UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSRS
Investment Company Act file number 811-1365
SCUDDER GROWTH TRUST
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(Exact Name of Registrant as Specified in Charter)
222 South Riverside Plaza, Chicago, IL 60606
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 295-2663
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Salvatore Schiavone
Two International Place
Boston, Massachusetts 02110
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(Name and Address of Agent for Service)
Date of fiscal year end: 9/30
Date of reporting period: 3/31/2004
ITEM 1. REPORT TO STOCKHOLDERS
[Scudder Investments logo]
| ||
Semiannual Report to Shareholders | ||
March 31, 2004 | ||
Contents |
<Click Here> Performance Summary <Click Here> Portfolio Management Review <Click Here> Portfolio Summary <Click Here> Investment Portfolio <Click Here> Financial Statements <Click Here> Financial Highlights <Click Here> Notes to Financial Statements <Click Here> Account Management Resources <Click Here> Privacy Statement |
This report must be preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the fund. Please read the prospectus carefully before you invest.
Investments in mutual funds involve risk. Some funds have more risk than others. This fund is subject to stock market risk, meaning stocks in the fund may decline in value for extended periods of time due to the activities and financial prospects of individual companies, or due to general market and economic conditions. Please read this fund's prospectus for specific details regarding its investments and risk profile.
Scudder Investments is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Investment Management Americas Inc., Deutsche Asset Management Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Bank Trust Company Americas and Scudder Trust Company.
Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.
All performance shown is historical, assumes reinvestment of all dividends and capital gains, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Please visit scudder.com for the product's most recent month-end performance.
The maximum sales charge for Class A shares is 5.75%. For Class B shares, the maximum contingent deferred sales charge (CDSC) is 4% within the first year after purchase, declining to 0% after six years. Class C shares have no adjustment for front-end sales charges but redemptions within one year of purchase may be subject to a CDSC of 1%. Unadjusted returns do not reflect sales charges and would have been lower if they had. Class I shares are not subject to sales charges.
Returns for Class B, C and I during all periods shown reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.
Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the sale of fund shares. Returns and rankings may differ by share class.
Returns shown for Class B and C shares for the periods prior to their inception on May 31, 1994 are derived from the historical performance of Class A shares of the Scudder Growth Fund during such periods and have been adjusted to reflect the higher gross total annual operating expenses of each specific class. Any difference in expenses will affect performance.
Average Annual Total Returns (Unadjusted for Sales Charge) as of 3/31/04 | |||||
Scudder Growth Fund | 6-Month++ | 1-Year | 3-Year | 5-Year | 10-Year |
| Class A | 9.27% | 25.57% | -4.88% | -7.14% | 4.01% |
| Class B | 8.73% | 24.52% | -5.71% | -8.03% | 2.97% |
| Class C | 8.85% | 24.53% | -5.65% | -7.92% | 3.12% |
| Russell 1000 Growth Index+ | 11.28% | 32.18% | -1.74% | -6.13% | 9.79% |
| S&P 500 Index++ | 14.08% | 35.12% | .63% | -1.20% | 11.68% |
Scudder Growth Fund | 6-Month++ | 1-Year | 3-Year | 5-Year | Life of Class* |
| Class I | 9.52% | 26.03% | -4.49% | -6.78% | 3.49% |
| Russell 1000 Growth Index+ | 11.28% | 32.18% | -1.74% | -6.13% | 8.06% |
| S&P 500 Index++ | 14.08% | 35.12% | .63% | -1.20% | 10.44% |
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
++ Total returns shown for periods less than one year are not annualized.* Class I shares commenced operations on July 3, 1995. Index returns begin June 30, 1995.
Net Asset Value | ||||
Class A | Class B | Class C | Class I | |
| Net Asset Value: 3/31/04 | $ 8.84 | $ 7.72 | $ 7.87 | $ 9.20 |
| 9/30/03 | $ 8.09 | $ 7.10 | $ 7.23 | $ 8.40 |
Class A Lipper Rankings - Large-Cap Growth Funds Category as of 3/31/04 | ||||
Period | Rank | Number of Funds Tracked | Percentile Ranking | |
| 1-Year | 464 | of | 607 | 77 |
| 3-Year | 317 | of | 494 | 65 |
| 5-Year | 234 | of | 329 | 71 |
| 10-Year | 94 | of | 97 | 96 |
Source: Lipper Inc. Rankings are historical and do not guarantee future results. Rankings are based on total return unadjusted for sales charges with distributions reinvested. If sales charges had been included, results might have been less favorable. Rankings are for Class A shares; other share classes may vary.
Growth of an Assumed $10,000 Investment (Adjusted for Maximum Sales Charge) |
[] Scudder Growth Fund - Class A [] Russell 1000 Growth Index+[] S&P 500 Index++ |
 |
Yearly periods ended March 31 |
The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.75%. This results in a net initial investment of $9,425.
The growth of $10,000 is cumulative.
Comparative Results (Adjusted for Maximum Sales Charge) as of 3/31/04 | |||||
| Scudder Growth Fund | 1-Year | 3-Year | 5-Year | 10-Year | |
Class A | Growth of $10,000 | $11,835 | $8,113 | $6,506 | $13,961 |
| Average annual total return | 18.35% | -6.73% | -8.24% | 3.39% | |
Class B | Growth of $10,000 | $12,152 | $8,215 | $6,528 | $13,400 |
| Average annual total return | 21.52% | -6.35% | -8.18% | 2.97% | |
Class C | Growth of $10,000 | $12,453 | $8,399 | $6,619 | $13,603 |
| Average annual total return | 24.53% | -5.65% | -7.92% | 3.12% | |
| Russell 1000 Growth Index+ | Growth of $10,000 | $13,218 | $9,487 | $7,289 | $25,441 |
| Average annual total return | 32.18% | -1.74% | -6.13% | 9.79% | |
| S&P 500 Index++ | Growth of $10,000 | $13,512 | $10,191 | $9,414 | $30,191 |
| Average annual total return | 35.12% | .63% | -1.20% | 11.68% | |
Scudder Growth Fund | 1-Year | 3-Year | 5-Year | Life of Class* | |
Class I | Growth of $10,000 | $12,603 | $8,712 | $7,039 | $13,497 |
| Average annual total return | 26.03% | -4.49% | -6.78% | 3.49% | |
| Russell 1000 Growth Index+ | Growth of $10,000 | $13,218 | $9,487 | $7,289 | $19,701 |
| Average annual total return | 32.18% | -1.74% | -6.13% | 8.06% | |
| S&P 500 Index++ | Growth of $10,000 | $13,512 | $10,191 | $9,414 | $23,848 |
| Average annual total return | 35.12% | .63% | -1.20% | 10.44% | |
The growth of $10,000 is cumulative.
