UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-07507
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SCUDDER INVESTMENTS VIT FUNDS
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(Exact name of registrant as specified in charter)
101 FEDERAL STREET
BOSTON, MA 02110
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(Address of principal executive offices) (Zip code)
DANIEL O. HIRSCH
DEUTSCHE ASSET MANAGEMENT
ONE SOUTH STREET
BALTIMORE, MD 21202
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(Name and address of agent for service)
Registrant's telephone number, including area code: 617-535-0532
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Date of fiscal year end: DECEMBER 31, 2003
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Date of reporting period: JUNE 30, 2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO OMITTED]
SCUDDER
INVESTMENTS
Scudder VIT Equity 500 Index Fund
Class A and B Shares
SEMIANNUAL REPORT
June 30, 2003
Scudder VIT Equity 500 Index Fund
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TABLE OF CONTENTS
LETTER TO SHAREHOLDERS ........................... 3
PERFORMANCE COMPARISON ........................... 6
SCUDDER VIT EQUITY 500 INDEX FUND
Schedule of Investments ....................... 7
Statement of Assets and Liabilities ...........13
Statement of Operations .......................14
Statements of Changes in Net Assets ...........15
Financial Highlights ..........................16
Notes to Financial Statements .................18
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The Fund is not insured by the FDIC and is not a deposit, obligation of or
guaranteed by Deutsche Bank AG. The Fund is subject to investment risks,
including possible loss of principal amount invested.
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2
Scudder VIT Equity 500 Index Fund
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LETTER TO SHAREHOLDERS
In the following interview, the portfolio management team discusses Scudder VIT
Equity 500 Index Fund's market environment during the six-month period ended
June 30, 2003.
Q: HOW DID SCUDDER VIT EQUITY 500 INDEX FUND PERFORM OVER THE FIRST HALF OF
2003?
A: Scudder VIT Equity 500 Index Fund tracked its benchmark, the Standard &
Poor's 500 Index,1 for the six months ended June 30, 2003. The fund produced a
return of 11.53% (VIT Class A shares) for the semi-annual period, as compared to
11.76% for the benchmark. The broad-based S&P 500 Index is a group of
large-company stocks that is not available for direct investment.
Q: WHAT WERE THE PRIMARY FACTORS IMPACTING THE U.S. EQUITY MARKETS DURING THE
PAST SIX MONTHS?
A: In a welcome turnabout from the past three years, U.S. equities gained ground
for the six months ended June 30, 2003. Still, the S&P 500 Index saw divergent
performance within the semi-annual period.
During the first quarter, the S&P 500 Index declined 3.15%, as equities
partially offset the market rally of the fourth quarter of 2002. After starting
the New Year on a positive note, equity markets peaked during the second week of
January and then started a sustained decline, as fears surrounding the likely
war with Iraq heightened. Economic activity slowed, as the geopolitical concerns
reverberated throughout most sectors. Indeed, virtually every major indicator
proved weaker than expected as full-year U.S. Gross Domestic Product (GDP)
growth estimates continued to be reduced. By the beginning of March, a `war
relief' rally took place, erasing much of the quarter's decline, as investors
grew optimistic that the war would not last very long.
During the second quarter, the S&P 500 Index was up 15.39%, marking the largest
single quarterly gain for the Index in 41/2 years. Economic and political
conditions improved, leading investors to favor equities. A significant number
of corporate earnings announcements during the quarter met or exceeded
expectations, and earnings estimates were revised up going forward. Furthermore,
the low interest rate environment and declining yields on bond investments drew
more attention to equities, as investors sought higher returns. The case for
owning equities was additionally strengthened by a $350 billion U.S. tax cut, an
accommodative Federal Reserve Board, and a declining dollar that benefited U.S.
companies distributing products and services overseas. Finally, while the
journey to freedom and democracy in Iraq is by no means at an end, the
conclusion of active military operations toward the end of April provided the
equity markets with a degree of geopolitical stability not seen in the last two
years or so.
For the semi-annual period overall, large-cap stocks, as measured by the S&P 500
Index, underperformed mid-cap and small-cap stocks, as measured by the S&P
MidCap 400 Index2 and the Russell 2000 Index,3 respectively. Within the
large-cap sector, value-oriented stocks only modestly outperformed
growth-oriented stocks, with year-to-date returns separated by approximately 1%,
as measured by the S&P 500 Barra Value Index4 versus the S&P 500 Barra Growth
Index.5
Q: WHICH SECTORS AND STOCKS WITHIN THE S&P 500 INDEX WERE THE BEST AND WORST
PERFORMERS?
A: For the six months ended June 30, 2003, sector performance within the S&P 500
Index was positive across the board. Financials, information technology and
consumer discretionary were the best performing sectors. Telecommunications
services, materials, and consumer staples were the worst performing sectors for
the semi-annual period. The financials sector continued to be the
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1`S&P 500(R)' is a trademark of The McGraw-Hill Companies, Inc. and has been
licensed for use by the Fund's investment advisor. S&P 500(R) Index is an
unmanaged index used to portray the pattern of common stock movement of 500
large companies.
2 S&P MidCap 400 Index is an unmanaged index that tracks the stock movement of
400 mid-sized U.S. companies.
3 Russell 2000 Index is an unmanaged index that tracks the common stock price
movement of the 2,000 smallest companies of the Russell 3000 Index, which
measures the performance of the 3,000 largest U.S. companies based on market
capitalization.
4 S&P 500 Barra Value Index is a capitalization-weighted index of all the stocks
in the Standard & Poor's 500 that have low price-to-book ratios.
5 S&P 500 Barra Growth Index is a capitalization-weighted index of all the
stocks in the Standard & Poor's 500 that have high price-to-book ratios.
Index returns assume reinvestment of dividends and capital gains and, unlike
fund returns, do not reflect fees and expenses. A direct investment in an index
is not possible.
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3
Scudder VIT Equity 500 Index Fund
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LETTER TO SHAREHOLDERS
SECTOR ALLOCATION
As of June 30, 2003
(percentages are based on market value* of total investments in the Fund) A
Fund's sector allocation is subject to change.
Financial Services ........................... 19.83%
Information Technology ....................... 14.77
Healthcare ................................... 14.35
Consumer Discretionary ....................... 13.12
Industrials .................................. 11.11
Consumer Staples ............................. 8.91
Energy ....................................... 5.62
Telecommunication Services ................... 3.78
Utilities .................................... 2.90
Other ........................................ 5.61
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100.00%
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* Excluding Cash Equivalents.
largest weight within the S&P 500 Index through the period, accounting at June
30, 2003 for 20.1% of the Index's market capitalization. However, the biggest
changes in weighting within the Index during the first half of the year came
from the consumer staples, information technology and utilities sectors, which
each grew in weighting, and from the consumer discretionary, industrials and
telecommunications services sectors, which each declined in Index weighting.
The best semi-annual returns among the S&P 500 Index stocks came from General
Electric, Citigroup and Intel. The worst performing individual stocks based on
total return were AIG, SBC Communications and AT&T.
Q: WHAT WERE THE MAJOR CHANGES TO THE S&P 500 INDEX DURING THE SEMI-ANNUAL
PERIOD?
A: In all, there were just 5 additions and deletions to the S&P 500 Index for
the first half of year. Perhaps most notable was the deletion of Pharmacia
during the second quarter and its replacement by Federated Investors. Pharmacia
was acquired by S&P 500 Index component Pfizer Inc. Also, on the last day of the
first quarter was the deletion of Household International, which was bought out
by foreign-owned HSBC, and thus became ineligible for a place in the Index.
Household International was replaced by Symantec Corp.
INVESTMENT REVIEW
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CUMULATIVE TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
Periods Ended 6 Months 1 Year 3 Years 5 Years Since 1 Year 3 Years 5 Years Since
June 30, 2003 Inception 1 Inception 1
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Scudder VIT Equity 500 Index Fund 2
Class A 11.53% 0.01% (30.62)% (9.36)% 9.04% 0.01% (11.47)% (1.95)% 1.52%
Class B 11.35% (0.24)% n/a n/a (8.21)% (0.24)% n/a n/a (7.08)%
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S&P 500 Index 3 11.76% 0.25% (29.98)% (7.81)% 11.64% 0.25% (11.20)% (1.61)% 1.93%
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Lipper S&P 500 Index Objective
Fund Average 4 11.37% (0.38)% (39.16)% (10.15)% 8.46% (0.38)% (11.70)% (2.12)% 1.42%
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1 The Fund's inception dates are: Class A Shares: October 1, 1997, Class B
Shares: April 30, 2002. Benchmark returns are for comparative purposes
relative to Class A Shares and are for the periods beginning October 1, 1997
for the S&P 500 Index and September 30, 1997 for the Lipper S&P 500 Index
Objective Fund Average.
2 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. MARKET VOLATILITY CAN
SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN INVESTMENT MADE
TODAY MAY DIFFER SUBSTANTIALLY FROM THE FUND'S HISTORICAL PERFORMANCE.
Investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost. All
performance assumes the reinvestment of dividend and capital gains
distributions. Earnings from variable annuity investments compound tax free
until withdrawal, so no adjustments are made for income taxes. Performance
figures for the classes differ because each class maintains a distinct expense
structure. Performance would have been lower during the specified periods if
certain of the Fund's fees and expenses had not been waived. Returns are net
of the portfolio's management fee and other operating expenses. There is no
guarantee that the Fund will be able to mirror the S&P 500 Index closely
enough to track its performance.
3 The S&P 500 Index is an unmanaged index that measures the performance of 500
large U.S. companies.
4 Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Inc. as falling into the category
indicated.
Index returns assume reinvestment of dividends and capital gains and, unlike
fund returns, do not reflect fees and expenses. A direct investment in an index
is not possible.
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4
Scudder VIT Equity 500 Index Fund
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LETTER TO SHAREHOLDERS
TEN LARGEST STOCK HOLDINGS
As of June 30, 2003
(percentages are based on total net assets of the Fund) A Fund's holdings are
subject to change.
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General Electric Co ..................... 3.09%
Microsoft Corp .......................... 2.97
Pfizer, Inc ............................. 2.91
Exxon Mobil Corp ........................ 2.59
Wal-Mart Stores, Inc .................... 2.54
Citigroup, Inc .......................... 2.38
Johnson & Johnson Co .................... 1.65
American International Group, Inc ....... 1.55
International Business Machines Corp .... 1.54
Intel Corp .............................. 1.47
Q: WHAT INVESTMENT STRATEGIES DO YOU INTEND TO PURSUE IN THE FUND?
A: As managers of an index fund, which seeks to replicate as closely as possible
(before deduction of expenses) the broad diversification and returns of the S&P
500 Index, we neither evaluate short-term fluctuations in the Fund's performance
nor manage according to a given outlook for the equity markets or the economy in
general. Still, we will continue monitoring economic conditions and how they
affect the financial markets, as we seek to closely track the performance of the
stock market.
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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
manager's views are subject to change at any time, based on market and other
conditions and should not be construed as a recommendation.
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5
Scudder VIT Equity 500 Index Fund
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PERFORMANCE COMPARISON 1
SCUDDER VIT EQUITY 500 INDEX FUND--CLASS A SHARES AND S&P 500 INDEX GROWTH OF A
$10,000 INVESTMENT (SINCE INCEPTION) 2
Scudder VIT Equity 500
Index Fund-Class A
Shares $10,904 S&P 500 Index3 $11,124
- ---------------------------------------------------------
10/1/97 $10000 $10000
10/31/97 9600 9666
11/30/97 10020 10114
12/31/97 10190 10287
1/31/98 10300 10402
2/28/98 11030 11152
3/31/98 11580 11723
4/30/98 11770 11841
5/31/98 11560 11637
6/30/98 12030 12110
7/31/98 11870 11981
8/31/98 10180 10249
9/30/98 10820 10906
10/31/98 11690 11793
11/30/98 12390 12507
12/31/98 13116 13228
1/31/99 13641 13780
2/28/99 13219 13352
3/31/99 13744 13886
4/30/99 14259 14423
5/31/99 13919 14083
6/30/99 14682 14865
7/31/99 14218 14401
8/31/99 14146 14330
9/30/99 13765 13938
10/31/99 14620 14820
11/30/99 14908 15121
12/31/99 15789 16011
1/31/00 14999 15208
2/29/00 14718 14920
3/31/00 16153 16379
4/30/00 15665 15886
5/31/00 15342 15561
6/30/00 15717 15945
7/31/00 15467 15696
8/31/00 16424 16671
9/30/00 15550 15791
10/31/00 15488 15724
11/30/00 14260 14485
12/31/00 14331 14556
1/31/01 14831 15073
2/28/01 13478 13698
3/31/01 12624 12830
4/30/01 13603 13827
5/31/01 13686 13919
6/30/01 13353 13581
7/30/01 13218 13448
8/31/01 12385 12606
9/30/01 11375 11588
10/31/01 11594 11809
11/30/01 12479 12715
12/31/01 12585 12827
1/31/02 12396 12639
2/28/02 12155 12395
3/31/02 12606 12861
4/30/02 11840 12082
5/31/02 11756 11993
6/30/02 10905 11139
7/30/02 10064 10271
8/31/02 10127 10338
9/30/02 9024 9214
10/31/02 9812 10025
11/30/02 10390 10615
12/31/02 9777 9989
1/31/03 9522 9720
2/28/03 9373 9571
3/31/03 9469 9658
4/30/03 10237 10448
5/31/03 10764 10991
6/30/03 10904 11124
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AVERAGE ANNUAL TOTAL RETURNS
Periods Ended 1 Year 3 Years 5 Years Since
June 30, 2003 Inception 2
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Scudder VIT Equity 500 Index Fund--Class A Shares 0.01% (11.47)% (1.95)% 1.52%
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CUMULATIVE TOTAL RETURNS
Periods Ended 1 Year Since
June 30, 2003 Inception 4
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Scudder VIT Equity 500 Index Fund--Class B Shares (0.24)% (8.21)%
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1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. MARKET VOLATILITY CAN
SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN INVESTMENT MADE
TODAY MAY DIFFER SUBSTANTIALLY FROM THE FUND'S HISTORICAL PERFORMANCE.
Investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost. All
performance assumes the reinvestment of dividend and capital gain
distributions. Earnings from variable annuity investments compound tax free
until withdrawal, so no adjustments are made for income taxes. Performance
would have been lower during the specified periods if certain of the Fund's
fees and expenses had not been waived. Returns are net of the portfolio's
management fee and other operating expenses.
2 Class A Shares commenced operations on October 1, 1997. Benchmark return is
for the period beginning October 1, 1997.
3 The S&P 500 Index is an unmanaged index that measures the performance of 500
large U.S. companies. Index returns assume reinvestment of dividends and,
unlike Fund returns, do not reflect any fees or expenses. A
direct investment in an index is not possible.
4 Class B Shares commenced operations on April 30, 2002. Growth of $10,000 for
B Shares from inception through June 30, 2003: $9,179.
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6
Scudder VIT Equity 500 Index Fund
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SCHEDULE OF INVESTMENTS June 30, 2003 (Unaudited)
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SHARES SECURITY VALUE
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COMMON STOCKS--96.92%
21,300 3M Co. .............................$2,747,274
85,100 Abbott Laboratories ................ 3,723,976
14,200 ACE Ltd ............................ 486,918
42,500 ADC Telecommunications, Inc.1 ...... 98,940
12,600 Adobe Systems, Inc ................. 404,082
2,000 Adolph Coors Co.--Class B .......... 97,960
18,700 Advanced Micro Devices, Inc.1,2 .... 119,867
29,500 AES Corp.1 ......................... 187,325
8,200 Aetna, Inc ......................... 493,640
28,100 AFLAC, Inc ......................... 864,075
25,718 Agilent Technologies, Inc.1 ........ 502,787
12,400 Air Products & Chemicals, Inc ...... 515,840
3,200 Alberto-Culver Co.2 ................ 163,520
20,642 Albertsons, Inc .................... 396,326
45,976 Alcoa, Inc ......................... 1,172,388
6,800 Allegheny Energy, Inc.1,2 .......... 57,460
4,350 Allegheny Technologies, Inc ........ 28,710
7,000 Allergan, Inc.2 .................... 539,700
11,400 Allied Waste Industries, Inc.1 ..... 114,570
38,200 Allstate Corp ...................... 1,361,830
17,100 ALLTEL Corp ........................ 824,562
20,800 Altera Corp.1 ...................... 341,120
110,900 Altria Group, Inc .................. 5,039,296
5,750 Ambac Financial Group, Inc ......... 380,937
4,800 Amerada Hess Corp .................. 236,064
8,700 Ameren Corp ........................ 383,670
22,040 American Electric Power Co ......... 657,453
70,800 American Express Co ................ 2,960,148
3,600 American Greetings Corp.--Class
A1,2 ............................... 70,704
142,089 American International Group, Inc .. 7,840,471
11,000 American Power Conversion Corp.1 ... 171,490
3,900 American Standard Cos., Inc.1 ...... 288,327
5,984 AmerisourceBergen Corp ............. 414,990
68,708 Amgen, Inc.1 ....................... 4,564,960
19,400 AmSouth Bancorp .................... 423,696
13,521 Anadarko Petroleum Co .............. 601,279
19,800 Analog Devices, Inc ................ 689,436
6,200 Andrew Corp.1,2 .................... 57,040
45,600 Anheuser-Busch Cos., Inc ........... 2,327,880
7,664 Anthem, Inc.1 ...................... 591,278
