UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM N-CSR Investment Company Act file number 811-8606 Scudder Pathway Series -------------------------------- (Exact Name of Registrant as Specified in Charter) Two International Place Boston, Massachusetts 02110-4103 -------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code: (617) 295-2663 -------------- Salvatore Schiavone Two International Place Boston, Massachusetts 02110 --------------------------------------- (Name and Address of Agent for Service) Date of fiscal year end: 8/31 Date of reporting period: 8/31/03ITEM 1. REPORT TO STOCKHOLDERS
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Scudder Pathway SeriesPathway Conservative PortfolioPathway Moderate PortfolioPathway Growth Portfolio | ||
Annual Report to Shareholders | ||
August 31, 2003 |
Contents |
<Click Here> Portfolio Management Review <Click Here> Portfolio Highlights <Click Here> Performance Summaries <Click Here> Portfolio Summaries <Click Here> Investment Portfolios <Click Here> Financial Statements <Click Here> Financial Highlights <Click Here> Notes to Financial Statements <Click Here> Report of Independent Auditors <Click Here> Tax Information <Click Here> Trustees and Officers <Click Here> Investment Products <Click Here> Account Management Resources |
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.
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. The prospectus contains more complete information, including a description of the risks of investing in the fund, management fees and expenses. Please read it carefully before you invest or send money.
Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.
Scudder Pathway Series: A Team Approach to Investing
Deutsche Investment Management Americas Inc. ("DeIM" or the "Advisor"), which is part of Deutsche Asset Management, is the investment advisor for Scudder Pathway Series. DeIM and its predecessors have more than 80 years of experience managing mutual funds and DeIM provides a full range of investment advisory services to institutional and retail clients. DeIM is also responsible for selecting brokers and dealers and for negotiating brokerage commissions and dealer charges.
Deutsche Asset Management is a global asset management organization that offers a wide range of investing expertise and resources. This well-resourced global investment platform brings together a wide variety of experience and investment insight across industries, regions, asset classes and investing styles.
DeIM is an indirect, wholly owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is engaged in a wide range of financial services, including investment management, mutual funds, retail, private and commercial banking, investment banking and insurance.
Portfolio Management Team
Janet Campagna
Managing Director of Deutsche Asset Management and Co-Manager of the portfolios.
• Joined Deutsche Asset Management in 1999 and the portfolios in 2002.
• Head of Advanced Research and Quantitative Strategies.
• Over 10 years of investment industry experience.
• MS, Social Science, California Institute of Technology.
• PhD, Political Science, University of California at Irvine.
Inna Okounkova
Vice President of Deutsche Asset Management and Co-Manager of the portfolios.
• Joined Deutsche Asset Management in 1999 and the portfolios in 2002.
• Began investment career in 1999.
• Portfolio manager for asset allocation portfolios.
• MS, Moscow State University.
• MBA, University of Chicago.
Robert Wang
Managing Director of Deutsche Asset Management and Co-Manager of the portfolios.
• Joined Deutsche Asset Management in 1995 and the portfolios in 2002.
• Over 21 years of investment industry experience.
• Portfolio manager for global and tactical asset allocation portfolios, with a focus on quantitative asset allocation, portfolio risk control and derivatives trading management.
In the following interview, Co-Managers Janet Campagna, Robert Wang and Inna Okounkova and Investment Strategist Arnim Holzer discuss the Pathway Series' strategy and the market environment during the 12-month period ended August 31, 2003.
Q: Will you give us an overview of the main political and economic catalysts that affected the financial markets during the past 12 months?
A: The financial markets were affected by a tale of two sorts during the past 12 months. From September through March, the markets had to grapple with the realization that global economic recovery, with the United States as the primary driver, was still a ways off. Consensus forecasts for US gross domestic product growth were adjusted moderately downward for 2003. The economies of Europe were especially sluggish, even though the general expectation was for ongoing stimulative policies. Asia was struck with the SARS virus, which slowed economic activity temporarily. Japan's economy remained depressed. Acknowledging a deterioration in the outlook for the global economy, both the US Federal Reserve Board and the European Central Bank (ECB) cut interest rates by 50 basis points in November. (A basis point is one-hundredth of one percent, so 100 basis points equals 1.00%.) Concerns regarding corporate malfeasance and geopolitical realities, including potential hostilities against Iraq, the spike in oil prices and North Korea's nuclear brinksmanship, weighed heavily on investors.
From April through August, risk aversion appeared to relent. There were signs of improvement in the US economy, and international economies embraced the signals and advanced sharply. The end of active military operations in Iraq seemed to ease investors' fears further and led to a rebound in consumer confidence in both the United States and Europe. Business sentiment improved in the United States, although it remained weak in Europe until July and August, hurt by a stronger euro and sluggish domestic demand. Japan's economy began to improve due to corporate restructuring efforts and better trade performance. Oil prices declined before spiking at the tail end of the fiscal year. The critical catalyst during this period was the Federal Reserve Board. In May, the Federal Reserve Board's statements gave the possibility of deflation, i.e., a decline in the prices of goods and services, some legitimacy. In June, the Federal Reserve Board moderated its stance on deflation and cut the targeted federal funds rate by 0.25% to 1.00% in an effort to "add further support for an economy which it expects to improve over time." (The federal funds rate is the interest rate banks charge each other for overnight loans and is a closely watched indicator of US Federal Reserve Board monetary policy.) The ECB cut interest rates by 50 basis points to a record low of 2.00%. By the end of the fiscal year in August, the labor markets still did not mirror the positive consumption and capital expenditure statistics. In other words, even though consumers and companies were spending money, nobody was hiring. As a result, the sustainability of the economic recovery beyond the second half of 2003 began to be questioned.
Q: How did this environment affect the stock markets around the world?
A: As we headed into the new fiscal year, the US equity market was experiencing its worst quarter since 1987. The S&P 500 index was down 10.86% for the month of September 2002 alone. The Federal Reserve Board's monetary easing in November, together with a Republican electoral sweep of Congress and favorable year-over-year fourth-quarter earnings comparisons, supported a dramatic six-week recovery of the US equity market from its early October lows. Renewed selling in December wiped out part of the rally's gains, but the S&P 500 index was still up 8.44% for the fourth calendar quarter. As 2003 began, the US equity market stumbled again, with the S&P 500 index down 4.08% for the first two months of the year. Once the military action in Iraq actually began in March, the equity markets began a rally that was sustained over the next several months by better-than-expected corporate earnings reports believed to be driven by ongoing cost cutting, stronger revenue growth and a weaker dollar relative to foreign currencies (which it was hoped would fuel American exports and American jobs to supply exports). The strong message of the Federal Reserve Board that it would use any and all tools to support the economy, along with its 25-basis-point interest rate cut in June, supported equities through the end of the fiscal year. However, concerns about the sustainability of the economic recovery made it difficult for the equity market in the last months of the annual period to breach the highs reached in early June. For the 12 months, the S&P 500 index gained 12.07%. The European equity markets, as measured by the Morgan Stanley Capital International Europe Index, gained 8.62%, and the Japanese equity market, as measured by the Morgan Stanley Capital International Japan Index, gained 6.66% for the annual period.1
1 The Morgan Stanley Capital International Europe Index (MSCI Europe Index) is an unmanaged, capitalization-weighted measure of 16 stock markets in Europe.The Morgan Stanley Capital International Japan Index (MSCI Japan) is an unmanaged, capitalization-weighted measure of equity securities listed on the Tokyo stock exchange. Index returns assume reinvested dividends and do not reflect fees; it is not possible to invest directly in an index.
Q: How did the bond markets perform over the 12-month period?
A: The bond markets, while providing positive returns for the fiscal year, underperformed equities. US Treasury yields actually increased slightly from the beginning to the end of the fiscal year, with great volatility during the period.
Through much of the first half of the fiscal year, corporate scandals, continued US economic sluggishness, equity market weakness and volatility, and geopolitical instability led risk-averse investors to favor US Treasuries. As concerns about an extended war in Iraq eased, US Treasury yields, which had dropped precipitously in the run-up to the war, gave up some of their yield gains. For example, the 10-year US Treasury started the fiscal year with a 4.14% interest rate, dropped to approximately 3.55% at the start of the war in mid-March, and then ended the first calendar quarter (March 31, 2003) at 3.79%. When the Federal Reserve Board incorporated deflation concerns into its bias in May by stating in its post-meeting press release that "the probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already low level," the impact on the fixed-income markets was dramatic. Ten-year US Treasury yields reached new lows of approximately 3.11% in mid-June. Indeed, US bond yields fell to levels not seen since the 1950s. The ripple effect was felt around the world, with German bond yields, for instance, falling 22 basis points.
After a strong rally, the bond markets struggled in the last three months of the fiscal year. The Federal Reserve Board's conservative 25-basis-point interest rate cut in June and its softened outlook on the risk of deflation led to a market sell-off, and US Treasury yields rose dramatically by July. Compounding matters were economic indicators showing positive momentum toward a stronger second half of 2003. After peaking in mid-August, US Treasury yields declined somewhat by the end of the fiscal year. Ten-year US Treasury yields stood at 4.36% at the end of August. On a duration-adjusted basis, i.e., when the weighted average term to maturity of securities are taken into account, the spread sectors in the Lehman Brothers Aggregate Bond Index - representing mortgage-backed securities, collateralized mortgage-backed securities, asset-backed securities and corporate bonds - outperformed 10-year US Treasury securities for the 12 months ended August 31, 2003.
Q: What were the key strategies you implemented within the portfolios during the annual period?
A: We implemented several key strategies.
• We added 10 new underlying Scudder funds to the range of investments that the portfolios can use and allocated assets into several of the new fund offerings:
• Scudder Fixed Income Fund
• Scudder Short Duration Fund2
• Scudder High Income Plus Fund
• Scudder Equity 500 Index Fund
• Scudder Contrarian Fund
• Scudder-Dreman High Return Equity Fund
• Scudder Small Cap Fund
• Scudder-Dreman Small Cap Value Fund
• Scudder International Select Equity Fund
• Scudder International Equity Fund
2 Scudder Short-Term Fixed Income Fund was renamed Scudder Short Duration Fund on February 28, 2003.This move enabled us to further diversify the portfolios' risk against that of the blended benchmark, with the goal of improving relative performance. Indeed, each portfolio did improve its relative performance in each month of 2003 year to date. Adding the new underlying funds also allowed us to have more flexibility in managing the portfolios and to take better advantage of Deutsche Asset Management's broad investment capabilities.
• We added a "core strategy" element to the portfolios. Within the fixed-income portion of the portfolios, we moved assets into Scudder Fixed Income Fund from Scudder Income Fund, as the former is more diversified across the fixed-income sector spectrum and its overall credit quality is higher. Within the US equity portion of the portfolios, we moved assets into Scudder Equity 500 Index Fund from Scudder S&P 500 Index Fund3 to maintain equity diversification while lowering underlying fund fees. Serving as the "core" element for small-cap equities and international equities, respectively, were Scudder Small Company Stock Fund and Scudder International Fund.
3 "Standard & Poor's," "S&P," "S&P 500," "Standard & Poor's 500" and "500" are trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use. This fund is not sponsored, endorsed, sold or promoted by Standard & Poor's, and Standard & Poor's makes no representation regarding the advisability of investing in the portfolio. The S&P 500 is an unmanaged group of large-company stocks that is not available for direct investment.• We moved most of the Conservative Portfolio cash to Scudder Money Market Series from Scudder Cash Investment Trust because of the higher yields it was offering.
• We shifted share classes within several of the underlying funds owned by the portfolios to take advantage of lower fee structures.
• We overweighted the portfolios in equities for most of the annual period. In the fixed-income area, we underweighted cash and overweighted bonds in the Moderate and Conservative Portfolios and slightly underweighted bonds in the Growth Portfolio.
It should also be noted that in implementing our asset allocation strategy, we use a top-down approach, employing a proprietary mix of qualitative and quantitative input to arrive at a view of the securities markets. In deciding which funds to use as underlying funds and in which proportions, we make careful risk management a top priority. As economic prospects began to improve during this annual period, investors embraced what are considered the more high-risk, high-beta sectors of both the equity and fixed-income markets. High-beta sectors are those considered more volatile than the market as a whole. For example, emerging-market international equities, small-cap US equities and high-yield bonds were among the best-performing investment sectors for this fiscal year. This meant that strategies emphasizing thorough risk analysis, such as those used for the Pathway Series, lagged. However, we remain committed to our approach with respect to a long-term investment view.
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.
Pathway Conservative Portfolio
Pathway Conservative Portfolio seeks current income and, secondarily, long-term growth of capital by investing substantially in fixed-income mutual funds, with a more moderate exposure to equity funds.
Performance
Pathway Conservative Portfolio had a total return of 6.85% (Class A shares unadjusted for sales charges) for the 12-month period ended August 31, 2003. The portfolio underperformed the 8.24% annual return of the Lipper Income Funds category1 average and the 7.56% annual return of its composite benchmark. The dominant factors affecting returns were the results of the underlying actively managed funds, which hampered performance relative to the benchmarks. The impact of asset allocation was relatively neutral. Detailed performance information is provided in the Performance Summary section. Past performance is no guarantee of future results. (Please see pages 19 through 24 for the performance of other share classes.)
1 Source: Lipper Inc. The Lipper Income Funds category includes funds that normally seek a high level of current income through investing in income-producing stocks, bonds and money market instruments. It is not possible to invest directly in a Lipper category.Portfolio Strategy
The fixed income portion of the portfolio (where the weighting was 52% of portfolio assets as of August 31) provided positive absolute returns, with each of the five bond funds we hold delivering gains. Scudder High Income Opportunity Fund and Scudder Income Fund outperformed the Lehman Brothers Aggregate Bond Index, although because of a modest allocation of assets to these funds they had minimal impact on portfolio results. However, we added value by sharply underweighting cash in favor of fixed income, as all five bond funds outperformed the historically low interest rates available through the money market funds.
In the equity portion of the portfolio (where the weighting was 42% of portfolio assets as of August 31), our largest equity holding - Scudder Equity 500 Index Fund, representing nearly 26% of portfolio assets at the end of the fiscal year - fell only slightly short of its benchmark, the S&P 500 index, for the period. Among the actively managed equity funds in the Portfolio, only Scudder Large Company Growth Fund outperformed the S&P 500 index component of the benchmark, but again, because of a modest allocation of assets to this fund, it had a minimal impact on portfolio results. On the other hand, the portfolio was overweight in equity funds for all 12 months of the fiscal year. While this strategy hurt performance during months when the equity market lost ground, it boosted portfolio returns for most of the annual period, as equities were the best-performing asset class overall.
Pathway Moderate Portfolio
Pathway Moderate Portfolio seeks a balance of growth of capital and current income by investing in a mix of money market, bond and equity mutual funds.
Performance
Pathway Moderate Portfolio provided a total return of 8.28% (Class A shares unadjusted for sales charges) for the 12-month period ended August 31, 2003. The portfolio underperformed the 9.02% annual return of the Lipper Balanced Funds category average and the 9.62% annual return of its composite benchmark.2 The dominant factors affecting returns were the results of the underlying actively managed funds, which hampered performance relative to the benchmarks. The impact of asset allocation was relatively neutral. Detailed performance information is provided in the Performance Summary section. Past performance is no guarantee of future results. (Please see pages 25 through 30 for the performance of other share classes.)
