenue, NYC Recovery: | ||||||||||||
Series 3G, 2.18%*, 11/1/2022 | 1,215,000 | 1,215,000 | ||||||||||
Series 3C, 2.23%*, 11/1/2022 | 200,000 | 200,000 | ||||||||||
Series 3F, 2.26%*, 11/1/2022 | 300,000 | 300,000 | ||||||||||
Series 1B, 2.35%*, 11/1/2022 | 1,000,000 | 1,000,000 | ||||||||||
New York City, NY, Transitional Finance Authority, Star Certificate: | ||||||||||||
Series 2003-7, 144A, 2.31%*, 2/1/2009 | 3,425,000 | 3,425,000 | ||||||||||
New York City, NY, Trust For Cultural Resources Revenue, Asia Society, 2.19%*, 4/1/2030, The Chase Manhattan Bank (c) | 875,000 | 875,000 |
8 Investment Funds
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Principal | |||||||||||
NY Tax Free Money Fund Investment | Amount ($) | Value ($) | |||||||||
New York City, NY, Trust For Cultural Resources Revenue, Museum of Broadcasting, 2.2%*, 5/1/2014, KBC Bank NV (c) | 710,000 | 710,000 | |||||||||
New York, NY, General Obligation, Series H-6, 2.2%*, 3/1/2034, Fleet National Bank (c) | 600,000 | 600,000 | |||||||||
New York, NY, State General Obligation: | |||||||||||
Series H-1, 2.17%*, 3/1/2034, Bank of New York (c) | 400,000 | 400,000 | |||||||||
Series A-6, 2.22%*, 8/1/2031, Landesbank Baden-Wurttemberg (c) | 1,800,000 | 1,800,000 | |||||||||
Series A-3, 2.23%*, 8/1/2031, BNP Paribas (c) | 1,465,000 | 1,465,000 | |||||||||
Series H-4, 2.3%*, 8/1/2015 (b) | 900,000 | 900,000 | |||||||||
New York, NY, Triborough Bridge & Tunnel Authority Revenue: | |||||||||||
Series A, 2.23%*, 1/1/2031 (b) | 305,000 | 305,000 | |||||||||
Series B-13, 144A, 2.31%*, 11/15/2021 (b) | 2,080,000 | 2,080,000 | |||||||||
Series R-2013, 144A, 2.31%*, 11/15/2021 (b) | 300,000 | 300,000 | |||||||||
Oneida Indian Nation, NY, County General Obligation, Revenue Bond, 2.28%*, 10/1/2032, Bank of America NA (c) | 2,245,000 | 2,245,000 | |||||||||
Onondaga County, NY, Industrial Development Agency, Civic Facility Revenue, YMCA of Greater Syracuse, Series A, 2.37%*, 11/1/2025, HSBC Bank PLC (c) | 3,700,000 | 3,700,000 | |||||||||
Otsego County, NY, Industrial Development Agency, Civic Facility Revenue, Noonan Community Service Corp. Project, Series A, 2.35%*, 3/1/2025, Wilber National Bank (c) | 1,435,000 | 1,435,000 | |||||||||
Schenectady County, NY, Industrial Development Agency, Civic Facilities Revenue, Sunnyview, Series B, 2.32%*, 8/1/2033, KeyBank NA (c) | 2,390,000 | 2,390,000 | |||||||||
Schoharie County, NY, Industrial Development Agency, Civic Facility Revenue, Bassett Hospital Project, Series A, 144A, 2.37%*, 2/1/2021, KeyBank NA (c) | 210,000 | 210,000 | |||||||||
Yonkers, NY, Industrial Development Agency, Civic Facilities Revenue, 2.35%*, 7/1/2021, Bank of New York (c) | 1,000,000 | 1,000,000 | |||||||||
90,345,403 | |||||||||||
Multi-State 2.9% | |||||||||||
ABN AMRO Munitops, Certificates Trust, Series 2000-17, 144A, 2.29%*, 10/1/2008 | 2,650,000 | 2,650,000 | |||||||||
Puerto Rico 1.0% | |||||||||||
Commonwealth of Puerto Rico, General Obligation, Series 813-D, 144A, 2.3%*, 7/1/2020 (b) | 875,000 | 875,000 | |||||||||
Investment Funds 9
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% of | ||||||||||
Net Assets | Value ($) | |||||||||
Total Investment Portfolio | ||||||||||
(Cost $93,870,403) (a) | 103.4 | 93,870,403 | ||||||||
Other Assets and Liabilities, Net | (3.4 | ) | (3,049,399 | ) | ||||||
Net Assets | 100.0 | 90,821,004 |
* | Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of June 30, 2005. | |
(a) | The cost for federal income tax purposes was $93,870,403. | |
(b) | Bond is insured by one of these companies: |
As a % of Total | ||||||
Insurance Coverage | Investment Portfolio | |||||
Ambac Financial Group | 8.6 | |||||
Financial Guaranty Insurance Company | 6.2 | |||||
Financial Security Assurance Inc. | 8.6 | |||||
MBIA Corporation | 5.2 | |||||
(c) | Security incorporates a letter of credit or line of credit from a major bank. |
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
10 Investment Funds
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Principal | |||||||||||
Tax Free Money Fund Investment | Amount ($) | Value ($) | |||||||||
Municipal Bonds and Notes 103.7% | |||||||||||
California 2.9% | |||||||||||
California, Community College Financing Authority, Series A, 4.0%, 6/30/2006 (b) | 1,000,000 | 1,013,410 | |||||||||
California, School Cash Reserve Program Authority, Series A, 4.0%, 7/6/2006 | 1,500,000 | 1,520,460 | |||||||||
