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)
Two International Place
Boston, MA 02110-4103
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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, 2004
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Date of reporting period: June 30, 2004
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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.
The Report to Shareholders is attached herewith.
[LOGO OMITTED]
SCUDDER
INVESTMENTS
Scudder VIT Equity 500 Index Fund
SEMIANNUAL REPORT
June 30, 2004
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
Proxy Voting ...........................................22
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THIS REPORT MUST BE PRECEDED OR
ACCOMPANIED BY A PROSPECTUS. TO OBTAIN A
PROSPECTUS, CALL YOUR FINANCIAL
REPRESENTATIVE. 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.
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. There is no guarantee
that the Fund will be able to mirror the
S&P 500(R) Index closely enough to track
its performance.
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2
Scudder VIT Equity 500 Index Fund
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LETTER TO SHAREHOLDERS
ALL PERFORMANCE IN THIS REPORT IS HISTORICAL AND IS NO GUARANTEE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE FLUCTUATE WITH CHANGING MARKETING
CONDITIONS, SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE RETURN
FIGURES QUOTED. FOR THE FUND'S MOST RECENT MONTH-END PERFORMANCE, CALL
1-800-621-1048. PERFORMANCE QUOTED FOR THE FUND DOES NOT INCLUDE THE EFFECT OF
CONTRACT CHARGES, WHICH WOULD LOWER THE RETURNS PRESENTED. RETURNS ARE NET OF
THE FUND'S MANAGEMENT FEES AND OTHER OPERATING EXPENSES. RETURNS WOULD HAVE BEEN
LOWER IF CERTAIN OF THE FUND'S FEES AND EXPENSES HAD NOT BEEN WAIVED.
This Fund is designed to serve as an investment option for certain variable
annuity contracts, variable life insurance policies and tax-qualified plans.
Variable annuities are long-term, tax-deferred contracts designed for retirement
purposes, asset accumulation, distribution and transference. Contract value will
fluctuate based on the performance of your subaccount selection. Earnings from
variable annuity investments compound tax free until withdrawal, so no
adjustments are made for income taxes.
In the following interview, the portfolio management team discusses Scudder VIT
Equity 500 Index Fund's market environment and performance during the six-month
period ended June 30, 2004.
Q: HOW DID SCUDDER VIT EQUITY 500 INDEX FUND PERFORM DURING THE FIRST HALF OF
2004?
A: Scudder VIT Equity 500 Index Fund tracked its benchmark, the Standard &
Poor's 500 Index (the 'S&P 500 Index'), 1 for the six months ended June 30,
2004. The Fund produced a total return of 3.30% (Class A shares) for the
semiannual period, compared with 3.44% for the benchmark. (Please see pages 4
and 6 for the performance of Class B shares and more complete performance
information.) The Fund outperformed the Lipper S&P 500 Index Objective Funds 2
category average semiannual return of 3.12%.
Q: WHAT WERE THE PRIMARY FACTORS AFFECTING THE US EQUITY MARKETS DURING THE PAST
SIX MONTHS?
A: Following an 18-month rally in growth stocks, led by technology and
semiconductor issues, equity markets traded 'sideways' for much of the first
half of 2004, remaining within a 5% trading range. Though the conflict in Iraq
continued, there were no significant turns in the market as a response to events
in Iraq. Following the transfer of Iraqi sovereignty from the United States to
Iraq in June, there was a slight upward movement in stocks, which did not hold.
Elsewhere, the late-June federal funds rate increase of one-quarter of a
percentage point was well-anticipated. Again, the market edged up on this news
and then immediately sold off. Investors remain risk-wary and prone to quick
sell-offs following gains. On a more positive note, late April marked one of the
most favorable earnings seasons in the last five years. After a succession of
positive earnings announcements, the market rallied off of its six-month lows,
but it gave back those gains at the end of April and in early May.
In 2003 and through early 2004, investors favored high-beta growth stocks with
relatively high price-to-earnings ratios. Then in March, many investors began to
switch over to value-oriented stocks as they pursued more-defensive strategies.
For the six-month period, the value portion of the S&P 500(R) Index outgained
the growth portion by 1.45%. Now that many companies have made renewed
investments in technology during 2003 and 2004, the markets are waiting for
these high-tech investments to bear fruit in the form of increased earnings for
more value-oriented companies.
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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. The Standard & Poor's 500
index (S&P 500(R)) is an unmanaged index used to portray the pattern of common
stock movement of 500 large US companies.
2 The Lipper S&P 500 Index Objective Funds category represents funds that are
passively managed and commit by prospectus language to replicate the
performance of the S&P 500 index, including reinvested dividends. Lipper
figures represent the average of the total returns reported by all of the
mutual funds designated by Lipper Inc. as falling into the respective
categories indicated. These figures do not reflect sales charges.
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
Lastly, small-cap stocks significantly outperformed large-cap stocks in 2003 and
were expected to surrender their leadership in 2004. But that has not occurred
so far, as the Russell 2000(R) Index 1 outperformed the S&P 500(R) Index by
3.32% during the first half of this year.
Q: WHICH SECTORS AND STOCKS WITHIN THE S&P 500(R) INDEX WERE THE BEST AND WORST
PERFORMERS?
A: The energy sector posted the strongest performance during the six-month
period, going hand in hand with recent and significant increases in oil prices.
Industrials were the second-best-performing sector. In terms of underperformers,
semiconductors and equipment--one of 2003's leading subsectors--dragged down the
technology sector over the period as semiconductor stocks declined approximately
12% as a group.
The best individual stock return came from AT&T Wireless Services, Inc., which
is being sold; the leading bidder for the company is Cingular. AutoDesk, Inc., a
leading design software and digital content company, was the next best
performer. The worst performing stock within the index was storage provider
Qlogic Corp., which made a negative earnings announcement at the end of March.
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1 The Russell 2000(R) Index is an unmanaged index that tracks the common stock
price movement of the 2,000 smallest companies of the Russell 3000(R) Index,
which measures the performance of the 3,000 largest US companies based on
total market capitalization. Index and Lipper category returns assume
reinvestment of all distributions and do not reflect fees or expenses. It is
not possible to invest directly in an index or Lipper category.
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, 2004 Inception 2 Inception 2
Class A (inception 10-1-97)
Class B (inception 4-30-02)
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Scudder VIT Equity
500 Index Fund
Class A 3.30% 18.69% (3.07)% (11.85)% 29.43% 18.69% (1.03)% (2.49)% 3.90%
Class B 3.21% 18.49% n/a n/a 8.76% 18.49% n/a n/a 3.95%
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S&P 500(R) Index 3 3.44% 19.11% (2.07)% (10.55)% 32.97% 19.11% (0.70)% (2.20)% 4.31%
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Lipper S&P 500(R)
Index Objective
Fund Average 4 3.12% 18.35% (3.84)% (12.85)% 28.82% 18.35% (1.30)% (2.72)% 3.82%
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ALL PERFORMANCE IN THIS REPORT IS HISTORICAL AND IS NO GUARANTEE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE FLUCTUATE WITH CHANGING MARKETING
CONDITIONS, SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE RETURN
FIGURES QUOTED. FOR THE FUND'S MOST RECENT MONTH-END PERFORMANCE, CALL
1-800-621-1048. PERFORMANCE QUOTED FOR THE FUND DOES NOT INCLUDE THE EFFECT OF
CONTRACT CHARGES, WHICH WOULD LOWER THE RETURNS PRESENTED. RETURNS ARE NET OF
THE FUND'S MANAGEMENT FEES AND OTHER OPERATING EXPENSES. RETURNS WOULD HAVE BEEN
LOWER IF CERTAIN OF THE FUND'S FEES AND EXPENSES HAD NOT BEEN WAIVED.
PERFORMANCE FIGURES FOR CLASSES A AND B DIFFER BECAUSE EACH CLASS MAINTAINS A
DISTINCT EXPENSE STRUCTURE. TOTAL RETURN IS BASED ON NET CHANGE IN NET ASSET
VALUE, ASSUMING THE REINVESTMENT OF ALL DISTRIBUTIONS.