* Class I shares commenced operations on July 3, 1995. Index returns begin June 30, 1995.+ The Russell 1000 Growth Index is an unmanaged index that consists of those stocks in the Russell 1000 Index with higher price-to-book ratios and higher forecasted growth values.
++ The Standard & Poor's (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.
Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.
In the following interview, Portfolio Managers Julie M. Van Cleave, Thomas J. Schmid and Jack A. Zehner discuss Scudder Growth Fund's performance, the team's strategy and the market environment during the six-month period ended March 31, 2004.
Q: How did the US stock market perform over the past six months?
A: The equity market had quite a bit of information to process over the six-month period, both encouraging and troublesome.
Looking at the bright side, we saw continued economic growth, strong corporate earnings, a resilient consumer and continued low interest rates. On the negative side, we witnessed anemic employment growth, stubbornly high commodity prices and a number of unwelcome geopolitical events. The insurrection in Haiti, the terrorist bombing in Madrid, an escalation of fighting between Israelis and Palestinians and the continued conflict in Iraq heightened anxiety worldwide.
Fortunately for the equity market, the net result was that the positive outweighed the negative. The market broadened considerably over the last six months, expanding beyond cyclical sectors, such as technology and consumer.1 In fact, the best-performing sectors over the time period were energy, materials, telecom and financials.
1 Cyclical describes an industry which is sensitive to business cycles and whose performance is tied to the overall economy, especially interest rates. Many cyclical industries produce durable, commodity-like goods such as raw materials, cars, chemicals, construction, paper, steel and heavy equipment. Given the durable nature of the goods, such purchases often get postponed in poor economic conditions, but sell especially well in good economic conditions.The 14.08% return of US large-company stocks (as measured by the S&P 500 index) trailed the 21.69% return of their more potent small-company counterparts
(as measured by the Russell 2000 Index).2,3 In addition, US value stocks (companies thought to be underpriced) solidly outperformed growth (companies thought to have strong earnings or revenue potential). The 17.65% return of the Russell 1000 Value Index outdistanced the 11.28% return of the Russell 1000 Growth Index.4,5 Within the growth category, lesser-quality names - companies perceived to have problems that could inhibit their long-term earnings potential - thrived in a speculative environment. Although low quality outperformed high quality for the overall period, high quality has begun to outperform more recently. We're starting to see an inflection point where investors are reassessing their risk tolerance and looking at a broader range of higher-quality companies that are capable of sustaining growth as market leaders going forward.
2 "Standard & Poor's," "S&P," "S&P 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 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. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly in an index.3 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 fund returns, do not reflect any fees or expenses. It is not possible to invest directly in an index.
4 The Russell 1000 Value Index is an unmanaged index that consists of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly in an index.
5 The Russell 1000 Growth Index is an unmanaged index that consists of those stocks in the Russell 1000 Index with higher price-to-book ratios and higher forecasted growth values. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly in an index.
Q: How did the fund perform during its most recent semiannual period?
A: For the semiannual period, Scudder Growth Fund posted a strong positive return of 9.27%. (Fund return is for Class A shares unadjusted for sales charges. If sales charges had been included, return would have been lower. Past performance is no guarantee of future results.) However, the fund fell short of its benchmark, as the Russell 1000 Growth Index was at 11.28%. The fund also trailed the 10.79% average return of the 626 funds in the Lipper Large-Cap Growth Funds category.6 (Please see pages 3 through 5 for performance of other share classes and more complete performance information.)
6 Source: Lipper Inc. The Lipper Large-Cap Growth Funds category is an unmanaged group of mutual funds that primarily invest in large-cap stocks with a greater-than-average growth orientation compared with the overall market. Returns reflect the reinvestment of all distributions. It is not possible to invest directly in the category.While sector allocation was essentially neutral over the time period, disappointing stock selection led the fund to underperform relative to its benchmark over the last six months.
Q: Specifically, what helped and hurt the fund's performance?
A: Our sector-allocation decision to stay overweight in energy was the largest positive contributor to performance. Oil-field-services providers Schlumberger Ltd. and Nabors Industries Ltd. as well as Devon Energy Corp., an exploration company, exemplify the strength of the sector, as all of these holdings were up significantly with respect to the time frame. We remain positive on energy, as the high global demand and limited supply imbalance show no sign of abating.
Virtually all of the deviation from the benchmark resulted from security selection. Ironically, some of the biggest contributors and detractors came from the same sectors. In health care, for example, biotechnology holding Biogen Idec, Inc. posted strong returns after announcing that it will submit its multiple sclerosis drug, Antegren, for Food and Drug Administration approval earlier than expected based on encouraging clinical studies. But then there was medical device maker Medtronic, Inc. Its stock suffered during the period after the company lost a patent dispute with rival Johnson & Johnson. Medtronic's stock has since come back thanks to medical trials showing the benefits of implantable defibrillators for patients suffering from heart failure.
As another example, in the consumer discretionary sector, gaming-machine-maker International Game Technology saw its stock soar based on strong demand for cashless slot machines and the potential for continued expansion of slot machine gaming.7 On the flip side, merchandising and inventory missteps caused retailer Kohl's Corp. to stumble.
7 Consumer discretionary products are items such as home electronics that are nonnecessities and therefore more sensitive to economic conditions.While holdings such as Analog Devices, Inc., Symantec Corp., Cisco Systems, Inc. and Xilinx, Inc. displayed considerable strength over this time period, our overall allocation to and selection in the information technology sector weighed on performance. After leading the market higher in 2003, technology stocks sold off in the first quarter of 2004 on concerns over slowing order growth. Therefore, our overweight position detracted from performance as the sector lagged the benchmark. Two cases in point are tech bellwethers Microsoft Corp. and Intel Corp., which both saw their stocks decline over the period.