Los Angeles County, CA, Tax & Revenue Anticipation Notes, Series A, 4.0%, 6/30/2006 | 2,000,000 | 2,028,380 | |||||||||
4,562,250 | |||||||||||
Colorado 10.2% | |||||||||||
Adams & Weld Counties, CO, Brighton School District No. 27J, Series RR-II-R-6514, 144A, 2.32%*, 12/1/2024 (b) | 1,995,000 | 1,995,000 | |||||||||
Colorado, Health Facilities Authority Revenue, Adventist Health, Sunbelt, Series B, 2.29%*, 11/15/2034, SunTrust Bank (c) | 5,000,000 | 5,000,000 | |||||||||
Colorado, State Education Loan Program, Tax & Revenue Anticipation Notes, Series A, 3.5%, 8/9/2005 | 6,215,000 | 6,219,776 | |||||||||
Denver, CO, City & County Economic Development Revenue, Western Stock Show Project, 2.45%*, 7/1/2029, Bank One Colorado NA (c) | 2,615,000 | 2,615,000 | |||||||||
15,829,776 | |||||||||||
District of Columbia 5.3% | |||||||||||
District of Columbia, General Obligation, Core City: | |||||||||||
2.35%*, 3/1/2028, Bank of America NA (c) | 1,670,000 | 1,670,000 | |||||||||
Series A, 2.4%*, 6/1/2015 (b) | 2,500,000 | 2,500,000 | |||||||||
District of Columbia, Tax & Revenue Anticipation Notes, 3.5%, 9/30/2005 | 4,000,000 | 4,009,551 | |||||||||
8,179,551 | |||||||||||
Florida 3.9% | |||||||||||
Jacksonville, FL, Capital Project Revenue, Series 1, 2.23%*, 10/1/2017 (b) | 620,000 | 620,000 | |||||||||
Lee County, FL, Airport Revenue, AMT, Series 811-X, 144A, 2.36%*, 10/1/2029 (b) | 150,000 | 150,000 | |||||||||
Pasco County, FL, School Board Certificates of Participation, 2.28%*, 8/1/2026 (b) | �� | 375,000 | 375,000 | ||||||||
Reedy Creek, FL, Improvement District Florida Utilities Revenue, Series 986, 144A, 2.31%*, 10/1/2012 (b) | 3,850,000 | 3,850,000 | |||||||||
Tampa, FL, Health Care Facilities Revenue, Lifelink Foundation, Inc. Project, 2.29%*, 8/1/2022, SunTrust Bank (c) | 1,000,000 | 1,000,000 | |||||||||
5,995,000 | |||||||||||
Investment Funds 11
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Principal | |||||||||||
Tax Free Money Fund Investment | Amount ($) | Value ($) | |||||||||
Georgia 1.6% | |||||||||||
Fayette County, GA, Development Authority Educational Facilities Revenue, Catholic School Properties, Inc., Project, 2.29%*, 4/1/2024, Wachovia Bank (c) | 100,000 | 100,000 | |||||||||
La Grange, GA, Development Authority Revenue, La Grange College Project, 2.29%*, 6/1/2031, SunTrust Bank (c) | 1,105,000 | 1,105,000 | |||||||||
Roswell, GA, Housing Authority, Multi-Family Revenue, Post Canyon Project, 2.29%*, 6/1/2025 | 1,300,000 | 1,300,000 | |||||||||
2,505,000 | |||||||||||
Hawaii 7.1% | |||||||||||
ABN AMRO Munitops, Certificates Trust, Series 2004-16, 144A, 2.33%*, 7/1/2012 (b) | 4,000,000 | 4,000,000 | |||||||||
Honolulu, HI, City & County, General Obligation, 2.5%, 8/16/2005 | 7,000,000 | 7,000,000 | |||||||||
11,000,000 | |||||||||||
Illinois 10.1% | |||||||||||
Illinois, Development Finance Authority Revenue, Chicago Symphony Orchestra, 2.22%*, 12/1/2028, Northern Trust Company (c) | 5,000,000 | 5,000,000 | |||||||||
Illinois, Development Finance Authority Revenue, Goodman Theatre Project, 2.35%*, 12/1/2033, Bank One NA (c) | 675,000 | 675,000 | |||||||||
Illinois, Educational Facilities Authority Revenue, Shedd Aquarium Society, 2.1%, 7/11/2005 | 3,000,000 | 3,000,000 | |||||||||
Illinois, Finance Authority Revenue, Series PA-1286, 144A, 2.31%*, 11/15/2023 (b) | 3,500,000 | 3,500,000 | |||||||||
Illinois, Health Facilities Authority Revenue, The Carle Foundation, Series B, 2.28%*, 7/1/2028 (b) | 1,600,000 | 1,600,000 | |||||||||
Will & Kendall Counties, IL, Community School District No. 202, Series RR-II-R 4031, 144A, 2.32%*, 1/1/2023 (b) | 1,930,000 | 1,930,000 | |||||||||
15,705,000 | |||||||||||
Indiana 6.2% | |||||||||||
ABN AMRO Munitops, Certificates Trust, Series 2003-32, 144A, 2.33%*, 1/15/2012 (b) | 3,000,000 | 3,000,000 | |||||||||
Indiana, Health Facility Financing Authority Revenue, Ascension Health Credit, Series B, 2.18%*, 11/15/2039 | 3,600,000 | 3,600,000 | |||||||||
Indiana, Transportation Finance Authority Highway Revenue: | |||||||||||
Series 853, 144A, 2.31%*, 6/1/2017 (b) | 900,000 | 900,000 | |||||||||
Series B-21, 144A, 2.32%*, 12/1/2022 (b) | 2,090,000 | 2,090,000 | |||||||||
9,590,000 | |||||||||||
Iowa 1.4% | |||||||||||
Iowa, Finance Authority Hospital Facility Revenue, Iowa Health Systems, Series B, 2.28%*, 7/1/2015 (b) | 2,100,000 | 2,100,000 | |||||||||
12 Investment Funds
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Principal | |||||||||||