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2 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 period beginning September 30, 1997
for the S&P 500 Index and for the Lipper S&P 500 Index Objective Fund Average.
3 The S&P 500(R) Index is an unmanaged index that measures the performance of
500 large US 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
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TEN LARGEST STOCK HOLDINGS
As of June 30, 2004
(percentages are based on total net assets of the Fund)
A Fund's holdings are subject to change.
General Electric Co. .........................3.14%
Microsoft Corp. ..............................2.82
Exxon Mobil Corp. ............................2.66
Pfizer, Inc. .................................2.39
Citigroup, Inc. ..............................2.21
Wal-Mart Stores, Inc. ........................2.08
American International Group, Inc. ...........1.71
Intel Corp. ..................................1.65
Bank of America Corp. ........................1.58
Johnson & Johnson Co. ........................1.51
Information concerning portfolio holdings of the Fund as of a month end is
available upon request on the 16th of the following month.
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There were 10 additions to and deletions from the index during the period, with
many of the changes coming from merger and acquisition activity announced in
2003 and executed this year. Merger and acquisition activity included Bank of
America Corp.'s acquisition of Fleet Boston Financial Corp., and Travelers
Property Casualty Corp.'s purchase by St. Paul Cos., Inc. Other significant
additions to the index during the period included E*TRADE Financial Corp., M&T
Bank Corp. and Valero Energy Corp.
In March, Standard & Poor's joined other major market index providers in
announcing that it will be making a two-part 'float adjustment' to the S&P
500(R) Index in 2005. This significant event, which is expected to create 3% to
5% turnover within the index, means that closely held shares that are not widely
traded--mainly those owned by company insiders--will no longer be counted as
equity market capitalization for S&P 500(R) companies when this changeover in
index composition is completed.
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SECTOR ALLOCATION
As of June 30, 2004
(percentages are based on market value* of total investments in the Fund)
A Fund's sector allocation is subject to change.
Financial Services ......................... 20.27%
Information Technology ..................... 16.27
Health Care ................................ 13.23
Industrials ................................ 12.43
Consumer Staples ........................... 11.30
Consumer Discretionary ..................... 10.73
Energy ..................................... 6.37
Telecommunication Services ................. 3.40
Materials .................................. 2.96
Other ...................................... 3.04
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100.00%
======
*Excluding Cash Equivalents.
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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
Scudder VIT Equity 500 Index Fund--Class A Shares and S&P 500(R) Index
Growth of a $10,000 Investment (Since Inception)
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW:
Scudder
Equity 500 Index Fund S&P 500 Index
10/1/97 $10,000 $10,000
10/31/97 9,600 9,666
11/30/97 10,020 10,114
12/31/97 10,190 10,287
1/31/98 10,300 10,402
2/28/98 11,030 11,152
3/31/98 11,580 11,723
4/30/98 11,770 11,841
5/31/98 11,560 11,637
6/30/98 12,030 12,110
7/31/98 11,870 11,981
8/31/98 10,180 10,249
9/30/98 10,820 10,906
10/31/98 11,690 11,793
11/30/98 12,390 12,507
12/31/98 13,116 13,228
1/31/99 13,641 13,780
2/28/99 13,219 13,352
3/31/99 13,744 13,886
4/30/99 14,259 14,423
5/31/99 13,919 14,083
6/30/99 14,682 14,865
7/31/99 14,218 14,401
8/31/99 14,146 14,330
9/30/99 13,765 13,938
10/31/99 14,620 14,820
11/30/99 14,908 15,121
12/31/99 15,789 16,011
1/31/00 14,999 15,208
2/29/00 14,718 14,920
3/31/00 16,153 16,379
4/30/00 15,665 15,886
5/31/00 15,342 15,561
6/30/00 15,717 15,945
7/31/00 15,467 15,696
8/31/00 16,424 16,671
9/30/00 15,550 15,791
10/31/00 15,488 15,724
11/30/00 14,260 14,485
12/31/00 14,331 14,556
1/31/01 14,831 15,073
2/28/01 13,478 13,698
3/31/01 12,624 12,830
4/30/01 13,603 13,827
5/31/01 13,686 13,919
6/30/01 13,353 13,581
7/30/01 13,218 13,448
8/31/01 12,385 12,606
9/30/01 11,375 11,588
10/31/01 11,594 11,809
11/30/01 12,479 12,715
12/31/01 12,585 12,827
1/31/02 12,396 12,639
2/28/02 12,155 12,395
3/31/02 12,606 12,861
4/30/02 11,840 12,082
5/31/02 11,756 11,993
6/30/02 10,905 11,139
7/30/02 10,064 10,271
8/31/02 10,127 10,338
9/30/02 9,024 9,214
10/31/02 9,812 10,025
11/30/02 10,390 10,615
12/31/02 9,777 9,992
1/31/03 9,522 9,731
2/28/03 9,373 9,585
3/31/03 9,469 9,678
4/30/03 10,237 10,475
5/31/03 10,765 11,027
6/30/03 10,904 11,168
7/30/03 11,098 11,365
8/30/03 11,314 11,586
9/30/03 11,184 11,463
10/30/03 11,819 12,112
11/30/03 11,916 12,219
12/31/03 12,530 12,859
1/31/04 12,756 13,096
2/28/04 12,928 13,278
3/31/04 12,734 13,077
4/30/04 12,529 12,872
5/31/04 12,703 13,048
6/30/04 12,943 13,297
Not depicted in graph: growth of $10,000 for B Shares from inception through
June 30, 2004: $10,876.
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AVERAGE ANNUAL TOTAL RETURNS
Since Inception
Periods Ended 1 Year 3 Years 5 Years Class A
June 30, 2004 10-1-97
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Scudder VIT Equity 500
Index Fund--Class A Shares 18.69% (1.03)% (2.49)% 3.90%
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AVERAGE ANNUAL TOTAL RETURNS
Since Inception
Periods Ended 1 Year Class B
June 30, 2004 4-30-02
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Scudder VIT Equity 500 Index
Fund--Class B Shares 18.49% 3.95%
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ALL PERFORMANCE IN THIS REPORT IS HISTORICAL AND IS NO GUARANTEE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE FLUCTUATE WITH CHANGING MARKETING
CONDITIONS, SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE RETURN
FIGURES QUOTED. FOR THE FUND'S MOST RECENT MONTH-END PERFORMANCE, CALL
1-800-621-1048. PERFORMANCE QUOTED FOR THE FUND DOES NOT INCLUDE THE EFFECT OF
CONTRACT CHARGES, WHICH WOULD LOWER THE RETURNS PRESENTED. RETURNS ARE NET OF
THE FUND'S MANAGEMENT FEES AND OTHER OPERATING EXPENSES. RETURNS WOULD HAVE BEEN
LOWER IF CERTAIN OF THE FUND'S FEES AND EXPENSES HAD NOT BEEN WAIVED.
PERFORMANCE FIGURES FOR CLASSES A AND B DIFFER BECAUSE EACH CLASS MAINTAINS A
DISTINCT EXPENSE STRUCTURE. TOTAL RETURN IS BASED ON NET CHANGE IN NET ASSET
VALUE, ASSUMING THE REINVESTMENT OF ALL DISTRIBUTIONS.
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1 The S&P 500(R) Index is an unmanaged index that measures the performance of
500 large US 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.
