<PAGE> 1
ANNUAL REPORT TO
SHAREHOLDERS FOR THE YEAR
ENDED NOVEMBER 30, 1998
LONG-TERM INVESTING IN A SHORT-TERM WORLD(SM)
[MORNINGSTAR RATINGS LOGO]
Seeks to provide long-term growth
KEMPER
ASIAN GROWTH FUND
"... Though economic, political, and social
risks remain high, we are optimistic on the
outlook for Asian equities and are positioning
the fund to benefit from a potential upturn....."
[KEMPER FUNDS LOGO]
<PAGE> 2
CONTENTS
3
Economic Overview
5
Performance Update
9
Largest Holdings
10
Portfolio of
Investments
15
Report of
Independent Auditors
16
Financial Statements
18
Notes to
Financial Statements
22
Financial Highlights
AT A GLANCE
- --------------------------------------------------------------------------------
KEMPER ASIAN GROWTH FUND
TOTAL RETURNS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED NOVEMBER 30, 1998
(UNADJUSTED FOR ANY SALES CHARGE)
[BAR GRAPH]
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
CLASS A -17.66%
CLASS B -18.65%
CLASS C -18.72%
LIPPER PACIFIC EX JAPAN FUNDS CATEGORY AVERAGE* -14.49%
- --------------------------------------------------------------------------------
</TABLE>
Returns and rankings are historical and do not guarantee future results.
Investment returns and principal values will fluctuate so that shares, when
redeemed, may be worth more or less than original cost.
* Lipper Analytical Services, Inc. returns and rankings are based upon changes
in net asset value with all dividends reinvested and do not include the effect
of sales charges and, if they had, results may have been less favorable.
There are special risk considerations associated with international investing,
including fluctuating exchange rates, government regulation and differences in
liquidity that may affect the volatility of the fund. Please see the fund's
prospectus for more information.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NET ASSET VALUE
- --------------------------------------------------------------------------------
AS OF AS OF
11/30/98 11/30/97
- --------------------------------------------------------------------------------
<S> <C> <C>
KEMPER ASIAN GROWTH FUND
CLASS A $5.41 $6.65
- --------------------------------------------------------------------------------
KEMPER ASIAN GROWTH FUND
CLASS B $5.34 $6.58
- --------------------------------------------------------------------------------
KEMPER ASIAN GROWTH FUND
CLASS C $5.35 $6.60
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
KEMPER ASIAN GROWTH FUND RANKINGS
AS OF 11/30/98
- --------------------------------------------------------------------------------
COMPARED TO ALL OTHER FUNDS IN THE LIPPER PACIFIC EX JAPAN FUNDS CATEGORY*
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
#58 of #65 of #66 of
1-YEAR 87 Funds 87 Funds 87 Funds
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
DIVIDEND REVIEW
- --------------------------------------------------------------------------------
DURING FISCAL YEAR, KEMPER ASIAN GROWTH FUND MADE THE FOLLOWING DISTRIBUTIONS
PER SHARE.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
INCOME DIVIDEND $0.0775 $0.0155 $0.0175
- --------------------------------------------------------------------------------
</TABLE>
TERMS TO KNOW
YOUR FUND'S STYLE
[MORNINGSTYLE EQUITY BOX]
- --------------------------------------------------------------------------------
MORNINGSTAR EQUITY STYLE BOX
- --------------------------------------------------------------------------------
Source: Morningstar, Inc. Chicago, IL (312) 696-6000. The Morningstar Style Box
is based on a software release date of 11/30/98. The Equity Style Box placement
is based on two variables: a fund's market capitalization relative to the
movements of the market and a fund's valuation, which is calculated by comparing
the stocks in the fund's portfolio with the most relevant of the three
market-cap groups.
Please note that style boxes do not represent an exact assessment of risk and do
not represent future performance. The fund's portfolio changes from day-to-day.
A longer-term view is represented by the fund's Morningstar category, which is
based on its actual investment style as measured by its underlying portfolio
holdings since the fund's inception. Morningstar has placed Kemper Asian Growth
Fund in the Pacific/Asia Ex-Japan Stock category. Please consult the prospectus
for a description of investment policies.
BALANCE OF TRADE The net difference over a period of time between the value of a
country's imports and exports of merchandise. When a country exports more than
it imports, it is said to have a favorable balance of trade.
CURRENCY DEVALUATION A significant decline of a currency's value relative to
other currencies, such as the U.S. dollar. This may be prompted by trading or
central bank intervention (or the lack of intervention) in the currency markets.
