Filed electronically with the Securities and Exchange Commission
                              on November 30, 2007

                                                                File No. 2-14400
                                                                File No. 811-642

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM N-1A

             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                           Pre-Effective Amendment No.

                        Post-Effective Amendment No. 110                / X /

                                     and/or

         REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

                                Amendment No. 90                        / X /


                          DWS International Fund, Inc.
                          ----------------------------
               (Exact Name of Registrant as Specified in Charter)

                       345 Park Avenue, New York, NY 10154
                       -----------------------------------
               (Address of Principal Executive Offices) (Zip Code)

       Registrant's Telephone Number, including Area Code: (617) 295-1000
                                                           --------------

                                  John Millette
                    Two International Place, Boston, MA 02110
                    -----------------------------------------
                     (Name and Address of Agent for Service)


It is proposed that this filing will become effective (check appropriate box):

/___/    Immediately upon filing pursuant to paragraph (b)
/ X /    On December 1, 2007 pursuant to paragraph (b)
/___/    60 days after filing pursuant to paragraph (a)(1)
/___/    On ______________ pursuant to paragraph (a)(1)
/___/    75 days after filing pursuant to paragraph (a)(2)
/___/    On ______________ pursuant to paragraph (a)(2) of Rule 485

         If appropriate, check the following box:

/___/    This post-effective amendment designates a new effective date for a
         previously filed post-effective amendment.



<PAGE>




                                EXPLANATORY NOTE
                                ----------------

This post-effective amendment contains the prospectuses and statements of
additional information relating to the following series of the registrant:

   o   DWS International Fund - Classes A, B, C, Institutional and S

   o   DWS International Value Opportunities Fund - Classes A, C, Institutional
       and S

This post-effective amendment is not intended to update or amend any other
prospectuses or statements of additional information of the registrant's other
series or classes.


                                       2

<PAGE>

--------------------------------------------------------------------------------


                                DECEMBER 1, 2007








                                   PROSPECTUS


                               ------------------






--------------------------------------------------------------------------------



                DWS GLOBAL THEMATIC FUND - Classes A, B, C and R

                  DWS INTERNATIONAL FUND - Classes A, B and C


As with all mutual funds, the Securities and Exchange  Commission (SEC) does not
approve or disapprove these shares or determine  whether the information in this
prospectus  is  truthful  or  complete.  It is a criminal  offense for anyone to
inform you otherwise.


                                         [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]



<PAGE>
--------------------------------------------------------------------------------










CONTENTS
--------------------------------------------------------------------------------


<TABLE>
<S>      <C>
HOW EACH FUND WORKS

  4      DWS Global Thematic Fund

 13      DWS International Fund

 22      Other Policies and Risks

 23      Who Manages and Oversees
         the Funds

 26      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUNDS

 34      Choosing a Share Class

 41      How to Buy Class A, B and C
         Shares

 42      How to Exchange or Sell
         Class A, B and C Shares

 43      How to Buy and Sell Class R
         Shares

 45      Policies You Should Know
         About

 59      Understanding Distributions
         and Taxes

 62      Appendix
</TABLE>


<PAGE>

HOW EACH FUND WORKS

On the next few pages, you'll find information about each fund's investment
goal, the main strategies each uses to pursue that goal and the main risks that
could affect performance.

Whether you are considering investing in a fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

CLASSES A, B AND C shares are generally intended for investors seeking the
advice and assistance of a financial advisor. CLASS R shares are only available
to participants in certain retirement plans.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-SCUDDER.COM (the Web
site does not form a part of this prospectus).
<PAGE>


<TABLE>
--------------------------------------------------------------------------------
<S>                                     <C>        <C>        <C>        <C>
                                        Class A    Class B    Class C    Class R
                     ticker symbol      SGQAX      SGQBX      SGQCX      SGQRX
                       fund number      407        607        707        1512

DWS GLOBAL THEMATIC FUND
--------------------------------------------------------------------------------

</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term growth of capital.


            The fund invests at least 65% of its total assets in US and foreign
            equities (equities issued by US and foreign-based companies). Most
            of the fund's equities are common stocks. Although the fund can
            invest in companies of any size and from any country, it invests
            mainly in common stocks of established companies in countries with
            developed economies. The fund's equity investments are mainly
            common stocks, but may also include preferred stocks and other
            securities with equity characteristics, such as convertible
            securities and warrants.


            In choosing securities, the portfolio manager uses a combination of
            three analytical disciplines:

            BOTTOM-UP RESEARCH. The manager looks for individual companies with
            a history of above-average growth, strong competitive positioning,
            attractive prices relative to potential growth, sound financial
            strength and effective management, among other factors.

            GROWTH ORIENTATION. The manager generally looks for companies that
            the manager believes have above-average potential for sustainable
            growth of revenue or earnings and whose market value appears
            reasonable in light of their business prospects.

            ANALYSIS OF GLOBAL THEMES. The manager considers global economic
            outlooks, seeking to identify industries and companies that are
            likely to benefit from social, political and economic changes.

            The manager uses analytical tools to actively monitor the risk
            profile of the portfolio as compared to comparable funds and
            appropriate benchmarks and peer groups.


4 | DWS Global Thematic Fund
<PAGE>

            The manager may favor different types of securities from different
            industries and companies at different times, while still
            maintaining variety in terms of the types of securities, issuers
            and countries represented.

            The manager will normally sell a stock when the manager believes
            its price is unlikely to go much higher, its fundamentals have
            deteriorated, other investments offer better opportunities or in
            the course of adjusting the fund's exposure to a given country.


            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.


            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.

            THE MAIN RISKS OF INVESTING IN THE FUND


            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's performance
            to trail that of other investments.


            STOCK MARKET RISK. As with most stock funds, an important factor
            with this fund is how stock markets perform - in this case US and
            foreign stock markets. When US and foreign stock prices fall, you
            should expect the value of your investment to fall as well.
            Compared to large company stocks, small company stocks tend to be
            more volatile, in part because these companies tend to be less
            established and the valuation of their stocks often depends on
            future expectations. Because a stock represents ownership in its
            issuer, stock prices can be hurt by poor management, shrinking
            product demand and other business risks. These may affect single
            companies as well as groups of companies. In addition, movements in
            financial markets may adversely affect a stock's

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for long-term investors who are interested in a broadly
diversified approach to global investing with an emphasis on long-term growth of
capital.


                                                   DWS Global Thematic Fund  | 5
<PAGE>

            price, regardless of how well the company performs. The market as a
            whole may not favor the types of investments the fund makes and the
            fund may not be able to get attractive prices for them.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investment and imposed high taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a foreign company, as compared
               to the financial reports of US companies.

            -  LIQUIDITY RISK. Investments that trade less can be more
               difficult or more costly to buy, or to sell, than more liquid or
               active investments. This liquidity risk is a factor of the
               trading volume of a particular investment, as well as the size
               and liquidity of the entire local market. On the whole, foreign
               exchanges are smaller and less liquid than the US market. This
               can make buying and selling certain investments more difficult
               and costly. Relatively small transactions in some instances can
               have a disproportionately large effect on the price and supply
               of securities. In certain situations, it may become virtually
               impossible to sell an investment in an orderly fashion at a
               price that approaches portfolio management's estimate of its
               value. For the same reason, it may at times be difficult to
               value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

6 | DWS Global Thematic Fund
<PAGE>

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. This creates the possibility that changes in
               exchange rates between foreign currencies and the US dollar will
               affect the US dollar value of foreign securities or the income
               or gain received on these securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            EMERGING MARKET RISK. All of the risks of investing in foreign
            securities are increased in connection with investments in emerging
            markets securities. In addition, profound social changes and
            business practices that depart from norms in developed countries'
            economies have hindered the orderly growth of emerging economies
            and their markets in the past and have caused instability. High
            levels of debt tend to make emerging economies heavily reliant on
            foreign capital and vulnerable to capital flight. These countries
            are also more likely to experience high levels of inflation,
            deflation or currency devaluation, which could also hurt their
            economies and securities markets. For these and other reasons,
            investments in emerging markets are often considered speculative.

            PRICING RISK. At times, market conditions might make it hard to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such methodologies, it is
            possible that the value determined for an investment may be
            different than the value realized upon such investment's sale. If
            the fund has valued its securities too highly, you may end up
            paying too much for fund shares when you buy into the fund. If the
            fund underestimates the price of its securities, you may not
            receive the full market value for your fund shares when you sell.


                                                   DWS Global Thematic Fund  | 7
<PAGE>

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.


            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may not have the intended effects and may result in losses or
            missed opportunities; the risk that the fund will be unable to sell
            the derivative because of an illiquid secondary market; the risk
            that a counterparty is unwilling or unable to meet its obligation;
            and the risk that the derivative transaction could expose the fund
            to the effects of leverage, which could increase the fund's
            exposure to the market and magnify potential losses. There is no
            guarantee that derivatives, to the extent employed, will have the
            intended effect, and their use could cause lower returns or even
            losses to the fund. The use of derivatives by the fund to hedge
            risk may reduce the opportunity for gain by offsetting the positive
            effect of favorable price movements.

            Another factor that could affect performance is:



            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.



8 | DWS Global Thematic Fund
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.


The bar chart shows how the performance of the fund's Class A shares has varied
from year to year, which may give some idea of risk. The bar chart does not
reflect sales loads; if it did, total returns would be lower than those shown.
The table on the following page shows how fund performance compares to relevant
index information (which, unlike fund performance, does not reflect fees or
expenses). The table includes the effects of maximum sales loads. The
performance of both the fund and the index information varies over time. All
figures assume reinvestment of dividends and distributions (in the case of
after-tax returns, reinvested net of assumed tax rates).


The table shows returns for Class A shares on a before-tax and after-tax basis.
After-tax returns are shown for Class A only and will vary for Classes B and C.
After-tax returns are estimates calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.


In addition, after-tax returns are not relevant for Class R shares.


The inception date for Class A, B and C shares is June 18, 2001. The inception
date for Class R shares is November 3, 2003. In the bar chart, the performance
figures for Class A shares before that date are based on the historical
performance of the fund's original share class (Class S), adjusted to reflect
the higher gross total annual operating expenses of Class A.

In the table, the performance figures for each share class prior to its
inception are based on the historical performance of Class S, adjusted to
reflect both the higher gross total annual operating expenses of Class A, B, C
or R and the current applicable sales charges of Class A, B or C. Class S
shares are offered in a separate prospectus.

DWS Global Thematic Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS A (Results do not reflect
sales loads; if they did, total returns would be lower than those shown.)

[BAR CHART GRAPHIC APPEARS HERE]


<TABLE>
<S>      <C>        <C>        <C>        <C>         <C>         <C>        <C>        <C>        <C>
16.92    12.28      23.13       -3.28      -16.62      -17.21     31.93      14.69      22.73      29.94
1997     1998       1999        2000       2001       2002        2003       2004       2005       2006
</TABLE>

<TABLE>
<CAPTION>
2007 TOTAL RETURN AS OF SEPTEMBER 30: 11.47%
<S>                                          <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:

BEST QUARTER: 15.12%, Q4 1999                WORST QUARTER: -17.42%, Q3 2002
</TABLE>


                                                 DWS Global Thematic Fund  | 9
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 12/31/2006 (Fund returns include the
effects of maximum sales load.)


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                              1 YEAR       5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                                           <C>           <C>          <C>
 CLASS A
   Return before Taxes                          22.47        13.49         9.39
--------------------------------------------------------------------------------
   Return after Taxes on Distributions          18.33        12.33         7.25
--------------------------------------------------------------------------------
   Return after Taxes on Distributions
   and Sale of Fund Shares                      15.16        11.37         7.14
--------------------------------------------------------------------------------
 CLASS B (Return before Taxes)                  25.76        13.79         9.16
--------------------------------------------------------------------------------
 CLASS C (Return before Taxes)                  29.00        13.97         9.19
--------------------------------------------------------------------------------
 CLASS R (Return before Taxes)                  29.64        14.59         9.79
--------------------------------------------------------------------------------
 MORGAN STANLEY CAPITAL
 INTERNATIONAL (MSCI) WORLD INDEX
 (reflects no deductions for fees,
 expenses or taxes)                             20.07         9.97         7.64
--------------------------------------------------------------------------------
</TABLE>



Total returns would have been lower if operating expenses hadn't been reduced.

MSCI WORLD INDEX is an unmanaged capitalization-weighted measure of stock
markets around the world, including North America, Europe, Australia and Asia.

--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 621-1048 or visit our Web site at www.dws-scudder.com.


--------------------------------------------------------------------------------
The RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund
shares at the end of the period. The number represents only the fund's taxable
distributions and not a shareholder's gain or loss from selling fund shares.

The RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The number
reflects both the fund's taxable distributions and a shareholder's gain or loss
from selling fund shares.


10 | DWS Global Thematic Fund
<PAGE>

HOW MUCH INVESTORS PAY

This table describes the fees and expenses that you may pay if you buy and hold
fund shares. This information doesn't include any fees that may be charged by
your financial advisor.



<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
FEE TABLE                                       CLASS A        CLASS B      CLASS C      CLASS R
----------------------------------------------------------------------------------------------------
<S>                                          <C>              <C>          <C>          <C>
 SHAREHOLDER FEES, paid directly from your investment
----------------------------------------------------------------------------------------------------
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price) 1           5.75% 1        None         None         None
----------------------------------------------------------------------------------------------------
 Maximum Contingent Deferred Sales
 Charge (Load) (as % of redemption
 proceeds)                                         None 2         4.00%        1.00%       None
----------------------------------------------------------------------------------------------------
 Redemption/Exchange fee on shares
 owned less than 15 days (as % of
 redemption proceeds) 3                            2.00           2.00         2.00        2.00
----------------------------------------------------------------------------------------------------
 ANNUAL OPERATING EXPENSES, deducted from fund assets
----------------------------------------------------------------------------------------------------
 Management Fee 4                                  0.94  %        0.94%        0.94%       0.94%
----------------------------------------------------------------------------------------------------
 Distribution/Service (12b-1) Fees                 0.21           1.00         1.00        0.48
----------------------------------------------------------------------------------------------------
 Other Expenses                                    0.25           0.33         0.22        0.26
----------------------------------------------------------------------------------------------------
 Acquired Funds (Underlying Funds) Fees
 and Expenses 5                                    0.01           0.01         0.01        0.01
----------------------------------------------------------------------------------------------------
 TOTAL ANNUAL OPERATING EXPENSES 6                 1.41           2.28         2.17        1.69
----------------------------------------------------------------------------------------------------
</TABLE>



1   Because of rounding in the calculation of the offering price, the actual
    maximum front-end sales charge paid by an investor may be higher than the
    percentage noted (see "Choosing a Share Class - Class A shares").


2   The redemption of shares purchased at net asset value under the Large Order
    NAV Purchase Privilege (see "Choosing a Share Class - Class A shares") may
    be subject to a contingent deferred sales charge of 1.00% if redeemed within
    12 months of purchase and 0.50% if redeemed within the following six months.


3   This fee is charged on all applicable redemptions or exchanges. Please see
    "Policies You Should Know About - Policies about transactions" for further
    information.

4   Includes 0.10% administration fee.


5   The amount indicated is based on the indirect net expenses associated with
    the fund's investment in the underlying funds for the fiscal year ended
    August 31, 2007.

6   Through September 30, 2008, the Advisor has contractually agreed to waive
    all or a portion of its management fee and reimburse or pay operating
    expenses to the extent necessary to maintain the fund's total operating
    expenses at 1.90% for Class R shares, excluding certain expenses such as
    extraordinary expenses, taxes, brokerage and interest.


                                                  DWS Global Thematic Fund  | 11
<PAGE>


Based on the costs above, this example helps you compare this fund's expenses
to those of other mutual funds. This example assumes expenses above remain the
same and that you invested $10,000, earned 5% annual returns and reinvested all
dividends and distributions at the end of each period. This is only an example;
actual expenses will be different.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                  <C>         <C>          <C>          <C>
 EXPENSES, assuming you sold your shares at the end of each period.
--------------------------------------------------------------------------------
 Class A shares        $710       $  996       $1,302       $2,169
--------------------------------------------------------------------------------
 Class B shares         631        1,012        1,420        2,196
--------------------------------------------------------------------------------
 Class C shares         320          679        1,164        2,503
--------------------------------------------------------------------------------
 Class R shares         172          533          918        1,998
--------------------------------------------------------------------------------
 EXPENSES, assuming you kept your shares.
--------------------------------------------------------------------------------
 Class A shares        $710       $  996       $1,302       $2,169
--------------------------------------------------------------------------------
 Class B shares         231          712        1,220        2,196
--------------------------------------------------------------------------------
 Class C shares         220          679        1,164        2,503
--------------------------------------------------------------------------------
 Class R shares         172          533          918        1,998
--------------------------------------------------------------------------------
</TABLE>




12 | DWS Global Thematic Fund
<PAGE>


<TABLE>
--------------------------------------------------------------------------------
<S>                                             <C>        <C>        <C>
                                                Class A    Class B    Class C
                              ticker symbol     SUIAX      SUIBX      SUICX
                                fund number     468        668        768

DWS INTERNATIONAL FUND
--------------------------------------------------------------------------------

</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term growth of capital by investing at least
            65% of its total assets in foreign equities (equities issued by
            foreign-based companies and listed on foreign exchanges).

            Although the fund can invest in companies of any size and from any
            country, it invests mainly in common stocks of established
            companies in countries with developed economies (other than the
            United States). The fund may invest up to 20% of net assets in
            foreign debt securities, including convertible bonds. The fund's
            equity investments are mainly common stocks, but may also include
            preferred stocks and other securities with equity characteristics,
            such as convertible securities and warrants.

            In choosing securities, the portfolio manager uses a combination of
            two analytical disciplines:

            BOTTOM-UP RESEARCH. The manager look for individual companies with
            a history of above average growth, strong competitive positioning,
            attractive prices relative to potential growth, sound financial
            strength and effective management, among other factors.

            TOP-DOWN ANALYSIS. The manager considers the economic outlooks for
            various sectors and industries while looking for those that may
            benefit from changes in the overall business environment.

            The manager may favor different types of securities from different
            industries and companies at different times, while still
            maintaining variety in terms of the types of securities, issuers
            and countries represented.

            The manager will normally sell a stock when the manager believes
            its price is unlikely to go much higher, its fundamentals have
            deteriorated, other investments offer better opportunities or in
            the course of adjusting the fund's exposure to a given country.


                                                    DWS International Fund  | 13
<PAGE>


            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.



            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. As with most stock funds, an important factor
            with this fund is how stock markets perform - (to the extent the
            fund invests in a particular geographic region, the fund's
            performance may be proportionately affected by that region's general
            performance). When stock prices fall, you should expect the value of
            your investment to fall as well. Because a stock represents
            ownership in its issuer, stock prices can be hurt by poor
            management, shrinking product demand and other business risks. These
            may affect single companies as well as groups of companies. In
            addition, movements in financial markets may adversely affect a
            stock's price, regardless of how well the company performs. The
            market as a whole may not favor the types of investments the fund
            makes and the fund may not be able to get attractive prices for
            them.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The fund is designed for investors who are interested in a broadly diversified
non-US international investment with the emphasis squarely on long-term growth
of capital.


14 | DWS International Fund
<PAGE>

            -  POLITICAL RISK. Some foreign governments have limited the outflow
               of profits to investors abroad, imposed restrictions on the
               exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized foreign
               investment and imposed high taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a foreign company, as compared
               to the financial reports of US companies.

            -  LIQUIDITY RISK. Investments that trade less can be more
               difficult or more costly to buy, or to sell, than more liquid or
               active investments. This liquidity risk is a factor of the
               trading volume of a particular investment, as well as the size
               and liquidity of the entire local market. On the whole, foreign
               exchanges are smaller and less liquid than the US market. This
               can make buying and selling certain investments more difficult
               and costly. Relatively small transactions in some instances can
               have a disproportionately large effect on the price and supply
               of securities. In certain situations, it may become virtually
               impossible to sell an investment in an orderly fashion at a
               price that approaches portfolio management's estimate of its
               value. For the same reason, it may at times be difficult to
               value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. This creates the possibility that changes in
               exchange rates between foreign currencies and the US dollar will
               affect the US dollar value of foreign securities or the income
               or gain received on these securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the remedies available in the US.

                                                    DWS International Fund  | 15
<PAGE>

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US investments.
               The procedures and rules governing foreign transactions and
               custody may also involve delays in payment, delivery or recovery
               of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            EMERGING MARKET RISK. All of the risks of investing in foreign
            securities are increased in connection with investments in emerging
            markets securities. In addition, profound social changes and
            business practices that depart from norms in developed countries'
            economies have hindered the orderly growth of emerging economies
            and their markets in the past and have caused instability. High
            levels of debt tend to make emerging economies heavily reliant on
            foreign capital and vulnerable to capital flight. These countries
            are also more likely to experience high levels of inflation,
            deflation or currency devaluation, which could also hurt their
            economies and securities markets. For these and other reasons,
            investments in emerging markets are often considered speculative.

            PRICING RISK. At times, market conditions might make it hard to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such methodologies, it is
            possible that the value determined for an investment may be
            different than the value realized upon such investment's sale. If
            the fund has valued its securities too highly, you may end up
            paying too much for fund shares when you buy into the fund. If the
            fund underestimates the price of its securities, you may not
            receive the full market value for your fund shares when you sell.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially


16 | DWS International Fund
<PAGE>

            while the loan is outstanding. However, loans will be made only to
            borrowers selected by the fund's delegate after a review of
            relevant facts and circumstances, including the creditworthiness of
            the borrower.


            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may not have the intended effects and may result in losses or
            missed opportunities; the risk that the fund will be unable to sell
            the derivative because of an illiquid secondary market; the risk
            that a counterparty is unwilling or unable to meet its obligation;
            and the risk that the derivative transaction could expose the fund
            to the effects of leverage, which could increase the fund's
            exposure to the market and magnify potential losses. There is no
            guarantee that derivatives, to the extent employed, will have the
            intended effect, and their use could cause lower returns or even
            losses to the fund. The use of derivatives by the fund to hedge
            risk may reduce the opportunity for gain by offsetting the positive
            effect of favorable price movements.

            Another factor that could affect performance is:



            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.



                                                    DWS International Fund  | 17
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.


The bar chart shows how the performance of the fund's Class A shares has varied
from year to year, which may give some idea of risk. The bar chart does not
reflect sales loads; if it did, total returns would be lower than those shown.
The table on the following page shows how fund performance compares to relevant
index information (which, unlike fund performance, does not reflect fees or
expenses). The table includes the effects of maximum sales loads. The
performance of both the fund and the index information varies over time. All
figures assume reinvestment of dividends and distributions (in the case of
after-tax returns, reinvested net of assumed tax rates).


The table shows returns for Class A shares on a before-tax and after-tax basis.
After-tax returns are shown for Class A only and will vary for Classes B and C.
After-tax returns are estimates calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

The inception date for Class A shares (formerly Class R) is August 2, 1999. The
inception date for Class B and C shares is December 29, 2000. In the bar chart,
the performance figures for Class A before its inception date are based on the
historical performance of the fund's original share class (Class S), adjusted
to reflect the higher gross total annual operating expenses of Class A.

In the table, the performance figures for each share class prior to its
inception date are based on the historical performance of Class S, adjusted to
reflect the higher gross total annual operating expenses of Classes A, B and C
and the current applicable sales charges of Classes A, B and C. Class S shares
are offered in a separate prospectus.

DWS International Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS A (Results do not reflect
sales loads; if they did, total returns would be lower than those shown.)

[BAR CHART GRAPHIC APPEARS HERE]




<TABLE>
<S>      <C>        <C>        <C>         <C>         <C>         <C>        <C>        <C>        <C>
7.68     18.30      57.33       -19.40      -27.10      -16.56     27.46      16.37      15.94      25.76
1997     1998       1999        2000        2001       2002        2003       2004       2005       2006
</TABLE>







<TABLE>
<CAPTION>
2007 TOTAL RETURN AS OF SEPTEMBER 30: 16.09%
<S>                                          <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:

BEST QUARTER: 30.20%, Q4 1999                WORST QUARTER: -19.42%, Q3 2002
</TABLE>


18 | DWS International Fund
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 12/31/2006 (Fund returns include the
effects of maximum sales load.)


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                              1 YEAR       5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                                         <C>           <C>          <C>
 CLASS A
   Return before Taxes                          18.53        11.21         7.18
--------------------------------------------------------------------------------
   Return after Taxes on Distributions          17.91        11.05         6.23
--------------------------------------------------------------------------------
   Return after Taxes on Distributions
   and Sale of Fund Shares                      10.51         9.75         6.00
--------------------------------------------------------------------------------
 CLASS B (Return before Taxes)                  21.51        11.38         6.91
--------------------------------------------------------------------------------
 CLASS C (Return before Taxes)                  24.79        11.60         6.97
--------------------------------------------------------------------------------
 MORGAN STANLEY CAPITAL
 INTERNATIONAL (MSCI) EUROPE,
 AUSTRALASIA, FAR EAST (EAFE) INDEX
 (reflects no deductions for fees,
 expenses or taxes)                             26.34        14.98         7.71
--------------------------------------------------------------------------------
</TABLE>




Total returns would have been lower had operating expenses not been reduced.


MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EUROPE, AUSTRALASIA AND THE FAR EAST
(EAFE) INDEX is an unmanaged index that tracks international stock performance
in the 21 developed markets of Europe, Australasia and the Far East.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 621-1048 or visit our Web site at www.dws-scudder.com.


--------------------------------------------------------------------------------
The RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund
shares at the end of the period. The number represents only the fund's taxable
distributions and not a shareholder's gain or loss from selling fund shares.

The RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The number
reflects both the fund's taxable distributions and a shareholder's gain or loss
from selling fund shares.


                                                    DWS International Fund  | 19
<PAGE>

HOW MUCH INVESTORS PAY

This table describes the fees and expenses that you may pay if you buy and hold
fund shares. This information doesn't include any fees that may be charged by
your financial advisor.



<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
FEE TABLE                                        CLASS A         CLASS B       CLASS C
-------------------------------------------------------------------------------------------
<S>                                              <C>             <C>          <C>
 SHAREHOLDER FEES, paid directly from your investment
-------------------------------------------------------------------------------------------
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)             5.75% 1         None         None
-------------------------------------------------------------------------------------------
 Maximum Contingent Deferred Sales
 Charge (Load) (as % of redemption
 proceeds)                                         None 2         4.00%         1.00%
-------------------------------------------------------------------------------------------
 Redemption/Exchange fee on shares
 owned less than 15 days (as % of
 redemption proceeds) 3                            2.00           2.00          2.00
-------------------------------------------------------------------------------------------
 ANNUAL OPERATING EXPENSES, deducted from fund assets
-------------------------------------------------------------------------------------------
 Management Fee 4                                  0.67  %        0.67%         0.67%
-------------------------------------------------------------------------------------------
 Distribution/Service (12b-1) Fees                 0.24           0.99          1.00
-------------------------------------------------------------------------------------------
 Other Expenses                                    0.32           0.49          0.33
-------------------------------------------------------------------------------------------
 TOTAL ANNUAL OPERATING EXPENSES                   1.23           2.15          2.00
-------------------------------------------------------------------------------------------
 Less Expense Waiver/Reimbursement                 0.00           0.12          0.00
-------------------------------------------------------------------------------------------
 NET ANNUAL OPERATING EXPENSES 5                   1.23           2.03          2.00
-------------------------------------------------------------------------------------------
</TABLE>



1   Because of rounding in the calculation of the offering price, the actual
    maximum front-end sales charge paid by an investor may be higher than the
    percentage noted (see "Choosing a Share Class - Class A shares").


2   The redemption of shares purchased at net asset value under the Large Order
    NAV Purchase Privilege (see "Choosing a Share Class - Class A shares") may
    be subject to a contingent deferred sales charge of 1.00% if redeemed within
    12 months of purchase and 0.50% if redeemed within the following six months.


3   This fee is charged on all applicable redemptions or exchanges. Please see
    "Policies You Should Know About - Policies about transactions" for further
    information.


4   Restated on an annualized basis to reflect fee changes that took effect on
    June 11, 2007. Includes 0.10% administration fee.

5   Through November 30, 2010, the Advisor has contractually agreed to waive all
    or a portion of its management fee and reimburse or pay operating expenses
    of the fund to the extent necessary to maintain the fund's total operating
    expenses at 1.28%, 2.03% and 2.03%, respectively, for Class A, Class B and
    Class C shares, excluding certain expenses such as extraordinary expenses,
    taxes, brokerage and interest.



20 | DWS International Fund
<PAGE>


Based on the costs above (including one year of capped expenses in the "1 Year"
period and three years of capped expenses in each of the "3 Years," "5 Years"
and "10 Years" periods for Class B shares), this example helps you compare this
fund's expenses to those of other mutual funds. This example assumes the
expenses above remain the same and that you invested $10,000, earned 5% annual
returns and reinvested all dividends and distributions at the end of each
period. This is only an example; actual expenses will be different.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                  <C>         <C>          <C>          <C>
 EXPENSES, assuming you sold your shares at the end of each period
--------------------------------------------------------------------------------
 Class A shares        $693         $943       $1,212       $1,978
--------------------------------------------------------------------------------
 Class B shares         606          937        1,320        2,001
--------------------------------------------------------------------------------
 Class C shares         303          627        1,078        2,327
--------------------------------------------------------------------------------
 EXPENSES, assuming you kept your shares
--------------------------------------------------------------------------------
 Class A shares        $693         $943       $1,212       $1,978
--------------------------------------------------------------------------------
 Class B shares         206          637        1,120        2,001
--------------------------------------------------------------------------------
 Class C shares         203          627        1,078        2,327
--------------------------------------------------------------------------------
</TABLE>




                                                    DWS International Fund  | 21
<PAGE>


OTHER POLICIES AND RISKS


           While the previous pages describe the main points of each fund's
           strategy and risks, there are a few other issues to know about:

           -  Although major changes tend to be infrequent, each fund's Board
              could change a fund's investment objective without seeking
              shareholder approval.


           -  As a temporary defensive measure, each fund could shift up to
              100% of assets into investments such as money market securities
              and DWS International Fund could shift up to 100% of assets into
              US or Canadian money market securities This could prevent losses,
              but, while engaged in a temporary defensive position, a fund will
              not be pursuing its investment goal. However, portfolio
              management may choose not to use these strategies for various
              reasons, even in volatile market conditions.



           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in each fund.

           If you want more information on each fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that a fund will achieve its
           goal.

           A complete list of each fund's portfolio holdings is posted as of
           the month-end on www.dws-scudder.com (the Web site does not form a
           part of this prospectus) on or after the last day of the following
           month. This posted information generally remains accessible at least
           until the date on which a fund files its Form N-CSR or N-Q with the
           Securities and Exchange
           Commission for the period that includes the date as of which the
           posted information is current. In addition, each fund's top ten
           equity holdings and other fund information is posted on
           www.dws-scudder.com as of the calendar quarter-end on or after the
           15th day following quarter-end. Each fund's Statement of Additional
           Information includes a description of a fund's policies and
           procedures with respect to the disclosure of a fund's portfolio
           holdings.


22 | Other Policies and Risks
<PAGE>

WHO MANAGES AND OVERSEES THE FUNDS

           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for each fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for each fund and conducts research that leads to these
           purchase and sale decisions. The Advisor provides a full range of
           global investment advisory services to institutional and retail
           clients.

           DWS Scudder is part of Deutsche Asset Management, which is the
           marketing name in the US for the asset management activities of
           Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS
           Trust Company.

           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.

           The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank
           AG. Deutsche Bank AG is a major global banking institution that is
           engaged in a wide range of financial services, including investment
           management, mutual funds, retail, private and commercial banking,
           investment banking and insurance.


           MANAGEMENT FEE. The Advisor receives a management fee from each
           fund. Below are the actual rates paid by each fund for the most
           recent fiscal year, as a percentage of each fund's average daily net
           assets.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FUND NAME                                 FEE PAID
--------------------------------------------------------------------------------
<S>                                      <C>
  DWS Global Thematic Fund                  0.84%
--------------------------------------------------------------------------------
  DWS International Fund                    0.58%
--------------------------------------------------------------------------------
</TABLE>




                                        Who Manages and Oversees the Funds  | 23
<PAGE>


           Effective June 11, 2007, DWS International Fund pays the Advisor
           under the investment management agreement a fee, calculated daily
           and paid monthly, at the annual rate of 0.565% of the fund's average
           daily net assets up to $2.5 billion, 0.545% of the next $2.5
           billion, 0.525% of the next $5 billion, 0.515% of the next $5
           billion and 0.465% thereafter.

           A discussion regarding the basis for the Board's approval of each
           fund's investment management agreement is contained in the most
           recent shareholder reports for the semi-annual period ended February
           28 (see "Shareholder reports" on the back cover).


           Under a separate administrative services agreement between each fund
           and the Advisor, each fund pays the Advisor for providing most of
           each fund's administrative services.


24 | Who Manages and Oversees the Funds
<PAGE>

Portfolio management

The following person handles the day-to-day management of DWS Global Thematic
Fund.

DWS GLOBAL THEMATIC FUND

Oliver Kratz
Managing Director of Deutsche Asset Management and Lead Manager of the fund.

-   Joined Deutsche Asset Management in 1996, having since served as portfolio
    manager for European Equity Fund and Global Emerging Markets analyst for
    International Equity Fund, after two years of experience at Merrill Lynch,
    Brown Brothers Harriman and McKinsey & Co.; authored Frontier Emerging
    Markets Securities Price Behavior and Valuation; Kluwers Academic
    Publishers, 1999; member of Budapest Stock Exchange Advisory Board.

-   Head of Global Thematic Equity; Co-Head of Global Agribusiness; Lead
    Portfolio Manager Global Thematic Strategy: New York.

-   Joined the fund in 2003.
-   BA, Tufts University and Karlova Universidad, Prague; MALD, Ph.D, The
    Fletcher School, administered jointly by Harvard University and Tufts
    University.

The following person handles the day-to-day management of DWS International
Fund.

DWS INTERNATIONAL FUND

Matthias Knerr, CFA
Director, Deutsche Asset Management and Portfolio Manager of the fund.

-   Joined Deutsche Asset Management in 1995 and the fund in 2004.
-   Portfolio manager for International Equities.
-   BS, Pennsylvania State University.

Each fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in each fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


                                        Who Manages and Oversees the Funds  | 25
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in a
fund would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with each
fund's financial statements, is included in each fund's annual report (see
"Shareholder reports" on the back cover).


DWS Global Thematic Fund - Class A




<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                          2007          2006          2005           2004          2003
---------------------------------------------------------------------------------------------------------------------
<S>                                            <C>            <C>           <C>            <C>            <C>
SELECTED PER SHARE DATA
---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD          $35.02      $  29.60       $ 22.81       $  20.42      $  18.76
---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
  Net investment income (loss) a                 .30 d         .19           .13            .00*          .12
---------------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain
  (loss)                                        6.60          7.63          6.66           2.65          1.69
---------------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS              6.90          7.82          6.79           2.65          1.81
---------------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                         (.11)       (  .11)            -         (  .26)       (  .15)
---------------------------------------------------------------------------------------------------------------------
  Net realized gains                          ( 6.00)       ( 2.29)            -              -             -
---------------------------------------------------------------------------------------------------------------------
  TOTAL DISTRIBUTIONS                          (6.11)       ( 2.40)            -         (  .26)       (  .15)
---------------------------------------------------------------------------------------------------------------------
Redemption fees                                  .00*          .00*          .00*             -             -
---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                $35.81      $  35.02       $ 29.60       $  22.81      $  20.42
---------------------------------------------------------------------------------------------------------------------
Total Return (%) b                             21.19 d       27.65         29.77 c        12.99 c        9.75
---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)           560           119            26             17            15
---------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions (%)                                  1.40          1.56          1.76           1.77          1.66
---------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions (%)                                  1.40          1.56          1.70           1.69          1.66
---------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) (%)                                       .85 d             .62       .51            .04           .66
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)                      151           143            54             81            55
---------------------------------------------------------------------------------------------------------------------
</TABLE>




a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charges.

c   Total return would have been lower had certain expenses not been reduced.

d   Includes non-recurring income from the Advisor recorded as a result of an
    administrative proceeding regarding disclosure of brokerage allocation
    practices in connection with sales of DWS Scudder Funds. The non-recurring
    income resulted in an increase of net investment income of $0.003 per share
    and an increase in the ratio of net investment income of 0.01%. Excluding
    this non-recurring income, total return would have been 0.003% lower.

*   Amount is less than $.005.


26 | Financial Highlights
<PAGE>


DWS Global Thematic Fund - Class B




<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                           2007           2006           2005           2004          2003
---------------------------------------------------------------------------------------------------------------------
<S>                                         <C>             <C>            <C>            <C>            <C>
SELECTED PER SHARE DATA
---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD           $34.50        $ 29.35       $  22.79       $  20.40       $ 18.73
---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
  Net investment income (loss) a                  .00 d*        (.10)        (  .07)        (  .18)       (  .03)
---------------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain
  (loss)                                         6.47           7.54           6.63           2.65          1.70
---------------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS               6.47           7.44           6.56           2.47          1.67
---------------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                              -             -              -         (  .08)       (  .00)*
---------------------------------------------------------------------------------------------------------------------
  Net realized gains                            (6.00)         (2.29)             -              -             -
---------------------------------------------------------------------------------------------------------------------
  TOTAL DISTRIBUTIONS                           (6.00)         (2.29)             -         (  .08)       (  .00)*
---------------------------------------------------------------------------------------------------------------------
Redemption fees                                   .00*           .00*           .00*             -             -
---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                $ 34.97        $ 34.50       $  29.35       $  22.79       $ 20.40
---------------------------------------------------------------------------------------------------------------------
Total Return (%) b                              20.21 d        26.42 c        28.78 c        12.21 c        8.93
---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)             41             14              7              8             9
---------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions (%)                                   2.27           2.61           2.69           2.58          2.45
---------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions (%)                                   2.27           2.49           2.47           2.47          2.45
---------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) (%)                                      ( .02) d        (.31)        (  .26)        (  .74)       (  .13)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)                       151            143             54             81            55
---------------------------------------------------------------------------------------------------------------------
</TABLE>




a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charges.

c   Total return would have been lower had certain expenses not been reduced.

d   Includes non-recurring income from the Advisor recorded as a result of an
    administrative proceeding regarding disclosure of brokerage allocation
    practices in connection with sales of DWS Scudder Funds. The non-recurring
    income resulted in an increase of net investment income of $0.003 per share
    and an increase in the ratio of net investment income of 0.01%. Excluding
    this non-recurring income, total return would have been 0.003% lower.

*   Amount is less than $.005.


                                                      Financial Highlights  | 27
<PAGE>


DWS Global Thematic Fund - Class C




<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                           2007            2006          2005            2004           2003
---------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>             <C>            <C>             <C>             <C>
SELECTED PER SHARE DATA
---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD           $34.55       $  29.35        $ 22.79        $  20.39       $  18.73
---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
  Net investment income (loss) a                  .04 d         (.06)         ( .07)         (  .16)        (  .02)
---------------------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain
  (loss)                                         6.48           7.55           6.63            2.64           1.69
---------------------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS               6.52           7.49           6.56            2.48           1.67
---------------------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                             -              -              -          (  .08)        (  .01)
---------------------------------------------------------------------------------------------------------------------------
  Net realized gains                            (6.00)        ( 2.29)             -               -              -
---------------------------------------------------------------------------------------------------------------------------
  TOTAL DISTRIBUTIONS                           (6.00)        ( 2.29)             -          (  .08)        (  .01)
---------------------------------------------------------------------------------------------------------------------------
Redemption fees                                   .00*           .00*           .00*              -              -
---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                 $35.07       $  34.55        $ 29.35        $  22.79       $  20.39
---------------------------------------------------------------------------------------------------------------------------
Total Return (%) b                              20.31 d        26.64          28.78 c         12.23 c         8.91
---------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)            223             39              5               5              5
---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions (%)                                   2.16           2.33           2.62            2.56           2.44
---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions (%)                                   2.16           2.33           2.47            2.46           2.44
---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) (%)                                        .09 d         (.15)         ( .26)         (  .73)        (  .12)
---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)                       151            143             54              81             55
---------------------------------------------------------------------------------------------------------------------------
</TABLE>




a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charges.

c   Total return would have been lower had certain expenses not been reduced.

d   Includes non-recurring income from the Advisor recorded as a result of an
    administrative proceeding regarding disclosure of brokerage allocation
    practices in connection with sales of DWS Scudder Funds. The non-recurring
    income resulted in an increase of net investment income of $0.003 per share
    and an increase in the ratio of net investment income of 0.01%. Excluding
    this non-recurring income, total return would have been 0.003% lower.

*   Amount is less than $.005.


28 | Financial Highlights
<PAGE>


DWS Global Thematic Fund - Class R




<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                                  2007              2006             2005              2004 a
-----------------------------------------------------------------------------------------------------------------------
<S>                                                <C>              <C>              <C>              <C>
SELECTED PER SHARE DATA
-----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                 $  34.98         $  29.63         $  22.89         $   21.69
-----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
  Net investment income (loss) b                          .20 d                .12          .06               .02
-----------------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain (loss)                6.62             7.62             6.68              1.37
-----------------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS                       6.82             7.74             6.74              1.39
-----------------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                                (  .02)          (  .10)               -            (  .19)
-----------------------------------------------------------------------------------------------------------------------
  Net realized gains on investment
  transactions                                         ( 6.00)          ( 2.29)               -                 -
-----------------------------------------------------------------------------------------------------------------------
  TOTAL DISTRIBUTIONS                                  ( 6.02)          ( 2.39)               -            (  .19)
-----------------------------------------------------------------------------------------------------------------------
Redemption fees                                           .00***           .00***           .00***              -
-----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                       $  35.78         $  34.98         $  29.63         $   22.89
-----------------------------------------------------------------------------------------------------------------------
Total Return (%)                                        20.91 d          27.37            29.45 c            6.38 c**
-----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)                      7                4                1                .5
-----------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions (%)                                           1.68             1.79             2.27              1.87*
-----------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions (%)                                           1.68             1.79             1.96              1.82*
-----------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) (%)                                                .57 d            .39              .25               .13*
-----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)                               151              143               54                81
-----------------------------------------------------------------------------------------------------------------------
</TABLE>




a   For the period from November 3, 2003 (commencement of operations of Class R
    shares) to August 31, 2004.

b   Based on average shares outstanding during the period.

c   Total return would have been lower had certain expenses not been reduced.

d   Includes non-recurring income from the Advisor recorded as a result of an
    administrative proceeding regarding disclosure of brokerage allocation
    practices in connection with sales of DWS Scudder Funds. The non-recurring
    income resulted in an increase of net investment income of $0.003 per share
    and an increase in the ratio of net investment income of 0.01%. Excluding
    this non-recurring income, total return would have been 0.006% lower.

*   Annualized

**   Not annualized

***   Amount is less than $.005.


                                                      Financial Highlights  | 29
<PAGE>


DWS International Fund - Class A



<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                             2007            2006           2005           2004           2003
--------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>             <C>            <C>            <C>
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD           $  57.01        $  47.44       $  37.86       $  33.18       $  32.35
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
  Net investment income (loss) a                    .77 e          1.13 d          .56            .16            .26
--------------------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain
  (loss)                                          11.05            9.31           9.48           4.82            .79
--------------------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS                11.82           10.44          10.04           4.98           1.05
--------------------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                          ( 1.66)         (  .87)        (  .46)        (  .30)        (  .22)
--------------------------------------------------------------------------------------------------------------------------
Redemption fees*                                    .00             .00            .00            .00            .00
--------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                 $  67.17        $  57.01       $  47.44       $  37.86       $  33.18
--------------------------------------------------------------------------------------------------------------------------
Total Return (%) b                                21.03 c         22.24 c        26.63          15.06           3.28
--------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)              308             241            219            192            204
--------------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions (%)                                     1.24            1.32           1.33           1.55           1.49
--------------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions (%)                                     1.24            1.30           1.33           1.55           1.49
--------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) (%)                                         1.21 e          2.16 d         1.28            .41            .84
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)                         104              76             57             82            104
--------------------------------------------------------------------------------------------------------------------------
</TABLE>




a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charges.

c   Total return would have been lower had certain expenses not been reduced.

d   Net investment income per share and the ratio of net investment income
    include non-recurring dividend income amounting to $0.51 per share and 0.98%
    of average daily net assets, respectively.

e   Net investment income per share and the ratio of net investment income
    include non-recurring dividend income amounting to $0.31 per share and 0.49%
    of average daily net assets, respectively.

*   Amount is less than $.005.


30 | Financial Highlights
<PAGE>


DWS International Fund - Class B



<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                           2007            2006            2005            2004           2003
----------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>             <C>             <C>             <C>             <C>
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD           $56.18        $  46.74        $  37.36        $  32.74       $  31.95
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
  Net investment income (loss) a                  .23 e           .51 d           .13          (  .14)           .03
----------------------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain
  (loss)                                        10.89            9.26            9.31            4.77            .76
----------------------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS              11.12            9.77            9.44            4.63            .79
----------------------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                          (.98)         (  .33)         (  .06)         (  .01)             -
----------------------------------------------------------------------------------------------------------------------------
Redemption fees*                                  .00             .00             .00             .00            .00
----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                 $66.32        $  56.18        $  46.74        $  37.36       $  32.74
----------------------------------------------------------------------------------------------------------------------------
Total Return (%) b                              20.01 c         20.92 c         25.21 c         14.19 c         2.47
----------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)             29              28              33              40             47
----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions (%)                                   2.16            2.42            2.62            2.49           2.27
----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions (%)                                   2.14            2.35            2.37            2.37           2.27
----------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) (%)                                        .31 e           1.00 d          .24          (  .41)           .06
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)                       104              76              57              82            104
----------------------------------------------------------------------------------------------------------------------------
</TABLE>




a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charges.

c   Total return would have been lower had certain expenses not been reduced.

d   Net investment income per share and the ratio of net investment income
    include non-recurring dividend income amounting to $0.51 per share and 0.98%
    of average daily net assets, respectively.

e   Net investment income per share and the ratio of net investment income
    include non-recurring dividend income amounting to $0.31 per share and 0.49%
    of average daily net assets, respectively.

*   Amount is less than $.005.


                                                      Financial Highlights  | 31
<PAGE>


DWS International Fund - Class C



<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                           2007            2006           2005            2004           2003
---------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>             <C>             <C>            <C>             <C>
SELECTED PER SHARE DATA
---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD           $56.22        $  46.74       $  37.35        $  32.74       $  31.94
---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
  Net investment income (loss) a                  .30 e           .67 d          .18          (  .14)           .03
---------------------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain
  (loss)                                        10.90            9.21           9.32            4.76            .77
---------------------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS              11.20            9.88           9.50            4.62            .80
---------------------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                         (1.13)         (  .40)        (  .11)         (  .01)             -
---------------------------------------------------------------------------------------------------------------------------
Redemption fees*                                  .00             .00            .00             .00            .00
---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                 $66.29        $  56.22       $  46.74        $  37.35       $  32.74
---------------------------------------------------------------------------------------------------------------------------
Total Return (%) b                              20.10 c         21.26          25.44           14.17 c         2.50
---------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)             32              23             22              22             22
---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions (%)                                   2.01            2.11           2.24            2.38           2.26
---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions (%)                                   2.01            2.11           2.24            2.36           2.26
---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) (%)                                        .44 e          1.31 d          .37          (  .40)           .07
---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)                       104              76             57              82            104
---------------------------------------------------------------------------------------------------------------------------
</TABLE>




a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charges.

c   Total return would have been lower had certain expenses not been reduced.

d   Net investment income per share and the ratio of net investment income
    include non-recurring dividend income amounting to $0.51 per share and 0.98%
    of average daily net assets, respectively.

e   Net investment income per share and the ratio of net investment income
    include non-recurring dividend income amounting to $0.31 per share and 0.49%
    of average daily net assets, respectively.

*   Amount is less than $.005.


32 | Financial Highlights
<PAGE>

HOW TO INVEST IN THE FUNDS

The following pages tell you how to invest in a fund and what to expect as a
shareholder. If you're investing directly with DWS Scudder, all of this
information applies to you.

The following pages also tell you about many of the services, choices and
benefits of being a shareholder. You'll also find information on how to check
the status of your account using the method that's most convenient for you.

If you're investing through a "third party provider" - for example, a workplace
retirement plan, financial supermarket or financial advisor - your provider may
have its own policies or instructions and you should follow those.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.
<PAGE>

CHOOSING A SHARE CLASS

Offered in this prospectus are the share classes noted on the front cover. Each
class has its own fees and expenses, offering you a choice of cost structures.
Each fund may offer other classes of shares in a separate prospectus. These
shares are intended for investors seeking the advice and assistance of a
financial advisor, who will typically receive compensation for those services.
Class R shares are only available to participants in certain retirement plans.

Before you invest, take a moment to look over the characteristics of each share
class, so that you can be sure to choose the class that's right for you. You
may want to ask your financial advisor to help you with this decision.

We describe each share class in detail on the following pages. But first, you
may want to look at the table below, which gives you a brief comparison of the
main features of each class.


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
 CLASSES AND FEATURES                           POINTS TO HELP YOU COMPARE
--------------------------------------------------------------------------------------------------
<S>                                            <C>
 CLASS A
 -  Sales charge of up to 5.75% charged         -  Some investors may be able to reduce
    when you buy shares                            or eliminate their sales charge; see
                                                   "Class A shares"
 -  In most cases, no charge when you
    sell shares                                 -  Total annual expenses are lower than
                                                   those for Class B or Class C
 -  Up to 0.25% annual shareholder
    servicing fee
--------------------------------------------------------------------------------------------------
 CLASS B
 -  No sales charge when you buy shares         -  The deferred sales charge rate falls to
                                                   zero after six years
 -  Deferred sales charge declining from
    4.00%, charged when you sell shares         -  Shares automatically convert to
    you bought within the last six years           Class A after six years, which means
                                                   lower annual expenses going forward
 -  0.75% annual distribution fee and up
    to 0.25% annual shareholder servicing
    fee
--------------------------------------------------------------------------------------------------
 CLASS C
 -  No sales charge when you buy shares         -  The deferred sales charge rate for one
                                                   year is lower for Class C shares than
 -  Deferred sales charge of 1.00%,                Class B shares, but your shares never
    charged when you sell shares you               convert to Class A, so annual expenses
    bought within the last year                    remain higher

 -  0.75% annual distribution fee and up
    to 0.25% annual shareholder servicing
    fee
--------------------------------------------------------------------------------------------------
 CLASS R
 -  No sales charges when you buy or sell       -  Class R is only available to participants
    shares                                         in certain retirement plans

 -  0.25% annual distribution fee and up
    to 0.25% annual shareholder servicing
    fee
--------------------------------------------------------------------------------------------------
</TABLE>



34 | Choosing a Share Class
<PAGE>

           Your financial advisor will typically be paid a fee when you buy
           shares and may receive different levels of compensation depending
           upon which class of shares you buy. Each fund may pay financial
           advisors or other intermediaries compensation for the services they
           provide to their clients. This compensation may vary depending on
           the fund you buy or the class of shares of a fund that you buy. Your
           financial advisor may also receive compensation from the Advisor
           and/or its affiliates, please see "Financial intermediary support
           payments."


           Class A shares

           Class A shares may make sense for long-term investors, especially
           those who are eligible for a reduced or eliminated sales charge.

           Class A shares have a 12b-1 plan, under which a shareholder
           servicing fee of up to 0.25% is deducted from class assets each
           year. Because the shareholder servicing fee is continuous in nature,
           it may, over time, increase the cost of your investment and may cost
           you more than paying other types of sales charges.

           Class A shares have an up-front sales charge that varies with the
           amount you invest:


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                              FRONT-END SALES          FRONT-END SALES
                                CHARGE AS %          CHARGE AS % OF YOUR
YOUR INVESTMENT            OF OFFERING PRICE 1,2        NET INVESTMENT 2
--------------------------------------------------------------------------------
<S>                             <C>                       <C>
Up to $50,000                   5.75%                     6.10%
--------------------------------------------------------------------------------
$50,000-$99,999                 4.50                      4.71
--------------------------------------------------------------------------------
$100,000-$249,999               3.50                      3.63
--------------------------------------------------------------------------------
$250,000-$499,999               2.60                      2.67
--------------------------------------------------------------------------------
$500,000-$999,999               2.00                      2.04
--------------------------------------------------------------------------------
$1 million or more            see below                see below
--------------------------------------------------------------------------------
</TABLE>


           1   The offering price includes the sales charge.

           2   Because of rounding in the calculation of the offering price,
               the actual front-end sales charge paid by an investor may be
               higher or lower than the percentages noted.


           YOU MAY BE ABLE TO LOWER YOUR CLASS A SALES CHARGE IF:

           -  you plan to invest at least $50,000 in Class A shares (including
              Class A shares in other retail DWS funds) over the next 24 months
              ("Letter of Intent")

                                                    Choosing a Share Class  | 35
<PAGE>

           -  the amount of Class A shares you already own (including Class A
              shares in other retail DWS funds) plus the amount you're
              investing now in Class A shares is at least $50,000 ("Cumulative
              Discount")

           -  you are investing a total of $50,000 or more in Class A shares of
              several retail DWS funds on the same day ("Combined Purchases")

           The point of these three features is to let you count investments
           made at other times or in certain other funds for purposes of
           calculating your present sales charge. Any time you can use the
           privileges to "move" your investment into a lower sales charge
           category, it's generally beneficial for you to do so.

           For purposes of determining whether you are eligible for a reduced
           Class A sales charge, you and your immediate family (your spouse or
           life partner and your children or stepchildren age 21 or younger)
           may aggregate your investments in the DWS family of funds. This
           includes, for example, investments held in a retirement account, an
           employee benefit plan or at a financial advisor other than the one
           handling your current purchase. These combined investments will be
           valued at their current offering price to determine whether your
           current investment qualifies for a reduced sales charge.

           To receive a reduction in your Class A initial sales charge, you
           must let your financial advisor or Shareholder Services know at the
           time you purchase shares that you qualify for such a reduction. You
           may be asked by your financial advisor or Shareholder Services to
           provide account statements or other information regarding related
           accounts of you or your immediate family in order to verify your
           eligibility for a reduced sales charge.


           For more information about sales charge discounts, please visit
           www.dws-scudder.com (click on the link entitled "Fund Sales Charge
           and Breakpoint Schedule"), consult with your financial advisor or
           refer to the section entitled "Purchase or Redemption of Shares" in
           each fund's Statement of Additional Information.


           IN CERTAIN CIRCUMSTANCES, YOU MAY BE ABLE TO BUY CLASS A SHARES
           WITHOUT A SALES CHARGE. For example, the sales charge will be waived
           if you are reinvesting dividends or distributions or if you are
           exchanging an investment in Class A shares of another fund in the
           DWS family of funds for an investment in Class A shares of a fund.
           In addition, a sales charge waiver may


36 | Choosing a Share Class
<PAGE>

           apply to transactions by certain retirement plans and certain other
           entities or persons (e.g., affiliated persons of DeAM or the DWS
           funds) and with respect to certain types of investments (e.g., an
           investment advisory or agency commission program under which you pay
           a fee to an investment advisor or other firm for portfolio
           management or brokerage services).

           Details regarding the types of investment programs and categories of
           investors eligible for a sales charge waiver are provided in each
           fund's Statement of Additional Information.

           There are a number of additional provisions that apply in order to
           be eligible for a sales charge waiver. Each fund may waive the sales
           charge for investors in other situations as well. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU'RE INVESTING $1 MILLION OR MORE, either as a lump sum or
           through one of the sales charge reduction features described above,
           you may be eligible to buy Class A shares without a sales charge
           ("Large Order NAV Purchase Privilege"). However, you may be charged
           a contingent deferred sales charge (CDSC) of 1.00% on any shares you
           sell within 12 months of owning them and a similar charge of 0.50%
           on shares you sell within the following six months. This CDSC is
           waived under certain circumstances (see "Policies You Should Know
           About"). Your financial advisor or Shareholder Services can answer
           your questions and help you determine if you're eligible.


           Class B shares

           Class B shares may make sense for long-term investors who prefer to
           see all of their investment go to work right away and can accept
           somewhat higher annual expenses. Please note, however, that since
           not all DWS funds offer Class B shares, exchange options may be
           limited.

           With Class B shares, you pay no up-front sales charge to a fund.
           Class B shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. This means the annual expenses for
           Class B shares are somewhat higher (and their performance
           correspondingly lower) compared to Class A shares. However, unlike
           Class A shares, your entire investment


                                                    Choosing a Share Class  | 37
<PAGE>

           goes to work immediately. After six years, Class B shares
           automatically convert on a tax-free basis to Class A shares, which
           has the net effect of lowering the annual expenses from the seventh
           year on.

           Class B shares have a CDSC. This charge declines over the years you
           own shares and disappears completely after six years of ownership.
           But for any shares you sell within those six years, you may be
           charged as follows:


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
    YEAR AFTER YOU BOUGHT SHARES               CDSC ON SHARES YOU SELL
--------------------------------------------------------------------------------
<S>                                                     <C>
  First year                                            4.00%
--------------------------------------------------------------------------------
  Second or third year                                  3.00
--------------------------------------------------------------------------------
  Fourth or fifth year                                  2.00
--------------------------------------------------------------------------------
  Sixth year                                            1.00
--------------------------------------------------------------------------------
  Seventh year and later               None (automatic conversion to Class A)
--------------------------------------------------------------------------------
</TABLE>


           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.


           While Class B shares don't have any front-end sales charge, their
           higher annual expenses mean that over the years you could end up
           paying more than the equivalent of the maximum allowable front-end
           sales charge.

           If you are thinking of making a large purchase in Class B shares or
           if you already own a large amount of Class A shares of a fund or
           other DWS funds, it may be more cost efficient to purchase Class A
           shares instead. Orders to purchase Class B shares of $100,000 or
           more will be declined with the exception of orders received from
           financial representatives acting for clients whose shares are held
           in an omnibus account and certain employer-sponsored employee
           benefit plans. You should consult with your financial advisor to
           determine which class of shares is appropriate for you.


38 | Choosing a Share Class
<PAGE>

           Class C shares

           Class C shares may appeal to investors who plan to sell some or all
           of their shares within six years of buying them or who aren't
           certain of their investment time horizon.

           With Class C shares, you pay no up-front sales charge to a fund.
           Class C shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. Because of these fees, the annual
           expenses for Class C shares are similar to those of Class B shares,
           but higher than those for Class A shares (and the performance of
           Class C shares is correspondingly lower than that of Class A
           shares).

           Unlike Class B shares, Class C shares do NOT automatically convert
           to Class A shares after six years, so they continue to have higher
           annual expenses.

           Class C shares have a CDSC, but only on shares you sell within one
           year of buying them:


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
   YEAR AFTER YOU BOUGHT SHARES        CDSC ON SHARES YOU SELL
--------------------------------------------------------------------------------
<S>                                             <C>
  First year                                    1.00%
--------------------------------------------------------------------------------
  Second year and later                         None
--------------------------------------------------------------------------------
</TABLE>


           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.


           While Class C shares do not have an up-front sales charge, their
           higher annual expenses mean that, over the years, you could end up
           paying more than the equivalent of the maximum allowable up-front
           sales charge.

           Orders to purchase Class C shares of $500,000 or more will be
           declined with the exception of orders received from financial
           representatives acting for clients whose shares are held in an
           omnibus account and certain employer-sponsored employee benefit
           plans.


                                                    Choosing a Share Class  | 39
<PAGE>

           Class R shares

           Class R shares have no initial sales charge or deferred sales
           charge. Class R shares have a 12b-1 plan, under which a distribution
           fee of 0.25% and a shareholder servicing fee of up to 0.25% are
           deducted from class assets each year. Because distribution fees are
           continuous in nature, these fees may, over time, increase the cost
           of your investment and may cost you more than paying other types of
           sales charges.


           Eligibility requirements

           YOU MAY BUY CLASS R SHARES IF you are a participant in any of the
           following types of employer-sponsored plans that offer
           Class R shares of the fund:

           -  All section 401(a) and 457 plans

           -  Certain section 403(b)(7) plans

           -  401(k), profit sharing, money purchase pension and defined
              benefit plans

           -  Non-qualified deferred compensation plans

40 | Choosing a Share Class
<PAGE>

How to BUY Class A, B and C Shares

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
 FIRST INVESTMENT                              ADDITIONAL INVESTMENTS
-----------------------------------------------------------------------------------------
<S>                                            <C>
 $1,000 or more for regular accounts           $50 or more for regular accounts and
 $500 or more for IRAs                         IRA accounts
 $500 or more with an Automatic                $50 or more with an Automatic
 Investment Plan                               Investment Plan
-----------------------------------------------------------------------------------------
 THROUGH A FINANCIAL ADVISOR
 -  Contact your advisor using the             -  Contact your advisor using the
    method that's most convenient for you         method that's most convenient for you
-----------------------------------------------------------------------------------------
 BY MAIL OR EXPRESS MAIL (SEE BELOW)
 -  Fill out and sign an application           -  Send a check made out to "DWS
                                                  Scudder" and a DWS Scudder
 -  Send it to us at the appropriate              investment slip to us at the
    address, along with an investment             appropriate address below
    check
                                               -  If you don't have an investment slip,
                                                  simply include a letter with your
                                                  name, account number, the full name
                                                  of the fund and the share class and
                                                  your investment instructions
-----------------------------------------------------------------------------------------
 BY WIRE
 -  Call (800) 621-1048 for instructions       -  Call (800) 621-1048 for instructions
-----------------------------------------------------------------------------------------
 BY PHONE
 Not available                                 -  Call (800) 621-1048 for instructions
-----------------------------------------------------------------------------------------
 WITH AN AUTOMATIC INVESTMENT PLAN
 -  Fill in the application and include a      -  Call (800) 621-1048 for instructions
    voided check
-----------------------------------------------------------------------------------------
 USING QuickBuy
 Not available                                 -  Call (800) 621-1048 to make sure
                                                  QuickBuy is set up on your account; if
                                                  it is, you can request a transfer from
                                                  your bank account of any amount
                                                  between $50 and $250,000
-----------------------------------------------------------------------------------------
 ON THE INTERNET
 Not available                                 -  Go to www.dws-scudder.com and
                                                  register

                                               -  Follow the instructions for buying
                                                  shares with money from your bank
                                                  account
-----------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
REGULAR MAIL:

First Investment: DWS Scudder, PO Box 219356, Kansas City, MO 64121-9356
Additional Investments: DWS Scudder, PO Box 219154, Kansas City, MO 64121-9154

EXPRESS, REGISTERED OR CERTIFIED MAIL:

DWS Scudder, 210 West 10th Street, Kansas City, MO 64105-1614


                                        How to Buy Class A, B and C Shares  | 41
<PAGE>

How to EXCHANGE or SELL Class A, B and C Shares

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
 EXCHANGING INTO ANOTHER FUND                   SELLING SHARES
-----------------------------------------------------------------------------------------
<S>                                            <C>
 -  Exchanges into existing accounts:          Some transactions, including most for
    $50 minimum per fund                       over $100,000, can only be ordered in
                                               writing with a signature guarantee;
 -  Exchanges into new accounts:               please see "Signature Guarantee"
    $1,000 minimum per fund
    $500 minimum for IRAs
-----------------------------------------------------------------------------------------
 THROUGH A FINANCIAL ADVISOR
 -  Contact your advisor by the method         -  Contact your advisor by the method
    that's most convenient for you                that's most convenient for you
-----------------------------------------------------------------------------------------
 BY PHONE OR WIRE
 -  Call (800) 621-1048 for instructions       -  Call (800) 621-1048 for instructions
-----------------------------------------------------------------------------------------
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)
 Write a letter that includes:                 Write a letter that includes:

 -  the fund, class and account number         -  the fund, class and account number
    you're exchanging out of                      from which you want to sell shares

 -  the dollar amount or number of shares      -  the dollar amount or number of shares
    you want to exchange                          you want to sell

 -  the name and class of the fund you         -  your name(s), signature(s) and
    want to exchange into                         address, as they appear on your
                                                  account
 -  your name(s), signature(s) and
    address, as they appear on your            -  a daytime telephone number
    account

 -  a daytime telephone number
-----------------------------------------------------------------------------------------
 WITH AN AUTOMATIC EXCHANGE PLAN                WITH AN AUTOMATIC WITHDRAWAL PLAN
 -  To set up regular exchanges from a         -  Call (800) 621-1048 (minimum $50)
    fund account, call (800) 621-1048
-----------------------------------------------------------------------------------------
 USING QuickSell
 Not available                                 -  Call (800) 621-1048 to make sure
                                                  QuickSell is set up on your account; if
                                                  it is, you can request a transfer to your
                                                  bank account of any amount between
                                                  $50 and $250,000
-----------------------------------------------------------------------------------------
 ON THE INTERNET
 -  Register at www.dws-scudder.com            -  Register at www.dws-scudder.com
    and log in and then follow the                and log in and then follow the
    instructions for making on-line               instructions for making on-line
    exchanges                                     redemptions
-----------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------

<TABLE>
<S>               <C>
TO REACH US:      WEB SITE: www.dws-scudder.com
                  TELEPHONE REPRESENTATIVE: (800) 621-1048, M-F, 9 a.m. - 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m. - 6 p.m. ET
</TABLE>



42 | How to Exchange or Sell Class A, B and C Shares
<PAGE>

How to BUY and SELL Class R Shares

           If your plan sponsor has selected Class R shares as an investment
           option, you may buy Class R shares through your securities dealer or
           through any financial institution that is authorized to act as a
           shareholder servicing agent ("financial advisor"). Contact them for
           details on how to enter and pay for your order. Financial advisors
           include brokers, financial representatives or any other bank, dealer
           or other institution that has a sub-shareholder servicing agreement
           with the funds. Financial advisors may charge additional fees to
           investors for those services not otherwise included in their
           sub-distribution or servicing agreement, such as cash management or
           special trust or retirement investment reporting. In addition, the
           Advisor or administrator may provide compensation to financial
           advisors for distribution, administrative and promotional services.

           There are no minimum investments with respect to Class R shares.

           Instructions for buying and selling shares must generally be
           submitted by your employer-sponsored plan, not by plan participants
           for whose benefit the shares are held. Please contact your financial
           advisor for more information on how to open a fund account.


           Financial intermediary support payments


           The Advisor, DWS Scudder Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to each fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/or servicing of fund investors and fund
           shares ("revenue sharing"). Such revenue sharing payments are in
           addition to any distribution or service fees payable under any Rule
           12b-1 or service plan of each fund, any record keeping/sub-transfer
           agency/networking fees payable by each fund (generally through the
           Distributor or an affiliate) and/or the Distributor to certain
           financial advisors for performing such services and any sales
           charges, commissions, non-cash compensation arrangements expressly
           permitted under applicable rules of the Financial Industry
           Regulatory Authority ("FINRA") or other concessions described in the
           fee



                                        How to Buy and Sell Class R Shares  | 43
<PAGE>


           table or elsewhere in this prospectus or the Statement of Additional
           Information as payable to all financial advisors. For example, the
           Advisor, the Distributor and/or their affiliates may compensate
           financial advisors for providing a fund with "shelf space" or access
           to a third party platform or fund offering list or other marketing
           programs, including, without limitation, inclusion of the fund on
           preferred or recommended sales lists, mutual fund "supermarket"
           platforms and other formal sales programs; granting the Distributor
           access to the financial advisor's sales force; granting the
           Distributor access to the financial advisor's conferences and
           meetings; assistance in training and educating the financial
           advisor's personnel; and obtaining other forms of marketing support.



           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of each fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.

           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS Fund shares or the retention
           and/or servicing of investors and DWS Fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of each fund serviced and maintained by the financial
           advisor, .10% to .25% of sales of each fund attributable to the
           financial advisor, a flat fee of $12,500 up to $500,000, or any
           combination thereof. These amounts are subject to change at the
           discretion of the Advisor, the Distributor and/or their affiliates.
           Receipt of, or the prospect of receiving, this additional
           compensation may influence your financial advisor's recommendation
           of each fund or of any particular share class of each fund. You
           should review your financial advisor's compensation disclosure
           and/or talk to your financial advisor to obtain more information on
           how this compensation may have influenced your financial advisor's
           recommendation of each fund. Additional information regarding these
           revenue sharing


44 | How to Buy and Sell Class R Shares
<PAGE>

           payments is included in each fund's Statement of Additional
           Information, which is available to you on request at no charge (see
           the back cover of this prospectus for more information on how to
           request a copy of the Statement of Additional Information).

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Scudder branded retirement plan platform (the "Platform") with the
           level of revenue sharing payments being based upon sales of both the
           DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for each fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of broker-dealers to
           execute portfolio transactions for each fund. In addition, the
           Advisor, the Distributor and/or their affiliates will not use fund
           brokerage to pay for their obligation to provide additional
           compensation to financial advisors as described above.


POLICIES YOU SHOULD KNOW ABOUT


           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.



                                            Policies You Should Know About  | 45
<PAGE>

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by a fund. Please note that a
           financial advisor may charge fees separate from those charged by a
           fund and may be compensated by a fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           621-1048.


           Policies about transactions

           EACH FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. Each fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.


46 | Policies You Should Know About
<PAGE>

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by each fund, then we may reject your application and order.

           Each fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated, less any applicable sales charge.

           If we are unable to verify your identity within time frames
           established by each fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in
           each fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           IRA ROLLOVERS. You may complete a direct rollover from an
           employer-sponsored plan offering Class R shares to an IRA account by
           reinvesting up to the full amount of your distribution in Class A
           shares of any DWS fund at net asset value. Subsequent purchases of
           Class A shares will be made at the public offering price as
           described in the prospectus for Class A shares. Please note that if
           you terminate your participation in an employer-sponsored plan and
           transfer all of your Class R shares, you will lose the privilege of
           purchasing Class R shares in the future. Rollovers to a DWS Class R
           share IRA are not permitted.

           INITIAL PURCHASE. The minimum initial investment for Class A, B and
           C shares is $1,000, except for investments on behalf of participants
           in certain fee-based and wrap programs offered through certain
           financial intermediaries approved by the Advisor, for which there is
           no minimum initial investment; and IRAs, for which the minimum
           initial investment is $500 per account. The


                                            Policies You Should Know About  | 47
<PAGE>

           minimum initial investment is $500 per account if you establish an
           automatic investment plan. Group retirement plans and certain other
           accounts have similar or lower minimum share balance requirements.


           SUB-MINIMUM BALANCES. Each fund may close your account and send you
           the proceeds if your balance falls below $1,000 ($250 for retirement
           accounts and $500 for accounts with an Automatic Investment Plan
           funded with $50 or more per month in subsequent investments). We
           will give you 60 days' notice (90 days for retirement accounts) so
           you can either increase your balance or close your account (these
           policies don't apply to investors with $100,000 or more in DWS fund
           shares, investors in certain fee-based and wrap programs offered
           through certain financial intermediaries approved by the Advisor, or
           group retirement plans and certain other accounts having lower
           minimum share balance requirements).


           SUBSEQUENT INVESTMENTS. The minimum subsequent investment is $50.
           However, there is no minimum investment requirement for subsequent
           investments in Class A shares on behalf of participants in certain
           fee-based and wrap programs offered through certain financial
           intermediaries approved by the Advisor.


           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of a fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if a fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by a fund (e.g.,
           "time zone arbitrage"). Each fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.


           Pursuant to its policies, each fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). Each fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior


48 | Policies You Should Know About
<PAGE>

           notice. For example, a fund may in its discretion reject or cancel a
           purchase or an exchange order even if the transaction is not subject
           to the specific roundtrip transaction limitation described below if
           the Advisor believes that there appears to be a pattern of
           short-term or excessive trading activity by a shareholder or deems
           any other trading activity harmful or disruptive to a fund. Each
           fund, through its Advisor and Transfer Agent, will measure
           short-term and excessive trading by the number of roundtrip
           transactions within a shareholder's account during a rolling
           12-month period. A "roundtrip" transaction is defined as any
           combination of purchase and redemption activity (including
           exchanges) of the same fund's shares. Each fund may take other
           trading activity into account if a fund believes such activity is of
           an amount or frequency that may be harmful to long-term shareholders
           or disruptive to portfolio management.

           Shareholders are limited to four roundtrip transactions in the same
           DWS Fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS Fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS Fund. Each fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS Fund are not affected by the four roundtrip
           transaction limitation, but all redemptions remain subject to each
           fund's redemption fee policy (see "Redemption fees" described
           below).

           The Advisor may make exceptions to the roundtrip transaction policy
           for certain types of transactions if in its opinion the transactions
           do not represent short-term or excessive trading or are not abusive
           or harmful to a fund, such as, but not limited to, systematic
           transactions, required minimum retirement distributions,
           transactions initiated by a fund or administrator and transactions
           by certain qualified fund-of-fund(s).


           In certain circumstances where shareholders hold shares of a fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of a fund. A financial intermediary's
           policy relating to short-term or excessive trading



                                            Policies You Should Know About  | 49
<PAGE>

           may be more or less restrictive than the DWS Funds' policy, may
           permit certain transactions not permitted by the DWS Funds'
           policies, or prohibit transactions not subject to the DWS Funds'
           policies.


           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of a fund that provide a substantially similar level of
           protection for each fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.


           In addition, if a fund invests some portion of its assets in foreign
           securities, it has adopted certain fair valuation practices intended
           to protect the fund from "time zone arbitrage" with respect to its
           foreign securities holdings and other trading practices that seek to
           exploit variations in portfolio valuation that arise from the nature
           of the securities held by a fund. (See "How each fund calculates
           share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying
           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of a fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in a fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

           Each fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. Each fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value, without
           regard to the effect of any contingent deferred sales charge; any
           contingent deferred sales charge is also assessed


50 | Policies You Should Know About
<PAGE>

           on the total redemption amount without regard to the assessment of
           the 2% redemption fee) on all fund shares redeemed or exchanged
           within 15 days of buying them (either by purchase or exchange). The
           redemption fee is paid directly to each fund and is designed to
           encourage long-term investment and to offset transaction and other
           costs associated with short-term or excessive trading. For purposes
           of determining whether the redemption fee applies, shares held the
           longest time will be treated as being redeemed first and shares held
           the shortest time will be treated as being redeemed last.

           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with a fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally netted
           against one another and placed on an aggregate basis; consequently
           the identities of the individuals on whose behalf the transactions
           are placed generally are not known to a fund. For this reason, each
           fund has undertaken to notify financial intermediaries of their
           obligation to assess the redemption fee on customer accounts and to
           collect and remit the proceeds to each fund. However, due to
           operational requirements, the intermediaries' methods for tracking
           and calculating the fee may be inadequate or differ in some respects
           from each fund's. Subject to approval by the Advisor or each fund's
           Board, intermediaries who transact business on an omnibus basis may
           implement the redemption fees according to their own operational
           guidelines (which may be different than the funds' policies) and
           remit the fees to the funds.

           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of participants in certain group retirement
           plans and financial intermediaries whose processing systems are
           incapable of properly applying the redemption fee to underlying
           shareholders; (iii) transactions on behalf of a shareholder to
           return any excess IRA contributions to the shareholder; (iv)
           transactions on behalf of a shareholder to effect a required minimum
           distribution on an IRA; (v) transactions on behalf of any mutual
           fund advised by the Advisor and its affiliates (e.g., "funds of
           funds") or, in the case of a master/feeder relationship, redemptions
           by the feeder fund from the master portfolio; (vi)


                                            Policies You Should Know About  | 51
<PAGE>


           transactions on behalf of certain unaffiliated mutual funds
           operating as funds of funds; (vii) transactions following death or
           disability of any registered shareholder, beneficial owner or
           grantor of a living trust with respect to shares purchased before
           death or disability; (viii) transactions involving hardship of any
           registered shareholder; (ix) systematic transactions with
           pre-defined trade dates for purchases, exchanges or redemptions,
           such as automatic account rebalancing, or loan origination and
           repayments; (x) transactions involving shares purchased through the
           reinvestment of dividends or other distributions; (xi) transactions
           involving shares transferred from another account in the same fund
           or converted from another class of the same fund (the redemption fee
           period will carry over to the acquired shares); (xii) transactions
           initiated by a fund or administrator (e.g., redemptions for not
           meeting account minimums, to pay account fees funded by share
           redemptions, or in the event of the liquidation or merger of the
           fund); or (xiii) transactions in cases when there are legal or
           contractual limitations or restrictions on the imposition of the
           redemption fee (as determined by a fund or its agents in their sole
           discretion). It is the policy of the DWS funds to permit approved
           fund platform providers to execute transactions within the funds
           without the imposition of a redemption fee if such providers have
           implemented alternative measures that are determined by the Advisor
           to provide controls on short-term and excessive trading that are
           comparable to the DWS funds' policies.


           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Scudder. You can also use this service to make exchanges and
           sell shares.

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 621-1048.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Scudder Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-SCUDDER.COM to get up-to-date information, review
balances or even place orders for exchanges.

52 | Policies You Should Know About
<PAGE>

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 621-1048 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           EACH FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. Each fund can only send wires of $1,000 or more and accept
           wires of $50 or more.


           EACH FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by check,
           bank or Federal Funds wire transfer or by electronic bank transfer.
           Please note that a fund does not accept cash, money orders,
           traveler's checks, starter checks, third party checks (except checks
           for retirement plan asset transfers and rollovers or for Uniform
           Gifts to Minors Act/Uniform Transfers to Minors Act accounts),
           checks drawn on foreign banks or checks issued by credit card
           companies or Internet-based companies. Thus, subject to the
           foregoing exceptions for certain third party checks, checks that are
           otherwise permissible must be drawn by the account holder on a
           domestic bank and must be payable to a fund.


           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.

                                            Policies You Should Know About  | 53
<PAGE>

           wired to a bank account that is already on file with us, you don't
           need a signature guarantee. Also, generally you don't need a
           signature guarantee for an exchange, although we may require one in
           certain other circumstances.


           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.


           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           621-1048 or contact your financial advisor for more information.

           WHEN YOU SELL SHARES THAT HAVE A CDSC, we calculate the CDSC as a
           percentage of what you paid for the shares or what you are selling
           them for - whichever results in the lower charge to you. In
           processing orders to sell shares, the shares with the lowest CDSC
           are sold first. Exchanges from one fund into another don't affect
           CDSCs; for each investment you make, the date you first bought
           shares is the date we use to calculate a CDSC on that particular
           investment.

           There are certain cases in which you may be exempt from a CDSC.
           These include:

           -  the death or disability of an account owner (including a joint
              owner). This waiver applies only under certain conditions. Please
              contact your financial advisor or Shareholder Services to
              determine if the conditions exist


           -  withdrawals made through an automatic withdrawal plan up to a
              maximum of 12% per year of the net asset value of the account


           -  withdrawals related to certain retirement or benefit plans

           -  redemptions for certain loan advances, hardship provisions or
              returns of excess contributions from retirement plans

           -  for Class A shares purchased through the Large Order NAV Purchase
              Privilege, redemption of shares whose dealer of record at the
              time of the investment notifies the Distributor that the dealer
              waives the applicable commission

54 | Policies You Should Know About
<PAGE>

           -  for Class C shares, redemption of shares purchased through a
              dealer-sponsored asset allocation program maintained on an
              omnibus record-keeping system, provided the dealer of record has
              waived the advance of the first year distribution and service
              fees applicable to such shares and has agreed to receive such
              fees quarterly

           In each of these cases, there are a number of additional provisions
           that apply in order to be eligible for a CDSC waiver. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU SELL SHARES IN A DWS FUND AND THEN DECIDE TO INVEST WITH DWS
           SCUDDER AGAIN WITHIN SIX MONTHS, you may be able to take advantage
           of the "reinstatement feature." With this feature, you can put your
           money back into the same class of a DWS fund at its current NAV and,
           for purposes of a sales charge, it will be treated as if it had
           never left DWS Scudder.

           You'll be reimbursed (in the form of fund shares) for any CDSC you
           paid when you sold. Future CDSC calculations will be based on your
           original investment date, rather than your reinstatement date. There
           is also an option that lets investors who sold Class B shares buy
           Class A shares (if available) with no sales charge, although they
           won't be reimbursed for any CDSC they paid. You can only use the
           reinstatement feature once for any given group of shares. To take
           advantage of this feature, contact Shareholder Services or your
           financial advisor.

           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are other
           circumstances when it could be longer: When you are selling shares
           you bought recently by check (redemption proceeds from such a sale
           are unavailable until the check has cleared), when you make
           purchases by ACH (the funds will be placed under a 10 calendar day
           hold to ensure good funds) or when unusual circumstances prompt the
           SEC to allow further delays. Certain expedited redemption processes
           may also be delayed when you are selling recently purchased shares
           or in the event of closing of the Federal Reserve Bank's wire
           payment system. In addition, each fund reserves the right to suspend
           or postpone redemptions as permitted pursuant to
           Section 22(e) of the Investment Company Act of 1940. Generally,
           those circumstances are when 1) the New York Stock Exchange is
           closed other than customary weekend or holiday


                                            Policies You Should Know About  | 55
<PAGE>

           closings; 2) trading on the New York Stock Exchange is restricted;
           3) an emergency exists which makes the disposal of securities owned
           by a fund or the fair determination of the value of a fund's net
           assets not reasonably practicable; or 4) the SEC, by order, permits
           the suspension of the right of redemption. Redemption payments by
           wire may also be delayed in the event of a non-routine closure of
           the Federal Reserve wire payment system. For additional rights
           reserved by each fund, please see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


           How each fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>             <C>                                          <C>
                TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy shares is the NAV, although for Class A
           shares it will be adjusted to allow for any applicable sales charge
           (see "Choosing a Share Class"). The price at which you sell shares
           is also the NAV, although a CDSC may be taken out of the proceeds
           (see "Choosing a Share Class").


           EACH FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.


           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by a fund's Board, such as a
           fair valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of a fund's portfolio is believed to have been materially
           affected by a significant event, such as a natural disaster, an
           economic event like a bankruptcy filing, or a substantial
           fluctuation in domestic or foreign markets that has occurred between
           the close of the exchange or market on which the security is
           principally traded (for example, a foreign exchange or market) and
           the close of the New York Stock Exchange. In such a case, a fund's
           value for a security is likely to


56 | Policies You Should Know About
<PAGE>

           be different from the last quoted market price or pricing service
           information. In addition, due to the subjective and variable nature
           of fair value pricing, it is possible that the value determined for
           a particular asset may be materially different from the value
           realized upon such asset's sale. It is expected that the greater the
           percentage of fund assets that is invested in non-US securities, the
           more extensive will be a fund's use of fair value pricing. This is
           intended to reduce a fund's exposure to "time zone arbitrage" and
           other harmful trading practices. (See "Market timing policies and
           procedures.")

           TO THE EXTENT THAT A FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when a
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change significantly on days when the
           New York Stock Exchange is closed and you cannot buy or sell fund
           shares. Price changes in the securities a fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)


           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              as federal income tax if we have been notified by the IRS that
              you are subject to backup withholding or if you fail to provide
              us with a correct taxpayer ID number and certain certifications
              or certification that you are exempt from backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

                                            Policies You Should Know About  | 57
<PAGE>


           -  refuse, cancel, limit or rescind any purchase or exchange order,
              without prior notice; freeze any account (meaning you will not be
              able to purchase fund shares in your account); suspend account
              services; and/or involuntarily redeem your account if we think
              that the account is being used for fraudulent or illegal
              purposes; one or more of these actions will be taken when, at our
              sole discretion, they are deemed to be in a fund's best interests
              or when a fund is requested or compelled to do so by governmental
              authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less any applicable sales charge or redemption fee); you
              may recognize a gain or loss on the redemption of your fund
              shares and incur a tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; a fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of a fund's net assets, whichever is less


           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust a fund's investment minimums
              at any time)


58 | Policies You Should Know About
<PAGE>

UNDERSTANDING DISTRIBUTIONS AND TAXES

           Each fund intends to distribute to its shareholders virtually all of
           its net earnings. Each fund can earn money in two ways: by receiving
           interest, dividends or other income from securities it holds and by
           selling securities for more than it paid for them. (Each fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) Each fund may not always pay a
           dividend or distribution for a given period.

           EACH FUND INTENDS TO PAY DISTRIBUTIONS to its shareholders annually
           in November or December, and, if necessary, may do so at other times
           as well.

           Dividends or distributions declared to shareholders of record in the
           last quarter of a given calendar year are treated for federal income
           tax purposes as if they were received on December 31 of that year,
           provided such dividends or distributions are paid by the end of the
           following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable. However, dividends and
           distributions received by retirement plans qualifying for tax
           exemption under federal income tax laws generally will not be
           taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different fund. Tell us your preference
           on your application. If you don't indicate a preference, your
           dividends and distributions will all be reinvested in shares of the
           fund without a sales charge (if applicable). Distributions are
           treated the same for federal income tax purposes whether you receive
           them in cash or reinvest them in additional shares. For
           employer-sponsored qualified plans, and retirement plans,
           reinvestment (at NAV) is the only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.

                                     Understanding Distributions and Taxes  | 59
<PAGE>

           gain or loss. The gain or loss will be long-term or short-term
           depending on how long you owned the shares that were sold. For
           federal income tax purposes, an exchange is treated the same as a
           sale.

           THE FEDERAL INCOME TAX STATUS of a fund's earnings you receive and
           your own fund transactions generally depend on their type:


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
GENERALLY TAXED AT LONG-TERM                    GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                             INCOME RATES:
-------------------------------------------------------------------------------
<S>                                             <C>
DISTRIBUTIONS FROM A FUND
- gains from the sale of                        -  gains from the sale of
  securities held (or treated as                   securities held by a fund for
  held) by a fund for more than                    one year or less
  one year
                                                -  all other taxable income
- qualified dividend income
-------------------------------------------------------------------------------
TRANSACTIONS INVOLVING FUND SHARES

- gains from selling fund                       -  gains from selling fund
  shares held for more than                        shares held for one year or
  one year                                         less
-------------------------------------------------------------------------------
</TABLE>


           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY A FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, a fund's yield
           on those securities would generally be decreased. Each fund may
           elect to pass through to its shareholders a credit or deduction for
           foreign taxes it has paid if at the end of its year more than 50% of
           a fund's total assets are stocks or securities of foreign
           corporations. In addition, any investments in foreign securities or
           foreign currencies may increase or accelerate a fund's recognition
           of ordinary income and may affect the timing or amount of the fund's
           distributions. If you invest in a fund through a taxable account,
           your after-tax return could be negatively impacted.

           To the extent that a fund invests in certain debt obligations or
           certain other securities, investments in these obligations or
           securities may cause a fund to recognize taxable income in excess of
           the cash generated by such obligations. Thus, a fund could be
           required at times to liquidate other investments in order to satisfy
           its distribution requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by a fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital


60 | Understanding Distributions and Taxes
<PAGE>

           gain rates. Qualified dividend income generally includes dividends
           from domestic and some foreign corporations. It does not include
           income from investments in debt securities or, generally, from
           REITs. In addition, a fund must meet certain holding period and
           other requirements with respect to the dividend-paying stocks in its
           portfolio and the shareholder must meet certain holding period and
           other requirements with respect to a fund's shares for the lower tax
           rates to apply.


           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been reduced to 15%. For taxable years beginning on or after January
           1, 2011, the long-term capital gain rate is scheduled to return to
           20%. For more information, see the Statement of Additional
           Information, under "Taxes."


           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE A FUND PAYS A DIVIDEND, you'll be getting
           some of your investment back as a taxable dividend. You can avoid
           this by investing after a fund declares a dividend. In
           tax-advantaged retirement accounts you do not need to worry about
           this.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains, but may be eligible for a dividends-received
           deduction for a portion of the income dividends they receive from a
           fund, provided certain holding period and other requirements are
           met.

           The above discussion is applicable to shareholders who are US
           persons. If you are a non-US person, please consult your own tax
           advisor with respect to the US tax consequences to you of an
           investment in a fund.


                                     Understanding Distributions and Taxes  | 61
<PAGE>

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary


           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The tables also assume that all dividends and
           distributions are reinvested and that Class B shares convert to
           Class A shares after six years. The annual fund expense ratios shown
           are net of any contractual fee waivers or expense reimbursements, if
           any, for the period of the contractual commitment. The tables
           reflect the maximum initial sales charge, if any, but do not reflect
           any contingent deferred sales charge or redemption fees, if any,
           which may be payable upon redemption. If contingent deferred sales
           charges or redemption fees were shown, the "Hypothetical Year-End
           Balance After Fees and Expenses" amounts shown would be lower and
           the "Annual Fees and Expenses" amounts shown would be higher. Also,
           please note that if you are investing through a third party
           provider, that provider may have fees and expenses separate from
           those of the fund that are not reflected here. Mutual fund fees and
           expenses fluctuate over time and actual expenses may be higher or
           lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.



62 | Appendix
<PAGE>

DWS Global Thematic Fund - Class A


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               5.75%                   $10,000                            5%
------------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
------------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.41%             -2.37%       $  9,763.36        $   710.28
------------------------------------------------------------------------------------------------
   2           10.25%        1.41%              1.14%       $ 10,113.86        $   140.13
------------------------------------------------------------------------------------------------
   3           15.76%        1.41%              4.77%       $ 10,476.95        $   145.17
------------------------------------------------------------------------------------------------
   4           21.55%        1.41%              8.53%       $ 10,853.07        $   150.38
------------------------------------------------------------------------------------------------
   5           27.63%        1.41%             12.43%       $ 11,242.70        $   155.78
------------------------------------------------------------------------------------------------
   6           34.01%        1.41%             16.46%       $ 11,646.31        $   161.37
------------------------------------------------------------------------------------------------
   7           40.71%        1.41%             20.64%       $ 12,064.41        $   167.16
------------------------------------------------------------------------------------------------
   8           47.75%        1.41%             24.98%       $ 12,497.53        $   173.16
------------------------------------------------------------------------------------------------
   9           55.13%        1.41%             29.46%       $ 12,946.19        $   179.38
------------------------------------------------------------------------------------------------
  10           62.89%        1.41%             34.11%       $ 13,410.95        $   185.82
------------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 2,168.63
------------------------------------------------------------------------------------------------
</TABLE>



DWS Global Thematic Fund - Class B


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
------------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
------------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.28%              2.72%       $ 10,272.00        $   231.10
------------------------------------------------------------------------------------------------
   2           10.25%        2.28%              5.51%       $ 10,551.40        $   237.39
------------------------------------------------------------------------------------------------
   3           15.76%        2.28%              8.38%       $ 10,838.40        $   243.84
------------------------------------------------------------------------------------------------
   4           21.55%        2.28%             11.33%       $ 11,133.20        $   250.48
------------------------------------------------------------------------------------------------
   5           27.63%        2.28%             14.36%       $ 11,436.02        $   257.29
------------------------------------------------------------------------------------------------
   6           34.01%        2.28%             17.47%       $ 11,747.08        $   264.29
------------------------------------------------------------------------------------------------
   7           40.71%        1.41%             21.69%       $ 12,168.80        $   168.61
------------------------------------------------------------------------------------------------
   8           47.75%        1.41%             26.06%       $ 12,605.66        $   174.66
------------------------------------------------------------------------------------------------
   9           55.13%        1.41%             30.58%       $ 13,058.21        $   180.93
------------------------------------------------------------------------------------------------
  10           62.89%        1.41%             35.27%       $ 13,527.00        $   187.43
------------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 2,196.02
------------------------------------------------------------------------------------------------
</TABLE>




                                                                  Appendix  | 63
<PAGE>

DWS Global Thematic Fund - Class C


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
------------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
------------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.17%              2.83%       $ 10,283.00        $   220.07
------------------------------------------------------------------------------------------------
   2           10.25%        2.17%              5.74%       $ 10,574.01        $   226.30
------------------------------------------------------------------------------------------------
   3           15.76%        2.17%              8.73%       $ 10,873.25        $   232.70
------------------------------------------------------------------------------------------------
   4           21.55%        2.17%             11.81%       $ 11,180.97        $   239.29
------------------------------------------------------------------------------------------------
   5           27.63%        2.17%             14.97%       $ 11,497.39        $   246.06
------------------------------------------------------------------------------------------------
   6           34.01%        2.17%             18.23%       $ 11,822.76        $   253.02
------------------------------------------------------------------------------------------------
   7           40.71%        2.17%             21.57%       $ 12,157.35        $   260.18
------------------------------------------------------------------------------------------------
   8           47.75%        2.17%             25.01%       $ 12,501.40        $   267.55
------------------------------------------------------------------------------------------------
   9           55.13%        2.17%             28.55%       $ 12,855.19        $   275.12
------------------------------------------------------------------------------------------------
  10           62.89%        2.17%             32.19%       $ 13,218.99        $   282.90
------------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 2,503.19
------------------------------------------------------------------------------------------------
</TABLE>



DWS Global Thematic Fund - Class R


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
------------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
------------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.69%              3.31%       $ 10,331.00        $   171.80
------------------------------------------------------------------------------------------------
   2           10.25%        1.69%              6.73%       $ 10,672.96        $   177.48
------------------------------------------------------------------------------------------------
   3           15.76%        1.69%             10.26%       $ 11,026.23        $   183.36
------------------------------------------------------------------------------------------------
   4           21.55%        1.69%             13.91%       $ 11,391.20        $   189.43
------------------------------------------------------------------------------------------------
   5           27.63%        1.69%             17.68%       $ 11,768.25        $   195.70
------------------------------------------------------------------------------------------------
   6           34.01%        1.69%             21.58%       $ 12,157.78        $   202.17
------------------------------------------------------------------------------------------------
   7           40.71%        1.69%             25.60%       $ 12,560.20        $   208.87
------------------------------------------------------------------------------------------------
   8           47.75%        1.69%             29.76%       $ 12,975.94        $   215.78
------------------------------------------------------------------------------------------------
   9           55.13%        1.69%             34.05%       $ 13,405.45        $   222.92
------------------------------------------------------------------------------------------------
  10           62.89%        1.69%             38.49%       $ 13,849.17        $   230.30
------------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 1,997.81
------------------------------------------------------------------------------------------------
</TABLE>




64 | Appendix
<PAGE>

DWS International Fund - Class A


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               5.75%                   $10,000                            5%
------------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
------------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.23%             -2.20%       $  9,780.32        $   693.11
------------------------------------------------------------------------------------------------
   2           10.25%        1.23%              1.49%       $ 10,149.04        $   122.57
------------------------------------------------------------------------------------------------
   3           15.76%        1.23%              5.32%       $ 10,531.66        $   127.19
------------------------------------------------------------------------------------------------
   4           21.55%        1.23%              9.29%       $ 10,928.70        $   131.98
------------------------------------------------------------------------------------------------
   5           27.63%        1.23%             13.41%       $ 11,340.72        $   136.96
------------------------------------------------------------------------------------------------
   6           34.01%        1.23%             17.68%       $ 11,768.26        $   142.12
------------------------------------------------------------------------------------------------
   7           40.71%        1.23%             22.12%       $ 12,211.92        $   147.48
------------------------------------------------------------------------------------------------
   8           47.75%        1.23%             26.72%       $ 12,672.31        $   153.04
------------------------------------------------------------------------------------------------
   9           55.13%        1.23%             31.50%       $ 13,150.06        $   158.81
------------------------------------------------------------------------------------------------
  10           62.89%        1.23%             36.46%       $ 13,645.85        $   164.79
------------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 1,978.05
------------------------------------------------------------------------------------------------
</TABLE>



DWS International Fund - Class B


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
------------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
------------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.03%              2.97%       $ 10,297.00        $   206.01
------------------------------------------------------------------------------------------------
   2           10.25%        2.03%              6.03%       $ 10,602.82        $   212.13
------------------------------------------------------------------------------------------------
   3           15.76%        2.03%              9.18%       $ 10,917.72        $   218.43
------------------------------------------------------------------------------------------------
   4           21.55%        2.15%             12.29%       $ 11,228.88        $   238.08
------------------------------------------------------------------------------------------------
   5           27.63%        2.15%             15.49%       $ 11,548.90        $   244.86
------------------------------------------------------------------------------------------------
   6           34.01%        2.15%             18.78%       $ 11,878.05        $   251.84
------------------------------------------------------------------------------------------------
   7           40.71%        1.23%             23.26%       $ 12,325.85        $   148.85
------------------------------------------------------------------------------------------------
   8           47.75%        1.23%             27.91%       $ 12,790.53        $   154.47
------------------------------------------------------------------------------------------------
   9           55.13%        1.23%             32.73%       $ 13,272.74        $   160.29
------------------------------------------------------------------------------------------------
  10           62.89%        1.23%             37.73%       $ 13,773.12        $   166.33
------------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 2,001.29
------------------------------------------------------------------------------------------------
</TABLE>




                                                                  Appendix  | 65
<PAGE>

DWS International Fund - Class C


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
------------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
------------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.00%              3.00%       $ 10,300.00        $   203.00
------------------------------------------------------------------------------------------------
   2           10.25%        2.00%              6.09%       $ 10,609.00        $   209.09
------------------------------------------------------------------------------------------------
   3           15.76%        2.00%              9.27%       $ 10,927.27        $   215.36
------------------------------------------------------------------------------------------------
   4           21.55%        2.00%             12.55%       $ 11,255.09        $   221.82
------------------------------------------------------------------------------------------------
   5           27.63%        2.00%             15.93%       $ 11,592.74        $   228.48
------------------------------------------------------------------------------------------------
   6           34.01%        2.00%             19.41%       $ 11,940.52        $   235.33
------------------------------------------------------------------------------------------------
   7           40.71%        2.00%             22.99%       $ 12,298.74        $   242.39
------------------------------------------------------------------------------------------------
   8           47.75%        2.00%             26.68%       $ 12,667.70        $   249.66
------------------------------------------------------------------------------------------------
   9           55.13%        2.00%             30.48%       $ 13,047.73        $   257.15
------------------------------------------------------------------------------------------------
  10           62.89%        2.00%             34.39%       $ 13,439.16        $   264.87
------------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 2,327.15
------------------------------------------------------------------------------------------------
</TABLE>




66 | Appendix
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from a fund's management team
about recent market conditions and the effects of a fund's strategies on its
performance. They also have detailed performance figures, a list of everything
a fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about a fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
a fund, call (800) 621-1048, or contact DWS Scudder at the address listed
below. Each fund's SAI and shareholder reports are also available through the
DWS Scudder Web site at www.dws-scudder.com. These documents and other
information about each fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about each fund,
including each fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.



<TABLE>
<CAPTION>
DWS SCUDDER              SEC                     DISTRIBUTOR
--------------------------------------------------------------------------------
<S>                      <C>                     <C>
PO Box 219151            100 F Street, N.E.      DWS Scudder Distributors, Inc.
Kansas City, MO          Washington, D.C.        222 South Riverside Plaza
64121-9151               20549-0102              Chicago, IL 60606-5808
WWW.DWS-SCUDDER.COM      WWW.SEC.GOV             (800) 621-1148
(800) 621-1048           (800) SEC-0330
</TABLE>




<TABLE>
<S>                                      <C>                           <C>
SEC FILE NUMBER:

DWS Global/International Fund, Inc.        DWS Global Thematic Fund    811-4670
DWS International Fund, Inc.                 DWS International Fund    811-642
</TABLE>






(12/01/07) DGINTF1-1

[RECYCLED PAPER GRAPHIC APPEARS HERE]    [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]


<PAGE>

<PAGE>


                                DECEMBER 1, 2007








                                   PROSPECTUS

                              ------------------

                              INSTITUTIONAL CLASS


--------------------------------------------------------------------------------

                             DWS INTERNATIONAL FUND




As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.


                                         [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]




<PAGE>

CONTENTS
--------------------------------------------------------------------------------




<TABLE>
<S>      <C>
HOW THE FUND WORKS

  4      The Fund's Main Investment
         Strategy

  5      The Main Risks of Investing in
         the Fund

  9      The Fund's Performance
         History

 11      How Much Investors Pay

 12      Other Policies and Risks

 13      Who Manages and Oversees
         the Fund

 16      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUND

 18      Buying and Selling
         Institutional Class Shares

 24      Policies You Should Know
         About

 35      Understanding Distributions
         and Taxes

 39      Appendix
</TABLE>


<PAGE>

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
goal, the main strategies it uses to pursue that goal and the main risks that
could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-SCUDDER.COM (the Web
site does not form a part of this prospectus).
<PAGE>


<TABLE>

<S>                           <C>
--------------------------------------------------------------------------------
                                                        Institutional Class

                          ticker symbol                 SUIIX

                            fund number                 1468

    DWS INTERNATIONAL FUND
--------------------------------------------------------------------------------

</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term growth of capital by investing at least
            65% of its total assets in foreign equities (equities issued by
            foreign-based companies and listed on foreign exchanges).

            Although the fund can invest in companies of any size and from any
            country, it invests mainly in common stocks of established
            companies in countries with developed economies (other than the
            United States). The fund may invest up to 20% of net assets in
            foreign debt securities, including convertible bonds. The fund's
            equity investments are mainly common stocks, but may also include
            preferred stocks and other securities with equity characteristics,
            such as convertible securities and warrants.

            In choosing securities, the portfolio manager uses a combination of
            two analytical disciplines:

            BOTTOM-UP RESEARCH. The manager look for individual companies with
            a history of above average growth, strong competitive positioning,
            attractive prices relative to potential growth, sound financial
            strength and effective management, among other factors.

            TOP-DOWN ANALYSIS. The manager considers the economic outlooks for
            various sectors and industries while looking for those that may
            benefit from changes in the overall business environment.

            The manager may favor different types of securities from different
            industries and companies at different times, while still
            maintaining variety in terms of the types of securities, issuers
            and countries represented.

            The manager will normally sell a stock when the manager believes
            its price is unlikely to go much higher, its fundamentals have
            deteriorated, other investments offer better opportunities or in
            the course of adjusting the fund's exposure to a given country.


4 | DWS International Fund
<PAGE>


            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.



            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. As with most stock funds, an important factor
            with this fund is how stock markets perform - (to the extent the
            fund invests in a particular geographic region, the fund's
            performance may be proportionately affected by that region's general
            performance). When stock prices fall, you should expect the value of
            your investment to fall as well. Because a stock represents
            ownership in its issuer, stock prices can be hurt by poor
            management, shrinking product demand and other business risks. These
            may affect single companies as well as groups of companies. In
            addition, movements in financial markets may adversely affect a
            stock's price, regardless of how well the company performs. The
            market as a whole may not favor the types of investments the fund
            makes and the fund may not be able to get attractive prices for
            them.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:





THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



The fund is designed for investors who are interested in a broadly diversified
non-US international investment with the emphasis squarely on long-term growth
of capital.









                                                     DWS International Fund  | 5
<PAGE>

            -   POLITICAL RISK. Some foreign governments have limited the
                outflow of profits to investors abroad, imposed restrictions
                on the exchange or export of foreign currency, extended
                diplomatic disputes to include trade and financial relations,
                seized foreign investment and imposed high taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a foreign company, as compared
               to the financial reports of US companies.

            -  LIQUIDITY RISK. Investments that trade less can be more
               difficult or more costly to buy, or to sell, than more liquid or
               active investments. This liquidity risk is a factor of the
               trading volume of a particular investment, as well as the size
               and liquidity of the entire local market. On the whole, foreign
               exchanges are smaller and less liquid than the US market. This
               can make buying and selling certain investments more difficult
               and costly. Relatively small transactions in some instances can
               have a disproportionately large effect on the price and supply
               of securities. In certain situations, it may become virtually
               impossible to sell an investment in an orderly fashion at a
               price that approaches portfolio management's estimate of its
               value. For the same reason, it may at times be difficult to
               value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. This creates the possibility that changes in
               exchange rates between foreign currencies and the US dollar will
               affect the US dollar value of foreign securities or the income
               or gain received on these securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the remedies available in the US.

6 | DWS International Fund
<PAGE>

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees
               are generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            EMERGING MARKET RISK. All of the risks of investing in foreign
            securities are increased in connection with investments in emerging
            markets securities. In addition, profound social changes and
            business practices that depart from norms in developed countries'
            economies have hindered the orderly growth of emerging economies
            and their markets in the past and have caused instability. High
            levels of debt tend to make emerging economies heavily reliant on
            foreign capital and vulnerable to capital flight. These countries
            are also more likely to experience high levels of inflation,
            deflation or currency devaluation, which could also hurt their
            economies and securities markets. For these and other reasons,
            investments in emerging markets are often considered speculative.

            PRICING RISK. At times, market conditions might make it hard to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such methodologies, it is
            possible that the value determined for an investment may be
            different than the value realized upon such investment's sale. If
            the fund has valued its securities too highly, you may end up
            paying too much for fund shares when you buy into the fund. If the
            fund underestimates the price of its securities, you may not
            receive the full market value for your fund shares when you sell.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially


                                                     DWS International Fund  | 7
<PAGE>

            while the loan is outstanding. However, loans will be made only to
            borrowers selected by the fund's delegate after a review of
            relevant facts and circumstances, including the creditworthiness of
            the borrower.


            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may not have the intended effects and may result in losses or
            missed opportunities; the risk that the fund will be unable to sell
            the derivative because of an illiquid secondary market; the risk
            that a counterparty is unwilling or unable to meet its obligation;
            and the risk that the derivative transaction could expose the fund
            to the effects of leverage, which could increase the fund's
            exposure to the market and magnify potential losses. There is no
            guarantee that derivatives, to the extent employed, will have the
            intended effect, and their use could cause lower returns or even
            losses to the fund. The use of derivatives by the fund to hedge
            risk may reduce the opportunity for gain by offsetting the positive
            effect of favorable price movements.

            Another factor that could affect performance is:



            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.



8 | DWS International Fund
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.


The bar chart shows how the performance of the fund's Institutional Class
shares has varied from year to year, which may give some idea of risk. The
table on the following page shows how fund performance compares to relevant
index information (which, unlike fund performance, does not reflect fees or
expenses). The performance of both the fund and the index information varies
over time. All figures assume reinvestment of dividends and distributions (in
the case of after-tax returns, reinvested net of assumed tax rates).


The table shows returns for Institutional Class shares on a before-tax and
after-tax basis. After-tax returns are estimates calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on
an investor's tax situation and may differ from those shown in the table.
After-tax returns shown are not relevant for investors who hold their shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts.

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Institutional Class

[BAR GRAPHIC APPEARS HERE]






<TABLE>
<S>         <C>         <C>        <C>        <C>      <C>
-26.81       -16.14     28.26      17.03      16.42    26.24
2001        2002        2003       2004       2005     2006
</TABLE>







<TABLE>
<CAPTION>
2007 TOTAL RETURN AS OF SEPTEMBER 30: 16.48%
<S>                                          <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 16.42%, Q2 2003                WORST QUARTER: -19.29%, Q3 2002
</TABLE>




                                                     DWS International Fund  | 9
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2006



<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
                                              1 YEAR       5 YEARS      SINCE INCEPTION*
-----------------------------------------------------------------------------------------
<S>                                         <C>           <C>          <C>
 INSTITUTIONAL CLASS
-----------------------------------------------------------------------------------------
   Return before Taxes                          26.24        13.09             5.18
-----------------------------------------------------------------------------------------
   Return after Taxes on Distributions          25.48        12.85             4.98
-----------------------------------------------------------------------------------------
   Return after Taxes on Distributions
   and Sale of Fund Shares                      17.63        11.49             4.49
-----------------------------------------------------------------------------------------
 MORGAN STANLEY CAPITAL
 INTERNATIONAL (MSCI) EUROPE,
 AUSTRALASIA, FAR EAST (EAFE) INDEX
 (reflects no deductions for fees,
 expenses or taxes)                             26.34        14.98             7.90
-----------------------------------------------------------------------------------------
</TABLE>



*     Since 12/29/2000. Index comparison begins 12/31/2000.

Returns would have been lower had expenses not been waived.

MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EUROPE, AUSTRALASIA AND THE FAR EAST
(EAFE) INDEX is an unmanaged index that tracks international stock performance
in the 21 developed markets of Europe, Australasia and the Far East.

--------------------------------------------------------------------------------

Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 730-1313 or visit our Web site at www.dws-scudder.com.

--------------------------------------------------------------------------------

The RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund
shares at the end of the period. The number represents only the fund's taxable
distributions and not a shareholder's gain or loss from selling fund shares.

The RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The number
reflects both the fund's taxable distributions and a shareholder's gain or loss
from selling fund shares.


10 | DWS International Fund
<PAGE>

HOW MUCH INVESTORS PAY

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Class shares of the fund. This information doesn't include any
fees that may be charged by your financial advisor.



<TABLE>
<CAPTION>
FEE TABLE
<S>                                       <C>
--------------------------------------------------------------------------------
 SHAREHOLDER FEES, paid directly from
 your investment                                      None
--------------------------------------------------------------------------------
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                                2.00%
--------------------------------------------------------------------------------

 ANNUAL OPERATING EXPENSES, deducted from fund assets
--------------------------------------------------------------------------------
 Management Fee2                                      0.67%
--------------------------------------------------------------------------------
 Distribution/Service (12b-1) Fee                     None
--------------------------------------------------------------------------------
 Other Expenses                                       0.11
--------------------------------------------------------------------------------
 TOTAL ANNUAL OPERATING EXPENSES3                     0.78
--------------------------------------------------------------------------------
</TABLE>



1     This fee is charged on applicable redemptions or exchanges. Please see
      "Policies You Should Know About - Policies about transactions" for further
      information.


2     Restated on an annualized basis to reflect fee changes that took effect on
      June 11, 2007. Includes 0.10% administration fee.

3     Through November 30, 2010, the Advisor has contractually agreed to waive
      all or a portion of its management fee and reimburse or pay operating
      expenses of the fund to the extent necessary to maintain the fund's total
      operating expenses at 0.88% for Institutional Class shares, excluding
      certain expenses such as extraordinary expenses, taxes, brokerage and
      interest. .


Based on the costs above, this example helps you compare the fund's
Institutional Class shares expenses to those of other mutual funds. This
example assumes the expenses above remain the same, and that you invested
$10,000, earned 5% annual returns and reinvested all dividends and
distributions. This is only an example; actual expenses will be different.



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                       <C>         <C>          <C>          <C>
 Institutional Class         $80         $249         $433         $966
--------------------------------------------------------------------------------
</TABLE>




                                                    DWS International Fund  | 11
<PAGE>


OTHER POLICIES AND RISKS


           While the previous pages describe the main points of the fund's
           strategy and risks, there are a few other issues to know about:

           -  Although major changes tend to be infrequent, the fund's Board
              could change the fund's investment objective without seeking
              shareholder approval.


           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as US or Canadian money market
              securities This could prevent losses, but, while engaged in a
              temporary defensive position, the fund will not be pursuing its
              investment goal. However, portfolio management may choose not to
              use these strategies for various reasons, even in volatile market
              conditions.



           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in the fund.

           If you want more information on the fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that the fund will achieve
           its goal.

           A complete list of the fund's portfolio holdings is posted as of the
           month-end on www.dws-scudder.com (the Web site does not form a part
           of this prospectus) on or after the last day of the following month.
           This posted information generally remains accessible at least until
           the date on which the fund files its Form N-CSR or N-Q with the
           Securities and Exchange
           Commission for the period that includes the date as of which the
           posted information is current. In addition, the fund's top ten
           equity holdings and other fund information is posted on
           www.dws-scudder.com as of the calendar quarter-end on or after the
           15th day following quarter-end. The fund's Statement of Additional
           Information includes a description of the fund's policies and
           procedures with respect to the disclosure of the fund's portfolio
           holdings.


12 | Other Policies and Risks
<PAGE>

WHO MANAGES AND OVERSEES THE FUND

           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for the fund and conducts research that leads to these
           purchase and sale decisions. The Advisor provides a full range of
           global investment advisory services to institutional and retail
           clients.

           DWS Scudder is part of Deutsche Asset Management, which is the
           marketing name in the US for the asset management activities of
           Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS
           Trust Company.

           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.

           The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank
           AG. Deutsche Bank AG is a major global banking institution that is
           engaged in a wide range of financial services, including investment
           management, mutual funds, retail, private and commercial banking,
           investment banking and insurance.


           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below are the actual rates paid by the fund for the most recent
           fiscal year, as a percentage of the fund's average daily net assets.





<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FUND NAME                               FEE PAID
--------------------------------------------------------------------------------
<S>                                    <C>
DWS International Fund                    0.58%
--------------------------------------------------------------------------------
</TABLE>




                                         Who Manages and Oversees the Fund  | 13
<PAGE>


           Effective June 11, 2007, DWS International Fund pays the Advisor
           under the investment management agreement a fee, calculated daily
           and paid monthly, at the annual rate of 0.565% of the fund's average
           daily net assets up to $2.5 billion, 0.545% of the next $2.5
           billion, 0.525% of the next $5 billion, 0.515% of the next $5
           billion and 0.465% thereafter.

           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement is contained in the most
           recent shareholder report for the semi-annual period ended February
           28 (see "Shareholder reports" on the back cover).


           Under a separate administrative services agreement between the fund
           and the Advisor, the fund pays the Advisor for providing most of the
           fund's administrative services.


14 | Who Manages and Oversees the Fund
<PAGE>

Portfolio management

The following person handles the day-to-day management of DWS International
Fund.

DWS INTERNATIONAL FUND

Matthias Knerr, CFA
Director, Deutsche Asset Management and Portfolio Manager of the fund.
- Joined Deutsche Asset Management in 1995 and the fund in 2004.
- Portfolio manager for International
  Equities.
- BS, Pennsylvania State University.

The fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in the fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


                                         Who Manages and Oversees the Fund  | 15
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).


DWS International Fund - Institutional Class




<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                       2007            2006            2005           2004            2003
-----------------------------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>             <C>            <C>             <C>
SELECTED PER SHARE DATA
-----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD       $  57.10        $  47.58       $  37.99        $  33.28       $  32.42
-----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
  Net investment income a                   1.06d           1.52c              .76             .39            .43
-----------------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain
  (loss)                                      11.06            9.12           9.51            4.84            .80
-----------------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS            12.12           10.64          10.27            5.23           1.23
-----------------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                      ( 1.88)         ( 1.12)        (  .68)         (  .52)        (  .37)
-----------------------------------------------------------------------------------------------------------------------
Redemption fees*                                .00             .00            .00             .00            .00
-----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD             $  67.34        $  57.10       $  47.58        $  37.99       $  33.28
-----------------------------------------------------------------------------------------------------------------------
Total Return (%)                            21.60b          22.65b           27.18         15.77b            3.90
-----------------------------------------------------------------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)           26               8              9               8             21
-----------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions (%)                                  .79             .98            .85             .96            .92
-----------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions (%)                                  .79             .96            .85             .94            .92
-----------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (%)          1.66d           2.87c             1.76            1.02           1.41
-----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)                     104              76             57              82            104
-----------------------------------------------------------------------------------------------------------------------
</TABLE>




a     Based on average shares outstanding during the period.

b     Total return would have been lower had certain expenses not been reduced.

c     Net investment income per share and the ratio of net investment income
      include non-recurring dividend income amounting to $0.51 per share and
      0.98% of average daily net assets, respectively.

d     Net investment income per share and the ratio of net investment income
      include non-recurring dividend income amounting to $0.31 per share and
      0.49% of average daily net assets, respectively.

*     Amount is less than $.005.


16 | Financial Highlights
<PAGE>

HOW TO INVEST IN THE FUND

The following pages tell you how to invest in the fund and what to expect as a
shareholder. If you're investing directly with DWS Scudder, all of this
information applies to you.

The following pages also tell you about many of the services, choices and
benefits of being a shareholder. You'll also find information on how to check
the status of your account using the method that's most convenient for you.

If you're investing through a "third party provider" - for example, a workplace
retirement plan, financial supermarket or financial advisor - your provider may
have its own policies or instructions and you should follow those.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.
<PAGE>

Buying and Selling INSTITUTIONAL CLASS Shares

           You may buy Institutional Class shares through your securities
           dealer or through any financial institution that is authorized to
           act as a shareholder servicing agent ("financial advisor"). Contact
           them for details on how to enter and pay for your order. Your
           financial advisor may also receive compensation from the Advisor
           and/or its affiliates, please see "Financial intermediary support
           payments."

           You may also buy Institutional Class shares by sending your check
           (along with a completed Application Form) directly to DWS Scudder
           Investments Service Company (the "transfer agent"). Your purchase
           order may not be accepted if the fund withdraws the offering of fund
           shares, the sale of fund shares has been suspended or if it is
           determined that your purchase would be detrimental to the interests
           of the fund's shareholders.


           Eligibility requirements

           You may buy Institutional Class shares if you are any of the
           following:

           -  An eligible institution (e.g., a financial institution,
              corporation, trust, estate or educational, religious or
              charitable institution).

           -  An employee benefit plan with assets of at least $50 million.

           -  A registered investment advisor or financial planner purchasing
              on behalf of clients and charging an asset-based or
              hourly fee.

           -  A client of the private banking division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              mutual funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares in the funds.


           Investment minimum

           Your initial investment must be for at least $1,000,000. There are
           no minimum subsequent investment requirements.


18 | Buying and Selling Institutional Class Shares
<PAGE>

           The minimum initial investment is waived for:

           -  Shareholders with existing accounts prior to August 13, 2004 who
              met the previous minimum investment eligibility requirement.

           -  Investment advisory affiliates of Deutsche Bank Securities, Inc.,
              DWS funds or Deutsche funds purchasing shares for the accounts of
              their investment advisory clients.

           -  Employee benefit plans with assets of at least $50 million.

           -  Clients of the private banking division of Deutsche Bank AG.

           -  Institutional clients and qualified purchasers that are clients
              of a division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              mutual funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares of the funds.

           -  Registered investment advisors who trade through platforms
              approved by the Advisor and whose client assets in the aggregate
              meet the $1,000,000 minimum investment.

           The fund reserves the right to modify the above eligibility
           requirements and investment minimum at any time.


           How to contact the transfer agent



<TABLE>
<S>                       <C>
--------------------------------------------------------------------------------
  BY PHONE:               (800) 730-1313
--------------------------------------------------------------------------------
  FIRST INVESTMENTS       DWS Scudder Investments Service Company
  BY MAIL:                P.O. Box 219210
                          Kansas City, MO 64121-9151
--------------------------------------------------------------------------------
  ADDITIONAL              DWS Scudder Investments Service Company
  INVESTMENTS BY          P.O. Box 219210
  MAIL:                   Kansas City, MO 64121-9154
--------------------------------------------------------------------------------
  BY OVERNIGHT MAIL:      DWS Scudder Investments Service Company
                          210 West 10th Street
                          Kansas City, MO 64105-1614
--------------------------------------------------------------------------------
</TABLE>



           You can reach the automated information line, 24 hours a day,
           7 days a week by calling (800) 621-1048.


                             Buying and Selling Institutional Class Shares  | 19
<PAGE>

           How to open your fund account

<TABLE>
<S>                  <C>
 --------------------------------------------------------------------------------
 MAIL:               Complete and sign the account application that
                     accompanies this prospectus. (You may obtain
                     additional applications by calling the transfer agent.)
                     Mail the completed application along with a check
                     payable to the fund you have selected to the transfer
                     agent. Be sure to include the fund number. (For fund
                     number, refer to "The Fund's Main Investment
                     Strategy"). The applicable addresses are shown under
                     "How to contact the transfer agent."
 --------------------------------------------------------------------------------
 WIRE:               Call the transfer agent to set up a wire account.
 --------------------------------------------------------------------------------
 FUND NAME AND       Please use the complete fund name. Refer to "The
 FUND NUMBER:        Fund's Main Investment Strategy" above for the fund
                    number.
 --------------------------------------------------------------------------------
</TABLE>


           Please note that your account cannot become activated until we
           receive a completed application.


           How to BUY and SELL shares

           MAIL:

           BUYING: Send your check, payable to the fund you have selected, to
           the transfer agent. Be sure to include the fund number and your
           account number on your check. If you are investing in more than one
           fund, make your check payable to "DWS Scudder" and include your
           account number, the names and numbers of the funds you have
           selected, and the dollar amount or percentage you would like
           invested in each fund. Mailing addresses are shown under "How to
           contact the transfer agent."

           SELLING: Send a signed letter to the transfer agent with your name,
           your fund number and account number, the fund's name, and either the
           number of shares you wish to sell or the dollar amount you wish to
           receive. Unless exchanging into another DWS fund, you must submit a
           written authorization to sell shares in a retirement account.

           WIRE:

           BUYING: You may buy shares by wire only if your account is
           authorized to do so. Please note that you or your financial advisor
           must call Shareholder Services at (800) 730-1313 to notify us in
           advance of a wire transfer purchase. Inform Shareholder Services of
           the amount of your purchase and receive a trade confirmation number.
           Instruct your bank to send payment by wire using the wire
           instructions noted below. All


20 | Buying and Selling Institutional Class Shares
<PAGE>

           wires must be received by 4:00 p.m. (Eastern time) the next business
           day following your purchase. If your wire is not received by 4:00
           p.m. (Eastern time) on the next business day after the fund receives
           your request to purchase shares, your transaction will be canceled
           at your expense and risk.


<TABLE>
<S>                <C>
 --------------------------------------------------------------------------------
  BANK NAME:        State Street Bank Boston
 --------------------------------------------------------------------------------
  ROUTING NO:       011000028
 --------------------------------------------------------------------------------
  ATTN:             DWS Scudder
 --------------------------------------------------------------------------------
  DDA NO:           9903-5552
 --------------------------------------------------------------------------------
  FBO:              (Account name) (Account number)
 --------------------------------------------------------------------------------
  CREDIT:           (fund name, fund number and, if applicable, class
                    name) (see "How to open your fund account")
 --------------------------------------------------------------------------------
</TABLE>


           Refer to your account statement for the account name and number.
           Wire transfers normally take two or more hours to complete. Wire
           transfers may be restricted on holidays and at certain other times.

           SELLING: You may sell shares by wire only if your account is
           authorized to do so. You will be paid for redeemed shares by wire
           transfer of funds to your financial advisor or bank upon receipt of
           a duly authorized redemption request as promptly as feasible. For
           your protection, you may not change the destination bank account
           over the phone. To sell by wire, contact your financial advisor or
           Shareholder Services at (800) 730-1313. Inform Shareholder Services
           of the amount of your redemption and receive a trade confirmation
           number. The minimum redemption by wire is $1,000. The fund reserves
           the right to change the above eligibility requirements and
           investment minimum at any time. We must receive your order by 4:00
           p.m. (Eastern time) to wire your account the next business day.

           TELEPHONE TRANSACTIONS:

           You may place orders to buy and sell over the phone by calling your
           financial advisor or Shareholder Services at (800) 730-1313. If your
           shares are in an account with the transfer agent, you may (1) redeem
           by check in an amount up to $100,000, or by wire (minimum $1,000),
           or (2) exchange the shares for Institutional shares of another DWS
           fund by calling the
           transfer agent.

                             Buying and Selling Institutional Class Shares  | 21
<PAGE>

           You may make regular investments from a bank checking account. For
           more information on setting up an automatic investment plan or
           payroll investment plan, call Shareholder Services at (800)
           730-1313.


           Financial intermediary support payments


           The Advisor, DWS Scudder Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to the fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/or servicing of fund investors and fund
           shares ("revenue sharing"). Such revenue sharing payments are in
           addition to any distribution or service fees payable under any Rule
           12b-1 or service plan of the fund, any record keeping/sub-transfer
           agency/networking fees payable by the fund (generally through the
           Distributor or an affiliate) and/or the Distributor to certain
           financial advisors for performing such services and any sales
           charges, commissions, non-cash compensation arrangements expressly
           permitted under applicable rules of the Financial Industry
           Regulatory Authority ("FINRA") or other concessions described in the
           fee table or elsewhere in this prospectus or the Statement of
           Additional Information as payable to all financial advisors. For
           example, the Advisor, the Distributor and/or their affiliates may
           compensate financial advisors for providing the fund with "shelf
           space" or access to a third party platform or fund offering list or
           other marketing programs, including, without limitation, inclusion
           of the fund on preferred or recommended sales lists, mutual fund
           "supermarket" platforms and other formal sales programs; granting
           the Distributor access to the financial advisor's sales force;
           granting the Distributor access to the financial advisor's
           conferences and meetings; assistance in training and educating the
           financial advisor's personnel; and obtaining other forms of
           marketing support.


           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of the fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of


22 | Buying and Selling Institutional Class Shares
<PAGE>

           these revenue sharing payments is determined at the discretion of
           the Advisor, the Distributor and/or their affiliates from time to
           time, may be substantial, and may be different for different
           financial advisors based on, for example, the nature of the services
           provided by the financial advisor.

           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS Fund shares or the retention
           and/or servicing of investors and DWS Fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of the fund serviced and maintained by the financial advisor,
           .10% to .25% of sales of the fund attributable to the financial
           advisor, a flat fee of $12,500 up to $500,000, or any combination
           thereof. These amounts are subject to change at the discretion of
           the Advisor, the Distributor and/or their affiliates. Receipt of, or
           the prospect of receiving, this additional compensation may
           influence your financial advisor's recommendation of the fund or of
           any particular share class of the fund. You should review your
           financial advisor's compensation disclosure and/or talk to your
           financial advisor to obtain more information on how this
           compensation may have influenced your financial advisor's
           recommendation of the fund. Additional information regarding these
           revenue sharing payments is included in the fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Scudder branded retirement plan platform (the "Platform") with the
           level of revenue sharing payments being based upon sales of both the
           DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for the fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection


                             Buying and Selling Institutional Class Shares  | 23
<PAGE>

           of broker-dealers to execute portfolio transactions for the DWS
           funds. Accordingly, the Advisor has implemented policies and
           procedures reasonably designed to prevent its traders from
           considering sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the fund. In
           addition, the Advisor, the Distributor and/or their affiliates will
           not use fund brokerage to pay for their obligation to provide
           additional compensation to financial advisors as described above.


POLICIES YOU SHOULD KNOW ABOUT


           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.


           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           730-1313.


24 | Policies You Should Know About
<PAGE>

           Policies about transactions

           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.

           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated.

           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.


                                            Policies You Should Know About  | 25
<PAGE>

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           SUB-MINIMUM BALANCES. The fund may redeem your shares and close your
           account on 60 days' notice if it fails to meet the minimum account
           balance requirement of $1,000,000 ($250,000 for shareholders with
           existing accounts prior to August 13, 2004) for any reason other
           than a change in market value.


           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of the fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if the fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by the fund (e.g.,
           "time zone arbitrage"). The fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.


           Pursuant to its policies, the fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). The fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior notice. For
           example, the fund may in its discretion reject or cancel a purchase
           or an exchange order even if the transaction is not subject to the
           specific roundtrip transaction limitation described below if the
           Advisor believes that there appears to be a pattern of short-term or
           excessive trading activity by a shareholder or deems any other
           trading activity harmful or disruptive to the fund. The fund,
           through its Advisor and Transfer Agent, will measure short-term and
           excessive trading by the number of roundtrip transactions within a
           shareholder's account during a rolling 12-month period. A
           "roundtrip" transaction is


26 | Policies You Should Know About
<PAGE>

           defined as any combination of purchase and redemption activity
           (including exchanges) of the same fund's shares. The fund may take
           other trading activity into account if the fund believes such
           activity is of an amount or frequency that may be harmful to
           long-term shareholders or disruptive to portfolio management.

           Shareholders are limited to four roundtrip transactions in the same
           DWS Fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS Fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS Fund. The fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS Fund are not affected by the four roundtrip
           transaction limitation, but all redemptions remain subject to the
           fund's redemption fee policy (see "Redemption fees" described
           below).

           The Advisor may make exceptions to the roundtrip transaction policy
           for certain types of transactions if in its opinion the transactions
           do not represent short-term or excessive trading or are not abusive
           or harmful to the fund, such as, but not limited to, systematic
           transactions, required minimum retirement distributions,
           transactions initiated by the fund or administrator and transactions
           by certain qualified fund-of-fund(s).


           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive trading
           may be more or less restrictive than the DWS Funds' policy, may
           permit certain transactions not permitted by the DWS Funds'
           policies, or prohibit transactions not subject to the DWS Funds'
           policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of the fund that provide a substantially similar level of
           protection for the fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or



                                            Policies You Should Know About  | 27
<PAGE>


           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.


           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund from "time zone arbitrage" with respect
           to its foreign securities holdings and other trading practices that
           seek to exploit variations in portfolio valuation that arise from
           the nature of the securities held by the fund. (See "How the fund
           calculates share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying
           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of the fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in the fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

           The fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. The fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value) on all fund
           shares redeemed or exchanged within 15 days of buying them (either
           by purchase or exchange). The redemption fee is paid directly to the
           fund and is designed to encourage long-term investment and to offset
           transaction and other costs associated with short-term or excessive
           trading. For purposes of determining whether the redemption fee
           applies, shares held the longest time will be treated as being
           redeemed first and shares held the shortest time will be treated as
           being redeemed last.


28 | Policies You Should Know About
<PAGE>

           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with the fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally netted
           against one another and placed on an aggregate basis; consequently
           the identities of the individuals on whose behalf the transactions
           are placed generally are not known to the fund. For this reason, the
           fund has undertaken to notify financial intermediaries of their
           obligation to assess the redemption fee on customer accounts and to
           collect and remit the proceeds to the fund. However, due to
           operational requirements, the intermediaries' methods for tracking
           and calculating the fee may be inadequate or differ in some respects
           from the fund's.


           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of participants in certain group retirement
           plans whose processing systems are incapable of properly applying
           the redemption fee to underlying shareholders; (iii) transactions on
           behalf of a shareholder to return any excess IRA contributions to
           the shareholder; (iv) transactions on behalf of a shareholder to
           effect a required minimum distribution on an IRA; (v) transactions
           on behalf of any mutual fund advised by the Advisor and its
           affiliates (e.g., "funds of funds") or, in the case of a
           master/feeder relationship, redemptions by the feeder fund from the
           master portfolio; (vi) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vii)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (viii)
           transactions involving hardship of any registered shareholder; (ix)
           systematic transactions with pre-defined trade dates for purchases,
           exchanges or redemptions, such as automatic account rebalancing, or
           loan origination and repayments; (x) transactions involving shares
           purchased through the reinvestment of dividends or other
           distributions; (xi) transactions involving shares transferred from
           another account in the same fund or converted from another class of
           the same fund (the redemption fee period will carry over to the
           acquired shares); (xii) transactions initiated by the fund or
           administrator (e.g., redemptions for not meeting account minimums,
           to pay



                                            Policies You Should Know About  | 29
<PAGE>


           account fees funded by share redemptions, or in the event of the
           liquidation or merger of the fund); or (xiii) transactions in cases
           when there are legal or contractual limitations or restrictions on
           the imposition of the redemption fee (as determined by the fund or
           its agents in their sole discretion). It is the policy of the DWS
           funds to permit approved fund platform providers to execute
           transactions within the funds without the imposition of a redemption
           fee if such providers have implemented alternative measures that are
           determined by the Advisor to provide controls on short-term and
           excessive trading that are comparable to the DWS funds' policies.


           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Scudder. You can also use this service to make exchanges and
           sell shares.

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 730-1313.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 730-1313 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.





THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Scudder Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-SCUDDER.COM to get up-to-date information, review
balances or even place orders for exchanges.








30 | Policies You Should Know About
<PAGE>

           THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.

           IF YOU PAY FOR SHARES BY CHECK and the check fails to clear, or if
           you order shares by phone and fail to pay for them by 4:00 p.m.
           Eastern time the next business day, we have the right to cancel your
           order, hold you liable or charge you or your account for any losses
           or fees the fund or its agents have incurred. To sell shares, you
           must state whether you would like to receive the proceeds by wire or
           check.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.


           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by check,
           bank or Federal Funds wire transfer or by electronic bank transfer.
           Please note that the fund does not accept cash, money orders,
           traveler's checks, starter checks, third party checks (except checks
           for retirement plan asset transfers and rollovers or for Uniform
           Gifts to Minors Act/Uniform Transfers to Minors Act accounts),
           checks drawn on foreign banks or checks issued by credit card
           companies or Internet-based companies. Thus, subject to the
           foregoing exceptions for certain third party checks, checks that are
           otherwise permissible must be drawn by the account holder on a
           domestic bank and must be payable to the fund.


           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust





THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.









                                            Policies You Should Know About  | 31
<PAGE>

           companies, credit unions, member firms of a national stock exchange
           or any member or participant of an approved signature guarantor
           program. Note that you can't get a signature guarantee from a notary
           public and we must be provided the original guarantee.

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           730-1313 or contact your financial advisor for more information.

           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are other
           circumstances when it could be longer: When you are selling shares
           you bought recently by check (redemption proceeds from such a sale
           are unavailable until the check has cleared), when you make
           purchases by ACH (the funds will be placed under a 10 calendar day
           hold to ensure good funds) or when unusual circumstances prompt the
           SEC to allow further delays. Certain expedited redemption processes
           may also be delayed when you are selling recently purchased shares
           or in the event of closing of the Federal Reserve Bank's wire
           payment system. In addition, the fund reserves the right to suspend
           or postpone redemptions as permitted pursuant to
           Section 22(e) of the Investment Company Act of 1940. Generally,
           those circumstances are when 1) the New York Stock Exchange is
           closed other than customary weekend or holiday closings; 2) trading
           on the New York Stock Exchange is restricted; 3) an emergency exists
           which makes the disposal of securities owned by the fund or the fair
           determination of the value of the fund's net assets not reasonably
           practicable; or 4) the SEC, by order, permits the suspension of the
           right of redemption. Redemption payments by wire may also be delayed
           in the event of a non-routine closure of the Federal Reserve wire
           payment system. For additional rights reserved by the fund, please
           see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


32 | Policies You Should Know About
<PAGE>

           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>                                                     <C> <C>
            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy and sell shares is the NAV.



           THE FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.


           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by the fund's Board, such as a
           fair valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of the fund's portfolio is believed to have been materially
           affected by a significant event, such as a natural disaster, an
           economic event like a bankruptcy filing, or a substantial
           fluctuation in domestic or foreign markets that has occurred between
           the close of the exchange or market on which the security is
           principally traded (for example, a foreign exchange or market) and
           the close of the New York Stock Exchange. In such a case, the fund's
           value for a security is likely to be different from the last quoted
           market price or pricing service information. In addition, due to the
           subjective and variable nature of fair value pricing, it is possible
           that the value determined for a particular asset may be materially
           different from the value realized upon such asset's sale. It is
           expected that the greater the percentage of fund assets that is
           invested in non-US securities, the more extensive will be the fund's
           use of fair value pricing. This is intended to reduce the fund's
           exposure to "time zone arbitrage" and other harmful trading
           practices. (See "Market timing policies and procedures.")

           TO THE EXTENT THAT THE FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when the
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change


                                            Policies You Should Know About  | 33
<PAGE>

           significantly on days when the New York Stock Exchange is closed and
           you cannot buy or sell fund shares. Price changes in the securities
           the fund owns may ultimately affect the price of fund shares the
           next time the NAV is calculated.)


           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              as federal income tax if we have been notified by the IRS that
              you are subject to backup withholding or if you fail to provide
              us with a correct taxpayer ID number and certain certifications
              or certification that you are exempt from backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason


           -  refuse, cancel, limit or rescind any purchase or exchange order,
              without prior notice; freeze any account (meaning you will not be
              able to purchase fund shares in your account); suspend account
              services; and/or involuntarily redeem your account if we think
              that the account is being used for fraudulent or illegal
              purposes; one or more of these actions will be taken when, at our
              sole discretion, they are deemed to be in the fund's best
              interests or when the fund is requested or compelled to do so by
              governmental authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less any applicable redemption fee); you may recognize a
              gain or loss on the redemption of your fund shares and incur a
              tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; the fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of the fund's net assets, whichever is less


34 | Policies You Should Know About
<PAGE>

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)


UNDERSTANDING DISTRIBUTIONS AND TAXES

           The fund intends to distribute to its shareholders virtually all of
           its net earnings. The fund can earn money in two ways: by receiving
           interest, dividends or other income from securities it holds and by
           selling securities for more than it paid for them. (The fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) The fund may not always pay a
           dividend or distribution for a given period.

           THE FUND INTENDS TO PAY DISTRIBUTIONS to its shareholders annually
           in November or December, and, if necessary, may do so at other times
           as well.

           Dividends or distributions declared to shareholders of record in the
           last quarter of a given calendar year are treated for federal income
           tax purposes as if they were received on December 31 of that year,
           provided such dividends or distributions are paid by the end of the
           following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable. However, dividends and
           distributions received by retirement plans qualifying for tax
           exemption under federal income tax laws generally will not be
           taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different fund. Tell us your preference
           on your application. If you don't indicate a preference, your
           dividends and distributions will all be reinvested in shares of the
           fund without a sales charge (if applicable). Distributions are
           treated the same for federal income tax purposes whether you receive
           them in cash or reinvest them in additional shares. For
           employer-sponsored qualified plans, and retirement plans,
           reinvestment (at NAV) is the only option.






THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.


                                     Understanding Distributions and Taxes  | 35
<PAGE>

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital gain or loss. The gain or loss
           will be long-term or short-term depending on how long you owned the
           shares that were sold. For federal income tax purposes, an exchange
           is treated the same as a sale.

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depend on their type:


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
GENERALLY TAXED AT LONG-TERM               GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                        INCOME RATES:
--------------------------------------------------------------------------------
<S>                                                   <C>
DISTRIBUTIONS FROM THE FUND
- gains from the sale of                   -  gains from the sale of
  securities held (or treated as              securities held by the fund for
  held) by the fund for more                  one year or less
  than one year                            -  all other taxable income
- qualified dividend income
--------------------------------------------------------------------------------
TRANSACTIONS INVOLVING FUND
SHARES
- gains from selling fund                  -  gains from selling fund
  shares held for more than                   shares held for one year or
  one year                                    less
--------------------------------------------------------------------------------
</TABLE>


           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. The fund may elect
           to pass through to its shareholders a credit or deduction for
           foreign taxes it has paid if at the end of its year more than 50% of
           the fund's total assets are stocks or securities of foreign
           corporations. In addition, any investments in foreign securities or
           foreign currencies may increase or accelerate the fund's recognition
           of ordinary income and may affect the timing or amount of the fund's
           distributions. If you invest in the fund through a taxable account,
           your after-tax return could be negatively impacted.

           To the extent that the fund invests in certain debt obligations or
           certain other securities, investments in these obligations or
           securities may cause the fund to recognize taxable income in excess
           of the cash generated by such obligations. Thus, the fund could be
           required at times to liquidate other investments in order to satisfy
           its distribution requirements.


36 | Understanding Distributions and Taxes
<PAGE>

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes dividends from domestic and some foreign
           corporations. It does not include income from investments in debt
           securities or, generally, from REITs. In addition, the fund must
           meet certain holding period and other requirements with respect to
           the dividend-paying stocks in its portfolio and the shareholder must
           meet certain holding period and other requirements with respect to
           the fund's shares for the lower tax rates to apply.


           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been reduced to 15%. For taxable years beginning on or after January
           1, 2011, the long-term capital gain rate is scheduled to return to
           20%. For more information, see the Statement of Additional
           Information, under "Taxes."


           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund declares a dividend. In
           tax-advantaged retirement accounts you do not need to worry about
           this.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains, but may be eligible for a dividends-received
           deduction for a portion of the income dividends they receive from
           the fund, provided certain holding period and other requirements are
           met.

           The above discussion is applicable to shareholders who are US
           persons. If you are a non-US person, please consult your own tax
           advisor with respect to the US tax consequences to you of an
           investment in the fund.


                                     Understanding Distributions and Taxes  | 37
<PAGE>

APPENDIX
--------------------------------------------------------------------------------


           Hypothetical Expense Summary

           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The tables also assume that all dividends and
           distributions are reinvested. The annual fund expense ratios shown
           are net of any contractual fee waivers or expense reimbursements, if
           any, for the period of the contractual commitment. The tables do not
           reflect redemption fees, if any, which may be payable upon
           redemption. If redemption fees were shown, the "Hypothetical
           Year-End Balance After Fees and Expenses" amounts shown would be
           lower and the "Annual Fees and Expenses" amounts shown would be
           higher. Also, please note that if you are investing through a third
           party provider, that provider may have fees and expenses separate
           from those of the fund that are not reflected here. Mutual fund fees
           and expenses fluctuate over time and actual expenses may be higher
           or lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.




38 | Appendix
<PAGE>

                 DWS International Fund - Institutional Class




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
-------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
-------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.78%              4.22%       $ 10,422.00         $  79.65
-------------------------------------------------------------------------------------------
   2           10.25%        0.78%              8.62%       $ 10,861.81         $  83.01
-------------------------------------------------------------------------------------------
   3           15.76%        0.78%             13.20%       $ 11,320.18         $  86.51
-------------------------------------------------------------------------------------------
   4           21.55%        0.78%             17.98%       $ 11,797.89         $  90.16
-------------------------------------------------------------------------------------------
   5           27.63%        0.78%             22.96%       $ 12,295.76         $  93.97
-------------------------------------------------------------------------------------------
   6           34.01%        0.78%             28.15%       $ 12,814.64         $  97.93
-------------------------------------------------------------------------------------------
   7           40.71%        0.78%             33.55%       $ 13,355.42         $ 102.06
-------------------------------------------------------------------------------------------
   8           47.75%        0.78%             39.19%       $ 13,919.02         $ 106.37
-------------------------------------------------------------------------------------------
   9           55.13%        0.78%             45.06%       $ 14,506.40         $ 110.86
-------------------------------------------------------------------------------------------
  10           62.89%        0.78%             51.19%       $ 15,118.57         $ 115.54
-------------------------------------------------------------------------------------------
  TOTAL                                                                         $ 966.06
-------------------------------------------------------------------------------------------
</TABLE>




                                                                  Appendix  | 39
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund's features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
the fund, call (800) 730-1313, or contact DWS Scudder at the address listed
below. The fund's SAI and shareholder reports are also available through the
DWS Scudder Web site at www.dws-scudder.com. These documents and other
information about the fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about the fund,
including the fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.


<TABLE>
<CAPTION>
DWS SCUDDER              SEC                     DISTRIBUTOR
---------------------    --------------------    -------------------------------
<S>                      <C>                     <C>
PO Box 219210            100 F Street, N.E.      DWS Scudder Distributors, Inc.
Kansas City, MO          Washington, D.C.        222 South Riverside Plaza
64121-9210               20549-0102              Chicago, IL 60606-5808
WWW.DWS-SCUDDER.COM      WWW.SEC.GOV             (800) 621-1148
(800) 730-1313           (800) SEC-0330
</TABLE>



<TABLE>
<S>                               <C>                         <C>
SEC FILE NUMBER:
DWS International Fund, Inc.        DWS International Fund    811-642
</TABLE>



                                         [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]






(12/01/07) DIF-1-IN
[RECYCLE GRAPHIC APPEARS HERE]


<PAGE>
--------------------------------------------------------------------------------



                                DECEMBER 1, 2007






                                   PROSPECTUS
                              ------------------
                                    CLASS S


--------------------------------------------------------------------------------


                            DWS GLOBAL THEMATIC FUND

                             DWS INTERNATIONAL FUND


As with all mutual funds, the Securities and Exchange  Commission (SEC) does not
approve or disapprove these shares or determine  whether the information in this
prospectus  is  truthful  or  complete.  It is a criminal  offense for anyone to
inform you otherwise.


                                         [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]


<PAGE>
--------------------------------------------------------------------------------










CONTENTS
--------------------------------------------------------------------------------


<TABLE>
<S>      <C>
HOW EACH FUND WORKS

  4      DWS Global Thematic Fund

 12      DWS International Fund

 20      Other Policies and Risks

 21      Who Manages and Oversees
         the Funds

 24      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUNDS

 27      How to Buy, Sell and
         Exchange Shares

 31      Policies You Should Know
         About

 43      Understanding Distributions
         and Taxes

 46      Appendix
</TABLE>


<PAGE>

HOW EACH FUND WORKS

On the next few pages, you'll find information about each fund's investment
goal, the main strategies each uses to pursue that goal and the main risks that
could affect performance.

Whether you are considering investing in a fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

CLASS S shares are generally only available to new investors through fee-based
programs of investment dealers that have special agreements with each fund's
distributor and through certain registered investment advisors. These dealers
and advisors typically charge ongoing fees for services they provide.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-SCUDDER.COM (the Web
site does not form a part of this prospectus).
<PAGE>


<TABLE>
--------------------------------------------------------------------------------
<S>                                                             <C>
                                                                Class S
                                             ticker symbol      SCOBX
                                               fund number      2007

DWS GLOBAL THEMATIC FUND
--------------------------------------------------------------------------------

</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term growth of capital.


            The fund invests at least 65% of its total assets in US and foreign
            equities (equities issued by US and foreign-based companies). Most
            of the fund's equities are common stocks. Although the fund can
            invest in companies of any size and from any country, it invests
            mainly in common stocks of established companies in countries with
            developed economies. The fund's equity investments are mainly
            common stocks, but may also include preferred stocks and other
            securities with equity characteristics, such as convertible
            securities and warrants.


            In choosing securities, the portfolio manager uses a combination of
            three analytical disciplines:

            BOTTOM-UP RESEARCH. The manager looks for individual companies with
            a history of above-average growth, strong competitive positioning,
            attractive prices relative to potential growth, sound financial
            strength and effective management, among other factors.

            GROWTH ORIENTATION. The manager generally looks for companies that
            the manager believes have above-average potential for sustainable
            growth of revenue or earnings and whose market value appears
            reasonable in light of their business prospects.

            ANALYSIS OF GLOBAL THEMES. The manager considers global economic
            outlooks, seeking to identify industries and companies that are
            likely to benefit from social, political and economic changes.

            The manager uses analytical tools to actively monitor the risk
            profile of the portfolio as compared to comparable funds and
            appropriate benchmarks and peer groups.


4 | DWS Global Thematic Fund
<PAGE>

            The manager may favor different types of securities from different
            industries and companies at different times, while still
            maintaining variety in terms of the types of securities, issuers
            and countries represented.

            The manager will normally sell a stock when the manager believes
            its price is unlikely to go much higher, its fundamentals have
            deteriorated, other investments offer better opportunities or in
            the course of adjusting the fund's exposure to a given country.


            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.


            STOCK MARKET RISK. As with most stock funds, an important factor
            with this fund is how stock markets perform - in this case US and
            foreign stock markets. When US and foreign stock prices fall, you
            should expect the value of your investment to fall as well.
            Compared to large company stocks, small company stocks tend to be
            more volatile, in part because these companies tend to be less
            established and the valuation of their stocks often depends on
            future expectations. Because a stock represents ownership in its
            issuer, stock prices can be hurt by poor management, shrinking
            product demand and other business risks. These may affect single
            companies as well as groups of companies. In addition, movements in
            financial markets may adversely affect a stock's

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for long-term  investors  who are  interested in a broadly
diversified approach to global investing with an emphasis on long-term growth of
capital.

                                                   DWS Global Thematic Fund  | 5
<PAGE>

            price, regardless of how well the company performs. The market as a
            whole may not favor the types of investments the fund makes and the
            fund may not be able to get attractive prices for them.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investment and imposed high taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a foreign company, as compared
               to the financial reports of US companies.

            -  LIQUIDITY RISK. Investments that trade less can be more
               difficult or more costly to buy, or to sell, than more liquid or
               active investments. This liquidity risk is a factor of the
               trading volume of a particular investment, as well as the size
               and liquidity of the entire local market. On the whole, foreign
               exchanges are smaller and less liquid than the US market. This
               can make buying and selling certain investments more difficult
               and costly. Relatively small transactions in some instances can
               have a disproportionately large effect on the price and supply
               of securities. In certain situations, it may become virtually
               impossible to sell an investment in an orderly fashion at a
               price that approaches portfolio management's estimate of its
               value. For the same reason, it may at times be difficult to
               value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

6 | DWS Global Thematic Fund
<PAGE>

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. This creates the possibility that changes in
               exchange rates between foreign currencies and the US dollar will
               affect the US dollar value of foreign securities or the income or
               gain received on these securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            EMERGING MARKET RISK. All of the risks of investing in foreign
            securities are increased in connection with investments in emerging
            markets securities. In addition, profound social changes and
            business practices that depart from norms in developed countries'
            economies have hindered the orderly growth of emerging economies
            and their markets in the past and have caused instability. High
            levels of debt tend to make emerging economies heavily reliant on
            foreign capital and vulnerable to capital flight. These countries
            are also more likely to experience high levels of inflation,
            deflation or currency devaluation, which could also hurt their
            economies and securities markets. For these and other reasons,
            investments in emerging markets are often considered speculative.

            PRICING RISK. At times, market conditions might make it hard to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such methodologies, it is
            possible that the value determined for an investment may be
            different than the value realized upon such investment's sale. If
            the fund has valued its securities too highly, you may end up
            paying too much for fund shares when you buy into the fund. If the
            fund underestimates the price of its securities, you may not
            receive the full market value for your fund shares when you sell.


                                                   DWS Global Thematic Fund  | 7
<PAGE>

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.


            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may not have the intended effects and may result in losses or
            missed opportunities; the risk that the fund will be unable to sell
            the derivative because of an illiquid secondary market; the risk
            that a counterparty is unwilling or unable to meet its obligation;
            and the risk that the derivative transaction could expose the fund
            to the effects of leverage, which could increase the fund's
            exposure to the market and magnify potential losses. There is no
            guarantee that derivatives, to the extent employed, will have the
            intended effect, and their use could cause lower returns or even
            losses to the fund. The use of derivatives by the fund to hedge
            risk may reduce the opportunity for gain by offsetting the positive
            effect of favorable price movements.

            Another factor that could affect performance is:



            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.



8 | DWS Global Thematic Fund
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.


The bar chart shows how the performance of the fund's Class S shares has varied
from year to year, which may give some idea of risk. The table on the following
page shows how fund performance compares to relevant index information (which,
unlike fund performance, does not reflect fees or expenses). The performance of
both the fund and the index information varies over time. All figures assume
reinvestment of dividends and distributions (in the case of after-tax returns,
reinvested net of assumed tax rates).


The table shows returns for Class S shares on a before-tax and after-tax basis.
After-tax returns are estimates calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

DWS Global Thematic Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Class S

[BAR CHART GRAPHIC APPEARS HERE]



<TABLE>
<S>      <C>        <C>        <C>        <C>         <C>         <C>        <C>        <C>        <C>
17.24    12.59      23.47       -3.01      -16.40      -17.00     32.23      15.04      23.29      30.35
1997     1998       1999        2000       2001       2002        2003       2004       2005       2006
</TABLE>







<TABLE>
<CAPTION>
2007 TOTAL RETURN AS OF SEPTEMBER 30: 11.60%
<S>                                          <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:

BEST QUARTER: 15.20%, Q4 1999                WORST QUARTER: -17.42%, Q3 2002
</TABLE>


                                                 DWS Global Thematic Fund  | 9
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2006


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                              1 YEAR       5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                                           <C>           <C>          <C>
 CLASS S
   Return before Taxes                          30.35        15.20        10.37
--------------------------------------------------------------------------------
   Return after Taxes on Distributions          25.82        13.95         8.13
--------------------------------------------------------------------------------
   Return after Taxes on Distributions
   and Sale of Fund Shares                      23.24        13.03         8.00
--------------------------------------------------------------------------------
 MORGAN STANLEY CAPITAL
 INTERNATIONAL (MSCI) WORLD INDEX
 (reflects no deductions for fees,
 expenses or taxes)                             20.07         9.97         7.64
--------------------------------------------------------------------------------
</TABLE>



Total returns would have been lower had operating expenses not been reduced.

MSCI WORLD INDEX is an unmanaged capitalization-weighted measure of stock
markets around the world, including North America, Europe, Australia and Asia.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 728-3337 or visit our Web site at www.dws-scudder.com.


--------------------------------------------------------------------------------
The RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund
shares at the end of the period. The number represents only the fund's taxable
distributions and not a shareholder's gain or loss from selling fund shares.

The RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The number
reflects both the fund's taxable distributions and a shareholder's gain or loss
from selling fund shares.


10 | DWS Global Thematic Fund
<PAGE>

HOW MUCH INVESTORS PAY

The fund's Class S shares have no sales charges or other shareholder fees other
than a short-term redemption/exchange fee. This information doesn't include any
fees that may be charged by your financial advisor. The fund does have annual
operating expenses, and as a shareholder of Class S shares you pay them
indirectly.



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FEE TABLE                                             CLASS S
--------------------------------------------------------------------------------
<S>                                                   <C>
 SHAREHOLDER FEES, paid directly from your investment
--------------------------------------------------------------------------------
 Redemption/Exchange fee on shares
 owned less than 15 days (as % of
 redemption proceeds) 1                                  2.00%
--------------------------------------------------------------------------------
 ANNUAL OPERATING EXPENSES, deducted from fund assets
--------------------------------------------------------------------------------
 Management Fee 2                                        0.94%
--------------------------------------------------------------------------------
 Distribution/Service (12b-1) Fee                        None
--------------------------------------------------------------------------------
 Other Expenses                                          0.24
--------------------------------------------------------------------------------
 Acquired Funds (Underlying Funds) Fees
 and Expenses 3                                          0.01
--------------------------------------------------------------------------------
 TOTAL ANNUAL OPERATING EXPENSES                         1.19
--------------------------------------------------------------------------------
</TABLE>



1    This fee is charged on all applicable redemptions or exchanges. Please see
     "Policies You Should Know About - Policies about transactions" for further
     information.

2    Includes 0.10% administration fee.


3    The indicated is based on the indirect net expenses associated with the
     fund's investment in the underlying funds for the fiscal year ended August
     31, 2007.


Based on the costs above, this example helps you compare the fund's Class S
shares expenses to those of other mutual funds. The example assumes the
expenses above remain the same, and that you invested $10,000, earned 5% annual
returns, reinvested all dividends and distributions, and sold your shares at
the end of each period. This is only an example; actual expenses will be
different.



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                    <C>         <C>          <C>          <C>
 Class S shares        $121         $378         $654       $1,443
--------------------------------------------------------------------------------
</TABLE>


                                                  DWS Global Thematic Fund  | 11
<PAGE>


<TABLE>
--------------------------------------------------------------------------------
<S>                                                             <C>
                                                                Class S
                                            ticker symbol       SCINX
                                              fund number       2068

DWS INTERNATIONAL FUND
--------------------------------------------------------------------------------

</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term growth of capital by investing at least
            65% of its total assets in foreign equities (equities issued by
            foreign-based companies and listed on foreign exchanges).

            Although the fund can invest in companies of any size and from any
            country, it invests mainly in common stocks of established
            companies in countries with developed economies (other than the
            United States). The fund may invest up to 20% of net assets in
            foreign debt securities, including convertible bonds. The fund's
            equity investments are mainly common stocks, but may also include
            preferred stocks and other securities with equity characteristics,
            such as convertible securities and warrants.

            In choosing securities, the portfolio manager uses a combination of
            two analytical disciplines:

            BOTTOM-UP RESEARCH. The manager look for individual companies with
            a history of above average growth, strong competitive positioning,
            attractive prices relative to potential growth, sound financial
            strength and effective management, among other factors.

            TOP-DOWN ANALYSIS. The manager considers the economic outlooks for
            various sectors and industries while looking for those that may
            benefit from changes in the overall business environment.

            The manager may favor different types of securities from different
            industries and companies at different times, while still
            maintaining variety in terms of the types of securities, issuers
            and countries represented.

            The manager will normally sell a stock when the manager believes
            its price is unlikely to go much higher, its fundamentals have
            deteriorated, other investments offer better opportunities or in
            the course of adjusting the fund's exposure to a given country.


12 | DWS International Fund
<PAGE>


            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.



            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. As with most stock funds, an important factor
            with this fund is how stock markets perform - (to the extent the
            fund invests in a particular geographic region, the fund's
            performance may be proportionately affected by that region's general
            performance). When stock prices fall, you should expect the value of
            your investment to fall as well. Because a stock represents
            ownership in its issuer, stock prices can be hurt by poor
            management, shrinking product demand and other business risks. These
            may affect single companies as well as groups of companies. In
            addition, movements in financial markets may adversely affect a
            stock's price, regardless of how well the company performs. The
            market as a whole may not favor the types of investments the fund
            makes and the fund may not be able to get attractive prices for
            them.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The fund is designed for investors who are interested in a broadly diversified
non-US international investment with the emphasis squarely on long-term growth
of capital.

                                                    DWS International Fund  | 13
<PAGE>

            -  POLITICAL RISK. Some foreign governments have limited the outflow
               of profits to investors abroad, imposed restrictions on the
               exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized foreign
               investment and imposed high taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a foreign company, as compared
               to the financial reports of US companies.

            -  LIQUIDITY RISK. Investments that trade less can be more
               difficult or more costly to buy, or to sell, than more liquid or
               active investments. This liquidity risk is a factor of the
               trading volume of a particular investment, as well as the size
               and liquidity of the entire local market. On the whole, foreign
               exchanges are smaller and less liquid than the US market. This
               can make buying and selling certain investments more difficult
               and costly. Relatively small transactions in some instances can
               have a disproportionately large effect on the price and supply
               of securities. In certain situations, it may become virtually
               impossible to sell an investment in an orderly fashion at a
               price that approaches portfolio management's estimate of its
               value. For the same reason, it may at times be difficult to
               value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. This creates the possibility that changes in
               exchange rates between foreign currencies and the US dollar will
               affect the US dollar value of foreign securities or the income
               or gain received on these securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the remedies available in the US.

14 | DWS International Fund
<PAGE>

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US investments.
               The procedures and rules governing foreign transactions and
               custody may also involve delays in payment, delivery or recovery
               of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            EMERGING MARKET RISK. All of the risks of investing in foreign
            securities are increased in connection with investments in emerging
            markets securities. In addition, profound social changes and
            business practices that depart from norms in developed countries'
            economies have hindered the orderly growth of emerging economies
            and their markets in the past and have caused instability. High
            levels of debt tend to make emerging economies heavily reliant on
            foreign capital and vulnerable to capital flight. These countries
            are also more likely to experience high levels of inflation,
            deflation or currency devaluation, which could also hurt their
            economies and securities markets. For these and other reasons,
            investments in emerging markets are often considered speculative.

            PRICING RISK. At times, market conditions might make it hard to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such methodologies, it is
            possible that the value determined for an investment may be
            different than the value realized upon such investment's sale. If
            the fund has valued its securities too highly, you may end up
            paying too much for fund shares when you buy into the fund. If the
            fund underestimates the price of its securities, you may not
            receive the full market value for your fund shares when you sell.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially


                                                    DWS International Fund  | 15
<PAGE>

            while the loan is outstanding. However, loans will be made only to
            borrowers selected by the fund's delegate after a review of
            relevant facts and circumstances, including the creditworthiness of
            the borrower.


            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may not have the intended effects and may result in losses or
            missed opportunities; the risk that the fund will be unable to sell
            the derivative because of an illiquid secondary market; the risk
            that a counterparty is unwilling or unable to meet its obligation;
            and the risk that the derivative transaction could expose the fund
            to the effects of leverage, which could increase the fund's
            exposure to the market and magnify potential losses. There is no
            guarantee that derivatives, to the extent employed, will have the
            intended effect, and their use could cause lower returns or even
            losses to the fund. The use of derivatives by the fund to hedge
            risk may reduce the opportunity for gain by offsetting the positive
            effect of favorable price movements.

            Another factor that could affect performance is:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.



16 | DWS International Fund
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.


The bar chart shows how the performance of the fund's Class S shares has varied
from year to year, which may give some idea of risk. The table on the following
page shows how fund performance compares to relevant index information (which,
unlike fund performance, does not reflect fees or expenses). The performance of
both the fund and the index information varies over time. All figures assume
reinvestment of dividends and distributions (in the case of after-tax returns,
reinvested net of assumed tax rates).


The table shows returns for Class S shares on a before-tax and after-tax basis.
After-tax returns are estimates calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

DWS International Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Class S

[BAR CHART GRAPHIC APPEARS HERE]


<TABLE>
<S>      <C>        <C>        <C>         <C>         <C>         <C>        <C>        <C>        <C>
7.98     18.62      57.89       -19.23      -26.89      -16.37     27.91      16.85      16.29      26.15
1997     1998       1999        2000        2001       2002        2003       2004       2005       2006
</TABLE>

<TABLE>
<CAPTION>
2007 TOTAL RETURN AS OF SEPTEMBER 30: 16.36%
<S>                                          <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:

BEST QUARTER: 30.46%, Q4 1999                WORST QUARTER: -19.37%, Q3 2002
</TABLE>


                                                   DWS International Fund  | 17
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2006


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                              1 YEAR       5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                                           <C>           <C>          <C>
 CLASS S
   Return before Taxes                          26.15        12.89         8.15
--------------------------------------------------------------------------------
   Return after Taxes on Distributions          25.40        12.69         7.14
--------------------------------------------------------------------------------
   Return after Taxes on Distributions
   and Sale of Fund Shares                      17.56        11.34         6.82
--------------------------------------------------------------------------------
 MORGAN STANLEY CAPITAL
 INTERNATIONAL (MSCI) EUROPE,
 AUSTRALASIA, FAR EAST (EAFE) INDEX
 (reflects no deductions for fees,
 expenses or taxes)                             26.34        14.98         7.71
--------------------------------------------------------------------------------
</TABLE>



Total returns would have been lower had operating expenses not been reduced.

MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EUROPE, AUSTRALASIA AND THE FAR EAST
(EAFE) INDEX is an unmanaged index that tracks international stock performance
in the 21 developed markets of Europe, Australasia and the Far East.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 728-3337 or visit our Web site at www.dws-scudder.com.


--------------------------------------------------------------------------------
The RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund
shares at the end of the period. The number represents only the fund's taxable
distributions and not a shareholder's gain or loss from selling fund shares.

The RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The number
reflects both the fund's taxable distributions and a shareholder's gain or loss
from selling fund shares.


18 | DWS International Fund
<PAGE>

HOW MUCH INVESTORS PAY

The fund's Class S shares have no sales charges or other shareholder fees, other
than a short-term redemption/exchange fee. This information doesn't include any
fees that may be charged by your financial advisor. The fund does have annual
operating expenses and as a shareholder of Class S shares you pay them
indirectly.



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FEE TABLE                                                       CLASS S
--------------------------------------------------------------------------------
<S>                                    <C>
 SHAREHOLDER FEES, paid directly from your investment
--------------------------------------------------------------------------------
 Redemption/Exchange fee on shares
 owned less than 15 days (as % of
 redemption proceeds) 1                                         2.00%
 ANNUAL OPERATING EXPENSES, deducted from fund assets
--------------------------------------------------------------------------------
 Management Fee 2                                               0.67%
--------------------------------------------------------------------------------
 Distribution/Service (12b-1) Fee                               None
--------------------------------------------------------------------------------
 Other Expenses                                                 0.25
--------------------------------------------------------------------------------
 TOTAL ANNUAL OPERATING EXPENSES 3                              0.92
--------------------------------------------------------------------------------
</TABLE>



1    This fee is charged on all applicable redemptions or exchanges. Please see
     "Policies You Should Know About - Policies about transactions" for further
     information.


2    Restated on an annualized basis to reflect fee changes that took effect on
     June 11, 2007. Includes 0.10% administration fee.

3    Through November 30, 2010, the Advisor has contractually agreed to waive
     all or a portion of its management fee and reimburse or pay operating
     expenses of the fund to the extent necessary to maintain the fund's total
     operating expenses at 0.95% for Class S shares, excluding certain expenses
     such as extraordinary expenses, taxes, brokerage and interest.


Based on the costs above, this example helps you compare the fund's Class S
shares expenses to those of other mutual funds. This example assumes the
expenses above remain the same. It also assumes that you invested $10,000,
earned 5% annual returns, reinvested all dividends and distributions and sold
your shares at the end of each period. This is only an example; actual expenses
will be different.



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                    <C>         <C>          <C>          <C>
 Class S shares         $94         $293         $509       $1,131
--------------------------------------------------------------------------------
</TABLE>




                                                    DWS International Fund  | 19
<PAGE>


OTHER POLICIES AND RISKS


           While the previous pages describe the main points of each fund's
           strategy and risks, there are a few other issues to know about:

           -  Although major changes tend to be infrequent, each fund's Board
              could change a fund's investment objective without seeking
              shareholder approval.


           -  As a temporary defensive measure, each fund could shift up to
              100% of assets into investments such as money market securities
              and DWS International Fund could shift up to 100% of assets into
              US or Canadian money market securities This could prevent losses,
              but, while engaged in a temporary defensive position, a fund will
              not be pursuing its investment goal. However, portfolio
              management may choose not to use these strategies for various
              reasons, even in volatile market conditions.



           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in each fund.

           If you want more information on each fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that a fund will achieve its
           goal.

           A complete list of each fund's portfolio holdings is posted as of
           the month-end on www.dws-scudder.com (the Web site does not form a
           part of this prospectus) on or after the last day of the following
           month. This posted information generally remains accessible at least
           until the date on which a fund files its Form N-CSR or N-Q with the
           Securities and Exchange Commission for the period that includes the
           date as of which the posted information is current. In addition,
           each fund's top ten holdings and other fund information is posted on
           www.dws-scudder.com as of the calendar quarter-end on or after the
           15th day following quarter-end. Each fund's Statement of Additional
           Information includes a description of a fund's policies and
           procedures with respect to the disclosure of a fund's portfolio
           holdings.


20 | Other Policies and Risks
<PAGE>

WHO MANAGES AND OVERSEES THE FUNDS

           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for each fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for each fund and conducts research that leads to these
           purchase and sale decisions. The Advisor provides a full range of
           global investment advisory services to institutional and retail
           clients.

           DWS Scudder is part of Deutsche Asset Management, which is the
           marketing name in the US for the asset management activities of
           Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS
           Trust Company.

           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.

           The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank
           AG. Deutsche Bank AG is a major global banking institution that is
           engaged in a wide range of financial services, including investment
           management, mutual funds, retail, private and commercial banking,
           investment banking and insurance.


           MANAGEMENT FEE. The Advisor receives a management fee from each
           fund. Below are the actual rates paid by each fund for the most
           recent fiscal year, as a percentage of each fund's average daily net
           assets.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FUND NAME                                               FEE PAID
--------------------------------------------------------------------------------
<S>                                                     <C>
  DWS Global Thematic Fund                              0.84%
--------------------------------------------------------------------------------
  DWS International Fund                                0.58%
--------------------------------------------------------------------------------
</TABLE>




                                        Who Manages and Oversees the Funds  | 21
<PAGE>


           Effective June 11, 2007, DWS International Fund pays the Advisor
           under the investment management agreement a fee, calculated daily
           and paid monthly, at the annual rate of 0.565% of the fund's average
           daily net assets up to $2.5 billion, 0.545% of the next $2.5
           billion, 0.525% of the next $5 billion, 0.515% of the next $5
           billion and 0.465% thereafter.

           A discussion regarding the basis for the Board's approval of each
           fund's investment management agreement is contained in the most
           recent shareholder reports for the semi-annual period ended February
           28 (see "Shareholder reports" on the back cover).


           Under a separate administrative services agreement between each fund
           and the Advisor, each fund pays the Advisor for providing most of
           each fund's administrative services.


22 | Who Manages and Oversees the Funds
<PAGE>

Portfolio management

The following person handles the day-to-day management of DWS Global Thematic
Fund.

DWS GLOBAL THEMATIC FUND

Oliver Kratz
Managing Director of Deutsche Asset Management and Lead Manager of the fund.

-   Joined Deutsche Asset Management in 1996, having since served as portfolio
    manager for European Equity Fund and Global Emerging Markets analyst for
    International Equity Fund, after two years of experience at Merrill Lynch,
    Brown Brothers Harriman and McKinsey & Co.; authored Frontier Emerging
    Markets Securities Price Behavior and Valuation; Kluwers Academic
    Publishers, 1999; member of Budapest Stock Exchange Advisory Board.

-   Head of Global Thematic Equity; Co-Head of Global Agribusiness; Lead
    Portfolio Manager Global Thematic Strategy: New York.

-   Joined the fund in 2003.
-   BA, Tufts University and Karlova Universidad, Prague; MALD, Ph.D, The
    Fletcher School, administered jointly by Harvard University and Tufts
    University.

The following person handles the day-to-day management of DWS International
Fund.

DWS INTERNATIONAL FUND

Matthias Knerr, CFA
Director, Deutsche Asset Management and Portfolio Manager of the fund.

-   Joined Deutsche Asset Management in 1995 and the fund in 2004.
-   Portfolio manager for International Equities.
-   BS, Pennsylvania State University.

Each fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in each fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


                                        Who Manages and Oversees the Funds  | 23
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in a
fund would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with each
fund's financial statements, is included in each fund's annual report (see
"Shareholder reports" on the back cover).


DWS Global Thematic Fund - Class S


<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                        2007          2006          2005          2004          2003
----------------------------------------------------------------------------------------------------------------
<S>                                           <C>            <C>           <C>           <C>           <C>
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD      $  34.99      $  29.64      $  22.82       $ 20.41      $  18.76
----------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
  Net investment income a                      .38 c         .29           .25           .07           .16
----------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain
  (loss)                                      6.58          7.62          6.66          2.66          1.69
----------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS            6.96          7.91          6.91          2.73          1.85
----------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                     (  .22)       (  .27)       (  .09)        ( .32)       (  .20)
----------------------------------------------------------------------------------------------------------------
  Net realized gains                        ( 6.00)       ( 2.29)            -             -             -
----------------------------------------------------------------------------------------------------------------
  TOTAL DISTRIBUTIONS                       ( 6.22)       ( 2.56)       (  .09)        ( .32)       (  .20)
----------------------------------------------------------------------------------------------------------------
Redemption fees                                .00*          .00*          .00*            -             -
----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD            $  35.73      $  34.99      $  29.64       $ 22.82      $  20.41
----------------------------------------------------------------------------------------------------------------
Total Return (%)                             21.48 c       28.01         30.35         13.36 b       10.01
----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)       1,440         1,186           832           703           705
----------------------------------------------------------------------------------------------------------------
Ratio of expenses (%)                         1.18          1.27          1.25          1.42          1.43
----------------------------------------------------------------------------------------------------------------
Ratio of net investment income (%)            1.07 c         .91           .96           .31           .89
----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)                    151           143            54            81            55
----------------------------------------------------------------------------------------------------------------
</TABLE>




a   Based on average shares outstanding during the period.

b   Total return would have been lower had certain expenses not been reduced.

c   Includes non-recurring income from the Advisor recorded as a result of an
    administrative proceeding regarding disclosure of brokerage allocation
    practices in connection with sales of DWS Scudder Funds. The non-recurring
    income resulted in an increase of net investment income of $0.003 per share
    and an increase in the ratio of net investment income of 0.01%. Excluding
    this non-recurring income, total return would have been 0.011% lower.

*   Amount is less than $.005.


24 | Financial Highlights
<PAGE>


DWS International Fund - Class S



<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                         2007            2006           2005            2004           2003
-----------------------------------------------------------------------------------------------------------------------
<S>                                            <C>             <C>             <C>            <C>             <C>
SELECTED PER SHARE DATA
-----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD       $  57.34        $  47.74       $  38.10        $  33.36       $  32.51
-----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
  Net investment income a                       .97 d          1.28 c          .71             .30            .35
-----------------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain
  (loss)                                      11.11            9.37           9.54            4.86            .80
-----------------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS            12.08           10.65          10.25            5.16           1.15
-----------------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                      ( 1.85)         ( 1.05)        (  .61)         (  .42)        (  .30)
-----------------------------------------------------------------------------------------------------------------------
Redemption fees*                                .00             .00            .00             .00            .00
-----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD             $  67.57        $  57.34       $  47.74        $  38.10       $  33.36
-----------------------------------------------------------------------------------------------------------------------
Total Return (%)                              21.42 b         22.61 b        27.06           15.49 b         3.62
-----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)        1,870           1,390          1,278           1,273          1,444
-----------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions (%)                                  .93            1.02            .98            1.23           1.18
-----------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions (%)                                  .93            1.01            .98            1.17           1.18
-----------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (%)             1.52 d          2.40 c         1.63             .79           1.15
-----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)                     104              76             57              82            104
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


a   Based on average shares outstanding during the period.

b   Total return would have been lower had certain expenses not been reduced.

c   Net investment income per share and the ratio of net investment income
    include non-recurring dividend income amounting to $0.51 per share and 0.98%
    of average daily net assets, respectively.

d   Net investment income per share and the ratio of net investment income
    include non-recurring dividend income amounting to $0.31 per share and 0.49%
    of average daily net assets, respectively.

*   Amount is less than $.005.


                                                      Financial Highlights  | 25
<PAGE>

HOW TO INVEST IN THE FUNDS

The following pages tell you how to invest in a fund and what to expect as a
shareholder. If you're investing directly with DWS Scudder, all of this
information applies to you.

The following pages also tell you about many of the services, choices and
benefits of being a shareholder. You'll also find information on how to check
the status of your account using the method that's most convenient for you.

If you're investing through a "third party provider" - for example, a workplace
retirement plan, financial supermarket or financial advisor - your provider may
have its own policies or instructions and you should follow those.

Please remember, CLASS S shares are generally only available to new investors
through fee-based programs of investment dealers that have special agreements
with the fund's distributor, through certain group retirement plans and through
certain registered investment advisors. These dealers and advisors typically
charge ongoing fees for services they provide.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.
<PAGE>

How to Buy, Sell and Exchange Shares

BUYING SHARES: Use these instructions to invest directly. Make out your check
to "DWS Scudder."

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
 FIRST INVESTMENT                              ADDITIONAL INVESTMENTS
-----------------------------------------------------------------------------------------
<S>                                            <C>
 $2,500 or more for regular accounts           $50 or more for regular accounts and
 $1,000 or more for IRAs                       IRA accounts
 $1,000 or more with an Automatic              $50 or more with an Automatic
 Investment Plan                               Investment Plan
-----------------------------------------------------------------------------------------
 BY MAIL OR EXPRESS MAIL (SEE BELOW)

 -  Fill out and sign an application           Send a DWS Scudder investment slip or
                                               short note that includes:
 -  Send it to us at the appropriate
    address, along with an investment          -  fund and class name
    check
                                               -  account number

                                               -  check payable to "DWS Scudder"
-----------------------------------------------------------------------------------------
 BY WIRE
 -  Call (800) 728-3337 for instructions       -  Call (800) 728-3337 for instructions
-----------------------------------------------------------------------------------------
 BY PHONE
 Not available                                 -  Call (800) 728-3337 for instructions
-----------------------------------------------------------------------------------------
 WITH AN AUTOMATIC INVESTMENT PLAN
 -  Fill in the information on your            -  To set up regular investments from a
    application and include a voided check        bank checking account, call
                                                  (800) 728-3337
-----------------------------------------------------------------------------------------
 USING QuickBuy
 Not available                                 -  Call (800) 728-3337 to make sure
                                                  QuickBuy is set up on your account; if
                                                  it is, you can request a transfer from
                                                  your bank account of any amount
                                                  between $50 and $250,000
-----------------------------------------------------------------------------------------
 ON THE INTERNET
 -  Go to www.dws-scudder.com                  -  Call (800) 728-3337 to ensure you have
                                                  electronic services
 -  Print out a prospectus and a new
    account application                        -  Register at www.dws-scudder.com

 -  Complete and return the application        -  Follow the instructions for buying
    with your check                               shares with money from your bank
                                                  account
-----------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
REGULAR MAIL:

First Investment: DWS Scudder, PO Box 219356, Kansas City, MO 64121-9356
Additional Investments: DWS Scudder, PO Box 219154, Kansas City, MO 64121-9154

EXPRESS, REGISTERED OR CERTIFIED MAIL:
DWS Scudder, 210 West 10th Street, Kansas City, MO 64105-1614


                                      How to Buy, Sell and Exchange Shares  | 27
<PAGE>

EXCHANGING OR SELLING SHARES: Use these instructions to exchange or sell shares
in an account opened directly with DWS Scudder.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
 EXCHANGING INTO ANOTHER FUND                    SELLING SHARES
-----------------------------------------------------------------------------------------
<S>                                             <C>
 -  Exchanges into existing accounts:           Some transactions, including most for
    $50 minimum per fund                        over $100,000, can only be ordered in
                                                writing with a signature guarantee;
 -  Exchanges into new accounts:                please see "Signature Guarantee" for
    $2,500 minimum per fund                     details
    $1,000 minimum for IRAs
-----------------------------------------------------------------------------------------
 BY PHONE OR WIRE
 -  Call (800) 728-3337 for instructions        -  Call (800) 728-3337 for instructions
-----------------------------------------------------------------------------------------
 USING THE AUTOMATED INFORMATION LINE
 -  Call (800) 728-3337 for instructions        -  Call (800) 728-3337 for instructions
-----------------------------------------------------------------------------------------
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)
 Your instructions should include:              Your instructions should include:

 -  the fund, class and account number          -  the fund, class and account number
    you're exchanging out of                       from which you want to sell shares

 -  the dollar amount or number of shares       -  the dollar amount or number of shares
    you want to exchange                           you want to sell

 -  the name and class of the fund you          -  your name(s), signature(s) and
    want to exchange into                          address, as they appear on your
                                                   account
 -  your name(s), signature(s) and
    address, as they appear on your             -  a daytime telephone number
    account

 -  a daytime telephone number
-----------------------------------------------------------------------------------------
 WITH AN AUTOMATIC EXCHANGE PLAN                 WITH AN AUTOMATIC WITHDRAWAL PLAN
 -  To set up regular exchanges from a          -  To set up regular cash payments from
    fund account, call (800) 728-3337              a DWS fund account, call
                                                   (800) 728-3337
-----------------------------------------------------------------------------------------
 USING QuickSell
 Not available                                  -  Call (800) 728-3337 to make sure
                                                   QuickSell is set up on your account; if
                                                   it is, you can request a transfer to your
                                                   bank account of any amount between
                                                   $50 and $250,000
-----------------------------------------------------------------------------------------
 ON THE INTERNET
 -  Register at www.dws-scudder.com             -  Register at www.dws-scudder.com

 -  Follow the instructions for making on-      -  Follow the instructions for making on-
    line exchanges                                 line redemptions
-----------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------


<TABLE>
<S>               <C>
TO REACH US:      WEB SITE: www.dws-scudder.com
                  TELEPHONE REPRESENTATIVE: (800) 728-3337, M-F, 9 a.m.- 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m.- 6 p.m. ET
</TABLE>




28 | How to Buy, Sell and Exchange Shares
<PAGE>

           Financial intermediary support payments


           The Advisor, DWS Scudder Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to each fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/or servicing of fund investors and fund
           shares ("revenue sharing"). Such revenue sharing payments are in
           addition to any distribution or service fees payable under any Rule
           12b-1 or service plan of each fund, any record keeping/sub-transfer
           agency/networking fees payable by each fund (generally through the
           Distributor or an affiliate) and/or the Distributor to certain
           financial advisors for performing such services and any sales
           charges, commissions, non-cash compensation arrangements expressly
           permitted under applicable rules of the Financial Industry
           Regulatory Authority ("FINRA") or other concessions described in the
           fee table or elsewhere in this prospectus or the Statement of
           Additional Information as payable to all financial advisors. For
           example, the Advisor, the Distributor and/or their affiliates may
           compensate financial advisors for providing a fund with "shelf
           space" or access to a third party platform or fund offering list or
           other marketing programs, including, without limitation, inclusion
           of the fund on preferred or recommended sales lists, mutual fund
           "supermarket" platforms and other formal sales programs; granting
           the Distributor access to the financial advisor's sales force;
           granting the Distributor access to the financial advisor's
           conferences and meetings; assistance in training and educating the
           financial advisor's personnel; and obtaining other forms of
           marketing support.


           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of each fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.


                                      How to Buy, Sell and Exchange Shares  | 29
<PAGE>

           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS Fund shares or the retention
           and/or servicing of investors and DWS Fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of each fund serviced and maintained by the financial
           advisor, .10% to .25% of sales of each fund attributable to the
           financial advisor, a flat fee of $12,500 up to $500,000, or any
           combination thereof. These amounts are subject to change at the
           discretion of the Advisor, the Distributor and/or their affiliates.
           Receipt of, or the prospect of receiving, this additional
           compensation may influence your financial advisor's recommendation
           of each fund or of any particular share class of each fund. You
           should review your financial advisor's compensation disclosure
           and/or talk to your financial advisor to obtain more information on
           how this compensation may have influenced your financial advisor's
           recommendation of each fund. Additional information regarding these
           revenue sharing payments is included in each fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Scudder branded retirement plan platform (the "Platform") with the
           level of revenue sharing payments being based upon sales of both the
           DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for each fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of


30 | How to Buy, Sell and Exchange Shares
<PAGE>

           broker-dealers to execute portfolio transactions for each fund. In
           addition, the Advisor, the Distributor and/or their affiliates will
           not use fund brokerage to pay for their obligation to provide
           additional compensation to financial advisors as described above.


POLICIES YOU SHOULD KNOW ABOUT


           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.


           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by a fund. Please note that a
           financial advisor may charge fees separate from those charged by a
           fund and may be compensated by a fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           728-3337.

           Policies about transactions

           EACH FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. Each fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Questions? You can speak to a DWS Scudder representative between 9 a.m. and 6
p.m. Eastern time on any fund business day by calling (800) 728-3337.

                                            Policies You Should Know About  | 31
<PAGE>

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by each fund, then we may reject your application and order.

           Each fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated.

           If we are unable to verify your identity within time frames
           established by each fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in
           each fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           INITIAL PURCHASE. The minimum initial investment is $2,500, except
           for investments on behalf of participants in certain fee-based and
           wrap programs offered through certain financial intermediaries
           approved by the Advisor, for which there is no minimum initial
           investment; and fiduciary accounts such as IRAs


32 | Policies You Should Know About
<PAGE>

           and custodial accounts such as Uniform Gifts to Minors Act and
           Uniform Transfers to Minors Act accounts for which the minimum
           initial investment is $1,000 per account. In addition, the minimum
           initial investment is $1,000 if an automatic investment plan of $50
           per month is established. Group retirement plans and certain other
           accounts have similar or lower minimum share balance requirements.


           SUB-MINIMUM BALANCES. Each fund may close your account and send you
           the proceeds if your balance falls below $2,500 ($1,000 with an
           Automatic Investment Plan funded with $50 or more per month in
           subsequent investments); $250 for retirement accounts. We will give
           you 60 days' notice (90 days for retirement accounts) so you can
           either increase your balance or close your account (these policies
           don't apply to investors with $100,000 or more in DWS fund shares,
           investors in certain fee-based and wrap programs offered through
           certain financial intermediaries approved by the Advisor, or group
           retirement plans and certain other accounts having lower minimum
           share balance requirements).

           Because of the high cost of servicing accounts with low balances, an
           account maintenance fee of $6.25 per quarter (for a $25 annual fee)
           will be assessed on accounts whose balances fail to meet the minimum
           initial investment requirement for a period of 90 days prior to the
           assessment date. The quarterly assessment will occur on or about the
           15th of the last month in each calendar quarter. Please note that
           the fee will be assessed on accounts that fall below the minimum for
           any reason, including due to market value fluctuations, redemptions
           or exchanges. The account maintenance fee will apply to all
           shareholders of the DWS Funds except for: accounts with an automatic
           investment plan, accounts held in an omnibus account through a
           financial services firm, accounts maintained on behalf of
           participants in certain fee based and wrap programs offered through
           certain financial intermediaries approved by the Advisor,
           participant level accounts in group retirement plans held on the
           records of a retirement plan record keeper.


           SUBSEQUENT INVESTMENTS. The minimum subsequent investment is $50.
           However, there is no minimum investment requirement for subsequent
           investments on behalf of participants in certain fee-based and wrap
           programs offered through certain financial intermediaries approved
           by the Advisor.


                                            Policies You Should Know About  | 33
<PAGE>


           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of a fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if a fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by a fund (e.g.,
           "time zone arbitrage"). Each fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.


           Pursuant to its policies, each fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). Each fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior notice. For
           example, a fund may in its discretion reject or cancel a purchase or
           an exchange order even if the transaction is not subject to the
           specific roundtrip transaction limitation described below if the
           Advisor believes that there appears to be a pattern of short-term or
           excessive trading activity by a shareholder or deems any other
           trading activity harmful or disruptive to a fund. Each fund, through
           its Advisor and Transfer Agent, will measure short-term and
           excessive trading by the number of roundtrip transactions within a
           shareholder's account during a rolling 12-month period. A
           "roundtrip" transaction is defined as any combination of purchase
           and redemption activity (including exchanges) of the same fund's
           shares. Each fund may take other trading activity into account if a
           fund believes such activity is of an amount or frequency that may be
           harmful to long-term shareholders or disruptive to portfolio
           management.

           Shareholders are limited to four roundtrip transactions in the same
           DWS Fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS Fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS Fund. Each fund has sole discretion whether to remove a block
           from a shareholder's


34 | Policies You Should Know About
<PAGE>

           account. The rights of a shareholder to redeem shares of a DWS Fund
           are not affected by the four roundtrip transaction limitation, but
           all redemptions remain subject to each fund's redemption fee policy
           (see "Redemption fees" described below).

           The Advisor may make exceptions to the roundtrip transaction policy
           for certain types of transactions if in its opinion the transactions
           do not represent short-term or excessive trading or are not abusive
           or harmful to a fund, such as, but not limited to, systematic
           transactions, required minimum retirement distributions,
           transactions initiated by a fund or administrator and transactions
           by certain qualified fund-of-fund(s).


           In certain circumstances where shareholders hold shares of a fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of a fund. A financial intermediary's
           policy relating to short-term or excessive trading may be more or
           less restrictive than the DWS Funds' policy, may permit certain
           transactions not permitted by the DWS Funds' policies, or prohibit
           transactions not subject to the DWS Funds' policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of a fund that provide a substantially similar level of
           protection for each fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.


           In addition, if a fund invests some portion of its assets in foreign
           securities, it has adopted certain fair valuation practices intended
           to protect the fund from "time zone arbitrage" with respect to its
           foreign securities holdings and other trading practices that seek to
           exploit variations in portfolio valuation that arise from the nature
           of the securities held by a fund. (See "How each fund calculates
           share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying


                                            Policies You Should Know About  | 35
<PAGE>

           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of a fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in a fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

           Each fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. Each fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value) on all fund
           shares redeemed or exchanged within 15 days of buying them (either
           by purchase or exchange). The redemption fee is paid directly to
           each fund and is designed to encourage long-term investment and to
           offset transaction and other costs associated with short-term or
           excessive trading. For purposes of determining whether the
           redemption fee applies, shares held the longest time will be treated
           as being redeemed first and shares held the shortest time will be
           treated as being redeemed last.

           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with a fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally netted
           against one another and placed on an aggregate basis; consequently
           the identities of the individuals on whose behalf the transactions
           are placed generally are not known to a fund. For this reason, each
           fund has undertaken to notify financial intermediaries of their
           obligation to assess the redemption fee on customer accounts and to
           collect and remit the proceeds to each fund. However, due to
           operational requirements, the intermediaries' methods for tracking
           and calculating the fee may be inadequate or differ in some respects
           from each fund's.


36 | Policies You Should Know About
<PAGE>


           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of participants in certain group retirement
           plans whose processing systems are incapable of properly applying
           the redemption fee to underlying shareholders; (iii) transactions on
           behalf of a shareholder to return any excess IRA contributions to
           the shareholder; (iv) transactions on behalf of a shareholder to
           effect a required minimum distribution on an IRA; (v) transactions
           on behalf of any mutual fund advised by the Advisor and its
           affiliates (e.g., "funds of funds") or, in the case of a
           master/feeder relationship, redemptions by the feeder fund from the
           master portfolio; (vi) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vii)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (viii)
           transactions involving hardship of any registered shareholder; (ix)
           systematic transactions with pre-defined trade dates for purchases,
           exchanges or redemptions, such as automatic account rebalancing, or
           loan origination and repayments; (x) transactions involving shares
           purchased through the reinvestment of dividends or other
           distributions; (xi) transactions involving shares transferred from
           another account in the same fund or converted from another class of
           the same fund (the redemption fee period will carry over to the
           acquired shares); (xii) transactions initiated by a fund or
           administrator (e.g., redemptions for not meeting account minimums,
           to pay account fees funded by share redemptions, or in the event of
           the liquidation or merger of the fund); or (xiii) transactions in
           cases when there are legal or contractual limitations or
           restrictions on the imposition of the redemption fee (as determined
           by a fund or its agents in their sole discretion). It is the policy
           of the DWS funds to permit approved fund platform providers to
           execute transactions within the funds without the imposition of a
           redemption fee if such providers have implemented alternative
           measures that are determined by the Advisor to provide controls on
           short-term and excessive trading that are comparable to the DWS
           funds' policies.



                                            Policies You Should Know About  | 37
<PAGE>

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 728-3337. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Scudder. You can also use this service to make exchanges and
           sell shares.

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 728-3337.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 728-3337 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           EACH FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. Each fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Scudder Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-SCUDDER.COM to get up-to-date information, review
balances or even place orders for exchanges.

38 | Policies You Should Know About
<PAGE>


           EACH FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by check,
           bank or Federal Funds wire transfer or by electronic bank transfer.
           Please note that a fund does not accept cash, money orders,
           traveler's checks, starter checks, third party checks (except checks
           for retirement plan asset transfers and rollovers or for Uniform
           Gifts to Minors Act/Uniform Transfers to Minors Act accounts),
           checks drawn on foreign banks or checks issued by credit card
           companies or Internet-based companies. Thus, subject to the
           foregoing exceptions for certain third party checks, checks that are
           otherwise permissible must be drawn by the account holder on a
           domestic bank and must be payable to a fund.


           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.


           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.


           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           728-3337 or contact your financial advisor for more information.


           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days.
           There are other circumstances when it could be longer: When you are
           selling shares you bought recently by check (redemption proceeds
           from such a sale are unavailable until the check has cleared), when
           you make purchases by ACH (the funds will be placed under a 10
           calendar day hold to ensure good funds) or when unusual
           circumstances prompt the SEC to allow further delays. Certain
           expedited redemption processes may also be


THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.

                                            Policies You Should Know About  | 39
<PAGE>

           delayed when you are selling recently purchased shares or in the
           event of closing of the Federal Reserve Bank's wire payment system.
           In addition, each fund reserves the right to suspend or postpone
           redemptions as permitted pursuant to
           Section 22(e) of the Investment Company Act of 1940. Generally,
           those circumstances are when 1) the New York Stock Exchange is
           closed other than customary weekend or holiday closings; 2) trading
           on the New York Stock Exchange is restricted; 3) an emergency exists
           which makes the disposal of securities owned by a fund or the fair
           determination of the value of a fund's net assets not reasonably
           practicable; or 4) the SEC, by order, permits the suspension of the
           right of redemption. Redemption payments by wire may also be delayed
           in the event of a non-routine closure of the Federal Reserve wire
           payment system. For additional rights reserved by each fund, please
           see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


           How each fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>            <C>                                           <C>
               TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy and sell shares is the NAV.



           EACH FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.


           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by a fund's Board, such as a
           fair valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of a fund's portfolio is believed to have been materially
           affected by a significant event, such as a natural disaster, an
           economic event like a bankruptcy filing, or a substantial
           fluctuation in domestic or foreign markets that has occurred between
           the close of the exchange or market on


40 | Policies You Should Know About
<PAGE>

           which the security is principally traded (for example, a foreign
           exchange or market) and the close of the New York Stock Exchange. In
           such a case, a fund's value for a security is likely to be different
           from the last quoted market price or pricing service information. In
           addition, due to the subjective and variable nature of fair value
           pricing, it is possible that the value determined for a particular
           asset may be materially different from the value realized upon such
           asset's sale. It is expected that the greater the percentage of fund
           assets that is invested in non-US securities, the more extensive
           will be a fund's use of fair value pricing. This is intended to
           reduce a fund's exposure to "time zone arbitrage" and other harmful
           trading practices. (See "Market timing policies and procedures.")