Tax Free Money Fund Investment | Amount ($) | Value ($) | |||||||||
Kentucky 7.5% | |||||||||||
Boone County, KY, Pollution Control Revenue, Cincinnati Gas & Electric Co., Series A, 2.85%*, 8/1/2013, Credit Lyonnais (c) | 1,800,000 | 1,800,000 | |||||||||
Pendleton, KY, County Lease: | |||||||||||
2.85%, 8/5/2005 | 2,000,000 | 2,000,000 | |||||||||
2.9%, 9/7/2005 | 5,000,000 | 5,000,000 | |||||||||
Somerset, KY, Blakley Family YMCA, Inc., Project, 2.34%*, 4/1/2015, Fifth Third Bank (c) | 2,770,000 | 2,770,000 | |||||||||
11,570,000 | |||||||||||
Maryland 3.0% | |||||||||||
Gaithersburg, MD, Economic Development Revenue, Asbury Methodist Village, 2.32%*, 1/1/2034, KBC Bank NV (c) | 3,600,000 | 3,600,000 | |||||||||
Montgomery County, MD, Economic Development Revenue, Howard Hughes Medical Facility, Series A, 2.32%*, 10/15/2020 | 1,000,000 | 1,000,000 | |||||||||
4,600,000 | |||||||||||
Massachusetts 1.9% | |||||||||||
Massachusetts, Development Finance Agency, Industrial Development Revenue, North Shore YMCA Project, 2.37%*, 11/1/2022, KeyBank NA (c) | 2,895,000 | 2,895,000 | |||||||||
Michigan 2.3% | |||||||||||
Detroit, MI, City School District, Series PT-1844, 144A, 2.31%*, 5/1/2011 (b) | 1,535,000 | 1,535,000 | |||||||||
Michigan, University of Michigan Hospital Revenue, Series A, 2.25%*, 12/1/2019 | 1,360,000 | 1,360,000 | |||||||||
Oakland University, MI, Michigan Revenue Bond, 2.4%*, 3/1/2031 (b) | 625,000 | 625,000 | |||||||||
3,520,000 | |||||||||||
New Jersey 0.6% | |||||||||||
Salem County, NJ, Industrial Pollution Control, Financing Authority Revenue, E.I. Du Pont de Nemours and Co., 2.8%*, 3/1/2012 | 1,000,000 | 1,000,000 | |||||||||
New York 1.9% | |||||||||||
New York City, NY, Transitional Finance Authority Revenue, Future Tax Secured, Series A, 2.35%*, 2/15/2030 | 3,000,000 | 3,000,000 | |||||||||
Investment Funds 13
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Principal | |||||||||||
Tax Free Money Fund Investment | Amount ($) | Value ($) | |||||||||
North Carolina 2.1% | |||||||||||
North Carolina, Medical Care Community, Retirement Facilities Revenue, 1st Mortgage, United Methodist: | |||||||||||
Series B, 2.3%*, 10/1/2008, Branch Banking & Trust (c) | 2,300,000 | 2,300,000 | |||||||||
Series B, 2.3%*, 10/1/2035, Branch Banking & Trust (c) | 1,000,000 | 1,000,000 | |||||||||
3,300,000 | |||||||||||
Ohio 1.2% | |||||||||||
Ohio, State Higher Educational Facility Community Revenue, Pooled Program: | |||||||||||
Series A, 2.37%*, 9/1/2020, Fifth Third Bank (c) | 645,000 | 645,000 | |||||||||
Series C, 2.37%*, 9/1/2025, Fifth Third Bank (c) | 1,250,000 | 1,250,000 | |||||||||
1,895,000 | |||||||||||
Pennsylvania 4.9% | |||||||||||
Allegheny County, PA, Hospital Development Authority Revenue, UPMC Senior Living Corp., 2.28%*, 7/15/2028 | 2,075,000 | 2,075,000 | |||||||||
Latrobe, PA, Industrial Development Authority Revenue, Greensburg Diocese, 2.35%*, 6/1/2033, Allied Irish Bank PLC (c) | 2,310,000 | 2,310,000 | |||||||||
Lehigh County, PA, Industrial Development Authority, Pollution Control Revenue, 2.85%*, 6/1/2014, Rabobank Nederland (c) | 180,000 | 180,000 | |||||||||
Pennsylvania, PA, State Higher Educational Facilities Authority Revenue, Drexel University, Series B, 2.28%*, 5/1/2033, Allied Irish Bank PLC (c) | 50,000 | 50,000 | |||||||||
Pennsylvania, PA, State Higher Educational Facilities Authority Revenue, University Properties, Student Housing, Series A, 2.3%*, 8/1/2035, Citizens Bank of PA (c) | 2,765,000 | 2,765,000 | |||||||||
Pennsylvania, PA, State School District Revenue Lease, Public School Building Authority, Series A42, 144A, 1.8%*, 6/1/2028 (b) | 300,000 | 300,000 | |||||||||
7,680,000 | |||||||||||
South Carolina 1.5% | |||||||||||
South Carolina, Educational Facilities Authority for Private Nonprofit Institutions, Coker College, 2.34%*, 6/1/2019, Wachovia Bank NA (c) | 2,275,000 | 2,275,000 | |||||||||
Tennessee 2.1% | |||||||||||
Clarksville, TN, Public Building Authority Revenue, Pooled Financing, Municipal Bond Fund, 2.28%*, 7/1/2034, Bank of America NA (c) | 2,700,000 | 2,700,000 | |||||||||
Montgomery County, TN, Public Building Authority, Pooled Financing Revenue, Tennessee County Loan Pool, 2.28%*, 7/1/2034, Bank of America NA (c) | 500,000 | 500,000 | |||||||||
3,200,000 | |||||||||||
14 Investment Funds
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Principal | |||||||||||