245,948 AOL Time Warner, Inc.1 ............. 3,957,303
16,900 AON Corp ........................... 406,952
8,706 Apache Corp ........................ 566,412
5,300 Apartment Investment &
Management Co.--Class A ............ 183,380
9,600 Apollo Group, Inc.--Class A1,2 ..... 592,896
20,000 Apple Computer, Inc.1 .............. 382,400
11,400 Applera Corp.--Applied
Biosystems Group ................... 216,942
89,900 Applied Materials, Inc.1 ........... 1,425,814
16,500 Applied Micro Circuits Corp.1 ...... 99,825
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SHARES SECURITY VALUE
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35,175 Archer-Daniels-Midland Co .......... $ 452,702
3,700 Ashland, Inc ....................... 113,516
43,404 AT&T Corp .......................... 835,527
148,399 AT&T Wireless Services, Inc.1 ...... 1,218,356
6,200 AutoDesk, Inc.2 .................... 100,192
32,700 Automatic Data Processing, Inc ..... 1,107,222
15,700 AutoNation, Inc.1,2 ................ 246,804
5,300 AutoZone, Inc.1 .................... 402,641
21,030 Avaya, Inc.1 ....................... 135,854
6,000 Avery Dennison Corp ................ 301,200
12,800 Avon Products, Inc ................. 796,160
18,340 Baker Hughes, Inc .................. 615,674
3,100 Ball Corp .......................... 141,081
62,300 Banc One Corp ...................... 2,316,314
81,871 Bank of America Corp ............... 6,470,265
41,700 Bank of New York Co., Inc .......... 1,198,875
2,900 Bard (C. R.), Inc .................. 206,799
3,100 Bausch & Lomb ...................... 116,250
32,500 Baxter International, Inc .......... 845,000
25,700 BB&T Corp .......................... 881,510
5,472 Bear Stearns Cos., Inc ............. 396,282
14,000 Becton, Dickinson & Co ............. 543,900
16,000 Bed Bath & Beyond, Inc.1 ........... 620,960
101,300 BellSouth Corp ..................... 2,697,619
2,900 Bemis Co., Inc ..................... 135,720
17,550 Best Buy Co., Inc.1,2 .............. 770,796
6,300 Big Lots, Inc.1 .................... 94,752
8,100 Biogen, Inc.1,2 .................... 307,800
14,325 Biomet, Inc ........................ 410,554
8,600 BJ Services Co.1,2 ................. 321,296
4,300 Black & Decker Corp ................ 186,835
9,700 Block (H&R), Inc ................... 419,525
12,700 BMC Software, Inc.1 ................ 207,391
45,700 Boeing Co .......................... 1,568,424
3,200 Boise Cascade Corp ................. 76,480
22,200 Boston Scientific Corp.1 ........... 1,356,420
105,446 Bristol-Myers Squibb Co ............ 2,862,859
15,056 Broadcom Corp.--Class A1 ........... 375,045
3,300 Brown-Forman Corp.2 ................ 259,446
4,900 Brunswick Corp.2 ................... 122,598
20,400 Burlington Northern Santa Fe Corp .. 580,176
10,900 Burlington Resources, Inc .......... 589,363
20,489 Calpine Corp.1,2 ................... 135,227
22,400 Campbell Soup Co.2 ................. 548,800
12,100 Capital One Financial Corp ......... 595,078
24,615 Cardinal Health, Inc ............... 1,582,744
34,700 Carnival Corp.2 .................... 1,128,097
18,700 Caterpillar, Inc ................... 1,040,842
55,893 Cendant Corp.1 ..................... 1,023,960
16,500 CenterPoint Energy, Inc ............ 134,475
3,400 Centex Corp.2 ...................... 264,486
7,750 CenturyTel, Inc .................... 270,087
See Notes to Financial Statements.
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7
Scudder VIT Equity 500 Index Fund
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SCHEDULE OF INVESTMENTS June 30, 2003 (Unaudited)
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SHARES SECURITY VALUE
- ----------------------------------------------------------------
12,344 Charter One Financial, Inc ..... $ 384,886
58,233 ChevronTexaco Corp ............. 4,204,423
10,200 Chiron Corp. 1,2 ................ 445,944
10,300 Chubb Corp ...................... 618,000
24,400 CIENA Corp. 1,2 ................. 126,636
7,600 CIGNA Corp ..................... 356,744
8,700 Cincinnati Financial Corp........ 322,683
9,200 CINergy Corp. 2 ................. 338,468
9,400 Cintas Corp. 2 ................. 333,136
11,500 Circuit City Stores, Inc ........ 101,200
383,100 Cisco Systems, Inc. 1 ........... 6,393,939
280,774 Citigroup, Inc ................. 12,017,127
15,500 Citizens Communications Co. 1,2 . 199,795
9,300 Citrix Systems, Inc. 1,2 ........ 189,348
33,234 Clear Channel Communications, Inc. 1 1,408,789
12,000 Clorox Co ...................... 511,800
8,116 CMS Energy Corp. 1,2 ............ 65,740
134,400 Coca-Cola Co ................... 6,237,504
24,500 Coca-Cola Enterprises, Inc....... 444,675
29,300 Colgate-Palmolive Co ............ 1,697,935
123,086 Comcast Corp.--Class A1.......... 3,714,735
9,500 Comerica, Inc ................... 441,750
31,350 Computer Associates
International, Inc. 2............ 698,478
10,200 Computer Sciences Corp. 1,2 ..... 388,824
20,700 Compuware Corp. 1 ............... 119,439
10,498 Comverse Technology, Inc. 1 ..... 157,785
29,300 ConAgra Foods, Inc ............. 691,480
27,674 Concord EFS, Inc. 1 ............. 407,361
37,444 ConocoPhillips ................. 2,051,931
11,600 Consolidated Edison Co. of
New York, Inc .................. 502,048
9,000 Constellation Energy Group ..... 308,700
9,700 Convergys Corp. 1 .............. 155,200
5,200 Cooper Industries Ltd.--Class A 214,760
3,900 Cooper Tire & Rubber Co ........ 68,601
69,749 Corning, Inc. 1 ................ 515,445
24,800 Costco Cos., Inc.1 ............. 907,680
6,900 Countrywide Financial Corp ..... 480,033
3,200 Crane Co ....................... 72,416
11,700 CSX Corp ....................... 352,053
2,400 Cummins, Inc ................... 86,136
21,400 CVS Corp ....................... 599,842
7,985 Dana Corp ...................... 92,307
8,400 Danaher Corp. 2 ................ 571,620
9,250 Darden Restaurants, Inc ........ 175,565
13,100 Deere & Co ..................... 598,670
140,700 Dell Computer Corp. 1 .......... 4,496,772
30,373 Delphi Corp .................... 262,119
6,800 Delta Air Lines, Inc. 2 ........ 99,824
3,100 Deluxe Corp .................... 138,880
12,500 Devon Energy Corp .............. 667,500
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SHARES SECURITY VALUE
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4,600 Dillard' s, Inc.--Class A3 ..... $ 61,962
18,147 Dollar General Corp ............ 331,364
16,716 Dominion Resources, Inc.2 ...... 1,074,337
6,200 Donnelley (R.R.) & Sons Co ..... 162,068
11,200 Dover Corp ..................... 335,552
50,416 Dow Chemical Co ................ 1,560,879
4,500 Dow Jones & Co., Inc ........... 193,635
9,200 DTE Energy Co .................. 355,488
54,245 Du Pont (E.I.) de Nemours & Co . 2,258,762
49,800 Duke Energy Corp.2 ............. 993,510
19,735 Dynegy, Inc.--Class A1 ......... 82,887
4,200 Eastman Chemical Co ............ 133,014
15,900 Eastman Kodak Co.2 ............. 434,865
4,000 Eaton Corp ..................... 314,440
17,300 eBay, Inc.1 .................... 1,802,314
14,200 Ecolab, Inc.2 .................. 363,520
17,700 Edison International1 .......... 290,811
32,386 El Paso Corp.2 ................. 261,679
7,800 Electronic Arts, Inc.1 ......... 577,122
26,000 Electronic Data Systems Corp.2 . 557,700
120,400 EMC Corp.1 ..................... 1,260,588
22,900 Emerson Electric Co ............ 1,170,190
7,000 Engelhard Corp ................. 173,390
12,100 Entergy Corp ................... 638,638
6,200 EOG Resources, Inc ............. 259,408
7,900 Equifax, Inc ................... 205,400
22,200 Equity Office Properties Trust . 599,622
14,900 Equity Residential ............. 386,655
17,625 Exelon Corp .................... 1,054,151
365,220 Exxon Mobil Corp ............... 13,115,050
9,326 Family Dollar Stores, Inc ...... 355,787
53,500 Fannie Mae ..................... 3,608,040
10,400 Federated Department Stores, Inc 383,240
6,200 Federated Investors, Inc.--Class B 170,004
16,260 FedEx Corp ..................... 1,008,608
31,492 Fifth Third Bancorp ............ 1,805,751
41,000 First Data Corp ................ 1,699,040
6,900 First Tennessee National Corp .. 302,979
16,184 FirstEnergy Corp ............... 622,275
10,501 Fiserv, Inc.1,2 ................ 373,941
57,154 FleetBoston Financial Corp ..... 1,698,045
4,400 Fluor Corp.2 ................... 148,016
99,902 Ford Motor Co.2 ................ 1,097,923
19,700 Forest Laboratories, Inc.1 ..... 1,078,575
8,100 Fortune Brands, Inc ............ 422,820
9,900 FPL Group, Inc ................. 661,815
14,100 Franklin Resources, Inc ........ 550,887
37,900 Freddie Mac .................... 1,924,183
8,000 Freeport-McMoran Copper &
Gold, Inc.--Class B ............ 196,000
14,600 Gannet Co., Inc ................ 1,121,426
48,125 Gap, Inc.2 ..................... 902,825
See Notes to Financial Statements.