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6
Scudder VIT Equity 500 Index Fund
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SCHEDULE OF INVESTMENTS June 30, 2004 (Unaudited)
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SHARES SECURITY VALUE
- ---------------------------------------------------------------
COMMON STOCKS--97.69%
50,600 3M Co. ........................$ 4,554,506
103,800 Abbott Laboratories ........... 4,230,888
18,500 ACE Ltd. ...................... 782,180
59,000 ADC Telecommunications, Inc. 1 167,560
15,100 Adobe Systems, Inc. ........... 702,150
3,200 Adolph Coors Co.--Class B ..... 231,488
23,800 Advanced Micro Devices, Inc. 1 378,420
38,100 AES Corp. 1 ................... 378,333
9,700 Aetna, Inc. ................... 824,500
8,800 Affiliated Computer
Services, Inc.--
Class A 1 .................... 465,872
34,100 AFLAC, Inc. ................... 1,391,621
30,418 Agilent Technologies, Inc. 1 .. 890,639
15,900 Air Products & Chemicals, Inc. 833,955
5,100 Alberto-Culver Co. ............ 255,714
25,842 Albertsons, Inc. .............. 685,847
58,076 Alcoa, Inc. ................... 1,918,250
7,300 Allegheny Energy, Inc. 1 ...... 112,493
4,750 Allegheny Technologies, Inc. .. 85,737
8,300 Allergan, Inc. ................ 743,016
19,600 Allied Waste Industries, Inc. 1 258,328
47,700 Allstate Corp. ................ 2,220,435
21,400 ALLTEL Corp. .................. 1,083,268
26,100 Altera Corp. 1 ................ 579,942
133,100 Altria Group, Inc. ............ 6,661,655
6,350 Ambac Financial Group, Inc. ... 466,344
6,300 Amerada Hess Corp. ............ 498,897
10,200 Ameren Corp. .................. 438,192
24,140 American Electric Power Co. ... 772,480
83,700 American Express Co. .......... 4,300,506
171,189 American International
Group, Inc. .................. 12,202,352
14,500 American Power
Conversion Corp. ............. 284,925
15,600 American Standard Cos., Inc. 1 628,836
6,784 AmerisourceBergen Corp. ....... 405,548
84,308 Amgen, Inc. 1 ................. 4,600,688
20,400 AmSouth Bancorp ............... 519,588
15,221 Anadarko Petroleum Co. ........ 891,951
23,800 Analog Devices, Inc. .......... 1,120,504
11,300 Andrew Corp. 1 ................ 226,113
53,600 Anheuser-Busch Cos., Inc. ..... 2,894,400
9,464 Anthem, Inc. 1 ................ 847,596
18,900 AON Corp. ..................... 538,083
19,812 Apache Corp. .................. 862,813
5,500 Apartment Investment &
Management Co.--Class A ...... 171,215
12,000 Apollo Group, Inc.--Class A 1 . 1,059,480
25,300 Apple Computer, Inc. 1 ........ 823,262
12,100 Applera Corp.-Applied
Biosystems Group ............. 263,175
108,700 Applied Materials, Inc. 1 ..... 2,132,694
22,600 Applied Micro Circuits Corp. 1 120,232
- ------------------------------------------------------------
SHARES SECURITY VALUE
- ------------------------------------------------------------
44,975 Archer-Daniels-Midland Co. ....$ 754,680
4,000 Ashland, Inc. ................. 211,240
51,604 AT&T Corp. .................... 754,967
177,399 AT&T Wireless Services, Inc. 1 2,540,354
8,300 AutoDesk, Inc. ................ 355,323
39,700 Automatic Data Processing, Inc. 1,662,636
16,300 AutoNation, Inc. 1 ............ 278,730
5,300 AutoZone, Inc. 1 .............. 424,530
29,130 Avaya, Inc. 1 ................. 459,963
6,400 Avery Dennison Corp. .......... 409,664
31,000 Avon Products, Inc. ........... 1,430,340
22,340 Baker Hughes, Inc. ............ 841,101
3,300 Ball Corp. .................... 237,765
72,200 Banc One Corp. ................ 3,682,200
133,105 Bank of America Corp. ......... 11,263,345
50,700 Bank of New York Co., Inc. .... 1,494,636
6,200 Bard (C. R.), Inc. ............ 351,230
4,000 Bausch & Lomb ................. 260,280
39,400 Baxter International, Inc. .... 1,359,694
36,100 BB&T Corp. .................... 1,334,617
6,672 Bear Stearns Cos., Inc. ....... 562,516
17,600 Becton, Dickinson & Co. ....... 911,680
20,600 Bed Bath & Beyond, Inc. 1 ..... 792,070
122,000 BellSouth Corp. ............... 3,198,840
6,200 Bemis Co., Inc. ............... 175,150
20,750 Best Buy Co., Inc. ............ 1,052,855
6,800 Big Lots, Inc. 1 .............. 98,328
20,990 Biogen Idec, Inc. 1 ........... 1,327,617
17,925 Biomet, Inc. .................. 796,587
11,200 BJ Services Co. 1 ............. 513,408
4,500 Black & Decker Corp. .......... 279,585
12,100 Block (H&R), Inc. ............. 576,928
15,900 BMC Software, Inc. 1 .......... 294,150
55,600 Boeing Co. .................... 2,840,604
6,700 Boise Cascade Corp. ........... 252,188
52,900 Boston Scientific Corp. 1 ..... 2,264,120
129,346 Bristol-Myers Squibb Co. ...... 3,168,977
19,156 Broadcom Corp.--Class A 1 ..... 895,926
7,000 Brown-Forman Corp. ............ 337,890
6,800 Brunswick Corp. ............... 277,440
24,600 Burlington Northern
Santa Fe Corp. ............... 862,722
26,800 Burlington Resources, Inc. .... 969,624
30,289 Calpine Corp. 1,2 ............. 130,848
25,100 Campbell Soup Co. ............. 674,688
14,700 Capital One Financial Corp. ... 1,005,186
28,749 Cardinal Health, Inc. ......... 2,013,867
28,800 Caremark Rx, Inc. 1 ........... 948,672
42,300 Carnival Corp. ................ 1,988,100
22,600 Caterpillar, Inc. ............. 1,795,344
65,993 Cendant Corp. ................. 1,615,509
17,700 CenterPoint Energy, Inc. ...... 203,550
8,600 Centex Corp. .................. 393,450
See Notes to Financial Statements.