Tax Free Money Fund Investment | Amount ($) | Value ($) | |||||||||
Texas 23.7% | |||||||||||
Arlington, TX, General Obligation, Series 760, 144A, 2.32%*, 2/15/2013 (b) | 3,000,000 | 3,000,000 | |||||||||
Austin, TX, Higher Education Authority Inc., University Revenue, Concordia University at Austin, 2.3%*, 4/1/2025, Wachovia Bank NA (c) | 2,200,000 | 2,200,000 | |||||||||
Corpus Christi, TX, Utility Systems Revenue, Series PT-1816, 144A, 2.33%*, 7/15/2010 (b) | 2,305,000 | 2,305,000 | |||||||||
Cypress-FairBanks, TX, Independent School District, Series PT-2512, 144A, 2.31%*, 2/15/2022 | 6,700,000 | 6,700,000 | |||||||||
Galena Park, TX, Independent School District, Series SG-153, 144A, 2.31%*, 8/15/2023 | 3,000,000 | 3,000,000 | |||||||||
Houston, TX, Tax & Revenue Anticipation Notes, 3.0%, 6/30/2005 | 1,800,000 | 1,800,000 | |||||||||
Houston, TX, Water & Sewer Systems Revenue, Star Certificates, Series 2003-14, 144A, 2.31%*, 6/1/2026 (b) | 495,000 | 495,000 | |||||||||
North Texas, North Dallas Thruway System Authority Revenue, Series 05-8, 144A, 2.57%*, 7/1/2012 (b) | 3,375,000 | 3,375,000 | |||||||||
Texas, A & M University Revenue, Series 945, 144A, 2.32%*, 5/15/2013 | 1,460,000 | 1,460,000 | |||||||||
Texas, Lower Colorado River Authority: | |||||||||||
2.5%, 8/5/2005 | 4,000,000 | 4,000,000 | |||||||||
2.78%, 8/4/2005 | 2,500,000 | 2,500,000 | |||||||||
Texas, Tax & Revenue Anticipation Notes, 3.0%, 8/31/2005 | 5,900,000 | 5,909,332 | |||||||||
36,744,332 | |||||||||||
Washington 2.3% | |||||||||||
Port Tacoma, WA, State General Obligation, Core City, Series R-4036, 144A, 2.32%*, 12/1/2025 (b) | 495,000 | 495,000 | |||||||||
Spokane, WA, Public Facilities District Hotel, Motel & Sales Use Tax, Series R-2041, 144A, 1.7%*, 12/1/2023 (b) | 3,150,000 | 3,150,000 | |||||||||
3,645,000 | |||||||||||
% of | ||||||||||
Net Assets | Value ($) | |||||||||
Total Investment Portfolio (Cost $160,790,909) (a) | 103.7 | 160,790,909 | ||||||||
Other Assets and Liabilities, Net | (3.7 | ) | (5,726,142 | ) | ||||||
Net Assets | 100.0 | 155,064,767 |
* | Variable Rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of June 30, 2005. | |
(a) | The cost for federal income tax purposes was $160,790,909. |
Investment Funds 15
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(b) | Bond is insured by one of these companies: |
As a % of Total | ||||
Insurance Coverage | Investment Portfolio | |||
Ambac Financial Group | 5.4 | |||
Financial Guaranty Insurance Company | 7.0 | |||
Financial Security Assurance Inc. | 8.7 | |||
MBIA Corporation | 6.8 | |||
(c) | Security incorporates a letter of credit or line of credit from a major bank. |
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
16 Investment Funds
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Financial Statements |
Statements of Assets and Liabilities as of June 30, 2005 (Unaudited) |
NY Tax Free | Tax Free | |||||||||
Money Fund | Money Fund | |||||||||
Assets | Investment | Investment | ||||||||
Investments in securities, at amortized cost | $ | 93,870,403 | $ | 160,790,909 | ||||||
Cash | 1,098 | — | ||||||||
Receivable for Investments sold | 70,250 | — | ||||||||
Interest receivable | 316,231 | 975,125 | ||||||||
Other assets | 13,001 | 16,254 | ||||||||
Total assets | 94,270,983 | 161,782,288 | ||||||||
Liabilities | ||||||||||
Due to custodian bank | — | 266,735 | ||||||||
Payable for investments purchased | 3,274,895 | 6,152,250 | ||||||||
Dividends payable | 87,451 | 170,911 | ||||||||
Administration and service fee payable | 44,129 | 79,594 | ||||||||
Other accrued expenses and payables | 43,504 | 48,031 | ||||||||
Total liabilities | 3,449,979 | 6,717,521 | ||||||||
Net assets, at value | $ | 90,821,004 | $ | 155,064,767 | ||||||
Net Assets | ||||||||||
Net assets consist of: | ||||||||||
Undistributed net investment income and distributions in excess of net investment income, respectively | 25,571 | (9 | ) | |||||||
Accumulated net realized gain (loss) | (604 | ) | 526 | |||||||
Paid-in capital | 90,796,037 | 155,064,250 | ||||||||
Net assets, at value | $ | 90,821,004 | $ | 155,064,767 | ||||||
Net Asset Value | ||||||||||
Net assets applicable to shares outstanding | $ | 90,821,004 | $ | 155,064,767 | ||||||
Shares outstanding, ($.001 par value per share, unlimited number of shares authorized) | 90,818,501 | 155,063,712 | ||||||||
Net Asset Value, offering and redemption price per share (net assets divided by shares outstanding) | $ | 1.00 | $ | 1.00 | ||||||