8
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS June 30, 2003 (Unaudited)
- -----------------------------------------------------------------
SHARES SECURITY VALUE
- -----------------------------------------------------------------
14,200 Gateway, Inc. 1 ........................... $ 51,830
10,900 General Dynamics Corp. 2 .................. 790,250
545,000 General Electric Co. 1 .................... 5,630,600
20,064 General Mills, Inc. 2 ..................... 951,234
30,530 General Motors Corp. 2 .................... 1,099,080
9,600 Genuine Parts Co .......................... 307,296
11,700 Genzyme Corp. 1 ........................... 489,060
13,677 Georgia-Pacific Corp ...................... 259,179
55,700 Gillette Co ............................... 1,774,602
8,400 Golden West Financial Group ............... 672,084
25,700 Goldman Sachs Group, Inc .................. 2,152,375
6,300 Goodrich Corp ............................. 132,300
9,700 Goodyear Tire & Rubber Co. 1,2 ............ 50,925
5,000 Grainger (W.W.), Inc ...................... 233,800
2,800 Great Lakes Chemical Corp. 2 .............. 57,120
16,800 Guidant Corp .............................. 745,752
23,700 Halliburton Co ............................ 545,100
16,500 Harley-Davidson, Inc ...................... 657,690
6,000 Harrah' s Entertainment, Inc. 1............ 241,440
15,151 Hartford Financial Services Group, Inc..... 763,004
9,459 Hasbro, Inc. 2 ............................ 165,438
28,000 HCA, Inc .................................. 897,120
13,000 Health Management
Associates, Inc.--Class A2 ................ 239,850
19,200 Heinz (H. J.) Co .......................... 633,216
6,100 Hercules, Inc. 1 ......................... 60,390
7,400 Hershey Foods Corp ........................ 515,484
166,526 Hewlett-Packard Co ........................ 3,547,004
20,500 Hilton Hotels Corp ........................ 262,195
125,800 Home Depot, Inc ........................... 4,166,496
46,475 Honeywell International, Inc .............. 1,247,854
8,800 Humana, Inc. 1 ............................ 132,880
12,850 Huntington Bancshares, Inc ................ 250,832
16,700 Illinois Tool Works, Inc .................. 1,099,695
13,500 IMS Health, Inc ........................... 242,865
9,200 Ingersoll-Rand Co.--Class A ............... 435,344
357,300 Intel Corp ................................ 7,426,123
94,208 International Business MachinesCorp. ...... 7,772,160
5,100 International Flavors & ................... 162,843
Fragrances, Inc.
4,592 International Game ........................ 469,899
Technology 1,2
26,108 International Paper Co .................... 932,839
21,200 Interpublic Group of Cos., Inc ............ 283,656
11,200 Intuit, Inc. 1 ............................ 498,736
5,000 ITT Industries, Inc ....................... 327,300
111,240 J.P. Morgan Chase & Co .................... 3,802,183
11,000 Jabil Circuit, Inc. 1,2 ................... 243,100
13,300 Janus Capital Group, Inc .................. 218,120
73,655 JDS Uniphase Corp. 1 ...................... 258,529
7,800 Jefferson-Pilot Corp ...................... 323,388
15,729 John Hancock Financial .................... 483,352
Services, Inc.
161,818 Johnson & Johnson Co ...................... 8,365,991
4,800 Johnson Controls, Inc ..................... 410,880
- ------------------------------------------------------------------
SHARES SECURITY VALUE
- ------------------------------------------------------------------
7,097 Jones Apparel Group, Inc. 1,2 ........... $ 207,658
2,600 KB HOME ................................. 161,148
22,300 Kellogg Co .............................. 766,451
5,536 Kerr-McGee Corp ......................... 248,013
23,100 KeyCorp ................................. 583,737
8,500 KeySpan Corp ............................ 301,325
28,000 Kimberly-Clark Corp ..................... 1,459,920
6,900 Kinder Morgan, Inc ...................... 377,085
12,921 King Pharmaceuticals, Inc. 1 ............ 190,714
10,400 KLA-Tencor Corp. 1,2 .................... 483,496
4,500 Knight-Ridder, Inc ...................... 310,185
18,400 Kohl' s Corp. 1 ......................... 945,392
41,600 Kroger Co. 1 ............................ 693,888
10,600 Leggett & Platt, Inc .................... 217,300
13,222 Lehman Brothers Holdings, Inc ........... 878,999
6,900 Lexmark International, Inc. 1,2 ......... 488,313
61,200 Lilly (Eli) & Co ........................ 4,220,964
28,476 Limited Brands .......................... 441,378
9,700 Lincoln National Corp ................... 345,611
17,000 Linear Technology Corp. 2 ............... 547,570
5,900 Liz Claiborne, Inc ...................... 207,975
24,800 Lockheed Martin Corp .................... 1,179,736
10,000 Loews Corp .............................. 472,900
5,800 Louisiana-Pacific Corp. 1 ............... 62,872
42,600 Lowe' s Cos., Inc ....................... 1,829,670
20,300 LSI Logic Corp. 1 ....................... 143,724
223,360 Lucent Technologies, Inc. 1,2 ........... 453,421
4,900 Manor Care, Inc. 1 ...................... 122,549
17,400 Marathon Oil Corp ....................... 458,490
12,700 Marriott International, Inc.--Class A2 .. 487,934
29,200 Marsh & McLennan Cos., Inc .............. 1,491,244
12,000 Marshall & Ilsley Corp .................. 366,960
26,800 Masco Corp .............................. 639,180
23,800 Mattel, Inc ............................. 450,296
17,600 Maxim Integrated Products, Inc .......... 601,744
15,750 May Department Stores Co. 2 ............. 350,595
4,300 Maytag Corp ............................. 105,006
7,900 MBIA, Inc. 2 ............................ 385,125
69,540 MBNA Corp ............................... 1,449,214
7,600 McCormick & Co., Inc .................... 206,720
3,400 McDermott International, Inc. 1.......... 21,522
69,100 McDonald' s Corp ........................ 1,524,346
10,600 McGraw-Hill Cos., Inc ................... 657,200
15,725 McKesson Corp ........................... 562,011
10,965 MeadWestvaco Corp ....................... 270,835
13,700 MedImmune, Inc. 1 ....................... 498,269
66,400 Medtronic, Inc .......................... 3,185,208
23,500 Mellon Bank Corp ........................ 652,125
122,262 Merck & Co., Inc ........................ 7,402,964
4,600 Mercury Interactive Corp. 1,2 ........... 177,606
2,700 Meredith Corp ........................... 118,800
50,500 Merrill Lynch & Co., Inc ................ 2,357,340
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
9
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS June 30, 2003 (Unaudited)
- -----------------------------------------------------------
SHARES SECURITY VALUE
- -----------------------------------------------------------
41,400 MetLife, Inc .................... $ 1,172,448
5,400 MGIC Investment 2 ............... 251,856
33,139 Micron Technology, Inc. 1,2 ..... 385,407
586,400 Microsoft Corp .................. 15,017,704
2,600 Millipore Corp. 1 ............... 115,362
17,664 Mirant Corp. 1,2 ................ 51,226
10,600 Molex, Inc. 2 ................... 286,094
14,221 Monsanto Co ..................... 307,742
6,319 Monster Worldwide, Inc. 1,2 ..... 124,674
8,300 Moody' s Corp ................... 437,493
59,000 Morgan Stanley .................. 2,522,250
125,881 Motorola, Inc ................... 1,187,058
7,894 Nabors Industries Ltd. 1,2 ...... 312,208
33,300 National City Corp .............. 1,089,243
9,900 National Semiconductor Corp. 1 .. 195,228
3,700 Navistar International Corp. 1 .. 120,731
5,500 NCR Corp. 1,2 ................... 140,910
18,800 Network Appliance, Inc. 1 ....... 304,748
8,200 New York Times Co.--Class A ..... 373,100
14,524 Newell Rubbermaid, Inc .......... 406,672
21,800 Newmont Mining Corp ............. 707,628
56,500 Nextel Communication, ........... 1,021,520
Inc.--Class A1
2,400 Nicor, Inc ...................... 89,064
