UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSRS
Investment Company Act file number 811-5385
SCUDDER VALUE SERIES, INC.
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(Exact Name of Registrant as Specified in Charter)
222 South Riverside Plaza, Chicago, IL 60606
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 295-2663
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Salvatore Schiavone
Two International Place
Boston, Massachusetts 02110
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(Name and Address of Agent for Service)
Date of fiscal year end: 11/30
Date of reporting period: 5/31/2004
ITEM 1. REPORT TO STOCKHOLDERS
[Scudder Investments logo]
Scudder-Dreman Small Cap Value Fund
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| |
| Semiannual Report to Shareholders |
| May 31, 2004 |
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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 fund's objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the fund. Please read the prospectus carefully before you invest.
Investments in mutual funds involve risk. Some funds have more risk than others. This fund is subject to stock market risk. Stocks of small companies involve greater risk, as they often have limited product lines, markets or financial resources and may be exposed to more erratic and abrupt market movements than securities of larger, more-established companies. The fund may focus its investments on certain economic sectors, thereby increasing its vulnerability to any single economic, political or regulatory development. This may result in greater share price volatility. Please read this fund's prospectus for specific details regarding its investments and risk profile.
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 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.
Performance Summary May 31, 2004 |
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All performance shown is historical, assumes reinvestment of all dividends and capital gains, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Please visit scudder.com for the product's most recent month-end performance.
The maximum sales charge for Class A shares is 5.75%. For Class B shares, the maximum contingent deferred sales charge (CDSC) is 4% within the first year after purchase, declining to 0% after six years. Class C shares have no adjustments for front-end sales charges but redemptions within one year of purchase may be subject to a CDSC of 1%. Unadjusted returns do not reflect sales charges and would have been lower if they had. Class I, Class R, and Institutional Class shares are not subject to sales charges.
Returns and rankings during the 3-year, 5-year and 10-year periods shown reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns and rankings would have been lower.
Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns and rankings may differ by share class.
Returns shown for Class B and C shares for the periods prior to their inception on September 11, 1995 and for Class R shares prior to October 1, 2003 are derived from the historical performance of Class A shares of the Scudder-Dreman Small Cap Value Fund during such periods and have been adjusted to reflect the higher gross total annual operating expenses of each specific class. Any differences in expenses will affect performance.
Average Annual Total Returns (Unadjusted for Sales Charge) as of 5/31/04 |
Scudder-Dreman Small Cap Value Fund | 6-Month++ | 1-Year | 3-Year | 5-Year | 10-Year |
Class A
| 9.05% | 32.61% | 11.36% | 7.64% | 11.05% |
Class B
| 8.50% | 31.46% | 10.44% | 6.76% | 10.13% |
Class C
| 8.65% | 31.63% | 10.51% | 6.88% | 10.22% |
Class R
| 9.09% | 32.41% | 10.96% | 7.21% | 10.57% |
Russell 2000 Index+
| 4.53%
| 30.29%
| 5.98%
| 6.70%
| 10.09%
|
Russell 2000 Value Index++
| 6.32%
| 30.81%
| 11.78%
| 12.51%
| 13.05%
|
Scudder-Dreman Small Cap Value Fund | 6-Month++ | 1-Year | 3-Year | 5-Year | Life of Class* |
Class I
| 9.14% | 33.03% | 11.94% | 8.27% | 10.22% |
Russell 2000 Index+
| 4.53%
| 30.29%
| 5.98%
| 6.70%
| 9.32%
|
Russell 2000 Value Index++
| 6.32%
| 30.81%
| 11.78%
| 12.51%
| 13.37%
|
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
++ Total returns shown for periods less than one year are not annualized.* Class I commenced operations on November 1, 1995. Index returns begin October 31, 1995.Average Annual Total Returns (Unadjusted for Sales Charge) as of 5/31/04 |
Scudder-Dreman Small Cap Value Fund | 6-Month++ | 1-Year | Life of Class** |
Institutional Class
| 9.26% | 33.14% | 21.44% |
Russell 2000 Index+
| 4.53%
| 30.29%
| 25.42%
|
Russell 2000 Value Index++
| 6.32%
| 30.81%
| 24.14%
|
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
++ Total returns shown for periods less than one year are not annualized.** Institutional Class commenced operations on August 19, 2002. Index returns begin August 31, 2002.Net Asset Value and Distribution Information |
| Class A | Class B | Class C | Class I | Class R | Institutional Class |
Net Asset Value:
5/31/04
| $ 27.38 | $ 25.78 | $ 26.01 | $ 28.49 | $ 27.55 | $ 27.42 |
11/30/03
| $ 25.27 | $ 23.76 | $ 23.94 | $ 26.39 | $ 25.26 | $ 25.31 |
Distribution Information:
Six Months:
Income Dividends as of 5/31/04 | $ .17 | $ - | $ - | $ .29 | $ .01 | $ .22 |
Class A Lipper Rankings - Small-Cap Core Funds Category as of 5/31/04 |
Period | Rank | | Number of Funds Tracked | Percentile Ranking |
1-Year
| 152 | of | 533 | 29 |
3-Year
| 72 | of | 422 | 18 |
5-Year
| 224 | of | 303 | 74 |
10-Year
| 55 | of | 87 | 63 |
Source: Lipper Inc. 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, rankings might have been less favorable. Rankings are for Class A shares; other share classes may vary.
Growth of an Assumed $10,000 Investment (Adjusted for Maximum Sales Charge) |
[] Scudder-Dreman Small Cap Value Fund - Class A [] Russell 2000 Index+
[] Russell 2000 Value Index++
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 |
Yearly periods ended May 31 |
The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.75%. This results in a net investment of $9,425. The growth of $10,000 is cumulative.
Comparative Results (Adjusted for Maximum Sales Charge) as of 5/31/04 |
Scudder-Dreman Small Cap Value Fund | 1-Year | 3-Year | 5-Year | 10-Year |
Class A | Growth of $10,000
| $12,498 | $13,017 | $13,622 | $26,894 |
Average annual total return
| 24.98% | 9.19% | 6.38% | 10.40% |
Class B | Growth of $10,000
| $12,846 | $13,269 | $13,768 | $26,236 |
Average annual total return
| 28.46% | 9.89% | 6.60% | 10.13% |
Class C | Growth of $10,000
| $13,163 | $13,498 | $13,946 | $26,472 |
Average annual total return
| 31.63% | 10.51% | 6.88% | 10.22% |
Class R | Growth of $10,000
| $13,241 | $13,662 | $14,162 | $27,311 |
Average annual total return
| 32.41% | 10.96% | 7.21% | 10.57% |
Russell 2000 Index+
| Growth of $10,000
| $13,029 | $11,903 | $13,827 | $26,160 |
Average annual total return
| 30.29% | 5.98% | 6.70% | 10.09% |
Russell 2000 Value Index++
| Growth of $10,000
| $13,081 | $13,966 | $18,027 | $34,104 |
Average annual total return
| 30.81% | 11.78% | 12.51% | 13.05% |
The growth of $10,000 is cumulative.
Comparative Results as of 5/31/04 |
Scudder-Dreman Small Cap Value Fund | 1-Year | 3-Year | 5-Year | Life of Class* |
Class I | Growth of $10,000
| $13,303 | $14,027 | $14,880 | $23,020 |
Average annual total return
| 33.03% | 11.94% | 8.27% | 10.22% |
Russell 2000 Index+
| Growth of $10,000
| $13,029 | $11,903 | $13,827 | $21,479 |
Average annual total return
| 30.29% | 5.98% | 6.70% | 9.32% |
Russell 2000 Value Index++
| Growth of $10,000
| $13,081 | $13,966 | $18,027 | $29,370 |
Average annual total return
| 30.81% | 11.78% | 12.51% | 13.37% |
The growth of $10,000 is cumulative.
Scudder-Dreman Small Cap Value Fund | 1-Year | Life of Class** |
Institutional Class | Growth of $250,000
| $332,850 | $352,875 |
Average annual total return
| 33.14% | 21.44% |
Russell 2000 Index+
| Growth of $250,000
| $325,725 | $371,625 |
Average annual total return
| 30.29% | 25.42% |
Russell 2000 Value Index++
| Growth of $250,000
| $327,025 | $364,975 |
Average annual total return
| 30.81% | 24.14% |
The growth of $250,000 is cumulative.