2 Source: Lipper Inc. The Lipper Balanced Funds category includes portfolios whose primary objective is to conserve principal by maintaining at all times a balance of both stocks and bonds. Typically, the stock/bond ratio ranges around 60%/40%. It is not possible to invest directly in a Lipper category.Portfolio Strategy
The fixed income portion of the portfolio (where the weighting was 37% of portfolio assets as of August 31) provided positive absolute returns, with each of the five bond funds we hold delivering gains. Scudder High Income Opportunity Fund and Scudder Income Fund outperformed the Lehman Brothers Aggregate Bond Index, although because of a modest allocation of assets to these funds, they had minimal impact on portfolio results. However, we added value by sharply underweighting cash in favor of fixed income, as all five bond funds outperformed the historically low interest rates available through the money market funds.
In the equity portion of the portfolio (where the weighting was 62% of portfolio assets as of August 31), our largest equity holding - Scudder Equity 500 Index Fund, representing more than 33% of portfolio assets at the end of the fiscal year - fell only slightly short of its benchmark, the S&P 500 index, for the period. Among the actively managed equity funds in the portfolio, only Scudder Large Company Growth Fund outperformed the S&P 500 index component of the benchmark, but again, because of a modest allocation of assets to this fund, it had a minimal impact on portfolio results. On the other hand, the portfolio was overweight in equity funds for nine of the 12 months of the fiscal year. While this strategy hurt performance during months when the equity market lost ground, it boosted portfolio returns for most of the annual period, as equities were the best-performing asset class overall.
Pathway Growth Portfolio
Pathway Growth Portfolio seeks long-term growth of capital by investing primarily in equity mutual funds. The portfolio also invests a portion of assets in fixed-income funds, which offer the potential for capital appreciation as well as income.
Performance
Pathway Growth Portfolio provided a total return of 10.00% (Class A shares unadjusted for sales charges) for the 12-month period ended August 31, 2003. The portfolio underperformed the 13.94% annual return of the Lipper Multi-Cap Core Funds category average and the 11.67% annual return of its composite benchmark.3 The dominant factors affecting returns were the results of the underlying actively managed funds and our asset class allocation, both of which hampered performance relative to the benchmarks. Detailed performance information is provided in the Performance Summary section. Past performance is no guarantee of future results. (Please see pages 31 through 36 for the performance of other share classes.)
3 Source: Lipper Inc. The Lipper Multi-Cap Core Funds category includes funds that, by portfolio practice, invest in a variety of market capitalization ranges, without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-Cap funds will generally have between 25% to 75% of their assets invested in companies with market capitalizations (on a three-year weighted basis) above 300% of the dollar-weighted median market capitalization of the S&P Mid-Cap 400 Index. Multi-Cap Core funds have wide latitude in the companies in which they invest. These funds will normally have an average price-to-earnings ratio, price-to-book ratio and three-year earnings growth figure, compared to the US diversified multi-cap equity funds universe average.Portfolio Strategy
The equity portion of the portfolio (where the weighting was 87% of portfolio assets as of August 31) provided positive absolute returns, with each of the 18 equity funds we hold delivering gains. On a relative basis, our largest equity holding - Scudder Equity 500 Index Fund, representing over 43% of portfolio assets at the end of the fiscal year - fell only slightly short of its benchmark, the S&P 500 index, for the period. However, among the actively managed equity funds in the portfolio, only Scudder Large Company Growth Fund and Scudder Emerging Markets Growth Fund outperformed their benchmark index components (the S&P 500 index and the MSCI EAFE Index, respectively). With only modest allocations of assets to these funds, they had a minimal impact on portfolio results. The underlying small-cap funds experienced the most severe underperformance relative to their benchmark, the Russell 2000 Index, although the portfolio maintained a rather neutral position in small-cap equity funds throughout the annual period. The portfolio was consistently overweighted in US equity funds relative to the benchmark. This strategy was effective, as US equities outperformed fixed income securities for the annual period, as measured by the S&P 500 index and the Lehman Brothers Aggregate Bond Index, respectively. The portfolio was overweighted in international equity funds during the first half of the fiscal year and neutral to slightly underweighted during the second half. Unfortunately, this strategy hurt portfolio performance, as international equity performance was stronger during the second half of the year than during the first. Overall, the portfolio was overweight in equity funds for 10 of the 12 months of the fiscal year. While this strategy hurt performance during months when the equity market lost ground, it boosted portfolio returns for most of the annual period, as equities were the best-performing asset class for the fiscal year as a whole.
In the fixed income portion of the portfolio (where the weighting was 12% of portfolio assets as of August 31), each of the five bond funds we held delivered absolute gains. Scudder High Income Opportunity Fund and Scudder Income Fund outperformed the Lehman Brothers Aggregate Bond Index, although, again, because of a modest allocation of assets to these funds, they had minimal impact on portfolio results. However, we added value by slightly underweighting fixed income in nine of the 12 months of the fiscal year, which particularly helped performance when the bond markets struggled from late June through August.
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.
Pathway Conservative Portfolio
Classes A, B and C
Average Annual Total Returns* (Unadjusted for Sales Charge) | ||||
1-Year | 3-Year | 5-Year | Life of Class** | |
Class A(a) | 6.85% | -1.42% | 1.96% | 3.31% |
Class B(a) | 6.04% | -2.09% | 1.23% | 2.56% |
Class C(a) | 6.04% | -2.12% | 1.21% | 2.54% |
S&P 500 Index+ | 12.07% | -11.43% | 2.48% | 5.89% |
Lehman Aggregate Bond Index+ | 4.36% | 8.22% | 6.56% | 7.01% |
Lehman Aggregate Bond Index (50%), S&P 500 Index (37%), MSCI EAFE Index (3%), 3-month T-Bill (10%)+ | 7.56% | -.07% | 5.00% | 6.65% |
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
Net Asset Value and Distribution Information | |||
Class A | Class B | Class C | |
Net Asset Value: 8/31/03 | $ 10.69 | $ 10.70 | $ 10.69 |
8/31/02 | $ 10.30 | $ 10.31 | $ 10.30 |
Distribution Information: Twelve Months: Income Dividends | $ .30 | $ .22 | $ .22 |
Class A Lipper Rankings* - Income Funds Category | ||||
Period | Rank | Number of Funds Tracked | Percentile Ranking | |
1-Year | 85 | of | 146 | 58 |
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.
Source: Lipper Inc.
Growth of an Assumed $10,000 Investment*(b) (Adjusted for Sales Charge) |
[] Pathway Conservative Portfolio - Class A(c) [] S&P 500 Index+[] Lehman Aggregate Bond Index+ [] Lehman Aggregate Bond Index (50%), S&P 500 Index (37%), MSCI EAFE Index (3%), 3-month T-Bill (10%)+ |
Yearly periods ended August 31 |
Comparative Results* (Adjusted for Sales Charge) | |||||
Pathway Conservative Portfolio | 1-Year | 3-Year | 5-Year | Life of Class** | |
Class A(c) | Growth of $10,000 | $10,070 | $9,030 | $10,383 | $11,755 |
Average annual total return | .70% | -3.35% | .76% | 2.41% | |
Class B(c) | Growth of $10,000 | $10,304 | $9,214 | $10,545 | $11,872 |
Average annual total return | 3.04% | -2.69% | 1.07% | 2.56% | |
Class C(c) | Growth of $10,000 | $10,497 | $9,283 | $10,516 | $11,742 |
Average annual total return | 4.97% | -2.45% | 1.01% | 2.39% | |
S&P 500 Index+ | Growth of $10,000 | $11,207 | $6,949 | $11,301 | $14,717 |
Average annual total return | 12.07% | -11.43% | 2.48% | 5.89% | |
Lehman Aggregate Bond Index+ | Growth of $10,000 | $10,436 | $12,676 | $13,742 | $15,801 |
Average annual total return | 4.36% | 8.22% | 6.56% | 7.01% | |
Lehman Aggregate Bond Index (50%), S&P 500 Index (37%), MSCI EAFE Index (3%), 3-month T-Bill (10%)+ | Growth of $10,000 | $10,756 | $9,979 | $12,760 | $15,349 |
Average annual total return | 7.56% | -.07% | 5.00% | 6.65% |
The growth of $10,000 is cumulative.
Notes to Performance Summary |
* Returns and rankings during all periods shown reflect a fee waiver and/or expense reimbursement for some underlying funds. Without these waivers/reimbursements, returns and rankings would have been lower.
** The Portfolio commenced operations on November 15, 1996. Index returns begin November 30, 1996.
a Returns shown for Class A, B and C shares for the periods prior to their inception on December 29, 2000 are derived from the historical performance of Class S shares of the Scudder Pathway Series: Conservative Portfolio during such periods and have been adjusted to reflect the higher gross annual total operating expenses of each specific class. Any difference in expenses will affect performance.
b The Portfolio's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.75%. This results in a net initial investment of $9,425.
c Returns shown for Class A, B and C shares for the periods prior to their inception on December 29, 2000 are derived from the historical performance of Class S shares of the Scudder Pathway Series: Conservative Portfolio during such periods and have been adjusted to reflect the higher gross total annual operating expenses and the current applicable sales charges of each specific class. Returns for Class A reflect the current maximum initial sales charge of 5.75%. Class B share performance is adjusted for the applicable contingent deferred sales charge ("CDSC"), which is 4% within the first year after purchase, declining to 0% after six years. Returns for Class C reflect an initial sales charge of 1%. Redemptions on Class C within one year of purchase may be subject to a CDSC of 1%. Any difference in expenses will affect performance.
+ The Lehman Aggregate Bond Index is a market-value-weighted measure of treasury issues, agency issues, corporate bond issues and mortgage-backed securities. The Standard & Poor's 500 (S&P 500) Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The MSCI EAFE Index is a market-value-weighted measure of stocks of 21 countries. Index returns assume reinvestment of dividends and, unlike Portfolio returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.
All performance is historical, assumes reinvestment of all dividends and capital gains, and is not indicative of future results. Investment return and principal value will fluctuate, so an investor's shares, when redeemed, may be worth more or less than when purchased. Performance figures do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. Returns and rankings may differ by share class.
Shareholders of the Class A, B and C shares of the portfolio will indirectly bear that portfolio's pro rata share of expenses and fees incurred by the underlying Scudder funds in which the portfolio is invested.
Investments in funds involve risk. Some funds have more risk than others. These include funds that allow exposure to or otherwise concentrate investments in certain sectors, geographic regions, security types, market capitalization or foreign securities (e.g., political or economic instability, which can be accentuated in emerging market countries). Please read this fund's prospectus for specific details regarding its investments and risk profile.
Please call (800) 621-1048 for the portfolio's most up-to-date performance. On the Web, go to scudder.com.
Pathway Conservative Portfolio
Class AARP and Class S
Class AARP has been created especially for members of AARP. Class S is not available to new investors.
Average Annual Total Returns* | ||||
1-Year | 3-Year | 5-Year | Life of Class** | |
Class S | 7.10% | -1.19% | 2.20% | 3.56% |
Class AARP(a) | 7.10% | -1.19% | 2.20% | 3.56% |
S&P 500 Index+ | 12.07% | -11.43% | 2.48% | 5.89% |
Lehman Aggregate Bond Index+ | 4.36% | 8.22% | 6.56% | 7.01% |
Lehman Aggregate Bond Index (50%), S&P 500 Index (37%), MSCI EAFE Index (3%), 3-month T-Bill (10%)+ | 7.56% | -.07% | 5.00% | 6.65% |
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
Net Asset Value and Distribution Information | ||
Class AARP | Class S | |
Net Asset Value: 8/31/03 | $ 10.69 | $ 10.69 |
8/31/02 | $ 10.30 | $ 10.30 |
Distribution Information: Twelve Months: Income Dividends | $ .32 | $ .32 |
Class S Lipper Rankings* - Income Funds Category | ||||
Period | Rank | Number of Funds Tracked | Percentile Ranking | |
1-Year | 70 | of | 146 | 48 |
3-Year | 73 | of | 89 | 82 |
5-Year | 65 | of | 73 | 88 |
Rankings are historical and do not guarantee future results. Rankings are based on total return with distributions reinvested.
Source: Lipper Inc.
Growth of an Assumed $10,000 Investment* |
[] Pathway Conservative Portfolio - Class S [] S&P 500 Index+[] Lehman Aggregate Bond Index+ [] Lehman Aggregate Bond Index (50%), S&P 500 Index (37%), MSCI EAFE Index (3%), 3-month T-Bill (10%)+ |
Yearly periods ended August 31 |
Comparative Results* | |||||
Pathway Conservative Portfolio | 1-Year | 3-Year | 5-Year | Life of Class** | |
Class S | Growth of $10,000 | $10,710 | $9,648 | $11,150 | $12,680 |
Average annual total return | 7.10% | -1.19% | 2.20% | 3.56% | |
Class AARP(a) | Growth of $10,000 | $10,710 | $9,647 | $11,149 | $12,680 |
Average annual total return | 7.10% | -1.19% | 2.20% | 3.56% | |
S&P 500 Index+ | Growth of $10,000 | $11,207 | $6,949 | $11,301 | $14,717 |
Average annual total return | 12.07% | -11.43% | 2.48% | 5.89% | |
Lehman Aggregate Bond Index+ | Growth of $10,000 | $10,436 | $12,676 | $13,742 | $15,801 |
Average annual total return | 4.36% | 8.22% | 6.56% | 7.01% | |
Lehman Aggregate Bond Index (50%), S&P 500 Index (37%), MSCI EAFE Index (3%), 3-month T-Bill (10%)+ | Growth of $10,000 | $10,756 | $9,979 | $12,760 | $15,349 |
Average annual total return | 7.56% | -.07% | 5.00% | 6.65% |
The growth of $10,000 is cumulative.
Notes to Performance Summary |
* Returns and rankings during all periods shown reflect a fee waiver and/or expense reimbursement for some underlying funds. Without these waivers/reimbursements, returns and rankings would have been lower.
** The Portfolio commenced operations on November 15, 1996. Index returns begin November 30, 1996.
a Returns shown for Class AARP shares for the period prior to its inception on September 25, 2000 are derived from the historical performance of Class S shares of Scudder Pathway Series: Conservative Portfolio during such periods and have assumed the same expense structure during such periods. Any difference in expenses will affect performance.
+ The Lehman Aggregate Bond Index is a market-value-weighted measure of treasury issues, agency issues, corporate bond issues and mortgage-backed securities. The Standard & Poor's 500 (S&P 500) Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The MSCI EAFE Index is a market-value-weighted measure of stocks of 21 countries. Index returns assume reinvestment of dividends and unlike Portfolio returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.
All performance is historical, assumes reinvestment of all dividends and capital gains, and is not indicative of future results. Investment return and principal value will fluctuate, so an investor's shares, when redeemed, may be worth more or less than when purchased. Performance figures do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. Returns and rankings may differ by share class.
The Portfolio invests in other Scudder Funds and although Class S and Class AARP did not incur any direct expenses for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested.
Investments in funds involve risk. Some funds have more risk than others. These include funds that allow exposure to or otherwise concentrate investments in certain sectors, geographic regions, security types, market capitalization or foreign securities (e.g., political or economic instability, which can be accentuated in emerging market countries). Please read this fund's prospectus for specific details regarding its investments and risk profile.
Please call (800) 728-3337 (Class AARP) or (800) SCUDDER (Class S) for the portfolio's most up-to-date performance. On the Web, go to aarp.scudder.com (Class AARP) or myScudder.com (Class S).