14,400 Nike, Inc.--Class B2 ............ 770,256
14,308 NiSource, Inc ................... 271,852
7,400 Noble Corp. 1 ................... 253,820
7,400 Nordstrom, Inc .................. 144,448
21,200 Norfolk Southern Corp ........... 407,040
8,900 North Fork Bancorporation, Inc .. 303,134
10,900 Northern Trust Corp. 2 .......... 455,511
9,921 Northrop Grumman Corp ........... 856,083
21,900 Novell, Inc. 1 .................. 67,452
8,200 Novellus Systems, Inc. 1,2 ...... 300,292
4,300 Nucor Corp. 2 ................... 210,055
8,600 NVIDIA Corp. 1 .................. 197,886
20,500 Occidental Petroleum Corp ....... 687,775
16,800 Office Depot, Inc. 1 ............ 243,768
10,300 Omnicom Group, Inc .............. 738,510
287,100 Oracle Corp. 1 .................. 3,450,942
6,250 PACCAR, Inc ..................... 422,250
8,600 Pactiv Corp. 1 .................. 169,506
6,700 Pall Corp ....................... 150,750
11,100 Parametric Technology Corp. 1 ... 33,855
6,400 Parker-Hannifin Corp ............ 268,736
20,500 Paychex, Inc .................... 600,855
14,600 Penney (J.C.) Co., Inc. 2 ....... 246,010
2,000 Peoples Energy Corp ............. 85,780
17,100 PeopleSoft, Inc. 1,2 ............ 300,789
15,292 Pepsi Bottling Group, Inc ....... 306,146
94,060 PepsiCo, Inc .................... 4,185,670
7,200 PerkinElmer, Inc. 2 ............. 99,432
431,343 Pfizer, Inc ..................... 14,730,363
- --------------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------------
22,200 PG&E Corp. 1 ........................ $ 469,530
4,820 Phelps Dodge Corp. 1,2 .............. 184,799
4,900 Pinnacle West Capital Corp .......... 183,505
13,000 Pitney Bowes, Inc ................... 499,330
10,100 Plum Creek Timber Co., Inc., REIT ... 262,095
9,124 PMC-Sierra, Inc. 1 .................. 107,025
15,500 PNC Financial Services Group ........ 756,555
5,600 Power-One, Inc. 1,2 ................. 40,040
9,200 PPG Industries, Inc ................. 466,808
8,960 PPL Corp ............................ 385,280
8,800 Praxair, Inc ........................ 528,880
17,500 Principal Financial Group, Inc ...... 564,375
70,467 Procter & Gamble Co ................. 6,284,247
12,908 Progress Energy, Inc. 2 ............. 566,661
11,800 Progressive Corp .................... 862,580
15,700 Providian Financial Corp. 1,2 ....... 145,382
30,900 Prudential Financial, Inc ........... 1,039,785
12,100 Public Service Enterprise Group, Inc. 511,225
3,300 Pulte Homes, Inc .................... 203,478
5,100 Qlogic Corp. 1,2 .................... 246,483
43,100 QUALCOMM, Inc ....................... 1,540,825
5,722 Quest Diagnostics, Inc. 1 ........... 365,064
6,700 Quintiles Transnational Corp. 1 ..... 95,073
93,691 Qwest Communications
International, Inc. 1 ............... 447,843
4,500 R.J. Reynolds Tobacco Holdings, ..... 167,445
Inc.
9,200 RadioShack Corp ..................... 242,052
22,000 Raytheon Co ......................... 722,480
3,300 Reebok International Ltd. 1 ......... 110,979
12,000 Regions Financial Corp .............. 405,360
10,000 Robert Half International, Inc. 1,2.. 189,400
10,300 Rockwell Automation, Inc ............ 245,552
9,700 Rockwell Collins, Inc. 2 ............ 238,911
12,042 Rohm & Haas Co ...................... 373,663
5,100 Rowan Cos., Inc. 1,2 ................ 114,240
3,800 Ryder System, Inc ................... 97,356
7,790 Sabre Holdings Corp. 2 .............. 192,024
7,600 SAFECO Corp ......................... 268,128
24,000 Safeway, Inc. 1 ..................... 491,040
28,500 Sanmina-SCI Corp. 1 ................. 179,835
42,700 Sara Lee Corp ....................... 803,187
181,865 SBC Communications, Inc ............. 4,646,651
79,700 Schering-Plough Corp ................ 1,482,420
31,700 Schlumberger Ltd .................... 1,507,969
73,300 Schwab (Charles) Corp ............... 739,597
8,500 Scientific Atlanta, Inc. 2 .......... 202,640
4,553 Sealed Air Corp. 1,2 ................ 216,996
17,200 Sears, Roebuck & Co. 2 .............. 578,608
11,410 Sempra Energy ....................... 325,527
8,200 Sherwin-Williams Co ................. 220,416
26,484 Siebel Systems, Inc. 1 .............. 252,657
3,900 Sigma-Aldrich Corp. 2 ............... 211,302
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS June 30, 2003 (Unaudited)
- ------------------------------------------------------------------
SHARES SECURITY VALUE
- ------------------------------------------------------------------
9,900 Simon Property Group, Inc., REIT ....... $ 386,397
25,200 SLM Corp. .............................. 987,084
3,200 Snap-On, Inc. .......................... 92,896
43,400 Solectron Corp. 1,2 .................... 162,316
38,800 Southern Co. ........................... 1,209,008
18,800 SouthTrust Corp ........................ 511,360
42,125 Southwest Airlines Co. ................. 724,550
48,600 Sprint Corp. (FON Group) ............... 699,840
56,500 Sprint Corp. (PCS Group) 1,2 ........... 324,875
9,772 St. Jude Medical, Inc. 1 ............... 561,890
12,212 St. Paul Cos., Inc. .................... 445,860
4,800 Stanley Works .......................... 132,480
25,750 Staples, Inc. 1 ........................ 472,513
21,100 Starbucks Corp. 1,2 .................... 517,372
10,932 Starwood Hotels & Resorts ..............
Worldwide, Inc. 2 ...................... 312,546
18,100 State Street Corp. 2 ................... 713,140
10,801 Stryker Corp. 2 ........................ 749,265
175,900 Sun Microsystems, Inc. 1 ............... 809,140
15,500 SunGard Data Systems, Inc. 1 ........... 401,605
4,500 Sunoco, Inc. ........................... 169,830
15,400 SunTrust Banks, Inc .................... 913,836
7,300 SuperValu, Inc. ........................ 155,636
8,100 Symantec Corp. 1,2 ..................... 355,266
12,950 Symbol Technologies, Inc ............... 168,480
16,550 Synovus Financial Corp. 2 .............. 355,825
35,600 Sysco Corp. 2 .......................... 1,069,424
6,800 T. Rowe Price Group, Inc. .............. 256,700
49,500 Target Corp. ........................... 1,873,080
9,500 TECO Energy, Inc. 2 .................... 113,905
5,000 Tektronix, Inc. 1 ...................... 108,000
23,000 Tellabs, Inc. 1 ........................ 151,110
2,900 Temple-Inland, Inc. .................... 124,439
25,850 Tenet Healthcare Corp. 1 ............... 301,153
10,000 Teradyne, Inc. 1,2 ..................... 173,100
94,291 Texas Instruments, Inc. ................ 1,659,522
7,300 Textron, Inc. .......................... 284,846
9,300 Thermo Electron Corp. 1,2 .............. 195,486
3,600 Thomas & Betts Corp. 1 ................. 52,020
7,900 Tiffany & Co. .......................... 258,172
28,600 TJX Cos., Inc. ......................... 538,824
6,500 Torchmark Corp . ....................... 242,125
11,600 Toys `R' Us, Inc. 1,2 .................. 140,592
17,320 Transocean, Inc. 1 ..................... 380,520
54,608 Travelers Property Casualty Corp.-- ....
Class B .............................. 861,168
16,625 Tribune Co. ............................ 802,988
3,200 Tupperware Corp. 2 ..................... 45,952
17,500 TXU Corp. 2 ............................ 392,875
- -----------------------------------------------------------------
SHARES SECURITY VALUE
- -----------------------------------------------------------------
108,706 Tyco International Ltd. 2 ........... $ 2,063,240
104,370 U.S. Bancorp ........................ 2,557,065
13,800 Union Pacific Corp. ................. 800,676
10,800 Union Planters Corp. ................ 335,124
17,800 Unisys Corp. 1 ...................... 218,584
61,172 United Parcel Service, Inc.-- ....... 3,896,656
Class B
5,600 United States Steel Corp. 2 ......... 91,672
25,600 United Technologies Corp. ........... 1,813,248
32,300 UnitedHealth Group, Inc. ............ 1,623,075
12,300 Univision Communications, Inc.-- ....