The minimum initial investment for Institutional Class Shares is $250,000.
* Class I commenced operations on November 1, 1995. Index returns begin October 31, 1995.** Institutional Class commenced operations on August 19, 2002. Index returns begin August 31, 2002.+ The Russell 2000 Index is an unmanaged capitalization-weighted measure of approximately 2,000 small US stocks.++ The Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. 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.Portfolio Management Review |
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In the following interview, Co-Lead Portfolio Managers David N. Dreman and Nelson Woodard address the economy, the management team's approach and the resulting performance of Scudder-Dreman Small Cap Value Fund for the six months ended May 31, 2004.
Q: Will you provide an overview of market conditions during the period?
A: The fund continued to benefit from a trend that has favored small-cap and value stocks for the majority of the last three to four years. During the semiannual period, an economic recovery of uncertain strength, rising interest rates and global unrest brought about a market turnaround that also proved positive for the fund.
On the leading edge of economic recovery, investors had favored high-risk, low- or negative-earnings stocks - typically, the kinds of stocks the fund does not own. While most experts agreed that the economy was rebounding, its longer-term strength was widely debated during the period. Seeking greater value and higher quality, investors shifted into stocks with lower price-to-earnings ratios (P/E) and higher returns on equity (ROE).1 Because these are among the fundamental attributes we seek in the stocks in which the fund invests, the move helped support portfolio holdings.
1 P/E is equal to a stock's market capitalization divided by its after-tax earnings over the most recent 12-month period. ROE, generally, is a measure of how well a company used reinvested earnings to generate additional earnings.Q: How did the fund perform during the semiannual period?
A: Scudder-Dreman Small Cap Value Fund Class A shares (unadjusted for sales charges, which, if included, would have reduced total returns) advanced 9.05% during the six months ended May 31, 2004. (Please see pages 4 through 7 for performance of other share classes and more complete performance information.) The fund far outpaced the 6.32% return of its benchmark, the Russell 2000 Value Index.2
2 The Russell 2000 Value Index is an unmanaged index that measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.We are especially gratified by the fund's performance relative to its benchmark. We believe the fund's outperformance of the Russell 2000 Value Index was due to strict adherence to our contrarian investment discipline. Our "bottom-up" approach to stock picking, which focuses on the fundamental attributes of individual companies, resulted in our including a number of stocks that outperformed during the period. Both asset allocation and stock selection proved advantageous.
Q: Will you describe the "contrarian" philosophy that informs your investment management decisions?
A: The classic contrarian value investing philosophy is based on our contention that consensus opinion, especially when it comes to investing, is often wrong. We seek companies that we believe are financially sound and that have, for one reason or another, fallen out of favor with the investing public. We look for stocks that are trading below what we believe are their intrinsic values, with prices that are low relative to their earnings (P/E, the most common measure of how expensive a stock is), book value (P/B) and cash flow (P/CF).3 Typically, these types of companies provide potential for above-market returns over time.
3 P/E is equal to a stock's market capitalization divided by its after-tax earnings over the most recent 12-month period. P/B is equal to a stock's market capitalization divided by its book value. (This ratio compares the market's valuation of a company with the value of that company as indicated on its financial statements.) P/CF is equal to a stock's capitalization divided by its cash flow for the latest fiscal year.We base our stock selection solely on fundamental, "bottom-up" analysis, a process of evaluation that takes into account the individual merits of each stock. Therefore, we do not choose stocks based on industry sector or the macroeconomic environment. Industry sector weightings are a residual of individual stock selection.
Q: Which strategies or individual stocks contributed most to performance?
A: It's hard to point to a single stock that drove performance. Rather, fund returns were driven primarily by asset allocation, which, as mentioned previously, is a residual of our bottom-up stock selection. The bulk of the gains was derived from holdings in energy - the fund's heaviest overweight (proportionately larger) position relative to the benchmark index - and technology, which was the fund's most significant underweight (proportionately smaller) position. Stock selection in utilities also contributed.
• The portfolio's energy stake was markedly greater than that of the benchmark index for the last six months. The position's size was predicated on our correct assumption that gas prices would rise. Natural gas remains in short supply in North America, while demand continues to grow. Unlike oil, gas is difficult to ship. Further exploration, therefore, is needed to find new domestic resources. Therefore, our strategy was to concentrate on exploration and production companies with natural gas exposure. Stock selection aided performance. The portfolio's top-performing energy stocks were Ultra Petroleum Corp. and Tesoro Petroleum Corp.
Ultra Petroleum, the portfolio's third-largest holding overall, is an independent company engaged in the acquisition, exploration, operation and production of oil and gas properties. The stock rose significantly after a major discovery of natural gas on the company's Wyoming property attracted attention. We believe the stock has tremendous upside potential from here, based on the value of the gas that is thought to be in the ground. Further, the company is considered a likely takeover candidate, as many major oil and gas companies have had difficulty finding new sources. While we expect natural gas prices to remain at elevated levels, we pared back the fund's holdings in Ultra Petroleum during the period to lock in profits for shareholders.
Tesoro, an independent refiner and marketer of petroleum products, was among the fund's best performers and is an excellent example of the contrarian investment philosophy in practice. We originally purchased this stock in the summer of 2002. The stock price fell soon after due to temporary weakness in refining margins and concerns over leverage that the company took on to fund an acquisition. While others abandoned the stock, we added to the fund's position because we were convinced of the company's fundamental strength. The stock was up powerfully during the period, due to increasing demand for gasoline and the limited capacity of US refineries. Since the 1980s, the number of refineries has been reduced by approximately half. Many older plants have been closed due to inefficiency and noncompliance with newer laws regarding pollutants. As a result, there is no excess capacity in US refineries, which has been positive for companies, such as Tesoro, that still are in existence. Because of the stock's robust gains, we took the opportunity to reduce the fund's position in Tesoro on the strength of its stock price.
• Reliant Resources, Inc., an independent power producer, led the fund's utility stocks to robust gains during the period. In 2002, Reliant was brought to the brink of bankruptcy, hit hard by fallout from the Enron scandal, the collapse of energy trading and serious short-term liquidity issues. Adept management, along with the resolution of issues relating to liquidity, helped save the company, which has rebounded strongly. The fund's position in the stock has grown substantially, primarily through appreciation over time. While we continue to be convinced of the company's future earnings growth potential, we have pared back the fund's position to take profits for shareholders. Also, because its market capitalization grew from the small-cap to the mid-cap stock range in the period, we expect to reduce the portfolio's stake in the company still further as we go forward. It's always difficult to walk away from what we believe is huge upside potential. Nevertheless, the constraints of small-cap investing often require it. When a company's market cap grows beyond a certain point, it ceases to fit the fund's small-cap criteria. Reliant Resources has been a powerful contributor to the fund's performance. We are indeed reluctant to let this one go.
Q: Were there strategies or individual stocks that disappointed?
A: Other than technology, no other sector of the Russell 2000 Value Index lost ground, which speaks to the strength of small-cap stocks throughout the period.
Based on our concerns about the ultimate longevity and strength of the economic recovery, coupled with concerns that high levels of debt would force consumers to rein in spending, we chose to underweight the materials and consumer discretionary segments of the market. This choice proved disappointing as those areas - particularly the materials sector - within the Russell 2000 Value posted strong gains.
The performance of materials stocks - for example, metals and mining companies that trade like commodities - - is closely tied to the health of the economy. The consistency of earnings of materials stocks can be volatile. We felt more comfortable focusing the fund's commodity-type investments in energy stocks - the dynamics of which we understand much better. Our underweight and selection of stocks within the materials sector caused the fund to lose significant ground against the benchmark. We've added to our materials position somewhat as we've found opportunities that meet our investment discipline. However, we don't anticipate adding significantly in this area to create a position closely aligned with the benchmark.