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Statements of Operations for the six months ended June 30, 2005 (Unaudited) |
NY Tax Free | Tax Free | |||||||||
Money | Money | |||||||||
Fund | Fund | |||||||||
Investment Income | Investment | Investment | ||||||||
Income: | ||||||||||
Interest | $ | 1,069,778 | $ | 1,719,791 | ||||||
Expenses: | ||||||||||
Administration and service fees | 294,765 | 462,222 | ||||||||
Advisory fee | 73,691 | 115,556 | ||||||||
Auditing | 17,889 | 18,514 | ||||||||
Legal | 21,218 | 17,323 | ||||||||
Trustees’ fees and expenses | 4,779 | 3,616 | ||||||||
Reports to shareholders | 6,575 | 11,388 | ||||||||
Registration fees | 9,732 | 10,666 | ||||||||
Other | 3,776 | 3,180 | ||||||||
Total expenses, before expense reductions | 432,425 | 642,465 | ||||||||
Expense reductions | (65,277 | ) | (66,193 | ) | ||||||
Total expenses, after expense reductions | 367,148 | 576,272 | ||||||||
Net investment income | 702,630 | 1,143,519 | ||||||||
Net realized gain (loss) on investment transactions | 7 | (2,053 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | $ | 702,637 | $ | 1,141,466 | ||||||
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Statement of Changes in Net Assets — NY Tax Free Money Fund Investment |
Six months | ||||||||||
ended June 30, | Year ended | |||||||||
2005 | December 31, | |||||||||
Increase (Decrease) in Net Assets | (Unaudited) | 2004 | ||||||||
Operations: | ||||||||||
Net investment income | $ | 702,630 | $ | 436,636 | ||||||
Net realized gain (loss) on investment transactions | 7 | 9,183 | ||||||||
Net increase (decrease) in net assets resulting from operations | 702,637 | 445,819 | ||||||||
Distributions to shareholders from: | ||||||||||
Net investment income | (702,636 | ) | (436,714 | ) | ||||||
Fund share transactions: | ||||||||||
Proceeds from shares sold | 127,321,859 | 477,073,897 | ||||||||
Reinvestment of distributions | 204,362 | 137,967 | ||||||||
Cost of shares redeemed | (146,915,519 | ) | (455,652,178 | ) | ||||||
Net increase (decrease) in net assets from Fund share transactions | (19,389,298 | ) | 21,559,686 | |||||||
Increase (decrease) in net assets | (19,389,297 | ) | 21,568,791 | |||||||
Net assets at beginning of period | 110,210,301 | 88,641,510 | ||||||||
Net assets at end of period (including undistributed net investment income of $25,571 and $25,577, respectively) | $ | 90,821,004 | $ | 110,210,301 | ||||||
Other Information | ||||||||||
Shares outstanding at beginning of period | 110,207,798 | 88,648,139 | ||||||||
Shares sold | 127,321,859 | 477,073,897 | ||||||||
Shares issued to shareholders in reinvestment of distributions | 204,362 | 137,967 | ||||||||
Shares redeemed | (146,915,518 | ) | (455,652,205 | ) | ||||||
Net increase (decrease) in Fund shares | (19,389,297 | ) | 21,559,659 | |||||||
Shares outstanding at end of period | 90,818,501 | 110,207,798 | ||||||||
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Statement of Changes in Net Assets — Tax Free Money Fund Investment |
Six months | ||||||||||
ended June 30, | Year ended | |||||||||
2005 | December 31, | |||||||||
Increase (Decrease) in Net Assets | (Unaudited) | 2004 | ||||||||
Operations: | ||||||||||
Net investment income | $ | 1,143,519 | $ | 690,126 | ||||||
Net realized gain (loss) on investment transactions | (2,053 | ) | 24,554 | |||||||
Net increase (decrease) in net assets resulting from operations | 1,141,466 | 714,680 | ||||||||
Distributions to shareholders from: | ||||||||||
Net investment income | (1,143,528 | ) | (690,126 | ) | ||||||
Fund share transactions: | ||||||||||
Proceeds from shares sold | 412,766,350 | 741,308,274 | ||||||||
Reinvestment of distributions | 237,078 | 165,273 | ||||||||
Cost of shares redeemed | (392,758,755 | ) | (774,896,049 | ) | ||||||
Net increase (decrease) in net assets from Fund share transactions | 20,244,673 | (33,422,502 | ) | |||||||
Increase (decrease) in net assets | 20,242,611 | (33,397,948 | ) | |||||||
Net assets at beginning of period | 134,822,156 | 168,220,104 | ||||||||
Net assets at end of period (including distributions in excess of net investment income of $9 at June 30, 2005) | $ | 155,064,767 | $ | 134,822,156 | ||||||
Other Information | ||||||||||
Shares outstanding at beginning of period | 134,819,039 | 168,241,303 | ||||||||
Shares sold | 412,766,350 | 741,308,274 | ||||||||
