KEMPER HORIZON FUND
PORTFOLIOS
KEMPER HORIZON 20+ PORTFOLIO
KEMPER HORIZON 10+ PORTFOLIO
KEMPER HORIZON 5 PORTFOLIO
SUPPLEMENT TO PROSPECTUS
DATED NOVEMBER 30, 1998
CLASS I SHARES
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The Kemper Horizon Fund consists of three investment portfolios, Kemper Horizon
20+ Portfolio ("Horizon 20+ Portfolio"), Kemper Horizon 10+ Portfolio ("Horizon
10+ Portfolio") and Kemper Horizon 5 Portfolio ("Horizon 5 Portfolio")
(collectively the "Portfolios"), each currently offering four classes of shares
to provide investors with different purchasing options. These are Class A, Class
B and Class C shares, which are described in the prospectus, and Class I shares,
which are described in the prospectus as supplemented hereby.
Class I shares are available for purchase exclusively by the following
categories of institutional investors: (1) tax-exempt retirement plans (Profit
Sharing, 401(k), Money Purchase Pension and Defined Benefit Plans) of Scudder
Kemper Investments, Inc. ("Scudder Kemper") and its affiliates and rollover
accounts from those plans; (2) the following investment advisory clients of
Scudder Kemper and its investment advisory affiliates that invest at least $1
million in a Fund: unaffiliated benefit plans, such as qualified retirement
plans (other than individual retirement accounts and self-directed retirement
plans); unaffiliated banks and insurance companies purchasing for their own
accounts; and endowment funds of unaffiliated non-profit organizations; (3)
investment-only accounts for large qualified plans, with at least $50 million in
total plan assets or at least 1000 participants; (4) trust and fiduciary
accounts of trust companies and bank trust departments providing fee based
advisory services that invest at least $1 million in a Fund on behalf of each
trust; and (5) policy holders under Zurich-American Insurance Group's collateral
investment program investing at least $200,000 in a Fund. Class I shares
currently are available for purchase only from Kemper Distributors, Inc.
("KDI"), principal underwriter for the Funds, and, in the case of category 4
above, selected dealers authorized by KDI. Share certificates are not available
for Class I shares.
The primary distinctions among the classes of shares lie in their initial and
contingent deferred sales charge schedules and in their ongoing expenses,
including asset-based sales charges in the form of Rule 12b-1 distribution fees.
Class I shares are offered at net asset value without an initial sales charge
and are not subject to a contingent deferred sales charge or a Rule 12b-1
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distribution fee. Also, there is no administrative services fee charged to Class
I shares. As a result of the relatively lower expenses for Class I shares, the
level of income dividends per share (as a percentage of net asset value) and,
therefore, the overall investment return, will typically be higher for Class I
shares than for Class A, Class B and Class C shares.
The following information supplements the indicated sections of the prospectus.
SUMMARY OF EXPENSES
Shareholder Transaction Expenses (applicable to all Portfolios)
CLASS I SHARES
Maximum Sales Charge on Purchases
(as a percentage of offering price)................................ None
Maximum Sales Charge on Reinvested Dividends......................... None
Redemption Fees...................................................... None
Exchange Fee......................................................... None
Deferred Sales Charge (as a percentage of redemption proceeds)....... None
Annual Fund Operating Expenses
HORIZON 20+ HORIZON 10+ HORIZON 5
PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- ---------
Management 0.58% 0.58% 0.58%
Fees
12b-1 Fees None None None
Other Expenses 0.27% 0.41% 0.45%
----- ----- -----
Total
Operating
Expenses 0.85% 0.99% 1.03%
===== ===== =====
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------- ------ ------- ------- --------
Horizon 20+ $9 $27 $47 $105
Horizon 10+ $10 $32 $55 $121
Horizon 5 $11 $33 $57 $126
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The purpose of the preceding table is to assist investors in understanding the
various costs and expenses that an investor in Class I shares of a Portfolio
will bear directly or indirectly.