The fund's underweight in consumer discretionary stocks also caused us to lose ground to the benchmark, but it was much less detrimental overall. Strong stock selection within the sector helped mitigate relative losses. As with the materials sector, we'll continue to look for opportunities in this area that meet our investment criteria. However, we won't arbitrarily increase the fund's position in these stocks just to mimic the benchmark's position. We remain committed to our bottom-up approach to stock selection.
Q: How did financial services stocks which, as the fund's largest position, account for nearly one-third of the fund's total assets, perform amid rising interest rates?
A: The fund's financial services holdings advanced and as a group outperformed the financial sector of the Russell 2000 Value Index. Select real estate investment trusts performed exceedingly well, including the fund's largest holding, Newcastle Investment Corp. More vulnerable to rising interest rates than their larger, more diversified counterparts, however, small banks and savings & loans lagged. These comprise just under half of the fund's financial holdings.
Because we believe that today's historically low short-term interest rates are likely to rise, we are in the process of shifting assets away from banks with significant home mortgage loan exposure into those that draw a greater portion of earnings from commercial ventures. Commercial banks typically benefit from increased loan demand as businesses expand along with economic growth.
Q: Do you have any closing comments for shareholders?
A: Despite the dominant performance of small-cap stocks over the past several years, we are still finding tremendous value and interesting new ideas within the small-cap universe. We believe the fund is positioned to perform well in almost any market environment, other than one led by technology.
Nonetheless, rising interest rates underscore the need to balance risk and return potential. As always, we are thankful for our shareholders' continued support and look forward to serving their needs in the future.
The views expressed in this report reflect those of the portfolio managers only through the end of the period of the report as stated on the cover. The 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 May 31, 2004 |
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Asset Allocation | 5/31/04 | 11/30/03 |
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Equity Securities
| 95%
| 96%
|
Corporate Bonds
| 1%
| -
|
Cash Equivalents
| 4%
| 4%
|
| 100%
| 100%
|
Sector Diversification (Excludes Cash Equivalents) | 5/31/04 | 11/30/03 |
|
Financials
| 32%
| 37%
|
Industrials
| 17%
| 18%
|
Energy
| 10%
| 8%
|
Consumer Discretionary
| 10%
| 13%
|
Health Care
| 9%
| 8%
|
Utilities
| 7%
| 5%
|
Consumer Staples
| 6%
| 7%
|
Materials
| 5%
| 1%
|
Information Technology
| 4%
| 3%
|
| 100%
| 100%
|
Asset allocation and sector diversification are subject to change.
Ten Largest Equity Holdings at May 31, 2004 (14.7% of Portfolio) |
1. Newcastle Investment Corp. (REIT)
Operator of a real estate investment trust company
| 2.0% |
2. Reliant Resources, Inc.
Provider of electricity and energy services
| 1.8% |
3. Ultra Petroleum Corp.
Producer and explorer of natural gas
| 1.6% |
4. Delta Petroleum Corp.
Acquires, explores, develops and produces oil and gas properties
| 1.5% |
5. Precision Castparts Corp.
Manufacturer of complex metal components and products
| 1.4% |
6. Scottish Re Group Ltd.
Provider of customized variable life insurance products
| 1.3% |
7. Triad Hospitals, Inc.
Provider of health care services through its ambulatory surgery centers
| 1.3% |
8. Penn Virginia Corp.
Owner of coal reserves, developer and producer of crude oil and natural gas
| 1.3% |
9. Mettler-Toledo International, Inc.
Supplier of related analytical and measurement technologies
| 1.3% |
10. Moog, Inc. "A"
Manufacturer of precision control components and systems
| 1.2% |
Portfolio holdings are subject to change.For more complete details about the Fund's investment portfolio, see page 17. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end is available upon request on the 16th of the following month. Please see the Account Management Resources section for contact information.
Investment Portfolio as of May 31, 2004 (Unaudited) | |
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| Shares | Value ($) |
|
|
Common Stocks 93.2% |
Consumer Discretionary 8.7%
|
Auto Components 0.3%
|
Noble International Ltd.
| 72,500
| 2,091,625 |
Automobiles 1.0%
|
Fleetwood Enterprises, Inc.*
| 438,900
| 5,881,260 |
Hotels Restaurants & Leisure 1.8%
|
Bluegreen Corp.*
| 304,900
| 3,652,702
|
CBRL Group, Inc.
| 94,500
| 3,047,625
|
Isle of Capri Casinos, Inc.*
| 83,600
| 1,620,168
|
Navigant International, Inc.*
| 171,800
| 2,985,884
|
| 11,306,379 |
Household Durables 0.8%
|
Meritage Corp.*
| 26,100
| 1,779,759
|
Standard Pacific Corp.
| 61,200
| 3,118,140
|
| 4,897,899 |
Media 0.4%
|
Catalina Marketing Corp.*
| 158,700
| 2,680,443 |
Specialty Retail 3.6%
|
AnnTaylor Stores Corp.*
| 116,250
| 3,291,037
|
Borders Group, Inc.
| 189,100
| 4,317,153
|
Dress Barn, Inc.*
| 155,800
| 2,728,058
|
Linens 'N Things, Inc.*
| 139,400
| 4,233,578
|
Mettler-Toledo International, Inc.*
| 171,000
| 7,930,980
|
| 22,500,806 |
Textiles, Apparel & Luxury Goods 0.8%
|
Phillips-Van Heusen Corp.
| 257,564
| 4,875,687 |
Consumer Staples 5.3%
|
Food Products 2.4%
|
Chiquita Brands International, Inc.*
| 229,000
| 4,012,080
|
J & J Snack Foods Corp.*
| 101,000
| 4,015,760
|
Ralcorp Holdings, Inc.*
| 199,000
| 6,636,650
|
| 14,664,490 |
Personal Products 1.2%
|
Helen of Troy Ltd.*
| 225,200
| 7,528,436 |
Tobacco 1.7%
|
Universal Corp.
| 109,700
| 5,162,482
|
Vector Group Ltd.
| 343,339
| 5,459,090
|
| 10,621,572 |
Energy 9.7%
|
Energy Equipment & Services 1.3%
|
Matrix Service Co.*
| 231,200
| 2,469,216
|
Oil States International, Inc.*
| 300,700
| 4,269,940
|
Unit Corp.*
| 61,000
| 1,737,890
|
| 8,477,046 |
Oil & Gas 8.4%
|
Chesapeake Energy Corp.
| 255,700
| 3,375,240
|
Comstock Resources, Inc.*
| 219,200
| 4,123,152
|
Delta Petroleum Corp.*
| 693,500
| 9,265,160
|
Energy Partners Ltd.*
| 148,300
| 1,967,941
|
Frontier Oil Corp.
| 150,100
| 2,967,477
|
Global Industries, Inc.*
| 120,500
| 655,520
|
Magnum Hunter Resources, Inc.*
| 206,500
| 2,079,455
|
Penn Virginia Corp.
| 130,300
| 8,117,690
|
Remington Oil & Gas Corp.*
| 161,500
| 3,349,510
|
Tesoro Petroleum Corp.*
| 270,300
| 6,438,546
|
Ultra Petroleum Corp.*
| 326,100
| 9,994,965
|
| 52,334,656 |
Financials 30.4%
|
Banks 14.9%
|
BankAtlantic Bancorp., Inc. "A"
| 190,300
| 3,044,800
|
BOK Financial Corp.*
| 68,329
| 2,613,591
|
Capital Bancorp., Ltd.
| 63,600
| 1,603,992
|
Center Financial Corp.
| 178,000
| 2,625,500
|
Colonial BancGroup, Inc.
| 208,900
| 3,756,022
|
Community First Bankshares, Inc.
| 56,100
| 1,800,810
|
First Federal Capital Corp.
| 176,100
| 4,779,354
|
First Federal Financial Corp.*
| 129,100
| 5,330,539
|
First Niagara Financial Group
| 203,900
| 2,538,555
|
Fulton Financial Corp.
| 214,591
| 4,450,609
|
Glacier Bancorp., Inc.
| 206,800
| 5,463,656
|
Greater Bay Bancorp.
| 242,500
| 6,962,175
|
Independence Community Bank Corp.
| 132,400
| 4,967,648
|
IndyMac Bancorp., Inc.