           TO THE EXTENT THAT A FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when a
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change significantly on days when the
           New York Stock Exchange is closed and you cannot buy or sell fund
           shares. Price changes in the securities a fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)


           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              as federal income tax if we have been notified by the IRS that
              you are subject to backup withholding or if you fail to provide
              us with a correct taxpayer ID number and certain certifications
              or certification that you are exempt from backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

                                            Policies You Should Know About  | 41
<PAGE>


           -  refuse, cancel, limit or rescind any purchase or exchange order,
              without prior notice; freeze any account (meaning you will not be
              able to purchase fund shares in your account); suspend account
              services; and/or involuntarily redeem your account if we think
              that the account is being used for fraudulent or illegal
              purposes; one or more of these actions will be taken when, at our
              sole discretion, they are deemed to be in a fund's best interests
              or when a fund is requested or compelled to do so by governmental
              authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less any applicable redemption fee); you may recognize a
              gain or loss on the redemption of your fund shares and incur a
              tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; a fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of a fund's net assets, whichever is less


           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust a fund's investment minimums
              at any time)


42 | Policies You Should Know About
<PAGE>

UNDERSTANDING DISTRIBUTIONS AND TAXES

           Each fund intends to distribute to its shareholders virtually all of
           its net earnings. Each fund can earn money in two ways: by receiving
           interest, dividends or other income from securities it holds and by
           selling securities for more than it paid for them. (Each fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) Each fund may not always pay a
           dividend or distribution for a given period.

           EACH FUND INTENDS TO PAY DISTRIBUTIONS to its shareholders annually
           in November or December, and, if necessary, may do so at other times
           as well.

           Dividends or distributions declared to shareholders of record in the
           last quarter of a given calendar year are treated for federal income
           tax purposes as if they were received on December 31 of that year,
           provided such dividends or distributions are paid by the end of the
           following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable. However, dividends and
           distributions received by retirement plans qualifying for tax
           exemption under federal income tax laws generally will not be
           taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different fund. Tell us your preference
           on your application. If you don't indicate a preference, your
           dividends and distributions will all be reinvested in shares of the
           fund without a sales charge (if applicable). Distributions are
           treated the same for federal income tax purposes whether you receive
           them in cash or reinvest them in additional shares. For
           employer-sponsored qualified plans, and retirement plans,
           reinvestment (at NAV) is the only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.

                                     Understanding Distributions and Taxes  | 43
<PAGE>

           gain or loss. The gain or loss will be long-term or short-term
           depending on how long you owned the shares that were sold. For
           federal income tax purposes, an exchange is treated the same as a
           sale.

           THE FEDERAL INCOME TAX STATUS of a fund's earnings you receive and
           your own fund transactions generally depend on their type:


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
------------------------------------------------------------------------------------------
<S>                                                   <C>
DISTRIBUTIONS FROM A FUND

-  gains from the sale of                             -  gains from the sale of
   securities held (or treated as                        securities held by a fund for
   held) by a fund for more than                         one year or less
   one year
                                                      -  all other taxable income
-  qualified dividend income
------------------------------------------------------------------------------------------
TRANSACTIONS INVOLVING FUND SHARES

-  gains from selling fund                            -  gains from selling fund
   shares held for more than                             shares held for one year or
   one year                                              less
------------------------------------------------------------------------------------------
</TABLE>


           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY A FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, a fund's yield
           on those securities would generally be decreased. Each fund may
           elect to pass through to its shareholders a credit or deduction for
           foreign taxes it has paid if at the end of its year more than 50% of
           a fund's total assets are stocks or securities of foreign
           corporations. In addition, any investments in foreign securities or
           foreign currencies may increase or accelerate a fund's recognition
           of ordinary income and may affect the timing or amount of the fund's
           distributions. If you invest in a fund through a taxable account,
           your after-tax return could be negatively impacted.

           To the extent that a fund invests in certain debt obligations or
           certain other securities, investments in these obligations or
           securities may cause a fund to recognize taxable income in excess of
           the cash generated by such obligations. Thus, a fund could be
           required at times to liquidate other investments in order to satisfy
           its distribution requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by a fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital


44 | Understanding Distributions and Taxes
<PAGE>

           gain rates. Qualified dividend income generally includes dividends
           from domestic and some foreign corporations. It does not include
           income from investments in debt securities or, generally, from
           REITs. In addition, a fund must meet certain holding period and
           other requirements with respect to the dividend-paying stocks in its
           portfolio and the shareholder must meet certain holding period and
           other requirements with respect to a fund's shares for the lower tax
           rates to apply.


           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been reduced to 15%. For taxable years beginning on or after January
           1, 2011, the long-term capital gain rate is scheduled to return to
           20%. For more information, see the Statement of Additional
           Information, under "Taxes."


           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE A FUND PAYS A DIVIDEND, you'll be getting
           some of your investment back as a taxable dividend. You can avoid
           this by investing after a fund declares a dividend. In
           tax-advantaged retirement accounts you do not need to worry about
           this.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains, but may be eligible for a dividends-received
           deduction for a portion of the income dividends they receive from a
           fund, provided certain holding period and other requirements are
           met.

           The above discussion is applicable to shareholders who are US
           persons. If you are a non-US person, please consult your own tax
           advisor with respect to the US tax consequences to you of an
           investment in a fund.


                                     Understanding Distributions and Taxes  | 45
<PAGE>

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary



           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The tables also assume that all dividends and
           distributions are reinvested. The annual fund expense ratios shown
           are net of any contractual fee waivers or expense reimbursements, if
           any, for the period of the contractual commitment. The tables do not
           reflect redemption fees, if any, which may be payable upon
           redemption. If redemption fees were shown, the "Hypothetical
           Year-End Balance After Fees and Expenses" amounts shown would be
           lower and the "Annual Fees and Expenses" amounts shown would be
           higher. Also, please note that if you are investing through a third
           party provider, that provider may have fees and expenses separate
           from those of the fund that are not reflected here. Mutual fund fees
           and expenses fluctuate over time and actual expenses may be higher
           or lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.



46 | Appendix
<PAGE>

DWS Global Thematic Fund - Class S


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
----------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
----------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.19%              3.81%       $ 10,381.00        $   121.27
----------------------------------------------------------------------------------------------
   2           10.25%        1.19%              7.77%       $ 10,776.52        $   125.89
----------------------------------------------------------------------------------------------
   3           15.76%        1.19%             11.87%       $ 11,187.10        $   130.68
----------------------------------------------------------------------------------------------
   4           21.55%        1.19%             16.13%       $ 11,613.33        $   135.66
----------------------------------------------------------------------------------------------
   5           27.63%        1.19%             20.56%       $ 12,055.80        $   140.83
----------------------------------------------------------------------------------------------
   6           34.01%        1.19%             25.15%       $ 12,515.12        $   146.20
----------------------------------------------------------------------------------------------
   7           40.71%        1.19%             29.92%       $ 12,991.95        $   151.77
----------------------------------------------------------------------------------------------
   8           47.75%        1.19%             34.87%       $ 13,486.94        $   157.55
----------------------------------------------------------------------------------------------
   9           55.13%        1.19%             40.01%       $ 14,000.80        $   163.55
----------------------------------------------------------------------------------------------
  10           62.89%        1.19%             45.34%       $ 14,534.23        $   169.78
----------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 1,443.18
----------------------------------------------------------------------------------------------
</TABLE>



DWS International Fund - Class S


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                  ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                       OF RETURN:
               0.00%                   $10,000                             5%
----------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER         ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND          FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES          EXPENSES
----------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.92%              4.08%       $ 10,408.00        $    93.88
----------------------------------------------------------------------------------------------
   2           10.25%        0.92%              8.33%       $ 10,832.65        $    97.71
----------------------------------------------------------------------------------------------
   3           15.76%        0.92%             12.75%       $ 11,274.62        $   101.69
----------------------------------------------------------------------------------------------
   4           21.55%        0.92%             17.35%       $ 11,734.62        $   105.84
----------------------------------------------------------------------------------------------
   5           27.63%        0.92%             22.13%       $ 12,213.40        $   110.16
----------------------------------------------------------------------------------------------
   6           34.01%        0.92%             27.12%       $ 12,711.70        $   114.66
----------------------------------------------------------------------------------------------
   7           40.71%        0.92%             32.30%       $ 13,230.34        $   119.33
----------------------------------------------------------------------------------------------
   8           47.75%        0.92%             37.70%       $ 13,770.14        $   124.20
----------------------------------------------------------------------------------------------
   9           55.13%        0.92%             43.32%       $ 14,331.96        $   129.27
----------------------------------------------------------------------------------------------
  10           62.89%        0.92%             49.17%       $ 14,916.70        $   134.54
----------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 1,131.28
----------------------------------------------------------------------------------------------
</TABLE>




                                                                  Appendix  | 47
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from a fund's management team
about recent market conditions and the effects of a fund's strategies on its
performance. They also have detailed performance figures, a list of everything
a fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about a fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
a fund, call (800) 728-3337, or contact DWS Scudder at the address listed
below. Each fund's SAI and shareholder reports are also available through the
DWS Scudder Web site at www.dws-scudder.com. These documents and other
information about each fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about each fund,
including each fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.


<TABLE>
<CAPTION>
DWS SCUDDER              SEC                     DISTRIBUTOR
--------------------------------------------------------------------------------
<S>                      <C>                     <C>
PO Box 219151            100 F Street, N.E.      DWS Scudder Distributors, Inc.
Kansas City, MO          Washington, D.C.        222 South Riverside Plaza
64121-9151               20549-0102              Chicago, IL 60606-5808
WWW.DWS-SCUDDER.COM      WWW.SEC.GOV             (800) 621-1148
(800) 728-3337           (800) SEC-0330
</TABLE>



<TABLE>
<S>                                      <C>                           <C>
SEC FILE NUMBER:

DWS Global/International Fund, Inc.        DWS Global Thematic Fund    811-4670
DWS International Fund, Inc.                 DWS International Fund    811-642
</TABLE>




(12/01/07) 68/07-2
[RECYCLED PAPER GRAPHIC APPEARS HERE]    [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]


<PAGE>


--------------------------------------------------------------------------------



                                DECEMBER 1, 2007








                                   PROSPECTUS
                              ------------------
                                CLASSES A AND C


--------------------------------------------------------------------------------



                   DWS INTERNATIONAL VALUE OPPORTUNITIES FUND



As with all mutual funds, the Securities and Exchange  Commission (SEC) does not
approve or disapprove these shares or determine  whether the information in this
prospectus  is  truthful  or  complete.  It is a criminal  offense for anyone to
inform you otherwise.


                                         [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]


<PAGE>


--------------------------------------------------------------------------------









CONTENTS
--------------------------------------------------------------------------------


<TABLE>
<S>      <C>
HOW THE FUND WORKS

  4      The Fund's Main Investment
         Strategy

  5      The Main Risks of Investing in
         the Fund

  8      The Fund's Performance
         History

  9      How Much Investors Pay

 11      Other Policies and Secondary
         Risks

 12      Who Manages and Oversees
         the Fund

 16      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUND

 19      Choosing a Share Class

 24      How to Buy Class A and C
         Shares

 25      How to Exchange or Sell
         Class A and C Shares

 28      Policies You Should Know
         About

 41      Understanding Distributions
         and Taxes

 44      Appendix
</TABLE>


<PAGE>

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
goal, the main strategies it uses to pursue that goal and the main risks that
could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.


CLASSES A AND C shares are generally intended for investors seeking the advice
and assistance of a financial advisor.


Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.


You can find DWS prospectuses on the Internet at WWW.DWS-SCUDDER.COM (the Web
site does not form a part of this prospectus).


<PAGE>


<TABLE>
--------------------------------------------------------------------------------
<S>                                             <C>        <C>
                                                 Class A    Class C
  ticker symbol                                  DNVAX      DNVCX
    fund number                                  455        755

DWS INTERNATIONAL VALUE OPPORTUNITIES FUND
--------------------------------------------------------------------------------

</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term capital appreciation, with current
            income as a secondary objective.


            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in the stocks and other
            securities with equity characteristics of companies in developed
            countries outside the United States. Almost all the companies in
            which the fund invests are based in the developed foreign countries
            that make up the Morgan Stanley Capital International Europe,
            Australasia and Far East Index ("MSCI EAFE (Reg. TM) Index"). The
            fund may also invest a portion of its assets in companies based in
            the emerging markets of Latin America, the Middle East, Europe,
            Asia and Africa if the portfolio managers believe that their return
            potential more than compensates for the extra risks associated with
            these markets. While the portfolio managers have invested in
            emerging markets in the past, under normal market conditions they
            do not consider this a central element of the fund's strategy.
            Typically, the fund would not hold more than 20% of its net assets
            in emerging markets. In implementing this overall strategy, the
            fund may experience a high portfolio turnover rate. The fund's
            equity investments are mainly common stocks, but may also include
            other types of equities such as preferred stocks or convertible
            securities. The fund may also invest up to 20% of its assets in
            cash equivalents, US investment-grade fixed-income securities, and
            US stocks and other equities.


            The fund invests for the long term. The portfolio managers employ a
            value strategy and invest in companies that they believe are
            undervalued. These are typically companies that have been
            historically sound but are temporarily out of favor. The fund
            intends to invest primarily in companies whose market
            capitalizations fall within the normal range of the MSCI EAFE (Reg.
            TM) Index.


4 | DWS International Value Opportunities Fund
<PAGE>


            The portfolio managers track several thousand companies to arrive
            at between 50 to 70 stocks the fund normally holds. The managers
            use a variety of quantitative screens to compare a company's stock
            price to its book value, cash flow and dividend yield, and analyze
            individual companies to identify those that are financially sound
            and appear to have strong potential for long-term growth.


            After narrowing the investment universe through the use of
            valuation screens, the portfolio managers' use of fundamental
            research tools lies at the heart of the investment process. The
            portfolio managers' process brings an added dimension to this
            fundamental research by drawing on the insight of experts from a
            range of financial disciplines - regional stock market specialists,
            global industry specialists, economists and quantitative analysts.
            They challenge, refine and amplify each other's ideas. Their close
            collaboration is a critical element of the portfolio managers'
            investment process.


            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.



            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. As with most stock funds, an important factor
            with this fund is how stock markets perform - (to the extent the
            fund invests in a particular geographic region, the fund's
            performance may be proportionately affected by that region's
            general performance). When stock prices fall, you should expect the
            value of your investment to fall as well.


                                 DWS International Value Opportunities Fund  | 5
<PAGE>

            Because a stock represents ownership in its issuer, stock prices
            can be hurt by poor management, shrinking product demand and other
            business risks. These may affect single companies as well as groups
            of companies. In addition, movements in financial markets may
            adversely affect a stock's price, regardless of how well the
            company performs. The market as a whole may not favor the types of
            investments the fund makes and the fund may not be able to get
            attractive prices for them.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.


            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:


            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investment and imposed high taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a foreign company, as compared
               to the financial reports of US companies.

            -  LIQUIDITY RISK. Investments that trade less can be more
               difficult or more costly to buy, or to sell, than more liquid or
               active investments. This liquidity risk is a factor of the
               trading volume of a particular investment, as well as the size
               and liquidity of the entire local market. On the whole, foreign
               exchanges are smaller and less liquid than the US market. This
               can make buying and selling certain investments more difficult
               and costly. Relatively small transactions in some instances can
               have a disproportionately large effect on the price and supply
               of securities. In certain situations, it may become virtually
               impossible to sell an investment in an orderly fashion at a
               price that approaches portfolio management's estimate of its
               value. For the same reason, it may at times be difficult to
               value the fund's foreign investments.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The fund is designed for investors who are seeking capital appreciation and are
willing to accept the risks of investing in the stocks of foreign companies.

6 | DWS International Value Opportunities Fund
<PAGE>

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. This creates the possibility that changes in
               exchange rates between foreign currencies and the US dollar will
               affect the US dollar value of foreign securities or the income
               or gain received on these securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            EMERGING MARKET RISK. All of the risks of investing in foreign
            securities are increased in connection with investments in emerging
            markets securities. In addition, profound social changes and
            business practices that depart from norms in developed countries'
            economies have hindered the orderly growth of emerging economies
            and their markets in the past and have caused instability. High
            levels of debt tend to make emerging economies heavily reliant on
            foreign capital and vulnerable to capital flight. These countries
            are also more likely to experience high levels of inflation,
            deflation or currency devaluation, which could also hurt their
            economies and securities markets. For these and other reasons,
            investments in emerging markets are often considered speculative.


            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may not have the intended effects and may result in losses or
            missed opportunities; the risk that the fund will be unable to sell
            the derivative because of an illiquid secondary market; the risk
            that a counterparty is unwilling or unable to meet its obligation;
            and the risk that the derivative transaction could



                                 DWS International Value Opportunities Fund  | 7
<PAGE>


            expose the fund to the effects of leverage, which could increase
            the fund's exposure to the market and magnify potential losses.
            There is no guarantee that derivatives, to the extent employed,
            will have the intended effect, and their use could cause lower
            returns or even losses to the fund. The use of derivatives by the
            fund to hedge risk may reduce the opportunity for gain by
            offsetting the positive effect of favorable price movements.


            PRICING RISK. At times, market conditions might make it hard to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such methodologies, it is
            possible that the value determined for an investment may be
            different than the value realized upon such investment's sale. If
            the fund has valued its securities too highly, you may end up
            paying too much for fund shares when you buy into the fund. If the
            fund underestimates the price of its securities, you may not
            receive the full market value for your fund shares when you sell.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.


            THE FUND'S PERFORMANCE HISTORY

            Since the fund commenced operations on July 5, 2006, performance
            information is not available for a full calendar year.


8 | DWS International Value Opportunities Fund
<PAGE>

HOW MUCH INVESTORS PAY


The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FEE TABLE                                           CLASS A              CLASS C
--------------------------------------------------------------------------------
<S>                                                  <C>                 <C>
 SHAREHOLDER FEES, paid directly from your investment
--------------------------------------------------------------------------------
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)                5.75% 1              None
--------------------------------------------------------------------------------
 Maximum Contingent Deferred Sales
 Charge (Load) (as % of redemption
 proceeds)                                            None 2               1.00%
--------------------------------------------------------------------------------
 Redemption/Exchange fee on shares
 owned less than 15 days (as % of
 redemption proceeds) 3                               2.00                 2.00
--------------------------------------------------------------------------------
 ANNUAL OPERATING EXPENSES, deducted from fund assets
--------------------------------------------------------------------------------
 Management Fee 4                                     0.90%                0.90%
--------------------------------------------------------------------------------
 Distribution/Service (12b-1) Fee                     0.25                 1.00
--------------------------------------------------------------------------------
 Other Expenses                                       2.36                 2.41
--------------------------------------------------------------------------------
 TOTAL ANNUAL OPERATING EXPENSES                      3.51                 4.31
--------------------------------------------------------------------------------
 Less Fee Waiver/Expense
 Reimbursement 5                                      1.90                 1.95
--------------------------------------------------------------------------------
 NET ANNUAL OPERATING EXPENSES 5                      1.61                 2.36
--------------------------------------------------------------------------------
</TABLE>



1   Because of rounding in the calculation of the offering price, the actual
    maximum front-end sales charge paid by an investor may be higher than the
    percentage noted (see "Choosing a Share Class - Class A shares").


2   The redemption of shares purchased at net asset value under the Large Order
    NAV Purchase Privilege (see "Choosing a Share Class - Class A shares") may
    be subject to a contingent deferred sales charge of 1.00% if redeemed within
    12 months of purchase and 0.50% if redeemed within the following six months.


3   This fee is charged on all applicable redemptions or exchanges. Please see
    "Policies You Should Know About - Policies about transactions" for further
    information.

4   Includes 0.10% administration fee.


5   Through November 30, 2008, the advisor has contractually agreed to waive all
    or a portion of its management fee and reimburse or pay operating expenses
    of the fund to the extent necessary to maintain the fund's total operating
    expenses at 1.57% and 2.32% for Class A and Class C shares, respectively,
    excluding certain expenses such as extraordinary expenses, taxes, brokerage
    and interest.



                                 DWS International Value Opportunities Fund  | 9
<PAGE>


Based on the costs above (including one year of capped expenses in each
period), this example helps you compare this fund's expenses to those of other
mutual funds. This example assumes the expenses above remain the same and that
you invested $10,000, earned 5% annual returns and reinvested all dividends and
distributions. This is only an example; actual expenses will be different.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                  <C>         <C>          <C>          <C>
 EXPENSES, assuming you sold your shares at the end of each period
--------------------------------------------------------------------------------
 Class A shares        $729       $1,424       $2,139       $4,022
--------------------------------------------------------------------------------
 Class C shares         339        1,130        2,033        4,346
--------------------------------------------------------------------------------
 EXPENSES, assuming you kept your shares
--------------------------------------------------------------------------------
 Class A shares        $729       $1,424       $2,139       $4,022
--------------------------------------------------------------------------------
 Class C shares         239        1,130        2,033        4,346
--------------------------------------------------------------------------------
</TABLE>




10 | DWS International Value Opportunities Fund
<PAGE>


OTHER POLICIES AND SECONDARY RISKS


           While the previous pages describe the main points of the fund's
           strategy and risks, there are a few other issues to know about:


           -  Although major changes tend to be infrequent, the fund's Board
              could change the fund's investment objective without seeking
              shareholder approval. However, the Board will provide
              shareholders with at least 60 days' notice prior to making any
              changes to the fund's 80% investment policy as described herein.

           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as money market securities or
              other short-term securities that offer comparable levels of risk
              This could prevent losses, but, while engaged in a temporary
              defensive position, the fund will not be pursuing its investment
              goal. However, portfolio management may choose not to use these
              strategies for various reasons, even in volatile market
              conditions.

           -  The fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean higher taxable
              distributions.


           Secondary risks


           CREDIT RISK. A fund purchasing bonds faces the risk that the
           creditworthiness of the issuer may decline, causing the value of its
           bonds to decline. In addition, an issuer may not be able to make
           timely payments on the interest and principal on the bonds it has
           issued. In some cases, bonds may decline in credit quality or go
           into default.


           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in the fund.

           If you want more information on the fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that the fund will achieve
           its goal.


                                        Other Policies and Secondary Risks  | 11
<PAGE>

           A complete list of the fund's portfolio holdings is posted as of the
           month-end on www.dws-scudder.com (the Web site does not form a part
           of this prospectus) on or after the last day of the following month.
           This posted information generally remains accessible at least until
           the date on which the fund files its Form N-CSR or N-Q with the
           Securities and Exchange Commission for the period that includes the
           date as of which the posted information is current. In addition, the
           fund's top ten equity holdings and other fund information is posted
           on www.dws-scudder.com as of the calendar quarter-end on or after
           the 15th day following quarter-end. The fund's Statement of
           Additional Information includes a description of the fund's policies
           and procedures with respect to the disclosure of the fund's
           portfolio holdings.


WHO MANAGES AND OVERSEES THE FUND

           The investment advisor


           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor, or the subadvisor, makes investment
           decisions, buys and sells securities for the fund and conducts
           research that leads to these purchase and sale decisions. The
           Advisor provides a full range of global investment advisory services
           to institutional and retail clients.

           DWS Scudder is part of Deutsche Asset Management, which is the
           marketing name in the US for the asset management activities of
           Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS
           Trust Company.


           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.


12 | Who Manages and Oversees the Fund
<PAGE>


           The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank
           AG. Deutsche Bank AG is a major global banking institution that is
           engaged in a wide range of financial services, including investment
           management, mutual funds, retail, private and commercial banking,
           investment banking and insurance.

           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below is the actual rate paid by the fund for the most recent fiscal
           year, as a percentage of the fund's average daily net assets.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FUND NAME                                                    FEE PAID
--------------------------------------------------------------------------------
<S>                                                          <C>
DWS International Value Opportunities Fund                     0.00%*
--------------------------------------------------------------------------------
</TABLE>

*   Reflects the effects of expense limitations and/or fee waivers then in
    effect.


           As compensation for its services, DIMA is entitled to receive from
           the fund a fee (based upon the fund's average daily net assets) in
           accordance with the following schedule: 1.25% on the first $1
           billion; 1.20% on the next $1 billion; 1.15% on the next $1 billion
           and 1.10% on assets in excess of $3 billion.

           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement and subadvisory agreement, is
           contained in the shareholder report for the annual period ended
           August 31, 2006 (see "Shareholder reports" on the back cover).


           Under a separate administrative services agreement between the fund
           and the Advisor, the fund pays the Advisor for providing most of the
           fund's administrative services.


                                         Who Manages and Oversees the Fund  | 13
<PAGE>

           Subadvisor for DWS International Value Opportunities Fund


           The subadvisor for DWS International Value Opportunities Fund is
           Deutsche Asset Management International GmbH ("DeAMi"), Mainzer
           Landstrasse 178-190, Frankfurt am Main, Germany. DeAMi renders
           investment advisory and management services to the fund. DeAMi is an
           investment advisor registered with the Securities and Exchange
           Commission and currently manages over $40 billion in assets, which
           is primarily comprised of institutional accounts and investment
           companies. DeAMi is a subsidiary of Deutsche Bank AG. DIMA
           compensates DeAMi out of the management fee it receives from the
           fund.




14 | Who Manages and Oversees the Fund
<PAGE>

Portfolio management


The fund is managed by a team of investment professionals who collaborate to
develop and implement the fund's investment strategy. Each portfolio manager on
the team has authority over all aspects of the fund's investment portfolio,
including but not limited to, purchases and sales of individual securities,
portfolio construction techniques, portfolio risk assessment, and the
management of daily cash flows in accordance with portfolio holdings.


The following people handle the day-to-day management of the fund.


Klaus Kaldemorgen
Managing Director of Deutsche Asset Management and Lead Portfolio Manager of
the fund.

- Joined Deutsche Asset Management in 1982 and the fund in 2006.
- Head of Equities: Germany; senior portfolio manager of international
  equities; Managing Director of DWS Investment GmbH: Frankfurt.
- Master's degree in economics, Johannes-Gutenberg University, Mainz.

Carmen Weber, CFA
Director of Deutsche Asset Management and Portfolio Manager of the fund.

- Joined Deutsche Asset Management and the fund in 2006.
- Senior portfolio manager for Global Equities: Frankfurt.
- Prior to that, Head of Growth and Equity Funds at Metzler.
- Over 13 years of investment industry experience.
- BA, University of Siegen, Germany.


The fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in the fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


                                         Who Manages and Oversees the Fund  | 15
<PAGE>

FINANCIAL HIGHLIGHTS


The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in
the fund would have earned (or lost), assuming all dividends and distributions
were reinvested. This information has been audited by PricewaterhouseCoopers
LLP, independent registered public accounting firm, whose report, along with
the fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).

DWS International Value Opportunities Fund - Class A


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
YEARS ENDED AUGUST 31,                                   2007            2006 a
<S>                                                      <C>              <C>
--------------------------------------------------------------------------------
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                   $10.25         $ 10.00
--------------------------------------------------------------------------------
Income (loss) from investment operations:
  Net investment income (loss) b                          .19             .02
--------------------------------------------------------------------------------
  Net realized and unrealized gain (loss)                1.93             .23
--------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS                       2.12             .25
--------------------------------------------------------------------------------
Less distributions from:
  Net investment income                                  (.10)              -
--------------------------------------------------------------------------------
Redemption fees                                           .00***            -
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                        $ 12.27         $ 10.25
--------------------------------------------------------------------------------
Total Return (%) c,d                                    20.67            2.50**
--------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------
Net assets, end of period ($ millions)                      3               1
--------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%)          4.51            9.51*
--------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%)           2.05 e          1.56*
--------------------------------------------------------------------------------
Ratio of net investment income (loss) (%)                1.62            1.74*
--------------------------------------------------------------------------------
Portfolio turnover rate (%)                               127               7**
--------------------------------------------------------------------------------
</TABLE>


a   For the period from July 5, 2006 (commencement of operations) to August 31,
    2006.

b   Based on average shares outstanding during the period.

c   Total return does not reflect the effect of any sales charges.

d   Total returns would have been lower had certain expenses not been reduced.

e   Ratio includes interest expense incurred on foreign cash overdrafts.
    Interest income incurred on domestic cash balances is included in income
    from investment operations. The ratio of expenses after expense reductions
    excluding interest expense was 1.51% for the year ended August 31, 2007.

*   Annualized

**  Not annualized

*** Amount is less than $.005.


16 | Financial Highlights
<PAGE>


DWS International Value Opportunities Fund - Class C



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
YEARS ENDED AUGUST 31,                                   2007            2006 a
<S>                                                      <C>              <C>
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                  $ 10.23         $ 10.00
--------------------------------------------------------------------------------
Income (loss) from investment operations:
  Net investment income (loss) b                          .10             .01
--------------------------------------------------------------------------------
  Net realized and unrealized gain (loss)                1.93             .22
--------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS                       2.03             .23
--------------------------------------------------------------------------------
Less distributions from:
  Net investment income                                  (.01)              -
--------------------------------------------------------------------------------
Redemption fees                                           .00***            -
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                        $ 12.25         $ 10.23
--------------------------------------------------------------------------------
Total Return (%) c,d                                    19.90            2.30**
--------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------
Net assets, end of period ($ millions)                      3               1
--------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%)          5.31           10.26*
--------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%)           2.85 e          2.31*
--------------------------------------------------------------------------------
Ratio of net investment income (loss) (%)                 .82             .99*
--------------------------------------------------------------------------------
Portfolio turnover rate (%)                               127               7**
--------------------------------------------------------------------------------
</TABLE>


a   For the period from July 5, 2006 (commencement of operations) to August 31,
    2006.

b   Based on average shares outstanding during the period.

c   Total return does not reflect the effect of any sales charges.

d   Total returns would have been lower had certain expenses not been reduced.

e   Ratio includes interest expense incurred on foreign cash overdrafts.
    Interest income incurred on domestic cash balances is included in income
    from investment operations. The ratio of expenses after expense reductions
    excluding interest expense was 2.31% for the year ended August 31, 2007.

*   Annualized

**  Not annualized

*** Amount is less than $.005.


                                                      Financial Highlights  | 17
<PAGE>

HOW TO INVEST IN THE FUND


The following pages tell you how to invest in the fund and what to expect as a
shareholder. If you're investing directly with DWS Scudder, all of this
information applies to you.

The following pages also tell you about many of the services, choices and
benefits of being a shareholder. You'll also find information on how to check
the status of your account using the method that's most convenient for you.

If you're investing through a "third party provider" - for example, a workplace
retirement plan, financial supermarket or financial advisor - your provider may
have its own policies or instructions and you should follow those.


You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.
<PAGE>

CHOOSING A SHARE CLASS


Offered in this prospectus are the share classes noted on the front cover. Each
class has its own fees and expenses, offering you a choice of cost structures.
The fund may offer other classes of shares in a separate prospectus. These
shares are intended for investors seeking the advice and assistance of a
financial advisor, who will typically receive compensation for those services.


Before you invest, take a moment to look over the characteristics of each share
class, so that you can be sure to choose the class that's right for you. You
may want to ask your financial advisor to help you with this decision.

We describe each share class in detail on the following pages. But first, you
may want to look at the table below, which gives you a brief comparison of the
main features of each class.


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
 CLASSES AND FEATURES                         POINTS TO HELP YOU COMPARE
------------------------------------------------------------------------------------------

<S>                                          <C>
 CLASS A

 -  Sales charge of up to 5.75% charged       -  Some investors may be able to reduce
    when you buy shares                          or eliminate their sales charge; see
                                                 "Class A shares"
 -  In most cases, no charge when you
    sell shares                               -  Total annual expenses are lower than
                                                 those for Class C
 -  Up to 0.25% annual shareholder
    servicing fee

------------------------------------------------------------------------------------------
 CLASS C

 -  No sales charge when you buy shares       -  Unlike Class A shares, Class C shares
                                                 do not have a sales charge when
 -  Deferred sales charge of 1.00%,              buying shares, but have higher annual
    charged when you sell shares you             expenses than those for Class A
    bought within the last year                  shares and a one year deferred sales
                                                 charge
 -  0.75% annual distribution fee and up
    to 0.25% annual shareholder servicing
    fee
------------------------------------------------------------------------------------------
</TABLE>



                                                    Choosing a Share Class  | 19
<PAGE>


           Your financial advisor will typically be paid a fee when you buy
           shares and may receive different levels of compensation depending
           upon which class of shares you buy. The fund may pay financial
           advisors or other intermediaries compensation for the services they
           provide to their clients. This compensation may vary depending on
           the fund you buy or the class of shares of a fund that you buy. Your
           financial advisor may also receive compensation from the Advisor
           and/or its affiliates, please see "Financial intermediary support
           payments."



           Class A shares

           Class A shares may make sense for long-term investors, especially
           those who are eligible for a reduced or eliminated sales charge.


           Class A shares have a 12b-1 plan, under which a shareholder
           servicing fee of up to 0.25% is deducted from class assets each
           year. Because the shareholder servicing fee is continuous in nature,
           it may, over time, increase the cost of your investment and may cost
           you more than paying other types of sales charges.

           Class A shares have an up-front sales charge that varies with the
           amount you invest:



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                              FRONT-END SALES          FRONT-END SALES
                                CHARGE AS %          CHARGE AS % OF YOUR
YOUR INVESTMENT            OF OFFERING PRICE 1,2       NET INVESTMENT 2
--------------------------------------------------------------------------------
<S>                             <C>                       <C>
Up to $50,000                   5.75%                     6.10%
--------------------------------------------------------------------------------
$50,000-$99,999                 4.50                      4.71
--------------------------------------------------------------------------------
$100,000-$249,999               3.50                      3.63
--------------------------------------------------------------------------------
$250,000-$499,999               2.60                      2.67
--------------------------------------------------------------------------------
$500,000-$999,999               2.00                      2.04
--------------------------------------------------------------------------------
$1 million or more            see below                see below
--------------------------------------------------------------------------------
</TABLE>


           1   The offering price includes the sales charge.

           2   Because of rounding in the calculation of the offering price,
               the actual front-end sales charge paid by an investor may be
               higher or lower than the percentages noted.


           YOU MAY BE ABLE TO LOWER YOUR CLASS A SALES CHARGE IF:

           -  you plan to invest at least $50,000 in Class A shares (including
              Class A shares in other retail DWS funds) over the next 24 months
              ("Letter of Intent")

20 | Choosing a Share Class
<PAGE>

           -  the amount of Class A shares you already own (including Class A
              shares in other retail DWS funds) plus the amount you're
              investing now in Class A shares is at least $50,000 ("Cumulative
              Discount")

           -  you are investing a total of $50,000 or more in Class A shares of
              several retail DWS funds on the same day ("Combined Purchases")

           The point of these three features is to let you count investments
           made at other times or in certain other funds for purposes of
           calculating your present sales charge. Any time you can use the
           privileges to "move" your investment into a lower sales charge
           category, it's generally beneficial for you to do so.

           For purposes of determining whether you are eligible for a reduced
           Class A sales charge, you and your immediate family (your spouse or
           life partner and your children or stepchildren age 21 or younger)
           may aggregate your investments in the DWS family of funds. This
           includes, for example, investments held in a retirement account, an
           employee benefit plan or at a financial advisor other than the one
           handling your current purchase. These combined investments will be
           valued at their current offering price to determine whether your
           current investment qualifies for a reduced sales charge.

           To receive a reduction in your Class A initial sales charge, you
           must let your financial advisor or Shareholder Services know at the
           time you purchase shares that you qualify for such a reduction. You
           may be asked by your financial advisor or Shareholder Services to
           provide account statements or other information regarding related
           accounts of you or your immediate family in order to verify your
           eligibility for a reduced sales charge.


           For more information about sales charge discounts, please visit
           www.dws-scudder.com (click on the link entitled "Fund Sales Charge
           and Breakpoint Schedule"), consult with your financial advisor or
           refer to the section entitled "Purchase or Redemption of Shares" in
           the fund's Statement of Additional Information.

           IN CERTAIN CIRCUMSTANCES, YOU MAY BE ABLE TO BUY CLASS A SHARES
           WITHOUT A SALES CHARGE. For example, the sales charge will be waived
           if you are reinvesting dividends or distributions or if you are
           exchanging an investment in Class A shares of another fund in the
           DWS family of funds for an investment in Class A shares of the fund.
           In addition, a sales charge waiver



                                                    Choosing a Share Class  | 21
<PAGE>


           may apply to transactions by certain retirement plans and certain
           other entities or persons (e.g., affiliated persons of DeAM or the
           DWS funds) and with respect to certain types of investments (e.g.,
           an investment advisory or agency commission program under which you
           pay a fee to an investment advisor or other firm for portfolio
           management or brokerage services).

           Details regarding the types of investment programs and categories of
           investors eligible for a sales charge waiver are provided in the
           fund's Statement of Additional Information.


           There are a number of additional provisions that apply in order to
           be eligible for a sales charge waiver. The fund may waive the sales
           charge for investors in other situations as well. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU'RE INVESTING $1 MILLION OR MORE, either as a lump sum or
           through one of the sales charge reduction features described above,
           you may be eligible to buy Class A shares without a sales charge
           ("Large Order NAV Purchase Privilege"). However, you may be charged
           a contingent deferred sales charge (CDSC) of 1.00% on any shares you
           sell within 12 months of owning them and a similar charge of 0.50%
           on shares you sell within the following six months. This CDSC is
           waived under certain circumstances (see "Policies You Should Know
           About"). Your financial advisor or Shareholder Services can answer
           your questions and help you determine if you're eligible.


22 | Choosing a Share Class
<PAGE>

           Class C shares


           Class C shares may appeal to investors who plan to sell some or all
           of their shares within six years of buying them or who aren't
           certain of their investment time horizon.

           With Class C shares, you pay no up-front sales charge to the fund.
           Class C shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. Because of these fees, the annual
           expenses for Class C shares are higher than those for Class A shares
           (and the performance of Class C shares is correspondingly lower than
           that of Class A shares).


           Class C shares have a CDSC, but only on shares you sell within one
           year of buying them:


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
   YEAR AFTER YOU BOUGHT SHARES        CDSC ON SHARES YOU SELL
--------------------------------------------------------------------------------
<S>                                             <C>
First year                                      1.00%
--------------------------------------------------------------------------------
Second year and later                           None
--------------------------------------------------------------------------------
</TABLE>


           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.

           While Class C shares do not have an up-front sales charge, their
           higher annual expenses mean that, over the years, you could end up
           paying more than the equivalent of the maximum allowable up-front
           sales charge.

           Orders to purchase Class C shares of $500,000 or more will be
           declined with the exception of orders received from financial
           representatives acting for clients whose shares are held in an
           omnibus account and certain employer-sponsored employee benefit
           plans.


                                                    Choosing a Share Class  | 23
<PAGE>

How to BUY Class A and C Shares

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
 FIRST INVESTMENT                              ADDITIONAL INVESTMENTS
------------------------------------------------------------------------------------------
<S>                                            <C>


 $1,000 or more for regular accounts           $50 or more for regular accounts and
 $500 or more for IRAs                         IRA accounts
 $500 or more with an Automatic                $50 or more with an Automatic
 Investment Plan                               Investment Plan

------------------------------------------------------------------------------------------
 THROUGH A FINANCIAL ADVISOR
 -  Contact your advisor using the             -  Contact your advisor using the
    method that's most convenient for you         method that's most convenient for you
------------------------------------------------------------------------------------------
 BY MAIL OR EXPRESS MAIL (SEE BELOW)
 -  Fill out and sign an application           -  Send a check made out to "DWS
                                                  Scudder" and a DWS Scudder
 -  Send it to us at the appropriate              investment slip to us at the
    address, along with an investment             appropriate address below
    check
                                               -  If you don't have an investment slip,
                                                  simply include a letter with your
                                                  name, account number, the full name
                                                  of the fund and the share class and
                                                  your investment instructions
------------------------------------------------------------------------------------------
 BY WIRE
 -  Call (800) 621-1048 for instructions       -  Call (800) 621-1048 for instructions
------------------------------------------------------------------------------------------
 BY PHONE
 Not available                                 -  Call (800) 621-1048 for instructions
------------------------------------------------------------------------------------------

 WITH AN AUTOMATIC INVESTMENT PLAN
 -  Fill in the application and include a      -  Call (800) 621-1048 for instructions
    voided check

------------------------------------------------------------------------------------------
 USING QuickBuy
 Not available                                 -  Call (800) 621-1048 to make sure
                                                  QuickBuy is set up on your account; if
                                                  it is, you can request a transfer from
                                                  your bank account of any amount
                                                  between $50 and $250,000
------------------------------------------------------------------------------------------


 ON THE INTERNET
 Not available                                 -  Go to www.dws-scudder.com and
                                                  register

                                               -  Follow the instructions for buying
                                                  shares with money from your bank
                                                  account

------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
REGULAR MAIL:


First Investment: DWS Scudder, PO Box 219356, Kansas City, MO 64121-9356
Additional Investments: DWS Scudder, PO Box 219154, Kansas City, MO 64121-9154


EXPRESS, REGISTERED OR CERTIFIED MAIL:

DWS Scudder, 210 West 10th Street, Kansas City, MO 64105-1614


24 | How to Buy Class A and C Shares
<PAGE>

How to EXCHANGE or SELL Class A and C Shares

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
 EXCHANGING INTO ANOTHER FUND                   SELLING SHARES
------------------------------------------------------------------------------------------
<S>                                            <C>

 -  Exchanges into existing accounts:          Some transactions, including most for
    $50 minimum per fund                       over $100,000, can only be ordered in
                                               writing with a signature guarantee;
 -  Exchanges into new accounts:               please see "Signature Guarantee"
    $1,000 minimum per fund
    $500 minimum for IRAs

------------------------------------------------------------------------------------------
 THROUGH A FINANCIAL ADVISOR
 -  Contact your advisor by the method         -  Contact your advisor by the method
    that's most convenient for you                that's most convenient for you
------------------------------------------------------------------------------------------
 BY PHONE OR WIRE
 -  Call (800) 621-1048 for instructions       -  Call (800) 621-1048 for instructions
------------------------------------------------------------------------------------------
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)
 Write a letter that includes:                 Write a letter that includes:

 -  the fund, class and account number         -  the fund, class and account number
    you're exchanging out of                      from which you want to sell shares

 -  the dollar amount or number of shares      -  the dollar amount or number of shares
    you want to exchange                          you want to sell

 -  the name and class of the fund you         -  your name(s), signature(s) and
    want to exchange into                         address, as they appear on your
                                                  account
 -  your name(s), signature(s) and
    address, as they appear on your            -  a daytime telephone number
    account

 -  a daytime telephone number
------------------------------------------------------------------------------------------

 WITH AN AUTOMATIC EXCHANGE PLAN                WITH AN AUTOMATIC WITHDRAWAL PLAN
 -  To set up regular exchanges from a         -  Call (800) 621-1048 (minimum $50)
    fund account, call (800) 621-1048

------------------------------------------------------------------------------------------
 USING QuickSell
 Not available                                 -  Call (800) 621-1048 to make sure
                                                  QuickSell is set up on your account; if
                                                  it is, you can request a transfer to your
                                                  bank account of any amount between
                                                  $50 and $250,000
------------------------------------------------------------------------------------------

 ON THE INTERNET
 -  Register at www.dws-scudder.com            -  Register at www.dws-scudder.com
    and log in and then follow the                and log in and then follow the
    instructions for making on-line               instructions for making on-line
    exchanges                                     redemptions
------------------------------------------------------------------------------------------
</TABLE>



--------------------------------------------------------------------------------

<TABLE>
<S>               <C>
TO REACH US:      WEB SITE: www.dws-scudder.com
                  TELEPHONE REPRESENTATIVE: (800) 621-1048, M-F, 9 a.m. - 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m. - 6 p.m. ET
</TABLE>



                              How to Exchange or Sell Class A and C Shares  | 25
<PAGE>


           Financial intermediary support payments

           The Advisor, DWS Scudder Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to the fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/or servicing of fund investors and fund
           shares ("revenue sharing"). Such revenue sharing payments are in
           addition to any distribution or service fees payable under any Rule
           12b-1 or service plan of the fund, any record keeping/sub-transfer
           agency/networking fees payable by the fund (generally through the
           Distributor or an affiliate) and/or the Distributor to certain
           financial advisors for performing such services and any sales
           charges, commissions, non-cash compensation arrangements expressly
           permitted under applicable rules of the Financial Industry
           Regulatory Authority ("FINRA") or other concessions described in the
           fee table or elsewhere in this prospectus or the Statement of
           Additional Information as payable to all financial advisors. For
           example, the Advisor, the Distributor and/or their affiliates may
           compensate financial advisors for providing the fund with "shelf
           space" or access to a third party platform or fund offering list or
           other marketing programs, including, without limitation, inclusion
           of the fund on preferred or recommended sales lists, mutual fund
           "supermarket" platforms and other formal sales programs; granting
           the Distributor access to the financial advisor's sales force;
           granting the Distributor access to the financial advisor's
           conferences and meetings; assistance in training and educating the
           financial advisor's personnel; and obtaining other forms of
           marketing support.

           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of the fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.



26 | How to Exchange or Sell Class A and C Shares
<PAGE>


           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS Fund shares or the retention
           and/or servicing of investors and DWS Fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of the fund serviced and maintained by the financial advisor,
           .10% to .25% of sales of the fund attributable to the financial
           advisor, a flat fee of $12,500 up to $500,000, or any combination
           thereof. These amounts are subject to change at the discretion of
           the Advisor, the Distributor and/or their affiliates. Receipt of, or
           the prospect of receiving, this additional compensation may
           influence your financial advisor's recommendation of the fund or of
           any particular share class of the fund. You should review your
           financial advisor's compensation disclosure and/or talk to your
           financial advisor to obtain more information on how this
           compensation may have influenced your financial advisor's
           recommendation of the fund. Additional information regarding these
           revenue sharing payments is included in the fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Scudder branded retirement plan platform (the "Platform") with the
           level of revenue sharing payments being based upon sales of both the
           DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for the fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of


                              How to Exchange or Sell Class A and C Shares  | 27
<PAGE>

           broker-dealers to execute portfolio transactions for the fund. In
           addition, the Advisor, the Distributor and/or their affiliates will
           not use fund brokerage to pay for their obligation to provide
           additional compensation to financial advisors as described above.



POLICIES YOU SHOULD KNOW ABOUT


           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.


           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           621-1048.


           Policies about transactions


           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.



28 | Policies You Should Know About
<PAGE>

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.


           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated, less any applicable sales charge.

           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.


           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           INITIAL PURCHASE. The minimum initial investment for Class A and C
           shares is $1,000, except for investments on behalf of participants
           in certain fee-based and wrap programs offered through certain
           financial intermediaries approved by the Advisor,


                                            Policies You Should Know About  | 29
<PAGE>

           for which there is no minimum initial investment; and IRAs, for
           which the minimum initial investment is $500 per account. The
           minimum initial investment is $500 per account if you establish an
           automatic investment plan. Group retirement plans and certain other
           accounts have similar or lower minimum share balance requirements.


           SUB-MINIMUM BALANCES. The fund may close your account and send you
           the proceeds if your balance falls below $1,000 ($250 for retirement
           accounts and $500 for accounts with an Automatic Investment Plan
           funded with $50 or more per month in subsequent investments). We
           will give you 60 days' notice (90 days for retirement accounts) so
           you can either increase your balance or close your account (these
           policies don't apply to investors with $100,000 or more in DWS fund
           shares, investors in certain fee-based and wrap programs offered
           through certain financial intermediaries approved by the Advisor, or
           group retirement plans and certain other accounts having lower
           minimum share balance requirements).


           SUBSEQUENT INVESTMENTS. The minimum subsequent investment is $50.
           However, there is no minimum investment requirement for subsequent
           investments in Class A shares on behalf of participants in certain
           fee-based and wrap programs offered through certain financial
           intermediaries approved by the Advisor.


           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of the fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if the fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by the fund (e.g.,
           "time zone arbitrage"). The fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.



30 | Policies You Should Know About
<PAGE>


           Pursuant to its policies, the fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). The fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior notice. For
           example, the fund may in its discretion reject or cancel a purchase
           or an exchange order even if the transaction is not subject to the
           specific roundtrip transaction limitation described below if the
           Advisor believes that there appears to be a pattern of short-term or
           excessive trading activity by a shareholder or deems any other
           trading activity harmful or disruptive to the fund. The fund,
           through its Advisor and Transfer Agent, will measure short-term and
           excessive trading by the number of roundtrip transactions within a
           shareholder's account during a rolling 12-month period. A
           "roundtrip" transaction is defined as any combination of purchase
           and redemption activity (including exchanges) of the same fund's
           shares. The fund may take other trading activity into account if the
           fund believes such activity is of an amount or frequency that may be
           harmful to long-term shareholders or disruptive to portfolio
           management.

           Shareholders are limited to four roundtrip transactions in the same
           DWS Fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS Fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS Fund. The fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS Fund are not affected by the four roundtrip
           transaction limitation, but all redemptions remain subject to the
           fund's redemption fee policy (see "Redemption fees" described
           below).

           The Advisor may make exceptions to the roundtrip transaction policy
           for certain types of transactions if in its opinion the transactions
           do not represent short-term or excessive trading or are not abusive
           or harmful to the fund, such as, but not limited to, systematic
           transactions, required minimum retirement distributions,
           transactions initiated by the fund or administrator and transactions
           by certain qualified fund-of-fund(s).



                                            Policies You Should Know About  | 31
<PAGE>


           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive trading
           may be more or less restrictive than the DWS Funds' policy, may
           permit certain transactions not permitted by the DWS Funds'
           policies, or prohibit transactions not subject to the DWS Funds'
           policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of the fund that provide a substantially similar level of
           protection for the fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.

           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund from "time zone arbitrage" with respect
           to its foreign securities holdings and other trading practices that
           seek to exploit variations in portfolio valuation that arise from
           the nature of the securities held by the fund. (See "How the fund
           calculates share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying
           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of the fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in the fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.



32 | Policies You Should Know About
<PAGE>


           The fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. The fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value, without
           regard to the effect of any contingent deferred sales charge; any
           contingent deferred sales charge is also assessed on the total
           redemption amount without regard to the assessment of the 2%
           redemption fee) on all fund shares redeemed or exchanged within 15
           days of buying them (either by purchase or exchange). The redemption
           fee is paid directly to the fund and is designed to encourage
           long-term investment and to offset transaction and other costs
           associated with short-term or excessive trading. For purposes of
           determining whether the redemption fee applies, shares held the
           longest time will be treated as being redeemed first and shares held
           the shortest time will be treated as being redeemed last.


           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with the fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally netted
           against one another and placed on an aggregate basis; consequently
           the identities of the individuals on whose behalf the transactions
           are placed generally are not known to the fund. For this reason, the
           fund has undertaken to notify financial intermediaries of their
           obligation to assess the redemption fee on customer accounts and to
           collect and remit the proceeds to the fund. However, due to
           operational requirements, the intermediaries' methods for tracking
           and calculating the fee may be inadequate or differ in some respects
           from the fund's. Subject to approval by the Advisor or the fund's
           Board, intermediaries who transact business on an omnibus basis may
           implement the redemption fees according to their own operational
           guidelines (which may be different than the fund's policies) and
           remit the fees to the fund.

           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of participants in certain group retirement
           plans and financial intermediaries whose processing systems are
           incapable of properly applying the redemption fee to underlying
           shareholders; (iii) transactions on behalf of a shareholder to


                                            Policies You Should Know About  | 33
<PAGE>


           return any excess IRA contributions to the shareholder; (iv)
           transactions on behalf of a shareholder to effect a required minimum
           distribution on an IRA; (v) transactions on behalf of any mutual
           fund advised by the Advisor and its affiliates (e.g., "funds of
           funds") or, in the case of a master/feeder relationship, redemptions
           by the feeder fund from the master portfolio; (vi) transactions on
           behalf of certain unaffiliated mutual funds operating as funds of
           funds; (vii) transactions following death or disability of any
           registered shareholder, beneficial owner or grantor of a living
           trust with respect to shares purchased before death or disability;
           (viii) transactions involving hardship of any registered
           shareholder; (ix) systematic transactions with pre-defined trade
           dates for purchases, exchanges or redemptions, such as automatic
           account rebalancing, or loan origination and repayments; (x)
           transactions involving shares purchased through the reinvestment of
           dividends or other distributions; (xi) transactions involving shares
           transferred from another account in the same fund or converted from
           another class of the same fund (the redemption fee period will carry
           over to the acquired shares); (xii) transactions initiated by the
           fund or administrator (e.g., redemptions for not meeting account
           minimums, to pay account fees funded by share redemptions, or in the
           event of the liquidation or merger of the fund); or (xiii)
           transactions in cases when there are legal or contractual
           limitations or restrictions on the imposition of the redemption fee
           (as determined by the fund or its agents in their sole discretion).
           It is the policy of the DWS funds to permit approved fund platform
           providers to execute transactions within the funds without the
           imposition of a redemption fee if such providers have implemented
           alternative measures that are determined by the Advisor to provide
           controls on short-term and excessive trading that are comparable to
           the DWS funds' policies.

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Scudder. You can also use this service to make exchanges and
           sell shares.


           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Scudder Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-SCUDDER.COM to get up-to-date information, review
balances or even place orders for exchanges.

34 | Policies You Should Know About
<PAGE>

           (ACH) services. Transactions take two to three days to be completed
           and there is a $50 minimum and a $250,000 maximum. To set up
           QuickBuy or QuickSell on a new account, see the account application;
           to add it to an existing account, call (800) 621-1048.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 621-1048 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           THE FUND DOES NOT ISSUE SHARE CERTIFICATES.


           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by check,
           bank or Federal Funds wire transfer or by electronic bank transfer.
           Please note that the fund does not accept cash, money orders,
           traveler's checks, starter checks, third party checks (except checks
           for retirement plan asset transfers and rollovers or for Uniform
           Gifts to Minors Act/Uniform Transfers to Minors Act accounts),
           checks drawn on foreign banks or checks issued by credit card
           companies or Internet-based companies. Thus, subject to the
           foregoing exceptions for certain third party checks, checks that are
           otherwise permissible must be drawn by the account holder on a
           domestic bank and must be payable to the fund.


THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.


                                            Policies You Should Know About  | 35
<PAGE>


           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.


           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           621-1048 or contact your financial advisor for more information.

           WHEN YOU SELL SHARES THAT HAVE A CDSC, we calculate the CDSC as a
           percentage of what you paid for the shares or what you are selling
           them for - whichever results in the lower charge to you. In
           processing orders to sell shares, the shares with the lowest CDSC
           are sold first. Exchanges from one fund into another don't affect
           CDSCs; for each investment you make, the date you first bought
           shares is the date we use to calculate a CDSC on that particular
           investment.

           There are certain cases in which you may be exempt from a CDSC.
           These include:

           -  the death or disability of an account owner (including a joint
              owner). This waiver applies only under certain conditions. Please
              contact your financial advisor or Shareholder Services to
              determine if the conditions exist


           -  withdrawals made through an automatic withdrawal plan up to a
              maximum of 12% per year of the net asset value of the account


           -  withdrawals related to certain retirement or benefit plans

           -  redemptions for certain loan advances, hardship provisions or
              returns of excess contributions from retirement plans

36 | Policies You Should Know About
<PAGE>

           -  for Class A shares purchased through the Large Order NAV
              Purchase Privilege, redemption of shares whose dealer of record
              at the time of the investment notifies the Distributor that the
              dealer waives the applicable commission

           -  for Class C shares, redemption of shares purchased through a
              dealer-sponsored asset allocation program maintained on an
              omnibus record-keeping system, provided the dealer of record has
              waived the advance of the first year distribution and service
              fees applicable to such shares and has agreed to receive such
              fees quarterly

           In each of these cases, there are a number of additional provisions
           that apply in order to be eligible for a CDSC waiver. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU SELL SHARES IN A DWS FUND AND THEN DECIDE TO INVEST WITH DWS
           SCUDDER AGAIN WITHIN SIX MONTHS, you may be able to take advantage
           of the "reinstatement feature." With this feature, you can put your
           money back into the same class of a DWS fund at its current NAV and,
           for purposes of a sales charge, it will be treated as if it had
           never left DWS Scudder.

           You'll be reimbursed (in the form of fund shares) for any CDSC you
           paid when you sold. Future CDSC calculations will be based on your
           original investment date, rather than your reinstatement date. You
           can only use the reinstatement feature once for any given group of
           shares. To take advantage of this feature, contact Shareholder
           Services or your financial advisor.


           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are other
           circumstances when it could be longer: When you are selling shares
           you bought recently by check (redemption proceeds from such a sale
           are unavailable until the check has cleared), when you make
           purchases by ACH (the funds will be placed under a 10 calendar day
           hold to ensure good funds) or when unusual circumstances prompt the
           SEC to allow further delays. Certain expedited redemption processes
           may also be delayed when you are selling recently purchased shares
           or in the event of closing of the Federal Reserve Bank's wire
           payment system. In addition, the fund reserves the right to suspend
           or postpone redemptions as permitted pursuant to
           Section 22(e) of the Investment Company Act of 1940. Generally,
           those circumstances are when 1) the New York Stock



                                            Policies You Should Know About  | 37
<PAGE>

           Exchange is closed other than customary weekend or holiday closings;
           2) trading on the New York Stock Exchange is restricted; 3) an
           emergency exists which makes the disposal of securities owned by the
           fund or the fair determination of the value of the fund's net assets
           not reasonably practicable; or 4) the SEC, by order, permits the
           suspension of the right of redemption. Redemption payments by wire
           may also be delayed in the event of a non-routine closure of the
           Federal Reserve wire payment system. For additional rights reserved
           by the fund, please see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>             <C>                                          <C>
                TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy shares is the NAV, although for Class A
           shares it will be adjusted to allow for any applicable sales charge
           (see "Choosing a Share Class"). The price at which you sell shares
           is also the NAV, although a CDSC may be taken out of the proceeds
           (see "Choosing a Share Class").


           THE FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by the fund's Board, such as a
           fair valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of the fund's portfolio is believed to have been materially
           affected by a significant event, such as a natural disaster, an
           economic event like a bankruptcy filing, or a substantial
           fluctuation in domestic or foreign markets that has occurred between
           the close of the exchange or market on which the security is
           principally traded (for example, a foreign exchange or market) and
           the close of the New York



38 | Policies You Should Know About
<PAGE>

           Stock Exchange. In such a case, the fund's value for a security is
           likely to be different from the last quoted market price or pricing
           service information. In addition, due to the subjective and variable
           nature of fair value pricing, it is possible that the value
           determined for a particular asset may be materially different from
           the value realized upon such asset's sale. It is expected that the
           greater the percentage of fund assets that is invested in non-US
           securities, the more extensive will be the fund's use of fair value
           pricing. This is intended to reduce the fund's exposure to "time
           zone arbitrage" and other harmful trading practices. (See "Market
           timing policies and procedures.")


           TO THE EXTENT THAT THE FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when the
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change significantly on days when the
           New York Stock Exchange is closed and you cannot buy or sell fund
           shares. Price changes in the securities the fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)



           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              as federal income tax if we have been notified by the IRS that
              you are subject to backup withholding or if you fail to provide
              us with a correct taxpayer ID number and certain certifications
              or certification that you are exempt from backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

                                            Policies You Should Know About  | 39
<PAGE>


           -  refuse, cancel, limit or rescind any purchase or exchange order,
              without prior notice; freeze any account (meaning you will not be
              able to purchase fund shares in your account); suspend account
              services; and/or involuntarily redeem your account if we think
              that the account is being used for fraudulent or illegal
              purposes; one or more of these actions will be taken when, at our
              sole discretion, they are deemed to be in the fund's best
              interests or when the fund is requested or compelled to do so by
              governmental authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less any applicable sales charge or redemption fee); you
              may recognize a gain or loss on the redemption of your fund
              shares and incur a tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; the fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of the fund's net assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)



40 | Policies You Should Know About
<PAGE>

UNDERSTANDING DISTRIBUTIONS AND TAXES

           The fund intends to distribute to its shareholders virtually all of
           its net earnings. The fund can earn money in two ways: by receiving
           interest, dividends or other income from securities it holds and by
           selling securities for more than it paid for them. (The fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) The fund may not always pay a
           dividend or distribution for a given period.

           THE FUND INTENDS TO PAY DIVIDENDS AND DISTRIBUTIONS to its
           shareholders annually in December and, if necessary, may do so at
           other times as well.

           Dividends or distributions declared to shareholders of record in the
           last quarter of a given calendar year are treated for federal income
           tax purposes as if they were received on December 31 of that year,
           provided such dividends or distributions are paid by the end of the
           following January.


           For federal income tax purposes, income and capital gains
           distributions are generally taxable. However, dividends and
           distributions received by retirement plans qualifying for tax
           exemption under federal income tax laws generally will not be
           taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different fund. Tell us your preference
           on your application. If you don't indicate a preference, your
           dividends and distributions will all be reinvested in shares of the
           fund without a sales charge (if applicable). Distributions are
           treated the same for federal income tax purposes whether you receive
           them in cash or reinvest them in additional shares. For
           employer-sponsored qualified plans, and retirement plans,
           reinvestment (at NAV) is the only option.


           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.


                                     Understanding Distributions and Taxes  | 41
<PAGE>

           gain or loss. The gain or loss will be long-term or short-term
           depending on how long you owned the shares that were sold. For
           federal income tax purposes, an exchange is treated the same as a
           sale.

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depend on their type:


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
GENERALLY TAXED AT LONG-TERM                 GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                          INCOME RATES:
--------------------------------------------------------------------------------
<S>                                          <C>
DISTRIBUTIONS FROM THE FUND

-   gains from the sale of                   -  gains from the sale of
    securities held (or treated                 securities held by the fund for
    as held) by the fund for                    one year or less
    more than one year

-   qualified dividend income                -  all other taxable income
--------------------------------------------------------------------------------

TRANSACTIONS INVOLVING FUND
SHARES

-   gains from selling fund                  -  gains from selling fund
    shares held for more than                   shares held for one year or
    one year                                    less
--------------------------------------------------------------------------------
</TABLE>




           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. The fund may elect
           to pass through to its shareholders a credit or deduction for
           foreign taxes it has paid if at the end of its year more than 50% of
           the fund's total assets are stocks or securities of foreign
           corporations. In addition, any investments in foreign securities or
           foreign currencies may increase or accelerate the fund's recognition
           of ordinary income and may affect the timing or amount of the fund's
           distributions. If you invest in the fund through a taxable account,
           your after-tax return could be negatively impacted.

           To the extent that the fund invests in certain debt obligations or
           certain other securities, investments in these obligations or
           securities may cause the fund to recognize taxable income in excess
           of the cash generated by such obligations. Thus, the fund could be
           required at times to liquidate other investments in order to satisfy
           its distribution requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal



42 | Understanding Distributions and Taxes
<PAGE>


           income tax purposes at the more favorable long-term capital gain
           rates. Qualified dividend income generally includes dividends from
           domestic and some foreign corporations. It does not include income
           from investments in debt securities or, generally, from REITs. In
           addition, the fund must meet certain holding period and other
           requirements with respect to the dividend-paying stocks in its
           portfolio and the shareholder must meet certain holding period and
           other requirements with respect to the fund's shares for the lower
           tax rates to apply. Because the fund will invest in both long and
           short positions in equity securities, it is anticipated that a
           smaller portion of the income dividends paid to you by the fund will
           be qualified dividend income eligible for taxation at long-term
           capital gain rates than if the fund invested in only long positions
           in equity securities.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been reduced to 15%. For taxable years beginning on or after January
           1, 2011, the long-term capital gain rate is scheduled to return to
           20%. For more information, see the Statement of Additional
           Information, under "Taxes."

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.


           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund declares a dividend. In
           tax-advantaged retirement accounts you do not need to worry about
           this.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains, but may be eligible for a dividends-received
           deduction for a portion of the income dividends they receive from
           the fund, provided certain holding period and other requirements are
           met.

           The above discussion is applicable to shareholders who are US
           persons. If you are a non-US person, please consult your own tax
           advisor with respect to the US tax consequences to you of an
           investment in the fund.


                                     Understanding Distributions and Taxes  | 43
<PAGE>

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary



           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The tables also assume that all dividends and
           distributions are reinvested. The annual fund expense ratios shown
           are net of any contractual fee waivers or expense reimbursements, if
           any, for the period of the contractual commitment. The tables
           reflect the maximum initial sales charge, if any, but do not reflect
           any contingent deferred sales charge or redemption fees, if any,
           which may be payable upon redemption. If contingent deferred sales
           charges or redemption fees were shown, the "Hypothetical Year-End
           Balance After Fees and Expenses" amounts shown would be lower and
           the "Annual Fees and Expenses" amounts shown would be higher. Also,
           please note that if you are investing through a third party
           provider, that provider may have fees and expenses separate from
           those of the fund that are not reflected here. Mutual fund fees and
           expenses fluctuate over time and actual expenses may be higher or
           lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.



44 | Appendix
<PAGE>

DWS International Value Opportunities Fund - Class A


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               5.75%                   $10,000                            5%
----------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
----------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.61%             -2.55%       $  9,744.51        $   729.31
----------------------------------------------------------------------------------------------
   2           10.25%        3.51%             -1.10%       $  9,889.70        $   344.58
----------------------------------------------------------------------------------------------
   3           15.76%        3.51%              0.37%       $ 10,037.06        $   349.71
----------------------------------------------------------------------------------------------
   4           21.55%        3.51%              1.87%       $ 10,186.61        $   354.93
----------------------------------------------------------------------------------------------
   5           27.63%        3.51%              3.38%       $ 10,338.39        $   360.21
----------------------------------------------------------------------------------------------
   6           34.01%        3.51%              4.92%       $ 10,492.43        $   365.58
----------------------------------------------------------------------------------------------
   7           40.71%        3.51%              6.49%       $ 10,648.77        $   371.03
----------------------------------------------------------------------------------------------
   8           47.75%        3.51%              8.07%       $ 10,807.44        $   376.56
----------------------------------------------------------------------------------------------
   9           55.13%        3.51%              9.68%       $ 10,968.47        $   382.17
----------------------------------------------------------------------------------------------
  10           62.89%        3.51%             11.32%       $ 11,131.90        $   387.86
----------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 4,021.94
----------------------------------------------------------------------------------------------
</TABLE>



DWS International Value Opportunities Fund - Class C


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
----------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
----------------------------------------------------------------------------------------------
<S>          <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.36%              2.64%       $ 10,264.00        $   239.12
----------------------------------------------------------------------------------------------
   2           10.25%        4.31%              3.35%       $ 10,334.82        $   443.90
----------------------------------------------------------------------------------------------
   3           15.76%        4.31%              4.06%       $ 10,406.13        $   446.97
----------------------------------------------------------------------------------------------
   4           21.55%        4.31%              4.78%       $ 10,477.93        $   450.05
----------------------------------------------------------------------------------------------
   5           27.63%        4.31%              5.50%       $ 10,550.23        $   453.16
----------------------------------------------------------------------------------------------
   6           34.01%        4.31%              6.23%       $ 10,623.03        $   456.28
----------------------------------------------------------------------------------------------
   7           40.71%        4.31%              6.96%       $ 10,696.33        $   459.43
----------------------------------------------------------------------------------------------
   8           47.75%        4.31%              7.70%       $ 10,770.13        $   462.60
----------------------------------------------------------------------------------------------
   9           55.13%        4.31%              8.44%       $ 10,844.45        $   465.79
----------------------------------------------------------------------------------------------
  10           62.89%        4.31%              9.19%       $ 10,919.27        $   469.01
----------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 4,346.31
----------------------------------------------------------------------------------------------
</TABLE>




                                                                  Appendix  | 45
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund's features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
the fund, call (800) 621-1048, or contact DWS Scudder at the address listed
below. The fund's SAI and shareholder reports are also available through the
DWS Scudder Web site at www.dws-scudder.com. These documents and other
information about the fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about the fund,
including the fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.



<TABLE>
<CAPTION>
DWS SCUDDER              SEC                     DISTRIBUTOR
--------------------------------------------------------------------------------
<S>                      <C>                     <C>
PO Box 219151            100 F Street, N.E.      DWS Scudder Distributors, Inc.
Kansas City, MO          Washington, D.C.        222 South Riverside Plaza
64121-9151               20549-0102              Chicago, IL 60606-5808
WWW.DWS-SCUDDER.COM      WWW.SEC.GOV             (800) 621-1148
(800) 621-1048           (800) SEC-0330
</TABLE>




<TABLE>
<S>                               <C>                                             <C>
SEC FILE NUMBER:
DWS International Fund, Inc.        DWS International Value Opportunities Fund    811-642
</TABLE>






(12/1/07) DIVOF-1
[RECYCLED PAPER GRAPHIC APPEARS HERE]    [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]


<PAGE>
--------------------------------------------------------------------------------




                                DECEMBER 1, 2007








                                   PROSPECTUS

                              ------------------

                              INSTITUTIONAL CLASS



--------------------------------------------------------------------------------



                   DWS INTERNATIONAL VALUE OPPORTUNITIES FUND



As with all mutual funds, the Securities and Exchange  Commission (SEC) does not
approve or disapprove these shares or determine  whether the information in this
prospectus  is  truthful  or  complete.  It is a criminal  offense for anyone to
inform you otherwise.


                                         [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]



<PAGE>

--------------------------------------------------------------------------------









CONTENTS
--------------------------------------------------------------------------------


<TABLE>
<S>      <C>
HOW THE FUND WORKS

  4      The Fund's Main Investment
         Strategy

  5      The Main Risks of Investing in
         the Fund

  8      The Fund's Performance
         History

  9      How Much Investors Pay

 10      Other Policies and Secondary
         Risks

 11      Who Manages and Oversees
         the Fund

 15      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUND

 17      Buying and Selling
         Institutional Class Shares

 23      Policies You Should Know
         About

 34      Understanding Distributions
         and Taxes

 38      Appendix
</TABLE>


<PAGE>

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
goal, the main strategies it uses to pursue that goal and the main risks that
could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-SCUDDER.COM (the Web
site does not form a part of this prospectus).
<PAGE>


<TABLE>
--------------------------------------------------------------------------------
<S>                                                     <C>
                                                        Institutional Class
                                   ticker symbol        DNVIX
                                     fund number        591

DWS INTERNATIONAL VALUE OPPORTUNITIES FUND
--------------------------------------------------------------------------------

</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term capital appreciation, with current
            income as a secondary objective.


            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in the stocks and other
            securities with equity characteristics of companies in developed
            countries outside the United States. Almost all the companies in
            which the fund invests are based in the developed foreign countries
            that make up the Morgan Stanley Capital International Europe,
            Australasia and Far East Index ("MSCI EAFE (Reg. TM) Index"). The
            fund may also invest a portion of its assets in companies based in
            the emerging markets of Latin America, the Middle East, Europe,
            Asia and Africa if the portfolio managers believe that their return
            potential more than compensates for the extra risks associated with
            these markets. While the portfolio managers have invested in
            emerging markets in the past, under normal market conditions they
            do not consider this a central element of the fund's strategy.
            Typically, the fund would not hold more than 20% of its net assets
            in emerging markets. In implementing this overall strategy, the
            fund may experience a high portfolio turnover rate. The fund's
            equity investments are mainly common stocks, but may also include
            other types of equities such as preferred stocks or convertible
            securities. The fund may also invest up to 20% of its assets in
            cash equivalents, US investment-grade fixed-income securities, and
            US stocks and other equities.


            The fund invests for the long term. The portfolio managers employ a
            value strategy and invest in companies that they believe are
            undervalued. These are typically companies that have been
            historically sound but are temporarily out of favor. The fund
            intends to invest primarily in companies whose market
            capitalizations fall within the normal range of the MSCI EAFE (Reg.
            TM) Index.


4 | DWS International Value Opportunities Fund
<PAGE>


            The portfolio managers track several thousand companies to arrive
            at between 50 to 70 stocks the fund normally holds. The managers
            use a variety of quantitative screens to compare a company's stock
            price to its book value, cash flow and dividend yield, and analyze
            individual companies to identify those that are financially sound
            and appear to have strong potential for long-term growth.


            After narrowing the investment universe through the use of
            valuation screens, the portfolio managers' use of fundamental
            research tools lies at the heart of the investment process. The
            portfolio managers' process brings an added dimension to this
            fundamental research by drawing on the insight of experts from a
            range of financial disciplines - regional stock market specialists,
            global industry specialists, economists and quantitative analysts.
            They challenge, refine and amplify each other's ideas. Their close
            collaboration is a critical element of the portfolio managers'
            investment process.


            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. As with most stock funds, an important factor
            with this fund is how stock markets perform - (to the extent the
            fund invests in a particular geographic region, the fund's
            performance may be proportionately affected by that region's
            general performance). When stock prices fall, you should expect the
            value of your investment to fall as well.


                                 DWS International Value Opportunities Fund  | 5
<PAGE>

            Because a stock represents ownership in its issuer, stock prices
            can be hurt by poor management, shrinking product demand and other
            business risks. These may affect single companies as well as groups
            of companies. In addition, movements in financial markets may
            adversely affect a stock's price, regardless of how well the
            company performs. The market as a whole may not favor the types of
            investments the fund makes and the fund may not be able to get
            attractive prices for them.


            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.


            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investment and imposed high taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a foreign company, as compared
               to the financial reports of US companies.

            -  LIQUIDITY RISK. Investments that trade less can be more
               difficult or more costly to buy, or to sell, than more liquid or
               active investments. This liquidity risk is a factor of the
               trading volume of a particular investment, as well as the size
               and liquidity of the entire local market. On the whole, foreign
               exchanges are smaller and less liquid than the US market. This
               can make buying and selling certain investments more difficult
               and costly. Relatively small transactions in some instances can
               have a disproportionately large effect on the price and supply
               of securities. In certain situations, it may become virtually
               impossible to sell an investment in an orderly fashion at a
               price that approaches portfolio management's estimate of its
               value. For the same reason, it may at times be difficult to
               value the fund's foreign investments.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The fund is designed for investors who are seeking capital  appreciation and are
willing to accept the risks of investing in the stocks of foreign companies.


6 | DWS International Value Opportunities Fund
<PAGE>

            -  REGULATORY RISK.  There is generally less government  regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. This creates the possibility that changes in
               exchange rates between foreign currencies and the US dollar will
               affect the US dollar value of foreign securities or the income
               or gain received on these securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            EMERGING MARKET RISK. All of the risks of investing in foreign
            securities are increased in connection with investments in emerging
            markets securities. In addition, profound social changes and
            business practices that depart from norms in developed countries'
            economies have hindered the orderly growth of emerging economies
            and their markets in the past and have caused instability. High
            levels of debt tend to make emerging economies heavily reliant on
            foreign capital and vulnerable to capital flight. These countries
            are also more likely to experience high levels of inflation,
            deflation or currency devaluation, which could also hurt their
            economies and securities markets. For these and other reasons,
            investments in emerging markets are often considered speculative.


            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may not have the intended effects and may result in losses or
            missed opportunities; the risk that the fund will be unable to sell
            the derivative because of an illiquid secondary market; the risk
            that a counterparty is unwilling or unable to meet its obligation;
            and the risk that the derivative transaction could



                                 DWS International Value Opportunities Fund  | 7
<PAGE>


            expose the fund to the effects of leverage, which could increase
            the fund's exposure to the market and magnify potential losses.
            There is no guarantee that derivatives, to the extent employed,
            will have the intended effect, and their use could cause lower
            returns or even losses to the fund. The use of derivatives by the
            fund to hedge risk may reduce the opportunity for gain by
            offsetting the positive effect of favorable price movements.


            PRICING RISK. At times, market conditions might make it hard to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such methodologies, it is
            possible that the value determined for an investment may be
            different than the value realized upon such investment's sale. If
            the fund has valued its securities too highly, you may end up
            paying too much for fund shares when you buy into the fund. If the
            fund underestimates the price of its securities, you may not
            receive the full market value for your fund shares when you sell.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.


            THE FUND'S PERFORMANCE HISTORY

            Since the fund commenced operations on July 5, 2006, performance
            information is not available for a full calendar year.


8 | DWS International Value Opportunities Fund
<PAGE>

HOW MUCH INVESTORS PAY

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Class shares of the fund. This information doesn't include any
fees that may be charged by your financial advisor.



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FEE TABLE
--------------------------------------------------------------------------------
<S>                                                             <C>
 SHAREHOLDER FEES, paid directly from your investment
--------------------------------------------------------------------------------
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds) 1                                         2.00%
--------------------------------------------------------------------------------

 ANNUAL OPERATING EXPENSES, deducted from fund assets
--------------------------------------------------------------------------------
 Management Fee 2                                               0.90%
--------------------------------------------------------------------------------
 Distribution/Service (12b-1) Fee                               None
--------------------------------------------------------------------------------
 Other Expenses                                                 2.36
--------------------------------------------------------------------------------
 TOTAL ANNUAL OPERATING EXPENSES                                3.26
--------------------------------------------------------------------------------
 Less Fee Waiver/Expense
 Reimbursement 3                                                1.90
--------------------------------------------------------------------------------
 NET ANNUAL OPERATING EXPENSES 3                                1.36
--------------------------------------------------------------------------------
</TABLE>



1   This fee is charged on all applicable  redemptions or exchanges.  Please see
    "Policies You Should Know About - Policies about  transactions"  for further
    information.

2   Includes 0.10% administration fee.


3   Through November 30, 2008, the advisor has contractually agreed to waive all
    or a portion of its management  fee and reimburse or pay operating  expenses
    of the fund to the extent  necessary  to maintain  the fund's  total  annual
    operating  expenses  at 1.32%  for  Institutional  Class  shares,  excluding
    certain  expenses  such as  extraordinary  expenses,  taxes,  brokerage  and
    interest.

Based on the costs above (including one year of capped expenses in each
period), this example helps you compare the fund's Institutional Class shares
expenses to those of other mutual funds. This example assumes the expenses
above remain the same. It also assumes that you invested $10,000, earned 5%
annual returns, reinvested all dividends and distributions and sold your shares
at the end of each period. This is only an example; actual expenses will be
different.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                         <C>         <C>          <C>          <C>
 Institutional Class        $138         $826       $1,538       $3,428
--------------------------------------------------------------------------------
</TABLE>




                                 DWS International Value Opportunities Fund  | 9
<PAGE>

OTHER POLICIES AND SECONDARY RISKS


           While the previous pages describe the main points of the fund's
           strategy and risks, there are a few other issues to know about:

           -  Although major changes tend to be infrequent, the fund's Board
              could change the fund's investment objective without seeking
              shareholder approval. However, the Board will provide
              shareholders with at least 60 days' notice prior to making any
              changes to the fund's 80% investment policy as described herein.

           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as money market securities or
              other short-term securities that offer comparable levels of risk
              This could prevent losses, but, while engaged in a temporary
              defensive position, the fund will not be pursuing its investment
              goal. However, portfolio management may choose not to use these
              strategies for various reasons, even in volatile market
              conditions.

           -  The fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean higher taxable
              distributions.


           Secondary risks


           CREDIT RISK. A fund purchasing bonds faces the risk that the
           creditworthiness of the issuer may decline, causing the value of its
           bonds to decline. In addition, an issuer may not be able to make
           timely payments on the interest and principal on the bonds it has
           issued. In some cases, bonds may decline in credit quality or go
           into default.



           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in the fund.

           If you want more information on the fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that the fund will achieve
           its goal.


10 | Other Policies and Secondary Risks
<PAGE>

           A complete list of the fund's portfolio holdings is posted as of the
           month-end on www.dws-scudder.com (the Web site does not form a part
           of this prospectus) on or after the last day of the following month.
           This posted information generally remains accessible at least until
           the date on which the fund files its Form N-CSR or N-Q with the
           Securities and Exchange
           Commission for the period that includes the date as of which the
           posted information is current. In addition, the fund's top ten
           equity holdings and other fund information is posted on
           www.dws-scudder.com as of the calendar quarter-end on or after the
           15th day following quarter-end. The fund's Statement of Additional
           Information includes a description of the fund's policies and
           procedures with respect to the disclosure of the fund's portfolio
           holdings.


WHO MANAGES AND OVERSEES THE FUND

           The investment advisor


           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor, or the subadvisor, makes investment
           decisions, buys and sells securities for the fund and conducts
           research that leads to these purchase and sale decisions. The
           Advisor provides a full range of global investment advisory services
           to institutional and retail clients.

           DWS Scudder is part of Deutsche Asset Management, which is the
           marketing name in the US for the asset management activities of
           Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS
           Trust Company.


           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.


                                         Who Manages and Oversees the Fund  | 11
<PAGE>


           The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank
           AG. Deutsche Bank AG is a major global banking institution that is
           engaged in a wide range of financial services, including investment
           management, mutual funds, retail, private and commercial banking,
           investment banking and insurance.

           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below is the actual rate paid by the fund for the most recent fiscal
           year, as a percentage of the fund's average daily net assets.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FUND NAME                                                      FEE PAID
--------------------------------------------------------------------------------
<S>                                                             <C>
DWS International Value Opportunities Fund                      0.00%*
--------------------------------------------------------------------------------
</TABLE>

           *  Reflects the effects of expense  limitations  and/or fee waivers
               then in effect.


           As compensation for its services, DIMA is entitled to receive from
           the fund a fee (based upon the fund's average daily net assets) in
           accordance with the following schedule: 0.800% on the first $500
           million; 0.780% on the next $500 million; 0.760% on the next $1
           billion and 0.740% thereafter.

           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement and subadvisory agreement, is
           contained in the shareholder report for the annual period ended
           August 31, 2006 (see "Shareholder reports" on the back cover).


           Under a separate administrative services agreement between the fund
           and the Advisor, the fund pays the Advisor for providing most of the
           fund's administrative services.


12 | Who Manages and Oversees the Fund
<PAGE>

           Subadvisor for DWS International Value Opportunities Fund


           The subadvisor for DWS International Value Opportunities Fund is
           Deutsche Asset Management International GmbH ("DeAMi"), Mainzer
           Landstrasse 178-190, Frankfurt am Main, Germany. DeAMi renders
           investment advisory and management services to the fund. DeAMi is an
           investment advisor registered with the Securities and Exchange
           Commission and currently manages over $40 billion in assets, which
           is primarily comprised of institutional accounts and investment
           companies. DeAMi is a subsidiary of Deutsche Bank AG. DIMA
           compensates DeAMi out of the management fee it receives from the
           fund.



                                         Who Manages and Oversees the Fund  | 13
<PAGE>

Portfolio management


The fund is managed by a team of investment professionals who collaborate to
develop and implement the fund's investment strategy. Each portfolio manager on
the team has authority over all aspects of the fund's investment portfolio,
including but not limited to, purchases and sales of individual securities,
portfolio construction techniques, portfolio risk assessment, and the
management of daily cash flows in accordance with portfolio holdings.


The following people handle the day-to-day management of the fund.


Klaus Kaldemorgen
Managing Director of Deutsche Asset Management and Lead Portfolio Manager of
the fund.

- Joined Deutsche Asset Management in 1982 and the fund in 2006.
- Head of Equities: Germany; senior portfolio manager of international
   equities; Managing Director of DWS Investment GmbH: Frankfurt.
- Master's degree in economics, Johannes-Gutenberg University, Mainz.

Carmen Weber, CFA
Director of Deutsche Asset Management and Portfolio Manager of the fund.

- Joined Deutsche Asset Management and the fund in 2006.
- Senior portfolio manager for Global Equities: Frankfurt.
- Prior to that, Head of Growth and Equity Funds at Metzler.
- Over 13 years of investment industry experience.
- BA, University of Siegen, Germany.


The fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in the fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


14 | Who Manages and Oversees the Fund
<PAGE>

FINANCIAL HIGHLIGHTS


The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).

DWS International Value Opportunities Fund - Institutional Class




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
YEARS ENDED AUGUST 31,                                   2007            2006 a
--------------------------------------------------------------------------------
<S>                                                      <C>              <C>
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                  $ 10.25         $ 10.00
--------------------------------------------------------------------------------
Income (loss) from investment operations:
  Net investment income (loss) b                          .22             .03
--------------------------------------------------------------------------------
  Net realized and unrealized gain (loss)                1.93             .22
--------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS                       2.15             .25
--------------------------------------------------------------------------------
Less distributions from:
  Net investment income                                 ( .13)              -
--------------------------------------------------------------------------------
Redemption fees                                           .00***            -
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                        $ 12.27         $ 10.25
--------------------------------------------------------------------------------
Total Return (%) c                                      21.23            2.50**
--------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------
Net assets, end of period ($ millions)                     10               1
--------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%)          4.26            9.12*
--------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%)           1.80 d          1.26*
--------------------------------------------------------------------------------
Ratio of net investment income (loss) (%)                1.87            2.04*
--------------------------------------------------------------------------------
Portfolio turnover rate (%)                               127               7**
--------------------------------------------------------------------------------
</TABLE>


a   For the period from July 5, 2006  (commencement of operations) to August 31,
    2006.

b   Based on average shares outstanding during the period.

c   Total returns would have been lower had certain expenses not been reduced.

d   Ratio  includes  interest  expense  incurred  on  foreign  cash  overdrafts.
    Interest  income  incurred on domestic  cash  balances is included in income
    from investment  operations.  The ratio of expenses after expense reductions
    excluding interest expense was 1.26% for the year ended August 31, 2007.

*   Annualized

**  Not annualized

*** Amount is less than $.005.


                                                      Financial Highlights  | 15
<PAGE>

HOW TO INVEST IN THE FUND

The following pages tell you how to invest in the fund and what to expect as a
shareholder. If you're investing directly with DWS Scudder, all of this
information applies to you.


The following pages also tell you about many of the services, choices and
benefits of being a shareholder. You'll also find information on how to check
the status of your account using the method that's most convenient for you.

If you're investing through a "third party provider" - for example, a workplace
retirement plan, financial supermarket or financial advisor - your provider may
have its own policies or instructions and you should follow those.


You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.
<PAGE>

Buying and Selling INSTITUTIONAL CLASS Shares



           You may buy Institutional Class shares through your securities
           dealer or through any financial institution that is authorized to
           act as a shareholder servicing agent ("financial advisor"). Contact
           them for details on how to enter and pay for your order. Your
           financial advisor may also receive compensation from the Advisor
           and/or its affiliates, please see "Financial intermediary support
           payments."


           You may also buy Institutional Class shares by sending your check
           (along with a completed Application Form) directly to DWS Scudder
           Investments Service Company (the "transfer agent"). Your purchase
           order may not be accepted if the fund withdraws the offering of fund
           shares, the sale of fund shares has been suspended or if it is
           determined that your purchase would be detrimental to the interests
           of the fund's shareholders.


           Eligibility requirements

           You may buy Institutional Class shares if you are any of the
           following:

           -  An eligible institution (e.g., a financial institution,
              corporation, trust, estate or educational, religious or
              charitable institution).

           -  An employee benefit plan with assets of at least $50 million.

           -  A registered investment advisor or financial planner purchasing
              on behalf of clients and charging an asset-based or
              hourly fee.

           -  A client of the private banking division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              mutual funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares in the funds.


           Investment minimum

           Your initial investment must be for at least $1,000,000. There are
           no minimum subsequent investment requirements.


                             Buying and Selling Institutional Class Shares  | 17
<PAGE>


           The minimum initial investment is waived for:


           -  Investment advisory affiliates of Deutsche Bank Securities, Inc.,
              DWS funds or Deutsche funds purchasing shares for the accounts of
              their investment advisory clients.

           -  Employee benefit plans with assets of at least $50 million.

           -  Clients of the private banking division of Deutsche Bank AG.

           -  Institutional clients and qualified purchasers that are clients
              of a division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              mutual funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares of the funds.


           -  Registered investment advisors who trade through platforms
              approved by the Advisor and whose client assets in the aggregate
              meet the $1,000,000 minimum investment.

           The fund reserves the right to modify the above eligibility
           requirements and investment minimum at any time.


           How to contact the transfer agent



<TABLE>
--------------------------------------------------------------------------------
<S>                       <C>
  BY PHONE:               (800) 730-1313
--------------------------------------------------------------------------------
  FIRST INVESTMENTS       DWS Scudder Investments Service Company
  BY MAIL:                P.O. Box 219210
                          Kansas City, MO 64121-9151
--------------------------------------------------------------------------------
  ADDITIONAL              DWS Scudder Investments Service Company
  INVESTMENTS BY          P.O. Box 219210
  MAIL:                   Kansas City, MO 64121-9154
--------------------------------------------------------------------------------
  BY OVERNIGHT MAIL:      DWS Scudder Investments Service Company
                          210 West 10th Street
                          Kansas City, MO 64105-1614
--------------------------------------------------------------------------------
</TABLE>



           You can reach the automated information line, 24 hours a day,
           7 days a week by calling (800) 621-1048.


18 | Buying and Selling Institutional Class Shares
<PAGE>

           How to open your fund account


<TABLE>
--------------------------------------------------------------------------------
<S>                  <C>
  MAIL:              Complete and sign the account application that
                     accompanies this prospectus. (You may obtain
                     additional applications by calling the transfer agent.)
                     Mail the completed application along with a check
                     payable to the fund you have selected to the transfer
                     agent. Be sure to include the fund number. (For fund
                     number, refer to "The Fund's Main Investment
                     Strategy"). The applicable addresses are shown under
                     "How to contact the transfer agent."
--------------------------------------------------------------------------------
  WIRE:              Call the transfer agent to set up a wire account.
--------------------------------------------------------------------------------
  FUND NAME AND      Please use the complete fund name. Refer to "The
  FUND NUMBER:       Fund's Main Investment Strategy" above for the fund
                     number.
--------------------------------------------------------------------------------
</TABLE>



           Please note that your account cannot become activated until we
           receive a completed application.


           How to BUY and SELL shares

           MAIL:


           BUYING: Send your check, payable to the fund you have selected, to
           the transfer agent. Be sure to include the fund number and your
           account number on your check. If you are investing in more than one
           fund, make your check payable to "DWS Scudder" and include your
           account number, the names and numbers of the funds you have
           selected, and the dollar amount or percentage you would like
           invested in each fund. Mailing addresses are shown under "How to
           contact the transfer agent."


           SELLING: Send a signed letter to the transfer agent with your name,
           your fund number and account number, the fund's name, and either the
           number of shares you wish to sell or the dollar amount you wish to
           receive. Unless exchanging into another DWS fund, you must submit a
           written authorization to sell shares in a retirement account.


                             Buying and Selling Institutional Class Shares  | 19
<PAGE>

           WIRE:


           BUYING: You may buy shares by wire only if your account is
           authorized to do so. Please note that you or your financial advisor
           must call Shareholder Services at (800) 730-1313 to notify us in
           advance of a wire transfer purchase. Inform Shareholder Services of
           the amount of your purchase and receive a trade confirmation number.
           Instruct your bank to send payment by wire using the wire
           instructions noted below. All wires must be received by 4:00 p.m.
           (Eastern time) the next business day following your purchase. If
           your wire is not received by 4:00 p.m. (Eastern time) on the next
           business day after the fund receives your request to purchase
           shares, your transaction will be canceled at your expense and risk.


<TABLE>
--------------------------------------------------------------------------------
<S>                 <C>
  BANK NAME:        State Street Bank Boston
--------------------------------------------------------------------------------
  ROUTING NO:       011000028
--------------------------------------------------------------------------------
  ATTN:             DWS Scudder
--------------------------------------------------------------------------------
  DDA NO:           9903-5552
--------------------------------------------------------------------------------
  FBO:              (Account name) (Account number)
--------------------------------------------------------------------------------
  CREDIT:           (fund name, fund number and, if applicable, class
                    name) (see "How to open your fund account")
--------------------------------------------------------------------------------
</TABLE>


           Refer to your account statement for the account name and number.
           Wire transfers normally take two or more hours to complete. Wire
           transfers may be restricted on holidays and at certain other times.


           SELLING: You may sell shares by wire only if your account is
           authorized to do so. You will be paid for redeemed shares by wire
           transfer of funds to your financial advisor or bank upon receipt of
           a duly authorized redemption request as promptly as feasible. For
           your protection, you may not change the destination bank account
           over the phone. To sell by wire, contact your financial advisor or
           Shareholder Services at (800) 730-1313. Inform Shareholder Services
           of the amount of your redemption and receive a trade confirmation
           number. The minimum redemption by wire is $1,000. The fund reserves
           the right to change the above eligibility requirements and
           investment minimum at any time. We must receive your order by 4:00
           p.m. (Eastern time) to wire your account the next business day.


20 | Buying and Selling Institutional Class Shares
<PAGE>

           TELEPHONE TRANSACTIONS:

           You may place orders to buy and sell over the phone by calling your
           financial advisor or Shareholder Services at (800) 730-1313. If your
           shares are in an account with the transfer agent, you may (1) redeem
           by check in an amount up to $100,000, or by wire (minimum $1,000),
           or (2) exchange the shares for Institutional shares of another DWS
           fund by calling the
           transfer agent.

           You may make regular investments from a bank checking account. For
           more information on setting up an automatic investment plan or
           payroll investment plan, call Shareholder Services at (800)
           730-1313.


           Financial intermediary support payments


           The Advisor, DWS Scudder Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to the fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/or servicing of fund investors and fund
           shares ("revenue sharing"). Such revenue sharing payments are in
           addition to any distribution or service fees payable under any Rule
           12b-1 or service plan of the fund, any record keeping/sub-transfer
           agency/networking fees payable by the fund (generally through the
           Distributor or an affiliate) and/or the Distributor to certain
           financial advisors for performing such services and any sales
           charges, commissions, non-cash compensation arrangements expressly
           permitted under applicable rules of the Financial Industry
           Regulatory Authority ("FINRA") or other concessions described in the
           fee table or elsewhere in this prospectus or the Statement of
           Additional Information as payable to all financial advisors. For
           example, the Advisor, the Distributor and/or their affiliates may
           compensate financial advisors for providing the fund with "shelf
           space" or access to a third party platform or fund offering list or
           other marketing programs, including, without limitation, inclusion
           of the fund on preferred or recommended sales lists, mutual fund
           "supermarket" platforms and other formal sales programs; granting
           the Distributor access to the financial advisor's sales


                             Buying and Selling Institutional Class Shares  | 21
<PAGE>

           force; granting the Distributor access to the financial advisor's
           conferences and meetings; assistance in training and educating the
           financial advisor's personnel; and obtaining other forms of
           marketing support.


           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of the fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.


           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS Fund shares or the retention
           and/or servicing of investors and DWS Fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of the fund serviced and maintained by the financial advisor,
           .10% to .25% of sales of the fund attributable to the financial
           advisor, a flat fee of $12,500 up to $500,000, or any combination
           thereof. These amounts are subject to change at the discretion of
           the Advisor, the Distributor and/or their affiliates. Receipt of, or
           the prospect of receiving, this additional compensation may
           influence your financial advisor's recommendation of the fund or of
           any particular share class of the fund. You should review your
           financial advisor's compensation disclosure and/or talk to your
           financial advisor to obtain more information on how this
           compensation may have influenced your financial advisor's
           recommendation of the fund. Additional information regarding these
           revenue sharing payments is included in the fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).


           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to


22 | Buying and Selling Institutional Class Shares
<PAGE>

           retirement plans that obtain record keeping services from ADP, Inc.
           on the DWS Scudder branded retirement plan platform (the "Platform")
           with the level of revenue sharing payments being based upon sales of
           both the DWS funds and the non-DWS funds by the financial advisor on
           the Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for the fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of broker-dealers to
           execute portfolio transactions for the fund. In addition, the
           Advisor, the Distributor and/or their affiliates will not use fund
           brokerage to pay for their obligation to provide additional
           compensation to financial advisors as described above.


POLICIES YOU SHOULD KNOW ABOUT


           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.



                                            Policies You Should Know About  | 23
<PAGE>

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           730-1313.


           Policies about transactions


           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.


           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.


           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated.



24 | Policies You Should Know About
<PAGE>


           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.


           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.


           SUB-MINIMUM BALANCES. The fund may redeem your shares and close your
           account on 60 days' notice if it fails to meet the minimum account
           balance requirement of $1,000,000 for any reason other than a change
           in market value.

           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of the fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if the fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by the fund (e.g.,
           "time zone arbitrage"). The fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.

           Pursuant to its policies, the fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). The fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior notice. For
           example, the fund may in its discretion reject or cancel a purchase
           or an exchange order even if the transaction is not subject to the
           specific roundtrip transaction limitation described below if the
           Advisor believes that there appears to be a pattern of short-term or
           excessive trading activity by a shareholder or deems any other
           trading activity harmful or


                                            Policies You Should Know About  | 25
<PAGE>

           disruptive to the fund. The fund, through its Advisor and Transfer
           Agent, will measure short-term and excessive trading by the number
           of roundtrip transactions within a shareholder's account during a
           rolling 12-month period. A "roundtrip" transaction is defined as any
           combination of purchase and redemption activity (including
           exchanges) of the same fund's shares. The fund may take other
           trading activity into account if the fund believes such activity is
           of an amount or frequency that may be harmful to long-term
           shareholders or disruptive to portfolio management.

           Shareholders are limited to four roundtrip transactions in the same
           DWS Fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS Fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS Fund. The fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS Fund are not affected by the four roundtrip
           transaction limitation, but all redemptions remain subject to the
           fund's redemption fee policy (see "Redemption fees" described
           below).

           The Advisor may make exceptions to the roundtrip transaction policy
           for certain types of transactions if in its opinion the transactions
           do not represent short-term or excessive trading or are not abusive
           or harmful to the fund, such as, but not limited to, systematic
           transactions, required minimum retirement distributions,
           transactions initiated by the fund or administrator and transactions
           by certain qualified fund-of-fund(s).

           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive trading
           may be more or less restrictive than the DWS Funds' policy, may
           permit certain transactions not permitted by the DWS Funds'
           policies, or prohibit transactions not subject to the DWS Funds'
           policies.



26 | Policies You Should Know About
<PAGE>


           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of the fund that provide a substantially similar level of
           protection for the fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.

           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund from "time zone arbitrage" with respect
           to its foreign securities holdings and other trading practices that
           seek to exploit variations in portfolio valuation that arise from
           the nature of the securities held by the fund. (See "How the fund
           calculates share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying
           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of the fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in the fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

           The fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. The fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value) on all fund
           shares redeemed or exchanged within 15 days of buying them (either
           by purchase or exchange). The redemption fee is paid directly to the
           fund and is designed to encourage long-term investment and to offset
           transaction and other costs


                                            Policies You Should Know About  | 27
<PAGE>

           associated with short-term or excessive trading. For purposes of
           determining whether the redemption fee applies, shares held the
           longest time will be treated as being redeemed first and shares held
           the shortest time will be treated as being redeemed last.


           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with the fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally netted
           against one another and placed on an aggregate basis; consequently
           the identities of the individuals on whose behalf the transactions
           are placed generally are not known to the fund. For this reason, the
           fund has undertaken to notify financial intermediaries of their
           obligation to assess the redemption fee on customer accounts and to
           collect and remit the proceeds to the fund. However, due to
           operational requirements, the intermediaries' methods for tracking
           and calculating the fee may be inadequate or differ in some respects
           from the fund's.

           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of participants in certain group retirement
           plans whose processing systems are incapable of properly applying
           the redemption fee to underlying shareholders; (iii) transactions on
           behalf of a shareholder to return any excess IRA contributions to
           the shareholder; (iv) transactions on behalf of a shareholder to
           effect a required minimum distribution on an IRA; (v) transactions
           on behalf of any mutual fund advised by the Advisor and its
           affiliates (e.g., "funds of funds") or, in the case of a
           master/feeder relationship, redemptions by the feeder fund from the
           master portfolio; (vi) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vii)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (viii)
           transactions involving hardship of any registered shareholder; (ix)
           systematic transactions with pre-defined trade dates for purchases,
           exchanges or redemptions, such as automatic account rebalancing, or
           loan origination and repayments; (x) transactions involving shares
           purchased through the


28 | Policies You Should Know About
<PAGE>


           reinvestment of dividends or other distributions; (xi) transactions
           involving shares transferred from another account in the same fund
           or converted from another class of the same fund (the redemption fee
           period will carry over to the acquired shares); (xii) transactions
           initiated by the fund or administrator (e.g., redemptions for not
           meeting account minimums, to pay account fees funded by share
           redemptions, or in the event of the liquidation or merger of the
           fund); or (xiii) transactions in cases when there are legal or
           contractual limitations or restrictions on the imposition of the
           redemption fee (as determined by the fund or its agents in their
           sole discretion). It is the policy of the DWS funds to permit
           approved fund platform providers to execute transactions within the
           funds without the imposition of a redemption fee if such providers
           have implemented alternative measures that are determined by the
           Advisor to provide controls on short-term and excessive trading that
           are comparable to the DWS funds' policies.

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Scudder. You can also use this service to make exchanges and
           sell shares.


           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll
           need to make sure your bank has Automated Clearing House (ACH)
           services. Transactions take two to three days to be completed and
           there is a $50 minimum and a $250,000 maximum. To set up QuickBuy or
           QuickSell on a new account, see the account application; to add it
           to an existing account, call (800) 730-1313.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 730-1313 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS  Scudder  Web site can be a  valuable  resource  for  shareholders  with
Internet access. Go to WWW.DWS-SCUDDER.COM to get up-to-date information, review
balances or even place orders for exchanges.


                                            Policies You Should Know About  | 29
<PAGE>

           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           IF YOU PAY FOR SHARES BY CHECK and the check fails to clear, or if
           you order shares by phone and fail to pay for them by 4:00 p.m.
           Eastern time the next business day, we have the right to cancel your
           order, hold you liable or charge you or your account for any losses
           or fees the fund or its agents have incurred. To sell shares, you
           must state whether you would like to receive the proceeds by wire or
           check.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           THE FUND DOES NOT ISSUE SHARE CERTIFICATES.


           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by check,
           bank or Federal Funds wire transfer or by electronic bank transfer.
           Please note that the fund does not accept cash, money orders,
           traveler's checks, starter checks, third party checks (except checks
           for retirement plan asset transfers and rollovers or for Uniform
           Gifts to Minors Act/Uniform Transfers to Minors Act accounts),
           checks drawn on foreign banks or checks issued by credit card
           companies or Internet-based companies. Thus, subject to the
           foregoing exceptions for certain third party checks, checks that are
           otherwise permissible must be drawn by the account holder on a
           domestic bank and must be payable to the fund.

           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't
           need a signature guarantee. Also, generally you don't need a
           signature guarantee for an exchange, although we may require one in
           certain other circumstances.


           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet,  you can send
us your order in writing.


30 | Policies You Should Know About
<PAGE>

           companies, credit unions, member firms of a national stock exchange
           or any member or participant of an approved signature guarantor
           program. Note that you can't get a signature guarantee from a notary
           public and we must be provided the original guarantee.

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           730-1313 or contact your financial advisor for more information.


           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are other
           circumstances when it could be longer: When you are selling shares
           you bought recently by check (redemption proceeds from such a sale
           are unavailable until the check has cleared), when you make
           purchases by ACH (the funds will be placed under a 10 calendar day
           hold to ensure good funds) or when unusual circumstances prompt the
           SEC to allow further delays. Certain expedited redemption processes
           may also be delayed when you are selling recently purchased shares
           or in the event of closing of the Federal Reserve Bank's wire
           payment system. In addition, the fund reserves the right to suspend
           or postpone redemptions as permitted pursuant to
           Section 22(e) of the Investment Company Act of 1940. Generally,
           those circumstances are when 1) the New York Stock Exchange is
           closed other than customary weekend or holiday closings; 2) trading
           on the New York Stock Exchange is restricted; 3) an emergency exists
           which makes the disposal of securities owned by the fund or the fair
           determination of the value of the fund's net assets not reasonably
           practicable; or 4) the SEC, by order, permits the suspension of the
           right of redemption. Redemption payments by wire may also be delayed
           in the event of a non-routine closure of the Federal Reserve wire
           payment system. For additional rights reserved by the fund, please
           see "Other rights we reserve."


           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.

           ACCOUNT STATEMENTS. We or your financial advisor will generally
           furnish you with a written confirmation of every transaction that
           affects your account balance. You will also receive periodic
           statements reflecting the balances in your account.


                                            Policies You Should Know About  | 31
<PAGE>

           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>              <C>                                         <C>
                 TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy and sell shares is the NAV.



           THE FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by the fund's Board, such as a
           fair valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of the fund's portfolio is believed to have been materially
           affected by a significant event, such as a natural disaster, an
           economic event like a bankruptcy filing, or a substantial
           fluctuation in domestic or foreign markets that has occurred between
           the close of the exchange or market on which the security is
           principally traded (for example, a foreign exchange or market) and
           the close of the New York Stock Exchange. In such a case, the fund's
           value for a security is likely to be different from the last quoted
           market price or pricing service information. In addition, due to the
           subjective and variable nature of fair value pricing, it is possible
           that the value determined for a particular asset may be materially
           different from the value realized upon such asset's sale. It is
           expected that the greater the percentage of fund assets that is
           invested in non-US securities, the more extensive will be the fund's
           use of fair value pricing. This is intended to reduce the fund's
           exposure to "time zone arbitrage" and other harmful trading
           practices. (See "Market timing policies and procedures.")

           TO THE EXTENT THAT THE FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when the
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change



32 | Policies You Should Know About
<PAGE>


           significantly on days when the New York Stock Exchange is closed and
           you cannot buy or sell fund shares. Price changes in the securities
           the fund owns may ultimately affect the price of fund shares the
           next time the NAV is calculated.)



           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              as federal income tax if we have been notified by the IRS that
              you are subject to backup withholding or if you fail to provide
              us with a correct taxpayer ID number and certain certifications
              or certification that you are exempt from backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason


           -  refuse, cancel, limit or rescind any purchase or exchange order,
              without prior notice; freeze any account (meaning you will not be
              able to purchase fund shares in your account); suspend account
              services; and/or involuntarily redeem your account if we think
              that the account is being used for fraudulent or illegal
              purposes; one or more of these actions will be taken when, at our
              sole discretion, they are deemed to be in the fund's best
              interests or when the fund is requested or compelled to do so by
              governmental authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less any applicable redemption fee); you may recognize a
              gain or loss on the redemption of your fund shares and incur a
              tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; the fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of the fund's net assets, whichever is less


                                            Policies You Should Know About  | 33
<PAGE>


           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)



UNDERSTANDING DISTRIBUTIONS AND TAXES

           The fund intends to distribute to its shareholders virtually all of
           its net earnings. The fund can earn money in two ways: by receiving
           interest, dividends or other income from securities it holds and by
           selling securities for more than it paid for them. (The fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) The fund may not always pay a
           dividend or distribution for a given period.

           THE FUND INTENDS TO PAY DIVIDENDS AND DISTRIBUTIONS to its
           shareholders annually in December and, if necessary, may do so at
           other times as well.

           Dividends or distributions declared to shareholders of record in the
           last quarter of a given calendar year are treated for federal income
           tax purposes as if they were received on December 31 of that year,
           provided such dividends or distributions are paid by the end of the
           following January.


           For federal income tax purposes, income and capital gains
           distributions are generally taxable. However, dividends and
           distributions received by retirement plans qualifying for tax
           exemption under federal income tax laws generally will not be
           taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in
           fund shares (at NAV), all deposited directly to your bank account or
           all sent to you by check, have one type reinvested and the other
           sent to you by check or have them invested in a different fund. Tell
           us your preference on your application. If you don't indicate a
           preference, your dividends and distributions will all be reinvested
           in shares of the fund without a sales charge (if applicable).
           Distributions are treated the same for federal income tax purposes
           whether you receive them in cash or reinvest them in additional
           shares. For employer-sponsored qualified plans, and retirement
           plans, reinvestment (at NAV) is the only option.


THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each  shareholder's  tax situation is unique,  ask your tax professional
about the tax  consequences of your  investments,  including any state and local
tax consequences.


34 | Understanding Distributions and Taxes
<PAGE>

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital gain or loss. The gain or loss
           will be long-term or short-term depending on how long you owned the
           shares that were sold. For federal income tax purposes, an exchange
           is treated the same as a sale.

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depend on their type:


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
GENERALLY TAXED AT LONG-TERM                 GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                          INCOME RATES:
--------------------------------------------------------------------------------
<S>                                          <C>
DISTRIBUTIONS FROM THE FUND

-   gains from the sale of                   -  gains from the sale of
    securities held (or treated                 securities held by the fund for
    as held) by the fund for                    one year or less
    more than one year

-   qualified dividend income                -  all other taxable income
--------------------------------------------------------------------------------

TRANSACTIONS INVOLVING FUND
SHARES

-   gains from selling fund                  -  gains from selling fund
    shares held for more than                   shares held for one year or
    one year                                    less
--------------------------------------------------------------------------------
</TABLE>



           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. The fund may elect
           to pass through to its shareholders a credit or deduction for
           foreign taxes it has paid if at the end of its year more than 50% of
           the fund's total assets are stocks or securities of foreign
           corporations. In addition, any investments in foreign securities or
           foreign currencies may increase or accelerate the fund's recognition
           of ordinary income and may affect the timing or amount of the fund's
           distributions. If you invest in the fund through a taxable account,
           your after-tax return could be negatively impacted.

           To the extent that the fund invests in certain debt obligations or
           certain other securities, investments in these obligations or
           securities may cause the fund to recognize taxable income in excess
           of the cash generated by such obligations. Thus, the fund could be
           required at times to liquidate other investments in order to satisfy
           its distribution requirements.



                                     Understanding Distributions and Taxes  | 35
<PAGE>


           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes dividends from domestic and some foreign
           corporations. It does not include income from investments in debt
           securities or, generally, from REITs. In addition, the fund must
           meet certain holding period and other requirements with respect to
           the dividend-paying stocks in its portfolio and the shareholder must
           meet certain holding period and other requirements with respect to
           the fund's shares for the lower tax rates to apply. Because the fund
           will invest in both long and short positions in equity securities,
           it is anticipated that a smaller portion of the income dividends
           paid to you by the fund will be qualified dividend income eligible
           for taxation at long-term capital gain rates than if the fund
           invested in only long positions in equity securities.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been reduced to 15%. For taxable years beginning on or after January
           1, 2011, the long-term capital gain rate is scheduled to return to
           20%. For more information, see the Statement of Additional
           Information, under "Taxes."

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.


           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund declares a dividend. In
           tax-advantaged retirement accounts you do not need to worry about
           this.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains, but may be eligible for a dividends-received
           deduction for a portion of the income dividends they receive from
           the fund, provided certain holding period and other requirements are
           met.


36 | Understanding Distributions and Taxes
<PAGE>

           The above discussion is applicable to shareholders who are US
           persons. If you are a non-US person, please consult your own tax
           advisor with respect to the US tax consequences to you of an
           investment in the fund.


                                     Understanding Distributions and Taxes  | 37
<PAGE>

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary



           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The tables also assume that all dividends and
           distributions are reinvested. The annual fund expense ratios shown
           are net of any contractual fee waivers or expense reimbursements, if
           any, for the period of the contractual commitment. The tables do not
           reflect redemption fees, if any, which may be payable upon
           redemption. If redemption fees were shown, the "Hypothetical
           Year-End Balance After Fees and Expenses" amounts shown would be
           lower and the "Annual Fees and Expenses" amounts shown would be
           higher. Also, please note that if you are investing through a third
           party provider, that provider may have fees and expenses separate
           from those of the fund that are not reflected here. Mutual fund fees
           and expenses fluctuate over time and actual expenses may be higher
           or lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.



38 | Appendix
<PAGE>

DWS International Value Opportunities Fund - Institutional Class


<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
----------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
----------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.36%              3.64%       $ 10,364.00        $   138.48
----------------------------------------------------------------------------------------------
   2           10.25%        3.26%              5.44%       $ 10,544.33        $   340.81
----------------------------------------------------------------------------------------------
   3           15.76%        3.26%              7.28%       $ 10,727.81        $   346.74
----------------------------------------------------------------------------------------------
   4           21.55%        3.26%              9.14%       $ 10,914.47        $   352.77
----------------------------------------------------------------------------------------------
   5           27.63%        3.26%             11.04%       $ 11,104.38        $   358.91
----------------------------------------------------------------------------------------------
   6           34.01%        3.26%             12.98%       $ 11,297.60        $   365.15
----------------------------------------------------------------------------------------------
   7           40.71%        3.26%             14.94%       $ 11,494.17        $   371.51
----------------------------------------------------------------------------------------------
   8           47.75%        3.26%             16.94%       $ 11,694.17        $   377.97
----------------------------------------------------------------------------------------------
   9           55.13%        3.26%             18.98%       $ 11,897.65        $   384.55
----------------------------------------------------------------------------------------------
  10           62.89%        3.26%             21.05%       $ 12,104.67        $   391.24
----------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 3,428.13
----------------------------------------------------------------------------------------------
</TABLE>




                                                                  Appendix  | 39
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund's features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
the fund, call (800) 730-1313, or contact DWS Scudder at the address listed
below. The fund's SAI and shareholder reports are also available through the
DWS Scudder Web site at www.dws-scudder.com. These documents and other
information about the fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about the fund,
including the fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.



<TABLE>
<CAPTION>
DWS SCUDDER              SEC                     DISTRIBUTOR
--------------------------------------------------------------------------------
<S>                      <C>                     <C>
PO Box 219210            100 F Street, N.E.      DWS Scudder Distributors, Inc.
Kansas City, MO          Washington, D.C.        222 South Riverside Plaza
64121-9210               20549-0102              Chicago, IL 60606-5808
WWW.DWS-SCUDDER.COM      WWW.SEC.GOV             (800) 621-1148
(800) 730-1313           (800) SEC-0330
</TABLE>



<TABLE>
<S>                               <C>                                             <C>
SEC FILE NUMBER:
DWS International Fund, Inc.        DWS International Value Opportunities Fund    811-642
</TABLE>







(12/01/07) DIVOF-1-IN
[RECYCLED PAPER GRAPHIC APPEARS HERE]    [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]


<PAGE>
<PAGE>


                                DECEMBER 1, 2007








                                   PROSPECTUS

                              ------------------

                                    CLASS S

--------------------------------------------------------------------------------

                   DWS INTERNATIONAL VALUE OPPORTUNITIES FUND





As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.


                                         [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]




<PAGE>

CONTENTS

--------------------------------------------------------------------------------



<TABLE>
<S>      <C>
HOW THE FUND WORKS

  4      The Fund's Main Investment
         Strategy

  5      The Main Risks of Investing in
         the Fund

  8      The Fund's Performance
         History

  9      How Much Investors Pay

 10      Other Policies and Secondary
         Risks

 11      Who Manages and Oversees
         the Fund

 15      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUND

 17      How to Buy, Sell and
         Exchange Shares

 21      Policies You Should Know
         About

 33      Understanding Distributions
         and Taxes

 36      Appendix
</TABLE>


<PAGE>

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
goal, the main strategies it uses to pursue that goal and the main risks that
could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

CLASS S shares are generally only available to new investors through fee-based
programs of investment dealers that have special agreements with the fund's
distributor and through certain registered investment advisors. These dealers
and advisors typically charge ongoing fees for services they provide.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-SCUDDER.COM (the Web
site does not form a part of this prospectus).
<PAGE>


<TABLE>
<S>                                               <C>
--------------------------------------------------------------------------------
                                                                        Class S

                          ticker symbol                                 DNVSX

                            fund number                                 2355

DWS INTERNATIONAL VALUE OPPORTUNITIES FUND
--------------------------------------------------------------------------------

</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term capital appreciation, with current
            income as a secondary objective.


            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in the stocks and other
            securities with equity characteristics of companies in developed
            countries outside the United States. Almost all the companies in
            which the fund invests are based in the developed foreign countries
            that make up the Morgan Stanley Capital International Europe,
            Australasia and Far East Index ("MSCI EAFE (Reg. TM) Index"). The
            fund may also invest a portion of its assets in companies based in
            the emerging markets of Latin America, the Middle East, Europe,
            Asia and Africa if the portfolio managers believe that their return
            potential more than compensates for the extra risks associated with
            these markets. While the portfolio managers have invested in
            emerging markets in the past, under normal market conditions they
            do not consider this a central element of the fund's strategy.
            Typically, the fund would not hold more than 20% of its net assets
            in emerging markets. In implementing this overall strategy, the
            fund may experience a high portfolio turnover rate. The fund's
            equity investments are mainly common stocks, but may also include
            other types of equities such as preferred stocks or convertible
            securities. The fund may also invest up to 20% of its assets in
            cash equivalents, US investment-grade fixed-income securities, and
            US stocks and other equities.


            The fund invests for the long term. The portfolio managers employ a
            value strategy and invest in companies that they believe are
            undervalued. These are typically companies that have been
            historically sound but are temporarily out of favor. The fund
            intends to invest primarily in companies whose market
            capitalizations fall within the normal range of the MSCI EAFE (Reg.
            TM) Index.


4 | DWS International Value Opportunities Fund
<PAGE>


            The portfolio managers track several thousand companies to arrive
            at between 50 to 70 stocks the fund normally holds. The managers
            use a variety of quantitative screens to compare a company's stock
            price to its book value, cash flow and dividend yield, and analyze
            individual companies to identify those that are financially sound
            and appear to have strong potential for long-term growth.


            After narrowing the investment universe through the use of
            valuation screens, the portfolio managers' use of fundamental
            research tools lies at the heart of the investment process. The
            portfolio managers' process brings an added dimension to this
            fundamental research by drawing on the insight of experts from a
            range of financial disciplines - regional stock market specialists,
            global industry specialists, economists and quantitative analysts.
            They challenge, refine and amplify each other's ideas. Their close
            collaboration is a critical element of the portfolio managers'
            investment process.


            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.



            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. As with most stock funds, an important factor
            with this fund is how stock markets perform - (to the extent the
            fund invests in a particular geographic region, the fund's
            performance may be proportionately affected by that region's
            general performance). When stock prices fall, you should expect the
            value of your investment to fall as well.


                                 DWS International Value Opportunities Fund  | 5
<PAGE>

            Because a stock represents ownership in its issuer, stock prices
            can be hurt by poor management, shrinking product demand and other
            business risks. These may affect single companies as well as groups
            of companies. In addition, movements in financial markets may
            adversely affect a stock's price, regardless of how well the
            company performs. The market as a whole may not favor the types of
            investments the fund makes and the fund may not be able to get
            attractive prices for them.


            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.


            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investment and imposed high taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a foreign company, as compared
               to the financial reports of US companies.

            -  LIQUIDITY RISK. Investments that trade less can be more
               difficult or more costly to buy, or to sell, than more liquid or
               active investments. This liquidity risk is a factor of the
               trading volume of a particular investment, as well as the size
               and liquidity of the entire local market. On the whole, foreign
               exchanges are smaller and less liquid than the US market. This
               can make buying and selling certain investments more difficult
               and costly. Relatively small transactions in some instances can
               have a disproportionately large effect on the price and supply
               of securities. In certain situations, it may become virtually
               impossible to sell an investment in an orderly fashion at a
               price that approaches portfolio management's estimate of its
               value. For the same reason, it may at times be difficult to
               value the fund's foreign investments.






THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



The fund is designed for investors who are seeking capital appreciation and are
willing to accept the risks of investing in the stocks of foreign companies.









6 | DWS International Value Opportunities Fund
<PAGE>

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. This creates the possibility that changes in
               exchange rates between foreign currencies and the US dollar will
               affect the US dollar value of foreign securities or the income
               or gain received on these securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            EMERGING MARKET RISK. All of the risks of investing in foreign
            securities are increased in connection with investments in emerging
            markets securities. In addition, profound social changes and
            business practices that depart from norms in developed countries'
            economies have hindered the orderly growth of emerging economies
            and their markets in the past and have caused instability. High
            levels of debt tend to make emerging economies heavily reliant on
            foreign capital and vulnerable to capital flight. These countries
            are also more likely to experience high levels of inflation,
            deflation or currency devaluation, which could also hurt their
            economies and securities markets. For these and other reasons,
            investments in emerging markets are often considered speculative.


            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may not have the intended effects and may result in losses or
            missed opportunities; the risk that the fund will be unable to sell
            the derivative because of an illiquid secondary market; the risk
            that a counterparty is unwilling or unable to meet its obligation;
            and the risk that the derivative transaction could



                                 DWS International Value Opportunities Fund  | 7
<PAGE>


            expose the fund to the effects of leverage, which could increase
            the fund's exposure to the market and magnify potential losses.
            There is no guarantee that derivatives, to the extent employed,
            will have the intended effect, and their use could cause lower
            returns or even losses to the fund. The use of derivatives by the
            fund to hedge risk may reduce the opportunity for gain by
            offsetting the positive effect of favorable price movements.


            PRICING RISK. At times, market conditions might make it hard to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such methodologies, it is
            possible that the value determined for an investment may be
            different than the value realized upon such investment's sale. If
            the fund has valued its securities too highly, you may end up
            paying too much for fund shares when you buy into the fund. If the
            fund underestimates the price of its securities, you may not
            receive the full market value for your fund shares when you sell.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.


            THE FUND'S PERFORMANCE HISTORY

            Since the fund commenced operations on July 5, 2006, performance
            information is not available for a full calendar year.


8 | DWS International Value Opportunities Fund
<PAGE>

HOW MUCH INVESTORS PAY



This fund's Class S shares have no sales charges or other shareholder fees
other than a short-term redemption/exchange fee. This information doesn't
include any fees that may be charged by your financial advisor. The fund does
have annual operating expenses, and as a shareholder of Class S shares, you pay
them indirectly.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FEE TABLE                                        CLASS S
--------------------------------------------------------------------------------
<S>                                    <C>
 SHAREHOLDER FEES, paid directly from your investment
--------------------------------------------------------------------------------
 Redemption/Exchange fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                             2.00%
--------------------------------------------------------------------------------
 ANNUAL OPERATING EXPENSES, deducted from fund assets
--------------------------------------------------------------------------------
 Management Fee 2                                  0.90%
--------------------------------------------------------------------------------
 Distribution/Service (12b-1) Fee                  None
--------------------------------------------------------------------------------
 Other Expenses                                    2.43
--------------------------------------------------------------------------------
 TOTAL ANNUAL OPERATING EXPENSES                   3.33
--------------------------------------------------------------------------------
 Less Fee Waiver/Expense
 Reimbursement 3                                   1.97
--------------------------------------------------------------------------------
 NET ANNUAL OPERATING EXPENSES3                    1.36
--------------------------------------------------------------------------------
</TABLE>



1    This fee is charged on all applicable redemptions or exchanges. Please see
     "Policies You Should Know About - Policies about transactions" for further
     information.

2    Includes 0.10% administration fee.


3    Through November 30, 2008, the advisor has contractually agreed to waive
     all or a portion of its management fee and reimburse or pay operating
     expenses of the fund to the extent necessary to maintain the fund's total
     operating expenses at 1.32% for Class S shares, excluding certain expenses
     such as extraordinary expenses, taxes, brokerage and interest.

Based on the costs above (including one year of capped expenses in each
period), this example helps you compare the fund's Class S shares expenses to
those of other mutual funds. This example assumes the expenses above remain the
same and that you invested $10,000, earned 5% annual returns, reinvested all
dividends and distributions and sold your shares at the end of each period.
This is only an example; actual expenses will be different.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                  <C>         <C>          <C>          <C>
 Class S shares        $138         $840       $1,566       $3,488
--------------------------------------------------------------------------------
</TABLE>




                                 DWS International Value Opportunities Fund  | 9
<PAGE>

OTHER POLICIES AND SECONDARY RISKS

           While the previous pages describe the main points of the fund's
           strategy and risks, there are a few other issues to know about:


           -  Although major changes tend to be infrequent, the fund's Board
              could change the fund's investment objective without seeking
              shareholder approval. However, the Board will provide
              shareholders with at least 60 days' notice prior to making any
              changes to the fund's 80% investment policy as described herein.

           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as money market securities or
              other short-term securities that offer comparable levels of risk
              This could prevent losses, but, while engaged in a temporary
              defensive position, the fund will not be pursuing its investment
              goal. However, portfolio management may choose not to use these
              strategies for various reasons, even in volatile market
              conditions.

           -  The fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean higher taxable
              distributions.



           Secondary risks


           CREDIT RISK. A fund purchasing bonds faces the risk that the
           creditworthiness of the issuer may decline, causing the value of its
           bonds to decline. In addition, an issuer may not be able to make
           timely payments on the interest and principal on the bonds it has
           issued. In some cases, bonds may decline in credit quality or go
           into default.



           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in the fund.

           If you want more information on the fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that the fund will achieve
           its goal.


10 | Other Policies and Secondary Risks
<PAGE>

           A complete list of the fund's portfolio holdings is posted as of the
           month-end on www.dws-scudder.com (the Web site does not form a part
           of this prospectus) on or after the last day of the following month.
           This posted information generally remains accessible at least until
           the date on which the fund files its Form N-CSR or N-Q with the
           Securities and Exchange
           Commission for the period that includes the date as of which the
           posted information is current. In addition, the fund's top ten
           equity holdings and other fund information is posted on
           www.dws-scudder.com as of the calendar quarter-end on or after the
           15th day following quarter-end. The fund's Statement of Additional
           Information includes a description of the fund's policies and
           procedures with respect to the disclosure of the fund's portfolio
           holdings.


WHO MANAGES AND OVERSEES THE FUND


           The investment advisor


           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor, or the subadvisor, makes investment
           decisions, buys and sells securities for the fund and conducts
           research that leads to these purchase and sale decisions. The
           Advisor provides a full range of global investment advisory services
           to institutional and retail clients.

           DWS Scudder is part of Deutsche Asset Management, which is the
           marketing name in the US for the asset management activities of
           Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS
           Trust Company.


           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.


                                         Who Manages and Oversees the Fund  | 11
<PAGE>


           The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank
           AG. Deutsche Bank AG is a major global banking institution that is
           engaged in a wide range of financial services, including investment
           management, mutual funds, retail, private and commercial banking,
           investment banking and insurance.

           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below is the actual rate paid by the fund for the most recent fiscal
           year, as a percentage of the fund's average daily net assets.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FUND NAME                                                    FEE PAID
--------------------------------------------------------------------------------
<S>                                                        <C>
           DWS International Value Opportunities Fund           0.00%*
--------------------------------------------------------------------------------
</TABLE>




          *    Reflects the effects of expense limitations and/or fee waivers
               then in effect.


           As compensation for its services, DIMA is entitled to receive from
           the fund a fee (based upon the fund's average daily net assets) in
           accordance with the following schedule: 0.800% on the first $500
           million; 0.780% on the next $500 million; 0.760% on the next $1
           billion and 0.740% thereafter.

           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement and subadvisory agreement, is
           contained in the shareholder report for the annual period ended
           August 31, 2006 (see "Shareholder reports" on the back cover).


           Under a separate administrative services agreement between the fund
           and the Advisor, the fund pays the Advisor for providing most of the
           fund's administrative services.


12 | Who Manages and Oversees the Fund
<PAGE>

           Subadvisor for DWS International Value Opportunities Fund


           The subadvisor for DWS International Value Opportunities Fund is
           Deutsche Asset Management International GmbH ("DeAMi"), Mainzer
           Landstrasse 178-190, Frankfurt am Main, Germany. DeAMi renders
           investment advisory and management services to the fund. DeAMi is an
           investment advisor registered with the Securities and Exchange
           Commission and currently manages over $40 billion in assets, which
           is primarily comprised of institutional accounts and investment
           companies. DeAMi is a subsidiary of Deutsche Bank AG. DIMA
           compensates DeAMi out of the management fee it receives from the
           fund.




                                         Who Manages and Oversees the Fund  | 13
<PAGE>

Portfolio management


The fund is managed by a team of investment professionals who collaborate to
develop and implement the fund's investment strategy. Each portfolio manager on
the team has authority over all aspects of the fund's investment portfolio,
including but not limited to, purchases and sales of individual securities,
portfolio construction techniques, portfolio risk assessment, and the
management of daily cash flows in accordance with portfolio holdings.


The following people handle the day-to-day management of the fund.


Klaus Kaldemorgen
Managing Director of Deutsche Asset Management and Lead Portfolio Manager of
the fund.
- Joined Deutsche Asset Management in 1982 and the fund in 2006.
- Head of Equities: Germany; senior portfolio manager of international
  equities; Managing Director of DWS Investment GmbH: Frankfurt.
- Master's degree in economics, Johannes-Gutenberg University, Mainz.

Carmen Weber, CFA
Director of Deutsche Asset Management and Portfolio Manager of the fund.
- Joined Deutsche Asset Management and the fund in 2006.
- Senior portfolio manager for Global Equities: Frankfurt.
- Prior to that, Head of Growth and Equity Funds at Metzler.
- Over 13 years of investment industry experience.
- BA, University of Siegen, Germany.


The fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in the fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


14 | Who Manages and Oversees the Fund
<PAGE>

FINANCIAL HIGHLIGHTS


The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).



DWS International Value Opportunities Fund - Class S




<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,                                   2007           2006a
--------------------------------------------------------------------------------

<S>                                                 <C>              <C>
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD                  $  10.25         $ 10.00
--------------------------------------------------------------------------------
Income (loss) from investment operations:
  Net investment income (loss)b                            .21             .03
--------------------------------------------------------------------------------
  Net realized and unrealized gain (loss)                 1.94             .22
--------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS                        2.15             .25
--------------------------------------------------------------------------------
Less distributions from:
  Net investment income                                 (  .13)              -
--------------------------------------------------------------------------------
  Redemption fees                                          .00***            -
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD                        $  12.27         $ 10.25
--------------------------------------------------------------------------------
Total Return (%)c                                        21.07            2.50**
--------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------
Net assets, end of period ($ millions)                       4               1
--------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%)           4.33            9.44*
--------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%)         1.85d              1.31*
--------------------------------------------------------------------------------
Ratio of net investment income (loss) (%)                 1.82            1.99*
--------------------------------------------------------------------------------
Portfolio turnover rate (%)                                127               7**
--------------------------------------------------------------------------------
</TABLE>




a    For the period from July 5, 2006 (commencement of operations) to August 31,
     2006.

b    Based on average shares outstanding during the period.

c    Total returns would have been lower had certain expenses not been reduced.

d    Ratio includes interest expense incurred on foreign cash overdrafts.
     Interest income incurred on domestic cash balances is included in income
     from investment operations. The ratio of expenses after expense reductions
     excluding interest expense was 1.31% for the year ended August 31, 2007.

*    Annualized

**   Not annualized

***  Amount is less than $.005.


                                                      Financial Highlights  | 15
<PAGE>

HOW TO INVEST IN THE FUND

The following pages tell you how to invest in the fund and what to expect as a
shareholder. If you're investing directly with DWS Scudder, all of this
information applies to you.


The following pages also tell you about many of the services, choices and
benefits of being a shareholder. You'll also find information on how to check
the status of your account using the method that's most convenient for you.


If you're investing through a "third party provider" - for example, a workplace
retirement plan, financial supermarket or financial advisor - your provider may
have its own policies or instructions and you should follow those.


Please remember, CLASS S shares are generally only available to new investors
through fee-based programs of investment dealers that have special agreements
with the fund's distributor, through certain group retirement plans and through
certain registered investment advisors. These dealers and advisors typically
charge ongoing fees for services they provide.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.


<PAGE>

How to Buy, Sell and Exchange Shares


BUYING SHARES: Use these instructions to invest directly. Make out your check
to "DWS Scudder."


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
 FIRST INVESTMENT                               ADDITIONAL INVESTMENTS
----------------------------------------------------------------------------------------

<S>                                            <C>
 $2,500 or more for regular accounts           $50 or more for regular accounts and
 $1,000 or more for IRAs                       IRA accounts
 $1,000 or more with an Automatic              $50 or more with an Automatic
 Investment Plan                               Investment Plan

----------------------------------------------------------------------------------------
 BY MAIL OR EXPRESS MAIL (SEE BELOW)

 -  Fill out and sign an application           Send a DWS Scudder investment slip or
                                               short note that includes:
 -  Send it to us at the appropriate
    address, along with an investment          -  fund and class name
    check
                                               -  account number

                                               -  check payable to "DWS Scudder"
----------------------------------------------------------------------------------------
 BY WIRE

 -  Call (800) 728-3337 for instructions       -  Call (800) 728-3337 for instructions
----------------------------------------------------------------------------------------
 BY PHONE

 Not available                                 -  Call (800) 728-3337 for instructions
----------------------------------------------------------------------------------------
 WITH AN AUTOMATIC INVESTMENT PLAN

-  Fill in the information on your             -  To set up regular investments from a
    application and include a voided check        bank checking account, call
                                                  (800) 728-3337
----------------------------------------------------------------------------------------
 USING QuickBuy

 Not available                                 -  Call (800) 728-3337 to make sure
                                                  QuickBuy is set up on your account; if
                                                  it is, you can request a transfer from
                                                  your bank account of any amount
                                                  between $50 and $250,000
----------------------------------------------------------------------------------------

 ON THE INTERNET

 -  Go to www.dws-scudder.com                  -  Call (800) 728-3337 to ensure you have
                                                  electronic services
 -  Print out a prospectus and a new
    account application                        -  Register at www.dws-scudder.com

 -  Complete and return the application        -  Follow the instructions for buying
    with your check                               shares with money from your bank
                                                  account
----------------------------------------------------------------------------------------

</TABLE>


--------------------------------------------------------------------------------
REGULAR MAIL:

First Investment: DWS Scudder, PO Box 219356, Kansas City, MO 64121-9356
Additional Investments: DWS Scudder, PO Box 219154, Kansas City, MO 64121-9154

EXPRESS, REGISTERED OR CERTIFIED MAIL:
DWS Scudder, 210 West 10th Street, Kansas City, MO 64105-1614


                                      How to Buy, Sell and Exchange Shares  | 17
<PAGE>

EXCHANGING OR SELLING SHARES: Use these instructions to exchange or sell shares
in an account opened directly with DWS Scudder.


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
 EXCHANGING INTO ANOTHER FUND                    SELLING SHARES
------------------------------------------------------------------------------------------
<S>                                             <C>


 -  Exchanges into existing accounts:           Some transactions, including most for
     $50 minimum per fund                       over $100,000, can only be ordered in
                                                writing with a signature guarantee;
 -  Exchanges into new accounts:                please see "Signature Guarantee" for
    $2,500 minimum per fund                     details
    $1,000 minimum for IRAs

------------------------------------------------------------------------------------------
 BY PHONE OR WIRE

 -  Call (800) 728-3337 for instructions        -  Call (800) 728-3337 for instructions
------------------------------------------------------------------------------------------
 USING THE AUTOMATED INFORMATION LINE

 -  Call (800) 728-3337 for instructions        -  Call (800) 728-3337 for instructions
------------------------------------------------------------------------------------------
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)

 Your instructions should include:              Your instructions should include:
 -  the fund, class and account number          -  the fund, class and account number
    you're exchanging out of                       from which you want to sell shares

 -  the dollar amount or number of shares       -  the dollar amount or number of shares
    you want to exchange                           you want to sell

 -  the name and class of the fund you          -  your name(s), signature(s) and
    want to exchange into                          address, as they appear on your
                                                   account
 -  your name(s), signature(s) and
    address, as they appear on your             -  a daytime telephone number
    account

 -  a daytime telephone number
------------------------------------------------------------------------------------------

 WITH AN AUTOMATIC EXCHANGE PLAN                 WITH AN AUTOMATIC WITHDRAWAL PLAN

 -  To set up regular exchanges from a          -  To set up regular cash payments from
    fund account, call (800) 728-3337              a DWS fund account, call
                                                   (800) 728-3337

------------------------------------------------------------------------------------------
 USING QuickSell

 Not available                                  -  Call (800) 728-3337 to make sure
                                                   QuickSell is set up on your account; if
                                                   it is, you can request a transfer to your
                                                   bank account of any amount between
                                                   $50 and $250,000
------------------------------------------------------------------------------------------
 ON THE INTERNET

 -  Register at www.dws-scudder.com             -  Register at www.dws-scudder.com

 -  Follow the instructions for making on-      -  Follow the instructions for making on-
    line exchanges                                 line redemptions
------------------------------------------------------------------------------------------

</TABLE>


--------------------------------------------------------------------------------


<TABLE>
<S>               <C>
TO REACH US:      WEB SITE: www.dws-scudder.com
                  TELEPHONE REPRESENTATIVE: (800) 728-3337, M-F, 9 a.m.- 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m.- 6 p.m. ET
</TABLE>




18 | How to Buy, Sell and Exchange Shares
<PAGE>


           Financial intermediary support payments

           The Advisor, DWS Scudder Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to the fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/or servicing of fund investors and fund
           shares ("revenue sharing"). Such revenue sharing payments are in
           addition to any distribution or service fees payable under any Rule
           12b-1 or service plan of the fund, any record keeping/sub-transfer
           agency/networking fees payable by the fund (generally through the
           Distributor or an affiliate) and/or the Distributor to certain
           financial advisors for performing such services and any sales
           charges, commissions, non-cash compensation arrangements expressly
           permitted under applicable rules of the Financial Industry
           Regulatory Authority ("FINRA") or other concessions described in the
           fee table or elsewhere in this prospectus or the Statement of
           Additional Information as payable to all financial advisors. For
           example, the Advisor, the Distributor and/or their affiliates may
           compensate financial advisors for providing the fund with "shelf
           space" or access to a third party platform or fund offering list or
           other marketing programs, including, without limitation, inclusion
           of the fund on preferred or recommended sales lists, mutual fund
           "supermarket" platforms and other formal sales programs; granting
           the Distributor access to the financial advisor's sales force;
           granting the Distributor access to the financial advisor's
           conferences and meetings; assistance in training and educating the
           financial advisor's personnel; and obtaining other forms of
           marketing support.


           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of the fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.


                                      How to Buy, Sell and Exchange Shares  | 19
<PAGE>


           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS Fund shares or the retention
           and/or servicing of investors and DWS Fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of the fund serviced and maintained by the financial advisor,
           .10% to .25% of sales of the fund attributable to the financial
           advisor, a flat fee of $12,500 up to $500,000, or any combination
           thereof. These amounts are subject to change at the discretion of
           the Advisor, the Distributor and/or their affiliates. Receipt of, or
           the prospect of receiving, this additional compensation may
           influence your financial advisor's recommendation of the fund or of
           any particular share class of the fund. You should review your
           financial advisor's compensation disclosure and/or talk to your
           financial advisor to obtain more information on how this
           compensation may have influenced your financial advisor's
           recommendation of the fund. Additional information regarding these
           revenue sharing payments is included in the fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).


           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Scudder branded retirement plan platform (the "Platform") with the
           level of revenue sharing payments being based upon sales of both the
           DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for the fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of


20 | How to Buy, Sell and Exchange Shares
<PAGE>


           broker-dealers to execute portfolio transactions for the fund. In
           addition, the Advisor, the Distributor and/or their affiliates will
           not use fund brokerage to pay for their obligation to provide
           additional compensation to financial advisors as described above.



POLICIES YOU SHOULD KNOW ABOUT


           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.


           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           728-3337.

           Policies about transactions


           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.





THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Questions? You can speak to a DWS Scudder representative between 9 a.m. and 6
p.m. Eastern time on any fund business day by calling (800) 728-3337.




                                            Policies You Should Know About  | 21
<PAGE>

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.


           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated.

           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.


           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           INITIAL PURCHASE. The minimum initial investment is $2,500, except
           for investments on behalf of participants in certain fee-based and
           wrap programs offered through certain financial intermediaries
           approved by the Advisor, for which there is no
           minimum initial investment; and fiduciary accounts such as IRAs


22 | Policies You Should Know About
<PAGE>

           and custodial accounts such as Uniform Gifts to Minors Act and
           Uniform Transfers to Minors Act accounts for which the minimum
           initial investment is $1,000 per account. In addition, the minimum
           initial investment is $1,000 if an automatic investment plan of $50
           per month is established. Group retirement plans and certain other
           accounts have similar or lower minimum share balance requirements.


           SUB-MINIMUM BALANCES. The fund may close your account and send you
           the proceeds if your balance falls below $2,500 ($1,000 with an
           Automatic Investment Plan funded with $50 or more per month in
           subsequent investments); $250 for retirement accounts. We will give
           you 60 days' notice (90 days for retirement accounts) so you can
           either increase your balance or close your account (these policies
           don't apply to investors with $100,000 or more in DWS fund shares,
           investors in certain fee-based and wrap programs offered through
           certain financial intermediaries approved by the Advisor, or group
           retirement plans and certain other accounts having lower minimum
           share balance requirements).

           Because of the high cost of servicing accounts with low balances, an
           account maintenance fee of $6.25 per quarter (for a $25 annual fee)
           will be assessed on accounts whose balances fail to meet the minimum
           initial investment requirement for a period of 90 days prior to the
           assessment date. The quarterly assessment will occur on or about the
           15th of the last month in each calendar quarter. Please note that
           the fee will be assessed on accounts that fall below the minimum for
           any reason, including due to market value fluctuations, redemptions
           or exchanges. The account maintenance fee will apply to all
           shareholders of the DWS Funds except for: accounts with an automatic
           investment plan, accounts held in an omnibus account through a
           financial services firm, accounts maintained on behalf of
           participants in certain fee based and wrap programs offered through
           certain financial intermediaries approved by the Advisor,
           participant level accounts in group retirement plans held on the
           records of a retirement plan record keeper.


           SUBSEQUENT INVESTMENTS. The minimum subsequent investment is $50.
           However, there is no minimum investment requirement for subsequent
           investments on behalf of participants in certain fee-based and wrap
           programs offered through certain financial intermediaries approved
           by the Advisor.


                                            Policies You Should Know About  | 23
<PAGE>


           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of the fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if the fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by the fund (e.g.,
           "time zone arbitrage"). The fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.

           Pursuant to its policies, the fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). The fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior notice. For
           example, the fund may in its discretion reject or cancel a purchase
           or an exchange order even if the transaction is not subject to the
           specific roundtrip transaction limitation described below if the
           Advisor believes that there appears to be a pattern of short-term or
           excessive trading activity by a shareholder or deems any other
           trading activity harmful or disruptive to the fund. The fund,
           through its Advisor and Transfer Agent, will measure short-term and
           excessive trading by the number of roundtrip transactions within a
           shareholder's account during a rolling 12-month period. A
           "roundtrip" transaction is defined as any combination of purchase
           and redemption activity (including exchanges) of the same fund's
           shares. The fund may take other trading activity into account if the
           fund believes such activity is of an amount or frequency that may be
           harmful to long-term shareholders or disruptive to portfolio
           management.

           Shareholders are limited to four roundtrip transactions in the same
           DWS Fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS Fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS Fund. The fund has sole discretion whether to remove a block
           from a shareholder's



24 | Policies You Should Know About
<PAGE>


           account. The rights of a shareholder to redeem shares of a DWS Fund
           are not affected by the four roundtrip transaction limitation, but
           all redemptions remain subject to the fund's redemption fee policy
           (see "Redemption fees" described below).

           The Advisor may make exceptions to the roundtrip transaction policy
           for certain types of transactions if in its opinion the transactions
           do not represent short-term or excessive trading or are not abusive
           or harmful to the fund, such as, but not limited to, systematic
           transactions, required minimum retirement distributions,
           transactions initiated by the fund or administrator and transactions
           by certain qualified fund-of-fund(s).

           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive trading
           may be more or less restrictive than the DWS Funds' policy, may
           permit certain transactions not permitted by the DWS Funds'
           policies, or prohibit transactions not subject to the DWS Funds'
           policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of the fund that provide a substantially similar level of
           protection for the fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.

           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund from "time zone arbitrage" with respect
           to its foreign securities holdings and other trading practices that
           seek to exploit variations in portfolio valuation that arise from
           the nature of the securities held by the fund. (See "How the fund
           calculates share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying



                                            Policies You Should Know About  | 25
<PAGE>


           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of the fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in the fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

           The fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. The fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value) on all fund
           shares redeemed or exchanged within 15 days of buying them (either
           by purchase or exchange). The redemption fee is paid directly to the
           fund and is designed to encourage long-term investment and to offset
           transaction and other costs associated with short-term or excessive
           trading. For purposes of determining whether the redemption fee
           applies, shares held the longest time will be treated as being
           redeemed first and shares held the shortest time will be treated as
           being redeemed last.


           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with the fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally netted
           against one another and placed on an aggregate basis; consequently
           the identities of the individuals on whose behalf the transactions
           are placed generally are not known to the fund. For this reason, the
           fund has undertaken to notify financial intermediaries of their
           obligation to assess the redemption fee on customer accounts and to
           collect and remit the proceeds to the fund. However, due to
           operational requirements, the intermediaries' methods for tracking
           and calculating the fee may be inadequate or differ in some respects
           from the fund's.




THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Scudder Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-SCUDDER.COM to get up-to-date information, review
balances or even place orders for exchanges.









26 | Policies You Should Know About
<PAGE>


           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of participants in certain group retirement
           plans whose processing systems are incapable of properly applying
           the redemption fee to underlying shareholders; (iii) transactions on
           behalf of a shareholder to return any excess IRA contributions to
           the shareholder; (iv) transactions on behalf of a shareholder to
           effect a required minimum distribution on an IRA; (v) transactions
           on behalf of any mutual fund advised by the Advisor and its
           affiliates (e.g., "funds of funds") or, in the case of a
           master/feeder relationship, redemptions by the feeder fund from the
           master portfolio; (vi) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vii)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (viii)
           transactions involving hardship of any registered shareholder; (ix)
           systematic transactions with pre-defined trade dates for purchases,
           exchanges or redemptions, such as automatic account rebalancing, or
           loan origination and repayments; (x) transactions involving shares
           purchased through the reinvestment of dividends or other
           distributions; (xi) transactions involving shares transferred from
           another account in the same fund or converted from another class of
           the same fund (the redemption fee period will carry over to the
           acquired shares); (xii) transactions initiated by the fund or
           administrator (e.g., redemptions for not meeting account minimums,
           to pay account fees funded by share redemptions, or in the event of
           the liquidation or merger of the fund); or (xiii) transactions in
           cases when there are legal or contractual limitations or
           restrictions on the imposition of the redemption fee (as determined
           by the fund or its agents in their sole discretion). It is the
           policy of the DWS funds to permit approved fund platform providers
           to execute transactions within the funds without the imposition of a
           redemption fee if such providers have implemented alternative
           measures that are determined by the Advisor to provide controls on
           short-term and excessive trading that are comparable to the DWS
           funds' policies.

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 728-3337. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Scudder. You can also use this service to make exchanges and
           sell shares.



                                            Policies You Should Know About  | 27
<PAGE>

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 728-3337.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 728-3337 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           THE FUND DOES NOT ISSUE SHARE CERTIFICATES.


           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by check,
           bank or Federal Funds wire transfer or by electronic bank transfer.
           Please note that the fund does not accept cash, money orders,
           traveler's checks, starter checks, third party checks
           (except checks for retirement plan asset transfers and rollovers or
           for Uniform Gifts to Minors Act/Uniform Transfers to Minors Act
           accounts), checks drawn on foreign banks or checks issued by credit
           card companies or Internet-based companies. Thus, subject to the
           foregoing exceptions for certain third party checks, checks that are
           otherwise permissible must be drawn by the account holder on a
           domestic bank and must be payable to the fund.






THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.









28 | Policies You Should Know About
<PAGE>


           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.


           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           728-3337 or contact your financial advisor for more information.


           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are other
           circumstances when it could be longer: When you are selling shares
           you bought recently by check (redemption proceeds from such a sale
           are unavailable until the check has cleared), when you make
           purchases by ACH (the funds will be placed under a 10 calendar day
           hold to ensure good funds) or when unusual circumstances prompt the
           SEC to allow further delays. Certain expedited redemption processes
           may also be delayed when you are selling recently purchased shares
           or in the event of closing of the Federal Reserve Bank's wire
           payment system. In addition, the fund reserves the right to suspend
           or postpone redemptions as permitted pursuant to
           Section 22(e) of the Investment Company Act of 1940. Generally,
           those circumstances are when 1) the New York Stock Exchange is
           closed other than customary weekend or holiday closings; 2) trading
           on the New York Stock Exchange is restricted; 3) an emergency exists
           which makes the disposal of securities owned by the fund or the fair
           determination of the value of the fund's net assets not reasonably
           practicable; or 4) the SEC, by order, permits the suspension of the
           right of



                                            Policies You Should Know About  | 29
<PAGE>

           redemption. Redemption payments by wire may also be delayed in the
           event of a non-routine closure of the Federal Reserve wire payment
           system. For additional rights reserved by the fund, please see
           "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>                                                     <C> <C>
            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy and sell shares is the NAV.



           THE FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by the fund's Board, such as a
           fair valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of the fund's portfolio is believed to have been materially
           affected by a significant event, such as a natural disaster, an
           economic event like a bankruptcy filing, or a substantial
           fluctuation in domestic or foreign markets that has occurred between
           the close of the exchange or market on which the security is
           principally traded (for example, a foreign exchange or market) and
           the close of the New York Stock Exchange. In such a case, the fund's
           value for a security is likely to be different from the last quoted
           market price or pricing service information. In addition, due to the
           subjective and variable nature of fair value pricing, it is possible
           that the value determined for a particular asset may be materially
           different from the value realized upon such asset's sale. It is
           expected that the greater the percentage of fund assets that is
           invested



30 | Policies You Should Know About
<PAGE>


           in non-US securities, the more extensive will be the fund's use of
           fair value pricing. This is intended to reduce the fund's exposure
           to "time zone arbitrage" and other harmful trading practices. (See
           "Market timing policies and procedures.")

           TO THE EXTENT THAT THE FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when the
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change significantly on days when the
           New York Stock Exchange is closed and you cannot buy or sell fund
           shares. Price changes in the securities the fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)



           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              as federal income tax if we have been notified by the IRS that
              you are subject to backup withholding or if you fail to provide
              us with a correct taxpayer ID number and certain certifications
              or certification that you are exempt from backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason


           -  refuse, cancel, limit or rescind any purchase or exchange order,
              without prior notice; freeze any account (meaning you will not be
              able to purchase fund shares in your account); suspend account
              services; and/or involuntarily redeem your account if we think
              that the account is being used for fraudulent or illegal
              purposes; one or more of these actions will be taken when, at our
              sole discretion, they are deemed to be in the fund's best
              interests or when the fund is requested or compelled to do so by
              governmental authority or by applicable law



                                            Policies You Should Know About  | 31
<PAGE>


           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less any applicable redemption fee); you may recognize a
              gain or loss on the redemption of your fund shares and incur a
              tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; the fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of the fund's net assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)



32 | Policies You Should Know About
<PAGE>

UNDERSTANDING DISTRIBUTIONS AND TAXES

           The fund intends to distribute to its shareholders virtually all of
           its net earnings. The fund can earn money in two ways: by receiving
           interest, dividends or other income from securities it holds and by
           selling securities for more than it paid for them. (The fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) The fund may not always pay a
           dividend or distribution for a given period.

           THE FUND INTENDS TO PAY DIVIDENDS AND DISTRIBUTIONS to its
           shareholders annually in December and, if necessary, may do so at
           other times as well.

           Dividends or distributions declared to shareholders of record in the
           last quarter of a given calendar year are treated for federal income
           tax purposes as if they were received on December 31 of that year,
           provided such dividends or distributions are paid by the end of the
           following January.


           For federal income tax purposes, income and capital gains
           distributions are generally taxable. However, dividends and
           distributions received by retirement plans qualifying for tax
           exemption under federal income tax laws generally will not be
           taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS.
           You can have them all automatically reinvested in fund shares (at
           NAV), all deposited directly to your bank account or all sent to
           you by check, have one type reinvested and the other sent to you
           by check or have them invested in a different fund. Tell us your
           preference on your application. If you don't indicate a
           preference, your dividends and distributions will all be
           reinvested in shares of the fund without a sales charge (if
           applicable). Distributions are treated the same for federal
           income tax purposes whether you receive them in cash or reinvest
           them in additional shares. For employer-sponsored qualified
           plans, and retirement plans, reinvestment (at NAV) is the only
           option.


           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital





THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.



                                     Understanding Distributions and Taxes  | 33
<PAGE>

           gain or loss. The gain or loss will be long-term or short-term
           depending on how long you owned the shares that were sold. For
           federal income tax purposes, an exchange is treated the same as a
           sale.

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depend on their type:


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
GENERALLY TAXED AT LONG-TERM                  GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                           INCOME RATES:
--------------------------------------------------------------------------------
<S>                                           <C>
DISTRIBUTIONS FROM THE FUND

- gains from the sale of                   -  gains from the sale of
  securities held (or treated as              securities held by the fund for
  held) by the fund for more                  one year or less
  than one year                            -  all other taxable income
- qualified dividend income
--------------------------------------------------------------------------------
TRANSACTIONS INVOLVING FUND
SHARES

- gains from selling fund                  -  gains from selling fund
  shares held for more than                   shares held for one year or
  one year                                    less
--------------------------------------------------------------------------------
</TABLE>



           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. The fund may elect
           to pass through to its shareholders a credit or deduction for
           foreign taxes it has paid if at the end of its year more than 50% of
           the fund's total assets are stocks or securities of foreign
           corporations. In addition, any investments in foreign securities or
           foreign currencies may increase or accelerate the fund's recognition
           of ordinary income and may affect the timing or amount of the fund's
           distributions. If you invest in the fund through a taxable account,
           your after-tax return could be negatively impacted.

           To the extent that the fund invests in certain debt obligations or
           certain other securities, investments in these obligations or
           securities may cause the fund to recognize taxable income in excess
           of the cash generated by such obligations. Thus, the fund could be
           required at times to liquidate other investments in order to satisfy
           its distribution requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal



34 | Understanding Distributions and Taxes
<PAGE>


           income tax purposes at the more favorable long-term capital gain
           rates. Qualified dividend income generally includes dividends from
           domestic and some foreign corporations. It does not include income
           from investments in debt securities or, generally, from REITs. In
           addition, the fund must meet certain holding period and other
           requirements with respect to the dividend-paying stocks in its
           portfolio and the shareholder must meet certain holding period and
           other requirements with respect to the fund's shares for the lower
           tax rates to apply. Because the fund will invest in both long and
           short positions in equity securities, it is anticipated that a
           smaller portion of the income dividends paid to you by the fund will
           be qualified dividend income eligible for taxation at long-term
           capital gain rates than if the fund invested in only long positions
           in equity securities.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been reduced to 15%. For taxable years beginning on or after January
           1, 2011, the long-term capital gain rate is scheduled to return to
           20%. For more information, see the Statement of Additional
           Information, under "Taxes."

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.


           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund declares a dividend. In
           tax-advantaged retirement accounts you do not need to worry about
           this.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains, but may be eligible for a dividends-received
           deduction for a portion of the income dividends they receive from
           the fund, provided certain holding period and other requirements are
           met.

           The above discussion is applicable to shareholders who are US
           persons. If you are a non-US person, please consult your own tax
           advisor with respect to the US tax consequences to you of an
           investment in the fund.


                                     Understanding Distributions and Taxes  | 35
<PAGE>

APPENDIX
--------------------------------------------------------------------------------

           Hypothetical Expense Summary


           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The tables also assume that all dividends and
           distributions are reinvested. The annual fund expense ratios shown
           are net of any contractual fee waivers or expense reimbursements, if
           any, for the period of the contractual commitment. The tables do not
           reflect redemption fees, if any, which may be payable upon
           redemption. If redemption fees were shown, the "Hypothetical
           Year-End Balance After Fees and Expenses" amounts shown would be
           lower and the "Annual Fees and Expenses" amounts shown would be
           higher. Also, please note that if you are investing through a third
           party provider, that provider may have fees and expenses separate
           from those of the fund that are not reflected here. Mutual fund fees
           and expenses fluctuate over time and actual expenses may be higher
           or lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.



36 | Appendix
<PAGE>

             DWS International Value Opportunities Fund - Class S




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
----------------------------------------------------------------------------------------------
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
----------------------------------------------------------------------------------------------
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.36%              3.64%       $ 10,364.00        $   138.48
----------------------------------------------------------------------------------------------
   2           10.25%        3.33%              5.37%       $ 10,537.08        $   348.00
----------------------------------------------------------------------------------------------
   3           15.76%        3.33%              7.13%       $ 10,713.05        $   353.81
----------------------------------------------------------------------------------------------
   4           21.55%        3.33%              8.92%       $ 10,891.96        $   359.72
----------------------------------------------------------------------------------------------
   5           27.63%        3.33%             10.74%       $ 11,073.85        $   365.73
----------------------------------------------------------------------------------------------
   6           34.01%        3.33%             12.59%       $ 11,258.78        $   371.84
----------------------------------------------------------------------------------------------
   7           40.71%        3.33%             14.47%       $ 11,446.81        $   378.05
----------------------------------------------------------------------------------------------
   8           47.75%        3.33%             16.38%       $ 11,637.97        $   384.36
----------------------------------------------------------------------------------------------
   9           55.13%        3.33%             18.32%       $ 11,832.32        $   390.78
----------------------------------------------------------------------------------------------
  10           62.89%        3.33%             20.30%       $ 12,029.92        $   397.31
----------------------------------------------------------------------------------------------
  TOTAL                                                                        $ 3,488.08
----------------------------------------------------------------------------------------------
</TABLE>




                                                                  Appendix  | 37
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund's features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
the fund, call (800) 728-3337, or contact DWS Scudder at the address listed
below. The fund's SAI and shareholder reports are also available through the
DWS Scudder Web site at www.dws-scudder.com. These documents and other
information about the fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about the fund,
including the fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.


<TABLE>
<CAPTION>
DWS SCUDDER              SEC                     DISTRIBUTOR
---------------------    --------------------    -------------------------------
<S>                      <C>                     <C>
PO Box 219151            100 F Street, N.E.      DWS Scudder Distributors, Inc.
Kansas City, MO          Washington, D.C.        222 South Riverside Plaza
64121-9151               20549-0102              Chicago, IL 60606-5808
WWW.DWS-SCUDDER.COM      WWW.SEC.GOV             (800) 621-1148
(800) 728-3337           (800) SEC-0330
</TABLE>




<TABLE>
<S>                               <C>                                             <C>
SEC FILE NUMBER:
DWS International Fund, Inc.        DWS International Value Opportunities Fund    811-642
</TABLE>




                                         [DWS SCUDDER LOGO GRAPHIC APPEARS HERE]






(12/01/07) 355-2
[RECYCLE GRAPHIC APPEARS HERE]



<PAGE>
Supplement to the currently effective Statement of Additional Information of
each of the listed funds/portfolios:

--------------------------------------------------------------------------------

Cash Management Fund Institutional
Cash Reserve Fund, Inc.
    Prime Series
Cash Reserve Fund Institutional
NY Tax Free Money Fund
Tax Free Money Fund Investment
DWS Capital Growth Fund
DWS Climate Change Fund
DWS Commodity Securities Fund
DWS Communications Fund
DWS Core Fixed Income Fund
DWS Core Plus Income Fund
DWS EAFE(R) Equity Index Fund
DWS Emerging Markets Equity Fund
DWS Emerging Markets Fixed Income Fund
DWS Enhanced S&P 500 Index Fund
DWS Equity 500 Index Fund
DWS Equity Income Fund
DWS Equity Partners Fund
DWS Europe Equity Fund
DWS Floating Rate Plus Fund
DWS Global Bond Fund
DWS Global Opportunities Fund
DWS Global Thematic Fund
DWS GNMA Fund
DWS Gold & Precious Metals Fund
DWS Growth & Income Fund
DWS Health Care Fund
DWS High Income Plus Fund
DWS High Yield Tax Free Fund
DWS Inflation Protected Plus Fund
DWS Intermediate Tax/AMT Free Fund
DWS International Fund
DWS International Select Equity Fund
DWS International Value Opportunities Fund
DWS Investments VIT Funds
    DWS Equity 500 Index VIP
    DWS RREEF Real Estate Securities VIP
    DWS Small Cap Index VIP
DWS Japan Equity Fund
DWS Large Company Growth Fund
DWS Latin America Equity Fund
DWS LifeCompass 2015 Fund
DWS LifeCompass 2020 Fund
DWS LifeCompass 2030 Fund
DWS LifeCompass 2040 Fund
DWS LifeCompass Retirement Fund
DWS Lifecycle Long Range Fund
DWS Managed Municipal Bond Fund
DWS Massachusetts Tax-Free Fund
DWS Micro Cap Fund
DWS Mid Cap Growth Fund
DWS Money Market Series
DWS RREEF Global Real Estate Securities Fund
DWS RREEF Real Estate Securities Fund
DWS S&P 500 Index Fund
DWS Short Duration Fund
DWS Short Duration Plus Fund
DWS Short-Term Municipal Bond Fund
DWS Small Cap Core Fund
DWS Small Cap Growth Fund
DWS Small Cap Value Fund
DWS U.S. Bond Index Fund
DWS Value Builder Fund
DWS Variable Series I
    DWS Bond VIP
    DWS Capital Growth VIP
    DWS Global Opportunities VIP
    DWS Growth & Income VIP
    DWS Health Care VIP
    DWS International VIP


At present, substantially all DWS mutual funds are overseen by one of two boards
of  trustees/directors  (the  "Boards").  Each Board,  including  the Board that
oversees your Fund (the "New York Board"),  has determined that the formation of
a single consolidated Board overseeing  substantially all DWS mutual funds is in
the best interests of the Funds and their shareholders. In this connection, each
Board  has  approved  a  plan  outlining  the  process  for   implementing   the
consolidation of the New York Board with the other primary DWS mutual fund board
(the "Chicago  Board").  (The geographic  references in the preceding  sentences
merely indicate where each Board historically held most of its meetings.)

The consolidation of the two Boards is expected to take effect on or about April
1, 2008 (the  "Consolidation  Date"). To accomplish the  consolidation,  the New
York Board will nominate and elect four individuals (John W. Ballantine, Paul K.
Freeman,  William  McClayton and Robert H. Wadsworth) who currently serve on the
Chicago  Board to the Board of your Fund and each other fund overseen by the New
York Board.  Information regarding these four individuals is set forth below. In
addition,  the Chicago  Board has  determined  to nominate  and  recommend  that
shareholders  of each fund  overseen by that Board  elect eight  members of your
Fund's Board (Henry P. Becton, Jr., Dawn-Marie  Driscoll,  Keith R. Fox, Kenneth
C. Froewiss,  Richard J. Herring,  Rebecca W. Rimel,  William N. Searcy, Jr. and
Jean  Gleason  Stromberg).  As a result,  as of the  Consolidation  Date,  it is
expected  that the four Chicago  Board  members and eight New York Board members
named above (each of whom will be an Independent  Board  Member),  together with
Axel  Schwarzer,  CEO of DWS  Scudder,  will  constitute  the  Board of each DWS
Scudder mutual fund (134 funds), including your Fund.


<PAGE>

To  facilitate  the Board  consolidation,  three  members  of the New York Board
(Martin J. Gruber, Graham E. Jones and Carl W. Vogt) have agreed to resign as of
the  Consolidation  Date,  which  is prior to  their  normal  retirement  dates.
Independent  Board Members of the New York Board do not receive  benefits  under
any pension or retirement plan. However,  the New York Board has determined that
it would be  appropriate  to provide those three  Independent  Board Members who
agreed to resign prior to the Board's normal  retirement  date with a retirement
agreement,  the terms of which include a one-time  benefit.  As DIMA, the Funds'
investment adviser, will also benefit from the administrative  efficiencies of a
consolidated  Board, DIMA has agreed to reimburse the Funds for the full cost of
this one-time  benefit  (which for each retiring  Independent  Board Member will
equal his annual  compensation  immediately  preceding  the  Consolidation  Date
multiplied  by the lesser of (i) two;  or (ii) the  number of years (or  portion
thereof)  from  the  Consolidation  Date  to his  normal  retirement  date).  As
consideration  for this  benefit,  each  retiring  Independent  Board Member has
agreed not to serve on the board of another  mutual fund without  prior  consent
for a specified  period.  In  addition,  pursuant to an  agreement  between each
retiring  Independent  Board Member,  the New York Funds and DIMA, each retiring
Independent Board Member has received certain assurances regarding  continuation
of insurance and indemnification rights.

Following the  Consolidation  Date, it is expected that the  consolidated  Board
will implement  certain  changes to the Fund's current  committee  structure and
other  governance  practices,  including the appointment of new committee chairs
and members. Additional information regarding these changes will be set forth in
the Fund's statement of additional information upon implementation.


<PAGE>






<TABLE>
<CAPTION>
                                                                                                      Position with
                                                                                                      the DWS Funds
                                                Business Experience and Directorships                 and Length of
     Name and Year of Birth                            During the Past 5 Years                         Time Served
---------------------------------- ---------------------------------------------------------------- ------------------
Chicago Board Members to be
   Elected to New York Board
---------------------------------- ---------------------------------------------------------------- ------------------
<S>                                <C>                                                              <C>
John W. Ballantine (1946)          Retired; formerly, Executive Vice President and Chief Risk       Chicago Board
                                   Management Officer, First Chicago NBD Corporation/The First      Member since
                                   National Bank of Chicago (1996-1998); Executive Vice President   1999.
                                   and Head of International Banking (1995-1996).
                                   Directorships:  Healthways Inc. (provider of disease and care
                                   management services); Portland General Electric (utility
                                   company); Stockwell Capital Investments PLC (private equity).
                                   Former Directorships: First Oak Brook Bancshares, Inc. and Oak
                                   Brook Bank
---------------------------------- ---------------------------------------------------------------- ------------------
Paul K. Freeman (1950)             Consultant, World Bank/Inter-American Development Bank;          Chicago Board
                                   formerly, Project Leader, International Institute for Applied    Member since
                                   Systems Analysis (1998-2001); Chief Executive Officer, The       2002,
                                   Eric Group, Inc. (environmental insurance) (1986-1998).          Chairperson
                                   Formerly, Trustee of funds managed by DIMA or its affiliates     since 2007.
                                   (1993-2002).
---------------------------------- ---------------------------------------------------------------- ------------------
William McClayton (1944)           Chief Administrative Officer, Diamond Management & Technology    Chicago Board
                                   Consultants, Inc. (global management consulting firm)            Member since
                                   (2001-present); formerly, Senior Partner, Arthur Andersen LLP    2004.
                                   (accounting) (1966-2001).  Directorships: Board of Managers,
                                   YMCA of Metropolitan Chicago; formerly, Trustee, Ravinia
                                   Festival.
---------------------------------- ---------------------------------------------------------------- ------------------
Robert H. Wadsworth (1940)         President, Robert H. Wadsworth & Associates, Inc. (consulting    Chicago Board
                                   firm) (1983 to present).  Formerly, Trustee of funds managed     Member since
                                   by DIMA or its affiliates (1999-2004).                           2004.
---------------------------------- ---------------------------------------------------------------- ------------------


</TABLE>











                            Please Retain This Supplement for Future Reference


November 26, 2007

<PAGE>











                            DWS Global Thematic Fund
                          (Class A, B, C and R Shares)

                 a series of DWS Global/International Fund, Inc.


                             DWS International Fund
                 (Class A, B, C and Institutional Class Shares)

                    a series of DWS International Fund, Inc.















                       STATEMENT OF ADDITIONAL INFORMATION


                                December 1, 2007

This combined Statement of Additional Information is not a prospectus and should
be read in conjunction  with the combined Class A, B, C and R shares  prospectus
for DWS Global  Thematic Fund,  the combined Class A, B and C shares  prospectus
and the  Institutional  Class  prospectuses for DWS  International  Fund (each a
"Fund," collectively the "Funds"), series of DWS Global/International Fund, Inc.
and DWS  International  Fund,  Inc.,  respectively,  dated  December 1, 2007, as
amended  from time to time,  copies of which may be obtained  without  charge by
contacting DWS Scudder  Distributors,  Inc., 222 South Riverside Plaza, Chicago,
Illinois 60606, or the firm from which this Statement of Additional  Information
was obtained and is available  along with other  materials on the Securities and
Exchange Commission's Internet Web site (http://www.sec.gov).

The Annual  Report to  Shareholders  of each  Fund,  dated  August 31,  2007 are
incorporated  by reference and are hereby deemed to be part of this Statement of
Additional Information.


This combined  Statement of Additional  Information is incorporated by reference
into each applicable prospectus.


<PAGE>

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----


INVESTMENT RESTRICTIONS........................................................1

INVESTMENT POLICIES AND TECHNIQUES.............................................4
   Portfolio Holdings Information.............................................26

MANAGEMENT OF THE FUNDS.......................................................29
   Investment Advisor.........................................................29
   Administrative Agreement...................................................32
   Compensation of Portfolio Managers.........................................33
   Other SEC Registered Investment Companies Managed:.........................35
   Other Pooled Investment Vehicles Managed:..................................35

FUND SERVICE PROVIDERS........................................................39
   Independent Registered Public Accounting Firm..............................45
   Legal Counsel..............................................................45
   Custodian, Transfer Agent and Shareholder Service Agent....................46

PORTFOLIO TRANSACTIONS........................................................48

PURCHASE AND REDEMPTION OF SHARES.............................................53

FEDERAL INCOME TAXES..........................................................76

NET ASSET VALUE...............................................................87

DIRECTORS AND OFFICERS........................................................88

FUND ORGANIZATION............................................................115

PROXY VOTING GUIDELINES......................................................118

FINANCIAL STATEMENTS.........................................................119

ADDITIONAL INFORMATION.......................................................119

RATINGS OF INVESTMENTS.......................................................120

                                       i


<PAGE>


                                       ii
<PAGE>


                             INVESTMENT RESTRICTIONS

Except as otherwise indicated, each Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders.  There can be
no assurance that a Fund's objective will be met.

Unless specified to the contrary,  the following fundamental policies may not be
changed without the approval of a majority of the outstanding  voting securities
of a Fund which, under the Investment Company Act of 1940, as amended (the "1940
Act") and the  rules  thereunder  and as used in this  Statement  of  Additional
Information,  means  the  lesser  of (1) 67% or more  of the  voting  securities
present at such  meeting,  if the  holders  of more than 50% of the  outstanding
voting  securities of a Fund are present or  represented  by proxy,  or (2) more
than 50% of the outstanding voting securities of a Fund.

Any  investment  restrictions  herein  which  involve  a maximum  percentage  of
securities  or assets shall not be  considered  to be violated  unless an excess
over the percentage occurs  immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, a Fund.


Each Fund has elected to be classified  as a  diversified  series of an open-end
management  investment  company. A diversified fund may not, with respect to 75%
of total  assets,  invest more than 5% of total  assets in the  securities  of a
single issuer or invest in more than 10% of the outstanding voting securities of
such issuer, with certain exceptions.


As a matter of fundamental policy, each Fund may not:

(1)      borrow money, except as permitted under the 1940 Act, as interpreted or
         modified by  regulatory  authority  having  jurisdiction,  from time to
         time;

(2)      issue senior  securities,  except as  permitted  under the 1940 Act, as
         interpreted or modified by regulatory  authority  having  jurisdiction,
         from time to time;

(3)      concentrate its investments in a particular  industry,  as that term is
         used  in the  1940  Act,  as  interpreted  or  modified  by  regulatory
         authority having jurisdiction, from time to time;

(4)      engage in the  business of  underwriting  securities  issued by others,
         except to the extent  that the Fund may be deemed to be an  underwriter
         in connection with the disposition of portfolio securities;

(5)      purchase or sell real estate, which term does not include securities of
         companies which deal in real estate or mortgages or investments secured
         by real estate or  interests  therein,  except  that the Fund  reserves
         freedom of action to hold and to sell real estate  acquired as a result
         of the Fund's ownership of securities;

(6)      purchase or sell  commodities,  except as permitted by the 1940 Act, as
         amended,  and as interpreted or modified by regulatory authority having
         jurisdiction, from time to time; or

(7)      make loans to other persons, except as permitted under the 1940 Act, as
         interpreted or modified by regulatory  authority  having  jurisdiction,
         from time to time.

With respect to fundamental  policy number five above, the Funds have no current
intention  to hold  and  sell  real  estate  acquired  as a  result  of a Fund's
ownership of securities.

The Directors of each  Corporation (as defined below) have  voluntarily  adopted
certain  policies  and  restrictions,  which are observed in the conduct of each
Fund's affairs.  These represent  intentions of the Directors based upon current
circumstances.  Non-fundamental  policies may be changed by the Directors of the
Corporation without requiring prior notice to or approval of shareholders.

<PAGE>

As a matter of non-fundamental policy, each Fund currently does not intend to:

(a)      borrow money in an amount  greater than 5% of its total assets,  except
         (i) for temporary or emergency purposes and (ii) by engaging in reverse
         repurchase   agreements,   dollar  rolls,   or  other   investments  or
         transactions  described in the Fund's registration  statement which may
         be deemed to be borrowings;

(b)      enter into either reverse  repurchase  agreements or dollar rolls in an
         amount greater than 5% of its total assets;

(c)      purchase  securities  on margin or make short  sales,  except (i) short
         sales against the box, (ii) in connection with arbitrage  transactions,
         (iii) for margin deposits in connection with futures contracts, options
         or other  permitted  investments,  (iv) that  transactions  in  futures
         contracts  and  options  shall  not be  deemed  to  constitute  selling
         securities  short,  and (v) that the Fund may  obtain  such  short-term
         credits  as  may  be  necessary   for  the   clearance  of   securities
         transactions;

(d)      purchase  options,  unless  the  aggregate  premiums  paid on all  such
         options  held by the Fund at any time do not  exceed  20% of its  total
         assets; or sell put options, if as a result, the aggregate value of the
         obligations  underlying  such put options would exceed 50% of its total
         assets;

(e)      enter  into  futures  contracts  or  purchase  options  thereon  unless
         immediately  after the  purchase,  the value of the  aggregate  initial
         margin with respect to such futures contracts entered into on behalf of
         the Fund and the premiums  paid for such  options on futures  contracts
         does not exceed 5% of the fair market value of the Fund's total assets;
         provided that in the case of an option that is in-the-money at the time
         of purchase,  the in-the-money  amount may be excluded in computing the
         5% limit;

(f)      purchase warrants if as a result,  such securities,  taken at the lower
         of cost or market value,  would  represent more than 5% of the value of
         the Fund's total assets (for this purpose,  warrants  acquired in units
         or attached to securities will be deemed to have no value); and

(g)      lend  portfolio  securities in an amount greater than 33?% of its total
         assets.

Each Fund will not purchase illiquid securities, including repurchase agreements
maturing in more than seven days, if, as a result thereof,  more than 15% of the
Fund's net assets,  valued at the time of the transaction,  would be invested in
such securities.

Each Fund may engage in short sales  against-the-box,  although it is the Fund's
current intention that no more than 5% of its net assets will be at risk.

Each  Fund  will  not  acquire  securities  of  registered  open-end  investment
companies  or  registered  unit  investment   trusts  in  reliance  on  Sections
12(d)(1)(F) or 12(d)(1)(G) of the Investment Company Act of 1940, as amended.

If a percentage  restriction  is adhered to at the time of  investment,  a later
increase or decrease in percentage  beyond the specified  limit resulting from a
change in values or net assets will not be considered a violation.

Each Fund is an open-end management investment company which continuously offers
and  redeems  shares at net  asset  value.  Each  Fund is a company  of the type
commonly  known as a mutual  fund.  DWS Global  Thematic  Fund is a  diversified
series  of DWS  Global/International  Fund,  Inc.  DWS  International  Fund is a
diversified  series  of DWS  International  Fund,  Inc.  (each a  "Corporation,"
collectively the  "Corporations").  DWS Global Thematic Fund offers five classes
of shares:  Class S, Class A, Class B, Class C and Class R shares. Only Class A,
Class B, Class C and Class R are offered herein.  DWS International  Fund offers
five  classes of shares:  Class S, Class A, Class B, Class C, and  Institutional
Class  shares.  Only  Class  A,  Class  B,  Class C and  Institutional  Class of
International Fund are offered herein. Each class has its own important features
and policies.

                                       2
<PAGE>

Except as otherwise indicated, each Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders. If there is a
change in investment  objective,  shareholders  should consider whether the Fund
remains  an  appropriate  investment  in light of their then  current  financial
position and needs.  There can be no assurance  that a Fund's  objective will be
met.

Changes  in  portfolio   securities   are  made  on  the  basis  of   investment
considerations  and it is against the policy of  management  to make changes for
trading purposes.


To meet federal tax  requirements for  qualification  as a regulated  investment
company  each  Fund  must  limit  its  investments  so that at the close of each
quarter  of its  taxable  year (1) no more  than  25% of its  total  assets  are
invested  in  securities  of a single  issuer  (other  than US  government  or a
regulated investment company), and (2) with respect to at least 50% of its total
assets,  no more than 5% of its total assets are invested in the securities of a
single issuer.



                                       3
<PAGE>


Master/feeder  Fund  Structure.  The Boards of Directors  has the  discretion to
retain the current  distribution  arrangement  for a Fund while  investing  in a
master fund in a master/feeder fund structure as described below.

A master/feeder fund structure is one in which a Fund (a "feeder fund"), instead
of investing  directly in a portfolio of securities,  invests most or all of its
investment  assets in a separate  registered  investment  company  (the  "master
fund") with  substantially  the same  investment  objective  and policies as the
feeder  fund.  Such a  structure  permits  the  pooling of assets of two or more
feeder funds,  preserving  separate  identities or distribution  channels at the
feeder  fund  level.  Based on the  premise  that  certain  of the  expenses  of
operating an investment  portfolio are  relatively  fixed,  a larger  investment
portfolio may eventually  achieve a lower ratio of operating expenses to average
net assets. An existing  investment  company is able to convert to a feeder fund
by  selling  all  of  its  investments,   which  involves  brokerage  and  other
transaction  costs and realization of a taxable gain or loss, or by contributing
its assets to the master  fund and  avoiding  transaction  costs and,  if proper
procedures are followed, the realization of taxable gain or loss.

                       INVESTMENT POLICIES AND TECHNIQUES

General Investment Objective and Policies


Descriptions  in  this  Statement  of  Additional  Information  of a  particular
investment  practice  or  technique  in which a Fund  may  engage  are  meant to
describe  the  spectrum  of  investments  that  Deutsche  Investment  Management
Americas Inc.  ("DIMA" or the  "Advisor") in its  discretion  might,  but is not
required to, use in managing each Fund's portfolio  assets.  The Advisor may, in
its  discretion,  at any time employ such practice,  technique or instrument for
one or more  Funds  but not for all  funds  advised  by it.  Furthermore,  it is
possible that certain types of financial  instruments  or investment  techniques
described  herein may not be available,  permissible,  economically  feasible or
effective  for  their  intended  purposes  in all  markets.  Certain  practices,
techniques or instruments may not be principal  activities of the Funds, but, to
the extent employed,  could from time to time have a material impact on a Fund's
performance. The Fund may engage in certain practices not described herein.


It is possible that certain investment  practices and techniques described below
may not be  permissible  for a Fund  based on its  investment  restrictions,  as
described herein, and in the Funds' applicable prospectus.


Borrowing.  As a matter of  fundamental  policy,  a Fund will not borrow  money,
except as  permitted  under the 1940 Act,  and as  interpreted  or  modified  by
regulatory  authority  having  jurisdiction,  from time to time. While each Fund
does not currently intend to borrow for investment  leveraging purposes, if such
a  strategy  were  implemented  in the  future  it  would  increase  the  Funds'
volatility and the risk of loss in a declining market.  Borrowing by a Fund will
involve  special  risk  considerations.  The  Fund's  assets may change in value
during the time a borrowing is outstanding,  thus increasing exposure to capital
risk.


Common  Stocks.  Common  stock is issued by companies to raise cash for business
purposes  and  represents  a  proportionate  interest in the issuing  companies.
Therefore, a Fund participates in the success or failure of any company in which
it holds stock.  The market values of common stock can fluctuate  significantly,
reflecting the business performance of the issuing company,  investor perception
and general economic and financial market  movements.  Despite the risk of price
volatility, however, common stocks have historically offered a greater potential

                                       4
<PAGE>

for long-term gain on investment,  compared to other classes of financial assets
such as bonds or cash equivalents,  although there can be no assurance that this
will be true in the future.

Convertible Securities.  A Fund may invest in convertible  securities,  that is,
bonds,  notes,  debentures,  preferred  stocks  and other  securities  which are
convertible into common stock. Investments in convertible securities can provide
an  opportunity  for capital  appreciation  and/or income  through  interest and
dividend payments by virtue of their conversion or exchange features.

The convertible securities in which a Fund may invest are either fixed income or
zero coupon debt  securities  which may be converted or exchanged at a stated or
determinable exchange ratio into underlying shares of common stock. The exchange
ratio for any particular  convertible security may be adjusted from time to time
due to stock splits,  dividends,  spin-offs,  other corporate  distributions  or
scheduled  changes  in the  exchange  ratio.  Convertible  debt  securities  and
convertible  preferred  stocks,  until converted,  have general  characteristics
similar to both debt and equity  securities.  Although  to a lesser  extent than
with debt securities generally, the market value of convertible securities tends
to decline as interest  rates  increase  and,  conversely,  tends to increase as
interest  rates  decline.  In addition,  because of the  conversion  or exchange
feature,  the market value of convertible  securities  typically  changes as the
market value of the underlying common stocks changes, and, therefore, also tends
to follow  movements  in the  general  market  for equity  securities.  A unique
feature of convertible  securities is that as the market price of the underlying
common stock declines,  convertible  securities tend to trade  increasingly on a
yield basis, and so may not experience  market value declines to the same extent
as the underlying  common stock.  When the market price of the underlying common
stock  increases,  the prices of the  convertible  securities  tend to rise as a
reflection of the value of the underlying common stock,  although  typically not
as much as the  underlying  common stock.  While no securities  investments  are
without risk,  investments in convertible  securities generally entail less risk
than investments in common stock of the same issuer.

As debt securities,  convertible  securities are investments which provide for a
stream of income (or in the case of zero coupon securities, accretion of income)
with  generally  higher  yields  than  common  stocks.   Convertible  securities
generally offer lower yields than non-convertible  securities of similar quality
because of their conversion or exchange features.

Of course,  like all debt  securities,  there can be no  assurance  of income or
principal payments because the issuers of the convertible securities may default
on their obligations.

Convertible   securities   generally  are  subordinated  to  other  similar  but
non-convertible  securities of the same issuer,  although  convertible bonds, as
corporate debt  obligations,  enjoy  seniority in right of payment to all equity
securities,  and  convertible  preferred stock is senior to common stock, of the
same issuer.  However,  because of the subordination feature,  convertible bonds
and  convertible  preferred  stock  typically  have lower  ratings  than similar
non-convertible securities. Convertible securities may be issued as fixed income
obligations that pay current income or as zero coupon notes and bonds, including
Liquid Yield Option Notes ("LYONs(TM)").

Corporate Obligations.  Investment in corporate debt obligations involves credit
and interest rate risk.  The value of  fixed-income  investments  will fluctuate
with changes in interest  rates and bond market  conditions,  tending to rise as
interest  rates decline and to decline as interest  rates rise.  Corporate  debt
obligations generally offer less current yield than securities of lower quality,
but lower-quality  securities generally have less liquidity,  greater credit and
market  risk,  and as a result,  more price  volatility.  Longer term bonds are,
however, generally more volatile than bonds with shorter maturities.

Depositary  Receipts.  A Fund may invest in  sponsored or  unsponsored  American
Depositary  Receipts ("ADRs"),  European  Depositary  Receipts ("EDRs"),  Global
Depositary  Receipts ("GDRs"),  International  Depositary  Receipts ("IDRs") and
other types of Depositary Receipts (which, together with ADRs, GDRs and IDRs are
hereinafter referred to as "Depositary  Receipts").  Depositary receipts provide
indirect  investment  in securities of foreign  issuers.  Prices of  unsponsored
Depositary  Receipts  may be more  volatile  than if they were  sponsored by the
issuer of the underlying securities.  Depositary Receipts may not necessarily be
denominated  in the same currency as the underlying  securities  into which they
may be  converted.  In  addition,  the  issuers  of  the  stock  of  unsponsored
Depositary  Receipts are not obligated to disclose  material  information in the
United  States  and,  therefore,  there may


                                       5
<PAGE>

not be a  correlation  between  such  information  and the  market  value of the
Depositary  Receipts.  ADRs are Depositary Receipts which are bought and sold in
the United States and are  typically  issued by a US bank or trust company which
evidence ownership of underlying securities by a foreign corporation. GDRs, IDRs
and other types of Depositary  Receipts are typically issued by foreign banks or
trust  companies,  although  they may also be issued by United  States  banks or
trust  companies,  and evidence  ownership of  underlying  securities  issued by
either a foreign or a United States corporation.  Generally, Depositary Receipts
in registered form are designed for use in the United States securities  markets
and  Depositary  Receipts  in bearer  form are  designed  for use in  securities
markets outside the United States. For purposes of a Fund's investment policies,
a Fund's  investments in ADRs, GDRs and other types of Depositary  Receipts will
be deemed to be investments in the underlying  securities.  Depositary Receipts,
including  those  denominated in US dollars will be subject to foreign  currency
exchange rate risk. However, by investing in US  dollar-denominated  ADRs rather
than directly in foreign issuers' stock, a Fund avoids currency risks during the
settlement  period.  In general,  there is a large,  liquid market in the United
States for most ADRs. However,  certain Depositary Receipts may not be listed on
an exchange and therefore may be illiquid securities.

Dollar Roll Transactions. Dollar roll transactions consist of the sale by a Fund
to a bank or broker-dealer  (the  "counterparty")  of GNMA certificates or other
mortgage-backed  securities  together  with a  commitment  to purchase  from the
counterparty  similar,  but not  identical,  securities at a future date, at the
same price.  The  counterparty  receives all  principal  and interest  payments,
including  prepayments,  made on the  security  while it is the  holder.  A Fund
receives a fee from the  counterparty  as  consideration  for entering  into the
commitment  to  purchase.  Dollar  rolls may be renewed over a period of several
months  with  a  different  purchase  and  repurchase  price  fixed  and a  cash
settlement  made  at each  renewal  without  physical  delivery  of  securities.
Moreover,  the  transaction  may  be  preceded  by a firm  commitment  agreement
pursuant to which a Fund agrees to buy a security on a future date.


A Fund will segregate  cash, US Government  securities or other liquid assets in
an amount sufficient to meet their purchase  obligations under the transactions.
A Fund will also maintain asset coverage to the extent required by the 1940 Act.



Dollar  rolls may be treated for  purposes of the 1940 Act, as  borrowings  of a
Fund because  they  involve the sale of a security  coupled with an agreement to
repurchase.  A dollar roll involves costs to a Fund.  For example,  while a Fund
receives a fee as consideration for agreeing to repurchase the security,  a Fund
forgoes the right to receive  all  principal  and  interest  payments  while the
counterparty  holds the security.  These payments to the counterparty may exceed
the fee received by a Fund, thereby effectively  charging a Fund interest on its
borrowing.  Further,  although  a Fund  can  estimate  the  amount  of  expected
principal prepayment over the term of the dollar roll, a variation in the actual
amount of prepayment could increase or decrease the cost of a Fund's borrowing.

The entry into dollar rolls involves  potential risks of loss that are different
from those related to the securities  underlying the transactions.  For example,
if the  counterparty  becomes  insolvent,  a Fund's  right to purchase  from the
counterparty might be restricted. Additionally, the value of such securities may
change adversely before a Fund is able to purchase them.  Similarly,  a Fund may
be required to purchase  securities in connection with a dollar roll at a higher
price than may otherwise be available on the open market. Since, as noted above,
the counterparty is required to deliver a similar, but not identical security to
a Fund, the security that a Fund is required to buy under the dollar roll may be
worth less than an identical security. Finally, there can be no assurance that a
Fund's use of the cash that it receives from a dollar roll will provide a return
that exceeds borrowing costs.

Euro. The  implementation  of the Euro may result in uncertainties  for European
securities  and the operation of a Fund.  The Euro was  introduced on January 1,
1999 by eleven  members  countries of the European  Economic and Monetary  Union
(EMU).  Implementation of the Euro requires the  redenomination of European debt
and  equity  securities  over a period  of time,  which may  result  in  various
accounting  differences  and/or tax treatments  which would not otherwise occur.
Additional  questions  are  raised  by the  fact  that  certain  other  European
Community members,  including the United Kingdom,  did not officially  implement
the Euro on January 1, 1999.

                                       6
<PAGE>


Eurodollar  Instruments.  A Fund may make investments in Eurodollar  instruments
for hedging purposes or to enhance potential gain. Eurodollar instruments are US
dollar-denominated  futures contracts or options thereon which are linked to the
London Interbank Offered Rate ("LIBOR"),  although foreign  currency-denominated
instruments are available from time to time. Eurodollar futures contracts enable
purchasers to obtain a fixed rate for the lending of Funds and sellers to obtain
a fixed rate for borrowings.  A Fund might use Eurodollar  futures contracts and
options  thereon to hedge against  changes in LIBOR, to which many interest rate
swaps and fixed income instruments are linked or for any other purpose.


Eurodollar  Obligations.  Eurodollar bank obligations are US  dollar-denominated
certificates  of deposit and time deposits issued outside the US capital markets
by foreign  branches of US banks and US branches  of foreign  banks.  Eurodollar
obligations  are  subject  to the same risks that  pertain to  domestic  issues,
notably credit risk,  market risk and liquidity risk.  Additionally,  Eurodollar
obligations are subject to certain sovereign risks.


Foreign  Currencies.  Because  investments  in foreign  securities  usually will
involve  currencies  of foreign  countries,  and because a Fund may hold foreign
currencies  and  forward  contracts,   futures  contracts,  options  on  foreign
currencies and foreign  currency  futures  contracts and other currency  related
instruments,  the value of the assets of a Fund as measured in US dollars may be
affected  favorably or unfavorably by changes in foreign currency exchange rates
and  exchange  control  regulations,  and a Fund may incur costs and  experience
conversion difficulties and uncertainties in connection with conversions between
various  currencies.  Fluctuations in exchange rates may also affect the earning
power and asset value of the foreign entity issuing the security.


The  strength  or  weakness  of  the  US  dollar  against  these  currencies  is
responsible for part of a Fund's investment performance.  If the dollar falls in
value relative to the Japanese yen, for example,  the dollar value of a Japanese
stock held in the portfolio will rise even though the price of the stock remains
unchanged.  Conversely,  if the dollar  rises in value  relative to the yen, the
dollar  value of the Japanese  stock will fall.  Many  foreign  currencies  have
experienced significant devaluation relative to the dollar.

Although  a Fund  values its assets  daily in terms of US  dollars,  it does not
intend to convert its holdings of foreign  currencies into US dollars on a daily
basis.  It will do so from time to time,  and  investors  should be aware of the
costs of currency conversion.  Although foreign exchange dealers do not charge a
fee for  conversion,  they do  realize  a profit  based on the  difference  (the
"spread")  between  the  prices at which they are  buying  and  selling  various
currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at one
rate,  while  offering a lesser rate of exchange  should a Fund desire to resell
that currency to the dealer. A Fund will conduct its foreign  currency  exchange
transactions  either on a spot (i.e., cash) basis at the spot rate prevailing in
the foreign  currency  exchange  market,  or through  entering  into  options or
forward or futures contracts to purchase or sell foreign currencies.

Foreign Fixed Income Securities.  Since most foreign fixed income securities are
not rated,  a Fund will invest in foreign fixed income  securities  based on the
Advisor's analysis without relying on published ratings.  Since such investments
will be based upon the Advisor's  analysis  rather than upon published  ratings,
achievement  of a Fund's goals may depend more upon the abilities of the Advisor
than would otherwise be the case.

The value of the foreign fixed income  securities  held by a Fund,  and thus the
net asset value of a Fund's shares, generally will fluctuate with (a) changes in
the perceived creditworthiness of the issuers of those securities, (b) movements
in interest  rates,  and (c) changes in the relative values of the currencies in
which a Fund's  investments  in fixed income  securities  are  denominated  with
respect to the US Dollar.  The extent of the fluctuation  will depend on various
factors,  such as the average maturity of a Fund's  investments in foreign fixed
income  securities,  and the extent to which a Fund  hedges its  interest  rate,
credit and currency exchange rate risks. A longer average maturity  generally is
associated  with a  higher  level  of  volatility  in the  market  value of such
securities in response to changes in market conditions.