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7
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS June 30, 2004 (Unaudited)
- --------------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------------
10,350 CenturyTel, Inc. ..............$ 310,914
13,544 Charter One Financial, Inc. ... 598,509
69,333 ChevronTexaco Corp. ........... 6,524,929
13,000 Chiron Corp. 1 ................ 580,320
11,500 Chubb Corp. ................... 784,070
34,600 CIENA Corp. 1 ................. 128,712
8,700 CIGNA Corp. ................... 598,647
9,765 Cincinnati Financial Corp. .... 424,973
10,700 Cinergy Corp. ................. 406,600
12,100 Cintas Corp. .................. 576,807
15,000 Circuit City Stores, Inc. ..... 194,250
443,100 Cisco Systems, Inc. 1 ......... 10,501,470
338,974 Citigroup, Inc. ............... 15,762,291
16,000 Citizens Communications Co. 1 . 193,600
11,900 Citrix Systems, Inc. 1 ........ 242,284
40,934 Clear Channel
Communications, Inc. ......... 1,512,511
14,800 Clorox Co. .................... 795,944
9,216 CMS Energy Corp. 1 ............ 84,142
159,100 Coca-Cola Co. ................. 8,031,368
27,800 Coca-Cola Enterprises, Inc. ... 805,922
35,300 Colgate-Palmolive Co. ......... 2,063,285
149,086 Comcast Corp.--Class A 1 ...... 4,178,881
10,900 Comerica, Inc. ................ 598,192
37,150 Computer Associates
International, Inc. .......... 1,042,429
11,400 Computer Sciences Corp. 1 ..... 529,302
27,800 Compuware Corp. 1 ............. 183,480
13,798 Comverse Technology, Inc. 1 ... 275,132
35,700 ConAgra Foods, Inc. ........... 966,756
45,844 ConocoPhillips ................ 3,497,439
13,000 Consolidated Edison Co. of
New York, Inc. ............... 516,880
9,900 Constellation Energy Group .... 375,210
9,700 Convergys Corp. 1 ............. 149,380
5,500 Cooper Industries Ltd.--
Class A ...................... 326,755
4,300 Cooper Tire & Rubber Co. ...... 98,900
86,549 Corning, Inc. 1 ............... 1,130,330
31,200 Costco Cos., Inc. ............. 1,281,384
17,449 Countrywide Financial Corp. ... 1,225,792
3,400 Crane Co. ..................... 106,726
14,500 CSX Corp. ..................... 475,165
3,200 Cummins, Inc. ................. 200,000
27,100 CVS Corp. ..................... 1,138,742
10,685 Dana Corp. .................... 209,426
21,000 Danaher Corp. ................. 1,088,850
11,050 Darden Restaurants, Inc. ...... 227,077
16,600 Deere & Co. ................... 1,164,324
165,300 Dell, Inc. 1 .................. 5,921,046
32,573 Delphi Corp. .................. 347,880
9,900 Delta Air Lines, Inc. 1,2 ..... 70,488
3,200 Deluxe Corp. .................. 139,200
16,300 Devon Energy Corp. ............ 1,075,800
- --------------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------------
4,900 Dillard's, Inc.--Class A ......$ 109,270
23,747 Dollar General Corp. .......... 464,491
22,216 Dominion Resources, Inc. ...... 1,401,385
14,200 Dover Corp. ................... 597,820
62,316 Dow Chemical Co. .............. 2,536,261
4,700 Dow Jones & Co., Inc. ......... 211,970
11,900 DTE Energy Co. ................ 482,426
66,845 Du Pont (E.I.) de
Nemours & Co. ................ 2,969,255
60,200 Duke Energy Corp. ............. 1,221,458
28,735 Dynegy, Inc.--Class A 1 ....... 122,411
23,600 E*TRADE Financial Corp. 1 ..... 263,140
4,500 Eastman Chemical Co. .......... 208,035
19,300 Eastman Kodak Co. ............. 520,714
10,200 Eaton Corp. ................... 660,348
43,081 eBay, Inc. 1 .................. 3,961,298
15,300 Ecolab, Inc. .................. 485,010
22,700 Edison International .......... 580,439
37,886 El Paso Corp. ................. 298,542
19,000 Electronic Arts, Inc. 1 ....... 1,036,450
32,100 Electronic Data Systems Corp. . 614,715
160,900 EMC Corp. 1 ................... 1,834,260
28,700 Emerson Electric Co. .......... 1,823,885
7,300 Engelhard Corp. ............... 235,863
15,500 Entergy Corp. ................. 868,155
6,700 EOG Resources, Inc. ........... 400,057
8,200 Equifax, Inc. ................. 202,950
27,200 Equity Office Properties Trust 739,840
17,800 Equity Residential ............ 529,194
45,450 Exelon Corp. .................. 1,513,030
5,600 Express Scripts, Inc. 1 ....... 443,688
428,217 Exxon Mobil Corp. ............. 19,017,117
12,126 Family Dollar Stores, Inc. .... 368,873
64,500 Fannie Mae .................... 4,602,720
12,000 Federated Department
Stores, Inc. ................. 589,200
6,400 Federated Investors, Inc.--
Class B ...................... 194,176
18,960 FedEx Corp. ................... 1,548,842
38,392 Fifth Third Bancorp ........... 2,064,722
57,319 First Data Corp. .............. 2,551,842
9,200 First Horizon National Corp. .. 418,324
21,884 FirstEnergy Corp. ............. 818,680
13,601 Fiserv, Inc. 1 ................ 528,943
4,700 Fluor Corp. ................... 224,049
121,902 Ford Motor Co. ................ 1,907,766
23,700 Forest Laboratories, Inc. 1 ... 1,342,131
8,900 Fortune Brands, Inc. .......... 671,327
12,800 FPL Group, Inc. ............... 818,560
17,100 Franklin Resources, Inc. ...... 856,368
45,300 Freddie Mac ................... 2,867,490
13,500 Freeport-McMoran Copper &
Gold, Inc.--Class B .......... 447,525
18,600 Gannet Co., Inc. .............. 1,578,210
57,225 Gap, Inc. ..................... 1,387,706
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS June 30, 2004 (Unaudited)
- --------------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------------
21,500 Gateway, Inc. 1 ...............$ 96,750
12,900 General Dynamics Corp. ........ 1,280,970
691,700 General Electric Co. .......... 22,411,080
25,664 General Mills, Inc. ........... 1,219,810
37,230 General Motors Corp. .......... 1,734,546
10,100 Genuine Parts Co. ............. 400,768
15,200 Genzyme Corp. 1 ............... 719,416
17,377 Georgia-Pacific Corp. ......... 642,601
14,004 Gilead Sciences, Inc. 1 ....... 938,268
67,500 Gillette Co. .................. 2,862,000
10,400 Golden West Financial Group ... 1,106,040
31,200 Goldman Sachs Group, Inc. ..... 2,937,792
6,800 Goodrich Corp. ................ 219,844
13,400 Goodyear Tire & Rubber Co. 1,2 121,806
5,300 Grainger (W.W.), Inc. ......... 304,750
3,600 Great Lakes Chemical Corp. .... 97,416
20,100 Guidant Corp. ................. 1,123,188
26,900 Halliburton Co. ............... 813,994
20,300 Harley-Davidson, Inc. ......... 1,257,382
7,500 Harrah's Entertainment, Inc. .. 405,750
19,951 Hartford Financial Services
Group, Inc. .................. 1,371,432
10,059 Hasbro, Inc. .................. 191,121
33,600 HCA, Inc. ..................... 1,397,424
17,500 Health Management Associates,
Inc.--Class A ................ 392,350
24,700 Heinz (H. J.) Co. ............. 968,240
6,400 Hercules, Inc. 1 .............. 78,016
15,400 Hershey Foods Corp. ........... 712,558
201,726 Hewlett-Packard Co. ........... 4,256,419
21,900 Hilton Hotels Corp. ........... 408,654
145,700 Home Depot, Inc. .............. 5,128,640
57,575 Honeywell International, Inc. . 2,108,972
10,380 Hospira, Inc. 1 ............... 286,488
11,900 Humana, Inc. 1 ................ 201,110
14,650 Huntington Bancshares, Inc. ... 335,485
21,000 Illinois Tool Works, Inc. ..... 2,013,690
14,100 IMS Health, Inc. .............. 330,504
12,300 Ingersoll-Rand Co.--Class A ... 840,213
426,400 Intel Corp. ................... 11,768,640
110,455 International Business
Machines Corp. ............... 9,736,608
5,500 International Flavors &
Fragrances, Inc. ............. 205,700
21,968 International Game Technology . 847,965