Within the consumer staples sector, the fund's overweight position in household products company Colgate-Palmolive Co., which reported slow North American sales, dragged on performance, though the company's stock was on the upswing toward the end of the period.8
8 Consumer staples are products that consumers need to buy regardless of economic conditions, such as food and beverages.Q: Will you tell us about some additions to and deletions from the portfolio during the period?
A: Recent portfolio additions that reconcile well with our key selection criteria of quality, growth and innovation include AFLAC, Inc., American Express Co., Boston Scientific Corp., C.R. Bard, Inc., Dell, Inc., Goldman Sachs Group, Inc., Intuit, Inc. and Symantec Corp.
Among the holdings we eliminated during this time period were Federal Home Loan Mortgage, Medco Health Solutions, Noble Corp. and State Street.
Q: Any final thoughts?
A: In general, the equity market has broadened, and the fund's more-diversified approach has begun to reap rewards. We continue to look for growth opportunities in a variety of sectors and industries and feel that we are well-positioned for a broadening market that gravitates toward higher-quality, more-consistent earners, such as the companies held in Scudder Growth Fund.
While we of course can't suggest that the market will continue its gains, we urge investors to keep their long-term investment goals in mind at all times. Moving into and out of the market to seek short-term gains or miss short-term volatility seldom profits investors over the long term. We urge investors to maintain a diversified portfolio and to remain focused on long-term objectives regardless of what the market happens to be doing in the short term. We hope you'll keep Scudder Growth Fund as an important mainstay of your well-diversified portfolio.
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.
Sector Diversification (Excludes Cash Equivalents) | 3/31/04 | 9/30/03 |
| Information Technology | 29% | 29% |
| Health Care | 22% | 21% |
| Consumer Discretionary | 15% | 14% |
| Consumer Staples | 12% | 12% |
| Financials | 9% | 8% |
| Industrials | 8% | 9% |
| Energy | 4% | 6% |
| Materials | 1% | 1% |
| 100% | 100% | |
Ten Largest Equity Holdings at March 31, 2004 (32.2% of Portfolio) | |
| 1. Pfizer, Inc. Manufacturer of prescription pharmaceuticals and non-prescription self-medications | 4.3% |
| 2. Microsoft Corp. Developer of computer software | 3.8% |
| 3. Intel Corp. Designer, manufacturer and seller of computer components and related products | 3.6% |
| 4. Cisco Systems, Inc. Developer of computer network products | 3.6% |
| 5. General Electric Co. Industrial conglomerate | 3.5% |
| 6. Johnson & Johnson Provider of health care products | 3.4% |
| 7. Wal-Mart Stores, Inc. Operator of discount stores | 3.3% |
| 8. PepsiCo, Inc. Provider of soft drinks, snack foods and food services | 2.3% |
| 9. United Technologies Corp. Manufacturer of aerospace equipment, climate control systems and elevators | 2.2% |
| 10. International Game Technology Designer and manufacturer of computerized casino gaming systems | 2.2% |
Sector diversification and portfolio holdings are subject to change.
For more complete details about the Fund's investment portfolio, see page 12. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end is available upon request on the 16th of the following month. Please see the Account Management Resources section for contact information.
| Value ($) | |
Common Stocks 98.9% | ||
| Consumer Discretionary 14.8% | ||
| Automobiles 1.5% | ||
| Harley-Davidson, Inc. | 271,500 | 14,481,810 |
| Hotels Restaurants & Leisure 2.8% | ||
| Brinker International, Inc.* | 153,300 | 5,814,669 |
| International Game Technology | 477,700 | 21,477,392 |
27,292,061 | ||
| Internet & Catalog Retail 0.7% | ||
| eBay, Inc.* | 100,600 | 6,974,598 |
| Media 4.6% | ||
| Clear Channel Communications, Inc. | 118,800 | 5,031,180 |
| Comcast Corp. "A"* | 241,600 | 6,735,808 |
| McGraw-Hill, Inc. | 61,500 | 4,682,610 |
| New York Times Co. "A" | 110,200 | 4,870,840 |
| Omnicom Group, Inc. | 181,000 | 14,525,250 |
| Viacom, Inc. "B" | 248,900 | 9,759,369 |
45,605,057 | ||
| Multiline Retail 2.4% | ||
| Kohl's Corp.* | 141,900 | 6,858,027 |
| Target Corp. | 369,300 | 16,633,272 |
23,491,299 | ||
| Specialty Retail 2.8% | ||
| Bed Bath & Beyond, Inc.* | 184,500 | 7,704,720 |
| Home Depot, Inc. | 138,300 | 5,166,888 |
| Lowe's Companies, Inc. | 144,200 | 8,093,946 |
| Staples, Inc.* | 249,900 | 6,344,961 |
27,310,515 | ||
| Consumer Staples 11.8% | ||
| Beverages 2.7% | ||
| Anheuser-Busch Companies, Inc. | 76,700 | 3,911,700 |