Class A1,2 ......................... 373,920
14,000 Unocal Corp. ........................ 401,660
15,649 UnumProvident Corp. ................. 209,853
9,100 UST, Inc. ........................... 318,773
6,000 V.F. Corp. .......................... 203,820
22,436 VERITAS Software Corp. 1,2 .......... 643,240
149,850 Verizon Communications, Inc. ........ 5,911,583
96,025 Viacom, Inc.--Class B1 .............. 4,192,452
6,836 Visteon Corp. ....................... 46,963
5,600 Vulcan Materials Co. ................ 207,592
73,448 Wachovia Corp. ...................... 2,934,982
239,000 Wal-Mart Stores, Inc. ............... 12,827,130
55,800 Walgreen Co. ........................ 1,679,580
111,000 Walt Disney Co. ..................... 2,192,250
50,783 Washington Mutual, Inc. ............. 2,097,338
32,397 Waste Management, Inc. .............. 780,444
7,300 Waters Corp. 1 ...................... 212,649
5,700 Watson Pharmaceuticals, Inc. 1,2 .... 230,109
8,100 WellPoint Health Networks, Inc. 1 ... 682,830
91,400 Wells Fargo & Co. ................... 4,606,560
6,300 Wendy' s International, Inc. 2 ...... 182,511
11,900 Weyerhaeuser Co. 2 .................. 642,600
3,700 Whirlpool Corp. ..................... 235,690
27,823 Williams Cos., Inc. ................. 219,802
7,700 Winn-Dixie Stores, Inc. 2 ........... 94,787
4,700 Worthington Industries, Inc. ........ 62,980
12,300 Wrigley, (Wm.) Jr., Co. ............. 691,629
72,200 Wyeth ............................... 3,288,710
21,715 Xcel Energy, Inc. 2 ................. 326,594
40,500 Xerox Corp. 1 ....................... 428,895
18,400 Xilinx, Inc. 1 ...................... 465,704
7,400 XL Capital Ltd.--Class A ............ 614,200
33,100 Yahoo!, Inc. 1 ...................... 1,084,356
16,100 Yum! Brands, Inc. 1 ................. 475,916
10,764 Zimmer Holdings, Inc. 1 ............. 484,918
4,900 Zions Bancorp ....................... 247,989
------------
TOTAL COMMON STOCKS
(Cost $607,617,262) ......................... 490,347,005
------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
11
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS June 30, 2003 (Unaudited)
- -------------------------------------------------------------------------------
PRINCIPAL
AMOUNT/
SHARES SECURITY VALUE
- -------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS--3.02%
U.S.TREASURY BILLS4 --3.02%
1,435,000 1.10%, 07/03/032 ........... $ 1,434,914
5,907,000 0.84%, 07/10/03 ............ 5,905,774
1,100,000 1.15%, 07/17/033 ........... 1,099,502
1,730,000 1.07%, 07/24/032 ........... 1,728,890
33,000 1.04%, 08/14/03 ............ 32,967
684,000 1.02%, 08/21/03 ............ 683,223
3,821,000 0.86%, 09/11/03 ............ 3,814,459
340,000 0.86%, 09/18/03 ............ 339,356
274,000 0.84%, 09/25/03 ............ 273,438
---------------
TOTAL SHORT-TERM INSTRUMENTS
(Cost $15,312,288) ............................ 15,312,523
---------------
CASH EQUIVALENTS--8.49%
42,977,431 Daily Assets Fund
Institutional 1.08% 5
(Cost $42,977,431) ......... 8.49 42,977,431
TOTAL INVESTMENTS
(Cost $665,906,981) ........................... 108.43% $548,636,959
LIABILITIES IN EXCESS OF
OTHER ASSETS .................................. (8.43) (42,691,179)
--------- ----------------
NET ASSETS ......................................... 100.00% $ 505,945,780
========= ================
- --------------------------------------------------------------------------------
1 Non-income producing security.
2 All or a portion of this security was on loan (see Note 1). The value of all
securities loaned at June 30, 2003 amounted to $41,793,175
3 Held as collateral for future contracts.
4 Rates shown represent effective yield at time of purchase.
5 The rate shown is the annualized seven-day yield at period end.
REIT--Real Estate Investment Trust
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
- ----------------------------------------------------------------------------------------------------------
JUNE 30, 2003
- ----------------------------------------------------------------------------------------------------------
ASSETS
Investments at value (cost $622,929,550) ........................................... $ 505,659,528
Investments in affiliated issuers, at value (cost $42,977,431) ..................... 42,977,431
Cash ............................................................................... 10,200
Receivable for capital shares sold ................................................. 125,581
Dividends and interest receivable .................................................. 601,019
Other assets ....................................................................... 4,746
---------------
Total assets .......................................................................... 549,378,505
---------------
LIABILITIES
Payable upon return of securities loaned ........................................... 42,977,431
Payable for capital shares redeemed ................................................ 227,638
Variation margin payable for futures contracts ..................................... 3,350
Advisory fees payable .............................................................. 80,920
12b-1 fees payable ................................................................. 1,078
Administration fee payable ......................................................... 40,793
Custody fee payable ................................................................ 24,347
Accrued expenses and other ......................................................... 77,168
---------------
Total liabilities ..................................................................... 43,432,725
---------------
NET ASSETS ............................................................................ $ 505,945,780
---------------
COMPOSITION OF NET ASSETS
Paid-in capital .................................................................... $ 646,840,668
Undistributed net investment income ................................................ 3,146,393
Accumulated net realized loss on investmentsand futures transactions ............... (26,531,559)
Net unrealized depreciation on investments and futures contracts ................... (117,509,722)
---------------
NET ASSETS ............................................................................ $ 505,945,780
---------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(net assets divided by shares outstanding)
Class A1 ........................................................................... $ 10.13
---------------
Class B2 ........................................................................... $ 10.13
---------------
- --------------------------------------------------------------------------------
1 Net asset value, redemption price and offering price per share (based on net
assets of $499,689,125 and 49,330,890 shares outstanding at June 30, 2003 and
0.001 par value, unlimited number of shares authorized).
2 Net asset value, redemption price and offering price per share (based on net
assets of $6,256,655 and 617,482 shares outstanding at June 30, 2003 and 0.001
par value, unlimited number of shares authorized).
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
13
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (Unaudited)
- ----------------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED
JUNE 30, 2003
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ............................................................. $ 3,703,266
Interest .............................................................. 63,700
Securities lending income ............................................. 26,291
-----------
TOTAL INVESTMENT INCOME ................................................. 3,793,257
-----------
EXPENSES
Advisory fees ......................................................... 422,463
Administration and services fees ...................................... 89,190
Printing and shareholder reports ...................................... 17,643
Custodian fees ........................................................ 36,417
Transfer agent fees ................................................... 59,153
Trustees fees ......................................................... 5,273
Professional fees ..................................................... 20,563
Insurance ............................................................. 3,678
12b-1 Fees (Class B Shares) ........................................... 4,865
Miscellaneous ......................................................... 2,696
-----------
Total Expenses .......................................................... 661,941
-----------
Less: fee waivers ....................................................... (28,247)
-----------
Net expenses ............................................................ 633,694
-----------
NET INVESTMENT INCOME ................................................... 3,159,563
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES
CONTRACTS
Net realized gain (loss) from:
Investment transactions ............................................... (1,108,290)
Futures transactions .................................................. 1,591,723
Net change in unrealized appreciation/depreciation of investments
and futures contracts ................................................. 45,572,614
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FUTURES CONTRACTS ... 46,056,047
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS .............................. $49,215,610
-----------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------------------
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
JUNE 30, 2003 1 DECEMBER 31, 2002
- ---------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment income ............................. $ 3,159,563 $ 5,535,704
Net realized gain (loss) from
investment and
futures transactions ............................ 483,433 (22,750,500)
Net change in unrealized
appreciation/depreciation
of investments and futures contracts ............ 45,572,614 (89,940,295)
------------- -------------
Net increase (decrease) in net assets from ...........
