KEMPER HORIZON FUNDS
SUPPLEMENT TO PROSPECTUS
DATED DECEMBER 1, 1999
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CLASS I SHARES
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KEMPER HORIZON 20+ PORTFOLIO
KEMPER HORIZON 10+ PORTFOLIO
KEMPER HORIZON 5 PORTFOLIO
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The above funds currently offer 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 funds' prospectus, and Class I shares, which are
described in the prospectus as supplemented hereby. When placing purchase
orders, investors must specify whether the order is for Class A, Class B, Class
C or Class I shares.
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; (5) policy holders under Zurich-American Insurance Group's collateral
investment program investing at least $200,000 in a Fund; and (6) investment
companies managed by Scudder Kemper that invest primarily in other investment
companies.
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.
1
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The following information supplements the indicated sections of the prospectus.
PERFORMANCE
The following table shows how the funds Class I Shares' returns over different
periods average out. For context, the table has two broad-based market indices
(which, unlike the fund, have no fees or expenses). All figures in this section
assume reinvestment of dividends and distributions. As always, past performance
is no guarantee of future results.
Average Annual Total Returns -- Class I Shares (as of 12/31/1998)
Since 12/31/97 Since April 8, 1996
1 Year Life of Class
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Kemper Horizon 20+
Portfolio 12.47% 15.28%
Kemper Horizon 10+
Portfolio 13.06 14.12
Kemper Horizon 5 Portfolio 10.62 11.03
Index 1 28.58 28.69*
Index 2 9.47 8.96*
* Since 3/31/96
Index 1: Standard and Poor's 500 Composite Stock Price Index (S&P 500), an
unmanaged capitalization-weighted index that includes 500 large-cap U.S. stocks.
Index 2: Lehman Brothers Government/Corporate Bond Index, an unmanaged index
comprised of intermediate and long-term government and investment-grade
corporate debt securities.
In the table total returns for 1996 would have been lower if operating expenses
hadn't been reduced.
2
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HOW MUCH INVESTORS PAY
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
Shareholder fees: Fees paid directly from your investment.
Maximum
Sales Maximum
Charge Deferred
(Load) Sales Maximum Redemption
Imposed on Charge Sales Charge Fee (as %
Purchases (Load) on of amount
(as % of (as % of Reinvested redeemed,
offering redemption Dividends/ if Exchange
price) proceeds) Distributions applicable) Fee
------ --------- ------------- ----------- ---
Kemper Horizon
20+ Portfolio None None None None None
Kemper Horizon
10+ Portfolio None None None None None
Kemper Horizon
5 Portfolio None None None None None
Annual fund operating expenses: Expenses that are deducted from fund assets.
Investment Distribution Other Total annual fund
management fee (12b-1) fees expenses* operating expenses
-------------- ------------ --------- ------------------
Kemper
Horizon 20+
Portfolio 0.57% None 0.35% 0.92%
Kemper
Horizon 10+
Portfolio 0.57% None 0.52% 1.09%
Kemper
Horizon 5
Portfolio 0.57% None 0.58% 1.15%
* "Other Expenses" are restated to reflect current shareholder servicing fees.
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Example
Based on the figures above, this example is designed to help you compare the
expenses of a fund to those of other funds. The example assumes operating
expenses 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.