Shares issued to shareholders in reinvestment of distributions | 237,078 | 165,273 | ||||||||
Shares redeemed | (392,758,755 | ) | (774,895,811 | ) | ||||||
Net increase (decrease) in Fund shares | 20,244,673 | (33,422,264 | ) | |||||||
Shares outstanding at end of period | 155,063,712 | 134,819,039 | ||||||||
20 Investment Funds
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Financial Highlights |
NY Tax Free Money Fund Investment
Years Ended December 31, | 2005a | 2004 | 2003 | 2002 | 2001b | 2000b | |||||||||||||||||||||
Selected Per Share Data | |||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income | .007 | .005 | .003 | .006 | .02 | .03 | |||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactionsc | — | — | — | — | — | — | |||||||||||||||||||||
Total from investment operations | .007 | .005 | .003 | .006 | .02 | .03 | |||||||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||||
Net investment income | (.007 | ) | (.005 | ) | (.003 | ) | (.006 | ) | (.02 | ) | (.03 | ) | |||||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return (%)d | .73 | ** | .47 | .32 | .65 | 1.89 | 3.23 | ||||||||||||||||||||
Ratios to Average Net Assets and Supplemental Data | |||||||||||||||||||||||||||
Net assets, end of period ($ millions) | 91 | 110 | 89 | 113 | 110 | 86 | |||||||||||||||||||||
Ratio of expenses before expense reductions (%) | .88 | * | .88 | .83 | .82 | .80e | .86e | ||||||||||||||||||||
Ratio of expenses after expense reductions (%) | .75 | * | .75 | .75 | .75 | .75e | .75e | ||||||||||||||||||||
Ratio of net investment income (%) | 1.43 | * | .49 | .33 | .65 | 1.86 | 3.19 | ||||||||||||||||||||
a | For the six months ended June 30, 2005 (Unaudited). | |
b | The Financial Highlights prior to April 27, 2001 include the Fund’s information as a feeder fund to the NY Tax Free Money Portfolio for the respective periods. | |
c | Amount is less than $.0005 per share. | |
d | Total return would have been lower had certain expenses not been reduced. | |
e | Includes expenses of the NY Tax Free Money Portfolio. | |
* | Annualized | |
** | Not annualized |
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Financial Highlights |
Tax Free Money Fund Investment
Years Ended December 31, | 2005a | 2004 | 2003 | 2002 | 2001b | 2000b | |||||||||||||||||||||
Selected Per Share Data | |||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from investment operations: | |||||||||||||||||||||||||||
Net investment income | .007 | .005 | .003 | .007 | .02 | .03 | |||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactionsc | — | — | — | — | — | — | |||||||||||||||||||||
Total from investment operations | .007 | .005 | .003 | .007 | .02 | .03 | |||||||||||||||||||||
Less distributions from: | |||||||||||||||||||||||||||
Net investment income | (.007 | ) | (.005 | ) | (.003 | ) | (.007 | ) | (.02 | ) | (.03 | ) | |||||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return (%)d | .73 | ** | .49 | .33 | .72 | 2.08 | 3.35 | ||||||||||||||||||||
Ratios to Average Net Assets and Supplemental Data | |||||||||||||||||||||||||||
Net assets, end of period ($ millions) | 155 | 135 | 168 | 166 | 164 | 222 | |||||||||||||||||||||
Ratio of expenses before expense reductions (%) | .83 | * | .84 | .80 | .80 | .79 | e | .82 | e | ||||||||||||||||||
Ratio of expenses after expense reductions (%) | .75 | * | .75 | .75 | .75 | .75 | e | .75 | e | ||||||||||||||||||
Ratio of net investment income (loss) (%) | 1.48 | * | .46 | .32 | .72 | 2.11 | 3.30 | ||||||||||||||||||||
a | For the six months ended June 30, 2005 (Unaudited). | |
b | The Financial Highlights prior to April 27, 2001 include the Fund’s information as a feeder fund to the Tax Free Money Portfolio for the respective periods. | |
c | Amount is less than $.005 per share. | |
d | Total return would have been lower had certain expenses not been reduced. | |
e | Includes expenses of the Tax Free Money Portfolio. | |
* | Annualized | |
** | Not annualized |
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Notes to Financial Statements |
Note 1—Organization and Significant Accounting Policies
A. Organization
Scudder Advisor Funds (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end, diversified management investment company organized as a Massachusetts business trust. NY Tax Free Money Fund Investment and Tax Free Money Fund Investment (each a “Fund,” and collectively, the “Funds”) are two of the funds the Trust offers to investors.