Investments  in  sovereign  debt,  including  Brady Bonds  (Brady Bonds are debt
securities   issued  under  a  plan  implemented  to  allow  debtor  nations  to
restructure their  outstanding  commercial bank  indebtedness),  involve special
risks. Foreign governmental issuers of debt or the governmental authorities that
control the repayment of the debt may be unable or unwilling to repay  principal
or pay  interest  when due. In the event of default,  there may be limited or no
legal recourse in that, generally,  remedies for defaults must be pursued in the
courts of the defaulting  party.


                                       7
<PAGE>

Political  conditions,  especially a sovereign entity's  willingness to meet the
terms of its fixed income securities,  are of considerable  significance.  Also,
there can be no assurance that the holders of commercial  bank loans to the same
sovereign  entity may not contest  payments to the holders of sovereign  debt in
the event of default under commercial bank loan agreements.  In addition,  there
is no bankruptcy  proceeding with respect to sovereign debt on which a sovereign
has  defaulted,  and a Fund  may be  unable  to  collect  all or any part of its
investment in a particular issue.  Foreign  investment in certain sovereign debt
is restricted or controlled to varying degrees, including requiring governmental
approval for the repatriation of income,  capital or proceed of sales by foreign
investors. These restrictions or controls may at times limit or preclude foreign
investment  in certain  sovereign  debt or increase  the costs and expenses of a
Fund.

Sovereign  debt of  emerging  market  governmental  issuers is to be  considered
speculative.  Emerging market governmental issuers are among the largest debtors
to commercial banks, foreign governments,  international financial organizations
and other financial  institutions.  Certain emerging market governmental issuers
have  not  been  able to make  payments  of  interest  on or  principal  of debt
obligations as those payments have come due. There is a history of defaults with
respect  to  commercial  bank  loans by  public  and  private  entities  issuing
sovereign  debt.  All or a portion of the  interest  payments  and/or  principal
repayment  with respect to sovereign debt may be  uncollateralized.  Obligations
arising from past restructuring  agreements may affect the economic  performance
and political and social stability of those issuers.

The  ability of  emerging  market  country  governmental  issuers to make timely
payments  on their  obligations  is  likely  to be  influenced  strongly  by the
issuer's balance of payments,  including export  performance,  and its access to
international  credits and  investments.  An emerging  market whose  exports are
concentrated  in a few  commodities  could be  vulnerable  to a  decline  in the
international   prices   of  one  or  more  of  those   commodities.   Increased
protectionism  on the part of an emerging  market's  trading partners could also
adversely  affect the country's  exports and diminish its trade account surplus,
if any. To the extent that emerging  markets  receive payment for its exports in
currencies other than dollars or non-emerging market currencies,  its ability to
make debt payments  denominated  in dollars or  non-emerging  market  currencies
could be affected.

Another factor bearing on the ability of emerging market countries to repay debt
obligations is the level of international reserves of the country.  Fluctuations
in the level of these  reserves  affect the amount of foreign  exchange  readily
available  for  external  debt  payments  and thus  could  have a bearing on the
capacity  of  emerging   market   countries  to  make  payments  on  these  debt
obligations.

To the extent that an emerging  market country cannot  generate a trade surplus,
it must  depend on  continuing  loans  from  foreign  governments,  multilateral
organizations or private commercial banks, aid payments from foreign governments
and inflows of foreign investment. The access of emerging markets to these forms
of external  funding may not be certain,  and a withdrawal  of external  funding
could  adversely  affect the capacity of emerging  market  country  governmental
issuers  to make  payments  on  their  obligations.  In  addition,  the  cost of
servicing  emerging  market  debt  obligations  can be  affected  by a change in
international  interest  rates  since the  majority of these  obligations  carry
interest rates that are adjusted periodically based upon international rates.

Foreign  Investments.  Foreign securities are normally denominated and traded in
foreign currencies. As a result, the value of the Fund's foreign investments and
the value of its shares may be affected  favorably or  unfavorably by changes in
currency exchange rates relative to the US dollar. There may be less information
publicly  available  about a foreign issuer than about a US issuer,  and foreign
issuers  may not be subject to  accounting,  auditing  and  financial  reporting
standards  and practices  comparable to those in the US. The  securities of some
foreign  issuers are less liquid and at times more volatile  than  securities of
comparable US issuers.  Foreign  brokerage  commissions  and other fees are also
generally  higher  than in the  US.  Foreign  settlement  procedures  and  trade
regulations  may involve  certain risks (such as delay in payment or delivery of
securities or in the recovery of the Fund's assets held abroad) and expenses not
present in the settlement of  investments in US markets.  Payment for securities
without delivery may be required in certain foreign markets.

In addition, foreign securities may be subject to the risk of nationalization or
expropriation   of  assets,   imposition  of  currency   exchange   controls  or
restrictions on the  repatriation of foreign  currency,  confiscatory  taxation,
political or  financial  instability  and  diplomatic  developments  which could
affect  the  value of the  Fund's  investments  in  certain


                                       8
<PAGE>

foreign countries.  Governments of many countries have exercised and continue to
exercise  substantial  influence over many aspects of the private sector through
the  ownership or control of many  companies,  including  some of the largest in
these  countries.  As a result,  government  actions in the future  could have a
significant  effect on economic  conditions which may adversely affect prices of
certain   portfolio   securities.   There  is  also  generally  less  government
supervision and regulation of stock  exchanges,  brokers,  and listed  companies
than in the US.  Dividends or interest on, or proceeds from the sale of, foreign
securities  may be subject  to foreign  withholding  taxes,  and  special US tax
considerations  may apply.  Moreover,  foreign economies may differ favorably or
unfavorably  from the US economy in such  respects  as growth of gross  national
product, rate of inflation, capital reinvestment,  resource self-sufficiency and
balance of payments position.

Legal remedies  available to investors in certain foreign  countries may be more
limited than those  available  with respect to investments in the US or in other
foreign  countries.  The laws of some  foreign  countries  may limit the  Fund's
ability to invest in securities of certain  issuers  organized under the laws of
those foreign countries.

Of particular  importance,  many foreign  countries are heavily  dependent  upon
exports,  particularly to developed countries,  and, accordingly,  have been and
may continue to be adversely affected by trade barriers,  managed adjustments in
relative currency values, and other protectionist measures imposed or negotiated
by the US and other  countries with which they trade.  These economies also have
been and may continue to be negatively impacted by economic conditions in the US
and other  trading  partners,  which can lower the demand for goods  produced in
those countries.

The  risks  described  above,   including  the  risks  of   nationalization   or
expropriation of assets,  typically are increased in connection with investments
in "emerging  markets." For example,  political and economic structures in these
countries may be in their infancy and developing rapidly, and such countries may
lack  the  social,  political  and  economic  stability  characteristic  of more
developed countries (including amplified risk of war and terrorism).  Certain of
these countries have in the past failed to recognize private property rights and
have at times  nationalized and  expropriated  the assets of private  companies.
Investments in emerging markets may be considered speculative.

The  currencies  of  certain   emerging   market   countries  have   experienced
devaluations  relative to the US dollar,  and future  devaluations may adversely
affect the value of assets denominated in such currencies. In addition, currency
hedging techniques may be unavailable in certain emerging market countries. Many
emerging  market  countries have  experienced  substantial,  and in some periods
extremely  high,  rates of  inflation or  deflation  for many years,  and future
inflation may adversely  affect the  economies  and  securities  markets of such
countries.

In addition, unanticipated political or social developments may affect the value
of  investments  in  emerging   markets  and  the   availability  of  additional
investments  in these  markets.  Any change in the  leadership  or  politics  of
emerging  market  countries,  or  the  countries  that  exercise  a  significant
influence  over  those  countries,  may halt the  expansion  of or  reverse  the
liberalization of foreign investment policies now occurring and adversely affect
existing  investment  opportunities.  The small size, limited trading volume and
relative  inexperience  of the  securities  markets in these  countries may make
investments in securities  traded in emerging markets illiquid and more volatile
than investments in securities traded in more developed countries.  For example,
limited  market  size may cause  prices to be unduly  influenced  by traders who
control  large  positions.  In  addition,  the Fund may be required to establish
special custodial or other arrangements  before making investments in securities
traded  in  emerging  markets.  There  may be  little  financial  or  accounting
information available with respect to issuers of emerging market securities, and
it may be  difficult  as a  result  to  assess  the  value  of  prospects  of an
investment in such securities.


The risk  also  exists  that an  emergency  situation  may  arise in one or more
emerging  markets as a result of which trading of securities may cease or may be
substantially  curtailed and prices for a Fund's  securities in such markets may
not be readily  available.  A Fund may suspend  redemption of its shares for any
period during which an emergency exists,  as determined by the SEC.  Accordingly
if a Fund believes that appropriate circumstances exist, it may apply to the SEC
for a determination  that an emergency is present.  During the period commencing
from a Fund's identification of such condition until the date of the SEC action,
a Fund's  securities  in the  affected  markets  will be  valued  at fair  value
determined in good faith by or under the direction of a Fund's Board.


                                       9
<PAGE>

Certain of the foregoing risks may also apply to some extent to securities of US
issuers that are denominated in foreign currencies or that are traded in foreign
markets, or securities of US issuers having significant foreign operations.

High Yield/High Risk Bonds. A Fund may also purchase,  to a limited extent, debt
securities which are rated below investment-grade (commonly referred to as "junk
bonds"),  that is,  rated  below Baa by Moody's or below BBB by S&P and  unrated
securities,  which usually  entail greater risk  (including  the  possibility of
default or  bankruptcy  of the issuers of such  securities),  generally  involve
greater  volatility of price and risk of principal  and income,  and may be less
liquid,  than securities in the higher rating categories.  The lower the ratings
of such debt  securities,  the  greater  their  risks  render  them like  equity
securities.  DWS  International  Fund  will  invest no more than 5% of its total
assets in  securities  rated BB or lower by Moody's or Ba by S&P, and may invest
in  securities  which are rated D by S&P. See the Appendix to this  Statement of
Additional  Information for a more complete  description of the ratings assigned
by ratings organizations and their respective characteristics.

High yield,  high-risk  securities are especially  subject to adverse changes in
general  economic  conditions,  to changes in the  financial  condition of their
issuers and to price  fluctuations  in response to changes in interest rates. An
economic  downturn could disrupt the high yield market and impair the ability of
issuers to repay  principal  and interest.  Also, an increase in interest  rates
would have a greater  adverse  impact on the value of such  obligations  than on
higher quality debt securities.  During an economic downturn or period of rising
interest rates,  highly leveraged  issues may experience  financial stress which
would  adversely  affect their ability to service  their  principal and interest
payment  obligations.  Prices and yields of high yield securities will fluctuate
over time and, during periods of economic uncertainty,  volatility of high yield
securities  may  adversely  affect  a  Fund's  net  asset  value.  In  addition,
investments  in high  yield  zero  coupon  or  pay-in-kind  bonds,  rather  than
income-bearing high yield securities, may be more speculative and may be subject
to greater fluctuations in value due to changes in interest rates.

The  trading  market for high yield  securities  may be thin to the extent  that
there is no established retail secondary market. A thin trading market may limit
the ability of a Fund to accurately value high yield securities in its portfolio
and to dispose of those securities.  Adverse publicity and investor  perceptions
may decrease the values and liquidity of high yield securities. These securities
may also involve special registration  responsibilities,  liabilities and costs,
and liquidity and valuation difficulties.

Credit  quality in the  high-yield  securities  market can change  suddenly  and
unexpectedly,  and even recently issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield security. For these reasons, it is
the  policy  of the  Advisor  not to  rely  exclusively  on  ratings  issued  by
established credit rating agencies,  but to supplement such ratings with its own
independent and on-going  review of credit quality.  The achievement of a Fund's
investment  objective by investment in such  securities may be more dependent on
the Advisor's credit analysis than is the case for higher quality bonds.  Should
the rating of a portfolio  security be  downgraded,  the Advisor will  determine
whether  it is in the best  interests  of the Fund to retain or  dispose of such
security.

Prices for below investment-grade  securities may be affected by legislative and
regulatory developments. For example, new federal rules require savings and loan
institutions  to  gradually  reduce  their  holdings  of this type of  security.
Congress has from time to time  considered  legislation  which would restrict or
eliminate the corporate tax deduction for interest  payments in these securities
and  regulate  corporate  restructurings.  Such  legislation  may  significantly
depress the prices of outstanding securities of this type.


Illiquid  Securities and Restricted  Securities.  A Fund may purchase securities
that are subject to legal or  contractual  restrictions  on resale  ("restricted
securities").  Generally  speaking,  restricted  securities  may be sold  (i) to
qualified  institutional buyers; (ii) in a privately negotiated transaction to a
limited number of purchasers;  (iii) in limited  quantities after they have been
held for a specified  period of time and other conditions are met pursuant to an
exemption  from  registration;  or  (iv)  in  a  public  offering  for  which  a
registration statement is in effect under the Securities Act of 1933, as amended
(the "1933 Act").  Issuers of  restricted  securities  may not be subject to the
disclosure and other investor  protection  requirements that would be applicable
if their securities were publicly traded.


                                       10
<PAGE>

Restricted  securities  are often  illiquid,  but they may also be  liquid.  For
example,  restricted securities that are eligible for resale under Rule 144A are
often deemed to be liquid.

The Funds' Boards have approved guidelines for use by the Advisor in determining
whether a security  is liquid or  illiquid.  Among the  factors  the Advisor may
consider in reaching  liquidity  decisions relating to Rule 144A securities are:
(1) the  frequency  of trades  and quotes  for the  security;  (2) the number of
dealers  wishing  to  purchase  or sell the  security  and the  number  of other
potential purchasers;  (3) dealer undertakings to make a market in the security;
and (4) the nature of the security and the nature of the market for the security
(i.e.,  the time  needed to dispose of the  security,  the method of  soliciting
offers,  and the mechanics of the transfer).  Where a registration  statement is
required for the resale of restricted securities, a Fund may be required to bear
all or  part  of  the  registration  expenses.  A Fund  may be  deemed  to be an
"underwriter" for purposes of the 1933 Act when selling restricted securities to
the public  and,  in such event,  the Fund may be liable to  purchasers  of such
securities if the  registration  statement  prepared by the issuer is materially
inaccurate or misleading.

A Fund may also purchase securities that are not subject to legal or contractual
restrictions  on resale,  but that are deemed  illiquid.  Such securities may be
illiquid, for example, because there is a limited trading market for them.

A Fund may be unable to sell a restricted or illiquid security.  In addition, it
may be more  difficult to determine a market  value for  restricted  or illiquid
securities.  Moreover,  if adverse market  conditions were to develop during the
period between a Fund's  decision to sell a restricted or illiquid  security and
the point at which a Fund is permitted or able to sell such  security,  the Fund
might  obtain a price  less  favorable  than the price  that  prevailed  when it
decided to sell. This investment practice,  therefore,  could have the effect of
increasing the level of illiquidity of a Fund.


Impact of Large  Redemptions  and  Purchases of Fund Shares.  From time to time,
shareholders  of a Fund  (which may  include  affiliated  and/or  non-affiliated
registered investment companies that invest in a Fund) may make relatively large
redemptions or purchases of Fund shares.  These transactions may cause a Fund to
have to sell securities or invest  additional cash, as the case may be. While it
is impossible  to predict the overall  impact of these  transactions  over time,
there could be adverse effects on a Fund's performance to the extent that a Fund
may be  required  to sell  securities  or invest cash at times when it would not
otherwise do so. These  transactions  could also  accelerate the  realization of
taxable  income if sales of securities  resulted in capital gains and could also
increase transaction costs, which may impact a Fund's expense ratio.



IPO Risk.  Securities  issued  through  an  initial  public  offering  (IPO) can
experience an immediate drop in value if the demand for the securities  does not
continue to support the  offering  price.  Information  about the issuers of IPO
securities is also difficult to acquire since they are new to the market and may
not have lengthy operating histories. A Fund may engage in short-term trading in
connection  with its IPO  investments,  which could produce higher trading costs
and  adverse  tax  consequences.  The number of  securities  issued in an IPO is
limited,  so it is likely that IPO securities will represent a smaller component
of a Fund's  portfolio as a Fund's assets increase (and thus have a more limited
effect on a Fund's performance).

Interfund  Borrowing  and Lending  Program.  The Funds have  received  exemptive
relief from the Securities and Exchange  Commission  ("SEC"),  which permits the
Funds to participate in an interfund  lending  program among certain  investment
companies  advised by the Advisor.  The  interfund  lending  program  allows the
participating  funds to  borrow  money  from and loan  money to each  other  for
temporary  or  emergency  purposes.  The  program  is  subject  to a  number  of
conditions  designed to ensure fair and equitable treatment of all participating
funds, including the following: (1) no Fund may borrow money through the program
unless it receives a more favorable  interest rate than a rate approximating the
lowest  interest  rate at which  bank  loans  would be  available  to any of the
participating  funds


                                       11
<PAGE>

under a loan  agreement;  and (2) no Fund may lend  money  through  the  program
unless  it  receives  a more  favorable  return  than  that  available  from  an
investment in repurchase agreements and, to the extent applicable,  money market
cash sweep arrangements. In addition, a Fund may participate in the program only
if and to the  extent  that such  participation  is  consistent  with the Fund's
investment  objectives  and  policies  (for  instance,  money market funds would
normally  participate  only as lenders and tax exempt funds only as  borrowers).
Interfund  loans and borrowings may extend  overnight,  but could have a maximum
duration of seven days. Loans may be called on one day's notice. A Fund may have
to borrow from a bank at a higher  interest rate if an interfund  loan is called
or not renewed.  Any delay in repayment to a lending fund could result in a lost
investment  opportunity  or  additional  costs.  The  program  is subject to the
oversight and periodic review of the Boards of the  participating  funds. To the
extent the Funds are actually engaged in borrowing through the interfund lending
program,  the Funds, as a matter of  non-fundamental  policy, may not borrow for
other than temporary or emergency purposes (and not for leveraging), except that
the Funds may engage in reverse  repurchase  agreements and dollar rolls for any
purpose.

Investment Company Securities. A Fund may acquire securities of other investment
companies to the extent consistent with its investment  objective and subject to
the limitations of the 1940 Act. A Fund will  indirectly bear its  proportionate
share of any management  fees and other  expenses paid by such other  investment
companies.

For example,  a Fund may invest in a variety of investment  companies which seek
to track the  composition  and  performance  of  specific  indexes or a specific
portion of an index.  These  index-based  investments hold  substantially all of
their assets in securities representing their specific index.  Accordingly,  the
main risk of investing in index-based  investments is the same as investing in a
portfolio  of equity  securities  comprising  the index.  The  market  prices of
index-based  investments  will fluctuate in accordance  with both changes in the
market  value of their  underlying  portfolio  securities  and due to supply and
demand for the  instruments on the exchanges on which they are traded (which may
result in their  trading at a discount  or premium to their  NAVs).  Index-based
investments  may not replicate  exactly the performance of their specified index
because of  transaction  costs and because of the  temporary  unavailability  of
certain component securities of the index.

Examples of index-based investments include:

SPDRs(R):  SPDRs,  an acronym for "Standard & Poor's  Depositary  Receipts," are
based on the S&P 500  Composite  Stock Price Index.  They are issued by the SPDR
Trust,  a unit  investment  trust that  holds  shares of  substantially  all the
companies  in the S&P 500 in  substantially  the  same  weighting  and  seeks to
closely track the price performance and dividend yield of the Index.

MidCap  SPDRs(R):  MidCap SPDRs are based on the S&P MidCap 400 Index.  They are
issued by the MidCap SPDR Trust, a unit investment  trust that holds a portfolio
of securities  consisting of  substantially  all of the common stocks in the S&P
MidCap 400 Index in substantially  the same weighting and seeks to closely track
the price performance and dividend yield of the Index.

Select Sector SPDRs(R):  Select Sector SPDRs are based on a particular sector or
group of  industries  that are  represented  by a specified  Select Sector Index
within the Standard & Poor's Composite Stock Price Index. They are issued by The
Select Sector SPDR Trust, an open-end  management  investment  company with nine
portfolios  that each seeks to closely track the price  performance and dividend
yield of a particular Select Sector Index.

DIAMONDS(SM):  DIAMONDS are based on the Dow Jones Industrial Average(SM).  They
are issued by the DIAMONDS Trust, a unit investment trust that holds a portfolio
of all the component common stocks of the Dow Jones Industrial Average and seeks
to closely track the price performance and dividend yield of the Dow.

Nasdaq-100 Shares: Nasdaq-100 Shares are based on the Nasdaq 100 Index. They are
issued by the Nasdaq-100  Trust, a unit investment  trust that holds a portfolio
consisting of substantially  all of the securities,  in  substantially  the same
weighting,  as the component stocks of the Nasdaq-100 Index and seeks to closely
track the price performance and dividend yield of the Index.


                                       12
<PAGE>


Investment-Grade Bonds. A Fund may purchase  "investment-grade" bonds, which are
those  rated Aaa,  Aa, A or Baa by  Moody's  or AAA,  AA, A or BBB by S&P or, if
unrated,  judged to be of  equivalent  quality  as  determined  by the  Advisor.
Moody's  considers  bonds it rates Baa to have  speculative  elements as well as
investment-grade  characteristics.   To  the  extent  that  a  Fund  invests  in
higher-grade  securities,  the  Fund  will  not  be  able  to  avail  itself  of
opportunities for higher income which may be available at lower grades.


Investment of Uninvested  Cash  Balances.  The Funds may have cash balances that
have not been invested in portfolio securities  ("Uninvested Cash").  Uninvested
Cash may result  from a variety of  sources,  including  dividends  or  interest
received from portfolio securities, unsettled securities transactions,  reserves
held for investment strategy purposes, assets to cover a fund's open futures and
other derivatives positions,  scheduled maturity of investments,  liquidation of
investment securities to meet anticipated redemptions and dividend payments, and
new cash received from investors.  Uninvested  Cash may be invested  directly in
money market  instruments or other short-term debt  obligations.  A fund may use
Uninvested Cash to purchase shares of affiliated money market funds or shares of
Cash  Management  QP Trust,  or other  entities for which the Advisor may act as
investment  advisor  now  or in the  future  that  operate  as  cash  management
investment vehicles but are excluded from the definition of "investment company"
pursuant  to  Section  3(c)(1) or  3(c)(7)  of the 1940 Act  (collectively,  the
"Central  Funds"),  provided  that any Central  Funds will operate in accordance
with Rule 2a-7 under the 1940 Act.  Investments in such cash management vehicles
may exceed the limits of Rule 12(d)(1)(A).

Lending of Portfolio  Securities.  A Fund may lend its investment  securities to
approved institutional borrowers,  including those who need to borrow securities
in order  to  complete  certain  transactions,  such as  covering  short  sales,
avoiding failures to deliver securities or completing arbitrage  operations.  By
lending  its  investment  securities,  a  Fund  attempts  to  increase  its  net
investment  income through the receipt of interest on the loan. Any gain or loss
in the market price of the securities loaned that might occur during the term of
the loan would belong to the Fund. A Fund may lend its investment  securities so
long as the  terms,  structure  and the  aggregate  amount of such loans are not
inconsistent  with the 1940 Act or the rules and regulations or  interpretations
of the SEC thereunder,  which currently require that (a) the borrower pledge and
maintain  with the Fund  collateral  consisting of liquid,  unencumbered  assets
having a value at all times  not less  than 100% of the value of the  securities
loaned,  (b) the  borrower  add to such  collateral  whenever  the  price of the
securities  loaned  rises (i.e.,  the borrower  "marks to the market" on a daily
basis), (c) the loan be made subject to termination by the Fund at any time, and
(d) the Fund


                                       13
<PAGE>

receives  reasonable  interest on the loan (which may include the Fund investing
any  cash  collateral  in  interest   bearing   short-term   investments),   and
distributions  on the loaned  securities and any increase in their market value.
There may be risks of delay in recovery of the securities or even loss of rights
in the  collateral  should the  borrower  of the  securities  fail  financially.
However,  loans will be made only to  borrowers  selected  by a Fund's  delegate
after a  commercially  reasonable  review of relevant  facts and  circumstances,
including the creditworthiness of the borrower.


At the  present  time,  the staff of the SEC does not  object  if an  investment
company pays reasonable negotiated fees in connection with loaned securities, so
long as such  fees are set  forth in a  written  contract  and  approved  by the
investment company's Board of Trustees/Directors. In addition, voting rights may
pass with the loaned  securities,  but if a material  event occurs  affecting an
investment on loan, the loan must be called and the securities  voted.  Pursuant
to an exemptive order granted by the SEC, cash collateral received by a Fund may
be  invested  in a money  market  fund  managed  by the  Advisor  (or one of its
affiliates).

Micro-Cap Companies.  While, historically,  micro-capitalization  company stocks
have  outperformed  the stocks of large  companies,  the former have customarily
involved more investment risk as well.  There can be no assurance that this will
continue  to be true in the  future.  Micro-capitalization  companies  may  have
limited product lines, markets or financial resources; may lack management depth
or experience;  and may be more vulnerable to adverse general market or economic
developments than large companies.  The prices of  micro-capitalization  company
securities  are often more  volatile than prices  associated  with large company
issues,  and can display  abrupt or erratic  movements at times,  due to limited
trading volumes and less publicly available information.

Also,  because   micro-capitalization   companies  normally  have  fewer  shares
outstanding and these shares trade less frequently than large companies,  it may
be more difficult for a Fund to buy and sell significant  amounts of such shares
without an unfavorable impact on prevailing market prices.

Some of the companies in which a Fund may invest may distribute, sell or produce
products  which have recently been brought to market and may be dependent on key
personnel.  The  securities of  micro-capitalization  companies are often traded
over-the-counter  and may not be traded in the  volumes  typical  on a  national
securities exchange. Consequently, in order to sell this type of holding, a Fund
may need to  discount  the  securities  from  recent  prices or  dispose  of the
securities over a long period of time.

Participation  Interests.  A  Fund  may  purchase  from  financial  institutions
participation   interests  in  securities   in  which  a  Fund  may  invest.   A
participation interest gives a Fund an undivided interest in the security in the
proportion that a Fund's participation interest bears to the principal amount of
the security.  These  instruments may have fixed,  floating or variable interest
rates,  with  remaining  maturities  of 397 days or less.  If the  participation
interest is unrated,  or has been given a rating below that which is permissible
for  purchase  by a  Fund,  the  participation  interest  will be  backed  by an
irrevocable  letter of credit or guarantee of a bank, or the payment  obligation
otherwise will be collateralized by US Government securities, or, in the case of
unrated  participation  interest,  determined by the Advisor to be of comparable
quality  to  those  instruments  in  which  a  Fund  may  invest.   For  certain
participation  interests,  a Fund will have the right to demand payment,  on not
more than  seven  days'  notice,  for all or any part of a Fund's  participation
interests in the security,  plus accrued interest.  As to these  instruments,  a
Fund  generally  intends to  exercise  its right to demand  payment  only upon a
default under the terms of the security.

Privatized Enterprises. Investments in foreign securities may include securities
issued  by  enterprises   that  have  undergone  or  are  currently   undergoing
privatization.  The  governments of certain  foreign  countries have, to varying
degrees,  embarked on privatization  programs  contemplating  the sale of all or
part of their  interests  in state  enterprises.  A  Fund's  investments  in the
securities  of  privatized   enterprises   may  include   privately   negotiated
investments in a government or  state-owned or controlled  company or enterprise
that has not yet  conducted  an  initial  equity  offering,  investments  in the
initial  offering of equity  securities  of a state  enterprise  or former state
enterprise and investments in the securities of a state enterprise following its
initial equity offering.

In certain  jurisdictions,  the ability of foreign entities,  such as a Fund, to
participate in privatizations may be limited by local law, or the price or terms
on which a Fund may be able to  participate  may be less  advantageous  than for
local investors.  Moreover, there can be no assurance that governments that have
embarked on  privatization  programs


                                       14
<PAGE>

will  continue to divest their  ownership of state  enterprises,  that  proposed
privatizations  will be successful or that governments  will not  re-nationalize
enterprises that have been privatized.

In the case of the  enterprises in which a Fund may invest,  large blocks of the
stock of those  enterprises may be held by a small group of  stockholders,  even
after  the  initial  equity  offerings  by those  enterprises.  The sale of some
portion or all of those blocks could have an adverse  effect on the price of the
stock of any such enterprise.

Prior to making an initial  equity  offering,  most state  enterprises or former
state  enterprises go through an internal  reorganization  or  management.  Such
reorganizations  are made in an attempt to better  enable these  enterprises  to
compete in the private sector. However,  certain reorganizations could result in
a  management  team  that does not  function  as well as an  enterprise's  prior
management and may have a negative effect on such enterprise.  In addition,  the
privatization  of an  enterprise  by its  government  may occur over a number of
years,  with the  government  continuing to hold a  controlling  position in the
enterprise even after the initial equity offering for the enterprise.

Prior to privatization, most of the state enterprises in which a Fund may invest
enjoy the protection of and receive  preferential  treatment from the respective
sovereigns  that own or control them.  After making an initial equity  offering,
these   enterprises   may  no  longer  have  such  protection  or  receive  such
preferential  treatment and may become subject to market  competition from which
they were  previously  protected.  Some of these  enterprises may not be able to
operate  effectively in a competitive market and may suffer losses or experience
bankruptcy due to such competition.

Real  Estate  Investment  Trusts  ("REITs").   REITs  are  sometimes  informally
characterized  as equity REITs,  mortgage REITs and hybrid REITs.  Investment in
REITs may subject a Fund to risks  associated with the direct  ownership of real
estate,  such  as  decreases  in real  estate  values,  overbuilding,  increased
competition  and other risks  related to local or general  economic  conditions,
increases  in  operating  costs and  property  taxes,  changes  in zoning  laws,
casualty or condemnation losses, possible environmental liabilities,  regulatory
limitations on rent and  fluctuations  in rental income.  Equity REITs generally
experience  these risks  directly  through fee or leasehold  interests,  whereas
mortgage REITs generally  experience  these risks  indirectly  through  mortgage
interests,  unless the mortgage REIT  forecloses on the underlying  real estate.
Changes in interest  rates may also affect the value of a Fund's  investment  in
REITs.  For  instance,  during  periods of  declining  interest  rates,  certain
mortgage REITs may hold mortgages  that the  mortgagors  elect to prepay,  which
prepayment may diminish the yield on securities issued by those REITs.

Certain REITs have relatively  small market  capitalizations,  which may tend to
increase the  volatility of the market price of their  securities.  Furthermore,
REITs  are  dependent  upon   specialized   management   skills,   have  limited
diversification and are,  therefore,  subject to risks inherent in operating and
financing a limited  number of  projects.  REITs are also  subject to heavy cash
flow dependency, defaults by borrowers and the possibility of failing to qualify
for tax-free  pass-through of income under the Internal Revenue Code of 1986, as
amended,   (the  "Code")  and  to  maintain   exemption  from  the  registration
requirements of the 1940 Act. By investing in REITs indirectly through a Fund, a
shareholder will bear not only his or her proportionate share of the expenses of
a Fund, but also, indirectly,  similar expenses of the REITs. In addition, REITs
depend generally on their ability to generate cash flow to make distributions to
shareholders.

Repurchase  Agreements.  A Fund may invest in repurchase  agreements pursuant to
its investment guidelines.  In a repurchase agreement, a Fund acquires ownership
of a security and simultaneously  commits to resell that security to the seller,
typically a bank or broker-dealer.  Some repurchase commitment  transactions may
not  provide  a Fund with  collateral  marked-to-market  during  the term of the
commitment.

A repurchase  agreement  provides a means for a Fund to earn income on funds for
periods as short as overnight.  It is an  arrangement  under which the purchaser
(i.e., a Fund) acquires a security  ("Obligation") and the seller agrees, at the
time of sale,  to  repurchase  the  Obligation  at a  specified  time and price.
Securities  subject to a repurchase  agreement are held in a segregated  account
and the value of such securities kept at least equal to the repurchase  price on
a daily basis.  The repurchase  price may be higher than the purchase price, the
difference being income to a Fund, or the purchase and repurchase  prices may be
the  same,  with  interest  at a  stated  rate due to a Fund  together  with the

                                       15
<PAGE>

repurchase  price  upon  repurchase.  In either  case,  the  income to a Fund is
unrelated to the interest rate on the  Obligation  itself.  Obligations  will be
held by the Custodian or in the Federal Reserve Book Entry system.

It is not clear  whether a court would  consider the  Obligation  purchased by a
Fund  subject to a  repurchase  agreement  as being  owned by a Fund or as being
collateral for a loan by a Fund to the seller.  In the event of the commencement
of  bankruptcy  or  insolvency  proceedings  with  respect  to the seller of the
Obligation before repurchase of the Obligation under a repurchase  agreement,  a
Fund may encounter delay and incur costs before being able to sell the security.
Delays may involve  loss of interest or decline in price of the  Obligation.  If
the court characterizes the transaction as a loan and a Fund has not perfected a
security  interest  in the  Obligation,  a Fund may be  required  to return  the
Obligation to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor,  a Fund would be at risk of losing some or all
of the principal and income involved in the  transaction.  As with any unsecured
debt instrument  purchased for a Fund, the Advisor seeks to minimize the risk of
loss through  repurchase  agreements  by analyzing the  creditworthiness  of the
obligor,  in this case the  seller  of the  Obligation.  Apart  from the risk of
bankruptcy or insolvency proceedings, there is also the risk that the seller may
fail to repurchase the Obligation,  in which case a Fund may incur a loss if the
proceeds  to a Fund of the sale to a third  party are less  than the  repurchase
price.  However, if the market value of the Obligation subject to the repurchase
agreement  becomes less than the repurchase price (including  interest),  a Fund
will direct the seller of the  Obligation  to deliver  additional  securities so
that the market value of all securities subject to the repurchase agreement will
equal or  exceed  the  repurchase  price.  It is  possible  that a Fund  will be
unsuccessful  in seeking to  enforce  the  seller's  contractual  obligation  to
deliver additional securities.

Reverse  Repurchase  Agreements.  A Fund  may  enter  into  "reverse  repurchase
agreements,"  which are repurchase  agreements in which a Fund, as the seller of
the  securities,  agrees to repurchase  them at an agreed upon time and price. A
Fund  maintains a segregated  account in  connection  with  outstanding  reverse
repurchase agreements. Reverse repurchase agreements are deemed to be borrowings
subject to a Fund's investment  restrictions applicable to that activity. A Fund
will enter into reverse  repurchase  agreements  only when the Advisor  believes
that the interest income to be earned from the investment of the proceeds of the
transaction will be greater than the interest  expense of the transaction.  Such
transactions  may  increase  fluctuation  in the market value of Fund assets and
their yields.

Small Company  Risk.  The Advisor  believes  that many small  companies may have
sales and earnings growth rates which exceed those of larger companies, and that
such  growth  rates  may  in  turn  be  reflected  in  more  rapid  share  price
appreciation  over time.  However,  investing in smaller company stocks involves
greater risk than is  customarily  associated  with  investing  in larger,  more
established companies.  For example,  smaller companies can have limited product
lines,  markets,  or financial and managerial  resources.  Smaller companies may
also be dependent on one or a few key persons,  and may be more  susceptible  to
losses and risks of bankruptcy. Also, the securities of smaller companies may be
thinly traded (and  therefore  have to be sold at a discount from current market
prices or sold in small lots over an extended period of time). Transaction costs
in smaller company stocks may be higher than those of larger companies.

Strategic  Transactions  and  Derivatives.  A Fund may,  but is not required to,
utilize various other investment  strategies as described below for a variety of
purposes,  such as hedging various market risks, managing the effective maturity
or duration of the  fixed-income  securities in a Fund's  portfolio or enhancing
potential gain.  These  strategies may be executed through the use of derivative
contracts.


In the course of pursuing these investment  strategies,  a Fund may purchase and
sell  exchange-listed and  over-the-counter  put and call options on securities,
equity and fixed-income indices and other instruments, purchase and sell futures
contracts and options thereon,  enter into various  transactions  such as swaps,
caps, floors, collars,  currency forward contracts,  currency futures contracts,
currency swaps or options on currencies,  or currency  futures and various other
currency  transactions  (collectively,  all  the  above  are  called  "Strategic
Transactions").  In addition, strategic transactions may also include additional
techniques,  instruments or strategies that are permitted as regulatory  changes
occur.  Strategic  Transactions  may be used without  limit  (subject to certain
limits imposed by the 1940 Act) to attempt to protect against  possible  changes
in the  market  value  of  securities  held in or to be  purchased  for a Fund's
portfolio   resulting  from  securities   markets  or  currency   exchange  rate
fluctuations, to protect a Fund's unrealized gains in the value of its portfolio
securities,  to facilitate the sale of such securities for investment


                                       16
<PAGE>

purposes, to manage the effective maturity or duration of a Fund's portfolio, to
establish a position in the  derivatives  markets as a substitute for purchasing
or  selling  particular  securities  or  for  any  other  purpose  permitted  by
applicable  law.  Some  Strategic  Transactions  may  also be  used  to  enhance
potential  gain although no more than 5% of a Fund's assets will be committed to
certain Strategic Transactions entered into for non-hedging purposes. Any or all
of these  investment  techniques may be used at any time and in any combination,
and there is no  particular  strategy  that  dictates  the use of one  technique
rather  than  another,  as use of any  Strategic  Transaction  is a function  of
numerous variables including market conditions. The ability of a Fund to utilize
these Strategic  Transactions  successfully will depend on the Advisor's ability
to predict  pertinent  market  movements,  which  cannot be  assured.  Strategic
Transactions  will  not be used to alter  fundamental  investment  purposes  and
characteristics of a Fund.

Strategic  Transactions,  including derivative contracts,  have risks associated
with them  including  possible  default by the other  party to the  transaction,
illiquidity and, to the extent the Advisor's view as to certain market movements
is incorrect,  the risk that the use of such Strategic Transactions could result
in losses  greater  than if they had not been used.  Use of put and call options
may  result  in  losses  to a Fund,  force  the sale or  purchase  of  portfolio
securities  at  inopportune  times or for prices higher than (in the case of put
options)  or lower than (in the case of call  options)  current  market  values,
limit the amount of  appreciation a Fund can realize on its investments or cause
a Fund  to  hold a  security  it  might  otherwise  sell.  The  use of  currency
transactions  can result in a Fund  incurring  losses as a result of a number of
factors   including  the   imposition  of  exchange   controls,   suspension  of
settlements,  or the inability to deliver or receive a specified  currency.  The
use of  options  and  futures  transactions  entails  certain  other  risks.  In
particular,  the  variable  degree of  correlation  between  price  movements of
futures  contracts and price  movements in the related  portfolio  position of a
Fund  creates  the  possibility  that losses on the  hedging  instrument  may be
greater than gains in the value of a Fund's position.  In addition,  futures and
options   markets   may  not  be  liquid  in  all   circumstances   and  certain
over-the-counter options may have no markets. As a result, in certain markets, a
Fund might not be able to close out a transaction without incurring  substantial
losses,  if at all.  Although  the use of futures and options  transactions  for
hedging  should tend to minimize  the risk of loss due to a decline in the value
of the hedged  position,  at the same time they tend to limit any potential gain
which might  result from an increase  in value of such  position.  Finally,  the
daily variation margin requirements for futures contracts would create a greater
ongoing  potential  financial  risk than would  purchases of options,  where the
exposure  is  limited  to the  cost  of the  initial  premium.  Other  Strategic
Transactions,  such as forward  contracts and swaps, are also subject to similar
risks. Losses resulting from the use of Strategic  Transactions would reduce net
asset  value,  and possibly  income,  and such losses can be greater than if the
Strategic Transactions had not been utilized.


                                       17
<PAGE>

General  Characteristics of Options. Put options and call options typically have
similar structural  characteristics and operational  mechanics regardless of the
underlying  instrument on which they are purchased or sold.  Thus, the following
general  discussion relates to each of the particular types of options discussed
in greater  detail below.  In addition,  many Strategic  Transactions  involving
options  require  segregation of Fund assets in special  accounts,  as described
below under "Use of Segregated and Other Special Accounts."

A put option gives the purchaser of the option,  upon payment of a premium,  the
right to sell, and the writer the  obligation to buy, the  underlying  security,
commodity,  index,  currency or other  instrument  at the  exercise  price.  For
instance, the Fund's purchase of a put option on a security might be designed to
protect its holdings in the underlying  instrument (or, in some cases, a similar
instrument) against a substantial decline in the market value by giving the Fund
the right to sell such  instrument at the option  exercise price. A call option,
upon payment of a premium,  gives the  purchaser of the option the right to buy,
and the seller the obligation to sell, the underlying instrument at the exercise
price.  A Fund's  purchase  of a call option on a  security,  financial  future,
index,  currency  or other  instrument  might be  intended  to protect  the Fund
against an increase in the price of the underlying instrument that it intends to
purchase  in the  future  by  fixing  the  price at which it may  purchase  such
instrument.  An American  style put or call option may be  exercised at any time
during  the  option  period  while a  European  style put or call  option may be
exercised only upon expiration or during a fixed period prior thereto. A Fund is
authorized to purchase and sell  exchange  listed  options and  over-the-counter
options  ("OTC  options").  Exchange  listed  options  are issued by a regulated
intermediary such as the Options Clearing Corporation ("OCC"),  which guarantees
the  performance  of the  obligations  of  the  parties  to  such  options.  The
discussion  below uses the OCC as an example,  but is also  applicable  to other
financial intermediaries.


Index options and Eurodollar instruments are cash settled for the net amount, if
any,  by which  the  option  is  "in-the-money"  (i.e.,  where  the value of the
underlying instrument exceeds, in the case of a call option, or is less than, in
the case of a put  option,  the  exercise  price of the  option) at the time the
option is exercised.  Frequently,  rather than taking or making  delivery of the
underlying  instrument  through the  process of  exercising  the option,  listed
options are closed by entering  into  offsetting  purchase or sale  transactions
that do not result in ownership of the new option.


A Fund's ability to close out its position as a purchaser or seller of an OCC or
exchange listed put or call option is dependent,  in part, upon the liquidity of
the option market. Among the possible reasons for the absence of a liquid option
market on an exchange are: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions  imposed by an exchange;  (iii) trading halts,
suspensions or other restrictions  imposed with respect to particular classes or
series of  options or  underlying  securities  including  reaching  daily  price
limits;  (iv)  interruption of the normal  operations of the OCC or an exchange;
(v) inadequacy of the facilities of an exchange or OCC to handle current trading
volume;  or (vi) a decision by one or more exchanges to discontinue  the trading
of options  (or a  particular  class or series of  options),  in which event the
relevant market for that option on that exchange would cease to exist,  although
outstanding  options on that exchange would generally continue to be exercisable
in accordance with their terms.

The hours of trading for listed  options may not coincide  with the hours during
which the underlying  financial  instruments are traded.  To the extent that the
option   markets  close  before  the  markets  for  the   underlying   financial
instruments,  significant  price  and  rate  movements  can  take  place  in the
underlying markets that cannot be reflected in the option markets.

OTC  options  are  purchased  from  or  sold to  securities  dealers,  financial
institutions  or  other  parties  ("Counterparties")  through  direct  bilateral
agreement with the Counterparty.  In contrast to exchange listed options,  which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement,  term, exercise price,
premium,  guarantees and security, are set by negotiation of the parties. A Fund
will only sell OTC options (other than OTC currency options) that are subject to
a buy-back  provision  permitting a Fund to require the Counterparty to sell the
option  back to a Fund at a formula  price  within  seven days.  A Fund  expects
generally  to enter  into OTC  options  that  have cash  settlement  provisions,
although it is not required to do so.

                                       18
<PAGE>

Unless the  parties  provide  for it,  there is no central  clearing or guaranty
function in an OTC option.  As a result,  if the  Counterparty  fails to make or
take delivery of the security,  currency or other  instrument  underlying an OTC
option  it has  entered  into  with a Fund or  fails  to make a cash  settlement
payment due in  accordance  with the terms of that option,  a Fund will lose any
premium  it paid  for the  option  as well  as any  anticipated  benefit  of the
transaction.  Accordingly,  the Advisor must assess the creditworthiness of each
such Counterparty or any guarantor or credit  enhancement of the  Counterparty's
credit to  determine  the  likelihood  that the terms of the OTC option  will be
satisfied.  The  Fund  will  engage  in OTC  option  transactions  only  with US
government securities dealers recognized by the Federal Reserve Bank of New York
as "primary  dealers"  or  broker-dealers,  domestic  or foreign  banks or other
financial  institutions which have received (or the guarantors of the obligation
of which have  received) a short-term  credit rating of A-1 from S&P or P-1 from
Moody's or an  equivalent  rating  from any  nationally  recognized  statistical
rating organization ("NRSRO") or, in the case of OTC currency transactions,  are
determined to be of equivalent  credit quality by the Advisor.  The staff of the
SEC  currently  takes the position  that OTC options  purchased  by a Fund,  and
portfolio securities "covering" the amount of a Fund's obligation pursuant to an
OTC option sold by it (the cost of the sell-back plus the  in-the-money  amount,
if any) are  illiquid,  and are subject to a Fund's  limitation  on investing no
more than 15% of its net assets in illiquid securities.

If a Fund sells a call  option,  the  premium  that it  receives  may serve as a
partial hedge,  to the extent of the option  premium,  against a decrease in the
value of the  underlying  securities  or  instruments  in its  portfolio or will
increase a Fund's income. The sale of put options can also provide income.

A Fund may purchase and sell call  options on  securities  including US Treasury
and agency  securities,  mortgage-backed  securities,  foreign  sovereign  debt,
corporate debt securities,  equity securities (including convertible securities)
and  Eurodollar  instruments  that  are  traded  on US  and  foreign  securities
exchanges  and in the  over-the-counter  markets,  and  on  securities  indices,
currencies  and futures  contracts.  All calls sold by a Fund must be  "covered"
(i.e., a Fund must own the securities or futures  contract  subject to the call)
or must meet the asset segregation  requirements  described below as long as the
call is outstanding.  Even though a Fund will receive the option premium to help
protect it against  loss, a call sold by a Fund exposes the Fund during the term
of the option to possible loss of  opportunity  to realize  appreciation  in the
market price of the underlying  security or instrument and may require a Fund to
hold a security or instrument which it might otherwise have sold.

A Fund may purchase and sell put options on securities including US Treasury and
agency securities, mortgage-backed securities, foreign sovereign debt, corporate
debt  securities,  equity  securities  (including  convertible  securities)  and
Eurodollar  instruments  (whether  or not it holds the above  securities  in its
portfolio),  and on securities  indices,  currencies and futures contracts other
than futures on individual  corporate debt and individual equity  securities.  A
Fund will not sell put  options  if, as a  result,  more than 50% of the  Fund's
total  assets  would  be  required  to be  segregated  to  cover  its  potential
obligations  under such put options other than those with respect to futures and
options  thereon.  In selling  put  options,  there is a risk that a Fund may be
required to buy the  underlying  security at a  disadvantageous  price above the
market price.


General  Characteristics  of Futures. A Fund may enter into futures contracts or
purchase  or sell  put and  call  options  on such  futures  as a hedge  against
anticipated  interest rate, currency or equity market changes,  and for duration
management,  risk  management  and  return  enhancement  purposes.  Futures  are
generally  bought and sold on the  commodities  exchanges  where they are listed
with payment of initial and variation  margin as described  below. The sale of a
futures  contract  creates a firm  obligation  by the seller,  to deliver to the
buyer the specific type of financial  instrument called for in the contract at a
specific  future  time for a  specified  price  (or,  with  respect  to  certain
instruments,  such as index  futures and  Eurodollar  instruments,  the net cash
amount)  and a firm  obligation  by the buyer to deliver  the  specified  price.
Options on futures contracts are similar to options on securities except that an
option on a futures  contract  gives the  purchaser  the right in return for the
premium paid to assume a position in a futures contract and obligates the seller
to deliver such position.

The Funds have claimed exclusion from the definition of the term "commodity pool
operator" under the Commodity Exchange Act. Therefore, the Funds are not subject
to commodity  pool  operator  registration  and  regulation  under the Commodity
Exchange  Act.  Futures and options on futures may be entered into for bona fide
hedging,  risk management (including duration management) or other portfolio and
return  enhancement  management  purposes.


                                       19
<PAGE>

Typically,  maintaining a futures contract or selling an option thereon requires
a Fund to deposit with a financial  intermediary as security for its obligations
an amount of cash or other specified  assets (initial margin) which initially is
typically  1% to 10% of the face  amount of the  contract  (but may be higher in
some  circumstances).  Additional  cash  or  assets  (variation  margin)  may be
required to be deposited thereafter on a daily basis as the mark to market value
of the  contract  fluctuates.  The  purchase of an option on  financial  futures
involves  payment of a premium for the option without any further  obligation on
the part of a Fund. If a Fund exercises an option on a futures  contract it will
be obligated to post initial margin (and potential  subsequent variation margin)
for the resulting  futures  position just as it would for any position.  Futures
contracts  and  options  thereon  are  generally  settled  by  entering  into an
offsetting  transaction  but there can be no assurance  that the position can be
offset prior to  settlement  at an  advantageous  price,  nor that delivery will
occur.


Options on  Securities  Indices  and Other  Financial  Indices.  A Fund also may
purchase and sell call and put options on securities indices and other financial
indices and in so doing can achieve many of the same objectives it would achieve
through  the sale or  purchase  of options  on  individual  securities  or other
instruments.  Options on  securities  indices  and other  financial  indices are
similar to options on a security or other  instrument  except that,  rather than
settling by physical delivery of the underlying instrument,  they settle by cash
settlement,  i.e.,  an option on an index gives the holder the right to receive,
upon exercise of the option, an amount of cash if the closing level of the index
upon which the option is based exceeds,  in the case of a call, or is less than,
in the case of a put, the exercise  price of the option  (except if, in the case
of an OTC option, physical delivery is specified).  This amount of cash is equal
to the excess of the closing  price of the index over the exercise  price of the
option,  which  also may be  multiplied  by a formula  value.  The seller of the
option is  obligated,  in return for the premium  received,  to make delivery of
this  amount.  The  gain or loss on an  option  on an  index  depends  on  price
movements in the instruments making up the market,  market segment,  industry or
other  composite  on which the  underlying  index is based,  rather  than  price
movements in  individual  securities,  as is the case with respect to options on
securities.

Currency  Transactions.   A  Fund  may  engage  in  currency  transactions  with
counterparties  primarily in order to hedge,  or manage the risk of the value of
portfolio holdings denominated in particular  currencies against fluctuations in
relative  value.  Currency  transactions  include  forward  currency  contracts,
exchange listed currency futures, exchange listed and OTC options on currencies,
and currency swaps. A forward currency contract involves a privately  negotiated
obligation  to purchase or sell (with  delivery  generally  required) a specific
currency at a future  date,  which may be any fixed number of days from the date
of the contract  agreed upon by the  parties,  at a price set at the time of the
contract.  A currency  swap is an agreement to exchange  cash flows based on the
notional  difference  among two or more currencies and operates  similarly to an
interest  rate swap,  which is described  below.  A Fund may enter into currency
transactions with  counterparties  which have received (or the guarantors of the
obligations  which  have  received)  a  credit  rating  of  A-1 or P-1 by S&P or
Moody's, respectively, or that have an equivalent rating from a NRSRO or (except
for OTC currency  options) are determined to be of equivalent  credit quality by
the Advisor.

A Fund's dealings in forward currency contracts and other currency  transactions
such as futures, options, options on futures and swaps generally will be limited
to hedging involving either specific  transactions or portfolio positions except
as described below.  Transaction hedging is entering into a currency transaction
with respect to specific  assets or liabilities of a Fund,  which will generally
arise in connection with the purchase or sale of its portfolio securities or the
receipt  of income  therefrom.  Position  hedging  is  entering  into a currency
transaction  with  respect  to  portfolio  security  positions   denominated  or
generally quoted in that currency.


A Fund generally will not enter into a transaction to hedge currency exposure to
an extent greater,  after netting all transactions  intended wholly or partially
to offset other  transactions,  than the aggregate  market value (at the time of
entering into the  transaction) of the securities held in its portfolio that are
denominated or generally quoted in or currently  convertible into such currency,
other than with respect to proxy hedging or cross hedging as described below, as
applicable.


A Fund may also cross-hedge currencies by entering into transactions to purchase
or sell one or more currencies that are expected to decline in value relative to
other  currencies  to  which  a Fund  has or in  which  a Fund  expects  to have
portfolio exposure.

                                       20
<PAGE>

To reduce  the  effect of  currency  fluctuations  on the value of  existing  or
anticipated  holdings of portfolio  securities,  a Fund may also engage in proxy
hedging.  Proxy  hedging  is  often  used  when the  currency  to which a Fund's
portfolio is exposed is  difficult  to hedge or to hedge  against the US dollar.
Proxy  hedging  entails  entering into a commitment or option to sell a currency
whose changes in value are  generally  considered to be correlated to a currency
or currencies in which some or all of a Fund's  portfolio  securities are or are
expected  to be  denominated,  in  exchange  for US  dollars.  The amount of the
commitment  or  option  would  not  exceed  the  value  of a  Fund's  securities
denominated in correlated currencies. Currency hedging involves some of the same
risks  and  considerations  as  other  transactions  with  similar  instruments.
Currency  transactions  can  result in losses  to a Fund if the  currency  being
hedged  fluctuates  in  value  to  a  degree  or  in a  direction  that  is  not
anticipated.  Further,  there is the risk that the perceived correlation between
various  currencies  may  not be  present  or  may  not be  present  during  the
particular time that a Fund is engaging in proxy hedging.  If a Fund enters into
a currency hedging transaction,  the Fund will comply with the asset segregation
requirements described below.

Risks of  Currency  Transactions.  Currency  transactions  are  subject to risks
different from those of other portfolio  transactions.  Because currency control
is of great  importance  to the  issuing  governments  and  influences  economic
planning and policy, purchases and sales of currency and related instruments can
be  negatively  affected  by  government  exchange  controls,   blockages,   and
manipulations or exchange restrictions imposed by governments.  These can result
in losses to a Fund if it is unable to deliver or receive  currency  or funds in
settlement of obligations  and could also cause hedges it has entered into to be
rendered  useless,  resulting  in full  currency  exposure as well as  incurring
transaction  costs.  Buyers and sellers of  currency  futures are subject to the
same risks that apply to the use of futures generally.  Further, settlement of a
currency  futures  contract for the purchase of most  currencies must occur at a
bank  based in the  issuing  nation.  Trading  options  on  currency  futures is
relatively  new,  and the ability to establish  and close out  positions on such
options is subject to the maintenance of a liquid market which may not always be
available.  Currency  exchange rates may fluctuate based on factors extrinsic to
that country's economy.

Risks of Strategic  Transactions  Outside the US. When conducted outside the US,
Strategic  Transactions may not be regulated as rigorously as in the US, may not
involve a clearing mechanism and related guarantees, and are subject to the risk
of  governmental  actions  affecting  trading  in,  or the  prices  of,  foreign
securities,  currencies and other instruments.  The value of such positions also
could be adversely affected by: (i) other complex foreign  political,  legal and
economic  factors,  (ii) lesser  availability than in the US of data on which to
make trading  decisions,  (iii) delays in a Fund's  ability to act upon economic
events  occurring in foreign markets during  non-business  hours in the US, (iv)
the  imposition of different  exercise and  settlement  terms and procedures and
margin requirements than in the US, and (v) lower trading volume and liquidity.


Swaps, Caps, Floors and Collars.  Among the Strategic  Transactions into which a
Fund may enter  are  interest  rate,  currency,  index  and other  swaps and the
purchase or sale of related  caps,  floors and collars.  A Fund expects to enter
into these transactions primarily to preserve a return or spread on a particular
investment  or  portion  of  its   portfolio,   to  protect   against   currency
fluctuations,  as a  duration  management  technique,  to  protect  against  any
increase in the price of  securities a Fund  anticipates  purchasing  at a later
date or to enhance  returns.  A Fund will not sell  interest rate caps or floors
where it does not own  securities  or other  instruments  providing  the  income
stream a Fund may be obligated to pay.  Interest rate swaps involve the exchange
by a Fund with another party of their  respective  commitments to pay or receive
interest,  e.g.,  an exchange of floating  rate payments for fixed rate payments
with respect to a notional amount of principal.  A currency swap is an agreement
to exchange cash flows on a notional amount of two or more  currencies  based on
the relative value  differential among them and an index swap is an agreement to
swap cash  flows on a  notional  amount  based on  changes  in the values of the
reference  indices.  The  purchase of a cap  entitles  the  purchaser to receive
payments on a notional  principal  amount from the party selling such cap to the
extent that a specified index exceeds a  predetermined  interest rate or amount.
The purchase of a floor entitles the purchaser to receive payments on a notional
principal  amount  from  the  party  selling  such  floor to the  extent  that a
specified index falls below a predetermined interest rate or amount. A collar is
a  combination  of a cap and a floor that  preserves a certain  return  within a
predetermined range of interest rates or values.

Use of Segregated and Other Special Accounts. Most Strategic  Transactions,  and
certain other instruments (such as reverse repurchase  agreements,  dollar rolls
and when-issued securities),  expose the Fund to an obligation to another party.
The Fund will comply with SEC  guidelines  regarding  cover for these  Strategic
Transactions  and instruments and will, if the guidelines so require,  segregate
on its books cash or liquid assets in the prescribed


                                       21
<PAGE>

amount as determined daily. The Fund may also enter into offsetting transactions
or own positions  covering its obligations.  Although this SAI describes certain
permitted   methods  of  segregating   assets  or  otherwise   "covering"   such
transactions  for these  purposes,  such  descriptions  are not  intended  to be
exhaustive.  The Fund may cover such transactions  using other methods currently
or in the  future  permitted  under  the 1940 Act,  the  rules  and  regulations
thereunder,  or  orders  issued  by the  SEC  thereunder.  For  these  purposes,
interpretations and guidance provided by the SEC staff may be taken into account
when  deemed  appropriate  by the Fund.  To the  extent  that a Fund  covers its
commitment under Strategic Transactions and such other instruments, including by
segregation of liquid assets,  entering into  offsetting  transactions or owning
positions covering its obligations,  such Strategic Transactions and instruments
will not be considered a "senior security" by the Fund and therefore will not be
subject  to  the  300%  asset  coverage  requirement   otherwise  applicable  to
borrowings by the Fund.

Assets  used as cover  cannot be sold while the  position  in the  corresponding
Strategic Transaction or other such instrument is open, unless they are replaced
with other appropriate assets. As a result, the commitment of a large portion of
the Fund's assets to cover in accounts could impede portfolio  management or the
Fund's ability to meet redemption requests or other current obligations.



                                       22
<PAGE>


Combined Transactions. Each Fund may enter into multiple transactions, including
multiple options transactions,  multiple futures transactions, multiple currency
transactions  (including forward currency  contracts) and multiple interest rate
transactions and any combination of futures, options, currency and interest rate
transactions   ("component"   transactions),   instead  of  a  single  Strategic
Transaction,  as part of a single or combined  strategy  when, in the opinion of
the  Advisor,  it is in the best  interests  of the  Fund to do so.  A  combined
transaction  will usually  contain  elements of risk that are present in each of
its component transactions.  Although combined transactions are normally entered
into based on the Advisor's  judgment that the combined  strategies  will reduce
risk or otherwise  more  effectively  achieve the desired  portfolio  management
goal, it is possible that the  combination  will instead  increase such risks or
hinder achievement of the portfolio management objective.

Supranational Entities.  Supranational entities are international  organizations
designated   or  supported  by   governmental   entities  to  promote   economic
reconstruction or development and international banking institutions and related
government agencies.  Examples include the International Bank for Reconstruction
and Development  (the World Bank),  the European Coal and Steel  Community,  The
Asian  Development Bank and the InterAmerican  Development Bank.  Obligations of
supranational  entities  are  backed  by the  guarantee  of one or more  foreign
governmental parties which sponsor the entity.

Trust Preferred  Securities.  A Fund may invest in Trust  Preferred  Securities,
which are hybrid  instruments  issued by a special  purpose  trust (the "Special
Trust"),  the entire equity  interest of which is owned by a single issuer.  The
proceeds of the issuance to a Fund of Trust  Preferred  Securities are typically
used to purchase a junior  subordinated  debenture,  and distributions  from the
Special  Trust are funded by the  payments  of  principal  and  interest  on the
subordinated debenture.

If payments on the underlying junior subordinated debentures held by the Special
Trust are deferred by the debenture  issuer,  the debentures would be treated as
original issue discount ("OID")  obligations for the remainder of their term. As
a  result,  holders  of Trust  Preferred  Securities,  such as a Fund,  would be
required to accrue  daily for  Federal  income tax  purposes  their share of the
stated interest and the de minimis OID on the debentures  (regardless of whether
a Fund receives any cash distributions from the Special Trust), and the value of
Trust  Preferred  Securities  would  likely  be  negatively  affected.  Interest
payments on the underlying junior subordinated  debentures typically may only be
deferred if dividends are  suspended on both common and  preferred  stock of the
issuer. The underlying junior  subordinated  debentures  generally rank slightly
higher in terms of payment priority than both common and preferred securities of
the issuer,  but rank below other  subordinated  debentures and debt securities.
Trust Preferred  Securities may be subject to mandatory prepayment under certain
circumstances.  The  market  values of Trust  Preferred  Securities  may be more
volatile than those of conventional debt securities.  Trust Preferred Securities
may be issued in reliance on Rule 144A under the 1933 Act, and, unless and until
registered,  are  restricted  securities;  there can be no  assurance  as to the
liquidity  of Trust  Preferred  Securities  and the  ability of holders of Trust
Preferred Securities, such as a Fund, to sell their holdings.

                                       23
<PAGE>

US   Government   Securities.   There   are   two   broad   categories   of   US
Government-related debt instruments:  (a) direct obligations of the US Treasury,
and (b) securities issued or guaranteed by US Government agencies.

Examples of direct  obligations  of the US Treasury are Treasury  Bills,  Notes,
Bonds and other debt securities issued by the US Treasury. These instruments are
backed  by the  "full  faith and  credit"  of the  United  States.  They  differ
primarily in interest rates, the length of maturities and the dates of issuance.
Treasury bills have original maturities of one year or less. Treasury notes have
original  maturities  of one to ten  years and  Treasury  bonds  generally  have
original maturities of greater than ten years.

Some  agency  securities  are  backed by the full faith and credit of the United
States (such as Maritime Administration Title XI Ship Financing Bonds and Agency
for  International  Development  Housing Guarantee Program Bonds) and others are
backed only by the rights of the issuer to borrow from the US Treasury  (such as
Federal Home Loan Bank Bonds and Federal National Mortgage  Association  Bonds),
while still others,  such as the securities of the Federal Farm Credit Bank, are
supported only by the credit of the issuer. With respect to securities supported
only by the credit of the issuing agency or by an additional line of credit with
the US  Treasury,  there is no  guarantee  that the US  Government  will provide
support  to such  agencies  and  such  securities  may  involve  risk of loss of
principal and interest.

US Government  Securities  may include "zero coupon"  securities  that have been
stripped  by  the  US  Government  of  their  unmatured   interest  coupons  and
collateralized  obligations  issued or guaranteed  by a US Government  agency or
instrumentality.

Interest rates on US Government  obligations may be fixed or variable.  Interest
rates on variable rate obligations are adjusted at regular  intervals,  at least
annually,  according to a formula  reflecting  then current  specified  standard
rates, such as 91-day US Treasury bill rates.  These adjustments  generally tend
to reduce fluctuations in the market value of the securities.

The government  guarantee of the US Government  Securities in a Fund's portfolio
does not guarantee the net asset value of the shares of a Fund. There are market
risks  inherent in all  investments in securities and the value of an investment
in a Fund will  fluctuate  over time.  Normally,  the value of investments in US
Government  Securities  varies  inversely  with changes in interest  rates.  For
example,  as  interest  rates  rise the value of  investments  in US  Government
Securities  will tend to  decline,  and as  interest  rates  fall the value of a
Fund's  investments  will tend to  increase.  In  addition,  the  potential  for
appreciation  in the event of a decline  in  interest  rates may be  limited  or
negated   by   increased   principal   prepayments   with   respect  to  certain
Mortgage-Backed  Securities,  such as  GNMA  Certificates.  Prepayments  of high
interest  rate  Mortgage-Backed  Securities  during times of declining  interest
rates will tend to lower the return of a Fund and may even result in losses to a
Fund if some securities were acquired at a premium.  Moreover, during periods of
rising interest rates,  prepayments of  Mortgage-Backed  Securities may decline,
resulting in the extension of a Fund's average portfolio maturity.  As a result,
a Fund's portfolio may experience  greater  volatility  during periods of rising
interest rates than under normal market conditions.

Warrants.  The holder of a warrant has the right, until the warrant expires,  to
purchase a given number of shares of a particular  issuer at a specified  price.
Such  investments  can  provide a greater  potential  for profit or loss than an
equivalent  investment  in the  underlying  security.  Prices of warrants do not
necessarily  move in  tandem  with  the  prices  of the  underlying  securities,
however, and are, therefore, considered speculative investments. Warrants pay no
dividends and confer no rights other than a purchase option.  Thus, if a warrant
held by a Fund were not  exercised by the date of its  expiration,  a Fund would
lose the entire purchase price of the warrant.

When-Issued  Securities.  A Fund may from time to time purchase  equity and debt
securities on a "when-issued,"  "delayed  delivery" or "forward delivery" basis.
The price of such securities, which may be expressed in yield terms, is fixed at
the time the  commitment  to purchase is made,  but delivery and payment for the
securities  takes place at a later date.  During the period between purchase and
settlement, no payment is made by the Fund to the issuer and no interest accrues
to the Fund. When the Fund purchases such securities, it immediately assumes the
risks of ownership, including the risk of price fluctuation.  Failure to deliver
a security purchased on this basis may result in a loss or missed opportunity to
make an alternative investment.

                                       24
<PAGE>


To the extent that assets of the Fund are held in cash pending the settlement of
a purchase of securities,  the Fund would earn no income.  While such securities
may be sold prior to the settlement date, the Fund intends to purchase them with
the  purpose of actually  acquiring  them unless a sale  appears  desirable  for
investment  reasons.  At the time the Fund makes the  commitment  to  purchase a
security on this basis,  it will record the transaction and reflect the value of
the  security  in  determining  its net asset  value.  The  market  value of the
securities may be more or less than the purchase price.


Zero Coupon Securities. A Fund may invest in zero coupon securities which pay no
cash income and are sold at substantial  discounts from their value at maturity.
When held to  maturity,  their  entire  income,  which  consists of accretion of
discount,  comes from the difference  between the issue price and their value at
maturity.   Zero  coupon   securities   are  subject  to  greater  market  value
fluctuations  from changing  interest rates than debt  obligations of comparable
maturities  which make current  distributions  of interest  (cash).  Zero coupon
securities  which are  convertible  into common stock offer the  opportunity for
capital  appreciation  as  increases  (or  decreases)  in  market  value of such
securities  closely  follows the movements in the market value of the underlying
common stock. Zero coupon  convertible  securities  generally are expected to be
less volatile than the underlying common stocks, as they usually are issued with
maturities  of 15 years or less and are issued with  options  and/or  redemption
features  exercisable  by the holder of the  obligation  entitling the holder to
redeem the obligation and receive a defined cash payment.

Zero coupon  securities  include  securities issued directly by the US Treasury,
and US Treasury bonds or notes and their unmatured interest coupons and receipts
for their underlying  principal  ("coupons")  which have been separated by their
holder,  typically a custodian bank or investment  brokerage firm. A holder will
separate the interest  coupons from the  underlying  principal (the "corpus") of
the US Treasury  security.  A number of securities firms and banks have stripped
the interest  coupons and  receipts  and then resold them in  custodial  receipt
programs with a number of different  names,  including  "Treasury  Income Growth
Receipts" (TIGRS(TM)) and Certificate of Accrual on Treasuries  (CATS(TM)).  The
underlying US Treasury bonds and notes themselves are held in book-entry form at
the  Federal  Reserve  Bank  or,  in  the  case  of  bearer   securities  (i.e.,
unregistered  securities  which are  owned  ostensibly  by the  bearer or holder
thereof), in trust on behalf of the owners thereof.  Counsel to the underwriters
of these  certificates  or  other  evidences  of  ownership  of the US  Treasury
securities have stated that, for federal tax and securities  purposes,  in their
opinion  purchasers of such  certificates,  such as a Fund,  most likely will be
deemed the beneficial holder of the underlying US Government securities.  A Fund
understands  that the staff of the Division of Investment  Management of the SEC
no longer  considers  such  privately  stripped  obligations to be US Government
securities,  as defined in the 1940 Act; therefore,  a Fund intends to adhere to
this staff position and will not treat such privately stripped obligations to be
US  Government   securities  for  the  purpose  of  determining  if  a  Fund  is
"diversified" under the 1940 Act.

The US Treasury has facilitated transfers of ownership of zero coupon securities
by accounting  separately  for the beneficial  ownership of particular  interest
coupon and corpus  payments on Treasury  securities  through the Federal Reserve
book-entry record keeping system.  The Federal Reserve program as established by
the Treasury  Department is known as "STRIPS" or "Separate Trading of Registered
Interest and Principal of Securities."  Under the STRIPS program, a Fund will be
able  to have  its  beneficial  ownership  of zero  coupon  securities  recorded
directly  in the  book-entry  record-keeping  system  in lieu of  having to hold
certificates  or other  evidences  of ownership  of the  underlying  US Treasury
securities.

When US Treasury  obligations  have been  stripped of their  unmatured  interest
coupons  by the  holder,  the  principal  or corpus  is sold at a deep  discount
because the buyer  receives  only the right to receive a future fixed payment on
the  security  and does not  receive  any  rights to  periodic  interest  (cash)
payments.  Once  stripped  or  separated,  the  corpus and  coupons  may be sold
separately.  Typically,  the coupons are sold  separately  or grouped with other
coupons with like  maturity  dates and sold bundled in such form.  Purchasers of
stripped  obligations   acquire,  in  effect,   discount  obligations  that  are
economically  identical to the zero coupon  securities  that the Treasury  sells
itself.

                                       25
<PAGE>

Portfolio Holdings Information


In addition to the public disclosure of Fund portfolio holdings through required
Securities and Exchange  Commission  ("SEC") quarterly  filings, a Fund may make
its portfolio holdings information publicly available on the DWS Funds' Web site
as  described  in  each  Fund's  prospectus.  Each  Fund  does  not  disseminate
non-public  information  about  portfolio  holdings  except in  accordance  with
policies and procedures adopted by each Fund.

Each Fund's procedures permit non-public  portfolio  holdings  information to be
shared with Deutsche Asset Management and its affiliates  (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys,   officers  and  trustees/directors  and  each  of  their  respective
affiliates and advisers who require access to this  information to fulfill their
duties to each Fund and are subject to the duties of confidentiality,  including
the duty not to trade on non-public information,  imposed by law or contract, or
by each Fund's  procedures.  This non-public  information may also be disclosed,
subject to the  requirements  described  below,  to securities  lending  agents,
financial  printers,  proxy voting  firms,  mutual fund  analysts and rating and
tracking  agencies,  or to shareholders  in connection with in-kind  redemptions
(collectively, "Authorized Third Parties").

Prior to any disclosure of each Fund's non-public portfolio holdings information
to Authorized Third Parties,  a person  authorized by each Fund's Directors must
make a good faith determination in light of the facts then known that a Fund has
a legitimate business purpose for providing the information, that the disclosure
is in the  best  interest  of each  Fund,  and  that the  recipient  assents  or
otherwise has a duty to keep the information confidential and to not trade based
on the  information  received  while  the  information  remains  non-public.  No
compensation is received by each Fund or DeAM for disclosing non-public holdings
information.  Periodic  reports  regarding these  procedures will be provided to
each Fund's Directors.

Portfolio  holdings  information  distributed  by the trading desks of DeAM or a
subadvisor for the purpose of facilitating  efficient trading of such securities
and receipt of relevant  research is not subject to the foregoing  requirements.
Non-public   portfolio   holding   information   does  not   include   portfolio
characteristics (other than holdings or subsets of holdings) about each Fund and
information  derived therefrom,  including,  but not limited to, how each Fund's
investments are divided among various sectors, industries,  countries, value and
growth stocks,  bonds,  currencies and cash,  types of bonds,  bond  maturities,
duration,  bond coupons and bond credit  quality  ratings so long as each Fund's
holdings could not be derived from such information.



                                       26
<PAGE>

Registered  investment  companies  that are subadvised by DeAM may be subject to
different portfolio holdings disclosure policies,  and neither DeAM nor a Fund's
Directors  exercise  control over such policies.  In addition,  separate account
clients of DeAM have access to their portfolio holdings and are not subject to a
Fund's portfolio  holdings  disclosure policy. The portfolio holdings of some of
the Funds  subadvised by DeAM and some of the separate  accounts managed by DeAM
may substantially overlap with the portfolio holdings of a Fund.

DeAM also  manages  certain  unregistered  commingled  trusts and creates  model
portfolios,  the portfolio holdings of which may substantially  overlap with the
portfolio  holdings of a Fund. To the extent that investors in these  commingled
trusts  or  recipients  of model  portfolio  holdings  information  may  receive
portfolio  holdings  information  of their  trust or of a model  portfolio  on a
different basis from that on which Fund portfolio  holdings  information is made
public,  DeAM has implemented  procedures  reasonably designed to encourage such
investors and recipients to keep such information  confidential,  and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that a Fund's  policies and procedures with respect to the
disclosure  of  portfolio  holdings  information  will  protect  a Fund from the
potential  misuse of portfolio  holdings  information  by those in possession of
that information.


Regulatory Matters and Legal Proceedings

On December 21, 2006,  Deutsche Asset Management  ("DeAM")  settled  proceedings
with the  Securities and Exchange  Commission  ("SEC") and the New York Attorney
General on behalf of Deutsche  Asset  Management,  Inc.  ("DAMI") and DIMA,  the
investment advisors to many of the DWS Scudder funds,  regarding  allegations of
improper  trading of fund  shares at DeAM and at the legacy  Scudder  and Kemper
organizations prior to their acquisition by DeAM in April 2002. These regulators
alleged that although the prospectuses for certain funds in the regulators' view
indicated  that the funds did not permit market  timing,  DAMI and DIMA breached
their  fiduciary  duty to those  funds in that their  efforts  to limit  trading
activity in the funds were not effective at certain times.  The regulators  also
alleged that DAMI and DIMA  breached  their  fiduciary  duty to certain funds by
entering into certain market timing  arrangements with investors.  These trading
arrangements  originated  in  businesses  that  existed  prior to the  currently
constituted  DeAM  organization,  which  came  together  as a result of  various
mergers of the legacy Scudder,  Kemper and Deutsche fund groups,  and all of the
arrangements were terminated prior to the start of the regulatory investigations
that  began in the summer of 2003.  No  current  DeAM  employee  approved  these
trading arrangements.  Under the terms of the settlements, DAMI and DIMA neither
admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only,  provide for payment of  disgorgement  in
the  amount  of $17.2  million.  The terms of the  settlement  with the New York
Attorney  General  provide for payment of  disgorgement  in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million.  The total amount payable by DeAM,
approximately  $122.3  million,  will  be  distributed  to  shareholders  of the
affected  funds in  accordance  with a  distribution  plan to be  developed by a
distribution  consultant.  The funds'  investment  advisors do not believe these
amounts  will have a material  adverse  financial  impact on them or  materially
affect their ability to perform  under their  investment  management  agreements
with the DWS funds.  The  above-described  amounts are not  material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders,  DeAM is subject to certain  undertakings
regarding  the conduct of its business in the future,  including  formation of a
Code of Ethics  Oversight  Committee  to oversee all matters  relating to issues
arising  under  the  advisors'  Code of  Ethics;  establishment  of an  Internal
Compliance Controls Committee having


                                       27
<PAGE>

overall compliance  oversight  responsibility of the advisors;  engagement of an
Independent  Compliance  Consultant  to  conduct a  comprehensive  review of the
advisors'  supervisory  compliance and other policies and procedures designed to
prevent and detect  breaches of fiduciary  duty,  breaches of the Code of Ethics
and federal  securities law violations by the advisors and their employees;  and
commencing  in 2008,  the  advisors  shall  undergo  a  compliance  review by an
independent third party.

In addition,  DeAM is subject to certain  further  undertakings  relating to the
governance  of the mutual funds,  including  that at least 75% of the members of
the  Boards  of  Trustees/Directors  overseeing  the DWS  Funds  continue  to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors
continue to be  independent  of DeAM;  DeAM  maintain  existing  management  fee
reductions  for  certain  funds  for a period  of five  years  and not  increase
management  fees for these certain funds during this period;  the funds retain a
senior  officer (or  independent  consultants,  as applicable)  responsible  for
assisting in the review of fee  arrangements  and  monitoring  compliance by the
funds and the investment advisors with securities laws,  fiduciary duties, codes
of ethics and other compliance policies,  the expense of which shall be borne by
DeAM; and periodic account  statements,  fund prospectuses and the mutual funds'
web site contain  additional  disclosure  and/or tools that assist  investors in
understanding  the fees and costs associated with an investment in the funds and
the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education  contributions  totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On  September  28,  2006,  the SEC and the National  Association  of  Securities
Dealers  ("NASD")  announced  final  agreements  in  which  Deutsche  Investment
Management Americas Inc. ("DIMA"),  Deutsche Asset Management, Inc. ("DAMI") and
Scudder  Distributors,  Inc. ("DWS-SDI") (now known as DWS Scudder Distributors,
Inc.)  settled  administrative  proceedings  regarding  disclosure  of brokerage
allocation  practices in connection  with sales of the Scudder Funds' (now known
as the DWS Scudder Funds) shares during  2001-2003.  The agreements with the SEC
and NASD are reflected in orders which state, among other things,  that DIMA and
DAMI failed to disclose potential conflicts of interest to the funds' Boards and
to  shareholders   relating  to  DWS-SDI's  use  of  certain  funds'   brokerage
commissions to reduce revenue sharing costs to broker-dealer  firms with whom it
had  arrangements to market and distribute  Scudder Fund shares.  These directed
brokerage practices were discontinued in October 2003.

Under the terms of the  settlements,  in which DIMA,  DAMI and  DWS-SDI  neither
admitted  nor denied any of the  regulators'  findings,  DIMA,  DAMI and DWS-SDI
agreed to pay  disgorgement,  prejudgment  interest  and civil  penalties in the
total amount of $19.3 million. The portion of the settlements distributed to the
funds was approximately $17.8 million and was paid to the funds as prescribed by
the settlement  orders based upon the amount of brokerage  commissions from each
fund used to satisfy revenue sharing  agreements  with  broker-dealers  who sold
fund shares.

As part of the  settlements,  DIMA,  DAMI and DWS-SDI  also agreed to  implement
certain measures and undertakings relating to revenue sharing payments including
making  additional  disclosures  in the funds'  Prospectuses  or  Statements  of
Additional  Information,  adopting or modifying relevant policies and procedures
and providing regular reporting to the fund Boards.

Additional  information announced by DeAM regarding the terms of the settlements
is available at www.dws-scudder.com/regulatory_settlements.

The matters alleged in the regulatory  settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons,  including certain DWS
funds,  the  funds'  investment  advisors  and  their  affiliates,  and  certain
individuals,  including  in some cases fund  Trustees/Directors,  officers,  and
other parties.  Each DWS fund's  investment  advisor has agreed to indemnify the
applicable  DWS funds in connection  with these  lawsuits,  or other lawsuits or
regulatory actions that may be filed making similar allegations.

                                       28
<PAGE>

Based on currently available information, the funds' investment advisors believe
the likelihood that the pending lawsuits will have a material adverse  financial
impact on a DWS fund is remote and such  actions  are not  likely to  materially
affect their ability to perform  under their  investment  management  agreements
with the DWS funds.


                             MANAGEMENT OF THE FUNDS

Investment Advisor


On April 5,  2002,  100% of Zurich  Scudder  Investments,  Inc.,  not  including
certain UK  operations  (known as  Threadneedle  Investments),  was  acquired by
Deutsche Bank AG and changed its name to Deutsche Investment Management Americas
Inc. ("DIMA" or the "Advisor"). DIMA, which is part of Deutsche Asset Management
("DeAM"),  is the investment advisor for the Funds. Under the supervision of the
Board of Directors of each Fund, with headquarters at 345 Park Avenue, New York,
New York  10154,  DIMA makes the  Funds'  investment  decisions,  buys and sells
securities for the Funds and conducts  research that leads to these purchase and
sale decisions.  The Advisor  manages each Fund's daily  investment and business
affairs  subject to the  policies  established  by each  Corporation's  Board of
Directors.  DIMA and its  predecessors  have  more  than 80 years of  experience
managing  mutual  funds.  DIMA  provides  a full  range of  investment  advisory
services to institutional and retail clients.  The Funds' investment  advisor is
also responsible for selecting brokers and dealers and for negotiating brokerage
commissions  and dealer  charges.  The  Advisor's  duties are  described in more
detail below.

DeAM is the  marketing  name in the US for the asset  management  activities  of
Deutsche Bank AG, DIMA,  Deutsche  Asset  Management  Inc.,  Deutsche Bank Trust
Company  Americas  and DWS  Trust  Company.  DeAM is a global  asset  management
organization  that offers a wide range of  investing  expertise  and  resources,
including  hundreds of portfolio  managers and analysts,  and an office  network
that reaches the world's major investment centers.  This  well-resourced  global
investment  platform brings together a wide variety of experience and investment
insight, across industries, regions, asset classes and investing styles. DIMA is
an indirect,  wholly-owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a
major global  banking  institution  that is engaged in a wide range of financial
services,  including investment  management,  mutual funds, retail,  private and
commercial banking,  investment banking and insurance. The term "DWS Scudder" is
the  designation  given to the products  and  services  provided by DeAM and its
affiliates to the DWS Mutual Funds.


The Advisor provides  investment  counsel for many individuals and institutions,
including  insurance  companies,  industrial  corporations,  and  financial  and
banking  organizations,  as well as  providing  investment  advice  to open- and
closed-end SEC registered funds.

In certain cases, the investments for a Fund are managed by the same individuals
who manage one or more  other  mutual  funds  advised by the  Advisor  that have
similar names, objectives and investment styles. You should be aware that a Fund
is likely to differ from these other mutual funds in size, cash flow pattern and
tax matters. Accordingly, the holdings and performance of a Fund can be expected
to vary from those of these other mutual funds.

Certain  investments  may be  appropriate  for a Fund and also for other clients
advised by the Advisor.  Investment  decisions  for a Fund and other clients are
made with a view to achieving their respective  investment  objectives and after
consideration  of such factors as their current  holdings,  availability of cash
for  investment  and the  size of their  investments  generally.  Frequently,  a
particular  security  may be bought or sold for only one client or in  different
amounts  and at  different  times for more  than one but less than all  clients.
Likewise,  a particular  security may be bought for one or more clients when one
or more other clients are selling the security. In addition,  purchases or sales
of the same  security  may be made for two or more  clients on the same day.  In
such event,  such  transactions  will be allocated among the clients in a manner
believed by the Advisor to be equitable to each. In some cases,  this  procedure
could have an adverse effect on the price or amount of the securities  purchased
or sold by a Fund.  Purchase  and sale  orders for a Fund may be  combined  with
those of other  clients of the  Advisor in the  interest of  achieving  the most
favorable net results to a Fund.

                                       29
<PAGE>

The Boards and the  shareholders  of each Fund recently  approved an amended and
restated investment management agreement (the "Investment Management Agreement")
for the Funds.  Pursuant to each Investment  Management  Agreement,  the Advisor
provides  continuing  investment  management  of the  assets  of each  Fund.  In
addition to the  investment  management of the assets of each Fund,  the Advisor
determines the  investments to be made for each Fund,  including what portion of
its assets  remain  uninvested  in cash or cash  equivalents,  and with whom the
orders for  investments  are placed,  consistent  with each  Fund's  policies as
stated in its  Prospectus  and SAI,  or as adopted  by each  Fund's  Board.  The
Advisor  will  also  monitor,  to  the  extent  not  monitored  by  each  Fund's
administrator or other agent, the Fund's  compliance with its investment and tax
guidelines and other compliance policies.

The Advisor  provides  assistance to each Fund's Board in valuing the securities
and other  instruments held by each Fund, to the extent  reasonably  required by
valuation policies and procedures that may be adopted by each Fund.

Pursuant to each Investment Management Agreement,  (unless otherwise provided in
the agreement or as determined by each Fund's Board and to the extent  permitted
by applicable  law), the Advisor pays the  compensation  and expenses of all the
Board  members,  officers,  and executive  employees of the Fund,  including the
Fund's share of payroll taxes, who are affiliated persons of the Advisor.

Each  Investment  Management  Agreement  provides  that  the  Fund is  generally
responsible  for expenses  that  include:  fees payable to the Advisor;  outside
legal,  accounting  or auditing  expenses,  including  with  respect to expenses
related to negotiation,  acquisition or  distribution of portfolio  investments;
maintenance  of books and records that are  maintained  by the Fund,  the Fund's
custodian,  or other agents of the Fund; taxes and  governmental  fees; fees and
expenses   of  the   Fund's   accounting   agent,   custodian,   sub-custodians,
depositories,  transfer  agents,  dividend  reimbursing  agents and  registrars;
payment  for  portfolio  pricing  or  valuation   services  to  pricing  agents,
accountants,  bankers and other specialists,  if any;  brokerage  commissions or
other costs of  acquiring  or disposing  of any  portfolio  securities  or other
instruments  of the  Fund;  and  litigation  expenses  and  other  extraordinary
expenses not incurred in the ordinary course of the Fund's business.

Each Investment  Management  Agreement allows the Advisor to delegate any of its
duties under the  Agreement to a  subadvisor,  subject to a majority vote of the
Board of the Fund,  including  a  majority  of the Board who are not  interested
persons of the Fund, and, if required by applicable  law,  subject to a majority
vote of the Fund's shareholders.

Each  Investment  Management  Agreement  provides  that the Advisor shall not be
liable for any error of judgment  or mistake of law or for any loss  suffered by
the Fund in  connection  with matters to which the agreement  relates,  except a
loss resulting from willful  malfeasance,  bad faith or gross  negligence on the
part of the Advisor in the performance of its duties or from reckless  disregard
by the  Advisor  of  its  obligations  and  duties  under  the  agreement.  Each
Investment  Management  Agreement may be terminated at any time, without payment
of penalty,  by either party or by vote of a majority of the outstanding  voting
securities of the Fund on 60 days' written notice.

For all services provided under each Investment Management Agreement,  the Funds
pay the advisor a fee, computed daily and paid monthly, at the annual rates as a
percentage of net assets shown below:

DWS Global Thematic Fund                           Management Fee Rate
------------------------                           -------------------

$0-$500 million                                            0.915%
$500 million-$1 billion                                    0.865%
$1 billion-$1.5 billion                                    0.815%
$1.5 billion-$2 billion                                    0.765%
over $2 billion                                            0.715%

                                       30
<PAGE>

DWS International Fund                             Management Fee Rate
----------------------                             -------------------

$0-$6 billion                                             0.59%
$6 billion-$7 billion                                     0.54%
Over $7 billion                                          0.515%

The fee is  payable  monthly,  provided  that each  Fund will make such  interim
payments as may be  requested  by the Advisor not to exceed 75% of the amount of
the fee then accrued on the books of the Fund and unpaid.

The advisory fees paid by each Fund for its last three fiscal years are shown in
the table below.

<TABLE>
<CAPTION>


Fund                                         Fiscal Year 2007         Fiscal Year 2006*      Fiscal Year 2005*
----                                         ----------------         -----------------      -----------------

<S>                                              <C>                      <C>                     <C>
DWS Global Thematic Fund                         $15,662,093              $10,935,782             $8,883,911
DWS International Fund                           $10,999,420              $10,835,832            $10,735,566

</TABLE>

* Prior to June 1, 2006, these fees included an administrative service fee.


DWS  Global  Thematic  Fund.   Through  September  30,  2008,  the  Advisor  has
contractually  agreed  to  waive  all or a  portion  of its  management  fee and
reimburse  or pay  operating  expenses to the extent  necessary  to maintain the
fund's total operating  expenses at 1.90% for Class R shares,  excluding certain
expenses such as extraordinary expenses, taxes, brokerage and interest.

DWS International Fund. Through November 30, 2010, the Advisor has contractually
agreed to waive all or a portion  of its  management  fee and  reimburse  or pay
operating  expenses of the fund to the extent  necessary  to maintain the fund's
total operating  expenses at 1.28%,  2.03%, 2.03% and 0.88%,  respectively,  for
Class A, Class B, Class C and  Institutional  Class  shares,  excluding  certain
expenses such as extraordinary expenses, taxes, brokerage and interest.


The Advisor may enter into  arrangements with affiliates and third party service
providers to perform  various  administrative,  back-office  and other  services
relating to client accounts.  Such service providers may be located in the US or
in non-US jurisdictions.

In addition,  the Boards and  shareholders of each Fund recently  approved a new
subadvisor approval policy for the Fund (the "Subadvisor Approval Policy").  The
Subadvisor  Approval Policy permits the Advisor,  subject to the approval of the
applicable  Board,  including a majority of its  independent  board members,  to
appoint and replace  subadvisors  and to amend  sub-advisory  contracts  without
obtaining  shareholder  approval.  Under the  Subadvisor  Approval  Policy,  the
Boards, including their independent board members, will continue to evaluate and
approve all new sub-advisory  contracts  between the Advisor and any subadvisor,
as well as all changes to any existing sub-advisory  contract.  Each Fund cannot
implement  the  Subadvisor  Approval  Policy  without  the SEC  either  adopting
revisions  to current  rules (as it proposed to do in October  2003) or granting
the Fund exemptive  relief from existing rules.  Each Fund and the Advisor would
be subject to certain conditions imposed by the SEC (and certain conditions that
may be imposed in the future within either exemptive relief or a rule) to ensure
that the interests of the Fund and its  shareholders  are  adequately  protected
whenever the Advisor acts under the Subadvisor  Approval  Policy,  including any
shareholder notice requirements.

                                       31
<PAGE>

Officers and  employees  of the Advisor from time to time may have  transactions
with various  banks,  including the Funds'  custodian  bank. It is the Advisor's
opinion that the terms and conditions of those  transactions which have occurred
were  not   influenced  by  existing  or  potential   custodial  or  other  Fund
relationships.


Pursuant to DeAM  procedures  approved by the Boards on behalf of the DWS funds,
proof of claim forms are  routinely  filed on behalf of the DWS funds by a third
party service provider,  with certain limited exceptions.  The Boards of the DWS
funds receive periodic reports regarding the implementation of these procedures.


Administrative Agreement


Effective  June 1, 2006,  each Fund entered into a new  administrative  services
agreement with the Advisor (the "Administrative  Services Agreement"),  pursuant
to which the Advisor  provides  administrative  services to the Fund  including,
among others,  providing the Fund with personnel,  preparing and making required
filings on behalf of the Fund,  maintaining  books and records for the Fund, and
monitoring the valuation of Fund securities. For all services provided under the
Administrative  Services  Agreement,  each Fund pays the Advisor a fee, computed
daily and paid monthly, of 0.10% of the Fund's average daily net assets.


Under the  Administrative  Services  Agreement,  the Advisor is  obligated  on a
continuous  basis to provide such  administrative  services as each Board of the
Funds reasonably deems necessary for the proper administration of the Funds. The
Advisor  provides each Fund with  personnel;  arranges for the  preparation  and
filing of the Fund's tax  returns;  prepares  and  submits  reports  and meeting
materials to the Board and the  shareholders;  prepares and files updates to the
Fund's  prospectus  and  statement of  additional  information  as well as other
reports required to be filed by the SEC; maintains the Fund's records;  provides
the Fund with office space, equipment and services;  supervises,  negotiates the
contracts of and monitors the performance of third parties contractors; oversees
the  tabulation of proxies;  monitors the valuation of portfolio  securities and
monitors  compliance  with  Board-approved  valuation  procedures;   assists  in
establishing  the  accounting  and tax  policies  of the  Fund;  assists  in the
resolution  of  accounting  issues  that may  arise  with  respect  to the Fund;
establishes  and  monitors the Fund's  operating  expense  budgets;  reviews and
processes the Fund's bills;  assists in determining  the amount of dividends and
distributions  available to be paid by the Fund,  prepares and arranges dividend
notifications  and provides  information to agents to effect  payments  thereof;
provides to the Board periodic and special  reports;  provides  assistance  with
investor and public relations  matters;  and monitors the registration of shares
under  applicable  federal and state law. The Advisor also performs certain fund
accounting   services  under  the   Administrative   Services   Agreement.   The
Administrative  Services  Agreement provides that the Advisor will not be liable
under the Administrative Services Agreement except for willful misfeasance,  bad
faith or  negligence  in the  performance  of its  duties  or from the  reckless
disregard by it of its duties and obligations thereunder.

                                       32
<PAGE>


For DWS Global  Thematic  Fund,  for the period from June 1, 2006 through August
31, 2006, the Advisor received an Administration  Fee of $318,009.  For the year
ended August 31, 2007, the Advisor received an Administration Fee of $1,857,061,
of which $187,665 is unpaid at August 31, 2007.

For DWS International  Fund, for the period from June 1, 2006 through August 31,
2006, the Advisor received an Administration Fee of $410,578. For the year ended
August 31, 2007, the Advisor received an  Administration  Fee of $1,884,854,  of
which $187,079 is unpaid at August 31, 2007.


Pursuant to an agreement between the Administrator and Brown Brothers Harriman &
Co., ("BBH"), the Administrator has delegated certain  administrative  functions
to  BBH.  The  costs  and  expenses  of  such   delegation   are  borne  by  the
Administrator, not by the Fund.


Pursuant  to  Deutsche  Asset  Management  procedures  approved by the Boards on
behalf of the DWS funds,  proof of claim forms are routinely  filed on behalf of
the  DWS  funds  by  a  third  party  service  provider,  with  certain  limited
exceptions.  The Boards of the DWS funds receive periodic reports  regarding the
implementation of these procedures.


Codes of Ethics

The Funds,  the Advisor and the Funds'  principal  underwriter have each adopted
codes of ethics under Rule 17j-1 under the 1940 Act. Board members,  officers of
the  Corporations  and  employees of the Advisor and principal  underwriter  are
permitted to make personal securities  transactions,  including  transactions in
securities  that may be purchased or held by the Funds,  subject to requirements
and restrictions set forth in the applicable Code of Ethics.  The Advisor's Code
of Ethics contains provisions and requirements  designed to identify and address
certain  conflicts of interest  between personal  investment  activities and the
interests  of the  Funds.  Among  other  things,  the  Advisor's  Code of Ethics
prohibits  certain types of  transactions  absent prior  approval,  imposes time
periods  during  which  personal   transactions  may  not  be  made  in  certain
securities,  and requires the submission of duplicate broker  confirmations  and
quarterly reporting of securities transactions. Additional restrictions apply to
portfolio  managers,  traders,  research  analysts  and others  involved  in the
investment  advisory  process.  Exceptions to these and other  provisions of the
Advisor's Code of Ethics may be granted in particular circumstances after review
by appropriate personnel.

Compensation of Portfolio Managers


Each  Fund has been  advised  that the  Advisor  seeks to offer  its  investment
professionals  competitive  short-term  and  long-term  compensation.  Portfolio
managers and research professionals are paid (i) fixed base salaries,  which are
linked to job function,  responsibilities  and financial  services industry peer
comparison  and (ii)  variable  compensation,  which  is  linked  to  investment
performance, individual contributions to the team and DWS Scudder's and Deutsche
Bank's  financial  results.  Variable  compensation  may  include  a cash  bonus
incentive and  participation in a variety of long-term equity programs  (usually
in the form of Deutsche Bank equity).

Bonus  and  long-term   incentives   comprise  a  greater  proportion  of  total
compensation as an investment  professional's  seniority and compensation levels
increase.  Top performing  investment  professionals  earn a total  compensation
package  that is highly  competitive,  including  a bonus that is a multiple  of
their base  salary.  The amount of equity  awarded  under the  long-term  equity
programs is generally based on the individual's total  compensation  package and
may  comprise  from  0%-40%  of  the  total  compensation  award.  As  incentive
compensation increases,  the percentage of compensation awarded in Deutsche Bank
equity also increases. Certain senior investment professionals may be subject to
a mandatory diverting of a portion of their equity compensation into proprietary
mutual funds that they manage.

To  evaluate  its  investment  professionals,  the  Advisor  uses a  Performance
Management  Process.   Objectives  evaluated  by  the  process  are  related  to
investment  performance and generally take into account peer group and


                                       33
<PAGE>

benchmark  related  data.  The  ultimate  goal of this  process  is to link  the
performance of investment professionals with client investment objectives and to
deliver  investment  performance  that meets or exceeds clients' risk and return
objectives. When determining total compensation,  the Advisor considers a number
of quantitative and qualitative factors such as:

o        DWS  Scudder   performance   and  the  performance  of  Deutsche  Asset
         Management, quantitative measures which include 1, 3 and 5 year pre-tax
         returns versus benchmark (such as the benchmark used in the prospectus)
         and appropriate  peer group,  taking into  consideration  risk targets.
         Additionally, the portfolio manager's retail/institutional asset mix is
         weighted, as appropriate for evaluation purposes.

o        Qualitative  measures include  adherence to the investment  process and
         individual  contributions  to  the  process,  among  other  things.  In
         addition, the Advisor assesses compliance, risk management and teamwork
         skills.

o        Other factors,  including  contributions made to the investment team as
         well as  adherence  to  compliance,  risk  management,  and "living the
         values" of the Advisor,  are part of a  discretionary  component  which
         gives  management the ability to reward these behaviors on a subjective
         basis through bonus incentives.

In addition,  the Advisor analyzes  competitive  compensation levels through the
use of extensive market data surveys. Portfolio manager compensation is reviewed
and may be modified each year as appropriate  to reflect  changes in the market,
as well as to adjust the  factors  used to  determine  overall  compensation  to
promote good sustained investment performance.

Fund Ownership of Portfolio Managers

The following table shows the dollar range of shares owned  beneficially  and of
record by each Fund's portfolio  manager in the Fund as well as in all DWS Funds
as a group  (i.e.  those  funds  advised by  Deutsche  Asset  Management  or its
affiliates), including investments by their immediate family members sharing the
same household and amounts invested through retirement and deferred compensation
plans.  This  information  is provided as of each Fund's most recent fiscal year
end.

<TABLE>
<CAPTION>

                                                        Dollar Range of                Dollar Range of All DWS
Name of Portfolio Manager                              Fund Shares Owned                  Fund Shares Owned
-------------------------                              -----------------                  -----------------

<S>                                                   <C>                                <C>
Oliver Kratz - DWS Global Thematic Fund               $100,000 - $500,000                $100,000 - $500,000
Matthias Knerr - DWS International Fund               $100,000 - $500,000               $500,000 - $1,000,000
</TABLE>

Conflicts of Interest

In addition to managing the assets of the Fund,  each Fund's  portfolio  manager
may have responsibility for managing other client accounts of the Advisor or its
affiliates.  The tables below show, for each portfolio  manager,  the number and
asset size of (1) SEC registered  investment companies (or series thereof) other
than the Fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other  accounts  (e.g.,  accounts  managed for  individuals or
organizations)  managed by each  portfolio  manager.  The  tables  also show the
number of  performance  based fee  accounts,  as well as the total assets of the
accounts for which the advisory fee is based on the  performance of the account.
This information is provided as of each Fund's most recent fiscal year end.

                                       34
<PAGE>

Other SEC Registered Investment Companies Managed:

<TABLE>
<CAPTION>

                                                   Number of      Total Assets of   Number of Investment
                                                  Registered        Registered        Company Accounts     Total Assets of
                                                  Investment        Investment              with           Performance-Based
Name of Portfolio Manager                          Companies         Companies      Performance-Based Fee    Fee Accounts
-------------------------                          ---------         ---------      ---------------------    ------------

<S>                                                      <C>          <C>                     <C>                 <C>
Oliver Kratz - DWS Global Thematic Fund                  6            $808,948,012            0                   $0
Matthias Knerr - DWS International Fund                  3          $1,223,250,282            0                   $0

Other Pooled Investment Vehicles Managed:

                                                   Number of      Total Assets of     Number of Pooled     Total Assets of
                                                    Pooled            Pooled         Investment Vehicle      Performance-
                                                  Investment        Investment          Accounts with         Based Fee
Name of Portfolio Manager                          Vehicles          Vehicles       Performance-Based Fee      Accounts
-------------------------                          --------          --------       ---------------------      --------

Oliver Kratz - DWS Global Thematic Fund                 13           $513,333,402             0                   $0
Matthias Knerr - DWS International Fund                  4            $83,151,941             0                   $0

Other Accounts Managed:

                                                                                       Number of Other      Total Assets of
                                                                                        Accounts with        Performance-
                                                   Number of      Total Assets of    Performance-Based         Based Fee
Name of Portfolio Manager                       Other Accounts    Other Accounts             Fee               Accounts
-------------------------                       --------------    --------------             ---               --------

Oliver Kratz - DWS Global Thematic Fund                  11        $1,504,399,612             1              $232,750,440
Matthias Knerr - DWS International Fund                   4          $927,015,289             0                        $0
</TABLE>

In  addition  to the  accounts  above,  an  investment  professional  may manage
accounts in a personal  capacity that may include  holdings that are similar to,
or the same as,  those of the Fund.  The  Advisor  has in place a Code of Ethics
that is designed to address  conflicts of interest and that, among other things,
imposes  restrictions  on the ability of portfolio  managers  and other  "access
persons" to invest in securities  that may be  recommended or traded in the Fund
and other client accounts.

Real,  potential  or apparent  conflicts  of interest may arise when a portfolio
manager has day-to-day  portfolio  management  responsibilities  with respect to
more than one fund or account, including the following:

o        Certain  investments may be appropriate for the Fund and also for other
         clients advised by the Advisor, including other client accounts managed
         by the Fund's portfolio manager.  Investment decisions for the Fund and
         other  clients  are  made  with a view to  achieving  their  respective
         investment  objectives and after consideration of such factors as their
         current  holdings,  availability of cash for investment and the size of
         their  investments  generally.  A particular  security may be bought or
         sold for only one client or in different amounts and at different times
         for more than one but less than all clients.  Likewise, because clients
         of the Advisor may have differing investment  strategies,  a particular
         security  may be bought for one or more  clients when one or more other
         clients are selling the security.  The investment  results achieved for
         the Fund may differ from the results  achieved for other clients of the
         Advisor.  In addition,  purchases or sales of the same  security may be
         made for two or more  clients  on the same  day.  In such  event,  such
         transactions  will be allocated  among the clients in a manner believed
         by the Advisor to be most equitable to each client, generally utilizing
         a pro  rata  allocation  methodology.  In some  cases,  the  allocation
         procedure could  potentially  have an adverse effect or positive effect
         on the price or amount of the securities purchased or


                                       35
<PAGE>

         sold by the Fund. Purchase and sale orders for the Fund may be combined
         with those of other clients of the Advisor in the interest of achieving
         the most favorable net results to the Fund and the other clients.

o        To the  extent  that  a  portfolio  manager  has  responsibilities  for
         managing  multiple client  accounts,  a portfolio  manager will need to
         divide time and attention among relevant accounts. The Advisor attempts
         to minimize these conflicts by aligning its portfolio  management teams
         by  investment  strategy and by  employing  similar  investment  models
         across multiple client accounts.

o        In some cases, an apparent  conflict may arise where the Advisor has an
         incentive, such as a performance-based fee, in managing one account and
         not with  respect to other  accounts it manages.  The Advisor  will not
         determine  allocations based on whether it receives a performance-based
         fee from the client. Additionally, the Advisor has in place supervisory
         oversight processes to periodically monitor performance  deviations for
         accounts with like strategies.

o        The Advisor and its affiliates and the investment  team of the Fund may
         manage other mutual funds and separate  accounts on a long-short basis.
         The  simultaneous  management  of long  and  short  portfolios  creates
         potential  conflicts  of  interest  including  the risk that short sale
         activity  could   adversely   affect  the  market  value  of  the  long
         positions(and  vice versa),  the risk arising from sequential orders in
         long and short  positions,  and the  risks  associated  with  receiving
         opposing  orders at the same time.  The Advisor has adopted  procedures
         that it believes are reasonably  designed to mitigate  these  potential
         conflicts  of  interest.  Included  in these  procedures  are  specific
         guidelines  developed to ensure fair and  equitable  treatment  for all
         clients whose accounts are managed by each Fund's portfolio  management
         team. The Advisor and the portfolio  management  team have  established
         monitoring  procedures,  a protocol for supervisory reviews, as well as
         compliance  oversight  to ensure that  potential  conflicts of interest
         relating to this type of activity are properly addressed.

The Advisor is owned by Deutsche Bank AG, a  multi-national  financial  services
company.  Therefore,  the Advisor is affiliated  with a variety of entities that
provide, and/or engage in commercial banking, insurance,  brokerage,  investment
banking,  financial  advisory,  broker-dealer  activities  (including  sales and
trading),  hedge funds, real estate and private equity investing, in addition to
the provision of investment  management services to institutional and individual
investors.  Since  Deutsche  Bank AG, its  affiliates,  directors,  officers and
employees (the "Firm") are engaged in businesses  and have interests  other than
managing  asset  management  accounts,   such  other  activities  involve  real,
potential or apparent  conflicts of interest.  These  interests  and  activities
include potential  advisory,  transactional  and financial  activities and other
interests  in  securities  and  companies  that may be  directly  or  indirectly
purchased  or sold by the Firm for its  clients'  advisory  accounts.  These are
considerations  of which  advisory  clients  should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's  advisory  clients.
The Advisor has  instituted  business and  compliance  policies,  procedures and
disclosures  that are  designed to identify,  monitor and mitigate  conflicts of
interest and, as appropriate, to report them to the Fund's Board.



                                       36
<PAGE>


                                       37
<PAGE>


                                       38
<PAGE>


                             FUND SERVICE PROVIDERS

Principal  Underwriter.  Pursuant to an Underwriting and  Distribution  Services
Agreement   ("Distribution   Agreement"),   DWS   Scudder   Distributors,   Inc.
("DWS-SDI"), 222 South Riverside Plaza, Chicago, Illinois 60606, an affiliate of
the Advisor, is the principal underwriter and distributor for the Class A, Class
B and Class C shares of each Fund,  Class R shares for DWS Global  Thematic Fund
and Institutional  Class shares of DWS  International  Fund and acts as agent of
each Fund in the continuous offering of its shares. Each Distribution  Agreement
for the  Funds,  dated  April 5,  2002 was last  approved  by the  Directors  on
September 28, 2006. Each Distribution  Agreement will continue from year to year
thereafter  only if its continuance is approved for each class at least annually
by a vote of the Board members of each Fund, including the Directors who are not
interested  persons  of the Fund and who have no  direct or  indirect  financial
interest in the Distribution Agreement.

Each  Distribution  Agreement  automatically  terminates  in  the  event  of its
assignment  and may be terminated  for a class at any time without  penalty by a
Fund or by DWS-SDI upon 60 days' notice.  Termination  by each Fund with


                                       39
<PAGE>

respect to a class may be by vote of (i) a majority of the Board members who are
not interested  persons of the Fund and who have no direct or indirect financial
interest in the Distribution  Agreement,  or (ii) a "majority of the outstanding
voting securities" of the class of each Fund, as defined under the 1940 Act. All
material  amendments  must be approved by the Board of  Directors  in the manner
described  above  with  respect  to  the  continuation  of  the  Agreement.  The
provisions concerning continuation,  amendment and termination of a Distribution
Agreement are on a series by series and class by class basis.

DWS-SDI  bears  all  of its  expenses  of  providing  services  pursuant  to the
Distribution Agreement,  including the payment of any commissions. The Funds pay
the cost for the prospectuses and shareholder  reports to be typeset and printed
for existing shareholders,  and DWS-SDI, as principal underwriter,  pays for the
printing and distribution of copies thereof used in connection with the offering
of shares to prospective  investors.  DWS-SDI also pays for supplementary  sales
literature  and  advertising  costs.  As indicated  under  "Purchase of Shares,"
DWS-SDI retains the sales charge upon the purchase of Class A shares and pays or
allows  concessions  or  discounts  to firms for the sale of the Funds'  shares.
DWS-SDI  receives no  compensation  from the Funds as principal  underwriter for
Class A and R shares.  DWS-SDI receives compensation from the Funds as principal
underwriter for Class B, Class C and Class R shares as applicable.

Shareholder and  administrative  services are provided to each Fund on behalf of
Class A,  Class B,  Class C and Class R  shareholders,  as  applicable,  under a
Shareholder  Services  Agreement (the "Services  Agreement") with DWS-SDI.  Each
Services  Agreement  continues  in  effect  from  year  to  year so long as such
continuance is approved for the Fund at least annually by a vote of the Board of
the applicable Fund,  including the Board members who are not interested persons
of the  Fund  and who have no  direct  or  indirect  financial  interest  in the
Services  Agreement.  Each Services  Agreement  automatically  terminates in the
event of its assignment  and may be terminated at any time without  penalty by a
Fund or by DWS-SDI upon 60 days' notice.  Termination  with respect to the Class
A, B, C or R shares of a Fund may be by a vote of (i) the  majority of the Board
members of the Fund who are not  interested  persons of the Fund and who have no
direct or indirect  financial  interest  in the  Services  Agreement,  or (ii) a
"majority of the outstanding voting securities" of the Class A, B C or R shares,
as defined under the 1940 Act. Each Services  Agreement may not be amended for a
class to increase  materially the fee to be paid by the Fund without approval of
a majority of the outstanding  voting  securities of such class of the Fund, and
all material  amendments must in any event be approved by the Board of Directors
in the manner  described above with respect to the  continuation of the Services
Agreement.

Under  the  Services   Agreements,   DWS-SDI  may  provide  or  appoint  various
broker-dealer  firms and other  service or  administrative  firms  ("firms")  to
provide  information  and services to investors  in a Fund.  Typically,  DWS-SDI
appoints  firms that provide  services  and  facilities  for their  customers or
clients who are  investors in a Fund.  Firms  appointed by DWS-SDI  provide such
office space and equipment,  telephone  facilities and personnel as is necessary
or beneficial  for providing  information  and services to their  clients.  Such
services and assistance may include,  but are not limited to,  establishing  and
maintaining   accounts  and   records,   processing   purchase  and   redemption
transactions, answering routine inquiries regarding a Fund, providing assistance
to clients in changing dividend and investment options, account designations and
addresses and such other administrative services as may be agreed upon from time
to time and permitted by applicable statute, rule or regulation.

DWS-SDI bears all of its expenses of providing  those  services  pursuant to the
Services Agreements, including the payment of a service fee to firms (as defined
below).  As indicated under the Rule 12b-1 Plan,  DWS-SDI receives  compensation
from the Funds for its services under the Services Agreements.


                                       40
<PAGE>


Rule 12b-1 Plans

Each Fund has  adopted a plan  pursuant to Rule 12b-1 under the 1940 Act (each a
"Rule 12b-1  Plan") that  provides for fees payable as an expense of the Class B
shares,  Class  C and  Class R  shares  that  are  used  by  DWS-SDI  to pay for
distribution  services  for those  classes.  Pursuant  to each Rule 12b-1  Plan,
shareholder and  administrative  services are provided to the applicable Fund on
behalf  of its  Class A, B, C and R  shareholders  under  each  Fund's  Services
Agreement  with  DWS-SDI.  Because  12b-1 fees are paid out of Fund assets on an
ongoing basis, they will, over time,  increase the cost of an investment and may
cost more than other types of sales charges.

The Rule  12b-1  distribution  plans  for  Class B,  Class C and  Class R shares
provide  alternative methods for paying sales charges and may help funds grow or
maintain  asset  levels to provide  operational  efficiencies  and  economies of
scale.   Rule  12b-1   service  plans   provide   compensation   to  DWS-SDI  or
intermediaries  for  post-sales  servicing.  Since each  Distribution  Agreement
provides  for fees  payable as an expense of the Class B shares,  Class C shares
and Class R shares that are used by DWS-SDI to pay for distribution and services
for those  classes,  the agreement is approved and reviewed  separately  for the
Class B shares,  Class C shares and Class R shares in accordance with Rule 12b-1
under the 1940 Act,  which  regulates the manner in which an investment  company
may, directly or indirectly,  bear the expenses of distributing its shares.  The
Distribution  Agreement  may not be amended to increase  the fee to be


                                       41
<PAGE>

paid by a Fund with  respect to a class  without  approval  by a majority of the
outstanding voting securities of such class of the Fund. Similarly, the Services
Agreement is approved and reviewed  separately  for the Class A shares,  Class B
shares, Class C shares and Class R shares in accordance with Rule 12b-1.

If a Rule 12b-1 Plan is terminated in accordance with its terms,  the obligation
of the  applicable  Fund to make payments to DWS-SDI  pursuant to the Rule 12b-1
Plan will  cease  and the Fund will not be  required  to make any  payments  not
previously accrued past the termination date. Thus, there is no legal obligation
for a Fund to pay any expenses  incurred by DWS-SDI  other than fees  previously
accrued  and payable  under a Rule 12b-1 Plan,  if for any reason the Rule 12b-1
Plan is  terminated  in  accordance  with its terms.  Future fees under the Rule
12b-1  Plan may or may not be  sufficient  to  cover  DWS-SDI  for its  expenses
incurred. On the other hand, under certain circumstances,  DWS-SDI might collect
in the  aggregate  over  certain  periods more in fees under the Rule 12b-1 Plan
than it has expended  over that same period in providing  distribution  services
for a Fund. In connection with Class B shares, for example,  if shares of a Fund
were to  appreciate  (resulting  in greater  asset base against which Rule 12b-1
fees are charged) and sales of the Fund's  shares were to decline  (resulting in
lower  expenditures  by DWS-SDI  under the Rule 12b-1 Plan),  fees payable could
exceed expenditures.  This may also happen over certain periods shorter than the
life of the Rule 12b-1 Plan  simply due to the timing of  expenses  incurred  by
DWS-SDI that is not matched to the timing of revenues  received  (e.g.,  a sales
commission may be paid by DWS-SDI  related to an investment in year 1, while the
Rule 12b-1 fee to DWS-SDI  related to that  investment  may accrue during year 1
through year 6 prior to  conversion of the  investment to Class A shares).  As a
result,  if DWS-SDI's  expenses are less than the Rule 12b-1 fees,  DWS-SDI will
retain its full fees and make a profit.

Distribution  Services.  For its  services  under  the  Distribution  Agreement,
DWS-SDI  receives  a fee from  each  Fund  under its Rule  12b-1  Plan,  payable
monthly,  at the annual  rate of 0.75% of  average  daily net assets of the Fund
attributable  to its Class B shares.  This fee is accrued daily as an expense of
Class B shares. DWS-SDI also receives any contingent deferred sales charges paid
with respect to Class B shares. DWS-SDI currently compensates firms for sales of
Class B shares at a commission rate of 3.75%.

For its services under the Distribution  Agreement,  DWS-SDI receives a fee from
each Fund under its Rule 12b-1  Plan,  payable  monthly,  at the annual  rate of
0.75% of average  daily net assets of the Fund  attributable  to Class C shares.
This fee is accrued daily as an expense of Class C shares.  Effective January 1,
2006, DWS-SDI no longer advances the first year distribution fee and service fee
to firms for  sales of Class C shares to  employer  sponsored  employee  benefit
plans using the OmniPlus subaccount record keeping system made available through
ADP, Inc. under an alliance with DWS-SDI and its  affiliates.  For periods after
the  first  year,  DWS-SDI  currently  pays  firms for sales of Class C shares a
distribution  fee, payable  quarterly,  at an annual rate of 0.75% of net assets
attributable  to Class C shares  maintained  and serviced by the firm.  This fee
continues  until  terminated  by DWS-SDI or the  applicable  Fund.  DWS-SDI also
receives  any  contingent  deferred  sales  charges paid with respect to Class C
shares.

For its services under the Distribution  Agreement,  DWS-SDI receives a fee from
the DWS Global Thematic Fund under its 12b-1 Plan, payable monthly, at an annual
rate of 0.25% of average  daily net assets of the Fund  attributable  to Class R
shares.

Shareholder  Services.  For its services under the Services  Agreement,  DWS-SDI
receives a  shareholder  services  fee from each Fund  under a Rule 12b-1  Plan,
payable  monthly,  at an  annual  rate of up to 0.25% of the  average  daily net
assets of Class A, B, C and R shares of the Fund, as applicable.

With respect to Class A and R shares of a Fund, DWS-SDI pays each firm a service
fee,  payable  quarterly,  at an annual rate of up to 0.25% of the net assets in
Fund  accounts  that it  maintains  and services  attributable  to Class A and R
Shares,  respectively,  of a Fund,  commencing with the month after  investment.
With respect to Class B and Class C Shares of a Fund, DWS-SDI currently advances
to firms the  first-year  service  fee at a rate of up to 0.25% of the  purchase
price of such  shares.  For  periods  after the first  year,  DWS-SDI  currently
intends to pay firms a service fee at a rate of up to 0.25% (calculated  monthly
and paid quarterly) of the net assets attributable to Class B and Class C shares
of a Fund  maintained and serviced by the firm.  Firms to which service fees may
be paid include  affiliates  of DWS-SDI.  In addition  DWS-SDI may, from time to
time,  pay certain  firms from it own resources  additional  amounts for ongoing
administrative  services and assistance  provided to their customers and clients
who are shareholders of a Fund.

                                       42
<PAGE>

DWS-SDI also may provide  some of the above  services and may retain any portion
of the fee under the Services  Agreement not paid to firms to compensate  itself
for shareholder or administrative functions performed for a Fund. Currently, the
shareholder  services  fee payable to DWS-SDI is payable at an annual rate of up
to 0.25% of net  assets  based  upon Fund  assets in  accounts  for which a firm
provides  administrative  services and at the annual rate of 0.15% of net assets
based upon Fund assets in accounts  for which there is no firm of record  (other
than DWS-SDI) listed on a Fund's records. The effective shareholder services fee
rate to be charged  against all assets of each Fund while this  procedure  is in
effect will depend upon the  proportion  of Fund assets that is held in accounts
for  which a firm of record  provides  shareholder  services.  The Board of each
Fund,  in its  discretion,  may approve  basing the fee to DWS-SDI at the annual
rate of 0.25% on all Fund assets in the future.

Expenses  of the Funds paid in  connection  with the Rule  12b-1  Plans for each
class of shares are set forth below.  A portion of the  marketing  and sales and
operating expenses shown below could be considered overhead expenses.

Certain directors or officers of the Funds are also directors or officers of the
Advisor or DWS-SDI, as indicated under "Directors and Officers."





                                       43
<PAGE>


<TABLE>
<CAPTION>

                            Compensation to Underwriter and Firms                       Other Distribution Expenses
                                  for Calendar Year 2006                        Paid by Underwriter for Calendar Year 2006
                                  ----------------------                        -------------------------------------------

                                                                              Advertising,
                              12b-1 Fees    Compensation      Compensation      Sales,
                12b-1 Fees   (Shareholder  Paid by DWS-SDI   Paid by DWS-SDI  Literature
               (Distribution  Servicing    to Firms from     to Firms from       and                    Marketing  Postage
                Fee) Paid     Fee) Paid     Distribution     Shareholder     Promotional   Prospectus   and Sales   and     Interest
                to DWS-SDI    to DWS-SDI         Fee         Servicing Fee     Materials    Printing    Expenses   Mailing  Expenses
                ----------    ----------         ---         -------------     ---------    --------    --------   -------  --------
<S>                 <C>          <C>          <C>             <C>               <C>         <C>         <C>         <C>      <C>

DWS Global
Thematic Fund

Class A                         1,713                         200,669
Class B             89,825       238          414,329         38,578            50,532      3,770       13,250      3,307    47,318
Class C            224,563       129          554,701         150,172          306,056      22,853      81,162     20,148
Class R             7,790         8            6,805          13,947            12,721       849        3,012        841

DWS
International
Fund

Class A                        18,410                         551,199
Class B            224,516       155           50,262         72,750            6,850        445        1,466        443    715,978
Class C            173,077       92           169,034         51,862            17,157      1,155       3,789       1,094      0
</TABLE>







                                       44
<PAGE>

The  following  table  shows,  for  Class A  shares,  the  aggregate  amount  of
underwriting  commissions paid to DWS-SDI, the amount in commissions it paid out
to brokers and the amount of underwriting commissions retained by DWS-SDI.

<TABLE>
<CAPTION>

                                                                                  Aggregate          Aggregate
                                                Aggregate       Aggregate      Commissions Paid     Commissions
                                                  Sales        Commissions            to              Retained
Fund                              Fiscal Year  Commissions    Paid to Firms    Affiliated Firms      by DWS-SDI
----                              -----------  -----------    -------------    ----------------      ----------


<S>                                <C>           <C>             <C>               <C>                <C>
DWS Global Thematic Fund           2007          $614,000        $134,000          $8,000             $472,000
                                   2006          $117,000         $36,000          $3,000              $78,000
                                   2005           $25,000          $2,000         $19,000               $4,000

DWS International Fund             2007           $75,000         $57,000          $4,000              $14,000
                                   2006           $68,000         $53,000          $3,000              $12,000
                                   2005           $71,000         $54,000          $5,000              $12,000
</TABLE>




Independent Registered Public Accounting Firm

The financial  highlights of each Fund included in the Funds'  prospectuses  and
the  Financial  Statements  incorporated  by  reference  in  this  Statement  of
Additional  Information  have been so included or  incorporated  by reference in
reliance on the reports of PricewaterhouseCoopers  LLP, 125 High Street, Boston,
MA 02110,  independent registered public accounting firm, given on the authority
of said firm as  experts  in  auditing  and  accounting.  audits  the  financial
statements  of the Funds and  provides  other audit,  tax and related  services.
Shareholders  will receive annual audited  financial  statements and semi-annual
unaudited financial statements.

Legal Counsel

Ropes & Gray LLP, One International  Place,  Boston,  Massachusetts  02110-2624,
serves as legal counsel to each Fund and the Independent Directors of each Fund.


                                       45
<PAGE>


Custodian, Transfer Agent and Shareholder Service Agent

Brown Brothers  Harriman & Company  ("Custodian"),  40 Water Street,  Boston, MA
02109  serves  as  Custodian  of the  Funds.  The  Custodian  has  entered  into
agreements  with  foreign  subcustodians   approved  by  the  Directors  of  the
Corporations pursuant to Rule 17f-5 of the 1940 Act.



DWS Scudder Investments Service Company ("DWS-SISC"), 210 W. 10th Street, Kansas
City, Missouri  64105-1614,  an affiliate of the Advisor, is the Funds' transfer
agent, dividend-paying agent and shareholder service agent for each Fund's Class
A, B, C shares,  DWS Global Thematic Fund's Class R shares and DWS International
Fund's  Institutional Class shares.  Pursuant to a sub-transfer agency agreement
between DWS-SISC and DST Systems,  Inc. ("DST"),  DWS-SISC has delegated certain
transfer  agent  and  dividend  paying  agent  functions  to DST.  The costs and
expenses of such  delegation  are born by DWS-SISC,  not by the Funds.  DWS-SISC
receives as transfer agent,  annual account fees of $5 per account,  transaction
and maintenance  charges,  annual fees  associated with the contingent  deferred
sales charge (Class B shares only) and out-of-pocket expense reimbursement.  For
Class R shares,  DWS-SISC is  compensated  as  follows:  (for  non-money  market
accounts) an open account charge of $29 and an asset-based  fee of 0.05% for out
of pocket expenses.

Each Fund, or the Advisor (including any affiliate of the Advisor), or both, may
pay   unaffiliated   third  parties  for  providing   recordkeeping   and  other
administrative  services with respect to accounts of  participants in retirement
plans or other  beneficial  owners of Fund shares whose  interests are generally
held in an omnibus account.


The Transfer  Agent receives an annual service fee for each account of the Fund,
based on the type of account.  For open retail  accounts,  the fee is a flat fee
ranging from $20.00 to $27.50 per account,  for open  wholesale  money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.46 per account
(as of October  2006,  indexed to  inflation)  plus an asset  based fee of up to
0.25% of  average  net  assets.  1/12th of the  annual  service  charge for each
account is  charged  and  payable to the  Transfer  Agent each  month.  A fee is
charged for any account  which at any time during the month had a share  balance
in the  Fund.  Smaller  fees are also  charged  for  closed  accounts  for which
information  must be retained on the Transfer Agent's system for up to 18 months
after closing for tax reporting purposes.

Certain  out-of-pocket  expenses  incurred  by  the  Transfer  Agent,  including
expenses of printing and mailing  routine fund  disclosure  documents,  costs of
record retention and transaction  processing costs are reimbursed by the Fund or
are paid  directly  by the  Fund.  Certain  additional  out-of-pocket  expenses,
including costs of computer  hardware and


                                       46
<PAGE>

software,  third party  record-keeping  and processing of proxy statements,  may
only be reimbursed by the Fund with the prior approval of the Fund's Board.

Effective April 1, 2007, DWS Scudder Investments Service Company is the Transfer
Agent for all classes of all DWS funds.


                                  SERVICE PLANS

DWS Global Thematic Fund -- Class R Shares

The Fund has adopted a service plan (the "Service Plan") with respect to Class R
shares of Global Thematic Fund which  authorizes the Fund to compensate  Service
Organizations  whose customers  invest in Class R shares of Global Thematic Fund
for  providing  certain  personal,  account  administration  and/or  shareholder
liaison services.  Pursuant to the Plan, the Fund may enter into agreements with
Service Organizations ("Service  Agreements").  Under such Service Agreements or
otherwise,  the Service  Organizations  may perform some or all of the following
services:  (i) acting as record  holder and nominee of all Class R shares of the
Fund  beneficially  owned by their customers;  (ii) establishing and maintaining
individual  accounts  and records with respect to the Class R shares of the Fund
owned by each  customer;  (iii)  providing  facilities  to answer  inquiries and
respond to  correspondence  from customers about the status of their accounts or
about other aspects of the  Corporation  or Fund;  (iv)  processing  and issuing
confirmations  concerning customer orders to purchase,  redeem and exchange such
shares;  (v) receiving and transmitting funds representing the purchase price or
redemption  proceeds  of such  shares;  (vi)  participant  level  recordkeeping,
sub-accounting,  and other administrative  services in connection with the entry
of purchase and redemption  orders for the Service Plan; (vii)  withholding sums
required by applicable authorities; (viii) providing daily violation services to
the Service Plan; (ix) paying and filing of all  withholding  and  documentation
required by appropriate  government agencies;  (x) provision of reports,  refund
and other  documents  required by tax laws and the  Employee  Retirement  Income
Security Act of 1974 ("ERISA"); and (xi) providing prospectuses, proxy materials
and other  documents of an applicable Fund to participants as may be required by
law.

As  compensation  for such services,  each Service  Organization  of the Fund is
entitled  to  receive a service  fee in an amount up to 0.25% (on an  annualized
basis) of the average daily net assets of the Fund's Class R shares attributable
to customers of such Service  Organization.  Service Organizations may from time
to time be required to meet certain other  criteria in order to receive  service
fees.

In  accordance  with  the  terms  of  the  Service  Plan,  the  Officers  of the
Corporation  provide to the  Corporation's  Board of Directors  for their review
periodically  a written  report of services  performed  by and fees paid to each
Service Organization under the Service Agreements and Service Plan.

Conflict of interest  restrictions  (including  the Employee  Retirement  Income
Security Act of 1974 ("ERISA") may apply to a Service  Organization's receipt of
compensation  paid by the Fund in  connection  with the  investment of fiduciary
assets in Class R shares of the Fund. Service  Organizations that are subject to
the  jurisdiction  of the SEC,  the  Department  of  Labor  or state  securities
commissions  are urged to  consult  their own legal  advisors  before  investing
fiduciary assets in Class R shares of the Fund and receiving service fees.

The  Corporations  believe that  fiduciaries of ERISA plans may properly receive
fees under the Service Plan if the plan fiduciary  otherwise properly discharges
its fiduciary duties,  including (if applicable) those under ERISA. Under ERISA,
a plan  fiduciary,  such as a  trustee  or  investment  manager,  must  meet the
fiduciary  responsibility  standards  set  forth in part 4 of Title I of  ERISA.
Those standards are designed to help ensure that the  fiduciary's  decisions are
made in the best interests of the plan and are not colored by self-interest.

Section 403(c)(1) of ERISA provides, in part, that the assets of a plan shall be
held for the exclusive purpose of providing benefits to the plan's  participants
and their  beneficiaries and defraying  reasonable expenses of administering the
plan. Section 404(a)(1) sets forth a similar requirement on how a plan fiduciary
must discharge his or her duties with respect to the plan, and provides  further
that such  fiduciary  must act  prudently  and  solely in the  interests  of the
participants and  beneficiaries.  These basic provisions are supplemented by the
per se prohibitions of certain classes of transactions  set forth in Section 406
of ERISA.

                                       47
<PAGE>

Section  406(a)(1)(D)  of ERISA  prohibits  a  fiduciary  of an ERISA  plan from
causing that plan to engage in a transaction if he knows or should know that the
transaction  would constitute a direct or indirect transfer to, or use by or for
the benefit of, a party in interest,  of any assets of that plan.  Section 3(14)
includes within the definition of "party in interest" with respect to a plan any
fiduciary with respect to that plan. Thus,  Section  406(a)(1)(D) would not only
prohibit a  fiduciary  from  causing the plan to engage in a  transaction  which
would  benefit a third  person  who is a party in  interest,  but it would  also
prohibit the fiduciary from similarly  benefiting himself. In addition,  Section
406(b)(1) specifically prohibits a fiduciary with respect to a plan from dealing
with the assets of that plan in his own interest or for his own account. Section
406(b)(3)  supplements  these  provisions by  prohibiting a plan  fiduciary from
receiving any  consideration for his own personal account from any party dealing
with the plan in connection with a transaction involving the assets of the plan.

In  accordance  with the  foregoing,  however,  a fiduciary of an ERISA plan may
properly  receive  service  fees under the Service Plan if the fees are used for
the exclusive purpose of providing benefits to the plan's participants and their
beneficiaries or for defraying reasonable expenses of administering the plan for
which the plan would otherwise be liable.  See, e.g.,  Department of Labor ERISA
Technical Release No. 86-1 (stating a violation of ERISA would not occur where a
broker-dealer  rebates  commission  dollars to a plan  fiduciary  who,  in turn,
reduces its fees for which plan is otherwise responsible for paying).  Thus, the
fiduciary duty issues involved in a plan fiduciary's  receipt of the service fee
must be assessed on a case-by-case basis by the relevant plan fiduciary.

                             PORTFOLIO TRANSACTIONS


The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio  securities,  including  the  allocation  of  brokerage.  With
respect to those  funds for which a  sub-investment  advisor  manages the fund's
investments,  references in this section to the "Advisor" should be read to mean
the Sub-Advisor, except as noted below.

The  policy of the  Advisor  in  placing  orders  for the  purchase  and sale of
securities  for the Funds is to seek best  execution,  taking into  account such
factors,   among  others,   as  price;   commission  (where   applicable);   the
broker-dealer's   ability  to  ensure  that  securities  will  be  delivered  on
settlement date; the willingness of the  broker-dealer to commit its capital and
purchase  a  thinly  traded   security  for  its  own  inventory;   whether  the
broker-dealer   specializes  in  block  orders  or  large  program  trades;  the
broker-dealer's  knowledge of the market and the security;  the  broker-dealer's
ability to  maintain  confidentiality;  the  broker-dealer's  ability to provide
access to new  issues;  the  broker-dealer's  ability  to provide  support  when
placing a difficult trade;  the financial  condition of the  broker-dealer;  and
whether the broker-dealer has the infrastructure and operational capabilities to
execute  and  settle  the trade.  The  Advisor  seeks to  evaluate  the  overall
reasonableness of brokerage  commissions with commissions  charged on comparable
transactions  and compares the brokerage  commissions (if any) paid by the Funds
to reported commissions paid by others. The Advisor routinely reviews commission
rates,  execution  and  settlement  services  performed  and makes  internal and
external comparisons.

Commission  rates  on  transactions  in  equity  securities  on U.S.  securities
exchanges are subject to negotiation. Commission rates on transactions in equity
securities on foreign  securities  exchanges are generally fixed.  Purchases and
sales of  fixed-income  securities and certain  over-the-counter  securities are
effected  on  a  net  basis,  without  the  payment  of  brokerage  commissions.
Transactions  in  fixed  income  and  certain  over-the-counter  securities  are
generally  placed by the  Advisor  with the  principal  market  makers for these
securities  unless the Advisor  reasonably  believes more favorable  results are
available elsewhere.  Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices.  Purchases of  underwritten  issues
will  include  an  underwriting  fee  paid  to  the  underwriter.  Money  market
instruments are normally purchased in principal  transactions  directly from the
issuer or from an underwriter or market maker.

It is  likely  that the  broker-dealers  selected  based  on the  considerations
described in this section will include  firms that also sell shares of the Funds
to their  customers.  However,  the Advisor does not consider sales of shares of
the Funds as a factor in the selection of  broker-dealers  to execute  portfolio
transactions  for the Funds  and,  accordingly,  has  implemented  policies  and
procedures  reasonably designed to prevent its traders from considering sales of
shares of the Funds as a factor in the  selection of  broker-dealers  to execute
portfolio transactions for the Funds.

                                       48
<PAGE>

The Advisor is  permitted  by Section  28(e) of the  Securities  Exchange Act of
1934, as amended ("1934 Act"), when placing  portfolio  transactions for a Fund,
to cause the Fund to pay brokerage  commissions  in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage  services if the Advisor determines that such commissions
are  reasonable in relation to the overall  services  provided.  The Advisor may
from  time to time,  in  reliance  on  Section  28(e) of the 1934  Act,  execute
portfolio  transactions with  broker-dealers that provide research and brokerage
services to the Advisor.  Consistent  with the Advisor's  policy  regarding best
execution,  where more than one broker is  believed  to be capable of  providing
best execution for a particular  trade, the Advisor may take into  consideration
the receipt of research and brokerage services in selecting the broker-dealer to
execute  the trade.  Although  certain  research  and  brokerage  services  from
broker-dealers may be useful to a Fund and to the Advisor,  it is the opinion of
the Advisor that such information only supplements its own research effort since
the  information  must still be analyzed,  weighed and reviewed by the Advisor's
staff. To the extent that research and brokerage  services of value are received
by the Advisor,  the Advisor may avoid expenses that it might  otherwise  incur.
Research and brokerage  services  received from a broker-dealer may be useful to
the Advisor and its affiliates in providing  investment  management  services to
all or some of its  clients,  which  includes  a Fund.  Services  received  from
broker-dealers  that executed  securities  transactions for a Portfolio will not
necessarily be used by the Advisor specifically to service such Fund.

Research and brokerage services provided by broker-dealers may include,  but are
not limited to,  information on the economy,  industries,  groups of securities,
individual   companies,   statistical   information,   accounting  and  tax  law
interpretations,  political developments, legal developments affecting portfolio
securities,  technical  market action,  pricing and appraisal  services,  credit
analysis,  risk measurement  analysis,  performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically  received  in the form of written  or  electronic  reports,  access to
specialized  financial  publications,  telephone  contacts and personal meetings
with  security  analysts,  but may also be  provided  in the form of  access  to
various  computer  software and meetings  arranged  with  corporate and industry
representatives.

The Advisor may also select  broker-dealers  and obtain from them  research  and
brokerage  services that are used in connection  with executing  trades provided
that such services are consistent  with  interpretations  under Section 28(e) of
the 1934 Act.  Typically,  these  services  take the form of  computer  software
and/or  electronic  communication  services  used by the  Advisor to  facilitate
trading activity with those broker-dealers.

Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder.  Currently,
it  is  the  Advisor's  policy  that  Sub-Advisors  may  not  execute  portfolio
transactions on behalf of the Funds to obtain third party research and brokerage
services.  The  Advisor  may, in the future,  change  this  policy.  Regardless,
certain  Sub-Advisors may, as matter of internal policy, limit or preclude third
party research and brokerage services.

The Advisor may use brokerage  commissions to obtain certain brokerage  products
or services that have a mixed use (i.e., it also serves a function that does not
relate to the investment  decision-making process). In those circumstances,  the
Advisor  will make a good faith  judgment to evaluate  the various  benefits and
uses to which it  intends to put the mixed use  product or service  and will pay
for that portion of the mixed use product or service that it reasonably believes
does not constitute research and brokerage services with its own resources.

DIMA will  monitor  regulatory  developments  and market  practice in the use of
client  commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.

Investment  decisions for each Fund and for other investment accounts managed by
the  Advisor  are  made  independently  of each  other  in  light  of  differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases,  simultaneous  transactions are inevitable. To the
extent  permitted by law, the Advisor may aggregate the securities to be sold or
purchased  for a Fund with those to be sold or purchased  for other  accounts in
executing  transactions.  Purchases  or sales are then  averaged as to price and
commission  and  allocated  as to amount in a manner  deemed  equitable  to each
account.  While in some cases this practice  could have a detrimental  effect on
the price  paid or  received  by,  or on the size of the  position  obtained  or

                                       49
<PAGE>

disposed of for,  the Fund,  in other  cases it is believed  that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Funds' management team manage other mutual funds
and separate accounts,  some of which use short sales of securities as a part of
its  investment  strategy.  The  simultaneous   management  of  long  and  short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice  versa),  the  risk  arising  from  sequential  orders  in long  and  short
positions,  and the risks associated with receiving  opposing orders at the same
time.

DIMA has adopted procedures that it believes are reasonably designed to mitigate
these  potential  conflicts  of interest.  Incorporated  in the  procedures  are
specific  guidelines  developed to ensure fair and  equitable  treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory  reviews,  as well as compliance  oversight to ensure
that  potential  conflicts  of interest  relating  to this type of activity  are
properly addressed.

Deutsche Bank AG or one of its affiliates (or in the case of a Sub-Advisor,  the
Sub-Advisor  or one of its  affiliates)  may act as a broker  for the  Funds and
receive brokerage commissions or other transaction-related compensation from the
Funds in the purchase and sale of securities, options or futures contracts when,
in the judgment of the Advisor,  and in accordance with  procedures  approved by
the Funds'  Boards,  the  affiliated  broker  will be able to obtain a price and
execution at least as favorable as those obtained from other  qualified  brokers
and if, in the  transaction,  the  affiliated  broker  charges  the Funds a rate
consistent  with that charged to  comparable  unaffiliated  customers in similar
transactions.



                                       50
<PAGE>



DWS Global Thematic Fund: For the fiscal years ended August 31, 2005, August 31,
2006 and  August  31,  2007 the Fund paid  aggregate  brokerage  commissions  of
$1,881,808, $5,808,194 and $10,095,014, respectively.

                                       51
<PAGE>

The Fund is required to  identify  any  securities  of its  "regular  brokers or
dealers"  (as such term is defined  in the 1940 Act) that the Fund has  acquired
during the most  recent  fiscal  year.  As of August 31,  2007 the Fund held the
following securities of its regular brokers or dealers:

<TABLE>
<CAPTION>

Name of Regular Broker or Dealer or Parent (Issuer)     August 31, 2007 (in thousands)
---------------------------------------------------     ------------------------------

<S>                                                                  <C>
Commerzbank AG                                                       $50,914
UBS AG                                                               $49,325
Banca Popolare di Milano                                             $18,422
Unicredito Italiano SpA                                              $18,104
Blackstone Group LP                                                  $15,775
Credit Suisse Group                                                  $11,591
Australian Wealth Management Ltd.                                    $11,302
OTP Bank NYRT                                                        $10,981
Swedbank AB                                                          $10,585
Shinsei Bank Ltd.                                                     $8,571
Siam City Bank Pcl                                                    $5,100
ABN Amro Holding NV                                                     $203
</TABLE>


DWS  International  Fund: For the fiscal years ended August 31, 2005, August 31,
2006 and August  31,  2007 the Fund paid  aggregate  brokerage  commissions  of,
$3,601,297, $4,516,279 and $5,828,722, respectively.

The Fund is required to  identify  any  securities  of its  "regular  brokers or
dealers"  (as such term is defined  in the 1940 Act) that the Fund has  acquired
during the most  recent  fiscal  year.  As of August 31,  2007 the Fund held the
following securities of its regular brokers or dealers:

<TABLE>
<CAPTION>

                                                     Value of Securities Owned as of
Name of Regular Broker or Dealer or Parent (Issuer)   August 31, 2007 (in thousands)
---------------------------------------------------   ------------------------------

<S>                                                              <C>
Unicredito Italiano SpA                                          $53,856
UBS AG                                                           $44,530
KBC Groep NV                                                     $40,909
Ereste Bank Der Oesterreichischen Sparkassen                     $27,820


Prudential PLC                                                   $24,866
National Bank of Greece                                          $20,738
Bancolombia SA                                                   $14,902
Mizuho Financial Group, Inc.                                     $12,664
OTP Bank NYRT                                                    $11,636
Commerzbank AG                                                    $8,999
Unibanco                                                          $5,981
Zurich Financial Services AG                                       $373

                                       52
<PAGE>
                                                     Value of Securities Owned as of
Name of Regular Broker or Dealer or Parent (Issuer)   August 31, 2007 (in thousands)
---------------------------------------------------   ------------------------------

Nordea Bank AB                                                     $320
KBC Groep NV                                                       $289
Marfin Investment Group SA                                         $191
Lloyds TSB Group PLC                                               $132
</TABLE>


<TABLE>
<CAPTION>

                                                             Percentage of
                                  Percentage of      Transactions Involving      Dollar Amount of
                               Commissions Paid to         Commissions          Commissions Paid to
                                   Affiliated                Paid to                Brokers for
Name of Fund                         Brokers           Affiliated Brokers        Research Services
------------                         -------           ------------------        -----------------

<S>                                     <C>                    <C>                    <C>
DWS Global Thematic Fund                0%                     0%                     $0
DWS International Fund                  0%                     0%                     $0
</TABLE>

Portfolio Turnover

Portfolio  turnover  rate is  defined  by the SEC as the ratio of the  lesser of
sales or purchases to the monthly average value of such securities  owned during
the year,  excluding all securities  whose  remaining  maturities at the time of
acquisition were one year or less.




Portfolio turnover rates for the two most recent fiscal periods are as follows:


                                                     2007             2006
                                                     ----             ----

DWS Global Thematic Fund                             151%             143%
DWS International Fund                               104%              76%

Higher levels of activity by a Fund result in higher  transaction  costs and may
also  result  in  taxes on  realized  capital  gains  to be borne by the  Fund's
shareholders.  Purchases and sales are made whenever necessary, in the Advisor's
discretion, to meet a Fund's objective.


                        PURCHASE AND REDEMPTION OF SHARES

General Information

Policies and procedures affecting  transactions in Fund shares can be changed at
any  time  without  notice,  subject  to  applicable  law.  Transactions  may be
contingent  upon proper  completion of application  forms and other documents by
shareholders  and their  receipt by the  Funds'  agents.  Transaction  delays in
processing (and changing account features) due to circumstances within or beyond
the  control  of the Funds and its  agents  may  occur.  Shareholders  (or their
financial  service firms) are responsible for all losses and fees resulting from
bad checks,  cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A  distribution  will be  reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Orders  will be  confirmed  at a price  based on the net asset value of the Fund
next determined after receipt in good order by DWS-SDI of the order  accompanied
by payment.  Orders received by dealers or other financial  services firms prior
to the  determination  of net asset value and  received in good order by DWS-SDI
prior to the determination of net asset value will be confirmed at a price based
on the net asset value next determined after receipt by DWS-SDI ("trade date").

                                       53
<PAGE>

Certificates. Share certificates will not be issued. Share certificates now in a
shareholder's possession may be sent to DWS-SISC for cancellation and book-entry
credit to such  shareholder's  account.  Certain  telephone and other procedures
require book-entry holdings. Shareholders with outstanding certificates bear the
risk of loss.

Use of Financial  Services  Firms.  Investment  dealers and other firms  provide
varying  arrangements  for their clients to purchase and redeem a Fund's shares,
including higher minimum investments,  and may assess transaction or other fees.
Firms may arrange  with their  clients for other  investment  or  administrative
services.  Such firms may independently  establish and charge additional amounts
to their  clients  for such  services.  Firms  also may hold a Fund's  shares in
nominee or street  name as agent for and on behalf of their  customers.  In such
instances,  a Fund's  transfer  agent,  DWS-SISC will have no  information  with
respect  to  or  control  over  the  accounts  of  specific  shareholders.  Such
shareholders  may obtain access to their  accounts and  information  about their
accounts only from their firm.  Certain of these firms may receive  compensation
from the Fund through the Shareholder Service Agent for record-keeping and other
expenses relating to these nominee  accounts.  In addition,  certain  privileges
with respect to the purchase and  redemption  of shares or the  reinvestment  of
dividends may not be available through such firms. Some firms may participate in
a  program  allowing  them  access  to their  clients'  accounts  for  servicing
including,  without  limitation,  transfers of  registration  and dividend payee
changes; and may perform functions such as generation of confirmation statements
and disbursement of cash dividends. Such firms, including affiliates of DWS-SDI,
may receive compensation from the Fund through the Shareholder Service Agent for
these services.


Each Fund has authorized one or more financial service  institutions,  including
certain members of the Financial Industry  Regulatory  Authority ("FINRA") other
than  the  Distributor  ("financial  institutions"),   to  accept  purchase  and
redemption  orders for the Fund's shares.  Such financial  institutions may also
designate other parties, including plan administrator intermediaries,  to accept
purchase and redemption  orders on each Fund's  behalf.  Orders for purchases or
redemptions  will be  deemed  to have  been  received  by each  Fund  when  such
financial institutions or, if applicable,  their authorized designees accept the
orders. Subject to the terms of the contract between each Fund and the financial
institution, ordinarily orders will be priced at the Fund's net asset value next
computed  after  acceptance  by such  financial  institution  or its  authorized
designees and accepted by the Fund. Further, if purchases or redemptions of each
Fund's  shares are arranged and  settlement  is made at an  investor's  election
through any other authorized financial  institution,  that financial institution
may, at its  discretion,  charge a fee for that service.  The Board of Directors
and the Distributor,  also the Funds' principal underwriter,  each has the right
to limit the amount of purchases  by, and to refuse to sell to, any person.  The
Directors and the Distributor may suspend or terminate the offering of shares of
each Fund at any time for any reason.

DWS-SDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents  ("DWS Scudder  Wholesalers").  Generally,  DWS Scudder
Wholesalers  market shares of the DWS funds to your  financial  advisor,  who in
turn may  recommend  that you  purchase  shares  of a DWS  fund.  The Plan is an
incentive program that combines a monthly  incentive  component with a quarterly
strategic bonus component.  Under the Plan, DWS Scudder Wholesalers will receive
a monetary  monthly  incentive based on the amount of sales generated from their
marketing of the funds,  and that incentive will differ depending on the product
category  of  the  fund.   Each  fund  is  assigned  to  one  of  four   product
categories--"Core,"    "Strategic,"   "Satellite"   or   "Non-CSS"-taking   into
consideration, among other things, the following criteria, where applicable:

o        The Fund's 3-year performance;
o        The Fund's Morningstar rating;
o        Market size for the fund category;
o        The Fund's size, including sales and redemptions of the Fund's shares;
o        The length of time the Fund's Portfolio Managers have managed the Fund;
         and
o        The Fund's consistency with DWS Scudder's branding.

This  information  and other factors are presented to a committee  comprised of
representatives  from  various  groups  within  DWS  Scudder,  who  review  on a
quarterly basis the funds assigned to each product category described above, and
make any  changes to those  assignments  at that time.  No one  factor,  whether
positive or negative,  determines a fund's  placement in a given  category;  all
these factors together are considered, and the designation of funds in the Core,
Strategic and Satellite categories represents management's judgment based on the
above criteria.  In addition,


                                       54
<PAGE>

management  may  consider a fund's  profile  over the  course of several  review
periods  before  making a change  to its  category  assignment.  These  category
assignments   will  be  posted   quarterly   to  the  DWS  funds'  Web  site  at
www.dws-scudder.com,  approximately one month after the end of each quarter. DWS
Scudder Wholesalers will receive the highest compensation for Core and Strategic
funds,  less for Satellite funds and the lowest for Non-CSS funds.  The level of
compensation among these categories may differ significantly.

In the normal course of business,  DWS Scudder will from time to time  introduce
new funds into the DWS family of funds. As a general rule, all new funds will be
placed in the  Strategic  compensation  category  for a  minimum  period of four
consecutive quarters, and DWS Scudder Wholesalers will be paid at a rate that is
equivalent to that of the Core Fund  category.  After that four quarter  period,
each new fund in the  Strategic  category  will be reviewed by the committee and
either  assigned to one of the four  categories or continued as a Strategic fund
at that time.

The prospect of receiving,  or the receipt of, additional  compensation by a DWS
Scudder  Wholesaler  under the Plan may provide an incentive to favor  marketing
the Core,  Strategic  or  Satellite  funds  over the  Non-CSS  funds.  The Plan,
however,  will not change  the price that you pay for shares of a fund.  The DWS
Scudder  Compliance  Department  monitors DWS Scudder Wholesaler sales and other
activity  in an  effort  to  detect  unusual  activity  in  the  context  of the
compensation  structure under the Plan. However,  investors may wish to take the
Plan  and the  product  category  of the  fund  into  account  when  considering
purchasing a fund or evaluating any recommendations relating to fund shares.

Telephone  and  Electronic  Transaction  Procedures.  Shareholders  have various
telephone,  Internet,  wire and other electronic privileges available. A Fund or
its agents will not be liable for any losses,  expenses or costs  arising out of
fraudulent or unauthorized instructions pursuant to these privileges if the Fund
or its agents reasonably believe, based upon reasonable verification procedures,
that the instructions were genuine.  Verification  procedures  include recording
instructions,  requiring  certain  identifying  information  before  acting upon
instructions  and  sending  written  confirmations.  During  periods  when it is
difficult to contact the  Shareholder  Service Agent, it may be difficult to use
telephone, wire and other privileges.


QuickBuy  and  QuickSell  (not  applicable  to  Class R  shares).  QuickBuy  and
QuickSell permits the transfer of money via the Automated  Clearing House System
(minimum $50,  maximum  $250,000) from or to a shareholder's  bank,  savings and
loan, or credit union  account in connection  with the purchase or redemption of
Fund  shares.  Shares  purchased by check or through  QuickBuy and  QuickSell or
Direct Deposit may not be redeemed  under this privilege  until such Shares have
been owned for at least 10 calendar days.  QuickBuy and QuickSell cannot be used
with passbook savings accounts or for certain tax-deferred plans such as IRAs.

Tax-Sheltered   Retirement   Plans.  The  Shareholder   Service  Agent  provides
retirement  plan  services  and  documents  and DWS-SDI can  establish  investor
accounts in any of the following types of retirement plans:

o        Traditional,  Roth and Education IRAs. This includes Savings  Incentive
         Match Plan for  Employees  of Small  Employers  ("SIMPLE"),  Simplified
         Employee Pension Plan ("SEP") IRA accounts and prototype documents.

o        403(b)(7)  Custodial  Accounts.  This  type  of plan  is  available  to
         employees of most non-profit organizations.

o        Prototype  money  purchase  pension  and  profit-sharing  plans  may be
         adopted by employers.

Brochures  describing these plans as well as model defined benefit plans, target
benefit plans,  457 plans,  401(k) plans,  simple 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon request.
Additional fees and transaction policies and procedures may apply to such plans.
Investors  should  consult with their own tax  advisors  before  establishing  a
retirement plan.

                                       55
<PAGE>

Purchases

The Funds  reserve the right to withdraw all or any part of the offering made by
its prospectus and to reject purchase orders for any reason.  Also, from time to
time,  the Funds may  temporarily  suspend  the  offering  of any class of their
shares to new investors.  During the period of such suspension,  persons who are
already  shareholders of such class of such Fund may be permitted to continue to
purchase additional shares of such class and to have dividends reinvested.

To help the  government  fight the  funding of  terrorism  and money  laundering
activities,  federal law requires all financial  institutions to obtain,  verify
and record  information  that identifies  each person who opens an account.  For
more  information,  please  see  "Policies  You Should  Know  About" in the Fund
prospectuses.

The Funds may waive the minimum for purchases by trustees,  directors,  officers
or employees of the Fund or the Advisor and its affiliates.

Financial Services Firms' Compensation. Banks and other financial services firms
may provide  administrative  services  related to order placement and payment to
facilitate  transactions  in shares of the Funds for their clients,  and DWS-SDI
may pay them a  transaction  fee up to the level of the  discount or  commission
allowable or payable to dealers.

DWS-SDI may,  from time to time,  pay or allow to firms a 1%  commission  on the
amount of  shares of the Funds  sold  under the  following  conditions:  (i) the
purchased  shares are held in a DWS  Scudder  IRA  account,  (ii) the shares are
purchased as a direct "roll over" of a distribution from a qualified  retirement
plan account  maintained on the subaccount  record keeping system maintained for
DWS-branded  plans  by  ADP,  Inc.  under  an  alliance  with  DWS-SDI  and  its
affiliates, (iii) the registered representative placing the trade is a member of
Executive Council, a group of persons designated by DWS-SDI in acknowledgment of
their dedication to the employee benefit plan area; and (iv) the purchase is not
otherwise subject to a commission.  Furthermore, DWS Scudder Distributors,  Inc.
may, from time to time,  pay or allow to firms a 0.25%  commission on the amount
of Class R shares of DWS Global Thematic Fund sold.

In  addition  to  the  discounts  or  commissions  described  herein  and in the
prospectus,  DWS-SDI, the Advisor, or its affiliates may pay or allow additional
discounts,  commissions or promotional incentives, in the form of cash, to firms
that sell shares of the Funds.  In some  instances,  such amounts may be offered
only to certain  firms that sell or are expected to sell during  specified  time
periods  certain  minimum  amounts  of  shares  of the  Funds,  or  other  funds
underwritten by DWS-SDI.

Upon  notice to all  dealers,  DWS-SDI  may  re-allow  to dealers up to the full
applicable Class A sales charge during periods and for transactions specified in
such notice and such re-allowances may be based upon attainment of minimum sales
levels. During periods when 90% or more of the sales charge is re-allowed,  such
dealers  may be deemed to be  underwriters  as that term is  defined in the 1933
Act.

DWS-SDI may at its discretion  compensate  investment dealers or other financial
services  firms in  connection  with the sale of Class A shares  of the Funds in
accordance  with the Large  Order  NAV  Purchase  Privilege  and one of the five
compensation schedules up to the following amounts:

<TABLE>
<CAPTION>

                  Compensation Schedule #1:                        Compensation Schedule #2: DWS
          Retail Sales and DWS Scudder Flex Plan(1)                    Scudder Premium Plan(2)
          -----------------------------------------                    -----------------------

                                              As a Percentage                            As a
                 Amount of                        of Net       Amount of Shares    Percentage of Net
                Shares Sold                     Asset Value          Sold             Asset Value
                -----------                     -----------          ----             -----------

<S>               <C>                             <C>               <C>               <C>

$1 million to $3 million (equity funds)            1.00%

                                       56
<PAGE>


                  Compensation Schedule #1:                        Compensation Schedule #2: DWS
          Retail Sales and DWS Scudder Flex Plan(1)                    Scudder Premium Plan(2)
          -----------------------------------------                    -----------------------

                                              As a Percentage                            As a
                 Amount of                        of Net       Amount of Shares    Percentage of Net
                Shares Sold                     Asset Value          Sold             Asset Value
                -----------                     -----------          ----             -----------

Over $3 million to $50 million                     0.50%        Over $3 million      0.00% - 0.50%

Over $50 million                                   0.25%               --                   --
</TABLE>

           Compensation Schedule #3: DWS Scudder Choice Plan(3)
           ----------------------------------------------------

                 Amount of                      As a Percentage of Net
                Shares Sold                           Asset Value
                -----------                           -----------

All amounts (equity funds)                               1.00%

(1)      For purposes of determining the appropriate commission percentage to be
         applied to a particular sale under the foregoing schedule, DWS-SDI will
         consider the cumulative  amount invested by the purchaser in a Fund and
         other  Funds  listed  under  "Special  Features  -- Class A  Shares  --
         Combined  Purchases,"  including  purchases  pursuant to the  "Combined
         Purchases,"  "Letter  of Intent"  and  "Cumulative  Discount"  features
         referred to above.

(2)      Compensation Schedules 2 applies to employer sponsored employee benefit
         plans  using  the  OmniPlus   subaccount  record  keeping  system  made
         available  through  ADP,  Inc.  under an alliance  with DWS-SDI and its
         affiliates.

(3)      DWS-SDI compensates UBS Financial 0.50%.

DWS-SDI  compensates  firms for sales of Class B shares at the time of sale at a
commission  rate of up to 3.75%  of the  amount  of  Class B  shares  purchased.
DWS-SDI is compensated  by the Funds for services as  distributor  and principal
underwriter for Class B shares.  Except as provided below,  for sales of Class C
shares,  DWS-SDI advances to firms the first year  distribution fee at a rate of
0.75% of the  purchase  price of such shares,  and, for periods  after the first
year,  DWS-SDI  currently  pays firms for sales of Class C shares a distribution
fee, payable quarterly, at an annual rate of 0.75% of net assets attributable to
Class C shares  maintained and serviced by the firm. For sales of Class C shares
to employer  sponsored  employee  benefit  plans using the  OmniPlus  subaccount
record keeping  system made  available  through ADP, Inc. under an alliance with
DWS-SDI and its affiliates, DWS-SDI does not advance the first year distribution
fee and for  periods  after the date of sale,  DWS-SDI  currently  pays  firms a
distribution  fee,  payable  quarterly,  at an annual rate of 0.75% based on net
assets as of the last business day of the month  attributable  to Class C shares
maintained  and serviced by the firm.  DWS-SDI is  compensated  by the Funds for
services as distributor and principal underwriter for Class C shares.


Revenue Sharing

In light of recent  regulatory  developments,  the Advisor,  the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding  the  level  of  payments  made  by them to  selected  affiliated  and
unaffiliated  brokers,  dealers,  participating  insurance  companies  or  other
financial  intermediaries  ("financial  advisors") in  connection  with the sale
and/or  distribution  of  Fund  shares  or the  retention  and/or  servicing  of
investors and Fund shares ("revenue sharing").

The  Advisor,  the  Distributor  and/or  their  affiliates  may  pay  additional
compensation,  out of their own  assets and not as an  additional  charge to the
Fund, to financial  advisors in connection with the sale and/or  distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund shares.
Such revenue  sharing  payments are in


                                       57
<PAGE>

addition to any  distribution  or service fees  payable  under any Rule 12b-1 or
service plan of any fund, any record keeping/sub-transfer agency/networking fees
payable by the Fund (generally  through the Distributor or an affiliate)  and/or
the Distributor to certain  financial  advisors for performing such services and
any sales charges,  commissions,  non-cash compensation  arrangements  expressly
permitted under applicable rules of FINRA or other concessions  described in the
fee  table  or  elsewhere  in the  Prospectuses  or the  SAI as  payable  to all
financial  advisors.  For example,  the Advisor,  the  Distributor  and/or their
affiliates may compensate  financial advisors for providing the Fund with "shelf
space" or access to a third  party  platform  or fund  offering  list,  or other
marketing  programs  including,  without  limitation,  inclusion  of the Fund on
preferred or recommended sales lists,  mutual fund  "supermarket"  platforms and
other formal sales programs;  granting the  Distributor  access to the financial
advisor's  sales  force;  granting  the  Distributor  access  to  the  financial
advisor's  conferences  and  meetings;  assistance in training and educating the
financial advisor's personnel;  and, obtaining other forms of marketing support.
The level of revenue sharing payments made to financial  advisors may be a fixed
fee or based upon one or more of the  following  factors:  gross sales,  current
assets  and/or  number of accounts  of the Fund  attributable  to the  financial
advisor,  the particular fund or fund type or other measures as agreed to by the
Advisor,  the Distributor  and/or their affiliates and the financial advisors or
any  combination  thereof.  The amount of these  payments is  determined  at the
discretion of the Advisor,  the Distributor and/or their affiliates from time to
time, may be substantial,  and may be different for different financial advisors
based on, for  example,  the nature of the  services  provided by the  financial
advisor.

The Advisor,  the  Distributor  and/or their  affiliates  currently make revenue
sharing  payments  from  their own  assets in  connection  with the sale  and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial  advisors in amounts that  generally  range from .01% up to .50% of
assets of the Fund serviced and  maintained by the  financial  advisor,  .10% to
..25% of sales of the Fund attributable to the financial  advisor,  a flat fee of
$12,500 up to $500,000, or any combination thereof. These amounts are subject to
change  at  the  discretion  of  the  Advisor,   the  Distributor  and/or  their
affiliates.   Receipt  of,  or  the  prospect  of  receiving,   this  additional
compensation, may influence your financial advisor's recommendation of this Fund
or of any  particular  share class of the Fund. You should review your financial
advisor's  compensation  disclosure  and/or  talk to your  financial  advisor to
obtain  more  information  on how this  compensation  may have  influenced  your
financial advisor's recommendation of this Fund.

The Advisor,  the Distributor and/or their affiliates may also make such revenue
sharing  payments  to  financial  advisors  under the terms  discussed  above in
connection  with  the  distribution  of both  DWS  funds  and  non-DWS  funds by
financial  advisors to retirement plans that obtain record keeping services from
ADP, Inc. on the DWS Scudder branded  retirement plan platform (the  "Platform")
with the level of revenue  sharing  payments  being based upon sales of both the
DWS funds and the  non-DWS  funds by the  financial  advisor on the  Platform or
current  assets  of both  the DWS  funds  and the  non-DWS  funds  serviced  and
maintained by the financial advisor on the Platform.

As of the  date  hereof,  the  Fund  has been  advised  that  the  Advisor,  the
Distributor  and their  affiliates  expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors

A G Edwards & Sons Inc.
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth  Equity Services,  LLP (dba Commonwealth  Financial  Network)
First Clearing/Wachovia Securities
HD Vest Investment Securities, Inc.
ING Group
LaSalle Financial Services, Inc. (dba ABN Amro)
Linsco/Private Ledger Corp.
Marsh Insurance and Investment Company

                                       58
<PAGE>

Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Pacific Select Distributors Group
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wells Fargo Investments, LLC

Channel: Cash Product Platform

ADP Clearing & Outsourcing
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Bear, Stearns Securities Corp.
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
Citibank NA
D.A. Davidson & Company
Deutsche Bank Securities Inc.
Deutsche Bank Trust Company Americas
Emmett A. Larkin Company
Fiduciary Trust Co. - International
H.C. Denison Co.
Huntleigh Securities
Investors Bank & Trust
JPMorgan Chase
Lincoln Investment Planning
Linsco Private Ledger  Financial  Services
Mellon  Financial  Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Romano Brothers and Company
SAMCO Capital Markets (Fund Services, Inc.)
Smith Moore & Company
State Street Bank & Trust Co.
Sungard Institutional Brokerage Inc.
US Bancorp
UBS Financial Services Inc.
William Blair & Company

Channel: Third Party Insurance Platforms

Acacia National Life Insurance
Allmerica Financial Life Insurance Company
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
American General Life Insurance Company
Annuity Investors Life Insurance Company
Columbus Life Insurance Company

                                       59
<PAGE>

Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance Company
First Allmerica Financial Life Insurance Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity  Insurance  Company
Hartford Life Insurance Company
ICMG Registered Variable Life
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
Mutual of America Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America
Sun Life GroupSymetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company

Any additions,  modifications or deletions to the financial advisors  identified
above that have occurred since the date hereof are not reflected.

The Advisor,  the  Distributor  or their  affiliates  may enter into  additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The  prospect  of  receiving,  or the  receipt  of  additional  compensation  or
promotional  incentives  described above by financial  advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS Funds or a particular  DWS Fund over sales of shares of mutual
funds (or  non-mutual  fund  investments)  with  respect to which the  financial
advisor does not receive additional compensation or promotional  incentives,  or
receives  lower levels of additional  compensation  or  promotional  incentives.
Similarly,  financial advisors may receive different  compensation or incentives
that may influence  their  recommendation  of any particular  share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses.  You may
wish to take  such  payment  arrangements  into  account  when  considering  and
evaluating  any  recommendations  relating to Fund shares and you should discuss
this matter with your  financial  advisor  and review your  financial  advisor's
disclosures.


                                       60
<PAGE>


                                       61
<PAGE>


                                       62
<PAGE>


                                       63
<PAGE>


                                       64
<PAGE>


                                       65
<PAGE>

Class A Purchases.  The public  offering  price of Class A shares for purchasers
choosing  the initial  sales  charge  alternative  is the net asset value plus a
sales charge, as set forth below.

<TABLE>
<CAPTION>

                                                                Sales Charge
                                                                ------------
                                                                                         Allowed to Dealers
                                           As a Percentage of    As a Percentage of     as a Percentage of
Amount of Purchase                           Offering Price       Net Asset Value*         Offering Price
------------------                           --------------       ---------------          --------------

<S>                                               <C>                   <C>                   <C>
Less than $50,000                                 5.75%                 6.10%                 5.20%
$50,000 but less than $100,000                    4.50                  4.71                  4.00
$100,000 but less than $250,000                   3.50                  3.63                  3.00
$250,000 but less than $500,000                   2.60                  2.67                  2.25
$500,000 but less than $1 million                 2.00                  2.04                  1.75
$1 million and over                                .00**                 .00**                 .00***
</TABLE>

*        Rounded to the nearest one-hundredth percent.

**       Redemption  of shares  may be subject to a  contingent  deferred  sales
         charge as discussed below.

***      Commission is payable by DWS-SDI as discussed below.

Class A  Quantity  Discounts.  An  investor  or the  investor's  dealer or other
financial  services  firm must notify the  Shareholder  Service Agent or DWS-SDI
whenever  a  quantity  discount  or  reduced  sales  charge is  applicable  to a
purchase.  In order to qualify  for a lower  sales  charge,  all orders  from an
organized  group will have to be placed  through a single  investment  dealer or
other firm and identified as originating from a qualifying purchaser.

Combined  Purchases.  Each Fund's  Class A shares may be  purchased  at the rate
applicable to the sales charge discount  bracket  attained by combining same day
investments in Class A shares of any DWS Funds that bear a sales charge.

Class B Purchases.  Class B shares of a Fund are offered at net asset value.  No
initial  sales charge is imposed.  Class B shares sold without an initial  sales
charge allow the full amount of the investor's  purchase  payment to be invested
in Class B shares  for his or her  account.  Class B  shares  have a  contingent
deferred  sales charge of 4.00% that  declines (for shares sold within six years
of purchase)  and Rule 12b-1 fees, as described in the Funds'  Prospectuses  and
SAI. Class B shares automatically convert to Class A shares after six years.

Class C Purchases.  Class C shares of a Fund are offered at net asset value.  No
initial sales charge is imposed  which allows the full amount of the  investor's
purchase payment to be invested in Class C shares for his or her account.  Class
C shares are subject to a contingent  deferred sales charge of 1.00% (for shares
sold within one year of  purchase)  and Rule 12b-1  fees,  as  described  in the
Funds' prospectus and Statement of Additional Information.

Letter of Intent.  The reduced sales charges for Class A shares, as shown in the
applicable prospectus,  also apply to the aggregate amount of purchases of Class
A shares of DWS Funds that bear a sales  charge made by any  purchaser  within a
24-month period under a written Letter of Intent ("Letter") provided by DWS-SDI.
The Letter,  which imposes no obligation to purchase or sell additional  Class A
shares,  provides  for a price  adjustment  depending  upon  the  actual  amount
purchased  within  such  period.  The Letter  provides  that the first  purchase
following  execution  of the  Letter  must be at least 5% of the  amount  of the
intended  purchase,  and that 5% of the amount of the intended purchase normally
will be held in escrow in the form of shares pending  completion of the intended
purchase.  If the total  investments under the Letter are less than the intended
amount and thereby  qualify only for a higher sales charge than  actually  paid,
the  appropriate  number of escrowed  shares are redeemed and the proceeds  used
toward  satisfaction  of the obligation to pay the increased  sales charge.  The
Letter  for  an  employer-sponsored  employee  benefit  plan  maintained  on the
subaccount  record keeping system available  through ADP, Inc. under an alliance
with DWS-SDI and its affiliates may have special provisions regarding payment of
any  increased  sales charge  resulting  from a failure to complete the intended
purchase under the Letter.  A shareholder  may include the value (at the maximum
offering price,  which is determined by adding the maximum applicable sales load
charged to the net asset


                                       66
<PAGE>

value) of all Class A shares of such DWS Funds held of record as of the  initial
purchase date under the Letter as an "accumulation credit" toward the completion
of the Letter, but no price adjustment will be made on such shares.

Class A Cumulative  Discount.  Class A shares of a Fund may also be purchased at
the rate  applicable to the discount  bracket  attained by adding to the cost of
shares being purchased, the value of all Class A shares of DWS Funds that bear a
sales charge (computed at the maximum offering price at the time of the purchase
for which the discount is  applicable)  already  owned by the investor or his or
her immediate family member (including the investor's spouse or life partner and
children or stepchildren age 21 or younger).

For purposes of the Combined Purchases, Letter of Intent and Cumulative Discount
features  described above,  employer  sponsored employee benefit plans using the
Flex  subaccount  record  keeping  system  available  through ADP, Inc. under an
alliance with DWS-SDI and its affiliates may include:  (a) Money Market Funds as
"DWS  Funds," (b) all classes of shares of any DWS Fund and (c) the value of any
other plan  investments,  such as guaranteed  investment  contracts and employer
stock,  maintained on such subaccount record keeping system.  Once eligible plan
assets under this provision reach the $1,000,000  threshold,  a later decline in
assets  below the  $1,000,000  threshold  will not affect the plan's  ability to
continue to purchase Class A shares at net asset value.


Class A NAV Sales. Class A shares may be sold at net asset value to:

(a)      a current  or former  director  or trustee  of  Deutsche  or DWS mutual
         funds;

(b)      an  employee  (including  the  employee's  spouse or life  partner  and
         children or  stepchildren  age 21 or  younger) of Deutsche  Bank or its
         affiliates or of a subadvisor to any fund in the DWS family of funds or
         of a  broker-dealer  authorized  to sell  shares of the Fund or service
         agents of the Funds;

(c)      certain  professionals  who assist in the promotion of DWS mutual funds
         pursuant to personal services contracts with DWS-SDI, for themselves or
         members of their  families.  DWS-SDI in its  discretion  may compensate
         financial  services  firms  for  sales  of Class A  shares  under  this
         privilege at a commission rate of 0.50% of the amount of Class A shares
         purchased;

(d)      any trust, pension,  profit-sharing or other benefit plan for only such
         persons listed under the preceding paragraphs (a) and (b);

(e)      persons who purchase such shares  through bank trust  departments  that
         process  such  trades  through an  automated,  integrated  mutual  fund
         clearing program provided by a third party clearing firm;

(f)      selected  employees  (including  their  spouses  or life  partners  and
         children  or  stepchildren  age  21 or  younger)  of  banks  and  other
         financial services firms that provide  administrative  services related
         to order placement and payment to facilitate  transactions in shares of
         the Fund for their clients pursuant to an agreement with DWS-SDI or one
         of its  affiliates.  Only those employees of such banks and other firms
         who  as  part  of  their  usual  duties  provide  services  related  to
         transactions in Fund shares qualify;

(g)      unit  investment  trusts  sponsored  by Ranson &  Associates,  Inc. and
         unitholders of unit investment trusts sponsored by Ranson & Associates,
         Inc. or its predecessors through reinvestment programs described in the
         prospectuses of such trusts that have such programs;

(h)      through certain  investment  advisors  registered  under the Investment
         Advisers Act of 1940 and other  financial  services firms acting solely
         as  agent  for  their  clients,   that  adhere  to  certain   standards
         established  by DWS-SDI,  including a  requirement  that such shares be
         sold for the benefit of their  clients  participating  in an investment
         advisory program or agency commission  program under which such clients
         pay a fee to  the  investment  advisor  or  other  firm  for  portfolio
         management  or agency  brokerage  services.  Such  shares  are sold for
         investment  purposes and on the condition  that they will not be resold
         except through redemption or repurchase by the Fund;

                                       67
<PAGE>

(i)      employer  sponsored  employee  benefit plans using the Flex  subaccount
         recordkeeping system ("Flex Plans") made available through ADP under an
         alliance with DWS-SDI and its affiliates,  established prior to October
         1, 2003,  provided  that the Flex Plan is a  participant-directed  plan
         that has not less than 200 eligible employees;

(j)      investors investing $1 million or more, either as a lump sum or through
         the "Combined  Purchases," "Letter of Intent" and "Cumulative Discount"
         features referred to above (collectively, the "Large Order NAV Purchase
         Privilege"). The Large Order NAV Purchase Privilege is not available if
         another net asset value purchase privilege is available;

(k)      defined contribution investment only plans with a minimum of $1,000,000
         in plan assets regardless of the amount allocated to the DWS funds;

In addition, Class A shares may be sold at net asset value in connection with:

(l)      the  acquisition  of the  assets  of or merger  or  consolidation  with
         another investment  company,  or to shareholders in connection with the
         investment or reinvestment  of income and capital gain  dividends,  and
         under other circumstances  deemed appropriate by DWS-SDI and consistent
         with regulatory requirements; and

(m)      a  direct  "roll  over"  of a  distribution  from a Flex  Plan  or from
         participants in employer sponsored employee benefit plans maintained on
         the OmniPlus  subaccount  record keeping system made available  through
         ADP, Inc. under an alliance with DWS-SDI and its affiliates  into a DWS
         Scudder IRA;

(n)      reinvestment of fund dividends and distributions;

(o)      exchanging  an  investment in Class A shares of another fund in the DWS
         family of funds for an investment in the fund.

Class A shares also may be purchased at net asset value in any amount by members
of the plaintiff class in the proceeding known as Howard and Audrey Tabankin, et
al. v. Kemper  Short-Term  Global  Income Fund, et al., Case No. 93 C 5231 (N.D.
IL). This privilege is generally non-transferable and continues for the lifetime
of individual class members and for a ten-year period for  non-individual  class
members.  To make a  purchase  at net asset  value  under  this  privilege,  the
investor  must,  at the time of  purchase,  submit a  written  request  that the
purchase be processed at net asset value pursuant to this privilege specifically
identifying the purchaser as a member of the "Tabankin  Class." Shares purchased
under this privilege will be maintained in a separate account that includes only
shares  purchased  under  this  privilege.  For  more  details  concerning  this
privilege,  class members should refer to the Notice of (i) Proposed  Settlement
with Defendants;  and (ii) Hearing to Determine Fairness of Proposed Settlement,
dated  August 31,  1995,  issued in  connection  with the  aforementioned  court
proceeding.  For  sales of Fund  shares  at net  asset  value  pursuant  to this
privilege,  DWS-SDI  may in its  discretion  pay  investment  dealers  and other
financial services firms a concession,  payable quarterly,  at an annual rate of
up to 0.25% of net assets attributable to such shares maintained and serviced by
the firm.  A firm  becomes  eligible  for the  concession  based upon  assets in
accounts  attributable  to shares  purchased  under this  privilege in the month
after the month of purchase and the  concession  continues  until  terminated by
DWS-SDI.  The  privilege of  purchasing  Class A shares of the Fund at net asset
value under this  privilege is not available if another net asset value purchase
privilege also applies.



                                       68
<PAGE>


                                       69
<PAGE>


Multi-Class  Suitability.  DWS-SDI  has  established  the  following  procedures
regarding  the  purchase  of Class A,  Class B and  Class C  shares.  Orders  to
purchase  Class B shares of  $100,000  or more and  orders to  purchase  Class C
shares  of  $500,000  or more  will be  declined  with the  exception  of orders
received from financial representatives acting for clients whose shares are held
in an omnibus account and  employer-sponsored  employee  benefit plans using the
subaccount  record keeping system  ("System")  maintained for DWS-branded  plans
under an alliance with DWS-SDI and its affiliates  ("DWS Scudder Flex Plans" and
"DWS Scudder Choice Plans").

The following  provisions apply to DWS Scudder Flex Plans and DWS Scudder Choice
Plans.

a.       Class B Share DWS Scudder Flex Plans. Class B shares have not been sold
         to DWS Scudder  Flex Plans that were  established  on the System  after
         October 1, 2003.  Orders to  purchase  Class B shares for a DWS Scudder
         Flex Plan  established  on the System prior to October 1, 2003 that has
         regularly been  purchasing  Class B shares will be invested  instead in
         Class A shares at net asset value when the combined subaccount value in
         DWS Funds or other  eligible  assets  held by the plan is  $100,000  or
         more.  This  provision  will be imposed  for the first  purchase  after
         eligible plan assets reach the $100,000  threshold.  A later decline in
         assets below the $100,000  threshold will not affect the plan's ability
         to continue to purchase Class A shares at net asset value.

b.       Class C Share DWS Scudder Flex Plans. Orders to purchase Class C shares
         for a  DWS  Scudder  Flex  Plan,  regardless  of  when  such  plan  was
         established on the System,  will be invested  instead in Class A shares
         at net asset value when the combined  subaccount  value in DWS Funds or
         other  eligible  assets held by the plan is  $1,000,000  or more.  This
         provision  will be imposed for the first  purchase  after eligible plan
         assets reach the $1,000,000 threshold.  A later decline in assets below
         the $1,000,000 threshold will not affect the plan's ability to continue
         to purchase Class A shares at net asset value.

c.       Class C Share DWS Scudder  Choice  Plans.  Orders to  purchase  Class C
         shares for a DWS Scudder Choice Plan that has been regularly purchasing
         Class C shares will be invested  instead in Class A shares at net asset
         value when the combined subaccount value in DWS Funds or other eligible
         assets held by the plan is $1,000,000 or more.  This  provision will be
         imposed for purchases  made  beginning in the month after eligible plan
         assets reach the $1,000,000  threshold.  In addition, as a condition to
         being permitted to use the Choice Plan platform, plans must agree that,
         within  one month  after  eligible  plan  assets  reach the  $1,000,000
         threshold,  all  existing  Class  C  shares  held in the  plan  will be
         automatically converted to Class A shares.

The procedures  above do not reflect in any way the  suitability of a particular
class of shares for a particular investor and should not be relied upon as such.
A suitability  determination  must be made by investors  with the  assistance of
their financial representative.

Purchase  of  Institutional   Class  Shares.   (DWS   International  Fund  only)
Information  on how to buy shares is set forth in the section  entitled  "How to
Invest in the Fund" in the Fund's  Prospectus.  The following  supplements  that
information.  The minimum initial  investment for Institutional  Class shares is
$1,000,000.   There  is  no  minimum  subsequent   investment   requirement  for
Institutional Class shares.

                                       70
<PAGE>

To sell shares in a retirement  account  other than an IRA, your request must be
made in writing,  except for exchanges to other eligible funds in the DWS family
of funds, which can be requested by phone or in writing.

Purchase of Class R Shares. (DWS Global Thematic Fund only) Investors may invest
in Class R shares through certain retirement and other plans. Class R shares are
subject to an annual distribution and shareholder  servicing fee of 0.50% (0.25%
distribution fee, 0.25% shareholder service fee.)


You may buy  Class R shares  if you are a  participant  in any of the  following
types of employer sponsored plans that offer R shares of the fund:

o        All section 401(a) and 457 plans

o        Certain section 403(b)(7) plans

o        401(k),  profit  sharing,  money purchase  pension and defined  benefit
         plans

o        Non-qualified deferred compensation plans

The fund's  transfer  agent monitors  transactions  in Class R shares to help to
ensure  that  investors  purchasing  Class R shares  meet the above  eligibility
requirements.  If the transfer  agent is unable to verify that an investor meets
the  eligibility  requirements  for  Class  R,  either  following  receipt  of a
completed application form within time frames established by the fund or as part
of its ongoing  monitoring,  the transfer agent may take corrective action up to
and including canceling the purchase order or redeeming the account.

Automatic  Investment  Plan. A shareholder may purchase shares of a Fund through
an automatic investment program.  With the Direct Deposit Purchase Plan ("Direct
Deposit"), investments are made automatically (minimum $500 and maximum $250,000
for both initial and subsequent investments) from the shareholder's account at a
bank,  savings and loan or credit  union into the  shareholder's  Fund  account.
Termination by a shareholder  will become effective within thirty days after the
Shareholder  Service  Agent has  received the  request.  A Fund may  immediately
terminate a shareholder's Direct Deposit in the event that any item is unpaid by
the shareholder's financial institution.

Minimum Subsequent Investment Policies.  For current shareholders there is a $50
minimum investment  requirement for subsequent investments in the fund. There is
no  minimum  subsequent  investment  requirement  for  investments  on behalf of
participants in certain  fee-based and wrap programs  offered through  financial
intermediaries approved by the Advisor.


Payroll  Investment  Plans. A shareholder  may purchase  shares through  Payroll
Direct Deposit or Government  Direct  Deposit.  Under these  programs,  all or a
portion of a shareholder's  net pay or government check is invested each payment
period.  A shareholder may terminate  participation  in these programs by giving
written  notice  to  the  shareholder's   employer  or  government   agency,  as
appropriate.  (A reasonable  time to act is required.) A Fund is not responsible
for the  efficiency of the employer or  government  agency making the payment or
any financial institutions transmitting payments.

Redemptions


Redemption fee. Each Fund imposes a redemption fee of 2% of the total redemption
amount  (calculated  at net asset  value,  without  regard to the  effect of any
contingent  deferred sales charge; any contingent  deferred sales charge is also
assessed on the total redemption  amount without regard to the assessment of the
2% redemption  fee) on all Fund shares  redeemed or exchanged  within 15 days of
buying  them  (either by  purchase  or  exchange).  The  redemption  fee is paid
directly to a Fund,  and is designed to encourage  long-term  investment  and to
offset  transaction  and other costs  associated  with  short-term  or excessive
trading. For purposes of determining whether the redemption fee applies,  shares
held the longest  time will be treated as being  redeemed  first and shares held
the shortest time will be treated as being  redeemed last. The redemption fee is
applicable  to Fund  shares  purchased


                                       71
<PAGE>

either directly or through a financial  intermediary,  such as a  broker-dealer.
Transactions  through  financial  intermediaries  typically  are placed with the
Funds on an omnibus basis and include both purchase and sale transactions placed
on behalf of  multiple  investors.  These  purchase  and sale  transactions  are
generally  netted  against  one  another  and  placed  on  an  aggregate  basis;
consequently  the identities of the individuals on whose behalf the transactions
are placed generally are not known to the Funds. For this reason,  each Fund has
undertaken to notify financial  intermediaries of their obligation to assess the
redemption fee on customer accounts and to collect and remit the proceeds to the
Fund. However, due to operational requirements,  the intermediaries' methods for
tracking and  calculating  the fee may be  inadequate or differ in some respects
from the Funds'.


A Fund may suspend the right of redemption or delay payment more than seven days
(a) during any period when the Exchange is closed other than  customary  weekend
and holiday  closings or during any period in which  trading on the  Exchange is
restricted,  (b) during any period when an emergency exists as a result of which
(i) disposal of the Fund's investments is not reasonably practicable, or (ii) it
is not  reasonably  practicable  for the Fund to determine  the value of its net
assets,  or (c) for such other  periods  as the SEC may by order  permit for the
protection of the Fund's shareholders.

A  request  for  repurchase  (confirmed  redemption)  may be  communicated  by a
shareholder  through a  financial  services  firm to  DWS-SDI,  which firms must
promptly submit orders to be effective.

Redemption  requests  must be  unconditional.  Redemption  requests (and a stock
power for certificated  shares) must be duly endorsed by the account holder.  As
specified  in  the  prospectus,  signatures  may  need  to  be  guaranteed  by a
commercial bank, trust company,  savings and loan  association,  federal savings
bank,  member  firm  of  a  national  securities  exchange  or  other  financial
institution  permitted by SEC rule.  Additional  documentation  may be required,
particularly  from   institutional  and  fiduciary  account  holders,   such  as
corporations,  custodians  (e.g.,  under the Uniform  Transfers  to Minors Act),
executors, administrators, trustees or guardians.

If the proceeds of the  redemption  (prior to the  imposition of any  contingent
deferred  sales charge) are $100,000 or less and the proceeds are payable to the
shareholder of record at the address of record,  normally a telephone request or
a written  request by any one account  holder  without a signature  guarantee is
sufficient for  redemptions by individual or joint account  holders,  and trust,
executor  and  guardian  account  holders,  provided  the  trustee,  executor or
guardian  is named in the  account  registration.  Other  institutional  account
holders exercise this special privilege of redeeming shares by telephone request
or written request without signature guarantee subject to the same conditions as
individual account holders, provided that this privilege has been pre-authorized
by the  institutional  account holder by written  instruction to the Shareholder
Service  Agent with  signatures  guaranteed.  This  privilege may not be used to
redeem shares held in certificated form and may not be used if the shareholder's
account has had an address change within 15 days of the redemption request.

Wires.  Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed  by a Fund for up to seven days if the Fund or the  Shareholder  Service
Agent deems it appropriate under then-current market conditions.  The ability to
send wires is limited by the business hours and holidays of the firms  involved.
A Fund is not  responsible  for the efficiency of the federal wire system or the
account  holder's  financial  services  firm or  bank.  The  account  holder  is
responsible  for any charges  imposed by the account  holder's  firm or bank. To
change the  designated  account  to receive  wire  redemption  proceeds,  send a
written request to the Fund Shareholder Service Agent with signatures guaranteed
as described above or contact the firm through which Fund shares were purchased.

Automatic  Withdrawal  Plan.  The owner of $5,000 or more of a class of a Fund's
shares at the  offering  price (net  asset  value  plus,  in the case of Class A
shares,  the initial  sales charge) may provide for the payment from the owner's
account of any  requested  dollar amount to be paid to the owner or a designated
payee monthly,  quarterly,  semiannually or annually. The $5,000 minimum account
size is not applicable to IRAs. The minimum periodic payment is $50. The maximum
annual rate at which  shares,  subject to CDSC may be redeemed is 12% of the net
asset value of the account. Shares are redeemed so that the payee should receive
payment  approximately  the first of the month.  Investors  using this Plan must
reinvest Fund distributions.

Non-retirement plan shareholders may establish an Automatic Withdrawal Plan (the
"Plan") to receive  monthly,  quarterly or periodic  redemptions from his or her
account for any  designated  amount of $50 or more.  Shareholders


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<PAGE>

may designate which day they want the automatic withdrawal to be processed.  The
check  amounts may be based on the  redemption of a fixed dollar  amount,  fixed
share amount,  percent of account value or declining balance.  The Plan provides
for income dividends and capital gains  distributions,  if any, to be reinvested
in  additional  Shares.  Shares are then  liquidated as necessary to provide for
withdrawal  payments.  Since the  withdrawals  are in  amounts  selected  by the
investor and have no relationship to yield or income,  payments  received cannot
be  considered  as  yield  or  income  on  the   investment  and  the  resulting
liquidations may deplete or possibly  extinguish the initial  investment and any
reinvested dividends and capital gains distributions.  Any such requests must be
received by a Portfolio's transfer agent ten days prior to the date of the first
automatic withdrawal. An Automatic Withdrawal Plan may be terminated at any time
by the  shareholder,  the  Trust or its  agent on  written  notice,  and will be
terminated when all Shares of a Portfolio under the Plan have been liquidated or
upon receipt by the Trust of notice of death of the shareholder.

The purchase of Class A shares while  participating  in a systematic  withdrawal
plan will  ordinarily be  disadvantageous  to the investor  because the investor
will be paying a sales  charge on the  purchase  of shares at the same time that
the investor is redeeming shares upon which a sales charge may have already been
paid. Therefore, a Fund will not knowingly permit additional investments of less
than $2,000 if the investor is at the same time making systematic withdrawals.

Contingent  Deferred Sales Charge (CDSC).  The following example will illustrate
the operation of the CDSC.  Assume that an investor  makes a single  purchase of
$10,000  of a Fund's  Class B shares  and that 16 months  later the value of the
shares has grown by $1,000  through  reinvested  dividends  and by an additional
$1,000 of share appreciation to a total of $12,000. If the investor were then to
redeem the entire  $12,000 in share  value,  the CDSC would be payable only with
respect to $10,000  because  neither the $1,000 of reinvested  dividends nor the
$1,000 of share  appreciation  is subject to the charge.  The charge would be at
the rate of 3.00%  ($300)  because it was in the second year after the  purchase
was made.

The rate of the CDSC is  determined  by the length of the  period of  ownership.
Investments  are tracked on a monthly  basis.  The period of ownership  for this
purpose  begins the first day of the month in which the order for the investment
is received.  For example, an investment made in March of the year of investment
will be eligible for the second  year's  charge if redeemed on or after March of
the following  year. In the event no specific  order is requested when redeeming
shares  subject  to a  CDSC,  the  redemption  will be made  first  from  shares
representing reinvested dividends and then from the earliest purchase of shares.
DWS-SDI  receives  any  CDSC  directly.  The  charge  will not be  imposed  upon
redemption of reinvested dividends or share appreciation.

The Class A CDSC will be waived in the event of:

(a)      redemptions  by  a   participant-directed   qualified  retirement  plan
         described in Code Section 401(a), a participant-directed  non-qualified
         deferred   compensation  plan  described  in  Code  Section  457  or  a
         participant-directed   qualified  retirement  plan  described  in  Code
         Section 403(b)(7) which is not sponsored by a K-12 school district;

(b)      redemptions  by  employer-sponsored  employee  benefit  plans using the
         subaccount record keeping system made available through ADP, Inc. under
         an alliance with DWS-SDI and its affiliates;


(c)      redemption  of shares of a  shareholder  (including a registered  joint
         owner) who has died or is disabled (undr certain circumstances);


(d)      redemption  of shares of a  shareholder  (including a registered  joint
         owner) who after purchase of the shares being redeemed  becomes totally
         disabled  (as  evidenced  by a  determination  by  the  federal  Social
         Security Administration);

(e)      redemptions  under a Fund's  Automatic  Withdrawal Plan at a maximum of
         12% per year of the net asset value of the account;

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<PAGE>


(f)      redemptions  of  shares  whose  dealer  of  record  at the  time of the
         investment  notifies  DWS-SDI that the dealer waives the  discretionary
         commission applicable to such Large Order NAV Purchase; and

(g)      redemptions for certain loan advances,  hardship  provisions or returns
         of excess contributions from retirement plans.

The Class B CDSC will be waived  for the  circumstances  set forth in items (c),
(d), (e) and (g) for Class A shares. In addition, this CDSC will be waived:

(h)      for redemptions made pursuant to any IRA systematic withdrawal based on
         the  shareholder's  life  expectancy  including,  but not  limited  to,
         substantially  equal periodic  payments  described in Internal  Revenue
         Code Section 72(t)(2)(A)(iv) prior to age 59 1/2;

(i)      for redemptions to satisfy required minimum  distributions after age 70
         1/2 from an IRA account (with the maximum amount subject to this waiver
         being based only upon the shareholder's DWS Scudder IRA accounts); and

(j)      in connection with the following redemptions of shares held by employer
         sponsored  employee benefit plans  maintained on the subaccount  record
         keeping  system  made  available  through  ADP under an  alliance  with
         DWS-SDI and its affiliates:  (1) to satisfy  participant  loan advances
         (note that loan repayments constitute new purchases for purposes of the
         CDSC and the conversion  privilege),  (2) in connection with retirement
         distributions  (limited  at any one time to 12% of the  total  value of
         plan assets invested in the Fund), (3) in connection with distributions
         qualifying under the hardship  provisions of the Internal Revenue Code,
         (4) representing  returns of excess contributions to such plans and (5)
         in connection  with direct "roll over"  distributions  from a Flex Plan
         into a DWS  Scudder  IRA under the  Class A net  asset  value  purchase
         privilege.