| PepsiCo, Inc. | 413,900 | 22,288,515 |
26,200,215 | ||
| Food & Drug Retailing 4.6% | ||
| Wal-Mart Stores, Inc. | 541,200 | 32,304,228 |
| Walgreen Co. | 392,000 | 12,916,400 |
45,220,628 | ||
| Food Products 1.1% | ||
| General Mills, Inc. | 136,800 | 6,385,824 |
| Hershey Foods Corp. | 57,100 | 4,730,735 |
11,116,559 | ||
| Household Products 3.4% | ||
| Colgate-Palmolive Co. | 234,800 | 12,937,480 |
| Procter & Gamble Co. | 196,400 | 20,598,432 |
33,535,912 | ||
| Energy 4.2% | ||
| Energy Equipment & Services 2.8% | ||
| Baker Hughes, Inc. | 269,100 | 9,816,768 |
| Nabors Industries Ltd.* | 206,300 | 9,438,225 |
| Schlumberger Ltd. | 128,800 | 8,223,880 |
27,478,873 | ||
| Oil & Gas 1.4% | ||
| Devon Energy Corp. | 138,500 | 8,053,775 |
| EOG Resources, Inc. | 126,300 | 5,795,907 |
13,849,682 | ||
| Financials 8.6% | ||
| Capital Markets 2.5% | ||
| Goldman Sachs Group, Inc. | 25,100 | 2,619,185 |
| Lehman Brothers Holdings, Inc. | 113,800 | 9,430,606 |
| Morgan Stanley | 220,600 | 12,640,380 |
24,690,171 | ||
| Consumer Finance 1.5% | ||
| American Express Co. | 287,600 | 14,912,060 |
| Diversified Financial Services 2.4% | ||
| Citigroup, Inc. | 296,900 | 15,349,730 |
| Fannie Mae | 101,700 | 7,561,395 |
22,911,125 | ||
| Insurance 2.2% | ||
| AFLAC, Inc. | 202,600 | 8,132,364 |
| American International Group, Inc. | 186,050 | 13,274,668 |
21,407,032 | ||
| Health Care 21.9% | ||
| Biotechnology 4.8% | ||
| Amgen, Inc.* | 244,300 | 14,210,931 |
| Biogen Idec, Inc.* | 142,600 | 7,928,560 |
| Genentech, Inc.* | 140,100 | 14,825,382 |
| Gilead Sciences, Inc.* | 181,500 | 10,122,255 |
47,087,128 | ||
| Health Care Equipment & Supplies 5.2% | ||
| Baxter International, Inc. | 196,700 | 6,076,063 |
| Boston Scientific Corp.* | 150,700 | 6,386,666 |
| C.R. Bard, Inc. | 65,200 | 6,366,128 |
| Medtronic, Inc. | 354,500 | 16,927,375 |
| Zimmer Holdings, Inc.* | 198,600 | 14,652,708 |
50,408,940 | ||
| Health Care Providers & Services 1.4% | ||
| UnitedHealth Group, Inc. | 217,300 | 14,002,812 |
| Pharmaceuticals 10.5% | ||
| Eli Lilly & Co. | 104,600 | 6,997,740 |
| Johnson & Johnson | 649,406 | 32,937,872 |
| Merck & Co., Inc. | 162,500 | 7,180,875 |
| Pfizer, Inc. | 1,186,295 | 41,579,640 |
| Teva Pharmaceutical Industries Ltd. (ADR) | 222,200 | 14,089,702 |
102,785,829 | ||
| Industrials 7.7% | ||
| Aerospace & Defense 2.2% | ||
| United Technologies Corp. | 251,100 | 21,669,930 |
| Air Freight & Logistics 1.0% | ||
| FedEx Corp. | 136,900 | 10,289,404 |
| Industrial Conglomerates 4.5% | ||
| 3M Co. | 122,300 | 10,012,701 |
| General Electric Co. | 1,106,800 | 33,779,536 |
43,792,237 | ||
| Information Technology 29.1% | ||
| Communications Equipment 4.1% | ||
| Cisco Systems, Inc.* | 1,491,250 | 35,074,200 |
| QUALCOMM, Inc. | 76,500 | 5,081,130 |
40,155,330 | ||
| Computers & Peripherals 3.7% | ||
| Dell, Inc.* | 198,200 | 6,663,484 |
| EMC Corp.* | 1,071,600 | 14,584,476 |
| International Business Machines Corp. | 164,100 | 15,070,944 |
36,318,904 | ||
| IT Consulting & Services 2.3% | ||
| Fiserv, Inc.* | 281,900 | 10,083,563 |
| Paychex, Inc. | 346,900 | 12,349,640 |
22,433,203 | ||
| Semiconductors & Semiconductor Equipment 10.0% | ||
| Analog Devices, Inc. | 368,300 | 17,682,083 |
| Applied Materials, Inc.* | 675,400 | 14,440,052 |
| Intel Corp. | 1,313,310 | 35,722,032 |
| Linear Technology Corp. | 300,880 | 11,138,577 |
| Texas Instruments, Inc. | 365,800 | 10,688,676 |
| Xilinx, Inc.* | 224,200 | 8,519,600 |
98,191,020 | ||
| Software 9.0% | ||
| Adobe Systems, Inc. | 48,900 | 1,928,127 |
| BEA Systems, Inc.* | 387,100 | 4,939,396 |
| Electronic Arts, Inc.* | 278,000 | 15,000,880 |
| Intuit, Inc.* | 108,800 | 4,882,944 |
| Microsoft Corp. | 1,493,680 | 37,297,190 |
| Oracle Corp.* | 604,400 | 7,258,844 |
| Symantec Corp.* | 169,900 | 7,866,370 |
| VERITAS Software Corp.* | 315,100 | 8,479,341 |
87,653,092 | ||
| Materials 0.8% | ||
| Chemicals | ||
| Ecolab, Inc. | 283,300 | 8,082,549 |
| Total Common Stocks (Cost $786,875,435) | 969,347,975 | |
Other 0.5% | ||
| iShares Nasdaq Biotechnology Index Fund* (Cost $4,860,407) | 61,000 | 4,714,690 |
Cash Equivalents 0.6% | ||
| Scudder Cash Management QP Trust, 1.10% (b) (Cost $5,841,180) | 5,841,180 | 5,841,180 |
| Total Investment Portfolio - 100.0% (Cost $797,577,022) (a) | 979,903,845 | |
* Non-income producing security.
(a) The cost for federal income tax purposes was $799,930,209. At March 31, 2004, net unrealized appreciation for all securities based on tax cost was $179,973,636. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $198,802,189 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $18,828,553.