31,708 International Paper Co. ....... 1,417,348
28,800 Interpublic Group of
Cos., Inc. 1 ................. 395,424
13,800 Intuit, Inc. 1 ................ 532,404
6,400 ITT Industries, Inc. .......... 531,200
136,440 J.P. Morgan Chase & Co. ....... 5,289,779
12,100 Jabil Circuit, Inc. 1 ......... 304,678
13,900 Janus Capital Group, Inc. ..... 229,211
- --------------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------------
97,455 JDS Uniphase Corp. 1 ..........$ 369,354
8,300 Jefferson-Pilot Corp. ......... 421,640
193,318 Johnson & Johnson Co. ......... 10,767,813
11,600 Johnson Controls, Inc. ........ 619,208
7,397 Jones Apparel Group, Inc. ..... 292,034
3,500 KB HOME ....................... 240,205
28,800 Kellogg Co. ................... 1,205,280
9,836 Kerr-McGee Corp. .............. 528,882
29,800 KeyCorp ....................... 890,722
10,000 KeySpan Corp. ................. 367,000
33,900 Kimberly-Clark Corp. .......... 2,233,332
8,200 Kinder Morgan, Inc. ........... 486,178
14,521 King Pharmaceuticals, Inc. 1 .. 166,265
12,700 KLA-Tencor Corp. 1 ............ 627,126
4,700 Knight-Ridder, Inc. ........... 338,400
21,600 Kohl's Corp. 1 ................ 913,248
48,700 Kroger Co. 1 .................. 886,340
11,200 Leggett & Platt, Inc. ......... 299,152
17,622 Lehman Brothers Holdings, Inc. 1,326,055
8,500 Lexmark International, Inc. 1 . 820,505
74,300 Lilly (Eli) & Co. ............. 5,194,313
32,876 Limited Brands ................ 614,781
12,900 Lincoln National Corp. ........ 609,525
21,500 Linear Technology Corp. ....... 848,605
6,200 Liz Claiborne, Inc. ........... 223,076
30,300 Lockheed Martin Corp. ......... 1,578,024
11,500 Loews Corp. ................... 689,540
7,800 Louisiana-Pacific Corp. ....... 184,470
51,000 Lowe's Cos., Inc. ............. 2,680,050
26,700 LSI Logic Corp. 1 ............. 203,454
274,960 Lucent Technologies, Inc. 1 ... 1,039,349
8,500 M&T Bank Corp. ................ 742,050
5,200 Manor Care, Inc. .............. 169,936
20,800 Marathon Oil Corp. ............ 787,072
16,200 Marriott International, Inc.--
Class A ...................... 808,056
35,900 Marsh & McLennan Cos., Inc. ... 1,629,142
13,100 Marshall & Ilsley Corp. ....... 512,079
31,300 Masco Corp. ................... 975,934
29,300 Mattel, Inc. .................. 534,725
21,200 Maxim Integrated
Products, Inc. ............... 1,111,304
20,150 May Department Stores Co. ..... 553,923
4,600 Maytag Corp. .................. 112,746
9,100 MBIA, Inc. .................... 519,792
85,140 MBNA Corp. .................... 2,195,761
8,100 McCormick & Co., Inc. ......... 275,400
84,700 McDonald's Corp. .............. 2,202,200
13,400 McGraw-Hill Cos., Inc. ........ 1,026,038
20,225 McKesson Corp. ................ 694,324
11,665 MeadWestvaco Corp. ............ 342,834
16,966 Medco Health Solutions, Inc. 1 636,225
17,300 MedImmune, Inc. 1 ............. 404,820
78,400 Medtronic, Inc.2 .............. 3,819,648
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
9
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS June 30, 2004 (Unaudited)
- --------------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------------
27,900 Mellon Bank Corp. .............$ 818,307
146,062 Merck & Co., Inc. ............. 6,937,945
6,500 Mercury Interactive Corp. 1 ... 323,895
2,900 Meredith Corp. ................ 159,384
64,000 Merrill Lynch & Co., Inc. ..... 3,454,720
51,600 MetLife, Inc. ................. 1,849,860
6,900 MGIC Investment ............... 523,434
38,539 Micron Technology, Inc. 1 ..... 590,032
705,900 Microsoft Corp. ............... 20,160,504
2,800 Millipore Corp. 1 ............. 157,836
11,200 Molex, Inc. ................... 359,296
17,721 Monsanto Co. .................. 682,258
8,219 Monster Worldwide, Inc. 1 ..... 211,393
9,300 Moody's Corp. ................. 601,338
72,900 Morgan Stanley ................ 3,846,933
155,181 Motorola, Inc. ................ 2,832,053
17,600 Mylan Laboratories, Inc. ...... 356,400
10,094 Nabors Industries Ltd. 1 ...... 456,451
44,400 National City Corp. ........... 1,554,444
22,800 National Semiconductor Corp. 1 501,372
4,900 Navistar International Corp. 1 189,924
5,500 NCR Corp. 1 ................... 272,745
23,700 Network Appliance, Inc. 1 ..... 510,261
9,500 New York Times Co.--Class A ... 424,745
16,324 Newell Rubbermaid, Inc. ....... 383,614
27,200 Newmont Mining Corp. .......... 1,054,272
71,000 Nextel Communication, Inc.--
Class A 1 .................... 1,892,860
2,700 Nicor, Inc. ................... 91,719
17,900 Nike, Inc.--Class B ........... 1,355,925
15,208 NiSource, Inc. ................ 313,589
10,200 Noble Corp. 1 ................. 386,478
9,300 Nordstrom, Inc. ............... 396,273
24,000 Norfolk Southern Corp. ........ 636,480
11,800 North Fork Bancorporation, Inc. 448,990
14,300 Northern Trust Corp. .......... 604,604
23,642 Northrop Grumman Corp. ........ 1,269,575
26,300 Novell, Inc. 1 ................ 220,657
10,800 Novellus Systems, Inc. 1 ...... 339,552
5,800 Nucor Corp. ................... 445,208
11,400 NVIDIA Corp. 1 ................ 233,700
26,600 Occidental Petroleum Corp. .... 1,287,706
18,400 Office Depot, Inc. 1 .......... 329,544
12,300 Omnicom Group, Inc. ........... 933,447
345,400 Oracle Corp. 1 ................ 4,120,622
12,025 PACCAR, Inc. .................. 697,330
9,300 Pactiv Corp. 1 ................ 231,942
7,100 Pall Corp. .................... 185,949
12,900 Parametric Technology Corp. 1 . 64,500
7,900 Parker-Hannifin Corp. ......... 469,734
25,800 Paychex, Inc. ................. 874,104
16,900 Penney (J.C.) Co., Inc. ....... 638,144
- --------------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------------
2,200 Peoples Energy Corp. ..........$ 92,730
24,200 PeopleSoft, Inc. 1 ............ 447,700
15,892 Pepsi Bottling Group, Inc. .... 485,342
113,460 PepsiCo, Inc. ................. 6,113,225
7,300 PerkinElmer, Inc. ............. 146,292
498,443 Pfizer, Inc. .................. 17,086,626
27,900 PG&E Corp. 1 .................. 779,526
5,720 Phelps Dodge Corp. 1 .......... 443,357
5,300 Pinnacle West Capital Corp. ... 214,067
14,400 Pitney Bowes, Inc. ............ 637,200
10,600 Plum Creek Timber Co.,
Inc., REIT ................... 345,348
12,124 PMC-Sierra, Inc. 1 ............ 173,979
17,100 PNC Financial Services Group .. 907,668
5,600 Power-One, Inc. 1 ............. 61,488
10,200 PPG Industries, Inc. .......... 637,398
12,560 PPL Corp. ..................... 576,504
22,600 Praxair, Inc. ................. 901,966
19,800 Principal Financial
Group, Inc. .................. 688,644
168,134 Procter & Gamble Co. .......... 9,153,215
14,508 Progress Energy, Inc. ......... 639,077
14,200 Progressive Corp. ............. 1,211,260
11,500 ProLogis ...................... 378,580
16,800 Providian Financial Corp. 1 ... 246,456
36,600 Prudential Financial, Inc. .... 1,700,802
14,000 Public Service Enterprise
Group, Inc. .................. 560,420
7,400 Pulte Homes, Inc. ............. 385,022
6,700 Qlogic Corp. 1 ................ 178,153
52,400 QUALCOMM, Inc. ................ 3,824,152
6,322 Quest Diagnostics, Inc. ....... 537,054
109,891 Qwest Communications
International, Inc. 1 ........ 394,509
6,200 R.J. Reynolds Tobacco
Holdings, Inc. ............... 419,058
13,900 R.R. Donnelley & Sons Co. ..... 458,978
11,500 RadioShack Corp. .............. 329,245
28,900 Raytheon Co. .................. 1,033,753
3,400 Reebok International Ltd. ..... 122,332
12,900 Regions Financial Corp. ....... 471,495
10,000 Robert Half
International, Inc. .......... 297,700