| 140,600
| 4,625,740
|
International Bancshares Corp.
| 80,300
| 4,241,446
|
KNBT Bancorp, Inc.
| 38,200
| 649,018
|
Midwest Banc Holdings, Inc.
| 113,700
| 2,602,593
|
NewAlliance Bancshares, Inc.*
| 30,000
| 430,500
|
Oriental Finance Group, Inc.
| 78,500
| 2,157,180
|
Pacific Premier Bancorp, Inc.*
| 60,600
| 697,506
|
PFF Bancorp., Inc.
| 140,600
| 5,598,692
|
Provident Bankshares Corp.
| 152,300
| 4,393,855
|
R & G Financial Corp. "B"
| 214,200
| 6,719,454
|
S&T Bancorp, Inc.
| 61,900
| 1,850,810
|
Signature Bank*
| 23,400
| 585,936
|
Sterling Financial Corp.
| 75,405
| 2,405,419
|
TierOne Corp.
| 20,500
| 427,630
|
Webster Financial Corp.
| 113,600
| 5,321,024
|
| 92,644,054 |
Diversified Financial Services 2.5%
|
ACE Cash Express, Inc.*
| 151,600
| 3,608,080
|
Bank Mutual Corp.
| 285,500
| 2,976,338
|
CMET Finance Holdings, Inc.*
| 10,800
| 1,080,000
|
Fieldstone Private Capital Corp.*
| 225,900
| 3,896,775
|
Jer Investment Trust, Inc. 144A*
| 225,100
| 3,376,500
|
MCG Capital Corp.
| 30,100
| 466,249
|
| 15,403,942 |
Insurance 5.9%
|
Ceres Group, Inc.*
| 529,610
| 3,294,174
|
Endurance Specialty Holdings Ltd.
| 72,200
| 2,436,750
|
Meadowbrook Insurance Group, Inc.*
| 393,600
| 1,995,552
|
ProCentury Corp.*
| 508,500
| 5,161,275
|
PXRE Group Ltd.
| 76,800
| 1,910,784
|
Quanta Capital Holdings Ltd.*
| 420,700
| 4,577,216
|
Scottish Re Group Ltd.
| 378,600
| 8,329,200
|
Selective Insurance Group, Inc.
| 211,300
| 7,634,269
|
United National Group, Ltd. "A"*
| 107,700
| 1,665,042
|
| 37,004,262 |
Real Estate 7.1%
|
Capital Lease Funding, Inc. (REIT)*
| 291,900
| 3,064,950
|
Correctional Properties Trust (REIT)
| 108,800
| 3,068,160
|
Healthcare Realty Trust, Inc. (REIT)
| 91,000
| 3,326,050
|
Highland Hospitality Corp. (REIT)*
| 397,100
| 4,264,854
|
HRPT Properties Trust (REIT)
| 260,200
| 2,562,970
|
Luminent Mortgage Capital, Inc. (REIT)
| 88,200
| 1,121,022
|
Medical Properties of America (REIT)*
| 165,700
| 1,657,000
|
MFA Mortgage Investments, Inc. (REIT)
| 244,700
| 2,219,429
|
National Health Investors, Inc. (REIT)
| 125,700
| 3,274,485
|
Newcastle Investment Corp. (REIT)
| 445,059
| 12,434,948
|
Newcastle Investment Holding Corp. (REIT)*
| 388,759
| 2,865,737
|
Novastar Financial, Inc. (REIT)
| 123,300
| 4,657,041
|
| 44,516,646 |
Health Care 8.3%
|
Biotechnology 1.4%
|
Charles River Laboratories International, Inc.*
| 81,300
| 3,665,004
|
Serologicals Corp.*
| 282,900
| 4,846,077
|
| 8,511,081 |
Health Care Equipment & Supplies 1.9%
|
Apogent Technologies, Inc.*
| 126,500
| 4,075,830
|
Conmed Corp.*
| 133,700
| 3,402,665
|
Cytyc Corp.*
| 207,100
| 4,535,490
|
| 12,013,985 |
Health Care Providers & Services 4.4%
|
Apria Healthcare Group, Inc.*
| 122,900
| 3,451,032
|
LabOne, Inc.*
| 138,400
| 4,305,624
|
Odyssey Healthcare, Inc.*
| 107,600
| 1,823,820
|
Pediatrix Medical Group, Inc.*
| 79,200
| 5,235,120
|
Province Healthcare Co.*
| 276,400
| 4,427,928
|
Triad Hospitals, Inc.*
| 234,000
| 8,274,240
|
| 27,517,764 |
Pharmaceuticals 0.6%
|
Pharmaceutical Resources, Inc.*
| 94,900
| 4,000,035 |
Industrials 16.6%
|
Aerospace & Defense 5.9%
|
CAE, Inc.
| 786,500
| 3,248,245
|
Curtiss-Wright Corp.
| 88,000
| 4,140,400
|
DRS Technologies, Inc.*
| 120,100
| 3,361,599
|
Herley Industries, Inc.*
| 271,300
| 5,575,215
|
Kaman Corp. "A"
| 109,200
| 1,286,376
|
Moog, Inc. "A"*
| 248,250
| 7,720,575
|
Precision Castparts Corp.
| 179,500
| 8,416,755
|
United Defense Industries, Inc.*
| 92,600
| 3,092,840
|
| 36,842,005 |
Building Products 1.8%
|
Levitt Corp. "A"*
| 239,900
| 5,764,797
|
NCI Building Systems, Inc.*
| 91,700
| 2,665,719
|
York International Corp.
| 73,900
| 2,732,822
|
| 11,163,338 |
Commercial Services & Supplies 1.8%
|
Consolidated Graphics, Inc.*
| 107,500
| 4,316,125
|
FTI Consulting, Inc.*
| 144,500
| 2,420,375
|
Integrated Alarm Services, Inc.*
| 120,200
| 704,372
|
John H. Harland Co.
| 136,900
| 4,148,070
|
| 11,588,942 |
Construction & Engineering 1.1%
|
Integrated Electrical Services, Inc.*
| 125,700
| 1,131,300
|
URS Corp.*
| 217,800
| 5,484,204
|
| 6,615,504 |
Electrical Equipment 0.6%
|
Genlyte Group, Inc.*
| 61,000
| 3,584,970 |
Industrial Conglomerates 0.9%
|
Denbury Resources, Inc.*
| 308,600
| 5,678,240 |
Machinery 2.7%
|
Albany International Corp. "A"
| 109,400
| 3,335,606
|
Briggs & Stratton Corp.
| 40,400
| 3,065,552
|
Harsco Corp.
| 65,800
| 2,856,378
|
Oshkosh Truck Corp.
| 77,000
| 3,984,750
|
Valmont Industries
| 172,200
| 3,581,760
|
| 16,824,046 |
Road & Rail 1.8%
|
Genessee & Wyoming, Inc.*
| 187,500
| 4,286,250
|
RailAmerica, Inc.*
| 256,200
| 3,266,550
|
Yellow Roadway Corp.*
| 95,788
| 3,420,590
|
| 10,973,390 |
Information Technology 3.1%
|
Communications Equipment 1.8%
|
Emulex Corp.*
| 188,100
| 3,513,708
|
Luminent, Inc.*
| 215,000
| 2,739,100
|
PC-Tel, Inc.*
| 432,600
| 4,732,644
|
| 10,985,452 |
Computers & Peripherals 0.4%
|
Western Digital Corp.*
| 273,500
| 2,499,790 |
Electronic Equipment & Instruments 0.4%
|
Scansource, Inc.*
| 50,100
| 2,667,825 |
IT Consulting & Services 0.5%
|
BISYS Group, Inc.*
| 112,700
| 1,425,655
|
CACI International, Inc. "A"*
| 40,300
| 1,496,742
|
| 2,922,397 |
Materials 5.0%
|
Chemicals 2.0%
|
Headwaters, Inc.*
| 365,900
| 7,647,310
|
Sensient Technologies Corp.
| 250,800
| 5,066,160
|
| 12,713,470 |
Construction Materials 0.8%
|
Florida Rock Industries, Inc.