Fees and expenses if you sold shares after:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Kemper
Horizon 20+
Portfolio $94 $293 $509 $1,131
Kemper
Horizon 10+
Portfolio $111 $347 $601 $1,329
Kemper
Horizon 5
Portfolio $117 $365 $633 $1,398
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FINANCIAL HIGHLIGHTS
Kemper Horizon 20+ Portfolio
Year ended July 31, April 8
-------------------------------- to July 31,
CLASS I 1999 1998 1997 1996
- ----------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning
of period $13.62 12.96 9.73 10.03
- ----------------------------------------------------------------------------
Income from investment
operations:
Net investment income .27 .17 .19 .07
- ----------------------------------------------------------------------------
Net realized and unrealized
gain (loss) .46 1.09 3.17 (.37)
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Total from investment
operations .73 1.26 3.36 (.30)
- ----------------------------------------------------------------------------
Less dividends
Distribution from net
investment income .17 .12 .13 --
- ----------------------------------------------------------------------------
Distribution from net
realized gain .02 .48 -- --
- ----------------------------------------------------------------------------
Total dividends .19 .60 .13 --
- ----------------------------------------------------------------------------
Net asset value, end of
period $14.16 13.62 12.96 9.73
- ----------------------------------------------------------------------------
Total return (not annualized) 5.43% 10.29 34.84 (2.99)
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Ratios to average net assets
(annualized)
Expenses .84% .85 1.04 .73
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Net investment income 2.01% 1.64 1.73 2.32
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Dec. 29,
Year ended July 31, 1995 to
------------------------------ July 31,
1999 1998 1997 1996
- ----------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of period
(in thousands) $136,971 110,076 62,673 18,251
- ----------------------------------------------------------------------------
Portfolio turnover rate
(annualized) 72% 44 130 122
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Kemper Horizon 10+ Portfolio
Year ended July 31, April 8
----------------------------------- to July 31,
CLASS I 1999 1998 1997 1996
- ----------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning
of period $12.46 11.97 9.57 9.83
- ----------------------------------------------------------------------------
Income from investment operations:
Net investment income .36 .35 .26 .09
- ----------------------------------------------------------------------------
Net realized and unrealized
gain (loss) .36 .84 2.40 (.26)
- ----------------------------------------------------------------------------
Total from investment
operations .72 1.19 2.66 (.17)
- ----------------------------------------------------------------------------
Less dividends
Distribution from net
investment income .31 .29 .26 .09
- ----------------------------------------------------------------------------
Distribution from net
realized gain .11 .41 -- --
- ----------------------------------------------------------------------------
Total dividends .42 .70 .26 .09
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Net asset value, end of
period $12.76 12.46 11.97 9.57
- ----------------------------------------------------------------------------
Total return (not annualized) 5.86% 10.47 28.09 (1.74)
- ----------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 1.07% .99 1.06 .73
- ----------------------------------------------------------------------------
Net investment income 3.10% 2.75 2.81 3.21
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Dec. 29,
Year ended July 31, 1995 to
------------------------------ July 31,
1999 1998 1997 1996
- ----------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of period
(in thousands) $138,110 111,687 63,400 18,912
- ----------------------------------------------------------------------------
Portfolio turnover rate
(annualized) 64% 37 126 87
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Kemper Horizon 5 Portfolio
Year ended July 31, April 8
----------------------------------- to July 31,
CLASS I 1999 1998 1997 1996
- ----------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning
of period $11.28 11.06 9.58 9.69
- ----------------------------------------------------------------------------
Income from investment operations:
Net investment income .41 .41 .32 .08
- ----------------------------------------------------------------------------
Net realized and unrealized
gain (loss) .18 .47 1.49 (.11)
- ----------------------------------------------------------------------------
Total from investment
operations .59 .88 1.81 (.03)
- ----------------------------------------------------------------------------
Less dividends
Distribution from net
investment income .44 .39 .33 .08
- ----------------------------------------------------------------------------
Distribution from net
realized gain .12 .27 -- --
- ----------------------------------------------------------------------------
Total dividends .56 .66 .33 .08
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Net asset value, end of
period $11.31 11.28 11.06 9.58
- ----------------------------------------------------------------------------
Total return (not annualized) 5.47% 8.29 19.27 (.31)
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Ratios to average net assets
(annualized)
Expenses 1.13% 1.03 1.20 .73
- ----------------------------------------------------------------------------
Net investment income 3.75% 3.89 3.61 4.11
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Dec. 29,
Year ended July 31, 1995 to
------------------------------ July 31,
1999 1998 1997 1996
- ----------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of period
(in thousands) $59,953 55,335 30,700 10,831
- ----------------------------------------------------------------------------
Portfolio turnover rate
(annualized) 58% 43 150 57
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SPECIAL FEATURES
Shareholders of a Fund'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 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.
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, typically will be higher for Class I shares than
for Class A, Class B and Class C shares.
December 1, 1999
KHF-1I