12,400 Rockwell Automation, Inc. ..... 465,124
10,300 Rockwell Collins, Inc. ........ 343,196
13,242 Rohm & Haas Co. ............... 550,602
8,600 Rowan Cos., Inc. 1 ............ 209,238
3,900 Ryder System, Inc. ............ 156,273
8,290 Sabre Holdings Corp. .......... 229,716
10,300 SAFECO Corp. .................. 453,200
28,800 Safeway, Inc. 1 ............... 729,792
35,900 Sanmina-SCI Corp. 1 ........... 326,690
54,200 Sara Lee Corp. ................ 1,246,058
214,665 SBC Communications, Inc. ...... 5,205,626
98,400 Schering-Plough Corp. ......... 1,818,432
38,200 Schlumberger Ltd. ............. 2,426,082
90,500 Schwab (Charles) Corp. ........ 869,705
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS June 30, 2004 (Unaudited)
- --------------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------------
10,200 Scientific Atlanta, Inc. ......$ 351,900
4,853 Sealed Air Corp. 1 ............ 258,519
14,400 Sears, Roebuck & Co. .......... 543,744
15,710 Sempra Energy ................. 540,895
10,300 Sherwin-Williams Co. .......... 427,965
31,684 Siebel Systems, Inc. 1 ........ 338,385
5,400 Sigma-Aldrich Corp. ........... 321,894
13,900 Simon Property Group, Inc. .... 714,738
30,400 SLM Corp. ..................... 1,229,680
3,400 Snap-On, Inc. ................. 114,070
55,600 Solectron Corp. 1 ............. 359,732
50,500 Southern Co. .................. 1,472,075
23,600 SouthTrust Corp. .............. 915,916
49,925 Southwest Airlines Co. ........ 837,242
20,051 Sovereign Bancorp, Inc. ....... 443,127
94,100 Sprint Corp. (FON Group) ...... 1,656,160
10,772 St. Jude Medical, Inc. 1 ...... 814,902
43,756 St. Paul Travelers Cos., Inc. . 1,773,869
5,000 Stanley Works ................. 227,900
34,350 Staples, Inc. ................. 1,006,799
27,200 Starbucks Corp. 1 ............. 1,182,656
12,732 Starwood Hotels & Resorts
Worldwide, Inc. .............. 571,030
20,900 State Street Corp. ............ 1,024,936
27,202 Stryker Corp. ................. 1,496,110
211,200 Sun Microsystems, Inc. 1 ...... 916,608
17,600 SunGard Data Systems, Inc. 1 .. 457,600
5,900 Sunoco, Inc. .................. 375,358
19,300 SunTrust Banks, Inc. .......... 1,254,307
7,800 SuperValu, Inc. ............... 238,758
20,900 Symantec Corp. 1 .............. 915,002
13,350 Symbol Technologies, Inc. ..... 196,779
17,650 Synovus Financial Corp. ....... 446,898
44,000 Sysco Corp. ................... 1,578,280
9,100 T. Rowe Price Group, Inc. ..... 458,640
60,600 Target Corp. .................. 2,573,682
10,900 TECO Energy, Inc. ............. 130,691
5,000 Tektronix, Inc. ............... 170,100
29,700 Tellabs, Inc. 1 ............... 259,578
3,100 Temple-Inland, Inc. ........... 214,675
28,150 Tenet Healthcare Corp. 1 ...... 377,492
12,800 Teradyne, Inc. 1 .............. 290,560
112,391 Texas Instruments, Inc. ....... 2,717,614
8,300 Textron, Inc. ................. 492,605
9,500 Thermo Electron Corp. 1 ....... 292,030
4,300 Thomas & Betts Corp. .......... 117,089
8,900 Tiffany & Co. ................. 327,965
296,048 Time Warner, Inc. 1 ........... 5,204,524
32,500 TJX Cos., Inc. ................ 784,550
6,700 Torchmark Corp. ............... 360,460
15,700 Toys 'R' Us, Inc. 1 ........... 250,886
19,720 Transocean, Inc. 1 ............ 570,697
- --------------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------------
23,125 Tribune Co. ...................$ 1,053,113
22,800 TXU Corp. ..................... 923,628
130,006 Tyco International Ltd. ....... 4,308,399
128,370 U.S. Bancorp .................. 3,537,877
18,300 Union Pacific Corp. ........... 1,087,935
14,200 Union Planters Corp. .......... 423,302
21,300 Unisys Corp. 1 ................ 295,644
74,372 United Parcel Service, Inc.--
Class B ...................... 5,590,543
7,500 United States Steel Corp. ..... 263,400
33,500 United Technologies Corp. ..... 3,064,580
41,800 UnitedHealth Group, Inc. ...... 2,602,050
20,400 Univision Communications, Inc.--
Class A 1 .................... 651,372
18,900 Unocal Corp. .................. 718,200
16,749 UnumProvident Corp. ........... 266,309
9,600 UST, Inc. ..................... 345,600
6,300 V.F. Corp. .................... 306,810
8,300 Valero Energy Corp. ........... 612,208
27,336 VERITAS Software Corp. 1 ...... 757,207
179,450 Verizon Communications, Inc. .. 6,494,296
113,425 Viacom, Inc.--Class B ......... 4,051,541
10,336 Visteon Corp. ................. 120,621
5,900 Vulcan Materials Co. .......... 280,545
87,748 Wachovia Corp. ................ 3,904,786
281,100 Wal-Mart Stores, Inc. ......... 14,830,836
68,500 Walgreen Co. .................. 2,480,385
134,300 Walt Disney Co. ............... 3,423,307
56,648 Washington Mutual, Inc. ....... 2,188,879
38,897 Waste Management, Inc. ........ 1,192,193
7,300 Waters Corp. .................. 1348,794
7,200 Watson Pharmaceuticals, Inc. 1 193,680
9,700 WellPoint Health
Networks, Inc. 1 ............. 1,086,497
109,600 Wells Fargo & Co. ............. 6,272,408
6,600 Wendy's International, Inc. ... 229,944
14,800 Weyerhaeuser Co. .............. 934,176
4,800 Whirlpool Corp. ............... 329,280
31,123 Williams Cos., Inc. ........... 370,364
8,200 Winn-Dixie Stores, Inc. 1,2 ... 59,040
5,000 Worthington Industries, Inc. .. 102,650
13,500 Wrigley, (Wm.) Jr., Co. ....... 851,175
88,400 Wyeth ......................... 3,196,544
28,015 Xcel Energy, Inc. ............. 468,131
54,200 Xerox Corp. 1 ................. 785,900
21,900 Xilinx, Inc. .................. 729,489
8,600 XL Capital Ltd.--Class A ...... 648,956
86,000 Yahoo!, Inc. 1 ................ 3,124,380
18,400 Yum! Brands, Inc. 1 ........... 684,848
15,864 Zimmer Holdings, Inc. 1 ....... 1,399,205
6,800 Zions Bancorp ................. 417,860
------------
TOTAL COMMON STOCKS
(Cost $723,417,411) ...................... 697,726,871
------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
11
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS June 30, 2004 (Unaudited)
- --------------------------------------------------------------
PRINCIPAL
AMOUNT SECURITY VALUE
- --------------------------------------------------------------
SHORT-TERM INSTRUMENTS--2.41%
U.S. TREASURY BILLS 3--2.41%
$1,045,000 0.97%, 07/22/04 4 ............$ 1,044,435
15,000 0.99%, 08/12/04 .............. 14,980
670,000 1.04%, 08/19/04 .............. 668,967
1,858,000 1.04%, 08/26/04 .............. 1,854,462
4,907,000 1.24%, 09/30/04 .............. 4,890,463
4,761,000 1.38%, 10/07/04 .............. 4,743,322
978,000 1.46%, 10/21/04 .............. 973,646
3,017,000 1.47%, 10/28/04 .............. 3,002,220
22,000 1.54%, 11/04/04 .............. 21,884
------------
17,214,379
------------
TOTAL SHORT-TERM INSTRUMENTS
(Cost $17,217,012) ....................... 17,214,379
------------
SECURITIES LENDING COLLATERAL--0.20%
INVESTMENT IN AFFILIATED INVESTMENT
COMPANIES--0.20%
1,416,650 Daily Assets Fund
Institutional 1.14% 5,6
(Cost $1,416,650) ............ 1,416,650
------------
TOTAL INVESTMENTS
(Cost $742,051,073) ............ 100.30% $716,357,900
LIABILITIES IN EXCESS OF
OTHER ASSETS .................... (0.30) (2,132,193)
------ ------------
NET ASSETS ........................ 100.00% $714,225,707
====== ============
- --------------------------------------------------------------------------------
1 Non-income producing security for the period ended June 30, 2004.
2 All or a portion of this security was on loan (see Note 1). The value of all
securities loaned at June 30, 2004 amounted to $1,371,991, which is 0.19% of
total net assets.