| 123,855
| 4,923,236 |
Containers & Packaging 0.0%
|
Myers Industries, Inc.
| 1
| 14 |
Marine 0.7%
|
Tsakos Energy Navigation Ltd.
| 141,900
| 4,178,955 |
Metals & Mining 1.5%
|
Metal Management, Inc.*
| 91,000
| 1,425,970
|
Pan American Silver Corp.*
| 93,000
| 1,254,570
|
Stillwater Mining Co.*
| 210,300
| 3,186,045
|
Wheaton River Minerals Ltd.*
| 1,156,800
| 3,366,288
|
| 9,232,873 |
Utilities 6.1%
|
Electric Utilities 1.4%
|
CMS Energy Corp.*
| 483,000
| 4,163,460
|
WPS Resources Corp.
| 99,200
| 4,489,792
|
| 8,653,252 |
Gas Utilities 1.7%
|
Peoples Energy Corp.
| 98,200
| 4,067,444
|
Southern Union Co.*
| 336,600
| 6,772,392
|
| 10,839,836 |
Multi-Utilities 1.2%
|
ONEOK, Inc.
| 220,600
| 4,714,222
|
Sierra Pacific Resources*
| 329,200
| 2,455,832
|
| 7,170,054 |
Multi-Utilities & Unregulated Power 1.8%
|
Reliant Resources, Inc.*
| 1,146,700
| 11,363,797 |
Total Common Stocks (Cost $446,221,560)
| 580,893,454 |
|
Preferred Stocks 0.9% |
Financials 0.9%
|
Banks 0.3%
|
Chevy Chase Bank, 8.0%
| 60,700
| 1,608,550 |
Real Estate 0.6%
|
Equity Inns, Inc., 8.75%, Series B
| 61,300
| 1,574,644
|
Saul Centers, Inc., 8.0%
| 45,300
| 1,125,705
|
Winston Hotels, Inc., 8.0%
| 47,900
| 1,168,760
|
| 3,869,109 |
Total Preferred Stocks (Cost $5,380,000)
| 5,477,659 |
| Principal Amount ($) | Value ($) |
|
|
Corporate Bonds 0.8% |
Utilities
|
Mirant Corp.:
|
|
|
144A*, 7.4%, 7/15/2004 | 4,000,000
| 2,160,000
|
144A*, 7.9%, 7/15/2009 | 4,985,000
| 2,691,900
|
Total Corporate Bonds (Cost $5,286,225)
| 4,851,900 |
| Shares | Value ($) |
|
|
Other Investments 1.6% |
iShares Russell 2000 Index Fund
| 42,900
| 4,869,150
|
Tortoise Energy Infrastructure Corp.
| 207,700
| 5,026,340
|
Total Other Investments (Cost $10,222,830)
| 9,895,490 |
|
Cash Equivalents 3.5% |
Scudder Cash Management QP Trust, 1.12% (b) (Cost $21,881,519)
| 21,881,519
| 21,881,519 |
Total Investment Portfolio - 100.0% (Cost $488,992,134) (a)
| 623,000,022 |
* Non-income producing security. In the case of a bond, generally denotes that the issuer has defaulted on the payment of principal or interest or has filed for bankruptcy.(a) The cost for federal income tax purposes was $489,241,464. At May 31, 2004, net unrealized appreciation for all securities based on tax cost was $133,758,558. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $142,164,145 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $8,405,587.(b) Scudder Cash Management QP Trust is also managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.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.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of May 31, 2004 (Unaudited) |
Assets
|
Investments:
Investments in securities, at value (cost $467,110,615)
| $ 601,118,503 |
Investment in Scudder Cash Management QP Trust (cost $21,881,519)
| 21,881,519 |
Total investments in securities, at value (cost $488,992,134)
| 623,000,022 |
Cash
| 10,000 |
Receivable for investments sold
| 4,219,421 |
Dividends receivable
| 457,301 |
Interest receivable
| 81,940 |
Receivable for Fund shares sold
| 2,483,079 |
Other assets
| 11,213 |
Total assets
| 630,262,976 |
Liabilities
|
Payable for investments purchased
| 6,549,183 |
Payable for Fund shares redeemed
| 1,715,004 |
Accrued management fee
| 382,248 |
Other accrued expenses and payables
| 615,536 |
Total liabilities
| 9,261,971 |
Net assets, at value
| $ 621,001,005 |
Net Assets
|
Net assets consist of:
Undistributed net investment income
| 22,971 |
Net unrealized appreciation (depreciation) on investments
| 134,007,888 |
Accumulated net realized gain (loss)
| (30,466,771) |
Paid-in capital
| 517,436,917 |
Net assets, at value
| $ 621,001,005 |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of May 31, 2004 (Unaudited) (continued) |
Net Asset Value
|
Class A
Net Asset Value and redemption price per share ($417,292,361 / 15,242,785 shares of capital stock outstanding, $.01 par value, 320,000,000 shares authorized)
| $ 27.38 |
Maximum offering price per share (100 / 94.25 of $27.38)
| $ 29.05 |
Class B
Net Asset Value, offering and redemption price (subject to contingent deferred sales charge) per share ($120,053,398 / 4,657,686 shares of capital stock outstanding, $.01 par value, 320,000,000 shares authorized)
| $ 25.78 |
Class C
Net Asset Value, offering and redemption price (subject to contingent deferred sales charge) per share ($77,539,254 / 2,981,669 shares of capital stock outstanding, $.01 par value, 80,000,000 shares authorized)
| $ 26.01 |
Class I
Net Asset Value, offering and redemption price per share ($2,086,355 / 73,222 shares of capital stock outstanding, $.01 par value, 80,000,000 shares authorized)
| $ 28.49 |
Class R
Net Asset Value, offering and redemption price per share ($354,330 / 12,863 shares of capital stock outstanding, $.01 par value, 100,000,000 shares authorized)
| $ 27.55 |
Institutional Class
Net Asset Value, offering and redemption price per share ($3,675,307 / 134,055 shares of capital stock outstanding, $.01 par value, 100,000,000 shares authorized)
| $ 27.42 |
The accompanying notes are an integral part of the financial statements.
Statement of Operations for the six months ended May 31, 2004 (Unaudited) |
Investment Income
|
Dividends (net of foreign taxes withheld of $8,826)
| $ 4,880,220 |
Interest
| 59,689 |
Interest - Scudder Cash Management QP Trust
| 124,543 |
Total Income
| 5,064,452 |
Expenses:
Management fee
| 2,235,005 |
Distribution service fees
| 1,535,542 |
Services to shareholders
| 763,131 |
Custodian fees
| 10,000 |
Auditing
| 21,169 |
Legal
| 5,470 |
Directors' fees and expenses
| 17,678 |
Reports to shareholders
| 40,749 |
Registration fees
| 46,084 |
Total expenses, before expense reductions
| 4,674,828 |
Expense reductions
| (336) |
Total expenses, after expense reductions
| 4,674,492 |
Net investment income (loss)
| 389,960 |
Realized and Unrealized Gain (Loss) on Investment Transactions
|
Net realized gain (loss) from:
Investments
| 39,319,789 |
Foreign currency related transactions
| 208 |
| 39,319,997 |
Net unrealized appreciation (depreciation) during the period on investments
| 9,581,192 |
Net gain (loss) on investment transactions
| 48,901,189 |
Net increase (decrease) in net assets resulting from operations
| $ 49,291,149 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets |
Increase (Decrease) in Net Assets
| Six Months Ended May 31, 2004 (Unaudited) | Year Ended November 30, 2003 |
Operations:
Net investment income (loss)
| $ 389,960 | $ 2,514,812 |
Net realized gain (loss) on investment transactions
| 39,319,997 | (14,503,638) |
Net unrealized appreciation (depreciation) on investment transactions during the period
| 9,581,192 | 157,058,017 |
Net increase (decrease) in net assets resulting from operations
| 49,291,149 | 145,069,191 |
Distributions to shareholders from:
Net investment income:
Class A
| (2,321,960) | (1,092,630) |
Class I
| (25,797) | (62,485) |
Class R
| (3) | - |
Institutional Class
| (20,087) | (7) |
Fund share transactions:
Proceeds from shares sold
| 131,161,364 | 179,754,052 |
Reinvestment of distributions
| 2,107,763 | 1,013,264 |
Cost of shares redeemed
| (117,233,084) | (191,343,883) |
Net increase (decrease) in net assets from Fund share transactions
| 16,036,043 | (10,576,567) |
Increase (decrease) in net assets
| 62,959,345 | 133,337,502 |
Net assets at beginning of period
| 558,041,660 | 424,704,158 |
Net assets at end of period (including undistributed net investment income of $22,971 and $2,000,858, respectively)
| $ 621,001,005 | $ 558,041,660 |
The accompanying notes are an integral part of the financial statements.