Pathway Moderate Portfolio
Classes A, B and C
Average Annual Total Return* (Unadjusted for Sales Charge) | ||||
1-Year | 3-Year | 5-Year | Life of Class** | |
Class A(a) | 8.28% | -6.26% | 2.31% | 2.89% |
Class B(a) | 7.46% | -6.93% | 1.57% | 2.14% |
Class C(a) | 7.44% | -6.96% | 1.54% | 2.12% |
S&P 500 Index+ | 12.07% | -11.43% | 2.48% | 5.89% |
Lehman Aggregate Bond Index+ | 4.36% | 8.22% | 6.56% | 7.01% |
S&P 500 Index (50%), Lehman Aggregate Bond Index (35%), MSCI EAFE Index (7%), 3-month T-Bill (5%), Russell 2000 Index (3%)+ | 9.62% | -3.40% | 4.43% | 6.38% |
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
Net Asset Value and Distribution Information | |||
Class A | Class B | Class C | |
Net Asset Value: 8/31/03 | $ 9.91 | $ 9.91 | $ 9.90 |
8/31/02 | $ 9.38 | $ 9.38 | $ 9.37 |
Distribution Information: Twelve Months: Income Dividends | $ .23 | $ .16 | $ .15 |
Class A Lipper Rankings* - Balanced Funds Category | ||||
Period | Rank | Number of Funds Tracked | Percentile Ranking | |
1-Year | 289 | of | 528 | 55 |
Rankings are historical and do not guarantee future results. Rankings are based on total return unadjusted for sales charges with distributions reinvested. If sales charges had been included, rankings might have been less favorable.
Source: Lipper Inc.
Growth of an Assumed $10,000 Investment*(b) (Adjusted for Sales Charge) |
[] Pathway Moderate Portfolio - Class A(c) [] S&P 500 Index+[] Lehman Aggregate Bond Index+ [] S&P 500 Index (50%), Lehman Aggregate Bond Index (35%), MSCI EAFE Index (7%), 3-month T-Bill (5%), Russell 2000 Index (3%)+ |
Yearly periods ended August 31 |
Comparative Results* (Adjusted for Sales Charge) | |||||
Pathway Moderate Portfolio | 1-Year | 3-Year | 5-Year | Life of Class** | |
Class A(c) | Growth of $10,000 | $10,205 | $7,763 | $10,565 | $11,438 |
Average annual total return | 2.05% | -8.09% | 1.11% | 2.00% | |
Class B(c) | Growth of $10,000 | $10,446 | $7,924 | $10,727 | $11,543 |
Average annual total return | 4.46% | -7.46% | 1.41% | 2.14% | |
Class C(c) | Growth of $10,000 | $10,637 | $7,972 | $10,688 | $11,413 |
Average annual total return | 6.37% | -7.28% | 1.34% | 1.97% | |
S&P 500 Index+ | Growth of $10,000 | $11,207 | $6,949 | $11,301 | $14,717 |
Average annual total return | 12.07% | -11.43% | 2.48% | 5.89% | |
Lehman Aggregate Bond Index+ | Growth of $10,000 | $10,436 | $12,676 | $13,742 | $15,801 |
Average annual total return | 4.36% | 8.22% | 6.56% | 7.01% | |
S&P 500 Index (50%), Lehman Aggregate Bond Index (35%), MSCI EAFE Index (7%), 3-month T-Bill (5%), Russell 2000 Index (3%)+ | Growth of $10,000 | $10,962 | $9,015 | $12,422 | $15,095 |
Average annual total return | 9.62% | -3.40% | 4.43% | 6.38% |
The growth of $10,000 is cumulative.
Notes to Performance Summary |
* Returns and rankings during all periods shown reflect a fee waiver and/or expense reimbursement for some underlying funds. Without these waivers/reimbursements, returns and rankings would have been lower.
** The Portfolio commenced operations on November 15, 1996. Index returns begin November 30, 1996.
a Returns shown for Class A, B and C shares for the periods prior to their inception on December 29, 2000 are derived from the historical performance of Class S shares of the Scudder Pathway Series: Moderate Portfolio during such periods and have been adjusted to reflect the higher gross annual total operating expenses of each specific class. Any difference in expenses will affect performance.
b The Portfolio's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.75%. This results in a net initial investment of $9,425.
c Returns shown for Class A, B and C shares for the periods prior to their inception on December 29, 2000 are derived from the historical performance of Class S shares of the Scudder Pathway Series: Moderate Portfolio during such periods and have been adjusted to reflect the higher gross total annual operating expenses and the current applicable sales charges of each specific class. Returns for Class A reflect the current maximum initial sales charge of 5.75%. Class B share performance is adjusted for the applicable contingent deferred sales charge ("CDSC"), which is 4% within the first year after purchase, declining to 0% after six years. Returns for Class C reflect an initial sales charge of 1%. Redemptions on Class C within one year of purchase may be subject to a CDSC of 1%. Any difference in expenses will affect performance.
+ The Standard & Poor's 500 (S&P 500) Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Lehman Aggregate Bond Index is a market-value-weighted measure of treasury issues, agency issues, corporate bond issues and mortgage-backed securities. The MSCI EAFE Index is a market-value-weighted measure of stocks of 21 countries. The Russell 2000 Index is an unmanaged capitalization-weighted measure of approximately 2000 small US stocks. Index returns assume reinvestment of dividends and, unlike Portfolio returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.
All performance is historical, assumes reinvestment of all dividends and capital gains, and is not indicative of future results. Investment return and principal value will fluctuate, so an investor's shares, when redeemed, may be worth more or less than when purchased. Performance figures do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. Returns and rankings may differ by share class.
Shareholders of the Class A, B and C shares of the portfolio will indirectly bear that portfolio's pro rata share of expenses and fees incurred by the underlying Scudder funds in which the portfolio is invested.
Investments in funds involve risk. Some funds have more risk than others. These include funds that allow exposure to or otherwise concentrate investments in certain sectors, geographic regions, security types, market capitalization or foreign securities (e.g., political or economic instability, which can be accentuated in emerging market countries). Please read this fund's prospectus for specific details regarding its investments and risk profile.
Please call (800) 621-1048 for the portfolio's most up-to-date performance. On the Web, go to scudder.com.
Pathway Moderate Portfolio
Class AARP and Class S
Class AARP has been created especially for members of AARP. Class S is not available to new investors.
Average Annual Total Returns* | ||||
1-Year | 3-Year | 5-Year | Life of Class** | |
Class S | 8.43% | -6.08% | 2.53% | 3.13% |
Class AARP(a) | 8.54% | -6.05% | 2.55% | 3.14% |
S&P 500 Index+ | 12.07% | -11.43% | 2.48% | 5.89% |
Lehman Aggregate Bond Index+ | 4.36% | 8.22% | 6.56% | 7.01% |
S&P 500 Index (50%), Lehman Aggregate Bond Index (35%), MSCI EAFE Index (7%), 3-month T-Bill (5%), Russell 2000 Index (3%)+ | 9.62% | -3.40% | 4.43% | 6.38% |
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
Net Asset Value and Distribution Information | ||
Class AARP | Class S | |
Net Asset Value: 8/31/03 | $ 9.90 | $ 9.90 |
8/31/02 | $ 9.37 | $ 9.38 |
Distribution Information: Twelve Months: Income Dividends | $ .25 | $ .25 |
Class S Lipper Rankings* - Balanced Funds Category | ||||
Period | Rank | Number of Funds Tracked | Percentile Ranking | |
1-Year | 275 | of | 528 | 52 |
3-Year | 317 | of | 417 | 76 |
5-Year | 245 | of | 342 | 72 |
Rankings are historical and do not guarantee future results. Rankings are based on total return with distributions reinvested.
Source: Lipper Inc.
Growth of an Assumed $10,000 Investment* |
[] Pathway Moderate Portfolio - Class S [] S&P 500 Index+[] Lehman Aggregate Bond Index+ [] S&P 500 Index (50%), Lehman Aggregate Bond Index (35%), MSCI EAFE Index (7%), 3-month T-Bill (5%), Russell 2000 Index (3%)+ |
Yearly periods ended August 31 |
Comparative Results* | |||||
Pathway Moderate Portfolio | 1-Year | 3-Year | 5-Year | Life of Class** | |
Class S | Growth of $10,000 | $10,843 | $8,286 | $11,333 | $12,325 |
Average annual total return | 8.43% | -6.08% | 2.53% | 3.13% | |
Class AARP(a) | Growth of $10,000 | $10,854 | $8,293 | $11,342 | $12,335 |
Average annual total return | 8.54% | -6.05% | 2.55% | 3.14% | |
S&P 500 Index+ | Growth of $10,000 | $11,207 | $6,949 | $11,301 | $14,717 |
Average annual total return | 12.07% | -11.43% | 2.48% | 5.89% | |
Lehman Aggregate Bond Index+ | Growth of $10,000 | $10,436 | $12,676 | $13,742 | $15,801 |
Average annual total return | 4.36% | 8.22% | 6.56% | 7.01% | |
S&P 500 Index (50%), Lehman Aggregate Bond Index (35%), MSCI EAFE Index (7%), 3-month T-Bill (5%), Russell 2000 Index (3%)+ | Growth of $10,000 | $10,962 | $9,015 | $12,422 | $15,095 |
Average annual total return | 9.62% | -3.40% | 4.43% | 6.38% |
The growth of $10,000 is cumulative.
Notes to Performance Summary |
* Returns and rankings during all periods shown reflect a fee waiver and/or expense reimbursement for some underlying funds. Without these waivers/reimbursements, returns and rankings would have been lower.
** The Portfolio commenced operations on November 15, 1996. Index returns begin November 30, 1996.
a Returns shown for Class AARP shares for the periods prior to its inception on October 2, 2000 are derived from the historical performance of Class S shares of the Scudder Pathway Series: Moderate Portfolio during such periods and have assumed the same expense structure during such periods. Any difference in expenses will affect performance.
+ The Standard & Poor's 500 (S&P 500) Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Lehman Aggregate Bond Index is a market-value-weighted measure of treasury issues, agency issues, corporate bond issues and mortgage-backed securities. The MSCI EAFE Index is a market-value-weighted measure of stocks of 21 countries. The Russell 2000 Index is an unmanaged capitalization-weighted measure of approximately 2,000 US stocks. Index returns assume reinvestment of dividends and, unlike Portfolio returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.
All performance is historical, assumes reinvestment of all dividends and capital gains, and is not indicative of future results. Investment return and principal value will fluctuate, so an investor's shares, when redeemed, may be worth more or less than when purchased. Performance figures do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. Returns and rankings may differ by share class.
The Portfolio invests in other Scudder Funds and although Class S and Class AARP did not incur any direct expenses for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested.
Investments in funds involve risk. Some funds have more risk than others. These include funds that allow exposure to or otherwise concentrate investments in certain sectors, geographic regions, security types, market capitalization or foreign securities (e.g., political or economic instability, which can be accentuated in emerging market countries). Please read this fund's prospectus for specific details regarding its investments and risk profile.
Please call (800) 728-3337 (Class AARP) or (800) SCUDDER (Class S) for the portfolio's most up-to-date performance. On the Web, go to aarp.scudder.com (Class AARP) or myScudder.com (Class S).
Pathway Growth Portfolio
Classes A, B and C
Average Annual Total Returns* (Unadjusted for Sales Charge) | ||||
1-Year | 3-Year | 5-Year | Life of Class** | |
Class A(a) | 10.00% | -9.83% | 3.60% | 3.68% |
Class B(a) | 9.17% | -10.49% | 2.84% | 2.91% |
Class C(a) | 9.17% | -10.49% | 2.84% | 2.91% |
S&P 500 Index+ | 12.07% | -11.43% | 2.48% | 5.89% |
S&P 500 Index (68%), MSCI EAFE Index (12%), Lehman Aggregate Bond Index (15%), Russell 2000 Index (5%)+ | 11.67% | -7.86% | 3.38% | 5.57% |
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
Net Asset Value and Distribution Information | |||
Class A | Class B | Class C | |
Net Asset Value: 8/31/03 | $ 11.08 | $ 10.97 | $ 10.97 |
8/31/02 | $ 10.21 | $ 10.11 | $ 10.11 |
Distribution Information: Twelve Months: Income Dividends | $ .13 | $ .06 | $ .06 |
Class A Lipper Rankings* - Multi-Cap Core Funds Category | ||||
Period | Rank | Number of Funds Tracked | Percentile Ranking | |
1-Year | 405 | of | 528 | 77 |
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.
Source: Lipper Inc.
Growth of an Assumed $10,000 Investment*(b) (Adjusted for Sales Charge) |
[] Pathway Growth Portfolio - Class A(c) [] S&P 500 Index+[] S&P 500 Index (68%), MSCI EAFE Index (12%), Lehman Aggregate Bond Index (15%), Russell 2000 Index (5%)+ |
Yearly periods ended August 31 |
Comparative Results* (Adjusted for Sales Charge) | |||||
Pathway Growth Portfolio | 1-Year | 3-Year | 5-Year | Life of Class** | |
Class A(c) | Growth of $10,000 | $10,368 | $6,909 | $11,248 | $12,045 |
Average annual total return | 3.68% | -11.59% | 2.38% | 2.78% | |
Class B(c) | Growth of $10,000 | $10,617 | $7,050 | $11,413 | $12,149 |
Average annual total return | 6.17% | -11.00% | 2.68% | 2.91% | |
Class C(c) | Growth of $10,000 | $10,807 | $7,101 | $11,388 | $12,028 |
Average annual total return | 8.07% | -10.79% | 2.63% | 2.76% | |
S&P 500 Index+ | Growth of $10,000 | $11,207 | $6,949 | $11,301 | $14,717 |
Average annual total return | 12.07% | -11.43% | 2.48% | 5.89% | |
S&P 500 Index (68%), MSCI EAFE Index (12%), Lehman Aggregate Bond Index (15%), Russell 2000 Index (5%)+ | Growth of $10,000 | $11,167 | $7,823 | $11,806 | $14,344 |
Average annual total return | 11.67% | -7.86% | 3.38% | 5.57% |
The growth of $10,000 is cumulative.
Notes to Performance Summary |
* Returns and rankings during all periods shown reflect a fee waiver and/or expense reimbursement for some underlying funds. Without these waivers/reimbursements, returns and rankings would have been lower.
** The Portfolio commenced operations on November 15, 1996. Index returns begin November 30, 1996.
a Returns shown for Class A, B and C shares for the periods prior to their inception on December 29, 2000 are derived from the historical performance of Class S shares of the Scudder Pathway Series: Growth Portfolio during such periods and have been adjusted to reflect the higher gross annual total operating expenses of each specific class. Any difference in expenses will affect performance.
b The Portfolio's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.75%. This results in a net initial investment of $9,425.
c Returns shown for Class A, B and C shares for the periods prior to their inception on December 29, 2000 are derived from the historical performance of Class S shares of the Scudder Pathway Series: Growth Portfolio during such periods and have been adjusted to reflect the higher gross total annual operating expenses and the current applicable sales charges of each specific class. Returns for Class A reflect the current maximum initial sales charge of 5.75%. Class B share performance is adjusted for the applicable contingent deferred sales charge ("CDSC"), which is 4% within the first year after purchase, declining to 0% after six years. Returns for Class C reflect an initial sales charge of 1%. Redemptions on Class C within one year of purchase may be subject to a CDSC of 1%. Any difference in expenses will affect performance.
+ The Standard & Poor's 500 (S&P 500) Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The MSCI EAFE Index is a market-value-weighted measure of stocks of 21 countries. The Lehman Aggregate Bond Index is a market-value-weighted measure of treasury issues, agency issues, corporate bond issues and mortgage-backed securities. The Russell 2000 Index is an unmanaged capitalization-weighted measure of approximately 2000 small US stocks. Index returns assume reinvestment of dividends and, unlike Portfolio returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.
All performance is historical, assumes reinvestment of all dividends and capital gains, and is not indicative of future results. Investment return and principal value will fluctuate, so an investor's shares, when redeemed, may be worth more or less than when purchased. Performance figures do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. Returns and rankings may differ by share class.