3 Rates shown represent annualized yield at time of purchase, not a coupon rate.
4 Held as collateral for futures contracts.
5 Daily Assets Fund Institutional, an affiliated fund, is also managed by
Deutsche Asset Management, Inc. The rate shown is the annualized seven day
yield at period end.
6 Represents collateral held in connection with securities lending.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
- --------------------------------------------------------------------------------
JUNE 30, 2004
- --------------------------------------------------------------------------------
ASSETS
Investments at value (cost $740,634,423) ............ $ 714,941,250
Investments in affiliated issuers,
at value (cost $1,416,650) ......................... 1,416,650
Cash ................................................ 367
Receivable for capital shares sold .................. 284,941
Dividends and interest receivable ................... 789,927
Variation margin receivable for futures contracts ... 72,882
Other assets ........................................ 9,100
-------------
Total assets ........................................... 717,515,117
-------------
LIABILITIES
Payable for securities purchased .................... 1,478,565
Payable upon return of securities loaned ............ 1,416,650
Payable for capital shares redeemed ................. 142,007
Advisory fees payable ............................... 157,752
12b-1 fees payable .................................. 6,381
Accrued expenses and other .......................... 88,055
-------------
Total liabilities ...................................... 3,289,410
-------------
NET ASSETS ............................................. $ 714,225,707
=============
COMPOSITION OF NET ASSETS
Paid-in capital ..................................... $ 761,137,106
Undistributed net investment income ................. 4,293,419
Accumulated net realized loss on investments
and futures transactions ......................... (25,598,520)
Net unrealized depreciation on investments
and futures contracts ............................ (25,606,298)
-------------
NET ASSETS ............................................. $ 714,225,707
=============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(net assets divided by shares outstanding)
Class A 1 ........................................... $ 11.89
=============
Class B 2 ........................................... $ 11.90
=============
- --------------------------------------------------------------------------------
1 Net asset value, redemption price and offering price per share (based on net
assets of $680,738,538 and 57,248,370 shares outstanding at June 30, 2004 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 $33,487,169 and 2,814,778 shares outstanding at June 30, 2004 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, 2004
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ............................. $ 5,557,662
Interest .............................. 55,193
Securities lending income ............. 3,748
------------
TOTAL INVESTMENT INCOME .................. 5,616,603
------------
EXPENSES
Advisory fees ......................... 684,355
Administration and services fees ...... 115,676
Transfer agent fees ................... 56,267
12b-1 fees (Class B Shares) ........... 31,163
Custodian fees ........................ 29,765
Professional fees ..................... 29,563
Printing and shareholder reports ...... 18,298
Trustees fees ......................... 13,695
Insurance ............................. 6,025
Miscellaneous ......................... 1,437
------------
TOTAL EXPENSES ........................... 986,244
Plus: fee recoupments ................. 72,179
------------
NET EXPENSES ............................. 1,058,423
------------
NET INVESTMENT INCOME .................... 4,558,180
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES CONTRACTS
Net realized gain (loss) from:
Investment transactions ............. (16,195)
Futures transactions ................ 463,309
Net change in unrealized appreciation/
depreciation of investments and
futures contracts ................... 16,027,474
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FUTURES CONTRACTS ..... 16,474,588
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 21,032,768
============
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, 2004 1 DECEMBER 31, 2003
- --------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM:
OPERATIONS
Net investment income .................... $ 4,558,180 $ 7,413,652
Net realized gain from investment and
futures transactions ................... 447,114 911,531
Net change in unrealized appreciation/
depreciation of investments
and futures contracts .................. 16,027,474 121,448,564
------------- -------------
Net increase in net assets from operations .. 21,032,768 129,773,747
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income:
Class A Shares ......................... (7,389,469) (5,476,312)
Class B Shares ......................... (217,946) (46,303)
------------- -------------
Total distributions ......................... (7,607,415) (5,522,615)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Net increase resulting from Class A Shares 40,893,180 109,881,687
Net increase resulting from Class B Shares 15,617,698 12,363,800
------------- -------------
Net increase in net assets from
capital share transactions ............ 56,510,878 122,245,487
------------- -------------
TOTAL INCREASE IN NET ASSETS ............. 69,936,231 246,496,619
------------- -------------
NET ASSETS
Beginning of period ...................... 644,289,476 397,792,857
------------- -------------
End of period (including undistributed
net investment income
of $4,293,419 and $7,342,654,
respectively) .......................... $ 714,225,707 $ 644,289,476
============= =============
- --------------------------------------------------------------------------------
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,
2004 1 2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE,
BEGINNING OF PERIOD ................. $11.64 $ 9.20 $11.98 $13.77 $15.18 $12.73
------ ------ ------ ------ ------ ------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
Net investment income 2 ............. 0.08 0.15 0.14 0.09 0.13 0.05
Net realized and unrealized
gain (loss) on investments
and futures contracts ............. 0.30 2.41 (2.81) (1.77) (1.53) 2.55
------ ------ ------ ------ ------ ------
Total from investment
operations .......................... 0.38 2.56 (2.67) (1.68) (1.40) 2.60
------ ------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ............... (0.13) (0.12) (0.11) (0.10) -- (0.10)
Net realized gain on
investment and futures
contracts ......................... -- -- -- (0.01) (0.01) (0.05)
------ ------ ------ ------ ------ ------
Total distributions .................... (0.13) (0.12) (0.11) (0.11) (0.01) (0.15)
------ ------ ------ ------ ------ ------
NET ASSET VALUE,
END OF PERIOD ....................... $11.89 $11.64 $ 9.20 $11.98 $13.77 $15.18
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 3 .............. 3.30% 28.16% 4 (22.31)% 4 (12.18)% 4 (9.24)% 4 20.39% 4
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(000s omitted) ....................$680,739 $626,970 $394,964 $465,836 $427,855 $288,531
Ratios to average net assets:
Net investment income ............. 1.34% 6 1.50% 1.33% 1.06% 1.00% 1.16%
Expenses after waivers,
reimbursements and/or
recoupments .................... 0.30% 6 0.30% 0.30% 0.30% 0.30% 0.30%
Expenses before waivers,
reimbursements and/or
recoupments .................... 0.28% 6 0.30% 0.32% 0.31% 0.34% 0.43%
Portfolio turnover rate ............. 1% 6 1% 10% 2% 5 3% 2%
- --------------------------------------------------------------------------------
1 Unaudited.
2 Calculated based on average shares.
3 Total investment return is calculated assuming an initial investment made at
the net 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.
4 If fees for the advisor and administrator were not waived, the total return
would have been lower.