The Class C CDSC will be waived  for the  circumstances  set forth in items (b),
(c), (d), (e) and (g) for Class A shares and for the  circumstances set forth in
items (h) and (i) for Class B shares. In addition, this CDSC will be waived for:

(k)      redemption  of shares by an employer  sponsored  employee  benefit plan
         that offers  funds in addition to DWS Funds and whose  dealer of record
         has waived the  advance of the first year  administrative  service  and
         distribution  fees applicable to such shares and agrees to receive such
         fees quarterly, and

(l)      redemption  of  shares  purchased  through  a  dealer-sponsored   asset
         allocation  program  maintained  on an  omnibus  record-keeping  system
         provided  the dealer of record had waived the advance of the first year
         administrative services and distribution fees applicable to such shares
         and has agreed to receive such fees quarterly.


In-kind  Redemptions.  A Fund  reserves  the  right to  honor  any  request  for
redemption  or  repurchase  by  making  payment  in whole or in part in  readily
marketable  securities.  These securities will be chosen by a Fund and valued as
they are for purposes of computing the fund's net asset value. A shareholder may
incur transaction expenses in converting these securities to cash.

Exchanges

Shareholders  may request a taxable  exchange of their  shares for shares of the
corresponding  class of other DWS Funds  without  imposition  of a sales charge,
subject to the provisions  below. For purposes of calculating any CDSC,  amounts
exchanged retain their original cost and purchase date.


Shares of money  market  funds that were  acquired  by purchase  (not  including
shares acquired by dividend  reinvestment)  are subject to the applicable  sales
charge on exchange.  Series of DWS Target Fund are  available  on exchange  only
during  the  offering  period for such  series as  described  in the  applicable
prospectus.  Cash


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<PAGE>

Management Fund Investment,  Tax Free Money Fund  Investment,  NY Tax-Free Money
Fund  Investment,  Treasury  Money Fund -- Class  Investment,  Money Market Fund
Investment,   Cash   Management   Fund   Institutional,   Cash   Reserves   Fund
Institutional,  Treasury Money Fund --  Institutional,  Cash Reserve Fund,  Inc.
Prime Series,  Cash Reserve Fund, Inc.  Treasury Series,  Tax-Exempt  California
Money Market Fund,  Cash Account Trust and Investors Cash Trust are available on
exchange but only through a financial  services firm having a services agreement
with DWS-SDI.  All  exchanges  among money funds must meet  applicable  investor
eligibility  and investment  requirements.  Exchanges may only be made for funds
that are available for sale in the shareholder's state of residence.  Currently,
Tax-Exempt   California  Money  Market  Fund  is  available  for  sale  only  in
California.



Shareholders must obtain prospectuses of the Funds they are exchanging into from
dealers, other firms or DWS-SDI.

Automatic Exchange Plan (not applicable to Class R shares).  The owner of $1,000
or more of any  class  of  shares  of a DWS  Fund may  authorize  the  automatic
exchange  of a specified  amount ($50  minimum) of such shares for shares of the
same class of another such DWS Fund.  Exchanges will be made automatically until
the shareholder or the Fund  terminates the privilege.  Exchanges are subject to
the terms and conditions described above.

Multi-Class  Conversions.  For purposes of conversion to Class A shares,  shares
purchased  through the  reinvestment of dividends and other  distributions  paid
with respect to Class B shares in a shareholder's Fund account will be converted
to Class A shares on a pro rata basis.

Dividends

Each Fund intends to distribute  its investment  company  taxable income and any
net realized  capital gains in November or December to avoid federal excise tax,
although an additional distribution may be made if necessary.

Each Fund  intends  to  distribute  dividends  from its net  investment  income,
excluding short-term capital gains, annually in November and December. Each Fund
intends to distribute  net realized  capital gains after  utilization of capital
loss carryforwards, if any, in November and December to prevent application of a
federal excise tax. An additional distribution may be made, if necessary.

Any dividends or capital gains  distributions  declared in October,  November or
December  with a record  date in such a month  and  paid  during  the  following
January will be treated by  shareholders  for federal  income tax purposes as if
received on December 31 of the calendar year declared.

The level of income  dividends  per share (as a  percentage  of net asset value)
will be lower for Class B and Class C Shares  than for Class A Shares  primarily
as a result of the  distribution  services fee applicable to Class B and Class C
Shares.  Distributions of capital gains, if any, will be paid in the same amount
for each class.

Income  and  capital  gain  dividends,  if any,  of a Fund will be  credited  to
shareholder accounts in full and fractional shares of the same class of the Fund
at net asset value on the reinvestment  date,  except that, upon written request
to the Shareholder  Service Agent, a shareholder may select one of the following
options:

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<PAGE>

1.       To receive  income and  short-term  capital gain  dividends in cash and
         long-term  capital  gain  dividends  in shares of the same class at net
         asset value; or

2.       To receive income and capital gain dividends in cash.

Dividends  will be  reinvested  in  shares  of the same  class of a Fund  unless
shareholders  indicate in writing  that they wish to receive  them in cash or in
shares  of other  DWS  Funds  with  multiple  classes  of shares or DWS Funds as
provided in the prospectuses.  To use this privilege of investing dividends of a
Fund in shares of another DWS Fund, shareholders must maintain a minimum account
value of $1,000 in the Fund  distributing  the  dividends.  A Fund will reinvest
dividend checks (and future  dividends) in shares of that same Fund and class if
checks are returned as  undeliverable.  Dividends and other  distributions  of a
Fund in the  aggregate  amount of $10 or less are  automatically  reinvested  in
shares of the Fund  unless  the  shareholder  requests  that such  policy not be
applied to the shareholder's account.

If an investment is in the form of a retirement  plan, all dividends and capital
gains distributions must be reinvested into the shareholder's account.

If  a  shareholder   has  elected  to  reinvest  any   dividends   and/or  other
distributions,  such  distributions  will be made in  shares  of that  Fund  and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent.  Distributions of investment company taxable
income and net realized  capital  gains are  taxable,  whether made in shares or
cash.

Each  distribution  is  accompanied  by a  brief  explanation  of the  form  and
character of the  distribution.  The  characterization  of distributions on such
correspondence may differ from the characterization for federal tax purposes. In
January of each year,  each Fund issues to each  shareholder  a statement of the
federal income tax status of all distributions in the prior calendar year.

Each Fund may at any time vary its foregoing dividend practices and,  therefore,
reserves  the  right  from  time to time to  either  distribute  or  retain  for
reinvestment  such of its net  investment  income  and  its net  short-term  and
long-term  capital  gains as its  Board  determines  appropriate  under the then
current circumstances. In particular, and without limiting the foregoing, a Fund
may make additional  distributions of net investment  income or capital gain net
income in order to satisfy the minimum  distribution  requirements  contained in
the Code.

                              FEDERAL INCOME TAXES


The following is intended to be a general  summary of certain federal income tax
consequences  of  investing  in the  Funds.  It is not  intended  as a  complete
discussion  of all such  consequences,  nor  does it  purport  to deal  with all
categories of investors.  Investors are therefore  advised to consult with their
tax advisors before making an investment in a Fund.

Taxation of the Funds.  Each Fund  intends to elect to be treated and to qualify
each year as a regulated  investment  company under Subchapter M of the Code. In
order to qualify for the special tax  treatment  accorded  regulated  investment
companies and their shareholders, each Fund must, among other things:

(a)  derive at least  90% of its gross  income  for each  taxable  year from (i)
dividends,  interest,  payments with respect to certain  securities  loans,  and
gains  from  the sale or other  disposition  of  stock,  securities  or  foreign
currencies,  or other income  (including  but not limited to gains from options,
futures, or forward contracts) derived with respect to its business of investing
in such stock,  securities,  or  currencies;  and (ii) net income  derived  from
interest in "qualified publicly traded partnerships" (as defined below);

(b)  diversify  its  holdings so that,  at the end of each quarter of the Fund's
taxable year, (i) at least 50% of the market value of the Fund's total assets is
represented  by cash and cash items,  US  Government  securities,  securities of
other regulated investment companies, and other securities limited in respect of
any one issuer to a value not greater  than 5% of the value of the Fund's  total
assets  and not  more  than 10% of the  outstanding  voting  securities  of such
issuer,  and (ii) not more than 25% of the value of the Fund's  total  assets is
invested (x) in the  securities  (other


                                       76
<PAGE>

than those of the US Government or other regulated investment  companies) of any
one  issuer  or of two or more  issuers  which the Fund  controls  and which are
engaged in the same,  similar,  or related trades or  businesses,  or (y) in the
securities of one or more qualified  publicly  traded  partnerships  (as defined
below).  In the case of the Fund's investment in loan  participations,  the Fund
shall treat both the  financial  intermediary  and the issuer of the  underlying
loan as an issuer for the purposes of meeting this diversification  requirement;
and

(c) distribute  with respect to each taxable year at least 90% of the sum of its
investment  company  taxable income (as that term is defined in the Code without
regard to the deduction for dividends paid -- generally, taxable ordinary income
and the  excess,  if any, of net  short-term  capital  gains over net  long-term
capital losses) and net tax-exempt interest income, for such year..

In  general,  for  purposes of the 90% gross  income  requirement  described  in
paragraph  (a)  above,  income  derived  from a  partnership  will be treated as
qualifying  income only to the extent such  income is  attributable  to items of
income of the  partnership  which would be qualifying  income if realized by the
regulated  investment company.  However,  100% of the net income derived from an
interest in a "qualified publicly traded partnership"  (defined as a partnership
(i) interests in which are traded on an established securities market or readily
tradable on a secondary  market or the substantial  equivalent  thereof and (ii)
that derives less than 90% of its income from the qualifying income described in
paragraph  (a)(i)  above) will be treated as  qualifying  income.  In  addition,
although in general the passive loss rules of the Code do not apply to regulated
investment companies, such rules do apply to a regulated investment company with
respect to items  attributable  to an interest in a  qualified  publicly  traded
partnership. Finally, for purposes of paragraph (b) above, the term "outstanding
voting  securities  of such  issuer"  will  include the equity  securities  of a
qualified publicly traded partnership.

If a Fund qualifies as a regulated  investment  company that is accorded special
tax  treatment,  such Fund will not be subject  to federal  income tax on income
distributed  in a timely  manner to its  shareholders  in the form of  dividends
(including Capital Gain Dividends, as defined below).

If for any taxable year a Fund does not qualify for the special  federal  income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal  income tax at regular  corporate  rates (without any
deduction for distributions to its  shareholders),  and all  distributions  from
earnings and profits,  including any  distributions of net tax-exempt income and
net long-term capital gains, will be taxable to shareholders as ordinary income.
Such  distributions  would be eligible (i) to be treated as "qualified  dividend
income," in the case of individual and other noncorporate shareholders,  subject
to reduced rates of federal income taxation for taxable years  beginning  before
January 1, 2011 and (ii) for the 70% dividends received deduction in the case of
corporate  shareholders.  In addition,  such Fund could be required to recognize
unrealized  gains,  pay  substantial  taxes and  interest  and make  substantial
distributions  before  requalifying  as a regulated  investment  company that is
accorded special tax treatment.

Each Fund is subject to a 4% nondeductible  excise tax on amounts required to be
but not distributed under a prescribed formula.  The formula requires payment to
shareholders  during a calendar year of distributions  representing at least 98%
of the Fund's taxable  ordinary income for the calendar year and at least 98% of
the excess of its capital gains over capital losses realized during the one-year
period  ending  October 31 (in most cases) of such year as well as amounts  that
were neither  distributed  nor taxed to the Fund during the prior calendar year.
Although each Fund's distribution  policies should enable it to avoid excise tax
liability,  a Fund may  retain  (and be  subject  to income or excise  tax on) a
portion of its capital  gain or other income if it appears to be in the interest
of such Fund.

Taxation of Fund Distributions.  For federal income tax purposes,  distributions
of  investment  income  are  generally  taxable  as  ordinary  income.  Taxes on
distributions  of  capital  gains are  determined  by how long a Fund  owned the
investments  that generated  them,  rather than how long a shareholder has owned
his or  her  shares.  Distributions  of net  capital  gains  from  the  sale  of
investments  that a Fund  owned  for more  than  one year and that are  properly
designated by the Fund as capital gain dividends ("Capital Gain Dividends") will
be taxable as long-term  capital gains.  Distributions of gains from the sale of
investments  that a Fund owned for one year or less will be taxable as  ordinary
income.  For taxable years beginning  before January 1, 2011,  distributions  of
investment  income  designated  by a Fund as derived  from  "qualified  dividend
income" will be taxed in the hands of  individuals  at the rates


                                       77
<PAGE>

applicable  to  long-term  capital  gain,  provided  holding  period  and  other
requirements are met at both the shareholder and Fund levels.

Distributions  are taxable to shareholders  even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus were included
in  the  price  the  shareholder   paid).   Distributions  are  taxable  whether
shareholders  receive them in cash or reinvest them in additional shares through
the reinvestment  privilege. A shareholder whose distributions are reinvested in
shares will be treated as having  received a dividend  equal to either:  (i) the
fair market value of the new shares  issued to the  shareholder,  or (ii) if the
shares are trading  below net asset value,  the amount of cash  allocated to the
shareholder  for the  purchase of shares on its behalf in the open  market.  Any
gain  resulting  from the sale or  exchange  of Fund  shares  generally  will be
taxable as capital gains.

Long-term  capital gain rates  applicable to individuals  have been  temporarily
reduced -- in general,  to 15% with lower rates applying to taxpayers in the 10%
and 15% rate brackets -- for taxable years beginning before January 1, 2011.

For taxable years beginning before January 1, 2011,  "qualified dividend income"
received by an  individual  will be taxed at the rates  applicable  to long-term
capital  gain.  In order for some  portion of the  dividends  received by a Fund
shareholder to be "qualified dividend income," the Fund must meet holding period
and other  requirements  with  respect to some  portion of the  dividend  paying
stocks in its portfolio and the  shareholder  must meet holding period and other
requirements  with respect to each Fund's shares. A dividend will not be treated
as qualified  dividend  income (at either the Fund or shareholder  level) (1) if
the dividend is received  with respect to any share of stock held for fewer than
61 days during the 121-day period  beginning on the date which is 60 days before
the date on which such share becomes  ex-dividend  with respect to such dividend
(or, in the case of certain  preferred  stock, 91 days during the 181-day period
beginning  90 days before such date),  (2) to the extent that the  recipient  is
under an  obligation  (whether  pursuant to a short sale or  otherwise)  to make
related payments with respect to positions in  substantially  similar or related
property,  (3) if the recipient  elects to have the dividend  income  treated as
investment  interest,  or  (4) if  the  dividend  is  received  from  a  foreign
corporation that is (a) not eligible for the benefits of a comprehensive  income
tax treaty with the United States (with the exception of dividends paid on stock
of such a foreign  corporation  readily  tradable on an  established  securities
market in the United  States) or (b)  treated  as a passive  foreign  investment
company.

In  general,  distributions  of  investment  income  designated  by each Fund as
derived from  qualified  dividend  income will be treated as qualified  dividend
income by a shareholder  taxed as an individual  provided the shareholder  meets
the holding period and other  requirements  described  above with respect to the
Fund's shares. If the aggregate  qualified  dividends  received by a Fund during
any taxable  year are 95% or more of its gross  income,  then 100% of the Fund's
dividends (other than dividends  properly  designated as Capital Gain Dividends)
will be eligible to be treated as qualified  dividend income.  For this purpose,
the  only  gain  included  in the  term  "gross  income"  is the  excess  of net
short-term capital gain over net long-term capital loss.

Special tax rules apply to investments  through defined  contribution  plans and
other  tax-qualified  plans.  Shareholders  should  consult their tax adviser to
determine  the  suitability  of shares of a fund as an  investment  through such
plans  and  the  precise  effect  of and  investment  on  their  particular  tax
situation.

All distributions by a Fund result in a reduction in the net asset value of that
Fund's  shares.  Should  a  distribution  reduce  the net  asset  value  below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above,  even though,
from an investment standpoint, it may constitute a partial return of capital. In
particular,  investors  should be careful to consider  the tax  implications  of
buying  shares just prior to a  distribution.  The price of shares  purchased at
that time includes the amount of the forthcoming distribution.  Those purchasing
just prior to a  distribution  will receive a partial return of capital upon the
distribution, which will nevertheless be taxable to them.

Capital gains  distributions  may be reduced if Fund capital loss  carryforwards
are available.  Any capital loss  carryforwards  to which a Fund is entitled are
disclosed in such Fund's annual and semi-annual reports to shareholders.

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<PAGE>

Dividends Received Deduction.  Dividends from domestic corporations may comprise
a substantial part of each Fund's gross income. If any such dividends constitute
a portion of a Fund's gross  income,  a portion of the income  distributions  of
such Fund may be  eligible  for the 70%  deduction  for  dividends  received  by
corporations. Shareholders will be informed of the portion of dividends which so
qualify. The dividends-received deduction is reduced to the extent the shares of
a Fund  with  respect  to which  the  dividends  are  received  are  treated  as
debt-financed  under  federal  income tax law and is  eliminated if either those
shares or the  shares of a Fund are  deemed to have been held by the Fund or the
shareholder,  as the case may be, for less than 46 days during the 91-day period
beginning 45 days before the shares become ex-dividend.

Transactions  in Fund Shares.  The sale,  exchange or  redemption of shares of a
Fund may give rise to a gain or loss. In general, any gain or loss realized upon
a taxable  disposition  of shares will be treated as  long-term  capital gain or
loss if the shares have been held for more than 12 months.  Otherwise,  the gain
or loss on the  taxable  disposition  of  shares of a Fund  will be  treated  as
short-term gain or loss.  However,  any loss realized upon a taxable disposition
of shares held for six months or less will be treated as long-term,  rather than
short-term,  to the extent of any long-term capital gain distributions  received
(or deemed  received) by the  shareholder  with respect to the shares.  All or a
portion of any loss realized upon a taxable disposition of shares of a Fund will
be disallowed if other  substantially  identical  shares of a Fund are purchased
within 30 days before or after the disposition. In such a case, the basis of the
newly purchased shares will be adjusted to reflect the disallowed loss.

Foreign  Taxation.  Foreign  withholding  or other foreign taxes with respect to
income  (possibly  including,  in some cases,  capital gains) on certain foreign
securities may occur.  These taxes may be reduced or eliminated  under the terms
of an applicable US income tax treaty.

So long as more than 50% of the value of the total assets of a Fund at the close
of the taxable year consists of securities in foreign corporations, the Fund may
make an election  under  Section 853 of the Code to enable the  shareholders  to
claim a credit or deduction (subject to limitations) on their federal income tax
returns  for their  pro rata  portion  of  qualified  taxes  paid by the Fund to
foreign   countries  (which  taxes  relate  primarily  to  investment   income).
Shareholders  will treat such  amounts  as part of their  distribution  from the
Fund.  The foreign tax credit  available to  shareholders  is subject to certain
limitations and restrictions imposed by the Code.

If a Fund does not make the election  permitted  under  section 853 of the Code,
any foreign  taxes paid or accrued  will  represent  an expense to the Fund that
will reduce its investment company taxable income. In such a case,  shareholders
will not be able to claim  either a credit  or a  deduction  for  their pro rata
portion of such taxes paid by the Fund,  nor will  shareholders  be  required to
treat as part of the amounts  distributed to them their pro rata portion of such
taxes paid.

Foreign  Currency  Transactions.  A Fund's  transactions in foreign  currencies,
foreign-currency-denominated  debt  obligations  and  certain  foreign  currency
options,  futures contracts and forward contracts (and similar  instruments) may
give rise to ordinary  income or loss to the extent such income or loss  results
from fluctuations in the value of the foreign currency concerned.

Passive Foreign  Investment  Companies.  Equity investments by a Fund in certain
"passive foreign investment  companies"  ("PFICs") could potentially subject the
Fund to a US federal income tax (including  interest  charges) on  distributions
received from the company or on proceeds received from the disposition of shares
in the company,  which tax cannot be eliminated by making  distributions to Fund
shareholders.  However, such Fund may elect to avoid the imposition of that tax.
For example, a Fund may elect to treat a PFIC as a "qualified  electing fund" (a
"QEF  election"),  in which case the Fund would be required to include its share
of the company's income and net capital gains annually, regardless of whether it
receives any distribution from the company.  Such Fund also may make an election
to mark the gains  (and to a limited  extent  losses) in such  holdings  "to the
market" as though it had sold and repurchased its holdings in those PFICs on the
last day of the Fund's  taxable  year.  Such  gains and  losses  are  treated as
ordinary  income and loss. The QEF and  mark-to-market  elections may accelerate
the  recognition of income (without the receipt of cash) and increase the amount
required to be distributed by a Fund to avoid  taxation.  Making either of these
elections  therefore  may  require  such  Fund to  liquidate  other  investments
(including  when  it is not  advantageous  to do so) to  meet  its  distribution
requirement,  which also may accelerate  the  recognition of gain


                                       79
<PAGE>

and affect the Fund's total return. Dividends paid by PFICs will not be eligible
to be treated as "qualified dividend income."

Taxation of Certain  Investments.  A Fund's  investment in zero coupon bonds and
other debt  obligations  having  original  issue  discount may cause the Fund to
recognize  taxable income in excess of any cash received from the investment.  A
portion of the difference  between the issue price of zero coupon securities and
their face value  ('original  issue  discount")  is considered to be income to a
Fund each year,  even though the Fund will not receive  cash  interest  payments
from these securities. This original issue discount imputed income will comprise
a part  of the  investment  company  taxable  income  of a Fund,  which  must be
distributed to shareholders in order to maintain the  qualification  of the Fund
as a regulated  investment company and to avoid federal income tax at the Fund's
level.

Some debt  obligations with a fixed maturity date of more than one year from the
date of issuance (and all  zero-coupon  debt  obligations  with a fixed maturity
date of more than one year from the date of  issuance)  that are  acquired  by a
Fund  will be  treated  as debt  obligations  that are  issued  originally  at a
discount.  Generally,  the  amount of the  original  issue  discount  ("OID") is
treated as interest income and is included in taxable income (and required to be
distributed)  over the term of the debt  security,  even though  payment of that
amount  is not  received  until a later  time,  usually  when the debt  security
matures. In addition,  payment-in-kind securities will give rise to income which
is  required to be  distributed  and is taxable  even though a Fund  holding the
security receives no interest payment in cash on the security during the year.

Some debt  obligations with a fixed maturity date of more than one year from the
date of  issuance  that are  acquired by a Fund in the  secondary  market may be
treated  as  having  market  discount.  Generally,  any gain  recognized  on the
disposition  of, and any partial payment of principal on, a debt security having
market  discount  is treated  as  ordinary  income to the  extent  the gain,  or
principal  payment,  does not exceed the "accrued market  discount" on such debt
security. Market discount generally accrues in equal daily installments.  A Fund
may make one or more of the  elections  applicable  to debt  obligations  having
market  discount,  which could affect the character and timing of recognition of
income.

In addition, if a Fund invests in high yield original issue discount obligations
issued by  corporations  (including  tax-exempt  obligations),  a portion of the
original  issue  discount  accruing on the  obligation may be treated as taxable
dividend income. In such event,  dividends of investment  company taxable income
received from a Fund by its  shareholders,  to the extent  attributable  to such
portion of accrued original issue discount, would be taxable. Any such dividends
received by a Fund's  corporate  shareholders  may be eligible for the deduction
for dividends received by corporations.

Any market discount recognized on a bond is taxable as ordinary income. A market
discount bond is a bond  acquired on the  secondary  market at a price below its
redemption  value (or its  adjusted  issue price if issued with  original  issue
discount).  Absent an election  to include  the market  discount in income as it
accrues,  gain on the  disposition  of such an  obligation  will be  treated  as
ordinary  income  (instead  of capital  gain) to the  extent of  accrued  market
discount.

A Fund may invest to a significant  extent in debt  obligations  that are in the
lowest rating  categories or are unrated,  including debt obligations of issuers
not  currently  paying  interest  or who  are in  default.  Investments  in debt
obligations  that are at risk of or in default  present special tax issues for a
Fund.  Tax rules are not  entirely  clear  about  issues such as when a Fund may
cease to accrue interest,  original issue discount or market discount,  when and
to what extent deductions may be taken for bad debts or worthless securities and
how payments  received on  obligations  in default  should be allocated  between
principal and income. These and other related issues will be addressed by a Fund
when, as and if it invests in such  securities,  in order to seek to ensure that
it  distributes  sufficient  income  to  preserve  its  status  as  a  regulated
investment  company and does not become subject to U.S. federal income or excise
tax.

If a Fund engages in hedging  transactions,  including  hedging  transactions in
options,  futures contracts,  and straddles,  or other similar transactions,  it
will  be  subject   to  special   tax  rules   (including   constructive   sale,
mark-to-market,  straddle, wash sale, and short sale rules), the effect of which
may be to  accelerate  income to the  Fund,  defer  losses  to the  Fund,  cause
adjustments in the holding periods of the Fund's  securities,  convert long-term
capital gains into


                                       80
<PAGE>

short-term  capital gains or convert  short-term  capital  losses into long-term
capital  losses.  These rules  could  therefore  affect the  amount,  timing and
character of distributions to shareholders.  Such Fund will endeavor to make any
available  elections  pertaining to such transactions in a manner believed to be
in the best interests of the Fund.

Certain of a Fund's hedging activities may produce a difference between its book
income and the sum of its net  tax-exempt and taxable  income.  If a Fund's book
income exceeds its tax-exempt  income,  the distribution (if any) of such excess
will be treated as (i) a dividend to the extent of the Fund's remaining earnings
and profits  (including  earnings and profits arising from  tax-exempt  income),
(ii) thereafter as a return of capital to the extent of the recipient's basis in
the shares,  and (iii) thereafter as gain from the sale or exchange of a capital
asset.  If a Fund's book income is less than the sum of its net  tax-exempt  and
taxable income, such Fund could be required to make distributions exceeding book
income to qualify as a regulated investment company that is accorded special tax
treatment.

In general,  excess  inclusion  income  allocated to shareholders  (i) cannot be
offset by net  operating  losses  (subject  to a limited  exception  for certain
thrift  institutions),  (ii) will constitute  unrelated  business taxable income
("UBTI")  to  entities  (including  a  qualified  pension  plan,  an  individual
retirement  account,  a 401(k)  plan, a Keogh plan or other  tax-exempt  entity)
subject to tax on unrelated business income,  thereby potentially requiring such
an entity that is allocated excess inclusion income,  and otherwise might not be
required to file a tax return,  to file a tax return and pay tax on such income,
and  (iii) in the case of a  non-U.S.  shareholder,  will  not  qualify  for any
reduction in U.S. federal  withholding tax (discussed  below). Any investment in
residual  interests of a Collateralized  Mortgage  Obligation (a "CMO") that has
elected to be treated as a REMIC  likewise  can  create  complex  tax  problems,
especially  if a Fund  has  state  or  local  governments  or  other  tax-exempt
organizations as shareholders.  A tax-exempt  shareholder will recognize UBTI by
virtue  of  its  investment  in  a  Fund  if  shares  in  the  Fund   constitute
debt-financed  property in the hands of the  tax-exempt  shareholder  within the
meaning of Code  Section  514(b).  Furthermore,  a  tax-exempt  shareholder  may
recognize  UBTI if a Fund  recognizes  "excess  inclusion  income"  derived from
direct or indirect investments in REMIC residual interests or TMPs if the amount
of such income  recognized  by the Fund  exceeds the Fund's  investment  company
taxable  income (after taking into account  deductions for dividends paid by the
Fund).

Under  legislation  enacted in December  2006, if a charitable  remainder  trust
(defined in section 664 of the Code)  realizes any  unrelated  business  taxable
income for a taxable year, it must pay an excise tax annually of an amount equal
to such UBTI. Under IRS guidance issued in November 2006, a charitable remainder
trust will not  recognize  UBTI solely as a result of  investing  in a fund that
recognizes  "excess inclusion income." Rather, if at any time during any taxable
year  a  charitable   remainder  trust  (or  one  of  certain  other  tax-exempt
shareholders, such as the United States, a state or political subdivision, or an
agency or instrumentality  thereof, and certain energy cooperatives) is a record
holder of a share in a fund that recognizes  "excess inclusion income," then the
fund will be subject to a tax equal to that  portion  of its  "excess  inclusion
income" for the taxable year that is allocable to such shareholders,  multiplied
by the highest  federal income tax rate imposed on  corporations.  The extent to
which  this IRS  guidance  remains  applicable  in light  of the  December  2006
legislation is unclear.  To the extent  permitted under the 1940 Act, a Fund may
elect to specially allocate any such tax to the applicable  charitable remainder
trust, or other shareholder,  and thus reduce such  shareholder's  distributions
for the  year  by the  amount  of the tax  that  relates  to such  shareholder's
interest in the Fund. The Funds have not yet determined whether such an election
will be made.

Special rules apply to distributions to foreign shareholders from a Fund that is
either a "U.S.  real  property  holding  corporation"  ("USRPHC")  or would be a
USRPHC but for the operation of certain  exceptions to the  definition  thereof.
Additionally,  special  rules  apply to the sale of  shares  in a Fund that is a
USRPHC. Very generally,  a USRPHC is a domestic corporation that holds U.S. real
property interests  ("USRPIs") -- defined very generally in turn as any interest
in U.S. real property or any equity  interest in a USRPHC - when the fair market
value of a  corporations  USRPIs  equals or  exceeds  50% of the sum of the fair
market values of the  corporation's  USRPIs,  interests in real property located
outside the United States and other assets combined. A Fund that holds (directly
or indirectly) significant interests in REITs may be a USRPHC. The special rules
discussed  below  will also apply to  distributions  from a Fund that would be a
USRPHC absent  exclusions from USRPI treatment for (1) interests in domestically
controlled  REITs  and (2)  not-greater-than-5%  interests  in  publicly  traded
classes of stock in REITs.

                                       81
<PAGE>

In the  case of  Funds  that  would  be  USRPHCs  but  for  the  above-mentioned
exceptions  from the definition of USRPIs,  amounts the Fund receives from REITs
derived from gains realized from USRPIs will retain their character as USRPIs in
the hands of the Fund's foreign  shareholders (as will any direct USRPI gain the
Fund recognizes).  In the hands of a foreign shareholder that holds (or has held
in the prior  year) more than a 5% interest in the Fund,  such  amounts  will be
treated as gains  "effectively  connected" with the conduct of a "U.S.  trade or
business" subject to tax at graduated rates. Moreover, such shareholders will be
required  to file a U.S.  income  tax  return  for the year in which the gain is
recognized  and the Fund will be required to withhold  35% of the amount of such
distribution.  In the case of all other foreign shareholders (i.e., those with a
5%-or-smaller  interest in the Fund), the USRPI  distribution will be treated as
ordinary   income   (regardless  of  any  designation  by  the  Fund  that  such
distribution  is a Capital  Gain  Dividend),  and the Fund will be  required  to
withhold  30%  (or a  lower  applicable  treaty  rate)  of  the  amount  of  the
distribution  paid to such foreign  shareholder.  Foreign  shareholders  of such
funds are also  subject to "wash  sale" rules to prevent  the  avoidance  of the
tax-filing and -payment  obligations  discussed in the above paragraphs  through
the sale and repurchase of Fund shares.

In addition, a Fund that is a USRPHC must withhold 10% of the amount realized in
a redemption by a greater-than-5% foreign shareholder, and that shareholder must
file a U.S.  income tax return for the year of the  disposition of the USRPI and
pay any additional tax due on the gain. Prior to January 1, 2008, no withholding
generally is required  with respect to amounts paid in redemption of shares of a
Fund that is a USRPHC  and is also  domestically  controlled.  As of the date of
this filing, it is not clear that this exception will be extended by Congress.

Backup  Withholding.  Under  the  backup  withholding  provisions  of the  Code,
redemption  proceeds as well as  distributions  may be subject to federal income
tax withholding for certain shareholders,  including those who fail to furnish a
Fund with their taxpayer  identification  numbers and certifications as to their
tax status.

Non-US  Shareholders.  Capital Gain Dividends will not be subject to withholding
of federal income tax. In general, dividends (other than Capital Gain Dividends)
paid by each Fund to a shareholder  that is not a "US person" within the meaning
of the Code (such shareholder, a "foreign person") are subject to withholding of
US federal income tax at a rate of 30% (or lower applicable treaty rate) even if
they are  funded by  income or gains  (such as  portfolio  interest,  short-term
capital gains, or foreign-source  dividend and interest income) that, if paid to
a  foreign  person  directly,  would not be  subject  to  withholding.  However,
effective for taxable years of a Fund  beginning  before  January 1, 2008,  each
Fund  will  not be  required  to  withhold  any  amounts  (i)  with  respect  to
distributions  (other than  distributions  to a foreign  person (w) that has not
provided a satisfactory  statement that the beneficial owner is not a US person,
(x) to the extent that the dividend is  attributable  to certain  interest on an
obligation if the foreign  person is the issuer or is a 10%  shareholder  of the
issuer,  (y) that is within  certain  foreign  countries  that  have  inadequate
information  exchange with the United States,  or (z) to the extent the dividend
is  attributable  to interest  paid by a person that is a related  person of the
foreign person and the foreign person is a controlled foreign  corporation) from
US-source  interest income that, in general,  would not be subject to US federal
income tax if earned  directly by an individual  foreign  person,  to the extent
such  distributions are properly  designated by each Fund, and (ii) with respect
to distributions  (other than  distributions to an individual foreign person who
is present in the United States for a period or periods  aggregating 183 days or
more during the year of the  distribution)  of net  short-term  capital gains in
excess of net long-term  capital losses,  to the extent such  distributions  are
properly designated by the Fund. Depending on the circumstances, a Fund may make
such designations with respect to all, some or none of its potentially  eligible
dividends  and/or treat such  dividends,  in whole or in part, as ineligible for
this  exemption  from  withholding.  In order to qualify for this exemption from
withholding,  a foreign person will need to comply with applicable certification
requirements relating to its non-US status (including, in general, furnishing an
IRS Form  W-8BEN or  substitute  Form).  In the case of shares  held  through an
intermediary, the intermediary may withhold even if the Fund makes a designation
with respect to a payment.  Foreign persons should contact their  intermediaries
with respect to the application of these rules to their accounts.

If a  beneficial  holder who is a foreign  person has a trade or business in the
United States,  and the dividends are effectively  connected with the conduct by
the beneficial holder of a trade or business in the United States,  the dividend
will be subject to US federal net income taxation at regular income tax rates.

Tax Shelter Reporting Regulations.  Under Treasury regulations, if a shareholder
recognizes a loss with  respect to a Fund's  shares of $2 million or more for an
individual shareholder or $10 million or more for a corporate


                                       82
<PAGE>

shareholder,  the  shareholder  must file with the  Internal  Revenue  Service a
disclosure  statement on Form 8886. Direct shareholders of portfolio  securities
are in many cases  excepted from this reporting  requirement,  but under current
guidance,  shareholders  of a regulated  investment  company  are not  excepted.
Future guidance may extend the current exception from this reporting requirement
to shareholders of most or all regulated investment  companies.  The fact that a
loss  is  reportable   under  these   regulations  does  not  affect  the  legal
determination  of  whether  the  taxpayer's  treatment  of the  loss is  proper.
Shareholders should consult their tax advisors to determine the applicability of
these regulations in light of their individual circumstances.

Other Tax Considerations.  Shareholders of each Fund may be subject to state and
local taxes on  distributions  received from the Fund and on  redemptions of the
Fund's shares.

Investors  are advised to consult  their own tax advisors  with respect to their
own circumstances  regarding the above-referenced  federal income taxation rules
and with respect to other federal,  state,  local or foreign tax consequences to
them of an investment in shares of a Fund.



                                       83
<PAGE>


                                       84
<PAGE>


                                       85
<PAGE>


                                       86
<PAGE>


                                 NET ASSET VALUE

The net  asset  value of  shares  of each  Fund is  computed  as of the close of
regular trading on the New York Stock Exchange (the  "Exchange") on each day the
Exchange is open for trading (the "Value Time"). The Exchange is scheduled to be
closed on the following  holidays:  New Year's Day, Dr. Martin Luther King,  Jr.
Day,  Presidents' Day, Good Friday,  Memorial Day,  Independence Day, Labor Day,
Thanksgiving and Christmas,  and on a preceding Friday or subsequent Monday when
one of these  holidays  falls on a Saturday or Sunday,  respectively.  Net asset
value per share is  determined  separately  for each class of shares by dividing
the  value of the  total  assets of a Fund  attributable  to the  shares of that
class,  less all liabilities  attributable to that class, by the total number of
shares of that class outstanding. The per share net asset value may be lower for
certain classes of a Fund because of higher expenses borne by these classes.

An equity  security is valued at its most  recent  sale price on the  security's
primary  exchange  or  over-the-counter  ("OTC")  market as of the  Value  Time.
Lacking any sales,  the  security is valued at the  calculated  mean between the
most recent bid quotation and the most recent asked  quotation (the  "Calculated
Mean")  on such  exchange  or OTC  market  as of the  Value  Time.  If it is not
possible to determine the  Calculated  Mean,  the security is valued at the most
recent bid quotation on such exchange or OTC market as of the Value Time. In the
case of certain foreign exchanges or OTC markets,  the closing price reported by
the exchange or OTC market  (which may sometimes be referred to as the "official
close" or the "official closing price" or other similar term) will be considered
the most recent sale price.  If a security is traded on more than one  exchange,
or upon one or more  exchanges and in the OTC market,  quotations are taken from
the market in which the security is traded most extensively.

                                       87
<PAGE>

Debt securities are valued as follows.  Money market instruments  purchased with
an  original or  remaining  maturity  of 60 days or less,  maturing at par,  are
valued at amortized  cost.  Other money market  instruments  are valued based on
information  obtained from an approved  pricing agent or, if such information is
not readily  available,  by using  matrix  pricing  techniques  (formula  driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an approved  pricing agent (which are intended to reflect the
mean between the bid and asked prices), if available,  and otherwise at the mean
of the most recent bid and asked quotations or evaluated  prices, as applicable,
based  on   quotations   or  evaluated   prices   obtained   from  one  or  more
broker-dealers.  Privately  placed  debt  securities,  other than Rule 144A debt
securities,  initially are valued at cost and  thereafter  based on all relevant
factors  including  type  of  security,  size of  holding  and  restrictions  on
disposition.  Municipal  debt  securities  are valued at prices  supplied  by an
approved  pricing  agent (which are intended to reflect the mean between the bid
and asked  prices),  if available,  and otherwise at the mean of the most recent
bid and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities not addressed above are valued at prices supplied by an approved
pricing agent,  if available,  and otherwise at the most recent bid quotation or
evaluated price, as applicable, obtained from one or more broker-dealers.  If it
is not  possible  to value a  particular  debt  security  pursuant  to the above
methods,  the  security  is valued on the basis of  factors  including  (but not
limited to) maturity, coupon,  creditworthiness,  currency denomination, and the
movement of the market in which the security is normally traded.

An exchange-traded option contract on securities, currencies and other financial
instruments  is  valued  at its most  recent  sale  price  on such the  relevant
exchange.  Lacking any sales,  the option  contract is valued at the  Calculated
Mean.  If it is not  possible  to  determine  the  Calculated  Mean,  the option
contract is valued at the most recent bid  quotation  in the case of a purchased
option  contract or the most  recent  asked  quotation  in the case of a written
option  contract,  in each case as of the Value  Time.  An  option  contract  on
securities,  currencies and other financial instruments traded in the OTC market
is valued on the Value Date at the evaluated price provided by the broker-dealer
with which it was traded.  Futures contracts (and options thereon) are valued at
the most recent  settlement  price,  if  available,  on the  security's  primary
exchange on which they are traded most extensively.  With the exception of stock
index futures contracts which trade on the Chicago Mercantile Exchange,  closing
settlement  times  are  prior to the  close  of  trading  on the New York  Stock
Exchange.  For  stock  index  futures  contracts  which  trade  on  the  Chicago
Mercantile  Exchange,  closing  settlement  prices  are  normally  available  at
approximately  4:20 pm Eastern time. If no  settlement  price is available,  the
last traded price on such  exchange will be used.  Following  the  valuations of
securities  or other  portfolio  assets  in terms of the  currency  in which the
market  quotation  used is  expressed  ("Local  Currency"),  the  value of these
portfolio  assets in terms of US dollars is calculated  by converting  the Local
Currency  into  US  dollars  at the  prevailing  currency  exchange  rate on the
valuation date.

If market  quotations  for a portfolio  asset are not readily  available  or the
value of a portfolio  asset as  determined  in  accordance  with Board  approved
procedures does not represent the fair market value of the portfolio  asset, the
value of the portfolio asset is taken to be an amount which, in the opinion of a
Fund's Pricing Committee (or, in some cases, the Board's  Valuation  Committee),
represents fair market value.  The value of other portfolio  holdings owned by a
Fund is  determined  in a manner  which is intended  to fairly  reflect the fair
market value of the asset on the valuation date,  based on valuation  procedures
adopted  by the  Fund's  Board and  overseen  primarily  by the  Fund's  Pricing
Committee.

                             DIRECTORS AND OFFICERS


The following table presents certain information  regarding the Board Members of
each Corporation.  Each Board Member's year of birth is set forth in parentheses
after his or her name. Unless otherwise noted, (i) each Board Member has engaged
in the principal  occupation(s)  noted in the table for at least the most recent
five years, although not necessarily in the same capacity,  and (ii) the address
of each Board Member that is not an "interested  person" (as defined in the 1940
Act) of each  Corporation or the Advisor (each, an "Independent  Board Member"),
is c/o Dawn-Marie  Driscoll,  PO Box 100176,  Cape Coral, FL 33904.  The term of
office  for each  Board  Member is until the  election  and  qualification  of a
successor,  or until such Board Member  sooner dies,  resigns,  is removed or as
otherwise provided in the governing  documents of each Corporation.  Because the
Fund does not hold an annual  meeting of  shareholders,  each Board  Member will
hold office for an  indeterminate  period.  The Board  Members may also serve in
similar capacities with other funds in the DWS fund complex.


                                       88
<PAGE>



Independent Board Members
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each                                                                      Number of Funds
 Corporation and Length    Business Experience and                                       in DWS Fund
 of Time Served            Directorships During the Past 5 Years                         Complex Overseen
--------------------------------------------------------------------------------------------------------------------
<S>                        <C>                                                                   <C>
Dawn-Marie Driscoll (1946) President, Driscoll Associates (consulting firm); Executive           76
Chairperson since 2004     Fellow, Center for Business Ethics, Bentley College;
Board Member since         formerly, Partner, Palmer & Dodge (1988-1990); Vice
1987                       President of Corporate Affairs and General Counsel, Filene's
                           (1978-1988). Directorships: Trustee of 8 open-end mutual
                           funds managed by Sun Capital Advisers, Inc. (since 2007);
                           Director of ICI Mutual Insurance Company (since 2007);
                           Advisory Board, Center for Business Ethics, Bentley College;
                           Trustee, Southwest Florida Community Foundation (charitable
                           organization); Former Directorships: Investment Company
                           Institute (audit, executive, nominating committees) and
                           Independent Directors Council (governance, executive
                           committees)
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr.      Vice Chair, WGBH Educational Foundation. Directorships:               76
 (1943)                    Association of Public Television Stations; Becton Dickinson
 Board Member since        and Company(1) (medical technology company); Belo
 1990                      Corporation(1) (media company); Boston Museum of Science;
                           Public Radio International. Former Directorships: American
                           Public Television; Concord Academy; New England Aquarium;
                           Mass. Corporation for Educational Telecommunications;
                           Committee for Economic Development; Public Broadcasting
                           Service
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)        Managing General Partner, Exeter Capital Partners (a series           76
Board Member since         of private equity funds). Directorships: Progressive Holding
1996                       Corporation (kitchen goods importer and distributor);
                           Natural History, Inc. (magazine publisher); Box Top Media
                           Inc. (advertising); The Kennel Shop (retailer)
--------------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss        Clinical Professor of Finance, NYU Stern School of Business           76
(1945)                     (1997-present); Member, Finance Committee, Association for
Board Member since         Asian Studies (2002-present); Director, Mitsui Sumitomo
2005                       Insurance Group (US) (2004-present); prior thereto, Managing
                           Director, J.P. Morgan (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------

                                       89
<PAGE>
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each                                                                      Number of Funds
 Corporation and Length    Business Experience and                                       in DWS Fund
 of Time Served            Directorships During the Past 5 Years                         Complex Overseen
--------------------------------------------------------------------------------------------------------------------
Martin J. Gruber           Nomura Professor of Finance, Leonard N. Stern School of               76
(1937)                     Business, New York University (since September 1965);
Board Member since         Director, Japan Equity Fund, Inc. (since January 1992), Thai
2006                       Capital Fund, Inc. (since January 2000), Singapore Fund,
                           Inc. (since January 2000), National Bureau of Economic
                           Research (since January 2006). Formerly, Trustee, TIAA
                           (pension funds) (January 1996-January 2000); Trustee, CREF
                           and CREF Mutual Funds (January 2000-March 2005); Chairman,
                           CREF and CREF Mutual Funds (February 2004-March 2005); and
                           Director, S.G. Cowen Mutual Funds (January 1985-January 2001)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring         Jacob Safra Professor of International Banking and                    76
(1946)                     Professor, Finance Department, The Wharton School,
Board Member since         University of Pennsylvania (since July 1972); Co-Director,
2006                       Wharton Financial Institutions Center (since July 2000);
                           Director, Japan Equity Fund, Inc. (since September 2007),
                           Thai Capital Fund, Inc. (since September 2007), Singapore
                           Fund, Inc. (since September 2007). Formerly, Vice Dean and
                           Director, Wharton Undergraduate Division (July 1995-June
                           2000); Director, Lauder Institute of International
                           Management Studies (July 2000-June 2006)
--------------------------------------------------------------------------------------------------------------------
Graham E. Jones            Senior Vice President, BGK Realty, Inc. (commercial real              76
(1933)                     estate) (since 1995). Formerly, Trustee of various
Board Member since         investment companies managed by Sun Capital Advisors, Inc.
2006                       (1998-2005), Morgan Stanley Asset Management (1985-2001) and
                           Weiss, Peck and Greer (1985-2005)
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel           President and Chief Executive Officer, The Pew Charitable             76
(1951)                     Trusts (charitable organization) (1994 to present); Trustee,
Board Member since         Thomas Jefferson Foundation (charitable organization) (1994
2006                       to present); Trustee, Executive Committee, Philadelphia
                           Chamber of Commerce (2001 to present). Formerly, Executive
                           Vice President, The Glenmede Trust Company (investment trust
                           and wealth management) (1983 to 2004); Board Member,
                           Investor Education (charitable organization) (2004-2005);
                           Director, Viasys Health Care(1) (January 2007-June 2007)
--------------------------------------------------------------------------------------------------------------------
Philip Saunders, Jr.       Principal, Philip Saunders Associates (economic and                   74
(1935)                     financial consulting) (since November 1988).  Formerly,
Board Member since         Director, Financial Industry Consulting, Wolf & Company
2006                       (consulting) (1987-1988); President, John Hancock Home
                           Mortgage Corporation (1984-1986); Senior Vice President of
                           Treasury and Financial Services, John Hancock Mutual Life
                           Insurance Company, Inc. (1982-1986)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.     Private investor since October 2003; Trustee of 8 open-end            76
(1946)                     mutual funds managed by Sun Capital Advisers, Inc. (since
Board Member since         October 1998). Formerly, Pension & Savings Trust Officer,
2006                       Sprint Corporation(1) (telecommunications) (November
                           1989-September 2003)
--------------------------------------------------------------------------------------------------------------------

                                       90
<PAGE>
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each                                                                      Number of Funds
 Corporation and Length    Business Experience and                                       in DWS Fund
 of Time Served            Directorships During the Past 5 Years                         Complex Overseen
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg     Retired. Formerly, Consultant (1997-2001); Director, US               76
(1943)                     Government Accountability Office (1996-1997); Partner,
Board Member since         Fulbright & Jaworski, L.L.P. (law firm) (1978-1996).
1997                       Directorships: The William and Flora Hewlett Foundation;
                           Service Source, Inc. Former Directorships: Mutual Fund
                           Directors Forum (2002-2004), American Bar Retirement
                           Association (funding vehicle for retirement plans)
                           (1987-1990 and 1994-1996)
--------------------------------------------------------------------------------------------------------------------
Carl W. Vogt               Retired Senior Partner, Fulbright & Jaworski, L.L.P. (law             74
(1936)                     firm); formerly, President (interim) of Williams College
Board Member since         (1999-2000); formerly, President of certain funds in the
2002                       Deutsche Asset Management family of funds (formerly, Flag
                           Investors family of funds) (registered investment companies)
                           (1999-2000). Directorships: Yellow Corporation (trucking);
                           American Science & Engineering (x-ray detection equipment).
                           Former Directorships: ISI Family of Funds (registered
                           investment companies, 4 funds overseen); National Railroad
                           Passenger Corporation (Amtrak) Waste Management, Inc. (solid
                           waste disposal); formerly, Chairman and Member, National
                           Transportation Safety Board
--------------------------------------------------------------------------------------------------------------------




                                       91
<PAGE>


                                       92
<PAGE>




Interested Board Member
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each                                                                      Number of Funds
 Corporation and Length    Business Experience and                                       in DWS Fund
 of Time Served            Directorships During the Past 5 Years                         Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(2)         Managing Director(4), Deutsche Asset Management; Head of              82
 (1958)                    Deutsche Asset Management Americas; CEO of DWS Scudder;
 Board Member since        formerly board member of DWS Investments, Germany
 2006                      (1999-2005); formerly, Head of Sales and Product Management
                           for the Retail and Private Banking Division of Deutsche Bank
                           in Germany (1997-1999); formerly, various strategic and
                           operational positions for Deutsche Bank Germany Retail and
                           Private Banking Division in the field of investment funds,
                           tax driven instruments and asset management for corporates
                           (1989-1996)
--------------------------------------------------------------------------------------------------------------------


                                       93
<PAGE>



Officers(3)
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each
 Corporation and Length     Business Experience and
 of Time Served             Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(5)        Managing Director(4), Deutsche Asset Management (2006-present); President of
 (1965)                     DWS family of funds; Director, ICI Mutual Insurance Company (since
 President, 2006-present    October 2007); formerly, Director of Fund Board Relations (2004-2006) and
                            Director of Product Development (2000-2004), Merrill Lynch Investment
                            Managers; Senior Vice President Operations, Merrill Lynch Asset Management
                            (1999-2000)
--------------------------------------------------------------------------------------------------------------------
 John Millette(6) (1962)    Director(4), Deutsche Asset Management
 Vice President and
 Secretary, 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(5)        Managing Director(4), Deutsche Asset Management (since July 2004); formerly,
 (1963)                     Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family
 Chief Financial Officer,   of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at
 2004-present               UBS Global Asset Management (1994-1998)
 Treasurer, 2005-present
--------------------------------------------------------------------------------------------------------------------
 Patricia DeFilippis(5)     Vice President, Deutsche Asset Management (since June 2005); Counsel, New
 (1963)                     York Life Investment Management LLC (2003-2005); legal associate, Lord,
 Assistant Secretary,       Abbett & Co. LLC (1998-2003)
 2005-present
--------------------------------------------------------------------------------------------------------------------
 Elisa D. Metzger(5)        Director(4), Deutsche Asset Management (since September 2005); Counsel,
 (1962)                     Morrison and Foerster LLP (1999-2005)
 Assistant Secretary,
 2005-present
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(6)        Managing Director(4), Deutsche Asset Management
 (1962)
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(6)            Director(4), Deutsche Asset Management (since 2006); Vice President, The
 (1957)                     Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------

                                       94
<PAGE>
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each
 Corporation and Length     Business Experience and
 of Time Served             Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Kathleen Sullivan          Director(4), Deutsche Asset Management
 D'Eramo(6)
 (1957)
 Assistant Treasurer,
 2003-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(5) (1972)    Vice President, Deutsche Asset Management (since 2006); formerly, AML
 Anti-Money Laundering      Operations Manager for Bear Stearns (2004-2006), Supervising Compliance
 Compliance Officer,        Principal and Operations Manager for AXA Financial (1999-2004)
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Robert Kloby(5) (1962)     Managing Director(4), Deutsche Asset Management (2004-present); formerly,
 Chief Compliance           Chief Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice
 Officer, 2006-present      President, The Prudential Insurance Company of America (1988-2000); E.F.
                            Hutton and Company (1984-1988)
--------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(5)  Director(4), Deutsche Asset Management (2006-present); formerly, Director,
 (1951)                     Senior Vice President, General Counsel, and Assistant Secretary, Hansberger
 Chief Legal Officer,       Global Investors, Inc. (1996-2006); Director, National Society of Compliance
 2006-present               Professionals (2002-2005) (2006-2009)
--------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)      A publicly held company with securities  registered pursuant to Section
         12 of the Securities Exchange Act of 1934.

(2)      The  mailing  address  of Axel  Schwarzer  is c/o  Deutsche  Investment
         Management  Americas Inc.,  345 Park Avenue,  New York, New York 10154.
         Mr.  Schwarzer is an interested Board Member by virtue of his positions
         with Deutsche Asset Management.  As an interested person, Mr. Schwarzer
         receives no compensation from the Funds.

(3)      As a result of their respective positions held with the Advisor,  these
         individuals are considered  "interested  persons" of the Advisor within
         the meaning of the 1940 Act. Interested persons receive no compensation
         from the Funds.

(4)      Executive title, not a board directorship.

(5)      Address:  345 Park Avenue, New York, New York 10154.

(6)      Address: Two International Place, Boston, Massachusetts 02110.

Each Officer also holds  similar  positions for other  investment  companies for
which DIMA or an affiliate serves as the advisor.

Officer's Role with Principal Underwriter:  DWS Scudder Distributors, Inc.

 Paul H. Schubert:                         Vice President
 Caroline Pearson:                         Secretary


                                       95
<PAGE>


                                       96
<PAGE>



Information Concerning Committees and Meetings of Board Members

The Board of the  Corporation  met ten (10) times during the calendar year ended
December 31, 2006 and each Board Member attended at least 80% of the meetings of
the Board and meetings of the committees of the Board on which such Board Member
served.

Board  Committees.  Ms.  Driscoll  has served as Chair of the Board of the Funds
since June 2004.

The Board has established the following  standing  committees:  Audit Committee,
Nominating/Corporate Governance Committee, Valuation Committee, Equity Oversight
Committee, Fixed Income Oversight Committee,  Marketing/Distribution/Shareholder
Service Committee,  Legal/Regulatory/Compliance Committee and Expense/Operations
Committee.

The Audit  Committee  assists the Board in  fulfilling  its  responsibility  for
oversight of the quality and integrity of the accounting, auditing and financial
reporting  practices  of the  applicable  Fund.  It also  makes  recommendations
regarding the selection of an independent  registered public accounting firm for
a Fund,  reviews the  independence of such firm,  reviews the scope of audit and
internal  controls,  considers and reports to the Board on matters relating to a
Fund's  accounting and financial  reporting  practices,  and performs such other
tasks as the full Board deems  necessary  or  appropriate.  The Audit  Committee
receives  annual   representations   from  the  independent   registered  public
accounting firm as to its  independence.  The members of the Audit Committee are
Keith R. Fox (Chair and Audit Committee Financial Expert),  Kenneth C. Froewiss,
Richard J. Herring,  Graham E. Jones,  Philip Saunders,  Jr., William N. Searcy,
Jr. and Jean  Gleason  Stromberg.  The Audit  Committee  held eight (8) meetings
during the calendar year 2006.

The  Nominating/Corporate  Governance  Committee  (i)  recommends  to the  Board
candidates  to serve as Board  Members and (ii)  oversees  and, as  appropriate,
makes  recommendations  to the Board  regarding  other  fund  governance-related
matters,  including but not limited to Board compensation practices,  retirement
policies,  self-evaluations  of effectiveness,  review of possible  conflicts of
interest  and  independence  issues  involving  Board


                                       97
<PAGE>

Members,  allocations of  assignments  and functions of committees of the Board,
and share ownership policies. The members of the Nominating/Corporate Governance
Committee are Henry P. Becton,  Jr. (Chair),  Graham E. Jones,  Rebecca W. Rimel
and  Jean  Gleason  Stromberg.  The  Nominating/Corporate  Governance  Committee
(previously  known as the  Committee on  Independent  Directors)  held three (3)
meetings during the calendar year 2006.

The Valuation  Committee  oversees Fund  valuation  matters,  reviews  valuation
procedures  adopted  by the  Board,  determines  the fair  value  of the  Fund's
securities as needed in accordance  with the valuation  procedures  and performs
such other tasks as the full Board deems necessary or  appropriate.  The members
of the Valuation  Committee  are Keith R. Fox,  Kenneth C.  Froewiss,  Martin J.
Gruber,  Richard J. Herring and Philip Saunders,  Jr. (Chair).  On behalf of DWS
Global  Thematic Fund, the Valuation  Committee held eleven  meetings during the
calendar year 2006. On behalf of DWS International Fund, the Valuation Committee
held 3 meetings during the calendar year 2006.

The Board has established two Investment Oversight  Committees,  one focusing on
Funds  primarily   investing  in  equity   securities  (the  "Equity   Oversight
Committee")  and one  focusing  on Funds  primarily  investing  in fixed  income
securities  (the "Fixed Income  Oversight  Committee").  These  Committees  meet
regularly with Fund portfolio managers and other investment  personnel to review
the relevant  Funds'  investment  strategies  and  investment  performance.  The
members of the Equity  Oversight  Committee are Henry P. Becton,  Jr., Martin J.
Gruber (Chair),  Richard J. Herring,  Rebecca W. Rimel, Philip Saunders, Jr. and
Carl W. Vogt. The members of the Fixed Income Oversight Committee are Dawn-Marie
Driscoll, Keith R. Fox, Kenneth C. Froewiss, Graham E. Jones, William N. Searcy,
Jr. (Chair) and Jean Gleason Stromberg. Each Investment Oversight Committee held
six (6) meetings during the calendar year 2006.

The  Marketing/Distribution/Shareholder   Service  Committee  oversees  (i)  the
quality, costs and types of shareholder services provided to the Funds and their
shareholders,  and (ii) the distribution-related  services provided to the Funds
and their  shareholders.  The members of the  Marketing/Distribution/Shareholder
Service Committee are Martin J. Gruber,  Richard J. Herring (Chair),  Rebecca W.
Rimel,     Jean     Gleason     Stromberg     and    Carl    W.    Vogt.     The
Marketing/Distribution/Shareholder  Service  Committee  held  six  (6)  meetings
during the calendar year 2006.

The  Legal/Regulatory/Compliance  Committee  oversees (i) the significant  legal
affairs of the Funds, including the handling of pending or threatened litigation
or  regulatory  action  involving  the Funds,  (ii) general  compliance  matters
relating   to  the  Funds  and  (iii)   proxy   voting.   The   members  of  the
Legal/Regulatory/Compliance  Committee  are  Henry P.  Becton,  Jr.,  Dawn-Marie
Driscoll,  Rebecca W. Rimel,  William N. Searcy, Jr., Jean Gleason Stromberg and
Carl W. Vogt (Chair).  The  Legal/Regulatory/Compliance  Committee  held six (6)
meetings during the calendar year 2006.

The Expense/Operations Committee (i) monitors the Fund's total operating expense
levels,  (ii)  oversees the  provision of  administrative  services to the Fund,
including the Fund's custody,  fund accounting and insurance  arrangements,  and
(iii) reviews the Fund's investment advisers' brokerage practices, including the
implementation  of  related  policies.  The  members  of the  Expense/Operations
Committee are Henry P. Becton, Jr., Dawn-Marie  Driscoll,  Keith R. Fox, Kenneth
C.  Froewiss,  Graham E. Jones  (Chair),  Philip  Saunders,  Jr. and  William N.
Searcy,  Jr. This  committee  held seven (7) meetings  during the calendar  year
2006.

Ad Hoc Committees.  In addition to the standing committees described above, from
time to time the Board also forms ad hoc committees to consider specific issues.
In 2006,  various ad hoc  committees of the Board held an  additional  seven (7)
meetings.

Remuneration.  Each Independent Board Member receives compensation from the Fund
for his or her services, which includes an annual retainer and an attendance fee
for each meeting attended. No additional compensation is paid to any Independent
Board Member for travel time to meetings,  attendance at directors'  educational
seminars  or  conferences,   service  on  industry  or  association  committees,
participation  as speakers at directors'  conferences or service on special fund
industry director task forces or subcommittees. Independent Board Members do not
receive any employee  benefits such as pension or retirement  benefits or health
insurance  from the Fund or any fund in the DWS  fund  complex.

                                       98
<PAGE>

Members of the Board who are officers,  directors,  employees or stockholders of
Deutsche Asset Management or its affiliates receive no direct  compensation from
a Fund, although they are compensated as employees of Deutsche Asset Management,
or its affiliates,  and as a result may be deemed to participate in fees paid by
the Funds.  The following tables show  compensation  from the Fund and aggregate
compensation  from all of the  funds in the DWS fund  complex  received  by each
Board Member during the calendar year 2006. Mr. Schwarzer became a member of the
Board on May 5,  2006,  is an  interested  person of the Funds and  received  no
compensation  from the  Funds or any fund in the DWS  fund  complex  during  the
relevant periods.



                                       99
<PAGE>



<TABLE>
<CAPTION>

                              Aggregate Compensation   Aggregate Compensation      Total Compensation
                                 from DWS Global       from DWS International        from Fund and
 Name of Board Member             Thematic Fund                 Fund               DWS Fund Complex(1)
 --------------------             -------------                 ----               -------------------

<S>                  <C>              <C>                    <C>                        <C>
 Henry P. Becton, Jr.(3)              $3,773                 $5,550                     $189,000
 Dawn-Marie Driscoll(2)(3)(4)         $4,987                 $7,343                     $251,000
 Keith R. Fox(3)(4)                   $3,851                 $5,669                     $195,000
 Kenneth C. Froewiss(3)(4)            $3,983                 $5,851                     $234,988
 Martin J. Gruber(3)                  $1,563                 $2,200                     $188,000
 Richard J. Herring(3)(4)             $1,494                 $2,110                     $184,000
 Graham E. Jones(3)(4)                $1,733                 $2,440                     $206,000

                                      100
<PAGE>
                              Aggregate Compensation   Aggregate Compensation      Total Compensation
                                 from DWS Global       from DWS International        from Fund and
 Name of Board Member             Thematic Fund                 Fund               DWS Fund Complex(1)
 --------------------             -------------                 ----               -------------------
 Rebecca W. Rimel(3)                  $1,525                 $2,146                     $185,000
 Philip Saunders, Jr.(3)(4)           $1,733                 $2,440                     $207,000
 William N. Searcy, Jr.(3)(4)         $1,733                 $2,440                     $206,000
 Jean Gleason Stromberg(3)(4)         $3,970                 $5,837                     $202,000
 Carl W. Vogt(3)                      $3,773                 $5,550                     $189,000
</TABLE>

(1)      The DWS Fund Complex is composed of 155 funds as of December 31, 2006.

(2)      Includes  $50,000 in annual  retainer  fees in Ms.  Driscoll's  role as
         Chairperson of the Board.

(3)      For each Board Member,  except Mr. Becton,  Mr.  Froewiss and Mr. Vogt,
         total  compensation  for calendar year 2006 includes  compensation  for
         service  on  the  boards  of  34  trusts/corporations  comprised  of 87
         funds/portfolios.  For Messrs.  Becton and Vogt total  compensation for
         calendar year 2006 includes  compensation  for service on the boards of
         32  trusts/corporations  comprised  of  85  funds/portfolios.  For  Mr.
         Froewiss   total   compensation   for  calendar   year  2006   includes
         compensation  for  services  on the  boards  of 37  trusts/corporations
         comprised of 90 funds/portfolios.

(4)      Aggregate  compensation  includes amounts paid to the Board Members for
         special  meetings of ad hoc committees of the board in connection  with
         the  possible  consolidation  of the various DWS Fund boards and funds,
         meetings for considering fund expense simplification  initiatives,  and
         consideration  of issues  specific  to the Funds'  direct  shareholders
         (i.e., those shareholders who did not purchase shares through financial
         intermediaries).  Such amounts totaled $16,000 for Ms. Driscoll, $1,000
         for Mr. Fox, $17,000 for Mr. Froewiss,  $1,000 for Dr. Herring, $16,000
         for Mr.  Jones,  $17,000 for Dr.  Saunders,  $16,000 for Mr. Searcy and
         $16,000  for Ms.  Stromberg.  These  meeting  fees  were  borne  by the
         applicable DWS Funds.

Board Member Ownership in the Fund(1)

The  following  table shows the dollar range of equity  securities  beneficially
owned by each Board  Member in the Funds and DWS Fund Complex as of December 31,
2006.

<TABLE>
<CAPTION>

                                                                   Dollar Range of        Aggregate Dollar Range of
                                         Dollar Range of        Beneficial Ownership       Ownership in all Funds
                                      Beneficial Ownership in   in DWS International     Overseen by Board Member in
Board Member                         DWS Global Thematic Fund           Fund              the DWS Fund Complex(2)
------------                         ------------------------           ----              -----------------------

Independent Board Member:
-------------------------

<S>                                            <C>                   <C>                            <C>
Henry P. Becton, Jr.                     $10,001-$50,000              $1-$10,000                Over $100,000
Dawn-Marie Driscoll                      $10,001-$50,000              $1-$10,000                Over $100,000
Keith R. Fox                                   None              $10,001-$50,000                Over $100,000
Kenneth C. Froewiss                            None                         None                Over $100,000
Martin J. Gruber                               None                         None                Over $100,000
Richard J. Herring                       $50,001-$100,000                   None                Over $100,000
Graham E. Jones                                None                         None                Over $100,000
Rebecca W. Rimel                         $50,001-$100,000                   None                Over $100,000

                                      101
<PAGE>

                                                                   Dollar Range of        Aggregate Dollar Range of
                                         Dollar Range of        Beneficial Ownership       Ownership in all Funds
                                      Beneficial Ownership in   in DWS International     Overseen by Board Member in
Board Member                         DWS Global Thematic Fund           Fund              the DWS Fund Complex(2)
------------                         ------------------------           ----              -----------------------

Philip Saunders, Jr.                           None                Over $100,000                Over $100,000
William N. Searcy, Jr.                         None                         None                Over $100,000
Jean Gleason Stromberg                   $10,001-$50,000                    None                Over $100,000
Carl W. Vogt                               Over $100,000                    None                Over $100,000

Interested Board Member:
------------------------

Axel Schwarzer                           $10,001-$50,000             None                       Over $100,000
</TABLE>

(1)      The amount shown  includes  share  equivalents of funds which the Board
         Member  is  deemed  to be  invested  pursuant  to the  Fund's  deferred
         compensation   plan.  The  inclusion   therein  of  any  shares  deemed
         beneficially  owned does not  constitute  an  admission  of  beneficial
         ownership of the shares.

(2)      Securities  beneficially  owned as defined  under the 1934 Act  include
         direct and/or indirect ownership of securities where the Board Member's
         economic interest is tied to the securities,  employment  ownership and
         securities  when the Board  Member can exert  voting power and when the
         Board Member has  authority to sell the  securities.  The dollar ranges
         are:  None,   $1-$10,000,   $10,001-$50,000,   $50,001-$100,000,   over
         $100,000.

Ownership in Securities of the Advisor and Related Companies

As  reported to the Funds,  the  information  in the  following  table  reflects
ownership by the Independent Board Members and their immediate family members of
certain  securities as of December 31, 2006. An immediate family member can be a
spouse,  children  residing in the same  household  including  step and adoptive
children and any dependents.  The securities  represent ownership in the Advisor
or principal  underwriter  of the Fund and any persons  (other than a registered
investment company) directly or indirectly controlling,  controlled by, or under
common control with the Advisor or principal underwriter of the Funds (including
Deutsche Bank AG).

<TABLE>
<CAPTION>

                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----

<S>                                <C>                  <C>           <C>             <C>               <C>
Henry P. Becton, Jr.                                None

                                      102
<PAGE>
                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----

Dawn-Marie Driscoll                                 None
Keith R. Fox                                        None
Kenneth C. Froewiss                                 None
Martin J. Gruber                                    None
Richard J. Herring                                  None
Graham E. Jones                                     None
Rebecca W. Rimel                                    None
Philip Saunders, Jr.                                None
William N. Searcy, Jr.                              None
Jean Gleason Stromberg                              None
Carl W. Vogt                                        None
</TABLE>

Securities Beneficially Owned

As of November 7, 2007, the Board Members and officers of the Corporation owned,
as a group, less than 1% of the outstanding shares of the Fund.

To the best of each Fund's knowledge, as of November 7, 2007, no person owned of
record or beneficially 5% or more of any class of the Fund's outstanding shares,
except as noted below.

DWS Global Thematic Fund
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                            <C>
CHARLES SCHWAB & CO INC                                     1,973,808.7840                 11.39 % of Class A
SPECIAL CUSTODY ACCOUNT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMERS
SAN FRANCISCO CA  94104-4151
--------------------------------------------------------------------------------------------------------------------

MLPF&S FOR THE SOLE BENEFIT OF ITS                          1,714,510.7280                  9.90 % of Class A
CUSTOMERS
JACKSONVILLE FL  32246-6484
--------------------------------------------------------------------------------------------------------------------

MLPF&S FOR THE SOLE BENEFIT OF ITS                           217,690.9280                  17.21 % of Class B
CUSTOMERS
JACKSONVILLE FL  32246-6484
--------------------------------------------------------------------------------------------------------------------

CITIGROUP GLOBAL MARKETS INC                                 178,151.2700                  14.08 % of Class B
NEW YORK NY  10001-2402
--------------------------------------------------------------------------------------------------------------------

MLPF&S FOR THE SOLE BENEFIT OF ITS                          1,745,269.5530                 24.69 % of Class C
CUSTOMERS
JACKSONVILLE FL  32246-6484
--------------------------------------------------------------------------------------------------------------------

MORGAN STANLEY & CO.                                         544,724.4770                   7.71 % of Class C
JERSEY CITY NJ  07311
--------------------------------------------------------------------------------------------------------------------

CITIGROUP GLOBAL MARKETS INC                                 539,315.5540                   7.63 % of Class C
NEW YORK NY  10001-2402
--------------------------------------------------------------------------------------------------------------------

                                      103
<PAGE>
--------------------------------------------------------------------------------------------------------------------
Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------------------------------------------------------------------------------------

MLPF&S FOR THE SOLE BENEFIT OF ITS                            43,599.9740                  17.74 % of Class R
CUSTOMERS
JACKSONVILLE FL  32246-6484
--------------------------------------------------------------------------------------------------------------------

HARTFORD LIFE INSURANCE                                       36,208.3430                  14.73 % of Class R
COMPANY SEPARATE ACCOUNT
HARTFORD CT  06104-2999
--------------------------------------------------------------------------------------------------------------------

DWS TRUST COMPANY                                             21,496.7850                   8.75 % of Class R
FBO APPLIED ENERGY SOLUTIONS LLC
401(K) PLAN
SALEM NH  03079-1143
--------------------------------------------------------------------------------------------------------------------

GPC SECURITIES INC AS AGENT                                   13,643.7220                   5.55 % of Class R
MERRILL LYNCH BANK & TRUST FSB
TTEE
FBO PERRY & BARRON ORTHOPEDICS PLAN
ATLANTA GA  30348-5117
--------------------------------------------------------------------------------------------------------------------

DWS International Fund

--------------------------------------------------------------------------------------------------------------------
Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------------------------------------------------------------------------------------

MLPF&S FOR THE SOLE BENEFIT OF ITS                            45,444.0500                   9.50 % of Class C
CUSTOMERS
JACKSONVILLE FL  32246-6484
--------------------------------------------------------------------------------------------------------------------

NORTHERN TRUST CO CUST                                       188,220.1090            46.11 % of Institutional Class
FBO ARMY/AIR FORCE
CHICAGO IL  60675-0001
--------------------------------------------------------------------------------------------------------------------

NAT'L FINANCIAL SERVICES CORP FOR                             73,800.5910            18.08 % of Institutional Class
EXCL BENEFIT OUR CUSTOMERS
NEW YORK NY  10281-1003
--------------------------------------------------------------------------------------------------------------------

DWS TRUST COMPANY TTEE                                        62,020.7010            15.19 % of Institutional Class
FBO DB MATCHED SAVINGS PLAN
SALEM NH  03079-1143
--------------------------------------------------------------------------------------------------------------------

STATE STREET BANK & TRUST CO                                  43,212.8320            10.59 % of Institutional Class
CUST FBO
DWS LIFECOMPASS 2020 FUND
QUINCY MA  02171-2105
--------------------------------------------------------------------------------------------------------------------
</TABLE>



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                                      112
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                                      113
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Agreement to Indemnify Independent Directors for Certain Expenses.


In connection with litigation or regulatory  action related to possible improper
market timing or other improper trading activity or possible improper  marketing
and sales  activity  in the Funds,  each Fund's  investment  advisor has agreed,
subject to  applicable  law and  regulation,  to indemnify and hold harmless the
applicable  Funds  against  any and all loss,  damage,  liability  and  expense,
arising  from  market  timing or  marketing  and sales  matters  alleged  in any
enforcement actions brought by governmental authorities involving or potentially
affecting the Funds or the investment  advisor  ("Enforcement  Actions") or that
are the basis for private  actions  brought by shareholders of the Funds against
the Funds,  their directors and officers,  the Funds' investment  advisor and/or
certain other parties ("Private Litigation"), or any proceedings or actions that
may  be  threatened  or  commenced  in  the  future  by  any


                                      114
<PAGE>

person  (including  governmental  authorities),  arising  from or similar to the
matters alleged in the Enforcement Actions or Private Litigation. In recognition
of its  undertaking  to  indemnify  the  applicable  Funds  and in  light of the
rebuttable  presumption generally afforded to independent  directors/trustees of
investment  companies  that they have not  engaged in  disabling  conduct,  each
Fund's  investment  advisor  has also  agreed,  subject  to  applicable  law and
regulation,  to indemnify the applicable  Funds'  Independent  Directors against
certain liabilities the Independent Directors may incur from the matters alleged
in any Enforcement  Actions or Private  Litigation or arising from or similar to
the  matters  alleged in the  Enforcement  Actions or  Private  Litigation,  and
advance expenses that may be incurred by the Independent  Director in connection
with any Enforcement  Actions or Private Litigation.  The applicable  investment
advisor is not, however,  required to provide indemnification and advancement of
expenses: (1) with respect to any proceeding or action with respect to which the
applicable  Fund's Board  determines  that the Independent  Director  ultimately
would  not be  entitled  to  indemnification  or (2)  for any  liability  of the
Independent Director to the Funds or their shareholders to which the Independent
Director would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the Independent Director's duties as a
director or trustee of the Funds as determined in a final  adjudication  in such
action or proceeding.  The estimated amount of any expenses that may be advanced
to the  Independent  Directors  or  indemnity  that  may be  payable  under  the
indemnity  agreements  is currently  unknown.  These  agreements  by each Fund's
investment  advisor will survive the  termination of the  investment  management
agreements between the applicable investment advisor and the Funds.



                                FUND ORGANIZATION

Organizational Description

DWS  Global  Thematic  Fund.  DWS  Global  Thematic  Fund  is a  series  of  DWS
Global/International  Fund,  Inc., a Maryland  corporation  organized on May 15,
1986. The name of this  Corporation  was changed,  effective May 29, 1998,  from
Scudder Global Fund, Inc. This  Corporation  currently  consists of four series:
DWS Global  Thematic Fund, DWS Global Bond Fund, DWS Global  Opportunities  Fund
and DWS Emerging Markets Fixed Income Fund. Each Fund except DWS Global Thematic
Fund is further  divided into four classes of shares,  Class S, Class A, Class B
and Class C shares.  DWS  Global  Thematic  Fund is  further  divided  into five
classes of shares: Class S, Class A, Class B, Class C and Class R.

                                      115
<PAGE>

The authorized capital stock of DWS Global/International  Fund, Inc. consists of
1,559,993,796  shares  with $0.01 par  value,  200  million  shares of which are
allocated  to DWS Global  Opportunities  Fund,  529,154,575  shares of which are
allocated to DWS Global Bond Fund, and 320 million shares of which are allocated
to each of DWS  Emerging  Markets  Fixed  Income Fund and 370 million  shares of
which are allocated to DWS Global Thematic Fund.


DWS International  Fund, Inc. DWS International  Fund, Inc. (the  "Corporation")
was organized as Scudder Fund of Canada Ltd. in Canada in 1953 by the investment
management firm of Scudder, Stevens & Clark, Inc. On March 16, 1964, the name of
this Corporation was changed to Scudder  International  Investments Ltd. On July
31,  1975,  the  corporate  domicile of this  Corporation  was changed to the US
through the transfer of its net assets to a newly formed  Maryland  corporation,
Scudder  International  Fund,  Inc.,  in exchange for shares of the  Corporation
which then were distributed to the shareholders of the Corporation.  On February
6, 2006,  the name of the  Corporation  was changed from  Scudder  International
Fund, Inc. to DWS International Fund, Inc.

The authorized capital stock of the Corporation consists of 2,447,923,888 shares
of a par value of $.01 each,  which  capital  stock has been  divided  into five
series:  DWS International  Fund, the original series;  DWS Latin America Equity
Fund,  organized in December 1992; DWS Europe Equity Fund,  organized in October
1994;  DWS  Emerging  Markets  Equity  Fund,  organized  in  May  1996  and  DWS
International  Value  Opportunities  Fund  organized  in July 2006.  Each series
consists of 320 million shares, except for DWS International Fund which consists
of  620,595,597  shares,  DWS Latin  America  Equity Fund which  consists of 340
million shares and DWS Europe Equity Fund which consists of 420 million  shares.
DWS  International  Value  Opportunities  Fund is divided  into four  classes of
shares: Class A, Class C, Class S and Institutional Class shares. Class S shares
of the Fund are offered through a separate statement of additional information.


The Corporation is a Maryland  corporation  organized under the laws of Maryland
and is governed  by Amended and  Restated  Articles of  Incorporation  that were
approved  by  shareholders  in the  second  quarter  of 2006,  as may be further
amended from time to time (the "Articles of  Incorporation").  All shares issued
and  outstanding  are  fully  paid  and  non-assessable,  transferable,  have no
pre-emptive  rights  (except as may be  determined by the Board of Directors) or
conversion rights (except as described below) and are redeemable as described in
the SAI and in the  Fund's  prospectus.  Each share has equal  rights  with each
other share of the same class of the Fund as to voting, dividends, exchanges and
liquidation.  Shareholders  are  entitled  to one vote for each  share  held and
fractional votes for fractional shares held.

The Board of Directors may  determine  that shares of the Fund or a class of the
Fund  shall be  automatically  converted  into  shares  of  another  Fund of the
Corporation  or of  another  class  of the  same or  another  Fund  based on the
relative net assets of such Fund or class at the time of  conversion.  The Board
of Directors  may also provide that the holders of shares of the Fund or a class
of the Fund shall have the right to convert or exchange their shares into shares
of one or more  other  Funds or  classes  on terms  established  by the Board of
Directors.

Each share of the  Corporation  may be subject to such sales  loads or  charges,
expenses and fees, account size  requirements,  and other rights and provisions,
which may be the same or different  from any other share of the  Corporation  or
any other share of any Fund or class of the Fund  (including  shares of the same
Fund or class as the share),  as the Board of Directors of the  Corporation  may
establish or change from time to time and to the extent permitted under the 1940
Act.

The Corporation is not required to hold an annual meeting of shareholders in any
year in which the  election of  Directors  is not required by the 1940 Act. If a
meeting of  shareholders  of the Corporation is required by the 1940 Act to take
action on the election of  Directors,  then an annual  meeting  shall be held to
elect  Directors  and take such other  action as may come  before  the  meeting.
Special meetings of the shareholders of the Corporation,  or of the shareholders
of one or more Funds or classes  thereof,  for any purpose or  purposes,  may be
called at any time by the Board of Directors or by the  President,  and shall be
called by the  President or Secretary at the request in writing of  shareholders
entitled to cast a majority of the votes entitled to be cast at the meeting.

                                      116
<PAGE>

Except as  provided in the 1940 Act,  the  presence in person or by proxy of the
holders  of  one-third  of the  shares  entitled  to  vote  at a  meeting  shall
constitute a quorum for the  transaction of business at meetings of shareholders
of the Corporation or of the Fund or class.

On any matter submitted to a vote of shareholders, all shares of the Corporation
entitled  to vote  shall be voted in the  aggregate  as a single  class  without
regard  to  series  or  classes  of  shares,  provided,  however,  that (a) when
applicable law requires that one or more series or classes vote separately, such
series or classes shall vote  separately  and,  subject to (b) below,  all other
series  or  classes  shall  vote in the  aggregate;  and (b) when  the  Board of
Directors determines that a matter does not affect the interests of a particular
series or class, such series or class shall not be entitled to any vote and only
the shares of the affected series or classes shall be entitled to vote.

Notwithstanding any provision of Maryland corporate law requiring  authorization
of any action by a greater  proportion  than a majority  of the total  number of
shares  entitled  to vote  on a  matter,  such  action  shall  be  effective  if
authorized by the majority vote of the outstanding shares entitled to vote.

Subject to the requirements of applicable law and any procedures  adopted by the
Board of Directors from time to time,  the holders of shares of the  Corporation
or any one or more  series or classes  thereof may take action or consent to any
action by delivering a consent, in writing or by electronic transmission, of the
holders entitled to cast not less than the minimum number of votes that would be
necessary to authorize or take the action at a formal meeting.

The Articles of  Incorporation  provide that the Board of Directors  may, in its
discretion,  establish  minimum  investment  amounts for  shareholder  accounts,
impose  fees on  accounts  that do not  exceed a minimum  investment  amount and
involuntarily  redeem  shares in any such  account in payment of such fees.  The
Board of Directors,  in its sole  discretion,  also may cause the Corporation to
redeem all of the  shares of the  Corporation  or one or more  series or classes
held by any  shareholder for any reason,  to the extent  permissible by the 1940
Act,  including (a) if the shareholder owns shares having an aggregate net asset
value  of  less  than a  specified  minimum  amount,  (b)  if the  shareholder's
ownership of shares would disqualify a series from being a regulated  investment
company, (c) upon a shareholder's  failure to provide sufficient  identification
to permit the  Corporation  to verify  the  shareholder's  identity,  (d) upon a
shareholder's  failure to pay for shares or meet or maintain the  qualifications
for  ownership  of a particular  series or class,  (e) if the Board of Directors
determines (or pursuant to policies  established by the Board of Directors it is
determined)  that share  ownership by a shareholder is not in the best interests
of the  remaining  shareholders,  (f)  when  the  Corporation  is  requested  or
compelled to do so by  governmental  authority or applicable  law, or (g) upon a
shareholder's  failure to comply with a request for information  with respect to
the direct or indirect  ownership  of shares of the  Corporation.  By  redeeming
shares the Corporation  may terminate the Fund or any class without  shareholder
approval,  and the  Corporation may suspend the right of shareholders to require
the Corporation to redeem shares to the extent  permissible  under the 1940 Act.
Payment  for shares  redeemed  shall be made in cash or other  property,  or any
combination thereof; provided, however, that the composition of any such payment
(e.g.,  cash,  securities  and/or  other  assets)  to any  shareholder  shall be
determined by the Corporation in its sole discretion, and may be different among
shareholders  (including  differences  among  shareholders  in the same  fund or
class).

Except  as  otherwise   permitted  by  the  Articles  of  Incorporation  of  the
Corporation,  upon liquidation or termination of the Fund or class, shareholders
of such Fund or class of the Fund  shall be  entitled  to  receive,  pro rata in
proportion to the number of shares of such Fund or class held by each of them, a
share of the net assets of such Fund or class,  and the holders of shares of any
other  particular Fund or class shall not be entitled to any such  distribution,
provided,  however,  that the  composition  of any  such  payment  (e.g.,  cash,
securities  and/or other assets) to any  shareholder  shall be determined by the
Corporation  in its sole  discretion,  and may be different  among  shareholders
(including differences among shareholders in the same Fund or class).

The  Corporation's  Board of Directors  supervises  the Fund's  activities.  The
Corporation  adopted  a plan  pursuant  to Rule  18f-3  under  the 1940 Act (the
"Plan") to permit the  Corporation  to establish a multiple  class  distribution
system for its funds.

Under the  Plan,  each  class of shares  will  represent  interests  in the same
portfolio of investments of the Series, and be identical in all respects to each
other class,  except as set forth below. The only differences  among the various
classes  of  shares  of  the  Series  will  relate   solely  to:  (a)  different
distribution fee payments or service fee payments associated


                                      117
<PAGE>

with any Rule 12b-1 Plan for a  particular  class of shares and any other  costs
relating to implementing  or amending such Rule 12b-1 Plan (including  obtaining
shareholder  approval of such Rule 12b-1 Plan or any amendment  thereto),  which
will be borne solely by  shareholders of such class;  (b) different  service fee
payments associated with a service plan for a specific class and any other costs
relating to  implementing  or amending such service plan; (c) different  account
minimums; (d) the bearing by each class of its Class Expenses, as defined below;
(e) the voting rights  related to any Rule 12b-1 Plan affecting a specific class
of shares; (f) separate exchange  privileges;  (g) different conversion features
and (h) different class names and designations. Expenses currently designated as
"Class Expenses" by the Corporation's Board of Directors under the Plan include,
for example,  transfer agency fees  attributable to a specific class and certain
securities registration fees.

                             PROXY VOTING GUIDELINES

Each Fund has delegated proxy voting responsibilities to its investment advisor,
subject to the Board's general  oversight.  Each Fund has delegated proxy voting
to the Advisor with the direction that proxies should be voted  consistent  with
each  Fund's  best  economic  interests.  The  Advisor has adopted its own Proxy
Voting  Policies  and  Procedures  ("Policies"),  and  Proxy  Voting  Guidelines
("Guidelines")  for this  purpose.  The Policies  address,  among other  things,
conflicts of interest that may arise between the interests of the Funds, and the
interests  of the Advisor and its  affiliates,  including  the Fund's  principal
underwriter.  The Guidelines set forth the Advisor's general position on various
proposals, such as:

o        Shareholder  Rights -- The Advisor  generally  votes against  proposals
         that restrict shareholder rights.

o        Corporate  Governance -- The Advisor  generally votes for  confidential
         and cumulative voting and against supermajority voting requirements for
         charter and bylaw amendments. The Advisor generally votes for proposals
         to restrict a chief  executive  officer from serving on more than three
         outside  boards of  directors.  The  Advisor  generally  votes  against
         proposals  that  require a company  to  appoint  a  Chairman  who is an
         independent director.

o        Anti-Takeover Matters -- The Advisor generally votes for proposals that
         require shareholder ratification of poison pills or that request boards
         to redeem poison pills,  and votes against the adoption of poison pills
         if  they  are  submitted  for  shareholder  ratification.  The  Advisor
         generally votes for fair price proposals.

o        Compensation  Matters -- The Advisor generally votes for executive cash
         compensation  proposals,  unless they are unreasonably  excessive.  The
         Advisor generally votes against stock option plans that do not meet the
         Advisor's criteria.

o        Routine Matters -- The Advisor  generally votes for the ratification of
         auditors,  procedural matters related to the annual meeting and changes
         in company name, and against bundled proposals and adjournment.

The general provisions described above do not apply to investment companies. The
Advisor generally votes proxies solicited by investment  companies in accordance
with the  recommendations  of an  independent  third  party,  except for proxies
solicited by or with respect to investment companies for which the Advisor or an
affiliate  serves as investment  advisor or principal  underwriter  ("affiliated
investment companies").  The Advisor votes affiliated investment company proxies
in  the  same  proportion  as  the  vote  of  the  investment   company's  other
shareholders  (sometimes called "mirror" or "echo" voting).  Master fund proxies
solicited from feeder funds are voted in accordance with applicable requirements
of the Investment Company Act of 1940.

Although the  Guidelines  set forth the Advisor's  general  voting  positions on
various proposals,  the Advisor may,  consistent with the Fund's best interests,
determine under some circumstances to vote contrary to those positions.

The  Guidelines  on a  particular  issue  may or may  not  reflect  the  view of
individual members of the Board or of a majority of the Board. In addition,  the
Guidelines may reflect a voting position that differs from the actual  practices
of  the  public  companies  within  the  Deutsche  Bank  organization  or of the
investment  companies for which the Advisor or an affiliate serves as investment
advisor or sponsor.

                                      118
<PAGE>

The  Advisor  may  consider  the views of a portfolio  company's  management  in
deciding how to vote a proxy or in establishing general voting positions for the
Guidelines, but management's views are not determinative.

As mentioned above, the Policies  describe the way in which the Advisor resolves
conflicts  of  interest.  To  resolve  conflicts,   the  advisor,  under  normal
circumstances,  votes proxies in accordance with its Guidelines.  If the Advisor
departs  from  the  Guidelines  with  respect  to a  particular  proxy or if the
Guidelines do not specifically  address a certain proxy proposal, a proxy voting
committee established by the advisor will vote the proxy. Before voting any such
proxy,  however,  the  Advisor's  conflicts  review  committee  will  conduct an
investigation to determine whether any potential  conflicts of interest exist in
connection with the particular proxy proposal. If the conflicts review committee
determines  that the Advisor has a material  conflict  of  interest,  or certain
individuals on the proxy voting committee  should be recused from  participating
in a  particular  proxy vote,  it will  inform the proxy  voting  committee.  If
notified  that the Advisor has a material  conflict,  or fewer than three voting
members are eligible to  participate  in the proxy vote,  typically  the Advisor
will  engage an  independent  third  party to vote the proxy or follow the proxy
voting recommendations of an independent third party.

Under certain circumstances,  the Advisor may not be able to vote proxies or the
Advisor  may find that the  expected  economic  costs from voting  outweigh  the
benefits  associated with voting. For example,  the Advisor may not vote proxies
on certain foreign securities due to local restrictions or customs.  The Advisor
generally  does  not vote  proxies  on  securities  subject  to  share  blocking
restrictions.

You may  obtain  information  about  how a Fund  voted  proxies  related  to its
portfolio  securities  during the 12-month  period ended June 30 by visiting the
Securities and Exchange  Commission's Web site at www.sec.gov or by visiting our
Web site at:  www.dws-scudder.com  (click on "proxy voting" at the bottom of the
page).

                              FINANCIAL STATEMENTS


The financial statements,  including the portfolio of investments, of DWS Global
Thematic  Fund  and  DWS  International   Fund,  together  with  the  Report  of
Independent Registered Public Accounting Firm, Financial Highlights and notes to
financial  statements as applicable in the Annual Report to the  Shareholders of
each Fund dated August 31, 2007,  are  incorporated  herein by reference and are
hereby deemed to be a part of this combined Statement of Additional Information.


                             ADDITIONAL INFORMATION

The CUSIP number of DWS Global Thematic Fund -- Class A is 233379817.

The CUSIP number of DWS Global Thematic Fund -- Class B is 233379791.

The CUSIP number of DWS Global Thematic Fund -- Class C is 233379783.

The CUSIP number of DWS Global Thematic Fund -- Class R is 233379767.

The CUSIP number of DWS International Fund -- Class A: 23337R858.

The CUSIP number of DWS International Fund -- Class B is 23337R841.

The CUSIP number of DWS International Fund -- Class C is 23337833.

The CUSIP number of DWS International Fund -- Institutional Class is 23337R791.

Each Fund has a fiscal year end of August 31.

                                      119
<PAGE>

This Statement of Additional  Information contains the information of DWS Global
Thematic  Fund and DWS  International  Fund.  Each Fund,  through  its  combined
prospectus,  offers only its own share classes, yet it is possible that one Fund
might become liable for a  misstatement  regarding the other Fund. The Directors
of each Fund have  considered  this, and have approved the use of this Statement
of Additional Information.

The Funds'  prospectuses  and this  Statement  of  Additional  Information  omit
certain information contained in the Registration Statement which the Funds have
filed with the SEC under the Securities Act of 1933 and reference is hereby made
to the Registration  Statement for further information with respect to each Fund
and  the  securities  offered  hereby.  This  Registration   Statement  and  its
amendments  are available for inspection by the public at the SEC in Washington,
D.C.

                             RATINGS OF INVESTMENTS

Standard & Poor's Corporation Bond Ratings

AAA.  Debt  rated AAA had the  highest  rating  assigned  by  Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA. Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.

A. Debt  rated A has a strong  capacity  to pay  interest  and  repay  principal
although it is somewhat more  susceptible  to the adverse  effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB.  Debt rated BBB is regarded as having an adequate  capacity to pay interest
and  repay  principal.   Whereas  it  normally  exhibits   adequate   protection
parameters,  adverse  economic  conditions  or changing  circumstances  are more
likely to lead to a weakened  capacity to pay interest and repay  principal  for
debt in this category than in higher rated categories.

BB, B, CCC, CC and C. Debt rated BB, B, CCC, CC and C is  regarded,  on balance,
as predominantly  speculative with respect to capacity to pay interest and repay
principal in  accordance  with the terms of the  obligation.  BB  indicates  the
lowest degree of speculation and C the highest degree of speculation. While such
debt will likely have some  quality and  protective  characteristics,  these are
outweighed by large uncertainties or major risk exposures to adverse conditions.

CI. The rating CI is  reserved  for income  bonds on which no  interest is being
paid.

D. Debt rated D is in  default,  and  payment of interest  and/or  repayment  of
principal is in arrears.

Moody's Investors Service, Inc. Bond Ratings

AAA. Bonds which are rated Aaa are judged to be of the best quality.  They carry
the  smallest  degree  of  investment  risk  and are  generally  referred  to as
"gilt-edge."  Interest  payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change,  such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa. Bonds which are rated Aa are judged to be of high quality by all  standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds.  They are rated lower than the best bonds  because  margins of protection
may not be as large as in Aaa securities or  fluctuation of protective  elements
may be of greater  amplitude or there may be other  elements  present which make
the long term risks appear somewhat larger than in Aaa securities.

                                      120
<PAGE>

A. Bonds which are rated A possess many favorable investment  attributes and are
to be considered as upper medium grade  obligations.  Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa. Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither  highly  protected nor poorly  secured.  Interest  payments and
principal  security  appear  adequate  for the present  but  certain  protective
elements may be lacking or may be  characteristically  unreliable over any great
length of time. Such bonds lack outstanding  investment  characteristics  and in
fact have speculative characteristics as well.

Ba.  Bonds  which are rated Ba are judged to have  speculative  elements;  their
future cannot be considered  as well assured.  Often the  protection of interest
and  principal  payments may be very  moderate and thereby not well  safeguarded
during  both  good  and bad  times  over the  future.  Uncertainty  of  position
characterizes bonds in this class.

B. Bonds  which are rated B  generally  lack  characteristics  of the  desirable
investment.  Assurance of interest and principal  payments or of  maintenance of
other terms of the contract over any long period of time may be small.

Caa.  Bonds  which are rated Caa are of poor  standing.  Such  issues  may be in
default or there may be present  elements of danger with respect to principal or
interest.

Ca. Bonds which are rated Ca represent  obligations  which are  speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C.  Bonds  which are rated C are the lowest  rated  class of bonds and issues so
rated can be regarded as having  extremely  poor prospects of ever attaining any
real investment standing.

Fitch Long-Term Debt Ratings

AAA.  Highest credit  quality.  "AAA" ratings  denote the lowest  expectation of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments.  This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA. Very high credit  quality.  "AA" ratings  denote a very low  expectation  of
credit risk.  They indicate very strong capacity for timely payment of financial
commitments.  This  capacity  is not  significantly  vulnerable  to  foreseeable
events.

A. High credit quality. "A" ratings denote a low expectation of credit risk. The
capacity for timely payment of financial  commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB. Good credit quality.  "BBB" ratings  indicate that there is currently a low
expectation  of credit  risk.  The  capacity  for timely  payment  of  financial
commitments is considered adequate,  but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity.  This is the lowest
investment-grade category.

BB.  Speculative.  "BB" ratings  indicate that there is a possibility  of credit
risk  developing,  particularly  as the result of adverse  economic  change over
time;  however,  business or  financial  alternatives  may be available to allow
financial  commitments  to be met.  Securities  rated in this  category  are not
investment grade.

B. Highly  speculative.  "B" ratings  indicate that  significant  credit risk is
present,  but a limited  margin of safety  remains.  Financial  commitments  are
currently being met; however,  capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

                                      121
<PAGE>

CCC,  CC, C. High  default  risk.  Default is a real  possibility.  Capacity for
meeting  financial  commitments  is solely  reliant  upon  sustained,  favorable
business or economic developments.  A "CC" rating indicates that default of some
kind appears probable. "C" ratings signal imminent default.

DDD, DD, D. Default.  The ratings of  obligations  in this category are based on
their prospects for achieving  partial or full recovery in a  reorganization  or
liquidation  of  the  obligor.   While  expected   recovery  values  are  highly
speculative  and cannot be estimated with any precision,  the following serve as
general  guidelines.  "DDD" obligations have the highest potential for recovery,
around  90%-100% of  outstanding  amounts and accrued  interest.  "DD" indicates
potential  recoveries  in the  range of  50%-90%,  and "D" the  lowest  recovery
potential, i.e., below 50%.

Entities  rated  in  this  category  have  defaulted  on  some  or all of  their
obligations.  Entities  rated "DDD" have the highest  prospect for resumption of
performance  or  continued  operation  with or  without a formal  reorganization
process.  Entities  rated  "DD"  and  "D"  are  generally  undergoing  a  formal
reorganization or liquidation process;  those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.

Fitch Short-Term Debt Ratings

F1.  Highest credit  quality.  Indicates the Best capacity for timely payment of
financial commitments;  may have an added "+" to denote any exceptionally strong
credit feature.

F2. Good credit quality. A satisfactory capacity for timely payment of financial
commitments,  but the  margin  of  safety  is not as great as in the case of the
higher ratings.

F3.  Fair  credit  quality.   The  capacity  for  timely  payment  of  financial
commitments is adequate;  however,  near-term  adverse changes could result in a
reduction to non-investment grade.

B.  Speculative.  Minimal capacity for timely payment of financial  commitments,
plus  vulnerability  to  near-term  adverse  changes in  financial  and economic
conditions.

C. High  default  risk.  Default is a real  possibility.  Capacity  for  meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D. Default. Denotes actual or imminent payment default.

Commercial Paper Ratings

Commercial  paper rated by Standard & Poor's  Ratings  Services  ("S&P") has the
following characteristics:
Liquidity ratios are adequate to meet cash  requirements.  Long-term senior debt
is rated "A" or  better.  The  issuer  has  access  to at least  two  additional
channels of  borrowing.  Basic  earnings and cash flow have an upward trend with
allowance made for unusual  circumstances.  Typically,  the issuer's industry is
well  established and the issuer has a strong position within the industry.  The
reliability  and quality of management are  unquestioned.  Relative  strength or
weakness of the above factors determine whether the issuer's commercial paper is
rated A-1 or A-2.

The ratings  Prime-1 and Prime-2 are the two highest  commercial  paper  ratings
assigned  by Moody's  Investors  Service,  Inc.  ("Moody's").  Among the factors
considered by it in assigning  ratings are the following:  (1) evaluation of the
management of the issuer;  (2) economic  evaluation of the issuer's  industry or
industries and an appraisal of  speculative-type  risks which may be inherent in
certain  areas;  (3)  evaluation  of  the  issuer's   products  in  relation  to
competition and customer  acceptance;  (4) liquidity;  (5) amount and quality of
long-term debt; (6) trend of earnings over a period of ten years;  (7) financial
strength of a parent company and the relationships  which exist with the issuer;
and (8) recognition by the management of obligations which may be present or may
arise as a result of public  interest  questions and  preparations  to meet such
obligations.  Relative  strength  or weakness  of the above  factors  determines
whether the issuer's commercial paper is rated Prime-1 or 2.

                                      122
<PAGE>

Municipal Notes

Moody's: The highest ratings for state and municipal short-term  obligations are
"MIG 1," "MIG 2," and "MIG 3" (or "VMIG 1," "VMIG 2" and "VMIG 3" in the case of
an issue having a variable rate demand feature). Notes rated "MIG 1" or "VMIG 1"
are judged to be of the "best  quality".  Notes rated "MIG 2" or "VMIG 2" are of
"high  quality," with margins or protection  "ample  although not as large as in
the  preceding  group".  Notes  rated  "MIG  3" or  "VMIG  3" are of  "favorable
quality," with all security  elements  accounted for but lacking the strength of
the preceding grades.

S&P:  The  "SP-1"  rating  reflects  a "very  strong or strong  capacity  to pay
principal and interest". Notes issued with "overwhelming safety characteristics"
will be rated "SP-1+".  The "SP-2" rating reflects a "satisfactory  capacity" to
pay principal and interest.

Fitch:  The highest ratings for state and municipal  short-term  obligations are
"F-1+," "F-1," and "F-2."


                                      123
<PAGE>



                            DWS Global Thematic Fund


                 a series of DWS Global/International Fund, Inc.



                             DWS International Fund


                    a series of DWS International Fund, Inc.















                       STATEMENT OF ADDITIONAL INFORMATION


                                 Class S Shares


                                December 1, 2007

This combined Statement of Additional Information is not a prospectus and should
be read in conjunction with the combined  prospectus for the DWS Global Thematic
Fund and DWS  International  Fund  (each a "Fund,"  collectively  the  "Funds"),
series of DWS Global/International  Fund, Inc. and DWS International Fund, Inc.,
respectively,  dated  December 1, 2007,  as amended from time to time, a copy of
which may be obtained  without  charge by contacting  DWS Scudder  Distributors,
Inc., 222 South Riverside Plaza, Chicago, Illinois 60606,  1-800-728-3337 or the
firm from which this  Statement of  Additional  Information  was obtained and is
available  along with other  related  materials on the  Securities  and Exchange
Commission's Internet Web site (http://www.sec.gov).

The Annual  Report to  Shareholders  of each  Fund,  dated  August 31,  2007 are
incorporated  by reference and are hereby deemed to be part of this Statement of
Additional Information.


This combined  Statement of Additional  Information is incorporated by reference
into the combined prospectus.



<PAGE>

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----


INVESTMENT RESTRICTIONS.......................................................1

INVESTMENT POLICIES AND TECHNIQUES............................................4
   Portfolio Holdings Information............................................26

MANAGEMENT OF THE FUNDS......................................................27
   Investment Advisor........................................................27
   Administrative Agreement..................................................30
   Compensation of Portfolio Managers........................................33
   Other SEC Registered Investment Companies Managed:........................34
   Other Pooled Investment Vehicles Managed:.................................34

FUND SERVICE PROVIDERS.......................................................39
   Principal Underwriter.....................................................39
   Independent Registered Public Accounting Firm.............................39
   Legal Counsel.............................................................40
   Custodian.................................................................41

PORTFOLIO TRANSACTIONS.......................................................43

PURCHASE AND REDEMPTION OF SHARES............................................49

FEDERAL INCOME TAXES.........................................................66

NET ASSET VALUE..............................................................77

DIRECTORS AND OFFICERS.......................................................79

FUND ORGANIZATION...........................................................106

PROXY VOTING GUIDELINES.....................................................108

FINANCIAL STATEMENTS........................................................110

ADDITIONAL INFORMATION......................................................110

RATINGS OF INVESTMENTS......................................................111




                                       i

<PAGE>



                                       ii

<PAGE>


                             INVESTMENT RESTRICTIONS

Except as otherwise indicated, each Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders.  There can be
no assurance that a Fund's objective will be met.

Unless specified to the contrary,  the following fundamental policies may not be
changed without the approval of a majority of the outstanding  voting securities
of a Fund which, under the Investment Company Act of 1940, as amended (the "1940
Act") and the  rules  thereunder  and as used in this  Statement  of  Additional
Information,  means  the  lesser  of (1) 67% or more  of the  voting  securities
present at such  meeting,  if the  holders  of more than 50% of the  outstanding
voting  securities of a Fund are present or  represented  by proxy,  or (2) more
than 50% of the outstanding voting securities of a Fund.

Any  investment  restrictions  herein  which  involve  a maximum  percentage  of
securities  or assets shall not be  considered  to be violated  unless an excess
over the percentage occurs  immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, a Fund.


Each Fund has elected to be classified  as a  diversified  series of an open-end
management  investment  company. A diversified fund may not, with respect to 75%
of total  assets,  invest more than 5% of total  assets in the  securities  of a
single issuer or invest in more than 10% of the outstanding voting securities of
such issuer, with certain exceptions.


As a matter of fundamental policy, each Fund may not:

(1)      borrow money, except as permitted under the 1940 Act, as interpreted or
         modified by  regulatory  authority  having  jurisdiction,  from time to
         time;

(2)      issue senior  securities,  except as  permitted  under the 1940 Act, as
         interpreted or modified by regulatory  authority  having  jurisdiction,
         from time to time;

(3)      concentrate its investments in a particular  industry,  as that term is
         used  in the  1940  Act,  as  interpreted  or  modified  by  regulatory
         authority having jurisdiction, from time to time;

(4)      engage in the  business of  underwriting  securities  issued by others,
         except to the extent  that the Fund may be deemed to be an  underwriter
         in connection with the disposition of portfolio securities;

(5)      purchase or sell real estate, which term does not include securities of
         companies which deal in real estate or mortgages or investments secured
         by real estate or  interests  therein,  except  that the Fund  reserves
         freedom of action to hold and to sell real estate  acquired as a result
         of the Fund's ownership of securities;

(6)      purchase or sell  commodities,  except as permitted by the 1940 Act, as
         amended,  and as interpreted or modified by regulatory authority having
         jurisdiction, from time to time; or

(7)      make loans to other persons, except as permitted under the 1940 Act, as
         interpreted or modified by regulatory  authority  having  jurisdiction,
         from time to time.

With respect to fundamental  policy number five above, the Funds have no current
intention  to hold  and  sell  real  estate  acquired  as a  result  of a Fund's
ownership of securities.

The Directors of each  Corporation (as defined below) have  voluntarily  adopted
certain  policies  and  restrictions,  which are observed in the conduct of each
Fund's affairs.  These represent  intentions of the Directors based upon current
circumstances.  Non-fundamental  policies may be changed by the Directors of the
Corporation without requiring prior notice to or approval of shareholders.
<PAGE>

As a matter of non-fundamental policy, each Fund currently does not intend to:

(a)      borrow money in an amount  greater than 5% of its total assets,  except
         (i) for temporary or emergency purposes and (ii) by engaging in reverse
         repurchase   agreements,   dollar  rolls,   or  other   investments  or
         transactions  described in the Fund's registration  statement which may
         be deemed to be borrowings;

(b)      enter into either reverse  repurchase  agreements or dollar rolls in an
         amount greater than 5% of its total assets;

(c)      purchase  securities  on margin or make short  sales,  except (i) short
         sales against the box, (ii) in connection with arbitrage  transactions,
         (iii) for margin deposits in connection with futures contracts, options
         or other  permitted  investments,  (iv) that  transactions  in  futures
         contracts  and  options  shall  not be  deemed  to  constitute  selling
         securities  short,  and (v) that the Fund may  obtain  such  short-term
         credits  as  may  be  necessary   for  the   clearance  of   securities
         transactions;

(d)      purchase  options,  unless  the  aggregate  premiums  paid on all  such
         options  held by the Fund at any time do not  exceed  20% of its  total
         assets; or sell put options, if as a result, the aggregate value of the
         obligations  underlying  such put options would exceed 50% of its total
         assets;

(e)      enter  into  futures  contracts  or  purchase  options  thereon  unless
         immediately  after the  purchase,  the value of the  aggregate  initial
         margin with respect to such futures contracts entered into on behalf of
         the Fund and the premiums  paid for such  options on futures  contracts
         does not exceed 5% of the fair market value of the Fund's total assets;
         provided that in the case of an option that is in-the-money at the time
         of purchase,  the in-the-money  amount may be excluded in computing the
         5% limit;

(f)      purchase warrants if as a result,  such securities,  taken at the lower
         of cost or market value,  would  represent more than 5% of the value of
         the Fund's total assets (for this purpose,  warrants  acquired in units
         or attached to securities will be deemed to have no value); and

(g)      lend  portfolio  securities in an amount greater than 33?% of its total
         assets.

Each Fund will not purchase illiquid securities, including repurchase agreements
maturing in more than seven days, if, as a result thereof,  more than 15% of the
Fund's net assets,  valued at the time of the transaction,  would be invested in
such securities.

Each Fund may engage in short sales  against-the-box,  although it is the Fund's
current intention that no more than 5% of its net assets will be at risk.

Each  Fund  will  not  acquire  securities  of  registered  open-end  investment
companies  or  registered  unit  investment   trusts  in  reliance  on  Sections
12(d)(1)(F) or 12(d)(1)(G) of the Investment Company Act of 1940, as amended.

If a percentage  restriction  is adhered to at the time of  investment,  a later
increase or decrease in percentage  beyond the specified  limit resulting from a
change in values or net assets will not be considered a violation.

Each Fund is an open-end management investment company which continuously offers
and  redeems  shares at net  asset  value.  Each  Fund is a company  of the type
commonly  known as a mutual  fund.  DWS Global  Thematic  Fund is a  diversified
series  of DWS  Global/International  Fund,  Inc.  DWS  International  Fund is a
diversified  series  of DWS  International  Fund,  Inc.  (each a  "Corporation,"
collectively the  "Corporations").  DWS Global Thematic Fund offers five classes
of shares:  Class S, Class A, Class B, Class C and Class R shares.  Only Class S
shares are offered herein. DWS International Fund offers five classes of shares:
Class S, Class A, Class B, Class C and Institutional  Class shares. Only Class S
shares  are  offered  herein.  Each  class has its own  important  features  and
policies.

Except as otherwise indicated, each Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders. If there is a
change in investment  objective,  shareholders  should consider

                                       2
<PAGE>

whether  the Fund  remains  an  appropriate  investment  in light of their  then
current  financial  position and needs.  There can be no assurance that a Fund's
objective will be met.

Changes  in  portfolio   securities   are  made  on  the  basis  of   investment
considerations  and it is against the policy of  management  to make changes for
trading purposes.



To meet federal tax  requirements for  qualification  as a regulated  investment
company  each  Fund  must  limit  its  investments  so that at the close of each
quarter  of its  taxable  year (1) no more  than  25% of its  total  assets  are
invested  in  securities  of a single  issuer  (other  than US  government  or a
regulated investment company), and (2) with respect to at least 50% of its total
assets,  no more than 5% of its total assets are invested in the securities of a
single issuer.




                                       3
<PAGE>



Master/feeder  Fund  Structure.  The Boards of Directors  has the  discretion to
retain the current  distribution  arrangement  for a Fund while  investing  in a
master fund in a master/feeder fund structure as described below.

A master/feeder fund structure is one in which a Fund (a "feeder fund"), instead
of investing  directly in a portfolio of securities,  invests most or all of its
investment  assets in a separate  registered  investment  company  (the  "master
fund") with  substantially  the same  investment  objective  and policies as the
feeder  fund.  Such a  structure  permits  the  pooling of assets of two or more
feeder funds,  preserving  separate  identities or distribution  channels at the
feeder  fund  level.  Based on the  premise  that  certain  of the  expenses  of
operating an investment  portfolio are  relatively  fixed,  a larger  investment
portfolio may eventually  achieve a lower ratio of operating expenses to average
net assets. An existing  investment  company is able to convert to a feeder fund
by  selling  all  of  its  investments,   which  involves  brokerage  and  other
transaction  costs and realization of a taxable gain or loss, or by contributing
its assets to the master  fund and  avoiding  transaction  costs and,  if proper
procedures are followed, the realization of taxable gain or loss.

                                    INVESTMENT POLICIES AND TECHNIQUES

General Investment Objective and Policies


Descriptions  in  this  Statement  of  Additional  Information  of a  particular
investment  practice  or  technique  in which a Fund  may  engage  are  meant to
describe  the  spectrum  of  investments  that  Deutsche  Investment  Management
Americas Inc.  ("DIMA" or the  "Advisor") in its  discretion  might,  but is not
required to, use in managing each Fund's portfolio  assets.  The Advisor may, in
its  discretion,  at any time employ such practice,  technique or instrument for
one or more  Funds  but not for all  funds  advised  by it.  Furthermore,  it is
possible that certain types of financial  instruments  or investment  techniques
described  herein may not be available,  permissible,  economically  feasible or
effective  for  their  intended  purposes  in all  markets.  Certain  practices,
techniques or instruments may not be principal  activities of the Funds, but, to
the extent employed,  could from time to time have a material impact on a Fund's
performance. The Fund may engage in certain practices not described herein.

It is possible that certain investment  practices and techniques described below
may not be  permissible  for a Fund  based on its  investment  restrictions,  as
described herein, and in the Funds' applicable prospectus.

Borrowing.  As a matter of  fundamental  policy,  a Fund will not borrow  money,
except as  permitted  under the 1940 Act,  and as  interpreted  or  modified  by
regulatory  authority  having  jurisdiction,  from time to time. While each Fund
does not currently intend to borrow for investment  leveraging purposes, if such
a  strategy  were  implemented  in the  future  it  would  increase  the  Funds'
volatility and the risk of loss in a declining market.  Borrowing by a Fund will
involve  special  risk  considerations.  The  Fund's  assets may change in value
during the time a borrowing is outstanding,  thus increasing exposure to capital
risk.





                                       4
<PAGE>



Common  Stocks.  Common  stock is issued by companies to raise cash for business
purposes  and  represents  a  proportionate  interest in the issuing  companies.
Therefore, a Fund participates in the success or failure of any company in which
it holds stock.  The market values of common stock can fluctuate  significantly,
reflecting the business performance of the issuing company,  investor perception
and general economic and financial market  movements.  Despite the risk of price
volatility, however, common stocks have historically offered a greater potential
for long-term gain on investment,  compared to other classes of financial assets
such as bonds or cash equivalents,  although there can be no assurance that this
will be true in the future.

Convertible Securities.  A Fund may invest in convertible  securities,  that is,
bonds,  notes,  debentures,  preferred  stocks  and other  securities  which are
convertible into common stock. Investments in convertible securities can provide
an  opportunity  for capital  appreciation  and/or income  through  interest and
dividend payments by virtue of their conversion or exchange features.

The convertible securities in which a Fund may invest are either fixed income or
zero coupon debt  securities  which may be converted or exchanged at a stated or
determinable exchange ratio into underlying shares of common stock. The exchange
ratio for any particular  convertible security may be adjusted from time to time
due to stock splits,  dividends,  spin-offs,  other corporate  distributions  or
scheduled  changes  in the  exchange  ratio.  Convertible  debt  securities  and
convertible  preferred  stocks,  until converted,  have general  characteristics
similar to both debt and equity  securities.  Although  to a lesser  extent than
with debt securities generally, the market value of convertible securities tends
to decline as interest  rates  increase  and,  conversely,  tends to increase as
interest  rates  decline.  In addition,  because of the  conversion  or exchange
feature,  the market value of convertible  securities  typically  changes as the
market value of the underlying common stocks changes, and, therefore, also tends
to follow  movements  in the  general  market  for equity  securities.  A unique
feature of convertible  securities is that as the market price of the underlying
common stock declines,  convertible  securities tend to trade  increasingly on a
yield basis, and so may not experience  market value declines to the same extent
as the underlying  common stock.  When the market price of the underlying common
stock  increases,  the prices of the  convertible  securities  tend to rise as a
reflection of the value of the underlying common stock,  although  typically not
as much as the  underlying  common stock.  While no securities  investments  are
without risk,  investments in convertible  securities generally entail less risk
than investments in common stock of the same issuer.

As debt securities,  convertible  securities are investments which provide for a
stream of income (or in the case of zero coupon securities, accretion of income)
with  generally  higher  yields  than  common  stocks.   Convertible  securities
generally offer lower yields than non-convertible  securities of similar quality
because of their conversion or exchange features.

Of course,  like all debt  securities,  there can be no  assurance  of income or
principal payments because the issuers of the convertible securities may default
on their obligations.

Convertible   securities   generally  are  subordinated  to  other  similar  but
non-convertible  securities of the same issuer,  although  convertible bonds, as
corporate debt  obligations,  enjoy  seniority in right of payment to all equity
securities,  and  convertible  preferred stock is senior to common stock, of the
same issuer.  However,  because of the subordination feature,  convertible bonds
and  convertible  preferred  stock  typically  have lower  ratings  than similar
non-convertible securities. Convertible securities may be issued as fixed income
obligations that pay current income or as zero coupon notes and bonds, including
Liquid Yield Option Notes ("LYON"(TM)).

Corporate Obligations.  Investment in corporate debt obligations involves credit
and interest rate risk.  The value of  fixed-income  investments  will fluctuate
with changes in interest  rates and bond market  conditions,  tending to rise as

                                       5
<PAGE>

interest  rates decline and to decline as interest  rates rise.  Corporate  debt
obligations generally offer less current yield than securities of lower quality,
but lower-quality  securities generally have less liquidity,  greater credit and
market risk,  and as a result,  more price  volatility.  Longer-term  bonds are,
however, generally more volatile than bonds with shorter maturities.

Depositary  Receipts.  A Fund may invest in  sponsored or  unsponsored  American
Depositary  Receipts ("ADRs"),  European  Depositary  Receipts ("EDRs"),  Global
Depositary  Receipts ("GDRs"),  International  Depositary  Receipts ("IDRs") and
other types of Depositary Receipts (which, together with ADRs, GDRs and IDRs are
hereinafter referred to as "Depositary  Receipts").  Depositary receipts provide
indirect  investment  in securities of foreign  issuers.  Prices of  unsponsored
Depositary  Receipts  may be more  volatile  than if they were  sponsored by the
issuer of the underlying securities.  Depositary Receipts may not necessarily be
denominated  in the same currency as the underlying  securities  into which they
may be  converted.  In  addition,  the  issuers  of  the  stock  of  unsponsored
Depositary  Receipts are not obligated to disclose  material  information in the
United  States  and,  therefore,  there may not be a  correlation  between  such
information and the market value of the Depositary Receipts. ADRs are Depositary
Receipts which are bought and sold in the United States and are typically issued
by a US bank or trust company which evidence ownership of underlying  securities
by a foreign corporation.  GDRs, IDRs and other types of Depositary Receipts are
typically issued by foreign banks or trust companies,  although they may also be
issued by United  States banks or trust  companies,  and  evidence  ownership of
underlying securities issued by either a foreign or a United States corporation.
Generally,  Depositary  Receipts in registered  form are designed for use in the
United  States  securities  markets and  Depositary  Receipts in bearer form are
designed for use in securities  markets outside the United States.  For purposes
of a Fund's investment  policies,  a Fund's  investments in ADRs, GDRs and other
types of Depositary  Receipts will be deemed to be investments in the underlying
securities.  Depositary Receipts, including those denominated in US dollars will
be subject to foreign currency exchange rate risk.  However,  by investing in US
dollar-denominated  ADRs rather than directly in foreign  issuers' stock, a Fund
avoids  currency  risks during the  settlement  period.  In general,  there is a
large,  liquid  market in the  United  States for most  ADRs.  However,  certain
Depositary  Receipts  may not be  listed on an  exchange  and  therefore  may be
illiquid securities.

Dollar Roll Transactions. Dollar roll transactions consist of the sale by a Fund
to a bank or broker-dealer  (the  "counterparty")  of GNMA certificates or other
mortgage-backed  securities  together  with a  commitment  to purchase  from the
counterparty  similar,  but not  identical,  securities at a future date, at the
same price.  The  counterparty  receives all  principal  and interest  payments,
including  prepayments,  made on the  security  while it is the  holder.  A Fund
receives a fee from the  counterparty  as  consideration  for entering  into the
commitment  to  purchase.  Dollar  rolls may be renewed over a period of several
months  with  a  different  purchase  and  repurchase  price  fixed  and a  cash
settlement  made  at each  renewal  without  physical  delivery  of  securities.
Moreover,  the  transaction  may  be  preceded  by a firm  commitment  agreement
pursuant to which a Fund agrees to buy a security on a future date.


A Fund will segregate  cash, US Government  securities or other liquid assets in
an amount sufficient to meet their purchase  obligations under the transactions.
A Fund will also maintain asset coverage to the extent required by the 1940 Act.


Dollar  rolls may be treated for  purposes of the 1940 Act, as  borrowings  of a
Fund because  they  involve the sale of a security  coupled with an agreement to
repurchase.  A dollar roll involves costs to a Fund.  For example,  while a Fund
receives a fee as consideration for agreeing to repurchase the security,  a Fund
forgoes the right to receive  all  principal  and  interest  payments  while the
counterparty  holds the security.  These payments to the counterparty may exceed
the fee received by a Fund, thereby effectively  charging a Fund interest on its
borrowing.  Further,  although  a Fund  can  estimate  the  amount  of  expected
principal prepayment over the term of the dollar roll, a variation in the actual
amount of prepayment could increase or decrease the cost of a Fund's borrowing.

The entry into dollar rolls involves  potential risks of loss that are different
from those related to the securities  underlying the transactions.  For example,
if the  counterparty  becomes  insolvent,  a Fund's  right to purchase  from the
counterparty might be restricted. Additionally, the value of such securities may
change adversely before a Fund is able to purchase them.  Similarly,  a Fund may
be required to purchase  securities in connection with a dollar roll at a higher
price than may otherwise be available on the open market. Since, as noted above,
the counterparty is required to deliver a similar, but not identical security to
a Fund, the security that a Fund is required to buy under the dollar


                                       6
<PAGE>

roll may be worth  less than an  identical  security.  Finally,  there can be no
assurance that a Fund's use of the cash that it receives from a dollar roll will
provide a return that exceeds borrowing costs.

Euro. The  implementation  of the Euro may result in uncertainties  for European
securities  and the operation of a Fund.  The Euro was  introduced on January 1,
1999 by eleven  members  countries of the European  Economic and Monetary  Union
(EMU).  Implementation of the Euro requires the  redenomination of European debt
and  equity  securities  over a period  of time,  which may  result  in  various
accounting  differences  and/or tax treatments  which would not otherwise occur.
Additional  questions  are  raised  by the  fact  that  certain  other  European
Community members,  including the United Kingdom,  did not officially  implement
the Euro on January 1, 1999.


Eurodollar  Instruments.  A Fund may make investments in Eurodollar  instruments
for hedging purposes or to enhance potential gain. Eurodollar instruments are US
dollar-denominated  futures contracts or options thereon which are linked to the
London Interbank Offered Rate ("LIBOR"),  although foreign  currency-denominated
instruments are available from time to time. Eurodollar futures contracts enable
purchasers to obtain a fixed rate for the lending of Funds and sellers to obtain
a fixed rate for borrowings.  A Fund might use Eurodollar  futures contracts and
options  thereon to hedge against  changes in LIBOR, to which many interest rate
swaps and fixed income instruments are linked or for any other purpose.




Eurodollar  Obligations.  Eurodollar bank obligations are US  dollar-denominated
certificates  of deposit and time deposits issued outside the US capital markets
by foreign  branches of US banks and US branches  of foreign  banks.  Eurodollar
obligations  are  subject  to the same risks that  pertain to  domestic  issues,
notably credit risk,  market risk and liquidity risk.  Additionally,  Eurodollar
obligations are subject to certain sovereign risks.


Foreign  Currencies.  Because  investments  in foreign  securities  usually will
involve  currencies  of foreign  countries,  and because a Fund may hold foreign
currencies  and  forward  contracts,   futures  contracts,  options  on  foreign
currencies and foreign  currency  futures  contracts and other  currency-related
instruments,  the value of the assets of a Fund as measured in US dollars may be
affected  favorably or unfavorably by changes in foreign currency exchange rates
and  exchange  control  regulations,  and a Fund may incur costs and  experience
conversion difficulties and uncertainties in connection with conversions between
various  currencies.  Fluctuations in exchange rates may also affect the earning
power and asset value of the foreign entity issuing the security.


The  strength  or  weakness  of  the  US  dollar  against  these  currencies  is
responsible for part of a Fund's investment performance.  If the dollar falls in
value relative to the Japanese yen, for example,  the dollar value of a Japanese
stock held in the portfolio will rise even though the price of the stock remains
unchanged.  Conversely,  if the dollar  rises in value  relative to the yen, the
dollar  value of the Japanese  stock will fall.  Many  foreign  currencies  have
experienced significant devaluation relative to the dollar.

Although  a Fund  values its assets  daily in terms of US  dollars,  it does not
intend to convert its holdings of foreign  currencies into US dollars on a daily
basis.  It will do so from time to time,  and  investors  should be aware of the
costs of currency conversion.  Although foreign exchange dealers do not charge a
fee for  conversion,  they do  realize  a profit  based on the  difference  (the
"spread")  between  the  prices at which they are  buying  and  selling  various
currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at one
rate,  while  offering a lesser rate of exchange  should a Fund desire to resell
that currency to the dealer. A Fund will conduct its foreign  currency  exchange
transactions  either on a spot (i.e., cash) basis at the spot rate prevailing in
the foreign  currency  exchange  market,  or through  entering  into  options or
forward or futures contracts to purchase or sell foreign currencies.

Foreign Fixed Income Securities.  Since most foreign fixed income securities are
not rated,  a Fund will invest in foreign fixed income  securities  based on the
Advisor's analysis without relying on published ratings.  Since such


                                       7
<PAGE>

investments will be based upon the Advisor's analysis rather than upon published
ratings, achievement of a Fund's goals may depend more upon the abilities of the
Advisor than would otherwise be the case.

The value of the foreign fixed income  securities  held by a Fund,  and thus the
net asset value of a Fund's shares, generally will fluctuate with (a) changes in
the perceived creditworthiness of the issuers of those securities, (b) movements
in interest  rates,  and (c) changes in the relative values of the currencies in
which a Fund's  investments  in fixed income  securities  are  denominated  with
respect to the US Dollar.  The extent of the fluctuation  will depend on various
factors,  such as the average maturity of a Fund's  investments in foreign fixed
income  securities,  and the extent to which a Fund  hedges its  interest  rate,
credit and currency exchange rate risks. A longer average maturity  generally is
associated  with a  higher  level  of  volatility  in the  market  value of such
securities in response to changes in market conditions.

Investments  in  sovereign  debt,  including  Brady Bonds  (Brady Bonds are debt
securities   issued  under  a  plan  implemented  to  allow  debtor  nations  to
restructure  their  outstanding  commercial bank  indebtedness)  involve special
risks. Foreign governmental issuers of debt or the governmental authorities that
control the repayment of the debt may be unable or unwilling to repay  principal
or pay  interest  when due. In the event of default,  there may be limited or no
legal recourse in that, generally,  remedies for defaults must be pursued in the
courts of the defaulting  party.  Political  conditions,  especially a sovereign
entity's  willingness to meet the terms of its fixed income  securities,  are of
considerable  significance.  Also, there can be no assurance that the holders of
commercial bank loans to the same sovereign  entity may not contest  payments to
the holders of sovereign debt in the event of default under commercial bank loan
agreements.  In  addition,  there is no  bankruptcy  proceeding  with respect to
sovereign debt on which a sovereign has  defaulted,  and a Fund may be unable to
collect  all or any  part  of its  investment  in a  particular  issue.  Foreign
investment  in certain  sovereign  debt is  restricted  or controlled to varying
degrees,  including  requiring  governmental  approval for the  repatriation  of
income, capital or proceed of sales by foreign investors.  These restrictions or
controls may at times limit or preclude foreign  investment in certain sovereign
debt or increase the costs and expenses of a Fund.

Sovereign  debt of  emerging  market  governmental  issuers is to be  considered
speculative.  Emerging market governmental issuers are among the largest debtors
to commercial banks, foreign governments,  international financial organizations
and other financial  institutions.  Certain emerging market governmental issuers
have  not  been  able to make  payments  of  interest  on or  principal  of debt
obligations as those payments have come due. There is a history of defaults with
respect  to  commercial  bank  loans by  public  and  private  entities  issuing
sovereign  debt.  All or a portion of the  interest  payments  and/or  principal
repayment  with respect to sovereign debt may be  uncollateralized.  Obligations
arising from past restructuring  agreements may affect the economic  performance
and political and social stability of those issuers.

The  ability of  emerging  market  country  governmental  issuers to make timely
payments  on their  obligations  is  likely  to be  influenced  strongly  by the
issuer's balance of payments,  including export  performance,  and its access to
international  credits and  investments.  An emerging  market whose  exports are
concentrated  in a few  commodities  could be  vulnerable  to a  decline  in the
international   prices   of  one  or  more  of  those   commodities.   Increased
protectionism  on the part of an emerging  market's  trading partners could also
adversely  affect the country's  exports and diminish its trade account surplus,
if any. To the extent that emerging  markets  receive payment for its exports in
currencies other than dollars or non-emerging market currencies,  its ability to
make debt payments  denominated  in dollars or  non-emerging  market  currencies
could be affected.

Another factor bearing on the ability of emerging market countries to repay debt
obligations is the level of international reserves of the country.  Fluctuations
in the level of these  reserves  affect the amount of foreign  exchange  readily
available  for  external  debt  payments  and thus  could  have a bearing on the
capacity  of  emerging   market   countries  to  make  payments  on  these  debt
obligations.

To the extent that an emerging  market country cannot  generate a trade surplus,
it must  depend on  continuing  loans  from  foreign  governments,  multilateral
organizations or private commercial banks, aid payments from foreign governments
and inflows of foreign investment. The access of emerging markets to these forms
of external  funding may not be certain,  and a withdrawal  of external  funding
could  adversely  affect the capacity of emerging  market  country  governmental
issuers  to make  payments  on  their  obligations.  In  addition,  the  cost of
servicing  emerging


                                       8
<PAGE>

market debt  obligations can be affected by a change in  international  interest
rates since the  majority of these  obligations  carry  interest  rates that are
adjusted periodically based upon international rates.

Foreign  Investments.  Foreign securities are normally denominated and traded in
foreign currencies. As a result, the value of the Fund's foreign investments and
the value of its shares may be affected  favorably or  unfavorably by changes in
currency exchange rates relative to the US dollar. There may be less information
publicly  available  about a foreign issuer than about a US issuer,  and foreign
issuers  may not be subject to  accounting,  auditing  and  financial  reporting
standards  and practices  comparable to those in the US. The  securities of some
foreign  issuers are less liquid and at times more volatile  than  securities of
comparable US issuers.  Foreign  brokerage  commissions  and other fees are also
generally  higher  than in the  US.  Foreign  settlement  procedures  and  trade
regulations  may involve  certain risks (such as delay in payment or delivery of
securities or in the recovery of the Fund's assets held abroad) and expenses not
present in the settlement of  investments in US markets.  Payment for securities
without delivery may be required in certain foreign markets.

In addition, foreign securities may be subject to the risk of nationalization or
expropriation   of  assets,   imposition  of  currency   exchange   controls  or
restrictions on the  repatriation of foreign  currency,  confiscatory  taxation,
political or  financial  instability  and  diplomatic  developments  which could
affect  the  value of the  Fund's  investments  in  certain  foreign  countries.
Governments   of  many   countries  have  exercised  and  continue  to  exercise
substantial  influence  over many  aspects of the  private  sector  through  the
ownership or control of many  companies,  including some of the largest in these
countries.  As  a  result,  government  actions  in  the  future  could  have  a
significant  effect on economic  conditions which may adversely affect prices of
certain   portfolio   securities.   There  is  also  generally  less  government
supervision and regulation of stock  exchanges,  brokers,  and listed  companies
than in the US.  Dividends or interest on, or proceeds from the sale of, foreign
securities  may be subject  to foreign  withholding  taxes,  and  special US tax
considerations  may apply.  Moreover,  foreign economies may differ favorably or
unfavorably  from the US economy in such  respects  as growth of gross  national
product, rate of inflation, capital reinvestment,  resource self-sufficiency and
balance of payments position.

Legal remedies  available to investors in certain foreign  countries may be more
limited than those  available  with respect to investments in the US or in other
foreign  countries.  The laws of some  foreign  countries  may limit the  Fund's
ability to invest in securities of certain  issuers  organized under the laws of
those foreign countries.

Of particular  importance,  many foreign  countries are heavily  dependent  upon
exports,  particularly to developed countries,  and, accordingly,  have been and
may continue to be adversely affected by trade barriers,  managed adjustments in
relative currency values, and other protectionist measures imposed or negotiated
by the US and other  countries with which they trade.  These economies also have
been and may continue to be negatively impacted by economic conditions in the US
and other  trading  partners,  which can lower the demand for goods  produced in
those countries.

The  risks  described  above,   including  the  risks  of   nationalization   or
expropriation of assets,  typically are increased in connection with investments
in "emerging  markets." For example,  political and economic structures in these
countries may be in their infancy and developing rapidly, and such countries may
lack  the  social,  political  and  economic  stability  characteristic  of more
developed countries (including amplified risk of war and terrorism).  Certain of
these countries have in the past failed to recognize private property rights and
have at times  nationalized and  expropriated  the assets of private  companies.
Investments in emerging markets may be considered speculative.

The  currencies  of  certain   emerging   market   countries  have   experienced
devaluations  relative to the US dollar,  and future  devaluations may adversely
affect the value of assets denominated in such currencies. In addition, currency
hedging techniques may be unavailable in certain emerging market countries. Many
emerging  market  countries have  experienced  substantial,  and in some periods
extremely  high,  rates of  inflation or  deflation  for many years,  and future
inflation may adversely  affect the  economies  and  securities  markets of such
countries.

In addition, unanticipated political or social developments may affect the value
of  investments  in  emerging   markets  and  the   availability  of  additional
investments  in these  markets.  Any change in the  leadership  or  politics  of
emerging  market  countries,  or  the  countries  that  exercise  a  significant
influence  over  those  countries,  may halt the  expansion  of or  reverse  the
liberalization of foreign investment policies now occurring and adversely affect
existing  investment


                                       9
<PAGE>

opportunities.  The small size, limited trading volume and relative inexperience
of the securities  markets in these countries may make investments in securities
traded in emerging  markets  illiquid  and more  volatile  than  investments  in
securities traded in more developed countries.  For example, limited market size
may cause prices to be unduly influenced by traders who control large positions.
In addition,  the Fund may be required to establish  special  custodial or other
arrangements before making investments in securities traded in emerging markets.
There may be little financial or accounting  information  available with respect
to issuers of emerging market securities, and it may be difficult as a result to
assess the value of prospects of an investment in such securities.


The risk  also  exists  that an  emergency  situation  may  arise in one or more
emerging  markets as a result of which trading of securities may cease or may be
substantially  curtailed and prices for a Fund's  securities in such markets may
not be readily  available.  A Fund may suspend  redemption of its shares for any
period during which an emergency exists,  as determined by the SEC.  Accordingly
if a Fund believes that appropriate circumstances exist, it may apply to the SEC
for a determination  that an emergency is present.  During the period commencing
from a Fund's identification of such condition until the date of the SEC action,
a Fund's  securities  in the  affected  markets  will be  valued  at fair  value
determined in good faith by or under the direction of a Fund's Board.


Certain of the foregoing risks may also apply to some extent to securities of US
issuers that are denominated in foreign currencies or that are traded in foreign
markets, or securities of US issuers having significant foreign operations.

High Yield/High Risk Bonds. A Fund may also purchase,  to a limited extent, debt
securities which are rated below investment-grade (commonly referred to as "junk
bonds"),  that is,  rated  below Baa by Moody's or below BBB by S&P and  unrated
securities,  which usually  entail greater risk  (including  the  possibility of
default or  bankruptcy  of the issuers of such  securities),  generally  involve
greater  volatility of price and risk of principal  and income,  and may be less
liquid,  than securities in the higher rating categories.  The lower the ratings
of such debt  securities,  the  greater  their  risks  render  them like  equity
securities.  DWS  International  Fund  will  invest no more than 5% of its total
assets in  securities  rated BB or lower by Moody's or Ba by S&P, and may invest
in  securities  which are rated D by S&P. See the Appendix to this  Statement of
Additional  Information for a more complete  description of the ratings assigned
by ratings organizations and their respective characteristics.

High yield,  high-risk  securities are especially  subject to adverse changes in
general  economic  conditions,  to changes in the  financial  condition of their
issuers and to price  fluctuations  in response to changes in interest rates. An
economic  downturn could disrupt the high yield market and impair the ability of
issuers to repay  principal  and interest.  Also, an increase in interest  rates
would have a greater  adverse  impact on the value of such  obligations  than on
higher quality debt securities.  During an economic downturn or period of rising
interest rates,  highly leveraged  issues may experience  financial stress which
would  adversely  affect their ability to service  their  principal and interest
payment  obligations.  Prices and yields of high yield securities will fluctuate
over time and, during periods of economic uncertainty,  volatility of high yield
securities  may  adversely  affect  a  Fund's  net  asset  value.  In  addition,
investments  in high  yield  zero  coupon  or  pay-in-kind  bonds,  rather  than
income-bearing high yield securities, may be more speculative and may be subject
to greater fluctuations in value due to changes in interest rates.

The  trading  market for high yield  securities  may be thin to the extent  that
there is no established retail secondary market. A thin trading market may limit
the ability of a Fund to accurately value high yield securities in its portfolio
and to dispose of those securities.  Adverse publicity and investor  perceptions
may decrease the values and liquidity of high yield securities. These securities
may also involve special registration  responsibilities,  liabilities and costs,
and liquidity and valuation difficulties.

Credit  quality in the  high-yield  securities  market can change  suddenly  and
unexpectedly,  and even recently issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield security. For these reasons, it is
the  policy  of the  Advisor  not to  rely  exclusively  on  ratings  issued  by
established credit rating agencies,  but to supplement such ratings with its own
independent and on-going  review of credit quality.  The achievement of a Fund's
investment  objective by investment in such  securities may be more dependent on
the Advisor's credit analysis than is the case for higher quality bonds.  Should
the rating of a portfolio  security be  downgraded,  the Advisor will  determine
whether  it is in the best  interests  of the Fund to retain or  dispose of such
security.

                                       10
<PAGE>

Prices for below investment-grade  securities may be affected by legislative and
regulatory developments. For example, new federal rules require savings and loan
institutions  to  gradually  reduce  their  holdings  of this type of  security.
Congress has from time to time  considered  legislation  which would restrict or
eliminate the corporate tax deduction for interest  payments in these securities
and  regulate  corporate  restructurings.  Such  legislation  may  significantly
depress the prices of outstanding securities of this type.


Illiquid  Securities and Restricted  Securities.  A Fund may purchase securities
that are subject to legal or  contractual  restrictions  on resale  ("restricted
securities").  Generally  speaking,  restricted  securities  may be sold  (i) to
qualified  institutional buyers; (ii) in a privately negotiated transaction to a
limited number of purchasers;  (iii) in limited  quantities after they have been
held for a specified  period of time and other conditions are met pursuant to an
exemption  from  registration;  or  (iv)  in  a  public  offering  for  which  a
registration statement is in effect under the Securities Act of 1933, as amended
(the "1933 Act").  Issuers of  restricted  securities  may not be subject to the
disclosure and other investor  protection  requirements that would be applicable
if their securities were publicly traded.


Restricted  securities  are often  illiquid,  but they may also be  liquid.  For
example,  restricted securities that are eligible for resale under Rule 144A are
often deemed to be liquid.

The Funds' Boards have approved guidelines for use by the Advisor in determining
whether a security  is liquid or  illiquid.  Among the  factors  the Advisor may
consider in reaching  liquidity  decisions relating to Rule 144A securities are:
(1) the  frequency  of trades  and quotes  for the  security;  (2) the number of
dealers  wishing  to  purchase  or sell the  security  and the  number  of other
potential purchasers;  (3) dealer undertakings to make a market in the security;
and (4) the nature of the security and the nature of the market for the security
(i.e.,  the time  needed to dispose of the  security,  the method of  soliciting
offers,  and the mechanics of the transfer).  Where a registration  statement is
required for the resale of restricted securities, a Fund may be required to bear
all or  part  of  the  registration  expenses.  A Fund  may be  deemed  to be an
"underwriter" for purposes of the 1933 Act when selling restricted securities to
the  public  and,  in such  event,  a Fund may be liable to  purchasers  of such
securities if the  registration  statement  prepared by the issuer is materially
inaccurate or misleading.

A Fund may also purchase securities that are not subject to legal or contractual
restrictions  on resale,  but that are deemed  illiquid.  Such securities may be
illiquid, for example, because there is a limited trading market for them.

A Fund may be unable to sell a restricted or illiquid security.  In addition, it
may be more  difficult to determine a market  value for  restricted  or illiquid
securities.  Moreover,  if adverse market  conditions were to develop during the
period between a Fund's  decision to sell a restricted or illiquid  security and
the point at which a Fund is permitted or able to sell such  security,  the Fund
might  obtain a price  less  favorable  than the price  that  prevailed  when it
decided to sell. This investment practice,  therefore,  could have the effect of
increasing the level of illiquidity of a Fund.


Impact of Large  Redemptions  and  Purchases of Fund Shares.  From time to time,
shareholders  of a Fund  (which may  include  affiliated  and/or  non-affiliated
registered investment companies that invest in a Fund) may make relatively large
redemptions or purchases of Fund shares.  These transactions may cause a Fund to
have to sell securities or invest  additional cash, as the case may be. While it
is impossible  to predict the overall  impact of these  transactions  over time,
there could be adverse effects on a Fund's performance to the extent that a Fund
may be  required  to sell  securities  or invest cash at times when it would not
otherwise do so. These  transactions  could also  accelerate the  realization of
taxable  income if sales of securities  resulted in capital gains and could also
increase transaction costs, which may impact a Fund's expense ratio.





                                       11
<PAGE>

IPO Risk.  Securities  issued  through  an  initial  public  offering  (IPO) can
experience an immediate drop in value if the demand for the securities  does not
continue to support the  offering  price.  Information  about the issuers of IPO
securities is also difficult to acquire since they are new to the market and may
not have lengthy operating histories. A Fund may engage in short-term trading in
connection  with its IPO  investments,  which could produce higher trading costs
and  adverse  tax  consequences.  The number of  securities  issued in an IPO is
limited,  so it is likely that IPO securities will represent a smaller component
of a Fund's  portfolio as a Fund's assets increase (and thus have a more limited
effect on a Fund's performance).

Interfund  Borrowing  and Lending  Program.  The Funds have  received  exemptive
relief from the Securities and Exchange  Commission  ("SEC"),  which permits the
Funds to participate in an interfund  lending  program among certain  investment
companies  advised by the Advisor.  The  interfund  lending  program  allows the
participating  funds to  borrow  money  from and loan  money to each  other  for
temporary  or  emergency  purposes.  The  program  is  subject  to a  number  of
conditions  designed to ensure fair and equitable treatment of all participating
funds, including the following: (1) no Fund may borrow money through the program
unless it receives a more favorable  interest rate than a rate approximating the
lowest  interest  rate at which  bank  loans  would be  available  to any of the
participating  funds  under a loan  agreement;  and (2) no Fund may  lend  money
through  the  program  unless it  receives  a more  favorable  return  than that
available  from an  investment  in  repurchase  agreements  and,  to the  extent
applicable,  money  market  cash sweep  arrangements.  In  addition,  a Fund may
participate in the program only if and to the extent that such  participation is
consistent  with the Fund's  investment  objectives  and policies (for instance,
money market  funds would  normally  participate  only as lenders and tax exempt
funds only as borrowers).  Interfund loans and borrowings may extend  overnight,
but could  have a maximum  duration  of seven  days.  Loans may be called on one
day's notice. A Fund may have to borrow from a bank at a higher interest rate if
an interfund loan is called or not renewed.  Any delay in repayment to a lending
fund could result in a lost  investment  opportunity  or additional  costs.  The
program is subject to the  oversight  and  periodic  review of the Boards of the
participating  funds. To the extent the Funds are actually  engaged in borrowing
through the interfund lending program, the Funds, as a matter of non-fundamental
policy,  may not borrow for other than temporary or emergency  purposes (and not
for  leveraging),  except  that the  Funds  may  engage  in  reverse  repurchase
agreements and dollar rolls for any purpose.

Investment Company Securities. A Fund may acquire securities of other investment
companies to the extent consistent with its investment  objective and subject to
the limitations of the 1940 Act. A Fund will  indirectly bear its  proportionate
share of any management  fees and other  expenses paid by such other  investment
companies.

For example,  a Fund may invest in a variety of investment  companies which seek
to track the  composition  and  performance  of  specific  indexes or a specific
portion of an index.  These  index-based  investments hold  substantially all of
their assets in securities representing their specific index.  Accordingly,  the
main risk of investing in index-based  investments is the same as investing in a
portfolio  of equity  securities  comprising  the index.  The  market  prices of
index-based  investments  will fluctuate in accordance  with both changes in the
market  value of their  underlying  portfolio  securities  and due to supply and
demand for the  instruments on the exchanges on which they are traded (which may
result in their  trading at a discount  or premium to their  NAVs).  Index-based
investments  may not replicate  exactly the performance of their specified index
because of  transaction  costs and because of the  temporary  unavailability  of
certain component securities of the index.

Examples of index-based investments include:

SPDRs(R):  SPDRs,  an acronym for "Standard & Poor's  Depositary  Receipts," are
based on the S&P 500  Composite  Stock Price Index.  They are issued by the SPDR
Trust,  a unit  investment  trust that  holds  shares of  substantially  all the
companies  in the S&P 500 in  substantially  the  same  weighting  and  seeks to
closely track the price performance and dividend yield of the Index.

MidCap  SPDRs(R):  MidCap SPDRs are based on the S&P MidCap 400 Index.  They are
issued by the MidCap SPDR Trust, a unit investment  trust that holds a portfolio
of securities  consisting of  substantially  all of the common stocks in the S&P
MidCap 400 Index in substantially  the same weighting and seeks to closely track
the price performance and dividend yield of the Index.

                                       12
<PAGE>

Select Sector SPDRs(R):  Select Sector SPDRs are based on a particular sector or
group of  industries  that are  represented  by a specified  Select Sector Index
within the Standard & Poor's Composite Stock Price Index. They are issued by The
Select Sector SPDR Trust, an open-end  management  investment  company with nine
portfolios  that each seeks to closely track the price  performance and dividend
yield of a particular Select Sector Index.

DIAMONDS(SM):  DIAMONDS are based on the Dow Jones Industrial Average(SM).  They
are issued by the DIAMONDS Trust, a unit investment trust that holds a portfolio
of all the component common stocks of the Dow Jones Industrial Average and seeks
to closely track the price performance and dividend yield of the Dow.

Nasdaq-100 Shares: Nasdaq-100 Shares are based on the Nasdaq 100 Index. They are
issued by the Nasdaq-100  Trust, a unit investment  trust that holds a portfolio
consisting of substantially  all of the securities,  in  substantially  the same
weighting,  as the component stocks of the Nasdaq-100 Index and seeks to closely
track the price performance and dividend yield of the Index.



Investment-Grade Bonds. A Fund may purchase  "investment-grade" bonds, which are
those  rated Aaa,  Aa, A or Baa by  Moody's  or AAA,  AA, A or BBB by S&P or, if
unrated,  judged to be of  equivalent  quality  as  determined  by the  Advisor.
Moody's  considers  bonds it rates Baa to have  speculative  elements as well as
investment-grade  characteristics.   To  the  extent  that  a  Fund  invests  in
higher-grade   securities,   a  Fund  will  not  be  able  to  avail  itself  of
opportunities for higher income which may be available at lower grades.


Investment of Uninvested  Cash  Balances.  The Funds may have cash balances that
have not been invested in portfolio securities  ("Uninvested Cash").  Uninvested
Cash may result  from a variety of  sources,  including  dividends  or  interest
received from portfolio securities, unsettled securities transactions,  reserves
held for investment strategy purposes, assets to cover a fund's open futures and
other derivatives positions,  scheduled maturity of investments,  liquidation of
investment securities to meet anticipated redemptions and dividend payments, and
new cash received from investors.  Uninvested  Cash may be invested  directly in
money market  instruments or other short-term debt  obligations.  A fund may use
Uninvested Cash to purchase shares of affiliated money market funds or shares of
Cash  Management  QP Trust,  or other  entities for which the Advisor may act as
investment  advisor  now  or in the  future  that  operate  as  cash  management
investment vehicles but are excluded from the definition of "investment company"
pursuant  to  Section  3(c)(1) or  3(c)(7)  of the 1940 Act  (collectively,  the
"Central  Funds"),  provided  that any Central  Funds will operate in accordance
with Rule 2a-7 under the 1940 Act.  Investments in such cash management vehicles
may exceed the limits of Rule 12(d)(1)(A).





                                       13
<PAGE>




Lending of Portfolio  Securities.  A Fund may lend its investment  securities to
approved institutional borrowers,  including those who need to borrow securities
in order  to  complete  certain  transactions,  such as  covering  short  sales,
avoiding failures to deliver securities or completing arbitrage  operations.  By
lending  its  investment  securities,  a  Fund  attempts  to  increase  its  net
investment  income through the receipt of interest on the loan. Any gain or loss
in the market price of the securities loaned that might occur during the term of
the loan would belong to a Fund. A Fund may lend its  investment  securities  so
long as the  terms,  structure  and the  aggregate  amount of such loans are not
inconsistent  with the 1940 Act or the rules and regulations or  interpretations
of the SEC thereunder,  which currently require that (a) the borrower pledge and
maintain  with the Fund  collateral  consisting of liquid,  unencumbered  assets
having a value at all times  not less  than 100% of the value of the  securities
loaned,  (b) the  borrower  add to such  collateral  whenever  the  price of the
securities  loaned  rises (i.e.,  the borrower  "marks to the market" on a daily
basis), (c) the loan be made subject to termination by the Fund at any time, and
(d) the Fund  receives  reasonable  interest  on the loan (which may include the
Fund investing any cash collateral in interest bearing short-term  investments),
and  distributions  on the loaned  securities  and any  increase in their market
value. There may be risks of delay in recovery of the securities or even loss of
rights in the collateral should the borrower of the securities fail financially.
However,  loans will be made only to  borrowers  selected  by a Fund's  delegate
after a  commercially  reasonable  review of relevant  facts and  circumstances,
including the creditworthiness of the borrower.


At the  present  time,  the staff of the SEC does not  object  if an  investment
company pays reasonable negotiated fees in connection with loaned securities, so
long as such  fees are set  forth in a  written  contract  and  approved  by the
investment company's Board of Trustees/Directors. In addition, voting rights may
pass with the loaned  securities,  but if a material  event occurs  affecting an
investment on loan, the loan must be called and the securities  voted.  Pursuant
to an exemptive order granted by the SEC, cash collateral received by a Fund may
be  invested  in a money  market  fund  managed  by the  Advisor  (or one of its
affiliates).

Micro-Cap Companies.  While, historically,  micro-capitalization  company stocks
have  outperformed  the stocks of large  companies,  the former have customarily
involved more investment risk as well.  There can be no assurance that this will
continue  to be true in the  future.  Micro-capitalization  companies  may  have
limited product lines, markets or financial resources; may lack management depth
or experience;  and may be more vulnerable to adverse general market or economic
developments than large companies.  The prices of  micro-capitalization  company
securities  are often more  volatile than prices  associated  with large company
issues,  and can display  abrupt or erratic  movements at times,  due to limited
trading volumes and less publicly available information.

Also,  because   micro-capitalization   companies  normally  have  fewer  shares
outstanding and these shares trade less frequently than large companies,  it may
be more difficult for a Fund to buy and sell significant  amounts of such shares
without an unfavorable impact on prevailing market prices.

Some of the companies in which a Fund may invest may distribute, sell or produce
products  which have recently been brought to market and may be dependent on key
personnel.  The  securities of  micro-capitalization  companies are often traded
over-the-counter  and may not be traded in the  volumes  typical  on a  national
securities exchange. Consequently, in order to sell this type of holding, a Fund
may need to  discount  the  securities  from  recent  prices or  dispose  of the
securities over a long period of time.

Participation  Interests.  A  Fund  may  purchase  from  financial  institutions
participation   interests  in  securities   in  which  a  Fund  may  invest.   A
participation interest gives a Fund an undivided interest in the security in the
proportion that a Fund's participation interest bears to the principal amount of
the security.  These  instruments may have fixed,  floating or variable interest
rates,  with  remaining  maturities  of 397 days or less.  If the  participation
interest is unrated,  or has been given a rating below that which is permissible
for  purchase  by a  Fund,  the  participation  interest  will be  backed  by an
irrevocable  letter of credit or guarantee of a bank, or the payment  obligation
otherwise will be collateralized by US Government securities, or, in the case of
unrated  participation  interest,  determined by the Advisor to be of comparable
quality  to  those  instruments  in  which  a  Fund  may  invest.   For  certain
participation  interests,  a Fund will have the right to demand payment,  on not
more than  seven  days'  notice,  for all or any part of a


                                       14
<PAGE>

Fund's  participation  interests in the security,  plus accrued interest.  As to
these  instruments,  a Fund  generally  intends to exercise  its right to demand
payment only upon a default under the terms of the security.

Privatized Enterprises. Investments in foreign securities may include securities
issued  by  enterprises   that  have  undergone  or  are  currently   undergoing
privatization.  The  governments of certain  foreign  countries have, to varying
degrees,  embarked on privatization  programs  contemplating  the sale of all or
part of their  interests  in state  enterprises.  A  Fund's  investments  in the
securities  of  privatized   enterprises   may  include   privately   negotiated
investments in a government or  state-owned or controlled  company or enterprise
that has not yet  conducted  an  initial  equity  offering,  investments  in the
initial  offering of equity  securities  of a state  enterprise  or former state
enterprise and investments in the securities of a state enterprise following its
initial equity offering.

In certain  jurisdictions,  the ability of foreign entities,  such as a Fund, to
participate in privatizations may be limited by local law, or the price or terms
on which a Fund may be able to  participate  may be less  advantageous  than for
local investors.  Moreover, there can be no assurance that governments that have
embarked on  privatization  programs will continue to divest their  ownership of
state  enterprises,  that  proposed  privatizations  will be  successful or that
governments will not re-nationalize enterprises that have been privatized.

In the case of the  enterprises in which a Fund may invest,  large blocks of the
stock of those  enterprises may be held by a small group of  stockholders,  even
after  the  initial  equity  offerings  by those  enterprises.  The sale of some
portion or all of those blocks could have an adverse  effect on the price of the
stock of any such enterprise.

Prior to making an initial  equity  offering,  most state  enterprises or former
state  enterprises go through an internal  reorganization  or  management.  Such
reorganizations  are made in an attempt to better  enable these  enterprises  to
compete in the private sector. However,  certain reorganizations could result in
a  management  team  that does not  function  as well as an  enterprise's  prior
management and may have a negative effect on such enterprise.  In addition,  the
privatization  of an  enterprise  by its  government  may occur over a number of
years,  with the  government  continuing to hold a  controlling  position in the
enterprise even after the initial equity offering for the enterprise.

Prior to privatization, most of the state enterprises in which a Fund may invest
enjoy the protection of and receive  preferential  treatment from the respective
sovereigns  that own or control them.  After making an initial equity  offering,
these   enterprises   may  no  longer  have  such  protection  or  receive  such
preferential  treatment and may become subject to market  competition from which
they were  previously  protected.  Some of these  enterprises may not be able to
operate  effectively in a competitive market and may suffer losses or experience
bankruptcy due to such competition.

Real  Estate  Investment  Trusts  ("REITs").   REITs  are  sometimes  informally
characterized  as equity REITs,  mortgage REITs and hybrid REITs.  Investment in
REITs may subject a Fund to risks  associated with the direct  ownership of real
estate,  such  as  decreases  in real  estate  values,  overbuilding,  increased
competition  and other risks  related to local or general  economic  conditions,
increases  in  operating  costs and  property  taxes,  changes  in zoning  laws,
casualty or condemnation losses, possible environmental liabilities,  regulatory
limitations on rent and  fluctuations  in rental income.  Equity REITs generally
experience  these risks  directly  through fee or leasehold  interests,  whereas
mortgage REITs generally  experience  these risks  indirectly  through  mortgage
interests,  unless the mortgage REIT  forecloses on the underlying  real estate.
Changes in interest  rates may also affect the value of a Fund's  investment  in
REITs.  For  instance,  during  periods of  declining  interest  rates,  certain
mortgage REITs may hold mortgages  that the  mortgagors  elect to prepay,  which
prepayment may diminish the yield on securities issued by those REITs.

Certain REITs have relatively  small market  capitalizations,  which may tend to
increase the  volatility of the market price of their  securities.  Furthermore,
REITs  are  dependent  upon   specialized   management   skills,   have  limited
diversification and are,  therefore,  subject to risks inherent in operating and
financing a limited  number of  projects.  REITs are also  subject to heavy cash
flow dependency, defaults by borrowers and the possibility of failing to qualify
for tax-free  pass-through of income under the Internal Revenue Code of 1986, as
amended,   (the  "Code")  and  to  maintain   exemption  from  the  registration
requirements of the 1940 Act. By investing in REITs indirectly through a Fund, a
shareholder will bear not only his or her proportionate share of the expenses of
a Fund, but also, indirectly,


                                       15
<PAGE>

similar  expenses of the REITs.  In addition,  REITs  depend  generally on their
ability to generate cash flow to make distributions to shareholders.

Repurchase  Agreements.  A Fund may invest in repurchase  agreements pursuant to
its investment guidelines.  In a repurchase agreement, a Fund acquires ownership
of a security and simultaneously  commits to resell that security to the seller,
typically a bank or broker-dealer.  Some repurchase commitment  transactions may
not  provide  a Fund with  collateral  marked-to-market  during  the term of the
commitment.

A repurchase  agreement  provides a means for a Fund to earn income on funds for
periods as short as overnight.  It is an  arrangement  under which the purchaser
(i.e., a Fund) acquires a security  ("Obligation") and the seller agrees, at the
time of sale,  to  repurchase  the  Obligation  at a  specified  time and price.
Securities  subject to a repurchase  agreement are held in a segregated  account
and the value of such securities kept at least equal to the repurchase  price on
a daily basis.  The repurchase  price may be higher than the purchase price, the
difference being income to a Fund, or the purchase and repurchase  prices may be
the  same,  with  interest  at a  stated  rate due to a Fund  together  with the
repurchase  price  upon  repurchase.  In either  case,  the  income to a Fund is
unrelated to the interest rate on the  Obligation  itself.  Obligations  will be
held by the Custodian or in the Federal Reserve Book Entry system.

It is not clear  whether a court would  consider the  Obligation  purchased by a
Fund  subject to a  repurchase  agreement  as being  owned by a Fund or as being
collateral for a loan by a Fund to the seller.  In the event of the commencement
of  bankruptcy  or  insolvency  proceedings  with  respect  to the seller of the
Obligation before repurchase of the Obligation under a repurchase  agreement,  a
Fund may encounter delay and incur costs before being able to sell the security.
Delays may involve  loss of interest or decline in price of the  Obligation.  If
the court characterizes the transaction as a loan and a Fund has not perfected a
security  interest  in the  Obligation,  a Fund may be  required  to return  the
Obligation to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor,  a Fund would be at risk of losing some or all
of the principal and income involved in the  transaction.  As with any unsecured
debt instrument  purchased for a Fund, the Advisor seeks to minimize the risk of
loss through  repurchase  agreements  by analyzing the  creditworthiness  of the
obligor,  in this case the  seller  of the  Obligation.  Apart  from the risk of
bankruptcy or insolvency proceedings, there is also the risk that the seller may
fail to repurchase the Obligation,  in which case a Fund may incur a loss if the
proceeds  to a Fund of the sale to a third  party are less  than the  repurchase
price.  However, if the market value of the Obligation subject to the repurchase
agreement  becomes less than the repurchase price (including  interest),  a Fund
will direct the seller of the  Obligation  to deliver  additional  securities so
that the market value of all securities subject to the repurchase agreement will
equal or  exceed  the  repurchase  price.  It is  possible  that a Fund  will be
unsuccessful  in seeking to  enforce  the  seller's  contractual  obligation  to
deliver additional securities.

Reverse  Repurchase  Agreements.  A Fund  may  enter  into  "reverse  repurchase
agreements,"  which are repurchase  agreements in which a Fund, as the seller of
the  securities,  agrees to repurchase  them at an agreed upon time and price. A
Fund  maintains a segregated  account in  connection  with  outstanding  reverse
repurchase agreements. Reverse repurchase agreements are deemed to be borrowings
subject to a Fund's investment  restrictions applicable to that activity. A Fund
will enter into reverse  repurchase  agreements  only when the Advisor  believes
that the interest income to be earned from the investment of the proceeds of the
transaction will be greater than the interest  expense of the transaction.  Such
transactions  may  increase  fluctuation  in the market value of Fund assets and
their yields.

Small Company  Risk.  The Advisor  believes  that many small  companies may have
sales and earnings growth rates which exceed those of larger companies, and that
such  growth  rates  may  in  turn  be  reflected  in  more  rapid  share  price
appreciation  over time.  However,  investing in smaller company stocks involves
greater risk than is  customarily  associated  with  investing  in larger,  more
established companies.  For example,  smaller companies can have limited product
lines,  markets,  or financial and managerial  resources.  Smaller companies may
also be dependent on one or a few key persons,  and may be more  susceptible  to
losses and risks of bankruptcy. Also, the securities of smaller companies may be
thinly traded (and  therefore  have to be sold at a discount from current market
prices or sold in small lots over an extended period of time). Transaction costs
in smaller company stocks may be higher than those of larger companies.

                                       16
<PAGE>

Strategic  Transactions  and  Derivatives.  A Fund may,  but is not required to,
utilize various other investment  strategies as described below for a variety of
purposes,  such as hedging various market risks, managing the effective maturity
or duration of the  fixed-income  securities in a Fund's  portfolio or enhancing
potential gain.  These  strategies may be executed through the use of derivative
contracts.


In the course of pursuing these investment  strategies,  a Fund may purchase and
sell  exchange-listed and  over-the-counter  put and call options on securities,
equity and fixed-income indices and other instruments, purchase and sell futures
contracts and options thereon,  enter into various  transactions  such as swaps,
caps, floors, collars,  currency forward contracts,  currency futures contracts,
currency swaps or options on currencies,  or currency  futures and various other
currency  transactions  (collectively,  all  the  above  are  called  "Strategic
Transactions").  In addition, strategic transactions may also include additional
techniques,  instruments or strategies that are permitted as regulatory  changes
occur.  Strategic  Transactions  may be used without  limit  (subject to certain
limits imposed by the 1940 Act) to attempt to protect against  possible  changes
in the  market  value  of  securities  held in or to be  purchased  for a Fund's
portfolio   resulting  from  securities   markets  or  currency   exchange  rate
fluctuations, to protect a Fund's unrealized gains in the value of its portfolio
securities,  to facilitate the sale of such securities for investment  purposes,
to manage the effective maturity or duration of a Fund's portfolio, to establish
a position in the derivatives  markets as a substitute for purchasing or selling
particular securities or for any other purpose permitted by applicable law. Some
Strategic  Transactions  may also be used to enhance  potential gain although no
more  than  5% of a  Fund's  assets  will  be  committed  to  certain  Strategic
Transactions  entered  into  for  non-hedging  purposes.  Any or  all  of  these
investment techniques may be used at any time and in any combination,  and there
is no particular  strategy  that  dictates the use of one technique  rather than
another, as use of any Strategic Transaction is a function of numerous variables
including  market  conditions.  The ability of a Fund to utilize these Strategic
Transactions  successfully  will  depend on the  Advisor's  ability  to  predict
pertinent market movements, which cannot be assured. Strategic Transactions will
not be used to alter fundamental  investment  purposes and  characteristics of a
Fund.

Strategic  Transactions,  including derivative contracts,  have risks associated
with them  including  possible  default by the other  party to the  transaction,
illiquidity and, to the extent the Advisor's view as to certain market movements
is incorrect,  the risk that the use of such Strategic Transactions could result
in losses  greater  than if they had not been used.  Use of put and call options
may  result  in  losses  to a Fund,  force  the sale or  purchase  of  portfolio
securities  at  inopportune  times or for prices higher than (in the case of put
options)  or lower than (in the case of call  options)  current  market  values,
limit the amount of  appreciation a Fund can realize on its investments or cause
a Fund  to  hold a  security  it  might  otherwise  sell.  The  use of  currency
transactions  can result in a Fund  incurring  losses as a result of a number of
factors   including  the   imposition  of  exchange   controls,   suspension  of
settlements,  or the inability to deliver or receive a specified  currency.  The
use of  options  and  futures  transactions  entails  certain  other  risks.  In
particular,  the  variable  degree of  correlation  between  price  movements of
futures  contracts and price  movements in the related  portfolio  position of a
Fund  creates  the  possibility  that losses on the  hedging  instrument  may be
greater than gains in the value of a Fund's position.  In addition,  futures and
options   markets   may  not  be  liquid  in  all   circumstances   and  certain
over-the-counter options may have no markets. As a result, in certain markets, a
Fund might not be able to close out a transaction without incurring  substantial
losses,  if at all.  Although  the use of futures and options  transactions  for
hedging  should tend to minimize  the risk of loss due to a decline in the value
of the hedged  position,  at the same time they tend to limit any potential gain
which might  result from an increase  in value of such  position.  Finally,  the
daily variation margin requirements for futures contracts would create a greater
ongoing  potential  financial  risk than would  purchases of options,  where the
exposure  is  limited  to the  cost  of the  initial  premium.  Other  Strategic
Transactions,  such as forward  contracts and swaps, are also subject to similar
risks. Losses resulting from the use of Strategic  Transactions would reduce net
asset  value,  and possibly  income,  and such losses can be greater than if the
Strategic Transactions had not been utilized.


General  Characteristics of Options. Put options and call options typically have
similar structural  characteristics and operational  mechanics regardless of the
underlying  instrument on which they are purchased or sold.  Thus, the following
general  discussion relates to each of the particular types of options discussed
in greater  detail below.  In addition,  many Strategic  Transactions  involving
options  require  segregation of fund assets in special  accounts,  as described
below under "Use of Segregated and Other Special Accounts."

                                       17
<PAGE>

A put option gives the purchaser of the option,  upon payment of a premium,  the
right to sell, and the writer the  obligation to buy, the  underlying  security,
commodity,  index,  currency or other  instrument  at the  exercise  price.  For
instance, the Fund's purchase of a put option on a security might be designed to
protect its holdings in the underlying  instrument (or, in some cases, a similar
instrument) against a substantial decline in the market value by giving the Fund
the right to sell such  instrument at the option  exercise price. A call option,
upon payment of a premium,  gives the  purchaser of the option the right to buy,
and the seller the obligation to sell, the underlying instrument at the exercise
price.  A Fund's  purchase  of a call option on a  security,  financial  future,
index,  currency  or other  instrument  might be  intended  to protect  the Fund
against an increase in the price of the underlying instrument that it intends to
purchase  in the  future  by  fixing  the  price at which it may  purchase  such
instrument.  An American  style put or call option may be  exercised at any time
during  the  option  period  while a  European  style put or call  option may be
exercised only upon expiration or during a fixed period prior thereto. A Fund is
authorized to purchase and sell  exchange  listed  options and  over-the-counter
options  ("OTC  options").  Exchange  listed  options  are issued by a regulated
intermediary such as the Options Clearing Corporation ("OCC"),  which guarantees
the  performance  of the  obligations  of  the  parties  to  such  options.  The
discussion  below uses the OCC as an example,  but is also  applicable  to other
financial intermediaries.


Index options and Eurodollar instruments are cash settled for the net amount, if
any,  by which  the  option  is  "in-the-money"  (i.e.,  where  the value of the
underlying instrument exceeds, in the case of a call option, or is less than, in
the case of a put  option,  the  exercise  price of the  option) at the time the
option is exercised.  Frequently,  rather than taking or making  delivery of the
underlying  instrument  through the  process of  exercising  the option,  listed
options are closed by entering  into  offsetting  purchase or sale  transactions
that do not result in ownership of the new option.


A Fund's ability to close out its position as a purchaser or seller of an OCC or
exchange listed put or call option is dependent,  in part, upon the liquidity of
the option market. Among the possible reasons for the absence of a liquid option
market on an exchange are: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions  imposed by an exchange;  (iii) trading halts,
suspensions or other restrictions  imposed with respect to particular classes or
series of  options or  underlying  securities  including  reaching  daily  price
limits;  (iv)  interruption of the normal  operations of the OCC or an exchange;
(v) inadequacy of the facilities of an exchange or OCC to handle current trading
volume;  or (vi) a decision by one or more exchanges to discontinue  the trading
of options  (or a  particular  class or series of  options),  in which event the
relevant market for that option on that exchange would cease to exist,  although
outstanding  options on that exchange would generally continue to be exercisable
in accordance with their terms.

The hours of trading for listed  options may not coincide  with the hours during
which the underlying  financial  instruments are traded.  To the extent that the
option   markets  close  before  the  markets  for  the   underlying   financial
instruments,  significant  price  and  rate  movements  can  take  place  in the
underlying markets that cannot be reflected in the option markets.

OTC  options  are  purchased  from  or  sold to  securities  dealers,  financial
institutions  or  other  parties  ("Counterparties")  through  direct  bilateral
agreement with the Counterparty.  In contrast to exchange listed options,  which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement,  term, exercise price,
premium,  guarantees and security, are set by negotiation of the parties. A Fund
will only sell OTC options (other than OTC currency options) that are subject to
a buy-back  provision  permitting a Fund to require the Counterparty to sell the
option  back to a Fund at a formula  price  within  seven days.  A Fund  expects
generally  to enter  into OTC  options  that  have cash  settlement  provisions,
although it is not required to do so.

Unless the  parties  provide  for it,  there is no central  clearing or guaranty
function in an OTC option.  As a result,  if the  Counterparty  fails to make or
take delivery of the security,  currency or other  instrument  underlying an OTC
option  it has  entered  into  with a Fund or  fails  to make a cash  settlement
payment due in  accordance  with the terms of that option,  a Fund will lose any
premium  it paid  for the  option  as well  as any  anticipated  benefit  of the
transaction.  Accordingly,  the Advisor must assess the creditworthiness of each
such Counterparty or any guarantor or credit  enhancement of the  Counterparty's
credit to  determine  the  likelihood  that the terms of the OTC option  will be

                                       18
<PAGE>

satisfied.  The  Fund  will  engage  in OTC  option  transactions  only  with US
government securities dealers recognized by the Federal Reserve Bank of New York
as "primary  dealers"  or  broker-dealers,  domestic  or foreign  banks or other
financial  institutions which have received (or the guarantors of the obligation
of which have  received) a short-term  credit rating of A-1 from S&P or P-1 from
Moody's or an  equivalent  rating  from any  nationally  recognized  statistical
rating organization ("NRSRO") or, in the case of OTC currency transactions,  are
determined to be of equivalent  credit quality by the Advisor.  The staff of the
SEC  currently  takes the position  that OTC options  purchased  by a Fund,  and
portfolio securities "covering" the amount of a Fund's obligation pursuant to an
OTC option sold by it (the cost of the sell-back plus the  in-the-money  amount,
if any) are  illiquid,  and are subject to a Fund's  limitation  on investing no
more than 15% of its net assets in illiquid securities.

If a Fund sells a call  option,  the  premium  that it  receives  may serve as a
partial hedge,  to the extent of the option  premium,  against a decrease in the
value of the  underlying  securities  or  instruments  in its  portfolio or will
increase a Fund's income. The sale of put options can also provide income.

A Fund may purchase and sell call  options on  securities  including US Treasury
and agency  securities,  mortgage-backed  securities,  foreign  sovereign  debt,
corporate debt securities,  equity securities (including convertible securities)
and  Eurodollar  instruments  that  are  traded  on US  and  foreign  securities
exchanges  and in the  over-the-counter  markets,  and  on  securities  indices,
currencies  and futures  contracts.  All calls sold by a Fund must be  "covered"
(i.e., a Fund must own the securities or futures  contract  subject to the call)
or must meet the asset segregation  requirements  described below as long as the
call is outstanding.  Even though a Fund will receive the option premium to help
protect it against  loss, a call sold by a Fund exposes the Fund during the term
of the option to possible loss of  opportunity  to realize  appreciation  in the
market price of the underlying  security or instrument and may require a Fund to
hold a security or instrument which it might otherwise have sold.

A Fund may purchase and sell put options on securities including US Treasury and
agency securities, mortgage-backed securities, foreign sovereign debt, corporate
debt  securities,  equity  securities  (including  convertible  securities)  and
Eurodollar  instruments  (whether  or not it holds the above  securities  in its
portfolio),  and on securities  indices,  currencies and futures contracts other
than futures on individual  corporate debt and individual equity  securities.  A
Fund will not sell put  options  if, as a  result,  more than 50% of the  Fund's
total  assets  would  be  required  to be  segregated  to  cover  its  potential
obligations  under such put options other than those with respect to futures and
options  thereon.  In selling  put  options,  there is a risk that a Fund may be
required to buy the  underlying  security at a  disadvantageous  price above the
market price.


General  Characteristics  of Futures. A Fund may enter into futures contracts or
purchase  or sell  put and  call  options  on such  futures  as a hedge  against
anticipated  interest rate, currency or equity market changes,  and for duration
management,  risk  management  and  return  enhancement  purposes.  Futures  are
generally  bought and sold on the  commodities  exchanges  where they are listed
with payment of initial and variation  margin as described  below. The sale of a
futures  contract  creates a firm  obligation  by the seller,  to deliver to the
buyer the specific type of financial  instrument called for in the contract at a
specific  future  time for a  specified  price  (or,  with  respect  to  certain
instruments,  such as index  futures and  Eurodollar  instruments,  the net cash
amount)  and a firm  obligation  by the buyer to deliver  the  specified  price.
Options on futures contracts are similar to options on securities except that an
option on a futures  contract  gives the  purchaser  the right in return for the
premium paid to assume a position in a futures contract and obligates the seller
to deliver such position.

The Funds have claimed exclusion from the definition of the term "commodity pool
operator" under the Commodity Exchange Act. Therefore, the Funds are not subject
to commodity  pool  operator  registration  and  regulation  under the Commodity
Exchange  Act.  Futures and options on futures may be entered into for bona fide
hedging,  risk management (including duration management) or other portfolio and
return  enhancement  management  purposes.  Typically,   maintaining  a  futures
contract  or  selling  an  option  thereon  requires  a Fund to  deposit  with a
financial  intermediary  as security  for its  obligations  an amount of cash or
other specified  assets (initial  margin) which initially is typically 1% to 10%
of the face amount of the  contract  (but may be higher in some  circumstances).
Additional  cash or assets  (variation  margin) may be required to be  deposited
thereafter  on a  daily  basis  as the  mark to  market  value  of the  contract
fluctuates. The purchase of an option on financial futures involves payment of a
premium for the option without any further  obligation on the part of a Fund. If
a Fund  exercises  an option on a futures  contract it will be obligated to post
initial margin (and  potential  subsequent  variation  margin) for the resulting
futures  position


                                       19
<PAGE>

just as it would for any position.  Futures  contracts  and options  thereon are
generally settled by entering into an offsetting transaction but there can be no
assurance that the position can be offset prior to settlement at an advantageous
price, nor that delivery will occur.




Options on  Securities  Indices  and Other  Financial  Indices.  A Fund also may
purchase and sell call and put options on securities indices and other financial
indices and in so doing can achieve many of the same objectives it would achieve
through  the sale or  purchase  of options  on  individual  securities  or other
instruments.  Options on  securities  indices  and other  financial  indices are
similar to options on a security or other  instrument  except that,  rather than
settling by physical delivery of the underlying instrument,  they settle by cash
settlement,  i.e.,  an option on an index gives the holder the right to receive,
upon exercise of the option, an amount of cash if the closing level of the index
upon which the option is based exceeds,  in the case of a call, or is less than,
in the case of a put, the exercise  price of the option  (except if, in the case
of an OTC option, physical delivery is specified).  This amount of cash is equal
to the excess of the closing  price of the index over the exercise  price of the
option,  which  also may be  multiplied  by a formula  value.  The seller of the
option is  obligated,  in return for the premium  received,  to make delivery of
this  amount.  The  gain or loss on an  option  on an  index  depends  on  price
movements in the instruments making up the market,  market segment,  industry or
other  composite  on which the  underlying  index is based,  rather  than  price
movements in  individual  securities,  as is the case with respect to options on
securities.

Currency  Transactions.   A  Fund  may  engage  in  currency  transactions  with
counterparties  primarily in order to hedge,  or manage the risk of the value of
portfolio holdings denominated in particular  currencies against fluctuations in
relative  value.  Currency  transactions  include  forward  currency  contracts,
exchange listed currency futures, exchange listed and OTC options on currencies,
and currency swaps. A forward currency contract involves a privately  negotiated
obligation  to purchase or sell (with  delivery  generally  required) a specific
currency at a future  date,  which may be any fixed number of days from the date
of the contract  agreed upon by the  parties,  at a price set at the time of the
contract.  A currency  swap is an agreement to exchange  cash flows based on the
notional  difference  among two or more currencies and operates  similarly to an
interest  rate swap,  which is described  below.  A Fund may enter into currency
transactions with  counterparties  which have received (or the guarantors of the
obligations  which  have  received)  a  credit  rating  of  A-1 or P-1 by S&P or
Moody's, respectively, or that have an equivalent rating from a NRSRO or (except
for OTC currency  options) are determined to be of equivalent  credit quality by
the Advisor.

A Fund's dealings in forward currency contracts and other currency  transactions
such as futures, options, options on futures and swaps generally will be limited
to hedging involving either specific  transactions or portfolio positions except
as described below.  Transaction hedging is entering into a currency transaction
with respect to specific  assets or liabilities of a Fund,  which will generally
arise in connection with the purchase or sale of its portfolio securities or the
receipt  of income  therefrom.  Position  hedging  is  entering  into a currency
transaction  with  respect  to  portfolio  security  positions   denominated  or
generally quoted in that currency.

                                       20
<PAGE>


A Fund generally will not enter into a transaction to hedge currency exposure to
an extent greater,  after netting all transactions  intended wholly or partially
to offset other  transactions,  than the aggregate  market value (at the time of
entering into the  transaction) of the securities held in its portfolio that are
denominated or generally quoted in or currently  convertible into such currency,
other than with respect to proxy hedging or cross hedging as described below, as
applicable.


A Fund may also cross-hedge currencies by entering into transactions to purchase
or sell one or more currencies that are expected to decline in value relative to
other  currencies  to  which  a Fund  has or in  which  a Fund  expects  to have
portfolio exposure.

To reduce  the  effect of  currency  fluctuations  on the value of  existing  or
anticipated  holdings of portfolio  securities,  a Fund may also engage in proxy
hedging.  Proxy  hedging  is  often  used  when the  currency  to which a Fund's
portfolio is exposed is  difficult  to hedge or to hedge  against the US dollar.
Proxy  hedging  entails  entering into a commitment or option to sell a currency
whose changes in value are  generally  considered to be correlated to a currency
or currencies in which some or all of a Fund's  portfolio  securities are or are
expected  to be  denominated,  in  exchange  for US  dollars.  The amount of the
commitment  or  option  would  not  exceed  the  value  of a  Fund's  securities
denominated in correlated currencies. Currency hedging involves some of the same
risks  and  considerations  as  other  transactions  with  similar  instruments.
Currency  transactions  can  result in losses  to a Fund if the  currency  being
hedged  fluctuates  in  value  to  a  degree  or  in a  direction  that  is  not
anticipated.  Further,  there is the risk that the perceived correlation between
various  currencies  may  not be  present  or  may  not be  present  during  the
particular time that a Fund is engaging in proxy hedging.  If a Fund enters into
a currency hedging transaction,  the Fund will comply with the asset segregation
requirements described below.

Risks of  Currency  Transactions.  Currency  transactions  are  subject to risks
different from those of other portfolio  transactions.  Because currency control
is of great  importance  to the  issuing  governments  and  influences  economic
planning and policy, purchases and sales of currency and related instruments can
be  negatively  affected  by  government  exchange  controls,   blockages,   and
manipulations or exchange restrictions imposed by governments.  These can result
in losses to a Fund if it is unable to deliver or receive  currency  or funds in
settlement of obligations  and could also cause hedges it has entered into to be
rendered  useless,  resulting  in full  currency  exposure as well as  incurring
transaction  costs.  Buyers and sellers of  currency  futures are subject to the
same risks that apply to the use of futures generally.  Further, settlement of a
currency  futures  contract for the purchase of most  currencies must occur at a
bank  based in the  issuing  nation.  Trading  options  on  currency  futures is
relatively  new,  and the ability to establish  and close out  positions on such
options is subject to the maintenance of a liquid market which may not always be
available.  Currency  exchange rates may fluctuate based on factors extrinsic to
that country's economy.

Risks of Strategic  Transactions  Outside the US. When conducted outside the US,
Strategic  Transactions may not be regulated as rigorously as in the US, may not
involve a clearing mechanism and related guarantees, and are subject to the risk
of  governmental  actions  affecting  trading  in,  or the  prices  of,  foreign
securities,  currencies and other instruments.  The value of such positions also
could be adversely affected by: (i) other complex foreign  political,  legal and
economic  factors,  (ii) lesser  availability than in the US of data on which to
make trading  decisions,  (iii) delays in a Fund's  ability to act upon economic
events  occurring in foreign markets during  non-business  hours in the US, (iv)
the  imposition of different  exercise and  settlement  terms and procedures and
margin requirements than in the US, and (v) lower trading volume and liquidity.


Swaps, Caps, Floors and Collars.  Among the Strategic  Transactions into which a
Fund may enter  are  interest  rate,  currency,  index  and other  swaps and the
purchase or sale of related  caps,  floors and collars.  A Fund expects to enter
into these transactions primarily to preserve a return or spread on a particular
investment,  portion of its portfolio, to protect against currency fluctuations,
as a duration  management  technique  or to protect  against any increase in the
price of securities a Fund anticipates  purchasing at a later date or to enhance
returns. A Fund will not sell interest rate caps or floors where it does not own
securities  or  other  instruments  providing  the  income  stream a Fund may be
obligated  to pay.  Interest  rate swaps  involve  the  exchange  by a Fund with
another party of their respective commitments to pay or receive interest,  e.g.,
an exchange of floating  rate payments for fixed rate payments with respect to a
notional  amount of principal.  A currency swap is an agreement to exchange cash
flows on a notional amount of two or more currencies based on the relative value
differential  among them and an index swap is an agreement to swap cash flows on
a notional amount based on changes in the values of the reference  indices.  The

                                       21
<PAGE>

purchase  of a cap  entitles  the  purchaser  to receive  payments on a notional
principal  amount from the party selling such cap to the extent that a specified
index exceeds a predetermined  interest rate or amount.  The purchase of a floor
entitles the purchaser to receive  payments on a notional  principal amount from
the party selling such floor to the extent that a specified  index falls below a
predetermined  interest rate or amount. A collar is a combination of a cap and a
floor that preserves a certain return within a  predetermined  range of interest
rates or values.

Use of Segregated and Other Special Accounts. Most Strategic  Transactions,  and
certain other instruments (such as reverse repurchase  agreements,  dollar rolls
and when-issued securities),  expose the Fund to an obligation to another party.
The Fund will comply with SEC  guidelines  regarding  cover for these  Strategic
Transactions  and instruments and will, if the guidelines so require,  segregate
on its books cash or liquid assets in the prescribed amount as determined daily.
The Fund may also enter into offsetting  transactions or own positions  covering
its  obligations.  Although  this SAI  describes  certain  permitted  methods of
segregating assets or otherwise "covering" such transactions for these purposes,
such  descriptions  are not intended to be  exhaustive.  The Fund may cover such
transactions  using other methods currently or in the future permitted under the
1940 Act,  the rules and  regulations  thereunder,  or orders  issued by the SEC
thereunder. For these purposes, interpretations and guidance provided by the SEC
staff may be taken into  account  when deemed  appropriate  by the Fund.  To the
extent that a Fund covers its commitment  under Strategic  Transactions and such
other  instruments,  including by segregation  of liquid  assets,  entering into
offsetting  transactions  or owning  positions  covering its  obligations,  such
Strategic  Transactions  and  instruments  will  not  be  considered  a  "senior
security"  by the  Fund and  therefore  will not be  subject  to the 300%  asset
coverage requirement otherwise applicable to borrowings by the Fund.

Assets  used as cover  cannot be sold while the  position  in the  corresponding
Strategic Transaction or other such instrument is open, unless they are replaced
with other appropriate assets. As a result, the commitment of a large portion of
the Fund's assets to cover in accounts could impede portfolio  management or the
Fund's ability to meet redemption requests or other current obligations.





                                       22
<PAGE>



Combined Transactions.  A Fund may enter into multiple  transactions,  including
multiple options transactions,  multiple futures transactions, multiple currency
transactions  (including forward currency  contracts) and multiple interest rate
transactions and any combination of futures, options, currency and interest rate
transactions   ("component"   transactions),   instead  of  a  single  Strategic
Transaction,  as part of a single or combined  strategy  when, in the opinion of
the  Advisor,  it is in the best  interests  of the  Fund to do so.  A  combined
transaction  will usually  contain  elements of risk that are present in each of
its component transactions.  Although combined transactions are normally entered
into based on the Advisor's  judgment that the combined  strategies  will reduce
risk or otherwise  more  effectively  achieve the desired  portfolio  management
goal, it is possible that the  combination  will instead  increase such risks or
hinder achievement of the portfolio management objective.

Supranational Entities.  Supranational entities are international  organizations
designated   or  supported  by   governmental   entities  to  promote   economic
reconstruction or development and international banking institutions and related
government agencies.  Examples include the International Bank for Reconstruction
and Development  (the World Bank),  the European Coal and Steel  Community,  The
Asian  Development Bank and the InterAmerican  Development Bank.  Obligations of
supranational  entities  are  backed  by the  guarantee  of one or more  foreign
governmental parties which sponsor the entity.

Trust Preferred  Securities.  A Fund may invest in Trust  Preferred  Securities,
which are hybrid  instruments  issued by a special  purpose  trust (the "Special
Trust"),  the entire equity  interest of which is owned by a single issuer.  The
proceeds of the issuance to a Fund of Trust  Preferred  Securities are typically
used to purchase a junior  subordinated  debenture,  and distributions  from the
Special  Trust are funded by the  payments  of  principal  and  interest  on the
subordinated  debenture.

If payments on the underlying junior subordinated debentures held by the Special
Trust are deferred by the debenture  issuer,  the debentures would be treated as
original issue discount ("OID")  obligations for the remainder of their term. As
a  result,  holders  of Trust  Preferred  Securities,  such as a Fund,  would be
required to accrue  daily for  Federal  income tax  purposes  their share of the
stated interest and the de minimis OID on the debentures  (regardless of whether
a Fund receives any cash distributions from the Special Trust), and the value of
Trust  Preferred  Securities


                                       23
<PAGE>

would likely be negatively affected.  Interest payments on the underlying junior
subordinated  debentures  typically  may  only  be  deferred  if  dividends  are
suspended  on both  common and  preferred  stock of the issuer.  The  underlying
junior  subordinated  debentures  generally  rank  slightly  higher  in terms of
payment  priority than both common and preferred  securities of the issuer,  but
rank below other  subordinated  debentures and debt securities.  Trust Preferred
Securities may be subject to mandatory  prepayment under certain  circumstances.
The market values of Trust Preferred  Securities may be more volatile than those
of conventional  debt  securities.  Trust Preferred  Securities may be issued in
reliance on Rule 144A under the 1933 Act, and, unless and until registered,  are
restricted  securities;  there can be no assurance as to the  liquidity of Trust
Preferred  Securities and the ability of holders of Trust Preferred  Securities,
such as a Fund, to sell their holdings.

US   Government   Securities.   There   are   two   broad   categories   of   US
Government-related debt instruments:  (a) direct obligations of the US Treasury,
and (b) securities issued or guaranteed by US Government agencies.

Examples of direct  obligations  of the US Treasury are Treasury  Bills,  Notes,
Bonds and other debt securities issued by the US Treasury. These instruments are
backed  by the  "full  faith and  credit"  of the  United  States.  They  differ
primarily in interest rates, the length of maturities and the dates of issuance.
Treasury bills have original maturities of one year or less. Treasury notes have
original  maturities  of one to ten  years and  Treasury  bonds  generally  have
original maturities of greater than ten years.

Some  agency  securities  are  backed by the full faith and credit of the United
States (such as Maritime Administration Title XI Ship Financing Bonds and Agency
for  International  Development  Housing Guarantee Program Bonds) and others are
backed only by the rights of the issuer to borrow from the US Treasury  (such as
Federal Home Loan Bank Bonds and Federal National Mortgage  Association  Bonds),
while still others,  such as the securities of the Federal Farm Credit Bank, are
supported only by the credit of the issuer. With respect to securities supported
only by the credit of the issuing agency or by an additional line of credit with
the US  Treasury,  there is no  guarantee  that the US  Government  will provide
support  to such  agencies  and  such  securities  may  involve  risk of loss of
principal and interest.

US Government  Securities  may include "zero coupon"  securities  that have been
stripped  by  the  US  Government  of  their  unmatured   interest  coupons  and
collateralized  obligations  issued or guaranteed  by a US Government  agency or
instrumentality.

Interest rates on US Government  obligations may be fixed or variable.  Interest
rates on variable rate obligations are adjusted at regular  intervals,  at least
annually,  according to a formula  reflecting  then current  specified  standard
rates, such as 91-day US Treasury bill rates.  These adjustments  generally tend
to reduce fluctuations in the market value of the securities.

The government  guarantee of the US Government  Securities in a Fund's portfolio
does not guarantee the net asset value of the shares of a Fund. There are market
risks  inherent in all  investments in securities and the value of an investment
in a Fund will  fluctuate  over time.  Normally,  the value of investments in US
Government  Securities  varies  inversely  with changes in interest  rates.  For
example,  as  interest  rates  rise the value of  investments  in US  Government
Securities  will tend to  decline,  and as  interest  rates  fall the value of a
Fund's  investments  will tend to  increase.  In  addition,  the  potential  for
appreciation  in the event of a decline  in  interest  rates may be  limited  or
negated   by   increased   principal   prepayments   with   respect  to  certain
Mortgage-Backed  Securities,  such as  GNMA  Certificates.  Prepayments  of high
interest  rate  Mortgage-Backed  Securities  during times of declining  interest
rates will tend to lower the return of a Fund and may even result in losses to a
Fund if some securities were acquired at a premium.  Moreover, during periods of
rising interest rates,  prepayments of  Mortgage-Backed  Securities may decline,
resulting in the extension of a Fund's average portfolio maturity.  As a result,
a Fund's portfolio may experience  greater  volatility  during periods of rising
interest rates than under normal market conditions.

Warrants.  The holder of a warrant has the right, until the warrant expires,  to
purchase a given number of shares of a particular  issuer at a specified  price.
Such  investments  can  provide a greater  potential  for profit or loss than an
equivalent  investment  in the  underlying  security.  Prices of warrants do not
necessarily  move in  tandem  with  the  prices  of the  underlying  securities,
however, and are, therefore, considered speculative investments. Warrants pay no

                                       24
<PAGE>

dividends and confer no rights other than a purchase option.  Thus, if a warrant
held by a Fund were not  exercised by the date of its  expiration,  a Fund would
lose the entire purchase price of the warrant.

When-Issued Securities. Each Fund may from time to time purchase equity and debt
securities on a "when-issued,"  "delayed  delivery" or "forward delivery" basis.
The price of such securities, which may be expressed in yield terms, is fixed at
the time the  commitment  to purchase is made,  but delivery and payment for the
securities  takes place at a later date.  During the period between purchase and
settlement, no payment is made by the Fund to the issuer and no interest accrues
to the Fund. When the Fund purchases such securities, it immediately assumes the
risks of ownership, including the risk of price fluctuation.  Failure to deliver
a security purchased on this basis may result in a loss or missed opportunity to
make an alternative investment.


To the extent that assets of the Fund are held in cash pending the settlement of
a purchase of securities,  the Fund would earn no income.  While such securities
may be sold prior to the settlement date, the Fund intends to purchase them with
the  purpose of actually  acquiring  them unless a sale  appears  desirable  for
investment  reasons.  At the time the Fund makes the  commitment  to  purchase a
security on this basis,  it will record the transaction and reflect the value of
the  security  in  determining  its net asset  value.  The  market  value of the
securities may be more or less than the purchase price.