Shareholders of the Class A, B and C shares of the portfolio will indirectly bear that portfolio's pro rata share of expenses and fees incurred by the underlying Scudder funds in which the portfolio is invested.
Investments in funds involve risk. Some funds have more risk than others. These include funds that allow exposure to or otherwise concentrate investments in certain sectors, geographic regions, security types, market capitalization or foreign securities (e.g., political or economic instability, which can be accentuated in emerging market countries). Please read this fund's prospectus for specific details regarding its investments and risk profile.
Please call (800) 621-1048 for the portfolio's most up-to-date performance. On the Web, go to scudder.com.
Pathway Growth Portfolio
Class AARP and Class S
Class AARP has been created especially for members of AARP. Class S is not available to new investors.
Average Annual Total Returns* | ||||
1-Year | 3-Year | 5-Year | Life of Class** | |
Class S | 10.18% | -9.66% | 3.83% | 3.92% |
Class AARP(a) | 10.18% | -9.65% | 3.83% | 3.92% |
S&P 500 Index+ | 12.07% | -11.43% | 2.48% | 5.89% |
S&P 500 Index (68%), MSCI EAFE Index (12%), Lehman Aggregate Bond Index (15%), Russell 2000 Index (5%)+ | 11.67% | -7.86% | 3.38% | 5.57% |
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
Net Asset Value and Distribution Information | ||
Class AARP | Class S | |
Net Asset Value: 8/31/03 | $ 11.10 | $ 11.10 |
8/31/02 | $ 10.24 | $ 10.24 |
Distribution Information: Twelve Months: Income Dividends | $ .16 | $ .16 |
Class S Lipper Rankings* - Multi-Cap Core Funds Category | ||||
Period | Rank | Number of Funds Tracked | Percentile Ranking | |
1-Year | 398 | of | 528 | 76 |
3-Year | 184 | of | 376 | 49 |
5-Year | 139 | of | 235 | 59 |
Rankings are historical and do not guarantee future results. Rankings are based on total return with distributions reinvested.
Source: Lipper Inc.
Growth of an Assumed $10,000 Investment* |
[] Pathway Growth Portfolio - Class S [] S&P 500 Index+[] S&P 500 Index (68%), MSCI EAFE Index (12%), Lehman Aggregate Bond Index (15%), Russell 2000 Index (5%)+ |
Yearly periods ended August 31 |
Comparative Results* | |||||
Pathway Growth Portfolio | 1-Year | 3-Year | 5-Year | Life of Class** | |
Class S | Growth of $10,000 | $11,018 | $7,374 | $12,065 | $12,979 |
Average annual total return | 10.18% | -9.66% | 3.83% | 3.92% | |
Class AARP(a) | Growth of $10,000 | $11,018 | $7,374 | $12,065 | $12,979 |
Average annual total return | 10.18% | -9.65% | 3.83% | 3.92% | |
S&P 500 Index+ | Growth of $10,000 | $11,207 | $6,949 | $11,301 | $14,717 |
Average annual total return | 12.07% | -11.43% | 2.48% | 5.89% | |
S&P 500 Index (68%), MSCI EAFE Index (12%), Lehman Aggregate Bond Index (15%), Russell 2000 Index (5%)+ | Growth of $10,000 | $11,167 | $7,823 | $11,806 | $14,344 |
Average annual total return | 11.67% | -7.86% | 3.38% | 5.57% |
The growth of $10,000 is cumulative.
Notes to Performance Summary |
* Returns and rankings during all periods shown reflect a fee waiver and/or expense reimbursement for some underlying funds. Without these waivers/reimbursements, returns and rankings would have been lower.
** The Portfolio commenced operations on November 15, 1996. Index returns begin November 30, 1996.
a Returns shown for Class AARP shares for the periods prior to its inception on September 25, 2000 are derived from the historical performance of Class S shares of the Scudder Pathway Series: Growth Portfolio during such periods and have assumed the same expense structure during such periods. Any difference in expenses will affect performance.
+ The Standard & Poor's 500 (S&P 500) Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The MSCI EAFE Index is a market-value-weighted measure of stocks of 21 countries. The Lehman Aggregate Bond Index is a market-value-weighted measure of treasury issues, agency issues, corporate bond issues and mortgage-backed securities. The Russell 2000 Index is an unmanaged capitalization-weighted measure of approximately 2,000 small US stocks. Index returns assume reinvestment of dividends and, unlike Portfolio returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.
All performance is historical, assumes reinvestment of all dividends and capital gains, and is not indicative of future results. Investment return and principal value will fluctuate, so an investor's shares, when redeemed, may be worth more or less than when purchased. Performance figures do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. Returns and rankings may differ by share class.
The Portfolio invests in other Scudder Funds and although Class S and Class AARP did not incur any direct expenses for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested.
Investments in funds involve risk. Some funds have more risk than others. These include funds that allow exposure to or otherwise concentrate investments in certain sectors, geographic regions, security types, market capitalization or foreign securities (e.g., political or economic instability, which can be accentuated in emerging market countries). Please read this fund's prospectus for specific details regarding its investments and risk profile.
Please call (800) 728-3337 (Class AARP) or (800) SCUDDER (Class S) for the portfolio's most up-to-date performance. On the Web, go to aarp.scudder.com (Class AARP) or myScudder.com (Class S).
Pathway Conservative Portfolio
Asset Allocation | 8/31/03 | 8/31/02 |
Money Market | 6% | 6% |
Fixed Income | 52% | 53% |
Equity | 42% | 41% |
100% | 100% |
Asset Class Ranges | |
Fixed Income Funds | 50-70% |
Equity Funds | 30-50% |
Asset allocation is subject to change.
For more complete details about the fund's investment portfolio, see page 38. A quarterly Fact Sheet and Portfolio Holdings are available upon request.
Pathway Moderate Portfolio
Asset Allocation | 8/31/03 | 8/31/02 |
Money Market | 1% | 2% |
Fixed Income | 37% | 35% |
Equity | 62% | 63% |
100% | 100% |
Asset Class Ranges | |
Fixed Income Funds | 30-50% |
Equity Funds | 50-70% |
Asset allocation is subject to change.
For more complete details about the fund's investment portfolio, see page 39. A quarterly Fact Sheet and Portfolio Holdings are available upon request.
Pathway Growth Portfolio
Asset Allocation | 8/31/03 | 8/31/02 |
Money Market | 1% | - |
Fixed Income | 12% | 12% |
Equity | 87% | 88% |
100% | 100% |
Asset Class Ranges | |
Fixed Income Funds | 5-25% |
Equity Funds | 75-95% |
Asset allocation is subject to change.
For more complete details about the fund's investment portfolio, see page 41. A quarterly Fact Sheet and Portfolio Holdings are available upon request.
Pathway Conservative Portfolio | Shares | Value ($) |
Equity 41.5% | ||
Scudder Capital Growth Fund "I" | 47,490 | 1,812,694 |
Scudder Contrarian Fund "I" | 96,811 | 1,825,856 |
Scudder Equity 500 Index Fund "Premier" | 231,762 | 26,594,716 |
Scudder Growth and Income Fund "Institutional" | 253,602 | 4,711,932 |
Scudder International Fund "I" | 61,600 | 2,050,054 |
Scudder International Select Equity Fund "Premier" | 86,205 | 1,256,006 |
Scudder Large Company Growth Fund "I" | 112,916 | 2,394,957 |
Scudder Large Company Value Fund "I" | 43,709 | 919,641 |
Scudder S&P 500 Index Fund "S" | 1,592 | 21,393 |
Scudder-Dreman High Return Equity Fund "I" | 39,093 | 1,303,744 |
Total Equity (Cost $40,079,616) | 42,890,993 | |
Fixed Income 52.5% | ||
Scudder Fixed Income Fund "Institutional" | 4,923,617 | 53,372,007 |
Scudder GNMA Fund "S" | 13,424 | 202,306 |
Scudder High Income Opportunity Fund "S" | 6,132 | 53,658 |
Scudder Income Fund "I" | 13,771 | 173,927 |
Scudder Short-Term Bond Fund "S" | 40,052 | 422,545 |
Total Fixed Income (Cost $54,641,058) | 54,224,443 | |
Money Market 6.0% | ||
Scudder Cash Investment Trust "S" | 672,230 | 672,230 |
Scudder Money Market Series "Institutional" | 5,555,144 | 5,555,144 |
Total Money Market (Cost $6,227,374) | 6,227,374 | |
Total Investment Portfolio - 100.0% (Cost $100,948,048) (a) | 103,342,810 |
(a) The cost for federal income tax purposes was $103,586,695. At August 31, 2003, net unrealized depreciation for all securities based on tax cost was $243,885. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $3,143,199 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $3,387,084.
During the year ended August 31, 2003, purchases and sales of investment securities (excluding money market investments) aggregated $96,868,296 and $97,568,274, respectively.
The accompanying notes are an integral part of the financial statements.
Pathway Moderate Portfolio | Shares | Value ($) |
Equity 62.1% | ||
Scudder 21st Century Growth Fund "I" | 88,421 | 1,118,525 |
Scudder Capital Growth Fund "I" | 52,905 | 2,019,389 |
Scudder Contrarian Fund "I" | 271,501 | 5,120,512 |
Scudder Emerging Markets Growth Fund "S" | 77 | 934 |
Scudder Equity 500 Index Fund "Premier" | 572,987 | 65,750,224 |
Scudder Growth and Income Fund "Institutional" | 767,231 | 14,255,155 |
Scudder International Equity Fund "Institutional" | 442,380 | 3,941,604 |
Scudder International Fund "I" | 197,562 | 6,574,879 |
Scudder International Select Equity Fund "Premier" | 271,723 | 3,958,998 |
Scudder Large Company Growth Fund "I" | 290,828 | 6,168,471 |
Scudder Large Company Value Fund "I" | 104,257 | 2,193,572 |
Scudder S&P 500 Index Fund "S" | 656 | 8,819 |
Scudder Select 500 Fund "S" | 247,010 | 2,450,344 |
Scudder Small Cap Fund "Investment" | 14,848 | 303,642 |
Scudder Small Company Stock Fund "S" | 109,753 | 2,390,420 |
Scudder Small Company Value Fund "S" | 70,564 | 1,518,542 |
Scudder-Dreman High Return Equity Fund "I" | 119,644 | 3,990,129 |
Scudder-Dreman Small Cap Value Fund "I" | 38,232 | 898,070 |
Total Equity (Cost $115,415,751) | 122,662,229 | |
Fixed Income 37.0% | ||
Scudder Fixed Income Fund "Institutional" | 6,713,506 | 72,774,410 |
Scudder GNMA Fund "S" | 5,865 | 88,386 |
Scudder High Income Opportunity Fund "S" | 10,654 | 93,226 |
Scudder Income Fund "I" | 7,376 | 93,161 |
Scudder Short-Term Bond Fund "S" | 8,921 | 94,120 |
Total Fixed Income (Cost $73,681,580) | 73,143,303 | |
Money Market 0.9% | ||
Scudder Cash Investment Trust "S" | 1,682,223 | 1,682,223 |
Scudder Money Market Series "Institutional" | 6,480 | 6,480 |
Total Money Market (Cost $1,688,703) | 1,688,703 | |
Total Investment Portfolio - 100.0% (Cost $190,786,034) (a) | 197,494,235 |
(a) The cost for federal income tax purposes was $196,030,336. At August 31, 2003, net unrealized appreciation for all securities based on tax cost was $1,463,899. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $8,784,490 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $7,320,591.
During the year ended August 31, 2003, purchases and sales of investment securities (excluding money market investments) aggregated $195,876,306 and $217,825,091, respectively.
The accompanying notes are an integral part of the financial statements.
Pathway Growth Portfolio | Shares | Value ($) |
Equity 86.9% | ||
Scudder 21st Century Growth Fund "I" | 140,541 | 1,777,839 |
Scudder Capital Growth Fund "I" | 48,184 | 1,839,199 |
Scudder Contrarian Fund "I" | 401,967 | 7,581,096 |
Scudder Emerging Markets Growth Fund "S" | 43,951 | 531,373 |
Scudder Equity 500 Index Fund "Premier" | 703,979 | 80,781,562 |
Scudder Global Fund "S" | 341 | 6,957 |
Scudder Growth and Income Fund "Institutional" | 909,718 | 16,902,557 |
Scudder International Equity Fund "Institutional" | 736,998 | 6,566,653 |
Scudder International Fund "I" | 322,798 | 10,742,702 |
Scudder International Select Equity Fund "Premier" | 320,061 | 4,663,290 |
Scudder Large Company Growth Fund "I" | 550,948 | 11,685,610 |
Scudder Large Company Value Fund "I" | 272,942 | 5,742,710 |
Scudder S&P 500 Index Fund "S" | 3,083 | 41,431 |
Scudder Small Cap Fund "Investment" | 35,886 | 733,865 |
Scudder Small Company Stock Fund "S" | 187,132 | 4,075,729 |
Scudder Small Company Value Fund "S" | 88,707 | 1,908,973 |
Scudder-Dreman High Return Equity Fund "I" | 163,392 | 5,449,116 |
Scudder-Dreman Small Cap Value Fund "I" | 52,511 | 1,233,494 |
Total Equity (Cost $152,192,250) | 162,264,156 | |
Fixed Income 12.3% | ||
Scudder Emerging Markets Income Fund "S" | 1,350 | 12,625 |
Scudder Fixed Income Fund "Institutional" | 2,113,086 | 22,905,850 |
Scudder GNMA Fund "S" | 1,843 | 27,774 |
Scudder High Income Opportunity Fund "S" | 4,453 | 38,963 |
Scudder Income Fund "I" | 2,570 | 32,460 |
Total Fixed Income (Cost $23,347,916) | 23,017,672 | |
Money Market 0.8% | ||
Scudder Cash Investment Trust "S" | 1,412,627 | 1,412,627 |
Scudder Money Market Series "Institutional" | 11,613 | 11,613 |
Total Money Market (Cost $1,424,240) | 1,424,240 | |
Total Investment Portfolio - 100.0% (Cost $176,964,406) (a) | 186,706,068 |
(a) The cost for federal income tax purposes was $185,704,291. At August 31, 2003, net unrealized appreciation for all securities based on tax cost was $1,001,777. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $11,603,479 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $10,601,702.
During the year ended August 31, 2003, purchases and sales of investment securities (excluding money market investments) aggregated $161,746,297 and $173,340,000, respectively.
The accompanying notes are an integral part of the financial statements.
Statements of Assets and Liabilities as of August 31, 2003 | |||
Assets | Pathway Conservative Portfolio | Pathway Moderate Portfolio | Pathway Growth Portfolio |
Investments in securities, at value (for cost, see accompanying investment portfolios) | $ 103,342,810 | $ 197,494,235 | $ 186,706,068 |
Interest receivable | 35,730 | 42,876 | 13,642 |
Receivable for Portfolio shares sold | 60,165 | 112,282 | 160,075 |
Total assets | 103,438,705 | 197,649,393 | 186,879,785 |
Liabilities | |||
Payable for Portfolio shares redeemed | 63,156 | 329,903 | 119,572 |
Other accrued expenses and payables | 7,498 | 19,555 | 15,303 |
Total liabilities | 70,654 | 349,458 | 134,875 |
Net assets, at value | $ 103,368,051 | $ 197,299,935 | $ 186,744,910 |
Net Assets | |||
Net assets consist of: Undistributed net investment income | 368,235 | 409,263 | 2,591,882 |
Net unrealized appreciation (depreciation) on investments | 2,394,762 | 6,708,201 | 9,741,662 |
Accumulated net realized gain (loss) | (20,362,490) | (69,174,820) | (75,994,805) |
Paid-in capital | 120,967,544 | 259,357,291 | 250,406,171 |
Net assets, at value | $ 103,368,051 | $ 197,299,935 | $ 186,744,910 |
The accompanying notes are an integral part of the financial statements.