(b) Scudder Cash Management QP Trust is also managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of March 31, 2004 (Unaudited) | |
| Assets | |
| Investments: Investments in securities, at value (cost $791,735,842) | $ 974,062,665 |
| Investment in Scudder Cash Management QP Trust (cost $5,841,180) | 5,841,180 |
| Total investments in securities, at value (cost $797,577,022) | 979,903,845 |
| Dividends receivable | 540,755 |
| Interest receivable | 9,977 |
| Receivable for Fund shares sold | 164,095 |
| Other assets | 30,721 |
| Total assets | 980,649,393 |
| Liabilities | |
| Payable for Fund shares redeemed | 2,168,453 |
| Accrued management fee | 471,264 |
| Other accrued expenses and payables | 1,002,357 |
| Total liabilities | 3,642,074 |
| Net assets, at value | $ 977,007,319 |
| Net Assets | |
| Net assets consist of: Accumulated net investment loss | (1,133,446) |
| Net unrealized appreciation (depreciation) on investments | 182,326,823 |
| Accumulated net realized gain (loss) | (592,356,278) |
| Paid-in capital | 1,388,170,220 |
| Net assets, at value | $ 977,007,319 |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of March 31, 2004 (Unaudited) (continued) | |
| Net Asset Value | |
| Class A Net Asset Value and redemption price per share ($857,395,232 / 96,939,821 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | $ 8.84 |
| Maximum offering price per share (100 / 94.25 of $8.84) | $ 9.38 |
| Class B Net Asset Value, offering and redemption price (subject to contingent deferred sales charge) per share ($98,663,416 / 12,780,205 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | $ 7.72 |
| Class C Net Asset Value, offering and redemption price (subject to contingent deferred sales charge) per share ($20,229,249 / 2,571,061 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | $ 7.87 |
| Class I Net Asset Value, offering and redemption price per share ($719,422 / 78,226 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | $ 9.20 |
The accompanying notes are an integral part of the financial statements.
Statement of Operations for the six months ended March 31, 2004 (Unaudited) | |
| Investment Income | |
| Income: Dividends (net of foreign taxes withheld of $9,390) | $ 4,776,346 |
| Interest - Scudder Cash Management QP Trust | 52,788 |
| Total Income | 4,829,134 |
| Expenses: Management fee | 2,810,017 |
| Distribution service fees | 1,692,727 |
| Services to shareholders | 1,395,924 |
| Custodian fees | 13,731 |
| Auditing | 22,061 |
| Legal | 7,320 |
| Trustees' fees and expenses | 22,015 |
| Reports to shareholders | 87,840 |
| Registration fees | 30,195 |
| Other | 17,745 |
| Total expenses, before expense reductions | 6,099,575 |
| Expense reductions | (160,943) |
| Total expenses, after expense reductions | 5,938,632 |
| Net investment income (loss) | (1,109,498) |
| Realized and Unrealized Gain (Loss) on Investment Transactions | |
| Net realized gain (loss) from investments | 1,569,591 |
| Net unrealized appreciation (depreciation) during the period on investments | 88,340,772 |
| Net gain (loss) on investment transactions | 89,910,363 |
| Net increase (decrease) in net assets resulting from operations | $ 88,800,865 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | ||
| Increase (Decrease) in Net Assets | Six Months Ended March 31, 2004 (Unaudited) | Year Ended September 30, 2003 |
| Operations: Net investment income (loss) | $ (1,109,498) | $ (3,428,113) |
| Net realized gain (loss) on investment transactions | 1,569,591 | (96,657,040) |
| Net unrealized appreciation (depreciation) on investment transactions during the period | 88,340,772 | 279,542,843 |
| Net increase (decrease) in net assets resulting from operations | 88,800,865 | 179,457,690 |
| Fund share transactions: Proceeds from shares sold | 46,073,828 | 91,167,999 |
| Cost of shares redeemed | (126,966,513) | (221,983,859) |
| Net increase (decrease) in net assets from Fund share transactions | (80,892,685) | (130,815,860) |
| Increase (decrease) in net assets | 7,908,180 | 48,641,830 |
| Net assets at beginning of period | 969,099,139 | 920,457,309 |
| Net assets at end of period (including accumulated net investment loss of $1,133,446 and $23,948, respectively) | $ 977,007,319 | $ 969,099,139 |
The accompanying notes are an integral part of the financial statements.
Class A | ||||||
Years Ended | 2004a | 2003 | 2002 | 2001 | 2000 | 1999 |
| Selected Per Share Data | ||||||
| Net asset value, beginning of period | $ 8.09 | $ 6.69 | $ 9.10 | $ 18.04 | $ 15.79 | $ 11.72 |
| Income (loss) from investment operations: Net investment income (loss)b | (.01) | (.02) | (.03) | (.04) | (.08) | (.05) |
| Net realized and unrealized gain (loss) on investment transactions | .76 | 1.42 | (2.38) | (7.17) | 4.09 | 4.18 |
Total from investment operations | .75 | 1.40 | (2.41) | (7.21) | 4.01 | 4.13 |
| Less distributions from: Net realized gains on investment transactions | - | - | - | (1.73) | (1.76) | (.06) |
| Net asset value, end of period | $ 8.84 | $ 8.09 | $ 6.69 | $ 9.10 | $ 18.04 | $ 15.79 |
| Total Return (%)c | 9.27** | 20.93 | (26.48) | (42.55) | 25.49 | 35.29 |
| Ratios to Average Net Assets and Supplemental Data | ||||||
| Net assets, end of period ($ millions) | 857 | 843 | 779 | 1,255 | 2,445 | 2,054 |
| Ratio of expenses before expense reductions (%) | 1.06* | 1.13 | 1.00 | 1.04d | 1.00 | 1.05 |
| Ratio of expenses after expense reductions (%) | 1.06* | 1.13 | 1.00 | 1.02d | .99 | 1.05 |
| Ratio of net investment income (loss) (%) | (.10)* | (.24) | (.33) | (.28) | (.44) | (.36) |
| Portfolio turnover rate (%) | 27* | 25 | 44 | 80 | 49 | 97 |
| a For the six months ended March 31, 2004 (Unaudited). b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d The ratios of operating expenses excluding costs incurred in connection with a fund complex reorganization before and after expense reductions were 1.02% and 1.02%, respectively. * Annualized ** Not annualized | ||||||
Class B | ||||||
Years Ended | 2004a | 2003 | 2002 | 2001 | 2000 | 1999 |
| Selected Per Share Data | ||||||
| Net asset value, beginning of period | $ 7.10 | $ 5.91 | $ 8.12 | $ 16.50 | $ 14.69 | $ 11.03 |