5 Portfolio turnover excludes the impact of redemption in kind.
6 Annualized.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------------------------
CLASS B SHARES FOR THE PERIOD
FOR THE SIX FOR THE APRIL 30, 2002 2
MONTHS ENDED YEAR ENDED THROUGH
JUNE 30, 2004 1 DECEMBER 31, 2003 DECEMBER 31, 2002
- ------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............. $11.63 $ 9.20 $11.27
------ ------ ------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
Net investment income 3 ....................... 0.07 0.14 0.09
Net realized and unrealized gain (loss)
on investments
and futures contracts ....................... 0.30 2.40 (2.07)
------ ------ ------
Total from investment operations ................. 0.37 2.54 (1.98)
------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ......................... (0.10) (0.11) (0.09)
------ ------ ------
Total distributions .............................. (0.10) (0.11) (0.09)
------ ------ ------
NET ASSET VALUE, END OF PERIOD ................... $11.90 $11.63 $ 9.20
====== ====== ======
TOTAL INVESTMENT RETURN 4 ........................ 3.21% 27.83% 5 (17.56)% 5
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(000s omitted) .............................. $33,487 $17,320 $2,829
Ratios to average net assets:
Net investment income ....................... 1.11% 6 1.29% 1.45% 6
Expenses after waivers, reimbursements
and/or recoupments ....................... 0.55% 6 0.55% 0.55% 6
Expenses before waivers, reimbursements
and/or recoupments ....................... 0.53% 6 0.55% 0.55% 6
Portfolio turnover rate ....................... 1% 6 1% 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 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.
5 If fees for the advisor and administrator were not waived, the total return
would have been lower.
6 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 series the Trust offers to investors.
The Fund offers two classes of shares to investors: Class A Shares and Class B
Shares. Class B Shares are subject to Rule 12b-1 fees under the 1940 Act equal
to an annual rate up to 0.25% of the Class B Shares average daily net assets.
All shares have equal rights with respect to voting except that shareholders
vote separately on matters affecting their rights as holders of a particular
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(R) Index,
which emphasizes stocks of large US 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 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 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 of 1986, as amended, 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, 2004,
$1,416,650 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%.
Northern Trust Investments, N.A. ('NTI') acts as investment sub-advisor for the
Fund. As the Fund's investment sub-advisor, NTI makes the Fund's investment
decisions. It buys and sells securities for the Fund and conducts the research
that leads to these purchase and sale decisions. DeAM, Inc. pays a fee to NTI
for acting as sub-advisor 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.
Effective May 1, 2002, the Advisor may recoup any of its waived investment
advisory fees within the following three years if the Fund is able to make the
repayment without exceeding its current expense limits. Since January 1, 2004,
the Advisor recouped $72,179 of fees that were previously waived. At June 30,
2004, the Advisor has $72,727 remaining recoupable expenses available.
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.
- --------------------------------------------------------------------------------
19
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
State Street Bank and Trust Company ('Custodian') is the Fund's Custodian. The
Fund pays the Custodian an annual fee.
The Fund pays PFPC Distributors, Inc. an annual fee pursuant to Rule 12b-1,
which is calculated daily and paid monthly at the annual rate of up to 0.25% of
the Class B Shares average daily net assets.
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, 2004 1 December 31, 2003
------------------------ -------------------------
Shares Amount Shares Amount
----------- ------------ ----------- ------------
Sold 8,363,817 $ 99,222,621 17,810,134 $177,657,325
Reinvested 638,123 7,389,469 575,243 5,476,312
Redeemed (5,596,018) (65,718,910) (7,470,751) (73,251,950)
---------- ------------ ---------- ------------
Net increase 3,405,922 $ 40,893,180 10,914,626 $109,881,687
========== ============ ========== ============
Class B Shares
--------------------------------------------------
For the Six Months Ended For the Year Ended
June 30, 2004 1 December 31, 2003
------------------------ -------------------------
Shares Amount Shares Amount
----------- ------------ ----------- -----------
Sold 1,896,866 $22,394,592 1,860,120 $19,453,549
Reinvested 18,805 217,946 4,859 46,303
Redeemed (589,517) (6,994,840) (683,869) (7,136,052)
---------- ----------- ---------- -----------
Net increase 1,326,154 $15,617,698 1,181,110 $12,363,800
========== =========== ========== ===========
- --------------------------------------------------------------------------------
1 Unaudited.
NOTE 5--PURCHASE AND SALE OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments other
than US Government and short-term obligations, for the six months ended June 30,
2004, were $55,093,791 and $4,825,853, respectively.
NOTE 6--FEDERAL INCOME TAX
At December 31, 2003, 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
-------------- ------------- -------
$(57,827) $57,827 $ --
For federal income tax purposes, the tax basis of investments held at December
31, 2003 was $701,682,953. The net unrealized depreciation for all securities
based on tax cost was $49,080,125. The aggregate gross unrealized appreciation
for all investments at December 31, 2003 was $54,148,890 and the aggregate gross
unrealized depreciation for all investments was $103,229,015. 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 year ended December 31, 2003 were characterized as
follows for tax purposes:
Distributions paid from: 2003
- ------------------------ ----
Ordinary income $5,522,615
At December 31, 2003, the components of distributable earnings on a tax basis
were as follows:
Undistributed ordinary income $ 7,342,654
Accumulated capital loss $(18,599,281)
Unrealized appreciation/(depreciation) $(49,080,125)
At December 31, 2003, the Fund had capital loss carryovers available as a
reduction against future net realized capital gains of $18,599,281, of which
$280,012 expires in 2009 and $18,319,269 expires in 2010. The Fund utilized
$1,485,749 of its capital loss carryovers in the current year to reduce net
realized gains.
- --------------------------------------------------------------------------------
20
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 7--LINE OF CREDIT
The Fund and several other funds and portfolios advised or administered by the
Advisor or its affiliates (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%. The Fund may borrow up to a maximum of 33% of their net assets under
the agreement.
There were no significant borrowings during the six months ended June 30, 2004.
NOTE 8--OPEN FUTURES
The Fund had the following open contracts at June 30, 2004:
Type of Market Unrealized
Future Expiration Contracts Position Value Appreciation
-------------------------------------------------------------------------------
S&P 500 September
Index Future 2004 58 Long $16,535,800 $86,875
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, 2004 the Fund pledged securities with a value of $1,044,435 to cover
margin requirements on open futures contracts.
NOTE 9--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
portfolios/funds or their advisors. Publicity about mutual fund practices
arising from these industry-wide inquiries serves as the general basis of a
number of private lawsuits against the Scudder funds. These lawsuits, which
previously have been reported in the press, involve purported class action and
derivative lawsuits, making various allegations and naming as defendants various
persons, including certain Scudder funds, Deutsche Asset Management ('DeAM') and
its affiliates, certain individuals, including in some cases fund Trustees, 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.
- --------------------------------------------------------------------------------
21
Scudder VIT Equity 500 Index Fund
- --------------------------------------------------------------------------------
PROXY VOTING
A description of the Fund's policies and procedures for voting proxies for
portfolio securities and information about how the Fund voted proxies related to
its portfolio securities during the 12-month period ended June 30 is available
on our Web site--scudder.com (type 'proxy voting' in the search field)--or on
the SEC's Web site--www.sec.gov. To obtain a written copy of the Fund's policies
and procedures without charge, upon request, call us toll free at (800)
621-1048.
- --------------------------------------------------------------------------------
22
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
[LOGO OMITTED]
SCUDDER
INVESTMENTS
[LOGO OMITTED]
A MEMBER OF
DEUTSCHE ASSET MANAGEMENT
Portfolio changes should not be considered recommendations for action by
individual investors.
VIT6SA (8/31/04) MARS #32451
[LOGO OMITTED] Printed on recycled paper
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Nominating and Governance Committee evaluates and nominates Board member
candidates. Fund shareholders may also submit nominees that will be considered
by the Committee when a Board vacancy occurs. Submissions should be mailed to
the attention of the Secretary of the Fund, One South Street, Baltimore, MD
21202.
ITEM 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.
(b) There have been no changes in the registrant's internal control
over financial reporting that occurred during the registrant's
last half-year (the registrant's second fiscal half-year in the
case of the annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
controls over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
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/ Julian Sluyters
------------------------
Julian Sluyters
Chief Executive Officer
Date: August 23, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Registrant: Scudder VIT Equity 500 Index Fund
By: /s/ Julian Sluyters
------------------------
Julian Sluyters
Chief Executive Officer
Date: August 23, 2004
By: /s/ Charles A. Rizzo
------------------------
Charles A. Rizzo
Chief Financial Officer
Date: August 23, 2004