Statements of Assets and Liabilities as of August 31, 2003 (continued) | |||
Net Asset Value | Pathway Conservative Portfolio | Pathway Moderate Portfolio | Pathway Growth Portfolio |
Class A Net assets applicable to shares outstanding | $ 10,532,725 | $ 34,551,240 | $ 24,294,247 |
Shares outstanding of beneficial interest, $.01 par value, unlimited number of shares authorized | 985,100 | 3,486,157 | 2,192,894 |
Net Asset Value and redemption price per share | $ 10.69 | $ 9.91 | $ 11.08 |
Maximum offering price per share (100 / 94.25 of net asset value) | $ 11.34 | $ 10.51 | $ 11.76 |
Class B Net assets applicable to shares outstanding | $ 4,015,969 | $ 9,166,240 | $ 11,345,448 |
Shares outstanding of beneficial interest, $.01 par value, unlimited number of shares authorized | 375,450 | 924,861 | 1,034,425 |
Net Asset Value, offering and redemption price (subject to contingent deferred sales charge) per share | $ 10.70 | $ 9.91 | $ 10.97 |
Class C Net assets applicable to shares outstanding | $ 2,403,038 | $ 4,377,698 | $ 4,072,702 |
Shares outstanding of beneficial interest, $.01 par value, unlimited number of shares authorized | 224,809 | 442,024 | 371,379 |
Net Asset Value and redemption price (subject to contingent deferred sales charge) per share | $ 10.69 | $ 9.90 | $ 10.97 |
Maximum offering price per share (100 / 99 of net asset value) | $ 10.80 | $ 10.00 | $ 11.08 |
Class AARP Net assets applicable to shares outstanding | $ 44,447,007 | $ 3,800,667 | $ 59,561,433 |
Shares outstanding of beneficial interest, $.01 par value, unlimited number of shares authorized | 4,156,604 | 383,967 | 5,365,620 |
Net Asset Value, offering and redemption price per share | $ 10.69 | $ 9.90 | $ 11.10 |
Class S Net assets applicable to shares outstanding | $ 41,969,312 | $ 145,404,090 | $ 87,471,080 |
Shares outstanding of beneficial interest, $.01 par value, unlimited number of shares authorized | 3,925,160 | 14,682,005 | 7,879,047 |
Net Asset Value, offering and redemption price per share | $ 10.69 | $ 9.90 | $ 11.10 |
Statements of Operations for the year ended August 31, 2003 | |||
Investment Income | Pathway Conservative Portfolio | Pathway Moderate Portfolio | Pathway Growth Portfolio |
Income: Income distributions from Underlying Funds | $ 2,988,453 | $ 4,943,896 | $ 3,020,474 |
Expenses: Distribution service fees | 71,303 | 177,857 | 163,547 |
Net investment income | 2,917,150 | 4,766,039 | 2,856,927 |
Realized and Unrealized Gain (Loss) on Investment Transactions | |||
Net realized gain (loss) from investments | (10,496,826) | (29,854,738) | (49,362,938) |
Capital gain distributions from Underlying Funds | 25,348 | 381,987 | 280,940 |
(10,471,478) | (29,472,751) | (49,081,998) | |
Net unrealized appreciation (depreciation) during the period on investments | 14,310,323 | 39,663,758 | 62,671,718 |
Net gain (loss) on investment transactions | 3,838,845 | 10,191,007 | 13,589,720 |
Net increase (decrease) in net assets resulting from operations | $ 6,755,995 | $ 14,957,046 | $ 16,446,647 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets - Pathway Conservative Portfolio | ||
Increase (Decrease) in Net Assets | Years Ended August 31, | |
2003 | 2002 | |
Operations: Net investment income | $ 2,917,150 | $ 3,794,339 |
Net realized gain (loss) on investment transactions | (10,471,478) | (7,075,957) |
Net unrealized appreciation (depreciation) on investment transactions during the period | 14,310,323 | (2,898,281) |
Net increase (decrease) in net assets resulting from operations | 6,755,995 | (6,179,899) |
Distributions to shareholders from: Net investment income: Class A | (314,295) | (330,782) |
Class B | (59,006) | (56,742) |
Class C | (34,544) | (33,766) |
Class AARP | (1,378,996) | (2,028,374) |
Class S | (1,244,361) | (1,524,847) |
Portfolio share transactions: Proceeds from shares sold | 26,288,978 | 24,480,673 |
Reinvestment of distributions | 2,773,927 | 3,606,854 |
Cost of shares redeemed | (29,385,951) | (30,841,148) |
Net increase (decrease) in net assets from Portfolio share transactions | (323,046) | (2,753,621) |
Increase (decrease) in net assets | 3,401,747 | (12,908,031) |
Net assets at beginning of period | 99,966,304 | 112,874,335 |
Net assets at end of period (including undistributed net investment income of $368,235 and $477,404, respectively) | $ 103,368,051 | $ 99,966,304 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets - Pathway Moderate Portfolio | ||
Increase (Decrease) in Net Assets | Years Ended August 31, | |
2003 | 2002 | |
Operations: Net investment income | $ 4,766,039 | $ 6,082,495 |
Net realized gain (loss) on investment transactions | (29,472,751) | (29,170,842) |
Net unrealized appreciation (depreciation) on investment transactions during the period | 39,663,758 | (3,899,838) |
Net increase (decrease) in net assets resulting from operations | 14,957,046 | (26,988,185) |
Distributions to shareholders from: Net investment income: Class A | (645,688) | (497,804) |
Class B | (134,629) | (131,366) |
Class C | (52,160) | (44,176) |
Class AARP | (85,176) | (94,806) |
Class S | (4,139,132) | (5,616,490) |
Portfolio share transactions: Proceeds from shares sold | 51,684,760 | 65,311,177 |
Reinvestment of distributions | 5,030,296 | 6,368,383 |
Cost of shares redeemed | (81,019,686) | (94,973,071) |
Net increase (decrease) in net assets from Portfolio share transactions | (24,304,630) | (23,293,511) |
Increase (decrease) in net assets | (14,404,369) | (56,666,338) |
Net assets at beginning of period | 211,704,304 | 268,370,642 |
Net assets at end of period (including undistributed net investment income of $409,263 and $688,192, respectively) | $ 197,299,935 | $ 211,704,304 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets - Pathway Growth Portfolio | ||
Increase (Decrease) in Net Assets | Years Ended August 31, | |
2003 | 2002 | |
Operations: Net investment income | $ 2,856,927 | $ 2,483,504 |
Net realized gain (loss) on investment transactions | (49,081,998) | (24,286,281) |
Net unrealized appreciation (depreciation) on investment transactions during the period | 62,671,718 | (16,184,901) |
Net increase (decrease) in net assets resulting from operations | 16,446,647 | (37,987,678) |
Distributions to shareholders from: Net investment income: Class A | (250,135) | (176,769) |
Class B | (50,152) | (59,307) |
Class C | (18,148) | (19,248) |
Class AARP | (914,847) | (745,393) |
Class S | (1,377,450) | (976,537) |
Net realized gains: Class A | - | (455,393) |
Class B | - | (202,021) |
Class C | - | (65,922) |
Class AARP | - | (1,795,744) |
Class S | - | (2,353,007) |
Portfolio share transactions: Proceeds from shares sold | 37,275,279 | 66,834,418 |
Reinvestment of distributions | 2,570,909 | 6,761,267 |
Cost of shares redeemed | (51,166,843) | (81,636,594) |
Net increase (decrease) in net assets from Portfolio share transactions | (11,320,655) | (8,040,909) |
Increase (decrease) in net assets | 2,515,260 | (52,877,928) |
Net assets at beginning of period | 184,229,650 | 237,107,578 |
Net assets at end of period (including undistributed net investment income of $2,591,882 and $2,338,036, respectively) | $ 186,744,910 | $ 184,229,650 |
The accompanying notes are an integral part of the financial statements.
Pathway Conservative Portfolio - Class A | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 10.30 | $ 11.31 | $ 11.93 |
Income (loss) from investment operations: Net investment incomeb | .29 | .36 | .27 |
Net realized and unrealized gain (loss) on investment transactions | .40 | (.99) | (.69) |
Total from investment operations | .69 | (.63) | (.42) |
Less distributions from: Net investment income | (.30) | (.38) | (.20) |
Net asset value, end of period | $ 10.69 | $ 10.30 | $ 11.31 |
Total Return (%)c | 6.85d | (5.73) | (3.51)** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 11 | 10 | 8 |
Ratio of expenses (%)e | .23 | .23 | .25* |
Ratio of net investment income (%) | 2.77 | 3.32 | 3.43* |
Portfolio turnover rate (%) | 104 | 36 | 40 |
a For the period from December 29, 2000 (commencement of sales of Class A shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower if the Advisor had not maintained some underlying Funds' expenses. e The Portfolio invests in other Scudder Funds and although this class did not incur any fees or expenses other than distribution/service fees for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. * Annualized ** Not annualized |
Pathway Conservative Portfolio - Class B | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 10.31 | $ 11.31 | $ 11.93 |
Income (loss) from investment operations: Net investment incomeb | .21 | .28 | .23 |
Net realized and unrealized gain (loss) on investment transactions | .40 | (.99) | (.69) |
Total from investment operations | .61 | (.71) | (.46) |
Less distributions from: Net investment income | (.22) | (.29) | (.16) |
Net asset value, end of period | $ 10.70 | $ 10.31 | $ 11.31 |
Total Return (%)c | 6.04d | (6.36) | (3.87)** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 4 | 2 | 2 |
Ratio of expenses (%)e | .99 | .95 | 1.00* |
Ratio of net investment income (%) | 2.01 | 2.60 | 2.68* |
Portfolio turnover rate (%) | 104 | 36 | 40 |
a For the period from December 29, 2000 (commencement of sales of Class B shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower if the Advisor had not maintained some underlying Funds' expenses. e The Portfolio invests in other Scudder Funds and although this class did not incur any fees or expenses other than distribution/service fees for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. * Annualized ** Not annualized |
Pathway Conservative Portfolio - Class C | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 10.30 | $ 11.31 | $ 11.93 |
Income (loss) from investment operations: Net investment incomeb | .21 | .27 | .23 |
Net realized and unrealized gain (loss) on investment transactions | .40 | (.99) | (.69) |
Total from investment operations | .61 | (.72) | (.46) |
Less distributions from: Net investment income | (.22) | (.29) | (.16) |
Net asset value, end of period | $ 10.69 | $ 10.30 | $ 11.31 |
Total Return (%)c | 6.04d | (6.45) | (3.87)** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 2 | 1 | 1 |
Ratio of expenses (%)e | .99 | .97 | 1.00* |
Ratio of net investment income (%) | 2.01 | 2.58 | 2.68* |
Portfolio turnover rate (%) | 104 | 36 | 40 |
a For the period from December 29, 2000 (commencement of sales of Class C shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower if the Advisor had not maintained some underlying Funds' expenses. e The Portfolio invests in other Scudder Funds and although this class did not incur any fees or expenses other than distribution/service fees for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. * Annualized ** Not annualized |
Pathway Conservative Portfolio - Class AARP | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 10.30 | $ 11.32 | $ 12.16 |
Income (loss) from investment operations: Net investment incomeb | .31 | .39 | .44 |
Net realized and unrealized gain (loss) on investment transactions | .40 | (1.01) | (.88) |
Total from investment operations | .71 | (.62) | (.44) |
Less distributions from: Net investment income | (.32) | (.40) | (.39) |
Net realized gains on investment transactions | - | - | (.01) |
Total distributions | (.32) | (.40) | (.40) |
Net asset value, end of period | $10.69 | $ 10.30 | $ 11.32 |
Total Return (%) | 7.10c | (5.57) | (3.68)c** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 44 | 47 | 60 |
Ratio of expenses (%)d | - | - | - |
Ratio of net investment income (%) | 3.00 | 3.55 | 3.95* |
Portfolio turnover rate (%) | 104 | 36 | 40 |
a For the period from September 25, 2000 (commencement of sales of Class AARP shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return would have been lower if the Advisor had not maintained some Underlying Funds' expenses. d This Portfolio invests in other Scudder Funds, and although this class did not incur any direct expenses for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. * Annualized ** Not annualized |
Pathway Conservative Portfolio - Class S | |||||
Years Ended August 31, | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per Share Data | |||||
Net asset value, beginning of period | $ 10.30 | $ 11.32 | $ 12.47 | $ 12.45 | $ 12.28 |
Income (loss) from investment operations: | |||||
Net investment incomea | .31 | .39 | .47 | .65 | .57 |
Net realized and unrealized gain (loss) on investment transactions | .40 | (1.01) | (1.03) | .23 | .36 |
Total from investment operations | .71 | (.62) | (.56) | .88 | .93 |
Less distributions from: | |||||
Net investment income | (.32) | (.40) | (.58) | (.65) | (.55) |
Net realized gains on investment transactions | - | - | (.01) | (.21) | (.21) |
Total distributions | (.32) | (.40) | (.59) | (.86) | (.76) |
Net asset value, end of period | $ 10.69 | $ 10.30 | $ 11.32 | $ 12.47 | $ 12.45 |
Total Return (%) | 7.10b | (5.57) | (4.60)b | 7.39b | 7.62b |
Ratios to Average Net Assets and Supplemental Data | |||||
Net assets, end of period ($ millions) | 42 | 40 | 42 | 29 | 28 |
Ratio of expenses (%)c | - | - | - | - | - |
Ratio of net investment income (%) | 3.00 | 3.55 | 3.98 | 5.30 | 4.45 |
Portfolio turnover rate (%) | 104 | 36 | 40 | 26 | 28 |
a Based on average shares outstanding during the period. b Total return would have been lower if the Advisor had not maintained some Underlying Funds' expenses. c This Portfolio invests in other Scudder Funds, and although this class did not incur any direct expenses for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. |
Pathway Moderate Portfolio - Class A | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 9.38 | $ 10.77 | $ 12.04 |
Income (loss) from investment operations: Net investment incomeb | .21 | .24 | .17 |
Net realized and unrealized gain (loss) on investment transactions | .55 | (1.39) | (1.31) |
Total from investment operations | .76 | (1.15) | (1.14) |
Less distributions from: Net investment income | (.23) | (.24) | (.13) |
Net asset value, end of period | $ 9.91 | $ 9.38 | $ 10.77 |
Total Return (%)c | 8.28d | (10.83) | (9.47)** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 35 | 23 | 15 |
Ratio of expenses (%)e | .23 | .22 | .25* |
Ratio of net investment income (%) | 2.30 | 2.31 | 2.26* |
Portfolio turnover rate (%) | 101 | 57 | 58 |
a For the period from December 29, 2000 (commencement of sales of Class A shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower if the Advisor had not maintained some underlying Funds' expenses. e The Portfolio invests in other Scudder Funds and although this class did not incur any fees or expenses other than distribution/service fees for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. * Annualized ** Not annualized |
Pathway Moderate Portfolio - Class B | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 9.38 | $ 10.76 | $ 12.04 |
Income (loss) from investment operations: Net investment incomeb | .14 | .17 | .13 |
Net realized and unrealized gain (loss) on investment transactions | .55 | (1.38) | (1.32) |
Total from investment operations | .69 | (1.21) | (1.19) |
Less distributions from: Net investment income | (.16) | (.17) | (.09) |
Net asset value, end of period | $ 9.91 | $ 9.38 | $ 10.76 |
Total Return (%)c | 7.46d | (11.42) | (9.89)** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 9 | 8 | 8 |
Ratio of expenses (%)e | 1.00 | .90f | 1.00* |
Ratio of net investment income (%) | 1.53 | 1.63 | 1.51* |
Portfolio turnover rate (%) | 101 | 57 | 58 |
a For the period from December 29, 2000 (commencement of sales of Class B shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower if the Advisor had not maintained some underlying Funds' expenses. e The Portfolio invests in other Scudder Funds and although this class did not incur any fees or expenses other than distribution/service fees for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. f The ratio of operating expenses includes a one-time reduction in certain liabilities of the Farmers Income with Growth Portfolio, the Farmers Balanced Portfolio and the Farmers Growth with Income Portfolio. The ratio without this reduction was .93%. * Annualized ** Not annualized |
Pathway Moderate Portfolio - Class C | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 9.37 | $ 10.76 | $ 12.04 |
Income (loss) from investment operations: Net investment incomeb | .14 | .16 | .13 |
Net realized and unrealized gain (loss) on investment transactions | .54 | (1.38) | (1.32) |