| Income (loss) from investment operations: Net investment income (loss)b | (.04) | (.07) | (.09) | (.15) | (.23) | (.21) |
| Net realized and unrealized gain (loss) on investment transactions | .66 | 1.26 | (2.12) | (6.50) | 3.80 | 3.93 |
Total from investment operations | .62 | 1.19 | (2.21) | (6.65) | 3.57 | 3.72 |
| Less distributions from: Net realized gains on investment transactions | - | - | - | (1.73) | (1.76) | (.06) |
| Net asset value, end of period | $ 7.72 | $ 7.10 | $ 5.91 | $ 8.12 | $ 16.50 | $ 14.69 |
| Total Return (%)c | 8.73d** | 20.14 | (27.22) | (43.19) | 24.32 | 33.77 |
| Ratios to Average Net Assets and Supplemental Data | ||||||
| Net assets, end of period ($ millions) | 99 | 105 | 116 | 228 | 504 | 479 |
| Ratio of expenses before expense reductions (%) | 2.28* | 1.99 | 1.90 | 2.06e | 1.91 | 2.17 |
| Ratio of expenses after expense reductions (%) | 2.01* | 1.99 | 1.90 | 2.06e | 1.90 | 2.17 |
| Ratio of net investment income (loss) (%) | (1.05)* | (1.10) | (1.23) | (1.33) | (1.35) | (1.48) |
| Portfolio turnover rate (%) | 27* | 25 | 44 | 80 | 49 | 97 |
| a For the six months ended March 31, 2004 (Unaudited). b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower had certain expenses not been reduced. e The ratios of operating expenses excluding costs incurred in connection with a fund complex reorganization before and after expense reductions were 2.02% and 2.02%, respectively. * Annualized ** Not annualized | ||||||
Class C | ||||||
Years Ended September 30, | 2004a | 2003 | 2002 | 2001 | 2000 | 1999 |
| Selected Per Share Data | ||||||
| Net asset value, beginning of period | $ 7.23 | $ 6.03 | $ 8.27 | $ 16.72 | $ 14.87 | $ 11.13 |
| Income (loss) from investment operations: Net investment income (loss)b | (.04) | (.07) | (.09) | (.12) | (.23) | (.18) |
| Net realized and unrealized gain (loss) on investment transactions | .68 | 1.27 | (2.15) | (6.60) | 3.84 | 3.98 |
Total from investment operations | .64 | 1.20 | (2.24) | (6.72) | 3.61 | 3.80 |
| Less distributions from: Net realized gains on investment transactions | - | - | - | (1.73) | (1.76) | (.06) |
| Net asset value, end of period | $ 7.87 | $ 7.23 | $ 6.03 | $ 8.27 | $ 16.72 | $ 14.87 |
| Total Return (%)c | 8.85d** | 19.90 | (27.09) | (43.03) | 24.30 | 34.19 |
| Ratios to Average Net Assets and Supplemental Data | ||||||
| Net assets, end of period ($ millions) | 20 | 20 | 18 | 26 | 42 | 26 |
| Ratio of expenses before expense reductions (%) | 2.17* | 1.97 | 1.86 | 1.87e | 1.90 | 1.90 |
| Ratio of expenses after expense reductions (%) | 2.00* | 1.97 | 1.86 | 1.83e | 1.89 | 1.90 |
| Ratio of net investment income (loss) (%) | (1.04)* | (1.08) | (1.19) | (1.08) | (1.34) | (1.21) |
| Portfolio turnover rate (%) | 27* | 25 | 44 | 80 | 49 | 97 |
| a For the six months ended March 31, 2004 (Unaudited). b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower had certain expenses not been reduced. e The ratios of operating expenses excluding costs incurred in connection with a fund complex reorganization before and after expense reductions were 1.83% and 1.83%, respectively. * Annualized ** Not annualized | ||||||
Class I | ||||||
Years Ended September 30, | 2004a | 2003 | 2002 | 2001 | 2000 | 1999 |
| Selected Per Share Data | ||||||
| Net asset value, beginning of period | $ 8.40 | $ 6.91 | $ 9.38 | $ 18.45 | $ 16.07 | $ 11.88 |
| Income (loss) from investment operations: Net investment income (loss)b | .01 | .02 | -c | .02 | (.02) | -c |
| Net realized and unrealized gain (loss) on investment transactions | .79 | 1.47 | (2.47) | (7.36) | 4.16 | 4.25 |
Total from investment operations | .80 | 1.49 | (2.47) | (7.34) | 4.14 | 4.25 |
| Less distributions from: Net realized gains on investment transactions | - | - | - | (1.73) | (1.76) | (.06) |
| Net asset value, end of period | $ 9.20 | $ 8.40 | $ 6.91 | $ 9.38 | $ 18.45 | $ 16.07 |
| Total Return (%) | 9.52d** | 21.56 | (26.33) | (42.25) | 25.81 | 35.82 |
| Ratios to Average Net Assets and Supplemental Data | ||||||
| Net assets, end of period ($ millions) | 1 | 1 | 8 | 13 | 23 | 19 |
| Ratio of expenses before expense reductions (%) | 1.53* | .69 | .65 | .62e | .69 | .71 |
| Ratio of expenses after expense reductions (%) | .72* | .69 | .65 | .62e | .68 | .71 |
| Ratio of net investment income (loss) (%) | .24* | .20 | .02 | .12 | (.13) | (.02) |
| Portfolio turnover rate (%) | 27* | 25 | 44 | 80 | 49 | 97 |
| a For the six months ended March 31, 2004 (Unaudited). b Based on average shares outstanding during the period. c Amount is less than $.005. d Total return would have been lower had certain expenses not been reduced. e The ratios of operating expenses excluding costs incurred in connection with a fund complex reorganization before and after expense reductions were .61% and .61%, respectively. * Annualized ** Not annualized | ||||||
A. Significant Accounting Policies
Scudder Growth Fund (the "Fund") is a diversified series of the Scudder Growth Trust (the "Trust") which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust.
The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are offered to investors subject to an initial sales charge. Class B shares are offered without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class B shares automatically convert to Class A shares six years after issuance. Class C shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. Prior to March 1, 2004, Class C shares were offered with an initial sales charge. Class C shares do not convert into another class. Class I shares are offered to a limited group of investors, are not subject to initial or contingent deferred sales charges and have lower ongoing expenses than other classes.
Investment income, realized and unrealized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class such as distribution service fees, administrative fees and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Fund have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading. Equity securities are valued at the most recent sale price or official closing price reported on the exchange (US or foreign) or over-the-counter market on which the security is traded most extensively. Securities for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation.
Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost. Investments in open-end investment companies and Scudder Cash Management QP Trust are valued at their net asset value each business day.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Trustees.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable income to its shareholders. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required.
At September 30, 2003, the Fund had a net tax basis capital loss carryforward of approximately $496,383,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until September 30, 2010 ($355,279,000) and September 30, 2011 ($141,104,000), the respective expiration dates, whichever occurs first.
In addition, from November 1, 2002 through September 30, 2003, the Fund incurred approximately $95,580,000 of net realized capital losses. As permitted by tax regulations, the Fund intends to elect to defer these losses and treat them as arising in the fiscal year ending September 30, 2004.
Distribution of Income and Gains. Distributions of net investment income, if any, are made annually. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually.
The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to securities sold at a loss. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.
The tax character of current year distributions, if any, will be determined at the end of the current fiscal year.
Expenses. Expenses of the Trust arising in connection with a specific fund are allocated to that fund. Other Trust expenses which cannot be directly attributed to a fund are apportioned among the funds in the Trust.
Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified cost basis.
B. Purchases and Sales of Securities
During the six months ended March 31, 2004, purchases and sales of investment securities (excluding short-term investments) aggregated $136,291,553 and $213,567,092, respectively.
C. Related Parties
Management Agreement. Under the Management Agreement with Deutsche Investment Management Americas Inc. ("DeIM" or the "Advisor"), the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund. In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Management Agreement. The management fee payable under the Management Agreement is equal to an annual rate of 0.58% of the first $250,000,000 of the Fund's average daily net assets, 0.55% of the next $750,000,000 of such net assets, 0.53% of the next $1,500,000,000 of such net assets, 0.51% of the next $2,500,000,000 of such net assets, 0.48% of the next $2,500,000,000 of such net assets, 0.46% of the next $2,500,000,000 of such assets, 0.44% of the next $2,500,000,000 of such assets and 0.42% of such net assets in excess of $12,500,000,000, computed and accrued daily and payable monthly. Accordingly, for the six months ended March 31, 2004, the fee pursuant to the Management Agreement was equivalent to an annualized effective rate of 0.56% of the Fund's average daily net assets.
Effective October 1, 2003 through September 30, 2005, the Advisor has agreed to contractually waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Fund to the extent necessary to maintain the operating expenses of each class at 0.92%, 1.005%, 0.99% and 0.715% for Class A, B, C and I shares, respectively (excluding certain expenses such as Rule 12b-1 and/or service fees, trustee and trustee counsel fees, extraordinary expenses, taxes, brokerage, interest, and organizational and offering expenses).
Service Provider Fees. Scudder Investments Service Company ("SISC"), an affiliate of the Advisor, is the Fund's transfer, dividend-paying agent and shareholder service agent. Pursuant to a sub-transfer agency agreement between SISC and DST Systems, Inc. ("DST"), SISC has delegated certain transfer agent and dividend paying agent functions to DST. The costs and expenses of such delegation are borne by SISC, not by the Fund. For the six month period ended March 31, 2004, the amount charged to the Fund by SISC was as follows:
Service Provider Fee | Total Aggregated | Not Imposed | Unpaid at March 31, 2004 |
| Class A | $ 1,002,012 | $ - | $ 616,773 |
| Class B | 332,196 | 133,049 | - |
| Class C | 57,229 | 26,983 | - |
| Class I | 3,222 | 905 | - |
$ 1,394,659 | $ 160,937 | $ 616,773 |
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 six months ended March 31, 2004, the Distribution Fee was as follows:
Distribution Fee | Total Aggregated | Unpaid at March 31, 2004 |
| Class B | $ 396,208 | $ 66,733 |
| Class C | 80,390 | 13,438 |
$ 476,598 | $ 80,171 |
In addition, SDI provides information and administrative services ("Service Fee") to Class A, B and C shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. SDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder accounts the firms service. For the six months ended March 31, 2004, the Service Fee was as follows:
Service Fee | Total Aggregated | Unpaid at March 31, 2004 | Annualized Effective Rate |
| Class A | $ 1,059,005 | $ 190,365 | .24% |
| Class B | 130,468 | 24,548 | .25% |
| Class C | 26,656 | 5,486 | .25% |
$ 1,216,129 | $ 220,399 |
Underwriting and Contingent Deferred Sales Charge. SDI is the principal underwriter for the Fund. Underwriting commissions paid in connection with the distribution of Class A and C shares for the six months ended March 31, 2004 aggregated $32,730 and $94, respectively.
In addition, SDI receives any contingent deferred sales charge ("CDSC") from Class B share redemptions occurring within six years of purchase and Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates ranging from 4% to 1% for Class B and 1% for Class C, of the value of the shares redeemed. For the six months ended March 31, 2004, the CDSC for Class B and C shares aggregated $133,174 and $112, respectively. A deferred sales charge of up to 1% is assessed on certain redemptions of Class A shares. For the six months ended March 31, 2004, SDI received $598.
Trustees' Fees and Expenses. The Fund pays each Trustee not affiliated with the Advisor retainer fees plus specified amounts for attended board and committee meetings.
Scudder Cash Management QP Trust. Pursuant to an Exemptive Order issued by the SEC, the Fund may invest in the Scudder Cash Management QP Trust (the "QP Trust") and other affiliated funds managed by the Advisor. The QP Trust seeks to provide as high a level of current income as is consistent with the preservation of capital and the maintenance of liquidity. The QP Trust does not pay the Advisor a management fee for the affiliated funds' investments in the QP Trust.
D. Expense Off-Set Arrangement
The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's custodian expenses. During the six months ended March 31, 2004, the custodian fee was reduced by $6 for custodian credits earned.