Class A |
Years Ended November 30, | 2004a | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per Share Data
|
Net asset value, beginning of period
| $ 25.27 | $ 18.46 | $ 19.69 | $ 16.49 | $ 17.75 | $ 17.80 |
Income (loss) from investment operations:
Net investment income (loss)b
| .06 | .17 | .12 | -c | (.10) | .04 |
Net realized and unrealized gain (loss) on investment transactions
| 2.22 | 6.73 | (1.35) | 3.20 | (1.16) | (.09) |
Total from investment operations | 2.28 | 6.90 | (1.23) | 3.20 | (1.26) | (.05) |
Less distributions from:
Net investment income
| (.17) | (.09) | - | - | - | - |
Net asset value, end of period
| $ 27.38 | $ 25.27 | $ 18.46 | $ 19.69 | $ 16.49 | $ 17.75 |
Total Return (%)d
| 9.05** | 37.49 | (6.25) | 19.41 | (7.10) | (.28) |
Ratios to Average Net Assets and Supplemental Data
|
Net assets, end of period ($ millions)
| 417 | 351 | 222 | 177 | 156 | 297 |
Ratio of expenses before expense reductions (%)
| 1.22* | 1.43 | 1.44 | 1.54 | 1.67e | 1.52 |
Ratio of expenses after expense reductions (%)
| 1.22* | 1.43 | 1.44 | 1.49f | 1.66e | 1.52 |
Ratio of net investment income (loss) (%)
| .44* | .91 | .65 | .00 | (.58) | .21 |
Portfolio turnover rate (%)
| 66* | 67 | 89 | 73 | 19 | 47 |
a For the six months ended May 31, 2004 (Unaudited).
b Based on average shares outstanding during period.
c Amount is less than $.005.
d Total return does not reflect the effect of any sales charges.
e The ratio of operating expenses excluding costs incurred in connection with a fund complex reorganization before and after expense reductions were 1.62% and 1.61%, respectively.
f The ratio of operating expenses after expense reductions includes a reimbursement by the Advisor associated with the cancellation of the merger between the Fund and Scudder Small Company Value Fund.
* Annualized
** Not annualized
|
|
Class B |
Years Ended November 30, | 2004a | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per Share Data
|
Net asset value, beginning of period
| $ 23.76 | $ 17.41 | $ 18.72 | $ 15.80 | $ 17.15 | $ 17.33 |
Income (loss) from investment operations:
Net investment income (loss)b
| (.06) | .03 | (.02) | (.13) | (.24) | (.11) |
Net realized and unrealized gain (loss) on investment transactions
| 2.08 | 6.32 | (1.29) | 3.05 | (1.11) | (.07) |
Total from investment operations | 2.02 | 6.35 | (1.31) | 2.92 | (1.35) | (.18) |
Net asset value, end of period
| $ 25.78 | $ 23.76 | $ 17.41 | $ 18.72 | $ 15.80 | $ 17.15 |
Total Return (%)c
| 8.50** | 36.47 | (7.00) | 18.48 | (7.87) | (1.04) |
Ratios to Average Net Assets and Supplemental Data
|
Net assets, end of period ($ millions)
| 120 | 133 | 147 | 160 | 144 | 262 |
Ratio of expenses before expense reductions (%)
| 2.22* | 2.27 | 2.25 | 2.34 | 2.49d | 2.36 |
Ratio of expenses after expense reductions (%)
| 2.22* | 2.27 | 2.25 | 2.27e | 2.48d | 2.36 |
Ratio of net investment income (loss) (%)
| (.56)* | .07 | (.16) | (.78) | (1.40) | (.63) |
Portfolio turnover rate (%)
| 66* | 67 | 89 | 73 | 19 | 47 |
a For the six months ended May 31, 2004 (Unaudited).
b Based on average shares outstanding during the period.
c Total return does not reflect the effect of any sales charges.
d The ratios of operating expenses excluding costs incurred in connection with a fund complex reorganization before and after expense reductions were 2.43% and 2.42%, respectively.
e The ratio of operating expenses after expense reductions includes a reimbursement by the Advisor associated with the cancellation of the merger between the Fund and Scudder Small Company Value Fund.
* Annualized
** Not annualized
|
|
Class C |
Years Ended November 30, | 2004a | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per Share Data
|
Net asset value, beginning of period
| $ 23.94 | $ 17.54 | $ 18.85 | $ 15.91 | $ 17.24 | $ 17.39 |
Income (loss) from investment operations:
Net investment income (loss)b
| (.04) | .04 | (.01) | (.14) | (.21) | (.09) |
Net realized and unrealized gain (loss) on investment transactions
| 2.11 | 6.36 | (1.30) | 3.08 | (1.12) | (.06) |
Total from investment operations | 2.07 | 6.40 | (1.31) | 2.94 | (1.33) | (.15) |
Net asset value, end of period
| $ 26.01 | $ 23.94 | $ 17.54 | $ 18.85 | $ 15.91 | $ 17.24 |
Total Return (%)c
| 8.65** | 36.49 | (6.95) | 18.48 | (7.71) | (.86) |
Ratios to Average Net Assets and Supplemental Data
|
Net assets, end of period ($ millions)
| 78 | 71 | 49 | 32 | 29 | 57 |
Ratio of expenses before expense reductions (%)
| 2.00* | 2.21 | 2.23 | 2.36 | 2.32d | 2.25 |
Ratio of expenses after expense reductions (%)
| 2.00* | 2.21 | 2.23 | 2.28e | 2.31d | 2.25 |
Ratio of net investment income (loss) (%)
| (.34)* | .13 | (.14) | (.79) | (1.23) | (.52) |
Portfolio turnover rate (%)
| 66* | 67 | 89 | 73 | 19 | 47 |
a For the six months ended May 31, 2004 (Unaudited).
b Based on average shares outstanding during the period.
c Total return does not reflect the effect of any sales charges.
d The ratios of operating expenses excluding costs incurred in connection with a fund complex reorganization before and after expense reductions were 2.26% and 2.25%, respectively.
e The ratio of operating expenses after expense reductions includes a reimbursement by the Advisor associated with the cancellation of the merger between the Fund and Scudder Small Company Value Fund.
* Annualized
** Not annualized
|
|
Class I |
Years Ended November 30, | 2004a | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per Share Data
|
Net asset value, beginning of period
| $ 26.39 | $ 19.30 | $ 20.45 | $ 17.02 | $ 18.19 | $ 18.13 |
Income (loss) from investment operations:
Net investment income (loss)b
| .08 | .29 | .24 | .10 | .03 | .15 |
Net realized and unrealized gain (loss) on investment transactions
| 2.31 | 7.01 | (1.39) | 3.33 | (1.20) | (.09) |
Total from investment operations | 2.39 | 7.30 | (1.15) | 3.43 | (1.17) | .06 |
Less distributions from:
Net investment income
| (.29) | (.21) | - | - | - | - |
Net asset value, end of period
| $ 28.49 | $ 26.39 | $ 19.30 | $ 20.45 | $ 17.02 | $ 18.19 |
Total Return (%)
| 9.14** | 38.24 | (5.62) | 20.15 | (6.43) | .33 |
Ratios to Average Net Assets and Supplemental Data
|
Net assets, end of period ($ millions)
| 2 | 2 | 6 | 5 | 3 | 6 |
Ratio of expenses before expense reductions (%)
| 1.00* | .87 | .84 | .90 | .92c | .92 |
Ratio of expenses after expense reductions (%)
| 1.00* | .87 | .84 | .88d | .91c | .92 |
Ratio of net investment income (loss) (%)
| .66* | 1.47 | 1.25 | .62 | .18 | .81 |
Portfolio turnover rate (%)
| 66* | 67 | 89 | 73 | 19 | 47 |
a For the six months ended May 31, 2004 (Unaudited).
b Based on average shares outstanding during the period.
c The ratios of operating expenses excluding costs incurred in connection with a fund complex reorganization before and after expense reductions were .89% and .88%, respectively.
d The ratio of operating expenses after expense reductions includes a reimbursement by the Advisor associated with the cancellation of the merger between the Fund and Scudder Small Company Value Fund.