Total from investment operations | .68 | (1.22) | (1.19) |
Less distributions from: Net investment income | (.15) | (.17) | (.09) |
Net asset value, end of period | $ 9.90 | $ 9.37 | $ 10.76 |
Total Return (%)c | 7.44d | (11.51) | (9.89)** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 4 | 3 | 3 |
Ratio of expenses (%)e | .99 | 1.00 | 1.00* |
Ratio of net investment income (%) | 1.54 | 1.53 | 1.51* |
Portfolio turnover rate (%) | 101 | 57 | 58 |
a For the period from December 29, 2000 (commencement of sales of Class C shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower if the Advisor had not maintained some underlying Funds' expenses. e The Portfolio invests in other Scudder Funds and although this class did not incur any fees or expenses other than distribution/service fees for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. * Annualized ** Not annualized |
Pathway Moderate Portfolio - Class AARP | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 9.37 | $ 10.76 | $ 13.80 |
Income (loss) from investment operations: Net investment incomeb | .24 | .26 | .29 |
Net realized and unrealized gain (loss) on investment transactions | .54 | (1.38) | (1.84) |
Total from investment operations | .78 | (1.12) | (1.55) |
Less distributions from: Net investment income | (.25) | (.27) | (.31) |
Net realized gains on investment transactions | - | - | (1.18) |
Total distributions | (.25) | (.27) | (1.49) |
Net asset value, end of period | $ 9.90 | $ 9.37 | $ 10.76 |
Total Return (%) | 8.54c | (10.62) | (12.19)c** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 4 | 3 | 4 |
Ratio of expenses (%)d | - | - | - |
Ratio of net investment income (%) | 2.53 | 2.53 | 2.68* |
Portfolio turnover rate (%) | 101 | 57 | 58 |
a For the period from October 2, 2000 (commencement of sales of Class AARP shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return would have been lower if the Advisor had not maintained some Underlying Funds' expenses. d This Portfolio invests in other Scudder Funds, and although this class did not incur any direct expenses for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. * Annualized ** Not annualized |
Pathway Moderate Portfolio - Class S | |||||
Years Ended August 31, | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per Share Data | |||||
Net asset value, beginning of period | $ 9.38 | $ 10.76 | $ 14.30 | $ 13.42 | $ 12.06 |
Income (loss) from investment operations: | |||||
Net investment incomea | .24 | .26 | .33 | .45 | .38 |
Net realized and unrealized gain (loss) on investment transactions | .53 | (1.37) | (2.27) | 1.60 | 1.79 |
Total from investment operations | .77 | (1.11) | (1.94) | 2.05 | 2.17 |
Less distributions from: | |||||
Net investment income | (.25) | (.27) | (.42) | (.48) | (.38) |
Net realized gains on investment transactions | - | - | (1.18) | (.69) | (.43) |
Total distributions | (.25) | (.27) | (1.60) | (1.17) | (.81) |
Net asset value, end of period | $ 9.90 | $ 9.38 | $ 10.76 | $ 14.30 | $ 13.42 |
Total Return (%) | 8.43b | (10.52) | (14.60)b | 15.65b | 18.27b |
Ratios to Average Net Assets and Supplemental Data | |||||
Net assets, end of period ($ millions) | 145 | 175 | 238 | 258 | 247 |
Ratio of expenses (%)c | - | - | - | - | - |
Ratio of net investment income (%) | 2.53 | 2.53 | 2.75 | 3.23 | 2.88 |
Portfolio turnover rate (%) | 101 | 57 | 58 | 28 | 24 |
a Based on average shares outstanding during the period. b Total return would have been lower if the Advisor had not maintained some Underlying Funds' expenses. c This Portfolio invests in other Scudder Funds, and although this class did not incur any direct expenses for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. |
Pathway Growth Portfolio - Class A | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 10.21 | $ 12.61 | $ 14.55 |
Income (loss) from investment operations: Net investment incomeb | .15 | .12 | .08 |
Net realized and unrealized gain (loss) on investment transactions | .85 | (2.15) | (2.02) |
Total from investment operations | 1.00 | (2.03) | (1.94) |
Less distributions from: Net investment income | (.13) | (.10) | - |
Net realized gains on investment transactions | - | (.27) | - |
Total distributions | (.13) | (.37) | - |
Net asset value, end of period | $ 11.08 | $ 10.21 | $ 12.61 |
Total Return (%)c | 10.00d | (16.61) | (13.33)** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 24 | 18 | 18 |
Ratio of expenses (%)e | .22 | .21 | .25* |
Ratio of net investment income (%) | 1.52 | 1.00 | .81* |
Portfolio turnover rate (%) | 93 | 44 | 29 |
a For the period from December 29, 2000 (commencement of sales of Class A shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower if the Advisor had not maintained some underlying Funds' expenses. e The Portfolio invests in other Scudder Funds and although this class did not incur any fees or expenses other than distribution/service fees for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. * Annualized ** Not annualized |
Pathway Growth Portfolio - Class B | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 10.11 | $ 12.55 | $ 14.55 |
Income (loss) from investment operations: Net investment incomeb | .08 | .03 | .03 |
Net realized and unrealized gain (loss) on investment transactions | .84 | (2.12) | (2.03) |
Total from investment operations | .92 | (2.09) | (2.00) |
Less distributions from: Net investment income | (.06) | (.08) | - |
Net realized gains on investment transactions | - | (.27) | - |
Total distributions | (.06) | (.35) | - |
Net asset value, end of period | $ 10.97 | $ 10.11 | $ 12.55 |
Total Return (%)c | 9.17d | (17.19) | (13.75)** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 11 | 8 | 9 |
Ratio of expenses (%)e | .97 | .93f | 1.00* |
Ratio of net investment income (%) | .77 | .28 | .06* |
Portfolio turnover rate (%) | 93 | 44 | 29 |
a For the period from December 29, 2000 (commencement of sales of Class B shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower if the Advisor had not maintained some underlying Funds' expenses. e The Portfolio invests in other Scudder Funds and although this class did not incur any fees or expenses other than distribution/service fees for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. f The ratio of operating expenses includes a one-time reduction in certain liabilities of the Farmers Growth Portfolio. The ratio without this reduction was .95%. * Annualized ** Not annualized |
Pathway Growth Portfolio - Class C | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 10.11 | $ 12.55 | $ 14.55 |
Income (loss) from investment operations: Net investment incomeb | .08 | .03 | .03 |
Net realized and unrealized gain (loss) on investment transactions | .84 | (2.12) | (2.03) |
Total from investment operations | .92 | (2.09) | (2.00) |
Less distributions from: Net investment income | (.06) | (.08) | - |
Net realized gains on investment transactions | - | (.27) | - |
Total distributions | (.06) | (.35) | - |
Net asset value, end of period | $ 10.97 | $ 10.11 | $ 12.55 |
Total Return (%)c | 9.17d | (17.19) | (13.75)** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 4 | 3 | 3 |
Ratio of expenses (%)e | .99 | .95 | 1.00* |
Ratio of net investment income (%) | .75 | .26 | .06* |
Portfolio turnover rate (%) | 93 | 44 | 29 |
a For the period from December 29, 2000 (commencement of sales of Class C shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower if the Advisor had not maintained some underlying Funds' expenses. e The Portfolio invests in other Scudder Funds and although this class did not incur any fees or expenses other than distribution/service fees for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. * Annualized ** Not annualized. |
Pathway Growth Portfolio - Class AARP | |||
Years Ended August 31, | 2003 | 2002 | 2001a |
Selected Per Share Data | |||
Net asset value, beginning of period | $ 10.24 | $ 12.62 | $ 15.32 |
Income (loss) from investment operations: Net investment incomeb | .18 | .14 | .19 |
Net realized and unrealized gain (loss) on investment transactions | .84 | (2.14) | (2.77) |
Total from investment operations | 1.02 | (2.00) | (2.58) |
Less distributions from: Net investment income | (.16) | (.11) | (.12) |
Net realized gains on investment transactions | - | (.27) | - |
Total distributions | (.16) | (.38) | (.12) |
Net asset value, end of period | $ 11.10 | $ 10.24 | $ 12.62 |
Total Return (%) | 10.18c | (16.39) | (16.94)c** |
Ratios to Average Net Assets and Supplemental Data | |||
Net assets, end of period ($ millions) | 60 | 62 | 92 |
Ratio of expenses (%)d | - | - | - |
Ratio of net investment income (%) | 1.74 | 1.21 | 1.44* |
Portfolio turnover rate (%) | 93 | 44 | 29 |
a For the period from September 25, 2000 (commencement of sales of Class AARP shares) to August 31, 2001. b Based on average shares outstanding during the period. c Total return would have been lower if the Advisor had not maintained some Underlying Funds' expenses. d This Portfolio invests in other Scudder Funds, and although this class did not incur any direct expenses for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. * Annualized ** Not annualized |
Pathway Growth Portfolio - Class S | |||||
Years Ended August 31, | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per Share Data | |||||
Net asset value, beginning of period | $ 10.24 | $ 12.62 | $ 17.85 | $ 15.33 | $ 12.17 |
Income (loss) from investment operations: | |||||
Net investment incomea | .18 | .14 | .20 | .29 | .18 |
Net realized and unrealized gain (loss) on investment transactions | .84 | (2.14) | (3.43) | 3.41 | 3.61 |
Total from investment operations | 1.02 | (2.00) | (3.23) | 3.70 | 3.79 |
Less distributions from: | |||||
Net investment income | (.16) | (.11) | (.36) | (.29) | (.20) |
Net realized gains on investment transactions | - | (.27) | (1.64) | (.89) | (.43) |
Total distributions | (.16) | (.38) | (2.00) | (1.18) | (.63) |
Net asset value, end of period | $ 11.10 | $ 10.24 | $ 12.62 | $ 17.85 | $ 15.33 |
Total Return (%) | 10.18b | (16.39) | (19.95)b | 24.24b | 31.69b |
Ratios to Average Net Assets and Supplemental Data | |||||
Net assets, end of period ($ millions) | 87 | 92 | 115 | 128 | 94 |
Ratio of expenses (%)c | - | - | - | - | - |
Ratio of net investment income (%) | 1.74 | 1.21 | 1.41 | 1.67 | 1.26 |
Portfolio turnover rate (%) | 93 | 44 | 29 | 27 | 28 |
a Based on average shares outstanding during the period. b Total return would have been lower if the Advisor had not maintained some Underlying Funds' expenses. c This Portfolio invests in other Scudder Funds, and although this class did not incur any direct expenses for the period, the Portfolio did bear its share of the fees and expenses incurred by the Underlying Scudder Funds in which the Portfolio is invested. |
A. Significant Accounting Policies
The Pathway Conservative, Pathway Moderate and Pathway Growth Portfolios (the "Portfolios") are each a diversified series of Scudder Pathway Series (the "Trust") which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust. The Portfolios invest primarily in existing Scudder Funds (the "Underlying Scudder Funds"). Each Underlying Scudder Fund's accounting policies and investment holdings are outlined in the Underlying Scudder Fund's financial statements and are available upon request.
Each Portfolio offers multiple classes of shares which provide investors with different purchase options. Class A shares are offered to investors subject to an initial sales charge. Class B shares are offered without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class B shares automatically convert to Class A shares six years after issuance. Class C shares are offered to investors subject to an initial sales charge and are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. Prior to February 3, 2003, Class C shares were offered without an initial sales charge. Class C shares do not convert into another class. Shares of Class AARP are designed for members of AARP. Class S shares of each Portfolio are generally not available to new investors. Class AARP and S shares are not subject to initial or contingent deferred sales charges.
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 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 each Portfolio have equal rights with respect to voting subject to class-specific arrangements.
The Portfolios' 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 each Portfolio in the preparation of its financial statements.
Security Valuation. Investments in the Underlying Scudder Funds are valued at the net asset value per share of each class of the Underlying Scudder Fund as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading. Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost.
Federal Income Taxes. Each Portfolio'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. Each Portfolio is treated as a single corporate taxpayer. Accordingly, the Portfolios paid no federal income taxes and no federal income tax provisions were required.
At August 31, 2003, the Pathway Conservative Portfolio had a net tax basis capital loss carryforward of approximately $6,685,000, which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until August 31, 2008 ($3,000), August 31, 2009 ($886,000), August 31, 2010 ($2,882,000) and August 31, 2011 ($2,914,000), the respective expiration dates, whichever occurs first.
In addition, from November 1, 2002 through August 31, 2003, the Pathway Conservative Portfolio incurred approximately $11,039,000 of net realized capital losses. As permitted by tax regulations the Portfolio intends to elect to defer these losses and treat them as arising in the fiscal year ended August 31, 2004.
At August 31, 2003, the Pathway Moderate Portfolio had a net tax basis capital loss carryforward of approximately $34,004,000, which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until August 31, 2008 ($7,000), August 31, 2009 ($946,000), August 31, 2010 ($18,170,000) and August 31, 2011 ($14,881,000) the respective expiration dates, whichever occurs first.
In addition, from November 1, 2002 through August 31, 2003, the Pathway Moderate Portfolio incurred approximately $29,926,000 of net realized capital losses. As permitted by tax regulations, the Portfolio intends to elect to defer these losses and treat them as arising in the fiscal year ended August 31, 2004.
At August 31, 2003, the Pathway Growth Portfolio had a net tax basis capital loss carryforward of approximately $22,013,000, which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until August 31, 2010 ($1,376,000) and August 31, 2011 ($20,637,000), the respective expiration dates, whichever occurs first.
In addition, from November 1, 2002 through August 31, 2003, the Pathway Growth Portfolio incurred approximately $45,243,000 of net realized capital losses. As permitted by tax regulations, the Portfolio intends to elect to defer these losses and treat them as arising in the fiscal year ended August 31, 2004.
Distribution of Income and Gains. Distributions of net investment income from Pathway Conservative and Pathway Moderate Portfolios, if any, are made quarterly. Distributions of net investment income from Pathway Growth Portfolio, if any, are made annually. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to each Portfolio if not distributed, and, therefore, will be distributed to shareholders at least annually. An additional distribution may be made to the extent necessary to avoid payment of a four percent federal excise tax.
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 investments 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, each Portfolio may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Portfolio.
At August 31, 2003, the Pathway Conservative Portfolio's components of distributable earnings (accumulated losses) on a tax-basis are as follows:
Undistributed ordinary income* | $ 368,235 |
Undistributed net long-term capital gains | $ - |
Capital loss carryforwards | $ (6,685,000) |
Net unrealized appreciation (depreciation) on investments | $ (243,885) |
In addition, during the years ended August 31, 2003 and August 31, 2002, the tax character of distributions paid to shareholders by the Pathway Conservative Portfolio is summarized as follows:
2003 | 2002 | |
Distributions from ordinary income* | $ 3,031,202 | $ 3,974,511 |
* For tax purposes short-term capital gains distributions are considered ordinary income distributions.