Each 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 Funds in the preparation of their financial statements.
B. Security Valuation
Portfolio securities are valued utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium.
C. Federal Income Taxes
Each Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable and tax-exempt income to its shareholders. Accordingly, the Funds paid no federal income taxes and no federal income tax provisions were required.
D. Distributions of Income
The net investment income of each Fund is declared as a daily dividend and is distributed to shareholders monthly.
Permanent book and tax differences relating to shareholder distributions will result in reclassifications to paid-in capital. Temporary book and tax differences will reverse in a subsequent period. There were no significant book to tax differences for the Funds.
The tax character of current year distributions, if any, will be determined at the end of current fiscal year.
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E. Contingencies
In the normal course of business, the Funds may enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet been made. However, based on experience, the Funds expect the risk of loss to be remote.
F. Other
Investment transactions are accounted for on a trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All discounts and premiums are accreted/amortized for both tax and financial reporting purposes. Expenses directly attributed to a fund are charged to that fund, while expenses which are attributed to the Trust are allocated among the funds in the Trust on the basis of relative net assets.
Note 2—Fees and Transactions with Affiliates
Deutsche Asset Management, Inc. (“DeAM, Inc.” or the “Advisor”) is the Advisor for each Fund and Investment Company Capital Corp. (“ICCC” or the “Administrator”) is the Administrator for each Fund, both an indirect, wholly owned subsidiary of Deutsche Bank AG. Under the Advisory Agreement, each Fund pays the Advisor an annual fee based on its average daily net assets which is calculated daily and paid monthly at the annual rate of 0.15%.
For the six months ended June 30, 2005, the Advisor and Administrator contractually agreed to waive their fees and/or reimburse expenses of each Fund, to the extent necessary, to limit expenses to 0.75% of the average daily net assets of each Fund. Accordingly, for the six months ended June 30, 2005 each Fund did not impose a portion of its Advisory fee as follows:
Advisory | Amount | Annualized | ||||||||||||
Fee | Waived | Effective Rate | ||||||||||||
NY Tax Free Money Fund Investment | $ | 73,691 | $ | 63,970 | 0.02% | |||||||||
Tax Free Money Fund Investment | $ | 115,556 | $ | 64,688 | 0.07% | |||||||||
ICCC serves as Administrator and receives a fee based on each Fund’s average daily net assets which is calculated daily and paid monthly at the annualized rate of 0.60%.
Typesetting and Filing Service Fees. Under an agreement with Deutsche Investment Management Americas Inc. “DeIM”), an indirect, wholly owned subsidiary of Deutsche Bank AG, DeIM is compensated for providing typesetting
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and regulatory filing services to the Funds. For the six months ended June 30, 2005, the amount charged to each Fund by DeIM included in the reports to shareholders are as follows:
Total | Unpaid at | |||||||||
Aggregated | June 30, 2005 | |||||||||
NY Tax Free Money Fund Investment | $ | 7,560 | $ | 2,640 | ||||||
Tax Free Money Fund Investment | $ | 7,560 | $ | 2,640 | ||||||
Trustees’ Fees and Expenses. As compensation for his or her services, each Independent Trustee receives an aggregate annual fee, plus a fee for each meeting attended (plus reimbursement for reasonable out-of-pocket expenses incurred in connection with his or her attendance at board and committee meetings) from each Fund in the Fund Complex for which he or she serves. In addition, the Chairman of the Fund Complex’s Audit Committee receives an annual fee for his services. Payment of such fees and expenses is allocated among all such Funds described above in direct proportion to their relative net assets.