* Annualized
** Not annualized
|
|
Class R |
| 2004a | 2003b |
Selected Per Share Data
|
Net asset value, beginning of period
| $ 25.26 | $ 22.96 |
Income (loss) from investment operations:
Net investment income (loss)c
| .01 | .04 |
Net realized and unrealized gain (loss) on investment transactions
| 2.29 | 2.26 |
Total from investment operations | 2.30 | 2.30 |
Less distributions from::
Net investment income
| (.01) | - |
Net asset value, end of period
| $ 27.55 | $ 25.26 |
Total Return (%)
| 9.09** | 10.02** |
Ratios to Average Net Assets and Supplemental Data
|
Net assets, end of period ($ millions)
| .354 | .013 |
Ratio of expenses (%)
| 1.52* | 1.35* |
Ratio of net investment income (loss) (%)
| .14* | .90* |
Portfolio turnover rate (%)
| 66* | 67 |
a For the six months ended May 31, 2004 (Unaudited).
b For the period from October 1, 2003 (commencement of operations of Class R shares) to November 30, 2003.
c Based on average shares outstanding during the period.
* Annualized
** Not annualized
|
|
Institutional Class |
Years Ended November 30, | 2004a | 2003 | 2002b |
Selected Per Share Data
|
Net asset value, beginning of period
| $ 25.31 | $ 18.48 | $ 19.74 |
Income (loss) from investment operations:
Net investment income (loss)c
| .11 | .26 | .03 |
Net realized and unrealized gain (loss) on investment transactions
| 2.22 | 6.71 | (1.29) |
Total from investment operations | 2.33 | 6.97 | (1.26) |
Less distributions from:
Net investment income
| (.22) | (.14) | - |
Net asset value, end of period
| $ 27.42 | $ 25.31 | $ 18.48 |
Total Return (%)
| 9.26** | 38.07 | (6.38)** |
Ratios to Average Net Assets and Supplemental Data
|
Net assets, end of period ($ millions)
| 4 | .619 | .001 |
Ratio of expenses (%)
| .83* | .85 | 1.18* |
Ratio of net investment income (loss) (%)
| .83* | 1.49 | .58* |
Portfolio turnover rate (%)
| 66* | 67 | 89 |
a For the six months ended May 31, 2004 (Unaudited).
b For the period from August 19, 2002 (commencement of operations of Institutional Class shares) to November 30, 2002.
c Based on average shares outstanding during the period.
* Annualized
** Not annualized
|
Notes to Financial Statements (Unaudited) |
|
A. Significant Accounting Policies
Scudder-Dreman Small Cap Value Fund (the ``Fund'') is a diversified series of Scudder Value Series, Inc. (the ``Corporation'') 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 Maryland Corporation.
The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are offered to investors subject to an initial sales charge. Class B shares are offered without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class B shares automatically convert to Class A shares six years after issuance. Class C shares are offered to investors 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. Prior to March 1, 2004, Class C shares were offered with an initial sales charge. Class C shares do not convert into another class. Institutional Class and Class I shares are offered to a limited group of investors, are not subject to initial or contingent deferred sales charges and have lower ongoing expenses than other classes. Class R shares are only available to participants in certain retirement plans and are offered to investors without an initial sales charge.
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 or official closing price reported on the exchange (US or foreign) or over-the-counter market on which the security is traded most extensively. Securities for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation.
Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost. Investments in open-end investment companies and Scudder Cash Management QP Trust are valued at their net asset value each business day.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Directors.
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 November 30, 2003, the Fund had a net tax basis capital loss carryforward of approximately $68,459,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until November 30, 2007 ($39,441,000) and November 30, 2011 ($29,018,000), the respective expiration dates, whichever occurs first.
Distribution of Income and Gains. Distributions of net investment income, if any, are made annually. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually.
The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to certain securities sold at a loss. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.
The tax character of current year distributions, if any, will be determined at the end of the current fiscal year.
Expenses. Expenses of the Corporation arising in connection with a specific fund are allocated to that fund. Other Corporation expenses which cannot be directly attributed to a fund are apportioned among the funds in the Corporation.
Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset valuation calculations. However, for financial reporting purposes, investment security transactions are reported on 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 as soon as the Fund is informed of such dividends. Realized gains and losses from investment transactions are recorded on an identified cost basis.
B. Purchases and Sales of Securities
During the six months ended May 31, 2004, purchases and sales of investment securities (excluding short-term investments) aggregated $208,649,942 and $192,901,532, respectively.
C. Related Parties
Management Agreement. Under the Management Agreement with Deutsche Investment Management Americas Inc. ("DeIM" or the "Advisor"), the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund. In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Management Agreement. The management fee payable under the Management Agreement is equal to an annual rate of 0.75% of the first $250 million of the Fund's average daily net assets, 0.72% of the next $750 million of such net assets, 0.70% of the next $1.5 billion of such net assets, 0.68% of the next $2.5 billion of such net assets, 0.65% of the next $2.5 billion of such net assets, 0.64% of the next $2.5 billion of such net assets, 0.63% of the next $2.5 billion of such net assets and 0.62% of such net assets in excess of $12.5 billion, computed and accrued daily and payable monthly. Accordingly, for the six months ended May 31, 2004, the fee pursuant to the Management Agreement was equivalent to an annualized effective rate of 0.73% of the Fund's average daily net assets. Dreman Value Management, L.L.C. ("DVM") serves as subadvisor with respect to the investment and reinvestment of assets of the Fund. The Advisor compensates DVM out of the management fee it receives from the Fund.
Effective October 1, 2003 through September 30, 2005, the Advisor has agreed to contractually waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Fund to the extent necessary to maintain the operating expenses of each class at 1.50%, 1.50%, 1.50%, 1.00% and 1.17% of average daily net assets for Class A, B, C, I and Institutional Class shares, respectively (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest, Rule 12b-1 distribution and/or service fees, director and director counsel fees and organizational and offering expenses). For Class R shares, the Advisor has contractually agreed to waive all or a portion of its management fee and reimburse or pay operating expenses of the Fund to the extent necessary to maintain the Fund's operating expenses at 2.00%, excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest, and director and director counsel fees and organizational and offering expenses.
Service Provider Fees. Scudder Investments Service Company ("SISC"), an affiliate of the Advisor, is the Fund's transfer, dividend-paying agent and shareholder service agent. Pursuant to a sub-transfer agency agreement between SISC and DST Systems, Inc. ("DST"), SISC has delegated certain transfer agent and dividend paying agent functions to DST. The costs and expenses of such delegation are borne by SISC, not by the Fund. For the six months ended May 31, 2004, the amounts charged to the Fund by SISC were as follows:
Services to Shareholders | Total Aggregated | Unpaid at May 31, 2004 |
Class A
| $ 375,280 | $ 84,243 |
Class B
| 289,055 | 177,798 |
Class C
| 85,066 | 33,967 |
Class I
| 2,499 | 2,179 |
Class R
| 268 | 268 |
Institutional Class
| 88 | - |
| $ 752,256 | $ 298,455 |
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 0.25% of average daily net assets of Class R shares and 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, C and R shares. For the six months ended May 31, 2004, the Distribution Fee was as follows:
Distribution Fee
| Total Aggregated | Unpaid at May 31, 2004 |
Class B
| $ 491,822 | $ 77,495 |
Class C
| 289,288 | 48,311 |
Class R
| 248 | 97 |
| $ 781,358 | $ 125,903 |
In addition, SDI provides information and administrative services ("Service Fee") to Class A, B, C and R shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. SDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder accounts the firms service. For the six months ended May 31, 2004, the Service Fee was as follows:
Service Fee
| Total Aggregated | Unpaid at May 31, 2004 | Annualized Effective Rate |
Class A
| $ 494,222 | $ 120,571 | .25% |
Class B
| 163,596 | 33,182 | .25% |
Class C
| 96,112 | 22,939 | .25% |
Class R
| 254 | 81 | .25% |
| $ 754,184 | $ 176,773 | |
Underwriting Agreement and Contingent Deferred Sales Charge. SDI is the principal underwriter for the Fund. Underwriting commissions paid by shareholders in connection with the distribution of Class A and C shares for the six months ended May 31, 2004, aggregated $39,094 and $150, respectively.