At August 31, 2003, the Pathway Moderate Portfolio's components of distributable earnings (accumulated losses) on a tax-basis are as follows:
Undistributed ordinary income* | $ 409,263 |
Undistributed net long-term capital gains | $ - |
Capital loss carryforwards | $ (34,004,000) |
Net unrealized appreciation (depreciation) on investments | $ 1,463,899 |
In addition, during the years ended August 31, 2003 and August 31, 2002, the tax character of distributions paid to shareholders by the Pathway Moderate Portfolio is summarized as follows:
2003 | 2002 | |
Distributions from ordinary income* | $ 5,056,785 | $ 6,384,642 |
* For tax purposes short-term capital gains distributions are considered ordinary income distributions.
At August 31, 2003, the Pathway Growth Portfolio's components of distributable earnings (accumulated losses) on a tax-basis are as follows:
Undistributed ordinary income* | $ 2,591,882 |
Undistributed net long-term capital gains | $ - |
Capital loss carryforwards | $ (22,013,000) |
Net unrealized appreciation (depreciation) on investments | $ 1,001,777 |
In addition, during the years ended August 31, 2003 and August 31, 2002, the tax character of distributions paid to shareholders by the Pathway Growth Portfolio is summarized as follows:
2003 | 2002 | |
Distributions from ordinary income* | $ 2,610,732 | $ 1,977,254 |
Distributions from long-term capital gains | $ - | $ 4,872,087 |
* For tax purposes short-term capital gains distributions are considered ordinary income distributions.
Other. Investment transactions are accounted for on the trade date. Interest income is recorded on the accrual basis. Distributions of income and capital gains from the Underlying Scudder Funds are recorded on the ex-dividend date. Realized gains and losses from investment transactions are recorded on an identified cost basis.
B. Related Parties
Management Agreement. Under the Management Agreement with Deutsche Investment Management Americas Inc. ("DeIM" or the "Advisor"), the Advisor directs the investments of each Portfolio 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 each Portfolio. In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Management Agreement. The Advisor has agreed not to be paid a management fee for performing its services for the Portfolios. However, the Advisor will receive management fees from managing the Underlying Scudder Funds in which each Portfolio invests.
The Portfolios do not invest in the Underlying Scudder Funds for the purpose of exercising management or control; however, investments within the set limits may represent a significant portion of an Underlying Scudder Fund's net assets. At August 31, 2003, the Pathway Conservative Portfolio did not hold more than 5% of the Underlying Scudder Funds' outstanding shares. At August 31, 2003, the Pathway Moderate Portfolio held the following Underlying Scudder Funds' outstanding shares: approximately 6% of the Scudder Fixed Income Fund. At August 31, 2003, the Pathway Growth Portfolio did not hold more than 5% of the Underlying Scudder Funds' outstanding shares.
Administrative Fee. Under the Administrative Agreements (the "Administrative Agreements"), the Advisor provides or pays others to provide substantially all of the administrative services required by each Portfolio.
Various third-party service providers, some of which are affiliated with the Advisor, provide certain services to each Portfolio under the Administrative Agreements. Scudder Fund Accounting Corporation, a subsidiary of the Advisor, computes the net asset value for each Portfolio and maintains the accounting records of each Portfolio. Scudder Investments Service Company, an affiliate of the Advisor, is the transfer, shareholder service and dividend-paying agent for Class A, B and C shares of each Portfolio. Scudder Service Corporation, also a subsidiary of the Advisor, is the transfer, shareholder service and dividend-paying agent for Class AARP and S shares of each Portfolio. Scudder Trust Company, also an affiliate of the Advisor, provided subaccounting and record keeping services for the shareholders in certain retirement and employee benefit plans. These affiliated entities have in turn entered into various agreements with third-party service providers to provide these services. In addition, other service providers not affiliated with the Advisor provide certain services (i.e., custody, legal and audit) to each Portfolio under the Administrative Agreements. The Advisor pays the service providers for the provision of their services to each Portfolio and pays other Portfolio expenses, including insurance, registration, printing, postage and other costs.
For the twelve months ended August 31, 2003, each Portfolio did not directly bear any fees or expenses other than distribution service fees on Class A, B and C shares. Shareholders of each Portfolio will still indirectly bear their fair and proportionate share of the cost of operating the Underlying Scudder Funds in which each Portfolio invests because each Portfolio, as a shareholder of the Underlying Scudder Funds, will bear its proportionate share of any fees and expense paid by the Underlying Scudder Funds.
Starting in the fourth quarter of 2003, each Portfolio will implement a new expense structure. Under the new expense structure, each Portfolio will directly bear the fees and expenses of the Portfolio, subject to the Advisor's contractual obligation to waive fees and reimburse expenses to maintain each Portfolio's operating expenses at a specified level. Each Portfolio will continue to indirectly bear the Portfolio's proportionate share of fees and expenses incurred by the Underlying Scudder Funds in which each Portfolio is invested.
Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, Scudder Distributors, Inc. ("SDI"), a subsidiary of the Advisor, receives a fee ("Distribution Fee") of 0.75% of average daily net assets of Class B and C shares. Pursuant to the agreement, SDI enters into related selling group agreements with various firms at various rates for sales of Class B and C shares. For the year ended August 31, 2003, the Distribution Fees were as follows:
Distribution Fees | Total Aggregated | Unpaid at August 31, 2003 |
Pathway Conservative Portfolio | ||
Class B | $ 21,849 | $ 2,450 |
Class C | 12,875 | 1,569 |
$ 34,724 | $ 4,019 | |
Pathway Moderate Portfolio | ||
Class B | $ 61,079 | $ 5,797 |
Class C | 24,739 | 2,661 |
$ 85,818 | $ 8,458 | |
Pathway Growth Portfolio | ||
Class B | $ 68,445 | $ 7,316 |
Class C | 23,742 | 2,571 |
$ 92,187 | $ 9,887 |
In addition, SDI provides information and administrative services ("Service Fee") to Classes A, B and C shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. SDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder accounts the firms service. For the year ended August 31, 2003, the Service Fees were as follows:
Service Fees | Total Aggregated | Unpaid at August 31, 2003 | Effective Rate |
Pathway Conservative Portfolio | |||
Class A | $ 25,367 | $ 2,220 | .23% |
Class B | 7,055 | 765 | .24% |
Class C | 4,157 | 494 | .24% |
$ 36,579 | $ 3,479 | ||
Pathway Moderate Portfolio | |||
Class A | $ 63,820 | $ 8,075 | .23% |
Class B | 20,139 | 2,072 | .25% |
Class C | 8,080 | 950 | .24% |
$ 92,039 | $ 11,097 | ||
Pathway Growth Portfolio | |||
Class A | $ 43,952 | $ 2,224 | .22% |
Class B | 19,926 | 2,476 | .22% |
Class C | 7,482 | 716 | .24% |
$ 71,360 | $ 5,416 |
Underwriting Agreement and Contingent Deferred Sales Charge. SDI is the principal underwriter for Class A, B and C shares. Underwriting commissions paid in connection with the distribution of Class A shares for the year ended August 31, 2003 for the Pathway Conservative, Pathway Moderate and Pathway Growth Portfolios aggregated $3,433, $4,256 and $4,710, respectively. Underwriting commissions paid in connection with the distribution of Class C shares for the year ended August 31, 2003 for the Pathway Conservative, Pathway Moderate and Pathway Growth Portfolios aggregated $13, $0 and $6, 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 year ended August 31, 2003, the CDSC for Class B and Class C shares aggregated $9,885, $34,120 and $33,712, respectively, for the Pathway Conservative, Pathway Moderate and Pathway Growth Portfolios.
C. Ownership of the Fund
At August 31, 2003, one shareholder held 21% of the outstanding shares of the Pathway Conservative Portfolio, two shareholders held 49% and 11% of the Pathway Moderate Portfolio and one shareholder held 23% of the Pathway Growth Portfolio.
D. Lines of Credit
The Portfolios 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 redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, pro rata based upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. Each Portfolio may borrow up to a maximum of 20 percent of its net assets under the agreement.
E. Share Transactions
Pathway Conservative Portfolio
The following table summarizes share and dollar activity in the Portfolio:
Year Ended August 31, 2003 | Year Ended August 31, 2002 | |||
Shares | Dollars | Shares | Dollars | |
Shares sold | ||||
Class A | 580,843 | $ 5,997,022 | 614,393 | $ 6,725,925 |
Class B | 245,457 | 2,541,290 | 124,608 | 1,353,340 |
Class C | 156,899 | 1,624,766 | 64,701 | 705,199 |
Class AARP | 260,673 | 2,706,079 | 238,557 | 2,647,264 |
Class S | 1,301,062 | 13,419,821 | 1,196,815 | 13,048,945 |
$ 26,288,978 | $ 24,480,673 | |||
Shares issued to shareholders in reinvestment of distributions | ||||
Class A | 30,650 | $ 312,056 | 30,283 | $ 329,085 |
Class B | 5,696 | 58,130 | 5,168 | 56,203 |
Class C | 3,383 | 34,544 | 3,031 | 32,946 |
Class AARP | 111,245 | 1,130,268 | 153,773 | 1,671,871 |
Class S | 121,922 | 1,238,929 | 139,638 | 1,516,749 |
$ 2,773,927 | $ 3,606,854 | |||
Shares redeemed | ||||
Class A | (561,032) | $ (5,859,349) | (388,707) | $ (4,170,448) |
Class B | (107,049) | (1,101,186) | (50,473) | (538,567) |
Class C | (59,866) | (622,044) | (51,780) | (560,128) |
Class AARP | (784,072) | (8,039,964) | (1,145,258) | (12,395,671) |
Class S | (1,340,617) | (13,763,408) | (1,206,113) | (13,176,334) |
$ (29,385,951) | $ (30,841,148) | |||
Net increase (decrease) | ||||
Class A | 50,461 | $ 449,729 | 255,969 | $ 2,884,562 |
Class B | 144,104 | 1,498,234 | 79,303 | 870,976 |
Class C | 100,416 | 1,037,266 | 15,952 | 178,017 |
Class AARP | (412,154) | (4,203,617) | (752,928) | (8,076,536) |
Class S | 82,367 | 895,342 | 130,340 | 1,389,360 |
$ (323,046) | $ (2,753,621) |
Pathway Moderate Portfolio
The following table summarizes share and dollar activity in the Portfolio:
Year Ended August 31, 2003 | Year Ended August 31, 2002 | |||
Shares | Dollars | Shares | Dollars | |
Shares sold | ||||
Class A | 1,826,807 | $ 17,027,198 | 1,853,595 | $ 18,918,635 |
Class B | 366,578 | 3,421,285 | 231,305 | 2,380,339 |
Class C | 217,681 | 2,041,616 | 181,011 | 1,870,761 |
Class AARP | 165,482 | 1,539,780 | 176,248 | 1,833,680 |
Class S | 2,990,890 | 27,654,881 | 3,916,369 | 40,307,762 |
$ 51,684,760 | $ 65,311,177 | |||
Shares issued to shareholders in reinvestment of distributions | ||||
Class A | 70,165 | $ 642,730 | 48,063 | $ 494,086 |
Class B | 14,384 | 131,515 | 12,505 | 128,448 |
Class C | 5,695 | 52,082 | 4,296 | 44,084 |
Class AARP | 8,321 | 76,057 | 8,608 | 88,316 |
Class S | 453,025 | 4,127,912 | 547,615 | 5,613,449 |
$ 5,030,296 | $ 6,368,383 | |||
Shares redeemed | ||||
Class A | (872,808) | $ (8,130,784) | (838,526) | $ (8,449,272) |
Class B | (276,738) | (2,594,804) | (188,009) | (1,903,464) |
Class C | (99,165) | (915,385) | (107,776) | (1,114,855) |
Class AARP | (144,992) | (1,342,023) | (227,862) | (2,356,203) |
Class S | (7,384,863) | (68,036,690) | (7,977,387) | (81,149,277) |
$ (81,019,686) | $ (94,973,071) | |||
Net increase (decrease) | ||||
Class A | 1,024,164 | $ 9,539,144 | 1,063,132 | $ 10,963,449 |
Class B | 104,224 | 957,996 | 55,801 | 605,323 |
Class C | 124,211 | 1,178,313 | 77,531 | 799,990 |
Class AARP | 28,811 | 273,814 | (43,006) | (434,207) |
Class S | (3,940,948) | (36,253,897) | (3,513,403) | (35,228,066) |
$ (24,304,630) | $ (23,293,511) |
Pathway Growth Portfolio
The following table summarizes share and dollar activity in the Portfolio:
Year Ended August 31, 2003 | Year Ended August 31, 2002 | |||
Shares | Dollars | Shares | Dollars | |
Shares sold | ||||
Class A | 937,164 | $ 9,337,305 | 1,046,261 | $ 12,137,172 |
Class B | 428,538 | 4,272,539 | 271,088 | 3,164,493 |
Class C | 179,182 | 1,804,853 | 144,808 | 1,676,853 |
Class AARP | 272,002 | 2,816,473 | 360,832 | 4,236,651 |
Class S | 1,893,245 | 19,044,109 | 3,844,567 | 45,619,249 |
$ 37,275,279 | $ 66,834,418 | |||
Shares issued to shareholders in reinvestment of distributions | ||||
Class A | 25,317 | $ 249,863 | 51,374 | $ 631,891 |
Class B | 5,148 | 49,935 | 21,327 | 261,041 |
Class C | 1,871 | 18,148 | 6,958 | 85,165 |
Class AARP | 90,251 | 879,949 | 200,186 | 2,464,295 |
Class S | 140,822 | 1,373,014 | 269,394 | 3,318,875 |
$ 2,570,909 | $ 6,761,267 | |||
Shares redeemed | ||||
Class A | (555,849) | $ (5,563,531) | (760,209) | $ (8,652,415) |
Class B | (231,296) | (2,306,394) | (196,790) | (2,258,035) |
Class C | (98,014) | (965,986) | (96,976) | (1,136,240) |
Class AARP | (1,074,324) | (10,687,707) | (1,737,540) | (19,975,883) |
Class S | (3,183,499) | (31,643,225) | (4,206,725) | (49,614,021) |
$ (51,166,843) | $ (81,636,594) | |||
Net increase (decrease) | ||||
Class A | 406,632 | $ 4,023,637 | 337,426 | $ 4,116,648 |
Class B | 202,390 | 2,016,080 | 95,625 | 1,167,499 |
Class C | 83,039 | 857,015 | 54,790 | 625,778 |
Class AARP | (712,071) | (6,991,285) | (1,176,522) | (13,274,937) |
Class S | (1,149,432) | (11,226,102) | (92,764) | (675,897) |
$ (11,320,655) | $ (8,040,909) |
To the Trustees of Scudder Pathway Series and the Shareholders of Scudder Pathway Series: Conservative, Moderate, and Growth Portfolios:
In our opinion, the accompanying statements of assets and liabilities, including the investment portfolios, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Scudder Pathway Series: Conservative, Moderate, and Growth Portfolios (the three portfolios constituting the Scudder Pathway Series) (the "Funds") at August 31, 2003 and the results of their operations, the changes in their net assets and the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2003 by correspondence with the custodian and transfer agent, provide a reasonable basis for our opinion.