Zero Coupon Securities. A Fund may invest in zero coupon securities which pay no
cash income and are sold at substantial  discounts from their value at maturity.
When held to  maturity,  their  entire  income,  which  consists of accretion of
discount,  comes from the difference  between the issue price and their value at
maturity.   Zero  coupon   securities   are  subject  to  greater  market  value
fluctuations  from changing  interest rates than debt  obligations of comparable
maturities  which make current  distributions  of interest  (cash).  Zero coupon
securities  which are  convertible  into common stock offer the  opportunity for
capital  appreciation  as  increases  (or  decreases)  in  market  value of such
securities  closely  follows the movements in the market value of the underlying
common stock. Zero coupon  convertible  securities  generally are expected to be
less volatile than the underlying common stocks, as they usually are issued with
maturities  of 15 years or less and are issued with  options  and/or  redemption
features  exercisable  by the holder of the  obligation  entitling the holder to
redeem the obligation and receive a defined cash payment.

Zero coupon  securities  include  securities issued directly by the US Treasury,
and US Treasury bonds or notes and their unmatured interest coupons and receipts
for their underlying  principal  ("coupons")  which have been separated by their
holder,  typically a custodian bank or investment  brokerage firm. A holder will
separate the interest  coupons from the  underlying  principal (the "corpus") of
the US Treasury  security.  A number of securities firms and banks have stripped
the interest  coupons and  receipts  and then resold them in  custodial  receipt
programs with a number of different  names,  including  "Treasury  Income Growth
Receipts" (TIGRS(TM)) and Certificate of Accrual on Treasuries  (CATS(TM)).  The
underlying US Treasury bonds and notes themselves are held in book-entry form at
the  Federal  Reserve  Bank  or,  in  the  case  of  bearer   securities  (i.e.,
unregistered  securities  which are  owned  ostensibly  by the  bearer or holder
thereof), in trust on behalf of the owners thereof.  Counsel to the underwriters
of these  certificates  or  other  evidences  of  ownership  of the US  Treasury
securities have stated that, for federal tax and securities  purposes,  in their
opinion  purchasers of such  certificates,  such as a Fund,  most likely will be
deemed the beneficial holder of the underlying US Government securities.  A Fund
understands  that the staff of the Division of Investment  Management of the SEC
no longer  considers  such  privately  stripped  obligations to be US Government
securities,  as defined in the 1940 Act; therefore,  a Fund intends to adhere to
this staff position and will not treat such privately stripped obligations to be
US  Government   securities  for  the  purpose  of  determining  if  a  Fund  is
"diversified" under the 1940 Act.

The US Treasury has facilitated transfers of ownership of zero coupon securities
by accounting  separately  for the beneficial  ownership of particular  interest
coupon and corpus  payments on Treasury  securities  through the Federal Reserve
book-entry record keeping system.  The Federal Reserve program as established by
the Treasury  Department is known as "STRIPS" or "Separate Trading of Registered
Interest and Principal of Securities."  Under the STRIPS program, a Fund will be
able  to have  its  beneficial  ownership  of zero  coupon  securities  recorded
directly  in the  book-entry  record-keeping  system  in lieu of  having to hold
certificates  or other  evidences  of ownership  of the  underlying  US Treasury
securities.

                                       25
<PAGE>

When US Treasury  obligations  have been  stripped of their  unmatured  interest
coupons  by the  holder,  the  principal  or corpus  is sold at a deep  discount
because the buyer  receives  only the right to receive a future fixed payment on
the  security  and does not  receive  any  rights to  periodic  interest  (cash)
payments.  Once  stripped  or  separated,  the  corpus and  coupons  may be sold
separately.  Typically,  the coupons are sold  separately  or grouped with other
coupons with like  maturity  dates and sold bundled in such form.  Purchasers of
stripped  obligations   acquire,  in  effect,   discount  obligations  that  are
economically  identical to the zero coupon  securities  that the Treasury  sells
itself.

Portfolio Holdings Information


In addition to the public disclosure of Fund portfolio holdings through required
Securities and Exchange  Commission  ("SEC") quarterly  filings, a Fund may make
its portfolio holdings information publicly available on the DWS Funds' Web site
as  described  in  each  Fund's  prospectus.  Each  Fund  does  not  disseminate
non-public  information  about  portfolio  holdings  except in  accordance  with
policies and procedures adopted by each Fund.

Each Fund's procedures permit non-public  portfolio  holdings  information to be
shared with Deutsche Asset Management and its affiliates  (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys,   officers  and  trustees/directors  and  each  of  their  respective
affiliates and advisers who require access to this  information to fulfill their
duties to each Fund and are subject to the duties of confidentiality,  including
the duty not to trade on non-public information,  imposed by law or contract, or
by each Fund's  procedures.  This non-public  information may also be disclosed,
subject to the  requirements  described  below,  to securities  lending  agents,
financial  printers,  proxy voting  firms,  mutual fund  analysts and rating and
tracking  agencies,  or to shareholders  in connection with in-kind  redemptions
(collectively, "Authorized Third Parties").

Prior to any disclosure of each Fund's non-public portfolio holdings information
to Authorized Third Parties,  a person  authorized by each Fund's Directors must
make a good faith determination in light of the facts then known that a Fund has
a legitimate business purpose for providing the information, that the disclosure
is in the  best  interest  of each  Fund,  and  that the  recipient  assents  or
otherwise has a duty to keep the information confidential and to not trade based
on the  information  received  while  the  information  remains  non-public.  No
compensation is received by each Fund or DeAM for disclosing non-public holdings
information.  Periodic  reports  regarding these  procedures will be provided to
each Fund's Directors.





                                       26
<PAGE>



Registered  investment  companies  that are subadvised by DeAM may be subject to
different portfolio holdings disclosure policies,  and neither DeAM nor a Fund's
Trustees  exercise  control over such policies.  In addition,  separate  account
clients of DeAM have access to their portfolio holdings and are not subject to a
Fund's portfolio  holdings  disclosure policy. The portfolio holdings of some of
the Funds  subadvised by DeAM and some of the separate  accounts managed by DeAM
may substantially overlap with the portfolio holdings of a Fund.

DeAM also  manages  certain  unregistered  commingled  trusts and creates  model
portfolios,  the portfolio holdings of which may substantially  overlap with the
portfolio  holdings of a Fund. To the extent that investors in these  commingled
trusts  or  recipients  of model  portfolio  holdings  information  may  receive
portfolio  holdings  information  of their  trust or of a model  portfolio  on a
different basis from that on which Fund portfolio  holdings  information is made
public,  DeAM has implemented  procedures  reasonably designed to encourage such
investors and recipients to keep such information  confidential,  and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that a Fund's  policies and procedures with respect to the
disclosure  of  portfolio  holdings  information  will  protect  a Fund from the
potential  misuse of portfolio  holdings  information  by those in possession of
that information.

                             MANAGEMENT OF THE FUNDS

Investment Advisor


On April 5,  2002,  100% of Zurich  Scudder  Investments,  Inc.,  not  including
certain UK  operations  (known as  Threadneedle  Investments),  was  acquired by
Deutsche Bank AG and changed its name to Deutsche Investment Management Americas
Inc. ("DIMA" or the "Advisor"). DIMA, which is part of Deutsche Asset Management
("DeAM"),  is the investment advisor for the Funds. Under the supervision of the
Board of Directors of each Fund, with headquarters at 345 Park Avenue, New York,
New York  10154,  DIMA makes the  Funds'  investment  decisions,  buys and sells
securities for the Funds and conducts  research that leads to these purchase and
sale decisions.  The Advisor  manages each Fund's daily  investment and business
affairs  subject to the  policies  established  by each  Corporation's  Board of
Directors.  DIMA and its  predecessors  have  more  than 80 years of  experience
managing  mutual  funds.  DIMA  provides  a full  range of  investment  advisory
services to institutional and retail clients.  The Funds' investment  advisor is
also responsible for selecting brokers and dealers and for negotiating brokerage
commissions  and dealer  charges.  The  Advisor's  duties are  described in more
detail below.

DeAM is the  marketing  name in the US for the asset  management  activities  of
Deutsche  Bank AG,  DIMA,  Deutsche  Bank Trust  Company  Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide range
of investing  expertise and resources,  including hundreds of portfolio managers
and analysts,  and an office  network that reaches the world's major  investment
centers.  This well-resourced  global investment platform brings together a wide
variety of experience and investment insight, across industries,  regions, asset
classes and investing  styles.  DIMA is an indirect,  wholly owned subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is
engaged in a wide range of financial services,  including investment management,
mutual funds,  retail,  private and commercial  banking,  investment banking and
insurance.  The term "DWS Scudder" is the designation  given to the products and
services provided by DeAM and its affiliates to the DWS Mutual Funds.





                                       27
<PAGE>



The Advisor provides  investment  counsel for many individuals and institutions,
including  insurance  companies,  industrial  corporations,  and  financial  and
banking  organizations,  as well as  providing  investment  advice  to open- and
closed-end SEC registered funds.

In certain cases, the investments for a Fund are managed by the same individuals
who manage one or more  other  mutual  funds  advised by the  Advisor  that have
similar names, objectives and investment styles. You should be aware that a Fund
is likely to differ from these other mutual funds in size, cash flow pattern and
tax matters. Accordingly, the holdings and performance of a Fund can be expected
to vary from those of these other mutual funds.

Certain  investments  may be  appropriate  for a Fund and also for other clients
advised by the Advisor.  Investment  decisions  for a Fund and other clients are
made with a view to achieving their respective  investment  objectives and after
consideration  of such factors as their current  holdings,  availability of cash
for  investment  and the  size of their  investments  generally.  Frequently,  a
particular  security  may be bought or sold for only one client or in  different
amounts  and at  different  times for more  than one but less than all  clients.
Likewise,  a particular  security may be bought for one or more clients when one
or more other clients are selling the security. In addition,  purchases or sales
of the same  security  may be made for two or more  clients on the same day.  In
such event,  such  transactions  will be allocated among the clients in a manner
believed by the Advisor to be equitable to each. In some cases,  this  procedure
could have an adverse effect on the price or amount of the securities  purchased
or sold by a Fund.  Purchase  and sale  orders for a Fund may be  combined  with
those of other  clients of the  Advisor in the  interest of  achieving  the most
favorable net results to a Fund.


The Boards and the  shareholders  of each Fund recently  approved an amended and
restated investment management agreement (the "Investment Management Agreement")
for the Funds.  Pursuant to each Investment Management  Agreements,  the Advisor
provides  continuing  investment  management  of the  assets  of each  Fund.  In
addition to the  investment  management  of the assets of the Fund,  the Advisor
determines the  investments to be made for each Fund,  including what portion of
its assets  remain  uninvested  in cash or cash  equivalents,  and with whom the
orders for  investments  are placed,  consistent  with each  Fund's  policies as
stated in its  Prospectus  and SAI,  or as adopted  by each  Fund's  Board.  The
Advisor  will  also  monitor,  to  the  extent  not  monitored  by  each  Fund's
administrator or other agent, the Fund's  compliance with its investment and tax
guidelines and other compliance policies.

The Advisor  provides  assistance to each Fund's Board in valuing the securities
and other  instruments held by each Fund, to the extent  reasonably  required by
valuation policies and procedures that may be adopted by each Fund.


Pursuant to each Investment Management Agreement,  (unless otherwise provided in
the agreement or as determined by each Fund's Board and to the extent  permitted
by applicable  law), the Advisor pays the  compensation  and expenses of all the
Board  members,  officers,  and executive  employees of the Fund,  including the
Fund's share of payroll taxes, who are affiliated persons of the Advisor.

Each  Investment  Management  Agreement  provides  that  the  Fund is  generally
responsible  for expenses  that  include:  fees payable to the Advisor;  outside
legal,  accounting  or auditing  expenses,  including  with  respect to expenses
related to negotiation,  acquisition or  distribution of portfolio  investments;
maintenance  of books and records that are  maintained  by the Fund,  the Fund's
custodian,  or other agents of the Fund; taxes and  governmental  fees; fees and
expenses   of  the   Fund's   accounting   agent,   custodian,   sub-custodians,
depositories,  transfer  agents,  dividend  reimbursing  agents and  registrars;
payment  for  portfolio  pricing  or  valuation   services  to  pricing  agents,
accountants,  bankers and other specialists,  if any;  brokerage  commissions or
other costs of  acquiring  or disposing  of any  portfolio  securities  or other
instruments  of the  Fund;  and  litigation  expenses  and  other  extraordinary
expenses not incurred in the ordinary course of the Fund's business.

                                       28
<PAGE>

The Investment  Management  Agreement  allows the Advisor to delegate any of its
duties under the  Agreement to a  subadvisor,  subject to a majority vote of the
Board of the Fund,  including  a  majority  of the Board who are not  interested
persons of the Fund, and, if required by applicable  law,  subject to a majority
vote of the Fund's shareholders.

Each  Investment  Management  Agreement  provides  that the Advisor shall not be
liable for any error of judgment  or mistake of law or for any loss  suffered by
the Fund in  connection  with matters to which the agreement  relates,  except a
loss resulting from willful  malfeasance,  bad faith or gross  negligence on the
part of the Advisor in the performance of its duties or from reckless  disregard
by the  Advisor  of  its  obligations  and  duties  under  the  agreement.  Each
Investment  Management  Agreement may be terminated at any time, without payment
of penalty,  by either party or by vote of a majority of the outstanding  voting
securities of the Fund on 60 days' written notice.



For all series provided under each Investment  Management  Agreement,  the funds
pay the advisor a fee, computed daily and paid monthly, at the annual rates as a
percentage of net assets shown below:

DWS Global Thematic Fund                          Management Fee Rate
------------------------                          -------------------

$0-$500 million                                          0.915%
$500 million-$1 billion                                  0.865%
$1 billion-$1.5 billion                                  0.815%
$1.5 billion-$2 billion                                  0.765%
over $2 billion                                          0.715%

DWS International Fund                            Management Fee Rate
----------------------                            -------------------

$0-$6 billion                                            0.59%
$6 billion-$7 billion                                    0.54%
over $7 billion                                         0.515%

The fee is  payable  monthly,  provided  that each  Fund will make such  interim
payments as may be  requested  by the Advisor not to exceed 75% of the amount of
the fee then accrued on the books of the Fund and unpaid.


The advisory fees paid by each Fund for its last three fiscal years are shown in
the table below.

<TABLE>
<CAPTION>
Fund                                         Fiscal Year 2007         Fiscal Year 2006*      Fiscal Year 2005*
----                                         ----------------         -----------------      -----------------
<S>                                              <C>                      <C>                     <C>
DWS Global Thematic Fund                         $15,662,093              $10,935,782             $8,883,911
DWS International Fund                           $10,999,420              $10,835,832            $10,735,566
</TABLE>

* Prior to June 1, 2006, these fees included an administrative service fee.




                                       29
<PAGE>




DWS International Fund. Through November 30, 2010, the Advisor has contractually
agreed to waive all or a portion  of its  management  fee and  reimburse  or pay
operating  expenses of the fund to the extent  necessary  to maintain the fund's
total operating expenses at 0.95% for Class S shares, excluding certain expenses
such as extraordinary expenses, taxes, brokerage and interest.

Pursuant to DeAM  procedures  approved by the Boards on behalf of the DWS funds,
proof of claim forms are  routinely  filed on behalf of the DWS funds by a third
party service provider,  with certain limited exceptions.  The Boards of the DWS
funds receive periodic reports regarding the implementation of these procedures.


The Advisor may enter into  arrangements with affiliates and third party service
providers to perform  various  administrative,  back-office  and other  services
relating to client accounts.  Such service providers may be located in the US or
in non-US jurisdictions.


In addition,  the Boards and  shareholders of each Fund recently  approved a new
subadvisor approval policy for the Fund (the "Subadvisor Approval Policy").  The
Subadvisor  Approval Policy permits the Advisor,  subject to the approval of the
applicable  Board,  including a majority of its  independent  board members,  to
appoint and replace  subadvisors  and to amend  sub-advisory  contracts  without
obtaining  shareholder  approval.  Under the  Subadvisor  Approval  Policy,  the
Boards, including their independent board members, will continue to evaluate and
approve all new sub-advisory  contracts  between the Advisor and any subadvisor,
as well as all changes to any existing sub-advisory  contract.  Each Fund cannot
implement  the  Subadvisor  Approval  Policy  without  the SEC  either  adopting
revisions  to current  rules (as it proposed to do in October  2003) or granting
the Fund exemptive  relief from existing rules.  Each Fund and the Advisor would
be subject to certain conditions imposed by the SEC (and certain conditions that
may be imposed in the future within either exemptive relief or a rule) to ensure
that the interests of the Fund and its  shareholders  are  adequately  protected
whenever the Advisor acts under the Subadvisor  Approval  Policy,  including any
shareholder notice requirements.


Officers and  employees  of the Advisor from time to time may have  transactions
with various  banks,  including the Funds'  custodian  bank. It is the Advisor's
opinion that the terms and conditions of those  transactions which have occurred
were  not   influenced  by  existing  or  potential   custodial  or  other  Fund
relationships.




Administrative Agreement

Effective  June 1, 2006,  each Fund entered into a new  administrative  services
agreement with the Advisor (the "Administrative  Services Agreement"),  pursuant
to which the Advisor  provides  administrative  services to the Fund  including,
among others,  providing the Fund with personnel,  preparing and making required
filings on behalf of the


                                       30
<PAGE>

Fund,  maintaining  books and records for the Fund, and monitoring the valuation
of Fund securities.  For all services provided under the Administrative Services
Agreement, each Fund pays the Advisor a fee, computed daily and paid monthly, of
0.10% of the Fund's average daily net assets.

Under the  Administrative  Services  Agreement,  the Advisor is  obligated  on a
continuous  basis to provide such  administrative  services as each Board of the
Funds reasonably deems necessary for the proper administration of the Funds. The
Advisor  provides each Fund with  personnel;  arranges for the  preparation  and
filing of the Fund's tax  returns;  prepares  and  submits  reports  and meeting
materials to the Board and the  shareholders;  prepares and files updates to the
Fund's  prospectus  and  statement of  additional  information  as well as other
reports required to be filed by the SEC; maintains the Fund's records;  provides
the Fund with office space, equipment and services;  supervises,  negotiates the
contracts of and monitors the performance of third parties contractors; oversees
the  tabulation of proxies;  monitors the valuation of portfolio  securities and
monitors  compliance  with  Board-approved  valuation  procedures;   assists  in
establishing  the  accounting  and tax  policies  of the  Fund;  assists  in the
resolution  of  accounting  issues  that may  arise  with  respect  to the Fund;
establishes  and  monitors the Fund's  operating  expense  budgets;  reviews and
processes the Fund's bills;  assists in determining  the amount of dividends and
distributions  available to be paid by the Fund,  prepares and arranges dividend
notifications  and provides  information to agents to effect  payments  thereof;
provides to the Board periodic and special  reports;  provides  assistance  with
investor and public relations  matters;  and monitors the registration of shares
under  applicable  federal and state law. The Advisor also performs certain fund
accounting   services  under  the   Administrative   Services   Agreement.   The
Administrative  Services  Agreement provides that the Advisor will not be liable
under the Administrative Services Agreement except for willful misfeasance,  bad
faith or  negligence  in the  performance  of its  duties  or from the  reckless
disregard by it of its duties and obligations thereunder.

For DWS Global  Thematic  Fund,  for the period from June 1, 2006 through August
31, 2006, the Advisor received an Administration  Fee of $318,009.  For the year
ended August 31, 2007, the Advisor received an Administration Fee of $1,857,061,
of which $187,665 is unpaid at August 31, 2007.

For DWS International  Fund, for the period from June 1, 2006 through August 31,
2006, the Advisor received an Administration Fee of $410,578. For the year ended
August 31, 2007, the Advisor received an  Administration  Fee of $1,884,854,  of
which $187,079 is unpaid at August 31, 2007.

Pursuant to an agreement between the Administrator and Brown Brothers Harriman &
Co., ("BBH"), the Administrator has delegated certain  administrative  functions
to  BBH.  The  costs  and  expenses  of  such   delegation   are  borne  by  the
Administrator, not by the Fund.

Pursuant  to  Deutsche  Asset  Management  procedures  approved by the Boards on
behalf of the DWS funds,  proof of claim forms are routinely  filed on behalf of
the  DWS  funds  by  a  third  party  service  provider,  with  certain  limited
exceptions.  The Boards of the DWS funds receive periodic reports  regarding the
implementation of these procedures.





                                       31
<PAGE>



Codes of Ethics

The Funds,  the Advisor and the Funds'  principal  underwriter have each adopted
codes of ethics under Rule 17j-1 under the 1940 Act. Board members,  officers of
the  Corporations  and  employees of the Advisor and principal  underwriter  are
permitted to make personal securities  transactions,  including  transactions in
securities  that may be purchased or held by the Funds,  subject to requirements
and restrictions set forth in the applicable Code of Ethics.  The Advisor's Code
of Ethics contains provisions and requirements  designed to identify and address
certain  conflicts of interest  between personal  investment  activities and the
interests  of the  Funds.  Among  other  things,  the  Advisor's  Code of Ethics
prohibits  certain types of  transactions  absent prior  approval,  imposes time
periods  during  which  personal   transactions  may  not  be  made  in  certain
securities,  and requires the submission of duplicate broker


                                       32
<PAGE>

confirmations  and quarterly  reporting of securities  transactions.  Additional
restrictions apply to portfolio managers,  traders, research analysts and others
involved  in the  investment  advisory  process.  Exceptions  to these and other
provisions  of the  Advisor's  Code  of  Ethics  may be  granted  in  particular
circumstances after review by appropriate personnel.


Compensation of Portfolio Managers

Each  Fund has been  advised  that the  Advisor  seeks to offer  its  investment
professionals  competitive  short-term  and  long-term  compensation.  Portfolio
managers and research professionals are paid (i) fixed base salaries,  which are
linked to job function,  responsibilities  and financial  services industry peer
comparison  and (ii)  variable  compensation,  which  is  linked  to  investment
performance, individual contributions to the team and DWS Scudder's and Deutsche
Bank's  financial  results.  Variable  compensation  may  include  a cash  bonus
incentive and  participation in a variety of long-term equity programs  (usually
in the form of Deutsche Bank equity).

Bonus  and  long-term   incentives   comprise  a  greater  proportion  of  total
compensation as an investment  professional's  seniority and compensation levels
increase.  Top performing  investment  professionals  earn a total  compensation
package  that is highly  competitive,  including  a bonus that is a multiple  of
their base  salary.  The amount of equity  awarded  under the  long-term  equity
programs is generally based on the individual's total  compensation  package and
may  comprise  from  0%-40%  of  the  total  compensation  award.  As  incentive
compensation increases,  the percentage of compensation awarded in Deutsche Bank
equity also increases. Certain senior investment professionals may be subject to
a mandatory diverting of a portion of their equity compensation into proprietary
mutual funds that they manage.

To  evaluate  its  investment  professionals,  the  Advisor  uses a  Performance
Management  Process.   Objectives  evaluated  by  the  process  are  related  to
investment  performance and generally take into account peer group and benchmark
related data.  The ultimate goal of this process is to link the  performance  of
investment  professionals  with  client  investment  objectives  and to  deliver
investment   performance   that  meets  or  exceeds  clients'  risk  and  return
objectives. When determining total compensation,  the Advisor considers a number
of quantitative and qualitative factors such as:

o        DWS  Scudder   performance   and  the  performance  of  Deutsche  Asset
         Management, quantitative measures which include 1, 3 and 5 year pre-tax
         returns versus benchmark (such as the benchmark used in the prospectus)
         and appropriate  peer group,  taking into  consideration  risk targets.
         Additionally, the portfolio manager's retail/institutional asset mix is
         weighted, as appropriate for evaluation purposes.

o        Qualitative  measures include  adherence to the investment  process and
         individual  contributions  to  the  process,  among  other  things.  In
         addition, the Advisor assesses compliance, risk management and teamwork
         skills.

o        Other factors,  including  contributions made to the investment team as
         well as  adherence  to  compliance,  risk  management,  and "living the
         values" of the Advisor,  are part of a  discretionary  component  which
         gives  management the ability to reward these behaviors on a subjective
         basis through bonus incentives.

In addition,  the Advisor analyzes  competitive  compensation levels through the
use of extensive market data surveys. Portfolio manager compensation is reviewed
and may be modified each year as appropriate  to reflect  changes in the market,
as well as to adjust the  factors  used to  determine  overall  compensation  to
promote good sustained investment performance.

Fund Ownership of Portfolio Managers

The following table shows the dollar range of shares owned  beneficially  and of
record by each Fund's portfolio  manager in the Fund as well as in all DWS Funds
as a group  (i.e.  those  funds  advised by  Deutsche  Asset  Management  or its
affiliates), including investments by their immediate family members sharing the
same household


                                       33
<PAGE>

and amounts invested through  retirement and deferred  compensation  plans. This
information is provided as of each Fund's most recent fiscal year end.

<TABLE>
<CAPTION>
                                                        Dollar Range of                Dollar Range of All DWS
Name of Portfolio Manager                              Fund Shares Owned                  Fund Shares Owned
-------------------------                              -----------------                  -----------------
<S>                                                           <C>                                  <C>
Oliver Kratz - DWS Global Thematic Fund               $100,000 - $500,000                $100,000 - $500,000
Matthias Knerr - DWS International Fund               $100,000 - $500,000               $500,000 - $1,000,000
</TABLE>

Conflicts of Interest

In addition to managing the assets of the Fund,  each Fund's  portfolio  manager
may have responsibility for managing other client accounts of the Advisor or its
affiliates.  The tables below show, for each portfolio  manager,  the number and
asset size of (1) SEC registered  investment companies (or series thereof) other
than the Fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other  accounts  (e.g.,  accounts  managed for  individuals or
organizations)  managed by each  portfolio  manager.  The  tables  also show the
number of  performance  based fee  accounts,  as well as the total assets of the
accounts for which the advisory fee is based on the  performance of the account.
This information is provided as of each Fund's most recent fiscal year end.

Other SEC Registered Investment Companies Managed:

<TABLE>
<CAPTION>
                                                   Number of      Total Assets of   Number of Investment
                                                  Registered        Registered        Company Accounts     Total Assets of
                                                  Investment        Investment              with           Performance-Based
Name of Portfolio Manager                          Companies         Companies      Performance-Based Fee    Fee Accounts
-------------------------                          ---------         ---------      ---------------------    ------------
<S>                                                      <C>          <C>                     <C>                 <C>
Oliver Kratz - DWS Global Thematic Fund                  6            $808,948,012            0                   $0
Matthias Knerr - DWS International Fund                  3          $1,223,250,282            0                   $0

Other Pooled Investment Vehicles Managed:

                                                   Number of      Total Assets of     Number of Pooled     Total Assets of
                                                    Pooled            Pooled         Investment Vehicle      Performance-
                                                  Investment        Investment          Accounts with         Based Fee
Name of Portfolio Manager                          Vehicles          Vehicles       Performance-Based Fee      Accounts
-------------------------                          --------          --------       ---------------------      --------

Oliver Kratz - DWS Global Thematic Fund                 13           $513,333,402             0                   $0
Matthias Knerr - DWS International Fund                  4            $83,151,941             0                   $0

Other Accounts Managed:

                                                                                     Number of Other      Total Assets of
                                                                                        Accounts with        Performance-
                                                   Number of      Total Assets of    Performance-Based         Based Fee
Name of Portfolio Manager                       Other Accounts    Other Accounts             Fee               Accounts
-------------------------                       --------------    --------------             ---               --------

Oliver Kratz - DWS Global Thematic Fund                  11        $1,504,399,612             1              $232,750,440
Matthias Knerr - DWS International Fund                   4          $927,015,289             0                        $0
</TABLE>

In  addition  to the  accounts  above,  an  investment  professional  may manage
accounts in a personal  capacity that may include  holdings that are similar to,
or the same as,  those of the Fund.  The  Advisor  has in place a Code of Ethics
that is designed to address  conflicts of interest and that, among other things,
imposes  restrictions  on the ability of


                                       34
<PAGE>

portfolio  managers and other "access  persons" to invest in securities that may
be recommended or traded in the Fund and other client accounts.

Real,  potential  or apparent  conflicts  of interest may arise when a portfolio
manager has day-to-day  portfolio  management  responsibilities  with respect to
more than one fund or account, including the following:

o        Certain  investments may be appropriate for the Fund and also for other
         clients advised by the Advisor, including other client accounts managed
         by the Fund's portfolio manager.  Investment decisions for the Fund and
         other  clients  are  made  with a view to  achieving  their  respective
         investment  objectives and after consideration of such factors as their
         current  holdings,  availability of cash for investment and the size of
         their  investments  generally.  A particular  security may be bought or
         sold for only one client or in different amounts and at different times
         for more than one but less than all clients.  Likewise, because clients
         of the Advisor may have differing investment  strategies,  a particular
         security  may be bought for one or more  clients when one or more other
         clients are selling the security.  The investment  results achieved for
         the Fund may differ from the results  achieved for other clients of the
         Advisor.  In addition,  purchases or sales of the same  security may be
         made for two or more  clients  on the same  day.  In such  event,  such
         transactions  will be allocated  among the clients in a manner believed
         by the Advisor to be most equitable to each client, generally utilizing
         a pro  rata  allocation  methodology.  In some  cases,  the  allocation
         procedure could  potentially  have an adverse effect or positive effect
         on the price or amount of the securities purchased or sold by the Fund.
         Purchase  and sale  orders for the Fund may be  combined  with those of
         other  clients of the  Advisor in the  interest of  achieving  the most
         favorable net results to the Fund and the other clients.

o        To the  extent  that  a  portfolio  manager  has  responsibilities  for
         managing  multiple client  accounts,  a portfolio  manager will need to
         divide time and attention among relevant accounts. The Advisor attempts
         to minimize these conflicts by aligning its portfolio  management teams
         by  investment  strategy and by  employing  similar  investment  models
         across multiple client accounts.

o        In some cases, an apparent  conflict may arise where the Advisor has an
         incentive, such as a performance-based fee, in managing one account and
         not with  respect to other  accounts it manages.  The Advisor  will not
         determine  allocations based on whether it receives a performance-based
         fee from the client. Additionally, the Advisor has in place supervisory
         oversight processes to periodically monitor performance  deviations for
         accounts with like strategies.

o        The Advisor and its affiliates and the investment  team of the Fund may
         manage other mutual funds and separate  accounts on a long-short basis.
         The  simultaneous  management  of long  and  short  portfolios  creates
         potential  conflicts  of  interest  including  the risk that short sale
         activity  could   adversely   affect  the  market  value  of  the  long
         positions(and  vice versa),  the risk arising from sequential orders in
         long and short  positions,  and the  risks  associated  with  receiving
         opposing  orders at the same time.  The Advisor has adopted  procedures
         that it believes are reasonably  designed to mitigate  these  potential
         conflicts  of  interest.  Included  in these  procedures  are  specific
         guidelines  developed to ensure fair and  equitable  treatment  for all
         clients whose accounts are managed by each Fund's portfolio  management
         team. The Advisor and the portfolio  management  team have  established
         monitoring  procedures,  a protocol for supervisory reviews, as well as
         compliance  oversight  to ensure that  potential  conflicts of interest
         relating to this type of activity are properly addressed.

The Advisor is owned by Deutsche Bank AG, a  multi-national  financial  services
company.  Therefore,  the Advisor is affiliated  with a variety of entities that
provide, and/or engage in commercial banking, insurance,  brokerage,  investment
banking,  financial  advisory,  broker-dealer  activities  (including  sales and
trading),  hedge funds, real estate and private equity investing, in addition to
the provision of investment  management services to institutional and individual
investors.  Since  Deutsche  Bank AG, its  affiliates,  directors,  officers and
employees (the "Firm") are engaged in businesses  and have interests  other than
managing  asset  management  accounts,   such  other  activities  involve  real,
potential or apparent  conflicts of interest.  These  interests  and  activities
include potential  advisory,  transactional  and financial  activities and other
interests  in  securities  and  companies  that may be  directly  or  indirectly
purchased  or sold by the Firm for its  clients'  advisory  accounts.  These are
considerations  of which  advisory  clients


                                       35
<PAGE>

should be aware and which may cause conflicts that could be to the  disadvantage
of the  Advisor's  advisory  clients.  The Advisor has  instituted  business and
compliance  policies,  procedures and disclosures that are designed to identify,
monitor and mitigate  conflicts of interest and, as appropriate,  to report them
to the Fund's Board.





                                       36
<PAGE>




                                       37
<PAGE>




                                       38
<PAGE>



                             FUND SERVICE PROVIDERS

Principal Underwriter

The Corporations,  on behalf of the Funds,  have an underwriting  agreement with
DWS Scudder  Distributors,  Inc., 222 South Riverside Plaza,  Chicago,  Illinois
60606 (the "Distributor" or "DWS-SDI"), a Massachusetts corporation,  which is a
subsidiary  of  the  Advisor,   a  Delaware   corporation.   The   Corporations'
underwriting  agreements dated April 5, 2002 were last approved by the Directors
on  September  28, 2006 and will  remain in effect from year to year  thereafter
only if their  continuance is approved  annually by a majority of the members of
the Board of  Directors  who are not  parties to such  agreement  or  interested
persons  of any such  party  and  either by vote of a  majority  of the Board of
Directors or a majority of the outstanding voting securities of each Fund.


Under the  underwriting  agreement,  each Fund is responsible for the payment of
all fees and expenses in connection with the preparation and filing with the SEC
of  its   registration   statement  and  prospectuses  and  any  amendments  and
supplements  thereto;  the registration and  qualification of shares for sale in
the  various  states,  including  registering  the Fund as a broker or dealer in
various states,  as required;  the fees and expenses of preparing,  printing and
mailing prospectuses  annually to existing  shareholders (see below for expenses
relating to prospectuses  paid by the Distributor);  notices,  proxy statements,
reports  or  other  communications  to  shareholders  of the  Fund;  the cost of
printing and mailing  confirmations  of purchases of shares and any prospectuses
accompanying such confirmations;  any issuance taxes and/or any initial transfer
taxes;  a portion of  shareholder  toll-free  telephone  charges and expenses of
shareholder  service  representatives;  the  cost  of  wiring  funds  for  share
purchases  and  redemptions  (unless paid by the  shareholder  who initiates the
transaction);  the cost of printing and postage of business reply envelopes; and
a  portion  of the  cost of  computer  terminals  used by both  the Fund and the
Distributor.

The Distributor will pay for printing and  distributing  prospectuses or reports
prepared for its use in  connection  with the offering of each Fund's  shares to
the  public  and  preparing,  printing  and  mailing  any  other  literature  or
advertising  in  connection  with the  offering  of  shares  of each Fund to the
public.  The  Distributor  will pay all fees and expenses in connection with its
qualification  and  registration  as a broker or dealer under  federal and state
laws,  a portion of the cost of  toll-free  telephone  service  and  expenses of
shareholder  service  representatives,   a  portion  of  the  cost  of  computer
terminals, and expenses of any activity which is primarily intended to result in
the sale of shares  issued by each  Fund,  unless a Rule 12b-1 Plan is in effect
which provides that the Fund shall bear some or all of such expenses.

Although Class S shares of the Funds do not have a 12b-1 Plan, and the Directors
have no current  intention  of adopting  one, the Funds will also pay those fees
and expenses  permitted to be paid or assumed by the Corporations  pursuant to a
12b-1  Plan,  if any,  adopted by the  Corporations,  notwithstanding  any other
provision to the contrary in the underwriting agreement.


The Distributor  currently  offers shares of each Fund on a continuous  basis to
investors  in all  states in which  shares of each Fund may from time to time be
registered or where  permitted by  applicable  law. The  underwriting  agreement
provides that the Distributor accepts orders for shares at net asset value as no
sales commission or load is charged to the investor. The Distributor has made no
firm commitment to acquire shares of each Fund.

Independent Registered Public Accounting Firm

The financial  highlights of each Fund included in the Funds' prospectus and the
Financial  Statements  incorporated by reference in this Statement of Additional
Information  have been so included or  incorporated  by reference in reliance on
the reports of  PricewaterhouseCoopers  LLP, 125 High Street,  Boston, MA 02110,
independent


                                       39
<PAGE>

registered  public  accounting  firm,  given on the  authority  of said  firm as
experts in auditing and accounting.  PricewaterhouseCoopers audits the financial
statements  of the Funds and  provides  other audit,  tax and related  services.
Shareholders  will receive annual audited  financial  statements and semi-annual
unaudited financial statements.

Legal Counsel

Ropes & Gray, LLP, One International  Place, Boston,  Massachusetts  02110-2624,
serves as legal counsel to each Fund and the Independent Directors of each Fund.




                                       40
<PAGE>

Custodian

Brown Brothers  Harriman & Company  ("Custodian"),  40 Water Street,  Boston, MA
02109  serves  as  Custodian  to the  Funds.  The  Custodian  has  entered  into
agreements  with  foreign  subcustodians   approved  by  the  Directors  of  the
Corporations pursuant to Rule 17f-5 of the 1940 Act.




Transfer Agent and Shareholder  Service Agent. DWS Scudder  Investments  Service
Company ("DWS-SISC" or the "Transfer Agent"),  210 W. 10th Street,  Kansas City,
Missouri  64105-1614,  an  affiliate  of the  Advisor,  is the  transfer  agent,
dividend-paying agent and shareholder service agent for the Funds pursuant to an
agency  agreement (the "Agency  Agreement"),  under which the Transfer Agent (i)
maintains record shareholder  accounts,  and (ii) makes periodic reports to each
Board concerning the operations of the Funds.

The Transfer Agent receives an annual service fee for each account of the Funds,
based on the type of account.  For open retail  accounts,  the fee is a flat fee
ranging from $20.00 to $27.50 per account,  for open  wholesale  money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.46 per account
(as of October  2006,  indexed to  inflation)  plus an asset  based fee of up to
0.25% of  average  net  assets.  1/12th of the  annual  service  charge for each
account is  charged  and  payable to the  Transfer  Agent each  month.  A fee is
charged for any account  which at any time during the month had a share  balance
in the  Fund.  Smaller  fees are also  charged  for  closed  accounts  for which
information  must be retained on the Transfer Agent's system for up to 18 months
after closing for tax reporting purposes.

Certain  out-of-pocket  expenses  incurred  by  the  Transfer  Agent,  including
expenses of printing and mailing  routine fund  disclosure  documents,  costs of
record retention and transaction  processing costs are reimbursed by the Fund or
are paid  directly  by the Funds.  Certain  additional  out-of-pocket  expenses,
including costs of computer  hardware and software,  third party  record-keeping
and processing of proxy statements,  may only be reimbursed by the Fund with the
prior approval of each Fund's Board.

Pursuant to a sub-transfer  agency  agreement  between DWS-SISC and DST Systems,
Inc. ("DST"),  DWS-SISC has delegated certain transfer agent and dividend paying
agent  functions to DST. The costs and expenses of such  delegation are borne by
DWS-SISC, not by the Funds.

The Funds, or the Advisor (including any affiliate of the Advisor), or both, may
pay   unaffiliated   third  parties  for  providing   recordkeeping   and  other
administrative  services with respect to beneficial  owners of Fund shares whose
interests are generally held in an omnibus account.




Retirement  Service  Provider.  DWS Trust Company,  11  Northeastern  Boulevard,
Salem,  NH  03079  an  affiliate  of the  Advisor,  provides  subaccounting  and
recordkeeping  services  for  shareholder  accounts  in certain  retirement  and

                                       41
<PAGE>


employee  benefit plans  invested in the Funds.  Annual service fees are paid by
each  Fund to DWS  Trust  Company  for such  accounts.  Each Fund pays DWS Trust
Company an annual fee of $29 per shareholder account.

Prior to April 30,  2004,  the  foregoing  costs  were  borne by the  Advisor in
accordance with the Administrative Agreement.

Pursuant to an agreement  between DWS Trust  Company and ADP, DWS Trust  Company
has delegated certain of these sub-accounting and recordkeeping services to ADP.
The costs and expenses of such delegation are borne by DWSTC, not by the Funds.


Regulatory Matters and Legal Proceedings

On December 21, 2006,  Deutsche Asset Management  ("DeAM")  settled  proceedings
with the  Securities and Exchange  Commission  ("SEC") and the New York Attorney
General on behalf of Deutsche  Asset  Management,  Inc.  ("DAMI") and DIMA,  the
investment advisors to many of the DWS Scudder funds,  regarding  allegations of
improper  trading of fund  shares at DeAM and at the legacy  Scudder  and Kemper
organizations prior to their acquisition by DeAM in April 2002. These regulators
alleged that although the prospectuses for certain funds in the regulators' view
indicated  that the funds did not permit market  timing,  DAMI and DIMA breached
their  fiduciary  duty to those  funds in that their  efforts  to limit  trading
activity in the funds were not effective at certain times.  The regulators  also
alleged that DAMI and DIMA  breached  their  fiduciary  duty to certain funds by
entering into certain market timing  arrangements with investors.  These trading
arrangements  originated  in  businesses  that  existed  prior to the  currently
constituted  DeAM  organization,  which  came  together  as a result of  various
mergers of the legacy Scudder,  Kemper and Deutsche fund groups,  and all of the
arrangements were terminated prior to the start of the regulatory investigations
that  began in the summer of 2003.  No  current  DeAM  employee  approved  these
trading arrangements.  Under the terms of the settlements, DAMI and DIMA neither
admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only,  provide for payment of  disgorgement  in
the  amount  of $17.2  million.  The terms of the  settlement  with the New York
Attorney  General  provide for payment of  disgorgement  in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million.  The total amount payable by DeAM,
approximately  $122.3  million,  will  be  distributed  to  shareholders  of the
affected  funds in  accordance  with a  distribution  plan to be  developed by a
distribution  consultant.  The funds'  investment  advisors do not believe these
amounts  will have a material  adverse  financial  impact on them or  materially
affect their ability to perform  under their  investment  management  agreements
with the DWS funds.  The  above-described  amounts are not  material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders,  DeAM is subject to certain  undertakings
regarding  the conduct of its business in the future,  including  formation of a
Code of Ethics  Oversight  Committee  to oversee all matters  relating to issues
arising  under  the  advisors'  Code of  Ethics;  establishment  of an  Internal
Compliance Controls Committee having overall compliance oversight responsibility
of the advisors; engagement of an Independent Compliance Consultant to conduct a
comprehensive review of the advisors' supervisory  compliance and other policies
and  procedures  designed to prevent  and detect  breaches  of  fiduciary  duty,
breaches  of the Code of Ethics and federal  securities  law  violations  by the
advisors and their employees; and commencing in 2008, the advisors shall undergo
a compliance review by an independent third party.

In addition,  DeAM is subject to certain  further  undertakings  relating to the
governance  of the mutual funds,  including  that at least 75% of the members of
the  Boards  of  Trustees/Directors  overseeing  the DWS  Funds  continue  to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors
continue to be  independent  of DeAM;  DeAM  maintain  existing  management  fee
reductions  for  certain  funds  for a period  of five  years  and not  increase
management  fees for these certain funds during this period;  the funds retain a
senior  officer (or  independent  consultants,  as applicable)  responsible  for
assisting in the review of fee  arrangements  and  monitoring  compliance by the
funds and the investment advisors with securities laws,  fiduciary duties, codes
of ethics and other compliance policies,  the expense of which shall be borne by
DeAM; and periodic account  statements,  fund prospectuses and the mutual funds'
web site contain  additional  disclosure  and/or tools that assist


                                       42
<PAGE>

investors in  understanding  the fees and costs associated with an investment in
the funds and the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education  contributions  totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On  September  28,  2006,  the SEC and the National  Association  of  Securities
Dealers  ("NASD")  announced  final  agreements  in  which  Deutsche  Investment
Management Americas Inc. ("DIMA"),  Deutsche Asset Management, Inc. ("DAMI") and
Scudder  Distributors,  Inc. ("DWS-SDI") (now known as DWS Scudder Distributors,
Inc.)  settled  administrative  proceedings  regarding  disclosure  of brokerage
allocation  practices in connection  with sales of the Scudder Funds' (now known
as the DWS Scudder Funds) shares during  2001-2003.  The agreements with the SEC
and NASD are reflected in orders which state, among other things,  that DIMA and
DAMI failed to disclose potential conflicts of interest to the funds' Boards and
to  shareholders   relating  to  DWS-SDI's  use  of  certain  funds'   brokerage
commissions to reduce revenue sharing costs to broker-dealer  firms with whom it
had  arrangements to market and distribute  Scudder Fund shares.  These directed
brokerage practices were discontinued in October 2003.

Under the terms of the  settlements,  in which DIMA,  DAMI and  DWS-SDI  neither
admitted  nor denied any of the  regulators'  findings,  DIMA,  DAMI and DWS-SDI
agreed to pay  disgorgement,  prejudgment  interest  and civil  penalties in the
total amount of $19.3 million. The portion of the settlements distributed to the
funds was approximately $17.8 million and was paid to the funds as prescribed by
the settlement  orders based upon the amount of brokerage  commissions from each
fund used to satisfy revenue sharing  agreements  with  broker-dealers  who sold
fund shares.

As part of the  settlements,  DIMA,  DAMI and DWS-SDI  also agreed to  implement
certain measures and undertakings relating to revenue sharing payments including
making  additional  disclosures  in the funds'  Prospectuses  or  Statements  of
Additional  Information,  adopting or modifying relevant policies and procedures
and providing regular reporting to the fund Boards.

Additional  information announced by DeAM regarding the terms of the settlements
is available at www.dws-scudder.com/regulatory_settlements.

The matters alleged in the regulatory  settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons,  including certain DWS
funds,  the  funds'  investment  advisors  and  their  affiliates,  and  certain
individuals,  including  in some cases fund  Trustees/Directors,  officers,  and
other parties.  Each DWS fund's  investment  advisor has agreed to indemnify the
applicable  DWS funds in connection  with these  lawsuits,  or other lawsuits or
regulatory actions that may be filed making similar allegations.

Based on currently available information, the funds' investment advisors believe
the likelihood that the pending lawsuits will have a material adverse  financial
impact on a DWS fund is remote and such  actions  are not  likely to  materially
affect their ability to perform  under their  investment  management  agreements
with the DWS funds.


                             PORTFOLIO TRANSACTIONS


The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio  securities,  including  the  allocation  of  brokerage.  With
respect to those  funds for which a  sub-investment  advisor  manages the fund's
investments,  references in this section to the "Advisor" should be read to mean
the Sub-Advisor, except as noted below.

The  policy of the  Advisor  in  placing  orders  for the  purchase  and sale of
securities  for the Funds is to seek best  execution,  taking into  account such
factors,   among  others,   as  price;   commission  (where   applicable);   the
broker-dealer's   ability  to  ensure  that  securities  will  be  delivered  on
settlement date; the willingness of the  broker-dealer to commit its capital and
purchase  a  thinly  traded   security  for  its  own  inventory;   whether  the
broker-dealer   specializes


                                       43
<PAGE>

in block orders or large program trades;  the  broker-dealer's  knowledge of the
market   and   the   security;   the   broker-dealer's   ability   to   maintain
confidentiality;  the  broker-dealer's  ability to provide access to new issues;
the  broker-dealer's  ability to provide support when placing a difficult trade;
the financial condition of the broker-dealer;  and whether the broker-dealer has
the infrastructure and operational capabilities to execute and settle the trade.
The  Advisor  seeks  to  evaluate  the  overall   reasonableness   of  brokerage
commissions with commissions charged on comparable transactions and compares the
brokerage commissions (if any) paid by the Funds to reported commissions paid by
others. The Advisor routinely reviews commission rates, execution and settlement
services performed and makes internal and external comparisons.

Commission  rates  on  transactions  in  equity  securities  on U.S.  securities
exchanges are subject to negotiation. Commission rates on transactions in equity
securities on foreign  securities  exchanges are generally fixed.  Purchases and
sales of  fixed-income  securities and certain  over-the-counter  securities are
effected  on  a  net  basis,  without  the  payment  of  brokerage  commissions.
Transactions  in  fixed  income  and  certain  over-the-counter  securities  are
generally  placed by the  Advisor  with the  principal  market  makers for these
securities  unless the Advisor  reasonably  believes more favorable  results are
available elsewhere.  Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices.  Purchases of  underwritten  issues
will  include  an  underwriting  fee  paid  to  the  underwriter.  Money  market
instruments are normally purchased in principal  transactions  directly from the
issuer or from an underwriter or market maker.

It is  likely  that the  broker-dealers  selected  based  on the  considerations
described in this section will include  firms that also sell shares of the Funds
to their  customers.  However,  the Advisor does not consider sales of shares of
the Funds as a factor in the selection of  broker-dealers  to execute  portfolio
transactions  for the Funds  and,  accordingly,  has  implemented  policies  and
procedures  reasonably designed to prevent its traders from considering sales of
shares of the Funds as a factor in the  selection of  broker-dealers  to execute
portfolio transactions for the Funds.

The Advisor is  permitted  by Section  28(e) of the  Securities  Exchange Act of
1934, as amended ("1934 Act"), when placing  portfolio  transactions for a Fund,
to cause the Fund to pay brokerage  commissions  in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage  services if the Advisor determines that such commissions
are  reasonable in relation to the overall  services  provided.  The Advisor may
from  time to time,  in  reliance  on  Section  28(e) of the 1934  Act,  execute
portfolio  transactions with  broker-dealers that provide research and brokerage
services to the Advisor.  Consistent  with the Advisor's  policy  regarding best
execution,  where more than one broker is  believed  to be capable of  providing
best execution for a particular  trade, the Advisor may take into  consideration
the receipt of research and brokerage services in selecting the broker-dealer to
execute  the trade.  Although  certain  research  and  brokerage  services  from
broker-dealers may be useful to a Fund and to the Advisor,  it is the opinion of
the Advisor that such information only supplements its own research effort since
the  information  must still be analyzed,  weighed and reviewed by the Advisor's
staff. To the extent that research and brokerage  services of value are received
by the Advisor,  the Advisor may avoid expenses that it might  otherwise  incur.
Research and brokerage  services  received from a broker-dealer may be useful to
the Advisor and its affiliates in providing  investment  management  services to
all or some of its  clients,  which  includes  a Fund.  Services  received  from
broker-dealers  that executed  securities  transactions for a Portfolio will not
necessarily be used by the Advisor specifically to service such Fund.

Research and brokerage services provided by broker-dealers may include,  but are
not limited to,  information on the economy,  industries,  groups of securities,
individual   companies,   statistical   information,   accounting  and  tax  law
interpretations,  political developments, legal developments affecting portfolio
securities,  technical  market action,  pricing and appraisal  services,  credit
analysis,  risk measurement  analysis,  performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically  received  in the form of written  or  electronic  reports,  access to
specialized  financial  publications,  telephone  contacts and personal meetings
with  security  analysts,  but may also be  provided  in the form of  access  to
various  computer  software and meetings  arranged  with  corporate and industry
representatives.

The Advisor may also select  broker-dealers  and obtain from them  research  and
brokerage  services that are used in connection  with executing  trades provided
that such services are consistent  with  interpretations  under Section 28(e) of
the 1934 Act.  Typically,  these  services  take the form of  computer  software
and/or  electronic  communication  services  used by the  Advisor to  facilitate
trading activity with those broker-dealers.

                                       44
<PAGE>

Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder.  Currently,
it  is  the  Advisor's  policy  that  Sub-Advisors  may  not  execute  portfolio
transactions on behalf of the Funds to obtain third party research and brokerage
services.  The  Advisor  may, in the future,  change  this  policy.  Regardless,
certain  Sub-Advisors may, as matter of internal policy, limit or preclude third
party research and brokerage services.

The Advisor may use brokerage  commissions to obtain certain brokerage  products
or services that have a mixed use (i.e., it also serves a function that does not
relate to the investment  decision-making process). In those circumstances,  the
Advisor  will make a good faith  judgment to evaluate  the various  benefits and
uses to which it  intends to put the mixed use  product or service  and will pay
for that portion of the mixed use product or service that it reasonably believes
does not constitute research and brokerage services with its own resources.

DIMA will  monitor  regulatory  developments  and market  practice in the use of
client  commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.

Investment  decisions for each Fund and for other investment accounts managed by
the  Advisor  are  made  independently  of each  other  in  light  of  differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases,  simultaneous  transactions are inevitable. To the
extent  permitted by law, the Advisor may aggregate the securities to be sold or
purchased  for a Fund with those to be sold or purchased  for other  accounts in
executing  transactions.  Purchases  or sales are then  averaged as to price and
commission  and  allocated  as to amount in a manner  deemed  equitable  to each
account.  While in some cases this practice  could have a detrimental  effect on
the price  paid or  received  by,  or on the size of the  position  obtained  or
disposed of for,  the Fund,  in other  cases it is believed  that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Funds' management team manage other mutual funds
and separate accounts,  some of which use short sales of securities as a part of
its  investment  strategy.  The  simultaneous   management  of  long  and  short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice  versa),  the  risk  arising  from  sequential  orders  in long  and  short
positions,  and the risks associated with receiving  opposing orders at the same
time.

DIMA has adopted procedures that it believes are reasonably designed to mitigate
these  potential  conflicts  of interest.  Incorporated  in the  procedures  are
specific  guidelines  developed to ensure fair and  equitable  treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory  reviews,  as well as compliance  oversight to ensure
that  potential  conflicts  of interest  relating  to this type of activity  are
properly addressed.

Deutsche Bank AG or one of its affiliates (or in the case of a Sub-Advisor,  the
Sub-Advisor  or one of its  affiliates)  may act as a broker  for the  Funds and
receive brokerage commissions or other transaction-related compensation from the
Funds in the purchase and sale of securities, options or futures contracts when,
in the judgment of the Advisor,  and in accordance with  procedures  approved by
the Funds'  Boards,  the  affiliated  broker  will be able to obtain a price and
execution at least as favorable as those obtained from other  qualified  brokers
and if, in the  transaction,  the  affiliated  broker  charges  the Funds a rate
consistent  with that charged to  comparable  unaffiliated  customers in similar
transactions.





                                       45
<PAGE>




                                       46
<PAGE>




DWS Global Thematic Fund: For the fiscal years ended August 31, 2005, August 31,
2006 and  August  31,  2007 the Fund paid  aggregate  brokerage  commissions  of
$1,881,808, $5,808,194 and $10,095,014, respectively.

The Fund is required to  identify  any  securities  of its  "regular  brokers or
dealers"  (as such term is defined  in the 1940 Act) that the Fund has  acquired
during the most  recent  fiscal  year.  As of August 31,  2007 the Fund held the
following securities of its regular brokers or dealers:

<TABLE>
<CAPTION>
                                                                             Value of Securities Owned as of
Name of Regular Broker or Dealer or Parent (Issuer)                           August 31, 2007 (in thousands)
---------------------------------------------------                           ------------------------------
<S>                                                                                        <C>
Commerzbank AG                                                                             $50,914
UBS AG                                                                                     $49,325
Banca Popolare di Milano                                                                   $18,422
Unicredito Italiano SpA                                                                    $18,104
Blackstone Group LP                                                                        $15,775
Credit Suisse Group                                                                        $11,591
Australian Wealth Management Ltd.                                                          $11,302
OTP Bank NYRT                                                                              $10,981
Swedbank AB                                                                                $10,585
Shinsei Bank Ltd.                                                                           $8,571
Siam City Bank Pcl                                                                          $5,100
ABN Amro Holding NV                                                                           $203

DWS  International  Fund: For the fiscal years ended August 31, 2005, August 31,
2006 and August  31,  2007 the Fund paid  aggregate  brokerage  commissions  of,
$3,601,297, $4,516,279 and $5,828,722, respectively.

The Fund is required to  identify  any  securities  of its  "regular  brokers or
dealers"  (as such term is defined  in the 1940 Act) that the Fund has  acquired
during the most  recent  fiscal  year.  As of August 31,  2007 the Fund held the
following securities of its regular brokers or dealers:

                                                                             Value of Securities Owned as of
Name of Regular Broker or Dealer or Parent (Issuer)                           August 31, 2007 (in thousands)
---------------------------------------------------                           ------------------------------

Unicredito Italiano SpA                                                                  $53,856
UBS AG                                                                                   $44,530
KBC Groep NV                                                                             $40,909
Ereste Bank Der Oesterreichischen Sparkassen                                             $27,820
Prudential PLC                                                                           $24,866



                                       47
<PAGE>

National Bank of Greece                                                                  $20,738
Bancolombia SA                                                                           $14,902
Mizuho Financial Group, Inc.                                                             $12,664
OTP Bank NYRT                                                                            $11,636
Commerzbank AG                                                                            $8,999
Unibanco                                                                                  $5,981
Zurich Financial Services AG                                                               $373
Nordea Bank AB                                                                             $320
KBC Groep NV                                                                               $289
Marfin Investment Group SA                                                                 $191
Lloyds TSB Group PLC                                                                       $132





                                       48
<PAGE>

                                                                            Percentage of
                                                      Percentage of     Transactions Involving    Dollar Amount of
                                                   Commissions Paid to        Commissions        Commissions Paid to
                                                       Affiliated               Paid to              Brokers for
Name of Fund                                             Brokers          Affiliated Brokers      Research Services
------------                                             -------          ------------------      -----------------

DWS Global Thematic Fund                                   0%                     0%                     $0
DWS International Fund                                     0%                     0%                     $0
</TABLE>

Portfolio Turnover

Portfolio  turnover  rate is  defined  by the SEC as the ratio of the  lesser of
sales or purchases to the monthly average value of such securities  owned during
the year,  excluding all securities  whose  remaining  maturities at the time of
acquisition were one year or less.

Portfolio turnover rates for the two most recent fiscal periods are as follows:

                                                     2007             2006
                                                     ----             ----

DWS Global Thematic Fund                             151%             143%
DWS International Fund                               104%              76%

Higher levels of activity by a Fund result in higher  transaction  costs and may
also  result  in  taxes on  realized  capital  gains  to be borne by the  Fund's
shareholders.  Purchases and sales are made whenever necessary, in the Advisor's
discretion, to meet a Fund's objective.




                        PURCHASE AND REDEMPTION OF SHARES

General Information

Policies and procedures affecting  transactions in Fund shares can be changed at
any  time  without  notice,  subject  to  applicable  law.  Transactions  may be
contingent  upon proper  completion of application  forms and other documents by
shareholders  and their  receipt by the  Funds'  agents.  Transaction  delays in
processing (and changing account features) due to circumstances within or beyond
the  control of the Funds and their  agents may  occur.  Shareholders  (or their
financial  service firms) are responsible for all losses and fees resulting from
bad checks,  cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

                                       49
<PAGE>

A  distribution  will be  reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Orders will be  confirmed at a price based on the net asset value of a Fund next
determined  after receipt in good order by DWS-SDI of the order  accompanied  by
payment.  Orders received by dealers or other financial  services firms prior to
the determination of net asset value and received in good order by DWS-SDI prior
to the  determination  of net asset value will be  confirmed at a price based on
the net asset value next determined after receipt by DWS-SDI ("trade date").

Additional  Minimum Balance Policies.  For fiduciary  accounts such as IRAs, and
custodial  accounts such as Uniform Gifts to Minor Act and Uniform  Transfers to
Minor Act accounts, the minimum balance is $1,000 for Class S. A shareholder may
open an account with at least $1,000 ($500 for fiduciary/custodial accounts), if
an  automatic  investment  plan (AIP) of  $50/month  is  established.  DWS group
retirement  plans and certain other accounts have similar or lower minimum share
balance requirements.

Reductions in value that result solely from market  activity will not trigger an
annual fee or involuntary  redemption.  Shareholders  with a combined  household
account  balance in any of the DWS Funds of $100,000  or more,  as well as group
retirement  and certain other accounts will not be subject to a fee or automatic
redemption.

Fiduciary  (e.g., IRA or Roth IRA) and custodial  accounts (e.g.,  UGMA or UTMA)
with balances below $100 are subject to automatic  redemption following 60 days'
written notice to applicable shareholders.

Certificates. Share certificates will not be issued. Share certificates now in a
shareholder's possession may be sent to Service Corporation for cancellation and
book-entry  credit to such  shareholder's  account.  Certain telephone and other
procedures   require   book-entry   holdings.   Shareholders   with  outstanding
certificates bear the risk of loss.

Use of Financial  Services  Firms.  Investment  dealers and other firms  provide
varying  arrangements  for their clients to purchase and redeem a Fund's shares,
including higher minimum investments,  and may assess transaction or other fees.
Firms may arrange  with their  clients for other  investment  or  administrative
services.  Such firms may independently  establish and charge additional amounts
to their  clients for such  services.  Firms also may hold the Funds'  shares in
nominee or street  name as agent for and on behalf of their  customers.  In such
instances,  the  Transfer  Agent  will have no  information  with  respect to or
control over the accounts of specific shareholders. Such shareholders may obtain
access to their  accounts and  information  about their accounts only from their
firm. Certain of these firms may receive  compensation from the Fund through the
Shareholder  Service Agent for  record-keeping  and other  expenses  relating to
these nominee  accounts.  In addition,  certain  privileges  with respect to the
purchase and  redemption of shares or the  reinvestment  of dividends may not be
available  through such firms.  Some firms may participate in a program allowing
them  access  to  their  clients'  accounts  for  servicing  including,  without
limitation,  transfers of  registration  and  dividend  payee  changes;  and may
perform functions such as generation of confirmation statements and disbursement
of cash  dividends.  Such firms,  including  affiliates of DWS-SDI,  may receive
compensation  from the Fund  through  the  Shareholder  Service  Agent for these
services.


Each Fund has authorized one or more financial service  institutions,  including
certain members of the Financial Industry  Regulatory  Authority ("FINRA") other
than  the  Distributor  ("financial  institutions"),   to  accept  purchase  and
redemption  orders for the Fund's shares.  Such financial  institutions may also
designate other parties, including plan administrator intermediaries,  to accept
purchase and redemption  orders on each Fund's  behalf.  Orders for purchases or
redemptions  will be deemed to have been received by a Fund when such  financial
institutions or, if applicable,  their  authorized  designees accept the orders.
Subject  to  the  terms  of  the  contract  between  a Fund  and  the  financial
institution, ordinarily orders will be priced at the Fund's net asset value next
computed  after  acceptance  by such  financial  institution  or its  authorized
designees and accepted by the Fund.  Further,  if purchases or  redemptions of a
Fund's  shares are arranged and  settlement  is made at an  investor's  election
through any other authorized financial  institution,  that financial institution
may, at its  discretion,  charge a fee for that service.  The Board of Directors
and the Distributor,  also the Funds' principal underwriter,  each has the right
to limit the amount of purchases  by, and to refuse to sell to, any person.  The
Directors and the Distributor may suspend or terminate the offering of shares of
a Fund at any time for any reason.

                                       50
<PAGE>

DWS-SDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents  ("DWS Scudder  Wholesalers").  Generally,  DWS Scudder
Wholesalers  market shares of the DWS funds to your  financial  advisor,  who in
turn may  recommend  that you  purchase  shares  of a DWS  fund.  The Plan is an
incentive program that combines a monthly  incentive  component with a quarterly
strategic bonus component.  Under the Plan, DWS Scudder Wholesalers will receive
a monetary  monthly  incentive based on the amount of sales generated from their
marketing of the funds,  and that incentive will differ depending on the product
category  of  the  fund.   Each  fund  is  assigned  to  one  of  four   product
categories--"Core,"    "Strategic,"   "Satellite"   or   "Non-CSS"-taking   into
consideration, among other things, the following criteria, where applicable:

o        The Fund's 3-year performance;
o        The Fund's Morningstar rating;
o        Market size for the fund category;
o        The  Fund's   size,   including   sales  and
         redemptions of the Fund's shares;
o        The  length  of time  the  Fund's  Portfolio
         Managers have managed the Fund; and
o        The Fund's consistency with DWS Scudder's branding.

This  information  and other f actors are presented to a committee  comprised of
representatives  from  various  groups  within  DWS  Scudder,  who  review  on a
quarterly basis the funds assigned to each product category described above, and
make any  changes to those  assignments  at that time.  No one  factor,  whether
positive or negative,  determines a fund's  placement in a given  category;  all
these factors together are considered, and the designation of funds in the Core,
Strategic and Satellite categories represents management's judgment based on the
above criteria.  In addition,  management may consider a fund's profile over the
course  of  several  review  periods  before  making  a change  to its  category
assignment.  These  category  assignments  will be posted  quarterly  to the DWS
funds' Web site at www.dws-scudder.com, approximately one month after the end of
each quarter.  DWS Scudder Wholesalers will receive the highest compensation for
Core and Strategic  funds,  less for Satellite  funds and the lowest for Non-CSS
funds.   The  level  of   compensation   among  these   categories   may  differ
significantly.

In the normal course of business,  DWS Scudder will from time to time  introduce
new funds into the DWS family of funds. As a general rule, all new funds will be
placed in the  Strategic  compensation  category  for a  minimum  period of four
consecutive quarters, and DWS Scudder Wholesalers will be paid at a rate that is
equivalent to that of the Core Fund  category.  After that four quarter  period,
each new fund in the  Strategic  category  will be reviewed by the committee and
either  assigned to one of the four  categories or continued as a Strategic fund
at that time.

The prospect of receiving,  or the receipt of, additional  compensation by a DWS
Scudder  Wholesaler  under the Plan may provide an incentive to favor  marketing
the Core,  Strategic  or  Satellite  funds  over the  Non-CSS  funds.  The Plan,
however,  will not change  the price that you pay for shares of a fund.  The DWS
Scudder  Compliance  Department  monitors DWS Scudder Wholesaler sales and other
activity  in an  effort  to  detect  unusual  activity  in  the  context  of the
compensation  structure under the Plan. However,  investors may wish to take the
Plan  and the  product  category  of the  fund  into  account  when  considering
purchasing a fund or evaluating any recommendations relating to fund shares.

Telephone  and  Electronic  Transaction  Procedures.  Shareholders  have various
telephone,  Internet,  wire and other electronic privileges available. A Fund or
its agents will not be liable for any losses,  expenses or costs  arising out of
fraudulent or unauthorized  instructions  pursuant to these privileges if a Fund
or its agents reasonably believe, based upon reasonable verification procedures,
that the instructions were genuine.  Verification  procedures  include recording
instructions,  requiring  certain  identifying  information  before  acting upon
instructions  and  sending  written  confirmations.  During  periods  when it is
difficult to contact the  Shareholder  Service Agent, it may be difficult to use
telephone, wire and other privileges.


QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated  Clearing House System (minimum $50 and maximum  $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or  redemption  of Fund shares.  Shares  purchased by check or
through  QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege  until  such  Shares  have been


                                       51
<PAGE>

owned for at least 10 calendar days.  QuickBuy and QuickSell cannot be used with
passbook savings accounts or for certain tax-deferred plans such as IRAs.

Dividend  Payment  Option.   Investors  may  have  dividends  and  distributions
automatically   deposited  to  their  predesignated  bank  account  through  DWS
Scudder's Dividend Payment Option request form. Shareholders whose predesignated
checking  account of record is with a member bank of  Automated  Clearing  House
Network  (ACH) can have  income and  capital  gain  distributions  automatically
deposited to their  personal  bank account  usually  within three  business days
after a Fund pays its  distribution.  A Dividend Payment Option request form can
be  obtained  by  visiting  our Web  site  at:  www.dws-scudder.com  or  calling
1-800-728-3337.  Confirmation  Statements  will be  mailed  to  shareholders  as
notification that distributions have been deposited.

Tax-Sheltered   Retirement   Plans.  The  Shareholder   Service  Agent  provides
retirement  plan  services  and  documents  and DWS-SDI can  establish  investor
accounts in any of the following types of retirement plans:

o        Traditional,  Roth and Education IRAs. This includes Savings  Incentive
         Match Plan for  Employees  of Small  Employers  ("SIMPLE"),  Simplified
         Employee Pension Plan ("SEP") IRA accounts and prototype documents.

o        403(b)(7)  Custodial  Accounts.  This  type  of plan  is  available  to
         employees of most non-profit organizations.

o        Prototype  money  purchase  pension  and  profit-sharing  plans  may be
         adopted by employers.

Brochures  describing these plans as well as model defined benefit plans, target
benefit plans,  457 plans,  401(k) plans,  simple 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon request.
Additional fees and transaction policies and procedures may apply to such plans.
Investors  should  consult with their own tax  advisors  before  establishing  a
retirement plan.

Purchases

The Funds  reserve the right to withdraw all or any part of the offering made by
its prospectus and to reject purchase orders for any reason.  Also, from time to
time,  the Funds may  temporarily  suspend  the  offering  of any class of their
shares to new investors.  During the period of such suspension,  persons who are
already  shareholders of such class of such Fund may be permitted to continue to
purchase additional shares of such class and to have dividends reinvested.

To help the  government  fight the  funding of  terrorism  and money  laundering
activities,  federal law requires all financial  institutions to obtain,  verify
and record  information  that identifies  each person who opens an account.  For
more  information,  please see  "Policies  You Should  Know About" in the Funds'
prospectuses.

The Funds may waive the minimum for purchases by trustees,  directors,  officers
or  employees  of the Funds or the Advisor and its  affiliates.  Fees  generally
charged to IRA accounts will be charged to accounts of employees and directors.


Clients  having a regular  investment  counsel  account  with the Advisor or its
affiliates and members of their  immediate  families,  officers and employees of
the Advisor or of any  affiliated  organization  and members of their  immediate
families,  members  of the  FINRA  and  banks  may,  if they  prefer,  subscribe
initially for at least $2,500 for Class S through DWS Scudder Distributors, Inc.
by letter, fax, or telephone.

Automatic  Investment  Plan. A shareholder may purchase shares of a Fund through
an automatic investment program.  With the Direct Deposit Purchase Plan ("Direct
Deposit"),  investments  are made  automatically  (minimum  $1,000  and  maximum
$250,000 for both initial and  subsequent  investments)  from the  shareholder's
account at a bank,  savings and loan or credit union into the shareholder's Fund
account.  Termination by a shareholder  will become effective within thirty days
after  the  Shareholder  Service  Agent has  received  the  request.  A Fund may

                                       52
<PAGE>

immediately  terminate a shareholder's Direct Deposit in the event that any item
is unpaid by the shareholder's financial institution.

Minimum Subsequent Investment Policies.  For current shareholders there is a $50
minimum investment  requirement for subsequent investments in the fund. There is
no  minimum  subsequent  investment  requirement  for  investments  on behalf of
participants in certain  fee-based and wrap programs  offered through  financial
intermediaries approved by the Advisor.


Payroll  Investment  Plans. A shareholder  may purchase  shares through  Payroll
Direct Deposit or Government  Direct  Deposit.  Under these  programs,  all or a
portion of a shareholder's  net pay or government check is invested each payment
period.  A shareholder may terminate  participation  in these programs by giving
written  notice  to  the  shareholder's   employer  or  government   agency,  as
appropriate.  (A reasonable  time to act is required.) A Fund is not responsible
for the  efficiency of the employer or  government  agency making the payment or
any financial institutions transmitting payments.

Expedited Purchase Procedures for Existing  Shareholders.  Shareholders of other
DWS funds who have  submitted an account  application  and have  certified a tax
identification  number, clients having a regular investment counsel account with
the Advisor or its affiliates and members of their immediate families,  officers
and  employees  of the  Advisor  or of any  affiliated  organization  and  their
immediate  families,  members of the NASD, and banks may open an account by wire
by  calling  1-800-728-3337  for  instructions.  The  investor  must send a duly
completed and signed  application  to the Fund promptly.  A subsequent  purchase
order for $10,000 or more that is not greater  than four times an account  value
may be placed by telephone, fax, etc. by established shareholders (except by DWS
Scudder  Individual  Retirement  Account  (IRA),  DWS Scudder  Horizon Plan, DWS
Scudder Profit Sharing and Money Purchase  Pension Plans, DWS Scudder 401(k) and
DWS Scudder 403(b) Plan holders), members of the NASD, and banks.

It is our policy to offer purchase  privileges to current or former directors or
trustees of the Deutsche or DWS mutual funds,  employees,  their spouses or life
partners and children or step-children age 21 or younger of Deutsche Bank or its
affiliates  or a  sub-adviser  to any  fund  in the DWS  family  of  funds  or a
broker-dealer authorized to sell shares of the funds. Qualified individuals will
generally  be allowed to  purchase  shares in the class with the lowest  expense
ratio,  usually  the  Institutional  Class  shares.  If a Fund  does  not  offer
Institutional  Class shares,  these  individuals  will be allowed to buy Class A
shares at NAV.  The Funds also  reserve the right to waive the  minimum  account
balance  requirement for employee and director accounts.  Fees generally charged
to IRA accounts will be charged to accounts of employees and directors.




                                       53
<PAGE>




                                       54
<PAGE>




                                       55
<PAGE>




                                       56
<PAGE>




                                       57
<PAGE>




Eligible Class S Investors

A.       The following investors may purchase Class S shares of DWS Funds either
         (i)  directly  from DWS Scudder  Distributors,  Inc.  ("DWS-SDI"),  the
         Fund's   principal   underwriter;   or  (ii)  through  an  intermediary
         relationship with a financial services firm established with respect to
         the DWS Funds as of December 31, 2004.

          1.      Existing  shareholders of Class S shares of any DWS Fund as of
                  December 31, 2004, and household  members residing at the same
                  address.

          2.      Shareholders  of Class S of any DWS Fund  who  became  Class S
                  shareholders  in connection  with the  consolidation  of Class
                  AARP  and  Class S on July  17,  2006  and  household  members
                  residing at the same address.

          3.      Shareholders who have owned Class S shares  continuously since
                  December 31, 2004 and household  members  residing at the same
                  address  may open new  accounts  for Class S shares of any DWS
                  Fund.

         4.       Any  participant  who has owned Class S shares of any DWS Fund
                  through an  employee  sponsored  retirement,  employee  stock,
                  bonus,  pension  or profit  sharing  plan  continuously  since
                  December 31, 2004 may open a new individual  account for Class
                  S shares of any DWS Fund.

         5.       Any  participant  who  owns  Class S  shares  of any DWS  Fund
                  through a retirement, employee stock, bonus, pension or profit
                  sharing plan may complete a direct  rollover to an IRA account
                  that will hold Class S shares. This applies to individuals who
                  begin their retirement plan investments with a DWS Fund at any
                  time, including after December 31, 2004.

          6.      Officers, Fund Trustees and Directors, and full-time employees
                  and their family members, of the Advisor and its affiliates.

                                       58
<PAGE>

          7.      Class S shares are  available to any  accounts  managed by the
                  Advisor,  any  advisory  products  offered  by the  Advisor or
                  DWS-SDI  and to DWS  Allocation  Series or other fund of funds
                  managed by the Advisor or its affiliates.

          8.      Shareholders  of Class S of DWS Emerging  Markets  Equity Fund
                  who became  shareholders  of the fund in  connection  with the
                  fund's acquisition of Scudder New Asia Fund, Inc. on April 17,
                  2006.

          9.      Shareholders  of Class S of any DWS Fund  who  became  Class S
                  shareholders in connection with the  consolidation  of Class M
                  and Class S on August 18, 2006 and household  members residing
                  at the same address.

          10.     Shareholders  of Class S of any DWS Fund  who  became  Class S
                  shareholders  in connection with the renaming or conversion of
                  Investment Class to Class S on October 23, 2006.

B. The following additional investors may purchase Class S shares of DWS Funds.

          1.      Broker-dealers,   banks  and  registered  investment  advisors
                  ("RIAs")  may  purchase  Class S shares in  connection  with a
                  comprehensive  or  "wrap"  fee  program  or  other  fee  based
                  program.

          2.      Any  group  retirement,  employee  stock,  bonus,  pension  or
                  profit-sharing plans.

          3.      Persons  who  purchase  shares as part of an  investment  only
                  placement in a 529 College Savings Plan.

          4.      Persons who purchase  shares through a Health Savings  Account
                  or a Voluntary Employees' Benefit Association ("VEBA") Trust.

DWS-SDI may, at its discretion,  require appropriate documentation that shows an
investor is eligible to purchase Class S shares.





                                       59
<PAGE>




Revenue Sharing

In light of recent  regulatory  developments,  the Advisor,  the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding  the  level  of  payments  made  by them to  selected  affiliated  and
unaffiliated  brokers,  dealers,  participating  insurance  companies  or  other
financial  intermediaries  ("financial  advisors") in  connection  with the sale
and/or  distribution  of  Fund  shares  or the  retention  and/or  servicing  of
investors and Fund shares ("revenue sharing").

The  Advisor,  the  Distributor  and/or  their  affiliates  may  pay  additional
compensation,  out of their own  assets and not as an  additional  charge to the
Fund, to financial  advisors in connection with the sale and/or  distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund shares.
Such revenue  sharing  payments are in addition to any  distribution  or service
fees  payable  under any Rule  12b-1 or  service  plan of any fund,  any  record
keeping/sub-transfer  agency/networking  fees  payable  by the  Fund  (generally
through the  Distributor  or an  affiliate)  and/or the  Distributor  to certain
financial   advisors  for  performing  such  services  and  any  sales  charges,
commissions,   non-cash  compensation  arrangements  expressly  permitted  under
applicable  rules of FINRA or other  concessions  described  in the fee table or
elsewhere in the  Prospectuses or the SAI as payable to all financial  advisors.
For example, the Advisor, the Distributor and/or their affiliates may compensate
financial  advisors  for  providing  the Fund with "shelf  space" or access to a
third  party  platform  or fund  offering  list,  or  other  marketing  programs
including, without limitation, inclusion of the Fund on preferred or recommended
sales  lists,  mutual  fund  "supermarket"  platforms  and  other  formal  sales
programs;  granting the  Distributor  access to the  financial  advisor's  sales
force;  granting the Distributor access to the financial  advisor's  conferences
and meetings;  assistance  in training and  educating  the  financial  advisor's
personnel; and, obtaining other forms of marketing support. The level of revenue
sharing payments made to financial advisors may be a fixed fee or based upon one
or more of the following factors:  gross sales,  current assets and/or number of
accounts of the Fund attributable to the financial advisor,  the


                                       60
<PAGE>

particular fund or fund type or other measures as agreed to by the Advisor,  the
Distributor   and/or  their  affiliates  and  the  financial   advisors  or  any
combination  thereof.  The  amount  of  these  payments  is  determined  at  the
discretion of the Advisor,  the Distributor and/or their affiliates from time to
time, may be substantial,  and may be different for different financial advisors
based on, for  example,  the nature of the  services  provided by the  financial
advisor.

The Advisor,  the  Distributor  and/or their  affiliates  currently make revenue
sharing  payments  from  their own  assets in  connection  with the sale  and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial  advisors in amounts that  generally  range from .01% up to .50% of
assets of the Fund serviced and  maintained by the  financial  advisor,  .10% to
..25% of sales of the Fund attributable to the financial  advisor,  a flat fee of
$12,500 up to $500,000, or any combination thereof. These amounts are subject to
change  at  the  discretion  of  the  Advisor,   the  Distributor  and/or  their
affiliates.   Receipt  of,  or  the  prospect  of  receiving,   this  additional
compensation, may influence your financial advisor's recommendation of this Fund
or of any  particular  share class of the Fund. You should review your financial
advisor's  compensation  disclosure  and/or  talk to your  financial  advisor to
obtain  more  information  on how this  compensation  may have  influenced  your
financial advisor's recommendation of this Fund.

The Advisor,  the Distributor and/or their affiliates may also make such revenue
sharing  payments  to  financial  advisors  under the terms  discussed  above in
connection  with  the  distribution  of both  DWS  funds  and  non-DWS  funds by
financial  advisors to retirement plans that obtain record keeping services from
ADP, Inc. on the DWS Scudder branded  retirement plan platform (the  "Platform")
with the level of revenue  sharing  payments  being based upon sales of both the
DWS funds and the  non-DWS  funds by the  financial  advisor on the  Platform or
current  assets  of both  the DWS  funds  and the  non-DWS  funds  serviced  and
maintained by the financial advisor on the Platform.

As of the  date  hereof,  the  Fund  has been  advised  that  the  Advisor,  the
Distributor  and their  affiliates  expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors

A G Edwards & Sons Inc.
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth Equity Services, LLP (dba Commonwealth
Financial Network)
First Clearing/Wachovia Securities
HD Vest Investment Securities, Inc.
ING Group
LaSalle Financial Services, Inc. (dba ABN Amro)
Linsco/Private Ledger Corp.
Marsh Insurance and Investment Company
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Pacific Select Distributors Group
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wells Fargo Investments, LLC

                                       61
<PAGE>

Channel: Cash Product Platform

ADP Clearing & Outsourcing
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Bear, Stearns Securities Corp.
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
Citibank NA
D.A. Davidson & Company
Deutsche Bank Securities Inc.
Deutsche Bank Trust Company Americas
Emmett A. Larkin Company
Fiduciary Trust Co. - International
H.C. Denison Co.
Huntleigh Securities
Investors Bank & Trust
JPMorgan Chase
Lincoln Investment Planning
Linsco Private Ledger Financial Services
Mellon Financial Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Romano Brothers and Company
SAMCO Capital Markets (Fund Services, Inc.)
Smith Moore & Company
State Street Bank & Trust Co.
Sungard Institutional Brokerage Inc.
US Bancorp
UBS Financial Services Inc.
William Blair & Company

Channel: Third Party Insurance Platforms

Acacia National Life Insurance
Allmerica Financial Life Insurance Company
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
American General Life Insurance Company
Annuity Investors Life Insurance Company
Columbus Life Insurance Company
Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance Company
First Allmerica Financial Life Insurance Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity Insurance Company
Hartford Life Insurance Company

                                       62
<PAGE>

ICMG Registered Variable Life
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
Mutual of America Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America
Sun Life GroupSymetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company

Any additions,  modifications or deletions to the financial advisors  identified
above that have occurred since the date hereof are not reflected.

The Advisor,  the  Distributor  or their  affiliates  may enter into  additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The  prospect  of  receiving,  or the  receipt  of  additional  compensation  or
promotional  incentives  described above by financial  advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS Funds or a particular  DWS Fund over sales of shares of mutual
funds (or  non-mutual  fund  investments)  with  respect to which the  financial
advisor does not receive additional compensation or promotional  incentives,  or
receives  lower levels of additional  compensation  or  promotional  incentives.
Similarly,  financial advisors may receive different  compensation or incentives
that may influence  their  recommendation  of any particular  share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses.  You may
wish to take  such  payment  arrangements  into  account  when  considering  and
evaluating  any  recommendations  relating to Fund shares and you should discuss
this matter with your  financial  advisor  and review your  financial  advisor's
disclosures.


Redemptions


Redemption fee. Each Fund imposes a redemption fee of 2% of the total redemption
amount  (calculated at net asset value) on all Fund shares redeemed or exchanged
within 15 days of buying them (either by purchase or exchange).  The  redemption
fee  is  paid  directly  to a  Fund,  and is  designed  to  encourage  long-term
investment and to offset  transaction and other costs associated with short-term
or excessive  trading.  For purposes of  determining  whether the redemption fee
applies,  shares held the longest time will be treated as being  redeemed  first
and shares held the shortest time will be treated as being  redeemed  last.  The
redemption fee is applicable to Fund shares purchased either directly or through
a  financial  intermediary,  such  as  a  broker-dealer.   Transactions  through
financial intermediaries typically are placed with the Funds on an omnibus basis
and include  both  purchase and sale  transactions  placed on behalf of multiple
investors. These purchase and sale transactions are generally netted against


                                       63
<PAGE>

one another and placed on an aggregate basis; consequently the identities of the
individuals on whose behalf the  transactions are placed generally are not known
to the Funds.  For this reason,  each Fund has  undertaken  to notify  financial
intermediaries  of their  obligation  to assess the  redemption  fee on customer
accounts  and to collect  and remit the  proceeds to the Fund.  However,  due to
operational   requirements,   the  intermediaries'   methods  for  tracking  and
calculating  the fee may be  inadequate  or  differ  in some  respects  from the
Funds'.


A Fund may suspend the right of redemption or delay payment more than seven days
(a) during any period when the Exchange is closed other than  customary  weekend
and holiday  closings or during any period in which  trading on the  Exchange is
restricted,  (b) during any period when an emergency exists as a result of which
(i) disposal of the Fund's investments is not reasonably practicable, or (ii) it
is not  reasonably  practicable  for the Fund to determine  the value of its net
assets,  or (c) for such other  periods  as the SEC may by order  permit for the
protection of the Fund's shareholders.

A  request  for  repurchase  (confirmed  redemption)  may be  communicated  by a
shareholder  through a  financial  services  firm to  DWS-SDI,  which firms must
promptly submit orders to be effective.

Redemption  requests  must be  unconditional.  Redemption  requests (and a stock
power for certificated  shares) must be duly endorsed by the account holder.  As
specified  in  the  prospectus,  signatures  may  need  to  be  guaranteed  by a
commercial bank, trust company,  savings and loan  association,  federal savings
bank,  member  firm  of  a  national  securities  exchange  or  other  financial
institution  permitted by SEC rule.  Additional  documentation  may be required,
particularly  from   institutional  and  fiduciary  account  holders,   such  as
corporations,  custodians  (e.g.,  under the Uniform  Transfers  to Minors Act),
executors, administrators, trustees or guardians.

If the proceeds of the  redemption  (prior to the  imposition of any  contingent
deferred  sales charge) are $100,000 or less and the proceeds are payable to the
shareholder of record at the address of record,  normally a telephone request or
a written  request by any one account  holder  without a signature  guarantee is
sufficient for  redemptions by individual or joint account  holders,  and trust,
executor  and  guardian  account  holders,  provided  the  trustee,  executor or
guardian  is named in the  account  registration.  Other  institutional  account
holders exercise this special privilege of redeeming shares by telephone request
or written request without signature guarantee subject to the same conditions as
individual account holders, provided that this privilege has been pre-authorized
by the  institutional  account holder by written  instruction to the Shareholder
Service  Agent with  signatures  guaranteed.  This  privilege may not be used to
redeem shares held in certificated form and may not be used if the shareholder's
account has had an address change within 15 days of the redemption request.

Wires.  Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed  by a Fund for up to seven days if the Fund or the  Shareholder  Service
Agent deems it appropriate under then-current market conditions.  The ability to
send wires is limited by the business hours and holidays of the firms  involved.
A Fund is not  responsible  for the efficiency of the federal wire system or the
account  holder's  financial  services  firm or  bank.  The  account  holder  is
responsible  for any charges  imposed by the account  holder's  firm or bank. To
change the  designated  account  to receive  wire  redemption  proceeds,  send a
written request to the Fund Shareholder Service Agent with signatures guaranteed
as described above or contact the firm through which Fund shares were purchased.

Automatic  Withdrawal  Plan.  The owner of $5,000 or more of a class of a Fund's
shares at the offering  price (net asset value) may provide for the payment from
the owner's account of any requested  dollar amount to be paid to the owner or a
designated  payee  monthly,  quarterly,  semiannually  or  annually.  The $5,000
minimum account size is not applicable to IRAs. The minimum  periodic payment is
$50. The maximum  annual rate at which shares subject to CDSC may be redeemed is
12% of the net asset value of the account. Shares are redeemed so that the payee
should receive  payment  approximately  the first of the month.  Investors using
this Plan must reinvest Fund distributions.

Non-retirement plan shareholders may establish an Automatic Withdrawal Plan (the
"Plan") to receive  monthly,  quarterly or periodic  redemptions from his or her
account for any  designated  amount of $50 or more.  Shareholders  may designate
which day they want the automatic withdrawal to be processed.  The check amounts
may be based on the  redemption  of a fixed dollar  amount,  fixed share amount,
percent of account  value or  declining  balance.  The Plan  provides for income
dividends  and  capital  gains  distributions,  if  any,  to  be  reinvested  in
additional  Shares.  Shares are then  liquidated  as  necessary  to provide  for
withdrawal  payments.  Since the  withdrawals  are in  amounts


                                       64
<PAGE>

selected by the investor and have no relationship  to yield or income,  payments
received  cannot be  considered  as yield or income  on the  investment  and the
resulting liquidations may deplete or possibly extinguish the initial investment
and any reinvested dividends and capital gains distributions.  Any such requests
must be received by a Portfolio's  transfer  agent ten days prior to the date of
the first automatic  withdrawal.  An Automatic Withdrawal Plan may be terminated
at any time by the  shareholder,  the Trust or its agent on written notice,  and
will be  terminated  when all  Shares  of a  Portfolio  under the Plan have been
liquidated or upon receipt by the Trust of notice of death of the shareholder.

In-kind  Redemptions.  The Funds  reserve  the right to honor  any  request  for
redemption  or  repurchase  by  making  payment  in whole or in part in  readily
marketable  securities.  These securities will be chosen by a Fund and valued as
they are for purposes of computing the Fund's net asset value. A shareholder may
incur transaction expenses in converting these securities to cash.

Exchanges

Shareholders  may request a taxable  exchange of their  shares for shares of the
corresponding  class of other DWS Funds  without  imposition  of a sales charge,
subject to the provisions  below. For purposes of calculating any CDSC,  amounts
exchanged retain their original cost and purchase date.


Shares of money  market  funds that were  acquired  by purchase  (not  including
shares acquired by dividend  reinvestment)  are subject to the applicable  sales
charge on exchange.  Series of DWS Target Fund are  available  on exchange  only
during  the  offering  period for such  series as  described  in the  applicable
prospectus.  Cash Management Fund Investment, Tax Free Money Fund Investment, NY
Tax-Free Money Fund Investment,  Treasury Money Fund -- Class Investment,  Money
Market Fund Investment,  Cash Management Fund Institutional,  Cash Reserves Fund
Institutional,  Treasury Money Fund --  Institutional,  Cash Reserve Fund,  Inc.
Prime Series,  Cash Reserve Fund, Inc.  Treasury Series,  Tax-Exempt  California
Money Market Fund,  Cash Account Trust and Investors Cash Trust are available on
exchange but only through a financial  services firm having a services agreement
with DWS-SDI.  All  exchanges  among money funds must meet  applicable  investor
eligibility  and investment  requirements.  Exchanges may only be made for funds
that are available for sale in the shareholder's state of residence.  Currently,
Tax-Exempt   California  Money  Market  Fund  is  available  for  sale  only  in
California.




Shareholders must obtain prospectuses of the Funds they are exchanging into from
dealers, other firms or DWS-SDI.

Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS Fund may  authorize  the  automatic  exchange  of a  specified  amount  ($50
minimum) of such  shares for shares of the same class of another  such DWS Fund.
Exchanges  will  be  made  automatically  until  the  shareholder  or  the  Fund
terminates  the  privilege.  Exchanges  are subject to the terms and  conditions
described above.

Dividends

Each Fund intends to distribute  its investment  company  taxable income and any
net realized  capital gains in November or December to avoid federal excise tax,
although an additional distribution may be made if necessary.

                                       65
<PAGE>

Each Fund  intends  to  distribute  dividends  from its net  investment  income,
excluding short-term capital gains, annually in November and December. Each Fund
intends to distribute  net realized  capital gains after  utilization of capital
loss carryforwards, if any, in November and December to prevent application of a
federal excise tax. An additional distribution may be made, if necessary.

Any dividends or capital gains  distributions  declared in October,  November or
December  with a record  date in such a month  and  paid  during  the  following
January will be treated by  shareholders  for federal  income tax purposes as if
received on December 31 of the calendar year declared.

Income  and  capital  gain  dividends,  if any,  of a Fund will be  credited  to
shareholder accounts in full and fractional shares of the same class of the Fund
at net asset value on the reinvestment  date,  except that, upon written request
to the Shareholder  Service Agent, a shareholder may select one of the following
options:

1.       To receive  income and  short-term  capital gain  dividends in cash and
         long-term  capital  gain  dividends  in shares of the same class at net
         asset value; or

2.       To receive income and capital gain dividends in cash.


Dividends  will be  reinvested  in  shares  of the same  class of a Fund  unless
shareholders  indicate in writing  that they wish to receive  them in cash or in
shares  of other  DWS  Funds  with  multiple  classes  of shares or DWS Funds as
provided in the  prospectus.  To use this privilege of investing  dividends of a
Fund in shares of another DWS Fund, shareholders must maintain a minimum account
value of $1,000 in the Fund  distributing  the  dividends.  A Fund will reinvest
dividend checks (and future  dividends) in shares of that same Fund and class if
checks are returned as undeliverable.  Dividends and other  distributions of the
Fund in the  aggregate  amount of $10 or less are  automatically  reinvested  in
shares of the same class of the Fund unless the shareholder  requests in writing
that a check be issued for that particular distribution.


If an investment is in the form of a retirement  plan, all dividends and capital
gains distributions must be reinvested into the shareholder's account.

If  a  shareholder   has  elected  to  reinvest  any   dividends   and/or  other
distributions,  such  distributions  will be made in  shares  of that  Fund  and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent.  Distributions of investment company taxable
income and net realized  capital  gains are  taxable,  whether made in shares or
cash.

Each  distribution  is  accompanied  by a  brief  explanation  of the  form  and
character of the  distribution.  The  characterization  of distributions on such
correspondence may differ from the characterization for federal tax purposes. In
January of each year,  each Fund issues to each  shareholder  a statement of the
federal income tax status of all distributions in the prior calendar year.

Each Fund may at any time vary its foregoing dividend practices and,  therefore,
reserves  the  right  from  time to time to  either  distribute  or  retain  for
reinvestment  such of its net  investment  income  and  its net  short-term  and
long-term  capital  gains as its  Board  determines  appropriate  under the then
current circumstances. In particular, and without limiting the foregoing, a Fund
may make additional  distributions of net investment  income or capital gain net
income in order to satisfy the minimum  distribution  requirements  contained in
the Code.


                              FEDERAL INCOME TAXES

The following is intended to be a general  summary of certain federal income tax
consequences  of  investing  in the  Funds.  It is not  intended  as a  complete
discussion  of all such  consequences,  nor  does it  purport  to deal  with all
categories of investors.  Investors are therefore  advised to consult with their
tax advisors before making an investment in a Fund.

                                       66
<PAGE>

Taxation of the Funds.  Each Fund  intends to elect to be treated and to qualify
each year as a regulated  investment  company under Subchapter M of the Code. In
order to qualify for the special tax  treatment  accorded  regulated  investment
companies and their shareholders, each Fund must, among other things:

(a)  derive at least  90% of its gross  income  for each  taxable  year from (i)
dividends,  interest,  payments with respect to certain  securities  loans,  and
gains  from  the sale or other  disposition  of  stock,  securities  or  foreign
currencies,  or other income  (including  but not limited to gains from options,
futures, or forward contracts) derived with respect to its business of investing
in such stock,  securities,  or  currencies;  and (ii) net income  derived  from
interest in "qualified publicly traded partnerships" (as defined below);

(b)  diversify  its  holdings so that,  at the end of each quarter of the Fund's
taxable year, (i) at least 50% of the market value of the Fund's total assets is
represented  by cash and cash items,  US  Government  securities,  securities of
other regulated investment companies, and other securities limited in respect of
any one issuer to a value not greater  than 5% of the value of the Fund's  total
assets  and not  more  than 10% of the  outstanding  voting  securities  of such
issuer,  and (ii) not more than 25% of the value of the Fund's  total  assets is
invested (x) in the  securities  (other than those of the US Government or other
regulated  investment  companies)  of any one  issuer or of two or more  issuers
which the Fund controls and which are engaged in the same,  similar,  or related
trades or businesses, or (y) in the securities of one or more qualified publicly
traded  partnerships (as defined below). In the case of the Fund's investment in
loan  participations,  the Fund shall treat both the financial  intermediary and
the issuer of the underlying  loan as an issuer for the purposes of meeting this
diversification requirement; and

(c) distribute  with respect to each taxable year at least 90% of the sum of its
investment  company  taxable income (as that term is defined in the Code without
regard to the deduction for dividends paid -- generally, taxable ordinary income
and the  excess,  if any, of net  short-term  capital  gains over net  long-term
capital losses) and net tax-exempt interest income, for such year..

In  general,  for  purposes of the 90% gross  income  requirement  described  in
paragraph  (a)  above,  income  derived  from a  partnership  will be treated as
qualifying  income only to the extent such  income is  attributable  to items of
income of the  partnership  which would be qualifying  income if realized by the
regulated  investment company.  However,  100% of the net income derived from an
interest in a "qualified publicly traded partnership"  (defined as a partnership
(i) interests in which are traded on an established securities market or readily
tradable on a secondary  market or the substantial  equivalent  thereof and (ii)
that derives less than 90% of its income from the qualifying income described in
paragraph  (a)(i)  above) will be treated as  qualifying  income.  In  addition,
although in general the passive loss rules of the Code do not apply to regulated
investment companies, such rules do apply to a regulated investment company with
respect to items  attributable  to an interest in a  qualified  publicly  traded
partnership. Finally, for purposes of paragraph (b) above, the term "outstanding
voting  securities  of such  issuer"  will  include the equity  securities  of a
qualified publicly traded partnership.

If a Fund qualifies as a regulated  investment  company that is accorded special
tax  treatment,  such Fund will not be subject  to federal  income tax on income
distributed  in a timely  manner to its  shareholders  in the form of  dividends
(including Capital Gain Dividends, as defined below).

If for any taxable year a Fund does not qualify for the special  federal  income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal  income tax at regular  corporate  rates (without any
deduction for distributions to its  shareholders),  and all  distributions  from
earnings and profits,  including any  distributions of net tax-exempt income and
net long-term capital gains, will be taxable to shareholders as ordinary income.
Such  distributions  would be eligible (i) to be treated as "qualified  dividend
income," in the case of individual and other noncorporate shareholders,  subject
to reduced rates of federal income taxation for taxable years  beginning  before
January 1, 2011 and (ii) for the 70% dividends received deduction in the case of
corporate  shareholders.  In addition,  such Fund could be required to recognize
unrealized  gains,  pay  substantial  taxes and  interest  and make  substantial
distributions  before  requalifying  as a regulated  investment  company that is
accorded special tax treatment.

Each Fund is subject to a 4% nondeductible  excise tax on amounts required to be
but not distributed under a prescribed formula.  The formula requires payment to
shareholders  during a calendar year of distributions


                                       67
<PAGE>

representing at least 98% of the Fund's taxable ordinary income for the calendar
year and at least 98% of the excess of its  capital  gains over  capital  losses
realized  during the one-year  period ending  October 31 (in most cases) of such
year as well as  amounts  that were  neither  distributed  nor taxed to the Fund
during the prior  calendar  year.  Although  each Fund's  distribution  policies
should  enable it to avoid  excise  tax  liability,  a Fund may  retain  (and be
subject  to income or excise  tax on) a  portion  of its  capital  gain or other
income if it appears to be in the interest of such Fund.

Taxation of Fund Distributions.  For federal income tax purposes,  distributions
of  investment  income  are  generally  taxable  as  ordinary  income.  Taxes on
distributions  of  capital  gains are  determined  by how long a Fund  owned the
investments  that generated  them,  rather than how long a shareholder has owned
his or  her  shares.  Distributions  of net  capital  gains  from  the  sale  of
investments  that a Fund  owned  for more  than  one year and that are  properly
designated by the Fund as capital gain dividends ("Capital Gain Dividends") will
be taxable as long-term  capital gains.  Distributions of gains from the sale of
investments  that a Fund owned for one year or less will be taxable as  ordinary
income.  For taxable years beginning  before January 1, 2011,  distributions  of
investment  income  designated  by a Fund as derived  from  "qualified  dividend
income" will be taxed in the hands of  individuals  at the rates  applicable  to
long-term capital gain,  provided holding period and other  requirements are met
at both the shareholder and Fund levels.

Distributions  are taxable to shareholders  even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus were included
in  the  price  the  shareholder   paid).   Distributions  are  taxable  whether
shareholders  receive them in cash or reinvest them in additional shares through
the reinvestment  privilege. A shareholder whose distributions are reinvested in
shares will be treated as having  received a dividend  equal to either:  (i) the
fair market value of the new shares  issued to the  shareholder,  or (ii) if the
shares are trading  below net asset value,  the amount of cash  allocated to the
shareholder  for the  purchase of shares on its behalf in the open  market.  Any
gain  resulting  from the sale or  exchange  of Fund  shares  generally  will be
taxable as capital gains.

Long-term  capital gain rates  applicable to individuals  have been  temporarily
reduced -- in general,  to 15% with lower rates applying to taxpayers in the 10%
and 15% rate brackets -- for taxable years beginning before January 1, 2011.

For taxable years beginning before January 1, 2011,  "qualified dividend income"
received by an  individual  will be taxed at the rates  applicable  to long-term
capital  gain.  In order for some  portion of the  dividends  received by a Fund
shareholder to be "qualified dividend income," the Fund must meet holding period
and other  requirements  with  respect to some  portion of the  dividend  paying
stocks in its portfolio and the  shareholder  must meet holding period and other
requirements  with respect to each Fund's shares. A dividend will not be treated
as qualified  dividend  income (at either the Fund or shareholder  level) (1) if
the dividend is received  with respect to any share of stock held for fewer than
61 days during the 121-day period  beginning on the date which is 60 days before
the date on which such share becomes  ex-dividend  with respect to such dividend
(or, in the case of certain  preferred  stock, 91 days during the 181-day period
beginning  90 days before such date),  (2) to the extent that the  recipient  is
under an  obligation  (whether  pursuant to a short sale or  otherwise)  to make
related payments with respect to positions in  substantially  similar or related
property,  (3) if the recipient  elects to have the dividend  income  treated as
investment  interest,  or  (4) if  the  dividend  is  received  from  a  foreign
corporation that is (a) not eligible for the benefits of a comprehensive  income
tax treaty with the United States (with the exception of dividends paid on stock
of such a foreign  corporation  readily  tradable on an  established  securities
market in the United  States) or (b)  treated  as a passive  foreign  investment
company.

In  general,  distributions  of  investment  income  designated  by each Fund as
derived from  qualified  dividend  income will be treated as qualified  dividend
income by a shareholder  taxed as an individual  provided the shareholder  meets
the holding period and other  requirements  described  above with respect to the
Fund's shares. If the aggregate  qualified  dividends  received by a Fund during
any taxable  year are 95% or more of its gross  income,  then 100% of the Fund's
dividends (other than dividends  properly  designated as Capital Gain Dividends)
will be eligible to be treated as qualified  dividend income.  For this purpose,
the  only  gain  included  in the  term  "gross  income"  is the  excess  of net
short-term capital gain over net long-term capital loss.

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Special tax rules apply to investments  through defined  contribution  plans and
other  tax-qualified  plans.  Shareholders  should  consult their tax adviser to
determine  the  suitability  of shares of a fund as an  investment  through such
plans  and  the  precise  effect  of and  investment  on  their  particular  tax
situation.

All distributions by a Fund result in a reduction in the net asset value of that
Fund's  shares.  Should  a  distribution  reduce  the net  asset  value  below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above,  even though,
from an investment standpoint, it may constitute a partial return of capital. In
particular,  investors  should be careful to consider  the tax  implications  of
buying  shares just prior to a  distribution.  The price of shares  purchased at
that time includes the amount of the forthcoming distribution.  Those purchasing
just prior to a  distribution  will receive a partial return of capital upon the
distribution, which will nevertheless be taxable to them.

Capital gains  distributions  may be reduced if Fund capital loss  carryforwards
are available.  Any capital loss  carryforwards  to which a Fund is entitled are
disclosed in such Fund's annual and semi-annual reports to shareholders.

Dividends Received Deduction.  Dividends from domestic corporations may comprise
a substantial part of each Fund's gross income. If any such dividends constitute
a portion of a Fund's gross  income,  a portion of the income  distributions  of
such Fund may be  eligible  for the 70%  deduction  for  dividends  received  by
corporations. Shareholders will be informed of the portion of dividends which so
qualify. The dividends-received deduction is reduced to the extent the shares of
a Fund  with  respect  to which  the  dividends  are  received  are  treated  as
debt-financed  under  federal  income tax law and is  eliminated if either those
shares or the  shares of a Fund are  deemed to have been held by the Fund or the
shareholder,  as the case may be, for less than 46 days during the 91-day period
beginning 45 days before the shares become ex-dividend.

Transactions  in Fund Shares.  The sale,  exchange or  redemption of shares of a
Fund may give rise to a gain or loss. In general, any gain or loss realized upon
a taxable  disposition  of shares will be treated as  long-term  capital gain or
loss if the shares have been held for more than 12 months.  Otherwise,  the gain
or loss on the  taxable  disposition  of  shares of a Fund  will be  treated  as
short-term gain or loss.  However,  any loss realized upon a taxable disposition
of shares held for six months or less will be treated as long-term,  rather than
short-term,  to the extent of any long-term capital gain distributions  received
(or deemed  received) by the  shareholder  with respect to the shares.  All or a
portion of any loss realized upon a taxable disposition of shares of a Fund will
be disallowed if other  substantially  identical  shares of a Fund are purchased
within 30 days before or after the disposition. In such a case, the basis of the
newly purchased shares will be adjusted to reflect the disallowed loss.

Foreign  Taxation.  Foreign  withholding  or other foreign taxes with respect to
income  (possibly  including,  in some cases,  capital gains) on certain foreign
securities may occur.  These taxes may be reduced or eliminated  under the terms
of an applicable US income tax treaty.

So long as more than 50% of the value of the total assets of a Fund at the close
of the taxable year consists of securities in foreign corporations, the Fund may
make an election  under  Section 853 of the Code to enable the  shareholders  to
claim a credit or deduction (subject to limitations) on their federal income tax
returns  for their  pro rata  portion  of  qualified  taxes  paid by the Fund to
foreign   countries  (which  taxes  relate  primarily  to  investment   income).
Shareholders  will treat such  amounts  as part of their  distribution  from the
Fund.  The foreign tax credit  available to  shareholders  is subject to certain
limitations and restrictions imposed by the Code.

If a Fund does not make the election  permitted  under  section 853 of the Code,
any foreign  taxes paid or accrued  will  represent  an expense to the Fund that
will reduce its investment company taxable income. In such a case,  shareholders
will not be able to claim  either a credit  or a  deduction  for  their pro rata
portion of such taxes paid by the Fund,  nor will  shareholders  be  required to
treat as part of the amounts  distributed to them their pro rata portion of such
taxes paid.

Foreign  Currency  Transactions.  A Fund's  transactions in foreign  currencies,
foreign-currency-denominated  debt  obligations  and  certain  foreign  currency
options,  futures contracts and forward contracts (and similar  instruments)


                                       69
<PAGE>

may give rise to  ordinary  income  or loss to the  extent  such  income or loss
results from fluctuations in the value of the foreign currency concerned.

Passive Foreign  Investment  Companies.  Equity investments by a Fund in certain
"passive foreign investment  companies"  ("PFICs") could potentially subject the
Fund to a US federal income tax (including  interest  charges) on  distributions
received from the company or on proceeds received from the disposition of shares
in the company,  which tax cannot be eliminated by making  distributions to Fund
shareholders.  However, such Fund may elect to avoid the imposition of that tax.
For example, a Fund may elect to treat a PFIC as a "qualified  electing fund" (a
"QEF  election"),  in which case the Fund would be required to include its share
of the company's income and net capital gains annually, regardless of whether it
receives any distribution from the company.  Such Fund also may make an election
to mark the gains  (and to a limited  extent  losses) in such  holdings  "to the
market" as though it had sold and repurchased its holdings in those PFICs on the
last day of the Fund's  taxable  year.  Such  gains and  losses  are  treated as
ordinary  income and loss. The QEF and  mark-to-market  elections may accelerate
the  recognition of income (without the receipt of cash) and increase the amount
required to be distributed by a Fund to avoid  taxation.  Making either of these
elections  therefore  may  require  such  Fund to  liquidate  other  investments
(including  when  it is not  advantageous  to do so) to  meet  its  distribution
requirement,  which also may accelerate  the  recognition of gain and affect the
Fund's total return.  Dividends paid by PFICs will not be eligible to be treated
as "qualified dividend income."

Taxation of Certain  Investments.  A Fund's  investment in zero coupon bonds and
other debt  obligations  having  original  issue  discount may cause the Fund to
recognize  taxable income in excess of any cash received from the investment.  A
portion of the difference  between the issue price of zero coupon securities and
their face value  ('original  issue  discount")  is considered to be income to a
Fund each year,  even though the Fund will not receive  cash  interest  payments
from these securities. This original issue discount imputed income will comprise
a part  of the  investment  company  taxable  income  of a Fund,  which  must be
distributed to shareholders in order to maintain the  qualification  of the Fund
as a regulated  investment company and to avoid federal income tax at the Fund's
level.

Some debt  obligations with a fixed maturity date of more than one year from the
date of issuance (and all  zero-coupon  debt  obligations  with a fixed maturity
date of more than one year from the date of  issuance)  that are  acquired  by a
Fund  will be  treated  as debt  obligations  that are  issued  originally  at a
discount.  Generally,  the  amount of the  original  issue  discount  ("OID") is
treated as interest income and is included in taxable income (and required to be
distributed)  over the term of the debt  security,  even though  payment of that
amount  is not  received  until a later  time,  usually  when the debt  security
matures. In addition,  payment-in-kind securities will give rise to income which
is  required to be  distributed  and is taxable  even though a Fund  holding the
security receives no interest payment in cash on the security during the year.

Some debt  obligations with a fixed maturity date of more than one year from the
date of  issuance  that are  acquired by a Fund in the  secondary  market may be
treated  as  having  market  discount.  Generally,  any gain  recognized  on the
disposition  of, and any partial payment of principal on, a debt security having
market  discount  is treated  as  ordinary  income to the  extent  the gain,  or
principal  payment,  does not exceed the "accrued market  discount" on such debt
security. Market discount generally accrues in equal daily installments.  A Fund
may make one or more of the  elections  applicable  to debt  obligations  having
market  discount,  which could affect the character and timing of recognition of
income.

In addition, if a Fund invests in high yield original issue discount obligations
issued by  corporations  (including  tax-exempt  obligations),  a portion of the
original  issue  discount  accruing on the  obligation may be treated as taxable
dividend income. In such event,  dividends of investment  company taxable income
received from a Fund by its  shareholders,  to the extent  attributable  to such
portion of accrued original issue discount, would be taxable. Any such dividends
received by a Fund's  corporate  shareholders  may be eligible for the deduction
for dividends received by corporations.

Any market discount recognized on a bond is taxable as ordinary income. A market
discount bond is a bond  acquired on the  secondary  market at a price below its
redemption  value (or its  adjusted  issue price if issued with  original  issue
discount).  Absent an election  to include  the market  discount in income as it
accrues,  gain on the


                                       70
<PAGE>

disposition of such an obligation will be treated as ordinary income (instead of
capital gain) to the extent of accrued market discount.

A Fund may invest to a significant  extent in debt  obligations  that are in the
lowest rating  categories or are unrated,  including debt obligations of issuers
not  currently  paying  interest  or who  are in  default.  Investments  in debt
obligations  that are at risk of or in default  present special tax issues for a
Fund.  Tax rules are not  entirely  clear  about  issues such as when a Fund may
cease to accrue interest,  original issue discount or market discount,  when and
to what extent deductions may be taken for bad debts or worthless securities and
how payments  received on  obligations  in default  should be allocated  between
principal and income. These and other related issues will be addressed by a Fund
when, as and if it invests in such  securities,  in order to seek to ensure that
it  distributes  sufficient  income  to  preserve  its  status  as  a  regulated
investment  company and does not become subject to U.S. federal income or excise
tax.

If a Fund engages in hedging  transactions,  including  hedging  transactions in
options,  futures contracts,  and straddles,  or other similar transactions,  it
will  be  subject   to  special   tax  rules   (including   constructive   sale,
mark-to-market,  straddle, wash sale, and short sale rules), the effect of which
may be to  accelerate  income to the  Fund,  defer  losses  to the  Fund,  cause
adjustments in the holding periods of the Fund's  securities,  convert long-term
capital gains into short-term capital gains or convert short-term capital losses
into long-term  capital losses.  These rules could therefore  affect the amount,
timing and character of distributions  to shareholders.  Such Fund will endeavor
to make any  available  elections  pertaining to such  transactions  in a manner
believed to be in the best interests of the Fund.

Certain of a Fund's hedging activities may produce a difference between its book
income and the sum of its net  tax-exempt and taxable  income.  If a Fund's book
income exceeds its tax-exempt  income,  the distribution (if any) of such excess
will be treated as (i) a dividend to the extent of the Fund's remaining earnings
and profits  (including  earnings and profits arising from  tax-exempt  income),
(ii) thereafter as a return of capital to the extent of the recipient's basis in
the shares,  and (iii) thereafter as gain from the sale or exchange of a capital
asset.  If a Fund's book income is less than the sum of its net  tax-exempt  and
taxable income, such Fund could be required to make distributions exceeding book
income to qualify as a regulated investment company that is accorded special tax
treatment.

In general,  excess  inclusion  income  allocated to shareholders  (i) cannot be
offset by net  operating  losses  (subject  to a limited  exception  for certain
thrift  institutions),  (ii) will constitute  unrelated  business taxable income
("UBTI")  to  entities  (including  a  qualified  pension  plan,  an  individual
retirement  account,  a 401(k)  plan, a Keogh plan or other  tax-exempt  entity)
subject to tax on unrelated business income,  thereby potentially requiring such
an entity that is allocated excess inclusion income,  and otherwise might not be
required to file a tax return,  to file a tax return and pay tax on such income,
and  (iii) in the case of a  non-U.S.  shareholder,  will  not  qualify  for any
reduction in U.S. federal  withholding tax (discussed  below). Any investment in
residual  interests of a Collateralized  Mortgage  Obligation (a "CMO") that has
elected to be treated as a REMIC  likewise  can  create  complex  tax  problems,
especially  if a Fund  has  state  or  local  governments  or  other  tax-exempt
organizations as shareholders.  A tax-exempt  shareholder will recognize UBTI by
virtue  of  its  investment  in  a  Fund  if  shares  in  the  Fund   constitute
debt-financed  property in the hands of the  tax-exempt  shareholder  within the
meaning of Code  Section  514(b).  Furthermore,  a  tax-exempt  shareholder  may
recognize  UBTI if a Fund  recognizes  "excess  inclusion  income"  derived from
direct or indirect investments in REMIC residual interests or TMPs if the amount
of such income  recognized  by the Fund  exceeds the Fund's  investment  company
taxable  income (after taking into account  deductions for dividends paid by the
Fund).

Under  legislation  enacted in December  2006, if a charitable  remainder  trust
(defined in section 664 of the Code)  realizes any  unrelated  business  taxable
income for a taxable year, it must pay an excise tax annually of an amount equal
to such UBTI. Under IRS guidance issued in November 2006, a charitable remainder
trust will not  recognize  UBTI solely as a result of  investing  in a fund that
recognizes  "excess inclusion income." Rather, if at any time during any taxable
year  a  charitable   remainder  trust  (or  one  of  certain  other  tax-exempt
shareholders, such as the United States, a state or political subdivision, or an
agency or instrumentality  thereof, and certain energy cooperatives) is a record
holder of a share in a fund that recognizes  "excess inclusion income," then the
fund will be subject to a tax equal to that  portion  of its  "excess  inclusion
income" for the taxable year that is allocable to such shareholders,  multiplied
by the highest  federal income tax rate imposed on  corporations.  The extent to
which  this


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<PAGE>

IRS guidance  remains  applicable in light of the December 2006  legislation  is
unclear.  To the  extent  permitted  under  the 1940  Act,  a Fund may  elect to
specially allocate any such tax to the applicable charitable remainder trust, or
other shareholder, and thus reduce such shareholder's distributions for the year
by the amount of the tax that  relates  to such  shareholder's  interest  in the
Fund. The Funds have not yet determined whether such an election will be made.

Special rules apply to distributions to foreign shareholders from a Fund that is
either a "U.S.  real  property  holding  corporation"  ("USRPHC")  or would be a
USRPHC but for the operation of certain  exceptions to the  definition  thereof.
Additionally,  special  rules  apply to the sale of  shares  in a Fund that is a
USRPHC. Very generally,  a USRPHC is a domestic corporation that holds U.S. real
property interests  ("USRPIs") -- defined very generally in turn as any interest
in U.S. real property or any equity  interest in a USRPHC - when the fair market
value of a  corporations  USRPIs  equals or  exceeds  50% of the sum of the fair
market values of the  corporation's  USRPIs,  interests in real property located
outside the United States and other assets combined. A Fund that holds (directly
or indirectly) significant interests in REITs may be a USRPHC. The special rules
discussed  below  will also apply to  distributions  from a Fund that would be a
USRPHC absent  exclusions from USRPI treatment for (1) interests in domestically
controlled  REITs  and (2)  not-greater-than-5%  interests  in  publicly  traded
classes of stock in REITs.

In the  case of  Funds  that  would  be  USRPHCs  but  for  the  above-mentioned
exceptions  from the definition of USRPIs,  amounts the Fund receives from REITs
derived from gains realized from USRPIs will retain their character as USRPIs in
the hands of the Fund's foreign  shareholders (as will any direct USRPI gain the
Fund recognizes).  In the hands of a foreign shareholder that holds (or has held
in the prior  year) more than a 5% interest in the Fund,  such  amounts  will be
treated as gains  "effectively  connected" with the conduct of a "U.S.  trade or
business" subject to tax at graduated rates. Moreover, such shareholders will be
required  to file a U.S.  income  tax  return  for the year in which the gain is
recognized  and the Fund will be required to withhold  35% of the amount of such
distribution.  In the case of all other foreign shareholders (i.e., those with a
5%-or-smaller  interest in the Fund), the USRPI  distribution will be treated as
ordinary   income   (regardless  of  any  designation  by  the  Fund  that  such
distribution  is a Capital  Gain  Dividend),  and the Fund will be  required  to
withhold  30%  (or a  lower  applicable  treaty  rate)  of  the  amount  of  the
distribution  paid to such foreign  shareholder.  Foreign  shareholders  of such
funds are also  subject to "wash  sale" rules to prevent  the  avoidance  of the
tax-filing and -payment  obligations  discussed in the above paragraphs  through
the sale and repurchase of Fund shares.

In addition, a Fund that is a USRPHC must withhold 10% of the amount realized in
a redemption by a greater-than-5% foreign shareholder, and that shareholder must
file a U.S.  income tax return for the year of the  disposition of the USRPI and
pay any additional tax due on the gain. Prior to January 1, 2008, no withholding
generally is required  with respect to amounts paid in redemption of shares of a
Fund that is a USRPHC  and is also  domestically  controlled.  As of the date of
this filing, it is not clear that this exception will be extended by Congress.

Backup  Withholding.  Under  the  backup  withholding  provisions  of the  Code,
redemption  proceeds as well as  distributions  may be subject to federal income
tax withholding for certain shareholders,  including those who fail to furnish a
Fund with their taxpayer  identification  numbers and certifications as to their
tax status.

Non-US  Shareholders.  Capital Gain Dividends will not be subject to withholding
of federal income tax. In general, dividends (other than Capital Gain Dividends)
paid by each Fund to a shareholder  that is not a "US person" within the meaning
of the Code (such shareholder, a "foreign person") are subject to withholding of
US federal income tax at a rate of 30% (or lower applicable treaty rate) even if
they are  funded by  income or gains  (such as  portfolio  interest,  short-term
capital gains, or foreign-source  dividend and interest income) that, if paid to
a  foreign  person  directly,  would not be  subject  to  withholding.  However,
effective for taxable years of a Fund  beginning  before  January 1, 2008,  each
Fund  will  not be  required  to  withhold  any  amounts  (i)  with  respect  to
distributions  (other than  distributions  to a foreign  person (w) that has not
provided a satisfactory  statement that the beneficial owner is not a US person,
(x) to the extent that the dividend is  attributable  to certain  interest on an
obligation if the foreign  person is the issuer or is a 10%  shareholder  of the
issuer,  (y) that is within  certain  foreign  countries  that  have  inadequate
information  exchange with the United States,  or (z) to the extent the dividend
is  attributable  to interest  paid by a person that is a related  person of the
foreign person and the foreign person is a controlled foreign  corporation) from
US-source  interest income that, in general,  would not be subject to US federal
income tax if earned  directly by an individual  foreign  person,  to the extent
such  distributions are properly  designated by each Fund, and (ii) with respect

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to distributions  (other than  distributions to an individual foreign person who
is present in the United States for a period or periods  aggregating 183 days or
more during the year of the  distribution)  of net  short-term  capital gains in
excess of net long-term  capital losses,  to the extent such  distributions  are
properly designated by the Fund. Depending on the circumstances, a Fund may make
such designations with respect to all, some or none of its potentially  eligible
dividends  and/or treat such  dividends,  in whole or in part, as ineligible for
this  exemption  from  withholding.  In order to qualify for this exemption from
withholding,  a foreign person will need to comply with applicable certification
requirements relating to its non-US status (including, in general, furnishing an
IRS Form  W-8BEN or  substitute  Form).  In the case of shares  held  through an
intermediary, the intermediary may withhold even if the Fund makes a designation
with respect to a payment.  Foreign persons should contact their  intermediaries
with respect to the application of these rules to their accounts.

If a  beneficial  holder who is a foreign  person has a trade or business in the
United States,  and the dividends are effectively  connected with the conduct by
the beneficial holder of a trade or business in the United States,  the dividend
will be subject to US federal net income taxation at regular income tax rates.

Tax Shelter Reporting Regulations.  Under Treasury regulations, if a shareholder
recognizes a loss with  respect to a Fund's  shares of $2 million or more for an
individual shareholder or $10 million or more for a corporate  shareholder,  the
shareholder must file with the Internal  Revenue Service a disclosure  statement
on Form 8886.  Direct  shareholders  of portfolio  securities  are in many cases
excepted  from  this  reporting   requirement,   but  under  current   guidance,
shareholders of a regulated investment company are not excepted. Future guidance
may extend the current exception from this reporting requirement to shareholders
of  most  or all  regulated  investment  companies.  The  fact  that  a loss  is
reportable under these  regulations  does not affect the legal  determination of
whether the  taxpayer's  treatment  of the loss is proper.  Shareholders  should
consult their tax advisors to determine the  applicability of these  regulations
in light of their individual circumstances.

Other Tax Considerations.  Shareholders of each Fund may be subject to state and
local taxes on  distributions  received from the Fund and on  redemptions of the
Fund's shares.

Investors  are advised to consult  their own tax advisors  with respect to their
own circumstances  regarding the above-referenced  federal income taxation rules
and with respect to other federal,  state,  local or foreign tax consequences to
them of an investment in shares of a Fund.





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                                       75
<PAGE>




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                                 NET ASSET VALUE

The net  asset  value of  shares  of each  Fund is  computed  as of the close of
regular trading on the New York Stock Exchange (the  "Exchange") on each day the
Exchange is open for trading (the "Value Time"). The Exchange is scheduled to be
closed on the following  holidays:  New Year's Day, Dr. Martin Luther King,  Jr.
Day,  Presidents'



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<PAGE>

Day, Good Friday,  Memorial Day,  Independence Day, Labor Day,  Thanksgiving and
Christmas,  and on the preceding  Friday or subsequent  Monday when one of these
holidays falls on a Saturday or Sunday, respectively.  Net asset value per share
is determined  separately  for each class of shares by dividing the value of the
total  assets of the Fund  attributable  to the shares of that  class,  less all
liabilities  attributable  to that class,  by the total number of shares of that
class  outstanding.  The per  share net  asset  value  may be lower for  certain
classes of the Fund because of higher expenses borne by these classes.

An equity  security is valued at its most  recent  sale price on the  security's
primary  exchange  or  over-the-counter  ("OTC")  market as of the  Value  Time.
Lacking any sales,  the  security is valued at the  calculated  mean between the
most recent bid quotation and the most recent asked  quotation (the  "Calculated
Mean")  on such  exchange  or OTC  market  as of the  Value  Time.  If it is not
possible to determine the  Calculated  Mean,  the security is valued at the most
recent bid quotation on such exchange or OTC market as of the Value Time. In the
case of certain foreign exchanges or OTC markets,  the closing price reported by
the exchange or OTC market  (which may sometimes be referred to as the "official
close" or the "official closing price" or other similar term) will be considered
the most recent sale price.  If a security is traded on more than one  exchange,
or upon one or more  exchanges and in the OTC market,  quotations are taken from
the market in which the security is traded most extensively.

Debt securities are valued as follows.  Money market instruments  purchased with
an  original or  remaining  maturity  of 60 days or less,  maturing at par,  are
valued at amortized  cost.  Other money market  instruments  are valued based on
information  obtained from an approved  pricing agent or, if such information is
not readily  available,  by using  matrix  pricing  techniques  (formula  driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an approved  pricing agent (which are intended to reflect the
mean between the bid and asked prices), if available,  and otherwise at the mean
of the most recent bid and asked quotations or evaluated  prices, as applicable,
based  on   quotations   or  evaluated   prices   obtained   from  one  or  more
broker-dealers.  Privately  placed  debt  securities,  other than Rule 144A debt
securities,  initially are valued at cost and  thereafter  based on all relevant
factors  including  type  of  security,  size of  holding  and  restrictions  on
disposition.  Municipal  debt  securities  are valued at prices  supplied  by an
approved  pricing  agent (which are intended to reflect the mean between the bid
and asked  prices),  if available,  and otherwise at the mean of the most recent
bid and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities not addressed above are valued at prices supplied by an approved
pricing agent,  if available,  and otherwise at the most recent bid quotation or
evaluated price, as applicable, obtained from one or more broker-dealers.  If it
is not  possible  to value a  particular  debt  security  pursuant  to the above
methods,  the  security  is valued on the basis of  factors  including  (but not
limited to) maturity, coupon,  creditworthiness,  currency denomination, and the
movement of the market in which the security is normally traded.

An exchange-traded option contract on securities, currencies and other financial
instruments  is  valued  at its most  recent  sale  price  on such the  relevant
exchange.  Lacking any sales,  the option  contract is valued at the  Calculated
Mean.  If it is not  possible  to  determine  the  Calculated  Mean,  the option
contract is valued at the most recent bid  quotation  in the case of a purchased
option  contract or the most  recent  asked  quotation  in the case of a written
option  contract,  in each case as of the Value  Time.  An  option  contract  on
securities,  currencies and other financial instruments traded in the OTC market
is valued on the Value Date at the evaluated price provided by the broker-dealer
with which it was traded.  Futures contracts (and options thereon) are valued at
the most recent  settlement  price,  if  available,  on the  security's  primary
exchange on which they are traded most extensively.  With the exception of stock
index futures contracts which trade on the Chicago Mercantile Exchange,  closing
settlement  times  are  prior to the  close  of  trading  on the New York  Stock
Exchange.  For  stock  index  futures  contracts  which  trade  on  the  Chicago
Mercantile  Exchange,  closing  settlement  prices  are  normally  available  at
approximately  4:20 pm Eastern time. If no  settlement  price is available,  the
last traded price on such  exchange will be used.  Following  the  valuations of
securities  or other  portfolio  assets  in terms of the  currency  in which the
market  quotation  used is  expressed  ("Local  Currency"),  the  value of these
portfolio  assets in terms of US dollars is calculated  by converting  the Local
Currency  into  US  dollars  at the  prevailing  currency  exchange  rate on the
valuation date.

If market  quotations  for a portfolio  asset are not readily  available  or the
value of a portfolio  asset as  determined  in  accordance  with Board  approved
procedures does not represent the fair market value of the portfolio  asset, the
value of the portfolio asset is taken to be an amount which, in the opinion of a
Fund's Pricing Committee (or, in some cases, the Board's  Valuation  Committee),
represents fair market value.  The value of other portfolio  holdings owned by a
Fund is  determined  in a manner  which is intended  to fairly  reflect the fair
market value of the asset on the


                                       78
<PAGE>

valuation date,  based on valuation  procedures  adopted by the Fund's Board and
overseen primarily by the Fund's Pricing Committee.


                             DIRECTORS AND OFFICERS

The following table presents certain information  regarding the Board Members of
each Corporation.  Each Board Member's year of birth is set forth in parentheses
after his or her name. Unless otherwise noted, (i) each Board Member has engaged
in the principal  occupation(s)  noted in the table for at least the most recent
five years, although not necessarily in the same capacity,  and (ii) the address
of each Board Member that is not an "interested  person" (as defined in the 1940
Act) of each  Corporation or the Advisor (each, an "Independent  Board Member"),
is c/o Dawn-Marie  Driscoll,  PO Box 100176,  Cape Coral, FL 33904.  The term of
office  for each  Board  Member is until the  election  and  qualification  of a
successor,  or until such Board Member  sooner dies,  resigns,  is removed or as
otherwise provided in the governing  documents of each Corporation.  Because the
Fund does not hold an annual  meeting of  shareholders,  each Board  Member will
hold office for an  indeterminate  period.  The Board  Members may also serve in
similar capacities with other funds in the DWS fund complex.

Independent Board Members

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each                                                                      Number of Funds
 Corporation and Length    Business Experience and                                       in DWS Fund
 of Time Served            Directorships During the Past 5 Years                         Complex Overseen
------------------------------------------------------------------------------------------------------------
<S>                              <C>                                                             <C>
Dawn-Marie Driscoll (1946) President, Driscoll Associates (consulting firm); Executive           76
Chairperson since 2004     Fellow, Center for Business Ethics, Bentley College;
Board Member since         formerly, Partner, Palmer & Dodge (1988-1990); Vice
1987                       President of Corporate Affairs and General Counsel, Filene's
                           (1978-1988). Directorships: Trustee of 8 open-end mutual
                           funds managed by Sun Capital Advisers, Inc. (since 2007);
                           Director of ICI Mutual Insurance Company (since 2007);
                           Advisory Board, Center for Business Ethics, Bentley College;
                           Trustee, Southwest Florida Community Foundation (charitable
                           organization); Former Directorships: Investment Company
                           Institute (audit, executive, nominating committees) and
                           Independent Directors Council (governance, executive
                           committees)
------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr.      Vice Chair, WGBH Educational Foundation. Directorships:               76
 (1943)                    Association of Public Television Stations; Becton Dickinson
 Board Member since        and Company(1) (medical technology company); Belo
 1990                      Corporation(1) (media company); Boston Museum of Science;
                           Public Radio International. Former Directorships: American
                           Public Television; Concord Academy; New England Aquarium;
                           Mass. Corporation for Educational Telecommunications;
                           Committee for Economic Development; Public Broadcasting
                           Service
------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)        Managing General Partner, Exeter Capital Partners (a series           76
Board Member since         of private equity funds). Directorships: Progressive Holding
1996                       Corporation (kitchen goods importer and distributor);
                           Natural History, Inc. (magazine publisher); Box Top Media
                           Inc. (advertising); The Kennel Shop (retailer)
------------------------------------------------------------------------------------------------------------



                                       79
<PAGE>

------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each                                                                      Number of Funds
 Corporation and Length    Business Experience and                                       in DWS Fund
 of Time Served            Directorships During the Past 5 Years                         Complex Overseen
------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss        Clinical Professor of Finance, NYU Stern School of Business           76
(1945)                     (1997-present); Member, Finance Committee, Association for
Board Member since         Asian Studies (2002-present); Director, Mitsui Sumitomo
2005                       Insurance Group (US) (2004-present); prior thereto, Managing
                           Director, J.P. Morgan (investment banking firm) (until 1996)
------------------------------------------------------------------------------------------------------------
Martin J. Gruber           Nomura Professor of Finance, Leonard N. Stern School of               76
(1937)                     Business, New York University (since September 1965);
Board Member since         Director, Japan Equity Fund, Inc. (since January 1992), Thai
2006                       Capital Fund, Inc. (since January 2000), Singapore Fund,
                           Inc. (since January 2000), National Bureau of Economic
                           Research (since January 2006). Formerly, Trustee, TIAA
                           (pension funds) (January 1996-January 2000); Trustee, CREF
                           and CREF Mutual Funds (January 2000-March 2005); Chairman,
                           CREF and CREF Mutual Funds (February 2004-March 2005); and
                           Director, S.G. Cowen Mutual Funds (January 1985-January 2001)
------------------------------------------------------------------------------------------------------------
Richard J. Herring         Jacob Safra Professor of International Banking and                    76
(1946)                     Professor, Finance Department, The Wharton School,
Board Member since         University of Pennsylvania (since July 1972); Co-Director,
2006                       Wharton Financial Institutions Center (since July 2000);
                           Director, Japan Equity Fund, Inc. (since September 2007),
                           Thai Capital Fund, Inc. (since September 2007), Singapore
                           Fund, Inc. (since September 2007). Formerly, Vice Dean and
                           Director, Wharton Undergraduate Division (July 1995-June
                           2000); Director, Lauder Institute of International
                           Management Studies (July 2000-June 2006)
------------------------------------------------------------------------------------------------------------
Graham E. Jones            Senior Vice President, BGK Realty, Inc. (commercial real              76
(1933)                     estate) (since 1995). Formerly, Trustee of various
Board Member since         investment companies managed by Sun Capital Advisors, Inc.
2006                       (1998-2005), Morgan Stanley Asset Management (1985-2001) and
                           Weiss, Peck and Greer (1985-2005)
------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel           President and Chief Executive Officer, The Pew Charitable             76
(1951)                     Trusts (charitable organization) (1994 to present); Trustee,
Board Member since         Thomas Jefferson Foundation (charitable organization) (1994
2006                       to present); Trustee, Executive Committee, Philadelphia
                           Chamber of Commerce (2001 to present). Formerly, Executive
                           Vice President, The Glenmede Trust Company (investment trust
                           and wealth management) (1983 to 2004); Board Member,
                           Investor Education (charitable organization) (2004-2005);
                           Director, Viasys Health Care(1) (January 2007-June 2007)
------------------------------------------------------------------------------------------------------------
Philip Saunders, Jr.       Principal, Philip Saunders Associates (economic and                   74
(1935)                     financial consulting) (since November 1988).  Formerly,
Board Member since         Director, Financial Industry Consulting, Wolf & Company
2006                       (consulting) (1987-1988); President, John Hancock Home
                           Mortgage Corporation (1984-1986); Senior Vice President of
                           Treasury and Financial Services, John Hancock Mutual Life
                           Insurance Company, Inc. (1982-1986)
------------------------------------------------------------------------------------------------------------


                                       80
<PAGE>

------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each                                                                      Number of Funds
 Corporation and Length    Business Experience and                                       in DWS Fund
 of Time Served            Directorships During the Past 5 Years                         Complex Overseen
------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.     Private investor since October 2003; Trustee of 8 open-end            76
(1946)                     mutual funds managed by Sun Capital Advisers, Inc. (since
Board Member since         October 1998). Formerly, Pension & Savings Trust Officer,
2006                       Sprint Corporation(1) (telecommunications) (November
                           1989-September 2003)
------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg     Retired. Formerly, Consultant (1997-2001); Director, US               76
(1943)                     Government Accountability Office (1996-1997); Partner,
Board Member since         Fulbright & Jaworski, L.L.P. (law firm) (1978-1996).
1997                       Directorships: The William and Flora Hewlett Foundation;
                           Service Source, Inc. Former Directorships: Mutual Fund
                           Directors Forum (2002-2004), American Bar Retirement
                           Association (funding vehicle for retirement plans)
                           (1987-1990 and 1994-1996)
------------------------------------------------------------------------------------------------------------
Carl W. Vogt               Retired Senior Partner, Fulbright & Jaworski, L.L.P. (law             74
(1936)                     firm); formerly, President (interim) of Williams College
Board Member since         (1999-2000); formerly, President of certain funds in the
2002                       Deutsche Asset Management family of funds (formerly, Flag
                           Investors family of funds) (registered investment companies)
                           (1999-2000). Directorships: Yellow Corporation (trucking);
                           American Science & Engineering (x-ray detection equipment).
                           Former Directorships: ISI Family of Funds (registered
                           investment companies, 4 funds overseen); National Railroad
                           Passenger Corporation (Amtrak) Waste Management, Inc. (solid
                           waste disposal); formerly, Chairman and Member, National
                           Transportation Safety Board
------------------------------------------------------------------------------------------------------------

Interested Board Member

------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each                                                                      Number of Funds
 Corporation and Length    Business Experience and                                       in DWS Fund
 of Time Served            Directorships During the Past 5 Years                         Complex Overseen
------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(2)         Managing Director(4), Deutsche Asset Management; Head of              82
 (1958)                    Deutsche Asset Management Americas; CEO of DWS Scudder;
 Board Member since        formerly board member of DWS Investments, Germany
 2006                      (1999-2005); formerly, Head of Sales and Product Management
                           for the Retail and Private Banking Division of Deutsche Bank
                           in Germany (1997-1999); formerly, various strategic and
                           operational positions for Deutsche Bank Germany Retail and
                           Private Banking Division in the field of investment funds,
                           tax driven instruments and asset management for corporates
                           (1989-1996)
------------------------------------------------------------------------------------------------------------

                                       81
<PAGE>

Officers(3)

------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with each
 Corporation and Length     Business Experience and
 of Time Served             Directorships During the Past 5 Years
------------------------------------------------------------------------------------------------------------
 Michael G. Clark(5)        Managing Director(4), Deutsche Asset Management (2006-present); President of
 (1965)                     DWS family of funds; Director, ICI Mutual Insurance Company (since
 President, 2006-present    October 2007); formerly, Director of Fund Board Relations (2004-2006) and
                            Director of Product Development (2000-2004), Merrill Lynch Investment
                            Managers; Senior Vice President Operations, Merrill Lynch Asset Management
                            (1999-2000)
------------------------------------------------------------------------------------------------------------
 John Millette(6) (1962)    Director(4), Deutsche Asset Management
 Vice President and
 Secretary, 1999-present
------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(5)        Managing Director(4), Deutsche Asset Management (since July 2004); formerly,
 (1963)                     Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family
 Chief Financial Officer,   of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at
 2004-present               UBS Global Asset Management (1994-1998)
 Treasurer, 2005-present
------------------------------------------------------------------------------------------------------------
 Patricia DeFilippis(5)     Vice President, Deutsche Asset Management (since June 2005); Counsel, New
 (1963)                     York Life Investment Management LLC (2003-2005); legal associate, Lord,
 Assistant Secretary,       Abbett & Co. LLC (1998-2003)
 2005-present
------------------------------------------------------------------------------------------------------------
 Elisa D. Metzger(5)        Director(4), Deutsche Asset Management (since September 2005); Counsel,
 (1962)                     Morrison and Foerster LLP (1999-2005)
 Assistant Secretary,
 2005-present
------------------------------------------------------------------------------------------------------------
 Caroline Pearson(6)        Managing Director(4), Deutsche Asset Management
 (1962)
 Assistant Secretary,
 1997-present
------------------------------------------------------------------------------------------------------------
 Paul Antosca(6)            Director(4), Deutsche Asset Management (since 2006); Vice President, The
 (1957)                     Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
------------------------------------------------------------------------------------------------------------
 Kathleen Sullivan          Director(4), Deutsche Asset Management
 D'Eramo(6)
 (1957)
 Assistant Treasurer,
 2003-present
------------------------------------------------------------------------------------------------------------
 Jason Vazquez(5) (1972)    Vice President, Deutsche Asset Management (since 2006); formerly, AML
 Anti-Money Laundering      Operations Manager for Bear Stearns (2004-2006), Supervising Compliance
 Compliance Officer,        Principal and Operations Manager for AXA Financial (1999-2004)
 2007-present
------------------------------------------------------------------------------------------------------------
 Robert Kloby(5) (1962)     Managing Director(4), Deutsche Asset Management (2004-present); formerly,
 Chief Compliance           Chief Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice
 Officer, 2006-present      President, The Prudential Insurance Company of America (1988-2000); E.F.
                            Hutton and Company (1984-1988)
------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(5)  Director(4), Deutsche Asset Management (2006-present); formerly, Director,
 (1951)                     Senior Vice President, General Counsel, and Assistant Secretary, Hansberger
 Chief Legal Officer,       Global Investors, Inc. (1996-2006); Director, National Society of Compliance
 2006-present               Professionals (2002-2005) (2006-2009)
------------------------------------------------------------------------------------------------------------
</TABLE>


                                       82
<PAGE>

(1)      A publicly held company with securities  registered pursuant to Section
         12 of the Securities Exchange Act of 1934.

(2)      The  mailing  address  of Axel  Schwarzer  is c/o  Deutsche  Investment
         Management  Americas Inc.,  345 Park Avenue,  New York, New York 10154.
         Mr.  Schwarzer is an interested Board Member by virtue of his positions
         with Deutsche Asset Management.  As an interested person, Mr. Schwarzer
         receives no compensation from the Funds.

(3)      As a result of their respective positions held with the Advisor,  these
         individuals are considered  "interested  persons" of the Advisor within
         the meaning of the 1940 Act. Interested persons receive no compensation
         from the Funds.

(4)      Executive title, not a board directorship.

(5)      Address:  345 Park Avenue, New York, New York 10154.

(6)      Address: Two International Place, Boston, Massachusetts 02110.

Each Officer also holds  similar  positions for other  investment  companies for
which DIMA or an affiliate serves as the advisor.

Officer's Role with Principal Underwriter:  DWS Scudder Distributors, Inc.

 Paul H. Schubert:                         Vice President
 Caroline Pearson:                         Secretary

Information Concerning Committees and Meetings of Board Members

The Board of the  Corporation  met ten (10) times during the calendar year ended
December 31, 2006 and each Board Member attended at least 80% of the meetings of
the Board and meetings of the committees of the Board on which such Board Member
served.

Board  Committees.  Ms.  Driscoll  has served as Chair of the Board of the Funds
since June 2004.

The Board has established the following  standing  committees:  Audit Committee,
Nominating/Corporate Governance Committee, Valuation Committee, Equity Oversight
Committee, Fixed Income Oversight Committee,  Marketing/Distribution/Shareholder
Service Committee,  Legal/Regulatory/Compliance Committee and Expense/Operations
Committee.

The Audit  Committee  assists the Board in  fulfilling  its  responsibility  for
oversight of the quality and integrity of the accounting, auditing and financial
reporting  practices  of the  applicable  Fund.  It also  makes  recommendations
regarding the selection of an independent  registered public accounting firm for
a Fund,  reviews the  independence of such firm,  reviews the scope of audit and
internal  controls,  considers and reports to the Board on matters relating to a
Fund's  accounting and financial  reporting  practices,  and performs such other
tasks as the full Board deems  necessary  or  appropriate.  The Audit  Committee
receives  annual   representations   from  the  independent   registered  public
accounting firm as to its  independence.  The members of the Audit Committee are
Keith R. Fox (Chair and Audit Committee Financial Expert),  Kenneth C. Froewiss,
Richard J. Herring,  Graham E. Jones,  Philip Saunders,  Jr., William N. Searcy,
Jr. and Jean  Gleason  Stromberg.  The Audit  Committee  held eight (8) meetings
during the calendar year 2006.

The  Nominating/Corporate  Governance  Committee  (i)  recommends  to the  Board
candidates  to serve as Board  Members and (ii)  oversees  and, as  appropriate,
makes  recommendations  to the Board  regarding  other  fund  governance-related
matters,  including but not limited to Board compensation practices,  retirement
policies,  self-evaluations  of effectiveness,  review of possible  conflicts of
interest  and  independence  issues  involving  Board


                                       83
<PAGE>

Members,  allocations of  assignments  and functions of committees of the Board,
and share ownership policies. The members of the Nominating/Corporate Governance
Committee are Henry P. Becton,  Jr. (Chair),  Graham E. Jones,  Rebecca W. Rimel
and  Jean  Gleason  Stromberg.  The  Nominating/Corporate  Governance  Committee
(previously  known as the  Committee on  Independent  Directors)  held three (3)
meetings during the calendar year 2006.

The Valuation  Committee  oversees Fund  valuation  matters,  reviews  valuation
procedures  adopted  by the  Board,  determines  the fair  value  of the  Fund's
securities as needed in accordance  with the valuation  procedures  and performs
such other tasks as the full Board deems necessary or  appropriate.  The members
of the Valuation  Committee  are Keith R. Fox,  Kenneth C.  Froewiss,  Martin J.
Gruber,  Richard J. Herring and Philip Saunders,  Jr. (Chair).  On behalf of DWS
Global  Thematic Fund, the Valuation  Committee held eleven  meetings during the
calendar year 2006. On behalf of DWS International Fund, the Valuation Committee
held 3 meetings during the calendar year 2006.

The Board has established two Investment Oversight  Committees,  one focusing on
Funds  primarily   investing  in  equity   securities  (the  "Equity   Oversight
Committee")  and one  focusing  on Funds  primarily  investing  in fixed  income
securities  (the "Fixed Income  Oversight  Committee").  These  Committees  meet
regularly with Fund portfolio managers and other investment  personnel to review
the relevant  Funds'  investment  strategies  and  investment  performance.  The
members of the Equity  Oversight  Committee are Henry P. Becton,  Jr., Martin J.
Gruber (Chair),  Richard J. Herring,  Rebecca W. Rimel, Philip Saunders, Jr. and
Carl W. Vogt. The members of the Fixed Income Oversight Committee are Dawn-Marie
Driscoll, Keith R. Fox, Kenneth C. Froewiss, Graham E. Jones, William N. Searcy,
Jr. (Chair) and Jean Gleason Stromberg. Each Investment Oversight Committee held
six (6) meetings during the calendar year 2006.

The  Marketing/Distribution/Shareholder   Service  Committee  oversees  (i)  the
quality, costs and types of shareholder services provided to the Funds and their
shareholders,  and (ii) the distribution-related  services provided to the Funds
and their  shareholders.  The members of the  Marketing/Distribution/Shareholder
Service Committee are Martin J. Gruber,  Richard J. Herring (Chair),  Rebecca W.
Rimel,     Jean     Gleason     Stromberg     and    Carl    W.    Vogt.     The
Marketing/Distribution/Shareholder  Service  Committee  held  six  (6)  meetings
during the calendar year 2006.

The  Legal/Regulatory/Compliance  Committee  oversees (i) the significant  legal
affairs of the Funds, including the handling of pending or threatened litigation
or  regulatory  action  involving  the Funds,  (ii) general  compliance  matters
relating   to  the  Funds  and  (iii)   proxy   voting.   The   members  of  the
Legal/Regulatory/Compliance  Committee  are  Henry P.  Becton,  Jr.,  Dawn-Marie
Driscoll,  Rebecca W. Rimel,  William N. Searcy, Jr., Jean Gleason Stromberg and
Carl W. Vogt (Chair).  The  Legal/Regulatory/Compliance  Committee  held six (6)
meetings during the calendar year 2006.

The Expense/Operations Committee (i) monitors the Fund's total operating expense
levels,  (ii)  oversees the  provision of  administrative  services to the Fund,
including the Fund's custody,  fund accounting and insurance  arrangements,  and
(iii) reviews the Fund's investment advisers' brokerage practices, including the
implementation  of  related  policies.  The  members  of the  Expense/Operations
Committee are Henry P. Becton, Jr., Dawn-Marie  Driscoll,  Keith R. Fox, Kenneth
C.  Froewiss,  Graham E. Jones  (Chair),  Philip  Saunders,  Jr. and  William N.
Searcy,  Jr. This  committee  held seven (7) meetings  during the calendar  year
2006.

Ad Hoc Committees.  In addition to the standing committees described above, from
time to time the Board also forms ad hoc committees to consider specific issues.
In 2006,  various ad hoc  committees of the Board held an  additional  seven (7)
meetings.

Remuneration.  Each Independent Board Member receives compensation from the Fund
for his or her services, which includes an annual retainer and an attendance fee
for each meeting attended. No additional compensation is paid to any Independent
Board Member for travel time to meetings,  attendance at directors'  educational
seminars  or  conferences,   service  on  industry  or  association  committees,
participation  as speakers at directors'  conferences or service on special fund
industry director task forces or subcommittees. Independent Board Members do not
receive any employee  benefits such as pension or retirement  benefits or health
insurance from the Fund or any fund in the DWS fund complex.

                                       84
<PAGE>

Members of the Board who are officers,  directors,  employees or stockholders of
Deutsche Asset Management or its affiliates receive no direct  compensation from
a Fund, although they are compensated as employees of Deutsche Asset Management,
or its affiliates,  and as a result may be deemed to participate in fees paid by
the Funds.  The following tables show  compensation  from the Fund and aggregate
compensation  from all of the  funds in the DWS fund  complex  received  by each
Board Member during the calendar year 2006. Mr. Schwarzer became a member of the
Board on May 5,  2006,  is an  interested  person of the Funds and  received  no
compensation  from the  Funds or any fund in the DWS  fund  complex  during  the
relevant periods.

<TABLE>
<CAPTION>
                                 Aggregate Compensation                                    Total Compensation
                                from DWS Global Thematic    Aggregate Compensation           from Fund and
 Name of Board Member                    Fund            from DWS International Fund      DWS Fund Complex(1)
 --------------------                    ----            ---------------------------      -------------------
<S>                                        <C>                       <C>                        <C>
 Henry P. Becton, Jr.(3)                  $3,773                    $5,550                     $189,000
 Dawn-Marie Driscoll(2)(3)(4)             $4,987                    $7,343                     $251,000
 Keith R. Fox(3)(4)                       $3,851                    $5,669                     $195,000
 Kenneth C. Froewiss(3)(4)                $3,983                    $5,851                     $234,988
 Martin J. Gruber(3)                      $1,563                    $2,200                     $188,000
 Richard J. Herring(3)(4)                 $1,494                    $2,110                     $184,000
 Graham E. Jones(3)(4)                    $1,733                    $2,440                     $206,000
 Rebecca W. Rimel(3)                      $1,525                    $2,146                     $185,000
 Philip Saunders, Jr.(3)(4)               $1,733                    $2,440                     $207,000
 William N. Searcy, Jr.(3)(4)             $1,733                    $2,440                     $206,000
 Jean Gleason Stromberg(3)(4)             $3,970                    $5,837                     $202,000
 Carl W. Vogt(3)                          $3,773                    $5,550                     $189,000
</TABLE>

(1)      The DWS Fund Complex is composed of 155 funds as of December 31, 2006.

(2)      Includes  $50,000 in annual  retainer  fees in Ms.  Driscoll's  role as
         Chairperson of the Board.

(3)      For each Board Member,  except Mr. Becton,  Mr.  Froewiss and Mr. Vogt,
         total  compensation  for calendar year 2006 includes  compensation  for
         service  on  the  boards  of  34  trusts/corporations  comprised  of 87
         funds/portfolios.  For Messrs.  Becton and Vogt total  compensation for
         calendar year 2006 includes  compensation  for service on the boards of
         32  trusts/corporations  comprised  of  85  funds/portfolios.  For  Mr.
         Froewiss   total   compensation   for  calendar   year  2006   includes
         compensation  for  services  on the  boards  of 37  trusts/corporations
         comprised of 90 funds/portfolios.

(4)      Aggregate  compensation  includes amounts paid to the Board Members for
         special  meetings of ad hoc committees of the board in connection  with
         the  possible  consolidation  of the various DWS Fund boards and funds,
         meetings for considering fund expense simplification  initiatives,  and
         consideration  of issues  specific  to the Funds'  direct  shareholders
         (i.e., those shareholders who did not purchase shares through financial
         intermediaries).  Such amounts totaled $16,000 for Ms. Driscoll, $1,000
         for Mr. Fox, $17,000 for Mr. Froewiss,  $1,000 for Dr. Herring, $16,000
         for Mr.  Jones,  $17,000 for Dr.  Saunders,  $16,000 for Mr. Searcy and
         $16,000  for Ms.  Stromberg.  These  meeting  fees  were  borne  by the
         applicable DWS Funds.

Board Member Ownership in the Fund(1)

The  following  table shows the dollar range of equity  securities  beneficially
owned by each Board  Member in the Funds and DWS Fund Complex as of December 31,
2006.


                                       85
<PAGE>

<TABLE>
<CAPTION>
                                                                   Dollar Range of       Aggregate Dollar Range of
                                         Dollar Range of        Beneficial Ownership       Ownership in all Funds
                                     Beneficial Ownership in    in DWS International    Overseen by Board Member in
Board Member                         DWS Global Thematic Fund           Fund              the DWS Fund Complex(2)
------------                         ------------------------           ----              -----------------------

Independent Board Member:
-------------------------

<S>                                               <C>                  <C>                            <C>
Henry P. Becton, Jr.                     $10,001-$50,000              $1-$10,000                Over $100,000
Dawn-Marie Driscoll                      $10,001-$50,000              $1-$10,000                Over $100,000
Keith R. Fox                                   None              $10,001-$50,000                Over $100,000
Kenneth C. Froewiss                            None                         None                Over $100,000
Martin J. Gruber                               None                         None                Over $100,000
Richard J. Herring                       $50,001-$100,000                   None                Over $100,000
Graham E. Jones                                None                         None                Over $100,000
Rebecca W. Rimel                         $50,001-$100,000                   None                Over $100,000
Philip Saunders, Jr.                           None                Over $100,000                Over $100,000
William N. Searcy, Jr.                         None                         None                Over $100,000
Jean Gleason Stromberg                   $10,001-$50,000                    None                Over $100,000
Carl W. Vogt                               Over $100,000                    None                Over $100,000

Interested Board Member:
------------------------

Axel Schwarzer                           $10,001-$50,000             None                       Over $100,000
</TABLE>

(1)      The amount shown  includes  share  equivalents of funds which the Board
         Member  is  deemed  to be  invested  pursuant  to the  Fund's  deferred
         compensation   plan.  The  inclusion   therein  of  any  shares  deemed
         beneficially  owned does not  constitute  an  admission  of  beneficial
         ownership of the shares.

(2)      Securities  beneficially  owned as defined  under the 1934 Act  include
         direct and/or indirect ownership of securities where the Board Member's
         economic interest is tied to the securities,  employment  ownership and
         securities  when the Board  Member can exert  voting power and when the
         Board Member has  authority to sell the  securities.  The dollar ranges
         are:  None,   $1-$10,000,   $10,001-$50,000,   $50,001-$100,000,   over
         $100,000.

Ownership in Securities of the Advisor and Related Companies

As  reported to the Funds,  the  information  in the  following  table  reflects
ownership by the Independent Board Members and their immediate family members of
certain  securities as of December 31, 2006. An immediate family member can be a
spouse,  children  residing in the same  household  including  step and adoptive
children and any dependents.  The securities  represent ownership in the Advisor
or principal  underwriter  of the Fund and any persons  (other than a registered
investment company) directly or indirectly controlling,  controlled by, or under
common control with the Advisor or principal underwriter of the Funds (including
Deutsche Bank AG).

<TABLE>
<CAPTION>
                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----
<S>                                      <C>              <C>              <C>            <C>         <C>
Henry P. Becton, Jr.                                   None
Dawn-Marie Driscoll                                    None
Keith R. Fox                                           None
Kenneth C. Froewiss                                    None
Martin J. Gruber                                       None



                                       86
<PAGE>
                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----

Richard J. Herring                                     None
Graham E. Jones                                        None
Rebecca W. Rimel                                       None
Philip Saunders, Jr.                                   None
William N. Searcy, Jr.                                 None
Jean Gleason Stromberg                                 None
Carl W. Vogt                                           None

Securities Beneficially Owned

As of November 7, 2007, the Board Members and officers of the Corporation owned,
as a group, less than 1% of the outstanding shares of the Fund.

To the best of each Fund's knowledge, as of November 7, 2007, no person owned of
record or beneficially 5% or more of any class of the Fund's outstanding shares,
except as noted below.

DWS Global Thematic Fund


Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

CHARLES SCHWAB & CO INC                                     2,973,284.3220                  7.33 % of Class S
REINVEST ACCOUNT
SAN FRANCISCO CA  94104-4151

DWS International Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

CHARLES SCHWAB & CO INC                                     3,621,947.1360                 12.95 % of Class S
SAN FRANCISCO CA  94104-4151
</TABLE>

Agreement to Indemnify Independent Directors for Certain Expenses.

In connection with litigation or regulatory  action related to possible improper
market timing or other improper trading activity or possible improper  marketing
and sales  activity  in the Funds,  each Fund's  investment  advisor has agreed,
subject to  applicable  law and  regulation,  to indemnify and hold harmless the
applicable  Funds  against  any and all loss,  damage,  liability  and  expense,
arising  from  market  timing or  marketing  and sales  matters  alleged  in any
enforcement actions brought by governmental authorities involving or potentially
affecting the Funds or the investment  advisor  ("Enforcement  Actions") or that
are the basis for private  actions  brought by shareholders of the Funds against
the Funds,  their directors and officers,  the Funds' investment  advisor and/or
certain other parties ("Private Litigation"), or any proceedings or actions that
may  be  threatened  or  commenced  in  the  future  by  any  person  (including
governmental authorities), arising from or similar to the matters alleged in the
Enforcement Actions or Private Litigation.  In recognition of its undertaking to
indemnify  the  applicable  Funds  and in  light of the  rebuttable  presumption
generally  afforded to independent  directors/trustees  of investment  companies
that they have not engaged in disabling conduct,  each Fund's investment advisor
has also agreed,  subject to  applicable  law and  regulation,  to indemnify the
applicable  Funds'  Independent   Directors  against  certain   liabilities  the
Independent  Directors  may incur from the  matters  alleged in any  Enforcement
Actions or Private  Litigation or arising from or similar to the matters alleged
in the Enforcement Actions or Private Litigation,  and advance expenses that may
be  incurred by the  Independent  Director in  connection  with any  Enforcement
Actions  or  Private  Litigation.  The


                                       87
<PAGE>

applicable   investment   advisor   is  not,   however,   required   to  provide
indemnification and advancement of expenses:  (1) with respect to any proceeding
or action with respect to which the applicable  Fund's Board determines that the
Independent  Director ultimately would not be entitled to indemnification or (2)
for any liability of the Independent Director to the Funds or their shareholders
to which the  Independent  Director  would  otherwise  be  subject  by reason of
willful  misfeasance,  bad faith,  gross negligence or reckless disregard of the
Independent  Director's  duties  as a  director  or  trustee  of  the  Funds  as
determined in a final  adjudication in such action or proceeding.  The estimated
amount of any  expenses  that may be advanced to the  Independent  Directors  or
indemnity  that may be  payable  under the  indemnity  agreements  is  currently
unknown.  These  agreements by each Fund's  investment  advisor will survive the
termination  of the  investment  management  agreements  between the  applicable
investment advisor and the Funds.





                                       88
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                                      105
<PAGE>



                                FUND ORGANIZATION

Organizational Description

DWS  Global  Thematic  Fund.  DWS  Global  Thematic  Fund  is a  series  of  DWS
Global/International  Fund,  Inc., a Maryland  corporation  organized on May 15,
1986. The name of this  Corporation  was changed,  effective May 29, 1998,  from
Scudder Global Fund, Inc. This  Corporation  currently  consists of four series:
DWS Global  Thematic Fund, DWS Global Bond Fund, DWS Global  Opportunities  Fund
and DWS Emerging Markets Fixed Income Fund. Each Fund except DWS Global Thematic
Fund is further  divided into four classes of shares,  Class S, Class A, Class B
and Class C shares.  DWS  Global  Thematic  Fund is  further  divided  into five
classes of shares: Class S, Class A, Class B, Class C and Class R.

The authorized capital stock of DWS Global/International  Fund, Inc. consists of
1,559,993,796  shares  with $0.01 par  value,  200  million  shares of which are
allocated  to DWS Global  Opportunities  Fund,  529,154,575  shares of which are
allocated to DWS Global Bond Fund, and 320 million shares of which are allocated
to DWS Emerging  Markets  Fixed Income Fund and 370 million  shares of which are
allocated to DWS Global Thematic Fund.


DWS International  Fund, Inc. DWS International  Fund, Inc. (the  "Corporation")
was organized as Scudder Fund of Canada Ltd. in Canada in 1953 by the investment
management firm of Scudder, Stevens & Clark, Inc. On March 16, 1964, the name of
this Corporation was changed to Scudder  International  Investments Ltd. On July
31,  1975,  the  corporate  domicile of this  Corporation  was changed to the US
through the transfer of its net assets to a newly formed  Maryland  corporation,
Scudder  International  Fund,  Inc.,  in exchange for shares of the  Corporation
which then were distributed to the shareholders of the Corporation.  On February
6, 2006,  the name of the  Corporation  was changed from  Scudder  International
Fund, Inc. to DWS International Fund, Inc.

The authorized capital stock of the Corporation consists of 2,447,923,888 shares
of a par value of $.01 each,  which  capital  stock has been  divided  into five
series:  DWS International  Fund, the original series;  DWS Latin America Equity
Fund,  organized in December 1992; DWS Europe Equity Fund,  organized in October
1994;  DWS  Emerging  Markets  Equity  Fund,  organized  in  May  1996  and  DWS
International  Value  Opportunities  Fund  organized  in July 2006.  Each series
consists of 320 million shares, except for DWS International Fund which consists
of  620,595,597  shares,  DWS Latin  America  Equity Fund which  consists of 340
million shares and DWS Europe Equity Fund which consists of 420 million  shares.
DWS  International  Value  Opportunities  Fund is divided  into four  classes of
shares: Class A, Class C, Class S and Institutional Class shares. Class S shares
of the Fund are offered through a separate statement of additional information.





                                      106
<PAGE>



The Corporation is a Maryland  corporation  organized under the laws of Maryland
and is governed  by Amended and  Restated  Articles of  Incorporation  that were
approved  by  shareholders  in the  second  quarter  of 2006,  as may be further
amended from time to time (the "Articles of  Incorporation").  All shares issued
and  outstanding  are  fully  paid  and  non-assessable,  transferable,  have no
pre-emptive  rights  (except as may be  determined by the Board of Directors) or
conversion rights (except as described below) and are redeemable as described in
the SAI and in the  Fund's  prospectus.  Each share has equal  rights  with each
other share of the same class of the Fund as to voting, dividends, exchanges and
liquidation.  Shareholders  are  entitled  to one vote for each  share  held and
fractional votes for fractional shares held.

The Board of Directors may  determine  that shares of the Fund or a class of the
Fund  shall be  automatically  converted  into  shares  of  another  Fund of the
Corporation  or of  another  class  of the  same or  another  Fund  based on the
relative net assets of such Fund or class at the time of  conversion.  The Board
of Directors  may also provide that the holders of shares of the Fund or a class
of the Fund shall have the right to convert or exchange their shares into shares
of one or more  other  Funds or  classes  on terms  established  by the Board of
Directors.

Each share of the  Corporation  may be subject to such sales  loads or  charges,
expenses and fees, account size  requirements,  and other rights and provisions,
which may be the same or different  from any other share of the  Corporation  or
any other share of any Fund or class of the Fund  (including  shares of the same
Fund or class as the share),  as the Board of Directors of the  Corporation  may
establish or change from time to time and to the extent permitted under the 1940
Act.

The Corporation is not required to hold an annual meeting of shareholders in any
year in which the  election of  Directors  is not required by the 1940 Act. If a
meeting of  shareholders  of the Corporation is required by the 1940 Act to take
action on the election of  Directors,  then an annual  meeting  shall be held to
elect  Directors  and take such other  action as may come  before  the  meeting.
Special meetings of the shareholders of the Corporation,  or of the shareholders
of one or more Funds or classes  thereof,  for any purpose or  purposes,  may be
called at any time by the Board of Directors or by the  President,  and shall be
called by the  President or Secretary at the request in writing of  shareholders
entitled to cast a majority of the votes entitled to be cast at the meeting.

Except as  provided in the 1940 Act,  the  presence in person or by proxy of the
holders  of  one-third  of the  shares  entitled  to  vote  at a  meeting  shall
constitute a quorum for the  transaction of business at meetings of shareholders
of the Corporation or of the Fund or class.

On any matter submitted to a vote of shareholders, all shares of the Corporation
entitled  to vote  shall be voted in the  aggregate  as a single  class  without
regard  to  series  or  classes  of  shares,  provided,  however,  that (a) when
applicable law requires that one or more series or classes vote separately, such
series or classes shall vote  separately  and,  subject to (b) below,  all other
series  or  classes  shall  vote in the  aggregate;  and (b) when  the  Board of
Directors determines that a matter does not affect the interests of a particular
series or class, such series or class shall not be entitled to any vote and only
the shares of the affected series or classes shall be entitled to vote.

Notwithstanding any provision of Maryland corporate law requiring  authorization
of any action by a greater  proportion  than a majority  of the total  number of
shares  entitled  to vote  on a  matter,  such  action  shall  be  effective  if
authorized by the majority vote of the outstanding shares entitled to vote.

Subject to the requirements of applicable law and any procedures  adopted by the
Board of Directors from time to time,  the holders of shares of the  Corporation
or any one or more  series or classes  thereof may take action or consent to any
action by delivering a consent, in writing or by electronic transmission, of the
holders entitled to cast not less than the minimum number of votes that would be
necessary to authorize or take the action at a formal meeting.

The Articles of  Incorporation  provide that the Board of Directors  may, in its
discretion,  establish  minimum  investment  amounts for  shareholder  accounts,
impose  fees on  accounts  that do not  exceed a minimum  investment


                                      107
<PAGE>

amount and  involuntarily  redeem  shares in any such account in payment of such
fees.  The  Board of  Directors,  in its sole  discretion,  also may  cause  the
Corporation to redeem all of the shares of the Corporation or one or more series
or classes held by any shareholder for any reason, to the extent  permissible by
the 1940 Act,  including (a) if the shareholder  owns shares having an aggregate
net  asset  value  of  less  than  a  specified  minimum  amount,   (b)  if  the
shareholder's  ownership  of  shares  would  disqualify  a series  from  being a
regulated  investment  company,  (c) upon a  shareholder's  failure  to  provide
sufficient  identification to permit the Corporation to verify the shareholder's
identity, (d) upon a shareholder's failure to pay for shares or meet or maintain
the  qualifications  for ownership of a particular  series or class,  (e) if the
Board of Directors  determines (or pursuant to policies established by the Board
of Directors it is determined)  that share  ownership by a shareholder is not in
the best interests of the remaining  shareholders,  (f) when the  Corporation is
requested or compelled to do so by governmental  authority or applicable law, or
(g) upon a shareholder's  failure to comply with a request for information  with
respect to the direct or indirect  ownership  of shares of the  Corporation.  By
redeeming  shares the  Corporation  may  terminate the Fund or any class without
shareholder approval,  and the Corporation may suspend the right of shareholders
to require the Corporation to redeem shares to the extent  permissible under the
1940 Act.  Payment for shares  redeemed shall be made in cash or other property,
or any combination thereof; provided,  however, that the composition of any such
payment (e.g., cash, securities and/or other assets) to any shareholder shall be
determined by the Corporation in its sole discretion, and may be different among
shareholders  (including  differences  among  shareholders  in the same  fund or
class).

Except  as  otherwise   permitted  by  the  Articles  of  Incorporation  of  the
Corporation,  upon liquidation or termination of the Fund or class, shareholders
of such Fund or class of the Fund  shall be  entitled  to  receive,  pro rata in
proportion to the number of shares of such Fund or class held by each of them, a
share of the net assets of such Fund or class,  and the holders of shares of any
other  particular Fund or class shall not be entitled to any such  distribution,
provided,  however,  that the  composition  of any  such  payment  (e.g.,  cash,
securities  and/or other assets) to any  shareholder  shall be determined by the
Corporation  in its sole  discretion,  and may be different  among  shareholders
(including differences among shareholders in the same Fund or class).

The  Corporation's  Board of Directors  supervises  the Fund's  activities.  The
Corporation  adopted  a plan  pursuant  to Rule  18f-3  under  the 1940 Act (the
"Plan") to permit the  Corporation  to establish a multiple  class  distribution
system for its funds.

Under the  Plan,  each  class of shares  will  represent  interests  in the same
portfolio of investments of the Series, and be identical in all respects to each
other class,  except as set forth below. The only differences  among the various
classes  of  shares  of  the  Series  will  relate   solely  to:  (a)  different
distribution fee payments or service fee payments associated with any Rule 12b-1
Plan  for a  particular  class  of  shares  and  any  other  costs  relating  to
implementing or amending such Rule 12b-1 Plan (including  obtaining  shareholder
approval of such Rule 12b-1 Plan or any amendment thereto),  which will be borne
solely by  shareholders  of such  class;  (b)  different  service  fee  payments
associated with a service plan for a specific class and any other costs relating
to implementing or amending such service plan; (c) different  account  minimums;
(d) the bearing by each class of its Class Expenses,  as defined below;  (e) the
voting  rights  related  to any Rule 12b-1 Plan  affecting  a specific  class of
shares; (f) separate exchange privileges;  (g) different conversion features and
(h) different class names and  designations.  Expenses  currently  designated as
"Class Expenses" by the Corporation's Board of Directors under the Plan include,
for example,  transfer agency fees  attributable to a specific class and certain
securities registration fees.

                             PROXY VOTING GUIDELINES

Each Fund has delegated proxy voting responsibilities to its investment advisor,
subject to its respective  Board's  general  oversight.  Each Fund has delegated
proxy voting to the Advisor  with the  direction  that  proxies  should be voted
consistent with the Fund's best economic interests.  The Advisor has adopted its
own  Proxy  Voting  Policies  and  Procedures  ("Policies"),  and  Proxy  Voting
Guidelines  ("Guidelines") for this purpose.  The Policies address,  among other
things, conflicts of interest that may arise between the interests of the Funds,
and the  interests  of the  Advisor  and its  affiliates,  including  the Funds'
principal  underwriter.  The Guidelines set forth the Advisor's general position
on various proposals, such as:

o        Shareholder  Rights -- The Advisor  generally  votes against  proposals
         that restrict shareholder rights.

                                      108
<PAGE>

o        Corporate  Governance -- The Advisor  generally votes for  confidential
         and cumulative voting and against supermajority voting requirements for
         charter and bylaw amendments. The Advisor generally votes for proposals
         to restrict a chief  executive  officer from serving on more than three
         outside  boards of  directors.  The  Advisor  generally  votes  against
         proposals  that  require a company  to  appoint  a  Chairman  who is an
         independent director.

o        Anti-Takeover Matters -- The Advisor generally votes for proposals that
         require shareholder ratification of poison pills or that request boards
         to redeem poison pills,  and votes against the adoption of poison pills
         if  they  are  submitted  for  shareholder  ratification.  The  Advisor
         generally votes for fair price proposals.

o        Compensation  Matters -- The Advisor generally votes for executive cash
         compensation  proposals,  unless they are unreasonably  excessive.  The
         Advisor generally votes against stock option plans that do not meet the
         Advisor's criteria.

o        Routine Matters -- The Advisor  generally votes for the ratification of
         auditors,  procedural matters related to the annual meeting and changes
         in company name, and against bundled proposals and adjournment.

The general provisions described above do not apply to investment companies. The
Advisor generally votes proxies solicited by investment  companies in accordance
with the  recommendations  of an  independent  third  party,  except for proxies
solicited by or with respect to investment companies for which the Advisor or an
affiliate  serves as investment  advisor or principal  underwriter  ("affiliated
investment companies").  The Advisor votes affiliated investment company proxies
in  the  same  proportion  as  the  vote  of  the  investment   company's  other
shareholders  (sometimes called "mirror" or "echo" voting).  Master fund proxies
solicited from feeder funds are voted in accordance with applicable requirements
of the Investment Company Act of 1940.

Although the  Guidelines  set forth the Advisor's  general  voting  positions on
various proposals,  the Advisor may,  consistent with the Fund's best interests,
determine under some circumstances to vote contrary to those positions.

The  Guidelines  on a  particular  issue  may or may  not  reflect  the  view of
individual members of the Board or of a majority of the Board. In addition,  the
Guidelines may reflect a voting position that differs from the actual  practices
of  the  public  companies  within  the  Deutsche  Bank  organization  or of the
investment  companies for which the Advisor or an affiliate serves as investment
advisor or sponsor.

The  Advisor  may  consider  the views of a portfolio  company's  management  in
deciding how to vote a proxy or in establishing general voting positions for the
Guidelines, but management's views are not determinative.

As mentioned above, the Policies  describe the way in which the Advisor resolves
conflicts  of  interest.  To  resolve  conflicts,   the  advisor,  under  normal
circumstances,  votes proxies in accordance with its Guidelines.  If the Advisor
departs  from  the  Guidelines  with  respect  to a  particular  proxy or if the
Guidelines do not specifically  address a certain proxy proposal, a proxy voting
committee established by the advisor will vote the proxy. Before voting any such
proxy,  however,  the  Advisor's  conflicts  review  committee  will  conduct an
investigation to determine whether any potential  conflicts of interest exist in
connection with the particular proxy proposal. If the conflicts review committee
determines  that the Advisor has a material  conflict  of  interest,  or certain
individuals on the proxy voting committee  should be recused from  participating
in a  particular  proxy vote,  it will  inform the proxy  voting  committee.  If
notified  that the Advisor has a material  conflict,  or fewer than three voting
members are eligible to  participate  in the proxy vote,  typically  the Advisor
will  engage an  independent  third  party to vote the proxy or follow the proxy
voting recommendations of an independent third party.

Under certain circumstances,  the Advisor may not be able to vote proxies or the
Advisor  may find that the  expected  economic  costs from voting  outweigh  the
benefits  associated with voting. For example,  the Advisor may not vote proxies
on certain foreign securities due to local restrictions or customs.  The Advisor
generally  does  not vote  proxies  on  securities  subject  to  share  blocking
restrictions.

                                      109
<PAGE>


You may  obtain  information  about  how a Fund  voted  proxies  related  to its
portfolio  securities  during the 12-month  period ended June 30 by visiting the
Securities and Exchange  Commission's Web site at www.sec.gov or by visiting our
Web site at:  www.dws-scudder.com  (click on "proxy voting" at the bottom of the
page).


                              FINANCIAL STATEMENTS


The financial statements,  including the portfolio of investments, of DWS Global
Thematic  Fund  and  DWS  International   Fund,  together  with  the  Report  of
Independent Registered Public Accounting Firm, Financial Highlights and notes to
financial statements in the Annual Report to the Shareholders of each Fund dated
August 31, 2007, are  incorporated  herein by reference and are hereby deemed to
be a part of this combined Statement of Additional Information.


                             ADDITIONAL INFORMATION

The CUSIP number of DWS Global Thematic Fund Class S is 233379759.

The CUSIP number of DWS International Fund Class S shares is 23337R817.

Each Fund has a fiscal year end of August 31.

This Statement of Additional  Information contains the information of DWS Global
Thematic  Fund and DWS  International  Fund.  Each Fund,  through  its  combined
prospectus,  offers only its own share classes, yet it is possible that one Fund
might become liable for a  misstatement  regarding the other Fund. The Directors
of each Fund have  considered  this, and have approved the use of this Statement
of Additional Information.

The Funds' prospectus and this Statement of Additional  Information omit certain
information  contained in the Registration  Statement which the Funds have filed
with the SEC under the  Securities  Act of 1933 and  reference is hereby made to
the Registration Statement for further information with respect to each Fund and
the securities  offered hereby.  This Registration  Statement and its amendments
are available for inspection by the public at the SEC in Washington, D.C.



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<PAGE>


                             RATINGS OF INVESTMENTS

Standard & Poor's Corporation Bond Ratings

AAA.  Debt  rated AAA had the  highest  rating  assigned  by  Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA. Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.

A. Debt  rated A has a strong  capacity  to pay  interest  and  repay  principal
although it is somewhat more  susceptible  to the adverse  effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB.  Debt rated BBB is regarded as having an adequate  capacity to pay interest
and  repay  principal.   Whereas  it  normally  exhibits   adequate   protection
parameters,  adverse  economic  conditions  or changing  circumstances  are more
likely to lead to a weakened  capacity to pay interest and repay  principal  for
debt in this category than in higher rated categories.

BB, B, CCC, CC and C. Debt rated BB, B, CCC, CC and C is  regarded,  on balance,
as predominantly  speculative with respect to capacity to pay interest and repay
principal in  accordance  with the terms of the  obligation.  BB  indicates  the
lowest degree of speculation and C the highest degree of speculation. While such
debt will likely have some  quality and  protective  characteristics,  these are
outweighed by large uncertainties or major risk exposures to adverse conditions.

CI. The rating CI is  reserved  for income  bonds on which no  interest is being
paid.

D. Debt rated D is in  default,  and  payment of interest  and/or  repayment  of
principal is in arrears.

Moody's Investors Service, Inc. Bond Ratings

AAA. Bonds which are rated Aaa are judged to be of the best quality.  They carry
the  smallest  degree  of  investment  risk  and are  generally  referred  to as
"gilt-edge."  Interest  payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change,  such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa. Bonds which are rated Aa are judged to be of high quality by all  standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds.  They are rated lower than the best bonds  because  margins of protection
may not be as large as in Aaa securities or  fluctuation of protective  elements
may be of greater  amplitude or there may be other  elements  present which make
the long term risks appear somewhat larger than in Aaa securities.

A. Bonds which are rated A possess many favorable investment  attributes and are
to be considered as upper medium grade  obligations.  Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa. Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither  highly  protected nor poorly  secured.  Interest  payments and
principal  security  appear  adequate  for the present  but  certain  protective
elements may be lacking or may be  characteristically  unreliable over any great
length of time. Such bonds lack outstanding  investment  characteristics  and in
fact have speculative characteristics as well.

Ba.  Bonds  which are rated Ba are judged to have  speculative  elements;  their
future cannot be considered  as well assured.  Often the  protection of interest
and  principal  payments may be very  moderate and thereby not well


                                      111
<PAGE>

safeguarded  during  both good and bad times  over the  future.  Uncertainty  of
position characterizes bonds in this class.

B. Bonds  which are rated B  generally  lack  characteristics  of the  desirable
investment.  Assurance of interest and principal  payments or of  maintenance of
other terms of the contract over any long period of time may be small.

Caa.  Bonds  which are rated Caa are of poor  standing.  Such  issues  may be in
default or there may be present  elements of danger with respect to principal or
interest.

Ca. Bonds which are rated Ca represent  obligations  which are  speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C.  Bonds  which are rated C are the lowest  rated  class of bonds and issues so
rated can be regarded as having  extremely  poor prospects of ever attaining any
real investment standing.

Fitch Long-Term Debt Ratings

AAA.  Highest credit  quality.  "AAA" ratings  denote the lowest  expectation of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments.  This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA. Very high credit  quality.  "AA"` ratings  denote a very low  expectation of
credit risk.  They indicate very strong capacity for timely payment of financial
commitments.  This  capacity  is not  significantly  vulnerable  to  foreseeable
events.

A. High credit quality. "A" ratings denote a low expectation of credit risk. The
capacity for timely payment of financial  commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB. Good credit quality.  "BBB" ratings  indicate that there is currently a low
expectation  of credit  risk.  The  capacity  for timely  payment  of  financial
commitments is considered adequate,  but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity.  This is the lowest
investment-grade category.

BB.  Speculative.  "BB" ratings  indicate that there is a possibility  of credit
risk  developing,  particularly  as the result of adverse  economic  change over
time;  however,  business or  financial  alternatives  may be available to allow
financial  commitments  to be met.  Securities  rated in this  category  are not
investment grade.

B. Highly  speculative.  "B" ratings  indicate that  significant  credit risk is
present,  but a limited  margin of safety  remains.  Financial  commitments  are
currently being met; however,  capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC,  CC, C. High  default  risk.  Default is a real  possibility.  Capacity for
meeting  financial  commitments  is solely  reliant  upon  sustained,  favorable
business or economic developments.  A "CC" rating indicates that default of some
kind appears probable. "C" ratings signal imminent default.

DDD, DD, D. Default.  The ratings of  obligations  in this category are based on
their prospects for achieving  partial or full recovery in a  reorganization  or
liquidation  of  the  obligor.   While  expected   recovery  values  are  highly
speculative  and cannot be estimated with any precision,  the following serve as
general  guidelines.  "DDD" obligations have the highest potential for recovery,
around  90%-100% of  outstanding  amounts and accrued  interest.  "DD" indicates
potential  recoveries  in the  range of  50%-90%,  and "D" the  lowest  recovery
potential, i.e., below 50%.

Entities  rated  in  this  category  have  defaulted  on  some  or all of  their
obligations.  Entities  rated "DDD" have the highest  prospect for resumption of
performance  or  continued  operation  with or  without a formal  reorganization

                                      112
<PAGE>

process.  Entities  rated  "DD"  and  "D"  are  generally  undergoing  a  formal
reorganization or liquidation process;  those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.

Fitch Short-Term Debt Ratings

F1.  Highest credit  quality.  Indicates the Best capacity for timely payment of
financial commitments;  may have an added "+" to denote any exceptionally strong
credit feature.

F2. Good credit quality. A satisfactory capacity for timely payment of financial
commitments,  but the  margin  of  safety  is not as great as in the case of the
higher ratings.

F3.  Fair  credit  quality.   The  capacity  for  timely  payment  of  financial
commitments is adequate;  however,  near-term  adverse changes could result in a
reduction to non-investment grade.

B.  Speculative.  Minimal capacity for timely payment of financial  commitments,
plus  vulnerability  to  near-term  adverse  changes in  financial  and economic
conditions.

C. High  default  risk.  Default is a real  possibility.  Capacity  for  meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D. Default. Denotes actual or imminent payment default.

Commercial Paper Ratings

Commercial  paper rated by Standard & Poor's  Ratings  Services  ("S&P") has the
following   characteristics:   Liquidity   ratios  are  adequate  to  meet  cash
requirements.  Long-term  senior  debt is rated "A" or  better.  The  issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow  have an  upward  trend  with  allowance  made for  unusual  circumstances.
Typically, the issuer's industry is well established and the issuer has a strong
position  within the industry.  The  reliability  and quality of management  are
unquestioned.  Relative  strength  or weakness  of the above  factors  determine
whether the issuer's commercial paper is rated A-1 or A-2.

The ratings  Prime-1 and Prime-2 are the two highest  commercial  paper  ratings
assigned  by Moody's  Investors  Service,  Inc.  ("Moody's").  Among the factors
considered by it in assigning  ratings are the following:  (1) evaluation of the
management of the issuer;  (2) economic  evaluation of the issuer's  industry or
industries and an appraisal of  speculative-type  risks which may be inherent in
certain  areas;  (3)  evaluation  of  the  issuer's   products  in  relation  to
competition and customer  acceptance;  (4) liquidity;  (5) amount and quality of
long-term debt; (6) trend of earnings over a period of ten years;  (7) financial
strength of a parent company and the relationships  which exist with the issuer;
and (8) recognition by the management of obligations which may be present or may
arise as a result of public  interest  questions and  preparations  to meet such
obligations.  Relative  strength  or weakness  of the above  factors  determines
whether the issuer's commercial paper is rated Prime-1 or 2.

Municipal Notes

Moody's: The highest ratings for state and municipal short-term  obligations are
"MIG 1," "MIG 2," and "MIG 3" (or "VMIG 1," "VMIG 2" and "VMIG 3" in the case of
an issue having a variable rate demand feature). Notes rated "MIG 1" or "VMIG 1"
are judged to be of the "best  quality".  Notes rated "MIG 2" or "VMIG 2" are of
"high  quality," with margins or protection  "ample  although not as large as in
the  preceding  group".  Notes  rated  "MIG  3" or  "VMIG  3" are of  "favorable
quality," with all security  elements  accounted for but lacking the strength of
the preceding grades.

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<PAGE>

S&P:  The  "SP-1"  rating  reflects  a "very  strong or strong  capacity  to pay
principal and interest". Notes issued with "overwhelming safety characteristics"
will be rated "SP-1+".  The "SP-2" rating reflects a "satisfactory  capacity" to
pay principal and interest.

Fitch:  The highest ratings for state and municipal  short-term  obligations are
"F-1+," "F-1," and "F-2."


                                      114



<PAGE>








                          DWS INTERNATIONAL FUND, INC.

                   DWS International Value Opportunities Fund
                 Class A, Class C and Institutional Class Shares



                       STATEMENT OF ADDITIONAL INFORMATION


                                December 1, 2007



This Statement of Additional  Information is not a prospectus and should be read
in conjunction with the prospectuses (each, a "Prospectus" and collectively, the
"Prospectuses"),  dated December 1, 2007 for Class A, Class C and  Institutional
Class shares of DWS  International  Value  Opportunities  Fund (the  "Fund"),  a
series of DWS International Fund, Inc. (the "Corporation"), as amended from time
to time,  copies of which may be  obtained  without  charge  by  contacting  DWS
Scudder Distributors,  Inc., 222 South Riverside Plaza, Chicago, Illinois 60606,
1-800-621-1148,  or from  the firm  from  which  this  Statement  of  Additional
Information  was  obtained and is  available  along with other  materials on the
Securities and Exchange Commission's Internet Web site (http://www.sec.gov).

The Annual Report to Shareholders  dated August 31, 2007 is incorporated  herein
by reference  and is hereby  deemed to be part of this  Statement of  Additional
Information.


This Statement of Additional  Information is  incorporated by reference into the
corresponding Prospectus for each class of shares of the Fund.





<PAGE>


                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

INVESTMENT RESTRICTIONS......................................................2

INVESTMENT POLICIES AND TECHNIQUES...........................................4
   Investment Objective and Policies.........................................4
   Investment Techniques.....................................................4
   Portfolio Holdings.......................................................23

MANAGEMENT OF THE FUND......................................................24
   Investment Advisor.......................................................26
   Compensation of Portfolio Managers.......................................29
   Fund Ownership of Portfolio Managers.....................................30


FUND SERVICE PROVIDERS......................................................36
   Principal Underwriter....................................................36
   Independent Registered Public Accounting Firm............................41
   Legal Counsel............................................................41
   Custodian, Transfer Agent and Shareholder Service Agent..................41


PORTFOLIO TRANSACTIONS......................................................42

PURCHASE AND REDEMPTION OF SHARES...........................................46

DIVIDENDS...................................................................68

TAXES.......................................................................69

NET ASSET VALUE.............................................................76

DIRECTORS AND OFFICERS......................................................77

FUND ORGANIZATION...........................................................96

PROXY VOTING GUIDELINES.....................................................98

FINANCIAL STATEMENTS.......................................................100

ADDITIONAL INFORMATION.....................................................100




                                       i
<PAGE>



                             INVESTMENT RESTRICTIONS


Except as otherwise indicated,  the Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders.  There can be
no assurance that the Fund's objective will be met.

Any  investment  restrictions  herein  which  involve  a maximum  percentage  of
securities  or assets shall not be  considered  to be violated  unless an excess
over the percentage occurs  immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, the Fund.

The Fund has elected to be treated as a diversified  investment company, as that
term is used in the Investment Act of 1940, as amended (the "1940 Act"),  and as
interpreted or modified by regulatory authority having  jurisdiction,  from time
to time.

As a matter of fundamental policy:

1.       The Fund may not borrow money,  except as permitted under the 1940 Act,
         and  as  interpreted  or  modified  by  regulatory   authority   having
         jurisdiction, from time to time.

2.       The Fund may not issue senior securities, except as permitted under the
         1940 Act,  as amended,  and as  interpreted  or modified by  regulatory
         authority having jurisdiction, from time to time.

3.       The Fund may not concentrate its investments in a particular  industry,
         as that term is used in the 1940 Act, as amended, and as interpreted or
         modified by  regulatory  authority  having  jurisdiction,  from time to
         time.

4.       The Fund may not  engage in the  business  of  underwriting  securities
         issued by others,  except to the extent  that the Fund may be deemed to
         be an  underwriter  in  connection  with the  disposition  of portfolio
         securities.

5.       The Fund may not  purchase  or sell real  estate,  which  term does not
         include  securities of companies which deal in real estate or mortgages
         or investments secured by real estate or interests therein, except that
         the Fund  reserves  freedom  of action to hold and to sell real  estate
         acquired as a result of the Fund's ownership of securities.

6.       The Fund may not purchase or sell  commodities,  except as permitted by
         the 1940  Act,  as  amended,  and as  interpreted  or  modified  by the
         regulatory authority having jurisdiction, from time to time.

7.       The Fund may not make loans except as permitted  under the 1940 Act, as
         amended,  and as interpreted or modified by regulatory authority having
         jurisdiction, from time to time.

A  fundamental  policy may not be changed  without the approval of a majority of
the outstanding  voting securities of the Fund which, under the 1940 Act and the
rules thereunder and as used in this Statement of Additional Information,  means
the lesser of (1) 67% or more of the voting securities  present at such meeting,
if the holders of more than 50% of the outstanding voting securities of the Fund
are present or  represented  by proxy,  or (2) more than 50% of the  outstanding
voting securities of the Fund.

The Directors of DWS International  Fund, Inc. have voluntarily  adopted certain
policies  and  restrictions,  which are  observed  in the  conduct of the Fund's
affairs.  These  represent  intentions  of  the  Directors  based  upon  current
circumstances.  Non-fundamental  policies may be changed by the Directors of the
Corporation  without requiring  approval of or, with certain  exceptions,  prior
notice to, shareholders.

As a matter of nonfundamental policy, the Fund currently does not intend to:

                                       2
<PAGE>

(a)      borrow money in an amount  greater  than 5% of its total assets  except
         (i) for temporary or emergency purposes and (ii) by engaging in reverse
         repurchase   agreements,   dollar  rolls,   or  other   investments  or
         transactions  described in the Fund's registration  statement which may
         be deemed to be borrowings;

(b)      enter into either reverse  repurchase  agreements or dollar rolls in an
         amount greater than 5% of its total assets;

(c)      purchase  securities  on margin or make short  sales,  except (i) short
         sales against the box, (ii) in connection with arbitrage  transactions,
         (iii) for margin deposits in connection with futures contracts, options
         or other  permitted  investments,  (iv) that  transactions  in  futures
         contracts  and  options  shall  not be  deemed  to  constitute  selling
         securities  short,  and (v) that the Fund may  obtain  such  short-term
         credits  as  may  be  necessary   for  the   clearance  of   securities
         transactions;

(d)      purchase  options,  unless  the  aggregate  premiums  paid on all  such
         options  held by the Fund at any time do not  exceed  20% of its  total
         assets; or sell put options, if as a result, the aggregate value of the
         obligations  underlying  such put options would exceed 50% of its total
         assets;

(e)      enter  into  futures  contracts  or  purchase  options  thereon  unless
         immediately  after the  purchase,  the value of the  aggregate  initial
         margin with respect to such futures contracts entered into on behalf of
         the Fund and the premiums  paid for such  options on futures  contracts
         does not  exceed  20% of the fair  market  value  of the  Fund's  total
         assets;  provided that in the case of an option that is in-the-money at
         the time of  purchase,  the  in-the-money  amount  may be  excluded  in
         computing the 20% limit;

(f)      purchase warrants if as a result,  such securities,  taken at the lower
         of cost or market value,  would  represent more than 5% of the value of
         the Fund's total assets (for this purpose,  warrants  acquired in units
         or attached to securities will be deemed to have no value);

(g)      lend  portfolio  securities in an amount greater than 33?% of its total
         assets;

(h)      acquire  securities  of  registered  open-end  investment  companies or
         registered unit investment  trusts in reliance on Sections  12(d)(1)(F)
         or 12(d)(1)(G) of the 1940 Act.

The Fund will not purchase illiquid securities,  including repurchase agreements
maturing in more than seven days, if, as a result thereof,  more than 15% of the
Fund's net assets,  valued at the time of the transaction,  would be invested in
such securities.

If a percentage  restriction  is adhered to at the time of  investment,  a later
increase or decrease in percentage  beyond the specified  limit resulting from a
change in values or net assets will not be considered a violation.

Master/feeder  Fund  Structure.  The Board of Directors  has the  discretion  to
retain the current  distribution  arrangement  for the Fund while investing in a
master fund in a master/feeder fund structure as described below.

A master/feeder fund structure is one in which a fund (a "feeder fund"), instead
of investing  directly in a portfolio of securities,  invests most or all of its
investment  assets in a separate  registered  investment  company  (the  "master
fund") with  substantially  the same  investment  objective  and policies as the
feeder  fund.  Such a  structure  permits  the  pooling of assets of two or more
feeder funds,  preserving  separate  identities or distribution  channels at the
feeder  fund  level.  Based on the  premise  that  certain  of the  expenses  of
operating an investment  portfolio are  relatively  fixed,  a larger  investment
portfolio may eventually  achieve a lower ratio of operating expenses to average
net assets. An existing  investment  company is able to convert to a feeder fund
by  selling  all  of  its  investments,   which  involves  brokerage  and  other
transaction  costs and realization of a taxable gain or loss, or by contributing
its assets to the master  fund and  avoiding  transaction  costs and,  if proper
procedures are followed, the realization of taxable gain or loss.