The Example assumes a 5% annual rate of return pursuant to requirements of the
Securities and Exchange Commission. This hypothetical rate of return is not
intended to be representative of past or future performance of any Portfolio of
the Fund. THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
KEMPER HORIZON 20+ PORTFOLIO
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Year ended July 31, April 8 to
1998 1997 July 31, 1996
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PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period $12.96 9.73 10.03
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Income from investment
operations:
Net investment income 0.17 0.19 0.07
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Net realized and unrealized
gain (loss) 1.09 3.17 (0.37)
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Total from investment
operations 1.26 3.36 (0.30)
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Less Dividends
Distribution from net
investment income 0.12 0.13 --
- --------------------------------------------------------------------------
Distribution from net
realized gain 0.48 -- --
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Total Dividends 0.60 0.13 --
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Net asset value, end of period $13.62 12.96 9.73
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TOTAL RETURN (NOT
ANNUALIZED): 10.29% 34.84 (2.99)
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RATIOS TO AVERAGE NET
ASSETS (ANNUALIZED):
Expenses 0.85% 1.04 0.73
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Net investment income 1.64% 1.73 2.32
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KEMPER HORIZON 10+ PORTFOLIO
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Year ended July 31, April 8 to
1998 1997 July 31, 1996
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PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period $11.97 9.57 9.83
- --------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.35 0.26 0.09
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Net realized and unrealized
gain (loss) 0.84 2.40 (0.26)
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Total from investment
operations 1.19 2.66 (0.17)
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Less Dividends
Distribution from net
investment income 0.29 0.26 0.09
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Distribution from net
realized gain 0.41 -- --
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Total Dividends 0.70 0.26 0.09
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Net asset value,
end of period $12.46 11.97 9.57
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TOTAL RETURN
(NOT ANNUALIZED): 10.47% 28.09 (1.74)
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RATIOS TO AVERAGE
NET ASSETS
(ANNUALIZED):
Expenses 0.99% 1.06 0.73
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Net investment
income 2.75% 2.81 3.21
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KEMPER HORIZON 5 PORTFOLIO
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Year ended July 31, April 8 to
1998 1997 July 31, 1996
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PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period $11.06 9.58 9.69
- --------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.41 0.32 0.08
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Net realized and unrealized
gain (loss) 0.47 1.49 (0.11)
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Total from investment
operations 0.88 1.81 (0.03)
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Less Dividends
Distribution from net
investment income 0.39 0.33 0.08
- --------------------------------------------------------------------------
Distribution from net
realized gain 0.27 -- --
- --------------------------------------------------------------------------
Total Dividends 0.66 0.33 0.08
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Net asset value, end of
period $11.28 11.06 9.58
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TOTAL RETURN (NOT
ANNUALIZED): 8.29% 19.27 (0.31)
- --------------------------------------------------------------------------
RATIOS TO AVERAGE
NET ASSETS
(ANNUALIZED):
Expenses 1.03% 1.20 0.73
- --------------------------------------------------------------------------
Net investment
income 3.89% 3.61 4.11
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NOTES TO ALL PORTFOLIOS: Per share data for the period ended July 31, 1996, was
determined based on average shares outstanding. For the fiscal period ended July
31, 1996, the investment manager agreed to temporarily reduce its management fee
and absorb certain operating expenses of the Portfolios. If these expense
waivers had not been in effect, the expense ratio would have increased by 0.06%
of average net assets for Horizon 20+, 0.04% for Horizon 10+ and 0.05% for
Horizon 5. There would have been a corresponding decrease in the net investment
income ratio for the period. The waivers were discontinued on August 1, 1996.
<PAGE>
SPECIAL FEATURES
Shareholders of a Portfolio's Class I shares may exchange their shares for (i)
shares of Zurich Money Funds--Zurich Money Market Fund if the shareholders of
Class I shares have purchased shares because they are participants in tax-exempt
retirement plans of Scudder Kemper and its affiliates and (ii) Class I shares of
any other "Kemper Mutual Fund" listed under "Special Features-- Class A Shares--
Combined Purchases" in the prospectus. Conversely, shareholders of Zurich Money
Funds--Zurich Money Market Fund who have purchased shares because they are
participants in tax-exempt retirement plans of Scudder Kemper and its affiliates
may exchange their shares for Class I shares of "Kemper Mutual Funds" to the
extent that they are available through their plan. Exchanges will be made at the
relative net asset values of the shares. Exchanges are subject to the
limitations set forth in the prospectus under "Special Features-- Exchange
Privilege-- General."
November 30, 1998
KHF-1I