operations 49,215,610 (107,155,091)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income:
Class A Shares .................................... (5,476,312) (4,520,803)
Class B Shares .................................... (46,302) (27,503)
------------- -------------
Total distributions .................................. (5,522,614) (4,548,306)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Net increase resulting from Class A Shares ........ 61,436,229 40,777,614
Net increase resulting from Class B Shares ........ 3,023,698 2,882,816
------------- -------------
Net increase in net assets from capital share ........ 64,459,927 43,660,430
transactions
------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .............. 108,152,923 (68,042,967)
------------- -------------
NET ASSETS
Beginning of Year ................................. 397,792,857 465,835,824
------------- -------------
End of Year (including undistributed net investment
income
of $3,146,393 and $5,509,444, respectively) ..... $ 505,945,780 $ 397,792,857
------------- -------------
1 Unaudited.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
15
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------------
CLASS A SHARES FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE YEARS ENDED DECEMBER 31,
2003 1 2002 2001 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE,
BEGINNING OF PERIOD ......... $ 9.20 $ 11.98 $ 13.77 $ 15.18 $ 12.73 $ 10.19
----------- ----------- ----------- ------------- ----------- -----------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
Net investment income2 ...... 0.07 0.14 0.09 0.13 0.05 0.07
Net realized and unrealized
gain (loss) on investments
and futures contracts .... 0.98 (2.81) (1.77) (1.53) 2.55 2.84
----------- ----------- ----------- ------------- ----------- -----------
Total from investment
operations .................. 1.05 (2.67) (1.68) (1.40) 2.60 2.91
----------- ----------- ----------- ------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ....... (0.12) (0.11) (0.10) -- (0.10) (0.05)
Net realized gain on
investment and futures
transactions ............. -- -- (0.01) (0.01) (0.05) (0.32)
----------- ----------- ----------- ------------- ----------- -----------
Total distributions ........... (0.12) (0.11) (0.11) (0.01) (0.15) (0.37)
----------- ----------- ----------- ------------- ----------- -----------
NET ASSET VALUE,
END OF PERIOD ............... $ 10.13 $ 9.20 $ 11.98 $ 13.77 $ 15.18 $ 12.73
----------- ----------- ----------- ------------- ----------- -----------
TOTAL INVESTMENT RETURN3 ...... 11.53% (22.31)% (12.18)% (9.24)% 20.39% 28.71%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(000s omitted) ........... $499,689 $394,964 $465,836 $ 427,855 $288,531 $ 49,691
Ratios to average net assets:
Net investment income .... 1.50%4 1.33% 1.06% 1.00% 1.16% 1.37%
Expenses after waivers
and/or reimbursements .. 0.30%4 0.30% 0.30% 0.30% 0.30% 0.30%
Expenses before waivers
and/or reimbursements .. 0.31%4 0.32% 0.31% 0.34% 0.43% 1.19%
Portfolio turnover rate ..... 1%4 10% 2%5 3% 2% 36%
1 Unaudited.
2 Calculated based on average shares.
3 Total investment return is calculated assuming an initial investment made at
the net asset asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period and
redemption on the last day of the period. Total return calculated for a period
of less than one year is not annualized. If fees for the advisor and
administrator were not waived the total return would have been lower.
4 Annualized.
5 Portfolio turnover excludes the impact of redemption in kind.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------
CLASS B SHARES FOR THE PERIOD
FOR THE SIX APRIL 30, 2002 2
MONTHS ENDED THROUGH
JUNE 30, 2003 1 DECEMBER 31, 2002
- -----------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................................. $ 9.20 $ 11.27
----------- ----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income3 ............................................. 0.06 0.09
Net realized and unrealized gain (loss) on investments
and futures contracts ........................................... 0.98 (2.07)
----------- ----------
Total from investment operations ..................................... 1.04 (1.98)
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................................. (0.11) (0.09)
----------- ----------
Total distributions .................................................. (0.11) (0.09)
----------- ----------
NET ASSET VALUE, END OF PERIOD ....................................... $ 10.13 $ 9.20
----------- ----------
TOTAL INVESTMENT RETURN4 ............................................. 11.35% (17.56)%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000s omitted) ........................... $ 6,257 $ 2,829
Ratios to average net assets:
Net investment income5 .......................................... 1.25% 1.45%
Expenses after waivers and/or reimbursements5 ................... 0.55% 0.55%
Expenses before waivers and/or reimbursements5 .................. 0.56% 0.55%
Portfolio turnover rate ............................................ 1% 5 10%
1 Unaudited.
2 Commencement of operations.
3 Calculated based on average shares.
4 Total investment return is calculated assuming an initial investment made at
the net asset asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period and redemption on the last
day of the period. Total return calculated for a period of less than one year
is not annualized. If fees for the advisor and administrator were not waived
the total return would have been lower.
5 Annualized.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
17
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION
Scudder Investments VIT Funds (the `Trust') is registered under the Investment
Company Act of 1940 (the `1940 Act'), as amended, as a diversified, open-end
management investment company. The Trust is organized as a business trust under
the laws of the Commonwealth of Massachusetts. Scudder VIT Equity 500 Index Fund
(the `Fund') is one of the funds the Trust offers to investors.
The Fund offers two classes of shares to investors: Class A Shares and Class B
Shares. All shares have equal rights with respect to voting except that
shareholders vote separately on matters affecting their rights as holders of a
particular series or class.
The investment objective of the Fund is to replicate, as closely as possible
(before the deduction of expenses), the performance of the S&P 500 Index, which
emphasizes stocks of large U.S. companies.
B. VALUATION OF SECURITIES
Investments are stated at value determined as of the close of regular trading on
the New York Stock Exchange on each day the exchange is open for trading. Equity
securities are valued at the most recent sale price reported on the exchange
(U.S. or foreign) or over-the-counter market on which the security is traded
most extensively. Securities for which no sales are reported are valued at the
calculated mean between the most recent bid and asked quotations on the relevant
market or, if a mean cannot be determined, at the most recent bid quotation.
Money market instruments purchased with an original or remaining maturity of
sixty days or less, maturing at par, are valued at amortized cost.
Investments in open end investment companies 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 Board of Trustees.
C. SECURITIES TRANSACTIONS, INVESTMENT INCOME AND OTHER
Securities transactions are recorded on trade date. Realized gains and losses
are determined by comparing the proceeds of a sale or the cost of a purchase
with a specific offsetting transaction.
Dividend income is recorded on the ex-dividend date. Interest income, including
amortization of premiums and accretion of discounts, is accrued daily. Estimated
expenses are also accrued daily.
Distribution fees specifically attributable to a class are allocated to that
class. All other expenses, income, gains and losses are allocated among the
classes based upon their relative net assets.
The Trust accounts separately for the assets, liabilities and operations of each
of the funds. Expenses directly attributable to a fund are charged to that fund,
while the expenses that are attributable to the Trust are allocated among the
funds based upon the relative net assets of each fund.
D. DISTRIBUTIONS
The Fund pays annual dividends from its net investment income and makes annual
distributions of any net realized capital gains to the extent they exceed
capital loss carryforwards. The Fund records dividends and distributions on its
books on the ex-dividend date.
E. FEDERAL INCOME TAXES
It is the Fund's policy to continue to qualify as a regulated investment company
under the Internal Revenue Code and to distribute substantially all of its
taxable income to shareholders. Therefore, no federal income taxes have been
accrued.
F. FUTURES CONTRACTS
The Fund may buy or sell financial futures contracts on established futures
exchanges. Under the terms of a financial futures contract, the Fund agrees to
receive or deliver a specific amount of a financial instrument at a specific
price on a specific date.
The Fund's investments in financial futures contracts are designed to closely
replicate the benchmark index used by the Fund.
- --------------------------------------------------------------------------------
18
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
When the Fund enters into a futures contract, it is required to make a margin
deposit equal to a percentage of the face value of the contract. While the
contract is outstanding, the Fund may be required to make additional deposits or
may have part of its deposit returned as a result of changes in the relationship
between the face value of the contract and the value of the underlying security.
The Fund records these payments as unrealized gains or losses. When entering
into a closing transaction, the Fund realizes a gain or loss.
Futures contracts are valued at the settlement price established each day by the
board of trade or exchange on which they are traded.
G. SECURITIES LENDING
The Fund may lend securities to financial institutions. The Fund retains
beneficial ownership of the securities it has loaned and continues to receive
interest and dividends paid by the securities and to participate in any changes
in their market value. The Fund requires the borrowers of the securities to
maintain collateral with the Fund in the form of cash and/or government
securities equal to 102% of the value of domestic securities and 105% of the
value of international securities. The Fund receives compensation for lending
its securities either in the form of fees or by earning interest on invested
cash collateral. Either the Fund or the borrower may terminate the loan. The
Fund is subject to all risks associated with the investment of any cash
collateral received, including, but not limited to, interest rate, market,
credit and liquidity risk associated with such investments. At June 30, 2003,
$42,977,431 of cash collateral was invested in the Daily Assets Fund
Institutional.
H. ESTIMATES
In preparing its financial statements in conformity with accounting principles
generally accepted in the United States, management makes estimates and
assumptions. Actual results may be different.
NOTE 2--FEES AND TRANSACTIONS WITH AFFILIATES
Deutsche Asset Management, Inc. (`Advisor' or `DeAM, Inc.'), an indirect,
wholly-owned subsidiary of Deutsche Bank AG, is the Fund's Advisor. The Fund
pays the Advisor an annual fee based on its average daily net assets, which is
calculated daily and paid monthly at the annual rate of 0.20%.
Effective April 30, 2003, Northern Trust Investments, Inc. (`NTI') serves as
subadvisor to the Fund. DeAM, Inc. pays a fee to NTI for acting as subadvisor
to the Fund.
The Advisor has contractually agreed to waive its fees and/or reimburse expenses
of the Fund, to the extent necessary, to limit all expenses to 0.30% of average
daily net assets for Class A Shares and 0.55% of average daily net assets for
Class B Shares until April 30, 2005.
Deutsche Bank Trust Company Americas (`Custodian'), an affiliate of the Advisor,
is the Fund's Custodian. The Fund pays the custodian an annual fee.