                                       3
<PAGE>

                       INVESTMENT POLICIES AND TECHNIQUES

General

The Fund is an open-end management  investment company which continuously offers
and redeems shares at net asset value (less  applicable  sales charges or fees).
The Fund is a company  of the type  commonly  known as a mutual  fund.  The Fund
offers  four  classes  of shares:  Class A,  Class C, Class S and  Institutional
Class.  Class S shares of the Fund are offered  through a separate  Statement of
Additional Information.

Investment Objective and Policies

The  Fund  seeks  long-term  capital  appreciation,  with  current  income  as a
secondary objective.

Under  normal  circumstances,  the  Fund  invests  at least  80% of its  assets,
determined  at the time of  purchase,  in the stocks and other  securities  with
equity  characteristics  of companies in developed  countries outside the United
States.  Almost all the  companies  in which the Fund  invests  are based in the
developed   foreign   countries  that  make  up  the  Morgan   Stanley   Capital
International Europe, Australia and Ear East Index ("MSCI EAFE Index"). The Fund
may also  invest a portion  of its  assets in  companies  based in the  emerging
markets  of Latin  America,  the  Middle  East,  Europe,  Asia and Africa if the
portfolio managers believe that their return potential more than compensates for
the extra risks associated with these markets. While the portfolio managers have
invested in emerging markets in the past, under normal market conditions they do
not consider this a central element of the Fund's strategy.  Typically, the Fund
would  not  hold  more  than  20% of its net  assets  in  emerging  markets.  In
implementing  this overall  strategy,  the Fund may  experience a high portfolio
turnover  rate.  The  Fund  may  also  invest  up to 20% of its  assets  in cash
equivalents,  US  investment-grade  fixed-income  securities,  and US stocks and
other equities.

The Fund  invests  for the long  term.  The  portfolio  managers  employ a value
strategy and invest in companies  that they believe are  undervalued.  These are
typically companies that have been historically sound but are temporarily out of
favor.   The  Fund  intends  to  invest  primarily  in  companies  whose  market
capitalizations fall within the normal range of the MSCI EAFE Index.

The portfolio  managers track several thousand companies to arrive at between 50
to 70 stocks the Fund normally holds. The managers use a variety of quantitative
screens to compare a  company's  stock  price to its book  value,  cash flow and
dividend  yield,  and analyze  individual  companies to identify  those that are
financially sound and appear to have strong potential for long-term growth.

After narrowing the investment  universe  through the use of valuation  screens,
the portfolio  managers' use of fundamental  research tools lies at the heart of
the  investment  process.  The  portfolio  managers'  process  brings  an  added
dimension to this fundamental research by drawing on the insight of experts from
a range of financial  disciplines - regional  stock market  specialists,  global
industry  specialists,  economists and  quantitative  analysts.  They challenge,
refine and amplify each other's ideas.  Their close  collaboration is a critical
element of the portfolio managers' investment process.

The Fund may invest in various  instruments  commonly known as  `derivatives" to
increase or decrease its exposure to an asset class, securities market, index or
currency.  The Fund will  primarily  use futures,  options,  options on futures,
forward currency transactions and swaps. The Fund may also invest in derivatives
to gain  exposure  to the market  while,  at the same time,  maintaining  a high
degree of liquidity in order to meet shareholder redemptions or other needs. Use
of some  derivatives  may have the effect of leveraging the Fund's exposure to a
particular  asset class or other  investment,  which heightens risk but may also
allow  for  enhanced  returns.  In  implementing  this  strategy,  the  Fund may
experience a high portfolio turnover rate.

Investment Techniques


Descriptions  in  this  Statement  of  Additional  Information  of a  particular
investment  practice  or  technique  in which the Fund may  engage  are meant to
describe  the  spectrum  of  investments  that  the  Advisor  or the  subadvisor

                                       4
<PAGE>

(hereinafter the "Advisor") in its discretion might, but is not required to, use
in managing the Fund's  portfolio  assets.  The Advisor may in its discretion at
any time employ such a practice,  technique or instrument  for one or more funds
but not for all funds  advised by it.  Furthermore,  it is possible that certain
types of financial instruments or investment techniques described herein may not
be available, permissible, economically feasible or effective for their intended
purposes in all markets. Certain practices, techniques or instruments may not be
principal  activities of the Fund, but, to the extent employed,  could from time
to time have a material impact on the Fund's performance. The Fund may engage in
certain practices not described herein.

Borrowing.  As a matter of  fundamental  policy,  the Fund may not borrow money,
except as  permitted  under the 1940 Act,  and as  interpreted  or  modified  by
regulatory authority having jurisdiction, from time to time. While the Fund does
not currently  intend to borrow for investment  leveraging  purposes,  if such a
strategy were implemented in the future it would increase the Fund's  volatility
and the risk of loss in a declining  market.  Borrowing by the Fund will involve
special risk  considerations.  The Fund's  assets may change in value during the
time a borrowing is outstanding, thus increasing exposure to capital risk.


Common  Stocks.  Common  stock is issued by companies to raise cash for business
purposes  and  represents  a  proportionate  interest in the issuing  companies.
Therefore,  the Fund  participates  in the  success or failure of any company in
which  it  holds  stock.  The  market  values  of  common  stock  can  fluctuate
significantly,  reflecting  the  business  performance  of the issuing  company,
investor perception and general economic and financial market movements. Despite
the risk of price volatility, however, common stocks have historically offered a
greater potential for long-term gain on investment, compared to other classes of
financial  assets such as bonds or cash  equivalents,  although  there can be no
assurance that this will be true in the future.

Convertible Securities. The Fund may invest in convertible securities,  that is,
bonds,  notes,  debentures,  preferred  stocks  and other  securities  which are
convertible into common stock. Investments in convertible securities can provide
an  opportunity  for capital  appreciation  and/or income  through  interest and
dividend payments by virtue of their conversion or exchange features.

The convertible  securities in which the Fund may invest are either fixed income
or zero coupon debt  securities  which may be converted or exchanged at a stated
or  determinable  exchange  ratio into  underlying  shares of common stock.  The
exchange ratio for any particular convertible security may be adjusted from time
to time due to stock splits, dividends, spin-offs, other corporate distributions
or scheduled  changes in the exchange  ratio.  Convertible  debt  securities and
convertible  preferred  stocks,  until converted,  have general  characteristics
similar to both debt and equity  securities.  Although  to a lesser  extent than
with debt securities generally, the market value of convertible securities tends
to decline as interest  rates  increase  and,  conversely,  tends to increase as
interest  rates  decline.  In addition,  because of the  conversion  or exchange
feature,  the market value of convertible  securities  typically  changes as the
market value of the underlying common stocks changes, and, therefore, also tends
to follow  movements  in the  general  market  for equity  securities.  A unique
feature of convertible  securities is that as the market price of the underlying
common stock declines,  convertible  securities tend to trade  increasingly on a
yield basis, and so may not experience  market value declines to the same extent
as the underlying  common stock.  When the market price of the underlying common
stock  increases,  the prices of the  convertible  securities  tend to rise as a
reflection of the value of the underlying common stock,  although  typically not
as much as the  underlying  common stock.  While no securities  investments  are
without risk,  investments in convertible  securities generally entail less risk
than investments in common stock of the same issuer.

As debt securities,  convertible  securities are investments which provide for a
stream of income (or in the case of zero coupon securities, accretion of income)
with  generally  higher  yields  than  common  stocks.   Convertible  securities
generally offer lower yields than non-convertible  securities of similar quality
because of their conversion or exchange features.

Of course,  like all debt  securities,  there can be no  assurance  of income or
principal payments because the issuers of the convertible securities may default
on their obligations.

                                       5
<PAGE>

Convertible   securities   generally  are  subordinated  to  other  similar  but
non-convertible  securities of the same issuer,  although  convertible bonds, as
corporate debt  obligations,  enjoy  seniority in right of payment to all equity
securities,  and  convertible  preferred stock is senior to common stock, of the
same issuer.  However,  because of the subordination feature,  convertible bonds
and  convertible  preferred  stock  typically  have lower  ratings  than similar
non-convertible securities. Convertible securities may be issued as fixed income
obligations that pay current income or as zero coupon notes and bonds, including
Liquid Yield Option Notes ("LYONs"(TM)).

Debt  Securities.  The Fund may invest in debt  securities,  including  bonds of
private  issuers.  Portfolio debt  investments will be selected on the basis of,
among other things,  credit quality,  and the fundamental outlooks for currency,
economic  and interest  rate trends,  taking into account the ability to hedge a
degree  of  currency  or  local  bond  price   risk.   The  Fund  may   purchase
"investment-grade"  bonds,  rated Aaa,  Aa, A or Baa by Moody's or AAA, AA, A or
BBB by S&P or, if unrated,  judged to be of equivalent  quality as determined by
the Advisor.

The principal  risks involved with  investments  in bonds include  interest rate
risk, credit risk and pre-payment risk.  Interest rate risk refers to the likely
decline in the value of bonds as  interest  rates rise.  Generally,  longer-term
securities are more susceptible to changes in value as a result of interest-rate
changes than are shorter-term securities. Credit risk refers to the risk that an
issuer of a bond may  default  with  respect  to the  payment of  principal  and
interest.  The  lower  a bond  is  rated,  the  more  it is  considered  to be a
speculative or risky  investment.  Pre-payment risk is commonly  associated with
pooled debt  securities,  such as  mortgage-backed  securities  and asset backed
securities,  but may affect other debt  securities as well.  When the underlying
debt obligations are prepaid ahead of schedule,  the return on the security will
be lower than expected.  Pre-payment  rates usually increase when interest rates
are falling.

Depositary  Receipts.  The Fund may invest in sponsored or unsponsored  American
Depositary  Receipts ("ADRs"),  European  Depositary  Receipts ("EDRs"),  Global
Depositary  Receipts ("GDRs"),  International  Depositary  Receipts ("IDRs") and
other types of Depositary  Receipts  (which,  together with ADRs, EDRs, GDRs and
IDRs are hereinafter referred to as "Depositary Receipts").  Depositary Receipts
provide  indirect  investment  in  securities  of  foreign  issuers.  Prices  of
unsponsored Depositary Receipts may be more volatile than if they were sponsored
by  the  issuer  of the  underlying  securities.  Depositary  Receipts  may  not
necessarily be  denominated  in the same currency as the  underlying  securities
into which  they may be  converted.  In  addition,  the  issuers of the stock of
unsponsored   Depositary   Receipts  are  not  obligated  to  disclose  material
information in the United States and, therefore,  there may not be a correlation
between such information and the market value of the Depositary  Receipts.  ADRs
are  Depositary  Receipts which are bought and sold in the United States and are
typically  issued by a US bank or trust company and which evidence  ownership of
underlying  securities by a foreign  corporation.  GDRs, IDRs and other types of
Depositary  Receipts are typically  issued by foreign banks or trust  companies,
although they may also be issued by United States banks or trust companies,  and
evidence  ownership  of  underlying  securities  issued by either a foreign or a
United States corporation. Generally, Depositary Receipts in registered form are
designed for use in the United States securities markets and Depositary Receipts
in bearer form are designed  for use in  securities  markets  outside the United
States. For purposes of the Fund's investment  policies,  the Fund's investments
in ADRs,  GDRs and  other  types of  Depositary  Receipts  will be  deemed to be
investments in the underlying securities.  Depositary Receipts,  including those
denominated  in US dollars  will be subject to foreign  currency  exchange  rate
risk. However, by investing in US  dollar-denominated  ADRs rather than directly
in foreign  issuers' stock, the Fund avoids currency risks during the settlement
period.  In general,  there is a large,  liquid  market in the United States for
most ADRs. However, certain Depositary Receipts may not be listed on an exchange
and therefore may be illiquid securities.


Eurodollar Instruments.  The Fund may make investments in Eurodollar instruments
for hedging purposes or to enhance potential gain. Eurodollar instruments are US
dollar-denominated  futures contracts or options thereon which are linked to the
London Interbank Offered Rate ("LIBOR"),  although foreign  currency-denominated
instruments are available from time to time. Eurodollar futures contracts enable
purchasers to obtain a fixed rate for the lending of funds and sellers to obtain
a fixed rate for borrowings. The Fund might use Eurodollar futures contracts and
options  thereon to hedge against  changes in LIBOR, to which many interest rate
swaps and fixed income instruments are linked.


                                       6
<PAGE>

Eurodollar  Obligations.  Eurodollar bank obligations are US  dollar-denominated
certificates  of deposit and time deposits issued outside the US capital markets
by foreign  branches of US banks and US branches  of foreign  banks.  Eurodollar
obligations  are  subject  to the same risks that  pertain to  domestic  issues,
notably credit risk,  market risk and liquidity risk.  Additionally,  Eurodollar
obligations are subject to certain sovereign risks.


Foreign  Currencies.  Because  investments  in foreign  securities  usually will
involve currencies of foreign  countries,  and because the Fund may hold foreign
currencies  and  forward  contracts,   futures  contracts,  options  on  foreign
currencies and foreign  currency  futures  contracts and other  currency-related
instruments, the value of the assets of the Fund as measured in U.S. dollars may
be affected  favorably or  unfavorably by changes in foreign  currency  exchange
rates  and  exchange  control  regulations,  and the Fund may  incur  costs  and
experience   conversion   difficulties  and  uncertainties  in  connection  with
conversions between various currencies.  Fluctuations in exchange rates may also
affect the  earning  power and asset  value of the  foreign  entity  issuing the
security.


The  strength  or  weakness  of the U.S.  dollar  against  these  currencies  is
responsible for part of the Fund's investment  performance.  If the dollar falls
in value  relative to the  Japanese  yen,  for  example,  the dollar  value of a
Japanese  stock  held in the  portfolio  will rise even  though the price of the
stock remains  unchanged.  Conversely,  if the dollar rises in value relative to
the yen,  the  dollar  value of the  Japanese  stock  will  fall.  Many  foreign
currencies have experienced significant devaluation relative to the dollar.

Although the Fund values its assets daily in terms of U.S. dollars,  it does not
intend to convert its  holdings  of foreign  currencies  into U.S.  dollars on a
daily basis.  It will do so from time to time, and investors  should be aware of
the costs of  currency  conversion.  Although  foreign  exchange  dealers do not
charge a fee for  conversion,  they do realize a profit based on the  difference
(the "spread")  between the prices at which they are buying and selling  various
currencies.  Thus, a dealer may offer to sell a foreign  currency to the Fund at
one rate,  while  offering a lesser rate of  exchange  should the Fund desire to
resell that currency to the dealer.  The Fund will conduct its foreign  currency
exchange  transactions  either  on a spot  (i.e.,  cash)  basis at the spot rate
prevailing in the foreign  currency  exchange  market,  or through entering into
options or forward or futures contracts to purchase or sell foreign currencies.

Foreign Fixed Income Securities.  Since most foreign fixed income securities are
not rated,  a fund will invest in foreign fixed income  securities  based on the
Advisor's analysis without relying on published ratings.  Since such investments
will be based upon the Advisor's  analysis  rather than upon published  ratings,
achievement  of a fund's goals may depend more upon the abilities of the Advisor
than would otherwise be the case.

The value of the foreign fixed income  securities  held by a fund,  and thus the
net asset value of a fund's shares, generally will fluctuate with (a) changes in
the perceived creditworthiness of the issuers of those securities, (b) movements
in interest  rates,  and (c) changes in the relative values of the currencies in
which a fund's  investments  in fixed income  securities  are  denominated  with
respect to the US Dollar.  The extent of the fluctuation  will depend on various
factors,  such as the average maturity of a fund's  investments in foreign fixed
income  securities,  and the extent to which a fund  hedges its  interest  rate,
credit and currency exchange rate risks. A longer average maturity  generally is
associated  with a  higher  level  of  volatility  in the  market  value of such
securities in response to changes in market conditions.

Investments  in  sovereign  debt,  including  Brady Bonds  (Brady Bonds are debt
securities   issued  under  a  plan  implemented  to  allow  debtor  nations  to
restructure their  outstanding  commercial bank  indebtedness),  involve special
risks. Foreign governmental issuers of debt or the governmental authorities that
control the repayment of the debt may be unable or unwilling to repay  principal
or pay  interest  when due. In the event of default,  there may be limited or no
legal recourse in that, generally,  remedies for defaults must be pursued in the
courts of the defaulting  party.  Political  conditions,  especially a sovereign
entity's  willingness to meet the terms of its fixed income  securities,  are of
considerable  significance.  Also, there can be no assurance that the holders of
commercial bank loans to the same sovereign  entity may not contest  payments to
the holders of sovereign debt in the event of default under commercial bank loan
agreements.  In  addition,  there is no  bankruptcy  proceeding  with respect to
sovereign debt on which a sovereign has  defaulted,  and a fund may be unable to
collect  all or any  part  of its  investment  in a  particular  issue.  Foreign
investment  in certain  sovereign  debt is  restricted  or controlled to varying
degrees,  including  requiring  governmental  approval for the  repatriation  of
income, capital or proceed of sales by foreign investors.  These


                                       7
<PAGE>

restrictions  or controls may at times limit or preclude  foreign  investment in
certain sovereign debt or increase the costs and expenses of a fund.

Sovereign  debt of  emerging  market  governmental  issuers is to be  considered
speculative.  Emerging market governmental issuers are among the largest debtors
to commercial banks, foreign governments,  international financial organizations
and other financial  institutions.  Certain emerging market governmental issuers
have  not  been  able to make  payments  of  interest  on or  principal  of debt
obligations as those payments have come due. There is a history of defaults with
respect  to  commercial  bank  loans by  public  and  private  entities  issuing
sovereign  debt.  All or a portion of the  interest  payments  and/or  principal
repayment  with respect to sovereign debt may be  uncollateralized.  Obligations
arising from past restructuring  agreements may affect the economic  performance
and political and social stability of those issuers.

The  ability of  emerging  market  country  governmental  issuers to make timely
payments  on their  obligations  is  likely  to be  influenced  strongly  by the
issuer's balance of payments,  including export  performance,  and its access to
international  credits and  investments.  An emerging  market whose  exports are
concentrated  in a few  commodities  could be  vulnerable  to a  decline  in the
international   prices   of  one  or  more  of  those   commodities.   Increased
protectionism  on the part of an emerging  market's  trading partners could also
adversely  affect the country's  exports and diminish its trade account surplus,
if any. To the extent that emerging  markets  receive payment for its exports in
currencies other than dollars or non-emerging market currencies,  its ability to
make debt payments  denominated  in dollars or  non-emerging  market  currencies
could be affected.

Another factor bearing on the ability of emerging market countries to repay debt
obligations is the level of international reserves of the country.  Fluctuations
in the level of these  reserves  affect the amount of foreign  exchange  readily
available  for  external  debt  payments  and thus  could  have a bearing on the
capacity  of  emerging   market   countries  to  make  payments  on  these  debt
obligations.

To the extent that an emerging  market country cannot  generate a trade surplus,
it must  depend on  continuing  loans  from  foreign  governments,  multilateral
organizations or private commercial banks, aid payments from foreign governments
and inflows of foreign investment. The access of emerging markets to these forms
of external  funding may not be certain,  and a withdrawal  of external  funding
could  adversely  affect the capacity of emerging  market  country  governmental
issuers  to make  payments  on  their  obligations.  In  addition,  the  cost of
servicing  emerging  market  debt  obligations  can be  affected  by a change in
international  interest  rates  since the  majority of these  obligations  carry
interest rates that are adjusted periodically based upon international rates.

Foreign  Investment.  Foreign securities are normally  denominated and traded in
foreign currencies. As a result, the value of the Fund's foreign investments and
the value of its shares may be affected  favorably or  unfavorably by changes in
currency exchange rates relative to the US dollar. There may be less information
publicly  available  about a foreign issuer than about a US issuer,  and foreign
issuers  may not be subject to  accounting,  auditing  and  financial  reporting
standards  and practices  comparable to those in the US. The  securities of some
foreign  issuers are less liquid and at times more volatile  than  securities of
comparable US issuers.  Foreign  brokerage  commissions  and other fees are also
generally  higher  than in the  US.  Foreign  settlement  procedures  and  trade
regulations  may involve  certain risks (such as delay in payment or delivery of
securities or in the recovery of the Fund's assets held abroad) and expenses not
present in the settlement of  investments in US markets.  Payment for securities
without delivery may be required in certain foreign markets.

In addition, foreign securities may be subject to the risk of nationalization or
expropriation   of  assets,   imposition  of  currency   exchange   controls  or
restrictions on the  repatriation of foreign  currency,  confiscatory  taxation,
political or  financial  instability  and  diplomatic  developments  which could
affect  the  value of the  Fund's  investments  in  certain  foreign  countries.
Governments   of  many   countries  have  exercised  and  continue  to  exercise
substantial  influence  over many  aspects of the  private  sector  through  the
ownership or control of many  companies,  including some of the largest in these
countries.  As  a  result,  government  actions  in  the  future  could  have  a
significant  effect on economic  conditions which may adversely affect prices of
certain   portfolio   securities.   There  is  also  generally  less  government
supervision and regulation of stock  exchanges,  brokers,  and listed  companies
than in the US.  Dividends or interest on, or proceeds from the sale of, foreign
securities  may be subject  to foreign  withholding  taxes,  and  special US tax
considerations  may apply.  Moreover,  foreign economies may differ favorably or
unfavorably  from the US economy


                                       8
<PAGE>

in such respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payments position.

Legal remedies  available to investors in certain foreign  countries may be more
limited than those  available  with respect to investments in the US or in other
foreign  countries.  The laws of some  foreign  countries  may limit the  Fund's
ability to invest in securities of certain  issuers  organized under the laws of
those foreign countries.

Of particular  importance,  many foreign  countries are heavily  dependent  upon
exports,  particularly to developed countries,  and, accordingly,  have been and
may continue to be adversely affected by trade barriers,  managed adjustments in
relative currency values, and other protectionist measures imposed or negotiated
by the US and other  countries with which they trade.  These economies also have
been and may continue to be negatively impacted by economic conditions in the US
and other  trading  partners,  which can lower the demand for goods  produced in
those countries.

The  risks  described  above,   including  the  risks  of   nationalization   or
expropriation of assets,  typically are increased in connection with investments
in `emerging  markets.' For example,  political and economic structures in these
countries may be in their infancy and developing rapidly, and such countries may
lack  the  social,  political  and  economic  stability  characteristic  of more
developed countries (including amplified risk of war and terrorism).  Certain of
these countries have in the past failed to recognize private property rights and
have at times  nationalized and  expropriated  the assets of private  companies.
Investments in emerging markets may be considered speculative.

The  currencies  of  certain   emerging   market   countries  have   experienced
devaluations  relative to the US dollar,  and future  devaluations may adversely
affect the value of assets denominated in such currencies. In addition, currency
hedging techniques may be unavailable in certain emerging market countries. Many
emerging  market  countries have  experienced  substantial,  and in some periods
extremely  high,  rates of  inflation or  deflation  for many years,  and future
inflation may adversely  affect the  economies  and  securities  markets of such
countries.

In addition, unanticipated political or social developments may affect the value
of  investments  in  emerging   markets  and  the   availability  of  additional
investments  in these  markets.  Any change in the  leadership  or  politics  of
emerging  market  countries,  or  the  countries  that  exercise  a  significant
influence  over  those  countries,  may halt the  expansion  of or  reverse  the
liberalization of foreign investment policies now occurring and adversely affect
existing  investment  opportunities.  The small size, limited trading volume and
relative  inexperience  of the  securities  markets in these  countries may make
investments in securities  traded in emerging markets illiquid and more volatile
than investments in securities traded in more developed countries.  For example,
limited  market  size may cause  prices to be unduly  influenced  by traders who
control  large  positions.  In  addition,  the Fund may be required to establish
special custodial or other arrangements  before making investments in securities
traded  in  emerging  markets.  There  may be  little  financial  or  accounting
information available with respect to issuers of emerging market securities, and
it may be  difficult  as a  result  to  assess  the  value  of  prospects  of an
investment in such securities.


The risk  also  exists  that an  emergency  situation  may  arise in one or more
emerging  markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Fund's securities in such markets may
not be readily available.  The Fund may suspend redemption of its shares for any
period during which an emergency exists,  as determined by the SEC.  Accordingly
if a Fund believes that appropriate circumstances exist, it may apply to the SEC
for a determination  that an emergency is present.  During the period commencing
from a Fund's identification of such condition until the date of the SEC action,
the  Fund's  securities  in the  affected  markets  will be valued at fair value
determined in good faith by or under the direction of the Fund's Board.


Certain of the foregoing risks may also apply to some extent to securities of US
issuers that are denominated in foreign currencies or that are traded in foreign
markets, or securities of US issuers having significant foreign operations.

High Yield/High Risk Bonds. The Fund may also purchase debt securities which are
rated below  investment-grade  (commonly referred to as "junk bonds"),  that is,
rated below Baa by Moody's or below BBB by S&P and unrated  securities judged to
be of equivalent quality as determined by the Advisor.  These securities usually
entail greater


                                       9
<PAGE>

risk  (including the possibility of default or bankruptcy of the issuers of such
securities), generally involve greater volatility of price and risk to principal
and  income,  and may be less  liquid,  than  securities  in the  higher  rating
categories.  The lower the ratings of such debt securities, the more their risks
render them like equity  securities.  Securities  rated D may be in default with
respect to payment of principal or interest.

Issuers of such high yielding  securities often are highly leveraged and may not
have available to them more  traditional  methods of financing.  Therefore,  the
risk  associated  with  acquiring the  securities  of such issuers  generally is
greater than is the case with higher rated  securities.  For example,  during an
economic  downturn  or a  sustained  period of  rising  interest  rates,  highly
leveraged  issuers of high yield  securities  may experience  financial  stress.
During such periods, such issuers may not have sufficient revenues to meet their
interest  payment  obligations.   The  issuer's  ability  to  service  its  debt
obligations may also be adversely affected by specific  corporate  developments,
or the issuer's inability to meet specific projected business forecasts,  or the
unavailability  of  additional  financing.  The risk of loss from default by the
issuer is significantly greater for the holders of high yield securities because
such  securities  are generally  unsecured and are often  subordinated  to other
creditors  of the  issuer.  Prices  and  yields of high  yield  securities  will
fluctuate over time and, during periods of economic  uncertainty,  volatility of
high  yield  securities  may  adversely  affect a fund's  net  asset  value.  In
addition,  investments  in high yield zero coupon or pay-in-kind  bonds,  rather
than  income-bearing  high yield securities,  may be more speculative and may be
subject to greater fluctuations in value due to changes in interest rates.

The Fund may have  difficulty  disposing  of  certain  high  yield  (high  risk)
securities because they may have a thin trading market.  Because not all dealers
maintain  markets in all high yield  securities,  the Fund anticipates that such
securities  could be sold only to a limited  number of dealers or  institutional
investors.  The lack of a liquid  secondary market may have an adverse effect on
the market price and the Fund's ability to dispose of particular  issues and may
also make it more difficult for a fund to obtain accurate market  quotations for
purposes of valuing the Fund's assets. Market quotations generally are available
on many high yield  issues  only from a limited  number of  dealers  and may not
necessarily  represent  firm bids of such  dealers or prices  for actual  sales.
Adverse publicity and investor perceptions may decrease the values and liquidity
of high yield securities. These securities may also involve special registration
responsibilities,   liabilities   and  costs,   and   liquidity   and  valuation
difficulties.

Credit  quality in the  high-yield  securities  market can change  suddenly  and
unexpectedly,  and even recently issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield security. For these reasons, it is
generally the policy of the Advisor not to rely exclusively on ratings issued by
established credit rating agencies,  but to supplement such ratings with its own
independent and on-going review of credit quality. The achievement of the Fund's
investment  objective by investment in such  securities may be more dependent on
the Advisor's credit analysis than is the case for higher quality bonds.  Should
the rating of a portfolio  security be  downgraded,  the Advisor will  determine
whether  it is in the best  interests  of the Fund to retain or  dispose of such
security.


Illiquid Securities and Restricted Securities.  The Fund may purchase securities
that are subject to legal or  contractual  restrictions  on resale  ("restricted
securities").  Generally  speaking,  restricted  securities  may be sold  (i) to
qualified  institutional buyers; (ii) in a privately negotiated transaction to a
limited number of purchasers;  (iii) in limited  quantities after they have been
held for a specified  period of time and other conditions are met pursuant to an
exemption  from  registration;  or  (iv)  in  a  public  offering  for  which  a
registration statement is in effect under the Securities Act of 1933, as amended
(the "1933 Act").  Issuers of  restricted  securities  may not be subject to the
disclosure and other investor  protection  requirements that would be applicable
if their securities were publicly traded.


Restricted  securities  are often  illiquid,  but they may also be  liquid.  For
example,  restricted securities that are eligible for resale under Rule 144A are
often deemed to be liquid.

The Fund's Board has approved  guidelines  for use by the Advisor in determining
whether a security  is liquid or  illiquid.  Among the  factors  the Advisor may
consider in reaching  liquidity  decisions relating to Rule 144A securities are:
(1) the  frequency  of trades  and quotes  for the  security;  (2) the number of
dealers  wishing  to  purchase  or sell the  security  and the  number  of other
potential purchasers;  (3) dealer undertakings to make a market in the security;
and (4) the nature of the security and the nature of the market for the security
(i.e.,  the time  needed to dispose of the  security,  the method of  soliciting
offers, and the mechanics of the transfer.  Issuers of restricted securities may
not be


                                       10
<PAGE>

subject to the disclosure and other investor  protection  requirement that would
be applicable if their  securities  were publicly  traded.  Where a registration
statement is required for the resale of restricted  securities,  the Fund may be
required  to bear  all or part of the  registration  expenses.  The  Fund may be
deemed  to be an  "underwriter"  for  purposes  of the 1933  Act,  when  selling
restricted  securities to the public and, in such event,  the Fund may be liable
to purchasers of such securities if the registration  statement  prepared by the
issuer is materially inaccurate or misleading.

The  Fund  may  also  purchase  securities  that  are not  subject  to  legal or
contractual   restrictions  on  resale,  but  that  are  deemed  illiquid.  Such
securities  may be illiquid,  for example,  because  there is a limited  trading
market for them.

The Fund may be unable to sell a restricted or illiquid  security.  In addition,
it may be more  difficult to determine a market value for restricted or illiquid
securities.  Moreover,  if adverse market  conditions were to develop during the
period between the Fund's decision to sell a restricted or illiquid security and
the point at which the Fund is permitted or able to sell such security, the Fund
might  obtain a price  less  favorable  than the price  that  prevailed  when it
decided to sell.


Impact of Large  Redemptions  and  Purchases of Fund Shares.  From time to time,
shareholders  of the Fund (which may include  affiliated  and/or  non-affiliated
registered  investment  companies  that invest in the Fund) may make  relatively
large redemptions or purchases of Fund shares.  These transactions may cause the
Fund to have to sell securities or invest  additional  cash, as the case may be.
While it is impossible to predict the overall impact of these  transactions over
time,  there could be adverse  effects on the Fund's  performance  to the extent
that the Fund may be required to sell securities or invest cash at times when it
would  not  otherwise  do so.  These  transactions  could  also  accelerate  the
realization of taxable  income if sales of securities  resulted in capital gains
and could also increase  transaction  costs, which may impact the Fund's expense
ratio.




IPO Risk.  Securities  issued  through  an  initial  public  offering  (IPO) can
experience an immediate drop in value if the demand for the securities  does not
continue to support the  offering  price.  Information  about the issuers of IPO
securities is also difficult to acquire since they are new to the market and may
not have lengthy operating histories.  The Fund may engage in short-term trading
in connection with its IPO investments, which could produce higher trading costs
and  adverse  tax  consequences.  The number of  securities  issued in an IPO is
limited,  so it is likely that IPO securities will represent a smaller component
of the Fund's  portfolio  as the Fund's  assets  increase  (and thus have a more
limited effect on the Fund's performance).

Interfund Borrowing and Lending Program.  The Fund has received exemptive relief
from the SEC,  which  permits the Fund to  participate  in an interfund  lending
program among certain investment companies advised by the Advisor. The interfund
lending  program  allows the  participating  funds to borrow money from and loan
money to each other for temporary or emergency purposes.  The program is subject
to a number of conditions designed to ensure fair and equitable treatment of all
participating  funds,  including  the  following:  (1) no fund may borrow  money
through the program  unless it receives a more  favorable  interest  rate than a
rate  approximating  the  lowest  interest  rate at which  bank  loans  would be
available to any of the participating  funds under a loan agreement;  and (2) no
fund may lend money  through  the program  unless it  receives a more  favorable
return than that available from an investment in repurchase  agreements  and, to
the extent applicable, money market cash sweep arrangements. In addition, a fund
may participate in the program only if and to the extent that such participation
is consistent with the fund's investment  objectives and policies (for instance,
money market  funds would  normally  participate  only as lenders and tax exempt
funds  only as  borrowers).  Interfund  loans and  borrowings  may  extend  only
overnight,  but could have a maximum duration of seven days. Loans may be called
on one day's notice.  A fund may have to borrow from a bank at a higher interest
rate if an interfund loan is called or not renewed.  Any delay in repayment to


                                       11
<PAGE>

a lending  fund could  result in a lost  investment  opportunity  or  additional
costs. The program is subject to the oversight and periodic review of the Boards
of the  participating  funds.  To the  extent  the Fund is  actually  engaged in
borrowing through the interfund lending program, the Fund will comply with their
respective nonfundamental policies on borrowing.

Investment  Company  Securities.  The  Fund  may  acquire  securities  of  other
investment  companies to the extent consistent with its investment objective and
subject to the  limitations of the 1940 Act. The Fund will  indirectly  bear its
proportionate share of any management fees and other expenses paid by such other
investment companies.

For example, the Fund may invest in a variety of investment companies which seek
to track the  composition  and  performance  of  specific  indexes or a specific
portion of an index.  These  index-based  investments hold  substantially all of
their assets in securities representing their specific index.  Accordingly,  the
main risk of investing in index-based  investments is the same as investing in a
portfolio  of equity  securities  comprising  the index.  The  market  prices of
index-based  investments  will fluctuate in accordance  with both changes in the
market  value of their  underlying  portfolio  securities  and due to supply and
demand for the  instruments on the exchanges on which they are traded (which may
result in their  trading at a discount  or premium to their  NAVs).  Index-based
investments  may not replicate  exactly the performance of their specified index
because of  transaction  costs and because of the  temporary  unavailability  of
certain component securities of the index.

Examples of index-based investments include:

SPDRs(R):  SPDRs,  an acronym for "Standard & Poor's  Depositary  Receipts," are
based on the S&P 500  Composite  Stock Price Index.  They are issued by the SPDR
Trust,  a unit  investment  trust that  holds  shares of  substantially  all the
companies  in the S&P 500 in  substantially  the  same  weighting  and  seeks to
closely track the price performance and dividend yield of the Index.

MidCap  SPDRs(R):  MidCap SPDRs are based on the S&P MidCap 400 Index.  They are
issued by the MidCap SPDR Trust, a unit investment  trust that holds a portfolio
of securities  consisting of  substantially  all of the common stocks in the S&P
MidCap 400 Index in substantially  the same weighting and seeks to closely track
the price performance and dividend yield of the Index.

Select Sector SPDRs(R):  Select Sector SPDRs are based on a particular sector or
group of  industries  that are  represented  by a specified  Select Sector Index
within the Standard & Poor's Composite Stock Price Index. They are issued by The
Select Sector SPDR Trust, an open-end  management  investment  company with nine
portfolios  that each seeks to closely track the price  performance and dividend
yield of a particular Select Sector Index.

DIAMONDS(SM):  DIAMONDS are based on the Dow Jones Industrial Average(SM).  They
are issued by the DIAMONDS Trust, a unit investment trust that holds a portfolio
of all the component common stocks of the Dow Jones Industrial Average and seeks
to closely track the price performance and dividend yield of the Dow.

Nasdaq-100 Shares: Nasdaq-100 Shares are based on the Nasdaq 100 Index. They are
issued by the Nasdaq-100  Trust, a unit investment  trust that holds a portfolio
consisting of substantially  all of the securities,  in  substantially  the same
weighting,  as the component stocks of the Nasdaq 100 Index and seeks to closely
track the price performance and dividend yield of the Index.



Investment of  Uninvested  Cash  Balances.  The Fund may have cash balances that
have not been invested in portfolio securities  ("Uninvested Cash").  Uninvested
Cash may result  from a variety of  sources,  including  dividends  or  interest
received from portfolio securities, unsettled securities transactions,  reserves
held for  investment  strategy  purposes,  scheduled  maturity  of  investments,
liquidation  of  investment  securities  to  meet  anticipated  redemptions  and
dividend payments, and new cash received from investors.  Uninvested Cash may be
invested  directly  in  money


                                       12
<PAGE>

market  instruments  or  other  short-term  debt  obligations.  Pursuant  to  an
Exemptive  Order issued by the SEC, the Fund may use Uninvested Cash to purchase
shares of affiliated  funds including money market funds,  short-term bond funds
and Cash  Management  QP Trust or one or more  future  entities  for  which  the
Advisor acts as trustee or  investment  advisor that operate as cash  management
investment  vehicles and that are excluded  from the  definition  of  investment
company  pursuant to section  3(c)(1) or 3(c)(7) of the 1940 Act  (collectively,
the "Central  Funds") in excess of the  limitations  of Section  12(d)(1) of the
1940  Act.  Investment  by the Fund in shares of the  Central  Funds  will be in
accordance with the Fund's investment  policies and restrictions as set forth in
its registration statement.

Certain of the Central Funds comply with rule 2a-7 under the 1940 Act. The other
Central Funds are or will be short-term  bond funds that invest in  fixed-income
securities  and maintain a dollar  weighted  average  maturity of three years or
less.  Each of the  Central  Funds will be managed  specifically  to  maintain a
highly liquid  portfolio,  and access to them will enhance the Fund's ability to
manage Uninvested Cash.

The Fund will invest  Uninvested  Cash in Central  Funds only to the extent that
the Fund's aggregate  investment in the Central Funds does not exceed 25% of its
total  assets.  Purchase  and sales of shares of  Central  Funds are made at net
asset value.


Lending of Portfolio Securities.  The Fund may lend its investment securities to
approved institutional borrowers,  including those who need to borrow securities
in order  to  complete  certain  transactions,  such as  covering  short  sales,
avoiding failures to deliver securities or completing arbitrage  operations.  By
lending  its  investment  securities,  the Fund  attempts  to  increase  its net
investment  income through the receipt of interest on the loan. Any gain or loss
in the market price of the securities loaned that might occur during the term of
the loan would belong to the Fund. The Fund may lend its  investment  securities
so long as the terms,  structure and the aggregate  amount of such loans are not
inconsistent  with the 1940 Act or the rules and regulations or  interpretations
of the SEC thereunder,  which currently require that (a) the borrower pledge and
maintain  with the Fund  collateral  consisting of liquid,  unencumbered  assets
having a value at all times  not less  than 100% of the value of the  securities
loaned,  (b) the  borrower  add to such  collateral  whenever  the  price of the
securities  loaned  rises (i.e.,  the borrower  "marks to the market" on a daily
basis), (c) the loan be made subject to termination by the Fund at any time, and
(d) the Fund  receives  reasonable  interest  on the loan (which may include the
Fund investing any cash collateral in interest bearing short-term  investments),
and  distributions  on the loaned  securities  and any  increase in their market
value. There may be risks of delay in recovery of the securities or even loss of
rights in the collateral should the borrower of the securities fail financially.
However,  loans will be made only to borrowers  selected by the Fund's  delegate
after a  commercially  reasonable  review of relevant  facts and  circumstances,
including the creditworthiness of the borrower.


At the  present  time,  the staff of the SEC does not  object  if an  investment
company pays reasonable negotiated fees in connection with loaned securities, so
long as such  fees are set  forth in a  written  contract  and  approved  by the
investment  company's  Board of Directors.  In addition,  voting rights may pass
with  the  loaned  securities,  but if a  material  event  occurs  affecting  an
investment on loan, the loan must be called and the securities  voted.  Pursuant
to an exemptive order granted by the SEC, cash  collateral  received by the Fund
may be  invested in a money  market  fund  managed by the Advisor (or one of its
affiliates).

Micro-Cap Company Risk. While, historically, micro-capitalization company stocks
have  outperformed  the stocks of large  companies,  the former have customarily
involved more investment risk as well.  There can be no assurance that this will
continue  to be true in the  future.  Micro-capitalization  companies  may  have
limited product lines, markets or financial resources; may lack management depth
or experience;  and may be more vulnerable to adverse general market or economic
developments than large companies.  The prices of  micro-capitalization  company
securities  are often more  volatile than prices  associated  with large company
issues,  and can display  abrupt or erratic  movements at times,  due to limited
trading volumes and less publicly available information.

Also,  because   micro-capitalization   companies  normally  have  fewer  shares
outstanding and these shares trade less frequently than large companies,  it may
be more  difficult  for the Fund to buy and  sell  significant  amounts  of such
shares without an unfavorable impact on prevailing market prices.

Some of the  companies  in which the Fund may  invest  may  distribute,  sell or
produce products which have recently been brought to market and may be dependent
on key  personnel.  The securities of  micro-capitalization  companies


                                       13
<PAGE>

are often traded  over-the-counter  and may not be traded in the volumes typical
on a national securities exchange.  Consequently,  in order to sell this type of
holding,  the Fund may need to discount  the  securities  from recent  prices or
dispose of the securities over a long period of time.

Participation  Interests.  The Fund may  purchase  from  financial  institutions
participation   interests  in  securities  in  which  the  Fund  may  invest.  A
participation  interest gives the Fund an undivided  interest in the security in
the  proportion  that the Fund's  participation  interest bears to the principal
amount of the security.  These instruments may have fixed,  floating or variable
interest  rates,  with  remaining  maturities  of  397  days  or  less.  If  the
participation  interest is unrated,  or has been given a rating below that which
is  permissible  for purchase by the Fund,  the  participation  interest will be
backed by an irrevocable letter of credit or guarantee of a bank, or the payment
obligation otherwise will be collateralized by US Government securities,  or, in
the case of unrated participation  interest,  determined by the Advisor to be of
comparable  quality  to those  instruments  in which  the Fund may  invest.  For
certain participation interests, the Fund will have the right to demand payment,
on not  more  than  seven  days'  notice,  for  all or any  part  of the  Fund's
participation  interests in the  security,  plus accrued  interest.  As to these
instruments,  the Fund generally intends to exercise its right to demand payment
only upon a default under the terms of the security.

Privatized Enterprises. Investments in foreign securities may include securities
issued  by  enterprises   that  have  undergone  or  are  currently   undergoing
privatization.  The  governments of certain  foreign  countries have, to varying
degrees,  embarked on privatization  programs  contemplating  the sale of all or
part of their  interests in state  enterprises.  The Fund's  investments  in the
securities  of  privatized   enterprises   may  include   privately   negotiated
investments in a government or  state-owned or controlled  company or enterprise
that has not yet  conducted  an  initial  equity  offering,  investments  in the
initial  offering of equity  securities  of a state  enterprise  or former state
enterprise and investments in the securities of a state enterprise following its
initial equity offering.

In certain jurisdictions,  the ability of foreign entities, such as the Fund, to
participate in privatizations may be limited by local law, or the price or terms
on which the Fund may be able to participate may be less  advantageous  than for
local investors.  Moreover, there can be no assurance that governments that have
embarked on  privatization  programs will continue to divest their  ownership of
state  enterprises,  that  proposed  privatizations  will be  successful or that
governments will not re-nationalize enterprises that have been privatized.

In the case of the enterprises in which the Fund may invest, large blocks of the
stock of those  enterprises may be held by a small group of  stockholders,  even
after  the  initial  equity  offerings  by those  enterprises.  The sale of some
portion or all of those blocks could have an adverse  effect on the price of the
stock of any such enterprise.

Prior to making an initial  equity  offering,  most state  enterprises or former
state  enterprises go through an internal  reorganization  or  management.  Such
reorganizations  are made in an attempt to better  enable these  enterprises  to
compete in the private sector. However,  certain reorganizations could result in
a  management  team  that does not  function  as well as an  enterprise's  prior
management and may have a negative effect on such enterprise.  In addition,  the
privatization  of an  enterprise  by its  government  may occur over a number of
years,  with the  government  continuing to hold a  controlling  position in the
enterprise even after the initial equity offering for the enterprise.

Prior to  privatization,  most of the  state  enterprises  in which the Fund may
invest  enjoy the  protection  of and receive  preferential  treatment  from the
respective  sovereigns that own or control them.  After making an initial equity
offering,  these  enterprises may no longer have such protection or receive such
preferential  treatment and may become subject to market  competition from which
they were  previously  protected.  Some of these  enterprises may not be able to
operate  effectively in a competitive market and may suffer losses or experience
bankruptcy due to such competition.

Real  Estate  Investment  Trusts  ("REITs").   REITs  are  sometimes  informally
categorized  into equity REITs,  mortgage REITs and hybrid REITs.  Investment in
REITs may subject the Fund to risks associated with the direct ownership of real
estate,  such  as  decreases  in real  estate  values,  overbuilding,  increased
competition  and other risks  related to local or general  economic  conditions,
increases  in  operating  costs and  property  taxes,  changes  in zoning  laws,
casualty or condemnation losses, possible environmental liabilities,  regulatory
limitations on rent and  fluctuations  in rental income.  Equity REITs generally
experience  these risks  directly  through fee or leasehold


                                       14
<PAGE>

interests,  whereas  mortgage REITs generally  experience these risks indirectly
through  mortgage  interests,   unless  the  mortgage  REIT  forecloses  on  the
underlying  real estate.  Changes in interest rates may also affect the value of
the Fund's  investment  in REITs.  For  instance,  during  periods of  declining
interest  rates,  certain  mortgage REITs may hold mortgages that the mortgagors
elect to prepay, which prepayment may diminish the yield on securities issued by
those REITs.

Certain REITs have relatively  small market  capitalizations,  which may tend to
increase the  volatility of the market price of their  securities.  Furthermore,
REITs  are  dependent  upon   specialized   management   skills,   have  limited
diversification and are,  therefore,  subject to risks inherent in operating and
financing a limited  number of  projects.  REITs are also  subject to heavy cash
flow dependency, defaults by borrowers and the possibility of failing to qualify
for tax-free  pass-through  of income  under the Code and to maintain  exemption
from the  registration  requirements  of the 1940  Act.  By  investing  in REITs
indirectly  through  the  Fund,  a  shareholder  will  bear  not only his or her
proportionate share of the expenses of the Fund, but also, indirectly,  expenses
of the REITs. In addition,  REITs depend  generally on their ability to generate
cash flow to make distributions to shareholders.

Repurchase  Agreements.  The Fund may enter in repurchase agreements pursuant to
its  investment  guidelines.  In  a  repurchase  agreement,  the  Fund  acquires
ownership of a security and  simultaneously  commits to resell that  security to
the seller, typically a bank or broker/dealer.

A repurchase agreement provides a means for the Fund to earn income on funds for
periods as short as overnight.  It is an  arrangement  under which the purchaser
(i.e., the Fund) acquires a security  ("Obligation")  and the seller agrees,  at
the time of sale, to repurchase  the  Obligation at a specified  time and price.
Securities  subject to a repurchase  agreement are held in a segregated  account
and, as described in more detail below, and the value of such securities kept at
least equal to the repurchase  price on a daily basis.  The repurchase price may
be higher than the purchase price,  the difference  being income to the Fund, or
the purchase and  repurchase  prices may be the same,  with interest at a stated
rate due to the Fund  together with the  repurchase  price upon  repurchase.  In
either case,  the income to the Fund is  unrelated  to the interest  rate on the
Obligation  itself.  Obligations will be held by the Custodian or in the Federal
Reserve Book Entry system.

It is not clear whether a court would consider the  Obligation  purchased by the
Fund  subject to a  repurchase  agreement as being owned by the Fund or as being
collateral  for a  loan  by  the  Fund  to  the  seller.  In  the  event  of the
commencement of bankruptcy or insolvency  proceedings with respect to the seller
of the  Obligation  before  repurchase  of the  Obligation  under  a  repurchase
agreement,  the Fund may  encounter  delay and incur costs  before being able to
sell the  security.  Delays may involve  loss of interest or decline in price of
the  Obligation.  If the court  characterizes  the transaction as a loan and the
Fund has not perfected a security  interest in the  Obligation,  the Fund may be
required to return the  Obligation  to the seller's  estate and be treated as an
unsecured creditor of the seller. As an unsecured creditor, the Fund would be at
risk  of  losing  some  or all of  the  principal  and  income  involved  in the
transaction.  As with any unsecured debt instrument  purchased for the Fund, the
Advisor  seeks to minimize the risk of loss  through  repurchase  agreements  by
analyzing the  creditworthiness  of the obligor,  in this case the seller of the
Obligation.  Apart from the risk of bankruptcy or insolvency proceedings,  there
is also the risk that the seller may fail to repurchase the Obligation, in which
case  the  Fund may  incur a loss if the  proceeds  to the Fund of the sale to a
third party are less than the  repurchase  price.  However,  if the market value
(including  interest)  of the  Obligation  subject to the  repurchase  agreement
becomes  less than the  repurchase  price  (including  interest),  the Fund will
direct the seller of the Obligation to deliver additional securities so that the
market value  (including  interest) of all securities  subject to the repurchase
agreement will equal or exceed the repurchase price.

Repurchase Commitments.  The Fund may enter into repurchase commitments with any
party  deemed   creditworthy  by  the  Advisor,   including  foreign  banks  and
broker/dealers,  if the transaction is entered into for investment  purposes and
the  counterparty's  creditworthiness  is at least  equal to that of  issuers of
securities  which the Fund may purchase.  Such  transactions may not provide the
Fund with collateral marked-to-market during the term of the commitment.

Reverse  Repurchase  Agreements.  The Fund may enter  into  "reverse  repurchase
agreements," which are repurchase agreements in which the Fund, as the seller of
the securities,  agrees to repurchase them at an agreed time and price. The Fund
maintains a segregated account in connection with outstanding reverse repurchase
agreements. The Fund will enter into reverse repurchase agreements only when the
Advisor  believes that the interest  income to


                                       15
<PAGE>

be earned from the investment of the proceeds of the transaction will be greater
than the interest  expense of the  transaction.  Such  transactions may increase
fluctuations in the market value of Fund assets and its yield.

Small Company  Risk.  The Advisor  believes  that many small  companies may have
sales and earnings growth rates which exceed those of larger companies, and that
such  growth  rates  may  in  turn  be  reflected  in  more  rapid  share  price
appreciation  over time.  However,  investing in smaller company stocks involves
greater risk than is  customarily  associated  with  investing  in larger,  more
established companies.  For example,  smaller companies can have limited product
lines,  markets,  or financial and managerial  resources.  Smaller companies may
also be dependent on one or a few key persons,  and may be more  susceptible  to
losses and risks of bankruptcy. Also, the securities of smaller companies may be
thinly traded (and  therefore  have to be sold at a discount from current market
prices or sold in small lots over an extended period of time). Transaction costs
in smaller company stocks may be higher than those of larger companies.

Sovereign Debt.  Investment in sovereign debt can involve a high degree of risk.
The governmental entity that controls the repayment of sovereign debt may not be
able or willing to repay the  principal  and/or  interest when due in accordance
with the terms of such debt. A governmental  entity's  willingness or ability to
repay  principal  and interest due in a timely  manner may be affected by, among
other factors, its cash flow situation,  the extent of its foreign reserves, the
availability  of sufficient  foreign  exchange on the date a payment is due, the
relative  size of the  debt  service  burden  to the  economy  as a  whole,  the
governmental  entity's  policy toward the  International  Monetary Fund, and the
political   constraints  to  which  a   governmental   entity  may  be  subject.
Governmental  entities  may also be  dependent  on expected  disbursements  from
foreign governments, multilateral agencies and others abroad to reduce principal
and  interest  arrearages  on their debt.  The  commitment  on the part of these
governments,  agencies and others to make such  disbursements may be conditioned
on a governmental  entity's  implementation  of economic reforms and/or economic
performance  and the timely  service of such  debtor's  obligations.  Failure to
implement  such reforms,  achieve such levels of economic  performance  or repay
principal  or  interest  when due may result in the  cancellation  of such third
parties commitments to lend funds to the governmental  entity, which may further
impair such  debtor's  ability or  willingness  to service its debts in a timely
manner. Consequently, governmental entities may default on their sovereign debt.
Holders of sovereign debt may be requested to participate in the rescheduling of
such debt and to extend  further  loans to  governmental  entities.  There is no
bankruptcy  proceeding by which  sovereign debt on which  governmental  entities
have defaulted may be collected in whole or in part.

Strategic  Transactions and  Derivatives.  The Fund may, but is not required to,
utilize various other investment  strategies as described below for a variety of
purposes,  such as hedging various market risks, managing the effective maturity
or duration of the fixed-income  securities in the Fund's portfolio or enhancing
potential gain.  These  strategies may be executed through the use of derivative
contracts.


In the course of pursuing these investment strategies, the Fund may purchase and
sell  exchange-listed and  over-the-counter  put and call options on securities,
equity and fixed-income indices and other instruments, purchase and sell futures
contracts and options thereon,  enter into various  transactions  such as swaps,
caps, floors, collars,  currency forward contracts,  currency futures contracts,
currency swaps or options on currencies,  or currency  futures and various other
currency  transactions  (collectively,  all  the  above  are  called  "Strategic
Transactions").  In addition, strategic transactions may also include additional
techniques,  instruments or strategies that are permitted as regulatory  changes
occur.  Strategic  Transactions  may be used without  limit  (subject to certain
limits imposed by the 1940 Act) to attempt to protect against  possible  changes
in the market  value of  securities  held in or to be  purchased  for the Fund's
portfolio   resulting  from  securities   markets  or  currency   exchange  rate
fluctuations,  to  protect  the  Fund's  unrealized  gains  in the  value of its
portfolio  securities,  to facilitate the sale of such securities for investment
purposes,  to manage the effective maturity or duration of the Fund's portfolio,
to  establish  a  position  in  the  derivatives  markets  as a  substitute  for
purchasing or selling  particular  securities or for any other purpose permitted
by  applicable  law.  Some  Strategic  Transactions  may also be used to enhance
potential  gain  although no more than 5% of the Fund's assets will be committed
to certain Strategic  Transactions entered into for non-hedging purposes. Any or
all  of  these  investment  techniques  may  be  used  at  any  time  and in any
combination,  and there is no  particular  strategy that dictates the use of one
technique rather than another, as use of any Strategic Transaction is a function
of numerous variables  including market  conditions.  The ability of the Fund to
utilize these Strategic  Transactions  successfully will depend on the Advisor's
ability to predict pertinent market movements, which cannot be assured. The Fund
will comply with applicable  regulatory  requirements  when  implementing  these
strategies, techniques and


                                       16
<PAGE>

instruments.  Strategic  Transactions  will  not be  used to  alter  fundamental
investment purposes and characteristics of the Fund, and the Fund will segregate
assets (or as provided by applicable regulations,  enter into certain offsetting
positions) to cover its  obligations  under options,  futures and swaps to limit
leveraging of the Fund.

Strategic  Transactions,  including derivative contracts,  have risks associated
with them  including  possible  default by the other  party to the  transaction,
illiquidity and, to the extent the Advisor's view as to certain market movements
is incorrect,  the risk that the use of such Strategic Transactions could result
in losses  greater  than if they had not been used.  Use of put and call options
may  result  in  losses  to a fund,  force  the sale or  purchase  of  portfolio
securities  at  inopportune  times or for prices higher than (in the case of put
options)  or lower than (in the case of call  options)  current  market  values,
limit the amount of  appreciation  the Fund can  realize on its  investments  or
cause the Fund to hold a security it might  otherwise  sell. The use of currency
transactions  can result in a fund  incurring  losses as a result of a number of
factors   including  the   imposition  of  exchange   controls,   suspension  of
settlements,  or the inability to deliver or receive a specified  currency.  The
use of  options  and  futures  transactions  entails  certain  other  risks.  In
particular,  the  variable  degree of  correlation  between  price  movements of
futures  contracts and price  movements in the related  portfolio  position of a
fund  creates  the  possibility  that losses on the  hedging  instrument  may be
greater than gains in the value of the Fund's position. In addition, futures and
options   markets   may  not  be  liquid  in  all   circumstances   and  certain
over-the-counter  options may have no markets.  As a result, in certain markets,
the  Fund  might  not be able  to  close  out a  transaction  without  incurring
substantial  losses,  if at  all.  Although  the  use  of  futures  and  options
transactions  for  hedging  should  tend to  minimize  the risk of loss due to a
decline in the value of the hedged position, at the same time they tend to limit
any  potential  gain  which  might  result  from an  increase  in  value of such
position. Finally, the daily variation margin requirements for futures contracts
would create a greater ongoing potential  financial risk than would purchases of
options, where the exposure is limited to the cost of the initial premium. Other
Strategic Transactions, such as forward contracts and swaps, are also subject to
similar risks.  Losses  resulting from the use of Strategic  Transactions  would
reduce net asset value, and possibly income, and such losses can be greater than
if the Strategic Transactions had not been utilized.


General  Characteristics of Options. Put options and call options typically have
similar structural  characteristics and operational  mechanics regardless of the
underlying  instrument on which they are purchased or sold.  Thus, the following
general  discussion relates to each of the particular types of options discussed
in greater  detail below.  In addition,  many Strategic  Transactions  involving
options  require  segregation of Fund assets in special  accounts,  as described
below under "Use of Segregated and Other Special Accounts."

A put option gives the purchaser of the option,  upon payment of a premium,  the
right to sell, and the writer the  obligation to buy, the  underlying  security,
commodity,  index,  currency or other  instrument  at the  exercise  price.  For
instance, the Fund's purchase of a put option on a security might be designed to
protect its holdings in the underlying  instrument (or, in some cases, a similar
instrument) against a substantial decline in the market value by giving the Fund
the right to sell such  instrument at the option  exercise price. A call option,
upon payment of a premium,  gives the  purchaser of the option the right to buy,
and the seller the obligation to sell, the underlying instrument at the exercise
price.  The Fund's  purchase of a call option on a security,  financial  future,
index,  currency  or other  instrument  might be  intended  to protect  the Fund
against an increase in the price of the underlying instrument that it intends to
purchase  in the  future  by  fixing  the  price at which it may  purchase  such
instrument.  An American  style put or call option may be  exercised at any time
during  the  option  period  while a  European  style put or call  option may be
exercised only upon expiration or during a fixed period prior thereto.  The Fund
is authorized to purchase and sell exchange listed options and  over-the-counter
options  ("OTC  options").  Exchange  listed  options  are issued by a regulated
intermediary such as the Options Clearing Corporation ("OCC"),  which guarantees
the  performance  of the  obligations  of  the  parties  to  such  options.  The
discussion  below uses the OCC as an example,  but is also  applicable  to other
financial intermediaries.

With certain exceptions, OCC issued and exchange listed options generally settle
by physical  delivery of the  underlying  security or currency,  although in the
future cash  settlement  may become  available.  Index  options  and  Eurodollar
instruments are cash settled for the net amount,  if any, by which the option is
"in-the-money"  (i.e., where the value of the underlying  instrument exceeds, in
the case of a call  option,  or is less than,  in the case of a put option,  the
exercise  price of the option) at the time the option is exercised.  Frequently,
rather than taking or making delivery of the underlying  instrument  through the
process of  exercising  the option,  listed  options are closed by entering into
offsetting  purchase or sale transactions that do not result in ownership of the
new option.

                                       17
<PAGE>

The Fund's  ability to close out its position as a purchaser or seller of an OCC
or exchange listed put or call option is dependent,  in part, upon the liquidity
of the option  market.  Among the  possible  reasons for the absence of a liquid
option market on an exchange are: (i)  insufficient  trading interest in certain
options; (ii) restrictions on transactions imposed by an exchange; (iii) trading
halts,  suspensions  or other  restrictions  imposed with respect to  particular
classes or series of options or underlying  securities  including reaching daily
price  limits;  (iv)  interruption  of the  normal  operations  of the OCC or an
exchange;  (v)  inadequacy  of the  facilities  of an  exchange or OCC to handle
current  trading  volume;  or  (vi)  a  decision  by one or  more  exchanges  to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant  market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms.

The hours of trading for listed  options may not coincide  with the hours during
which the underlying  financial  instruments are traded.  To the extent that the
option   markets  close  before  the  markets  for  the   underlying   financial
instruments,  significant  price  and  rate  movements  can  take  place  in the
underlying markets that cannot be reflected in the option markets.

OTC  options  are  purchased  from  or  sold to  securities  dealers,  financial
institutions  or  other  parties  ("Counterparties")  through  direct  bilateral
agreement with the Counterparty.  In contrast to exchange listed options,  which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement,  term, exercise price,
premium,  guarantees and security,  are set by  negotiation of the parties.  The
Fund will only sell OTC  options  (other  than OTC  currency  options)  that are
subject to a buy-back provision  permitting the Fund to require the Counterparty
to sell the option back to the Fund at a formula  price within  seven days.  The
Fund  expects  generally  to enter into OTC  options  that have cash  settlement
provisions, although it is not required to do so.

Unless the  parties  provide  for it,  there is no central  clearing or guaranty
function in an OTC option.  As a result,  if the  Counterparty  fails to make or
take delivery of the security,  currency or other  instrument  underlying an OTC
option  it has  entered  into  with the Fund or fails to make a cash  settlement
payment due in accordance with the terms of that option,  the fund will lose any
premium  it paid  for the  option  as well  as any  anticipated  benefit  of the
transaction.  Accordingly,  the Advisor must assess the creditworthiness of each
such Counterparty or any guarantor or credit  enhancement of the  Counterparty's
credit to  determine  the  likelihood  that the terms of the OTC option  will be
satisfied.  The  Fund  will  engage  in OTC  option  transactions  only  with US
government securities dealers recognized by the Federal Reserve Bank of New York
as "primary  dealers"  or  broker/dealers,  domestic  or foreign  banks or other
financial  institutions which have received (or the guarantors of the obligation
of which have  received) a short-term  credit rating of A-1 from S&P or P-1 from
Moody's or an  equivalent  rating  from any  nationally  recognized  statistical
rating organization ("NRSRO") or, in the case of OTC currency transactions,  are
determined to be of equivalent  credit quality by the Advisor.  The staff of the
SEC  currently  takes the position that OTC options  purchased by the Fund,  and
portfolio securities  "covering" the amount of the Fund's obligation pursuant to
an OTC  option  sold by it (the  cost of the  sell-back  plus  the  in-the-money
amount,  if any) are  illiquid,  and are  subject  to the Fund's  limitation  on
investing no more than 15% of its net assets in illiquid securities.

If the Fund sells a call  option,  the premium  that it receives  may serve as a
partial hedge,  to the extent of the option  premium,  against a decrease in the
value of the  underlying  securities  or  instruments  in its  portfolio or will
increase the Fund's income. The sale of put options can also provide income.


The Fund may purchase and sell call options on, among other  things,  securities
including US Treasury and agency securities, mortgage-backed securities, foreign
sovereign  debt,  corporate  debt  securities,   equity  securities   (including
convertible  securities)  and Eurodollar  instruments  that are traded on US and
foreign  securities  exchanges  and  in  the  over-the-counter  markets,  and on
securities indices, currencies and futures contracts. All calls sold by the fund
must be "covered"  (i.e.,  the Fund must own the securities or futures  contract
subject to the call) or must meet the asset segregation  requirements  described
below as long as the call is outstanding.  Even though the Fund will receive the
option  premium to help protect it against loss, a call sold by the Fund exposes
the fund  during  the term of the  option to  possible  loss of  opportunity  to
realize  appreciation  in  the  market  price  of  the  underlying  security  or
instrument  and may require the Fund to hold a security or  instrument  which it
might otherwise have sold.


                                       18
<PAGE>


The Fund may purchase and sell put options on,  among other  things,  securities
including US Treasury and agency securities, mortgage-backed securities, foreign
sovereign  debt,  corporate  debt  securities,   equity  securities   (including
convertible  securities) and Eurodollar instruments (whether or not it holds the
above securities in its portfolio),  and on securities  indices,  currencies and
futures contracts other than futures on individual corporate debt and individual
equity securities. The Fund will not sell put options if, as a result, more than
50% of the Fund's total assets would be required to be  segregated  to cover its
potential  obligations  under such put options  other than those with respect to
futures and options  thereon.  In selling put options,  there is a risk that the
Fund may be required to buy the underlying  security at a disadvantageous  price
above the market price.

General Characteristics of Futures. The Fund may enter into futures contracts or
purchase  or sell  put and  call  options  on such  futures  as a hedge  against
anticipated  interest rate, currency or equity market changes,  and for duration
management,  risk  management  and  return  enhancement  purposes.  Futures  are
generally  bought and sold on the  commodities  exchanges  where they are listed
with payment of initial and variation  margin as described  below. The sale of a
futures  contract  creates a firm  obligation  by the seller,  to deliver to the
buyer the specific type of financial  instrument called for in the contract at a
specific  future  time for a  specified  price  (or,  with  respect  to  certain
instruments,  such as index  futures and  Eurodollar  instruments,  the net cash
amount)  and a firm  obligation  by the buyer to deliver  the  specified  price.
Options on futures contracts are similar to options on securities except that an
option on a futures  contract  gives the  purchaser  the right in return for the
premium paid to assume a position in a futures contract and obligates the seller
to deliver such position.

The Fund has claimed  exclusion from the definition of the term  "commodity pool
operator" under the Commodity Exchange Act.  Therefore,  the Fund is not subject
to commodity  pool  operator  registration  and  regulation  under the Commodity
Exchange  Act.  Futures and options on futures may be entered into for bona fide
hedging,  risk management (including duration management) or other portfolio and
return  enhancement  management  purposes.  Typically,   maintaining  a  futures
contract  or  selling an option  thereon  requires  the Fund to  deposit  with a
financial  intermediary  as security  for its  obligations  an amount of cash or
other specified  assets (initial  margin) which initially is typically 1% to 10%
of the face amount of the  contract  (but may be higher in some  circumstances).
Additional  cash or assets  (variation  margin) may be required to be  deposited
thereafter  on a daily  basis as the  marked  to  market  value of the  contract
fluctuates. The purchase of an option on financial futures involves payment of a
premium for the option  without any further  obligation on the part of the Fund.
If the Fund  exercises  an option on a futures  contract it will be obligated to
post  initial  margin  (and  potential  subsequent  variation  margin)  for  the
resulting futures position just as it would for any position.  Futures contracts
and  options  thereon  are  generally  settled by  entering  into an  offsetting
transaction  but there can be no assurance that the position can be offset prior
to settlement at an advantageous price, nor that delivery will occur.


Options on Securities  Indices and Other  Financial  Indices.  The Fund also may
purchase and sell call and put options on securities indices and other financial
indices and in so doing can achieve many of the same objectives it would achieve
through  the sale or  purchase  of options  on  individual  securities  or other
instruments.  Options on  securities  indices  and other  financial  indices are
similar to options on a security or other  instrument  except that,  rather than
settling by physical delivery of the underlying instrument,  they settle by cash
settlement,  i.e.,  an option on an index gives the holder the right to receive,
upon exercise of the option, an amount of cash if the closing level of the index
upon which the option is based exceeds,  in the case of a call, or is less than,
in the case of a put, the exercise  price of the option  (except if, in the case
of an OTC option, physical delivery is specified).  This amount of cash is equal
to the excess of the closing  price of the index over the exercise  price of the
option,  which  also may be  multiplied  by a formula  value.  The seller of the
option is  obligated,  in return for the premium  received,  to make delivery of
this  amount.  The  gain or loss on an  option  on an  index  depends  on  price
movements in the instruments making up the market,  market segment,  industry or
other  composite  on which the  underlying  index is based,  rather  than  price
movements in  individual  securities,  as is the case with respect to options on
securities.

Currency  Transactions.  The Fund  may  engage  in  currency  transactions  with
Counterparties  primarily in order to hedge,  or manage the risk of the value of
portfolio holdings denominated in particular  currencies against fluctuations in
relative  value.  Currency  transactions  include  forward  currency  contracts,
exchange listed currency futures, exchange listed and OTC options on currencies,
and currency swaps. A forward currency contract involves a


                                       19
<PAGE>

privately  negotiated  obligation to purchase or sell (with  delivery  generally
required) a specific currency at a future date, which may be any fixed number of
days from the date of the contract agreed upon by the parties, at a price set at
the time of the contract. A currency swap is an agreement to exchange cash flows
based on the  notional  difference  among two or more  currencies  and  operates
similarly to an interest rate swap, which is described below. The Fund may enter
into  currency  transactions  with  Counterparties  which have  received (or the
guarantors of the obligations which have received) a credit rating of A-1 or P-1
by S&P or Moody's,  respectively, or that have an equivalent rating from a NRSRO
or (except for OTC currency  options) are determined to be of equivalent  credit
quality by the Advisor.

The  Fund's   dealings  in  forward   currency   contracts  and  other  currency
transactions  such as futures,  options,  options on futures and swaps generally
will be limited to hedging  involving either specific  transactions or portfolio
positions  except as described  below.  Transaction  hedging is entering  into a
currency transaction with respect to specific assets or liabilities of the fund,
which  will  generally  arise in  connection  with the  purchase  or sale of its
portfolio  securities or the receipt of income  therefrom.  Position  hedging is
entering  into  a  currency  transaction  with  respect  to  portfolio  security
positions denominated or generally quoted in that currency.


The Fund generally will not enter into a transaction to hedge currency  exposure
to an  extent  greater,  after  netting  all  transactions  intended  wholly  or
partially to offset other transactions,  than the aggregate market value (at the
time of entering into the  transaction)  of the securities held in its portfolio
that are denominated or generally  quoted in or currently  convertible into such
currency, other than with respect to proxy hedging or cross hedging as described
below, as applicable.


The Fund may also  cross-hedge  currencies  by  entering  into  transactions  to
purchase or sell one or more  currencies  that are  expected to decline in value
relative to other  currencies to which the fund has or in which the Fund expects
to have portfolio exposure.


To reduce  the  effect of  currency  fluctuations  on the value of  existing  or
anticipated holdings of portfolio securities,  the Fund may also engage in proxy
hedging.  Proxy  hedging  is often  used when the  currency  to which the Fund's
portfolio is exposed is difficult to hedge or to hedge against the dollar. Proxy
hedging  entails  entering into a commitment or option to sell a currency  whose
changes in value are  generally  considered  to be  correlated  to a currency or
currencies in which some or all of the Fund's  portfolio  securities  are or are
expected  to be  denominated,  in  exchange  for US  dollars.  Currency  hedging
involves some of the same risks and  considerations  as other  transactions with
similar instruments.  Currency  transactions can result in losses to the Fund if
the currency being hedged fluctuates in value to a degree or in a direction that
is not anticipated.  Further,  there is the risk that the perceived  correlation
between  various  currencies may not be present or may not be present during the
particular  time that the Fund is engaging in proxy hedging.  If the Fund enters
into a  currency  hedging  transaction,  the Fund  will  comply  with the  asset
segregation requirements described below, as applicable.


Risks of  Currency  Transactions.  Currency  transactions  are  subject to risks
different from those of other portfolio  transactions.  Because currency control
is of great  importance  to the  issuing  governments  and  influences  economic
planning and policy, purchases and sales of currency and related instruments can
be  negatively  affected  by  government  exchange  controls,   blockages,   and
manipulations or exchange restrictions imposed by governments.  These can result
in losses to the Fund if it is unable to deliver or receive currency or funds in
settlement of obligations  and could also cause hedges it has entered into to be
rendered  useless,  resulting  in full  currency  exposure as well as  incurring
transaction  costs.  Buyers and sellers of  currency  futures are subject to the
same risks that apply to the use of futures generally.  Further, settlement of a
currency  futures  contract for the purchase of most  currencies must occur at a
bank  based in the  issuing  nation.  Trading  options  on  currency  futures is
relatively  new,  and the ability to establish  and close out  positions on such
options is subject to the maintenance of a liquid market which may not always be
available.  Currency  exchange rates may fluctuate based on factors extrinsic to
that country's economy.

Risks of Strategic  Transactions  Outside the US. When conducted outside the US,
Strategic  Transactions may not be regulated as rigorously as in the US, may not
involve a clearing mechanism and related guarantees, and are subject to the risk
of  governmental  actions  affecting  trading  in,  or the  prices  of,  foreign
securities,  currencies and other instruments.  The value of such positions also
could be adversely affected by: (i) other complex foreign


                                       20
<PAGE>

political,  legal and economic factors,  (ii) lesser availability than in the US
of data on which to make trading  decisions,  (iii) delays in the Fund's ability
to act upon economic  events  occurring in foreign  markets during  non-business
hours in the US, (iv) the imposition of different  exercise and settlement terms
and  procedures  and margin  requirements  than in the US, and (v) lower trading
volume and liquidity.


Swaps, Caps, Floors and Collars. Among the Strategic Transactions into which the
Fund may enter  are  interest  rate,  currency,  index  and other  swaps and the
purchase or sale of related caps, floors and collars.  The Fund expects to enter
into these transactions primarily to preserve a return or spread on a particular
investment  or  portion  of  its   portfolio,   to  protect   against   currency
fluctuations,  as a  duration  management  technique,  to  protect  against  any
increase in the price of securities the fund  anticipates  purchasing at a later
date or to enhance returns.  The Fund will not sell interest rate caps or floors
where it does not own  securities  or other  instruments  providing  the  income
stream  the fund may be  obligated  to pay.  Interest  rate  swaps  involve  the
exchange by the fund with another party of their  respective  commitments to pay
or receive interest,  e.g., an exchange of floating rate payments for fixed rate
payments with respect to a notional  amount of principal.  A currency swap is an
agreement to exchange cash flows on a notional  amount of two or more currencies
based on the  relative  value  differential  among  them and an index swap is an
agreement to swap cash flows on a notional amount based on changes in the values
of the  reference  indices.  The  purchase of a cap  entitles  the  purchaser to
receive payments on a notional  principal amount from the party selling such cap
to the extent that a specified  index exceeds a  predetermined  interest rate or
amount.  The purchase of a floor entitles the purchaser to receive payments on a
notional principal amount from the party selling such floor to the extent that a
specified index falls below a predetermined interest rate or amount. A collar is
a  combination  of a cap and a floor that  preserves a certain  return  within a
predetermined range of interest rates or values.


Use of Segregated and Other Special Accounts.  Many Strategic  Transactions,  in
addition to other  requirements,  require that the Fund segregate cash or liquid
assets with its  custodian  to the extent  fund  obligations  are not  otherwise
"covered" through ownership of the underlying security,  financial instrument or
currency.  In general,  either the full amount of any  obligation by the Fund to
pay or  deliver  securities  or  assets  must be  covered  at all  times  by the
securities, instruments or currency required to be delivered, or, subject to any
regulatory  restrictions,  an amount of cash or liquid  assets at least equal to
the current amount of the obligation must be segregated with the custodian.  The
segregated  assets cannot be sold or transferred  unless  equivalent  assets are
substituted in their place or it is no longer  necessary to segregate  them. For
example,  a call  option  written by the Fund will  require the Fund to hold the
securities  subject  to the  call (or  securities  convertible  into the  needed
securities  without  additional  consideration)  or to segregate  cash or liquid
assets  sufficient  to  purchase  and  deliver  the  securities  if the  call is
exercised.  A call option sold by the Fund on an index will  require the Fund to
own portfolio  securities which correlate with the index or to segregate cash or
liquid assets equal to the excess of the index value over the exercise  price on
a current basis. A put option written by the Fund requires the Fund to segregate
cash or liquid assets equal to the exercise price.

Except when the Fund enters into a forward  contract for the purchase or sale of
a security denominated in a particular currency,  which requires no segregation,
a  currency  contract  which  obligates  the Fund to buy or sell  currency  will
generally  require the Fund to hold an amount of that  currency or liquid assets
denominated  in that currency  equal to the Fund's  obligations  or to segregate
cash or liquid assets equal to the amount of the Fund's obligation.

OTC options entered into by the Fund,  including those on securities,  currency,
financial  instruments  or  indices  and OCC issued and  exchange  listed  index
options, will generally provide for cash settlement.  As a result, when the Fund
sells  these  instruments  it will  only  segregate  an amount of cash or liquid
assets  equal to its accrued net  obligations,  as there is no  requirement  for
payment or delivery of amounts in excess of the net amount.  These  amounts will
equal 100% of the exercise price in the case of a non cash-settled put, the same
as an OCC guaranteed listed option sold by the Fund, or the in-the-money  amount
plus any sell-back  formula amount in the case of a cash-settled put or call. In
addition,  when  the Fund  sells a call  option  on an index at a time  when the
in-the-money  amount exceeds the exercise price, the Fund will segregate,  until
the option expires or is closed out, cash or cash equivalents  equal in value to
such excess.  OCC issued and exchange listed options sold by the Fund other than
those above  generally  settle with  physical  delivery,  or with an election of
either  physical  delivery or cash  settlement  and the Fund will  segregate  an
amount of cash or  liquid  assets  equal to the full  value of the  option.  OTC
options settling


                                       21
<PAGE>

with physical delivery,  or with an election of either physical delivery or cash
settlement  will be treated the same as other  options  settling  with  physical
delivery.

In the case of a futures  contract or an option  thereon,  the Fund must deposit
initial  margin and possible daily  variation  margin in addition to segregating
cash or liquid assets  sufficient to meet its  obligation to purchase or provide
securities  or  currencies,  or to pay the amount owed at the  expiration  of an
index-based  futures  contract.  Such liquid  assets may  consist of cash,  cash
equivalents, liquid debt or equity securities or other acceptable assets.

With  respect to swaps,  the Fund will accrue the net amount of the  excess,  if
any, of its  obligations  over its  entitlements  with respect to each swap on a
daily basis and will segregate an amount of cash or liquid assets having a value
equal to the accrued excess.  Caps,  floors and collars  require  segregation of
assets with a value equal to the Fund's net obligation, if any.

Strategic  Transactions  may be covered  by other  means  when  consistent  with
applicable  regulatory  policies.  The  fund  may  also  enter  into  offsetting
transactions so that its combined position,  coupled with any segregated assets,
equals  its  net  outstanding   obligation  in  related  options  and  Strategic
Transactions.  For example,  the Fund could  purchase a put option if the strike
price of that option is the same or higher than the strike price of a put option
sold by the Fund. Moreover,  instead of segregating cash or liquid assets if the
Fund held a futures or forward  contract,  it could purchase a put option on the
same futures or forward  contract with a strike price as high or higher than the
price of the contract held.  Other Strategic  Transactions may also be offset in
combinations.  If the offsetting  transaction terminates at the time of or after
the primary  transaction no segregation is required,  but if it terminates prior
to such time, cash or liquid assets equal to any remaining obligation would need
to be segregated.

Combined Transactions. The Fund may enter into multiple transactions,  including
multiple options transactions,  multiple futures transactions, multiple currency
transactions  (including forward currency  contracts) and multiple interest rate
transactions and any combination of futures, options, currency and interest rate
transactions   ("component"   transactions),   instead  of  a  single  Strategic
Transaction,  as part of a single or combined  strategy  when, in the opinion of
the  Advisor,  it is in the best  interests  of the  Fund to do so.  A  combined
transaction  will usually  contain  elements of risk that are present in each of
its component transactions.  Although combined transactions are normally entered
into based on the Advisor's  judgment that the combined  strategies  will reduce
risk or otherwise  more  effectively  achieve the desired  portfolio  management
goal, it is possible that the  combination  will instead  increase such risks or
hinder achievement of the portfolio management objective.

Supranational Entities.  Supranational entities are international  organizations
designated   or  supported  by   governmental   entities  to  promote   economic
reconstruction or development and international banking institutions and related
government agencies.  Examples include the International Bank for Reconstruction
and Development  (the World Bank),  the European Coal and Steel  Community,  The
Asian  Development Bank and the InterAmerican  Development Bank.  Obligations of
supranational  entities  are  backed  by the  guarantee  of one or more  foreign
governmental parties which sponsor the entity.

When-Issued Securities.  The Fund may from time to time purchase equity and debt
securities on a "when-issued,"  "delayed  delivery" or "forward delivery" basis.
The price of such securities, which may be expressed in yield terms, is fixed at
the time the  commitment  to purchase is made,  but delivery and payment for the
securities  takes place at a later date.  During the period between purchase and
settlement, no payment is made by the Fund to the issuer and no interest accrues
to the Fund. When the Fund purchases such securities, it immediately assumes the
risks of ownership, including the risk of price fluctuation.  Failure to deliver
a security purchased on this basis may result in a loss or missed opportunity to
make an alternative investment.

To the extent that assets of the Fund are held in cash pending the settlement of
a purchase of securities,  the Fund would earn no income.  While such securities
may be sold prior to the settlement date, the Fund intends to purchase them with
the  purpose of actually  acquiring  them unless a sale  appears  desirable  for
investment  reasons.  At the time the Fund makes the  commitment  to  purchase a
security on this basis,  it will record the transaction and reflect the value of
the  security  in  determining  its net asset  value.  The  market  value of the
securities may be more or less than the purchase price.  The Fund will establish
a segregated  account in which it will maintain cash and liquid securities equal
in value to commitments for such securities.

                                       22
<PAGE>

Warrants.  The Fund may  invest in  warrants  up to 5% of the value of its total
assets.  The holder of a warrant has the right,  until the warrant  expires,  to
purchase a given number of shares of a particular  issuer at a specified  price.
Such  investments  can  provide a greater  potential  for profit or loss than an
equivalent  investment  in the  underlying  security.  Prices of warrants do not
necessarily  move,  however,  in  tandem  with  the  prices  of  the  underlying
securities and are, therefore, considered speculative investments.  Warrants pay
no  dividends  and confer no rights  other than a purchase  option.  Thus,  if a
warrant held by the Fund were not exercised by the date of its  expiration,  the
Fund would lose the entire purchase price of the warrant.

Zero Coupon Securities.  The Fund may invest in zero coupon securities which pay
no cash  income  and are  sold at  substantial  discounts  from  their  value at
maturity.  When  held to  maturity,  their  entire  income,  which  consists  of
accretion of discount,  comes from the difference between the purchase price and
their  value at  maturity.  The effect of owning  instruments  which do not make
current  interest  payments  is that a fixed  yield  is  earned  not only on the
original  investment but also, in effect,  on all discount  accretion during the
life of the obligation.  This implicit reinvestment of earnings at the same rate
eliminates the risk of being unable to reinvest  distributions at a rate as high
as the implicit yield on the zero coupon bond,  but at the same time  eliminates
any  opportunity  to reinvest  earnings at higher rates.  For this reason,  zero
coupon bonds are subject to  substantially  greater  price  fluctuations  during
periods of changing  market  interest rates than those of comparable  securities
that pay  interest  currently,  which  fluctuation  is  greater as the period to
maturity is longer.  Zero coupon  convertible  securities  which are convertible
into  common  stock  offer  the   opportunity  for  capital   appreciation   (or
depreciation)  as increases (or  decreases)  in market value of such  securities
closely follow the movements in the market value of the underlying common stock.
Zero coupon  convertible  securities  generally are expected to be less volatile
than the underlying common stocks, as they usually are issued with maturities of
15  years  or less  and are  issued  with  options  and/or  redemption  features
exercisable by the holder of the  obligation  entitling the holder to redeem the
obligation and receive a defined cash payment.

Portfolio Holdings


In addition to the public disclosure of Fund portfolio holdings through required
Securities and Exchange Commission ("SEC") quarterly filings,  the Fund may make
its portfolio holdings information publicly available on the DWS Funds' Web site
as described in the Fund's prospectus.  The Fund does not disseminate non-public
information  about  portfolio  holdings  except in accordance  with policies and
procedures adopted by the Fund.

The Fund's  procedures permit non-public  portfolio  holdings  information to be
shared with Deutsche Asset Management and its affiliates  (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys,   officers  and  trustees/directors  and  each  of  their  respective
affiliates and advisers who require access to this  information to fulfill their
duties to the Fund and are subject to the duties of  confidentiality,  including
the duty not to trade on non-public information,  imposed by law or contract, or
by the Fund's  procedures.  This  non-public  information may also be disclosed,
subject to the  requirements  described  below,  to securities  lending  agents,
financial  printers,  proxy voting  firms,  mutual fund  analysts and rating and
tracking  agencies,  or to shareholders  in connection with in-kind  redemptions
(collectively, "Authorized Third Parties").

Prior to any disclosure of the Fund's non-public  portfolio holdings information
to Authorized  Third Parties,  a person  authorized by the Fund's Directors must
make a good faith  determination  in light of the facts then known that the Fund
has a  legitimate  business  purpose for  providing  the  information,  that the
disclosure is in the best interest of the Fund,  and that the recipient  assents
or otherwise has a duty to keep the  information  confidential  and to not trade
based on the information  received while the information remains non-public.  No
compensation is received by the Fund or DeAM for disclosing  non-public holdings
information. Periodic reports regarding these procedures will be provided to the
Fund's Directors.

Portfolio  holdings  information  distributed  by the trading desks of DeAM or a
subadvisor for the purpose of facilitating  efficient trading of such securities
and receipt of relevant  research is not subject to the foregoing  requirements.
Non-public   portfolio   holding   information   does  not   include   portfolio
characteristics  (other than holdings or subsets of holdings) about the Fund and
information  derived  therefrom,  including,  but not limited to, how the Fund's
investments are divided among various sectors, industries,  countries, value and
growth stocks,  bonds,  currencies and cash,  types of bonds,  bond  maturities,
duration,  bond  coupons and bond credit  quality  ratings so long as the Fund's
holdings could not be derived from such information.


                                       23
<PAGE>



Registered  investment  companies  that are subadvised by DeAM may be subject to
different  portfolio  holdings  disclosure  policies,  and neither  DeAM nor the
Fund's  Directors  exercise  control over such policies.  In addition,  separate
account  clients of DeAM have  access to their  portfolio  holdings  and are not
subject  to the Fund's  portfolio  holdings  disclosure  policy.  The  portfolio
holdings  of some of the  funds  subadvised  by DeAM  and  some of the  separate
accounts managed by DeAM may substantially  overlap with the portfolio  holdings
of the Fund.

DeAM also  manages  certain  unregistered  commingled  trusts and creates  model
portfolios,  the portfolio holdings of which may substantially  overlap with the
portfolio holdings of the Fund. To the extent that investors in these commingled
trusts  or  recipients  of model  portfolio  holdings  information  may  receive
portfolio  holdings  information  of their  trust or of a model  portfolio  on a
different basis from that on which Fund portfolio  holdings  information is made
public,  DeAM has implemented  procedures  reasonably designed to encourage such
investors and recipients to keep such information  confidential,  and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that the Fund's  policies and  procedures  with respect to
the disclosure of portfolio holdings  information will protect the Fund from the
potential  misuse of portfolio  holdings  information  by those in possession of
that information.


Regulatory Matters and Legal Proceedings

On December 21, 2006,  Deutsche Asset Management  ("DeAM")  settled  proceedings
with the  Securities and Exchange  Commission  ("SEC") and the New York Attorney
General on behalf of Deutsche  Asset  Management,  Inc.  ("DAMI") and DIMA,  the
investment advisors to many of the DWS Scudder funds,  regarding  allegations of
improper  trading of fund  shares at DeAM and at the legacy  Scudder  and Kemper
organizations prior to their acquisition by DeAM in April 2002. These regulators
alleged that although the prospectuses for certain funds in the


                                       24
<PAGE>

regulators' view indicated that the funds did not permit market timing, DAMI and
DIMA breached their fiduciary duty to those funds in that their efforts to limit
trading  activity  in the  funds  were  not  effective  at  certain  times.  The
regulators  also alleged that DAMI and DIMA  breached  their  fiduciary  duty to
certain  funds  by  entering  into  certain  market  timing   arrangements  with
investors.  These trading  arrangements  originated  in businesses  that existed
prior to the currently  constituted DeAM organization,  which came together as a
result of various  mergers  of the legacy  Scudder,  Kemper  and  Deutsche  fund
groups,  and all of the  arrangements  were terminated prior to the start of the
regulatory  investigations  that  began in the summer of 2003.  No current  DeAM
employee   approved  these  trading   arrangements.   Under  the  terms  of  the
settlements, DAMI and DIMA neither admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only,  provide for payment of  disgorgement  in
the  amount  of $17.2  million.  The terms of the  settlement  with the New York
Attorney  General  provide for payment of  disgorgement  in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million.  The total amount payable by DeAM,
approximately  $122.3  million,  will  be  distributed  to  shareholders  of the
affected  funds in  accordance  with a  distribution  plan to be  developed by a
distribution  consultant.  The funds'  investment  advisors do not believe these
amounts  will have a material  adverse  financial  impact on them or  materially
affect their ability to perform  under their  investment  management  agreements
with the DWS funds.  The  above-described  amounts are not  material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders,  DeAM is subject to certain  undertakings
regarding  the conduct of its business in the future,  including  formation of a
Code of Ethics  Oversight  Committee  to oversee all matters  relating to issues
arising  under  the  advisors'  Code of  Ethics;  establishment  of an  Internal
Compliance Controls Committee having overall compliance oversight responsibility
of the advisors; engagement of an Independent Compliance Consultant to conduct a
comprehensive review of the advisors' supervisory  compliance and other policies
and  procedures  designed to prevent  and detect  breaches  of  fiduciary  duty,
breaches  of the Code of Ethics and federal  securities  law  violations  by the
advisors and their employees; and commencing in 2008, the advisors shall undergo
a compliance review by an independent third party.

In addition,  DeAM is subject to certain  further  undertakings  relating to the
governance  of the mutual funds,  including  that at least 75% of the members of
the  Boards  of  Trustees/Directors  overseeing  the DWS  Funds  continue  to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors
continue to be  independent  of DeAM;  DeAM  maintain  existing  management  fee
reductions  for  certain  funds  for a period  of five  years  and not  increase
management  fees for these certain funds during this period;  the funds retain a
senior  officer (or  independent  consultants,  as applicable)  responsible  for
assisting in the review of fee  arrangements  and  monitoring  compliance by the
funds and the investment advisors with securities laws,  fiduciary duties, codes
of ethics and other compliance policies,  the expense of which shall be borne by
DeAM; and periodic account  statements,  fund prospectuses and the mutual funds'
web site contain  additional  disclosure  and/or tools that assist  investors in
understanding  the fees and costs associated with an investment in the funds and
the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education  contributions  totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On  September  28,  2006,  the SEC and the National  Association  of  Securities
Dealers  ("NASD")  announced  final  agreements  in  which  Deutsche  Investment
Management Americas Inc. ("DIMA"),  Deutsche Asset Management, Inc. ("DAMI") and
Scudder  Distributors,  Inc. ("DWS-SDI") (now known as DWS Scudder Distributors,
Inc.)  settled  administrative  proceedings  regarding  disclosure  of brokerage
allocation  practices in connection  with sales of the Scudder Funds' (now known
as the DWS Scudder Funds) shares during  2001-2003.  The agreements with the SEC
and NASD are reflected in orders which state, among other things,  that DIMA and
DAMI failed to disclose potential conflicts of interest to the funds' Boards and
to  shareholders   relating  to  DWS-SDI's  use  of  certain  funds'   brokerage
commissions to reduce revenue sharing costs to broker-dealer  firms with whom it
had  arrangements to market and distribute  Scudder Fund shares.  These directed
brokerage practices were discontinued in October 2003.

                                       25
<PAGE>

Under the terms of the  settlements,  in which DIMA,  DAMI and  DWS-SDI  neither
admitted  nor denied any of the  regulators'  findings,  DIMA,  DAMI and DWS-SDI
agreed to pay  disgorgement,  prejudgment  interest  and civil  penalties in the
total amount of $19.3 million. The portion of the settlements distributed to the
funds was approximately $17.8 million and was paid to the funds as prescribed by
the settlement  orders based upon the amount of brokerage  commissions from each
fund used to satisfy revenue sharing  agreements  with  broker-dealers  who sold
fund shares.

As part of the  settlements,  DIMA,  DAMI and DWS-SDI  also agreed to  implement
certain measures and undertakings relating to revenue sharing payments including
making  additional  disclosures  in the funds'  Prospectuses  or  Statements  of
Additional  Information,  adopting or modifying relevant policies and procedures
and providing regular reporting to the fund Boards.

Additional  information announced by DeAM regarding the terms of the settlements
is available at www.dws-scudder.com/regulatory_settlements.

The matters alleged in the regulatory  settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons,  including certain DWS
funds,  the  funds'  investment  advisors  and  their  affiliates,  and  certain
individuals,  including  in some cases fund  Trustees/Directors,  officers,  and
other parties.  Each DWS fund's  investment  advisor has agreed to indemnify the
applicable  DWS funds in connection  with these  lawsuits,  or other lawsuits or
regulatory actions that may be filed making similar allegations.

Based on currently available information, the funds' investment advisors believe
the likelihood that the pending lawsuits will have a material adverse  financial
impact on a DWS fund is remote and such  actions  are not  likely to  materially
affect their ability to perform  under their  investment  management  agreements
with the DWS funds.


                             MANAGEMENT OF THE FUND

Investment Advisor


Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), which is
part of Deutsche Asset Management  ("DeAM"),  is the investment  advisor for the
Fund.  Under  the  supervision  of the  Board of  Directors  of the  Fund,  with
headquarters  at 345 Park  Avenue,  New York,  New York,  DIMA  makes the Fund's
investment  decisions,  buys and  sells  securities  for the  Fund and  conducts
research that leads to these purchase and sale  decisions.  The Advisor  manages
the Fund's  daily  investment  and  business  affairs  subject  to the  policies
established by the Corporation's  Board of Directors.  DIMA and its predecessors
have more than 80 years of experience  managing  mutual  funds.  DIMA provides a
full range of investment  advisory services to institutional and retail clients.
The Fund's  investment  advisor is also  responsible  for selecting  brokers and
dealers  and for  negotiating  brokerage  commissions  and dealer  charges.  The
Advisor's duties are described in more detail below.

DeAM is the  marketing  name in the US for the asset  management  activities  of
Deutsche  Bank AG,  DIMA,  Deutsche  Bank Trust  Company  Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide range
of investing  expertise and resources,  including hundreds of portfolio managers
and analysts and an office  network  that reaches the world's  major  investment
centers.  This well-resourced  global investment platform brings together a wide
variety of experience and investment insight, across industries,  regions, asset
classes and investing styles.  DIMA is an indirect,  wholly-owned  subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is
engaged in a wide range of financial services,  including investment management,
mutual fund,  retail,  private and commercial  banking,  investment  banking and
insurance.  The term "DWS Scudder" is the designation  given to the products and
services provided by the Advisor and its affiliates to the DWS Mutual Funds.


Pursuant to an  investment  management  agreement  (the  "Investment  Management
Agreement"), the Advisor provides continuing investment management of the assets
of the Fund.  The Investment  Management  Agreement


                                       26
<PAGE>

was approved by the Board of Directors of the Corporation  (including a majority
of the  Non-interested  Directors) on June 28, 2006. The  Investment  Management
Agreement will continue in effect until  September 30, 2007, and thereafter from
year to year  only if its  continuance  is  approved  annually  by the vote of a
majority of those  Directors who are not parties to such Agreement or interested
persons of the Advisor or the  Corporation,  cast in person at a meeting  called
for  the  purpose  of  voting  on such  approval,  and  either  by a vote of the
Corporation's Directors or of a majority of the outstanding voting securities of
the Fund.

In addition to the investment  management of the assets of the Fund, the Advisor
determines the  investments  to be made for the Fund,  including what portion of
its assets  remain  uninvested  in cash or cash  equivalents,  and with whom the
orders for investments are placed, consistent with the Fund's policies as stated
in its Prospectuses and SAI, or as adopted by the Fund's Board. The Advisor will
also monitor,  to the extent not monitored by the Fund's  administrator or other
agent,  the Fund's  compliance  with its investment and tax guidelines and other
compliance policies.

The Advisor  provides  assistance to the Fund's Board in valuing the  securities
and other  instruments  held by the Fund, to the extent  reasonably  required by
valuation policies and procedures that may be adopted by the Fund.

Pursuant to the Investment Management  Agreement,  (unless otherwise provided in
the agreement or as  determined by the Fund's Board and to the extent  permitted
by applicable  law), the Advisor pays the  compensation  and expenses of all the
Board  members,  officers,  and executive  employees of the Fund,  including the
Fund's share of payroll taxes, who are affiliated persons of the Advisor.

The  Investment  Management  Agreement  provides  that  the  Fund  is  generally
responsible  for expenses  that  include:  fees payable to the Advisor;  outside
legal,  accounting  or auditing  expenses,  including  with  respect to expenses
related to negotiation,  acquisition or  distribution of portfolio  investments;
maintenance  of books and records that are  maintained  by the Fund,  the Fund's
custodian,  or other agents of the Fund; taxes and  governmental  fees; fees and
expenses   of  the   Fund's   accounting   agent,   custodian,   sub-custodians,
depositories,  transfer  agents,  dividend  reimbursing  agents and  registrars;
payment  for  portfolio  pricing  or  valuation   services  to  pricing  agents,
accountants,  bankers and other specialists,  if any;  brokerage  commissions or
other costs of  acquiring  or disposing  of any  portfolio  securities  or other
instruments  of the  Fund;  and  litigation  expenses  and  other  extraordinary
expenses not incurred in the ordinary course of the Fund's business.

The Investment  Management  Agreement  allows the Advisor to delegate any of its
duties under the  Agreement to a  subadvisor,  subject to a majority vote of the
Board of the Fund,  including  a  majority  of the Board who are not  interested
persons of the Fund, and, if required by applicable  law,  subject to a majority
vote of the Fund's shareholders.

The  Investment  Management  Agreement  provides  that the Advisor  shall not be
liable for any error of judgment  or mistake of law or for any loss  suffered by
the Fund in  connection  with matters to which the agreement  relates,  except a
loss resulting from willful  malfeasance,  bad faith or gross  negligence on the
part of the Advisor in the performance of its duties or from reckless  disregard
by the Advisor of its obligations and duties under the agreement. The Investment
Management  Agreement may be terminated at any time, without payment of penalty,
by either party or by vote of a majority of the outstanding voting securities of
the Fund on 60 days' written notice.

The Fund pays the Advisor an  advisory  fee at the annual rate of 0.800% for the
first $500 million of the Fund's  average daily net assets;  0.780% for the next
$500  million  of the Fund'  average  daily net  assets;  0.760% for the next $1
billion of the Fund's  average daily net assets and 0.740% of the Fund's average
daily net asset over $2 billion.  The fee is payable monthly,  provided that the
Fund will make such  interim  payments as may be requested by the Advisor not to
exceed  75% of the  amount of the fee then  accrued on the books of the Fund and
unpaid. All of the Fund's expenses are paid out of gross investment income.


Through November 30, 2008, the advisor has contractually  agreed to waive all or
a portion of its management  fee and reimburse or pay operating  expenses of the
fund to the extent necessary to maintain the fund's total operating  expenses at
1.57%,  2.32% and 1.32% for Class A,  Class C and  Institutional  Class  shares,
respectively,  excluding certain expenses such as extraordinary expenses, taxes,
brokerage  and   interest.   Through   September  30,  2007,   the


                                       27
<PAGE>

advisor has contractually agreed to waive all or a portion of its management fee
and reimburse or pay operating  expenses of the Fund to the extent  necessary to
maintain the Fund's total operating expenses at 1.56%, 2.31% and 1.26% for Class
A, Class C and  Institutional  Class  shares,  respectively,  excluding  certain
expenses  such  as  extraordinary  expenses,  taxes,  brokerage,  interest,  and
organizational and offering expenses.

For the fiscal year ended  August 31,  2007,  the Fund  incurred  an  investment
management  fee of $87,384 all of which was waived.  For the fiscal period ended
August 31, 2006, the Fund incurred an investment management fee of $6,399 all of
which was waived.  In addition,  for the year ended August 31, 2007, the Advisor
reimbursed  the Fund $75,920 of other expenses and  voluntarily  agreed to waive
$55,080 of offering expenses.


In  addition,  there is a new  subadvisor  approval  policy  for the  Fund  (the
"Subadvisor  Approval  Policy").  The  Subadvisor  Approval  Policy  permits the
Advisor,  subject to the  approval  of the Board,  including  a majority  of its
independent  board  members,  to appoint  and replace  subadvisors  and to amend
sub-advisory  contracts  without  obtaining  shareholder  approval.   Under  the
Subadvisor Approval Policy, the Board,  including its independent board members,
will continue to evaluate and approve all new sub-advisory contracts between the
Advisor and any subadvisor,  as well as all changes to any existing sub-advisory
contract.  The Fund cannot implement the Subadvisor  Approval Policy without the
SEC either adopting  revisions to current rules (as it proposed to do in October
2003) or granting the Fund exemptive  relief from existing  rules.  The Fund and
the  Advisor  would be  subject to  certain  conditions  imposed by the SEC (and
certain  conditions  that may be imposed in the future within  either  exemptive
relief or a rule) to ensure that the interests of the Fund and its  shareholders
are adequately protected whenever the Advisor acts under the Subadvisor Approval
Policy, including any shareholder notice requirements.

The Advisor provides  investment  counsel for many individuals and institutions,
including  insurance  companies,  industrial  corporations,  and  financial  and
banking  organizations,  as well as  providing  investment  advice  to open- and
closed-end SEC registered funds.

In  certain  cases,  the  investments  for  the  Fund  is  managed  by the  same
individuals  who manage one or more other  mutual  funds  advised by the Advisor
that have similar names,  objectives and investment  styles. You should be aware
that the Fund is likely to differ from these other  mutual  funds in size,  cash
flow pattern and tax matters.  Accordingly,  the holdings and performance of the
Fund can be expected to vary from those of these other mutual funds.

Certain  investments  may be appropriate for the Fund and also for other clients
advised by the Advisor.  Investment decisions for the Fund and other clients are
made with a view to achieving their respective  investment  objectives and after
consideration  of such factors as their current  holdings,  availability of cash
for  investment  and the  size of their  investments  generally.  Frequently,  a
particular  security  may be bought or sold for only one client or in  different
amounts  and at  different  times for more  than one but less than all  clients.
Likewise,  a particular  security may be bought for one or more clients when one
or more other clients are selling the security. In addition,  purchases or sales
of the same  security  may be made for two or more  clients on the same day.  In
such event,  such  transactions  will be allocated among the clients in a manner
believed by the Advisor to be equitable to each. In some cases,  this  procedure
could have an adverse effect on the price or amount of the securities  purchased
or sold by the Fund.  Purchase and sale orders for the Fund may be combined with
those of other  clients of the  Advisor in the  interest of  achieving  the most
favorable net results to the Fund.

The Advisor may enter into arrangements with affiliates and third-party  service
providers to perform  various  administrative,  back-office  and other  services
relating to client accounts.  Such service providers may be located in the US or
in non-US jurisdictions.

                                       28
<PAGE>




Subadvisor.  Deutsche Asset  Management  International  GmbH ("DeAMi"),  Mainzer
Landstrasse  16, 60325  Frankfurt am Main,  Germany,  is the  subadvisor for the
Fund.  DeAMi renders  investment  advisory and management  services to the Fund.
DIMA  compensates  DeAMi out of the  management  fee it receives  from the Fund.
DeAMi serves as  sub-advisor  pursuant to the terms of a  Subadvisory  Agreement
between it and the Advisor.


Under the terms of the Subadvisory  Agreement,  DeAMi manages the investment and
reinvestment of the Fund's  portfolio and will provide such  investment  advice,
research  and  assistance  as the  Advisor  may,  from time to time,  reasonably
request.

The Subadvisory  Agreement  provides that DeAMi will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with matters to which the Subadvisory Agreement relates, except a loss resulting
from willful  misconduct,  bad faith or gross negligence on the part of DeAMi in
the  performance  of its  duties  or from  reckless  disregard  by  DeAMi of its
obligations and duties under the Subadvisory Agreement.

The Subadvisory  Agreement shall continue in effect until September 30, 2007 and
from  year to  year  thereafter,  but  only  as  long  as  such  continuance  is
specifically  approved at least  annually (a) by a majority of the  Directors of
the Corporation  who are not parties to such agreement or interested  persons of
any such party except in their capacity as Directors of the Corporation, and (b)
by  the  shareholders  or  the  Board  of  Directors  of  the  Corporation.  The
Subadvisory  Agreement may be terminated at any time upon 60 days' notice by the
Advisor or by the Board of Directors of the  Corporation  or by majority vote of
the  outstanding  shares  of the Fund,  and will  terminate  automatically  upon
assignment or upon termination of the Fund's investment management agreement.

Codes of Ethics

The Fund, the Advisor, subadvisor and the Fund's principal underwriter have each
adopted  codes of ethics  under Rule 17j-1  under the 1940 Act.  Board  members,
officers of the  Corporation  and  employees  of the  Advisor,  subadvisors  and
principal  underwriter are permitted to make personal  securities  transactions,
including  transactions in securities that may be purchased or held by the Fund,
subject to certain  requirements  and  restrictions  set forth in the applicable
Code  of  Ethics.   The  Advisor's  Code  of  Ethics  contains   provisions  and
requirements  designed to identify  and address  certain  conflicts  of interest
between  personal  investment  activities  and the interests of the Fund.  Among
other  things,   the  Advisor's  Code  of  Ethics  prohibits  certain  types  of
transactions  absent prior approval,  imposes time periods during which personal
transactions may not be made in certain securities,  and requires the submission
of  duplicate  broker   confirmations  and  quarterly  reporting  of  securities
transactions.  Additional  restrictions  apply to portfolio  managers,  traders,
research  analysts  and others  involved  in the  investment  advisory  process.
Exceptions to these and other  provisions of the Advisor's Code of Ethics may be
granted in particular circumstances after review by appropriate personnel.

Compensation of Portfolio Managers



                                       29
<PAGE>




                                       30
<PAGE>




                                       31
<PAGE>





The  Fund has  been  advised  that the  Advisor  seeks to offer  its  investment
professionals  competitive  short-term  and  long-term  compensation.  Portfolio
managers and research professionals are paid (i) fixed base salaries,  which are
linked to job function,  responsibilities  and financial  services industry peer
comparison  and (ii)  variable  compensation,  which  is  linked  to  investment
performance, individual contributions to the team and DWS Scudder's and Deutsche
Bank's  financial  results.  Variable  compensation  may  include  a cash  bonus
incentive and  participation in a variety of long-term equity programs  (usually
in the form of Deutsche Bank equity).

Bonus  and  long-term   incentives   comprise  a  greater  proportion  of  total
compensation as an investment  professional's  seniority and compensation levels
increase.  Top performing  investment  professionals  earn a total  compensation
package  that is highly  competitive,  including  a bonus that is a multiple  of
their base  salary.  The amount of equity  awarded  under the  long-term  equity
programs is generally based on the individual's total  compensation  package and
may  comprise  from  0%-40%  of  the  total  compensation  award.  As  incentive
compensation increases,  the percentage of compensation awarded in Deutsche Bank
equity also increases. Certain senior investment professionals may be


                                       32
<PAGE>

subject to a mandatory  diverting of a portion of their equity compensation into
proprietary mutual funds that they manage.

To  evaluate  its  investment  professionals,  the  Advisor  uses a  Performance
Management  Process.   Objectives  evaluated  by  the  process  are  related  to
investment  performance and generally take into account peer group and benchmark
related data.  The ultimate goal of this process is to link the  performance  of
investment  professionals  with  client  investment  objectives  and to  deliver
investment   performance   that  meets  or  exceeds  clients'  risk  and  return
objectives. When determining total compensation,  the Advisor considers a number
of quantitative and qualitative factors such as:

o        DWS  Scudder   performance   and  the  performance  of  Deutsche  Asset
         Management, quantitative measures which include 1, 3 and 5 year pre-tax
         returns versus benchmark (such as the benchmark used in the prospectus)
         and appropriate  peer group,  taking into  consideration  risk targets.
         Additionally, the portfolio manager's retail/institutional asset mix is
         weighted, as appropriate for evaluation purposes.

o        Qualitative  measures include  adherence to the investment  process and
         individual  contributions  to  the  process,  among  other  things.  In
         addition, the Advisor assesses compliance, risk management and teamwork
         skills.

o        Other factors,  including  contributions made to the investment team as
         well as  adherence  to  compliance,  risk  management,  and "living the
         values" of the Advisor,  are part of a  discretionary  component  which
         gives  management the ability to reward these behaviors on a subjective
         basis through bonus incentives.



In addition,  the Advisor analyzes  competitive  compensation levels through the
use of extensive market data surveys. Portfolio manager compensation is reviewed
and may be modified each year as appropriate  to reflect  changes in the market,
as well as to adjust the  factors  used to  determine  overall  compensation  to
promote good sustained investment performance.

Fund Ownership of Portfolio Managers

The following table shows the dollar range of shares owned  beneficially  and of
record by each  member of the Fund's  portfolio  management  team in the Fund as
well as in all DWS Funds as a group (i.e.  those funds advised by Deutsche Asset
Management or its affiliates),  including  investments by their immediate family
members sharing the same household and amounts invested  through  retirement and
deferred  compensation plans. This information is provided as of the Fund's most
recent fiscal year end.

<TABLE>
<CAPTION>
                                                   Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                         Fund Shares Owned                      Fund Shares Owned
-------------------------                         -----------------                      -----------------
<S>                                                      <C>                                    <C>
Klaus Kaldemorgen                                        $0                                     $0
Carmen Weber, CFA                                        $0                                     $0
</TABLE>

Because the fund's portfolio managers are not resident in the US, they generally
do not  invest in US  registered  investment  companies,  such as the  Fund,  on
account  of US tax  and  other  regulatory  limitations  applicable  to  foreign
investors.

Conflicts of Interest

In addition to managing the assets of the Fund,  the Fund's  portfolio  managers
may have responsibility for managing other client accounts of the Advisor or its
affiliates.  The tables below show, for each portfolio  manager,  the number and
asset size of (1) SEC registered  investment companies (or series thereof) other
than the Fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other  accounts  (e.g.,  accounts  managed for  individuals or
organizations)  managed by each  portfolio  manager.  The  tables  also show the
number of  performance


                                       33
<PAGE>

based fee  accounts,  as well as the total  assets of the accounts for which the
advisory fee is based on the  performance  of the account.  This  information is
provided as of the Fund's most recent fiscal year end.

Other SEC Registered Investment Companies Managed:

<TABLE>
<CAPTION>
                                       Number of        Total Assets of    Number of Investment
                                      Registered          Registered         Company Accounts       Total Assets of
                                      Investment          Investment               with           Performance-Based
Name of Portfolio Manager              Companies           Companies       Performance-Based Fee     Fee Accounts
-------------------------              ---------           ---------       ---------------------     ------------
<S>                                       <C>                 <C>                   <C>                   <C>
Klaus Kaldemorgen                         $0                  $0                    $0                    $0
Carmen Weber, CFA                         $0                  $0                    $0                    $0

Other Pooled Investment Vehicles Managed:

                                                                              Number of Pooled
                                      Number of                              Investment Vehicle
                                       Pooled          Total Assets of         Accounts with       Total Assets of
                                     Investment       Pooled Investment      Performance-Based    Performance-Based
Name of Portfolio Manager             Vehicles             Vehicles                 Fee              Fee Accounts
-------------------------             --------             --------                 ---              ------------

Klaus Kaldemorgen                           3          $13,168,997,266               $0                   $0
Carmen Weber, CFA                           1             $495,831,228               $0                   $0

Other Accounts Managed:

                                                                             Number of Other
                                                        Total Assets         Accounts with      Total Assets of
                                      Number of            of Other       Performance-Based        Performance-
Name of Portfolio Manager          Other Accounts          Accounts                 Fee          Based Fee Accounts
-------------------------          --------------          --------                 ---          ------------------

Klaus Kaldemorgen                        $0                   $0                    $0                   $0
Carmen Weber, CFA                        $0                   $0                    $0                   $0
</TABLE>

In  addition  to the  accounts  above,  an  investment  professional  may manage
accounts in a personal  capacity that may include  holdings that are similar to,
or the same as,  those of the Fund.  The  Advisor  has in place a Code of Ethics
that is designed to address  conflicts of interest and that, among other things,
imposes  restrictions  on the ability of portfolio  managers  and other  "access
persons" to invest in securities  that may be  recommended or traded in the Fund
and other client accounts.

Real,  potential  or apparent  conflicts  of interest may arise when a portfolio
manager has day-to-day  portfolio  management  responsibilities  with respect to
more than one fund or account, including the following:

o        Certain  investments may be appropriate for the Fund and also for other
         clients advised by the Advisor, including other client accounts managed
         by the Fund's portfolio  management team.  Investment decisions for the
         Fund  and  other  clients  are  made  with a view  to  achieving  their
         respective  investment  objectives  and  after  consideration  of  such
         factors as their current holdings,  availability of cash for investment
         and the size of their investments  generally. A particular security may
         be bought or sold for only one client or in  different  amounts  and at
         different times for more than one but less than all clients.  Likewise,
         because   clients  of  the  Advisor  may  have   differing   investment
         strategies, a particular security may be bought for one or more clients
         when one or more other clients are selling the security. The investment
         results  achieved for the Fund may differ from the results achieved for
         other  clients of the Advisor.  In addition,  purchases or


                                       34
<PAGE>

         sales of the same  security  may be made for two or more clients on the
         same day. In such event,  such transactions will be allocated among the
         clients in a manner  believed  by the Advisor to be most  equitable  to
         each client, generally utilizing a pro rata allocation methodology.  In
         some cases, the allocation  procedure could potentially have an adverse
         effect or  positive  effect  on the  price or amount of the  securities
         purchased  or sold by the Fund.  Purchase  and sale orders for the Fund
         may be  combined  with  those of other  clients  of the  Advisor in the
         interest of achieving  the most  favorable  net results to the Fund and
         the other clients.

o        To the  extent  that  a  portfolio  manager  has  responsibilities  for
         managing  multiple client  accounts,  a portfolio  manager will need to
         divide time and attention among relevant accounts. The Advisor attempts
         to minimize these conflicts by aligning its portfolio  management teams
         by  investment  strategy and by  employing  similar  investment  models
         across multiple client accounts.

o        In some cases, an apparent  conflict may arise where the Advisor has an
         incentive, such as a performance-based fee, in managing one account and
         not with  respect to other  accounts it manages.  The Advisor  will not
         determine  allocations based on whether it receives a performance-based
         fee from the client. Additionally, the Advisor has in place supervisory
         oversight processes to periodically monitor performance  deviations for
         accounts with like strategies.

o        The Advisor and its affiliates and the investment  team of the Fund may
         manage other mutual funds and separate  accounts on a long-short basis.
         The  simultaneous  management  of long  and  short  portfolios  creates
         potential  conflicts  of  interest  including  the risk that short sale
         activity  could   adversely   affect  the  market  value  of  the  long
         positions(and  vice versa),  the risk arising from sequential orders in
         long and short  positions,  and the  risks  associated  with  receiving
         opposing  orders at the same time.  The Advisor has adopted  procedures
         that it believes are reasonably  designed to mitigate  these  potential
         conflicts  of  interest.  Included  in these  procedures  are  specific
         guidelines  developed to ensure fair and  equitable  treatment  for all
         clients whose accounts are managed by each Fund's portfolio  management
         team. The Advisor and the portfolio  management  team have  established
         monitoring  procedures,  a protocol for supervisory reviews, as well as
         compliance  oversight  to ensure that  potential  conflicts of interest
         relating to this type of activity are properly addressed.

The Advisor is owned by Deutsche Bank AG, a  multi-national  financial  services
company.  Therefore,  the Advisor is affiliated  with a variety of entities that
provide, and/or engage in commercial banking, insurance,  brokerage,  investment
banking,  financial  advisory,  broker-dealer  activities  (including  sales and
trading),  hedge funds, real estate and private equity investing, in addition to
the provision of investment  management services to institutional and individual
investors.  Since  Deutsche  Bank AG, its  affiliates,  directors,  officers and
employees (the "Firm") are engaged in businesses  and have interests  other than
managing  asset  management  accounts,   such  other  activities  involve  real,
potential or apparent  conflicts of interest.  These  interests  and  activities
include potential  advisory,  transactional  and financial  activities and other
interests  in  securities  and  companies  that may be  directly  or  indirectly
purchased  or sold by the Firm for its  clients'  advisory  accounts.  These are
considerations  of which  advisory  clients  should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's  advisory  clients.
The Advisor has  instituted  business and  compliance  policies,  procedures and
disclosures  that are  designed to identify,  monitor and mitigate  conflicts of
interest and, as appropriate, to report them to the Fund's Board.


Administrator.  The  Advisor  also  serves  as the  Corporation's  administrator
pursuant to an Administrative Services Agreement. Pursuant to the Administrative
Services  Agreement,  the Advisor provides  administrative  services to the Fund
including, among others, providing the Fund with personnel, preparing and making
required  filings on behalf of the Fund,  maintaining  books and records for the
Fund, and monitoring the valuation of Fund securities.  The  Administrator  will
pay  Accounting  Agency fees out of the  Administration  fee.  For all  services
provided under the Administrative Services Agreement, the Fund pays the Advisor,
computed daily and paid monthly,  a fee of 0.10% of the average daily net assets
of the  Fund.  The  Administrator  will pay  Accounting  Agency  fees out of the
Administration fee.


For the  fiscal  year  ended  August  31,  2007,  the Fund  incurred  $50,000 in
administration  fees all of which was waived. For the fiscal period ended August
31,  2006,  the Fund  incurred  $6,823 in  administration  fees all of which was
waived.


                                       35
<PAGE>

Under the  Administrative  Services  Agreement,  the Advisor is  obligated  on a
continuous  basis to provide  such  administrative  services as the Board of the
Fund reasonably deems necessary for the proper  administration  of the Fund. The
Advisor  provides  the Fund with  personnel;  arranges for the  preparation  and
filing of the Fund's tax  returns;  prepares  and  submits  reports  and meeting
materials to the Board and the  shareholders;  prepares and files updates to the
Fund's  prospectus  and  statement of  additional  information  as well as other
reports required to be filed by the SEC; maintains the Fund's records;  provides
the Fund with office space, equipment and services;  supervises,  negotiates the
contracts of and monitors the performance of third parties contractors; oversees
the  tabulation of proxies;  monitors the valuation of portfolio  securities and
monitors  compliance  with  Board-approved  valuation  procedures;   assists  in
establishing  the  accounting  and tax  policies  of the  Fund;  assists  in the
resolution  of  accounting  issues  that may  arise  with  respect  to the Fund;
establishes  and  monitors the Fund's  operating  expense  budgets;  reviews and
processes the Fund's bills;  assists in determining  the amount of dividends and
distributions  available to be paid by the Fund,  prepares and arranges dividend
notifications  and provides  information to agents to effect  payments  thereof;
provides to the Board periodic and special  reports;  provides  assistance  with
investor and public relations  matters;  and monitors the registration of shares
under  applicable  federal and state law. The Advisor also performs certain fund
accounting   services  under  the   Administrative   Services   Agreement.   The
Administrative  Services  Agreement provides that the Advisor will not be liable
under the Administrative Services Agreement except for willful misfeasance,  bad
faith or  negligence  in the  performance  of its  duties  or from the  reckless
disregard by it of its duties and obligations thereunder.

Various third-party service providers (the "Service  Providers"),  some of which
are affiliated with the Advisor,  provide certain  services to the Fund pursuant
to separate agreements with the Fund.

The Advisor will pay the Service  Providers for the provision of their  services
to the  Fund  and  will  pay most  other  fund  expenses,  including  insurance,
registration,  printing  and  postage  fees.  In  return,  the Fund will pay the
Advisor an Administrative Fee.

The fee  payable  by the  Fund to the  Advisor  pursuant  to the  Administrative
Services  Agreement  is reduced by the  amount of any credit  received  from the
Fund's custodian for cash balances.

Certain  expenses  of the  Fund  will  not be borne  by the  Advisor  under  the
Administrative  Services  Agreement,  such as  taxes,  brokerage,  interest  and
extraordinary  expenses;  and the fees and expenses of the Independent Directors
(including the fees and expenses of their independent counsel). In addition, the
Fund will continue to pay the fees required by its Agreement with the Advisor.

Pursuant to an  agreement  between  the Advisor and State  Street Bank and Trust
Company ("SSB"), the Advisor has delegated certain  administrative  functions to
SSB. The costs and expenses of such delegation are borne by the Advisor,  not by
the Fund.

Pursuant  to  Deutsche  Asset  Management  procedures  approved by the Boards on
behalf of the DWS funds,  proof of claim forms are routinely  filed on behalf of
the  DWS  funds  by  a  third  party  service  provider,  with  certain  limited
exceptions.  The Boards of the DWS funds receive periodic reports  regarding the
implementation of these procedures.

                             FUND SERVICE PROVIDERS

Principal Underwriter


Pursuant to an Underwriting and Distribution  Services Agreement  ("Distribution
Agreement"),  DWS Scudder Distributors,  Inc.  ("DWS-SDI"),  222 South Riverside
Plaza,  Chicago,  Illinois 60606, an affiliate of the Advisor,  is the principal
underwriter  and distributor  for the Class A, Class C and  Institutional  Class
shares of the Fund and acts as agent of the Fund in the  continuous  offering of
its shares.  The  Distribution  Agreement for the Fund,  dated July 1, 2006, was
initially  approved  by the  Directors  on June 28,  2006 and last  approved  on
September 18, 2007. The Distribution  Agreement continues in effect from year to
year only if its  continuance  is approved for each class at least annually by a
vote of the Board  members  of the Fund,  including  the  Directors  who are not
interested  persons  of the Fund and who have no  direct or  indirect  financial
interest in the Distribution Agreement.


                                       36
<PAGE>

The  Distribution  Agreement  automatically  terminates  in  the  event  of  its
assignment and may be terminated for a class at any time without  penalty by the
relevant  Fund or by DWS-SDI upon sixty days'  notice.  Termination  by the Fund
with  respect to a class may be by vote of (i) a majority  of the Board  members
who are not  interested  persons of the Fund and who have no direct or  indirect
financial  interest in the  Distribution  Agreement,  or (ii) a "majority of the
outstanding  voting  securities"  of the class of the Fund, as defined under the
1940 Act. All material  amendments must be approved by the Board of Directors in
the manner  described  above with respect to the  continuation of the Agreement.
The  provisions  concerning  continuation,  amendment  and  termination  of  the
Distribution Agreement are on a series by series and class by class basis.

DWS-SDI  bears  all  of its  expenses  of  providing  services  pursuant  to the
Distribution Agreement,  including the payment of any commissions. The Fund pays
the cost for the  prospectus and  shareholder  reports to be typeset and printed
for existing shareholders,  and DWS-SDI, as principal underwriter,  pays for the
printing and distribution of copies thereof used in connection with the offering
of shares to prospective  investors.  DWS-SDI also pays for supplementary  sales
literature and advertising costs. As indicated under "Purchase and Redemption of
Shares,"  DWS-SDI  retains the sales charge upon the purchase of shares and pays
or allows  concessions  or discounts to firms for the sale of the Fund's shares.
DWS-SDI  receives no  compensation  from the Fund as principal  underwriter  for
Class A  shares.  DWS-SDI  receives  compensation  from  the  Fund as  principal
underwriter for Class C shares.


Shareholder  and  administrative  services are provided to the Fund on behalf of
Class A and Class C  shareholders  under a Shareholder  Services  Agreement (the
"Services  Agreement") with DWS-SDI.  The Services Agreement has an initial term
ending  September  30, 2007 and continues in effect from year to year so long as
such  continuance  is approved  for the Fund at least  annually by a vote of the
Board of the Fund, including the Board members who are not interested persons of
the Fund and who have no direct or indirect  financial  interest in the Services
Agreement.  The Services Agreement automatically  terminates in the event of its
assignment and may ber terminated at any time without  penalty by the Fund or by
DWS-SDI  upon sixty days'  notice.  Termination  with  respect to the Class A or
Class C shares  of the Fund may be by a vote of (i) the  majority  of the  Board
members of the Fund who are not  interested  persons of the Fund and who have no
direct or indirect  financial  interest  in the  Services  Agreement,  or (ii) a
"majority  of the  outstanding  voting  securities"  of the  Class A or  Class C
shares, respectively,  as defined under the 1940 Act. The Services Agreement may
not be amended for a class to increase materially the fee to be paid by the Fund
without  approval of a majority of the  outstanding  voting  securities  of such
class of the Fund, and all material  amendments must in any event be approved by
the Board of  Directors  in the  manner  described  above  with  respect  to the
continuation of the Services Agreement.


Under  the  Services   Agreement,   DWS-SDI  may  provide  or  appoint   various
broker-dealer  firms and other  service or  administrative  firms  ("firms")  to
provide  information and services to investors in the Fund.  Typically,  DWS-SDI
appoints  firms that provide  services  and  facilities  for their  customers or
clients who are investors in the Fund.  Firms  appointed by DWS-SDI provide such
office space and equipment,  telephone  facilities and personnel as is necessary
or beneficial  for providing  information  and services to their  clients.  Such
services and assistance may include,  but are not limited to,  establishing  and
maintaining   accounts  and   records,   processing   purchase  and   redemption
transactions,   answering  routine  inquiries  regarding  the  Fund,   providing
assistance  to clients in changing  dividend  and  investment  options,  account
designations  and  addresses  and such other  administrative  services as may be
agreed  upon from time to time and  permitted  by  applicable  statute,  rule or
regulation.

DWS-SDI bears all of its expenses of providing  those  services  pursuant to the
Services Agreement,  including the payment of a service fee to firms (as defined
below).  As  indicated  under the Rule 12b-1 Plan (as  defined  below),  DWS-SDI
receives  compensation  from the  Funds  for its  services  under  the  Services
Agreement.

Rule 12b-1 Plans

The Fund has  adopted a plan  pursuant  to Rule 12b-1 under the 1940 Act (each a
"Rule 12b-1  Plan") that  provides for fees payable as an expense of the Class C
shares that are used by DWS-SDI to pay for distribution  services for the class.
Pursuant to the Rule 12b-1 Plan,  shareholder  and  administrative  services are
provided to the Fund on behalf of its Class A and Class C shareholders under the
Fund's Services Agreement with DWS-SDI.  Because 12b-1 fees are paid out of Fund
assets on an ongoing  basis,  they  will,  over  time,  increase  the cost of an
investment and may cost more than other types of sales charges.

                                       37
<PAGE>

The Rule 12b-1 distribution plans for Class C shares provide alternative methods
for paying  sales  charges and may help funds grow or maintain  asset  levels to
provide  operational  efficiencies  and  economies of scale.  Rule 12b-1 service
plans  provide   compensation  to  DWS-SDI  or  intermediaries   for  post-sales
servicing.  Since the  Distribution  Agreement  provides  for fees payable as an
expense of the Class C shares  that are used by DWS-SDI to pay for  distribution
and services for the class,  the  agreement is approved and reviewed  separately
for the Class C shares in accordance  with Rule 12b-1 under the 1940 Act,  which
regulates the manner in which an investment company may, directly or indirectly,
bear the expenses of distributing  its shares.  The  Distribution  Agreement and
Rule 12b-1 plans may not be amended to  increase  the fee to be paid by the Fund
with respect to a class without approval by a majority of the outstanding voting
securities  of such class.  Similarly,  the  Services  Agreement is approved and
reviewed separately for the Class A shares and Class C shares in accordance with
Rule 12b-1.

If a Rule 12b-1 Plan is terminated in accordance with its terms,  the obligation
of the Fund to make  payments  to DWS-SDI  pursuant  to the Rule 12b-1 Plan will
cease and the Fund will not be  required  to make any  payments  not  previously
accrued past the termination  date.  Thus,  there is no legal obligation for the
Fund to pay any expenses incurred by DWS-SDI other than fees previously  accrued
and payable  under a Rule 12b-1  Plan,  if for any reason the Rule 12b-1 Plan is
terminated in accordance  with its terms.  Future fees under the Rule 12b-1 Plan
may or may not be sufficient to cover DWS-SDI for its expenses incurred.  On the
other hand, under certain circumstances,  DWS-SDI might collect in the aggregate
over certain periods more in fees under the Rule 12b-1 Plan than it has expended
over that same  period  in  providing  distribution  services  for the Fund.  In
connection  with  Class B  shares,  for  example,  if shares of the Fund were to
appreciate  (resulting  in greater  asset base against which Rule 12b-1 fees are
charged)  and sales of the Fund's  shares  were to decline  (resulting  in lower
expenditures  by DWS-SDI  under the Rule 12b-1 Plan),  fees payable could exceed
expenditures. This may also happen over certain periods shorter than the life of
the Rule 12b-1 Plan  simply due to the timing of  expenses  incurred  by DWS-SDI
that is not matched to the timing of revenues received (e.g., a sales commission
may be paid by DWS-SDI  related to an investment in year 1, while the Rule 12b-1
fee to DWS-SDI  related to that investment may accrue during year 1 through year
6 prior to conversion  of the  investment  to Class A shares).  As a result,  if
DWS-SDI's  expenses  are less than the Rule 12b-1 fees,  DWS-SDI will retain its
full fees and make a profit.

Class C Shares

Distribution  Services.  For its  services  under  the  Distribution  Agreement,
DWS-SDI receives a fee from the Fund under its Rule 12b-1 Plan, payable monthly,
at the annual rate of 0.75% of average daily net assets of the Fund attributable
to Class C shares.  This fee is  accrued  daily as an expense of Class C shares.
DWS-SDI  currently  advances to the firms the first year  distribution  fee at a
rate of 0.75% of the purchase price of Class C shares. However,  DWS-SDI will no
longer  advance  the first  year  distribution  fee to firms for sale of Class C
shares  to   employer-sponsored   employer  benefit  plans  using  the  OmniPlus
subaccount  recordkeeping  system made  available  through  ADP,  Inc.  under an
alliance made with DWS-SDI and its affiliates. For periods after the first year,
DWS-SDI  currently  pays firms for sales of Class C shares a  distribution  fee,
payable  quarterly,  at an annual  rate of 0.75% of net assets  attributable  to
Class C shares  maintained  and serviced by the firm.  This fee continues  until
terminated  by  DWS-SDI  or the  applicable  Fund.  DWS-SDI  also  receives  any
contingent deferred sales charges paid with respect to Class C shares.

Class A and Class C Shares


Shareholder  Services.  For its services under the Services  Agreement,  DWS-SDI
receives  a  shareholder  service  fee from the Fund  under a Rule  12b-1  Plan,
payable  monthly,  at an  annual  rate of up to 0.25% of the  average  daily net
assets of Class A and Class C shares of the Fund.


With  respect  to Class A shares of the Fund,  DWS-SDI  pays each firm a service
fee,  payable  quarterly,  at an annual rate of up to 0.25% of the net assets in
Fund accounts that it maintains and services  attributable  to Class A shares of
the Fund,  commencing with the month after  investment.  With respect to Class C
shares of the Fund,  DWS-SDI currently  advances to firms the first-year service
fee at a rate of up to 0.25% of the  purchase  price  of such  shares.  However,
DWS-SDI will no longer advance the first year distribution fee to firms for sale
of Class C  shares  to  employer-sponsored  employer  benefit  plans  using  the
OmniPlus subaccount  recordkeeping system made available through ADP, Inc. under
an alliance  made with DWS-SDI and its  affiliates.  For periods after the first
year,  DWS-


                                       38
<PAGE>

SDI  currently  intends  to pay  firms a  service  fee at a rate of up to  0.25%
(calculated  monthly and paid quarterly) of the net assets attributable to Class
C shares of the Fund maintained and serviced by the firm. Firms to which service
fees may be paid include  affiliates of DWS-SDI.  In addition  DWS-SDI may, from
time to time,  pay certain firms from its own resources  additional  amounts for
ongoing  administrative  services and assistance provided to their customers and
clients who are shareholders of the Fund.

DWS-SDI also may provide  some of the above  services and may retain any portion
of the fee under the Services  Agreement not paid to firms to compensate  itself
for shareholder or administrative  functions performed for the Fund.  Currently,
the shareholder  services fee payable to DWS-SDI is payable at an annual rate of
up to 0.25% of net assets  based upon Fund assets in  accounts  for which a firm
provides  administrative  services and at the annual rate of 0.15% of net assets
based upon Fund assets in accounts  for which there is no firm of record  (other
than DWS-SDI) listed on the Fund's records.  The effective  shareholder services
fee rate to be charged against all assets of the Fund while this procedure is in
effect will depend upon the  proportion  of Fund assets that is held in accounts
for which a firm of record provides shareholder services. The Board of the Fund,
in its  discretion,  may approve basing the fee to DWS-SDI at the annual rate of
0.25% on all Fund assets in the future.


For the fiscal year ended  August 31,  2007,  the Fund  aggregated  distribution
fees,  under the Rule 12b-1  plan for its Class C shares,  of  $19,162.  For the
fiscal period July 5, 2006 (commencement of operations) through August 31, 2006,
the Fund aggregated distribution fees, under the Rule 12b-1 plan for its Class C
shares, of $1,499.

In  addition,  for the fiscal year ended August 31,  2007,  the Fund  aggregated
service  fees of $3,931  and $6,385 on behalf of its Class A and Class C shares,
respectively.  For the fiscal period July 5, 2006  (commencement  of operations)
through  August 31, 2006, the Fund  aggregated  service fees of $504 and $504 on
behalf of its Class A and Class C shares, respectively.


                                       39
<PAGE>
<TABLE>
<CAPTION>
                        Compensation to Underwriter and Firms
                                for Calendar Year 2006
                                ----------------------
                                                                                       Compensation
                                                                                          Paid by
                                                                   Compensation Paid    DWS-SDI to
                           Rule 12b-1 Fees   Contingent Deferred     by DWS-SDI to      Firms from
                                Paid             Sales Charge         Firms from        Shareholder
                             to DWS-SDI        Paid to DWS-SDI      Distribution Fee   Servicing Fee
                             ----------        ---------------      ----------------   -------------
<S>                              <C>                     <C>              <C>                <C>
 DWS International Value
 Opportunities Fund
     Class A                          N/A                $520                   N/A            $672
     Class C                       $5,823                  $0                $3,638          $1,114




                         Other Distribution Expenses Paid by Underwriter for Calendar Year 2005
                         ----------------------------------------------------------------------




                             Advertising and  Prospectus   Marketing and    Postage     Interest
                               Literature      Printing    Sales Expenses and Mailing   Expense
                               ----------      --------         ---------     -------   -------

 DWS International Value
 Opportunities Fund
     Class A                           N/A           N/A            N/A         N/A          N/A
     Class C                         1,392          $107           $440         $95           $0

</TABLE>



                                       40
<PAGE>



Independent Registered Public Accounting Firm

The financial highlights of the Fund included in the Fund's Prospectuses and the
financial statements incorporated by reference into this Statement of Additional
Information  have been so included or  incorporated  by reference in reliance on
the report of  PricewaterhouseCoopers  LLP, 125 High Street,  Boston,  MA 02110,
independent  registered  public  accounting firm, given on the authority of said
firm as experts in auditing and  accounting.  PricewaterhouseCoopers  audits the
financial  statements  of the Fund and  provides  other  audit,  tax and related
services.  Shareholders  will receive  annual audited  financial  statements and
semi-annual unaudited financial statements.


Legal Counsel

Ropes & Gray LLP, One International  Place,  Boston,  Massachusetts  02110-2624,
serves  as  legal  counsel  to the  Fund and the  Independent  Directors  of the
Corporation.



Custodian, Transfer Agent and Shareholder Service Agent

Custodian.  Brown Brothers Harriman and Co. (the "Custodian"),  40 Water Street,
Boston, Massachusetts 02109, serves as the Corporation's custodian pursuant to a
Custodian  Agreement.  Under its custody  agreement  with the  Corporation,  the
Custodian (i) maintains  separate  accounts in the name of the Fund,  (ii) holds
and  transfers  portfolio  securities  on  account  of the Fund,  (iii)  accepts
receipts and makes  disbursements  of money on behalf of the Fund, (iv) collects
and receives all income and other payments and  distributions  on account of the
Fund's portfolio  securities and (v) makes periodic reports to the Corporation's
Board of Directors concerning the Fund's operations. The Custodian is authorized
to  select  one or more  foreign  or  domestic  banks or  companies  to serve as
sub-custodian on behalf of the Fund, pursuant to Rule 17f-5 or the 1940 Act.


Transfer Agent and Shareholder  Service Agent. DWS Scudder  Investments  Service
Company ("DWS SISC" or the "Transfer Agent"), 210 West 10th Street, Kansas City,
Missouri  64105-1614,  an  affiliate  of the  Advisor,  is the  transfer  agent,
dividend-paying agent and shareholder service agent for all classes of the Fund.

The Transfer  Agent receives an annual service fee for each account of the Fund,
based on the type of account.  For open retail  accounts,  the fee is a flat fee
ranging from $20.00 to $27.50 per account,  for open  wholesale  money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.46 per account
(as of October  2006,  indexed to  inflation)  plus an asset  based fee of up to
0.25% of  average  net  assets.  1/12th of the  annual  service  charge for each
account is  charged  and  payable to the  Transfer  Agent each  month.  A fee is
charged for any account  which at any time during the month had a share  balance
in the  Fund.  Smaller  fees are also  charged  for  closed  accounts  for which
information  must be retained on the Transfer Agent's system for up to 18 months
after closing for tax reporting purposes.

Certain  out-of-pocket  expenses  incurred  by  the  Transfer  Agent,  including
expenses of printing and mailing  routine fund  disclosure  documents,  costs of
record retention and transaction  processing costs are reimbursed by the Fund or
are paid  directly  by the  Fund.  Certain  additional  out-of-pocket  expenses,
including costs of computer  hardware and software,  third party  record-keeping
and processing of proxy statements,  may only be reimbursed by the Fund with the
prior approval of the Fund's Board.


                                       41
<PAGE>



Pursuant to a sub-transfer  agency  agreement  between DWS-SISC and DST Systems,
Inc. ("DST"),  DWS-SISC has delegated certain transfer agent and dividend paying
agent  functions to DST. The costs and expenses of such  delegation  are born by
DWS-SISC, not by the Fund.

The Fund, or the Advisor (including any affiliate of the Advisor),  or both, may
pay   unaffiliated   third  parties  for  providing   recordkeeping   and  other
administrative  services with respect to accounts of  participants in retirement
plans or other  beneficial  owners of Fund shares whose  interests are generally
held in an omnibus account.

                             PORTFOLIO TRANSACTIONS


The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio  securities,  including  the  allocation  of  brokerage.  With
respect to those  funds for which a  sub-investment  advisor  manages the fund's
investments,  references in this section to the "Advisor" should be read to mean
the Sub-Advisor, except as noted below.

The  policy of the  Advisor  in  placing  orders  for the  purchase  and sale of
securities  for the Funds is to seek best  execution,  taking into  account such
factors,   among  others,   as  price;   commission  (where   applicable);   the
broker-dealer's   ability  to  ensure  that  securities  will  be  delivered  on
settlement date; the willingness of the  broker-dealer to commit its capital and
purchase  a  thinly  traded   security  for  its  own  inventory;   whether  the
broker-dealer   specializes  in  block  orders  or  large  program  trades;  the
broker-dealer's  knowledge of the market and the security;  the  broker-dealer's
ability to  maintain  confidentiality;  the  broker-dealer's  ability to provide
access to new  issues;  the  broker-dealer's  ability  to provide  support  when
placing a difficult trade;  the financial  condition of the  broker-dealer;  and
whether the broker-dealer has the infrastructure and operational capabilities to
execute  and  settle  the trade.  The  Advisor  seeks to  evaluate  the  overall
reasonableness of brokerage  commissions with commissions  charged on comparable
transactions  and compares the brokerage  commissions (if any) paid by the Funds
to reported commissions paid by others. The Advisor routinely reviews commission
rates,  execution  and  settlement  services  performed  and makes  internal and
external comparisons.

Commission  rates  on  transactions  in  equity  securities  on U.S.  securities
exchanges are subject to negotiation. Commission rates on transactions in equity
securities on foreign  securities  exchanges are generally fixed.  Purchases and
sales of  fixed-income  securities and certain  over-the-counter  securities are
effected  on  a  net  basis,  without  the  payment  of  brokerage  commissions.
Transactions  in  fixed  income  and  certain  over-the-counter  securities  are
generally  placed by the  Advisor  with the  principal  market  makers for these
securities  unless the Advisor  reasonably  believes more favorable  results are
available elsewhere.  Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices.  Purchases of  underwritten  issues
will  include  an  underwriting  fee  paid  to  the  underwriter.  Money  market
instruments are normally purchased in principal  transactions  directly from the
issuer or from an underwriter or market maker.

It is  likely  that the  broker-dealers  selected  based  on the  considerations
described in this section will include  firms that also sell shares of the Funds
to their  customers.  However,  the Advisor does not consider sales of shares of
the Funds as a factor in the selection of  broker-dealers  to execute  portfolio
transactions  for the Funds  and,  accordingly,  has  implemented  policies  and
procedures  reasonably designed to prevent its traders from considering sales of
shares of the Funds as a factor in the  selection of  broker-dealers  to execute
portfolio transactions for the Funds.

The Advisor is  permitted  by Section  28(e) of the  Securities  Exchange Act of
1934, as amended ("1934 Act"), when placing  portfolio  transactions for a Fund,
to cause the Fund to pay brokerage  commissions  in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage  services if the Advisor determines that such commissions
are  reasonable in relation to the overall  services  provided.  The Advisor may
from  time to time,  in  reliance  on  Section  28(e) of the 1934  Act,  execute
portfolio  transactions with  broker-dealers that provide research and brokerage
services to the Advisor.  Consistent  with the Advisor's  policy  regarding best
execution,  where more than one broker is  believed  to be capable of  providing
best execution for a particular  trade, the Advisor may take into  consideration
the receipt of research and brokerage services in selecting


                                       42
<PAGE>

the broker-dealer to execute the trade.  Although certain research and brokerage
services from  broker-dealers may be useful to a Fund and to the Advisor,  it is
the  opinion of the  Advisor  that such  information  only  supplements  its own
research  effort  since the  information  must still be  analyzed,  weighed  and
reviewed by the  Advisor's  staff.  To the extent that  research  and  brokerage
services of value are  received by the Advisor,  the Advisor may avoid  expenses
that it might otherwise incur.  Research and brokerage  services received from a
broker-dealer  may be useful to the  Advisor  and its  affiliates  in  providing
investment  management services to all or some of its clients,  which includes a
Fund.   Services   received  from   broker-dealers   that  executed   securities
transactions  for a  Portfolio  will  not  necessarily  be used  by the  Advisor
specifically to service such Fund.

Research and brokerage services provided by broker-dealers may include,  but are
not limited to,  information on the economy,  industries,  groups of securities,
individual   companies,   statistical   information,   accounting  and  tax  law
interpretations,  political developments, legal developments affecting portfolio
securities,  technical  market action,  pricing and appraisal  services,  credit
analysis,  risk measurement  analysis,  performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically  received  in the form of written  or  electronic  reports,  access to
specialized  financial  publications,  telephone  contacts and personal meetings
with  security  analysts,  but may also be  provided  in the form of  access  to
various  computer  software and meetings  arranged  with  corporate and industry
representatives.

The Advisor may also select  broker-dealers  and obtain from them  research  and
brokerage  services that are used in connection  with executing  trades provided
that such services are consistent  with  interpretations  under Section 28(e) of
the 1934 Act.  Typically,  these  services  take the form of  computer  software
and/or  electronic  communication  services  used by the  Advisor to  facilitate
trading activity with those broker-dealers.

Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder.  Currently,
it  is  the  Advisor's  policy  that  Sub-Advisors  may  not  execute  portfolio
transactions on behalf of the Funds to obtain third party research and brokerage
services.  The  Advisor  may, in the future,  change  this  policy.  Regardless,
certain  Sub-Advisors may, as matter of internal policy, limit or preclude third
party research and brokerage services.

The Advisor may use brokerage  commissions to obtain certain brokerage  products
or services that have a mixed use (i.e., it also serves a function that does not
relate to the investment  decision-making process). In those circumstances,  the
Advisor  will make a good faith  judgment to evaluate  the various  benefits and
uses to which it  intends to put the mixed use  product or service  and will pay
for that portion of the mixed use product or service that it reasonably believes
does not constitute research and brokerage services with its own resources.

DIMA will  monitor  regulatory  developments  and market  practice in the use of
client  commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.

Investment  decisions for each Fund and for other investment accounts managed by
the  Advisor  are  made  independently  of each  other  in  light  of  differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases,  simultaneous  transactions are inevitable. To the
extent  permitted by law, the Advisor may aggregate the securities to be sold or
purchased  for a Fund with those to be sold or purchased  for other  accounts in
executing  transactions.  Purchases  or sales are then  averaged as to price and
commission  and  allocated  as to amount in a manner  deemed  equitable  to each
account.  While in some cases this practice  could have a detrimental  effect on
the price  paid or  received  by,  or on the size of the  position  obtained  or
disposed of for,  the Fund,  in other  cases it is believed  that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Funds' management team manage other mutual funds
and separate accounts,  some of which use short sales of securities as a part of
its  investment  strategy.  The  simultaneous   management  of  long  and  short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice  versa),  the  risk  arising  from  sequential  orders  in long  and  short
positions,  and the risks associated with receiving  opposing orders at the same
time.

                                       43
<PAGE>

DIMA has adopted procedures that it believes are reasonably designed to mitigate
these  potential  conflicts  of interest.  Incorporated  in the  procedures  are
specific  guidelines  developed to ensure fair and  equitable  treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory  reviews,  as well as compliance  oversight to ensure
that  potential  conflicts  of interest  relating  to this type of activity  are
properly addressed.

Deutsche Bank AG or one of its affiliates (or in the case of a Sub-Advisor,  the
Sub-Advisor  or one of its  affiliates)  may act as a broker  for the  Funds and
receive brokerage commissions or other transaction-related compensation from the
Funds in the purchase and sale of securities, options or futures contracts when,
in the judgment of the Advisor,  and in accordance with  procedures  approved by
the Funds'  Boards,  the  affiliated  broker  will be able to obtain a price and
execution at least as favorable as those obtained from other  qualified  brokers
and if, in the  transaction,  the  affiliated  broker  charges  the Funds a rate
consistent  with that charged to  comparable  unaffiliated  customers in similar
transactions.





                                       44
<PAGE>




For the fiscal year ended August 31 2007, the Fund paid brokerage commissions in
the amount of $46,906. The Fund did not pay any affiliated brokerage commissions
for the fiscal year ended August 31, 2007.

The Fund is required to  identify  any  securities  of its  "regular  brokers or
dealers"  (as such term is defined  in the 1940 Act) that the Fund has  acquired
during the most recent  fiscal year.  As of August 31,  2007,  the Fund held the
following securities of its regular broker-dealers:

<TABLE>
<CAPTION>
------------------------------------------------------------ ----------------------------------------------------------
Name of Regular Broker or Dealer or Parent (Issuer)               Value of Securities Owned as of August 31, 2007
---------------------------------------------------               -----------------------------------------------

------------------------------------------------------------ ----------------------------------------------------------
<S>                                                                               <C>
Lloyds TSB Group PLC                                                              $132,000
------------------------------------------------------------ ----------------------------------------------------------
KBC Group NV                                                                      $289,000
------------------------------------------------------------ ----------------------------------------------------------



                                       45
<PAGE>

------------------------------------------------------------ ----------------------------------------------------------
Name of Regular Broker or Dealer or Parent (Issuer)               Value of Securities Owned as of August 31, 2007
---------------------------------------------------               -----------------------------------------------

------------------------------------------------------------ ----------------------------------------------------------
Nordea Bank AB                                                                    $320,000
------------------------------------------------------------ ----------------------------------------------------------
Zurich Financial Services AG                                                      $373,000
------------------------------------------------------------ ----------------------------------------------------------
Marfin Investment Group SA                                                        $191,000
------------------------------------------------------------ ----------------------------------------------------------
</TABLE>



Portfolio Turnover

Portfolio  turnover  rate is  defined  by the SEC as the ratio of the  lesser of
sales or purchases to the monthly  average value of securities  owned during the
year,  excluding  all  securities  whose  remaining  maturities  at the  time of
acquisition were one year or less.

Higher levels of activity by the Fund result in higher transaction costs and may
also  result  in  taxes on  realized  capital  gains  to be borne by the  Fund's
shareholders.  Purchases and sales are made whenever necessary, in the Advisor's
discretion, to meet the Fund's objective.


For the fiscal year ended August 31, 2007 and for the fiscal period July 5, 2006
(commencement  of  operations)  through  August 31, 2006,  the Fund's  portfolio
turnover rate was 127% and 7% (not annualized), respectively.


                        PURCHASE AND REDEMPTION OF SHARES

General Information

Policies and procedures affecting  transactions in Fund shares can be changed at
any  time  without  notice,  subject  to  applicable  law.  Transactions  may be
contingent  upon proper  completion of application  forms and other documents by
shareholders  and their  receipt by the  Fund's  agents.  Transaction  delays in
processing (and changing account features) due to circumstances within or beyond
the  control  of the Fund and its  agents  may  occur.  Shareholders  (or  their
financial  service firms) are responsible for all losses and fees resulting from
bad checks,  cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A  distribution  will be  reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Orders  will be  confirmed  at a price  based on the net asset value of the Fund
next determined after receipt in good order by DWS-SDI of the order  accompanied
by payment.  However,  orders  received by dealers or other  financial  services
firms prior to the  determination  of net asset value and received in good order
by DWS-SDI prior to the  determination  of net asset value next determined after
receipt by DWS-SDI  will be  confirmed  at a price  based on the net asset value
("trade date").




                                       46
<PAGE>



Certificates. Share certificates will not be issued.

Use of Financial  Services  Firms.  Investment  dealers and other firms  provide
varying arrangements for their clients to purchase and redeem the Fund's shares,
including higher minimum investments,  and may assess transaction or other fees.
Firms may arrange  with their  clients for other  investment  or  administrative
services.  Such firms may independently  establish and charge additional amounts
to their  clients for such  services.  Firms also may hold the Fund's  shares in
nominee or street  name as agent for and on behalf of their  customers.  In such
instances,  the Fund's transfer agent, DWS Scudder  Investments  Service Company
("DWS-SISC" or the "Transfer  Agent"),  will have no information with respect to
or control over the accounts of specific  shareholders.  Such  shareholders  may
obtain access to their accounts and  information  about their accounts only from
their  firm.  Certain  of these  firms may  receive  compensation  from the Fund
through the  Shareholder  Service Agent for  record-keeping  and other  expenses
relating to these nominee accounts. In addition, certain privileges with respect
to the purchase and  redemption of shares or the  reinvestment  of dividends may
not be available  through such firms.  Some firms may  participate  in a program
allowing them access to their clients' accounts for servicing including, without
limitation,  transfers of  registration  and  dividend  payee  changes;  and may
perform functions such as generation of confirmation statements and disbursement
of cash  dividends.  Such firms,  including  affiliates of DWS-SDI,  may receive
compensation  from the Fund  through  the  Shareholder  Service  Agent for these
services.

The Fund will be deemed to have received a purchase or redemption  order when an
authorized  broker,  service  organization  or,  if  applicable,  an  authorized
designee,  accepts the order. Shares of the Fund may be purchased or redeemed on
any business  day at the net asset value next  determined  after  receipt of the
order,  in good order,  by the  Transfer  Agent.  Investors  who invest  through
authorized  brokers,  service  organizations or their designated  intermediaries
should submit purchase and redemption  orders directly to their broker,  service
organization or designated  intermediary.  The broker or intermediary may charge
you a transaction fee.


The Fund has authorized one or more financial  service  institutions,  including
certain members of the Financial Industry  Regulatory  Authority ("FINRA") other
than  the  Distributor  ("financial  institutions"),   to  accept  purchase  and
redemption  orders for the Fund's shares.  Such financial  institutions may also
designate other parties, including plan administrator intermediaries,  to accept
purchase and  redemption  orders on the Fund's  behalf.  Orders for purchases or
redemptions will be deemed to have been received by the Fund when such financial
institutions or, if applicable,  their  authorized  designees accept the orders.
Subject  to the  terms  of the  contract  between  the  Fund  and the  financial
institution, ordinarily orders will be priced at the Fund's net asset value next
computed  after  acceptance  by such  financial  institution  or its  authorized
designees and  acceptance by the Fund.  Further,  if purchases or redemptions of
the Fund's shares are arranged and settlement is made at an investor's  election
through any other authorized financial  institution,  that financial institution
may, at its  discretion,  charge a fee for that service.  The Board of Directors
and the Distributor,  also the Fund's principal underwriter,  each has the right
to limit the amount of purchases  by, and to refuse to sell to, any person.  The
Directors and the Distributor may suspend or terminate the offering of shares of
the Fund at any time for any reason.

DWS-SDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents  ("DWS Scudder  Wholesalers").  Generally,  DWS Scudder
Wholesalers  market shares of the DWS funds to your  financial  advisor,  who in
turn may  recommend  that you  purchase  shares  of a DWS  fund.  The Plan is an
incentive program that combines a monthly  incentive  component with a quarterly
strategic bonus component.  Under the Plan, DWS Scudder Wholesalers will receive
a monetary  monthly  incentive based on the amount of sales generated from their
marketing of the funds,  and that incentive will differ depending on the product
category  of  the  fund.   Each  fund  is  assigned  to  one  of  four   product
categories--"Core,"    "Strategic,"   "Satellite"   or   "Non-CSS"-taking   into
consideration, among other things, the following criteria, where applicable:

o        The Fund's 3-year performance;

                                       47
<PAGE>

o        The Fund's Morningstar rating;
o        Market size for the fund category;
o        The Fund's size, including sales and redemptions of the Fund's shares;
o        The length of time the Fund's Portfolio Managers have managed the Fund;
         and
o        The Fund's consistency with DWS Scudder's branding.

This  information  and other factors are  presented to a committee  comprised of
representatives  from  various  groups  within  DWS  Scudder,  who  review  on a
quarterly basis the funds assigned to each product category described above, and
make any  changes to those  assignments  at that time.  No one  factor,  whether
positive or negative,  determines a fund's  placement in a given  category;  all
these factors together are considered, and the designation of funds in the Core,
Strategic and Satellite categories represents management's judgment based on the
above criteria.  In addition,  management may consider a fund's profile over the
course  of  several  review  periods  before  making  a change  to its  category
assignment.  These  category  assignments  will be posted  quarterly  to the DWS
funds' Web site at www.dws-scudder.com, approximately one month after the end of
each quarter.  DWS Scudder Wholesalers will receive the highest compensation for
Core and Strategic  funds,  less for Satellite  funds and the lowest for Non-CSS
funds.   The  level  of   compensation   among  these   categories   may  differ
significantly.

In the normal course of business,  DWS Scudder will from time to time  introduce
new funds into the DWS family of funds. As a general rule, all new funds will be
placed in the  Strategic  compensation  category  for a  minimum  period of four
consecutive quarters, and DWS Scudder Wholesalers will be paid at a rate that is
equivalent to that of the Core Fund  category.  After that four quarter  period,
each new fund in the  Strategic  category  will be reviewed by the committee and
either  assigned to one of the four  categories or continued as a Strategic fund
at that time.

The prospect of receiving,  or the receipt of, additional  compensation by a DWS
Scudder  Wholesaler  under the Plan may provide an incentive to favor  marketing
the Core,  Strategic  or  Satellite  funds  over the  Non-CSS  funds.  The Plan,
however,  will not change  the price that you pay for shares of a fund.  The DWS
Scudder  Compliance  Department  monitors DWS Scudder Wholesaler sales and other
activity  in an  effort  to  detect  unusual  activity  in  the  context  of the
compensation  structure under the Plan. However,  investors may wish to take the
Plan  and the  product  category  of the  fund  into  account  when  considering
purchasing a fund or evaluating any recommendations relating to fund shares.





                                       48
<PAGE>




Telephone  and  Electronic  Transaction  Procedures.  Shareholders  have various
telephone, Internet, wire and other electronic privileges available. The Fund or
its agents will not be liable for any losses,  expenses or costs  arising out of
fraudulent or unauthorized instructions pursuant to these privileges if the Fund
or its agents reasonably believe, based upon reasonable verification procedures,
that the instructions were genuine.  Verification  procedures  include recording
instructions,  requiring  certain  identifying  information  before  acting upon
instructions  and  sending  written  confirmations.  During  periods  when it is
difficult to contact the  Shareholder  Service Agent, it may be difficult to use
telephone, wire and other privileges.


QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated  Clearing House System (minimum $50 and maximum  $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or  redemption  of Fund shares.  Shares  purchased by check or
through  QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege  until  such  Shares  have been owned for at least 10  calendar  days.
QuickBuy and  QuickSell  cannot be used with  passbook  savings  accounts or for
certain tax-deferred plans such as IRAs.

Tax-Sheltered   Retirement   Plans.  The  Shareholder   Service  Agent  provides
retirement plan services and documents and SDI can establish  investor  accounts
in any of the following types of retirement plans:

o        403(b)(7)  Custodial  Accounts,  prototype  money purchase  pension and
         profit-sharing  plans.  Forms for existing plans are available  through
         the Shareholder Service Agent.

Additional fees and transaction policies and procedures may apply to such plans.
Investors  should  consult with their own tax  advisors  before  establishing  a
retirement plan.

Purchases

The Fund  reserves the right to withdraw all or any part of the offering made by
its Prospectuses  and to reject purchase orders for any reason.  Also, from time
to time,  the Fund may  temporarily  suspend  the  offering  of any class of its
shares to new investors.  During the period of such suspension,  persons who are
already  shareholders  of the Fund may be  permitted  to  continue  to  purchase
additional shares of such class and to have dividends reinvested.

To help the  government  fight the  funding of  terrorism  and money  laundering
activities,  federal law requires all financial  institutions to obtain,  verify
and record  information  that identifies  each person who opens an account.  For
more  information,  please see  "Policies  You Should  Know About" in the Fund's
Prospectuses.

                                       49
<PAGE>

The Fund may waive the investment minimum, if any, for purchases by a current or
former director or trustee of the DWS mutual funds, an employee,  the employee's
spouse or life  partner  and  children  or  step-children  age 21 or  younger of
Deutsche Bank or its affiliates,  or a sub-advisor to any fund in the DWS family
of funds, or a broker-dealer authorized to sell shares of the funds.

Financial Services Firms' Compensation. Banks and other financial services firms
may provide  administrative  services  related to order placement and payment to
facilitate transactions in shares of the Fund for their clients, and DWS-SDI may
pay  them a  transaction  fee up to the  level  of the  discount  or  commission
allowable or payable to dealers.

DWS-SDI may,  from time to time,  pay or allow to firms a 1%  commission  on the
amount  of  shares of the Fund sold  under  the  following  conditions:  (i) the
purchased  shares are held in a DWS  Scudder  IRA  account,  (ii) the shares are
purchased as a direct "roll over" of a distribution from a qualified  retirement
plan account  maintained on the subaccount  record keeping system maintained for
DWS-branded  plans  by  ADP,  Inc.  under  an  alliance  with  DWS-SDI  and  its
affiliates, (iii) the registered representative placing the trade is a member of
the   Executive   Council,   a  group  of  persons   designated  by  DWS-SDI  in
acknowledgment  of their  dedication to the employee  benefit plan area and (iv)
the purchase is not otherwise subject to a commission.

In  addition  to  the  discounts  or  commissions  described  herein  and in the
Prospectuses,  DWS-SDI may pay or allow  additional  discounts,  commissions  or
promotional  incentives,  in the form of cash,  to firms that sell shares of the
Fund. In some instances,  such amounts may be offered only to certain firms that
sell or are  expected to sell during  specified  time  periods  certain  minimum
amounts of shares of the Fund, or other funds underwritten by DWS-SDI.

Upon  notice to all  dealers,  DWS-SDI  may  re-allow  to dealers up to the full
applicable Class A sales charge during periods and for transactions specified in
such notice and such re-allowances may be based upon attainment of minimum sales
levels. During periods when 90% or more of the sales charge is re-allowed,  such
dealers  may be deemed to be  underwriters  as that term is  defined in the 1933
Act.


DWS-SDI may at its discretion  compensate  investment dealers or other financial
services  firms in  connection  with  the sale of Class A shares  of the Fund in
accordance  with the Large  Order NAV  Purchase  Privilege  and one of the three
compensation schedules up to the following amounts:


<TABLE>
<CAPTION>
                     Compensation Schedule #1:                               Compensation Schedule #2:
                     -------------------------                               -------------------------
             Retail Sales and DWS Scudder Flex Plan(1)                        DWS Retirement Plans(2)
             --------------------------------------                           --------------------
Amount of                                       As a Percentage of      Amount of      As a Percentage of Net
Shares Sold                                       Net Asset Value      Shares Sold           Asset Value
-----------                                       ---------------      -----------           -----------
<S>                                                     <C>                <C>                    <C>
$1 million to $3 million (equity funds)                1.00%         Over $3 million         0.00%-0.50%
$1 million - $3 million (fixed income funds)           0.85%
Over $3 million to $50 million                         0.50%                --                     --
Over $50 million                                       0.25%                --                     --
</TABLE>


                        Compensation Schedule #3:
                        -------------------------
                       DWS Scudder Choice Plan(3)
                       --------------------------
Amount of                                        As a Percentage of Net
Shares Sold                                           Asset Value
-----------                                           -----------

All amounts (equity funds)                               1.00%
All amounts (fixed income funds)                         0.85%

(1)       For purposes of determining the appropriate  commission  percentage to
          be applied to a particular sale under the foregoing schedule,  DWS-SDI
          will consider the cumulative  amount  invested by the purchaser in the
          Fund and other funds listed under "Special  Features -- Class A Shares
          -- Combined Purchases,"  including


                                       50
<PAGE>

         purchases pursuant to the "Combined  Purchases," "Letter of Intent" and
         "Cumulative Discount" features referred to below.

(2)       Compensation Schedule 2 applies to employer sponsored employee benefit
          plans  using  the  OmniPlus  subaccount  record  keeping  system  made
          available  through ADP,  Inc.  under an alliance  with DWS-SDI and its
          affiliates.


(3)       DWS-SDI compensates UBS Financial at a rate of 0.50%.


DWS-SDI will no longer advance the first year  distribution  fee and service fee
to firms for sales of Class C shares to employer  sponsored  benefit plans using
the OmniPlus  subaccount  record keeping system made available through ADP, Inc.
under an alliance with DWS-SDI and it affiliates.  DWS-SDI is compensated by the
Fund for services as distributor and principal underwriter for Class C shares.


Revenue Sharing

In light of recent  regulatory  developments,  the Advisor,  the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding  the  level  of  payments  made  by them to  selected  affiliated  and
unaffiliated  brokers,  dealers,  participating  insurance  companies  or  other
financial  intermediaries  ("financial  advisors") in  connection  with the sale
and/or  distribution  of  Fund  shares  or the  retention  and/or  servicing  of
investors and Fund shares ("revenue sharing").

The  Advisor,  the  Distributor  and/or  their  affiliates  may  pay  additional
compensation,  out of their own  assets and not as an  additional  charge to the
Fund, to financial  advisors in connection with the sale and/or  distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund shares.
Such revenue  sharing  payments are in addition to any  distribution  or service
fees  payable  under any Rule  12b-1 or  service  plan of any fund,  any  record
keeping/sub-transfer  agency/networking  fees  payable  by the  Fund  (generally
through the  Distributor  or an  affiliate)  and/or the  Distributor  to certain
financial   advisors  for  performing  such  services  and  any  sales  charges,
commissions,   non-cash  compensation  arrangements  expressly  permitted  under
applicable  rules of FINRA or other  concessions  described  in the fee table or
elsewhere in the  Prospectuses or the SAI as payable to all financial  advisors.
For example, the Advisor, the Distributor and/or their affiliates may compensate
financial  advisors  for  providing  the Fund with "shelf  space" or access to a
third  party  platform  or fund  offering  list,  or  other  marketing  programs
including, without limitation, inclusion of the Fund on preferred or recommended
sales  lists,  mutual  fund  "supermarket"  platforms  and  other  formal  sales
programs;  granting the  Distributor  access to the  financial  advisor's  sales
force;  granting the Distributor access to the financial  advisor's  conferences
and meetings;  assistance  in training and  educating  the  financial  advisor's
personnel; and, obtaining other forms of marketing support. The level of revenue
sharing payments made to financial advisors may be a fixed fee or based upon one
or more of the following factors:  gross sales,  current assets and/or number of
accounts of the Fund attributable to the financial advisor,  the particular fund
or fund type or other  measures  as agreed to by the  Advisor,  the  Distributor
and/or their affiliates and the financial  advisors or any combination  thereof.
The amount of these payments is determined at the discretion of the Advisor, the
Distributor  and/or their affiliates from time to time, may be substantial,  and
may be different for different  financial  advisors  based on, for example,  the
nature of the services provided by the financial advisor.

The Advisor,  the  Distributor  and/or their  affiliates  currently make revenue
sharing  payments  from  their own  assets in  connection  with the sale  and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial  advisors in amounts that  generally  range from .01% up to .50% of
assets of the Fund serviced and  maintained by the  financial  advisor,  .10% to
..25% of sales of the Fund attributable to the financial  advisor,  a flat fee of
$12,500 up to $500,000, or any combination thereof. These amounts are subject to
change  at  the  discretion  of  the  Advisor,   the  Distributor  and/or  their
affiliates.   Receipt  of,  or  the  prospect  of  receiving,   this  additional
compensation, may influence your financial advisor's recommendation of this Fund
or of any  particular  share class of the Fund. You should review your financial
advisor's  compensation  disclosure  and/or  talk to your  financial  advisor to
obtain  more  information  on how this  compensation  may have  influenced  your
financial advisor's recommendation of this Fund.

                                       51
<PAGE>

The Advisor,  the Distributor and/or their affiliates may also make such revenue
sharing  payments  to  financial  advisors  under the terms  discussed  above in
connection  with  the  distribution  of both  DWS  funds  and  non-DWS  funds by
financial  advisors to retirement plans that obtain record keeping services from
ADP, Inc. on the DWS Scudder branded  retirement plan platform (the  "Platform")
with the level of revenue  sharing  payments  being based upon sales of both the
DWS funds and the  non-DWS  funds by the  financial  advisor on the  Platform or
current  assets  of both  the DWS  funds  and the  non-DWS  funds  serviced  and
maintained by the financial advisor on the Platform.

As of the  date  hereof,  the  Fund  has been  advised  that  the  Advisor,  the
Distributor  and their  affiliates  expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors

A G Edwards & Sons Inc.
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth Equity Services, LLP (dba Commonwealth Financial Network)
First Clearing/Wachovia Securities
HD Vest Investment Securities, Inc.
ING Group
LaSalle Financial Services, Inc. (dba ABN Amro)
Linsco/Private Ledger Corp.
Marsh Insurance and Investment Company
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Pacific Select Distributors Group
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wells Fargo Investments, LLC

Channel: Cash Product Platform

ADP Clearing & Outsourcing
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Bear, Stearns Securities Corp.
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
Citibank NA
D.A. Davidson & Company
Deutsche Bank Securities Inc.
Deutsche Bank Trust Company Americas
Emmett A. Larkin Company
Fiduciary Trust Co. - International
H.C. Denison Co.
Huntleigh Securities

                                       52
<PAGE>

Investors Bank & Trust
JPMorgan Chase
Lincoln Investment Planning
Linsco Private Ledger Financial Services
Mellon Financial Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Romano Brothers and Company
SAMCO Capital Markets (Fund Services, Inc.)
Smith Moore & Company
State Street Bank & Trust Co.
Sungard Institutional Brokerage Inc.
US Bancorp
UBS Financial Services Inc.
William Blair & Company

Channel: Third Party Insurance Platforms

Acacia National Life Insurance
Allmerica Financial Life Insurance Company
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
American General Life Insurance Company
Annuity Investors Life Insurance Company
Columbus Life Insurance Company
Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance Company
First Allmerica Financial Life Insurance Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity Insurance Company
Hartford Life Insurance Company
ICMG Registered Variable Life
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
Mutual of America Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America

                                       53
<PAGE>

Sun Life GroupSymetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company

Any additions,  modifications or deletions to the financial advisors  identified
above that have occurred since the date hereof are not reflected.

The Advisor,  the  Distributor  or their  affiliates  may enter into  additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The  prospect  of  receiving,  or the  receipt  of  additional  compensation  or
promotional  incentives  described above by financial  advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS Funds or a particular  DWS Fund over sales of shares of mutual
funds (or  non-mutual  fund  investments)  with  respect to which the  financial
advisor does not receive additional compensation or promotional  incentives,  or
receives  lower levels of additional  compensation  or  promotional  incentives.
Similarly,  financial advisors may receive different  compensation or incentives
that may influence  their  recommendation  of any particular  share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses.  You may
wish to take  such  payment  arrangements  into  account  when  considering  and
evaluating  any  recommendations  relating to Fund shares and you should discuss
this matter with your  financial  advisor  and review your  financial  advisor's
disclosures.




                                       54
<PAGE>




                                       55
<PAGE>




                                       56
<PAGE>




                                       57
<PAGE>




                                       58
<PAGE>





Class A Purchases.  The public  offering  price of Class A shares for purchasers
choosing  the initial  sales  charge  alternative  is the net asset value plus a
sales charge, as set forth below.

<TABLE>
<CAPTION>
                                                                       Sales Charge
                                                                       ------------
                                                                                        Allowed to Dealers as a
                                           As a Percentage of      As a Percentage of   Percentage of Offering
Amount of Purchase                            Offering Price        Net Asset Value*             Price
------------------                            --------------        ----------------             -----
<S>                                               <C>                     <C>                       <C>
Less than $50,000                                  5.75%                   6.10%                     5.20%
$50,000 but less than $100,000                     4.50                    4.71                      4.00
$100,000 but less than $250,000                    3.50                    3.63                      3.00
$250,000 but less than $500,000                    2.60                    2.67                      2.25
$500,000 but less than $1 million                  2.00                    2.04                      1.75
$1 million and over                                0.00**                  0.00**                    0.00***
</TABLE>

*        Rounded to the nearest one-hundredth percent.

**       Redemption  of shares  may be subject to a  contingent  deferred  sales
         charge ad discussed below.

***      Commission is payable by DWS-SDI as discussed below.


Class A NAV Sales. Class A shares may be sold at net asset value to:

(a)      a current  or former  director  or trustee  of  Deutsche  or DWS mutual
         funds;

(b)      an  employee  (including  the  employee's  spouse or life  partner  and
         children or  stepchildren  age 21 or  younger) of Deutsche  Bank or its
         affiliates or of a subadvisor to any fund in the DWS family of funds or
         of a  broker-dealer  authorized  to sell  shares of the Fund or service
         agents of the Funds;

(c)      certain  professionals  who assist in the promotion of DWS mutual funds
         pursuant to personal services contracts with DWS-SDI, for themselves or
         members of their  families.  DWS-SDI in its  discretion  may compensate
         financial  services  firms  for  sales  of Class A  shares  under  this
         privilege at a commission rate of 0.50% of the amount of Class A shares
         purchased;

(d)      any trust, pension,  profit-sharing or other benefit plan for only such
         persons listed under the preceding paragraphs (a) and (b);

(e)      persons who purchase such shares  through bank trust  departments  that
         process  such  trades  through an  automated,  integrated  mutual  fund
         clearing program provided by a third party clearing firm;

                                       59
<PAGE>

(f)      selected  employees  (including  their  spouses  or life  partners  and
         children  or  stepchildren  age  21 or  younger)  of  banks  and  other
         financial services firms that provide  administrative  services related
         to order placement and payment to facilitate  transactions in shares of
         the Fund for their clients pursuant to an agreement with DWS-SDI or one
         of its  affiliates.  Only those employees of such banks and other firms
         who  as  part  of  their  usual  duties  provide  services  related  to
         transactions in Fund shares qualify;

(g)      unit  investment  trusts  sponsored  by Ranson &  Associates,  Inc. and
         unitholders of unit investment trusts sponsored by Ranson & Associates,
         Inc. or its predecessors through reinvestment programs described in the
         prospectuses of such trusts that have such programs;

(h)      through certain  investment  advisors  registered  under the Investment
         Advisers Act of 1940 and other  financial  services firms acting solely
         as  agent  for  their  clients,   that  adhere  to  certain   standards
         established  by DWS-SDI,  including a  requirement  that such shares be
         sold for the benefit of their  clients  participating  in an investment
         advisory program or agency commission  program under which such clients
         pay a fee to  the  investment  advisor  or  other  firm  for  portfolio
         management  or agency  brokerage  services.  Such  shares  are sold for
         investment  purposes and on the condition  that they will not be resold
         except through redemption or repurchase by the Fund;

(i)      employer  sponsored  employee  benefit plans using the Flex  subaccount
         recordkeeping system ("Flex Plans") made available through ADP under an
         alliance with DWS-SDI and its affiliates,  established prior to October
         1, 2003,  provided  that the Flex Plan is a  participant-directed  plan
         that has not less than 200 eligible employees;

(j)      investors investing $1 million or more, either as a lump sum or through
         the "Combined  Purchases," "Letter of Intent" and "Cumulative Discount"
         features referred to above (collectively, the "Large Order NAV Purchase
         Privilege"). The Large Order NAV Purchase Privilege is not available if
         another net asset value purchase privilege is available;

(k)      defined contribution investment only plans with a minimum of $1,000,000
         in plan assets regardless of the amount allocated to the DWS funds;

In addition, Class A shares may be sold at net asset value in connection with:

(l)      the  acquisition  of the  assets  of or merger  or  consolidation  with
         another investment  company,  or to shareholders in connection with the
         investment or reinvestment  of income and capital gain  dividends,  and
         under other circumstances  deemed appropriate by DWS-SDI and consistent
         with regulatory requirements; and

(m)      a  direct  "roll  over"  of a  distribution  from a Flex  Plan  or from
         participants in employer sponsored employee benefit plans maintained on
         the OmniPlus  subaccount  record keeping system made available  through
         ADP, Inc. under an alliance with DWS-SDI and its affiliates  into a DWS
         Scudder IRA;

(n)      reinvestment of fund dividends and distributions;

(o)      exchanging  an  investment in Class A shares of another fund in the DWS
         family of funds for an investment in the fund.

Class A shares also may be purchased at net asset value in any amount by members
of the plaintiff class in the proceeding known as Howard and Audrey Tabankin, et
al. v. Kemper  Short-Term  Global  Income Fund, et al., Case No. 93 C 5231 (N.D.
IL). This privilege is generally non-transferable and continues for the lifetime
of individual class members and for a ten-year period for  non-individual  class
members.  To make a  purchase  at net asset  value  under  this  privilege,  the
investor  must,  at the time of  purchase,  submit a  written  request  that the
purchase be processed at net asset value pursuant to this privilege specifically
identifying the purchaser as a member of the "Tabankin  Class." Shares purchased
under this privilege will be maintained in a separate account that includes only

                                       60
<PAGE>

shares  purchased  under  this  privilege.  For  more  details  concerning  this
privilege,  class members should refer to the Notice of (i) Proposed  Settlement
with Defendants;  and (ii) Hearing to Determine Fairness of Proposed Settlement,
dated  August 31,  1995,  issued in  connection  with the  aforementioned  court
proceeding.  For  sales of Fund  shares  at net  asset  value  pursuant  to this
privilege,  DWS-SDI  may in its  discretion  pay  investment  dealers  and other
financial services firms a concession,  payable quarterly,  at an annual rate of
up to 0.25% of net assets attributable to such shares maintained and serviced by
the firm.  A firm  becomes  eligible  for the  concession  based upon  assets in
accounts  attributable  to shares  purchased  under this  privilege in the month
after the month of purchase and the  concession  continues  until  terminated by
DWS-SDI.  The  privilege of  purchasing  Class A shares of the Fund at net asset
value under this  privilege is not available if another net asset value purchase
privilege also applies.





                                       61
<PAGE>



Class A  Quantity  Discounts.  An  investor  or the  investor's  dealer or other
financial  services  firm must notify the  Shareholder  Service Agent or DWS-SDI
whenever  a  quantity  discount  or  reduced  sales  charge is  applicable  to a
purchase.  In order to qualify  for a lower  sales  charge,  all orders  from an
organized  group will have to be placed  through a single  investment  dealer or
other firm and identified as originating from a qualifying purchaser.

Letter of Intent.  The reduced sales charges for Class A shares, as shown in the
Prospectus, also apply to the aggregate amount of purchases of Class A shares of
DWS Funds  that bear a sales  charge  made by any  purchaser  within a  24-month
period  under a written  Letter of Intent  ("Letter")  provided by DWS-SDI.  The
Letter,  which  imposes no  obligation  to purchase or sell  additional  Class A
shares,  provides  for a price  adjustment  depending  upon  the  actual  amount
purchased  within  such  period.  The Letter  provides  that the first  purchase
following  execution  of the  Letter  must be at least 5% of the  amount  of the
intended  purchase,  and that 5% of the amount of the intended purchase normally
will be held in escrow in the form of shares pending  completion of the intended
purchase.  If the total  investments under the Letter are less than the intended
amount and thereby  qualify only for a higher sales charge than  actually  paid,
the  appropriate  number of escrowed  shares are redeemed and the proceeds  used
toward  satisfaction  of the obligation to pay the increased  sales charge.  The
Letter  for  an  employer-sponsored  employee  benefit  plan  maintained  on the
subaccount  record keeping system available  through ADP, Inc. under an alliance
with DWS-SDI and its affiliates may have special provisions regarding payment of
any  increased  sales charge  resulting


                                       62
<PAGE>

from a failure to complete the intended purchase under the Letter. A shareholder
may include the value (at the maximum  offering  price,  which is  determined by
adding the maximum  applicable sales load charged to the net asset value) of all
Class A shares of such DWS Funds held of record as of the initial  purchase date
under the  Letter as an  "accumulation  credit"  toward  the  completion  of the
Letter, but no price adjustment will be made on such shares.

Class A Cumulative Discount. Class A shares of the Fund may also be purchased at
the rate  applicable to the discount  bracket  attained by adding to the cost of
shares being purchased, the value of all Class A shares of DWS Funds that bear a
sales charge (computed at the maximum offering price at the time of the purchase
for which the discount is  applicable)  already  owned by the investor or his or
her immediate family member (including the investor's spouse or life partner and
children or stepchildren age 21 or younger).



Combined  Purchases.  The  Fund's  Class A shares may be  purchased  at the rate
applicable to the sales charge discount  bracket  attained by combining same day
investments in Class A shares of any DWS Funds that bear a sales charge.


For purposes of the Combined Purchases, Letter of Intent and Cumulative Discount
features  described above,  employer  sponsored employee benefit plans using the
Flex  subaccount  record  keeping  system  available  through ADP, Inc. under an
alliance with DWS-SDI and its affiliates may include:  (a) Money Market Funds as
"DWS Funds",  (b) all classes of shares of any DWS Fund and (c) the value of any
other plan  investments,  such as guaranteed  investment  contracts and employer
stock,  maintained on such subaccount record keeping system.  Once eligible plan
assets under the provision  reach the $1,000,000  threshold,  a later decline in
assets  below the  $1,000,000  threshold  will not affect the plan's  ability to
continue to purchase Class A shares at net asset value.


Class C Purchases. Class C shares of the Fund are offered at net asset value. No
initial sales charge is be imposed. Class C shares sold without an initial sales
charge  will  allow the full  amount of the  investor's  purchase  payment to be
invested in Class C shares for his or her account. Class C shares continue to be
subject to a contingent  deferred  sales charge of 1.00% (for shares sold within
one year of purchase) and Rule 12b-1 fees, as described in the Fund's Prospectus
and Statement of Additional Information.

Purchase of Institutional Class Shares.  Information on how to buy Institutional
Class shares is set forth in the section entitled "Buying and Selling Shares" in
the Fund's Prospectus.  The following supplements that information.  The minimum
initial  investment for  Institutional  Class shares is $1,000,000.  There is no
minimum subsequent  investment  requirement for the Institutional  Class shares.
This minimum amount may be changed at any time in management's discretion.

Investors who invest through authorized brokers,  service organizations or their
designated  intermediaries should submit purchase and redemption orders directly
to their broker, service organization or designated intermediary.  The broker or
intermediary  may charge you a transaction  fee. The Fund will be deemed to have
received a purchase  or  redemption  order when an  authorized  broker,  service
organization  or, if  applicable,  an  authorized  designee,  accepts the order.
Shares of the Fund may be  purchased  or redeemed on any Business Day at the net
asset  value next  determined  after  receipt of the order,  in good  order,  by
DWS-SISC.

Multi-Class  Suitability.  DWS-SDI  has  established  the  following  procedures
regarding the purchase of Class A and Class C shares. Orders to purchase Class C
shares  of  $500,000  or more  will be  declined  with the  exception  of orders
received  from firms acting for clients  whose shares will be held in an omnibus
account and employer-sponsored  employee benefit plans using the Flex subaccount
record keeping system ("Flex  System")  maintained by ADP under an alliance with
DWS-SDI and its affiliates ("DWS Scudder Flex Plans").

                                       63
<PAGE>

The following provisions apply to DWS Scudder Flex Plans.

a.       Class C Share DWS Scudder Flex Plans. Orders to purchase Class C shares
         for a  DWS  Scudder  Flex  Plan,  regardless  of  when  such  plan  was
         established  on the Flex  System,  will be invested  instead in Class A
         shares at net asset  value when the  combined  subaccount  value in DWS
         Funds or other eligible  assets held by the plan is $1,000,000 or more.
         This  provision  will be imposed for the first  purchase after eligible
         plan assets reach the $1,000,000  threshold.  A later decline in assets
         below the  $1,000,000  threshold  will not affect the plan's ability to
         continue to purchase Class A shares at net asset value.

b.       Class C Share DWS Scudder  Choice  Plans.  Orders to  purchase  Class C
         shares for a DWS Scudder Choice Plan that has been regularly purchasing
         Class C shares will be invested  instead in Class A shares at net asset
         value when the combined subaccount value in DWS Funds or other eligible
         assets held by the plan is $1,000,000 or more.  This  provision will be
         imposed for purchases  made  beginning in the month after eligible plan
         assets reach the $1,000,000  threshold.  In addition, as a condition to
         being permitted to use the Choice Plan platform, plans must agree that,
         within  one month  after  eligible  plan  assets  reach the  $1,000,000
         threshold,  all  existing  Class  C  shares  held in the  plan  will be
         automatically converted to Class A shares.

The procedures  above do not reflect in any way the  suitability of a particular
class of shares for a particular investor and should not be relied upon as such.
A suitability  determination  must be made by investors  with the  assistance of
their financial representative.

To sell shares in a retirement  account  other than an IRA, your request must be
made in writing,  except for exchanges to other eligible funds in the DWS family
of funds, which can be requested by phone or in writing.

To sell  shares by bank wire you will  need to sign up for these  services  when
completing your account application.


Automatic Investment Plan. A shareholder may purchase shares of the Fund through
an automatic investment program.  With the Direct Deposit Purchase Plan ("Direct
Deposit"), investments are made automatically (minimum $500 and maximum $250,000
for initial investments and a minimum of $50 and maximum $250,000 for subsequent
investments)  from the  shareholder's  account  at a bank,  savings  and loan or
credit union into the shareholder's  Fund account.  Termination by a shareholder
will become effective within thirty days after the Shareholder Service Agent has
received the request. The Fund may immediately  terminate a shareholder's Direct
Deposit  in the event  that any item is unpaid  by the  shareholder's  financial
institution.

Minimum Subsequent  Investment Policies.  For current shareholders of Class A or
Class C shares  there is a $50 minimum  investment  requirement  for  subsequent
investments in the fund. There is no minimum subsequent  investment  requirement
in Class A shares for investments on behalf of participants in certain fee-based
and wrap  programs  offered  through  financial  intermediaries  approved by the
Advisor or for Institutional Class shareholders.


Payroll  Investment  Plans. A shareholder  may purchase  shares through  Payroll
Direct Deposit or Government  Direct  Deposit.  Under these  programs,  all or a
portion of a shareholder's  net pay or government check is invested each payment
period.  A shareholder may terminate  participation  in these programs by giving
written  notice  to  the  shareholder's   employer  or  government   agency,  as
appropriate. (A reasonable time to act is required.) The Fund is not responsible
for the  efficiency of the employer or  government  agency making the payment or
any financial institutions transmitting payments.

Redemptions

                                       64
<PAGE>


The Fund  will  impose a  redemption  fee of 2% of the total  redemption  amount
(calculated  at net asset value,  without regard to the effect of any contingent
deferred sales charge; any contingent  deferred sales charge is also assessed on
the  total  redemption  amount  without  regard  to  the  assessment  of  the 2%
redemption  fee) on all Fund  shares  redeemed  or  exchanged  within 15 days of
buying  them  (either by  purchase  or  exchange).  The  redemption  fee is paid
directly to the Fund, and is designed to encourage  long-term  investment and to
offset  transaction  and other costs  associated  with  short-term  or excessive
trading. For purposes of determining whether the redemption fee applies,  shares
held the longest  time will be treated as being  redeemed  first and shares held
the shortest time will be treated as being  redeemed last. The redemption fee is
applicable  to Fund  shares  purchased  either  directly  or through a financial
intermediary,   such  as  a  broker-dealer.   Transactions   through   financial
intermediaries  typically  are  placed  with the Fund on an  omnibus  basis  and
include  both  purchase  and sale  transactions  placed on  behalf  of  multiple
investors. These purchase and sale transactions are generally netted against one
another and placed on an aggregate  basis;  consequently  the  identities of the
individuals on whose behalf the  transactions are placed generally are not known
to the Fund.  For this  reason,  the Fund has  undertaken  to  notify  financial
intermediaries  of their  obligation  to assess the  redemption  fee on customer
accounts  and to collect  and remit the  proceeds to the Fund.  However,  due to
operational   requirements,   the  intermediaries'   methods  for  tracking  and
calculating the fee may be inadequate or differ in some respects from the Fund.


Policies and procedures affecting  transactions in fund shares can be changed at
any  time  without  notice,  subject  to  applicable  law.  Transactions  may be
contingent  upon proper  completion of application  forms and other documents by
shareholders  and their  receipt by the  Fund's  agents.  Transaction  delays in
processing (and changing account features) due to circumstances within or beyond
the  control  of the Fund and its  agents  may  occur.  Shareholders  (or  their
financial  service firms) are responsible for all losses and fees resulting from
bad checks,  cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A  distribution  will be  reinvested in shares of the same fund and class if the
distribution check is returned as undeliverable.

Orders will be confirmed at a price based on the net asset value  (including any
applicable sales charge) of the Fund next determined after receipt in good order
by DWS-SDI of the order  accompanied  by payment.  However,  orders  received by
dealers or other  financial  services  firms prior to the  determination  of net
asset  value and  received  in good order by  DWS-SDI  prior to the close of its
business day will be confirmed at a price based on the net asset value effective
on that day ("trade date").

The Fund may suspend the right of  redemption  or delay  payment more than seven
days (a) during any period  when the  Exchange  is closed  other than  customary
weekend  and  holiday  closings  or during  any  period in which  trading on the
Exchange  is  restricted,  (b) during any period when an  emergency  exists as a
result  of which  (i)  disposal  of the  Fund's  investments  is not  reasonably
practicable,  or (ii) it is not reasonably practicable for the Fund to determine
the value of its net  assets,  or (c) for such  other  periods as the SEC may by
order permit for the protection of the Fund's shareholders.

A  request  for  repurchase  (confirmed  redemption)  may be  communicated  by a
shareholder  through a  financial  services  firm to  DWS-SDI,  which firms must
promptly submit orders to be effective.

Redemption  requests  must be  unconditional.  Redemption  requests (and a stock
power for certificated  shares) must be duly endorsed by the account holder.  As
specified  in the  Prospectuses,  signatures  may  need  to be  guaranteed  by a
commercial bank, trust company,  savings and loan  association,  federal savings
bank,  member  firm  of  a  national  securities  exchange  or  other  financial
institution  permitted by SEC rule.  Additional  documentation  may be required,
particularly  from   institutional  and  fiduciary  account  holders,   such  as
corporations,  custodians  (e.g.,  under the Uniform  Transfers  to Minors Act),
executors, administrators, trustees or guardians.

If the proceeds of the  redemption  (prior to the  imposition of any  contingent
deferred  sales charge) are $100,000 or less and the proceeds are payable to the
shareholder of record at the address of record,  normally a telephone request or
a written  request by any one account  holder  without a signature  guarantee is
sufficient for  redemptions by individual or joint account  holders,  and trust,
executor  and  guardian  account  holders,  provided  the  trustee,  executor or
guardian  is named in the  account  registration.  Other  institutional  account
holders may  exercise  this special


                                       65
<PAGE>

privilege of redeeming  shares by telephone  request or written  request without
signature  guarantee  subject  to the  same  conditions  as  individual  account
holders,   provided  that  this  privilege  has  been   pre-authorized   by  the
institutional  account holder by written  instruction to the Shareholder Service
Agent  with  signatures  guaranteed.  This  privilege  may not be used to redeem
shares  held in  certificated  form  and  may  not be used if the  shareholder's
account has had an address change within 15 days of the redemption request.

Wires.  Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed by the Fund for up to seven days if the Fund or the Shareholder  Service
Agent deems it appropriate under then-current market conditions.  The ability to
send wires is limited by the business hours and holidays of the firms  involved.
The Fund is not responsible for the efficiency of the federal wire system or the
account  holder's  financial  services  firm or  bank.  The  account  holder  is
responsible  for any charges  imposed by the account  holder's  firm or bank. To
change the  designated  account  to receive  wire  redemption  proceeds,  send a
written request to the Fund Shareholder Service Agent with signatures guaranteed
as described above or contact the firm through which Fund shares were purchased.


Automatic  Withdrawal Plan. The owner of $5,000 or more of a class of the Fund's
shares at the  offering  price (net  asset  value  plus,  in the case of Class A
shares,  the initial  sales charge) may provide for the payment from the owner's
account of any  requested  dollar amount to be paid to the owner or a designated
payee monthly,  quarterly,  semiannually or annually. The $5,000 minimum account
size is not applicable to IRAs. The minimum periodic payment is $50. The maximum
annual rate at which  shares,  subject to CDSC may be redeemed is 12% of the net
asset value of the account. Shares are redeemed so that the payee should receive
payment approximately on the first of the month.  Investors using this Plan must
reinvest Fund distributions.


Non-retirement plan shareholders may establish an Automatic Withdrawal Plan (the
"Plan") to receive  monthly,  quarterly or periodic  redemptions from his or her
account for any  designated  amount of $50 or more.  Shareholders  may designate
which day they want the automatic withdrawal to be processed.  The check amounts
may be based on the  redemption  of a fixed dollar  amount,  fixed share amount,
percent of account  value or  declining  balance.  The Plan  provides for income
dividends  and  capital  gains  distributions,  if  any,  to  be  reinvested  in
additional  shares.  Shares are then  liquidated  as  necessary  to provide  for
withdrawal  payments.  Since the  withdrawals  are in  amounts  selected  by the
investor and have no relationship to yield or income,  payments  received cannot
be  considered  as  yield  or  income  on  the   investment  and  the  resulting
liquidations may deplete or possibly  extinguish the initial  investment and any
reinvested dividends and capital gains distributions.  Any such requests must be
received  by the Fund's  transfer  agent ten days prior to the date of the first
automatic withdrawal. An Automatic Withdrawal Plan may be terminated at any time
by the  shareholder,  the  Trust or its  agent on  written  notice,  and will be
terminated  when all Shares of the Fund under the Plan have been  liquidated  or
upon receipt by the Trust of notice of death of the shareholder.

The purchase of Class A shares while  participating  in a systematic  withdrawal
plan will  ordinarily be  disadvantageous  to the investor  because the investor
will be paying a sales  charge on the  purchase  of shares at the same time that
the investor is redeeming shares upon which a sales charge may have already been
paid.  Therefore,  the Fund will not knowingly permit additional  investments of
less  than  $2,000  if  the  investor  is at the  same  time  making  systematic
withdrawals.

Contingent  Deferred Sales Charge (CDSC).  The following example will illustrate
the operation of the CDSC.  Assume that an investor  makes a single  purchase of
$10,000 of the Fund's  Class C shares and that 16 months  later the value of the
shares has grown by $1,000  through  reinvested  dividends  and by an additional
$1,000 of share appreciation to a total of $12,000. If the investor were then to
redeem the entire  $12,000 in share  value,  the CDSC would be payable only with
respect to $10,000  because  neither the $1,000 of reinvested  dividends nor the
$1,000 of share  appreciation  is subject to the charge.  The charge would be at
the rate of 3.00%  ($300)  because it was in the second year after the  purchase
was made.