In addition, SDI receives any contingent deferred sales charge ("CDSC") from Class B share redemptions occurring within six years of purchase and Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates, ranging from 4% to 1% for Class B and 1% for Class C, of the value of the shares redeemed. For the six months ended May 31, 2004, the CDSC for Class B and C shares aggregated $168,691 and $2,898, respectively. A deferred sales charge of up to 1% is assessed on certain redemptions of Class A shares. For the six months ended May 31, 2004, SDI received $931.
Directors' Fees and Expenses. The Fund pays each Director 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") 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.
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 six months ended May 31, 2004, the Custodian Fees were reduced by $336 for custodian credits earned.
E. Line of Credit
The Fund and several other affiliated funds (the "Participants") share in a $1.25 billion revolving credit facility administered by J.P. Morgan Chase Bank for temporary or emergency purposes, including the meeting of redemptions 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, 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:
| Six Months Ended
May 31, 2004 | Year Ended
November 30, 2003 |
| Shares | Amount | Shares | Amount |
Shares sold
|
Class A
| 3,618,557 | $ 98,246,266 | 6,376,800 | $ 132,901,344 |
Class B
| 637,679 | 16,265,782 | 1,272,098 | 24,521,203 |
Class C
| 498,010 | 12,837,558 | 980,384 | 19,214,431 |
Class I
| 8,147 | 234,097 | 132,186 | 2,508,558 |
Class R
| 26,930 | 761,162 | 495* | 11,500* |
Institutional
| 108,798 | 2,816,499 | 24,423 | 597,016 |
| | $ 131,161,364 | | $ 179,754,052 |
Shares issued to shareholders in reinvestment of distributions
|
Class A
| 80,292 | $ 2,061,879 | 52,126 | $ 950,779 |
Class I
| 966 | 25,797 | 3,296 | 62,485 |
Institutional
| 783 | 20,087 | - | - |
| | $ 2,107,763 |
| $ 1,013,264 |
Shares redeemed
|
Class A
| (2,347,158) | $ (63,504,827) | (4,580,443) | $ (90,100,357) |
Class B
| (1,575,357) | (40,130,605) | (4,133,993) | (79,024,841) |
Class C
| (486,049) | (12,474,800) | (802,377) | (15,268,295) |
Class I
| (25,045) | (705,920) | (366,457) | (6,950,390) |
Class R
| (14,562) | (416,932) | - | - |
|
| $ (117,233,084) | | $ (191,343,883) |
Net increase (decrease)
|
Class A
| 1,351,691 | $ 36,803,318 | 1,848,483 | $ 43,751,766 |
Class B
| (937,678) | (23,864,823) | (2,861,895) | (54,503,638) |
Class C
| 11,961 | 362,758 | 178,007 | 3,946,136 |
Class I
| (15,932) | (446,026) | (230,975) | (4,379,347) |
Class R
| 12,368 | 344,230 | 495* | 11,500* |
Institutional
| 109,581 | 2,836,586 | 24,423 | 597,016 |
|
| $ 16,036,043 | | $ (10,576,567) |
* For the period October 1, 2003 (commencement of operations of Class R shares) to November 30, 2003.G. 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. We are unable 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, Deutsche Asset Management ("DeAM") and its affiliates, certain individuals, including in some cases Fund Trustees/Directors, and other parties. DeAM has undertaken to bear all liabilities and expenses incurred by the Scudder funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding fund valuation, market timing, revenue sharing or other subjects of the pending inquiries. Based on currently available information, DeAM believes 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 its ability to perform under its investment management agreements with the Scudder funds.
Account Management Resources |
|
For shareholders of Classes A, B, C, I and Institutional
Automated Information Lines | ScudderACCESS (800) 972-3060 Personalized account information, information on other Scudder funds and services via touchtone telephone and for Classes A, B, and C only, the ability to exchange or redeem shares.
|
Web Site | scudder.com View your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day.
Obtain prospectuses and applications, blank forms, interactive worksheets, news about Scudder funds, subscription to fund updates by e-mail, retirement planning information, and more.
|
For More Information | (800) 621-1048 To speak with a Scudder service representative.
|
Written Correspondence | Scudder Investments PO Box 219356
Kansas City, MO 64121-9356
|
Proxy Voting | A description of the fund's policies and procedures for voting proxies for portfolio securities can be found 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 without charge, 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
|
| Class A | Class B | Class C | Institutional |
Nasdaq Symbol | KDSAX
| KDSBX
| KDSCX
| KDSIX
|
CUSIP Number | 81123U-303
| 81123U-873
| 81123U-865
| 81123U-824
|
Fund Number | 088
| 288
| 388
| 545
|
For shareholders of Class R
Automated Information Lines | Scudder Flex Plan Access (800) 532-8411 24-hour access to your retirement plan account.
|
Web Site | scudder.com Click "Retirement Plans" to reallocate assets, process transactions and review your funds through our secure online account access.
Obtain prospectuses and applications, blank forms, interactive worksheets, news about Scudder funds, subscription to fund updates by e-mail, retirement planning information, and more.
|
For More Information | (800) 543-5776 To speak with a Scudder service representative.
|
Written Correspondence | Scudder Retirement Services 222 South Riverside Plaza
Chicago, IL 60606-5806
|
Proxy Voting | A description of the fund's policies and procedures for voting proxies for portfolio securities can be found 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 without charge, call us toll free at (800) 543-5776.
|
Principal Underwriter | If you have questions, comments or complaints, contact:
Scudder Distributors, Inc. 222 South Riverside Plaza
Chicago, IL 60606-5808
(800) 621-1148
|
Nasdaq Symbol | KDSRX
|
CUSIP Number | 81123U-782
|
Fund Number | 1507
|
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 the Scudder 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 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:
Scudder Investments
Attention: Correspondence - Chicago
P.O. Box 219415
Kansas City, MO 64121-9415
August 2003
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. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The primary function of the Nominating and Governance Committee is to identify
and recommend individuals for membership on the Board and oversee the
administration of the Board Governance Procedures and Guidelines. Shareholders
may recommend candidates for Board positions by forwarding their correspondence
by U.S. mail or courier service to the Fund's Secretary for the attention of the
Chairman of the Nominating and Governance Committee, Two International Place,
Boston, MA 02110. Suggestions for candidates must include a resume of the
candidate.
ITEM 10. 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.
During the filing period of the report, fund management identified a significant
deficiency relating to the overall fund expense payment and accrual process.
This matter relates primarily to a bill payment processing issue. There was no
material impact to shareholders, fund net asset value, fund performance or the
accuracy of any fund's financial statements. Fund management discussed this
matter with the Registrant's Audit Committee and auditors, instituted additional
procedures to enhance its internal controls and will continue to develop
additional controls and redesign work flow to strengthen the overall control
environment associated with the processing and recording of fund expenses.
(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 11. 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: Scudder-Dreman Small Cap Value Fund
By: /s/Julian Sluyters
---------------------------------
Julian Sluyters
Chief Executive Officer
Date: July 29, 2004
---------------------------------
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: Scudder-Dreman Small Cap Value Fund
By: /s/Julian Sluyters
---------------------------------
Julian Sluyters
Chief Executive Officer
Date: July 29, 2004
---------------------------------
By: /s/Charles A. Rizzo
---------------------------------
Charles A. Rizzo
Chief Financial Officer
Date: July 29, 2004
---------------------------------