Certain officers and trustees of the Fund are also officers or directors of
DeAM, Inc. These persons are not paid by the Fund for serving in these
capacities.
NOTE 3--OTHER FEES
PFPC Inc. (`Administrator') is the Fund's Administrator and Transfer Agent. The
Fund pays the Administrator an annual fee based on its average daily net assets
which is calculated daily and paid monthly.
The Fund pays the Distributor (PFPC Distributors, Inc.) an annual fee pursuant
to Rule 12b-1, which is calculated daily and paid monthly at the annual rate of
0.25% of the Class B Shares average daily net assets.
- --------------------------------------------------------------------------------
19
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 4--CAPITAL SHARE TRANSACTIONS
Transactions in capital shares were as follows:
Class A Shares
---------------------------------------------------------
For the Six Months Ended For the Year Ended
June 30, 2003 1 December 31, 2002
-------------------------- ----------------------------
Shares Amount Shares Amount
Sold 10,354,702 $ 97,740,855 18,691,941 $ 194,255,362
Reinvested 575,243 5,476,312 494,077 4,520,803
Redeemed (4,526,877) (41,780,938) (15,132,890) (157,998,551)
------------ ------------ ------------ --------------
Net increase 6,403,068 $ 61,436,229 4,053,128 $ 40,777,614
------------ ------------ ------------ --------------
Class B Shares
------------------------------------------------------------
For the Six Months Ended For the Period April 30, 2002 2
June 30, 2003 1 through December 31, 2002
--------------------------- -------------------------------
Shares Amount Shares Amount
Sold 473,801 $ 4,500,569 487,283 $ 4,530,849
Reinvested 4,859 46,302 3,005 27,503
Redeemed (168,692) (1,523,173) (182,774) (1,675,536)
------------ ------------ ------------ --------------
Net increase 309,968 $ 3,023,698 307,514 $ 2,882,816
------------ ------------ ------------ --------------
1 Unaudited.
2 Commencement of operations.
NOTE 5--PURCHASE AND SALE OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments other
than U.S. Government and short-term obligations, for the six months ended June
30, 2003, were $61,938,021 and $2,113,881, respectively.
NOTE 6--FEDERAL INCOME TAX
At December 31, 2002, capital contributions, accumulated undistributed net
investment income, and accumulated net realized gain/(loss) from investments
have been adjusted for current period permanent book/tax differences which arose
principally from adjustments related to dividends and other non-taxable
distributions received by the Fund. These reclassifications resulted in the
following increases/(decreases) in the components of net assets:
Undistributed Undistributed
Net Investment Net Realized Paid-in
Income Gain/Loss Capital
- ------ --------- -------
$(26,224) $27,090 $(866)
For federal income tax purposes, the tax basis of investments held at December
31, 2002 was $568,474,094. The net unrealized depreciation for all securities
based on tax cost was $169,490,453. The aggregate gross unrealized appreciation
for all investments at December 31, 2002 was $13,209,099 and the aggregate gross
unrealized depreciation for all investments was $182,699,552. The difference
between book basis and tax-basis unrealized appreciation/depreciation is
primarily attributable to the tax deferral of losses on wash sales.
Income and capital gains distributions are determined in accordance with federal
income tax regulations, which may differ from accounting principles generally
accepted in the United States.
Distributions during the years ended December 31, 2002 and 2001 were
characterized as follows for tax purposes:
Distributions paid from: 2002 2001
- ------------------------ ---- ----
Ordinary income $4,548,306 $3,896,603
Net long-term capital gains -- 403,773
The tax character of current year distributions will be determined at the end of
the current year.
At December 31, 2002, the components of distributable earnings on a tax basis
were as follows:
Undistributed ordinary income $ 5,509,444
Accumulated capital loss $ (20,606,875)
Unrealized appreciation/(depreciation) $(169,490,453)
At December 31, 2002, the Fund had capital loss carryovers available as a
reduction against future net realized capital gains of $20,085,030, of which
$1,765,761 expires in 2009 and $18,319,269 expires in 2010.
For the year ended December 31, 2002, the Fund deferred to January 1, 2003
post-October capital losses of $521,845.
- --------------------------------------------------------------------------------
20
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 7--LINE OF CREDIT
Effective April 11, 2003, the Fund entered into a new revolving credit facility
with JP Morgan Chase Bank that provides $1.25 billion of credit coverage. The
new revolving line of credit facility covers the funds and portfolios advised or
administered by the Advisor or its affiliates. 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 its agreement.
Prior to April 11, 2003, the Fund participated with other affiliated entities in
an unsecured revolving line of credit facility with a syndicate of banks in the
amount of $200,000,000.
NOTE 8--FUTURES CONTRACTS
The Fund had the following open contracts at June 30, 2003:
Type of Market Unrealized
Future Expiration Contracts Position Value Depreciation
- ------ ---------- --------- -------- ----- ------------
S&P 500 September
Index Future 2003 63 Long $15,329,475 $(239,700)
The use of futures contracts involves elements of market risk and risks in
excess of the amount recognized in the Statement of Assets and Liabilities. The
`market value' presented above represents the Fund's total exposure in such
contracts whereas only the net unrealized appreciation/(depreciation) is
reflected in the Fund's net assets. Risks inherent in the use of futures
contracts include 1) adverse changes in the value of such instruments, 2) an
imperfect correlation between the price of the contracts and the underlying
index and 3) the possibility of an illiquid secondary market.
At June 30, 2003 the Fund pledged securities with a value of $1,045,000 to cover
margin requirements on open futures contracts.
NOTE 9--SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of the Fund was held on March 17, 2003. At the
meeting the following matters were voted upon by the shareholders (the resulting
votes are presented below):
1. To approve a new investment advisory agreement between the Fund and the
Advisor.
Affirmative Against Abstain
- ----------- ------- -------
38,727,191 915,102 3,384,203
2. To approve an investment subadvisory agreement for the Fund between DeAM,
Inc. and Northern Trust Investments, Inc., (`NTI').
Affirmative Against Abstain
- ----------- ------- -------
38,660,976 937,425 3,428,094
NOTE 10--OTHER INFORMATION
On January 31, 2003, Deutsche Bank AG completed the sale of its Global
Securities Service business to State Street Bank, Inc. The sale included US
custody, securities lending and other processing services located in Europe,
Asia and the Americas. The Board of Trustees of the Fund approved changing the
Fund's custodian to State Street Bank and Trust Company (`State Street') at
Board meetings held on February 24, 2003 and March 27, 2003. Deutsche Bank and
Trust Companies Americas (formerly, Bankers Trust Company), an affiliate of the
Fund's Advisor, currently serves as the custodian to the Fund. On July 21, 2003,
State Street is the Fund's custodian.
In connection with the transaction, on January 13, 2003 the Board approved an
interim outsourcing arrangement that allows a State Street subsidiary to perform
certain aspects of securities lending services for the Fund, subject to
oversight from Deutsche. At a later date, DeAM, Inc. will make recommendations
to the Fund's Board regarding its security lending program, but Deutsche will
remain as securities lending agent until such time as the Board approves a new
securities lending agent for the Fund.
In addition, on January 31, 2003, Deutsche Bank AG completed its sale of the
global passive equity, enhanced equity and passive fixed income businesses to
NTI, an indirect subsidiary of Northern Trust Corporation. Under this agreement,
DeAM, Inc. would remain the investment advisor to the Fund and NTI would become
the subadvisor, subject to Board and shareholder approval and satisfaction of
certain other conditions. Effective April 30, 2003, NTI serves as subadvisor to
the Fund.
- --------------------------------------------------------------------------------
21
[THIS PAGE INTENTIONALLY LEFT BLANK]
ABOUT THE FUND'S ADVISOR
Deutsche Asset Management, Inc., an indirect, wholly-owned subsidiary of
Deutsche Bank AG, is the Fund's Advisor.
Scudder Investments is part of Deutsche Asset Management, which is the marketing
name in the United States 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.
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.
Distributed by:
PFPC Distributors, Inc.
760 Moore Road
King of Prussia, PA 19406
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered
recommendations for action by individual investors.
VIT5SA (6/30/02) MARS #24744
[LOGO OMITTED] Printed on recycled paper
[LOGO OMITTED]
SCUDDER
INVESTMENTS
[LOGO OMITTED]
Deutsche Asset Management
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
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.
ITEM 10. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 are attached hereto.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 are attached hereto.
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 VIT Equity 500 Index Fund
By: /S/ RICHARD T. HALE
-------------------
Richard T. Hale
Chief Executive Officer
Date: AUGUST 19, 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 VIT Equity 500 Index Fund
By: /S/ RICHARD T. HALE
-------------------
Richard T. Hale
Chief Executive Officer
Date: AUGUST 19, 2003
---------------
By: /S/ CHARLES A. RIZZO
---------------------
Charles A. Rizzo
Chief Financial Officer
Date: AUGUST 19, 2003
---------------