The rate of the CDSC is  determined  by the length of the  period of  ownership.
Investments  are tracked on a monthly  basis.  The period of ownership  for this
purpose  begins the first day of the month in which the order for the investment
is received.  For example, an investment made in March of the year of investment
will be eligible for the second  year's  charge if redeemed on or after March of
the following  year. In the event no specific  order is requested when redeeming
shares  subject  to a  CDSC,  the  redemption  will be made  first  from  shares
representing reinvested


                                       66
<PAGE>

dividends and then from the earliest  purchase of shares.  DWS-SDI  receives any
CDSC  directly.  The charge will not be imposed upon  redemption  of  reinvested
dividends or share appreciation.

The Class A CDSC will be waived in the event of:

(a)      redemptions  by  a   participant-directed   qualified  retirement  plan
         described in Code Section 401(a), a participant-directed  non-qualified
         deferred   compensation  plan  described  in  Code  Section  457  or  a
         participant-directed   qualified  retirement  plan  described  in  Code
         Section 403(b)(7) which is not sponsored by a K-12 school district;

(b)      redemptions  by  employer-sponsored  employee  benefit  plans using the
         subaccount record keeping system made available through ADP, Inc. under
         an alliance with DWS-SDI and its affiliates;


(c)      redemption  of shares of a  shareholder  (including a registered  joint
         owner) who has died or is disabled (under certain circumstances);


(d)      redemption  of shares of a  shareholder  (including a registered  joint
         owner) who after purchase of the shares being redeemed  becomes totally
         disabled  (as  evidenced  by a  determination  by  the  federal  Social
         Security Administration);


(e)      redemptions under the Fund's Automatic  Withdrawal Plan at a maximum of
         12% per year of the net asset value of the account;

(f)      redemptions  of  shares  whose  dealer  of  record  at the  time of the
         investment  notifies  DWS-SDI that the dealer waives the  discretionary
         commission applicable to such Large Order NAV Purchase; and

(g)      redemptions for certain loan advances,  hardship  provisions or returns
         of excess contributions from retirement plans.

The Class C CDSC will be waived  for the  circumstances  set forth in items (b),
(c), (d), (e) and (g) for Class A shares. In addition,  this CDSC will be waived
for:

(h)       for redemptions  made pursuant to any IRA systematic  withdrawal based
          on the shareholder's  life expectancy  including,  but not limited to,
          substantially  equal periodic  payments  described in Internal Revenue
          Code Section 72(t)(2)(A)(iv) prior to age 59 1/2;

(i)       for redemptions to satisfy required minimum distributions after age 70
          1/2 from an IRA  account  (with the  maximum  amount  subject  to this
          waiver  being  based  only  upon the  shareholder's  DWS  Scudder  IRA
          accounts); and

(j)       redemption of shares by an employer  sponsored  employee  benefit plan
          that offers  funds in addition to DWS Funds and whose dealer of record
          has waived the  advance of the first year  administrative  service and
          distribution fees applicable to such shares and agrees to receive such
          fees quarterly, and

(k)       redemption  of  shares  purchased  through  a  dealer-sponsored  asset
          allocation  program  maintained  on an omnibus  record-keeping  system
          provided the dealer of record had waived the advance of the first year
          administrative  services  and  distribution  fees  applicable  to such
          shares and has agreed to receive such fees quarterly.


Exchanges

Shareholders  may request a taxable  exchange of their  shares for shares of the
corresponding  class of other DWS Funds  without  imposition  of a sales charge,
subject to the provisions  below. For purposes of calculating any CDSC,  amounts
exchanged retain their original cost and purchase date.

                                       67
<PAGE>


Shares of money  market  funds that were  acquired  by purchase  (not  including
shares acquired by dividend  reinvestment)  are subject to the applicable  sales
charge on exchange.  Series of DWS Target Fund are  available  on exchange  only
during  the  offering  period for such  series as  described  in the  applicable
prospectus.  Cash Management Fund Investment, Tax Free Money Fund Investment, NY
Tax-Free Money Fund Investment,  Treasury Money Fund -- Class Investment,  Money
Market Fund Investment,  Cash Management Fund Institutional,  Cash Reserves Fund
Institutional,  Treasury Money Fund --  Institutional,  Cash Reserve Fund,  Inc.
Prime Series,  Cash Reserve Fund, Inc.  Treasury Series,  Tax-Exempt  California
Money Market Fund,  Cash Account Trust and Investors Cash Trust are available on
exchange but only through a financial  services firm having a services agreement
with DWS-SDI.  All  exchanges  among money funds must meet  applicable  investor
eligibility  and investment  requirements.  Exchanges may only be made for funds
that are available for sale in the shareholder's state of residence.  Currently,
Tax-Exempt   California  Money  Market  Fund  is  available  for  sale  only  in
California.




Shareholders  must obtain  prospectuses of the fund or funds they are exchanging
into from dealers, other firms or DWS-SDI.

Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS Fund may  authorize  the  automatic  exchange  of a  specified  amount  ($50
minimum) of such  shares for shares of the same class of another  such DWS Fund.
Exchanges  will  be  made  automatically  until  the  shareholder  or  the  fund
terminates  the  privilege.  Exchanges  are subject to the terms and  conditions
described above.


In-kind  Redemptions.  The Fund  reserves  the  right to honor any  request  for
redemption  or  repurchase  by  making  payment  in whole or in part in  readily
securities.  These  securities will be chosen by the fund and valued as they are
for purposes of computing the Fund's net asset value.  A  shareholder  may incur
transaction expenses in converting these securities to cash.


                                    DIVIDENDS

The Fund intends to follow the practice of distributing substantially all of its
investment  company  taxable  income,  which includes any excess of net realized
short-term  capital gains over net realized  long-term capital losses.  The Fund
may follow the  practice  of  distributing  the  entire  excess of net  realized
long-term capital gains over net realized  short-term  capital losses.  However,
the Fund may retain all or part of such gain for reinvestment,  after paying the
related federal taxes for which  shareholders may then be able to claim a credit
against their federal tax liability.  If the Fund does not distribute the amount
of capital gain and/or  ordinary  income required to be distributed by an excise
tax  provision  of the Code,  the Fund may be subject  to that  excise  tax.  In
certain  circumstances,  the Fund may  determine  that it is in the  interest of
shareholders to distribute less than the required amount.

The  Fund  intends  to  distribute  dividends  from  its net  investment  income
excluding  short-term  capital gains  annually in December.  The Fund intends to
distribute  net  realized  capital  gains  after  utilization  of  capital  loss
carryforwards,  if any, in December to prevent  application  of a federal excise
tax. An additional distribution may be made, if necessary.

                                       68
<PAGE>

Any dividends or capital gains  distributions  declared in October,  November or
December  with a record  date in such a month  and  paid  during  the  following
January will be treated by  shareholders  for federal  income tax purposes as if
received on December 31 of the calendar year declared.

The level of income  dividends  per share (as a  percentage  of net asset value)
will be lower for Class C shares than for Class A shares  primarily  as a result
of the distribution services fee applicable to Class C shares.  Distributions of
capital gains, if any, will be paid in the same amount for each class.

Income and  capital  gain  dividends,  if any,  of the Fund will be  credited to
shareholder accounts in full and fractional shares of the same class of the Fund
at net asset value on the reinvestment  date,  except that, upon written request
to the Shareholder  Service Agent, a shareholder may select one of the following
options:

1.        To receive  income and  short-term  capital gain dividends in cash and
          long-term  capital  gain  dividends in shares of the same class at net
          asset value; or

2.        To receive income and capital gain dividends in cash.

Dividends  will be  reinvested  in shares of the same  class of the Fund  unless
shareholders  indicate in writing  that they wish to receive  them in cash or in
shares  of other  DWS  Funds  with  multiple  classes  of shares or DWS Funds as
provided in the prospectus. See "Combined Purchases" for a listing of such other
funds.  To use this  privilege of  investing  dividends of the Fund in shares of
another DWS Fund,  shareholders  must maintain a minimum account value of $1,000
in the Fund  distributing the dividends.  The Fund will reinvest dividend checks
(and  future  dividends)  in shares  of that  same Fund and class if checks  are
returned as undeliverable.  Dividends and other distributions of the Fund in the
aggregate  amount of $10 or less are  automatically  reinvested in shares of the
Fund  unless the  shareholder  requests  that such  policy not be applied to the
shareholder's account.

If an investment is in the form of a retirement  plan, all dividends and capital
gains distributions must be reinvested into the shareholder's account.

If  a  shareholder   has  elected  to  reinvest  any   dividends   and/or  other
distributions,  such  distributions  will be made in  shares  of that  Fund  and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent.  Distributions of investment company taxable
income and net realized  capital  gains are  taxable,  whether made in shares or
cash.

Each  distribution  is  accompanied  by a  brief  explanation  of the  form  and
character of the  distribution.  The  characterization  of distributions on such
correspondence may differ from the characterization for federal tax purposes. In
January of each year the Fund  issues to each  shareholder  a  statement  of the
federal income tax status of all distributions in the prior calendar year.

The Fund may at any time vary its foregoing dividend  practices and,  therefore,
reserves  the  right  from  time to time to  either  distribute  or  retain  for
reinvestment  such of its net  investment  income  and  its net  short-term  and
long-term  capital  gains as its  Board  determines  appropriate  under the then
current circumstances.  In particular,  and without limiting the foregoing,  the
Fund may make additional  distributions of net investment income or capital gain
net income in order to satisfy the minimum distribution  requirements  contained
in the Internal Revenue Code of 1986, as amended (the "Code").

                                      TAXES

The following is intended to be a general  summary of certain federal income tax
consequences  of  investing  in the  Fund.  It is  not  intended  as a  complete
discussion  of all such  consequences,  nor  does it  purport  to deal  with all
categories of investors.  Investors are therefore  advised to consult with their
tax advisors before making an investment in the Fund.

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Taxation  of the Fund.  The Fund  intends to elect to be treated  and to qualify
each year as a regulated  investment  company under Subchapter M of the Code. In
order to qualify for the special tax  treatment  accorded  regulated  investment
companies and their shareholders, the Fund must, among other things:


(a)      derive at least 90% of its gross  income for each taxable year from (i)
         dividends, interest, payments with respect to certain securities loans,
         and gains from the sale or other  disposition  of stock,  securities or
         foreign currencies, or other income (including but not limited to gains
         from options,  futures,  or forward  contracts) derived with respect to
         its business of investing in such stock, securities,  or currencies and
         (ii) net income  derived from interests in "qualified  publicly  traded
         partnerships" (as defined below);


(b)      diversify  its  holdings  so that,  at the end of each  quarter  of the
         Fund's taxable year, (i) at least 50% of the market value of the Fund's
         total assets is  represented  by cash and cash items,  U.S.  Government
         securities,  securities of other regulated  investment  companies,  and
         other  securities  limited  in respect of any one issuer to a value not
         greater  than 5% of the value of the Fund's  total  assets and not more
         than 10% of the outstanding  voting securities of such issuer, and (ii)
         not more than 25% of the value of the Fund's  total  assets is invested
         (x) in the securities (other than those of the U.S. Government or other
         regulated  investment  companies)  of any one  issuer or of two or more
         issuers  which the Fund  controls  and which are  engaged  in the same,
         similar,  or related trades or businesses,  or (y) in the securities of
         one or more qualified publicly traded  partnerships (as defined below).
         In the case of the Fund's investment in loan  participations,  the Fund
         shall  treat  both the  financial  intermediary  and the  issuer of the
         underlying  loan  as  an  issuer  for  the  purposes  of  meeting  this
         diversification  requirement;  and

(c)      distribute with respect to each taxable year at least 90% of the sum of
         its investment  company  taxable income (as that term is defined in the
         Code without  regard to the deduction  for  dividends  paid--generally,
         taxable  ordinary  income and the  excess,  if any,  of net  short-term
         capital gains over net  long-term  capital  losses) and net  tax-exempt
         interest income, for such year.

In  general,  for  purposes of the 90% gross  income  requirement  described  in
paragraph  (a)  above,  income  derived  from a  partnership  will be treated as
qualifying  income only to the extent such  income is  attributable  to items of
income of the  partnership  which would be qualifying  income if realized by the
regulated  investment company.  However,  100% of the net income derived from an
interest in a "qualified publicly traded partnership"  (defined as a partnership
(i) interests in which are traded on an established securities market or readily
tradable on a secondary  market or the substantial  equivalent  thereof and (ii)
that derives less than 90% of its income from the qualifying income described in
paragraph  (a)(i)  above) is now  treated as  qualifying  income.  In  addition,
although in general the passive loss rules of the Code do not apply to regulated
investment companies, such rules do apply to a regulated investment company with
respect to items  attributable  to an interest in a  qualified  publicly  traded
partnership. Finally, for purposes of paragraph (b) above, the term "outstanding
voting  securities  of such  issuer"  will  include the equity  securities  of a
qualified publicly traded partnership.


If the Fund qualifies as a regulated investment company that is accorded special
tax  treatment,  the Fund will not be subject  to  federal  income tax on income
distributed  in a timely  manner to its  shareholders  in the form of  dividends
(including Capital Gain Dividends, as defined below).

                                       70
<PAGE>


If for any taxable year the Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal  income tax at regular  corporate  rates (without any
deduction for distributions to its  shareholders),  and all  distributions  from
earnings and profits,  including any  distributions of net tax-exempt income and
net long-term capital gains, will be taxable to shareholders as ordinary income.
Such  distributions  would be eligible (i) to be treated as "qualified  dividend
income," in the case of individual and other noncorporate shareholders,  subject
to reduced rates of federal income taxation for taxable years  beginning  before
January 1, 2011 and (ii) for the 70% dividends received deduction in the case of
corporate  shareholders.  In  addition,  the Fund could be required to recognize
unrealized  gains,  pay  substantial  taxes and  interest  and make  substantial
distributions  before  requalifying  as a regulated  investment  company that is
accorded special tax treatment.

The Fund is subject to a 4%  nondeductible  excise tax on amounts required to be
but not distributed under a prescribed formula.  The formula requires payment to
shareholders  during a calendar year of distributions  representing at least 98%
of the Fund's taxable  ordinary income for the calendar year and at least 98% of
the excess of its capital gains over capital losses realized during the one-year
period  ending  October 31 (in most cases) of such year as well as amounts  that
were neither  distributed  nor taxed to the Fund during the prior calendar year.
Although the Fund's  distribution  policies should enable it to avoid excise tax
liability,  the Fund may  retain  (and be  subject to income or excise tax on) a
portion of its capital  gain or other income if it appears to be in the interest
of such Fund.

Taxation of Fund Distributions.  For federal income tax purposes,  distributions
of  investment  income  are  generally  taxable  as  ordinary  income.  Taxes on
distributions  of capital  gains are  determined  by how long the Fund owned the
investments  that generated  them,  rather than how long a shareholder has owned
his or  her  shares.  Distributions  of net  capital  gains  from  the  sale  of
investments  that the Fund  owned for more  than one year and that are  properly
designated by the Fund as capital gain dividends ("Capital Gain Dividends") will
be taxable as long-term  capital gains.  Distributions of gains from the sale of
investments that the Fund owned for one year or less will be taxable as ordinary
income.  For taxable years beginning  before January 1, 2011,  distributions  of
investment  income  designated by the Fund as derived from  "qualified  dividend
income" will be taxed in the hands of  individuals  at the rates  applicable  to
long-term capital gain,  provided holding period and other  requirements are met
at both the shareholder and Fund levels.

Distributions  are taxable to shareholders  even if they are paid from income or
gains  earned  by the Fund  before a  shareholder's  investment  (and  thus were
included in the price the shareholder  paid).  Distributions are taxable whether
shareholders  receive them in cash or reinvest them in additional shares through
the reinvestment  privilege. A shareholder whose distributions are reinvested in
shares will be treated as having  received a dividend  equal to either:  (i) the
fair market value of the new shares  issued to the  shareholder,  or (ii) if the
shares are trading  below net asset value,  the amount of cash  allocated to the
shareholder  for the  purchase of shares on its behalf in the open  market.  Any
gain  resulting  from the sale or  exchange  of Fund  shares  generally  will be
taxable as capital gains.


Long-term  capital gain rates  applicable to individuals  have been  temporarily
reduced -- in general,  to 15% with lower rates applying to taxpayers in the 10%
and 15% rate brackets -- for taxable years beginning before January 1, 2011.


For taxable years beginning before January 1, 2011,  "qualified dividend income"
received by an  individual  will be taxed at the rates  applicable  to long-term
capital gain.  In order for some portion of the  dividends  received by the Fund
shareholder to be "qualified dividend income," the Fund must meet holding period
and other  requirements  with  respect to some  portion of the  dividend  paying
stocks in its portfolio and the  shareholder  must meet holding period and other
requirements  with respect to the Fund's shares.  A dividend will not be treated
as qualified  dividend  income (at either the Fund or shareholder  level) (1) if
the dividend is received  with respect to any share of stock held for fewer than
61 days during the 121-day period  beginning on the date which is 60 days before
the date on which such share becomes  ex-dividend  with respect to such dividend
(or, in the case of certain  preferred  stock, 91 days during the 181-day period
beginning  90 days before such date),  (2) to the extent that the  recipient  is
under an  obligation  (whether  pursuant to a short sale or  otherwise)  to make
related payments with respect to positions in  substantially  similar or related
property,  (3) if the recipient  elects to have the dividend  income  treated as
investment  interest,  or  (4) if  the  dividend  is  received  from  a  foreign
corporation that is (a) not eligible for the benefits of a


                                       71
<PAGE>

comprehensive  income tax treaty with the United  States (with the  exception of
dividends  paid on stock of such a foreign  corporation  readily  tradable on an
established  securities market in the United States) or (b) treated as a passive
foreign investment company.


In general, distributions of investment income designated by the Fund as derived
from qualified dividend income will be treated as qualified dividend income by a
shareholder  taxed as an individual  provided the shareholder  meets the holding
period and other requirements described above with respect to the Fund's shares.
If the  aggregate  qualified  dividends  received by the Fund during any taxable
year are 95% or more of its  gross  income,  then 100% of the  Fund's  dividends
(other than dividends  properly  designated as Capital Gain  Dividends)  will be
eligible to be treated as qualified dividend income. For this purpose,  the only
gain included in the term "gross income" is the excess of net short-term capital
gain over net long-term capital loss.


Special tax rules apply to investments  through defined  contribution  plans and
other  tax-qualified  plans.  Shareholders  should  consult their tax adviser to
determine  the  suitability  of shares of a fund as an  investment  through such
plans  and  the  precise  effect  of and  investment  on  their  particular  tax
situation.

All  distributions  by the Fund result in a reduction  in the net asset value of
that Fund's  shares.  Should a  distribution  reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above,  even though,
from an investment standpoint, it may constitute a partial return of capital. In
particular,  investors  should be careful to consider  the tax  implications  of
buying  shares just prior to a  distribution.  The price of shares  purchased at
that time includes the amount of the forthcoming distribution.  Those purchasing
just prior to a  distribution  will receive a partial return of capital upon the
distribution, which will nevertheless be taxable to them.

Capital gains  distributions  may be reduced if Fund capital loss  carryforwards
are available.  Any capital loss carryforwards to which the Fund is entitled are
disclosed in the Fund's annual and semi-annual reports to shareholders.

Dividends Received Deduction. If dividends from domestic corporations constitute
a  substantial  portion  of the  Fund's  gross  income,  a portion of the income
distributions  of such Fund may be eligible for the 70%  deduction for dividends
received  by  corporations.  Shareholders  will be  informed  of the  portion of
dividends which so qualify. The  dividends-received  deduction is reduced to the
extent the shares of the Fund with respect to which the  dividends  are received
are treated as  debt-financed  under federal income tax law and is eliminated if
either  those shares or the shares of a fund are deemed to have been held by the
Fund or the  shareholder,  as the case may be, for less than 46 days  during the
91-day period beginning 45 days before the shares become ex-dividend.





Transactions in Fund Shares.  The sale,  exchange or redemption of shares of the
Fund may give rise to a gain or loss. In general, any gain or loss realized upon
a taxable  disposition  of shares will be treated as  long-term  capital gain or
loss if the shares have been held for more than 12 months.  Otherwise,  the gain
or loss on the  taxable  disposition  of shares of the Fund will be  treated  as
short-term gain or loss.  However,  any loss realized upon a taxable disposition
of shares held for six months or less will be treated as long-term,  rather than
short-term,  to the extent of any long-term capital gain distributions  received
(or deemed  received) by the  shareholder  with respect to the shares.  All or a
portion of any loss  realized upon a taxable  disposition  of shares of the Fund
will be  disallowed  if


                                       72
<PAGE>

other  substantially  identical  shares of the Fund are purchased within 30 days
before  or  after  the  disposition.  In such a case,  the  basis  of the  newly
purchased shares will be adjusted to reflect the disallowed loss.

Foreign  Taxation.  Foreign  withholding  or other foreign taxes with respect to
income  (possibly  including,  in some cases,  capital gains) on certain foreign
securities may occur.  These taxes may be reduced or eliminated  under the terms
of an applicable US income tax treaty.  If more than 50% of the Fund's assets at
year end consist of the securities of foreign  corporations,  the Fund may elect
to  permit  shareholders  to claim a credit or  deduction  on their  income  tax
returns  for their pro rata  portion  the  qualified  taxes  paid by the Fund to
foreign  countries  in respect of  foreign  securities  the Fund has held for at
least the minimum  period  specified in the Code.  In such a case,  shareholders
will include in gross income from foreign  sources their pro rata shares of such
taxes.  A  shareholder's  ability to claim a foreign tax credit or  deduction in
respect of foreign taxes paid by the Fund may be subject to certain  limitations
imposed  by the  Code,  as a result  of which a  shareholder  may not get a full
credit or deduction for the amount of such taxes.  In  particular,  shareholders
must  hold  their  Fund  shares  (without  protection  from risk of loss) on the
ex-dividend  date and for at least 15  additional  days during the 30-day period
surrounding  the  ex-dividend  date to be eligible to claim a foreign tax credit
with  respect  to a given  dividend.  Shareholders  who do not  itemize on their
federal  income  tax  returns  may claim a credit  (but no  deduction)  for such
foreign  taxes.  If the  Fund  does  not  make  the  election  discussed  above,
shareholders  will not be able to claim either a credit or a deduction for their
pro rata  portion  of such  taxes  paid by the Fund,  nor will  shareholders  be
required  to treat as part of the  amounts  distributed  to them  their pro rata
portion of such taxes paid.

Foreign Currency  Transactions.  The Fund's  transactions in foreign currencies,
foreign-currency-denominated  debt  obligations  and  certain  foreign  currency
options,  futures contracts and forward contracts (and similar  instruments) may
give rise to ordinary  income or loss to the extent such income or loss  results
from fluctuations in the value of the foreign currency concerned.

Passive Foreign Investment Companies.  Equity investments by the Fund in certain
"passive foreign investment  companies"  ("PFICs") could potentially subject the
Fund to a US federal income tax (including  interest  charges) on  distributions
received from the company or on proceeds received from the disposition of shares
in the company,  which tax cannot be eliminated by making  distributions to Fund
shareholders.  However,  the Fund may elect to avoid the imposition of that tax.
For example,  the Fund may elect to treat a PFIC as a "qualified  electing fund"
(a "QEF  election"),  in which case the Fund would be  required  to include  its
share of the  company's  income and net capital  gains  annually,  regardless of
whether it receives any distribution from the company. The Fund also may make an
election to mark the gains (and to a limited extent losses) in such holdings "to
the market" as though it had sold and repurchased its holdings in those PFICs on
the last day of the Fund's  taxable  year.  Such gains and losses are treated as
ordinary  income and loss. The QEF and  mark-to-market  elections may accelerate
the  recognition of income (without the receipt of cash) and increase the amount
required to be distributed by the Fund to avoid taxation. Making either of these
elections  therefore  may  require  the  Fund  to  liquidate  other  investments
(including  when  it is not  advantageous  to do so) to  meet  its  distribution
requirement,  which also may accelerate  the  recognition of gain and affect the
Fund's total return.  Dividends paid by PFICs will not be eligible to be treated
as "qualified dividend income."


Tax Effects of Certain Transactions.



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<PAGE>



The Fund's  investment  in zero coupon bonds and other debt  obligations  having
original issue discount may cause the Fund to recognize taxable income in excess
of any cash received from the  investment.  A portion of the difference  between
the issue price of zero coupon  securities and their face value ("original issue
discount")  is  considered  to be income to the Fund each year,  even though the
Fund will not  receive  cash  interest  payments  from  these  securities.  This
original  issue  discount  imputed income will comprise a part of the investment
company taxable income of the Fund, which must be distributed to shareholders in
order  to  maintain  the  qualification  of the Fund as a  regulated  investment
company and to avoid federal income tax at the Fund's level.


Some debt  obligations with a fixed maturity date of more than one year from the
date of issuance (and all  zero-coupon  debt  obligations  with a fixed maturity
date of more than one year from the date of  issuance)  that are acquired by the
Fund  will be  treated  as debt  obligations  that are  issued  originally  at a
discount.  Generally,  the  amount of the  original  issue  discount  ("OID") is
treated as interest income and is included in taxable income (and required to be
distributed)  over the term of the debt  security,  even though  payment of that
amount  is not  received  until a later  time,  usually  when the debt  security
matures. In addition,  payment-in-kind securities will give rise to income which
is required to be  distributed  and is taxable  even though the Fund holding the
security receives no interest payment in cash on the security during the year.

Some debt  obligations with a fixed maturity date of more than one year from the
date of issuance  that are acquired by the Fund in the  secondary  market may be
treated  as  having  market  discount.  Generally,  any gain  recognized  on the
disposition  of, and any partial payment of principal on, a debt security having
market  discount  is treated  as  ordinary  income to the  extent  the gain,  or
principal  payment,  does not exceed the "accrued market  discount" on such debt
security.  Market discount  generally accrues in equal daily  installments.  The
Fund may make one or more of the elections applicable to debt obligations having
market  discount,  which could affect the character and timing of recognition of
income.

In addition,  if the Fund invests in certain high yield  original issue discount
obligations issued by corporations (including tax-exempt obligations), a portion
of the original  issue  discount  accruing on the  obligation  may be treated as
taxable dividend income. In such event,  dividends of investment company taxable
income received from the Fund by its shareholders, to the extent attributable to
such portion of accrued  original  issue  discount,  would be taxable.  Any such
dividends received by the Fund's corporate  shareholders may be eligible for the
deduction for dividends received by corporations.


Any market discount recognized on a bond is taxable as ordinary income. A market
discount bond is a bond  acquired in the  secondary  market at a price below its
redemption  value (or its  adjusted  issue price if issued with  original  issue
discount).  Absent an election  to include  the market  discount in income as it
accrues,  gain on the  disposition  of such an  obligation  will be  treated  as
ordinary  income  (instead  of capital  gain) to the  extent of  accrued  market
discount.


The Fund may invest to a significant  extent in debt obligations that are in the
lowest rating  categories or are unrated,  including debt obligations of issuers
not  currently  paying  interest  or who  are in  default.  Investments  in debt
obligations that are at risk of or in default present special tax issues for the
Fund.  Tax rules are not  entirely  clear about issues such as when the Fund may
cease to accrue interest,  original issue discount or market discount,  when and
to what extent deductions may be taken for bad debts or worthless securities and
how payments  received on  obligations  in default  should be allocated  between
principal and income.  These and other  related  issues will be addressed by the
Fund when, as and if it invests in such  securities,  in order to seek to ensure
that it  distributes  sufficient  income to  preserve  its status as a regulated
investment  company and does not become subject to U.S. federal income or excise
tax.

If the Fund engages in hedging  transactions,  including hedging transactions in
options,  futures contracts,  and straddles,  or other similar transactions,  it
will  be  subject   to  special   tax  rules   (including   constructive   sale,
mark-to-market,  straddle, wash sale, and short sale rules), the effect of which
may be to  accelerate  income to the  Fund,  defer


                                       74
<PAGE>

losses to the Fund,  cause  adjustments  in the  holding  periods  of the Fund's
securities,  convert  long-term  capital gains into short-term  capital gains or
convert  short-term  capital losses into long-term  capital losses.  These rules
could  therefore  affect the amount,  timing and character of  distributions  to
shareholders.  The Fund will endeavor to make any available elections pertaining
to such  transactions  in a manner  believed to be in the best  interests of the
Fund.

Certain of the Fund's hedging  activities  (including  transactions,  if any, in
foreign  currencies or foreign  currency-denominated  instruments) may produce a
difference  between its book income and its taxable  income.  If the Fund's book
income exceeds its taxable income, the distribution (if any) of such excess will
be treated as (i) a dividend to the extent of the Fund's remaining  earnings and
profits (including  earnings and profits arising from tax-exempt  income),  (ii)
thereafter as a return of capital to the extent of the recipient's  basis in the
shares,  and (iii)  thereafter  as gain from the sale or  exchange  of a capital
asset. If the Fund's book income is less than its taxable income, the Fund could
be  required  to make  distributions  exceeding  book  income  to  qualify  as a
regulated investment company that is accorded special tax treatment.

Backup  Withholding.  Under  the  backup  withholding  provisions  of the  Code,
redemption  proceeds as well as  distributions  may be subject to federal income
tax  withholding for certain  shareholders,  including those who fail to furnish
the Fund with their taxpayer  identification  numbers and  certifications  as to
their tax status.

Non-U.S. Shareholders. Capital Gain Dividends will not be subject to withholding
of federal income tax. In general, dividends (other than Capital Gain Dividends)
paid by the Fund to a shareholder that is not a "U.S. person" within the meaning
of the Code (such shareholder, a "foreign person") are subject to withholding of
U.S. federal income tax at a rate of 30% (or lower applicable  treaty rate) even
if they are funded by income or gains (such as  portfolio  interest,  short-term
capital gains, or foreign-source  dividend and interest income) that, if paid to
a  foreign  person  directly,  would not be  subject  to  withholding.  However,
effective for taxable years of the Fund  beginning  before  January 1, 2008, the
Fund  will  not be  required  to  withhold  any  amounts  (i)  with  respect  to
distributions  (other than  distributions  to a foreign  person (w) that has not
provided  a  satisfactory  statement  that  the  beneficial  owner is not a U.S.
person,  (x) to the extent that the dividend is attributable to certain interest
on an obligation if the foreign person is the issuer or is a 10%  shareholder of
the issuer,  (y) that is within certain  foreign  countries that have inadequate
information  exchange with the United States,  or (z) to the extent the dividend
is  attributable  to interest  paid by a person that is a related  person of the
foreign person and the foreign person is a controlled foreign  corporation) from
U.S.-source  interest  income  that,  in  general,  would not be subject to U.S.
federal income tax if earned directly by an individual  foreign  person,  to the
extent such  distributions  are properly  designated by the Fund,  and (ii) with
respect to  distributions  (other than  distributions  to an individual  foreign
person who is present in the United  States for a period or periods  aggregating
183 days or more during the year of the distribution) of net short-term  capital
gains  in  excess  of  net  long-term   capital  losses,   to  the  extent  such
distributions   are  properly   designated   by  the  Fund.   Depending  on  the
circumstances,  the Fund may make such designations with respect to all, some or
none of its potentially eligible dividends and/or treat such dividends, in whole
or in part, as  ineligible  for this  exemption  from  withholding.  In order to
qualify  for this  exemption  from  withholding,  a foreign  person will need to
comply with applicable certification  requirements relating to its non-US status
(including,  in general,  furnishing an IRS Form W-8BEN or substitute  Form). In
the case of shares held through an  intermediary,  the intermediary may withhold
even if the Fund makes a designation with respect to a payment.  Foreign persons
should  contact their  intermediaries  with respect to the  application of these
rules to their accounts.


If a  beneficial  holder who is a foreign  person has a trade or business in the
United States,  and the dividends are effectively  connected with the conduct by
the beneficial holder of a trade or business in the United States,  the dividend
will be subject to U.S. federal net income taxation at regular income tax rates.




                                       75
<PAGE>


Tax Shelter Reporting Regulations.  Under Treasury regulations, if a shareholder
recognizes a loss with respect to the Fund's shares of $2 million or more for an
individual shareholder or $10 million or more for a corporate  shareholder,  the
shareholder must file with the Internal  Revenue Service a disclosure  statement
on Form 8886.  Direct  shareholders  of portfolio  securities  are in many cases
excepted  from  this  reporting   requirement,   but  under  current   guidance,
shareholders of a regulated investment company are not excepted. Future guidance
may extend the current exception from this reporting requirement to shareholders
of  most  or all  regulated  investment  companies.  The  fact  that  a loss  is
reportable under these  regulations  does not affect the legal  determination of
whether the  taxpayer's  treatment  of the loss is proper.  Shareholders  should
consult their tax advisors to determine the  applicability of these  regulations
in light of their individual circumstances.

Other Tax  Considerations.  Shareholders of the Fund may be subject to state and
local taxes on  distributions  received from the Fund and on  redemptions of the
Fund's shares.

Investors  are advised to consult  their own tax advisors  with respect to their
own circumstances  regarding the above-referenced  federal income taxation rules
and with respect to other federal,  state,  local or foreign tax consequences to
them of an investment in shares of a Fund.




                                 NET ASSET VALUE

The net asset value of shares of the Fund is computed as of the close of regular
trading on the New York Stock Exchange (the "Exchange") on each day the Exchange
is open for trading (the "Value  Time").  The Exchange is scheduled to be closed
on the following  holidays:  New Year's Day, Dr.  Martin  Luther King,  Jr. Day,
Presidents'  Day,  Good  Friday,  Memorial  Day,  Independence  Day,  Labor Day,
Thanksgiving  and Christmas,  and on the preceding  Friday or subsequent  Monday
when one of these  holidays  falls on a Saturday  or Sunday,  respectively.  Net
asset  value  per share is  determined  separately  for each  class of shares by
dividing the value of the total assets of the Fund attributable to the shares of
that class, less all liabilities attributable to that class, by the total number
of  shares  of that  class  outstanding.  The net  asset  value may be lower for
certain classes of the Fund because of higher expenses borne by these classes.

An equity  security is valued at its most  recent  sale price on the  security's
primary  exchange  or OTC market as of the Value Time.  Lacking  any sales,  the
security is valued at the calculated  mean between the most recent bid quotation
and the most recent asked quotation (the "Calculated  Mean") on such exchange or
OTC  market  as of the  Value  Time.  If it is not  possible  to  determine  the
Calculated Mean, the security is valued at the most recent bid quotation on such
exchange  or OTC market as of the Value  Time.  In the case of  certain  foreign
exchanges  or OTC  markets,  the closing  price  reported by the exchange or OTC
market  (which may  sometimes  be  referred  to as the  "official  close" or the
"official  closing  price" or other similar  term) will be  considered  the most
recent sale price.

Debt securities are valued as follows.  Money market instruments  purchased with
an  original or  remaining  maturity  of 60 days or less,  maturing at par,  are
valued at amortized  cost.  Other money market  instruments  are valued based on
information obtained from an independent pricing service or, if such information
is not readily  available,  by using matrix pricing  techniques  (formula driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an independent pricing service (which are intended to reflect
the mean between the bid and asked prices),  if available,  and otherwise at the
mean of the most  recent  bid and  asked  quotations  or  evaluated  prices,  as
applicable,  based on quotations or evaluated  prices  obtained from one or more
broker-dealers.  Privately  placed  debt  securities,  other than Rule 144A debt
securities,  initially are valued at cost and  thereafter  based on all relevant
factors  including  type  of  security,  size of  holding  and  restrictions  on
disposition.  Municipal  debt  securities  are valued at prices  supplied  by an
approved  pricing  agent (which are intended to reflect the mean between the bid
and asked  prices),  if available,  and otherwise at the mean of the most recent
bid and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities are valued at prices supplied by an independent pricing service,
if available, and otherwise at the most recent bid quotation or evaluated price,
as applicable,  obtained from one or more broker-dealers.  If it is not possible
to value a particular debt security pursuant to the above methods,  the security
is valued on the basis of  factors  including  (but not  limited  to)  maturity,
coupon, creditworthiness,  currency denomination, and the movement of the market
in which the security is normally traded.

                                       76
<PAGE>

An exchange-traded option contract on securities, currencies and other financial
instruments  is valued at its most recent sale price on the  relevant  exchange.
Lacking any sales,  the option contract is valued at the Calculated  Mean. If it
is not possible to determine the Calculated  Mean, the option contract is valued
at the most recent bid quotation in the case of a purchased  option  contract or
the most recent asked  quotation in the case of a written  option  contract,  in
each case as of the Value Time. An option contract on securities, currencies and
other financial instruments traded in the OTC market is valued on the Value Date
at the evaluated price provided by the  broker-dealer  with which it was traded.
Futures contracts (and options thereon) are valued at the most recent settlement
price,  if available on the exchange on which they are traded most  extensively.
With the exception of stock index futures  contracts  which trade on the Chicago
Mercantile Exchange,  closing settlement times are prior to the close of trading
on the New York Stock Exchange. For stock index futures contracts which trade on
the  Chicago  Mercantile  Exchange,   closing  settlement  prices  are  normally
available  at  approximately  4:20  Eastern  time.  If no  settlement  price  is
available, the last traded price on such exchange will be used.

If market quotations for portfolio assets are not readily available or the value
of a portfolio asset as determined in accordance with Board approved  procedures
does not represent the fair market value of the  portfolio  asset,  the value of
the portfolio asset is taken to be an amount which, in the opinion of the Fund's
Pricing  Committee  (or,  in  some  cases,  the  Board's  Valuation  Committee),
represents fair market value. The value of other portfolio holdings owned by the
Fund is  determined  in a manner  which is intended  to fairly  reflect the fair
market value of the asset on the valuation date,  based on valuation  procedures
adopted  by the  Fund's  Board and  overseen  primarily  by the  Fund's  Pricing
Committee.

                             DIRECTORS AND OFFICERS


The following table presents certain information  regarding the Board Members of
the  Corporation.  Each Board Member's year of birth is set forth in parentheses
after his or her name. Unless otherwise noted, (i) each Board Member has engaged
in the principal  occupation(s)  noted in the table for at least the most recent
five years, although not necessarily in the same capacity,  and (ii) the address
of each Board Member that is not an "interested  person" (as defined in the 1940
Act) of the Corporation or the Advisor (each, an "Independent Board Member"), is
c/o Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office
for each Board Member is until the election and qualification of a successor, or
until  such Board  Member  sooner  dies,  resigns,  is  removed or as  otherwise
provided in the governing  documents of the  Corporation.  Because the Fund does
not hold an annual meeting of  shareholders,  each Board Member will hold office
for an  indeterminate  period.  The  Board  Members  may also  serve in  similar
capacities with other funds in the DWS fund complex.

Independent Board Members

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the                                                                               Number of Funds
 Corporation and Length    Business Experience and                                               in DWS Fund
 of Time Served            Directorships During the Past 5 Years                                 Complex Overseen
--------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                                   <C>
Dawn-Marie Driscoll (1946) President, Driscoll Associates (consulting firm); Executive Fellow,           76
Chairperson since 2004     Center for Business Ethics, Bentley College; formerly, Partner,
Board Member since         Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and
1987                       General Counsel, Filene's (1978-1988). Directorships: Trustee of 8
                           open-end mutual funds managed by Sun Capital Advisers, Inc. (since
                           2007); Director of ICI Mutual Insurance Company (since 2007);
                           Advisory Board, Center for Business Ethics, Bentley College;
                           Trustee, Southwest Florida Community Foundation (charitable
                           organization); Former Directorships: Investment Company Institute
                           (audit, executive, nominating committees) and Independent Directors
                           Council (governance, executive committees)
--------------------------------------------------------------------------------------------------------------------



                                       77
<PAGE>

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the                                                                               Number of Funds
 Corporation and Length    Business Experience and                                               in DWS Fund
 of Time Served            Directorships During the Past 5 Years                                 Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr.      Vice Chair, WGBH Educational Foundation. Directorships: Association           76
 (1943)                    of Public Television Stations; Becton Dickinson and Company(1)
 Board Member since        (medical technology company); Belo Corporation(1) (media company);
 1990                      Boston Museum of Science; Public Radio International. Former
                           Directorships: American Public Television; Concord Academy; New
                           England Aquarium; Mass. Corporation for Educational
                           Telecommunications; Committee for Economic Development; Public
                           Broadcasting Service
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)        Managing General Partner, Exeter Capital Partners (a series of                76
Board Member since         private equity funds). Directorships: Progressive Holding
1996                       Corporation (kitchen goods importer and distributor); Natural
                           History, Inc. (magazine publisher); Box Top Media Inc.
                           (advertising); The Kennel Shop (retailer)
--------------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss        Clinical Professor of Finance, NYU Stern School of Business                   76
(1945)                     (1997-present); Member, Finance Committee, Association for Asian
Board Member since         Studies (2002-present); Director, Mitsui Sumitomo Insurance Group
2005                       (US) (2004-present); prior thereto, Managing Director, J.P. Morgan
                           (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------
Martin J. Gruber           Nomura Professor of Finance, Leonard N. Stern School of Business,             76
(1937)                     New York University (since September 1965); Director, Japan Equity
Board Member since         Fund, Inc. (since January 1992), Thai Capital Fund, Inc. (since
2006                       January 2000), Singapore Fund, Inc. (since January 2000), National
                           Bureau of Economic Research (since January 2006). Formerly, Trustee,
                           TIAA (pension funds) (January 1996-January 2000); Trustee, CREF and
                           CREF Mutual Funds (January 2000-March 2005); Chairman, CREF and CREF
                           Mutual Funds (February 2004-March 2005); and Director, S.G. Cowen
                           Mutual Funds (January 1985-January 2001)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring         Jacob Safra Professor of International Banking and Professor,                 76
(1946)                     Finance Department, The Wharton School, University of Pennsylvania
Board Member since         (since July 1972); Co-Director, Wharton Financial Institutions
2006                       Center (since July 2000); Director, Japan Equity Fund, Inc. (since
                           September 2007), Thai Capital Fund, Inc. (since September 2007),
                           Singapore Fund, Inc. (since September 2007). Formerly, Vice Dean and
                           Director, Wharton Undergraduate Division (July 1995-June 2000);
                           Director, Lauder Institute of International Management Studies (July
                           2000-June 2006)
--------------------------------------------------------------------------------------------------------------------
Graham E. Jones            Senior Vice President, BGK Realty, Inc. (commercial real estate)              76
(1933)                     (since 1995). Formerly, Trustee of various investment companies
Board Member since         managed by Sun Capital Advisors, Inc. (1998-2005), Morgan Stanley
2006                       Asset Management (1985-2001) and Weiss, Peck and Greer (1985-2005)
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel           President and Chief Executive Officer, The Pew Charitable Trusts              76
(1951)                     (charitable organization) (1994 to present); Trustee, Thomas
Board Member since         Jefferson Foundation (charitable organization) (1994 to present);
2006                       Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001
                           to present). Formerly, Executive Vice President, The Glenmede Trust
                           Company (investment trust and wealth management) (1983 to 2004);
                           Board Member, Investor Education (charitable organization)
                           (2004-2005); Director, Viasys Health Care(1) (January 2007-June 2007)
---------------------------------------------------------------------------------------------------------------------



                                       78
<PAGE>

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the                                                                               Number of Funds
 Corporation and Length    Business Experience and                                               in DWS Fund
 of Time Served            Directorships During the Past 5 Years                                 Complex Overseen
--------------------------------------------------------------------------------------------------------------------
Philip Saunders, Jr.       Principal, Philip Saunders Associates (economic and financial                 74
(1935)                     consulting) (since November 1988).  Formerly, Director, Financial
Board Member since         Industry Consulting, Wolf & Company (consulting) (1987-1988);
2006                       President, John Hancock Home Mortgage Corporation (1984-1986);
                           Senior Vice President of Treasury and Financial Services, John
                           Hancock Mutual Life Insurance Company, Inc. (1982-1986)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.     Private investor since October 2003; Trustee of 8 open-end mutual             76
(1946)                     funds managed by Sun Capital Advisers, Inc. (since October 1998).
Board Member since         Formerly, Pension & Savings Trust Officer, Sprint Corporation((1))
2006                       (telecommunications) (November 1989-September 2003)
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg     Retired. Formerly, Consultant (1997-2001); Director, US Government            76
(1943)                     Accountability Office (1996-1997); Partner, Fulbright & Jaworski,
Board Member since         L.L.P. (law firm) (1978-1996). Directorships: The William and Flora
1997                       Hewlett Foundation; Service Source, Inc. Former Directorships:
                           Mutual Fund Directors Forum (2002-2004), American Bar Retirement
                           Association (funding vehicle for retirement plans) (1987-1990 and
                           1994-1996)
--------------------------------------------------------------------------------------------------------------------
Carl W. Vogt               Retired Senior Partner, Fulbright & Jaworski, L.L.P. (law firm);              74
(1936)                     formerly, President (interim) of Williams College (1999-2000);
Board Member since         formerly, President of certain funds in the Deutsche Asset
2002                       Management family of funds (formerly, Flag Investors family of
                           funds) (registered investment companies) (1999-2000). Directorships:
                           Yellow Corporation (trucking); American Science & Engineering (x-ray
                           detection equipment). Former Directorships: ISI Family of Funds
                           (registered investment companies, 4 funds overseen); National
                           Railroad Passenger Corporation (Amtrak) Waste Management, Inc.
                           (solid waste disposal); formerly, Chairman and Member, National
                           Transportation Safety Board
--------------------------------------------------------------------------------------------------------------------

Interested Board Member

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the                                                                               Number of Funds
 Corporation and Length    Business Experience and                                               in DWS Fund
 of Time Served            Directorships During the Past 5 Years                                 Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(2)         Managing Director(4), Deutsche Asset Management; Head of Deutsche             82
 (1958)                    Asset Management Americas; CEO of DWS Scudder; formerly board member
 Board Member since        of DWS Investments, Germany (1999-2005); formerly, Head of Sales and
 2006                      Product Management for the Retail and Private Banking Division of
                           Deutsche Bank in Germany (1997-1999); formerly, various strategic
                           and operational positions for Deutsche Bank Germany Retail and
                           Private Banking Division in the field of investment funds, tax
                           driven instruments and asset management for corporates (1989-1996)
--------------------------------------------------------------------------------------------------------------------

                                       79
<PAGE>

Officers(3)

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the
 Corporation and Length     Business Experience and
 of Time Served             Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(5)        Managing Director(4), Deutsche Asset Management (2006-present); President of DWS
 (1965)                     family of funds; Director, ICI Mutual Insurance Company (since 2007); formerly,
 President, 2006-present    Director of Fund Board Relations (2004-2006) and Director of Product Development
                            (2000-2004), Merrill Lynch Investment Managers; Senior Vice President Operations,
                            Merrill Lynch Asset Management (1999-2000)
--------------------------------------------------------------------------------------------------------------------
 John Millette(6) (1962)    Director(4), Deutsche Asset Management
 Vice President and
 Secretary, 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(5)        Managing Director(4), Deutsche Asset Management (since July 2004); formerly,
 (1963)                     Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of
 Chief Financial Officer,   Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global
 2004-present               Asset Management (1994-1998)
 Treasurer, 2005-present
--------------------------------------------------------------------------------------------------------------------
 Patricia DeFilippis(5)     Vice President, Deutsche Asset Management (since June 2005); Counsel, New York Life
 (1963)                     Investment Management LLC (2003-2005); legal associate, Lord, Abbett & Co. LLC
 Assistant Secretary,       (1998-2003)
 2005-present
--------------------------------------------------------------------------------------------------------------------
 Elisa D. Metzger(5)        Director(4), Deutsche Asset Management (since September 2005); Counsel, Morrison and
 (1962)                     Foerster LLP (1999-2005)
 Assistant Secretary,
 2005-present
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(6)        Managing Director(4), Deutsche Asset Management
 (1962)
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(6)            Director(4), Deutsche Asset Management (since 2006); Vice President, The
 (1957)                     Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Kathleen Sullivan          Director(4), Deutsche Asset Management
 D'Eramo(6)
 (1957)
 Assistant Treasurer,
 2003-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(5) (1972)    Vice President, Deutsche Asset Management (since 2006); formerly, AML Operations
 Anti-Money Laundering      Manager for Bear Stearns (2004-2006), Supervising Compliance Principal and Operations
 Compliance Officer,        Manager for AXA Financial (1999-2004)
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Robert Kloby(5) (1962)     Managing Director(4), Deutsche Asset Management (2004-present); formerly, Chief
 Chief Compliance           Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President, The
 Officer, 2006-present      Prudential Insurance Company of America (1988-2000); E.F. Hutton and Company
                            (1984-1988)
--------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(5)  Director(4), Deutsche Asset Management (2006-present); formerly, Director, Senior
 (1951)                     Vice President, General Counsel, and Assistant Secretary, Hansberger Global
 Chief Legal Officer,       Investors, Inc. (1996-2006); Director, National Society of Compliance Professionals
 2006-present               (2002-2005)(2006-2009)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       80
<PAGE>

(1)      A publicly held company with securities  registered pursuant to Section
         12 of the Securities Exchange Act of 1934.

(2)      The  mailing  address  of Axel  Schwarzer  is c/o  Deutsche  Investment
         Management  Americas Inc.,  345 Park Avenue,  New York, New York 10154.
         Mr.  Schwarzer is an interested Board Member by virtue of his positions
         with Deutsche Asset Management.  As an interested person, Mr. Schwarzer
         receives no compensation from the Funds.

(3)      As a result of their respective positions held with the Advisor,  these
         individuals are considered  "interested  persons" of the Advisor within
         the meaning of the 1940 Act. Interested persons receive no compensation
         from the Funds.

(4)      Executive title, not a board directorship.

(5)      Address:  345 Park Avenue, New York, New York 10154.

(6)      Address: Two International Place, Boston, Massachusetts 02110.

Each Officer also holds  similar  positions for other  investment  companies for
which DIMA or an affiliate serves as the advisor.

Officer's Role with Principal Underwriter:  DWS Scudder Distributors, Inc.

 Paul H. Schubert:                         Vice President
 Caroline Pearson:                         Secretary

Information Concerning Committees and Meetings of Board Members

The Board of the  Corporation  met ten (10) times during the calendar year ended
December 31, 2006 and each Board Member attended at least 80% of the meetings of
the Board and meetings of the committees of the Board on which such Board Member
served.

Board  Committees.  Ms.  Driscoll  has served as Chair of the Board of the Funds
since June 2004.

The Board has established the following  standing  committees:  Audit Committee,
Nominating/Corporate Governance Committee, Valuation Committee, Equity Oversight
Committee, Fixed Income Oversight Committee,  Marketing/Distribution/Shareholder
Service Committee,  Legal/Regulatory/Compliance Committee and Expense/Operations
Committee.

The Audit  Committee  assists the Board in  fulfilling  its  responsibility  for
oversight of the quality and integrity of the accounting, auditing and financial
reporting  practices  of the  applicable  Fund.  It also  makes  recommendations
regarding the selection of an independent  registered public accounting firm for
a Fund,  reviews the  independence of such firm,  reviews the scope of audit and
internal  controls,  considers and reports to the Board on matters relating to a
Fund's  accounting and financial  reporting  practices,  and performs such other
tasks as the full Board deems  necessary  or  appropriate.  The Audit  Committee
receives  annual   representations   from  the  independent   registered  public
accounting firm as to its  independence.  The members of the Audit Committee are
Keith R. Fox (Chair and Audit Committee Financial Expert),  Kenneth C. Froewiss,
Richard J. Herring,  Graham E. Jones,  Philip Saunders,  Jr., William N. Searcy,
Jr. and Jean  Gleason  Stromberg.  The Audit  Committee  held eight (8) meetings
during the calendar year 2006.

The  Nominating/Corporate  Governance  Committee  (i)  recommends  to the  Board
candidates  to serve as Board  Members and (ii)  oversees  and, as  appropriate,
makes  recommendations  to the Board  regarding  other  fund  governance-related
matters,  including but not limited to Board compensation practices,  retirement
policies,  self-evaluations  of effectiveness,  review of possible  conflicts of
interest  and  independence  issues  involving  Board


                                       81
<PAGE>

Members,  allocations of  assignments  and functions of committees of the Board,
and share ownership policies. The members of the Nominating/Corporate Governance
Committee are Henry P. Becton,  Jr. (Chair),  Graham E. Jones,  Rebecca W. Rimel
and  Jean  Gleason  Stromberg.  The  Nominating/Corporate  Governance  Committee
(previously  known as the  Committee on  Independent  Directors)  held three (3)
meetings during the calendar year 2006.

The Valuation  Committee  oversees Fund  valuation  matters,  reviews  valuation
procedures  adopted  by the  Board,  determines  the fair  value  of the  Fund's
securities as needed in accordance  with the valuation  procedures  and performs
such other tasks as the full Board deems necessary or  appropriate.  The members
of the Valuation  Committee  are Keith R. Fox,  Kenneth C.  Froewiss,  Martin J.
Gruber,  Richard J. Herring and Philip  Saunders,  Jr.  (Chair).  The  Valuation
Committee held six (6) meetings during the calendar year 2006.

The Board has established two Investment Oversight  Committees,  one focusing on
Funds  primarily   investing  in  equity   securities  (the  "Equity   Oversight
Committee")  and one  focusing  on Funds  primarily  investing  in fixed  income
securities  (the "Fixed Income  Oversight  Committee").  These  Committees  meet
regularly with Fund portfolio managers and other investment  personnel to review
the relevant  Funds'  investment  strategies  and  investment  performance.  The
members of the Equity  Oversight  Committee are Henry P. Becton,  Jr., Martin J.
Gruber (Chair),  Richard J. Herring,  Rebecca W. Rimel, Philip Saunders, Jr. and
Carl W. Vogt. The members of the Fixed Income Oversight Committee are Dawn-Marie
Driscoll, Keith R. Fox, Kenneth C. Froewiss, Graham E. Jones, William N. Searcy,
Jr. (Chair) and Jean Gleason Stromberg. Each Investment Oversight Committee held
six (6) meetings during the calendar year 2006.

The  Marketing/Distribution/Shareholder   Service  Committee  oversees  (i)  the
quality, costs and types of shareholder services provided to the Funds and their
shareholders,  and (ii) the distribution-related  services provided to the Funds
and their  shareholders.  The members of the  Marketing/Distribution/Shareholder
Service Committee are Martin J. Gruber,  Richard J. Herring (Chair),  Rebecca W.
Rimel,     Jean     Gleason     Stromberg     and    Carl    W.    Vogt.     The
Marketing/Distribution/Shareholder  Service  Committee  held  six  (6)  meetings
during the calendar year 2006.

The  Legal/Regulatory/Compliance  Committee  oversees (i) the significant  legal
affairs of the Funds, including the handling of pending or threatened litigation
or  regulatory  action  involving  the Funds,  (ii) general  compliance  matters
relating   to  the  Funds  and  (iii)   proxy   voting.   The   members  of  the
Legal/Regulatory/Compliance  Committee  are  Henry P.  Becton,  Jr.,  Dawn-Marie
Driscoll,  Rebecca W. Rimel,  William N. Searcy, Jr., Jean Gleason Stromberg and
Carl W. Vogt (Chair).  The  Legal/Regulatory/Compliance  Committee  held six (6)
meetings during the calendar year 2006.

The Expense/Operations Committee (i) monitors the Fund's total operating expense
levels,  (ii)  oversees the  provision of  administrative  services to the Fund,
including the Fund's custody,  fund accounting and insurance  arrangements,  and
(iii) reviews the Fund's investment advisers' brokerage practices, including the
implementation  of  related  policies.  The  members  of the  Expense/Operations
Committee are Henry P. Becton, Jr., Dawn-Marie  Driscoll,  Keith R. Fox, Kenneth
C.  Froewiss,  Graham E. Jones  (Chair),  Philip  Saunders,  Jr. and  William N.
Searcy,  Jr. This  committee  held seven (7) meetings  during the calendar  year
2006.

Ad Hoc Committees.  In addition to the standing committees described above, from
time to time the Board also forms ad hoc committees to consider specific issues.
In 2006,  various ad hoc  committees of the Board held an  additional  seven (7)
meetings.

Remuneration.  Each Independent Board Member receives compensation from the Fund
for his or her services, which includes an annual retainer and an attendance fee
for each meeting attended. No additional compensation is paid to any Independent
Board Member for travel time to meetings,  attendance at directors'  educational
seminars  or  conferences,   service  on  industry  or  association  committees,
participation  as speakers at directors'  conferences or service on special fund
industry director task forces or subcommittees. Independent Board Members do not
receive any employee  benefits such as pension or retirement  benefits or health
insurance from the Fund or any fund in the DWS fund complex.

                                       82
<PAGE>

Members of the Board who are officers,  directors,  employees or stockholders of
Deutsche Asset Management or its affiliates receive no direct  compensation from
a Fund, although they are compensated as employees of Deutsche Asset Management,
or its affiliates,  and as a result may be deemed to participate in fees paid by
the Funds.  The following tables show  compensation  from the Fund and aggregate
compensation  from all of the  funds in the DWS fund  complex  received  by each
Board Member during the calendar year 2006. Mr. Schwarzer became a member of the
Board on May 5,  2006,  is an  interested  person of the Funds and  received  no
compensation  from the  Funds or any fund in the DWS  fund  complex  during  the
relevant periods.

<TABLE>
<CAPTION>
                                                                     Total Compensation
                                      Aggregate Compensation           from Fund and
Name of Board Member                        from Fund*               DWS Fund Complex(1)
--------------------                        ----------               -------------------
<S>                                               <C>                       <C>
Henry P. Becton, Jr.(3)                         $4                        $189,000
Dawn-Marie Driscoll(2)(3)(4)                    $5                        $251,000
Keith R. Fox(3)(4)                              $4                        $195,000
Kenneth C. Froewiss(3)(4)                       $4                        $234,988
Martin J. Gruber(3)                             $4                        $188,000
Richard J. Herring(3)(4)                        $3                        $184,000
Graham E. Jones(3)(4)                           $4                        $206,000
Rebecca W. Rimel(3)                             $4                        $185,000
Philip Saunders, Jr.(3)(4)                      $4                        $207,000
William N. Searcy, Jr.(3)(4)                    $4                        $206,000
Jean Gleason Stromberg(3)(4)                    $4                        $202,000
Carl W. Vogt(3)                                 $4                        $189,000
</TABLE>


*        The Fund commenced opeations on July 5, 2006.

(1)      The DWS Fund Complex is composed of 155 funds as of December 31, 2006.

(2)      Includes  $50,000 in annual  retainer  fees in Ms.  Driscoll's  role as
         Chairperson of the Board.

(3)      For each Board Member,  except Mr. Becton,  Mr.  Froewiss and Mr. Vogt,
         total  compensation  for calendar year 2006 includes  compensation  for
         service  on  the  boards  of  34  trusts/corporations  comprised  of 87
         funds/portfolios.  For Messrs.  Becton and Vogt total  compensation for
         calendar year 2006 includes  compensation  for service on the boards of
         32  trusts/corporations  comprised  of  85  funds/portfolios.  For  Mr.
         Froewiss   total   compensation   for  calendar   year  2006   includes
         compensation  for  services  on the  boards  of 37  trusts/corporations
         comprised of 90 funds/portfolios.

(4)      Aggregate  compensation  includes amounts paid to the Board Members for
         special  meetings of ad hoc committees of the board in connection  with
         the  possible  consolidation  of the various DWS Fund boards and funds,
         meetings for considering fund expense simplification  initiatives,  and
         consideration  of issues  specific  to the Funds'  direct  shareholders
         (i.e., those shareholders who did not purchase shares through financial
         intermediaries).  Such amounts totaled $16,000 for Ms. Driscoll, $1,000
         for Mr. Fox, $17,000 for Mr. Froewiss,  $1,000 for Dr. Herring, $16,000
         for Mr.  Jones,  $17,000 for Dr.  Saunders,  $16,000 for Mr. Searcy and
         $16,000  for Ms.  Stromberg.  These  meeting  fees  were  borne  by the
         applicable DWS Funds.

Board Member Ownership in the Fund(1)

The  following  table shows the dollar range of equity  securities  beneficially
owned by each Board  Member in the Fund and DWS Fund  Complex as of December 31,
2006.

                                       83
<PAGE>

<TABLE>
<CAPTION>
                                               Dollar Range of                Aggregate Dollar Range of
                                           Beneficial Ownership in        Ownership in all Funds Overseen by
                                           DWS International Value                   Board Member
Board Member                                  Opportunities Fund              in the DWS Fund Complex(2)
------------                                  ------------------              --------------------------

Independent Board Member:
-------------------------
<S>                                                 <C>                               <C>
Henry P. Becton, Jr.                                 None                         Over $100,000
Dawn-Marie Driscoll                                  None                         Over $100,000
Keith R. Fox                                         None                         Over $100,000
Kenneth C. Froewiss                               $1-$10,000                      Over $100,000
Martin J. Gruber                                     None                         Over $100,000
Richard J. Herring                                   None                         Over $100,000
Graham E. Jones                                      None                         Over $100,000
Rebecca W. Rimel                                     None                         Over $100,000
Philip Saunders, Jr.                                 None                         Over $100,000
William N. Searcy, Jr.                               None                         Over $100,000
Jean Gleason Stromberg                               None                         Over $100,000
Carl W. Vogt                                         None                         Over $100,000

Interested Board Member:
------------------------

Axel Schwarzer                                       None                           Over $100,000

(1)      The amount shown  includes  share  equivalents of funds which the Board
         Member  is  deemed  to be  invested  pursuant  to the  Fund's  deferred
         compensation   plan.  The  inclusion   therein  of  any  shares  deemed
         beneficially  owned does not  constitute  an  admission  of  beneficial
         ownership of the shares.

(2)      Securities  beneficially  owned as defined  under the 1934 Act  include
         direct and/or indirect ownership of securities where the Board Member's
         economic interest is tied to the securities,  employment  ownership and
         securities  when the Board  Member can exert  voting power and when the
         Board Member has  authority to sell the  securities.  The dollar ranges
         are:  None,   $1-$10,000,   $10,001-$50,000,   $50,001-$100,000,   over
         $100,000.

Ownership in Securities of the Advisor and Related Companies

As  reported  to the Fund,  the  information  in the  following  table  reflects
ownership by the Independent Board Members and their immediate family members of
certain  securities as of December 31, 2006. An immediate family member can be a
spouse,  children  residing in the same  household  including  step and adoptive
children and any dependents.  The securities  represent ownership in the Advisor
or principal  underwriter  of the Fund and any persons  (other than a registered
investment company) directly or indirectly controlling,  controlled by, or under
common control with the Advisor or principal  underwriter of the Fund (including
Deutsche Bank AG).

                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----

Henry P. Becton, Jr.                                None
Dawn-Marie Driscoll                                 None
Keith R. Fox                                        None
Kenneth C. Froewiss                                 None
Martin J. Gruber                                    None

                                       84
<PAGE>

                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----

Richard J. Herring                                  None
Graham E. Jones                                     None
Rebecca W. Rimel                                    None
Philip Saunders, Jr.                                None
William N. Searcy, Jr.                              None
Jean Gleason Stromberg                              None
Carl W. Vogt                                        None
</TABLE>

Securities Beneficially Owned

As of November 7, 2007, the Board Members and officers of the Corporation owned,
as a group, less than 1% of the outstanding shares of the Fund.

To the best of the Fund's knowledge,  as of November 7, 2007, no person owned of
record or beneficially 5% or more of any class of the Fund's outstanding shares,
except as noted below.


<TABLE>
<CAPTION>
Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

<S>                                                           <C>                          <C>
DEUTSCHE INVESTMENT MANAGEMENT                                93,386.7650                  29.30 % of Class A
AMERICAS INC
NEW YORK NY  10017-1216

CHARLES SCHWAB & CO INC                                       65,019.0130                  20.40 % of Class A
SPECIAL CUSTODY ACCOUNT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMERS
SAN FRANCISCO CA  94104-4151

MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS                  17,766.3730                   5.57 % of Class A
JACKSONVILLE FL  32246

STATE STREET BANK & TRUST CO                                 255,253.2170            36.59 % of Institutional Class
CUST FBO
DWS LIFECOMPASS 2015 FUND
QUINCY MA  02171-2105

STATE STREET BANK & TRUST CO                                 188,546.4570            27.02 % of Institutional Class
CUST FBO
DWS LIFECOMPASS 2020 FUND
QUINCY MA  02171-2105

DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC                   93,794.4180            13.44 % of Institutional Class
NEW YORK NY  10017-1216

STATE STREET BANK & TRUST CO                                  79,326.2520            11.37 % of Institutional Class
CUST FBO
DWS LIFECOMPASS RETIREMENT FUND
QUINCY MA  02171-2105


                                       85
<PAGE>
Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

STATE STREET BANK & TRUST CO                                  77,060.3140            11.05 % of Institutional Class
CUST FBO
DWS LIFECOMPASS 2030 FUND
QUINCY MA  02171-2105

DEUTSCHE INVESTMENT                                           92,388.3240                  35.23 % of Class C
MANAGEMENT AMERICAS INC
NEW YORK NY  10017-1216

MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS                  43,792.3590                  16.70 % of Class C
JACKSONVILLE FL  32246

DEUTSCHE INVESTMENT                                           93,731.3650                  30.84 % of Class S
MANAGEMENT AMERICAS INC
NEW YORK NY  10017-1216

MERRILL LYNCH PIERCE FENNER & SMITH FOR THE SOLE              79,227.8490                  26.07 % of Class S
BENEFITS OF ITS CUSTOMERS
JACKSONVILLE FL  32246-6484

DWS TRUST COMPANY CUST                                        15,691.7130                   5.16 % of Class S
WHITE SALMON WA  98672-1432
</TABLE>





                                       86
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                                       87
<PAGE>




                                       88
<PAGE>




                                       89
<PAGE>




                                       90
<PAGE>




                                       91
<PAGE>




                                       92
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                                       93
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                                       94
<PAGE>





Agreement to Indemnify Independent Directors for Certain Expenses

In connection with litigation or regulatory  action related to possible improper
market timing or other improper trading activity or possible improper  marketing
and sales  activity  in the Funds,  each Fund's  investment  advisor has agreed,
subject to  applicable  law and  regulation,  to indemnify and hold harmless the
applicable  Funds  against  any and all loss,  damage,  liability  and  expense,
arising  from  market  timing or  marketing  and sales  matters  alleged  in any

                                       95
<PAGE>

enforcement actions brought by governmental authorities involving or potentially
affecting the Funds or the investment  advisor  ("Enforcement  Actions") or that
are the basis for private  actions  brought by shareholders of the Funds against
the Funds,  their directors and officers,  the Funds' investment  advisor and/or
certain other parties ("Private Litigation"), or any proceedings or actions that
may  be  threatened  or  commenced  in  the  future  by  any  person  (including
governmental authorities), arising from or similar to the matters alleged in the
Enforcement Actions or Private Litigation.  In recognition of its undertaking to
indemnify  the  applicable  Funds  and in  light of the  rebuttable  presumption
generally  afforded to independent  directors/trustees  of investment  companies
that they have not engaged in disabling conduct,  each Fund's investment advisor
has also agreed,  subject to  applicable  law and  regulation,  to indemnify the
applicable  Funds'  Independent   Directors  against  certain   liabilities  the
Independent  Directors  may incur from the  matters  alleged in any  Enforcement
Actions or Private  Litigation or arising from or similar to the matters alleged
in the Enforcement Actions or Private Litigation,  and advance expenses that may
be  incurred by the  Independent  Director in  connection  with any  Enforcement
Actions  or  Private  Litigation.  The  applicable  investment  advisor  is not,
however,  required to provide  indemnification and advancement of expenses:  (1)
with respect to any  proceeding  or action with respect to which the  applicable
Fund's Board  determines that the Independent  Director  ultimately would not be
entitled to indemnification or (2) for any liability of the Independent Director
to the Funds or their  shareholders  to which  the  Independent  Director  would
otherwise  be  subject  by reason  of  willful  misfeasance,  bad  faith,  gross
negligence  or reckless  disregard  of the  Independent  Director's  duties as a
director or trustee of the Funds as determined in a final  adjudication  in such
action or proceeding.  The estimated amount of any expenses that may be advanced
to the  Independent  Directors  or  indemnity  that  may be  payable  under  the
indemnity  agreements  is currently  unknown.  These  agreements  by each Fund's
investment  advisor will survive the  termination of the  investment  management
agreements between the applicable investment advisor and the Funds.




                                FUND ORGANIZATION

DWS International  Fund, Inc. (the  "Corporation") was organized as Scudder Fund
of Canada Ltd. in Canada in 1953 by the investment  management  firm of Scudder,
Stevens  & Clark,  Inc.  On March 16,  1964,  the name of this  Corporation  was
changed  to  Scudder  International  Investments  Ltd.  On July  31,  1975,  the
corporate  domicile  of this  Corporation  was  changed  to the US  through  the
transfer  of its net  assets to a newly  formed  Maryland  corporation,  Scudder
International  Fund, Inc., in exchange for shares of the Corporation  which then
were distributed to the  shareholders of the  Corporation.  On February 6, 2006,
the name of the Corporation was changed from Scudder International Fund, Inc. to
DWS International Fund, Inc.

                                       96
<PAGE>


The authorized capital stock of the Corporation consists of 2,447,923,888 shares
of a par value of $.01 each,  which  capital  stock has been  divided  into five
series:  DWS International  Fund, the original series;  DWS Latin America Equity
Fund,  organized in December 1992; DWS Europe Equity Fund,  organized in October
1994;  DWS  Emerging  Markets  Equity  Fund,  organized  in  May  1996  and  DWS
International  Value  Opportunities  Fund  organized  in July 2006.  Each series
consists of 320 million shares, except for DWS International Fund which consists
of  620,595,597  shares,  DWS Latin  America  Equity Fund which  consists of 340
million shares and DWS Europe Equity Fund which consists of 420 million  shares.
DWS  International  Value  Opportunities  Fund is divided  into four  classes of
shares: Class A, Class C, Class S and Institutional Class shares. Class S shares
of the Fund are offered through a separate statement of additional information.


The Corporation is a Maryland  corporation  organized under the laws of Maryland
and is governed by Amended and  Restated  Articles of  Incorporation,  as may be
further amended from time to time (the "Articles of Incorporation").  All shares
issued and outstanding are fully paid and non-assessable,  transferable, have no
pre-emptive  rights  (except as may be  determined by the Board of Directors) or
conversion rights (except as described below) and are redeemable as described in
the SAI and in the  Fund's  prospectus.  Each share has equal  rights  with each
other share of the same class of the Fund as to voting, dividends, exchanges and
liquidation.
Shareholders  are entitled to one vote for each share held and fractional  votes
for fractional shares held.

The Board of Directors may determine  that shares of a fund or a class of a fund
shall be automatically  converted into shares of another fund of the Corporation
or of another class of the same or another Fund based on the relative net assets
of such Fund or class at the time of conversion. The Board of Directors may also
provide that the holders of shares of a fund or a class of a fund shall have the
right to convert or exchange their shares into shares of one or more other funds
or classes on terms established by the Board of Directors.

Each share of the  Corporation  may be subject to such sales  loads or  charges,
expenses and fees, account size  requirements,  and other rights and provisions,
which may be the same or different  from any other share of the  Corporation  or
any  other  share of any fund or class of a fund  (including  shares of the same
Fund or class as the share),  as the Board of Directors of the  Corporation  may
establish or change from time to time and to the extent permitted under the 1940
Act.

The Corporation is not required to hold an annual meeting of shareholders in any
year in which the  election of  Directors  is not required by the 1940 Act. If a
meeting of  shareholders  of the Corporation is required by the 1940 Act to take
action on the election of  Directors,  then an annual  meeting  shall be held to
elect  Directors  and take such other  action as may come  before  the  meeting.
Special meetings of the shareholders of the Corporation,  or of the shareholders
of one or more Funds or classes  thereof,  for any purpose or  purposes,  may be
called at any time by the Board of Directors or by the  President,  and shall be
called by the  President or Secretary at the request in writing of  shareholders
entitled to cast a majority of the votes entitled to be cast at the meeting.

Except as  provided in the 1940 Act,  the  presence in person or by proxy of the
holders  of  one-third  of the  shares  entitled  to  vote  at a  meeting  shall
constitute a quorum for the  transaction of business at meetings of shareholders
of the Corporation or of a fund or class.

On any matter submitted to a vote of shareholders, all shares of the Corporation
entitled  to vote  shall be voted in the  aggregate  as a single  class  without
regard  to  series  or  classes  of  shares,  provided,  however,  that (a) when
applicable law requires that one or more series or classes vote separately, such
series or classes shall vote  separately  and,  subject to (b) below,  all other
series  or  classes  shall  vote in the  aggregate;  and (b) when  the  Board of
Directors determines that a matter does not affect the interests of a particular
series or class, such series or class shall not be entitled to any vote and only
the shares of the affected series or classes shall be entitled to vote.

Notwithstanding any provision of Maryland corporate law requiring  authorization
of any action by a greater  proportion  than a majority  of the total  number of
shares  entitled  to vote  on a  matter,  such  action  shall  be  effective  if
authorized by the majority vote of the outstanding shares entitled to vote.

Subject to the requirements of applicable law and any procedures  adopted by the
Board of Directors from time to time,  the holders of shares of the  Corporation
or any one or more  series or classes  thereof may take action or consent


                                       97
<PAGE>

to any action by delivering a consent, in writing or by electronic transmission,
of the holders  entitled to cast not less than the minimum  number of votes that
would be necessary to authorize or take the action at a formal meeting.

The Articles of  Incorporation  provide that the Board of Directors  may, in its
discretion,  establish  minimum  investment  amounts for  shareholder  accounts,
impose  fees on  accounts  that do not  exceed a minimum  investment  amount and
involuntarily  redeem  shares in any such  account in payment of such fees.  The
Board of Directors,  in its sole  discretion,  also may cause the Corporation to
redeem all of the  shares of the  Corporation  or one or more  series or classes
held by any  shareholder for any reason,  to the extent  permissible by the 1940
Act,  including (a) if the shareholder owns shares having an aggregate net asset
value  of  less  than a  specified  minimum  amount,  (b)  if the  shareholder's
ownership of shares would disqualify a series from being a regulated  investment
company, (c) upon a shareholder's  failure to provide sufficient  identification
to permit the  Corporation  to verify  the  shareholder's  identity,  (d) upon a
shareholder's  failure to pay for shares or meet or maintain the  qualifications
for  ownership  of a particular  series or class,  (e) if the Board of Directors
determines (or pursuant to policies  established by the Board of Directors it is
determined)  that share  ownership by a shareholder is not in the best interests
of the  remaining  shareholders,  (f)  when  the  Corporation  is  requested  or
compelled to do so by  governmental  authority or applicable  law, or (g) upon a
shareholder's  failure to comply with a request for information  with respect to
the direct or indirect  ownership  of shares of the  Corporation.  By  redeeming
shares the  Corporation  may terminate a fund or any class  without  shareholder
approval,  and the  Corporation may suspend the right of shareholders to require
the Corporation to redeem shares to the extent  permissible  under the 1940 Act.
Payment  for shares  redeemed  shall be made in cash or other  property,  or any
combination thereof; provided, however, that the composition of any such payment
(e.g.,  cash,  securities  and/or  other  assets)  to any  shareholder  shall be
determined by the Corporation in its sole discretion, and may be different among
shareholders  (including  differences  among  shareholders  in the same  fund or
class).

Except  as  otherwise   permitted  by  the  Articles  of  Incorporation  of  the
Corporation, upon liquidation or termination of a fund or class, shareholders of
such  fund or  class  of a fund  shall  be  entitled  to  receive,  pro  rata in
proportion to the number of shares of such fund or class held by each of them, a
share of the net assets of such Fund or class,  and the holders of shares of any
other  particular fund or class shall not be entitled to any such  distribution,
provided,  however,  that the  composition  of any  such  payment  (e.g.,  cash,
securities  and/or other assets) to any  shareholder  shall be determined by the
Corporation  in its sole  discretion,  and may be different  among  shareholders
(including differences among shareholders in the same fund or class).

The  Corporation's  Board  of  Directors  supervises  a fund's  activities.  The
Corporation  adopted  a plan  pursuant  to Rule  18f-3  under  the 1940 Act (the
"Plan") to permit the  Corporation  to establish a multiple  class  distribution
system for its funds.

Under the  Plan,  each  class of shares  will  represent  interests  in the same
portfolio of investments of the series, and be identical in all respects to each
other class,  except as set forth below. The only differences  among the various
classes  of  shares  of  the  Series  will  relate   solely  to:  (a)  different
distribution fee payments or service fee payments associated with any Rule 12b-1
Plan  for a  particular  class  of  shares  and  any  other  costs  relating  to
implementing or amending such Rule 12b-1 Plan (including  obtaining  shareholder
approval of such Rule 12b-1 Plan or any amendment thereto),  which will be borne
solely by  shareholders  of such  class;  (b)  different  service  fee  payments
associated with a service plan for a specific class and any other costs relating
to implementing or amending such service plan; (c) different  account  minimums;
(d) the bearing by each class of its Class Expenses,  as defined below;  (e) the
voting  rights  related  to any Rule 12b-1 Plan  affecting  a specific  class of
shares; (f) separate exchange privileges;  (g) different conversion features and
(h) different class names and  designations.  Expenses  currently  designated as
"Class Expenses" by the Corporation's Board of Directors under the Plan include,
for example,  transfer agency fees  attributable to a specific class and certain
securities registration fees.

                             PROXY VOTING GUIDELINES

The Fund has delegated proxy voting responsibilities to the Advisor,  subject to
the  Board's  general  oversight.  The Fund has  delegated  proxy  voting to the
Advisor with the  direction  that proxies  should be voted  consistent  with the
Fund's best  economic  interests.  The Advisor has adopted its own Proxy  Voting
Policies and Procedures ("Policies"), and Proxy Voting Guidelines ("Guidelines")
for this  purpose.  The  Policies  address,  among other  things,  conflicts  of
interest that may arise between the interests of the Fund,  and the interests of
the Advisor and its affiliates,  including


                                       98
<PAGE>

the Fund's principal underwriter. The Guidelines set forth the Advisor's general
position on various proposals, such as:

o        Shareholder  Rights -- The Advisor  generally  votes against  proposals
         that restrict shareholder rights.

o        Corporate  Governance -- The Advisor  generally votes for  confidential
         and cumulative voting and against supermajority voting requirements for
         charter and bylaw amendments. The Advisor generally votes for proposals
         to restrict a chief  executive  officer from serving on more than three
         outside  boards of  directors.  The  Advisor  generally  votes  against
         proposals  that  require a company  to  appoint  a  Chairman  who is an
         independent director.

o        Anti-Takeover Matters -- The Advisor generally votes for proposals that
         require shareholder ratification of poison pills or that request boards
         to redeem poison pills,  and votes against the adoption of poison pills
         if  they  are  submitted  for  shareholder  ratification.  The  Advisor
         generally votes for fair price proposals.

o        Compensation  Matters -- The Advisor generally votes for executive cash
         compensation  proposals,  unless they are unreasonably  excessive.  The
         Advisor generally votes against stock option plans that do not meet the
         Advisor's criteria.

o        Routine Matters -- The Advisor  generally votes for the ratification of
         auditors,  procedural matters related to the annual meeting and changes
         in company name, and against bundled proposals and adjournment.

The general provisions described above do not apply to investment companies. The
Advisor generally votes proxies solicited by investment  companies in accordance
with the  recommendations  of an  independent  third  party,  except for proxies
solicited by or with respect to investment companies for which the Advisor or an
affiliate serves as the Advisor or principal underwriter ("affiliated investment
companies"). The Advisor votes affiliated investment company proxies in the same
proportion as the vote of the investment company's other shareholders (sometimes
called  "mirror" or "echo"  voting).  Master fund proxies  solicited from feeder
funds are voted in accordance  with  applicable  requirements  of the Investment
Company Act of 1940.

Although the  Guidelines  set forth the Advisor's  general  voting  positions on
various proposals,  the Advisor may,  consistent with the Funds' best interests,
determine under some circumstances to vote contrary to those positions.

The  Guidelines  on a  particular  issue  may or may  not  reflect  the  view of
individual members of the Board or of a majority of the Board. In addition,  the
Guidelines may reflect a voting position that differs from the actual  practices
of  the  public  companies  within  the  Deutsche  Bank  organization  or of the
investment  companies for which the Advisor or an affiliate serves as investment
advisor or sponsor.

The  Advisor  may  consider  the views of a portfolio  company's  management  in
deciding how to vote a proxy or in establishing general voting positions for the
Guidelines, but management's views are not determinative.

As mentioned above, the Policies  describe the way in which the Advisor resolves
conflicts  of  interest.  To  resolve  conflicts,   the  advisor,  under  normal
circumstances, votes proxies in accordance with its Guidelines.

If the Advisor departs from the Guidelines with respect to a particular proxy or
if the Guidelines do not specifically  address a certain proxy proposal, a proxy
voting committee  established by the advisor will vote the proxy.  Before voting
any such proxy,  however,  the Advisor's conflicts review committee will conduct
an investigation to determine whether any potential  conflicts of interest exist
in connection  with the  particular  proxy  proposal.  If the  conflicts  review
committee  determines that the Advisor has a material  conflict of interest,  or
certain  individuals  on the  proxy  voting  committee  should be  recused  from
participating  in a  particular  proxy  vote,  it will  inform the proxy  voting
committee.  If notified that the Advisor has a material conflict,  or fewer than
three voting members are eligible to  participate  in the proxy vote,  typically
the Advisor will engage an  independent  third party to vote the proxy or follow
the proxy voting recommendations of an independent third party.

                                       99
<PAGE>

Under certain circumstances,  the Advisor may not be able to vote proxies or the
Advisor  may find that the  expected  economic  costs from voting  outweigh  the
benefits  associated with voting. For example,  the Advisor may not vote proxies
on certain foreign securities due to local restrictions or customs.  The Advisor
generally  does  not vote  proxies  on  securities  subject  to  share  blocking
restrictions.

You may  obtain  information  about how the Fund  voted  proxies  related to its
portfolio  securities  during the 12-month  period ended June 30 by visiting the
Securities and Exchange  Commission's Web site at www.sec.gov or by visiting our
Web site at:  dws-scudder.com  (click on  "proxy  voting"  at the  bottom of the
page).

                              FINANCIAL STATEMENTS


The financial statements,  including the portfolio of investments,  of the Fund,
together  with the Report of  Independent  Registered  Public  Accounting  Firm,
Financial  Highlights and notes to financial  statements in the Annual Report to
the Shareholders of the Fund dated August 31, 2007, are  incorporated  herein by
reference  and are hereby  deemed to be a part of this  Statement of  Additional
Information.


                             ADDITIONAL INFORMATION

The CUSIP numbers for each class of DWS International  Value  Opportunities Fund
offered herein are:

Class A:                23337R650

Class C:                23337R643

Institutional Class:    23337R635

DWS International Value Opportunities Fund has a fiscal year ending August 31.

Many of the investment changes in the Fund will be made at prices different from
those  prevailing  at the time  they may be  reflected  in a  regular  report to
shareholders of the Fund. These transactions will reflect  investment  decisions
made by the Advisor in light of the Fund's  investment  objective  and policies,
its other portfolio holdings and tax considerations, and should not be construed
as recommendations for similar action by other investors.


The Fund's  Prospectuses  and this  Statement  of  Additional  Information  omit
certain information  contained in the Registration  Statement which the Fund has
filed with the SEC under the Securities Act of 1933 and reference is hereby made
to the Registration  Statement for further  information with respect to the Fund
and  the  securities  offered  hereby.  This  Registration   Statement  and  its
amendments  are available for inspection by the public at the SEC in Washington,
D.C.




                                      100
<PAGE>



                             RATINGS OF INVESTMENTS


Standard & Poor's Corporation Bond Ratings

AAA.  Debt  rated AAA had the  highest  rating  assigned  by  Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA. Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.

A. Debt  rated A has a strong  capacity  to pay  interest  and  repay  principal
although it is somewhat more  susceptible  to the adverse  effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB.  Debt rated BBB is regarded as having an adequate  capacity to pay interest
and  repay  principal.   Whereas  it  normally  exhibits   adequate   protection
parameters,  adverse  economic  conditions  or changing  circumstances  are more
likely to lead to a weakened  capacity to pay interest and repay  principal  for
debt in this category than in higher rated categories.

BB, B, CCC, CC and C. Debt rated BB, B, CCC, CC and C is  regarded,  on balance,
as predominantly  speculative with respect to capacity to pay interest and repay
principal in  accordance  with the terms of the  obligation.  BB  indicates  the
lowest degree of speculation and C the highest degree of speculation. While such
debt will likely have some  quality and  protective  characteristics,  these are
outweighed by large uncertainties or major risk exposures to adverse conditions.

CI. The rating CI is  reserved  for income  bonds on which no  interest is being
paid.

D. Debt rated D is in  default,  and  payment of interest  and/or  repayment  of
principal is in arrears.

Moody's Investors Service, Inc. Bond Ratings

AAA. Bonds which are rated Aaa are judged to be of the best quality.  They carry
the  smallest  degree  of  investment  risk  and are  generally  referred  to as
"gilt-edge."  Interest  payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change,  such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa. Bonds which are rated Aa are judged to be of high quality by all  standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds.  They are rated lower than the best bonds  because  margins of protection
may not be as large as in Aaa securities or  fluctuation of protective  elements
may be of greater  amplitude or there may be other  elements  present which make
the long term risks appear somewhat larger than in

Aaa securities.

A. Bonds which are rated A possess many favorable investment  attributes and are
to be considered as upper medium grade  obligations.  Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa. Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither  highly  protected nor poorly  secured.  Interest  payments and
principal  security  appear  adequate  for the present  but  certain  protective
elements may be lacking or may be  characteristically  unreliable over any great
length of time. Such bonds lack outstanding  investment  characteristics  and in
fact have speculative characteristics as well.

Ba.  Bonds  which are rated Ba are judged to have  speculative  elements;  their
future cannot be considered  as well assured.  Often the  protection of interest
and  principal  payments may be very  moderate and thereby not well


                                      101
<PAGE>

safeguarded  during  both good and bad times  over the  future.  Uncertainty  of
position characterizes bonds in this class.

B. Bonds  which are rated B  generally  lack  characteristics  of the  desirable
investment.  Assurance of interest and principal  payments or of  maintenance of
other terms of the contract over any long period of time may be small.

Caa.  Bonds  which are rated Caa are of poor  standing.  Such  issues  may be in
default or there may be present  elements of danger with respect to principal or
interest.

Ca. Bonds which are rated Ca represent  obligations  which are  speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C.  Bonds  which are rated C are the lowest  rated  class of bonds and issues so
rated can be regarded as having  extremely  poor prospects of ever attaining any
real investment standing.

Fitch Long-Term Debt Ratings

AAA.  Highest credit  quality.  "AAA" ratings  denote the lowest  expectation of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments.  This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA. Very high credit  quality.  "AA"` ratings  denote a very low  expectation of
credit risk.  They indicate very strong capacity for timely payment of financial
commitments.  This  capacity  is not  significantly  vulnerable  to  foreseeable
events.

A. High credit quality. "A" ratings denote a low expectation of credit risk. The
capacity for timely payment of financial  commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB. Good credit quality.  "BBB" ratings  indicate that there is currently a low
expectation  of credit  risk.  The  capacity  for timely  payment  of  financial
commitments is considered adequate,  but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity.  This is the lowest
investment-grade category.

BB.  Speculative.  "BB" ratings  indicate that there is a possibility  of credit
risk  developing,  particularly  as the result of adverse  economic  change over
time;  however,  business or  financial  alternatives  may be available to allow
financial  commitments  to be met.  Securities  rated in this  category  are not
investment grade.

B. Highly  speculative.  "B" ratings  indicate that  significant  credit risk is
present,  but a limited  margin of safety  remains.  Financial  commitments  are
currently being met; however,  capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC,  CC, C. High  default  risk.  Default is a real  possibility.  Capacity for
meeting  financial  commitments  is solely  reliant  upon  sustained,  favorable
business or economic developments.  A "CC" rating indicates that default of some
kind appears probable. "C" ratings signal imminent default.

DDD, DD, D. Default.  The ratings of  obligations  in this category are based on
their prospects for achieving  partial or full recovery in a  reorganization  or
liquidation  of  the  obligor.   While  expected   recovery  values  are  highly
speculative  and cannot be estimated with any precision,  the following serve as
general  guidelines.  "DDD" obligations have the highest potential for recovery,
around 90%-100% of outstanding amounts and accrued interest.

"DD" indicates potential  recoveries in the range of 50%-90%, and "D" the lowest
recovery  potential,  i.e.,  below 50%.  Entities  rated in this  category  have
defaulted  on some or all of their  obligations.  Entities  rated "DDD" have the
highest  prospect for resumption of  performance or continued  operation with or
without  a  formal  reorganization  process.  Entities  rated  "DD"  and "D" are
generally undergoing a formal reorganization or liquidation process; those


                                      102
<PAGE>

rated  "DD" are  likely  to  satisfy  a  higher  portion  of  their  outstanding
obligations,  while  entities  rated "D" have a poor  prospect  for repaying all
obligations.

Fitch Short-Term Debt Ratings

F1.  Highest credit  quality.  Indicates the Best capacity for timely payment of
financial commitments;  may have an added "+" to denote any exceptionally strong
credit feature.

F2. Good credit quality. A satisfactory capacity for timely payment of financial
commitments,  but the  margin  of  safety  is not as great as in the case of the
higher ratings.

F3.  Fair  credit  quality.   The  capacity  for  timely  payment  of  financial
commitments is adequate;  however,  near-term  adverse changes could result in a
reduction to non-investment grade.

B.  Speculative.  Minimal capacity for timely payment of financial  commitments,
plus  vulnerability  to  near-term  adverse  changes in  financial  and economic
conditions.

C. High  default  risk.  Default is a real  possibility.  Capacity  for  meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D. Default. Denotes actual or imminent payment default.

Commercial Paper Ratings

Commercial  paper rated by Standard & Poor's  Ratings  Services  ("S&P") has the
following   characteristics:   Liquidity   ratios  are  adequate  to  meet  cash
requirements.  Long-term  senior  debt is rated "A" or  better.  The  issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow  have an  upward  trend  with  allowance  made for  unusual  circumstances.
Typically, the issuer's industry is well established and the issuer has a strong
position  within the industry.  The  reliability  and quality of management  are
unquestioned.  Relative  strength  or weakness  of the above  factors  determine
whether the issuer's commercial paper is rated A-1 or A-2.

The ratings  Prime-1 and Prime-2 are the two highest  commercial  paper  ratings
assigned  by Moody's  Investors  Service,  Inc.  ("Moody's").  Among the factors
considered by it in assigning  ratings are the following:  (1) evaluation of the
management of the issuer;  (2) economic  evaluation of the issuer's  industry or
industries and an appraisal of  speculative-type  risks which may be inherent in
certain  areas;  (3)  evaluation  of  the  issuer's   products  in  relation  to
competition and customer  acceptance;  (4) liquidity;  (5) amount and quality of
long-term debt; (6) trend of earnings over a period of ten years;  (7) financial
strength of a parent company and the relationships  which exist with the issuer;
and (8) recognition by the management of obligations which may be present or may
arise as a result of public  interest  questions and  preparations  to meet such
obligations.  Relative  strength  or weakness  of the above  factors  determines
whether the issuer's commercial paper is rated Prime-1 or 2.

Municipal Notes

Moody's: The highest ratings for state and municipal short-term  obligations are
"MIG 1," "MIG 2," and "MIG 3" (or "VMIG 1," "VMIG 2" and "VMIG 3" in the case of
an issue having a variable rate demand feature). Notes rated "MIG 1" or "VMIG 1"
are judged to be of the "best  quality".  Notes rated "MIG 2" or "VMIG 2" are of
"high  quality," with margins or protection  "ample  although not as large as in
the  preceding  group".  Notes  rated  "MIG  3" or  "VMIG  3" are of  "favorable
quality," with all security  elements  accounted for but lacking the strength of
the preceding grades.

                                      103
<PAGE>

S&P:  The  "SP-1"  rating  reflects  a "very  strong or strong  capacity  to pay
principal and interest". Notes issued with "overwhelming safety characteristics"
will be rated "SP-1+".  The "SP-2" rating reflects a "satisfactory  capacity" to
pay principal and interest.

Fitch:  The highest ratings for state and municipal  short-term  obligations are
"F-1+," "F-1," and "F-2."


                                      104
<PAGE>


                          DWS INTERNATIONAL FUND, INC.

                   DWS International Value Opportunities Fund
                                 Class S Shares



                       STATEMENT OF ADDITIONAL INFORMATION


                                December 1, 2007



This Statement of Additional  Information is not a prospectus and should be read
in conjunction  with the prospectus (the  "Prospectus"),  dated December 1, 2007
for Class S shares of DWS International Value Opportunities Fund (the `Fund'), a
series of DWS International Fund, Inc. (the "Corporation"), as amended from time
to time,  copies of which may be  obtained  without  charge  by  contacting  DWS
Scudder Distributors,  Inc., 222 South Riverside Plaza, Chicago, Illinois 60606,
1-800-621-1148,  or from  the firm  from  which  this  Statement  of  Additional
Information  was  obtained and is  available  along with other  materials on the
Securities and Exchange Commission's Internet Web site (http://www.sec.gov).

The Annual Report to Shareholders  dated August 31, 2007 is incorporated  herein
by reference  and is hereby  deemed to be part of this  Statement of  Additional
Information.


This Statement of Additional  Information is  incorporated by reference into the
Prospectus of the Fund.



<PAGE>

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

INVESTMENT RESTRICTIONS........................................................1

INVESTMENT POLICIES AND TECHNIQUES.............................................3
   Investment Objective and Policies...........................................3
   Investment Techniques.......................................................3
   Portfolio Holdings.........................................................22


MANAGEMENT OF THE FUND........................................................25
   Investment Advisor.........................................................25
   Compensation of Portfolio Managers.........................................28
   Fund Ownership of Portfolio Managers.......................................32

FUND SERVICE PROVIDERS........................................................35
   Distributor and Underwriter................................................35
   Independent Registered Public Accounting Firm..............................36
   Legal Counsel..............................................................36
   Custodian, Transfer Agent and Shareholder Service Agent....................37

PORTFOLIO TRANSACTIONS........................................................37

PURCHASE AND REDEMPTION OF SHARES.............................................43

DIVIDENDS.....................................................................60

TAXES.........................................................................61

NET ASSET VALUE...............................................................71

DIRECTORS AND OFFICERS........................................................72

FUND ORGANIZATION.............................................................92

PROXY VOTING GUIDELINES.......................................................94

FINANCIAL STATEMENTS..........................................................95

ADDITIONAL INFORMATION........................................................95

RATINGS OF INVESTMENTS........................................................96




                                       i
<PAGE>



                             INVESTMENT RESTRICTIONS

Except as otherwise indicated,  the Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders.  There can be
no assurance that the Fund's objective will be met.

Any  investment  restrictions  herein  which  involve  a maximum  percentage  of
securities  or assets shall not be  considered  to be violated  unless an excess
over the percentage occurs  immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, the Fund.

The Fund has elected to be treated as a diversified  investment company, as that
term is used in the Investment Act of 1940, as amended (the "1940 Act"),  and as
interpreted or modified by regulatory authority having  jurisdiction,  from time
to time.

As a matter of fundamental policy:

1.       The Fund may not borrow money,  except as permitted under the 1940 Act,
         and  as  interpreted  or  modified  by  regulatory   authority   having
         jurisdiction, from time to time.

2.       The Fund may not issue senior securities, except as permitted under the
         1940 Act,  as amended,  and as  interpreted  or modified by  regulatory
         authority having jurisdiction, from time to time.

3.       The Fund may not concentrate its investments in a particular  industry,
         as that term is used in the 1940 Act, as amended, and as interpreted or
         modified by  regulatory  authority  having  jurisdiction,  from time to
         time.

4.       The Fund may not  engage in the  business  of  underwriting  securities
         issued by others,  except to the extent  that the Fund may be deemed to
         be an  underwriter  in  connection  with the  disposition  of portfolio
         securities.

5.       The Fund may not  purchase  or sell real  estate,  which  term does not
         include  securities of companies which deal in real estate or mortgages
         or investments secured by real estate or interests therein, except that
         the Fund  reserves  freedom  of action to hold and to sell real  estate
         acquired as a result of the Fund's ownership of securities.

6.       The Fund may not purchase or sell  commodities,  except as permitted by
         the 1940  Act,  as  amended,  and as  interpreted  or  modified  by the
         regulatory authority having jurisdiction, from time to time.

7.       The Fund may not make loans except as permitted  under the 1940 Act, as
         amended,  and as interpreted or modified by regulatory authority having
         jurisdiction, from time to time.

A  fundamental  policy may not be changed  without the approval of a majority of
the outstanding  voting securities of the Fund which, under the 1940 Act and the
rules thereunder and as used in this Statement of Additional Information,  means
the lesser of (1) 67% or more of the voting securities  present at such meeting,
if the holders of more than 50% of the outstanding voting securities of the Fund
are present or  represented  by proxy,  or (2) more than 50% of the  outstanding
voting securities of the Fund.

The Directors of DWS International  Fund, Inc. have voluntarily  adopted certain
policies  and  restrictions,  which are  observed  in the  conduct of the Fund's
affairs.  These  represent  intentions  of  the  Directors  based  upon  current
circumstances.  Non-fundamental  policies may be changed by the Directors of the
Corporation  without requiring  approval of or, with certain  exceptions,  prior
notice to, shareholders.

As a matter of nonfundamental policy, the Fund currently does not intend to:

                                       1
<PAGE>


(a)      borrow money in an amount  greater  than 5% of its total assets  except
         (i) for temporary or emergency purposes and (ii) by engaging in reverse
         repurchase   agreements,   dollar  rolls,   or  other   investments  or
         transactions  described in the Fund's registration  statement which may
         be deemed to be borrowings;

(b)      enter into either reverse  repurchase  agreements or dollar rolls in an
         amount greater than 5% of its total assets;

(c)      purchase  securities  on margin or make short  sales,  except (i) short
         sales against the box, (ii) in connection with arbitrage  transactions,
         (iii) for margin deposits in connection with futures contracts, options
         or other  permitted  investments,  (iv) that  transactions  in  futures
         contracts  and  options  shall  not be  deemed  to  constitute  selling
         securities  short,  and (v) that the Fund may  obtain  such  short-term
         credits  as  may  be  necessary   for  the   clearance  of   securities
         transactions;

(d)      purchase  options,  unless  the  aggregate  premiums  paid on all  such
         options  held by the Fund at any time do not  exceed  20% of its  total
         assets; or sell put options, if as a result, the aggregate value of the
         obligations  underlying  such put options would exceed 50% of its total
         assets;

(e)      enter  into  futures  contracts  or  purchase  options  thereon  unless
         immediately  after the  purchase,  the value of the  aggregate  initial
         margin with respect to such futures contracts entered into on behalf of
         the Fund and the premiums  paid for such  options on futures  contracts
         does not  exceed  20% of the fair  market  value  of the  Fund's  total
         assets;  provided that in the case of an option that is in-the-money at
         the time of  purchase,  the  in-the-money  amount  may be  excluded  in
         computing the 20% limit;

(f)      purchase warrants if as a result,  such securities,  taken at the lower
         of cost or market value,  would  represent more than 5% of the value of
         the Fund's total assets (for this purpose,  warrants  acquired in units
         or attached to securities will be deemed to have no value);

(g)      lend  portfolio  securities in an amount greater than 33?% of its total
         assets;

(h)      acquire  securities  of  registered  open-end  investment  companies or
         registered unit investment  trusts in reliance on Sections  12(d)(1)(F)
         or 12(d)(1)(G) of the 1940 Act.

The Fund will not purchase illiquid securities,  including repurchase agreements
maturing in more than seven days, if, as a result thereof,  more than 15% of the
Fund's net assets,  valued at the time of the transaction,  would be invested in
such securities.

If a percentage  restriction  is adhered to at the time of  investment,  a later
increase or decrease in percentage  beyond the specified  limit resulting from a
change in values or net assets will not be considered a violation.

Master/feeder  Fund  Structure.  The Board of Directors  has the  discretion  to
retain the current  distribution  arrangement  for the Fund while investing in a
master fund in a master/feeder fund structure as described below.

A master/feeder fund structure is one in which a fund (a `feeder fund'), instead
of investing  directly in a portfolio of securities,  invests most or all of its
investment  assets in a separate  registered  investment  company  (the  `master
fund') with  substantially  the same  investment  objective  and policies as the
feeder  fund.  Such a  structure  permits  the  pooling of assets of two or more
feeder funds,  preserving  separate  identities or distribution  channels at the
feeder  fund  level.  Based on the  premise  that  certain  of the  expenses  of
operating an investment  portfolio are  relatively  fixed,  a larger  investment
portfolio may eventually  achieve a lower ratio of operating expenses to average
net assets. An existing  investment  company is able to convert to a feeder fund
by  selling  all  of  its  investments,   which  involves  brokerage  and  other
transaction  costs and realization of a taxable gain or loss, or by contributing
its assets to the master  fund and  avoiding  transaction  costs and,  if proper
procedures are followed, the realization of taxable gain or loss.

                                       2
<PAGE>

                       INVESTMENT POLICIES AND TECHNIQUES

General

The Fund is an open-end management  investment company which continuously offers
and redeems shares at net asset value (less  applicable  sales charges or fees).
The Fund is a company  of the type  commonly  known as a mutual  fund.  The Fund
offers  four  classes  of shares:  Class A,  Class C, Class S and  Institutional
Class.  Class A, Class C and Institutional  Class shares of the Fund are offered
through a separate Statement of Additional Information.

Investment Objective and Policies

The  Fund  seeks  long-term  capital  appreciation,  with  current  income  as a
secondary objective.

Under  normal  circumstances,  the  Fund  invests  at least  80% of its  assets,
determined  at the time of  purchase,  in the stocks and other  securities  with
equity  characteristics  of companies in developed  countries outside the United
States.  Almost all the  companies  in which the Fund  invests  are based in the
developed   foreign   countries  that  make  up  the  Morgan   Stanley   Capital
International Europe, Australia and Ear East Index ("MSCI EAFE Index"). The Fund
may also  invest a portion  of its  assets in  companies  based in the  emerging
markets  of Latin  America,  the  Middle  East,  Europe,  Asia and Africa if the
portfolio managers believe that their return potential more than compensates for
the extra risks associated with these markets. While the portfolio managers have
invested in emerging markets in the past, under normal market conditions they do
not consider this a central element of the Fund's strategy.  Typically, the Fund
would  not  hold  more  than  20% of its net  assets  in  emerging  markets.  In
implementing  this overall  strategy,  the Fund may  experience a high portfolio
turnover  rate.  The  Fund  may  also  invest  up to 20% of its  assets  in cash
equivalents,  US  investment-grade  fixed-income  securities,  and US stocks and
other equities.

The Fund  invests  for the long  term.  The  portfolio  managers  employ a value
strategy and invest in companies  that they believe are  undervalued.  These are
typically companies that have been historically sound but are temporarily out of
favor.   The  Fund  intends  to  invest  primarily  in  companies  whose  market
capitalizations fall within the normal range of the MSCI EAFE Index.

The portfolio  managers track several thousand companies to arrive at between 50
to 70 stocks the Fund normally holds. The managers use a variety of quantitative
screens to compare a  company's  stock  price to its book  value,  cash flow and
dividend  yield,  and analyze  individual  companies to identify  those that are
financially sound and appear to have strong potential for long-term growth.

After narrowing the investment  universe  through the use of valuation  screens,
the portfolio  managers' use of fundamental  research tools lies at the heart of
the  investment  process.  The  portfolio  managers'  process  brings  an  added
dimension to this fundamental research by drawing on the insight of experts from
a range of financial  disciplines - regional  stock market  specialists,  global
industry  specialists,  economists and  quantitative  analysts.  They challenge,
refine and amplify each other's ideas.  Their close  collaboration is a critical
element of the portfolio managers' investment process.

The Fund may invest in various  instruments  commonly known as  `derivatives" to
increase or decrease its exposure to an asset class, securities market, index or
currency.  The Fund will  primarily  use futures,  options,  options on futures,
forward currency transactions and swaps. The Fund may also invest in derivatives
to gain  exposure  to the market  while,  at the same time,  maintaining  a high
degree of liquidity in order to meet shareholder redemptions or other needs. Use
of some  derivatives  may have the effect of leveraging the Fund's exposure to a
particular  asset class or other  investment,  which heightens risk but may also
allow  for  enhanced  returns.  In  implementing  this  strategy,  the  Fund may
experience a high portfolio turnover rate.

Investment Techniques


Descriptions  in  this  Statement  of  Additional  Information  of a  particular
investment  practice  or  technique  in which the Fund may  engage  are meant to
describe  the  spectrum  of  investments  that  the  Advisor  or the  subadvisor

                                       3
<PAGE>

(hereinafter the "Advisor") in its discretion might, but is not required to, use
in managing the Fund's  portfolio  assets.  The Advisor may in its discretion at
any time employ such a practice,  technique or instrument  for one or more funds
but not for all funds  advised by it.  Furthermore,  it is possible that certain
types of financial instruments or investment techniques described herein may not
be available, permissible, economically feasible or effective for their intended
purposes in all markets. Certain practices, techniques or instruments may not be
principal  activities of the Fund, but, to the extent employed,  could from time
to time have a material impact on the Fund's performance. The Fund may engage in
certain practices not described herein.

Borrowing.  As a matter of  fundamental  policy,  the Fund may not borrow money,
except as  permitted  under the 1940 Act,  and as  interpreted  or  modified  by
regulatory authority having jurisdiction, from time to time. While the Fund does
not currently  intend to borrow for investment  leveraging  purposes,  if such a
strategy were implemented in the future it would increase the Fund's  volatility
and the risk of loss in a declining  market.  Borrowing by the Fund will involve
special risk  considerations.  The Fund's  assets may change in value during the
time a borrowing is outstanding, thus increasing exposure to capital risk.


Common  Stocks.  Common  stock is issued by companies to raise cash for business
purposes  and  represents  a  proportionate  interest in the issuing  companies.
Therefore,  the Fund  participates  in the  success or failure of any company in
which  it  holds  stock.  The  market  values  of  common  stock  can  fluctuate
significantly,  reflecting  the  business  performance  of the issuing  company,
investor perception and general economic and financial market movements. Despite
the risk of price volatility, however, common stocks have historically offered a
greater potential for long-term gain on investment, compared to other classes of
financial  assets such as bonds or cash  equivalents,  although  there can be no
assurance that this will be true in the future.

Convertible Securities. The Fund may invest in convertible securities,  that is,
bonds,  notes,  debentures,  preferred  stocks  and other  securities  which are
convertible into common stock. Investments in convertible securities can provide
an  opportunity  for capital  appreciation  and/or income  through  interest and
dividend payments by virtue of their conversion or exchange features.

The convertible  securities in which the Fund may invest are either fixed income
or zero coupon debt  securities  which may be converted or exchanged at a stated
or  determinable  exchange  ratio into  underlying  shares of common stock.  The
exchange ratio for any particular convertible security may be adjusted from time
to time due to stock splits, dividends, spin-offs, other corporate distributions
or scheduled  changes in the exchange  ratio.  Convertible  debt  securities and
convertible  preferred  stocks,  until converted,  have general  characteristics
similar to both debt and equity  securities.  Although  to a lesser  extent than
with debt securities generally, the market value of convertible securities tends
to decline as interest  rates  increase  and,  conversely,  tends to increase as
interest  rates  decline.  In addition,  because of the  conversion  or exchange
feature,  the market value of convertible  securities  typically  changes as the
market value of the underlying common stocks changes, and, therefore, also tends
to follow  movements  in the  general  market  for equity  securities.  A unique
feature of convertible  securities is that as the market price of the underlying
common stock declines,  convertible  securities tend to trade  increasingly on a
yield basis, and so may not experience  market value declines to the same extent
as the underlying  common stock.  When the market price of the underlying common
stock  increases,  the prices of the  convertible  securities  tend to rise as a
reflection of the value of the underlying common stock,  although  typically not
as much as the  underlying  common stock.  While no securities  investments  are
without risk,  investments in convertible  securities generally entail less risk
than investments in common stock of the same issuer.

As debt securities,  convertible  securities are investments which provide for a
stream of income (or in the case of zero coupon securities, accretion of income)
with  generally  higher  yields  than  common  stocks.   Convertible  securities
generally offer lower yields than non-convertible  securities of similar quality
because of their conversion or exchange features.

Of course,  like all debt  securities,  there can be no  assurance  of income or
principal payments because the issuers of the convertible securities may default
on their obligations.

                                       4
<PAGE>

Convertible   securities   generally  are  subordinated  to  other  similar  but
non-convertible  securities of the same issuer,  although  convertible bonds, as
corporate debt  obligations,  enjoy  seniority in right of payment to all equity
securities,  and  convertible  preferred stock is senior to common stock, of the
same issuer.  However,  because of the subordination feature,  convertible bonds
and  convertible  preferred  stock  typically  have lower  ratings  than similar
non-convertible securities. Convertible securities may be issued as fixed income
obligations that pay current income or as zero coupon notes and bonds, including
Liquid Yield Option Notes ("LYONs"(TM)).

Debt  Securities.  The Fund may invest in debt  securities,  including  bonds of
private  issuers.  Portfolio debt  investments will be selected on the basis of,
among other things,  credit quality,  and the fundamental outlooks for currency,
economic  and interest  rate trends,  taking into account the ability to hedge a
degree  of  currency  or  local  bond  price   risk.   The  Fund  may   purchase
`investment-grade'  bonds,  rated Aaa,  Aa, A or Baa by Moody's or AAA, AA, A or
BBB by S&P or, if unrated,  judged to be of equivalent  quality as determined by
the Advisor.

The principal  risks involved with  investments  in bonds include  interest rate
risk, credit risk and pre-payment risk.  Interest rate risk refers to the likely
decline in the value of bonds as  interest  rates rise.  Generally,  longer-term
securities are more susceptible to changes in value as a result of interest-rate
changes than are shorter-term securities. Credit risk refers to the risk that an
issuer of a bond may  default  with  respect  to the  payment of  principal  and
interest.  The  lower  a bond  is  rated,  the  more  it is  considered  to be a
speculative or risky  investment.  Pre-payment risk is commonly  associated with
pooled debt  securities,  such as  mortgage-backed  securities  and asset backed
securities,  but may affect other debt  securities as well.  When the underlying
debt obligations are prepaid ahead of schedule,  the return on the security will
be lower than expected.  Pre-payment  rates usually increase when interest rates
are falling.

Depositary  Receipts.  The Fund may invest in sponsored or unsponsored  American
Depositary  Receipts ("ADRs"),  European  Depositary  Receipts ("EDRs"),  Global
Depositary  Receipts ("GDRs"),  International  Depositary  Receipts ("IDRs") and
other types of Depositary  Receipts  (which,  together with ADRs, EDRs, GDRs and
IDRs are hereinafter referred to as "Depositary Receipts").  Depositary Receipts
provide  indirect  investment  in  securities  of  foreign  issuers.  Prices  of
unsponsored Depositary Receipts may be more volatile than if they were sponsored
by  the  issuer  of the  underlying  securities.  Depositary  Receipts  may  not
necessarily be  denominated  in the same currency as the  underlying  securities
into which  they may be  converted.  In  addition,  the  issuers of the stock of
unsponsored   Depositary   Receipts  are  not  obligated  to  disclose  material
information in the United States and, therefore,  there may not be a correlation
between such information and the market value of the Depositary  Receipts.  ADRs
are  Depositary  Receipts which are bought and sold in the United States and are
typically  issued by a US bank or trust company and which evidence  ownership of
underlying  securities by a foreign  corporation.  GDRs, IDRs and other types of
Depositary  Receipts are typically  issued by foreign banks or trust  companies,
although they may also be issued by United States banks or trust companies,  and
evidence  ownership  of  underlying  securities  issued by either a foreign or a
United States corporation. Generally, Depositary Receipts in registered form are
designed for use in the United States securities markets and Depositary Receipts
in bearer form are designed  for use in  securities  markets  outside the United
States. For purposes of the Fund's investment  policies,  the Fund's investments
in ADRs,  GDRs and  other  types of  Depositary  Receipts  will be  deemed to be
investments in the underlying securities.  Depositary Receipts,  including those
denominated  in US dollars  will be subject to foreign  currency  exchange  rate
risk. However, by investing in US  dollar-denominated  ADRs rather than directly
in foreign  issuers' stock, the Fund avoids currency risks during the settlement
period.  In general,  there is a large,  liquid  market in the United States for
most ADRs. However, certain Depositary Receipts may not be listed on an exchange
and therefore may be illiquid securities.


Eurodollar Instruments.  The Fund may make investments in Eurodollar instruments
for hedging purposes or to enhance potential gain. Eurodollar instruments are US
dollar-denominated  futures contracts or options thereon which are linked to the
London Interbank Offered Rate (`LIBOR'),  although foreign  currency-denominated
instruments are available from time to time. Eurodollar futures contracts enable
purchasers to obtain a fixed rate for the lending of funds and sellers to obtain
a fixed rate for borrowings. The Fund might use Eurodollar futures contracts and
options  thereon to hedge against  changes in LIBOR, to which many interest rate
swaps and fixed income instruments are linked.


                                       5
<PAGE>

Eurodollar  Obligations.  Eurodollar bank obligations are US  dollar-denominated
certificates  of deposit and time deposits issued outside the US capital markets
by foreign  branches of US banks and US branches  of foreign  banks.  Eurodollar
obligations  are  subject  to the same risks that  pertain to  domestic  issues,
notably credit risk,  market risk and liquidity risk.  Additionally,  Eurodollar
obligations are subject to certain sovereign risks.


Foreign  Currencies.  Because  investments  in foreign  securities  usually will
involve currencies of foreign  countries,  and because the Fund may hold foreign
currencies  and  forward  contracts,   futures  contracts,  options  on  foreign
currencies and foreign  currency  futures  contracts and other  currency-related
instruments, the value of the assets of the Fund as measured in U.S. dollars may
be affected  favorably or  unfavorably by changes in foreign  currency  exchange
rates  and  exchange  control  regulations,  and the Fund may  incur  costs  and
experience   conversion   difficulties  and  uncertainties  in  connection  with
conversions between various currencies.  Fluctuations in exchange rates may also
affect the  earning  power and asset  value of the  foreign  entity  issuing the
security.


The  strength  or  weakness  of the U.S.  dollar  against  these  currencies  is
responsible for part of the Fund's investment  performance.  If the dollar falls
in value  relative to the  Japanese  yen,  for  example,  the dollar  value of a
Japanese  stock  held in the  portfolio  will rise even  though the price of the
stock remains  unchanged.  Conversely,  if the dollar rises in value relative to
the yen,  the  dollar  value of the  Japanese  stock  will  fall.  Many  foreign
currencies have experienced significant devaluation relative to the dollar.

Although the Fund values its assets daily in terms of U.S. dollars,  it does not
intend to convert its  holdings  of foreign  currencies  into U.S.  dollars on a
daily basis.  It will do so from time to time, and investors  should be aware of
the costs of  currency  conversion.  Although  foreign  exchange  dealers do not
charge a fee for  conversion,  they do realize a profit based on the  difference
(the `spread')  between the prices at which they are buying and selling  various
currencies.  Thus, a dealer may offer to sell a foreign  currency to the Fund at
one rate,  while  offering a lesser rate of  exchange  should the Fund desire to
resell that currency to the dealer.  The Fund will conduct its foreign  currency
exchange  transactions  either  on a spot  (i.e.,  cash)  basis at the spot rate
prevailing in the foreign  currency  exchange  market,  or through entering into
options or forward or futures contracts to purchase or sell foreign currencies.

Foreign Fixed Income Securities.  Since most foreign fixed income securities are
not rated,  a fund will invest in foreign fixed income  securities  based on the
Advisor's analysis without relying on published ratings.  Since such investments
will be based upon the Advisor's  analysis  rather than upon published  ratings,
achievement  of a fund's goals may depend more upon the abilities of the Advisor
than would otherwise be the case.

The value of the foreign fixed income  securities  held by a fund,  and thus the
net asset value of a fund's shares, generally will fluctuate with (a) changes in
the perceived creditworthiness of the issuers of those securities, (b) movements
in interest  rates,  and (c) changes in the relative values of the currencies in
which a fund's  investments  in fixed income  securities  are  denominated  with
respect to the US Dollar.  The extent of the fluctuation  will depend on various
factors,  such as the average maturity of a fund's  investments in foreign fixed
income  securities,  and the extent to which a fund  hedges its  interest  rate,
credit and currency exchange rate risks. A longer average maturity  generally is
associated  with a  higher  level  of  volatility  in the  market  value of such
securities in response to changes in market conditions.

Investments  in  sovereign  debt,  including  Brady Bonds  (Brady Bonds are debt
securities   issued  under  a  plan  implemented  to  allow  debtor  nations  to
restructure their  outstanding  commercial bank  indebtedness),  involve special
risks. Foreign governmental issuers of debt or the governmental authorities that
control the repayment of the debt may be unable or unwilling to repay  principal
or pay  interest  when due. In the event of default,  there may be limited or no
legal recourse in that, generally,  remedies for defaults must be pursued in the
courts of the defaulting  party.  Political  conditions,  especially a sovereign
entity's  willingness to meet the terms of its fixed income  securities,  are of
considerable  significance.  Also, there can be no assurance that the holders of
commercial bank loans to the same sovereign  entity may not contest  payments to
the holders of sovereign debt in the event of default under commercial bank loan
agreements.  In  addition,  there is no  bankruptcy  proceeding  with respect to
sovereign debt on which a sovereign has  defaulted,  and a fund may be unable to
collect  all or any  part  of its  investment  in a  particular  issue.  Foreign
investment  in certain  sovereign  debt is  restricted  or controlled to varying
degrees,  including  requiring  governmental  approval for the  repatriation  of
income, capital or proceed of sales by foreign investors.  These


                                       6
<PAGE>

restrictions  or controls may at times limit or preclude  foreign  investment in
certain sovereign debt or increase the costs and expenses of a fund.

Sovereign  debt of  emerging  market  governmental  issuers is to be  considered
speculative.  Emerging market governmental issuers are among the largest debtors
to commercial banks, foreign governments,  international financial organizations
and other financial  institutions.  Certain emerging market governmental issuers
have  not  been  able to make  payments  of  interest  on or  principal  of debt
obligations as those payments have come due. There is a history of defaults with
respect  to  commercial  bank  loans by  public  and  private  entities  issuing
sovereign  debt.  All or a portion of the  interest  payments  and/or  principal
repayment  with respect to sovereign debt may be  uncollateralized.  Obligations
arising from past restructuring  agreements may affect the economic  performance
and political and social stability of those issuers.

The  ability of  emerging  market  country  governmental  issuers to make timely
payments  on their  obligations  is  likely  to be  influenced  strongly  by the
issuer's balance of payments,  including export  performance,  and its access to
international  credits and  investments.  An emerging  market whose  exports are
concentrated  in a few  commodities  could be  vulnerable  to a  decline  in the
international   prices   of  one  or  more  of  those   commodities.   Increased
protectionism  on the part of an emerging  market's  trading partners could also
adversely  affect the country's  exports and diminish its trade account surplus,
if any. To the extent that emerging  markets  receive payment for its exports in
currencies other than dollars or non-emerging market currencies,  its ability to
make debt payments  denominated  in dollars or  non-emerging  market  currencies
could be affected.

Another factor bearing on the ability of emerging market countries to repay debt
obligations is the level of international reserves of the country.  Fluctuations
in the level of these  reserves  affect the amount of foreign  exchange  readily
available  for  external  debt  payments  and thus  could  have a bearing on the
capacity  of  emerging   market   countries  to  make  payments  on  these  debt
obligations.

To the extent that an emerging  market country cannot  generate a trade surplus,
it must  depend on  continuing  loans  from  foreign  governments,  multilateral
organizations or private commercial banks, aid payments from foreign governments
and inflows of foreign investment. The access of emerging markets to these forms
of external  funding may not be certain,  and a withdrawal  of external  funding
could  adversely  affect the capacity of emerging  market  country  governmental
issuers  to make  payments  on  their  obligations.  In  addition,  the  cost of
servicing  emerging  market  debt  obligations  can be  affected  by a change in
international  interest  rates  since the  majority of these  obligations  carry
interest rates that are adjusted periodically based upon international rates.

Foreign  Investment.  Foreign securities are normally  denominated and traded in
foreign currencies. As a result, the value of the Fund's foreign investments and
the value of its shares may be affected  favorably or  unfavorably by changes in
currency exchange rates relative to the US dollar. There may be less information
publicly  available  about a foreign issuer than about a US issuer,  and foreign
issuers  may not be subject to  accounting,  auditing  and  financial  reporting
standards  and practices  comparable to those in the US. The  securities of some
foreign  issuers are less liquid and at times more volatile  than  securities of
comparable US issuers.  Foreign  brokerage  commissions  and other fees are also
generally  higher  than in the  US.  Foreign  settlement  procedures  and  trade
regulations  may involve  certain risks (such as delay in payment or delivery of
securities or in the recovery of the Fund's assets held abroad) and expenses not
present in the settlement of  investments in US markets.  Payment for securities
without delivery may be required in certain foreign markets.

In addition, foreign securities may be subject to the risk of nationalization or
expropriation   of  assets,   imposition  of  currency   exchange   controls  or
restrictions on the  repatriation of foreign  currency,  confiscatory  taxation,
political or  financial  instability  and  diplomatic  developments  which could
affect  the  value of the  Fund's  investments  in  certain  foreign  countries.
Governments   of  many   countries  have  exercised  and  continue  to  exercise
substantial  influence  over many  aspects of the  private  sector  through  the
ownership or control of many  companies,  including some of the largest in these
countries.  As  a  result,  government  actions  in  the  future  could  have  a
significant  effect on economic  conditions which may adversely affect prices of
certain   portfolio   securities.   There  is  also  generally  less  government
supervision and regulation of stock  exchanges,  brokers,  and listed  companies
than in the US.  Dividends or interest on, or proceeds from the sale of, foreign
securities  may be subject  to foreign  withholding  taxes,  and  special US tax
considerations  may apply.  Moreover,  foreign economies may differ favorably or
unfavorably  from the US economy


                                       7
<PAGE>

in such respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payments position.

Legal remedies  available to investors in certain foreign  countries may be more
limited than those  available  with respect to investments in the US or in other
foreign  countries.  The laws of some  foreign  countries  may limit the  Fund's
ability to invest in securities of certain  issuers  organized under the laws of
those foreign countries.

Of particular  importance,  many foreign  countries are heavily  dependent  upon
exports,  particularly to developed countries,  and, accordingly,  have been and
may continue to be adversely affected by trade barriers,  managed adjustments in
relative currency values, and other protectionist measures imposed or negotiated
by the US and other  countries with which they trade.  These economies also have
been and may continue to be negatively impacted by economic conditions in the US
and other  trading  partners,  which can lower the demand for goods  produced in
those countries.

The  risks  described  above,   including  the  risks  of   nationalization   or
expropriation of assets,  typically are increased in connection with investments
in `emerging  markets.' For example,  political and economic structures in these
countries may be in their infancy and developing rapidly, and such countries may
lack  the  social,  political  and  economic  stability  characteristic  of more
developed countries (including amplified risk of war and terrorism).  Certain of
these countries have in the past failed to recognize private property rights and
have at times  nationalized and  expropriated  the assets of private  companies.
Investments in emerging markets may be considered speculative.

The  currencies  of  certain   emerging   market   countries  have   experienced
devaluations  relative to the US dollar,  and future  devaluations may adversely
affect the value of assets denominated in such currencies. In addition, currency
hedging techniques may be unavailable in certain emerging market countries. Many
emerging  market  countries have  experienced  substantial,  and in some periods
extremely  high,  rates of  inflation or  deflation  for many years,  and future
inflation may adversely  affect the  economies  and  securities  markets of such
countries.

In addition, unanticipated political or social developments may affect the value
of  investments  in  emerging   markets  and  the   availability  of  additional
investments  in these  markets.  Any change in the  leadership  or  politics  of
emerging  market  countries,  or  the  countries  that  exercise  a  significant
influence  over  those  countries,  may halt the  expansion  of or  reverse  the
liberalization of foreign investment policies now occurring and adversely affect
existing  investment  opportunities.  The small size, limited trading volume and
relative  inexperience  of the  securities  markets in these  countries may make
investments in securities  traded in emerging markets illiquid and more volatile
than investments in securities traded in more developed countries.  For example,
limited  market  size may cause  prices to be unduly  influenced  by traders who
control  large  positions.  In  addition,  the Fund may be required to establish
special custodial or other arrangements  before making investments in securities
traded  in  emerging  markets.  There  may be  little  financial  or  accounting
information available with respect to issuers of emerging market securities, and
it may be  difficult  as a  result  to  assess  the  value  of  prospects  of an
investment in such securities.


The risk  also  exists  that an  emergency  situation  may  arise in one or more
emerging  markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Fund's securities in such markets may
not be readily available.  The Fund may suspend redemption of its shares for any
period during which an emergency exists,  as determined by the SEC.  Accordingly
if a Fund believes that appropriate circumstances exist, it may apply to the SEC
for a determination  that an emergency is present.  During the period commencing
from a Fund's identification of such condition until the date of the SEC action,
the  Fund's  securities  in the  affected  markets  will be valued at fair value
determined in good faith by or under the direction of the Fund's Board.


Certain of the foregoing risks may also apply to some extent to securities of US
issuers that are denominated in foreign currencies or that are traded in foreign
markets, or securities of US issuers having significant foreign operations.

High Yield/High Risk Bonds. The Fund may also purchase debt securities which are
rated below  investment-grade  (commonly referred to as `junk bonds'),  that is,
rated below Baa by Moody's or below BBB by S&P and unrated  securities judged to
be of equivalent quality as determined by the Advisor.  These securities usually
entail greater


                                       8
<PAGE>

risk  (including the possibility of default or bankruptcy of the issuers of such
securities), generally involve greater volatility of price and risk to principal
and  income,  and may be less  liquid,  than  securities  in the  higher  rating
categories.  The lower the ratings of such debt securities, the more their risks
render them like equity  securities.  Securities  rated D may be in default with
respect to payment of principal or interest.

Issuers of such high yielding  securities often are highly leveraged and may not
have available to them more  traditional  methods of financing.  Therefore,  the
risk  associated  with  acquiring the  securities  of such issuers  generally is
greater than is the case with higher rated  securities.  For example,  during an
economic  downturn  or a  sustained  period of  rising  interest  rates,  highly
leveraged  issuers of high yield  securities  may experience  financial  stress.
During such periods, such issuers may not have sufficient revenues to meet their
interest  payment  obligations.   The  issuer's  ability  to  service  its  debt
obligations may also be adversely affected by specific  corporate  developments,
or the issuer's inability to meet specific projected business forecasts,  or the
unavailability  of  additional  financing.  The risk of loss from default by the
issuer is significantly greater for the holders of high yield securities because
such  securities  are generally  unsecured and are often  subordinated  to other
creditors  of the  issuer.  Prices  and  yields of high  yield  securities  will
fluctuate over time and, during periods of economic  uncertainty,  volatility of
high  yield  securities  may  adversely  affect a fund's  net  asset  value.  In
addition,  investments  in high yield zero coupon or pay-in-kind  bonds,  rather
than  income-bearing  high yield securities,  may be more speculative and may be
subject to greater fluctuations in value due to changes in interest rates.

The Fund may have  difficulty  disposing  of  certain  high  yield  (high  risk)
securities because they may have a thin trading market.  Because not all dealers
maintain  markets in all high yield  securities,  the Fund anticipates that such
securities  could be sold only to a limited  number of dealers or  institutional
investors.  The lack of a liquid  secondary market may have an adverse effect on
the market price and the Fund's ability to dispose of particular  issues and may
also make it more difficult for a fund to obtain accurate market  quotations for
purposes of valuing the Fund's assets. Market quotations generally are available
on many high yield  issues  only from a limited  number of  dealers  and may not
necessarily  represent  firm bids of such  dealers or prices  for actual  sales.
Adverse publicity and investor perceptions may decrease the values and liquidity
of high yield securities. These securities may also involve special registration
responsibilities,   liabilities   and  costs,   and   liquidity   and  valuation
difficulties.

Credit  quality in the  high-yield  securities  market can change  suddenly  and
unexpectedly,  and even recently issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield security. For these reasons, it is
generally the policy of the Advisor not to rely exclusively on ratings issued by
established credit rating agencies,  but to supplement such ratings with its own
independent and on-going review of credit quality. The achievement of the Fund's
investment  objective by investment in such  securities may be more dependent on
the Advisor's credit analysis than is the case for higher quality bonds.  Should
the rating of a portfolio  security be  downgraded,  the Advisor will  determine
whether  it is in the best  interests  of the Fund to retain or  dispose of such
security.


Illiquid Securities and Restricted Securities.  The Fund may purchase securities
that are subject to legal or  contractual  restrictions  on resale  ("restricted
securities").  Generally  speaking,  restricted  securities  may be sold  (i) to
qualified  institutional buyers; (ii) in a privately negotiated transaction to a
limited number of purchasers;  (iii) in limited  quantities after they have been
held for a specified  period of time and other conditions are met pursuant to an
exemption  from  registration;  or  (iv)  in  a  public  offering  for  which  a
registration statement is in effect under the Securities Act of 1933, as amended
(the `1933 Act').  Issuers of  restricted  securities  may not be subject to the
disclosure and other investor  protection  requirements that would be applicable
if their securities were publicly traded.


Restricted  securities  are often  illiquid,  but they may also be  liquid.  For
example,  restricted securities that are eligible for resale under Rule 144A are
often deemed to be liquid.

The Fund's Board has approved  guidelines  for use by the Advisor in determining
whether a security  is liquid or  illiquid.  Among the  factors  the Advisor may
consider in reaching  liquidity  decisions relating to Rule 144A securities are:
(1) the  frequency  of trades  and quotes  for the  security;  (2) the number of
dealers  wishing  to  purchase  or sell the  security  and the  number  of other
potential purchasers;  (3) dealer undertakings to make a market in the security;
and (4) the nature of the security and the nature of the market for the security
(i.e.,  the time  needed to dispose of the  security,  the method of  soliciting
offers, and the mechanics of the transfer.  Issuers of restricted securities may
not be


                                       9
<PAGE>

subject to the disclosure and other investor  protection  requirement that would
be applicable if their  securities  were publicly  traded.  Where a registration
statement is required for the resale of restricted  securities,  the Fund may be
required  to bear  all or part of the  registration  expenses.  The  Fund may be
deemed  to be an  "underwriter"  for  purposes  of the 1933  Act,  when  selling
restricted  securities to the public and, in such event,  the Fund may be liable
to purchasers of such securities if the registration  statement  prepared by the
issuer is materially inaccurate or misleading.

The  Fund  may  also  purchase  securities  that  are not  subject  to  legal or
contractual   restrictions  on  resale,  but  that  are  deemed  illiquid.  Such
securities  may be illiquid,  for example,  because  there is a limited  trading
market for them.

The Fund may be unable to sell a restricted or illiquid  security.  In addition,
it may be more  difficult to determine a market value for restricted or illiquid
securities.  Moreover,  if adverse market  conditions were to develop during the
period between the Fund's decision to sell a restricted or illiquid security and
the point at which the Fund is permitted or able to sell such security, the Fund
might  obtain a price  less  favorable  than the price  that  prevailed  when it
decided to sell.


Impact of Large  Redemptions  and  Purchases of Fund Shares.  From time to time,
shareholders  of the Fund (which may include  affiliated  and/or  non-affiliated
registered  investment  companies  that invest in the Fund) may make  relatively
large redemptions or purchases of Fund shares.  These transactions may cause the
Fund to have to sell securities or invest  additional  cash, as the case may be.
While it is impossible to predict the overall impact of these  transactions over
time,  there could be adverse  effects on the Fund's  performance  to the extent
that the Fund may be required to sell securities or invest cash at times when it
would  not  otherwise  do so.  These  transactions  could  also  accelerate  the
realization of taxable  income if sales of securities  resulted in capital gains
and could also increase  transaction  costs, which may impact the Fund's expense
ratio.




IPO Risk.  Securities  issued  through  an  initial  public  offering  (IPO) can
experience an immediate drop in value if the demand for the securities  does not
continue to support the  offering  price.  Information  about the issuers of IPO
securities is also difficult to acquire since they are new to the market and may
not have lengthy operating histories.  The Fund may engage in short-term trading
in connection with its IPO investments, which could produce higher trading costs
and  adverse  tax  consequences.  The number of  securities  issued in an IPO is
limited,  so it is likely that IPO securities will represent a smaller component
of the Fund's  portfolio  as the Fund's  assets  increase  (and thus have a more
limited effect on the Fund's performance).

Interfund Borrowing and Lending Program.  The Fund has received exemptive relief
from the SEC,  which  permits the Fund to  participate  in an interfund  lending
program among certain investment companies advised by the Advisor. The interfund
lending  program  allows the  participating  funds to borrow money from and loan
money to each other for temporary or emergency purposes.  The program is subject
to a number of conditions designed to ensure fair and equitable treatment of all
participating  funds,  including  the  following:  (1) no fund may borrow  money
through the program  unless it receives a more  favorable  interest  rate than a
rate  approximating  the  lowest  interest  rate at which  bank  loans  would be
available to any of the participating  funds under a loan agreement;  and (2) no
fund may lend money  through  the program  unless it  receives a more  favorable
return than that available from an investment in repurchase  agreements  and, to
the extent applicable, money market cash sweep arrangements. In addition, a fund
may participate in the program only if and to the extent that such participation
is consistent with the fund's investment  objectives and policies (for instance,
money market  funds would  normally  participate  only as lenders and tax exempt
funds  only as  borrowers).  Interfund  loans and  borrowings  may  extend  only
overnight,  but could have a maximum duration of seven days. Loans may be called
on one day's notice.  A fund may have to borrow from a bank at a higher interest
rate if an interfund loan is called or not renewed.  Any delay in repayment to


                                       10
<PAGE>

a lending  fund could  result in a lost  investment  opportunity  or  additional
costs. The program is subject to the oversight and periodic review of the Boards
of the  participating  funds.  To the  extent  the Fund is  actually  engaged in
borrowing through the interfund lending program, the Fund will comply with their
respective nonfundamental policies on borrowing.

Investment  Company  Securities.  The  Fund  may  acquire  securities  of  other
investment  companies to the extent consistent with its investment objective and
subject to the  limitations of the 1940 Act. The Fund will  indirectly  bear its
proportionate share of any management fees and other expenses paid by such other
investment companies.

For example, the Fund may invest in a variety of investment companies which seek
to track the  composition  and  performance  of  specific  indexes or a specific
portion of an index.  These  index-based  investments hold  substantially all of
their assets in securities representing their specific index.  Accordingly,  the
main risk of investing in index-based  investments is the same as investing in a
portfolio  of equity  securities  comprising  the index.  The  market  prices of
index-based  investments  will fluctuate in accordance  with both changes in the
market  value of their  underlying  portfolio  securities  and due to supply and
demand for the  instruments on the exchanges on which they are traded (which may
result in their  trading at a discount  or premium to their  NAVs).  Index-based
investments  may not replicate  exactly the performance of their specified index
because of  transaction  costs and because of the  temporary  unavailability  of
certain component securities of the index.

Examples of index-based investments include:

SPDRs(R):  SPDRs,  an acronym for "Standard & Poor's  Depositary  Receipts," are
based on the S&P 500  Composite  Stock Price Index.  They are issued by the SPDR
Trust,  a unit  investment  trust that  holds  shares of  substantially  all the
companies  in the S&P 500 in  substantially  the  same  weighting  and  seeks to
closely track the price performance and dividend yield of the Index.

MidCap  SPDRs(R):  MidCap SPDRs are based on the S&P MidCap 400 Index.  They are
issued by the MidCap SPDR Trust, a unit investment  trust that holds a portfolio
of securities  consisting of  substantially  all of the common stocks in the S&P
MidCap 400 Index in substantially  the same weighting and seeks to closely track
the price performance and dividend yield of the Index.

Select Sector SPDRs(R):  Select Sector SPDRs are based on a particular sector or
group of  industries  that are  represented  by a specified  Select Sector Index
within the Standard & Poor's Composite Stock Price Index. They are issued by The
Select Sector SPDR Trust, an open-end  management  investment  company with nine
portfolios  that each seeks to closely track the price  performance and dividend
yield of a particular Select Sector Index.

DIAMONDS(SM):  DIAMONDS are based on the Dow Jones Industrial Average(SM).  They
are issued by the DIAMONDS Trust, a unit investment trust that holds a portfolio
of all the component common stocks of the Dow Jones Industrial Average and seeks
to closely track the price performance and dividend yield of the Dow.

Nasdaq-100 Shares: Nasdaq-100 Shares are based on the Nasdaq 100 Index. They are
issued by the Nasdaq-100  Trust, a unit investment  trust that holds a portfolio
consisting of substantially  all of the securities,  in  substantially  the same
weighting,  as the component stocks of the Nasdaq 100 Index and seeks to closely
track the price performance and dividend yield of the Index.



Investment of  Uninvested  Cash  Balances.  The Fund may have cash balances that
have not been invested in portfolio securities  ("Uninvested Cash").  Uninvested
Cash may result  from a variety of  sources,  including  dividends  or  interest
received from portfolio securities, unsettled securities transactions,  reserves
held for  investment  strategy  purposes,  scheduled  maturity  of  investments,
liquidation  of  investment  securities  to  meet  anticipated  redemptions  and
dividend payments, and new cash received from investors.  Uninvested Cash may be
invested  directly  in  money


                                       11
<PAGE>

market  instruments  or  other  short-term  debt  obligations.  Pursuant  to  an
Exemptive  Order issued by the SEC, the Fund may use Uninvested Cash to purchase
shares of affiliated  funds including money market funds,  short-term bond funds
and Cash  Management  QP Trust or one or more  future  entities  for  which  the
Advisor acts as trustee or  investment  advisor that operate as cash  management
investment  vehicles and that are excluded  from the  definition  of  investment
company  pursuant to section  3(c)(1) or 3(c)(7) of the 1940 Act  (collectively,
the "Central  Funds") in excess of the  limitations  of Section  12(d)(1) of the
1940  Act.  Investment  by the Fund in shares of the  Central  Funds  will be in
accordance with the Fund's investment  policies and restrictions as set forth in
its registration statement.

Certain of the Central Funds comply with rule 2a-7 under the 1940 Act. The other
Central Funds are or will be short-term  bond funds that invest in  fixed-income
securities  and maintain a dollar  weighted  average  maturity of three years or
less.  Each of the  Central  Funds will be managed  specifically  to  maintain a
highly liquid  portfolio,  and access to them will enhance the Fund's ability to
manage Uninvested Cash.

The Fund will invest  Uninvested  Cash in Central  Funds only to the extent that
the Fund's aggregate  investment in the Central Funds does not exceed 25% of its
total  assets.  Purchase  and sales of shares of  Central  Funds are made at net
asset value.


Lending of Portfolio Securities.  The Fund may lend its investment securities to
approved institutional borrowers,  including those who need to borrow securities
in order  to  complete  certain  transactions,  such as  covering  short  sales,
avoiding failures to deliver securities or completing arbitrage  operations.  By
lending  its  investment  securities,  the Fund  attempts  to  increase  its net
investment  income through the receipt of interest on the loan. Any gain or loss
in the market price of the securities loaned that might occur during the term of
the loan would belong to the Fund. The Fund may lend its  investment  securities
so long as the terms,  structure and the aggregate  amount of such loans are not
inconsistent  with the 1940 Act or the rules and regulations or  interpretations
of the SEC thereunder,  which currently require that (a) the borrower pledge and
maintain  with the Fund  collateral  consisting of liquid,  unencumbered  assets
having a value at all times  not less  than 100% of the value of the  securities
loaned,  (b) the  borrower  add to such  collateral  whenever  the  price of the
securities  loaned  rises (i.e.,  the borrower  `marks to the market' on a daily
basis), (c) the loan be made subject to termination by the Fund at any time, and
(d) the Fund  receives  reasonable  interest  on the loan (which may include the
Fund investing any cash collateral in interest bearing short-term  investments),
and  distributions  on the loaned  securities  and any  increase in their market
value. There may be risks of delay in recovery of the securities or even loss of
rights in the collateral should the borrower of the securities fail financially.
However,  loans will be made only to borrowers  selected by the Fund's  delegate
after a  commercially  reasonable  review of relevant  facts and  circumstances,
including the creditworthiness of the borrower.


At the  present  time,  the staff of the SEC does not  object  if an  investment
company pays reasonable negotiated fees in connection with loaned securities, so
long as such  fees are set  forth in a  written  contract  and  approved  by the
investment  company's  Board of Directors.  In addition,  voting rights may pass
with  the  loaned  securities,  but if a  material  event  occurs  affecting  an
investment on loan, the loan must be called and the securities  voted.  Pursuant
to an exemptive order granted by the SEC, cash  collateral  received by the Fund
may be  invested in a money  market  fund  managed by the Advisor (or one of its
affiliates).

Micro-Cap Company Risk. While, historically, micro-capitalization company stocks
have  outperformed  the stocks of large  companies,  the former have customarily
involved more investment risk as well.  There can be no assurance that this will
continue  to be true in the  future.  Micro-capitalization  companies  may  have
limited product lines, markets or financial resources; may lack management depth
or experience;  and may be more vulnerable to adverse general market or economic
developments than large companies.  The prices of  micro-capitalization  company
securities  are often more  volatile than prices  associated  with large company
issues,  and can display  abrupt or erratic  movements at times,  due to limited
trading volumes and less publicly available information.

Also,  because   micro-capitalization   companies  normally  have  fewer  shares
outstanding and these shares trade less frequently than large companies,  it may
be more  difficult  for the Fund to buy and  sell  significant  amounts  of such
shares without an unfavorable impact on prevailing market prices.

Some of the  companies  in which the Fund may  invest  may  distribute,  sell or
produce products which have recently been brought to market and may be dependent
on key  personnel.  The securities of  micro-capitalization  companies


                                       12
<PAGE>

are often traded  over-the-counter  and may not be traded in the volumes typical
on a national securities exchange.  Consequently,  in order to sell this type of
holding,  the Fund may need to discount  the  securities  from recent  prices or
dispose of the securities over a long period of time.

Participation  Interests.  The Fund may  purchase  from  financial  institutions
participation   interests  in  securities  in  which  the  Fund  may  invest.  A
participation  interest gives the Fund an undivided  interest in the security in
the  proportion  that the Fund's  participation  interest bears to the principal
amount of the security.  These instruments may have fixed,  floating or variable
interest  rates,  with  remaining  maturities  of  397  days  or  less.  If  the
participation  interest is unrated,  or has been given a rating below that which
is  permissible  for purchase by the Fund,  the  participation  interest will be
backed by an irrevocable letter of credit or guarantee of a bank, or the payment
obligation otherwise will be collateralized by US Government securities,  or, in
the case of unrated participation  interest,  determined by the Advisor to be of
comparable  quality  to those  instruments  in which  the Fund may  invest.  For
certain participation interests, the Fund will have the right to demand payment,
on not  more  than  seven  days'  notice,  for  all or any  part  of the  Fund's
participation  interests in the  security,  plus accrued  interest.  As to these
instruments,  the Fund generally intends to exercise its right to demand payment
only upon a default under the terms of the security.

Privatized Enterprises. Investments in foreign securities may include securities
issued  by  enterprises   that  have  undergone  or  are  currently   undergoing
privatization.  The  governments of certain  foreign  countries have, to varying
degrees,  embarked on privatization  programs  contemplating  the sale of all or
part of their  interests in state  enterprises.  The Fund's  investments  in the
securities  of  privatized   enterprises   may  include   privately   negotiated
investments in a government or  state-owned or controlled  company or enterprise
that has not yet  conducted  an  initial  equity  offering,  investments  in the
initial  offering of equity  securities  of a state  enterprise  or former state
enterprise and investments in the securities of a state enterprise following its
initial equity offering.

In certain jurisdictions,  the ability of foreign entities, such as the Fund, to
participate in privatizations may be limited by local law, or the price or terms
on which the Fund may be able to participate may be less  advantageous  than for
local investors.  Moreover, there can be no assurance that governments that have
embarked on  privatization  programs will continue to divest their  ownership of
state  enterprises,  that  proposed  privatizations  will be  successful or that
governments will not re-nationalize enterprises that have been privatized.

In the case of the enterprises in which the Fund may invest, large blocks of the
stock of those  enterprises may be held by a small group of  stockholders,  even
after  the  initial  equity  offerings  by those  enterprises.  The sale of some
portion or all of those blocks could have an adverse  effect on the price of the
stock of any such enterprise.

Prior to making an initial  equity  offering,  most state  enterprises or former
state  enterprises go through an internal  reorganization  or  management.  Such
reorganizations  are made in an attempt to better  enable these  enterprises  to
compete in the private sector. However,  certain reorganizations could result in
a  management  team  that does not  function  as well as an  enterprise's  prior
management and may have a negative effect on such enterprise.  In addition,  the
privatization  of an  enterprise  by its  government  may occur over a number of
years,  with the  government  continuing to hold a  controlling  position in the
enterprise even after the initial equity offering for the enterprise.

Prior to  privatization,  most of the  state  enterprises  in which the Fund may
invest  enjoy the  protection  of and receive  preferential  treatment  from the
respective  sovereigns that own or control them.  After making an initial equity
offering,  these  enterprises may no longer have such protection or receive such
preferential  treatment and may become subject to market  competition from which
they were  previously  protected.  Some of these  enterprises may not be able to
operate  effectively in a competitive market and may suffer losses or experience
bankruptcy due to such competition.

Real  Estate  Investment  Trusts  ("REITs").   REITs  are  sometimes  informally
categorized  into equity REITs,  mortgage REITs and hybrid REITs.  Investment in
REITs may subject the Fund to risks associated with the direct ownership of real
estate,  such  as  decreases  in real  estate  values,  overbuilding,  increased
competition  and other risks  related to local or general  economic  conditions,
increases  in  operating  costs and  property  taxes,  changes  in zoning  laws,
casualty or condemnation losses, possible environmental liabilities,  regulatory
limitations on rent and  fluctuations  in rental income.  Equity REITs generally
experience  these risks  directly  through fee or leasehold


                                       13
<PAGE>

interests,  whereas  mortgage REITs generally  experience these risks indirectly
through  mortgage  interests,   unless  the  mortgage  REIT  forecloses  on  the
underlying  real estate.  Changes in interest rates may also affect the value of
the Fund's  investment  in REITs.  For  instance,  during  periods of  declining
interest  rates,  certain  mortgage REITs may hold mortgages that the mortgagors
elect to prepay, which prepayment may diminish the yield on securities issued by
those REITs.

Certain REITs have relatively  small market  capitalizations,  which may tend to
increase the  volatility of the market price of their  securities.  Furthermore,
REITs  are  dependent  upon   specialized   management   skills,   have  limited
diversification and are,  therefore,  subject to risks inherent in operating and
financing a limited  number of  projects.  REITs are also  subject to heavy cash
flow dependency, defaults by borrowers and the possibility of failing to qualify
for tax-free  pass-through  of income  under the Code and to maintain  exemption
from the  registration  requirements  of the 1940  Act.  By  investing  in REITs
indirectly  through  the  Fund,  a  shareholder  will  bear  not only his or her
proportionate share of the expenses of the Fund, but also, indirectly,  expenses
of the REITs. In addition,  REITs depend  generally on their ability to generate
cash flow to make distributions to shareholders.

Repurchase  Agreements.  The Fund may enter in repurchase agreements pursuant to
its  investment  guidelines.  In  a  repurchase  agreement,  the  Fund  acquires
ownership of a security and  simultaneously  commits to resell that  security to
the seller, typically a bank or broker/dealer.

A repurchase agreement provides a means for the Fund to earn income on funds for
periods as short as overnight.  It is an  arrangement  under which the purchaser
(i.e., the Fund) acquires a security  ("Obligation")  and the seller agrees,  at
the time of sale, to repurchase  the  Obligation at a specified  time and price.
Securities  subject to a repurchase  agreement are held in a segregated  account
and, as described in more detail below, and the value of such securities kept at
least equal to the repurchase  price on a daily basis.  The repurchase price may
be higher than the purchase price,  the difference  being income to the Fund, or
the purchase and  repurchase  prices may be the same,  with interest at a stated
rate due to the Fund  together with the  repurchase  price upon  repurchase.  In
either case,  the income to the Fund is  unrelated  to the interest  rate on the
Obligation  itself.  Obligations will be held by the Custodian or in the Federal
Reserve Book Entry system.

It is not clear whether a court would consider the  Obligation  purchased by the
Fund  subject to a  repurchase  agreement as being owned by the Fund or as being
collateral  for a  loan  by  the  Fund  to  the  seller.  In  the  event  of the
commencement of bankruptcy or insolvency  proceedings with respect to the seller
of the  Obligation  before  repurchase  of the  Obligation  under  a  repurchase
agreement,  the Fund may  encounter  delay and incur costs  before being able to
sell the  security.  Delays may involve  loss of interest or decline in price of
the  Obligation.  If the court  characterizes  the transaction as a loan and the
Fund has not perfected a security  interest in the  Obligation,  the Fund may be
required to return the  Obligation  to the seller's  estate and be treated as an
unsecured creditor of the seller. As an unsecured creditor, the Fund would be at
risk  of  losing  some  or all of  the  principal  and  income  involved  in the
transaction.  As with any unsecured debt instrument  purchased for the Fund, the
Advisor  seeks to minimize the risk of loss  through  repurchase  agreements  by
analyzing the  creditworthiness  of the obligor,  in this case the seller of the
Obligation.  Apart from the risk of bankruptcy or insolvency proceedings,  there
is also the risk that the seller may fail to repurchase the Obligation, in which
case  the  Fund may  incur a loss if the  proceeds  to the Fund of the sale to a
third party are less than the  repurchase  price.  However,  if the market value
(including  interest)  of the  Obligation  subject to the  repurchase  agreement
becomes  less than the  repurchase  price  (including  interest),  the Fund will
direct the seller of the Obligation to deliver additional securities so that the
market value  (including  interest) of all securities  subject to the repurchase
agreement will equal or exceed the repurchase price.

Repurchase Commitments.  The Fund may enter into repurchase commitments with any
party  deemed   creditworthy  by  the  Advisor,   including  foreign  banks  and
broker/dealers,  if the transaction is entered into for investment  purposes and
the  counterparty's  creditworthiness  is at least  equal to that of  issuers of
securities  which the Fund may purchase.  Such  transactions may not provide the
Fund with collateral marked-to-market during the term of the commitment.

Reverse  Repurchase  Agreements.  The Fund may enter  into  "reverse  repurchase
agreements," which are repurchase agreements in which the Fund, as the seller of
the securities,  agrees to repurchase them at an agreed time and price. The Fund
maintains a segregated account in connection with outstanding reverse repurchase
agreements. The Fund will enter into reverse repurchase agreements only when the
Advisor  believes that the interest  income to


                                       14
<PAGE>

be earned from the investment of the proceeds of the transaction will be greater
than the interest  expense of the  transaction.  Such  transactions may increase
fluctuations in the market value of Fund assets and its yield.

Small Company  Risk.  The Advisor  believes  that many small  companies may have
sales and earnings growth rates which exceed those of larger companies, and that
such  growth  rates  may  in  turn  be  reflected  in  more  rapid  share  price
appreciation  over time.  However,  investing in smaller company stocks involves
greater risk than is  customarily  associated  with  investing  in larger,  more
established companies.  For example,  smaller companies can have limited product
lines,  markets,  or financial and managerial  resources.  Smaller companies may
also be dependent on one or a few key persons,  and may be more  susceptible  to
losses and risks of bankruptcy. Also, the securities of smaller companies may be
thinly traded (and  therefore  have to be sold at a discount from current market
prices or sold in small lots over an extended period of time). Transaction costs
in smaller company stocks may be higher than those of larger companies.

Sovereign Debt.  Investment in sovereign debt can involve a high degree of risk.
The governmental entity that controls the repayment of sovereign debt may not be
able or willing to repay the  principal  and/or  interest when due in accordance
with the terms of such debt. A governmental  entity's  willingness or ability to
repay  principal  and interest due in a timely  manner may be affected by, among
other factors, its cash flow situation,  the extent of its foreign reserves, the
availability  of sufficient  foreign  exchange on the date a payment is due, the
relative  size of the  debt  service  burden  to the  economy  as a  whole,  the
governmental  entity's  policy toward the  International  Monetary Fund, and the
political   constraints  to  which  a   governmental   entity  may  be  subject.
Governmental  entities  may also be  dependent  on expected  disbursements  from
foreign governments, multilateral agencies and others abroad to reduce principal
and  interest  arrearages  on their debt.  The  commitment  on the part of these
governments,  agencies and others to make such  disbursements may be conditioned
on a governmental  entity's  implementation  of economic reforms and/or economic
performance  and the timely  service of such  debtor's  obligations.  Failure to
implement  such reforms,  achieve such levels of economic  performance  or repay
principal  or  interest  when due may result in the  cancellation  of such third
parties commitments to lend funds to the governmental  entity, which may further
impair such  debtor's  ability or  willingness  to service its debts in a timely
manner. Consequently, governmental entities may default on their sovereign debt.
Holders of sovereign debt may be requested to participate in the rescheduling of
such debt and to extend  further  loans to  governmental  entities.  There is no
bankruptcy  proceeding by which  sovereign debt on which  governmental  entities
have defaulted may be collected in whole or in part.

Strategic  Transactions and  Derivatives.  The Fund may, but is not required to,
utilize various other investment  strategies as described below for a variety of
purposes,  such as hedging various market risks, managing the effective maturity
or duration of the fixed-income  securities in the Fund's portfolio or enhancing
potential gain.  These  strategies may be executed through the use of derivative
contracts.


In the course of pursuing these investment strategies, the Fund may purchase and
sell  exchange-listed and  over-the-counter  put and call options on securities,
equity and fixed-income indices and other instruments, purchase and sell futures
contracts and options thereon,  enter into various  transactions  such as swaps,
caps, floors, collars,  currency forward contracts,  currency futures contracts,
currency swaps or options on currencies,  or currency  futures and various other
currency  transactions  (collectively,  all  the  above  are  called  `Strategic
Transactions').  In addition, strategic transactions may also include additional
techniques,  instruments or strategies that are permitted as regulatory  changes
occur.  Strategic  Transactions  may be used without  limit  (subject to certain
limits imposed by the 1940 Act) to attempt to protect against  possible  changes
in the market  value of  securities  held in or to be  purchased  for the Fund's
portfolio   resulting  from  securities   markets  or  currency   exchange  rate
fluctuations,  to  protect  the  Fund's  unrealized  gains  in the  value of its
portfolio  securities,  to facilitate the sale of such securities for investment
purposes,  to manage the effective maturity or duration of the Fund's portfolio,
to  establish  a  position  in  the  derivatives  markets  as a  substitute  for
purchasing or selling  particular  securities or for any other purpose permitted
by  applicable  law.  Some  Strategic  Transactions  may also be used to enhance
potential  gain  although no more than 5% of the Fund's assets will be committed
to certain Strategic  Transactions entered into for non-hedging purposes. Any or
all  of  these  investment  techniques  may  be  used  at  any  time  and in any
combination,  and there is no  particular  strategy that dictates the use of one
technique rather than another, as use of any Strategic Transaction is a function
of numerous variables  including market  conditions.  The ability of the Fund to
utilize these Strategic  Transactions  successfully will depend on the Advisor's
ability to predict pertinent market movements, which cannot be assured. The Fund
will comply with applicable  regulatory  requirements  when  implementing  these
strategies, techniques and


                                       15
<PAGE>

instruments.  Strategic  Transactions  will  not be  used to  alter  fundamental
investment purposes and characteristics of the Fund, and the Fund will segregate
assets (or as provided by applicable regulations,  enter into certain offsetting
positions) to cover its  obligations  under options,  futures and swaps to limit
leveraging of the Fund.

Strategic  Transactions,  including derivative contracts,  have risks associated
with them  including  possible  default by the other  party to the  transaction,
illiquidity and, to the extent the Advisor's view as to certain market movements
is incorrect,  the risk that the use of such Strategic Transactions could result
in losses  greater  than if they had not been used.  Use of put and call options
may  result  in  losses  to a fund,  force  the sale or  purchase  of  portfolio
securities  at  inopportune  times or for prices higher than (in the case of put
options)  or lower than (in the case of call  options)  current  market  values,
limit the amount of  appreciation  the Fund can  realize on its  investments  or
cause the Fund to hold a security it might  otherwise  sell. The use of currency
transactions  can result in a fund  incurring  losses as a result of a number of
factors   including  the   imposition  of  exchange   controls,   suspension  of
settlements,  or the inability to deliver or receive a specified  currency.  The
use of  options  and  futures  transactions  entails  certain  other  risks.  In
particular,  the  variable  degree of  correlation  between  price  movements of
futures  contracts and price  movements in the related  portfolio  position of a
fund  creates  the  possibility  that losses on the  hedging  instrument  may be
greater than gains in the value of the Fund's position. In addition, futures and
options   markets   may  not  be  liquid  in  all   circumstances   and  certain
over-the-counter  options may have no markets.  As a result, in certain markets,
the  Fund  might  not be able  to  close  out a  transaction  without  incurring
substantial  losses,  if at  all.  Although  the  use  of  futures  and  options
transactions  for  hedging  should  tend to  minimize  the risk of loss due to a
decline in the value of the hedged position, at the same time they tend to limit
any  potential  gain  which  might  result  from an  increase  in  value of such
position. Finally, the daily variation margin requirements for futures contracts
would create a greater ongoing potential  financial risk than would purchases of
options, where the exposure is limited to the cost of the initial premium. Other
Strategic Transactions, such as forward contracts and swaps, are also subject to
similar risks.  Losses  resulting from the use of Strategic  Transactions  would
reduce net asset value, and possibly income, and such losses can be greater than
if the Strategic Transactions had not been utilized.


General  Characteristics of Options. Put options and call options typically have
similar structural  characteristics and operational  mechanics regardless of the
underlying  instrument on which they are purchased or sold.  Thus, the following
general  discussion relates to each of the particular types of options discussed
in greater  detail below.  In addition,  many Strategic  Transactions  involving
options  require  segregation of Fund assets in special  accounts,  as described
below under "Use of Segregated and Other Special Accounts."

A put option gives the purchaser of the option,  upon payment of a premium,  the
right to sell, and the writer the  obligation to buy, the  underlying  security,
commodity,  index,  currency or other  instrument  at the  exercise  price.  For
instance, the Fund's purchase of a put option on a security might be designed to
protect its holdings in the underlying  instrument (or, in some cases, a similar
instrument) against a substantial decline in the market value by giving the Fund
the right to sell such  instrument at the option  exercise price. A call option,
upon payment of a premium,  gives the  purchaser of the option the right to buy,
and the seller the obligation to sell, the underlying instrument at the exercise
price.  The Fund's  purchase of a call option on a security,  financial  future,
index,  currency  or other  instrument  might be  intended  to protect  the Fund
against an increase in the price of the underlying instrument that it intends to
purchase  in the  future  by  fixing  the  price at which it may  purchase  such
instrument.  An American  style put or call option may be  exercised at any time
during  the  option  period  while a  European  style put or call  option may be
exercised only upon expiration or during a fixed period prior thereto.  The Fund
is authorized to purchase and sell exchange listed options and  over-the-counter
options  ("OTC  options").  Exchange  listed  options  are issued by a regulated
intermediary such as the Options Clearing Corporation ("OCC"),  which guarantees
the  performance  of the  obligations  of  the  parties  to  such  options.  The
discussion  below uses the OCC as an example,  but is also  applicable  to other
financial intermediaries.

With certain exceptions, OCC issued and exchange listed options generally settle
by physical  delivery of the  underlying  security or currency,  although in the
future cash  settlement  may become  available.  Index  options  and  Eurodollar
instruments are cash settled for the net amount,  if any, by which the option is
"in-the-money"  (i.e., where the value of the underlying  instrument exceeds, in
the case of a call  option,  or is less than,  in the case of a put option,  the
exercise  price of the option) at the time the option is exercised.  Frequently,
rather than taking or making delivery of the underlying  instrument  through the
process of  exercising  the option,  listed  options are closed by entering into
offsetting  purchase or sale transactions that do not result in ownership of the
new option.

                                       16
<PAGE>

The Fund's  ability to close out its position as a purchaser or seller of an OCC
or exchange listed put or call option is dependent,  in part, upon the liquidity
of the option  market.  Among the  possible  reasons for the absence of a liquid
option market on an exchange are: (i)  insufficient  trading interest in certain
options; (ii) restrictions on transactions imposed by an exchange; (iii) trading
halts,  suspensions  or other  restrictions  imposed with respect to  particular
classes or series of options or underlying  securities  including reaching daily
price  limits;  (iv)  interruption  of the  normal  operations  of the OCC or an
exchange;  (v)  inadequacy  of the  facilities  of an  exchange or OCC to handle
current  trading  volume;  or  (vi)  a  decision  by one or  more  exchanges  to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant  market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms.

The hours of trading for listed  options may not coincide  with the hours during
which the underlying  financial  instruments are traded.  To the extent that the
option   markets  close  before  the  markets  for  the   underlying   financial
instruments,  significant  price  and  rate  movements  can  take  place  in the
underlying markets that cannot be reflected in the option markets.

OTC  options  are  purchased  from  or  sold to  securities  dealers,  financial
institutions  or  other  parties  (`Counterparties')  through  direct  bilateral
agreement with the Counterparty.  In contrast to exchange listed options,  which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement,  term, exercise price,
premium,  guarantees and security,  are set by  negotiation of the parties.  The
Fund will only sell OTC  options  (other  than OTC  currency  options)  that are
subject to a buy-back provision  permitting the Fund to require the Counterparty
to sell the option back to the Fund at a formula  price within  seven days.  The
Fund  expects  generally  to enter into OTC  options  that have cash  settlement
provisions, although it is not required to do so.

Unless the  parties  provide  for it,  there is no central  clearing or guaranty
function in an OTC option.  As a result,  if the  Counterparty  fails to make or
take delivery of the security,  currency or other  instrument  underlying an OTC
option  it has  entered  into  with the Fund or fails to make a cash  settlement
payment due in accordance with the terms of that option,  the fund will lose any
premium  it paid  for the  option  as well  as any  anticipated  benefit  of the
transaction.  Accordingly,  the Advisor must assess the creditworthiness of each
such Counterparty or any guarantor or credit  enhancement of the  Counterparty's
credit to  determine  the  likelihood  that the terms of the OTC option  will be
satisfied.  The  Fund  will  engage  in OTC  option  transactions  only  with US
government securities dealers recognized by the Federal Reserve Bank of New York
as `primary  dealers'  or  broker/dealers,  domestic  or foreign  banks or other
financial  institutions which have received (or the guarantors of the obligation
of which have  received) a short-term  credit rating of A-1 from S&P or P-1 from
Moody's or an  equivalent  rating  from any  nationally  recognized  statistical
rating organization ("NRSRO") or, in the case of OTC currency transactions,  are
determined to be of equivalent  credit quality by the Advisor.  The staff of the
SEC  currently  takes the position that OTC options  purchased by the Fund,  and
portfolio securities  "covering" the amount of the Fund's obligation pursuant to
an OTC  option  sold by it (the  cost of the  sell-back  plus  the  in-the-money
amount,  if any) are  illiquid,  and are  subject  to the Fund's  limitation  on
investing no more than 15% of its net assets in illiquid securities.

If the Fund sells a call  option,  the premium  that it receives  may serve as a
partial hedge,  to the extent of the option  premium,  against a decrease in the
value of the  underlying  securities  or  instruments  in its  portfolio or will
increase the Fund's income. The sale of put options can also provide income.


The Fund may purchase and sell call options on, among other  things,  securities
including US Treasury and agency securities, mortgage-backed securities, foreign
sovereign  debt,  corporate  debt  securities,   equity  securities   (including
convertible  securities)  and Eurodollar  instruments  that are traded on US and
foreign  securities  exchanges  and  in  the  over-the-counter  markets,  and on
securities indices, currencies and futures contracts. All calls sold by the fund
must be "covered"  (i.e.,  the Fund must own the securities or futures  contract
subject to the call) or must meet the asset segregation  requirements  described
below as long as the call is outstanding.  Even though the Fund will receive the
option  premium to help protect it against loss, a call sold by the Fund exposes
the fund  during  the term of the  option to  possible  loss of  opportunity  to
realize  appreciation  in  the  market  price  of  the  underlying  security  or
instrument  and may require the Fund to hold a security or  instrument  which it
might otherwise have sold.


                                       17
<PAGE>


The Fund may purchase and sell put options on,  among other  things,  securities
including US Treasury and agency securities, mortgage-backed securities, foreign
sovereign  debt,  corporate  debt  securities,   equity  securities   (including
convertible  securities) and Eurodollar instruments (whether or not it holds the
above securities in its portfolio),  and on securities  indices,  currencies and
futures contracts other than futures on individual corporate debt and individual
equity securities. The Fund will not sell put options if, as a result, more than
50% of the Fund's total assets would be required to be  segregated  to cover its
potential  obligations  under such put options  other than those with respect to
futures and options  thereon.  In selling put options,  there is a risk that the
Fund may be required to buy the underlying  security at a disadvantageous  price
above the market price.

General Characteristics of Futures. The Fund may enter into futures contracts or
purchase  or sell  put and  call  options  on such  futures  as a hedge  against
anticipated  interest rate, currency or equity market changes,  and for duration
management,  risk  management  and  return  enhancement  purposes.  Futures  are
generally  bought and sold on the  commodities  exchanges  where they are listed
with payment of initial and variation  margin as described  below. The sale of a
futures  contract  creates a firm  obligation  by the seller,  to deliver to the
buyer the specific type of financial  instrument called for in the contract at a
specific  future  time for a  specified  price  (or,  with  respect  to  certain
instruments,  such as index  futures and  Eurodollar  instruments,  the net cash
amount)  and a firm  obligations  by the buyer to deliver the  specified  price.
Options on futures contracts are similar to options on securities except that an
option on a futures  contract  gives the  purchaser  the right in return for the
premium paid to assume a position in a futures contract and obligates the seller
to deliver such position.

The Fund has claimed  exclusion from the definition of the term  "commodity pool
operator" under the Commodity Exchange Act.  Therefore,  the Fund is not subject
to commodity  pool  operator  registration  and  regulation  under the Commodity
Exchange  Act.  Futures and options on futures may be entered into for bona fide
hedging,  risk management (including duration management) or other portfolio and
return  enhancement  management  purposes.  Typically,   maintaining  a  futures
contract  or  selling an option  thereon  requires  the Fund to  deposit  with a
financial  intermediary  as security  for its  obligations  an amount of cash or
other specified  assets (initial  margin) which initially is typically 1% to 10%
of the face amount of the  contract  (but may be higher in some  circumstances).
Additional  cash or assets  (variation  margin) may be required to be  deposited
thereafter  on a daily  basis as the  marked  to  market  value of the  contract
fluctuates. The purchase of an option on financial futures involves payment of a
premium for the option  without any further  obligation on the part of the Fund.
If the Fund  exercises  an option on a futures  contract it will be obligated to
post  initial  margin  (and  potential  subsequent  variation  margin)  for  the
resulting futures position just as it would for any position.  Futures contracts
and  options  thereon  are  generally  settled by  entering  into an  offsetting
transaction  but there can be no assurance that the position can be offset prior
to settlement at an advantageous price, nor that delivery will occur.


Options on Securities  Indices and Other  Financial  Indices.  The Fund also may
purchase and sell call and put options on securities indices and other financial
indices and in so doing can achieve many of the same objectives it would achieve
through  the sale or  purchase  of options  on  individual  securities  or other
instruments.  Options on  securities  indices  and other  financial  indices are
similar to options on a security or other  instrument  except that,  rather than
settling by physical delivery of the underlying instrument,  they settle by cash
settlement,  i.e.,  an option on an index gives the holder the right to receive,
upon exercise of the option, an amount of cash if the closing level of the index
upon which the option is based exceeds,  in the case of a call, or is less than,
in the case of a put, the exercise  price of the option  (except if, in the case
of an OTC option, physical delivery is specified).  This amount of cash is equal
to the excess of the closing  price of the index over the exercise  price of the
option,  which  also may be  multiplied  by a formula  value.  The seller of the
option is  obligated,  in return for the premium  received,  to make delivery of
this  amount.  The  gain or loss on an  option  on an  index  depends  on  price
movements in the instruments making up the market,  market segment,  industry or
other  composite  on which the  underlying  index is based,  rather  than  price
movements in  individual  securities,  as is the case with respect to options on
securities.

Currency  Transactions.  The Fund  may  engage  in  currency  transactions  with
Counterparties  primarily in order to hedge,  or manage the risk of the value of
portfolio holdings denominated in particular  currencies against fluctuations in
relative  value.  Currency  transactions  include  forward  currency  contracts,
exchange listed currency futures, exchange listed and OTC options on currencies,
and currency swaps. A forward currency contract involves a


                                       18
<PAGE>

privately  negotiated  obligation to purchase or sell (with  delivery  generally
required) a specific currency at a future date, which may be any fixed number of
days from the date of the contract agreed upon by the parties, at a price set at
the time of the contract. A currency swap is an agreement to exchange cash flows
based on the  notional  difference  among two or more  currencies  and  operates
similarly to an interest rate swap, which is described below. The Fund may enter
into  currency  transactions  with  Counterparties  which have  received (or the
guarantors of the obligations which have received) a credit rating of A-1 or P-1
by S&P or Moody's,  respectively, or that have an equivalent rating from a NRSRO
or (except for OTC currency  options) are determined to be of equivalent  credit
quality by the Advisor.

The  Fund's   dealings  in  forward   currency   contracts  and  other  currency
transactions  such as futures,  options,  options on futures and swaps generally
will be limited to hedging  involving either specific  transactions or portfolio
positions  except as described  below.  Transaction  hedging is entering  into a
currency transaction with respect to specific assets or liabilities of the fund,
which  will  generally  arise in  connection  with the  purchase  or sale of its
portfolio  securities or the receipt of income  therefrom.  Position  hedging is
entering  into  a  currency  transaction  with  respect  to  portfolio  security
positions denominated or generally quoted in that currency.


The Fund generally will not enter into a transaction to hedge currency  exposure
to an  extent  greater,  after  netting  all  transactions  intended  wholly  or
partially to offset other transactions,  than the aggregate market value (at the
time of entering into the  transaction)  of the securities held in its portfolio
that are denominated or generally  quoted in or currently  convertible into such
currency, other than with respect to proxy hedging or cross hedging as described
below, as applicable.


The Fund may also  cross-hedge  currencies  by  entering  into  transactions  to
purchase or sell one or more  currencies  that are  expected to decline in value
relative to other  currencies to which the fund has or in which the Fund expects
to have portfolio exposure.


To reduce  the  effect of  currency  fluctuations  on the value of  existing  or
anticipated holdings of portfolio securities,  the Fund may also engage in proxy
hedging.  Proxy  hedging  is often  used when the  currency  to which the Fund's
portfolio is exposed is difficult to hedge or to hedge against the dollar. Proxy
hedging  entails  entering into a commitment or option to sell a currency  whose
changes in value are  generally  considered  to be  correlated  to a currency or
currencies in which some or all of the Fund's  portfolio  securities  are or are
expected  to be  denominated,  in  exchange  for US  dollars.  Currency  hedging
involves some of the same risks and  considerations  as other  transactions with
similar instruments.  Currency  transactions can result in losses to the Fund if
the currency being hedged fluctuates in value to a degree or in a direction that
is not anticipated.  Further,  there is the risk that the perceived  correlation
between  various  currencies may not be present or may not be present during the
particular  time that the Fund is engaging in proxy hedging.  If the Fund enters
into a  currency  hedging  transaction,  the Fund  will  comply  with the  asset
segregation requirements described below, as applicable.


Risks of  Currency  Transactions.  Currency  transactions  are  subject to risks
different from those of other portfolio  transactions.  Because currency control
is of great  importance  to the  issuing  governments  and  influences  economic
planning and policy, purchases and sales of currency and related instruments can
be  negatively  affected  by  government  exchange  controls,   blockages,   and
manipulations or exchange restrictions imposed by governments.  These can result
in losses to the Fund if it is unable to deliver or receive currency or funds in
settlement of obligations  and could also cause hedges it has entered into to be
rendered  useless,  resulting  in full  currency  exposure as well as  incurring
transaction  costs.  Buyers and sellers of  currency  futures are subject to the
same risks that apply to the use of futures generally.  Further, settlement of a
currency  futures  contract for the purchase of most  currencies must occur at a
bank  based in the  issuing  nation.  Trading  options  on  currency  futures is
relatively  new,  and the ability to establish  and close out  positions on such
options is subject to the maintenance of a liquid market which may not always be
available.  Currency  exchange rates may fluctuate based on factors extrinsic to
that country's economy.

Risks of Strategic  Transactions  Outside the US. When conducted outside the US,
Strategic  Transactions may not be regulated as rigorously as in the US, may not
involve a clearing mechanism and related guarantees, and are subject to the risk
of  governmental  actions  affecting  trading  in,  or the  prices  of,  foreign
securities,  currencies and other instruments.  The value of such positions also
could be adversely affected by: (i) other complex foreign


                                       19
<PAGE>

political,  legal and economic factors,  (ii) lesser availability than in the US
of data on which to make trading  decisions,  (iii) delays in the Fund's ability
to act upon economic  events  occurring in foreign  markets during  non-business
hours in the US, (iv) the imposition of different  exercise and settlement terms
and  procedures  and margin  requirements  than in the US, and (v) lower trading
volume and liquidity.


Swaps, Caps, Floors and Collars. Among the Strategic Transactions into which the
Fund may enter  are  interest  rate,  currency,  index  and other  swaps and the
purchase or sale of related caps, floors and collars.  The Fund expects to enter
into these transactions primarily to preserve a return or spread on a particular
investment  or  portion  of  its   portfolio,   to  protect   against   currency
fluctuations,  as a  duration  management  technique,  to  protect  against  any
increase in the price of securities the fund  anticipates  purchasing at a later
date or to enhance returns.  The Fund will not sell interest rate caps or floors
where it does not own  securities  or other  instruments  providing  the  income
stream  the fund may be  obligated  to pay.  Interest  rate  swaps  involve  the
exchange by the fund with another party of their  respective  commitments to pay
or receive interest,  e.g., an exchange of floating rate payments for fixed rate
payments with respect to a notional  amount of principal.  A currency swap is an
agreement to exchange cash flows on a notional  amount of two or more currencies
based on the  relative  value  differential  among  them and an index swap is an
agreement to swap cash flows on a notional amount based on changes in the values
of the  reference  indices.  The  purchase of a cap  entitles  the  purchaser to
receive payments on a notional  principal amount from the party selling such cap
to the extent that a specified  index exceeds a  predetermined  interest rate or
amount.  The purchase of a floor entitles the purchaser to receive payments on a
notional principal amount from the party selling such floor to the extent that a
specified index falls below a predetermined interest rate or amount. A collar is
a  combination  of a cap and a floor that  preserves a certain  return  within a
predetermined range of interest rates or values.


Use of Segregated and Other Special Accounts.  Many Strategic  Transactions,  in
addition to other  requirements,  require that the Fund segregate cash or liquid
assets with its  custodian  to the extent  fund  obligations  are not  otherwise
"covered" through ownership of the underlying security,  financial instrument or
currency.  In general,  either the full amount of any  obligation by the Fund to
pay or  deliver  securities  or  assets  must be  covered  at all  times  by the
securities, instruments or currency required to be delivered, or, subject to any
regulatory  restrictions,  an amount of cash or liquid  assets at least equal to
the current amount of the obligation must be segregated with the custodian.  The
segregated  assets cannot be sold or transferred  unless  equivalent  assets are
substituted in their place or it is no longer  necessary to segregate  them. For
example,  a call  option  written by the Fund will  require the Fund to hold the
securities  subject  to the  call (or  securities  convertible  into the  needed
securities  without  additional  consideration)  or to segregate  cash or liquid
assets  sufficient  to  purchase  and  deliver  the  securities  if the  call is
exercised.  A call option sold by the Fund on an index will  require the Fund to
own portfolio  securities which correlate with the index or to segregate cash or
liquid assets equal to the excess of the index value over the exercise  price on
a current basis. A put option written by the Fund requires the Fund to segregate
cash or liquid assets equal to the exercise price.

Except when the Fund enters into a forward  contract for the purchase or sale of
a security denominated in a particular currency,  which requires no segregation,
a  currency  contract  which  obligates  the Fund to buy or sell  currency  will
generally  require the Fund to hold an amount of that  currency or liquid assets
denominated  in that currency  equal to the Fund's  obligations  or to segregate
cash or liquid assets equal to the amount of the Fund's obligation.

OTC options entered into by the Fund,  including those on securities,  currency,
financial  instruments  or  indices  and OCC issued and  exchange  listed  index
options, will generally provide for cash settlement.  As a result, when the Fund
sells  these  instruments  it will  only  segregate  an amount of cash or liquid
assets  equal to its accrued net  obligations,  as there is no  requirement  for
payment or delivery of amounts in excess of the net amount.  These  amounts will
equal 100% of the exercise price in the case of a non cash-settled put, the same
as an OCC guaranteed listed option sold by the Fund, or the in-the-money  amount
plus any sell-back  formula amount in the case of a cash-settled put or call. In
addition,  when  the Fund  sells a call  option  on an index at a time  when the
in-the-money  amount exceeds the exercise price, the Fund will segregate,  until
the option expires or is closed out, cash or cash equivalents  equal in value to
such excess.  OCC issued and exchange listed options sold by the Fund other than
those above  generally  settle with  physical  delivery,  or with an election of
either  physical  delivery or cash  settlement  and the Fund will  segregate  an
amount of cash or  liquid  assets  equal to the full  value of the  option.  OTC
options settling


                                       20
<PAGE>

with physical delivery,  or with an election of either physical delivery or cash
settlement  will be treated the same as other  options  settling  with  physical
delivery.

In the case of a futures  contract or an option  thereon,  the Fund must deposit
initial  margin and possible daily  variation  margin in addition to segregating
cash or liquid assets  sufficient to meet its  obligation to purchase or provide
securities  or  currencies,  or to pay the amount owed at the  expiration  of an
index-based  futures  contract.  Such liquid  assets may  consist of cash,  cash
equivalents, liquid debt or equity securities or other acceptable assets.

With  respect to swaps,  the Fund will accrue the net amount of the  excess,  if
any, of its  obligations  over its  entitlements  with respect to each swap on a
daily basis and will segregate an amount of cash or liquid assets having a value
equal to the accrued excess.  Caps,  floors and collars  require  segregation of
assets with a value equal to the Fund's net obligation, if any.

Strategic  Transactions  may be covered  by other  means  when  consistent  with
applicable  regulatory  policies.  The  fund  may  also  enter  into  offsetting
transactions so that its combined position,  coupled with any segregated assets,
equals  its  net  outstanding   obligation  in  related  options  and  Strategic
Transactions.  For example,  the Fund could  purchase a put option if the strike
price of that option is the same or higher than the strike price of a put option
sold by the Fund. Moreover,  instead of segregating cash or liquid assets if the
Fund held a futures or forward  contract,  it could purchase a put option on the
same futures or forward  contract with a strike price as high or higher than the
price of the contract held.  Other Strategic  Transactions may also be offset in
combinations.  If the offsetting  transaction terminates at the time of or after
the primary  transaction no segregation is required,  but if it terminates prior
to such time, cash or liquid assets equal to any remaining obligation would need
to be segregated.

Combined Transactions. The Fund may enter into multiple transactions,  including
multiple options transactions,  multiple futures transactions, multiple currency
transactions  (including forward currency  contracts) and multiple interest rate
transactions and any combination of futures, options, currency and interest rate
transactions   (`component'   transactions),   instead  of  a  single  Strategic
Transaction,  as part of a single or combined  strategy  when, in the opinion of
the  Advisor,  it is in the best  interests  of the  Fund to do so.  A  combined
transaction  will usually  contain  elements of risk that are present in each of
its component transactions.  Although combined transactions are normally entered
into based on the Advisor's  judgment that the combined  strategies  will reduce
risk or otherwise  more  effectively  achieve the desired  portfolio  management
goal, it is possible that the  combination  will instead  increase such risks or
hinder achievement of the portfolio management objective.

Supranational Entities.  Supranational entities are international  organizations
designated   or  supported  by   governmental   entities  to  promote   economic
reconstruction or development and international banking institutions and related
government agencies.  Examples include the International Bank for Reconstruction
and Development  (the World Bank),  the European Coal and Steel  Community,  The
Asian  Development Bank and the InterAmerican  Development Bank.  Obligations of
supranational  entities  are  backed  by the  guarantee  of one or more  foreign
governmental parties which sponsor the entity.

When-Issued Securities.  The Fund may from time to time purchase equity and debt
securities on a `when-issued,'  "delayed  delivery" or "forward delivery" basis.
The price of such securities, which may be expressed in yield terms, is fixed at
the time the  commitment  to purchase is made,  but delivery and payment for the
securities  takes place at a later date.  During the period between purchase and
settlement, no payment is made by the Fund to the issuer and no interest accrues
to the Fund. When the Fund purchases such securities, it immediately assumes the
risks of ownership, including the risk of price fluctuation.  Failure to deliver
a security purchased on this basis may result in a loss or missed opportunity to
make an alternative investment.

To the extent that assets of the Fund are held in cash pending the settlement of
a purchase of securities,  the Fund would earn no income.  While such securities
may be sold prior to the settlement date, the Fund intends to purchase them with
the  purpose of actually  acquiring  them unless a sale  appears  desirable  for
investment  reasons.  At the time the Fund makes the  commitment  to  purchase a
security on this basis,  it will record the transaction and reflect the value of
the  security  in  determining  its net asset  value.  The  market  value of the
securities may be more or less than the purchase price.  The Fund will establish
a segregated  account in which it will maintain cash and liquid securities equal
in value to commitments for such securities.

                                       21
<PAGE>

Warrants.  The Fund may  invest in  warrants  up to 5% of the value of its total
assets.  The holder of a warrant has the right,  until the warrant  expires,  to
purchase a given number of shares of a particular  issuer at a specified  price.
Such  investments  can  provide a greater  potential  for profit or loss than an
equivalent  investment  in the  underlying  security.  Prices of warrants do not
necessarily  move,  however,  in  tandem  with  the  prices  of  the  underlying
securities and are, therefore, considered speculative investments.  Warrants pay
no  dividends  and confer no rights  other than a purchase  option.  Thus,  if a
warrant held by the Fund were not exercised by the date of its  expiration,  the
Fund would lose the entire purchase price of the warrant.

Zero Coupon Securities.  The Fund may invest in zero coupon securities which pay
no cash  income  and are  sold at  substantial  discounts  from  their  value at
maturity.  When  held to  maturity,  their  entire  income,  which  consists  of
accretion of discount,  comes from the difference between the purchase price and
their  value at  maturity.  The effect of owning  instruments  which do not make
current  interest  payments  is that a fixed  yield  is  earned  not only on the
original  investment but also, in effect,  on all discount  accretion during the
life of the obligation.  This implicit reinvestment of earnings at the same rate
eliminates the risk of being unable to reinvest  distributions at a rate as high
as the implicit yield on the zero coupon bond,  but at the same time  eliminates
any  opportunity  to reinvest  earnings at higher rates.  For this reason,  zero
coupon bonds are subject to  substantially  greater  price  fluctuations  during
periods of changing  market  interest rates than those of comparable  securities
that pay  interest  currently,  which  fluctuation  is  greater as the period to
maturity is longer.  Zero coupon  convertible  securities  which are convertible
into  common  stock  offer  the   opportunity  for  capital   appreciation   (or
depreciation)  as increases (or  decreases)  in market value of such  securities
closely follow the movements in the market value of the underlying common stock.
Zero coupon  convertible  securities  generally are expected to be less volatile
than the underlying common stocks, as they usually are issued with maturities of
15  years  or less  and are  issued  with  options  and/or  redemption  features
exercisable by the holder of the  obligation  entitling the holder to redeem the
obligation and receive a defined cash payment.

Portfolio Holdings


In addition to the public disclosure of Fund portfolio holdings through required
Securities and Exchange Commission ("SEC") quarterly filings,  the Fund may make
its portfolio holdings information publicly available on the DWS Funds' Web site
as described in the Fund's prospectus.  The Fund does not disseminate non-public
information  about  portfolio  holdings  except in accordance  with policies and
procedures adopted by the Fund.

The Fund's  procedures permit non-public  portfolio  holdings  information to be
shared with Deutsche Asset Management and its affiliates  (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys,   officers  and  trustees/directors  and  each  of  their  respective
affiliates and advisers who require access to this  information to fulfill their
duties to the Fund and are subject to the duties of  confidentiality,  including
the duty not to trade on non-public information,  imposed by law or contract, or
by the Fund's  procedures.  This  non-public  information may also be disclosed,
subject to the  requirements  described  below,  to securities  lending  agents,
financial  printers,  proxy voting  firms,  mutual fund  analysts and rating and
tracking  agencies,  or to shareholders  in connection with in-kind  redemptions
(collectively, "Authorized Third Parties").

Prior to any disclosure of the Fund's non-public  portfolio holdings information
to Authorized  Third Parties,  a person  authorized by the Fund's Directors must
make a good faith  determination  in light of the facts then known that the Fund
has a  legitimate  business  purpose for  providing  the  information,  that the
disclosure is in the best interest of the Fund,  and that the recipient  assents
or otherwise has a duty to keep the  information  confidential  and to not trade
based on the information  received while the information remains non-public.  No
compensation is received by the Fund or DeAM for disclosing  non-public holdings
information. Periodic reports regarding these procedures will be provided to the
Fund's Directors.

Portfolio  holdings  information  distributed  by the trading desks of DeAM or a
subadvisor for the purpose of facilitating  efficient trading of such securities
and receipt of relevant  research is not subject to the foregoing  requirements.
Non-public   portfolio   holding   information   does  not   include   portfolio
characteristics  (other than holdings or subsets of holdings) about the Fund and
information  derived  therefrom,  including,  but not limited to, how the Fund's
investments are divided among various sectors, industries,  countries, value and
growth stocks,  bonds,  currencies and cash,  types of bonds,  bond  maturities,
duration,  bond  coupons and bond credit  quality  ratings so long as the Fund's
holdings could not be derived from such information.


                                       22
<PAGE>



Registered  investment  companies  that are subadvised by DeAM may be subject to
different  portfolio  holdings  disclosure  policies,  and neither  DeAM nor the
Fund's  Directors  exercise  control over such policies.  In addition,  separate
account  clients of DeAM have  access to their  portfolio  holdings  and are not
subject  to the Fund's  portfolio  holdings  disclosure  policy.  The  portfolio
holdings  of some of the  funds  subadvised  by DeAM  and  some of the  separate
accounts managed by DeAM may substantially  overlap with the portfolio  holdings
of the Fund.

DeAM also  manages  certain  unregistered  commingled  trusts and creates  model
portfolios,  the portfolio holdings of which may substantially  overlap with the
portfolio holdings of the Fund. To the extent that investors in these commingled
trusts  or  recipients  of model  portfolio  holdings  information  may  receive
portfolio  holdings  information  of their  trust or of a model  portfolio  on a
different basis from that on which Fund portfolio  holdings  information is made
public,  DeAM has implemented  procedures  reasonably designed to encourage such
investors and recipients to keep such information  confidential,  and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that the Fund's  policies and  procedures  with respect to
the disclosure of portfolio holdings  information will protect the Fund from the
potential  misuse of portfolio  holdings  information  by those in possession of
that information.


Regulatory Matters and Legal Proceedings

On December 21, 2006,  Deutsche Asset Management  ("DeAM")  settled  proceedings
with the  Securities and Exchange  Commission  ("SEC") and the New York Attorney
General on behalf of Deutsche  Asset  Management,  Inc.  ("DAMI") and DIMA,  the
investment advisors to many of the DWS Scudder funds,  regarding  allegations of
improper  trading of fund  shares at DeAM and at the legacy  Scudder  and Kemper
organizations prior to their acquisition by DeAM in April 2002. These regulators
alleged that although the prospectuses for certain funds in the


                                       23
<PAGE>

regulators' view indicated that the funds did not permit market timing, DAMI and
DIMA breached their fiduciary duty to those funds in that their efforts to limit
trading  activity  in the  funds  were  not  effective  at  certain  times.  The
regulators  also alleged that DAMI and DIMA  breached  their  fiduciary  duty to
certain  funds  by  entering  into  certain  market  timing   arrangements  with
investors.  These trading  arrangements  originated  in businesses  that existed
prior to the currently  constituted DeAM organization,  which came together as a
result of various  mergers  of the legacy  Scudder,  Kemper  and  Deutsche  fund
groups,  and all of the  arrangements  were terminated prior to the start of the
regulatory  investigations  that  began in the summer of 2003.  No current  DeAM
employee   approved  these  trading   arrangements.   Under  the  terms  of  the
settlements, DAMI and DIMA neither admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only,  provide for payment of  disgorgement  in
the  amount  of $17.2  million.  The terms of the  settlement  with the New York
Attorney  General  provide for payment of  disgorgement  in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million.  The total amount payable by DeAM,
approximately  $122.3  million,  will  be  distributed  to  shareholders  of the
affected  funds in  accordance  with a  distribution  plan to be  developed by a
distribution  consultant.  The funds'  investment  advisors do not believe these
amounts  will have a material  adverse  financial  impact on them or  materially
affect their ability to perform  under their  investment  management  agreements
with the DWS funds.  The  above-described  amounts are not  material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders,  DeAM is subject to certain  undertakings
regarding  the conduct of its business in the future,  including  formation of a
Code of Ethics  Oversight  Committee  to oversee all matters  relating to issues
arising  under  the  advisors'  Code of  Ethics;  establishment  of an  Internal
Compliance Controls Committee having overall compliance oversight responsibility
of the advisors; engagement of an Independent Compliance Consultant to conduct a
comprehensive review of the advisors' supervisory  compliance and other policies
and  procedures  designed to prevent  and detect  breaches  of  fiduciary  duty,
breaches  of the Code of Ethics and federal  securities  law  violations  by the
advisors and their employees; and commencing in 2008, the advisors shall undergo
a compliance review by an independent third party.

In addition,  DeAM is subject to certain  further  undertakings  relating to the
governance  of the mutual funds,  including  that at least 75% of the members of
the  Boards  of  Trustees/Directors  overseeing  the DWS  Funds  continue  to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors
continue to be  independent  of DeAM;  DeAM  maintain  existing  management  fee
reductions  for  certain  funds  for a period  of five  years  and not  increase
management  fees for these certain funds during this period;  the funds retain a
senior  officer (or  independent  consultants,  as applicable)  responsible  for
assisting in the review of fee  arrangements  and  monitoring  compliance by the
funds and the investment advisors with securities laws,  fiduciary duties, codes
of ethics and other compliance policies,  the expense of which shall be borne by
DeAM; and periodic account  statements,  fund prospectuses and the mutual funds'
web site contain  additional  disclosure  and/or tools that assist  investors in
understanding  the fees and costs associated with an investment in the funds and
the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education  contributions  totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On  September  28,  2006,  the SEC and the National  Association  of  Securities
Dealers  ("NASD")  announced  final  agreements  in  which  Deutsche  Investment
Management Americas Inc. ("DIMA"),  Deutsche Asset Management, Inc. ("DAMI") and
Scudder  Distributors,  Inc. ("DWS-SDI") (now known as DWS Scudder Distributors,
Inc.)  settled  administrative  proceedings  regarding  disclosure  of brokerage
allocation  practices in connection  with sales of the Scudder Funds' (now known
as the DWS Scudder Funds) shares during  2001-2003.  The agreements with the SEC
and NASD are reflected in orders which state, among other things,  that DIMA and
DAMI failed to disclose potential conflicts of interest to the funds' Boards and
to  shareholders   relating  to  DWS-SDI's  use  of  certain  funds'   brokerage
commissions to reduce revenue sharing costs to broker-dealer  firms with whom it
had  arrangements to market and distribute  Scudder Fund shares.  These directed
brokerage practices were discontinued in October 2003.