Note 3—Expense Reductions
For the six months ended June 30, 2005, the Advisor agreed to reimburse NY Tax Free Money Fund $1,307 and Tax Free Money Fund Investment $1,505, which represents a portion of the fee savings expected to be realized by the Advisor related to the outsourcing by the Advisor of certain administrative services to an unaffiliated service provider.
Note 4—Concentration of Ownership
From time to time each Fund may have a concentration of several shareholders holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on each Fund.
For the six months ended June 30, 2005, there was one shareholder who held approximately 14% of the outstanding shares of Tax Free Money Fund Investment.
Note 5—Line of Credit Agreement
The Funds and several other affiliated funds (the “Participants”) share in a $1.1 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, based upon net assets,
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among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. Each Fund may borrow up to a maximum of 5 percent of its net assets under this agreement.
Note 6—Regulatory Matters and Litigation
Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations (“inquiries”) into the mutual fund industry, and have requested information from numerous mutual fund companies, including Scudder Investments. It is not possible to determine what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the Scudder funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain Scudder funds, the funds’ investment advisors and their affiliates, certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each Scudder fund’s investment advisor has agreed to indemnify the applicable Scudder funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. Based on currently available information, the funds’ investment advisors believe the likelihood that the pending lawsuits will have a material adverse financial impact on a Scudder fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the Scudder funds.
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Account Management Resources |
Automated Information Lines | Institutional Investor Services (800) 730-1313 Personalized account information, information on other DeAm funds and services via touchtone telephone and the ability to exchange or redeem shares. | |||||
For More Information | (800) 730-1313, option 1 To speak with a fund service representative. | |||||
Written Correspondence | Deutsche Asset Management PO Box 219210 Kansas City, MO 64121-9210 | |||||
Proxy Voting | A description of the fund’s policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 is available on our Web site — scudder.com (type ‘proxy voting‘ in the search field) — or on the SEC’s Web site — www.sec.gov. To obtain a written copy of the fund’s policies and procedures without charge, upon request, call us toll free at (800) 621-1048. | |||||
Principal Underwriter | If you have questions, comments or complaints, contact: Scudder Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 (800) 621-1148 | |||||
NY Tax Free Money Fund Investment | Tax Free Money Fund Investment | |||||
Nasdaq Symbol | BNYXX | BTXXX | ||||
CUSIP Number | 81111R 304 | 81111R 205 | ||||
Fund Number | 844 | 839 | ||||
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Privacy Statement |
This privacy statement is issued by Deutsche Investment Management Americas Inc., Deutsche Asset Management, Inc., Scudder Distributors, Inc., Scudder Investor Services, Inc., Scudder Trust Company and Deutsche Asset Management mutual funds.
We never sell customer lists or individual client information. We consider privacy fundamental to our client relationships and adhere to the policies and practices described below to protect current and former clients’ information. Internal policies are in place to protect confidentiality, while allowing client needs to be served. Only individuals who need to do so in carrying out their job responsibilities may access client information. We maintain physical, electronic and procedural safeguards that comply with federal and state standards to protect confidentiality. These safeguards extend to all forms of interaction with us, including the Internet.
In the normal course of business, clients give us nonpublic personal information on applications and other forms, on our websites, and through transactions with us or our affiliates. Examples of the nonpublic personal information collected are name, address, Social Security number and transaction and balance information. To be able to serve our clients, certain of this client information is shared with affiliated and nonaffiliated third party service providers such as transfer agents, custodians, and broker-dealers to assist us in processing transactions and servicing your account with us. In addition, we may disclose all of the information we collect to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements. The organizations described above that receive client information may only use it for the purpose designated by the Scudder Companies listed above.
We may also disclose nonpublic personal information about you to other parties as required or permitted by law. For example, we are required or we may provide information to government entities or regulatory bodies in response to requests for information or subpoenas, to private litigants in certain circumstances, to law enforcement authorities, or any time we believe it necessary to protect the firm.
Questions on this policy may be sent to:
Deutsche Asset Management
September 2004
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NTXMFREESA
ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not Applicable ITEM 6. SCHEDULE OF INVESTMENTS Not Applicable ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS Not Applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Nominating and Governance Committee evaluates and nominates Board member candidates. Fund shareholders may also submit nominees that will be considered by the Committee when a Board vacancy occurs. Submissions should be mailed to the attention of the Secretary of the Fund, One South Street, Baltimore, MD 21202. ITEM 11. CONTROLS AND PROCEDURES. (a) The Chief Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. (b) There have been no changes in the registrant's internal control over financial reporting that occurred during the registrant's last half-year (the registrant's second fiscal half-year in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal controls over financial reporting. ITEM 12. EXHIBITS. (a)(1) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.Form N-CSR Item F SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Registrant: NY Tax Free Money Fund Investment and Tax Free Money Fund Investment, a series of Scudder Advisor Funds By: /s/ Julian Sluyters --------------------------- Julian Sluyters Chief Executive Officer Date: August 26, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Registrant: NY Tax Free Money Fund Investment and Tax Free Money Fund Investment, a series of Scudder Advisor Funds By: /s/ Julian Sluyters --------------------------- Julian Sluyters Chief Executive Officer Date: August 26, 2005 By: /s/ Paul Schubert --------------------------- Paul Schubert Chief Financial Officer Date: August 26, 2005