Boston, Massachusetts | PricewaterhouseCoopers LLP |
For federal income tax purposes, the Pathway Conservative, Pathway Moderate and Pathway Growth Portfolios designate $300,000, $700,000 and $800,000, respectively, or the maximum amount allowable under tax law, as qualified dividend income.
Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call 1-800-SCUDDER.
The following table presents certain information regarding the Trustees and Officers of the fund as of August 31, 2003. Each individual's age is set forth in parentheses after his or her name. Unless otherwise noted, (i) each individual has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity, and (ii) the address of each individual is c/o Deutsche Asset Management, Two International Place, Boston, Massachusetts 02110-4103. Each Trustee's term of office extends until the next shareholder's meeting called for the purpose of electing Trustees and until the election and qualification of a successor, or until such Trustee sooner dies, resigns or is removed as provided in the governing documents of the fund.
Independent Trustees | ||
Name, Age, Position(s) Held with the Fund and Length of Time Served1 | Principal Occupation(s) During Past 5 Years and Other Directorships Held | Number of Funds in Fund Complex Overseen |
Henry P. Becton, Jr. (59) Trustee, 1990-present | President, WGBH Educational Foundation. Directorships: Becton Dickinson and Company (medical technology company); The A.H. Belo Company (media company); Concord Academy; Boston Museum of Science; Public Radio International. Former Directorships: American Public Television; New England Aquarium; Mass Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service | 48 |
Dawn-Marie Driscoll (56) Trustee, 1987-present | President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley College; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: CRS Technology (technology service company); Advisory Board, Center for Business Ethics, Bentley College; Board of Governors, Investment Company Institute; former Chairman, ICI Directors Services Committee | 48 |
Keith R. Fox (49) Trustee, 1996-present | Managing Partner, Exeter Capital Partners (private equity funds). Directorships: Facts on File (school and library publisher); Progressive Holding Corporation (kitchen importer and distributor); Cloverleaf Transportation Inc. (trucking); K-Media, Inc. (broadcasting); Natural History, Inc. (magazine publisher); National Association of Small Business Investment Companies (trade association) | 48 |
Louis E. Levy (70) Trustee, 2002-present | Retired. Formerly, Chairman of the Quality Control Inquiry Committee, American Institute of Certified Public Accountants (1992-1998); Partner, KPMG LLP (1958-1990). Directorships: Household International (banking and finance); ISI Family of Funds (registered investment companies; 4 funds overseen); Kimberly-Clark Corporation (personal consumer products) | 48 |
Jean Gleason Stromberg (59) Trustee, 1999-present | Retired. Formerly, Consultant (1997-2001); Director, U.S. General Accounting Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; Service Source, Inc. | 48 |
Jean C. Tempel (60) Trustee, 1994-present | Managing Partner, First Light Capital (venture capital group) (2000-present); formerly, Special Limited Partner, TL Ventures (venture capital fund) (1996-1998); General Partner, TL Ventures (1994-1996); President and Chief Operating Officer, Safeguard Scientifics, Inc. (public technology business incubator company) (1991-1993). Directorships: Sonesta International Hotels, Inc.; Aberdeen Group (technology research); The Reference, Inc. (IT consulting for financial services); United Way of Mass Bay. Trusteeships: Connecticut College, Chair, Finance Committee; Northeastern University, Chair, Funds and Endowment Committee | 48 |
Carl W. Vogt (67) Trustee, 2002-present | Senior Partner, Fulbright & Jaworski, L.L.P. (law firm); formerly, President (interim) of Williams College (1999-2000); President, certain funds in the Deutsche Asset Management Family of Funds (formerly, Flag Investors Family of Funds) (registered investment companies) (1999-2000). Directorships: Yellow Corporation (trucking); American Science & Engineering (x-ray detection equipment); ISI Family of Funds (registered investment companies, 4 funds overseen); National Railroad Passenger Corporation (Amtrak); formerly, Chairman and Member, National Transportation Safety Board | 48 |
Interested Trustees and Officers2 | ||
Name, Age, Position(s) Held with the Fund and Length of Time Served1 | Principal Occupation(s) During Past 5 Years and Other Directorships Held | Number of Funds in Fund Complex Overseen |
Richard T. Hale3 (58) Chairman and Trustee, 2002-present President, 2003-present | Managing Director, Deutsche Investment Management Americas Inc. (2003-present); Managing Director, Deutsche Bank Securities Inc. (formerly Deutsche Banc Alex. Brown Inc.) and Deutsche Asset Management (1999 to present); Director and President, Investment Company Capital Corp. (registered investment advisor) (1996 to present); Director, Deutsche Global Funds, Ltd. (2000 to present), CABEI Fund (2000 to present), North American Income Fund (2000 to present) (registered investment companies); Director, Scudder Global Opportunities Fund (since 2003); Director/Officer Deutsche/Scudder Mutual Funds (various dates); President, Montgomery Street Income Securities, Inc. (2002 to present) (registered investment companies); Vice President, Deutsche Asset Management, Inc. (2000 to present); formerly, Director, ISI Family of Funds (registered investment companies; 4 funds overseen) (1992-1999) | 201 |
Janet C. Campagna (46) Vice President, 2002-present | Managing Director, Deutsche Asset Management (1999-present); prior thereto, investment strategist and manager of Asset Allocation Strategies Group at Barclays Global Investors; global asset allocation research director, First Quadrant Corp. | n/a |
Daniel O. Hirsch3 (49) Vice President and Assistant Secretary, 2002-present | Managing Director, Deutsche Asset Management (2002-present) and Director, Deutsche Global Funds Ltd. (2002-present); formerly, Director, Deutsche Asset Management (1999-2002); Principal, BT Alex. Brown Incorporated (now Deutsche Bank Securities Inc.) (1998-1999); Assistant General Counsel, United States Securities and Exchange Commission (1993-1998) | n/a |
John Millette (41) Vice President and Secretary, 1999-present | Director, Deutsche Asset Management | n/a |
Kenneth Murphy (39) Vice President, 2002-present | Vice President, Deutsche Asset Management (2000-present); Vice President, Scudder Distributors, Inc. (December 2002-present); formerly, Director, John Hancock Signature Services (1992-2000) | n/a |
Inna Okounkova (36) Vice President, 2002-present | Vice President, Deutsche Asset Management (1999-present). Joined Deutsche Asset Management in 1999 as quantitative analyst. | n/a |
Charles A. Rizzo (46) Treasurer, 2002-present | Director, Deutsche Asset Management (April 2000- present). Formerly, Vice President and Department Head, BT Alex. Brown Incorporated (now Deutsche Bank Securities Inc.) (1998-1999); Senior Manager, Coopers & Lybrand L.L.P. (now PricewaterhouseCoopers LLP) (1993-1998) | n/a |
Salvatore Schiavone (37) Assistant Treasurer, 2003-present | Director, Deutsche Asset Management | n/a |
Lucinda H. Stebbins (57) Assistant Treasurer, 2003-present | Director, Deutsche Asset Management | n/a |
Kathleen Sullivan D'Eramo (46) Assistant Treasurer, 2003-present | Director, Deutsche Asset Management | n/a |
Caroline Pearson (41) Assistant Secretary, 1997-present | Managing Director, Deutsche Asset Management | n/a |
1 Length of time served represents the date that each Trustee was first elected to the common board of trustees which oversees a number of investment companies, including the fund, managed by the Advisor. For the Officers of the fund, length of time served represents the date that each Officer was first elected to serve as an officer of any fund overseen by the aforementioned common board of trustees.
2 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act, as amended. Interested persons receive no compensation from the fund.
3 Address: One South Street, Baltimore, Maryland
The fund's Statement of Additional Information ("SAI") includes additional information about the Trustees. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: 1-800-SCUDDER.
Scudder Funds |
Growth Funds Scudder 21st Century Growth Fund Scudder Aggressive Growth Fund Scudder Blue Chip Fund Scudder Capital Growth Fund Scudder Development Fund Scudder Dynamic Growth Fund Scudder Flag Investors Scudder Gold & Precious Metals Fund Scudder Global Biotechnology Fund Scudder Growth Fund Scudder Health Care Fund Scudder Large Company Growth Fund Scudder Micro Cap Fund Scudder Mid Cap Fund Scudder Small Cap Fund Scudder Strategic Growth Fund Scudder Technology Fund Scudder Technology Innovation Fund Scudder Top 50 US Fund Value FundsScudder Contrarian Fund Scudder-Dreman Financial Services Fund Scudder-Dreman High Return Equity Fund Scudder-Dreman Small Cap Value Fund Scudder Flag Investors Equity Scudder Growth and Income Fund Scudder Large Company Value Fund Scudder-RREEF Real Estate Securities Fund Scudder Small Company Stock Fund Scudder Small Company Value Fund Scudder Tax Advantaged Dividend Fund Multicategory/Asset Allocation FundsScudder Balanced Fund Scudder Flag Investors Value Builder Fund Scudder Focus Value+Growth Fund Scudder Lifecycle Mid Range Fund Scudder Lifecycle Long Range Fund Scudder Lifecycle Short Range Fund Scudder Pathway Conservative Portfolio Scudder Pathway Growth Portfolio Scudder Pathway Moderate Portfolio Scudder Target 2013 Fund Scudder Total Return Fund International/Global FundsScudder Emerging Markets Growth Fund Scudder Emerging Markets Income Fund Scudder European Equity Fund Scudder Global Fund Scudder Global Bond Fund Scudder Global Discovery Fund Scudder Greater Europe Growth Fund Scudder International Fund Scudder International Equity Fund Scudder International Select Equity Fund Scudder Japanese Equity Fund Scudder Latin America Fund Scudder New Europe Fund Scudder Pacific Opportunities Fund Income FundsScudder Cash Reserves Fund Scudder Fixed Income Fund Scudder GNMA Fund Scudder High Income Plus Fund (formerly Deutsche High Yield Bond Fund) Scudder High Income Fund (formerly Scudder High Yield Fund) Scudder High Income Opportunity Fund (formerly Scudder High Yield Opportunity Fund) Scudder Income Fund Scudder PreservationPlus Fund Scudder PreservationPlus Income Fund Scudder Short Duration Fund (formerly Scudder Short-Term Fixed Income Fund) Scudder Short-Term Bond Fund Scudder Strategic Income Fund Scudder U.S. Government Securities Fund |
Not all funds are available in all share classes.
Scudder open-end funds are offered by prospectus only. For more complete information on any fund or variable annuity registered in your state, including information about a fund's objectives, strategies, risks, advisory fees, distribution charges, and other expenses, please order a free prospectus. Read the prospectus before investing in any fund to ensure the fund is appropriate for your goals and risk tolerance.
A money market mutual fund investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market mutual fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.
The products described should not be considered a solicitation to buy or an offer to sell a security to any person in any jurisdiction where such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.
For shareholders of Classes A, B and C
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 219356Kansas City, MO 64121-9356 |
Principal Underwriter | If you have questions, comments or complaints, contact: Scudder Distributors, Inc. 222 South Riverside PlazaChicago, IL 60606 (800) 621-1148 |
Nasdaq Symbol | CUSIP Number | Fund Number | |
Conservative Portfolio - Class A | SUCAX | 811189-877 | 480 |
Conservative Portfolio - Class B | SUCBX | 811189-869 | 680 |
Conservative Portfolio - Class C | SUCCX | 811189-851 | 780 |
Moderate Portfolio - Class A | SPDAX | 811189-844 | 481 |
Moderate Portfolio - Class B | SPDBX | 811189-836 | 681 |
Moderate Portfolio - Class C | SPDCX | 811189-828 | 781 |
Growth Portfolio - Class A | SUPAX | 811189-810 | 482 |
Growth Portfolio - Class B | SUPBX | 811189-794 | 682 |
Growth Portfolio - Class C | SUPCX | 811189-786 | 782 |
AARP Investment Program Shareholders | Scudder Class S Shareholders | |
Automated Information Lines | Easy-Access Line (800) 631-4636 | SAIL™ (800) 343-2890 |
Personalized account information, the ability to exchange or redeem shares, and information on other Scudder funds and services via touchtone telephone. | ||
Web Sites | aarp.scudder.com | myScudder.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) 253-2277 To speak with an AARP Investment Program service representative | (800) SCUDDER To speak with a Scudder service representative. |
Written correspondence | AARP Investment Program from Scudder Investments PO Box 219735Kansas City, MO 64121-9735 | Scudder Investments PO Box 219669Kansas City, MO 64121-9669 |
Principal Underwriter | If you have questions, comments or complaints, contact: Scudder Distributors, Inc. 222 South Riverside PlazaChicago, IL 60606 (800) 621-1148 |
Ticker Symbol | Fund Number | |
Pathway Conservative Portfolio - Class AARP | APWCX | 180 |
Pathway Conservative Portfolio - Class S | SCPCX | 080 |
Pathway Moderate Portfolio - Class AARP | SPWBX | 181 |
Pathway Moderate Portfolio - Class S | SPBAX | 081 |
Pathway Growth Portfolio - Class AARP | APWGX | 182 |
Pathway Growth Portfolio - Class S | SPGRX | 082 |
Notes |
ITEM 2. CODE OF ETHICS. As of the end of the period, August 31, 2003, the Scudder Pathway Series has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer and its Chief Financial Officer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Funds' audit committee is comprised solely of trustees who are "independent" (as such term has been defined by the Securities and Exchange Commission ("SEC") in regulations implementing Section 407 of the Sarbanes-Oxley Act (the "Regulations")). The Funds' Board of Trustees has determined that there are several "audit committee financial experts" serving on the Funds' audit committee. The Board has determined that Louis E. Levy, the chair of the Funds' audit committee, qualifies as an "audit committee financial expert" (as such term has been defined by the Regulations) based on its review of Mr. Levy's pertinent experience and education. The SEC has stated that the designation or identification of a person as an audit committee financial expert pursuant to this Item 3 of Form N-CSR does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. In accordance with New York Stock Exchange requirements, the Board believes that all members of the Funds' audit committee are financially literate, as such qualification is interpreted by the Board in its business judgment, and that at least one member of the audit committee has accounting or related financial management expertise. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not currently applicable. ITEM 5. [RESERVED] ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. ITEM 8. [RESERVED] ITEM 9. 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 significant changes in the Registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation and until the filing of this report, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10. EXHIBITS. (a)(1) Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. (a)(2) 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 Pathway Conservative Portfolio By: /s/Richard T. Hale --------------------------- Richard T. Hale Chief Executive Officer Date: October 22, 2003 --------------------------- 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 Pathway Conservative Portfolio By: /s/Richard T. Hale --------------------------- Richard T. Hale Chief Executive Officer Date: October 22, 2003 --------------------------- By: /s/Charles A. Rizzo --------------------------- Charles A. Rizzo Chief Financial Officer Date: October 22, 2003 --------------------------- 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 Pathway Growth Portfolio By: /s/Richard T. Hale --------------------------- Richard T. Hale Chief Executive Officer Date: October 22, 2003 --------------------------- 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 Pathway Growth Portfolio By: /s/Richard T. Hale --------------------------- Richard T. Hale Chief Executive Officer Date: October 22, 2003 --------------------------- By: /s/Charles A. Rizzo --------------------------- Charles A. Rizzo Chief Financial Officer Date: October 22, 2003 --------------------------- 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 Pathway Moderate Portfolio By: /s/Richard T. Hale --------------------------- Richard T. Hale Chief Executive Officer Date: October 22, 2003 --------------------------- 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 Pathway Moderate Portfolio By: /s/Richard T. Hale --------------------------- Richard T. Hale Chief Executive Officer Date: October 22, 2003 --------------------------- By: /s/Charles A. Rizzo --------------------------- Charles A. Rizzo Chief Financial Officer Date: October 22, 2003 ---------------------------