                                       24
<PAGE>

Under the terms of the  settlements,  in which DIMA,  DAMI and  DWS-SDI  neither
admitted  nor denied any of the  regulators'  findings,  DIMA,  DAMI and DWS-SDI
agreed to pay  disgorgement,  prejudgment  interest  and civil  penalties in the
total amount of $19.3 million. The portion of the settlements distributed to the
funds was approximately $17.8 million and was paid to the funds as prescribed by
the settlement  orders based upon the amount of brokerage  commissions from each
fund used to satisfy revenue sharing  agreements  with  broker-dealers  who sold
fund shares.

As part of the  settlements,  DIMA,  DAMI and DWS-SDI  also agreed to  implement
certain measures and undertakings relating to revenue sharing payments including
making  additional  disclosures  in the funds'  Prospectuses  or  Statements  of
Additional  Information,  adopting or modifying relevant policies and procedures
and providing regular reporting to the fund Boards.

Additional  information announced by DeAM regarding the terms of the settlements
is available at www.dws-scudder.com/regulatory_settlements.

The matters alleged in the regulatory  settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons,  including certain DWS
funds,  the  funds'  investment  advisors  and  their  affiliates,  and  certain
individuals,  including  in some cases fund  Trustees/Directors,  officers,  and
other parties.  Each DWS fund's  investment  advisor has agreed to indemnify the
applicable  DWS funds in connection  with these  lawsuits,  or other lawsuits or
regulatory actions that may be filed making similar allegations.

Based on currently available information, the funds' investment advisors believe
the likelihood that the pending lawsuits will have a material adverse  financial
impact on a DWS fund is remote and such  actions  are not  likely to  materially
affect their ability to perform  under their  investment  management  agreements
with the DWS funds.


                             MANAGEMENT OF THE FUND

Investment Advisor


Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), which is
part of Deutsche Asset Management  ("DeAM"),  is the investment  advisor for the
Fund.  Under  the  supervision  of the  Board of  Directors  of the  Fund,  with
headquarters  at 345 Park  Avenue,  New York,  New York,  DIMA  makes the Fund's
investment  decisions,  buys and  sells  securities  for the  Fund and  conducts
research that leads to these purchase and sale  decisions.  The Advisor  manages
the Fund's  daily  investment  and  business  affairs  subject  to the  policies
established by the Corporation's  Board of Directors.  DIMA and its predecessors
have more than 80 years of experience  managing  mutual  funds.  DIMA provides a
full range of investment  advisory services to institutional and retail clients.
The Fund's  investment  advisor is also  responsible  for selecting  brokers and
dealers  and for  negotiating  brokerage  commissions  and dealer  charges.  The
Advisor's duties are described in more detail below.

DeAM is the  marketing  name in the US for the asset  management  activities  of
Deutsche  Bank AG,  DIMA,  Deutsche  Bank Trust  Company  Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide range
of investing  expertise and resources,  including hundreds of portfolio managers
and analysts and an office  network  that reaches the world's  major  investment
centers.  This well-resourced  global investment platform brings together a wide
variety of experience and investment insight, across industries,  regions, asset
classes and investing styles.  DIMA is an indirect,  wholly-owned  subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is
engaged in a wide range of financial services,  including investment management,
mutual fund,  retail,  private and commercial  banking,  investment  banking and
insurance.  The term "DWS Scudder" is the designation  given to the products and
services provided by the Advisor and its affiliates to the DWS Mutual Funds.


                                       25
<PAGE>


Pursuant to an  investment  management  agreement  (the  "Investment  Management
Agreement"), the Advisor provides continuing investment management of the assets
of the Fund.  The Investment  Management  Agreement was approved by the Board of
Directors  of the  Corporation  (including  a  majority  of  the  Non-interested
Directors) on June 28, 2006. The Investment  Management  Agreement will continue
in effect until September 30, 2007, and thereafter from year to year only if its
continuance  is approved  annually by the vote of a majority of those  Directors
who are not parties to such  Agreement or  interested  persons of the Advisor or
the Corporation, cast in person at a meeting called for the purpose of voting on
such  approval,  and  either by a vote of the  Corporation's  Directors  or of a
majority of the outstanding voting securities of the Fund.


In addition to the investment  management of the assets of the Fund, the Advisor
determines the  investments  to be made for the Fund,  including what portion of
its assets  remain  uninvested  in cash or cash  equivalents,  and with whom the
orders for investments are placed, consistent with the Fund's policies as stated
in its Prospectus  and SAI, or as adopted by the Fund's Board.  The Advisor will
also monitor,  to the extent not monitored by the Fund's  administrator or other
agent,  the Fund's  compliance  with its investment and tax guidelines and other
compliance policies.

The Advisor  provides  assistance to the Fund's Board in valuing the  securities
and other  instruments  held by the Fund, to the extent  reasonably  required by
valuation policies and procedures that may be adopted by the Fund.

Pursuant to the Investment Management  Agreement,  (unless otherwise provided in
the agreement or as  determined by the Fund's Board and to the extent  permitted
by applicable  law), the Advisor pays the  compensation  and expenses of all the
Board  members,  officers,  and executive  employees of the Fund,  including the
Fund's share of payroll taxes, who are affiliated persons of the Advisor.

The  Investment  Management  Agreement  provides  that  the  Fund  is  generally
responsible  for expenses  that  include:  fees payable to the Advisor;  outside
legal,  accounting  or auditing  expenses,  including  with  respect to expenses
related to negotiation,  acquisition or  distribution of portfolio  investments;
maintenance  of books and records that are  maintained  by the Fund,  the Fund's
custodian,  or other agents of the Fund; taxes and  governmental  fees; fees and
expenses   of  the   Fund's   accounting   agent,   custodian,   sub-custodians,
depositories,  transfer  agents,  dividend  reimbursing  agents and  registrars;
payment  for  portfolio  pricing  or  valuation   services  to  pricing  agents,
accountants,  bankers and other specialists,  if any;  brokerage  commissions or
other costs of  acquiring  or disposing  of any  portfolio  securities  or other
instruments  of the  Fund;  and  litigation  expenses  and  other  extraordinary
expenses not incurred in the ordinary course of the Fund's business.

The Investment  Management  Agreement  allows the Advisor to delegate any of its
duties under the  Agreement to a  subadvisor,  subject to a majority vote of the
Board of the Fund,  including  a  majority  of the Board who are not  interested
persons of the Fund, and, if required by applicable  law,  subject to a majority
vote of the Fund's shareholders.

The  Investment  Management  Agreement  provides  that the Advisor  shall not be
liable for any error of judgment  or mistake of law or for any loss  suffered by
the Fund in  connection  with matters to which the agreement  relates,  except a
loss resulting from willful  malfeasance,  bad faith or gross  negligence on the
part of the Advisor in the performance of its duties or from reckless  disregard
by the Advisor of its obligations and duties under the agreement. The Investment
Management  Agreement may be terminated at any time, without payment of penalty,
by either party or by vote of a majority of the outstanding voting securities of
the Fund on 60 days' written notice.

The Fund pays the Advisor an  advisory  fee at the annual rate of 0.800% for the
first $500 million of the Fund's  average daily net assets;  0.780% for the next
$500  million  of the Fund'  average  daily net  assets;  0.760% for the next $1
billion of the Fund's  average daily net assets and 0.740% of the Fund's average
daily net asset over $2 billion.  The fee is payable monthly,  provided that the
Fund will make such  interim  payments as may be requested by the Advisor not to
exceed  75% of the  amount of the fee then  accrued on the books of the Fund and
unpaid. All of the Fund's expenses are paid out of gross investment income.


Through November 30, 2008, the Advisor has contractually  agreed to waive all or
a portion of its management  fee and reimburse or pay operating  expenses of the
Fund to the extent necessary to maintain the fund's total operating


                                       26
<PAGE>

expenses  at 1.32%  for  Class S  shares,  excluding  certain  expenses  such as
extraordinary expenses,  taxes, brokerage,  and interest.  Through September 30,
2007,  the  Advisor  had  contractually  agreed to waive all or a portion of its
management fee and reimburse or pay operating expenses of the Fund to the extent
necessary to maintain the fund's total  operating  expenses at 1.31% for Class S
shares,  excluding  certain  expenses  such as  extraordinary  expenses,  taxes,
brokerage, interest, and organizational and offering expenses.

For the fiscal year ended  August 31,  2007,  the Fund  incurred  an  investment
management fee of $$87,384 all of which was waived.  For the fiscal period ended
August 31, 2006,  the Fund incurred  investment  management fee of $6,399 all of
which was waived.  In addition,  for the year ended August 31, 2007, the Advisor
reimbursed  the Fund $75,920 of other expenses and  voluntarily  agreed to waive
$55,080 of offering expenses.


In  addition,  there is a new  subadvisor  approval  policy  for the  Fund  (the
"Subadvisor  Approval  Policy").  The  Subadvisor  Approval  Policy  permits the
Advisor,  subject to the  approval  of the Board,  including  a majority  of its
independent  board  members,  to appoint  and replace  subadvisors  and to amend
sub-advisory  contracts  without  obtaining  shareholder  approval.   Under  the
Subadvisor Approval Policy, the Board,  including its independent board members,
will continue to evaluate and approve all new sub-advisory contracts between the
Advisor and any subadvisor,  as well as all changes to any existing sub-advisory
contract.  The Fund cannot implement the Subadvisor  Approval Policy without the
SEC either adopting  revisions to current rules (as it proposed to do in October
2003) or granting the Fund exemptive  relief from existing  rules.  The Fund and
the  Advisor  would be  subject to  certain  conditions  imposed by the SEC (and
certain  conditions  that may be imposed in the future within  either  exemptive
relief or a rule) to ensure that the interests of the Fund and its  shareholders
are adequately protected whenever the Advisor acts under the Subadvisor Approval
Policy, including any shareholder notice requirements.

The Advisor provides  investment  counsel for many individuals and institutions,
including  insurance  companies,  industrial  corporations,  and  financial  and
banking  organizations,  as well as  providing  investment  advice  to open- and
closed-end SEC registered funds.

In  certain  cases,  the  investments  for  the  Fund  is  managed  by the  same
individuals  who manage one or more other  mutual  funds  advised by the Advisor
that have similar names,  objectives and investment  styles. You should be aware
that the Fund is likely to differ from these other  mutual  funds in size,  cash
flow pattern and tax matters.  Accordingly,  the holdings and performance of the
Fund can be expected to vary from those of these other mutual funds.

Certain  investments  may be appropriate for the Fund and also for other clients
advised by the Advisor.  Investment decisions for the Fund and other clients are
made with a view to achieving their respective  investment  objectives and after
consideration  of such factors as their current  holdings,  availability of cash
for  investment  and the  size of their  investments  generally.  Frequently,  a
particular  security  may be bought or sold for only one client or in  different
amounts  and at  different  times for more  than one but less than all  clients.
Likewise,  a particular  security may be bought for one or more clients when one
or more other clients are selling the security. In addition,  purchases or sales
of the same  security  may be made for two or more  clients on the same day.  In
such event,  such  transactions  will be allocated among the clients in a manner
believed by the Advisor to be equitable to each. In some cases,  this  procedure
could have an adverse effect on the price or amount of the securities  purchased
or sold by the Fund.  Purchase and sale orders for the Fund may be combined with
those of other  clients of the  Advisor in the  interest of  achieving  the most
favorable net results to the Fund.

The Advisor may enter into arrangements with affiliates and third-party  service
providers to perform  various  administrative,  back-office  and other  services
relating to client accounts.  Such service providers may be located in the US or
in non-US jurisdictions.




Subadvisor.  Deutsche Asset  Management  International  GmbH ("DeAMi"),  Mainzer
Landstrasse  16, 60325  Frankfurt am Main,  Germany,  is the  subadvisor for the
Fund.  DeAMi renders  investment  advisory and management


                                       27
<PAGE>

services  to the  Fund.  DIMA  compensates  DeAMi out of the  management  fee it
receives from the Fund.  DeAMi serves as sub-advisor  pursuant to the terms of a
Subadvisory Agreement between it and the Advisor.


Under the terms of the Subadvisory  Agreement,  DeAMi manages the investment and
reinvestment of the Fund's  portfolio and will provide such  investment  advice,
research  and  assistance  as the  Advisor  may,  from time to time,  reasonably
request.

The Subadvisory  Agreement  provides that DeAMi will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with matters to which the Subadvisory Agreement relates, except a loss resulting
from willful  misconduct,  bad faith or gross negligence on the part of DeAMi in
the  performance  of its  duties  or from  reckless  disregard  by  DeAMi of its
obligations and duties under the Subadvisory Agreement.

The Subadvisory  Agreement shall continue in effect until September 30, 2007 and
from  year to  year  thereafter,  but  only  as  long  as  such  continuance  is
specifically  approved at least  annually (a) by a majority of the  Directors of
the Corporation  who are not parties to such agreement or interested  persons of
any such party except in their capacity as Directors of the Corporation, and (b)
by  the  shareholders  or  the  Board  of  Directors  of  the  Corporation.  The
Subadvisory  Agreement may be terminated at any time upon 60 days' notice by the
Advisor or by the Board of Directors of the  Corporation  or by majority vote of
the  outstanding  shares  of the Fund,  and will  terminate  automatically  upon
assignment or upon termination of the Fund's investment management agreement.

Codes of Ethics

The Fund, the Advisor, subadvisor and the Fund's principal underwriter have each
adopted  codes of ethics  under Rule 17j-1  under the 1940 Act.  Board  members,
officers of the  Corporation  and  employees  of the  Advisor,  subadvisors  and
principal  underwriter are permitted to make personal  securities  transactions,
including  transactions in securities that may be purchased or held by the Fund,
subject to certain  requirements  and  restrictions  set forth in the applicable
Code  of  Ethics.   The  Advisor's  Code  of  Ethics  contains   provisions  and
requirements  designed to identify  and address  certain  conflicts  of interest
between  personal  investment  activities  and the interests of the Fund.  Among
other  things,   the  Advisor's  Code  of  Ethics  prohibits  certain  types  of
transactions  absent prior approval,  imposes time periods during which personal
transactions may not be made in certain securities,  and requires the submission
of  duplicate  broker   confirmations  and  quarterly  reporting  of  securities
transactions.  Additional  restrictions  apply to portfolio  managers,  traders,
research  analysts  and others  involved  in the  investment  advisory  process.
Exceptions to these and other  provisions of the Advisor's Code of Ethics may be
granted in particular circumstances after review by appropriate personnel.

Compensation of Portfolio Managers


The  Fund has  been  advised  that the  Advisor  seeks to offer  its  investment
professionals  competitive  short-term  and  long-term  compensation.  Portfolio
managers and research professionals are paid (i) fixed base salaries,  which are
linked to job function,  responsibilities  and financial  services industry peer
comparison  and (ii)  variable  compensation,  which  is  linked  to  investment
performance, individual contributions to the team and DWS Scudder's and Deutsche
Bank's  financial  results.  Variable  compensation  may  include  a cash  bonus
incentive and  participation in a variety of long-term equity programs  (usually
in the form of Deutsche Bank equity).

Bonus  and  long-term   incentives   comprise  a  greater  proportion  of  total
compensation as an investment  professional's  seniority and compensation levels
increase.  Top performing  investment  professionals  earn a total  compensation
package  that is highly  competitive,  including  a bonus that is a multiple  of
their base  salary.  The amount of equity  awarded  under the  long-term  equity
programs is generally based on the individual's total  compensation  package and
may  comprise  from  0%-40%  of  the  total  compensation  award.  As  incentive
compensation increases,  the percentage of compensation awarded in Deutsche Bank
equity also increases. Certain senior investment professionals may be subject to
a mandatory diverting of a portion of their equity compensation into proprietary
mutual funds that they manage.

To  evaluate  its  investment  professionals,  the  Advisor  uses a  Performance
Management  Process.   Objectives  evaluated  by  the  process  are  related  to
investment  performance and generally take into account peer group and


                                       28
<PAGE>

benchmark  related  data.  The  ultimate  goal of this  process  is to link  the
performance of investment professionals with client investment objectives and to
deliver  investment  performance  that meets or exceeds clients' risk and return
objectives. When determining total compensation,  the Advisor considers a number
of quantitative and qualitative factors such as:

o        DWS  Scudder   performance   and  the  performance  of  Deutsche  Asset
         Management, quantitative measures which include 1, 3 and 5 year pre-tax
         returns versus benchmark (such as the benchmark used in the prospectus)
         and appropriate  peer group,  taking into  consideration  risk targets.
         Additionally, the portfolio manager's retail/institutional asset mix is
         weighted, as appropriate for evaluation purposes.

o        Qualitative  measures include  adherence to the investment  process and
         individual  contributions  to  the  process,  among  other  things.  In
         addition, the Advisor assesses compliance, risk management and teamwork
         skills.

o        Other factors,  including  contributions made to the investment team as
         well as  adherence  to  compliance,  risk  management,  and "living the
         values" of the Advisor,  are part of a  discretionary  component  which
         gives  management the ability to reward these behaviors on a subjective
         basis through bonus incentives.

In addition,  the Advisor analyzes  competitive  compensation levels through the
use of extensive market data surveys. Portfolio manager compensation is reviewed
and may be modified each year as appropriate  to reflect  changes in the market,
as well as to adjust the  factors  used to  determine  overall  compensation  to
promote good sustained investment performance.

Fund Ownership of Portfolio Managers

The following table shows the dollar range of shares owned  beneficially  and of
record by each  member of the Fund's  portfolio  management  team in the Fund as
well as in all DWS Funds as a group (i.e.  those funds advised by Deutsche Asset
Management or its affiliates),  including  investments by their immediate family
members sharing the same household and amounts invested  through  retirement and
deferred  compensation plans. This information is provided as of the Fund's most
recent fiscal year end.

<TABLE>
<CAPTION>
                                                    Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                          Fund Shares Owned                      Fund Shares Owned
-------------------------                          -----------------                      -----------------
<S>                                                       <C>                                    <C>
Klaus Kaldemorgen                                         $0                                     $0
Carmen Weber, CFA                                         $0                                     $0
</TABLE>

Because the fund's portfolio managers are not resident in the US, they generally
do not  invest in US  registered  investment  companies,  such as the  Fund,  on
account  of US tax  and  other  regulatory  limitations  applicable  to  foreign
investors.

Conflicts of Interest

In addition to managing the assets of the Fund,  the Fund's  portfolio  managers
may have responsibility for managing other client accounts of the Advisor or its
affiliates.  The tables below show, for each portfolio  manager,  the number and
asset size of (1) SEC registered  investment companies (or series thereof) other
than the Fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other  accounts  (e.g.,  accounts  managed for  individuals or
organizations)  managed by each  portfolio  manager.  The  tables  also show the
number of  performance  based fee  accounts,  as well as the total assets of the
accounts for which the advisory fee is based on the  performance of the account.
This information is provided as of the Fund's most recent fiscal year end.

                                       29
<PAGE>

Other SEC Registered Investment Companies Managed:

<TABLE>
<CAPTION>
                                       Number of        Total Assets of    Number of Investment
                                      Registered          Registered         Company Accounts       Total Assets of
                                      Investment          Investment               with           Performance-Based
Name of Portfolio Manager              Companies           Companies       Performance-Based Fee     Fee Accounts
-------------------------              ---------           ---------       ---------------------     ------------
<S>                                       <C>                 <C>                   <C>                   <C>
Klaus Kaldemorgen                         $0                  $0                    $0                    $0
Carmen Weber, CFA                         $0                  $0                    $0                    $0

Other Pooled Investment Vehicles Managed:

                                                                               Number of Pooled
                                      Number of                              Investment Vehicle
                                       Pooled          Total Assets of         Accounts with       Total Assets of
                                     Investment       Pooled Investment      Performance-Based    Performance-Based
Name of Portfolio Manager             Vehicles             Vehicles                 Fee              Fee Accounts
-------------------------             --------             --------                 ---              ------------

Klaus Kaldemorgen                           3          $13,168,997,266               $0                   $0
Carmen Weber, CFA                           1             $495,831,228               $0                   $0

Other Accounts Managed:

                                                                              Number of Other
                                                          Total Assets         Accounts with      Total Assets of
                                      Number of            of Other          Performance-Based      Performance-
Name of Portfolio Manager          Other Accounts          Accounts                 Fee          Based Fee Accounts
-------------------------          --------------          --------                 ---          ------------------

Klaus Kaldemorgen                        $0                   $0                    $0                   $0
Carmen Weber, CFA                        $0                   $0                    $0                   $0
</TABLE>

In  addition  to the  accounts  above,  an  investment  professional  may manage
accounts in a personal  capacity that may include  holdings that are similar to,
or the same as,  those of the Fund.  The  Advisor  has in place a Code of Ethics
that is designed to address  conflicts of interest and that, among other things,
imposes  restrictions  on the ability of portfolio  managers  and other  "access
persons" to invest in securities  that may be  recommended or traded in the Fund
and other client accounts.

Real,  potential  or apparent  conflicts  of interest may arise when a portfolio
manager has day-to-day  portfolio  management  responsibilities  with respect to
more than one fund or account,  including the following:

o        Certain  investments may be appropriate for the Fund and also for other
         clients advised by the Advisor, including other client accounts managed
         by the Fund's portfolio  management team.  Investment decisions for the
         Fund  and  other  clients  are  made  with a view  to  achieving  their
         respective  investment  objectives  and  after  consideration  of  such
         factors as their current holdings,  availability of cash for investment
         and the size of their investments  generally. A particular security may
         be bought or sold for only one client or in  different  amounts  and at
         different times for more than one but less than all clients.  Likewise,
         because   clients  of  the  Advisor  may  have   differing   investment
         strategies, a particular security may be bought for one or more clients
         when one or more other clients are selling the security. The investment
         results  achieved for the Fund may differ from the results achieved for
         other  clients of the Advisor.  In addition,  purchases or sales of the
         same  security  may be made for two or more clients on the same day. In
         such event,  such transactions will be allocated among the clients in a
         manner  believed by the Advisor to be most  equitable  to each  client,
         generally utilizing a pro rata allocation  methodology.  In some cases,
         the allocation  procedure


                                       30
<PAGE>

         could  potentially  have an adverse  effect or  positive  effect on the
         price  or  amount  of the  securities  purchased  or sold by the  Fund.
         Purchase  and sale  orders for the Fund may be  combined  with those of
         other  clients of the  Advisor in the  interest of  achieving  the most
         favorable net results to the Fund and the other clients.

o        To the  extent  that  a  portfolio  manager  has  responsibilities  for
         managing  multiple client  accounts,  a portfolio  manager will need to
         divide time and attention among relevant accounts. The Advisor attempts
         to minimize these conflicts by aligning its portfolio  management teams
         by  investment  strategy and by  employing  similar  investment  models
         across multiple client accounts.

o        In some cases, an apparent  conflict may arise where the Advisor has an
         incentive, such as a performance-based fee, in managing one account and
         not with  respect to other  accounts it manages.  The Advisor  will not
         determine  allocations based on whether it receives a performance-based
         fee from the client. Additionally, the Advisor has in place supervisory
         oversight processes to periodically monitor performance  deviations for
         accounts with like strategies.

o        The Advisor and its affiliates and the investment  team of the Fund may
         manage other mutual funds and separate  accounts on a long-short basis.
         The  simultaneous  management  of long  and  short  portfolios  creates
         potential  conflicts  of  interest  including  the risk that short sale
         activity  could   adversely   affect  the  market  value  of  the  long
         positions(and  vice versa),  the risk arising from sequential orders in
         long and short  positions,  and the  risks  associated  with  receiving
         opposing  orders at the same time.  The Advisor has adopted  procedures
         that it believes are reasonably  designed to mitigate  these  potential
         conflicts  of  interest.  Included  in these  procedures  are  specific
         guidelines  developed to ensure fair and  equitable  treatment  for all
         clients whose accounts are managed by each Fund's portfolio  management
         team. The Advisor and the portfolio  management  team have  established
         monitoring  procedures,  a protocol for supervisory reviews, as well as
         compliance  oversight  to ensure that  potential  conflicts of interest
         relating to this type of activity are properly addressed.

The Advisor is owned by Deutsche Bank AG, a  multi-national  financial  services
company.  Therefore,  the Advisor is affiliated  with a variety of entities that
provide, and/or engage in commercial banking, insurance,  brokerage,  investment
banking,  financial  advisory,  broker-dealer  activities  (including  sales and
trading),  hedge funds, real estate and private equity investing, in addition to
the provision of investment  management services to institutional and individual
investors.  Since  Deutsche  Bank AG, its  affiliates,  directors,  officers and
employees (the "Firm") are engaged in businesses  and have interests  other than
managing  asset  management  accounts,   such  other  activities  involve  real,
potential or apparent  conflicts of interest.  These  interests  and  activities
include potential  advisory,  transactional  and financial  activities and other
interests  in  securities  and  companies  that may be  directly  or  indirectly
purchased  or sold by the Firm for its  clients'  advisory  accounts.  These are
considerations  of which  advisory  clients  should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's  advisory  clients.
The Advisor has  instituted  business and  compliance  policies,  procedures and
disclosures  that are  designed to identify,  monitor and mitigate  conflicts of
interest and, as appropriate, to report them to the Fund's Board.





                                       31
<PAGE>



                                       32
<PAGE>




                                       33
<PAGE>



Administrator.  The  Advisor  also  serves  as the  Corporation's  administrator
pursuant to an Administrative Services Agreement. Pursuant to the Administrative
Services  Agreement,  the Advisor provides  administrative  services to the Fund
including, among others, providing the Fund with personnel, preparing and making
required  filings on behalf of the Fund,  maintaining  books and records for the
Fund, and monitoring the valuation of Fund securities.  The  Administrator  will
pay  Accounting  Agency fees out of the  Administration  fee.  For all  services
provided under the Administrative Services Agreement, the Fund pays the Advisor,
computed daily and paid monthly,  a fee of 0.10% of the average daily net assets
of the  Fund.  The  Administrator  will pay  Accounting  Agency  fees out of the
Administration fee.


For the  fiscal  year  ended  August  31,  2007,  the Fund  incurred  $50,000 in
administration  fees all of which was waived. For the fiscal period ended August
31,  2006,  the Fund  incurred  $6,823 in  administration  fees all of which was
waived.


                                       34
<PAGE>

Under the  Administrative  Services  Agreement,  the Advisor is  obligated  on a
continuous  basis to provide  such  administrative  services as the Board of the
Fund reasonably deems necessary for the proper  administration  of the Fund. The
Advisor  provides  the Fund with  personnel;  arranges for the  preparation  and
filing of the Fund's tax  returns;  prepares  and  submits  reports  and meeting
materials to the Board and the  shareholders;  prepares and files updates to the
Fund's  prospectus  and  statement of  additional  information  as well as other
reports required to be filed by the SEC; maintains the Fund's records;  provides
the Fund with office space, equipment and services;  supervises,  negotiates the
contracts of and monitors the performance of third parties contractors; oversees
the  tabulation of proxies;  monitors the valuation of portfolio  securities and
monitors  compliance  with  Board-approved  valuation  procedures;   assists  in
establishing  the  accounting  and tax  policies  of the  Fund;  assists  in the
resolution  of  accounting  issues  that may  arise  with  respect  to the Fund;
establishes  and  monitors the Fund's  operating  expense  budgets;  reviews and
processes the Fund's bills;  assists in determining  the amount of dividends and
distributions  available to be paid by the Fund,  prepares and arranges dividend
notifications  and provides  information to agents to effect  payments  thereof;
provides to the Board periodic and special  reports;  provides  assistance  with
investor and public relations  matters;  and monitors the registration of shares
under  applicable  federal and state law. The Advisor also performs certain fund
accounting   services  under  the   Administrative   Services   Agreement.   The
Administrative  Services  Agreement provides that the Advisor will not be liable
under the Administrative Services Agreement except for willful misfeasance,  bad
faith or  negligence  in the  performance  of its  duties  or from the  reckless
disregard by it of its duties and obligations thereunder.

Various third-party service providers (the "Service  Providers"),  some of which
are affiliated with the Advisor,  provide certain  services to the Fund pursuant
to separate agreements with the Fund.

The Advisor will pay the Service  Providers for the provision of their  services
to the  Fund  and  will  pay most  other  fund  expenses,  including  insurance,
registration,  printing  and  postage  fees.  In  return,  the Fund will pay the
Advisor an Administrative Fee.

The fee  payable  by the  Fund to the  Advisor  pursuant  to the  Administrative
Services  Agreement  is reduced by the  amount of any credit  received  from the
Fund's custodian for cash balances.

Certain  expenses  of the  Fund  will  not be borne  by the  Advisor  under  the
Administrative  Services  Agreement,  such as  taxes,  brokerage,  interest  and
extraordinary  expenses;  and the fees and expenses of the Independent Directors
(including the fees and expenses of their independent counsel). In addition, the
Fund will continue to pay the fees required by its Agreement with the Advisor.

Pursuant to an  agreement  between  the Advisor and State  Street Bank and Trust
Company ("SSB"), the Advisor has delegated certain  administrative  functions to
SSB. The costs and expenses of such delegation are borne by the Advisor,  not by
the Fund.

Pursuant  to  Deutsche  Asset  Management  procedures  approved by the Boards on
behalf of the DWS funds,  proof of claim forms are routinely  filed on behalf of
the  DWS  funds  by  a  third  party  service  provider,  with  certain  limited
exceptions.  The Boards of the DWS funds receive periodic reports  regarding the
implementation of these procedures.

                             FUND SERVICE PROVIDERS

Distributor and Underwriter


Distributor.  The  Corporation,  on  behalf  of the  Fund,  has  entered  into a
Underwriting and Distribution Services Agreement (the "Distribution  Agreement",
pursuant to which  DWS-SDI,  222 South  Riverside  Plaza,  Chicago,  IL 60606 as
agent, serves as principal  underwriter for the continuous offering of shares of
the Fund.  DWS-SDI, an affiliate of the Advisor, is a wholly owned subsidiary of
Deutsche Bank AG.  DWS-SDI has agreed to use its best efforts to solicit  orders
for the purchase of shares of the Fund, although it is not obligated to sell any
particular amount of shares. The Distribution Agreement for the Fund, dated July
1, 2006,  was  initially  approved  by the  Directors  on June 28, 2006 and last
approved on September 18, 2007. The Distribution  Agreement  continues in effect
from year to year only if its  continuance  is approved  at least  annually by a
vote of the  Board  members  of the


                                       35
<PAGE>

Fund including the Directors who are not interested  persons of the Fund and who
have no direct or indirect financial interest in the Distribution Agreement.


Under the  Distribution  Agreement,  the Fund is responsible for: the payment of
all fees and expenses in connection with the preparation and filing with the SEC
of its registration  statement and prospectus and any amendments and supplements
thereto;  the registration  and  qualification of shares for sale in the various
states,  including registering the Fund as a broker or dealer in various states,
as  required;  the  fees  and  expenses  of  preparing,   printing  and  mailing
prospectuses  annually to existing shareholders (see below for expenses relating
to prospectuses paid by the Distributor);  notices, proxy statements, reports or
other  communications  to  shareholders  of the Fund;  the cost of printing  and
mailing  confirmations of purchases of shares and any prospectuses  accompanying
such  confirmations;  any issuance  taxes and/or any initial  transfer  taxes; a
portion of shareholder  toll-free  telephone charges and expenses of shareholder
service  representatives;  the cost of  wiring  funds for  share  purchases  and
redemptions (unless paid by the shareholder who initiates the transaction);  the
cost of printing and postage of business reply  envelopes;  and a portion of the
cost of computer terminals used by both the Fund and the Distributor.

The Distributor will pay for printing and  distributing  prospectuses or reports
prepared for its use in connection with the offering of the Fund's shares to the
public and preparing,  printing and mailing any other  literature or advertising
in  connection  with the  offering  of  shares  of the fund to the  public.  The
Distributor will pay all fees and expenses in connection with its  qualification
and  registration  as a broker or dealer under federal and state laws, a portion
of the cost of toll-free  telephone service and expenses of shareholder  service
representatives,  a portion of the cost of computer  terminals,  and expenses of
any activity which is primarily  intended to result in the sale of shares issued
by the fund,  unless a Rule 12b-1 Plan is in effect which provides that the Fund
shall bear some or all of such expenses.

Although the Fund does not currently  have a 12b-1 Plan for Class S shares,  and
the Directors have no current  intention of adopting one, the Fund will also pay
those fees and  expenses  permitted  to be paid or  assumed  by the  Corporation
pursuant to a 12b-1 Plan, if any,  adopted by the  Corporation,  notwithstanding
any other provision to the contrary in the underwriting agreement.

The  Distributor  currently  offers shares of the Fund on a continuous  basis to
investors  in all  states  in which  shares of the Fund may from time to time be
registered or where  permitted by  applicable  law. The  underwriting  agreement
provides  that the  Distributor  accepts  orders for  shares at net asset  value
because no sales commission or load is charged to the investor.  The Distributor
has made no firm commitment to acquire shares of the Fund.

Independent Registered Public Accounting Firm


The financial  highlights of the Fund included in the Fund's  Prospectus and the
financial statements incorporated by reference into this Statement of Additional
Information  have been so included or  incorporated  by reference in reliance on
the report of  PricewaterhouseCoopers  LLP, 125 High Street,  Boston,  MA 02110,
independent  registered  public  accounting firm, given on the authority of said
firm as experts in auditing and  accounting.  PricewaterhouseCoopers  audits the
financial  statements  of the Fund and  provides  other  audit,  tax and related
services.  Shareholders  will receive  annual audited  financial  statements and
semi-annual unaudited financial statements


Legal Counsel

Ropes & Gray LLP, One International  Place,  Boston,  Massachusetts  02110-2624,
serves  as  legal  counsel  to the  Fund and the  Independent  Directors  of the
Corporation.



                                       36
<PAGE>



Custodian, Transfer Agent and Shareholder Service Agent

Custodian.  Brown Brothers Harriman and Co. (the "Custodian"),  40 Water Street,
Boston, Massachusetts 02109, serves as the Corporation's custodian pursuant to a
Custodian  Agreement.  Under its custody  agreement  with the  Corporation,  the
Custodian (i) maintains  separate  accounts in the name of the Fund,  (ii) holds
and  transfers  portfolio  securities  on  account  of the Fund,  (iii)  accepts
receipts and makes  disbursements  of money on behalf of the Fund, (iv) collects
and receives all income and other payments and  distributions  on account of the
Fund's portfolio  securities and (v) makes periodic reports to the Corporation's
Board of Directors concerning the Fund's operations. The Custodian is authorized
to  select  one or more  foreign  or  domestic  banks or  companies  to serve as
sub-custodian on behalf of the Fund, pursuant to Rule 17f-5 or the 1940 Act.


Transfer Agent and Shareholder  Service Agent. DWS Scudder  Investments  Service
Company ("DWS SISC" or the "Transfer Agent"), 210 West 10th Street, Kansas City,
Missouri  64105-1614,  an  affiliate  of the  Advisor,  is the  transfer  agent,
dividend-paying agent and shareholder service agent for all classes of the Fund.

The Transfer  Agent receives an annual service fee for each account of the Fund,
based on the type of account.  For open retail  accounts,  the fee is a flat fee
ranging from $20.00 to $27.50 per account,  for open  wholesale  money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.46 per account
(as of October  2006,  indexed to  inflation)  plus an asset  based fee of up to
0.25% of  average  net  assets.  1/12th of the  annual  service  charge for each
account is  charged  and  payable to the  Transfer  Agent each  month.  A fee is
charged for any account  which at any time during the month had a share  balance
in the  Fund.  Smaller  fees are also  charged  for  closed  accounts  for which
information  must be retained on the Transfer Agent's system for up to 18 months
after closing for tax reporting purposes.

Certain  out-of-pocket  expenses  incurred  by  the  Transfer  Agent,  including
expenses of printing and mailing  routine fund  disclosure  documents,  costs of
record retention and transaction  processing costs are reimbursed by the Fund or
are paid  directly  by the  Fund.  Certain  additional  out-of-pocket  expenses,
including costs of computer  hardware and software,  third party  record-keeping
and processing of proxy statements,  may only be reimbursed by the Fund with the
prior approval of the Fund's Board.





Pursuant to a sub-transfer  agency  agreement  between DWS-SISC and DST Systems,
Inc. ("DST"),  DWS-SISC has delegated certain transfer agent and dividend paying
agent  functions to DST. The costs and expenses of such  delegation  are born by
DWS-SISC, not by the Fund.


The Fund, or the Advisor (including any affiliate of the Advisor),  or both, may
pay   unaffiliated   third  parties  for  providing   recordkeeping   and  other
administrative  services with respect to accounts of  participants in retirement
plans or other  beneficial  owners of Fund shares whose  interests are generally
held in an omnibus account.



                                       37
<PAGE>




                                       38
<PAGE>



                             PORTFOLIO TRANSACTIONS


The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio  securities,  including  the  allocation  of  brokerage.  With
respect to those  funds for which a  sub-investment  advisor  manages the fund's
investments,  references in this section to the "Advisor" should be read to mean
the Sub-Advisor, except as noted below.

The  policy of the  Advisor  in  placing  orders  for the  purchase  and sale of
securities  for the Funds is to seek best  execution,  taking into  account such
factors,   among  others,   as  price;   commission  (where   applicable);   the
broker-dealer's   ability  to  ensure  that  securities  will  be  delivered  on
settlement date; the willingness of the  broker-dealer to commit its capital and
purchase  a  thinly  traded   security  for  its  own  inventory;   whether  the
broker-dealer   specializes  in  block  orders  or  large  program  trades;  the
broker-dealer's  knowledge of the market and the security;  the  broker-dealer's
ability to  maintain  confidentiality;  the  broker-dealer's  ability to provide
access to new  issues;  the  broker-dealer's  ability  to provide  support  when
placing a difficult trade;  the financial  condition of the  broker-dealer;  and
whether the broker-dealer has the infrastructure and operational capabilities to
execute  and  settle  the trade.  The  Advisor  seeks to  evaluate  the  overall
reasonableness of brokerage  commissions with commissions  charged on comparable
transactions  and compares the brokerage  commissions (if any) paid by the Funds
to reported commissions paid by others. The Advisor routinely reviews commission
rates,  execution  and  settlement  services  performed  and makes  internal and
external comparisons.

Commission  rates  on  transactions  in  equity  securities  on U.S.  securities
exchanges are subject to negotiation. Commission rates on transactions in equity
securities on foreign  securities  exchanges are generally fixed.  Purchases and
sales of  fixed-income  securities and certain  over-the-counter  securities are
effected  on  a  net  basis,  without  the  payment  of  brokerage  commissions.
Transactions  in  fixed  income  and  certain  over-the-counter  securities  are
generally  placed by the  Advisor  with the  principal  market  makers for these
securities  unless the Advisor  reasonably  believes more favorable  results are
available elsewhere.  Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices.  Purchases of  underwritten  issues
will  include  an  underwriting  fee  paid  to  the  underwriter.  Money  market
instruments are normally purchased in principal  transactions  directly from the
issuer or from an underwriter or market maker.

                                       39
<PAGE>

It is  likely  that the  broker-dealers  selected  based  on the  considerations
described in this section will include  firms that also sell shares of the Funds
to their  customers.  However,  the Advisor does not consider sales of shares of
the Funds as a factor in the selection of  broker-dealers  to execute  portfolio
transactions  for the Funds  and,  accordingly,  has  implemented  policies  and
procedures  reasonably designed to prevent its traders from considering sales of
shares of the Funds as a factor in the  selection of  broker-dealers  to execute
portfolio transactions for the Funds.

The Advisor is  permitted  by Section  28(e) of the  Securities  Exchange Act of
1934, as amended ("1934 Act"), when placing  portfolio  transactions for a Fund,
to cause the Fund to pay brokerage  commissions  in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage  services if the Advisor determines that such commissions
are  reasonable in relation to the overall  services  provided.  The Advisor may
from  time to time,  in  reliance  on  Section  28(e) of the 1934  Act,  execute
portfolio  transactions with  broker-dealers that provide research and brokerage
services to the Advisor.  Consistent  with the Advisor's  policy  regarding best
execution,  where more than one broker is  believed  to be capable of  providing
best execution for a particular  trade, the Advisor may take into  consideration
the receipt of research and brokerage services in selecting the broker-dealer to
execute  the trade.  Although  certain  research  and  brokerage  services  from
broker-dealers may be useful to a Fund and to the Advisor,  it is the opinion of
the Advisor that such information only supplements its own research effort since
the  information  must still be analyzed,  weighed and reviewed by the Advisor's
staff. To the extent that research and brokerage  services of value are received
by the Advisor,  the Advisor may avoid expenses that it might  otherwise  incur.
Research and brokerage  services  received from a broker-dealer may be useful to
the Advisor and its affiliates in providing  investment  management  services to
all or some of its  clients,  which  includes  a Fund.  Services  received  from
broker-dealers  that executed  securities  transactions for a Portfolio will not
necessarily be used by the Advisor specifically to service such Fund.

Research and brokerage services provided by broker-dealers may include,  but are
not limited to,  information on the economy,  industries,  groups of securities,
individual   companies,   statistical   information,   accounting  and  tax  law
interpretations,  political developments, legal developments affecting portfolio
securities,  technical  market action,  pricing and appraisal  services,  credit
analysis,  risk measurement  analysis,  performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically  received  in the form of written  or  electronic  reports,  access to
specialized  financial  publications,  telephone  contacts and personal meetings
with  security  analysts,  but may also be  provided  in the form of  access  to
various  computer  software and meetings  arranged  with  corporate and industry
representatives.

The Advisor may also select  broker-dealers  and obtain from them  research  and
brokerage  services that are used in connection  with executing  trades provided
that such services are consistent  with  interpretations  under Section 28(e) of
the 1934 Act.  Typically,  these  services  take the form of  computer  software
and/or  electronic  communication  services  used by the  Advisor to  facilitate
trading activity with those broker-dealers.

Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder.  Currently,
it  is  the  Advisor's  policy  that  Sub-Advisors  may  not  execute  portfolio
transactions on behalf of the Funds to obtain third party research and brokerage
services.  The  Advisor  may, in the future,  change  this  policy.  Regardless,
certain  Sub-Advisors may, as matter of internal policy, limit or preclude third
party research and brokerage services.

The Advisor may use brokerage  commissions to obtain certain brokerage  products
or services that have a mixed use (i.e., it also serves a function that does not
relate to the investment  decision-making process). In those circumstances,  the
Advisor  will make a good faith  judgment to evaluate  the various  benefits and
uses to which it  intends to put the mixed use  product or service  and will pay
for that portion of the mixed use product or service that it reasonably believes
does not constitute research and brokerage services with its own resources.

DIMA will  monitor  regulatory  developments  and market  practice in the use of
client  commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.

Investment  decisions for each Fund and for other investment accounts managed by
the  Advisor  are  made  independently  of each  other  in  light  of  differing
conditions. However, the same investment decision may be made


                                       40
<PAGE>

for two or more of such accounts. In such cases,  simultaneous  transactions are
inevitable.  To the extent  permitted  by law,  the  Advisor may  aggregate  the
securities to be sold or purchased for a Fund with those to be sold or purchased
for  other  accounts  in  executing  transactions.  Purchases  or sales are then
averaged  as to price  and  commission  and  allocated  as to amount in a manner
deemed equitable to each account. While in some cases this practice could have a
detrimental  effect  on the  price  paid or  received  by, or on the size of the
position  obtained or disposed of for,  the Fund,  in other cases it is believed
that the  ability to engage in volume  transactions  will be  beneficial  to the
Fund.

DIMA and its affiliates and the Funds' management team manage other mutual funds
and separate accounts,  some of which use short sales of securities as a part of
its  investment  strategy.  The  simultaneous   management  of  long  and  short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice  versa),  the  risk  arising  from  sequential  orders  in long  and  short
positions,  and the risks associated with receiving  opposing orders at the same
time.

DIMA has adopted procedures that it believes are reasonably designed to mitigate
these  potential  conflicts  of interest.  Incorporated  in the  procedures  are
specific  guidelines  developed to ensure fair and  equitable  treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory  reviews,  as well as compliance  oversight to ensure
that  potential  conflicts  of interest  relating  to this type of activity  are
properly addressed.

Deutsche Bank AG or one of its affiliates (or in the case of a Sub-Advisor,  the
Sub-Advisor  or one of its  affiliates)  may act as a broker  for the  Funds and
receive brokerage commissions or other transaction-related compensation from the
Funds in the purchase and sale of securities, options or futures contracts when,
in the judgment of the Advisor,  and in accordance with  procedures  approved by
the Funds'  Boards,  the  affiliated  broker  will be able to obtain a price and
execution at least as favorable as those obtained from other  qualified  brokers
and if, in the  transaction,  the  affiliated  broker  charges  the Funds a rate
consistent  with that charged to  comparable  unaffiliated  customers in similar
transactions.





                                       41
<PAGE>




                                       42
<PAGE>


For the fiscal year ended August 31 2007, the Fund paid brokerage commissions in
the amount of $46,906. The Fund did not pay any affiliated brokerage commissions
for the fiscal year ended August 31, 2007.

The Fund is required to  identify  any  securities  of its  "regular  brokers or
dealers"  (as such term is defined  in the 1940 Act) that the Fund has  acquired
during the most recent  fiscal year.  As of August 31,  2007,  the Fund held the
following securities of its regular broker-dealers:

<TABLE>
<CAPTION>
------------------------------------------------------------ ----------------------------------------------------------
Name of Regular Broker or Dealer or Parent (Issuer)               Value of Securities Owned as of August 31, 2007
---------------------------------------------------               -----------------------------------------------

------------------------------------------------------------ ----------------------------------------------------------
<S>                                                                               <C>
Lloyds TSB Group PLC                                                              $132,000
------------------------------------------------------------ ----------------------------------------------------------
KBC Group NV                                                                      $289,000
------------------------------------------------------------ ----------------------------------------------------------
Nordea Bank AB                                                                    $320,000
------------------------------------------------------------ ----------------------------------------------------------
Zurich Financial Services AG                                                      $373,000
------------------------------------------------------------ ----------------------------------------------------------
Marfin Investment Group SA                                                        $191,000
------------------------------------------------------------ ----------------------------------------------------------
</TABLE>


Portfolio Turnover

Portfolio  turnover  rate is  defined  by the SEC as the ratio of the  lesser of
sales or purchases to the monthly  average value of securities  owned during the
year,  excluding  all  securities  whose  remaining  maturities  at the  time of
acquisition were one year or less.

Higher levels of activity by the Fund result in higher transaction costs and may
also  result  in  taxes on  realized  capital  gains  to be borne by the  Fund's
shareholders.  Purchases and sales are made whenever necessary, in the Advisor's
discretion, to meet the Fund's objective.


For the fiscal year ended August 31, 2007 and for the fiscal period July 5, 2006
(commencement  of  operations)  through  August 31, 2006,  the Fund's  portfolio
turnover rates were 127% and 7% (not annualized), respectively.


                        PURCHASE AND REDEMPTION OF SHARES

General Information


Policies and procedures affecting  transactions in Fund shares can be changed at
any  time  without  notice,  subject  to  applicable  law.  Transactions  may be
contingent  upon proper  completion of application  forms and other documents by
shareholders  and their  receipt by the  Fund's  agents.  Transaction  delays in
processing (and changing account features) due to circumstances within or beyond
the  control  of the Fund and its  agents  may  occur.  Shareholders  (or  their
financial  service firms) are responsible for all losses and fees resulting from
bad checks,  cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.


A  distribution  will be  reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Orders  will be  confirmed  at a price  based on the net asset value of the Fund
next determined after receipt in good order by DWS-SDI of the order  accompanied
by payment.  However,  orders  received by dealers or other  financial  services
firms prior to the  determination  of net asset value and received in good order
by DWS-SDI prior to the  determination  of net asset value next determined after
receipt by DWS-SDI  will be  confirmed  at a price  based on the net asset value
("trade date").

Additional  Minimum Balance Policies.  For fiduciary  accounts such as IRAs, and
custodial  accounts such as Uniform Gifts to Minor Act and Uniform  Transfers to
Minor Act accounts,  the minimum  balances are $1,000 for Class S. A shareholder
may  open  an  account  with  at  least  $1,000  ($500  for  fiduciary/custodial
accounts),  if an


                                       43
<PAGE>

automatic  investment  plan (AIP) of $50/month  is  established.  Scudder  group
retirement  plans and certain other accounts have similar or lower minimum share
balance requirements.

Reductions  in value that result  solely from market  activity  will not trigger
involuntary  redemption.  Shareholders with a combined household account balance
in any of the DWS Funds of $100,000  or more,  as well as group  retirement  and
certain other accounts will not be subject to automatic redemption.

Fiduciary  (e.g., IRA or Roth IRA) and custodial  accounts (e.g.,  UGMA or UTMA)
with balances below $250 are subject to automatic  redemption following 90 days'
written notice to applicable shareholders.

Certificates. Share certificates will not be issued.

Use of Financial  Services  Firms.  Investment  dealers and other firms  provide
varying arrangements for their clients to purchase and redeem the Fund's shares,
including higher minimum investments,  and may assess transaction or other fees.
Firms may arrange  with their  clients for other  investment  or  administrative
services.  Such firms may independently  establish and charge additional amounts
to their  clients for such  services.  Firms also may hold the Fund's  shares in
nominee or street  name as agent for and on behalf of their  customers.  In such
instances, the Fund's transfer agent, DWS Scudder Service Corporation ("DWS-SSC"
or the "Transfer  Agent"),  will have no information  with respect to or control
over the accounts of specific shareholders.  Such shareholders may obtain access
to their  accounts and  information  about their  accounts only from their firm.
Certain  of these  firms may  receive  compensation  from the Fund  through  the
Shareholder  Service Agent for  record-keeping  and other  expenses  relating to
these nominee  accounts.  In addition,  certain  privileges  with respect to the
purchase and  redemption of shares or the  reinvestment  of dividends may not be
available  through such firms.  Some firms may participate in a program allowing
them  access  to  their  clients'  accounts  for  servicing  including,  without
limitation,  transfers of  registration  and  dividend  payee  changes;  and may
perform functions such as generation of confirmation statements and disbursement
of cash  dividends.  Such firms,  including  affiliates of DWS-SDI,  may receive
compensation  from the Fund  through  the  Shareholder  Service  Agent for these
services.

The Fund will be deemed to have received a purchase or redemption  order when an
authorized  broker,  service  organization  or,  if  applicable,  an  authorized
designee,  accepts the order. Shares of the Fund may be purchased or redeemed on
any business  day at the net asset value next  determined  after  receipt of the
order,  in good order,  by the  Transfer  Agent.  Investors  who invest  through
authorized  brokers,  service  organizations or their designated  intermediaries
should submit purchase and redemption  orders directly to their broker,  service
organization or designated  intermediary.  The broker or intermediary may charge
you a transaction fee.


The Fund has authorized one or more financial  service  institutions,  including
certain members of the Financial Industry  Regulatory  Authority ("FINRA") other
than  the  Distributor  ("financial  institutions"),   to  accept  purchase  and
redemption  orders for the Fund's shares.  Such financial  institutions may also
designate other parties, including plan administrator intermediaries,  to accept
purchase and  redemption  orders on the Fund's  behalf.  Orders for purchases or
redemptions will be deemed to have been received by the Fund when such financial
institutions or, if applicable,  their  authorized  designees accept the orders.
Subject  to the  terms  of the  contract  between  the  Fund  and the  financial
institution, ordinarily orders will be priced at the Fund's net asset value next
computed  after  acceptance  by such  financial  institution  or its  authorized
designees and  acceptance by the Fund.  Further,  if purchases or redemptions of
the Fund's shares are arranged and settlement is made at an investor's  election
through any other authorized financial  institution,  that financial institution
may, at its  discretion,  charge a fee for that service.  The Board of Directors
and the Distributor,  also the Fund's principal underwriter,  each has the right
to limit the amount of purchases  by, and to refuse to sell to, any person.  The
Directors and the Distributor may suspend or terminate the offering of shares of
the Fund at any time for any reason.

DWS-SDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents  ("DWS Scudder  Wholesalers").  Generally,  DWS Scudder
Wholesalers  market shares of the DWS funds to your  financial  advisor,  who in
turn may  recommend  that you  purchase  shares  of a DWS  fund.  The Plan is an
incentive program that combines a monthly  incentive  component with a quarterly
strategic bonus component.  Under the Plan, DWS Scudder Wholesalers will receive
a monetary  monthly  incentive based on the amount of sales generated from their
marketing of the funds,  and that incentive will differ depending on the product
category  of  the  fund.   Each  fund  is


                                       44
<PAGE>

assigned to one of four product categories--"Core,"  "Strategic," "Satellite" or
"Non-CSS"-taking into consideration, among other things, the following criteria,
where applicable:

o        The Fund's 3-year performance;
o        The Fund's Morningstar rating;
o        Market size for the fund category;
o        The Fund's size, including sales and redemptions of the Fund's shares;
o        The length of time the Fund's Portfolio Managers have managed the Fund;
         and
o        The Fund's consistency with DWS Scudder's branding.

This  information  and other factors are  presented to a committee  comprised of
representatives  from  various  groups  within  DWS  Scudder,  who  review  on a
quarterly basis the funds assigned to each product category described above, and
make any  changes to those  assignments  at that time.  No one  factor,  whether
positive or negative,  determines a fund's  placement in a given  category;  all
these factors together are considered, and the designation of funds in the Core,
Strategic and Satellite categories represents management's judgment based on the
above criteria.  In addition,  management may consider a fund's profile over the
course  of  several  review  periods  before  making  a change  to its  category
assignment.  These  category  assignments  will be posted  quarterly  to the DWS
funds' Web site at www.dws-scudder.com, approximately one month after the end of
each quarter.  DWS Scudder Wholesalers will receive the highest compensation for
Core and Strategic  funds,  less for Satellite  funds and the lowest for Non-CSS
funds.   The  level  of   compensation   among  these   categories   may  differ
significantly.

In the normal course of business,  DWS Scudder will from time to time  introduce
new funds into the DWS family of funds. As a general rule, all new funds will be
placed in the  Strategic  compensation  category  for a  minimum  period of four
consecutive quarters, and DWS Scudder Wholesalers will be paid at a rate that is
equivalent to that of the Core Fund  category.  After that four quarter  period,
each new fund in the  Strategic  category  will be reviewed by the committee and
either  assigned to one of the four  categories or continued as a Strategic fund
at that time.

The prospect of receiving,  or the receipt of, additional  compensation by a DWS
Scudder  Wholesaler  under the Plan may provide an incentive to favor  marketing
the Core,  Strategic  or  Satellite  funds  over the  Non-CSS  funds.  The Plan,
however,  will not change  the price that you pay for shares of a fund.  The DWS
Scudder  Compliance  Department  monitors DWS Scudder Wholesaler sales and other
activity  in an  effort  to  detect  unusual  activity  in  the  context  of the
compensation  structure under the Plan. However,  investors may wish to take the
Plan  and the  product  category  of the  fund  into  account  when  considering
purchasing a fund or evaluating any recommendations relating to fund shares.





                                       45
<PAGE>




Telephone  and  Electronic  Transaction  Procedures.  Shareholders  have various
telephone, Internet, wire and other electronic privileges available. The Fund or
its agents will not be liable for any losses,  expenses or costs  arising out of
fraudulent or unauthorized instructions pursuant to these privileges if the Fund
or its agents reasonably believe, based upon reasonable verification procedures,
that the instructions were genuine.  Verification  procedures  include recording
instructions,  requiring  certain  identifying  information  before  acting upon
instructions  and  sending  written  confirmations.  During  periods  when it is
difficult to contact the  Shareholder  Service Agent, it may be difficult to use
telephone, wire and other privileges.


QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated  Clearing House System (minimum $50 and maximum  $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or  redemption  of Fund shares.  Shares  purchased by check or
through  QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege  until  such  Shares  have been owned for at least 10  calendar  days.
QuickBuy and  QuickSell  cannot be used with  passbook  savings  accounts or for
certain tax-deferred plans such as IRAs.


Share  Pricing.  Purchases  will be filled at the net asset value per share next
computed after receipt of the application in good order.  The net asset value of
shares of each Fund is  calculated  at 4:00  p.m.  Eastern  time or the close of
business on each day the New York Stock  Exchange (the  "Exchange")  is open for
trading. Orders received after the close of regular trading on the Exchange will
be executed at the next  business  day's net asset value.  If the order has been
placed  by a  member  of  the  FINRA,  other  than  the  Distributor,  it is the
responsibility  of the member  broker,  rather  than the fund,  to  forward  the
purchase order to (the "transfer  agent") in Kansas City by the close of regular
trading on the Exchange.


Dividend  Payment  Option.   Investors  may  have  dividends  and  distributions
automatically   deposited  to  their  predesignated  bank  account  through  DWS
Scudder's Dividend Payment Option request form. Shareholders whose predesignated
checking  account of record is with a member bank of  Automated  Clearing  House
Network  (ACH) can have  income and  capital  gain  distributions  automatically
deposited to their  personal  bank account  usually  within three  business days
after the Fund pays its distribution. A Dividend Payment Option request form can
be  obtained  by  visiting  our Web  site  at:  www.dws-scudder.com  or  calling
1-800-728-3337.  Confirmation  Statements  will be  mailed  to  shareholders  as
notification that distributions have been deposited.

Tax-Sheltered   Retirement   Plans.  The  Shareholder   Service  Agent  provides
retirement plan services and documents and SDI can establish  investor  accounts
in any of the  following  types  of  retirement  plans:


                                       46
<PAGE>

o        403(b)(7)  Custodial  Accounts,  prototype  money purchase  pension and
         profit-sharing  plans.  Forms for existing plans are available  through
         the Shareholder Service Agent.

Additional fees and transaction policies and procedures may apply to such plans.
Investors  should  consult with their own tax  advisors  before  establishing  a
retirement plan.

Purchases

The Fund  reserves the right to withdraw all or any part of the offering made by
its Prospectus and to reject purchase orders for any reason.  Also, from time to
time, the Fund may  temporarily  suspend the offering of any class of its shares
to new investors. During the period of such suspension,  persons who are already
shareholders of such class of such Fund may be permitted to continue to purchase
additional shares of such class and to have dividends reinvested.

To help the  government  fight the  funding of  terrorism  and money  laundering
activities,  federal law requires all financial  institutions to obtain,  verify
and record  information  that identifies  each person who opens an account.  For
more  information,  please see  "Policies  You Should  Know About" in the Fund's
Prospectus.

The Fund may waive the minimum for purchases by trustees, directors, officers or
employees of the Fund or the Advisor and its affiliates.

Class S shares of the Fund will generally not be available to new investors.


Eligible Class S Investors

A.        The  following  investors  may  purchase  Class S shares  of DWS Funds
          either (i) directly from DWS Scudder  Distributors,  Inc. ("DWS-SDI"),
          the Fund's  principal  underwriter;  or (ii)  through an  intermediary
          relationship  with a financial  services firm established with respect
          to the DWS Funds as of December 31, 2004.

          1.      Existing  shareholders of Class S shares of any DWS Fund as of
                  December 31, 2004, and household  members residing at the same
                  address.

          2.      Shareholders  of Class S of any DWS Fund  who  became  Class S
                  shareholders  in connection  with the  consolidation  of Class
                  AARP  and  Class S on July  17,  2006  and  household  members
                  residing at the same address.

          3.      Shareholders who have owned Class S shares  continuously since
                  December 31, 2004 and household  members  residing at the same
                  address  may open new  accounts  for Class S shares of any DWS
                  Fund.

          4.      Any  participant  who has owned Class S shares of any DWS Fund
                  through an  employee  sponsored  retirement,  employee  stock,
                  bonus,  pension  or profit  sharing  plan  continuously  since
                  December 31, 2004 may open a new individual  account for Class
                  S shares of any DWS Fund.

          5.      Any  participant  who  owns  Class S  shares  of any DWS  Fund
                  through a retirement, employee stock, bonus, pension or profit
                  sharing plan may complete a direct  rollover to an IRA account
                  that will hold Class S shares. This applies to individuals who
                  begin their retirement plan investments with a DWS Fund at any
                  time, including after December 31, 2004.

          6.      Officers, Fund Trustees and Directors, and full-time employees
                  and their family members, of the Advisor and its affiliates.

                                       47
<PAGE>

          7.      Class S shares are  available to any  accounts  managed by the
                  Advisor,  any  advisory  products  offered  by the  Advisor or
                  DWS-SDI  and to DWS  Allocation  Series or other fund of funds
                  managed by the Advisor or its affiliates.

          8.      Shareholders  of Class S of DWS Emerging  Markets  Equity Fund
                  who became  shareholders  of the fund in  connection  with the
                  fund's acquisition of Scudder New Asia Fund, Inc. on April 17,
                  2006.

          9.      Shareholders  of Class S of any DWS Fund  who  became  Class S
                  shareholders in connection with the  consolidation  of Class M
                  and Class S on August 18, 2006 and household  members residing
                  at the same address.

          10.     Shareholders  of Class S of any DWS Fund  who  became  Class S
                  shareholders  in connection with the renaming or conversion of
                  Investment Class to Class S on October 23, 2006.

B. The following additional investors may purchase Class S shares of DWS Funds.

          1.      Broker-dealers,   banks  and  registered  investment  advisors
                  ("RIAs")  may  purchase  Class S shares in  connection  with a
                  comprehensive  or  "wrap"  fee  program  or  other  fee  based
                  program.

          2.      Any  group  retirement,  employee  stock,  bonus,  pension  or
                  profit-sharing plans.

         3.       Persons  who  purchase  shares as part of an  investment  only
                  placement in a 529 College Savings Plan.

          4.      Persons who purchase  shares through a Health Savings  Account
                  or a Voluntary Employees' Benefit Association ("VEBA") Trust.

DWS-SDI may, at its discretion,  require appropriate documentation that shows an
investor is eligible to purchase Class S shares.





                                       48
<PAGE>




Revenue Sharing

In light of recent  regulatory  developments,  the Advisor,  the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding  the  level  of  payments  made  by them to  selected  affiliated  and
unaffiliated  brokers,  dealers,  participating  insurance  companies  or  other
financial  intermediaries  ("financial  advisors") in  connection  with the sale
and/or  distribution  of  Fund  shares  or the  retention  and/or  servicing  of
investors and Fund shares ("revenue sharing").

The  Advisor,  the  Distributor  and/or  their  affiliates  may  pay  additional
compensation,  out of their own  assets and not as an  additional  charge to the
Fund, to financial  advisors in connection with the sale and/or  distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund shares.
Such revenue  sharing  payments are in addition to any  distribution  or service
fees  payable  under any Rule  12b-1 or  service  plan of any fund,  any  record
keeping/sub-transfer  agency/networking  fees  payable  by the  Fund  (generally
through the  Distributor  or an  affiliate)  and/or the  Distributor  to certain
financial   advisors  for  performing  such  services  and  any  sales  charges,
commissions,   non-cash  compensation  arrangements  expressly  permitted  under
applicable  rules of FINRA or other  concessions  described  in the fee table or
elsewhere in the  Prospectuses or the SAI as payable to all financial  advisors.
For example, the Advisor, the Distributor and/or their affiliates may compensate
financial  advisors  for  providing  the Fund with "shelf  space" or access to a
third  party  platform  or fund  offering  list,  or  other  marketing  programs
including, without limitation, inclusion of the Fund on preferred or recommended
sales  lists,  mutual  fund


                                       49
<PAGE>

"supermarket"   platforms  and  other  formal  sales   programs;   granting  the
Distributor  access  to  the  financial  advisor's  sales  force;  granting  the
Distributor  access  to  the  financial  advisor's   conferences  and  meetings;
assistance in training and educating the  financial  advisor's  personnel;  and,
obtaining  other  forms of  marketing  support.  The  level of  revenue  sharing
payments made to financial advisors may be a fixed fee or based upon one or more
of the following factors:  gross sales, current assets and/or number of accounts
of the Fund attributable to the financial  advisor,  the particular fund or fund
type or other measures as agreed to by the Advisor, the Distributor and/or their
affiliates and the financial advisors or any combination  thereof. The amount of
these payments is determined at the discretion of the Advisor,  the  Distributor
and/or  their  affiliates  from  time to time,  may be  substantial,  and may be
different for different financial advisors based on, for example,  the nature of
the services provided by the financial advisor.

The Advisor,  the  Distributor  and/or their  affiliates  currently make revenue
sharing  payments  from  their own  assets in  connection  with the sale  and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial  advisors in amounts that  generally  range from .01% up to .50% of
assets of the Fund serviced and  maintained by the  financial  advisor,  .10% to
..25% of sales of the Fund attributable to the financial  advisor,  a flat fee of
$12,500 up to $500,000, or any combination thereof. These amounts are subject to
change  at  the  discretion  of  the  Advisor,   the  Distributor  and/or  their
affiliates.   Receipt  of,  or  the  prospect  of  receiving,   this  additional
compensation, may influence your financial advisor's recommendation of this Fund
or of any  particular  share class of the Fund. You should review your financial
advisor's  compensation  disclosure  and/or  talk to your  financial  advisor to
obtain  more  information  on how this  compensation  may have  influenced  your
financial advisor's recommendation of this Fund.

The Advisor,  the Distributor and/or their affiliates may also make such revenue
sharing  payments  to  financial  advisors  under the terms  discussed  above in
connection  with  the  distribution  of both  DWS  funds  and  non-DWS  funds by
financial  advisors to retirement plans that obtain record keeping services from
ADP, Inc. on the DWS Scudder branded  retirement plan platform (the  "Platform")
with the level of revenue  sharing  payments  being based upon sales of both the
DWS funds and the  non-DWS  funds by the  financial  advisor on the  Platform or
current  assets  of both  the DWS  funds  and the  non-DWS  funds  serviced  and
maintained by the financial advisor on the Platform.

As of the  date  hereof,  the  Fund  has been  advised  that  the  Advisor,  the
Distributor  and their  affiliates  expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors

A G Edwards & Sons Inc.
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth Equity Services, LLP (dba Commonwealth Financial Network)
First Clearing/Wachovia Securities
HD Vest Investment Securities, Inc.
ING Group
LaSalle Financial Services, Inc. (dba ABN Amro)
Linsco/Private Ledger Corp.
Marsh Insurance and Investment Company
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Pacific Select Distributors Group
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.

                                       50
<PAGE>

UBS Financial Services
Wells Fargo Investments, LLC

Channel: Cash Product Platform

ADP Clearing & Outsourcing
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Bear, Stearns Securities Corp.
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
Citibank NA
D.A. Davidson & Company
Deutsche Bank Securities Inc.
Deutsche Bank Trust Company Americas
Emmett A. Larkin Company
Fiduciary Trust Co. - International
H.C. Denison Co.
Huntleigh Securities
Investors Bank & Trust
JPMorgan Chase
Lincoln Investment Planning
Linsco Private Ledger Financial Services
Mellon Financial Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Romano Brothers and Company
SAMCO Capital Markets (Fund Services, Inc.)
Smith Moore & Company
State Street Bank & Trust Co.
Sungard Institutional Brokerage Inc.
US Bancorp
UBS Financial Services Inc.
William Blair & Company

Channel: Third Party Insurance Platforms

Acacia National Life Insurance
Allmerica Financial Life Insurance Company
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
American General Life Insurance Company
Annuity Investors Life Insurance Company
Columbus Life Insurance Company
Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance Company
First Allmerica Financial Life Insurance Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company

                                       51
<PAGE>

Great West Life and Annuity Insurance Company
Hartford Life Insurance Company
ICMG Registered Variable Life
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
Mutual of America Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America
Sun Life GroupSymetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company

Any additions,  modifications or deletions to the financial advisors  identified
above that have occurred since the date hereof are not reflected.

The Advisor,  the  Distributor  or their  affiliates  may enter into  additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The  prospect  of  receiving,  or the  receipt  of  additional  compensation  or
promotional  incentives  described above by financial  advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS Funds or a particular  DWS Fund over sales of shares of mutual
funds (or  non-mutual  fund  investments)  with  respect to which the  financial
advisor does not receive additional compensation or promotional  incentives,  or
receives  lower levels of additional  compensation  or  promotional  incentives.
Similarly,  financial advisors may receive different  compensation or incentives
that may influence  their  recommendation  of any particular  share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses.  You may
wish to take  such  payment  arrangements  into  account  when  considering  and
evaluating  any  recommendations  relating to Fund shares and you should discuss
this matter with your  financial  advisor  and review your  financial  advisor's
disclosures.

Automatic Investment Plan. A shareholder may purchase shares of the Fund through
an automatic investment program.  With the Direct Deposit Purchase Plan ("Direct
Deposit"),  investments  are made  automatically  (minimum  $1,000  and  maximum
$250,000 for initial  investments and a minimum of $50 and maximum  $250,000 for
subsequent  investments) from the shareholder's  account at a bank,  savings and
loan or credit  union into the  shareholder's  Fund  account.  Termination  by a
shareholder  will become  effective  within  thirty  days after the  Shareholder
Service  Agent has received the request.  The Fund may  immediately  terminate a
shareholder's  Plan in the event  that any item is  unpaid by the  shareholder's
financial institution.

                                       52
<PAGE>

Minimum Subsequent Investment Policies.  For current shareholders there is a $50
minimum investment  requirement for subsequent investments in the fund. There is
no  minimum  subsequent  investment  requirement  for  investments  on behalf of
participants in certain  fee-based and wrap programs  offered through  financial
intermediaries approved by the Advisor.


Payroll  Investment  Plans. A shareholder  may purchase  shares through  Payroll
Direct Deposit or Government  Direct  Deposit.  Under these  programs,  all or a
portion of a shareholder's  net pay or government check is invested each payment
period.  A shareholder may terminate  participation  in these programs by giving
written  notice  to  the  shareholder's   employer  or  government   agency,  as
appropriate. (A reasonable time to act is required.) The Fund is not responsible
for the  efficiency of the employer or  government  agency making the payment or
any financial institutions transmitting payments.


Expedited Purchase Procedures for Existing  Shareholders.  Shareholders of other
DWS funds who have  submitted an account  application  and have  certified a tax
identification  number, clients having a regular investment counsel account with
the Advisor or its affiliates and members of their immediate families,  officers
and  employees  of the  Advisor  or of any  affiliated  organization  and  their
immediate  families,  members of FINRA, and banks may open an account by wire by
calling 1-800-728-3337 for instructions. The investor must send a duly completed
and signed  application  to the Fund promptly.  A subsequent  purchase order for
$10,000 or more that is not  greater  than four  times an  account  value may be
placed by  telephone,  fax,  etc.  by  established  shareholders  (except by DWS
Scudder  Individual  Retirement  Account  (IRA),  DWS Scudder  Horizon Plan, DWS
Scudder Profit Sharing and Money Purchase  Pension Plans, DWS Scudder 401(k) and
DWS Scudder 403(b) Plan holders), members of FINRA, and banks.





                                       53
<PAGE>




                                       54
<PAGE>




                                       55
<PAGE>




                                       56
<PAGE>




                                       57
<PAGE>



Redemptions


The Fund  will  impose a  redemption  fee of 2% of the total  redemption  amount
(calculated at net asset value) on all Fund shares redeemed or exchanged  within
15 days of buying them (either by purchase or exchange).  The  redemption fee is
paid directly to the Fund, and is designed to encourage long-term investment and
to offset  transaction  and other costs  associated with short-term or excessive
trading. For purposes of determining whether the redemption fee applies,  shares
held the longest  time will be treated as being  redeemed  first and shares held
the shortest time will be treated as being  redeemed last. The redemption fee is
applicable  to Fund  shares  purchased  either  directly  or through a financial
intermediary,   such  as  a  broker-dealer.   Transactions   through   financial
intermediaries  typically  are  placed  with the Fund on an  omnibus  basis  and
include  both  purchase  and sale  transactions  placed on  behalf  of  multiple
investors. These purchase and sale transactions are generally netted against one
another and placed on an aggregate  basis;  consequently  the  identities of the
individuals on whose behalf the  transactions are placed generally are not known
to the Fund.  For this  reason,  the Fund has  undertaken  to  notify  financial
intermediaries  of their  obligation  to assess the  redemption  fee on customer
accounts  and to collect  and remit the  proceeds to the Fund.  However,  due to
operational   requirements,   the  intermediaries'   methods  for  tracking  and
calculating the fee may be inadequate or differ in some respects from the Fund.


Policies and procedures affecting  transactions in fund shares can be changed at
any  time  without  notice,  subject  to  applicable  law.  Transactions  may be
contingent  upon proper  completion of application  forms and other documents by
shareholders  and their  receipt by the  Fund's  agents.  Transaction  delays in
processing (and changing account features) due to circumstances within or beyond
the  control  of the Fund and its  agents  may  occur.  Shareholders  (or  their
financial  service firms) are responsible for all losses and fees resulting from
bad checks,  cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A  distribution  will be  reinvested in shares of the same fund and class if the
distribution check is returned as undeliverable.

Orders will be confirmed at a price based on the net asset value  (including any
applicable sales charge) of the Fund next determined after receipt in good order
by DWS-SDI of the order  accompanied  by payment.  However,  orders  received by
dealers or other  financial  services  firms prior to the  determination  of net
asset  value and  received  in good order by  DWS-SDI  prior to the close of its
business day will be confirmed at a price based on the net asset value effective
on that day ("trade date").

The Fund may suspend the right of  redemption  or delay  payment more than seven
days (a) during any period  when the  Exchange  is closed  other than  customary
weekend  and  holiday  closings  or during  any  period in which  trading on the
Exchange  is  restricted,  (b) during any period when an  emergency  exists as a
result  of which  (i)  disposal  of the  Fund's  investments  is not  reasonably
practicable,  or (ii) it is not reasonably practicable for the Fund to determine
the value of its net  assets,  or (c) for such  other  periods as the SEC may by
order permit for the protection of the Fund's shareholders.

                                       58
<PAGE>

A  request  for  repurchase  (confirmed  redemption)  may be  communicated  by a
shareholder  through a  financial  services  firm to  DWS-SDI,  which firms must
promptly submit orders to be effective.

Redemption  requests  must be  unconditional.  Redemption  requests (and a stock
power for certificated  shares) must be duly endorsed by the account holder.  As
specified  in  the  Prospectus,  signatures  may  need  to  be  guaranteed  by a
commercial bank, trust company,  savings and loan  association,  federal savings
bank,  member  firm  of  a  national  securities  exchange  or  other  financial
institution  permitted by SEC rule.  Additional  documentation  may be required,
particularly  from   institutional  and  fiduciary  account  holders,   such  as
corporations,  custodians  (e.g.,  under the Uniform  Transfers  to Minors Act),
executors, administrators, trustees or guardians.

Wires.  Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed by the Fund for up to seven days if the Fund or the Shareholder  Service
Agent deems it appropriate under then-current market conditions.  The ability to
send wires is limited by the business hours and holidays of the firms  involved.
The Fund is not responsible for the efficiency of the federal wire system or the
account  holder's  financial  services  firm or  bank.  The  account  holder  is
responsible  for any charges  imposed by the account  holder's  firm or bank. To
change the  designated  account  to receive  wire  redemption  proceeds,  send a
written request to the Fund Shareholder Service Agent with signatures guaranteed
as described above or contact the firm through which Fund shares were purchased.

Automatic  Withdrawal  Plan. An owner of $5,000 or more of a class of the Fund's
shares at the  offering  price may  provide  for the  payment  from the  owner's
account of any  requested  dollar amount to be paid to the owner or a designated
payee monthly,  quarterly,  semiannually or annually. The $5,000 minimum account
size is not applicable to IRAs. The minimum  periodic payment is $50. Shares are
redeemed so that the payee should receive payment  approximately on the first of
the month. Investors using this Plan must reinvest Fund distributions.

Non-retirement plan shareholders may establish an Automatic Withdrawal Plan (the
"Plan") to receive  monthly,  quarterly or periodic  redemptions from his or her
account for any  designated  amount of $50 or more.  Shareholders  may designate
which day they want the automatic withdrawal to be processed.  The check amounts
may be based on the  redemption  of a fixed dollar  amount,  fixed share amount,
percent of account  value or  declining  balance.  The Plan  provides for income
dividends  and  capital  gains  distributions,  if  any,  to  be  reinvested  in
additional  shares.  Shares are then  liquidated  as  necessary  to provide  for
withdrawal  payments.  Since the  withdrawals  are in  amounts  selected  by the
investor and have no relationship to yield or income,  payments  received cannot
be  considered  as  yield  or  income  on  the   investment  and  the  resulting
liquidations may deplete or possibly  extinguish the initial  investment and any
reinvested dividends and capital gains distributions.  Any such requests must be
received  by the Fund's  transfer  agent ten days prior to the date of the first
automatic withdrawal. An Automatic Withdrawal Plan may be terminated at any time
by the  shareholder,  the  Trust or its  agent on  written  notice,  and will be
terminated  when all shares of the Fund under the Plan have been  liquidated  or
upon receipt by the Trust of notice of death of the shareholder.

Exchanges

Shareholders  may request a taxable  exchange of their  shares for shares of the
corresponding class of other DWS Funds, subject to the provisions below.


Shares of money  market  funds that were  acquired  by purchase  (not  including
shares acquired by dividend  reinvestment)  are subject to the applicable  sales
charge on exchange.  Series of DWS Target Fund are  available  on exchange  only
during  the  offering  period for such  series as  described  in the  applicable
prospectus.  Cash Management Fund Investment, Tax Free Money Fund Investment, NY
Tax-Free Money Fund Investment,  Treasury Money Fund -- Class Investment,  Money
Market Fund Investment,  Cash Management Fund Institutional,  Cash Reserves Fund
Institutional,  Treasury Money Fund --  Institutional,  Cash Reserve Fund,  Inc.
Prime Series,  Cash Reserve Fund, Inc.  Treasury Series,  Tax-Exempt  California
Money Market Fund,  Cash Account Trust and Investors Cash Trust are available on
exchange but only through a financial  services firm having a services agreement
with DWS-SDI.  All  exchanges  among money funds must meet  applicable  investor
eligibility  and investment  requirements.  Exchanges may only be made for funds
that are available for sale in the shareholder's state of residence.  Currently,
Tax-Exempt   California  Money  Market  Fund  is  available  for  sale  only  in
California.


                                       59
<PAGE>



Shareholders  must obtain  prospectuses of the fund of funds they are exchanging
into from dealers, other firms or DWS-SDI.

Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS Fund may  authorize  the  automatic  exchange  of a  specified  amount  ($50
minimum) of such  shares for shares of the same class of another  such DWS Fund.
Exchanges  will  be  made  automatically  until  the  shareholder  or  the  fund
terminates  the  privilege.  Exchanges  are subject to the terms and  conditions
described above.


In-kind  Redemptions.  The Fund  reserves  the  right to honor any  request  for
redemption  or  repurchase  by  making  payment  in whole or in part in  readily
securities.  These  securities will be chosen by the fund and valued as they are
for purposes of computing the Fund's net asset value.  A  shareholder  may incur
transaction expenses in converting these securities to cash.


                                    DIVIDENDS

The Fund intends to follow the practice of distributing substantially all of its
investment  company  taxable  income,  which includes any excess of net realized
short-term  capital gains over net realized  long-term capital losses.  The Fund
may follow the  practice  of  distributing  the  entire  excess of net  realized
long-term capital gains over net realized  short-term  capital losses.  However,
the Fund may retain all or part of such gain for reinvestment,  after paying the
related federal taxes for which  shareholders may then be able to claim a credit
against their federal tax liability.  If the Fund does not distribute the amount
of capital gain and/or  ordinary  income required to be distributed by an excise
tax  provision  of the Code,  the Fund may be subject  to that  excise  tax.  In
certain  circumstances,  the Fund may  determine  that it is in the  interest of
shareholders to distribute less than the required amount.

The  Fund  intends  to  distribute  dividends  from  its net  investment  income
excluding  short-term  capital gains  annually in December.  The Fund intends to
distribute  net  realized  capital  gains  after  utilization  of  capital  loss
carryforwards,  if any, in December to prevent  application  of a federal excise
tax. An additional distribution may be made, if necessary.

Any dividends or capital gains  distributions  declared in October,  November or
December  with a record  date in such a month  and  paid  during  the  following
January will be treated by  shareholders  for federal  income tax purposes as if
received on December 31 of the calendar year declared.

Income and  capital  gain  dividends,  if any,  of the Fund will be  credited to
shareholder accounts in full and fractional shares of the same class of the Fund
at net asset value on the reinvestment  date,  except that, upon written request
to the Shareholder  Service Agent, a shareholder may select one of the following
options:

1.        To receive  income and  short-term  capital gain dividends in cash and
          long-term  capital  gain  dividends in shares of the same class at net
          asset value; or

2.        To receive income and capital gain dividends in cash.

                                       60
<PAGE>


Dividends  will be  reinvested  in shares of the same  class of the Fund  unless
shareholders  indicate in writing  that they wish to receive  them in cash or in
shares  of other  DWS  Funds  with  multiple  classes  of shares or DWS Funds as
provided in the prospectus. See `Combined Purchases' for a listing of such other
funds.  To use this  privilege of  investing  dividends of the Fund in shares of
another DWS Fund,  shareholders  must maintain a minimum account value of $1,000
in the Fund  distributing the dividends.  The Fund will reinvest dividend checks
(and  future  dividends)  in shares  of that  same Fund and class if checks  are
returned as undeliverable.  Dividends and other distributions of the Fund in the
aggregate  amount of $10 or less are  automatically  reinvested in shares of the
same class of the Fund unless the  shareholder  requests in writing that a check
be issued for that particular distribution.


If an investment is in the form of a retirement  plan, all dividends and capital
gains distributions must be reinvested into the shareholder's account.

If  a  shareholder   has  elected  to  reinvest  any   dividends   and/or  other
distributions,  such  distributions  will be made in  shares  of that  Fund  and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent.  Distributions of investment company taxable
income and net realized  capital  gains are  taxable,  whether made in shares or
cash.

Each  distribution  is  accompanied  by a  brief  explanation  of the  form  and
character of the  distribution.  The  characterization  of distributions on such
correspondence may differ from the characterization for federal tax purposes. In
January of each year the Fund  issues to each  shareholder  a  statement  of the
federal income tax status of all distributions in the prior calendar year.

The Fund may at any time vary its foregoing dividend  practices and,  therefore,
reserves  the  right  from  time to time to  either  distribute  or  retain  for
reinvestment  such of its net  investment  income  and  its net  short-term  and
long-term  capital  gains as its  Board  determines  appropriate  under the then
current circumstances.  In particular,  and without limiting the foregoing,  the
Fund may make additional  distributions of net investment income or capital gain
net income in order to satisfy the minimum distribution  requirements  contained
in the Internal Revenue Code of 1986, as amended (the "Code").

                                      TAXES


The following is intended to be a general  summary of certain federal income tax
consequences  of  investing  in the  Fund.  It is  not  intended  as a  complete
discussion  of all such  consequences,  nor  does it  purport  to deal  with all
categories of investors.  Investors are therefore  advised to consult with their
tax advisors before making an investment in the Fund.

Taxation  of the Fund.  The Fund  intends to elect to be treated  and to qualify
each year as a regulated  investment  company under Subchapter M of the Code. In
order to qualify for the special tax  treatment  accorded  regulated  investment
companies and their shareholders, the Fund must, among other things:

(a)      derive at least 90% of its gross  income for each taxable year from (i)
         dividends, interest, payments with respect to certain securities loans,
         and gains from the sale or other  disposition  of stock,  securities or
         foreign currencies, or other income (including but not limited to gains
         from options,  futures,  or forward  contracts) derived with respect to
         its business of investing in such stock, securities,  or currencies and
         (ii) net income  derived from interests in "qualified  publicly  traded
         partnerships" (as defined below);

(b)      diversify  its  holdings  so that,  at the end of each  quarter  of the
         Fund's taxable year, (i) at least 50% of the market value of the Fund's
         total assets is  represented  by cash and cash items,  U.S.  Government
         securities,  securities of other regulated  investment  companies,  and
         other  securities  limited  in respect of any one issuer to a value not
         greater  than 5% of the value of the Fund's  total  assets and not more
         than 10% of the outstanding  voting securities of such issuer, and (ii)
         not more than 25% of the value of the Fund's  total  assets is invested
         (x) in the securities (other than those of the U.S. Government or other
         regulated


                                       61
<PAGE>

         investment companies) of any one issuer or of two or more issuers which
         the Fund  controls  and which are  engaged  in the  same,  similar,  or
         related trades or  businesses,  or (y) in the securities of one or more
         qualified publicly traded  partnerships (as defined below). In the case
         of the Fund's investment in loan  participations,  the Fund shall treat
         both the financial  intermediary  and the issuer of the underlying loan
         as  an  issuer  for  the  purposes  of  meeting  this   diversification
         requirement; and

(c)      distribute with respect to each taxable year at least 90% of the sum of
         its investment  company  taxable income (as that term is defined in the
         Code without  regard to the deduction  for  dividends  paid--generally,
         taxable  ordinary  income and the  excess,  if any,  of net  short-term
         capital gains over net  long-term  capital  losses) and net  tax-exempt
         interest income, for such year.

In  general,  for  purposes of the 90% gross  income  requirement  described  in
paragraph  (a)  above,  income  derived  from a  partnership  will be treated as
qualifying  income only to the extent such  income is  attributable  to items of
income of the  partnership  which would be qualifying  income if realized by the
regulated  investment company.  However,  100% of the net income derived from an
interest in a "qualified publicly traded partnership"  (defined as a partnership
(i) interests in which are traded on an established securities market or readily
tradable on a secondary  market or the substantial  equivalent  thereof and (ii)
that derives less than 90% of its income from the qualifying income described in
paragraph  (a)(i)  above) is now  treated as  qualifying  income.  In  addition,
although in general the passive loss rules of the Code do not apply to regulated
investment companies, such rules do apply to a regulated investment company with
respect to items  attributable  to an interest in a  qualified  publicly  traded
partnership. Finally, for purposes of paragraph (b) above, the term "outstanding
voting  securities  of such  issuer"  will  include the equity  securities  of a
qualified publicly traded partnership.

If the Fund qualifies as a regulated investment company that is accorded special
tax  treatment,  the Fund will not be subject  to  federal  income tax on income
distributed  in a timely  manner to its  shareholders  in the form of  dividends
(including Capital Gain Dividends, as defined below).

If for any taxable year the Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal  income tax at regular  corporate  rates (without any
deduction for distributions to its  shareholders),  and all  distributions  from
earnings and profits,  including any  distributions of net tax-exempt income and
net long-term capital gains, will be taxable to shareholders as ordinary income.
Such  distributions  would be eligible (i) to be treated as "qualified  dividend
income," in the case of individual and other noncorporate shareholders,  subject
to reduced rates of federal income taxation for taxable years  beginning  before
January 1, 2011 and (ii) for the 70% dividends received deduction in the case of
corporate  shareholders.  In  addition,  the Fund could be required to recognize
unrealized  gains,  pay  substantial  taxes and  interest  and make  substantial
distributions  before  requalifying  as a regulated  investment  company that is
accorded special tax treatment.

The Fund is subject to a 4%  nondeductible  excise tax on amounts required to be
but not distributed under a prescribed formula.  The formula requires payment to
shareholders  during a calendar year of distributions  representing at least 98%
of the Fund's taxable  ordinary income for the calendar year and at least 98% of
the excess of its capital gains over capital losses realized during the one-year
period  ending  October 31 (in most cases) of such year as well as amounts  that
were neither  distributed  nor taxed to the Fund during the prior calendar year.
Although the Fund's  distribution  policies should enable it to avoid excise tax
liability,  the Fund may  retain  (and be  subject to income or excise tax on) a
portion of its capital  gain or other income if it appears to be in the interest
of such Fund.

Taxation of Fund Distributions.  For federal income tax purposes,  distributions
of  investment  income  are  generally  taxable  as  ordinary  income.  Taxes on
distributions  of capital  gains are  determined  by how long the Fund owned the
investments  that generated  them,  rather than how long a shareholder has owned
his or  her  shares.  Distributions  of net  capital  gains  from  the  sale  of
investments  that the Fund  owned for more  than one year and that are  properly
designated by the Fund as capital gain dividends ("Capital Gain Dividends") will
be taxable as long-term  capital gains.  Distributions of gains from the sale of
investments that the Fund owned for one year or less will be taxable as ordinary
income.  For taxable years beginning  before January 1, 2011,  distributions  of
investment  income  designated by the Fund as derived from  "qualified  dividend
income" will be taxed in the hands of  individuals  at the


                                       62
<PAGE>

rates  applicable to long-term  capital gain,  provided holding period and other
requirements are met at both the shareholder and Fund levels.

Distributions  are taxable to shareholders  even if they are paid from income or
gains  earned  by the Fund  before a  shareholder's  investment  (and  thus were
included in the price the shareholder  paid).  Distributions are taxable whether
shareholders  receive them in cash or reinvest them in additional shares through
the reinvestment  privilege. A shareholder whose distributions are reinvested in
shares will be treated as having  received a dividend  equal to either:  (i) the
fair market value of the new shares  issued to the  shareholder,  or (ii) if the
shares are trading  below net asset value,  the amount of cash  allocated to the
shareholder  for the  purchase of shares on its behalf in the open  market.  Any
gain  resulting  from the sale or  exchange  of Fund  shares  generally  will be
taxable as capital gains.

Long-term  capital gain rates  applicable to individuals  have been  temporarily
reduced -- in general,  to 15% with lower rates applying to taxpayers in the 10%
and 15% rate brackets -- for taxable years beginning before January 1, 2011.

For taxable years beginning before January 1, 2011,  "qualified dividend income"
received by an  individual  will be taxed at the rates  applicable  to long-term
capital gain.  In order for some portion of the  dividends  received by the Fund
shareholder to be "qualified dividend income," the Fund must meet holding period
and other  requirements  with  respect to some  portion of the  dividend  paying
stocks in its portfolio and the  shareholder  must meet holding period and other
requirements  with respect to the Fund's shares.  A dividend will not be treated
as qualified  dividend  income (at either the Fund or shareholder  level) (1) if
the dividend is received  with respect to any share of stock held for fewer than
61 days during the 121-day period  beginning on the date which is 60 days before
the date on which such share becomes  ex-dividend  with respect to such dividend
(or, in the case of certain  preferred  stock, 91 days during the 181-day period
beginning  90 days before such date),  (2) to the extent that the  recipient  is
under an  obligation  (whether  pursuant to a short sale or  otherwise)  to make
related payments with respect to positions in  substantially  similar or related
property,  (3) if the recipient  elects to have the dividend  income  treated as
investment  interest,  or  (4) if  the  dividend  is  received  from  a  foreign
corporation that is (a) not eligible for the benefits of a comprehensive  income
tax treaty with the United States (with the exception of dividends paid on stock
of such a foreign  corporation  readily  tradable on an  established  securities
market in the United  States) or (b)  treated  as a passive  foreign  investment
company.

In general, distributions of investment income designated by the Fund as derived
from qualified dividend income will be treated as qualified dividend income by a
shareholder  taxed as an individual  provided the shareholder  meets the holding
period and other requirements described above with respect to the Fund's shares.
If the  aggregate  qualified  dividends  received by the Fund during any taxable
year are 95% or more of its  gross  income,  then 100% of the  Fund's  dividends
(other than dividends  properly  designated as Capital Gain  Dividends)  will be
eligible to be treated as qualified dividend income. For this purpose,  the only
gain included in the term "gross income" is the excess of net short-term capital
gain over net long-term capital loss.

Special tax rules apply to investments  through defined  contribution  plans and
other  tax-qualified  plans.  Shareholders  should  consult their tax adviser to
determine  the  suitability  of shares of a fund as an  investment  through such
plans  and  the  precise  effect  of and  investment  on  their  particular  tax
situation.

All  distributions  by the Fund result in a reduction  in the net asset value of
that Fund's  shares.  Should a  distribution  reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above,  even though,
from an investment standpoint, it may constitute a partial return of capital. In
particular,  investors  should be careful to consider  the tax  implications  of
buying  shares just prior to a  distribution.  The price of shares  purchased at
that time includes the amount of the forthcoming distribution.  Those purchasing
just prior to a  distribution  will receive a partial return of capital upon the
distribution, which will nevertheless be taxable to them.

Capital gains  distributions  may be reduced if Fund capital loss  carryforwards
are available.  Any capital loss carryforwards to which the Fund is entitled are
disclosed in the Fund's annual and semi-annual reports to shareholders.

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<PAGE>

Dividends Received Deduction. If dividends from domestic corporations constitute
a  substantial  portion  of the  Fund's  gross  income,  a portion of the income
distributions  of such Fund may be eligible for the 70%  deduction for dividends
received  by  corporations.  Shareholders  will be  informed  of the  portion of
dividends which so qualify. The  dividends-received  deduction is reduced to the
extent the shares of the Fund with respect to which the  dividends  are received
are treated as  debt-financed  under federal income tax law and is eliminated if
either  those shares or the shares of a fund are deemed to have been held by the
Fund or the  shareholder,  as the case may be, for less than 46 days  during the
91-day period beginning 45 days before the shares become ex-dividend.

Transactions in Fund Shares.  The sale,  exchange or redemption of shares of the
Fund may give rise to a gain or loss. In general, any gain or loss realized upon
a taxable  disposition  of shares will be treated as  long-term  capital gain or
loss if the shares have been held for more than 12 months.  Otherwise,  the gain
or loss on the  taxable  disposition  of shares of the Fund will be  treated  as
short-term gain or loss.  However,  any loss realized upon a taxable disposition
of shares held for six months or less will be treated as long-term,  rather than
short-term,  to the extent of any long-term capital gain distributions  received
(or deemed  received) by the  shareholder  with respect to the shares.  All or a
portion of any loss  realized upon a taxable  disposition  of shares of the Fund
will be  disallowed  if other  substantially  identical  shares  of the Fund are
purchased  within 30 days before or after the  disposition.  In such a case, the
basis of the newly  purchased  shares will be adjusted to reflect the disallowed
loss.

Foreign  Taxation.  Foreign  withholding  or other foreign taxes with respect to
income  (possibly  including,  in some cases,  capital gains) on certain foreign
securities may occur.  These taxes may be reduced or eliminated  under the terms
of an applicable US income tax treaty.  If more than 50% of the Fund's assets at
year end consist of the securities of foreign  corporations,  the Fund may elect
to  permit  shareholders  to claim a credit or  deduction  on their  income  tax
returns  for their pro rata  portion  the  qualified  taxes  paid by the Fund to
foreign  countries  in respect of  foreign  securities  the Fund has held for at
least the minimum  period  specified in the Code.  In such a case,  shareholders
will include in gross income from foreign  sources their pro rata shares of such
taxes.  A  shareholder's  ability to claim a foreign tax credit or  deduction in
respect of foreign taxes paid by the Fund may be subject to certain  limitations
imposed  by the  Code,  as a result  of which a  shareholder  may not get a full
credit or deduction for the amount of such taxes.  In  particular,  shareholders
must  hold  their  Fund  shares  (without  protection  from risk of loss) on the
ex-dividend  date and for at least 15  additional  days during the 30-day period
surrounding  the  ex-dividend  date to be eligible to claim a foreign tax credit
with  respect  to a given  dividend.  Shareholders  who do not  itemize on their
federal  income  tax  returns  may claim a credit  (but no  deduction)  for such
foreign  taxes.  If the  Fund  does  not  make  the  election  discussed  above,
shareholders  will not be able to claim either a credit or a deduction for their
pro rata  portion  of such  taxes  paid by the Fund,  nor will  shareholders  be
required  to treat as part of the  amounts  distributed  to them  their pro rata
portion of such taxes paid.

Foreign Currency  Transactions.  The Fund's  transactions in foreign currencies,
foreign-currency-denominated  debt  obligations  and  certain  foreign  currency
options,  futures contracts and forward contracts (and similar  instruments) may
give rise to ordinary  income or loss to the extent such income or loss  results
from fluctuations in the value of the foreign currency concerned.

Passive Foreign Investment Companies.  Equity investments by the Fund in certain
"passive foreign investment  companies"  ("PFICs") could potentially subject the
Fund to a US federal income tax (including  interest  charges) on  distributions
received from the company or on proceeds received from the disposition of shares
in the company,  which tax cannot be eliminated by making  distributions to Fund
shareholders.  However,  the Fund may elect to avoid the imposition of that tax.
For example,  the Fund may elect to treat a PFIC as a "qualified  electing fund"
(a "QEF  election"),  in which case the Fund would be  required  to include  its
share of the  company's  income and net capital  gains  annually,  regardless of
whether it receives any distribution from the company. The Fund also may make an
election to mark the gains (and to a limited extent losses) in such holdings "to
the market" as though it had sold and repurchased its holdings in those PFICs on
the last day of the Fund's  taxable  year.  Such gains and losses are treated as
ordinary  income and loss. The QEF and  mark-to-market  elections may accelerate
the  recognition of income (without the receipt of cash) and increase the amount
required to be distributed by the Fund to avoid taxation. Making either of these
elections  therefore  may  require  the  Fund  to  liquidate  other  investments
(including  when  it is not  advantageous  to do so) to  meet  its  distribution
requirement,  which also may accelerate  the  recognition of gain and affect the
Fund's total return.  Dividends paid by PFICs will not be eligible to be treated
as "qualified dividend income."

                                       64
<PAGE>

Tax Effects of Certain Transactions.  The Fund's investment in zero coupon bonds
and other debt obligations  having original issue discount may cause the Fund to
recognize  taxable income in excess of any cash received from the investment.  A
portion of the difference  between the issue price of zero coupon securities and
their face value  ("original  issue discount") is considered to be income to the
Fund each year,  even though the Fund will not receive  cash  interest  payments
from these securities. This original issue discount imputed income will comprise
a part of the  investment  company  taxable  income of the Fund,  which  must be
distributed to shareholders in order to maintain the  qualification  of the Fund
as a regulated  investment company and to avoid federal income tax at the Fund's
level.

Some debt  obligations with a fixed maturity date of more than one year from the
date of issuance (and all  zero-coupon  debt  obligations  with a fixed maturity
date of more than one year from the date of  issuance)  that are acquired by the
Fund  will be  treated  as debt  obligations  that are  issued  originally  at a
discount.  Generally,  the  amount of the  original  issue  discount  ("OID") is
treated as interest income and is included in taxable income (and required to be
distributed)  over the term of the debt  security,  even though  payment of that
amount  is not  received  until a later  time,  usually  when the debt  security
matures. In addition,  payment-in-kind securities will give rise to income which
is required to be  distributed  and is taxable  even though the Fund holding the
security receives no interest payment in cash on the security during the year.

Some debt  obligations with a fixed maturity date of more than one year from the
date of issuance  that are acquired by the Fund in the  secondary  market may be
treated  as  having  market  discount.  Generally,  any gain  recognized  on the
disposition  of, and any partial payment of principal on, a debt security having
market  discount  is treated  as  ordinary  income to the  extent  the gain,  or
principal  payment,  does not exceed the "accrued market  discount" on such debt
security.  Market discount  generally accrues in equal daily  installments.  The
Fund may make one or more of the elections applicable to debt obligations having
market  discount,  which could affect the character and timing of recognition of
income.

In addition,  if the Fund invests in certain high yield  original issue discount
obligations issued by corporations (including tax-exempt obligations), a portion
of the original  issue  discount  accruing on the  obligation  may be treated as
taxable dividend income. In such event,  dividends of investment company taxable
income received from the Fund by its shareholders, to the extent attributable to
such portion of accrued  original  issue  discount,  would be taxable.  Any such
dividends received by the Fund's corporate  shareholders may be eligible for the
deduction for dividends received by corporations.

Any market discount recognized on a bond is taxable as ordinary income. A market
discount bond is a bond  acquired in the  secondary  market at a price below its
redemption  value (or its  adjusted  issue price if issued with  original  issue
discount).  Absent an election  to include  the market  discount in income as it
accrues,  gain on the  disposition  of such an  obligation  will be  treated  as
ordinary  income  (instead  of capital  gain) to the  extent of  accrued  market
discount.

The Fund may invest to a significant  extent in debt obligations that are in the
lowest rating  categories or are unrated,  including debt obligations of issuers
not  currently  paying  interest  or who  are in  default.  Investments  in debt
obligations that are at risk of or in default present special tax issues for the
Fund.  Tax rules are not  entirely  clear about issues such as when the Fund may
cease to accrue interest,  original issue discount or market discount,  when and
to what extent deductions may be taken for bad debts or worthless securities and
how payments  received on  obligations  in default  should be allocated  between
principal and income.  These and other  related  issues will be addressed by the
Fund when, as and if it invests in such  securities,  in order to seek to ensure
that it  distributes  sufficient  income to  preserve  its status as a regulated
investment  company and does not become subject to U.S. federal income or excise
tax.

If the Fund engages in hedging  transactions,  including hedging transactions in
options,  futures contracts,  and straddles,  or other similar transactions,  it
will  be  subject   to  special   tax  rules   (including   constructive   sale,
mark-to-market,  straddle, wash sale, and short sale rules), the effect of which
may be to  accelerate  income to the  Fund,  defer  losses  to the  Fund,  cause
adjustments in the holding periods of the Fund's  securities,  convert long-term
capital gains into short-term capital gains or convert short-term capital losses
into long-term  capital losses.  These rules could therefore  affect the amount,
timing and character of distributions to shareholders. The Fund will endeavor to
make  any  available  elections  pertaining  to such  transactions  in a  manner
believed to be in the best interests of the Fund.

                                       65
<PAGE>

Certain of the Fund's hedging  activities  (including  transactions,  if any, in
foreign  currencies or foreign  currency-denominated  instruments) may produce a
difference  between its book income and its taxable  income.  If the Fund's book
income exceeds its taxable income, the distribution (if any) of such excess will
be treated as (i) a dividend to the extent of the Fund's remaining  earnings and
profits (including  earnings and profits arising from tax-exempt  income),  (ii)
thereafter as a return of capital to the extent of the recipient's  basis in the
shares,  and (iii)  thereafter  as gain from the sale or  exchange  of a capital
asset. If the Fund's book income is less than its taxable income, the Fund could
be  required  to make  distributions  exceeding  book  income  to  qualify  as a
regulated investment company that is accorded special tax treatment.

Backup  Withholding.  Under  the  backup  withholding  provisions  of the  Code,
redemption  proceeds as well as  distributions  may be subject to federal income
tax  withholding for certain  shareholders,  including those who fail to furnish
the Fund with their taxpayer  identification  numbers and  certifications  as to
their tax status.

Non-U.S. Shareholders. Capital Gain Dividends will not be subject to withholding
of federal income tax. In general, dividends (other than Capital Gain Dividends)
paid by the Fund to a shareholder that is not a "U.S. person" within the meaning
of the Code (such shareholder, a "foreign person") are subject to withholding of
U.S. federal income tax at a rate of 30% (or lower applicable  treaty rate) even
if they are funded by income or gains (such as  portfolio  interest,  short-term
capital gains, or foreign-source  dividend and interest income) that, if paid to
a  foreign  person  directly,  would not be  subject  to  withholding.  However,
effective for taxable years of the Fund  beginning  before  January 1, 2008, the
Fund  will  not be  required  to  withhold  any  amounts  (i)  with  respect  to
distributions  (other than  distributions  to a foreign  person (w) that has not
provided  a  satisfactory  statement  that  the  beneficial  owner is not a U.S.
person,  (x) to the extent that the dividend is attributable to certain interest
on an obligation if the foreign person is the issuer or is a 10%  shareholder of
the issuer,  (y) that is within certain  foreign  countries that have inadequate
information  exchange with the United States,  or (z) to the extent the dividend
is  attributable  to interest  paid by a person that is a related  person of the
foreign person and the foreign person is a controlled foreign  corporation) from
U.S.-source  interest  income  that,  in  general,  would not be subject to U.S.
federal income tax if earned directly by an individual  foreign  person,  to the
extent such  distributions  are properly  designated by the Fund,  and (ii) with
respect to  distributions  (other than  distributions  to an individual  foreign
person who is present in the United  States for a period or periods  aggregating
183 days or more during the year of the distribution) of net short-term  capital
gains  in  excess  of  net  long-term   capital  losses,   to  the  extent  such
distributions   are  properly   designated   by  the  Fund.   Depending  on  the
circumstances,  the Fund may make such designations with respect to all, some or
none of its potentially eligible dividends and/or treat such dividends, in whole
or in part, as  ineligible  for this  exemption  from  withholding.  In order to
qualify  for this  exemption  from  withholding,  a foreign  person will need to
comply with applicable certification  requirements relating to its non-US status
(including,  in general,  furnishing an IRS Form W-8BEN or substitute  Form). In
the case of shares held through an  intermediary,  the intermediary may withhold
even if the Fund makes a designation with respect to a payment.  Foreign persons
should  contact their  intermediaries  with respect to the  application of these
rules to their accounts.

If a  beneficial  holder who is a foreign  person has a trade or business in the
United States,  and the dividends are effectively  connected with the conduct by
the beneficial holder of a trade or business in the United States,  the dividend
will be subject to U.S. federal net income taxation at regular income tax rates.

Tax Shelter Reporting Regulations.  Under Treasury regulations, if a shareholder
recognizes a loss with respect to the Fund's shares of $2 million or more for an
individual shareholder or $10 million or more for a corporate  shareholder,  the
shareholder must file with the Internal  Revenue Service a disclosure  statement
on Form 8886.  Direct  shareholders  of portfolio  securities  are in many cases
excepted  from  this  reporting   requirement,   but  under  current   guidance,
shareholders of a regulated investment company are not excepted. Future guidance
may extend the current exception from this reporting requirement to shareholders
of  most  or all  regulated  investment  companies.  The  fact  that  a loss  is
reportable under these  regulations  does not affect the legal  determination of
whether the  taxpayer's  treatment  of the loss is proper.  Shareholders  should
consult their tax advisors to determine the  applicability of these  regulations
in light of their individual circumstances.

Other Tax  Considerations.  Shareholders of the Fund may be subject to state and
local taxes on  distributions  received from the Fund and on  redemptions of the
Fund's shares.

                                       66
<PAGE>

Investors  are advised to consult  their own tax advisors  with respect to their
own circumstances  regarding the above-referenced  federal income taxation rules
and with respect to other federal,  state,  local or foreign tax consequences to
them of an investment in shares of a Fund.





                                       67
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                                       68
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                                       69
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                                       70
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                                 NET ASSET VALUE

The net asset value of shares of the Fund is computed as of the close of regular
trading on the New York Stock Exchange (the "Exchange") on each day the Exchange
is open for trading (the "Value  Time").  The Exchange is scheduled to be closed
on the following  holidays:  New Year's Day, Dr.  Martin  Luther King,  Jr. Day,
Presidents'  Day,  Good  Friday,  Memorial  Day,  Independence  Day,  Labor Day,
Thanksgiving  and Christmas,  and on the preceding  Friday or subsequent  Monday
when one of these  holidays  falls on a Saturday  or Sunday,  respectively.  Net
asset  value  per share is  determined  separately  for each  class of shares by
dividing the value of the total assets of the Fund attributable to the shares of
that class, less all liabilities attributable to that class, by the total number
of  shares  of that  class  outstanding.  The net  asset  value may be lower for
certain classes of the Fund because of higher expenses borne by these classes.

An equity  security is valued at its most  recent  sale price on the  security's
primary  exchange  or OTC market as of the Value Time.  Lacking  any sales,  the
security is valued at the calculated  mean between the most recent bid quotation
and the most recent asked quotation (the "Calculated  Mean") on such exchange or
OTC  market  as of the  Value


                                       71
<PAGE>

Time. If it is not possible to determine the  Calculated  Mean,  the security is
valued at the most recent bid quotation on such exchange or OTC market as of the
Value Time. In the case of certain foreign exchanges or OTC markets, the closing
price reported by the exchange or OTC market (which may sometimes be referred to
as the "official  close" or the "official  closing price" or other similar term)
will be considered the most recent sale price.

Debt securities are valued as follows.  Money market instruments  purchased with
an  original or  remaining  maturity  of 60 days or less,  maturing at par,  are
valued at amortized  cost.  Other money market  instruments  are valued based on
information obtained from an independent pricing service or, if such information
is not readily  available,  by using matrix pricing  techniques  (formula driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an independent pricing service (which are intended to reflect
the mean between the bid and asked prices),  if available,  and otherwise at the
mean of the most  recent  bid and  asked  quotations  or  evaluated  prices,  as
applicable,  based on quotations or evaluated  prices  obtained from one or more
broker-dealers.  Privately  placed  debt  securities,  other than Rule 144A debt
securities,  initially are valued at cost and  thereafter  based on all relevant
factors  including  type  of  security,  size of  holding  and  restrictions  on
disposition.  Municipal  debt  securities  are valued at prices  supplied  by an
approved  pricing  agent (which are intended to reflect the mean between the bid
and asked  prices),  if available,  and otherwise at the mean of the most recent
bid and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities are valued at prices supplied by an independent pricing service,
if available, and otherwise at the most recent bid quotation or evaluated price,
as applicable,  obtained from one or more broker-dealers.  If it is not possible
to value a particular debt security pursuant to the above methods,  the security
is valued on the basis of  factors  including  (but not  limited  to)  maturity,
coupon, creditworthiness,  currency denomination, and the movement of the market
in which the security is normally traded.

An exchange-traded option contract on securities, currencies and other financial
instruments  is valued at its most recent sale price on the  relevant  exchange.
Lacking any sales,  the option contract is valued at the Calculated  Mean. If it
is not possible to determine the Calculated  Mean, the option contract is valued
at the most recent bid quotation in the case of a purchased  option  contract or
the most recent asked  quotation in the case of a written  option  contract,  in
each case as of the Value Time. An option contract on securities, currencies and
other financial instruments traded in the OTC market is valued on the Value Date
at the evaluated price provided by the  broker-dealer  with which it was traded.
Futures contracts (and options thereon) are valued at the most recent settlement
price,  if available on the exchange on which they are traded most  extensively.
With the exception of stock index futures  contracts  which trade on the Chicago
Mercantile Exchange,  closing settlement times are prior to the close of trading
on the New York Stock Exchange. For stock index futures contracts which trade on
the  Chicago  Mercantile  Exchange,   closing  settlement  prices  are  normally
available  at  approximately  4:20  Eastern  time.  If no  settlement  price  is
available, the last traded price on such exchange will be used.

If market quotations for portfolio assets are not readily available or the value
of a portfolio asset as determined in accordance with Board approved  procedures
does not represent the fair market value of the  portfolio  asset,  the value of
the portfolio asset is taken to be an amount which, in the opinion of the Fund's
Pricing  Committee  (or,  in  some  cases,  the  Board's  Valuation  Committee),
represents fair market value. The value of other portfolio holdings owned by the
Fund is  determined  in a manner  which is intended  to fairly  reflect the fair
market value of the asset on the valuation date,  based on valuation  procedures
adopted  by the  Fund's  Board and  overseen  primarily  by the  Fund's  Pricing
Committee.

                             DIRECTORS AND OFFICERS


The following table presents certain information  regarding the Board Members of
the  Corporation.  Each Board Member's year of birth is set forth in parentheses
after his or her name. Unless otherwise noted, (i) each Board Member has engaged
in the principal  occupation(s)  noted in the table for at least the most recent
five years, although not necessarily in the same capacity,  and (ii) the address
of each Board Member that is not an "interested  person" (as defined in the 1940
Act) of the Corporation or the Advisor (each, an "Independent Board Member"), is
c/o Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office
for each Board Member is until the election and qualification of a successor, or
until  such Board  Member  sooner  dies,  resigns,  is  removed or as  otherwise
provided in the governing  documents of the  Corporation.  Because the Fund does
not hold an annual meeting of  shareholders,  each Board Member will hold office
for an  indeterminate  period.  The  Board  Members  may also  serve in  similar
capacities with other funds in the DWS fund complex.

                                       72
<PAGE>

Independent Board Members

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the                                                                               Number of Funds
 Corporation and Length    Business Experience and                                               in DWS Fund
 of Time Served            Directorships During the Past 5 Years                                 Complex Overseen
--------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                                    <C>
Dawn-Marie Driscoll (1946) President, Driscoll Associates (consulting firm); Executive Fellow,           76
Chairperson since 2004     Center for Business Ethics, Bentley College; formerly, Partner,
Board Member since         Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and
1987                       General Counsel, Filene's (1978-1988). Directorships: Trustee of 8
                           open-end mutual funds managed by Sun Capital Advisers, Inc. (since
                           2007); Director of ICI Mutual Insurance Company (since 2007);
                           Advisory Board, Center for Business Ethics, Bentley College;
                           Trustee, Southwest Florida Community Foundation (charitable
                           organization); Former Directorships: Investment Company Institute
                           (audit, executive, nominating committees) and Independent Directors
                           Council (governance, executive committees)
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr.      Vice Chair, WGBH Educational Foundation. Directorships: Association           76
 (1943)                    of Public Television Stations; Becton Dickinson and Company(1)
 Board Member since        (medical technology company); Belo Corporation(1) (media company);
 1990                      Boston Museum of Science; Public Radio International. Former
                           Directorships: American Public Television; Concord Academy; New
                           England Aquarium; Mass. Corporation for Educational
                           Telecommunications; Committee for Economic Development; Public
                           Broadcasting Service
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)        Managing General Partner, Exeter Capital Partners (a series of                76
Board Member since         private equity funds). Directorships: Progressive Holding
1996                       Corporation (kitchen goods importer and distributor); Natural
                           History, Inc. (magazine publisher); Box Top Media Inc.
                           (advertising); The Kennel Shop (retailer)
--------------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss        Clinical Professor of Finance, NYU Stern School of Business                   76
(1945)                     (1997-present); Member, Finance Committee, Association for Asian
Board Member since         Studies (2002-present); Director, Mitsui Sumitomo Insurance Group
2005                       (US) (2004-present); prior thereto, Managing Director, J.P. Morgan
                           (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------
Martin J. Gruber           Nomura Professor of Finance, Leonard N. Stern School of Business,             76
(1937)                     New York University (since September 1965); Director, Japan Equity
Board Member since         Fund, Inc. (since January 1992), Thai Capital Fund, Inc. (since
2006                       January 2000), Singapore Fund, Inc. (since January 2000), National
                           Bureau of Economic Research (since January 2006). Formerly, Trustee,
                           TIAA (pension funds) (January 1996-January 2000); Trustee, CREF and
                           CREF Mutual Funds (January 2000-March 2005); Chairman, CREF and CREF
                           Mutual Funds (February 2004-March 2005); and Director, S.G. Cowen
                           Mutual Funds (January 1985-January 2001)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring         Jacob Safra Professor of International Banking and Professor,                 76
(1946)                     Finance Department, The Wharton School, University of Pennsylvania
Board Member since         (since July 1972); Co-Director, Wharton Financial Institutions
2006                       Center (since July 2000); Director, Japan Equity Fund, Inc. (since
                           September 2007), Thai Capital Fund, Inc. (since September 2007),
                           Singapore Fund, Inc. (since September 2007). Formerly, Vice Dean and
                           Director, Wharton Undergraduate Division (July 1995-June 2000);
                           Director, Lauder Institute of International Management Studies (July
                           2000-June 2006)
--------------------------------------------------------------------------------------------------------------------



                                       73
<PAGE>

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the                                                                               Number of Funds
 Corporation and Length    Business Experience and                                               in DWS Fund
 of Time Served            Directorships During the Past 5 Years                                 Complex Overseen
--------------------------------------------------------------------------------------------------------------------
Graham E. Jones            Senior Vice President, BGK Realty, Inc. (commercial real estate)              76
(1933)                     (since 1995). Formerly, Trustee of various investment companies
Board Member since         managed by Sun Capital Advisors, Inc. (1998-2005), Morgan Stanley
2006                       Asset Management (1985-2001) and Weiss, Peck and Greer (1985-2005)
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel           President and Chief Executive Officer, The Pew Charitable Trusts              76
(1951)                     (charitable organization) (1994 to present); Trustee, Thomas
Board Member since         Jefferson Foundation (charitable organization) (1994 to present);
2006                       Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001
                           to present). Formerly, Executive Vice President, The Glenmede Trust
                           Company (investment trust and wealth management) (1983 to 2004);
                           Board Member, Investor Education (charitable organization)
                           (2004-2005); Director, Viasys Health Care(1) (January 2007-June 2007)
--------------------------------------------------------------------------------------------------------------------
Philip Saunders, Jr.       Principal, Philip Saunders Associates (economic and financial                 74
(1935)                     consulting) (since November 1988).  Formerly, Director, Financial
Board Member since         Industry Consulting, Wolf & Company (consulting) (1987-1988);
2006                       President, John Hancock Home Mortgage Corporation (1984-1986);
                           Senior Vice President of Treasury and Financial Services, John
                           Hancock Mutual Life Insurance Company, Inc. (1982-1986)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.     Private investor since October 2003; Trustee of 8 open-end mutual             76
(1946)                     funds managed by Sun Capital Advisers, Inc. (since October 1998).
Board Member since         Formerly, Pension & Savings Trust Officer, Sprint Corporation((1))
2006                       (telecommunications) (November 1989-September 2003)
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg     Retired. Formerly, Consultant (1997-2001); Director, US Government            76
(1943)                     Accountability Office (1996-1997); Partner, Fulbright & Jaworski,
Board Member since         L.L.P. (law firm) (1978-1996). Directorships: The William and Flora
1997                       Hewlett Foundation; Service Source, Inc. Former Directorships:
                           Mutual Fund Directors Forum (2002-2004), American Bar Retirement
                           Association (funding vehicle for retirement plans) (1987-1990 and
                           1994-1996)
--------------------------------------------------------------------------------------------------------------------
Carl W. Vogt               Retired Senior Partner, Fulbright & Jaworski, L.L.P. (law firm);              74
(1936)                     formerly, President (interim) of Williams College (1999-2000);
Board Member since         formerly, President of certain funds in the Deutsche Asset
2002                       Management family of funds (formerly, Flag Investors family of
                           funds) (registered investment companies) (1999-2000). Directorships:
                           Yellow Corporation (trucking); American Science & Engineering (x-ray
                           detection equipment). Former Directorships: ISI Family of Funds
                           (registered investment companies, 4 funds overseen); National
                           Railroad Passenger Corporation (Amtrak) Waste Management, Inc.
                           (solid waste disposal); formerly, Chairman and Member, National
                           Transportation Safety Board
--------------------------------------------------------------------------------------------------------------------

                                       74
<PAGE>

Interested Board Member

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the                                                                               Number of Funds
 Corporation and Length    Business Experience and                                               in DWS Fund
 of Time Served            Directorships During the Past 5 Years                                 Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(2)         Managing Director(4), Deutsche Asset Management; Head of Deutsche             82
 (1958)                    Asset Management Americas; CEO of DWS Scudder; formerly board member
 Board Member since        of DWS Investments, Germany (1999-2005); formerly, Head of Sales and
 2006                      Product Management for the Retail and Private Banking Division of
                           Deutsche Bank in Germany (1997-1999); formerly, various strategic
                           and operational positions for Deutsche Bank Germany Retail and
                           Private Banking Division in the field of investment funds, tax
                           driven instruments and asset management for corporates (1989-1996)
--------------------------------------------------------------------------------------------------------------------

Officers(3)

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the
 Corporation and Length     Business Experience and
 of Time Served             Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(5)        Managing Director(4), Deutsche Asset Management (2006-present); President of DWS
 (1965)                     family of funds; Director, ICI Mutual Insurance Company (since October 2007);
 President, 2006-present    formerly, Director of Fund Board Relations (2004-2006) and Director of Product
                            Development (2000-2004), Merrill Lynch Investment Managers; Senior Vice President
                            Operations, Merrill Lynch Asset Management (1999-2000)
--------------------------------------------------------------------------------------------------------------------
 John Millette(6) (1962)    Director(4), Deutsche Asset Management
 Vice President and
 Secretary, 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(5)        Managing Director(4), Deutsche Asset Management (since July 2004); formerly,
 (1963)                     Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of
 Chief Financial Officer,   Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global
 2004-present               Asset Management (1994-1998)
 Treasurer, 2005-present
--------------------------------------------------------------------------------------------------------------------
 Patricia DeFilippis(5)     Vice President, Deutsche Asset Management (since June 2005); Counsel, New York Life
 (1963)                     Investment Management LLC (2003-2005); legal associate, Lord, Abbett & Co. LLC
 Assistant Secretary,       (1998-2003)
 2005-present
--------------------------------------------------------------------------------------------------------------------
 Elisa D. Metzger(5)        Director(4), Deutsche Asset Management (since September 2005); Counsel, Morrison and
 (1962)                     Foerster LLP (1999-2005)
 Assistant Secretary,
 2005-present
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(6)        Managing Director(4), Deutsche Asset Management
 (1962)
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(6)            Director(4), Deutsche Asset Management (since 2006); Vice President, The
 (1957)                     Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------



                                       75
<PAGE>

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the
 Corporation and Length     Business Experience and
 of Time Served             Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Kathleen Sullivan          Director(4), Deutsche Asset Management
 D'Eramo(6)
 (1957)
 Assistant Treasurer,
 2003-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(5) (1972)    Vice President, Deutsche Asset Management (since 2006); formerly, AML Operations
 Anti-Money Laundering      Manager for Bear Stearns (2004-2006), Supervising Compliance Principal and Operations
 Compliance Officer,        Manager for AXA Financial (1999-2004)
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Robert Kloby(5) (1962)     Managing Director(4), Deutsche Asset Management (2004-present); formerly, Chief
 Chief Compliance           Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President, The
 Officer, 2006-present      Prudential Insurance Company of America (1988-2000); E.F. Hutton and Company
                            (1984-1988)
--------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(5)  Director(4), Deutsche Asset Management (2006-present); formerly, Director, Senior
 (1951)                     Vice President, General Counsel, and Assistant Secretary, Hansberger Global
 Chief Legal Officer,       Investors, Inc. (1996-2006); Director, National Society of Compliance Professionals
 2006-present               (2002-2005)(2006-2009)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      A publicly held company with securities  registered pursuant to Section
         12 of the Securities Exchange Act of 1934.

(2)      The  mailing  address  of Axel  Schwarzer  is c/o  Deutsche  Investment
         Management  Americas Inc.,  345 Park Avenue,  New York, New York 10154.
         Mr.  Schwarzer is an interested Board Member by virtue of his positions
         with Deutsche Asset Management.  As an interested person, Mr. Schwarzer
         receives no compensation from the Funds.

(3)      As a result of their respective positions held with the Advisor,  these
         individuals are considered  "interested  persons" of the Advisor within
         the meaning of the 1940 Act. Interested persons receive no compensation
         from the Funds.

(4)      Executive title, not a board directorship.

(5)      Address:  345 Park Avenue, New York, New York 10154.

(6)      Address: Two International Place, Boston, Massachusetts 02110.

Each Officer also holds  similar  positions for other  investment  companies for
which DIMA or an affiliate serves as the advisor.

Officer's Role with Principal Underwriter:  DWS Scudder Distributors, Inc.

 Paul H. Schubert:                         Vice President
 Caroline Pearson:                         Secretary

Information Concerning Committees and Meetings of Board Members

The Board of the  Corporation  met ten (10) times during the calendar year ended
December 31, 2006 and each Board Member attended at least 80% of the meetings of
the Board and meetings of the committees of the Board on which such Board Member
served.

                                       76
<PAGE>

Board  Committees.  Ms.  Driscoll  has served as Chair of the Board of the Funds
since June 2004.

The Board has established the following  standing  committees:  Audit Committee,
Nominating/Corporate Governance Committee, Valuation Committee, Equity Oversight
Committee, Fixed Income Oversight Committee,  Marketing/Distribution/Shareholder
Service Committee,  Legal/Regulatory/Compliance Committee and Expense/Operations
Committee.

The Audit  Committee  assists the Board in  fulfilling  its  responsibility  for
oversight of the quality and integrity of the accounting, auditing and financial
reporting  practices  of the  applicable  Fund.  It also  makes  recommendations
regarding the selection of an independent  registered public accounting firm for
a Fund,  reviews the  independence of such firm,  reviews the scope of audit and
internal  controls,  considers and reports to the Board on matters relating to a
Fund's  accounting and financial  reporting  practices,  and performs such other
tasks as the full Board deems  necessary  or  appropriate.  The Audit  Committee
receives  annual   representations   from  the  independent   registered  public
accounting firm as to its  independence.  The members of the Audit Committee are
Keith R. Fox (Chair and Audit Committee Financial Expert),  Kenneth C. Froewiss,
Richard J. Herring,  Graham E. Jones,  Philip Saunders,  Jr., William N. Searcy,
Jr. and Jean  Gleason  Stromberg.  The Audit  Committee  held eight (8) meetings
during the calendar year 2006.

The  Nominating/Corporate  Governance  Committee  (i)  recommends  to the  Board
candidates  to serve as Board  Members and (ii)  oversees  and, as  appropriate,
makes  recommendations  to the Board  regarding  other  fund  governance-related
matters,  including but not limited to Board compensation practices,  retirement
policies,  self-evaluations  of effectiveness,  review of possible  conflicts of
interest  and  independence  issues  involving  Board  Members,  allocations  of
assignments  and  functions  of  committees  of the Board,  and share  ownership
policies. The members of the Nominating/Corporate Governance Committee are Henry
P.  Becton,  Jr.  (Chair),  Graham E. Jones,  Rebecca W. Rimel and Jean  Gleason
Stromberg.  The  Nominating/Corporate  Governance Committee (previously known as
the  Committee on  Independent  Directors)  held three (3)  meetings  during the
calendar year 2006.

The Valuation  Committee  oversees Fund  valuation  matters,  reviews  valuation
procedures  adopted  by the  Board,  determines  the fair  value  of the  Fund's
securities as needed in accordance  with the valuation  procedures  and performs
such other tasks as the full Board deems necessary or  appropriate.  The members
of the Valuation  Committee  are Keith R. Fox,  Kenneth C.  Froewiss,  Martin J.
Gruber,  Richard J. Herring and Philip  Saunders,  Jr.  (Chair).  The  Valuation
Committee held six (6) meetings during the calendar year 2006.

The Board has established two Investment Oversight  Committees,  one focusing on
Funds  primarily   investing  in  equity   securities  (the  "Equity   Oversight
Committee")  and one  focusing  on Funds  primarily  investing  in fixed  income
securities  (the "Fixed Income  Oversight  Committee").  These  Committees  meet
regularly with Fund portfolio managers and other investment  personnel to review
the relevant  Funds'  investment  strategies  and  investment  performance.  The
members of the Equity  Oversight  Committee are Henry P. Becton,  Jr., Martin J.
Gruber (Chair),  Richard J. Herring,  Rebecca W. Rimel, Philip Saunders, Jr. and
Carl W. Vogt. The members of the Fixed Income Oversight Committee are Dawn-Marie
Driscoll, Keith R. Fox, Kenneth C. Froewiss, Graham E. Jones, William N. Searcy,
Jr. (Chair) and Jean Gleason Stromberg. Each Investment Oversight Committee held
six (6) meetings during the calendar year 2006.

The  Marketing/Distribution/Shareholder   Service  Committee  oversees  (i)  the
quality, costs and types of shareholder services provided to the Funds and their
shareholders,  and (ii) the distribution-related  services provided to the Funds
and their  shareholders.  The members of the  Marketing/Distribution/Shareholder
Service Committee are Martin J. Gruber,  Richard J. Herring (Chair),  Rebecca W.
Rimel,     Jean     Gleason     Stromberg     and    Carl    W.    Vogt.     The
Marketing/Distribution/Shareholder  Service  Committee  held  six  (6)  meetings
during the calendar year 2006.

The  Legal/Regulatory/Compliance  Committee  oversees (i) the significant  legal
affairs of the Funds, including the handling of pending or threatened litigation
or  regulatory  action  involving  the Funds,  (ii) general  compliance  matters
relating   to  the  Funds  and  (iii)   proxy   voting.   The   members  of  the
Legal/Regulatory/Compliance  Committee  are  Henry P.  Becton,  Jr.,  Dawn-Marie
Driscoll,  Rebecca W. Rimel,  William N. Searcy, Jr., Jean Gleason Stromberg and

                                       77
<PAGE>

Carl W. Vogt (Chair).  The  Legal/Regulatory/Compliance  Committee  held six (6)
meetings during the calendar year 2006.

The Expense/Operations Committee (i) monitors the Fund's total operating expense
levels,  (ii)  oversees the  provision of  administrative  services to the Fund,
including the Fund's custody,  fund accounting and insurance  arrangements,  and
(iii) reviews the Fund's investment advisers' brokerage practices, including the
implementation  of  related  policies.  The  members  of the  Expense/Operations
Committee are Henry P. Becton, Jr., Dawn-Marie  Driscoll,  Keith R. Fox, Kenneth
C.  Froewiss,  Graham E. Jones  (Chair),  Philip  Saunders,  Jr. and  William N.
Searcy,  Jr. This  committee  held seven (7) meetings  during the calendar  year
2006.

Ad Hoc Committees.  In addition to the standing committees described above, from
time to time the Board also forms ad hoc committees to consider specific issues.
In 2006,  various ad hoc  committees of the Board held an  additional  seven (7)
meetings.

Remuneration.  Each Independent Board Member receives compensation from the Fund
for his or her services, which includes an annual retainer and an attendance fee
for each meeting attended. No additional compensation is paid to any Independent
Board Member for travel time to meetings,  attendance at directors'  educational
seminars  or  conferences,   service  on  industry  or  association  committees,
participation  as speakers at directors'  conferences or service on special fund
industry director task forces or subcommittees. Independent Board Members do not
receive any employee  benefits such as pension or retirement  benefits or health
insurance from the Fund or any fund in the DWS fund complex.

Members of the Board who are officers,  directors,  employees or stockholders of
Deutsche Asset Management or its affiliates receive no direct  compensation from
a Fund, although they are compensated as employees of Deutsche Asset Management,
or its affiliates,  and as a result may be deemed to participate in fees paid by
the Funds.  The following tables show  compensation  from the Fund and aggregate
compensation  from all of the  funds in the DWS fund  complex  received  by each
Board Member during the calendar year 2006. Mr. Schwarzer became a member of the
Board on May 5,  2006,  is an  interested  person of the Funds and  received  no
compensation  from the  Funds or any fund in the DWS  fund  complex  during  the
relevant periods.

<TABLE>
<CAPTION>
                                                                     Total Compensation
                                      Aggregate Compensation           from Fund and
Name of Board Member                        from Fund*                DWS Fund Complex(1)
--------------------                        ----------               -------------------
<S>                                             <C>                       <C>
Henry P. Becton, Jr.(3)                         $4                        $189,000
Dawn-Marie Driscoll(2)(3)(4)                    $5                        $251,000
Keith R. Fox(3)(4)                              $4                        $195,000
Kenneth C. Froewiss(3)(4)                       $4                        $234,988
Martin J. Gruber(3)                             $4                        $188,000
Richard J. Herring(3)(4)                        $3                        $184,000
Graham E. Jones(3)(4)                           $4                        $206,000
Rebecca W. Rimel(3)                             $4                        $185,000
Philip Saunders, Jr.(3)(4)                      $4                        $207,000
William N. Searcy, Jr.(3)(4)                    $4                        $206,000
Jean Gleason Stromberg(3)(4)                    $4                        $202,000
Carl W. Vogt(3)                                 $4                        $189,000
</TABLE>


*        The Fund commenced opeations on July 5, 2006.

(1)      The DWS Fund Complex is composed of 155 funds as of December 31, 2006.

(2)      Includes  $50,000 in annual  retainer  fees in Ms.  Driscoll's  role as
         Chairperson of the Board.

(3)      For each Board Member,  except Mr. Becton,  Mr.  Froewiss and Mr. Vogt,
         total  compensation  for calendar year 2006 includes  compensation  for
         service  on  the  boards  of  34  trusts/corporations  comprised  of 87
         funds/portfolios.  For Messrs.  Becton and Vogt total  compensation for
         calendar year 2006 includes  compensation  for service on the boards of
         32  trusts/corporations  comprised  of  85  funds/portfolios.  For  Mr.

                                       78
<PAGE>

         Froewiss   total   compensation   for  calendar   year  2006   includes
         compensation  for  services  on the  boards  of 37  trusts/corporations
         comprised of 90 funds/portfolios.

(4)      Aggregate  compensation  includes amounts paid to the Board Members for
         special  meetings of ad hoc committees of the board in connection  with
         the  possible  consolidation  of the various DWS Fund boards and funds,
         meetings for considering fund expense simplification  initiatives,  and
         consideration  of issues  specific  to the Funds'  direct  shareholders
         (i.e., those shareholders who did not purchase shares through financial
         intermediaries).  Such amounts totaled $16,000 for Ms. Driscoll, $1,000
         for Mr. Fox, $17,000 for Mr. Froewiss,  $1,000 for Dr. Herring, $16,000
         for Mr.  Jones,  $17,000 for Dr.  Saunders,  $16,000 for Mr. Searcy and
         $16,000  for Ms.  Stromberg.  These  meeting  fees  were  borne  by the
         applicable DWS Funds.

Board Member Ownership in the Fund(1)

The  following  table shows the dollar range of equity  securities  beneficially
owned by each Board  Member in the Fund and DWS Fund  Complex as of December 31,
2006.

<TABLE>
<CAPTION>
                                               Dollar Range of                Aggregate Dollar Range of
                                           Beneficial Ownership in        Ownership in all Funds Overseen by
                                           DWS International Value                   Board Member
Board Member                                  Opportunities Fund              in the DWS Fund Complex(2)
------------                                  ------------------              --------------------------

Independent Board Member:
-------------------------
<S>                                                  <C>                               <C>
Henry P. Becton, Jr.                                 None                         Over $100,000
Dawn-Marie Driscoll                                  None                         Over $100,000
Keith R. Fox                                         None                         Over $100,000
Kenneth C. Froewiss                               $1-$10,000                      Over $100,000
Martin J. Gruber                                     None                         Over $100,000
Richard J. Herring                                   None                         Over $100,000
Graham E. Jones                                      None                         Over $100,000
Rebecca W. Rimel                                     None                         Over $100,000
Philip Saunders, Jr.                                 None                         Over $100,000
William N. Searcy, Jr.                               None                         Over $100,000
Jean Gleason Stromberg                               None                         Over $100,000
Carl W. Vogt                                         None                         Over $100,000

Interested Board Member:
------------------------

Axel Schwarzer                                       None                           Over $100,000
</TABLE>

(1)      The amount shown  includes  share  equivalents of funds which the Board
         Member  is  deemed  to be  invested  pursuant  to the  Fund's  deferred
         compensation   plan.  The  inclusion   therein  of  any  shares  deemed
         beneficially  owned does not  constitute  an  admission  of  beneficial
         ownership of the shares.

(2)      Securities  beneficially  owned as defined  under the 1934 Act  include
         direct and/or indirect ownership of securities where the Board Member's
         economic interest is tied to the securities,  employment  ownership and
         securities  when the Board  Member can exert  voting power and when the
         Board Member has  authority to sell the  securities.  The dollar ranges
         are:  None,   $1-$10,000,   $10,001-$50,000,   $50,001-$100,000,   over
         $100,000.

Ownership in Securities of the Advisor and Related Companies

As reported to the Fund, the information in the following table reflects
ownership by the Independent Board Members and their immediate family members of
certain securities as of December 31, 2006. An immediate family


                                       79
<PAGE>

member can be a spouse, children residing in the same household including step
and adoptive children and any dependents. The securities represent ownership in
the Advisor or principal underwriter of the Fund and any persons (other than a
registered investment company) directly or indirectly controlling, controlled
by, or under common control with the Advisor or principal underwriter of the
Fund (including Deutsche Bank AG).

<TABLE>
<CAPTION>
                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----
<S>                                   <C>                <C>               <C>           <C>           <C>
Henry P. Becton, Jr.                                      None
Dawn-Marie Driscoll                                       None
Keith R. Fox                                              None
Kenneth C. Froewiss                                       None
Martin J. Gruber                                          None
Richard J. Herring                                        None
Graham E. Jones                                           None
Rebecca W. Rimel                                          None
Philip Saunders, Jr.                                      None
William N. Searcy, Jr.                                    None
Jean Gleason Stromberg                                    None
Carl W. Vogt                                              None

Securities Beneficially Owned

As of November 7, 2007, the Board Members and officers of the Corporation owned,
as a group, less than 1% of the outstanding shares of the Fund.

To the best of the Fund's knowledge,  as of November 7, 2007, no person owned of
record or beneficially 5% or more of any class of the Fund's outstanding shares,
except as noted below.

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

DEUTSCHE INVESTMENT MANAGEMENT                                93,386.7650                  29.30 % of Class A
AMERICAS INC
NEW YORK NY  10017-1216

CHARLES SCHWAB & CO INC                                       65,019.0130                  20.40 % of Class A
SPECIAL CUSTODY ACCOUNT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMERS
SAN FRANCISCO CA  94104-4151

MLPF&S FOR THE SOLE BENEFIT OF ITS                            17,766.3730                   5.57 % of Class A
CUSTOMERS
JACKSONVILLE FL  32246

STATE STREET BANK & TRUST CO                                 255,253.2170            36.59 % of Institutional Class
CUST FBO
DWS LIFECOMPASS 2015 FUND
QUINCY MA  02171-2105


                                       80
<PAGE>
Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

STATE STREET BANK & TRUST CO                                 188,546.4570            27.02 % of Institutional Class
CUST FBO
DWS LIFECOMPASS 2020 FUND
QUINCY MA  02171-2105

DEUTSCHE INVESTMENT                                           93,794.4180            13.44 % of Institutional Class
MANAGEMENT AMERICAS INC
NEW YORK NY  10017-1216

STATE STREET BANK & TRUST CO                                  79,326.2520            11.37 % of Institutional Class
CUST FBO
DWS LIFECOMPASS RETIREMENT FUND
QUINCY MA  02171-2105

STATE STREET BANK & TRUST CO                                  77,060.3140            11.05 % of Institutional Class
CUST FBO
DWS LIFECOMPASS 2030 FUND
QUINCY MA  02171-2105

DEUTSCHE INVESTMENT                                           92,388.3240                  35.23 % of Class C
MANAGEMENT AMERICAS INC
NEW YORK NY  10017-1216

MLPF&S FOR THE SOLE BENEFIT OF ITS                            43,792.3590                  16.70 % of Class C
CUSTOMERS
JACKSONVILLE FL  32246

DEUTSCHE INVESTMENT                                           93,731.3650                  30.84 % of Class S
MANAGEMENT AMERICAS INC
NEW YORK NY  10017-1216

MERRILL LYNCH PIERCE FENNER &                                 79,227.8490                  26.07 % of Class S
SMITH FOR THE SOLE BENEFITS OF ITS
CUSTOMERS
JACKSONVILLE FL  32246-6484

DWS TRUST COMPANY CUST                                        15,691.7130                   5.16 % of Class S
WHITE SALMON WA  98672-1432
</TABLE>




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Agreement to Indemnify Independent Directors for Certain Expenses

In connection with litigation or regulatory  action related to possible improper
market timing or other improper trading activity or possible improper  marketing
and sales  activity  in the Funds,  each Fund's  investment  advisor has agreed,
subject to  applicable  law and  regulation,  to indemnify and hold harmless the
applicable  Funds  against  any and all loss,  damage,  liability  and  expense,
arising  from  market  timing or  marketing  and sales  matters  alleged  in any
enforcement actions brought by governmental authorities involving or potentially
affecting the Funds or the investment  advisor  ("Enforcement  Actions") or that
are the basis for private  actions  brought by shareholders of the Funds against
the Funds,  their directors and officers,  the Funds' investment  advisor and/or
certain other parties ("Private Litigation"), or any proceedings or actions that
may  be  threatened  or  commenced  in  the  future  by  any  person  (including
governmental authorities), arising from or similar to the matters alleged in the
Enforcement Actions or Private Litigation.  In recognition of its undertaking to
indemnify  the  applicable  Funds  and in  light of the  rebuttable  presumption
generally  afforded to independent  directors/trustees  of investment  companies
that they have not engaged in disabling conduct,  each Fund's investment advisor
has also agreed,  subject to  applicable  law and  regulation,  to indemnify the
applicable  Funds'  Independent   Directors  against  certain   liabilities  the
Independent  Directors  may incur from the  matters  alleged in any  Enforcement
Actions or Private  Litigation or arising from or similar to the matters alleged
in the Enforcement Actions or Private Litigation,  and advance expenses that may
be  incurred by the  Independent  Director in  connection  with any  Enforcement
Actions  or  Private  Litigation.  The  applicable  investment  advisor  is not,
however,  required to provide  indemnification and advancement of expenses:  (1)
with respect to any  proceeding  or action with respect to which the  applicable
Fund's Board  determines that the Independent  Director  ultimately would not be
entitled to indemnification or (2) for any liability of the Independent Director
to the Funds or their  shareholders  to which  the  Independent  Director  would
otherwise  be  subject  by reason  of  willful  misfeasance,  bad  faith,  gross
negligence  or reckless  disregard  of the  Independent  Director's  duties as a
director or trustee of the Funds as determined in a final  adjudication  in such
action or proceeding.  The estimated amount of any expenses that may be advanced
to the  Independent  Directors  or  indemnity  that  may be  payable  under  the
indemnity  agreements  is currently  unknown.  These  agreements  by each Fund's
investment  advisor will survive the  termination of the  investment  management
agreements between the applicable investment advisor and the Funds.





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                                FUND ORGANIZATION

DWS International  Fund, Inc. (the  "Corporation") was organized as Scudder Fund
of Canada Ltd. in Canada in 1953 by the investment  management  firm of Scudder,
Stevens  & Clark,  Inc.  On March 16,  1964,  the name of this  Corporation  was
changed  to  Scudder  International  Investments  Ltd.  On July  31,  1975,  the
corporate  domicile  of this  Corporation  was  changed  to the US  through  the
transfer  of its net  assets to a newly  formed  Maryland  corporation,  Scudder
International  Fund, Inc., in exchange for shares of the Corporation  which then
were distributed to the  shareholders of the  Corporation.  On February 6, 2006,
the name of the Corporation was changed from Scudder International Fund, Inc. to
DWS International Fund, Inc.


The authorized capital stock of the Corporation consists of 2,447,923,888 shares
of a par value of $.01  each,  which  capital  stock has been  divided  into six
series:  DWS International  Fund, the original series;  DWS Latin America Equity
Fund,  organized in December 1992; DWS Europe Equity Fund,  organized in October
1994;  DWS  Emerging  Markets  Equity  Fund,  organized  in  May  1996  and  DWS
International  Value  Opportunities  Fund  organized  in July 2006.  Each series
consists of 320 million shares, except for DWS International Fund which consists
of  620,595,597  shares,  DWS Latin  America  Equity Fund which  consists of 340
million shares and DWS Europe Equity Fund which consists of 420 million  shares.
DWS  International  Value  Opportunities  Fund is divided  into four  classes of
shares: Class A, Class C, Class S and Institutional Class shares. Class A, C and
Institutional  shares of the Fund are offered  through a separate  statement  of
additional information.


The Corporation is a Maryland corporation organized under the laws of Maryland
and is governed by Amended and Restated Articles of Incorporation, as may be
further amended from time to time (the "Articles of Incorporation"). All shares
issued and outstanding are fully paid and non-assessable, transferable, have no
pre-emptive rights (except as may be determined by the Board of Directors) or
conversion rights (except as described below) and are redeemable as described in
the SAI and in the Fund's prospectus. Each share has equal rights with each
other share of the same class of the Fund as to voting, dividends, exchanges and
liquidation. Shareholders are entitled to one vote for each share held and
fractional votes for fractional shares held.

The Board of Directors may determine  that shares of a fund or a class of a fund
shall be automatically  converted into shares of another fund of the Corporation
or of another class of the same or another Fund based on the relative net assets
of such Fund or class at the time of conversion. The Board of Directors may also
provide that the holders of shares of a fund or a class of a fund shall have the
right to convert or exchange their shares into shares of one or more other funds
or classes on terms established by the Board of Directors.

Each share of the  Corporation  may be subject to such sales  loads or  charges,
expenses and fees, account size  requirements,  and other rights and provisions,
which may be the same or different  from any other share of the  Corporation  or
any  other  share of any fund or class of a fund  (including  shares of the same
Fund or class as the share),  as the Board of Directors of the  Corporation  may
establish or change from time to time and to the extent permitted under the 1940
Act.

The Corporation is not required to hold an annual meeting of shareholders in any
year in which the  election of  Directors  is not required by the 1940 Act. If a
meeting of  shareholders  of the Corporation is required by the 1940 Act to take
action on the election of  Directors,  then an annual  meeting  shall be held to
elect  Directors  and take such other  action as may come  before  the  meeting.
Special meetings of the shareholders of the Corporation,  or of the shareholders
of one or more Funds or classes  thereof,  for any purpose or  purposes,  may be
called at any time by the Board of Directors or by the  President,  and shall be
called by the  President or Secretary at the request in writing of  shareholders
entitled to cast a majority of the votes entitled to be cast at the meeting.

Except as  provided in the 1940 Act,  the  presence in person or by proxy of the
holders  of  one-third  of the  shares  entitled  to  vote  at a  meeting  shall
constitute a quorum for the  transaction of business at meetings of shareholders
of the Corporation or of a fund or class.

On any matter submitted to a vote of shareholders, all shares of the Corporation
entitled  to vote  shall be voted in the  aggregate  as a single  class  without
regard  to  series  or  classes  of  shares,  provided,  however,  that (a) when
applicable law requires that one or more series or classes vote separately, such
series or classes shall vote  separately  and,


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subject to (b) below,  all other series or classes shall vote in the  aggregate;
and (b) when the Board of Directors determines that a matter does not affect the
interests  of a  particular  series or class,  such series or class shall not be
entitled to any vote and only the shares of the affected series or classes shall
be entitled to vote.

Notwithstanding any provision of Maryland corporate law requiring  authorization
of any action by a greater  proportion  than a majority  of the total  number of
shares  entitled  to vote  on a  matter,  such  action  shall  be  effective  if
authorized by the majority vote of the outstanding shares entitled to vote.

Subject to the requirements of applicable law and any procedures  adopted by the
Board of Directors from time to time,  the holders of shares of the  Corporation
or any one or more  series or classes  thereof may take action or consent to any
action by delivering a consent, in writing or by electronic transmission, of the
holders entitled to cast not less than the minimum number of votes that would be
necessary to authorize or take the action at a formal meeting.

The Articles of  Incorporation  provide that the Board of Directors  may, in its
discretion,  establish  minimum  investment  amounts for  shareholder  accounts,
impose  fees on  accounts  that do not  exceed a minimum  investment  amount and
involuntarily  redeem  shares in any such  account in payment of such fees.  The
Board of Directors,  in its sole  discretion,  also may cause the Corporation to
redeem all of the  shares of the  Corporation  or one or more  series or classes
held by any  shareholder for any reason,  to the extent  permissible by the 1940
Act,  including (a) if the shareholder owns shares having an aggregate net asset
value  of  less  than a  specified  minimum  amount,  (b)  if the  shareholder's
ownership of shares would disqualify a series from being a regulated  investment
company, (c) upon a shareholder's  failure to provide sufficient  identification
to permit the  Corporation  to verify  the  shareholder's  identity,  (d) upon a
shareholder's  failure to pay for shares or meet or maintain the  qualifications
for  ownership  of a particular  series or class,  (e) if the Board of Directors
determines (or pursuant to policies  established by the Board of Directors it is
determined)  that share  ownership by a shareholder is not in the best interests
of the  remaining  shareholders,  (f)  when  the  Corporation  is  requested  or
compelled to do so by  governmental  authority or applicable  law, or (g) upon a
shareholder's  failure to comply with a request for information  with respect to
the direct or indirect  ownership  of shares of the  Corporation.  By  redeeming
shares the  Corporation  may terminate a fund or any class  without  shareholder
approval,  and the  Corporation may suspend the right of shareholders to require
the Corporation to redeem shares to the extent  permissible  under the 1940 Act.
Payment  for shares  redeemed  shall be made in cash or other  property,  or any
combination thereof; provided, however, that the composition of any such payment
(e.g.,  cash,  securities  and/or  other  assets)  to any  shareholder  shall be
determined by the Corporation in its sole discretion, and may be different among
shareholders  (including  differences  among  shareholders  in the same  fund or
class).

Except  as  otherwise   permitted  by  the  Articles  of  Incorporation  of  the
Corporation, upon liquidation or termination of a fund or class, shareholders of
such  fund or  class  of a fund  shall  be  entitled  to  receive,  pro  rata in
proportion to the number of shares of such fund or class held by each of them, a
share of the net assets of such Fund or class,  and the holders of shares of any
other  particular fund or class shall not be entitled to any such  distribution,
provided,  however,  that the  composition  of any  such  payment  (e.g.,  cash,
securities  and/or other assets) to any  shareholder  shall be determined by the
Corporation  in its sole  discretion,  and may be different  among  shareholders
(including differences among shareholders in the same fund or class).

The  Corporation's  Board  of  Directors  supervises  a fund's  activities.  The
Corporation  adopted  a plan  pursuant  to Rule  18f-3  under  the 1940 Act (the
"Plan") to permit the  Corporation  to establish a multiple  class  distribution
system for its funds.

Under the  Plan,  each  class of shares  will  represent  interests  in the same
portfolio of investments of the series, and be identical in all respects to each
other class,  except as set forth below. The only differences  among the various
classes  of  shares  of  the  Series  will  relate   solely  to:  (a)  different
distribution fee payments or service fee payments associated with any Rule 12b-1
Plan  for a  particular  class  of  shares  and  any  other  costs  relating  to
implementing or amending such Rule 12b-1 Plan (including  obtaining  shareholder
approval of such Rule 12b-1 Plan or any amendment thereto),  which will be borne
solely by  shareholders  of such  class;  (b)  different  service  fee  payments
associated with a service plan for a specific class and any other costs relating
to implementing or amending such service plan; (c) different  account  minimums;
(d) the bearing by each class of its Class Expenses,  as defined below;  (e) the
voting  rights  related  to any Rule 12b-1 Plan  affecting  a specific  class of
shares; (f) separate exchange privileges;  (g) different conversion features and
(h) different class names and  designations.  Expenses  currently  designated as

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"Class Expenses" by the Corporation's Board of Directors under the Plan include,
for example,  transfer agency fees  attributable to a specific class and certain
securities registration fees.

                             PROXY VOTING GUIDELINES

The Fund has delegated proxy voting responsibilities to the Advisor,  subject to
the  Board's  general  oversight.  The Fund has  delegated  proxy  voting to the
Advisor with the  direction  that proxies  should be voted  consistent  with the
Fund's best  economic  interests.  The Advisor has adopted its own Proxy  Voting
Policies and Procedures ("Policies"), and Proxy Voting Guidelines ("Guidelines")
for this  purpose.  The  Policies  address,  among other  things,  conflicts  of
interest that may arise between the interests of the Fund,  and the interests of
the Advisor and its affiliates,  including the Fund's principal underwriter. The
Guidelines set forth the Advisor's general position on various  proposals,  such
as:

o        Shareholder  Rights -- The Advisor  generally  votes against  proposals
         that restrict shareholder rights.

o        Corporate  Governance -- The Advisor  generally votes for  confidential
         and cumulative voting and against supermajority voting requirements for
         charter and bylaw amendments. The Advisor generally votes for proposals
         to restrict a chief  executive  officer from serving on more than three
         outside  boards of  directors.  The  Advisor  generally  votes  against
         proposals  that  require a company  to  appoint  a  Chairman  who is an
         independent director.

o        Anti-Takeover Matters -- The Advisor generally votes for proposals that
         require shareholder ratification of poison pills or that request boards
         to redeem poison pills,  and votes against the adoption of poison pills
         if  they  are  submitted  for  shareholder  ratification.  The  Advisor
         generally votes for fair price proposals.

o        Compensation  Matters -- The Advisor generally votes for executive cash
         compensation  proposals,  unless they are unreasonably  excessive.  The
         Advisor generally votes against stock option plans that do not meet the
         Advisor's criteria.

o        Routine Matters -- The Advisor  generally votes for the ratification of
         auditors,  procedural matters related to the annual meeting and changes
         in company name, and against bundled proposals and adjournment.

The general provisions described above do not apply to investment companies. The
Advisor generally votes proxies solicited by investment  companies in accordance
with the  recommendations  of an  independent  third  party,  except for proxies
solicited by or with respect to investment companies for which the Advisor or an
affiliate serves as the Advisor or principal underwriter ("affiliated investment
companies"). The Advisor votes affiliated investment company proxies in the same
proportion as the vote of the investment company's other shareholders (sometimes
called  "mirror" or "echo"  voting).  Master fund proxies  solicited from feeder
funds are voted in accordance  with  applicable  requirements  of the Investment
Company Act of 1940.

Although the  Guidelines  set forth the Advisor's  general  voting  positions on
various proposals,  the Advisor may,  consistent with the Funds' best interests,
determine under some circumstances to vote contrary to those positions.

The  Guidelines  on a  particular  issue  may or may  not  reflect  the  view of
individual members of the Board or of a majority of the Board. In addition,  the
Guidelines may reflect a voting position that differs from the actual  practices
of  the  public  companies  within  the  Deutsche  Bank  organization  or of the
investment  companies for which the Advisor or an affiliate serves as investment
advisor or sponsor.

The  Advisor  may  consider  the views of a portfolio  company's  management  in
deciding how to vote a proxy or in establishing general voting positions for the
Guidelines, but management's views are not determinative.

As mentioned above, the Policies  describe the way in which the Advisor resolves
conflicts  of  interest.  To  resolve  conflicts,   the  advisor,  under  normal
circumstances, votes proxies in accordance with its Guidelines.

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<PAGE>

If the Advisor departs from the Guidelines with respect to a particular proxy or
if the Guidelines do not specifically  address a certain proxy proposal, a proxy
voting committee  established by the advisor will vote the proxy.  Before voting
any such proxy,  however,  the Advisor's conflicts review committee will conduct
an investigation to determine whether any potential  conflicts of interest exist
in connection  with the  particular  proxy  proposal.  If the  conflicts  review
committee  determines that the Advisor has a material  conflict of interest,  or
certain  individuals  on the  proxy  voting  committee  should be  recused  from
participating  in a  particular  proxy  vote,  it will  inform the proxy  voting
committee.  If notified that the Advisor has a material conflict,  or fewer than
three voting members are eligible to  participate  in the proxy vote,  typically
the Advisor will engage an  independent  third party to vote the proxy or follow
the proxy voting recommendations of an independent third party.

Under certain circumstances,  the Advisor may not be able to vote proxies or the
Advisor  may find that the  expected  economic  costs from voting  outweigh  the
benefits  associated with voting. For example,  the Advisor may not vote proxies
on certain foreign securities due to local restrictions or customs.  The Advisor
generally  does  not vote  proxies  on  securities  subject  to  share  blocking
restrictions.

You may  obtain  information  about how the Fund  voted  proxies  related to its
portfolio  securities  during the 12-month  period ended June 30 by visiting the
Securities and Exchange  Commission's Web site at www.sec.gov or by visiting our
Web site at:  dws-scudder.com  (click on  "proxy  voting"  at the  bottom of the
page).

                              FINANCIAL STATEMENTS


The financial statements,  including the portfolio of investments,  of the Fund,
together  with the Report of  Independent  Registered  Public  Accounting  Firm,
Financial  Highlights and notes to financial  statements in the Annual Report to
the Shareholders of the Fund dated August 31, 2007, are  incorporated  herein by
reference  and are hereby  deemed to be a part of this  Statement of  Additional
Information.


                             ADDITIONAL INFORMATION

The CUSIP  number of the class of DWS  International  Value  Opportunities  Fund
offered herein is:

Class S:
23337R627

DWS International Value Opportunities Fund has a fiscal year ending August 31.

Many of the investment changes in the Fund will be made at prices different from
those  prevailing  at the time  they may be  reflected  in a  regular  report to
shareholders of the Fund. These transactions will reflect  investment  decisions
made by the Advisor in light of the Fund's  investment  objective  and policies,
its other portfolio holdings and tax considerations, and should not be construed
as recommendations for similar action by other investors.

The Fund's Prospectus and this Statement of Additional  Information omit certain
information  contained in the  Registration  Statement  which the Fund has filed
with the SEC under the  Securities  Act of 1933 and  reference is hereby made to
the Registration  Statement for further information with respect to the Fund and
the securities  offered hereby.  This Registration  Statement and its amendments
are available for inspection by the public at the SEC in Washington, D.C.


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                             RATINGS OF INVESTMENTS

Standard & Poor's Corporation Bond Ratings

AAA.  Debt  rated AAA had the  highest  rating  assigned  by  Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA. Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.

A. Debt  rated A has a strong  capacity  to pay  interest  and  repay  principal
although it is somewhat more  susceptible  to the adverse  effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB.  Debt rated BBB is regarded as having an adequate  capacity to pay interest
and  repay  principal.   Whereas  it  normally  exhibits   adequate   protection
parameters,  adverse  economic  conditions  or changing  circumstances  are more
likely to lead to a weakened  capacity to pay interest and repay  principal  for
debt in this category than in higher rated categories.

BB, B, CCC, CC and C. Debt rated BB, B, CCC, CC and C is  regarded,  on balance,
as predominantly  speculative with respect to capacity to pay interest and repay
principal in  accordance  with the terms of the  obligation.  BB  indicates  the
lowest degree of speculation and C the highest degree of speculation. While such
debt will likely have some  quality and  protective  characteristics,  these are
outweighed by large uncertainties or major risk exposures to adverse conditions.

CI. The rating CI is  reserved  for income  bonds on which no  interest is being
paid.

D. Debt rated D is in  default,  and  payment of interest  and/or  repayment  of
principal is in arrears.

Moody's Investors Service, Inc. Bond Ratings

AAA. Bonds which are rated Aaa are judged to be of the best quality.  They carry
the  smallest  degree  of  investment  risk  and are  generally  referred  to as
"gilt-edge."  Interest  payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change,  such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa. Bonds which are rated Aa are judged to be of high quality by all  standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds.  They are rated lower than the best bonds  because  margins of protection
may not be as large as in Aaa securities or  fluctuation of protective  elements
may be of greater  amplitude or there may be other  elements  present which make
the long term risks appear somewhat larger than in

Aaa securities.

A. Bonds which are rated A possess many favorable investment  attributes and are
to be considered as upper medium grade  obligations.  Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa. Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither  highly  protected nor poorly  secured.  Interest  payments and
principal  security  appear  adequate  for the present  but  certain  protective
elements may be lacking or may be  characteristically  unreliable over any great
length of time. Such bonds lack outstanding  investment  characteristics  and in
fact have speculative characteristics as well.

Ba.  Bonds  which are rated Ba are judged to have  speculative  elements;  their
future cannot be considered  as well assured.  Often the  protection of interest
and  principal  payments may be very  moderate and thereby not well


                                       96
<PAGE>

safeguarded  during  both good and bad times  over the  future.  Uncertainty  of
position characterizes bonds in this class.

B. Bonds  which are rated B  generally  lack  characteristics  of the  desirable
investment.  Assurance of interest and principal  payments or of  maintenance of
other terms of the contract over any long period of time may be small.

Caa.  Bonds  which are rated Caa are of poor  standing.  Such  issues  may be in
default or there may be present  elements of danger with respect to principal or
interest.

Ca. Bonds which are rated Ca represent  obligations  which are  speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C.  Bonds  which are rated C are the lowest  rated  class of bonds and issues so
rated can be regarded as having  extremely  poor prospects of ever attaining any
real investment standing.

Fitch Long-Term Debt Ratings

AAA.  Highest credit  quality.  "AAA" ratings  denote the lowest  expectation of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments.  This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA. Very high credit  quality.  "AA"` ratings  denote a very low  expectation of
credit risk.  They indicate very strong capacity for timely payment of financial
commitments.  This  capacity  is not  significantly  vulnerable  to  foreseeable
events.

A. High credit quality. "A" ratings denote a low expectation of credit risk. The
capacity for timely payment of financial  commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB. Good credit quality.  "BBB" ratings  indicate that there is currently a low
expectation  of credit  risk.  The  capacity  for timely  payment  of  financial
commitments is considered adequate,  but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity.  This is the lowest
investment-grade category.

BB.  Speculative.  "BB" ratings  indicate that there is a possibility  of credit
risk  developing,  particularly  as the result of adverse  economic  change over
time;  however,  business or  financial  alternatives  may be available to allow
financial  commitments  to be met.  Securities  rated in this  category  are not
investment grade.

B. Highly  speculative.  "B" ratings  indicate that  significant  credit risk is
present,  but a limited  margin of safety  remains.  Financial  commitments  are
currently being met; however,  capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC,  CC, C. High  default  risk.  Default is a real  possibility.  Capacity for
meeting  financial  commitments  is solely  reliant  upon  sustained,  favorable
business or economic developments.  A "CC" rating indicates that default of some
kind appears probable. "C" ratings signal imminent default.

DDD, DD, D. Default.  The ratings of  obligations  in this category are based on
their prospects for achieving  partial or full recovery in a  reorganization  or
liquidation  of  the  obligor.   While  expected   recovery  values  are  highly
speculative  and cannot be estimated with any precision,  the following serve as
general  guidelines.  "DDD" obligations have the highest potential for recovery,
around 90%-100% of outstanding amounts and accrued interest.

"DD" indicates potential  recoveries in the range of 50%-90%, and "D" the lowest
recovery  potential,  i.e.,  below 50%.  Entities  rated in this  category  have
defaulted  on some or all of their  obligations.  Entities  rated "DDD" have the
highest  prospect for resumption of  performance or continued  operation with or
without  a  formal  reorganization  process.  Entities  rated  "DD"  and "D" are
generally undergoing a formal reorganization or liquidation process; those


                                       97
<PAGE>

rated  "DD" are  likely  to  satisfy  a  higher  portion  of  their  outstanding
obligations,  while  entities  rated "D" have a poor  prospect  for repaying all
obligations.

Fitch Short-Term Debt Ratings

F1.  Highest credit  quality.  Indicates the Best capacity for timely payment of
financial commitments;  may have an added "+" to denote any exceptionally strong
credit feature.

F2. Good credit quality. A satisfactory capacity for timely payment of financial
commitments,  but the  margin  of  safety  is not as great as in the case of the
higher ratings.

F3.  Fair  credit  quality.   The  capacity  for  timely  payment  of  financial
commitments is adequate;  however,  near-term  adverse changes could result in a
reduction to non-investment grade.

B.  Speculative.  Minimal capacity for timely payment of financial  commitments,
plus  vulnerability  to  near-term  adverse  changes in  financial  and economic
conditions.

C. High  default  risk.  Default is a real  possibility.  Capacity  for  meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D. Default. Denotes actual or imminent payment default.

Commercial Paper Ratings

Commercial  paper rated by Standard & Poor's  Ratings  Services  ("S&P") has the
following   characteristics:   Liquidity   ratios  are  adequate  to  meet  cash
requirements.  Long-term  senior  debt is rated "A" or  better.  The  issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow  have an  upward  trend  with  allowance  made for  unusual  circumstances.
Typically, the issuer's industry is well established and the issuer has a strong
position  within the industry.  The  reliability  and quality of management  are
unquestioned.  Relative  strength  or weakness  of the above  factors  determine
whether the issuer's commercial paper is rated A-1 or A-2.

The ratings  Prime-1 and Prime-2 are the two highest  commercial  paper  ratings
assigned  by Moody's  Investors  Service,  Inc.  ("Moody's").  Among the factors
considered by it in assigning  ratings are the following:  (1) evaluation of the
management of the issuer;  (2) economic  evaluation of the issuer's  industry or
industries and an appraisal of  speculative-type  risks which may be inherent in
certain  areas;  (3)  evaluation  of  the  issuer's   products  in  relation  to
competition and customer  acceptance;  (4) liquidity;  (5) amount and quality of
long-term debt; (6) trend of earnings over a period of ten years;  (7) financial
strength of a parent company and the relationships  which exist with the issuer;
and (8) recognition by the management of obligations which may be present or may
arise as a result of public  interest  questions and  preparations  to meet such
obligations.  Relative  strength  or weakness  of the above  factors  determines
whether the issuer's commercial paper is rated Prime-1 or 2.

Municipal Notes

Moody's: The highest ratings for state and municipal short-term  obligations are
"MIG 1," "MIG 2," and "MIG 3" (or "VMIG 1," "VMIG 2" and "VMIG 3" in the case of
an issue having a variable rate demand feature). Notes rated "MIG 1" or "VMIG 1"
are judged to be of the "best  quality".  Notes rated "MIG 2" or "VMIG 2" are of
"high  quality," with margins or protection  "ample  although not as large as in
the  preceding  group".  Notes  rated  "MIG  3" or  "VMIG  3" are of  "favorable
quality," with all security  elements  accounted for but lacking the strength of
the preceding grades.

                                       98
<PAGE>


S&P:  The  "SP-1"  rating  reflects  a "very  strong or strong  capacity  to pay
principal and interest". Notes issued with "overwhelming safety characteristics"
will be rated "SP-1+".  The "SP-2" rating reflects a "satisfactory  capacity" to
pay principal and interest.


Fitch:  The highest ratings for state and municipal  short-term  obligations are
"F-1+," "F-1," and "F-2."


                                       99

<PAGE>


                          DWS INTERNATIONAL FUND, INC.
                          ----------------------------

                                     PART C

                                OTHER INFORMATION

<TABLE>
<CAPTION>
Item 23.      Exhibits
--------      --------

<S>             <C>             <C>      <C>
                (a)             (1)      Articles of Amendment and Restatement of the Registrant dated June 23,
                                         2006.
                                         (Incorporated by reference to Post-Effective Amendment No. 107 to the
                                         Registration Statement, as filed on June 30, 2006.)

                                (2)      Articles Supplementary dated June 29, 2006.
                                         (Incorporated by reference to Post-Effective Amendment No. 107 to the
                                         Registration Statement, as filed on June 30, 2006.)

                (b)                      Amended and Restated By-Laws, dated June 27, 2006.
                                         (Incorporated by reference to Post-Effective Amendment No. 108 to the
                                         Registration Statement, as filed on December 1, 2006.)

                (c)                      Inapplicable.

                (d)             (1)      Investment Management Agreement between the Registrant, on behalf DWS
                                         Europe Equity Fund, DWS International Fund, DWS Latin America Fund and DWS
                                         Pacific Opportunities Equity Fund (dated June 1, 2006), DWS Emerging
                                         Markets Equity Fund (dated July 1, 2006) and DWS International Value
                                         Opportunities Fund (dated July 3, 2006) and Deutsche Investment Management
                                         Americas Inc.
                                         (Incorporated by reference to Post-Effective Amendment No. 108 to the
                                         Registration Statement, as filed on December 1, 2006.)

                (e)                      Underwriting Agreement between the Registrant and Scudder Distributors,
                                         Inc. dated September 30, 2002.
                                         (Incorporated by reference to Post-Effective Amendment No. 89 to the
                                         Registration Statement, as filed on November 1, 2002.)

                (f)             (1)      Form of Retirement Agreement between the Registrant and each of Martin J.
                                         Gruber, Graham E. Jones and Carl W. Vogt dated November 14, 2007 (filed
                                         herein).

                                (2)      Indemnification and Reimbursement Agreement between the Registrant and
                                         DIMA dated November 14, 2007 (filed herein).

                (g)                      Master Custodian Agreement between the Registrant and Brown Brothers
                                         Harriman & Co., dated February 1, 2007, is filed herein.

                (h)             (1)      Agency Agreement between the Registrant and DWS Scudder Investments
                                         Service Company, dated April 1, 2007, is filed herein.

                                (2)      Shareholder Services Agreement between the Registrant, for Classes A, B
                                         and C shares, and Kemper Distributors, Inc., dated December 29, 2000.
                                         (Incorporated by reference to Post-Effective Amendment No. 84 to the
                                         Registration Statement, as filed on March 1, 2001.)




                                       3
<PAGE>

                                (3)      Shareholder Services Agreement between the Registrant, for Classes A, B
                                         and C shares, and Scudder Distributors, Inc. dated April 5, 2002.
                                         (Incorporated by reference to Post-Effective Amendment No. 84 to the
                                         Registration Statement, as filed on March 1, 2001.)

                                (4)      Letter of Indemnity to the Scudder Funds dated October 13, 2004.
                                         (Incorporated by reference to Post-Effective Amendment No. 102 to the
                                         Registration Statement, as filed on December 2, 2005.)

                                (5)      Letter of Indemnity to the Scudder Funds dated October 13, 2004.
                                         (Incorporated by reference to Post-Effective Amendment No. 102 to the
                                         Registration Statement, as filed on December 2, 2005.)

                                (6)      Letter of Indemnity to the Independent Directors dated October 13, 2004.
                                         (Incorporated by reference to Post-Effective Amendment No. 102 to the
                                         Registration Statement, as filed on December 2, 2005.)

                                (7)      Administrative Services Agreement between DWS International Fund, Inc. and
                                         Deutsche Investment Management Americas Inc., dated June 1, 2006.
                                         (Incorporated by reference to Post-Effective Amendment No. 108 to the
                                         Registration Statement, as filed on December 1, 2006.)

                                (8)      Form of Mutual Fund Rule 22c-2 Information Sharing Agreement between
                                         Registrant and DWS Scudder Distributors, Inc. is filed herein.

                (i)             (1)      Opinion of Counsel, dated December 26, 2002.
                                         (Incorporated by reference to Post-Effective Amendment No. 91 to the
                                         Registration Statement, as filed on December 27, 2002.)

                                (2)      Opinion of Counsel (in regards to DWS International Value Opportunities
                                         Fund: Classes A, C, S and Institutional).
                                         (Incorporated by reference to Post-Effective Amendment No. 107 to the
                                         Registration Statement, as filed on June 30, 2006.)

                (j)                      Report of Independent Registered Public Accounting Firm is filed herein.

                (k)                      Inapplicable.

                (l)                      Inapplicable.

                (m)             (1)      Rule 12b-1 Plan for Scudder International Fund - Classes A, B and C
                                         shares, dated December 29, 2000.
                                         (Incorporated by reference to Post-Effective Amendment No. 84 to the
                                         Registration Statement, as filed on March 1, 2001.)

                                (2)      Rule 12b-1 Plan for Scudder Emerging Markets Growth Fund - Classes A, B
                                         and C shares, dated December 29, 2000.
                                         (Incorporated by reference to Post-Effective Amendment No. 84 to the
                                         Registration Statement, as filed on March 1, 2001.)

                                (3)      Rule 12b-1 Plan for Scudder Greater Europe Growth Fund - Classes A, B and
                                         C shares, dated December 29, 2000.
                                         (Incorporated by reference to Post-Effective Amendment No. 84 to the
                                         Registration Statement, as filed on March 1, 2001.)




                                       4
<PAGE>

                                (4)      Rule 12b-1 Plan for Scudder Latin America Fund - Classes A, B and C
                                         shares, dated December 29, 2000.
                                         (Incorporated by reference to Post-Effective Amendment No. 84 to the
                                         Registration Statement, as filed on March 1, 2001.)

                                (5)      Rule 12b-1 Plan for DWS International Value Opportunities Fund - Class A
                                         shares, dated July 5, 2006.
                                         (Incorporated by reference to Post-Effective Amendment No. 108 to the
                                         Registration Statement, as filed on December 1, 2006.)

                                (6)      Rule 12b-1 Plan for DWS International Value Opportunities Fund - Class C
                                         shares, dated July 5, 2006.
                                         (Incorporated by reference to Post-Effective Amendment No. 108 to the
                                         Registration Statement, as filed on December 1, 2006.)

                (n)                      Amended and Restated Plan with respect to the Registrant pursuant to Rule
                                         18f-3 dated October 12, 2004.  (Incorporated by reference to
                                         Post-Effective Amendment No. 100 to the Registration Statement, as filed
                                         on December 2, 2004.)

                (p)             (1)      Code of Ethics of Deutsche Asset Management International GmbH.
                                         (Incorporated by reference to Post-Effective Amendment No. 107 to the
                                         Registration Statement, as filed on June 30, 2006.)

                                (2)      Consolidated Fund Code of Ethics dated March 14, 2006.
                                         (Incorporated by reference to Post-Effective Amendment No. 108 to the
                                         Registration Statement, as filed on December 1, 2006.)

                                (3)      Code of Ethics for Deutsche Asset Management - U.S., effective January 1,
                                         2007 is filed herein.

                (q)                      Power of Attorney, dated June 27, 2006.
                                         (Incorporated by reference to Post-Effective No. 107 to the Registration
                                         Statement, as filed on June 30, 2006).
</TABLE>

Item 24.          Persons Controlled by or under Common Control with Registrant
--------          -------------------------------------------------------------

                  None

Item 25.          Indemnification
--------          ---------------

Sections 4.1, 4.2 and 4.3 of Article Fourth of Registrant's Articles of
Amendment and Restatement, included as Exhibit (a)(1) to this Registration
Statement and filed herein by reference, provide as follows:

Section 4.1. Limitation of Liability. To the fullest extent permitted by the
1940 Act and the Maryland General Corporation Law, no director or former
director and no officer or former officer of the Corporation shall be personally
liable to the Corporation or its Shareholders for money damages. No amendment to
the Charter or repeal of any of its provisions shall limit or eliminate the
benefits provided by this Section 4.1 to directors or former directors or
officers or former officers with respect to any act or omission that occurred
prior to such amendment or repeal.



                                       5
<PAGE>

Section 4.2.  Indemnification.
              ---------------

(a) Any word or words used in this Section 4.2 that are defined in Section 2-418
of the Maryland General Corporation Law (the "Indemnification Section") shall
have the same meaning as defined in the Indemnification Section.

(b) The Corporation shall indemnify and advance expenses to a director or
officer (which includes, with respect to any such person, any person who is or
was an officer of the Corporation and any person who, while an officer of the
Corporation, is or was serving at the request of the Corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise, or employee
benefit plan) of the Corporation in connection with a proceeding to the fullest
extent permitted by and in accordance with the Indemnification Section and the
1940 Act. The foregoing rights of indemnification and advancement of expenses
shall not be exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled.

(c) No amendment to this Charter or repeal of any of its provisions shall limit
or eliminate the protection afforded by this Section 4.2 to a director or
officer (as that term is described in subsection (b) above) with respect to any
act or omission that occurred prior to such amendment or repeal.

Section 4.3. Reliance on Experts. Subject to any requirements of the 1940 Act
and the Maryland General Corporation Law, the appointment, designation or
identification of a director as the chairperson of the Board of Directors, as a
member or chairperson of a committee of the Board of Directors, an expert on any
topic or in any area (including an audit committee financial expert), or the
lead independent director, or any other special appointment, designation or
identification of a director, shall not impose on that person any standard of
care or liability that is greater than that imposed on that person as a director
in the absence of the appointment, designation or identification, and no
director who has special skills or expertise, or is appointed, designated or
identified as aforesaid, shall be held to a higher standard of care by virtue
thereof. In addition, and subject to any contrary requirements of the 1940 Act
and the Maryland General Corporation Law, no appointment, designation or
identification of a director as aforesaid shall affect in any way that
director's rights or entitlement to indemnification.

Sections 11.1, 11.2, and 11.3 of Article 11 of Registrant's By-Laws, included as
Exhibit (b)(5) to this Registration Statement and filed herein by reference,
provide as follows:

11.1 Indemnification of Directors and Officers. The Corporation shall indemnify
and advance expenses to its current and former Directors and officers to the
extent provided by the Charter.

11.2 Indemnification of Employees and Agents. With respect to employees and
agents who are not officers or Directors of the Corporation, the Corporation
may, as determined by the Board of Directors, indemnify and advance expenses to
such persons to the extent permissible under the Maryland General Corporation
Law, the Securities Act of 1933, as amended, and the 1940 Act, as such statutes
are now or hereafter in force.

11.3 Other Rights. The indemnification and advancement of expenses provided by
this Article 11 or provided by the Charter shall not be deemed exclusive of any
other right, in respect of indemnification, advancement of expenses or
otherwise, to which those seeking such indemnification or advancement of
expenses may be entitled under any insurance, contract or other agreement, vote
of shareholders or Directors or otherwise. Neither the amendment nor repeal of
this Article, nor the adoption or amendment of any other provision of the Bylaws
or Charter inconsistent with this Article, shall apply to or affect in any
respect the applicability of the provisions of this Article with respect to any
act or failure to act which occurred prior to such amendment, repeal or
adoption.

Insofar as indemnification for liability arising under the 1933 Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1940 Act and is,
therefore, unenforceable. In the event of a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person in connection with the
securities being registered) the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the


                                       6
<PAGE>

question whether such indemnification by it is against public policy as
expressed in the 1940 Act and will be governed by the final adjudication of such
issue. In the absence of a determination by a court of competent jurisdiction,
the determinations that indemnification against such liabilities is proper, and
advances can be made, are made by a majority of a quorum of the disinterested,
non-party directors of the Fund, or an independent legal counsel in a written
opinion, based on review of readily available facts.

Deutsche Investment Management Americas, Inc. (hereafter, "DIMA"), the
investment advisor, has agreed, subject to applicable law and regulation, to
indemnify and hold harmless the Registrant against any loss, damage, liability
and expense, including, without limitation, the advancement and payment, as
incurred, of reasonable fees and expenses of counsel (including counsel to the
Registrant and counsel to the Independent Trustees) and consultants, whether
retained by the Registrant or the Independent Trustees, and other customary
costs and expenses incurred by the Registrant in connection with any litigation
or regulatory action related to possible improper market timing or other
improper trading activity or possible improper marketing and sales activity in
the Registrant ("Private Litigation and Enforcement Actions"). In the event that
this indemnification is unavailable to the Registrant for any reason, then DIMA
has agreed to contribute to the amount paid or payable by the Registrant as a
result of any loss, damage, liability or expense in such proportion as is
appropriate to reflect the relative fault of DIMA and the Registrant with
respect to the matters which resulted in such loss, damage, liability or
expense, as well as any other relevant equitable considerations; provided, that
if no final determination is made in such action or proceeding as to the
relative fault of DIMA and the Registrant, then DIMA shall pay the entire amount
of such loss, damage, liability or expense.

In recognition of its undertaking to indemnify the Registrant, and in light of
the rebuttable presumption generally afforded to non-interested board members of
an investment company that they have not engaged in disabling conduct, DIMA has
also agreed, subject to applicable law and regulation, to indemnify and hold
harmless each of the Independent Trustees against any and all loss, damage,
liability and expense, including without limitation the advancement and payment
as incurred of reasonable fees and expenses of counsel and consultants, and
other customary costs and expenses incurred by the Independent Trustees, arising
from the matters alleged in any Private Litigation and Enforcement Actions or
matters arising from or similar in subject matter to the matters alleged in the
Private Litigation and Enforcement Actions (collectively, "Covered Matters"),
including without limitation:

1. all reasonable legal and other expenses incurred by the Independent Trustees
in connection with the Private Litigation and Enforcement Actions, and any
actions that may be threatened or commenced in the future by any person
(including any governmental authority), arising from or similar to the matters
alleged in the Private Litigation and Enforcement Actions, including without
limitation expenses related to the defense of, service as a witness in, or
monitoring of such proceedings or actions;

2. all liabilities and reasonable legal and other expenses incurred by any
Independent Trustee in connection with any judgment resulting from, or
settlement of, any such proceeding, action or matter;

3. any loss or reasonable legal and other expenses incurred by any Independent
Trustee as a result of the denial of, or dispute about, any insurance claim
under, or actual or purported rescission or termination of, any policy of
insurance arranged by DIMA (or by a representative of DIMA acting as such,
acting as a representative of the Registrant or of the Independent Trustees or
acting otherwise) for the benefit of the Independent Trustee, to the extent that
such denial, dispute or rescission is based in whole or in part upon any alleged
misrepresentation made in the application for such policy or any other alleged
improper conduct on the part of DIMA, any of its corporate affiliates, or any of
their directors, officers or employees;

4. any loss or reasonable legal and other expenses incurred by any Independent
Trustee, whether or not such loss or expense is incurred with respect to a
Covered Matter, which is otherwise covered under the terms of any specified
policy of insurance, but for which the Independent Trustee is unable to obtain
advancement of expenses or indemnification under that policy of insurance, due
to the exhaustion of policy limits which is due in whole or in part to DIMA or
any affiliate thereof having received advancement of expenses or indemnification
under that policy for or with respect to any Covered Matter; provided, that the
total amount that DIMA will be obligated to pay under this provision for all
loss or expense shall not exceed the amount that DIMA and any of its affiliates
actually receive under that policy of insurance for or with respect to any and
all Covered Matters; and



                                       7
<PAGE>

5. all liabilities and reasonable legal and other expenses incurred by any
Independent Trustee in connection with any proceeding or action to enforce his
or her rights under the agreement, unless DIMA prevails on the merits of any
such dispute in a final, nonappealable court order.

DIMA is not required to pay costs or expenses or provide indemnification to or
for any individual Independent Trustee (i) with respect to any particular
proceeding or action as to which the Board of the Registrant has determined that
such Independent Trustee ultimately would not be entitled to indemnification
with respect thereto, or (ii) for any liability of the Independent Trustee to
the Registrant or its shareholders to which such Independent Trustee would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the Independent Trustee's duties as a
Trustee of the Registrant as determined in a final adjudication in such
proceeding or action. In addition, to the extent that DIMA has paid costs or
expenses under the agreement to any individual Independent Trustee with respect
to a particular proceeding or action, and there is a final adjudication in such
proceeding or action of the Independent Trustee's liability to the Registrant or
its shareholders by reason of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the Independent Trustee's duties as a Trustee of the
Registrant, such Independent Trustee has undertaken to repay such costs or
expenses to DIMA.

On November 14, 2007, the Registrant and DIMA entered into an agreement that
provides certain retiring Non-interested Trustees certain assurances regarding
continuation of insurance and indemnification rights. More specifically, the
agreement provides that the Registrant shall take all actions reasonably
necessary to assure that the retirement of certain Non-interested Trustees
and/or the election or appointment of members of the consolidated Board shall
not reduce or impair any rights of those Non-interested Trustees to
indemnification, defense, advancement of expenses, or other rights, for or with
respect to actual or threatened claims, liability, or expense that those
Non-interested Trustees may incur or suffer arising from or with respect to
those Non-interested Trustees' service in such capacity, except to the extent
that the consolidated Board determines in the exercise of its duties to modify
the rights of all Board members, past and present, without distinction. It is
understood that any such modification of rights shall not, without the written
consent of the Non-interested Trustees, serve to modify any contractual rights
that the Non-interested Trustees may have under any agreement to which the
Non-interested Trustees and the Registrant are parties.

For the six-year period following the election or appointment of members of the
consolidated Board, the Registrant currently expect to maintain, D&O/E&O
Insurance and IDL Insurance that is substantially equivalent in scope to the
current coverage, and in amounts providing aggregate coverage with respect to
the Registrant and all funds overseen by the consolidated Board of at least $100
million for D&O/E&O Insurance and at least $25 million for IDL Insurance;
subject however to the right of the consolidated Board in the exercise of its
duties to determine that a lower level of insurance coverage is in the best
interests of the Registrant provided that any such reduction in coverage apply
equally to their present and former Trustees.

Pursuant to the agreement, DIMA has agreed that the retirement of the
Non-interested Trustees under the terms of the retirement agreements shall in no
way affect or diminish the contractual rights of indemnification that the
Non-interested Trustees may have under any agreement of indemnification between
an Non-interested Trustees and DIMA, including without limitation agreements of
indemnification currently in effect with respect to matters related to market
timing and matters related to merged or liquidated funds. Upon request made by
any Non-interested Trustees, DIMA has agreed to execute a separate instrument
confirming the existence and continuation of any such agreement of
indemnification.

In addition, pursuant to the agreement, in the event that the consolidated Board
determines to reduce insurance coverage below the minimum levels stated above,
then DIMA at its expense will purchase excess insurance coverage for the benefit
of the Non-interested Trustees sufficient to maintain such minimum coverage
levels in place for the duration of the period specified in the retirement
agreements, provided that in the event that such excess coverage is not
available in the marketplace on commercially reasonable terms from a
conventional third-party insurer, DIMA (or an affiliate of DIMA) may, at DIMA's
discretion and in lieu of purchasing such excess insurance coverage, elect
instead to provide the Non-interested Trustees substantially equivalent
protection in the form of a written indemnity or financial guaranty reasonably
acceptable to each such Non-interested Trustee.



                                       8
<PAGE>

Item 26.          Business and Other Connections of Investment Advisor
--------          ----------------------------------------------------

                  During the last two fiscal years, no director or officer of
                  DIMA, the investment advisor, has engaged in any other
                  business, profession, vocation or employment of a substantial
                  nature other than that of the business of investment
                  management and, through affiliates, investment banking.

Item 27.          Principal Underwriters
--------          ----------------------

                  (a)

                  DWS Scudder Distributors, Inc. acts as principal underwriter
                  of the Registrant's shares and acts as principal underwriter
                  for registered open-end management investment companies other
                  funds managed by DIMA.

                  (b)

                  Information on the officers and directors of DWS Scudder
                  Distributors, Inc., principal underwriter for the Registrant,
                  is set forth below. The principal business address is 222
                  South Riverside Plaza, Chicago, Illinois 60606.

<TABLE>
<CAPTION>
                      (1)                             (2)                                  (3)
          DWS Scudder
          Distributors, Inc.
          Name and Principal             Positions and Offices with               Positions and
          Business Address               DWS Scudder Distributors, Inc.           Offices with Registrant
          ----------------               ------------------------------           -----------------------

<S>      <C>                            <C>                                       <C>
         Philipp Hensler                Director, Chairman of the Board and CEO   None
         345 Park Avenue
         New York, NY 10154

         Michael Colon                  Director and Chief Operating Officer      None
         345 Park Avenue
         New York, NY 10154

         Thomas Winnick                 Director and President                    None
         345 Park Avenue
         New York, NY 10154

         Cliff Goldstein                Chief Financial Officer and Treasurer     None
         60 Wall Street
         New York, NY 10005

         Robert Froehlich               Vice President                            None
         222 South Riverside Plaza
         Chicago, IL 60606

         Paul Schubert                  Vice President                            Chief Financial Officer
         345 Park Avenue                                                          and Treasurer
         New York, NY 10154

         Mark Perrelli                  Vice President                            None
         222 South Riverside Plaza
         Chicago, IL 60606

         Donna White                    Chief Compliance Officer                  None
         345 Park Avenue
         New York, NY 10154



                                       9
<PAGE>

                      (1)                             (2)                                  (3)
          DWS Scudder
          Distributors, Inc.
          Name and Principal             Positions and Offices with               Positions and
          Business Address               DWS Scudder Distributors, Inc.           Offices with Registrant
          ----------------               ------------------------------           -----------------------

         Jason Vazquez                  Vice President and AML Compliance         Anti-Money Laundering
         345 Park Avenue                Officer                                   Compliance Officer
         New York, NY 10154

         Caroline Pearson               Secretary                                 Assistant Secretary
         Two International Place
         Boston, MA 02110

         Philip J. Collora              Assistant Secretary                       None
         222 South Riverside Plaza
         Chicago, IL 60606

         Anjie LaRocca                  Assistant Secretary                       None
         345 Park Avenue
         New York, NY 10154
</TABLE>


         (c)      Not applicable


Item 28.          Location of Accounts and Records
--------          --------------------------------

                  Certain accounts, books and other documents required to be
                  maintained by Section 31(a) of the 1940 Act and the Rules
                  promulgated thereunder are maintained by Deutsche Investment
                  Management Americas Inc., 345 Park Avenue, New York, New York
                  10154. Records relating to the duties of the Registrant's
                  custodian are maintained by Brown Brothers Harriman & Co., 40
                  Water Street, Boston, Massachusetts. Records relating to the
                  duties of the Registrant's transfer agent are maintained by
                  DWS Scudder Investments Service Company ("DWS-SISC"), 210 West
                  10th Street, Kansas City, Missouri 64105, or at the offices of
                  DST Systems, Inc., 333 West 11th Street, Kansas City, Missouri
                  64105, the sub-transfer agent for the Registrant. Records
                  relating to shareholder services functions are maintained by
                  DWS-SISC.

Item 29.          Management Services
--------          -------------------

                  Inapplicable.

Item 30.          Undertakings
--------          ------------

                  Inapplicable.



                                       9
<PAGE>
                                   SIGNATURES
                                   ----------

          Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this amendment
to its Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of New York and the State of New York on
the 19th day of November 2007.


                                                   DWS INTERNATIONAL FUND, INC.

                                                   By:  /s/ Michael G. Clark
                                                        --------------------
                                                        Michael G. Clark
                                                        President

          Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to its Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated:

<TABLE>
<CAPTION>

 SIGNATURE                                  TITLE                                        DATE
 ---------                                  -----                                        ----
<S>                                         <C>                                          <C>

 /s/ Michael G. Clark
-------------------------------------
 Michael G. Clark                           President                                    November 19, 2007

 /s/ Paul H. Schubert
 -------------------------------------
 Paul H. Schubert                           Chief Financial Officer and Treasurer        November 19, 2007

 /s/ Henry P. Becton, Jr.
 -------------------------------------
 Henry P. Becton, Jr.*                      Director                                     November 19, 2007

 /s/ Dawn-Marie Driscoll
 -------------------------------------
 Dawn-Marie Driscoll *                      Chairperson and Director                     November 19, 2007

 /s/ Keith R. Fox
 -------------------------------------
 Keith R. Fox*                              Director                                     November 19, 2007

 /s/ Kenneth C. Froewiss
 -------------------------------------
 Kenneth C. Froewiss*                       Director                                     November 19, 2007

 /s/ Martin J. Gruber
 -------------------------------------
 Martin J. Gruber*                          Director                                     November 19, 2007

 /s/ Richard J. Herring
 -------------------------------------
 Richard J. Herring*                        Director                                     November 19, 2007

 /s/ Graham E. Jones
 -------------------------------------
 Graham E. Jones*                           Director                                     November 19, 2007

 /s/ Rebecca W. Rimel
 -------------------------------------
 Rebecca W. Rimel*                          Director                                     November 19, 2007

 /s/ Philip Saunders, Jr.
 -------------------------------------
 Philip Saunders, Jr.*                      Director                                     November 19, 2007

 /s/ William N. Searcy, Jr.
 -------------------------------------
 William N. Searcy, Jr.*                    Director                                     November 19, 2007

 /s/ Jean Gleason Stromberg
 -------------------------------------
 Jean Gleason Stromberg*                    Director                                     November 19, 2007

<PAGE>

 /s/ Axel Schwarzer
 -------------------------------------
 Axel Schwarzer*                            Director                                     November 19, 2007

 /s/ Carl W. Vogt
 -------------------------------------
 Carl W. Vogt*                              Director                                     November 19, 2007
</TABLE>


*By:     /s/ Caroline Pearson
         --------------------
         Caroline Pearson**
         Assistant Secretary

**        Attorney-in-fact pursuant to the powers of attorney as filed in
          Post-Effective Amendment No. 107 to the Registrant's Registration
          Statement on June 30, 2006.

<PAGE>




                                                                File No. 2-14400
                                                                File No. 811-642


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    EXHIBITS

                                       TO

                                    FORM N-1A


                        POST-EFFECTIVE AMENDMENT No. 110

                            TO REGISTRATION STATEMENT

                                      UNDER

                           THE SECURITIES ACT OF 1933

                                       AND

                                AMENDMENT NO. 90

                            TO REGISTRATION STATEMENT

                                      UNDER

                       THE INVESTMENT COMPANY ACT OF 1940



                          DWS INTERNATIONAL FUND, INC.



                                       10
<PAGE>



                          DWS INTERNATIONAL FUND, INC.

                                  EXHIBIT INDEX
                                  -------------

                                     (f)(1)
                                     (f)(2)
                                       (g)
                                     (h)(1)
                                     (h)(8)
                                       (j)
                                     (p)(3)





                                       11