E. Line of Credit
The Fund and several other affiliated funds (the "Participants") share in a $1.25 billion revolving credit facility administered by J.P. Morgan Chase Bank for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, based upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
F. Share Transactions
The following table summarizes share and dollar activity in the Fund:
Six Months Ended | Year Ended | |||
Shares | Dollars | Shares | Dollars | |
| Shares sold | ||||
| Class A | 3,601,351 | $ 31,422,484 | 8,340,194 | $ 62,351,168 |
| Class B | 1,437,411 | 10,992,427 | 3,251,607 | 21,472,223 |
| Class C | 444,886 | 3,451,725 | 949,152 | 6,390,511 |
| Class I | 22,738 | 207,192 | 125,559 | 954,097 |
$ 46,073,828 | $ 91,167,999 | |||
| Shares redeemed | ||||
| Class A | (10,883,061) | $ (95,281,763) | (20,678,944) | $ (153,604,710) |
| Class B | (3,434,835) | (26,266,541) | (8,096,494) | (52,788,103) |
| Class C | (676,682) | (5,261,135) | (1,059,296) | (7,130,269) |
| Class I | (17,218) | (157,074) | (1,141,592) | (8,460,777) |
$ (126,966,513) | $ (221,983,859) | |||
| Net increase (decrease) | ||||
| Class A | (7,281,710) | $ (63,859,279) | (12,338,750) | $ (91,253,542) |
| Class B | (1,997,424) | (15,274,114) | (4,844,887) | (31,315,880) |
| Class C | (231,796) | (1,809,410) | (110,144) | (739,758) |
| Class I | 5,520 | 50,118 | (1,016,033) | (7,506,680) |
$ (80,892,685) | $ (130,815,860) | |||
G. Regulatory Matters and Litigation
Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations ("inquiries") into the mutual fund industry, and have requested information from numerous mutual fund companies, including Scudder Investments. We are unable to determine what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisers. Publicity about mutual fund practices arising from these industry wide inquiries serve as the general basis of a number of private lawsuits against the Scudder Funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain Scudder funds, Deutsche Asset Management ("DeAM") and its affiliates, certain individuals, including in some cases Fund Trustees/Directors, and other parties. DeAM has undertaken to bear all liabilities and expenses incurred by the Scudder funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding fund valuation, market timing, revenue sharing or other subjects of the pending inquiries. Based on currently available information, DeAM believes the likelihood that the pending lawsuits will have a material adverse financial impact on a Scudder fund is remote and such actions are not likely to materially affect its ability to perform under its investment management agreements with the Scudder funds.
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 |
Proxy Voting | A description of the fund's policies and procedures for voting proxies for portfolio securities can be found on our Web site - scudder.com (type "proxy voting" in the search field) - or on the SEC's Web site - www.sec.gov. To obtain a written copy without charge, call us toll free at (800) 621-1048. |
Principal Underwriter | If you have questions, comments or complaints, contact: Scudder Distributors, Inc. 222 South Riverside PlazaChicago, IL 60606-5808 (800) 621-1148 |
Class A | Class B | Class C | |
Nasdaq Symbol | KGRAX | KGRBX | KGRCX |
CUSIP Number | 81115H-104 | 81115H-203 | 81115H-302 |
Fund Number | 003 | 203 | 303 |
This privacy statement is issued by Deutsche Investment Management Americas Inc., Deutsche Asset Management, Inc., Scudder Distributors, Inc., Scudder Investor Services, Inc., Scudder Trust Company and the Scudder Funds.
We never sell customer lists or individual client information. We consider privacy fundamental to our client relationships and adhere to the policies and practices described below to protect current and former clients' information. Internal policies are in place to protect confidentiality, while allowing client needs to be served. Only individuals who need to do so in carrying out their job responsibilities may access client information. We maintain physical, electronic and procedural safeguards that comply with federal standards to protect confidentiality. These safeguards extend to all forms of interaction with us, including the Internet.
In the normal course of business, clients give us nonpublic personal information on applications and other forms, on our websites, and through transactions with us or our affiliates. Examples of the nonpublic personal information collected are name, address, Social Security number and transaction and balance information. To be able to serve our clients, certain of this client information is shared with affiliated and nonaffiliated third party service providers such as transfer agents, custodians, and broker-dealers to assist us in processing transactions and servicing your account with us. In addition, we may disclose all of the information we collect to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements. The organizations described above that receive client information may only use it for the purpose designated by the Scudder Companies listed above.
We may also disclose nonpublic personal information about you to other parties as required or permitted by law. For example, we are required or we may provide information to government entities or regulatory bodies in response to requests for information or subpoenas, to private litigants in certain circumstances, to law enforcement authorities, or any time we believe it necessary to protect the firm.
Questions on this policy may be sent to:
Scudder Investments
Attention: Correspondence - Chicago
P.O. Box 219415
Kansas City, MO 64121-9415
August 2003
Notes |
Notes |
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The primary function of the Nominating and Governance Committee is to identify
and recommend individuals for membership on the Board and oversee the
administration of the Board Governance Procedures and Guidelines. Shareholders
may recommend candidates for Board positions by forwarding their correspondence
by U.S. mail or courier service to the Fund's Secretary for the attention of the
Chairman of the Nominating and Governance Committee, Two International Place,
Boston, MA 02110. Suggestions for candidates must include a resume of the
candidate.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The Chief Executive and Financial Officers concluded that the Registrant's
Disclosure Controls and Procedures are effective based on the evaluation of the
Disclosure Controls and Procedures as of a date within 90 days of the filing
date of this report.
Fund management has previously identified a significant deficiency relating to
the overall fund expense payment and accrual process. This matter relates
primarily to a bill payment processing issue. There was no material impact to
shareholders, fund net asset value, fund performance or the accuracy of any
fund's financial statements. Fund management discussed this matter with the
Registrant's Audit Committee and auditors, instituted additional procedures to
enhance its internal controls and will continue to develop additional controls
and redesign work flow to strengthen the overall control environment associated
with the processing and recording of fund expenses.
(b) There have been no changes in the registrant's internal control over
financial reporting that occurred during the filing period that has materially
affected, or is reasonably likely to materially affect, the registrant's
internal controls over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Certification pursuant to Rule 30a-2(a) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as
Exhibit 99.CERT.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as
Exhibit 99.906CERT.
Form N-CSR Item F
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: Scudder Growth Fund
By: Richard T. Hale
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Richard T. Hale
Chief Executive Officer
Date: May 28, 2004
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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 Growth Fund
By: Richard T. Hale
---------------------------
Richard T. Hale
Chief Executive Officer
Date: May 28, 2004
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By: Charles A. Rizzo
---------------------------
Charles A. Rizzo
Chief Financial Officer
Date: May 28, 2004
---------------------------