For U.S. investors who are investing overseas, a devaluation of a foreign
currency can have the effect of reducing the total return of their investment.
LIQUIDITY A characteristic of an investment or an asset referring to the ease of
convertibility into cash within a reasonably short period of time.
PRICE/EARNINGS RATIO (ALSO "EARNINGS MULTIPLE") A widely used gauge of a stock's
valuation that indicates what investors are paying for a company's earning power
at the current stock price. A P/E ratio may be based on a company's projected
earnings for the coming 12 months. A higher "earnings multiple" indicates higher
expected earnings growth, along with greater risk of earnings disappointment.
TRANSPARENCY The degree to which investors can evaluate if a company is managed
in the interests of shareholders. Transparency is often not as strong in
developing markets where disclosure requirements may be less stringent and
protectionism, subsidies, and cronyism may distort the business environment.
Sources: Scudder Kemper Investments, Inc., Barron's Dictionary of Finance and
Investment Terms
<PAGE> 3
ECONOMIC OVERVIEW
[SILVIA PHOTO]
DR. JOHN E. SILVIA IS A MANAGING DIRECTOR OF SCUDDER KEMPER INVESTMENTS, INC.
HIS PRIMARY RESPONSIBILITIES INCLUDE ANALYSIS, MODELING AND FORECASTING OF
ECONOMIC DEVELOPMENTS AND FEDERAL RESERVE ACTIVITY THAT AFFECT FINANCIAL
MARKETS, ESPECIALLY INTEREST RATE TRENDS. THIS EFFORT INCLUDES CLOSE
COLLABORATION WITH BOTH INCOME AND EQUITY MUTUAL FUND MANAGERS AND PENSION FUND
MANAGERS.
SILVIA HOLDS A BACHELOR'S DEGREE AND PH.D. IN ECONOMICS FROM NORTHEASTERN
UNIVERSITY IN BOSTON AND A MASTER'S DEGREE IN ECONOMICS FROM BROWN UNIVERSITY IN
PROVIDENCE, R.I. PRIOR TO HIS CAREER AT SCUDDER KEMPER, HE WAS WITH THE HARRIS
BANK AND ALSO TAUGHT AT INDIANA UNIVERSITY.
SCUDDER KEMPER INVESTMENTS, INC. IS THE INVESTMENT MANAGER FOR KEMPER FUNDS. IT
IS ONE OF THE LARGEST AND MOST EXPERIENCED INVESTMENT MANAGEMENT ORGANIZATIONS
WORLDWIDE, MANAGING MORE THAN $245 BILLION IN ASSETS GLOBALLY FOR MUTUAL FUND
INVESTORS, RETIREMENT AND PENSION PLANS, INSTITUTIONAL AND CORPORATE CLIENTS,
INSURANCE COMPANIES, AND PRIVATE, FAMILY AND INDIVIDUAL ACCOUNTS.
DEAR SHAREHOLDERS,
If you're like most investors, you may be wondering if you should allow yourself
to breathe a sigh of relief as 1999 begins. After several months of generally
declining stock prices and extreme volatility, the U.S. stock market seems to
have rediscovered its resiliency. In the fourth quarter, the Standard & Poor's
500, an unmanaged index generally representative of the U.S. stock market,
bounced back into the 1200-point range, up approximately 20 percent from its
third-quarter low of 957. The blue chip Dow Jones Industrial Average enjoyed a
comparable rise. Investor confidence suddenly overtook the investor uncertainty
that had plagued the markets at summer's end. While financial volatility appears
to be continuing, the mood for investors definitely has improved.
To what can we attribute the change? Simply this -- the cumulative effect of
some good news, not the least of which was a long-awaited series of interest
rate reductions by the Federal Reserve Board. In September, the Fed reduced the
federal funds rate a modest quarter of a percentage point, however, this first
cut disappointed some investors who were expecting a more dramatic gesture. Two
weeks later, the Fed came back with an additional quarter of a percentage point
reduction. This was an unexpected cut that seemed to have a positive effect on
Wall Street. In November, a third rate cut of a quarter of a percentage point
also boosted investor confidence. Investors were further surprised by
better-than-expected corporate earnings reports early in the fourth quarter.
Finally, economic data regarding retail sales, employment and home sales
suggested continued economic growth and very little prospect of recession.
In many ways, 1998's market activity provides a study in how investor
perceptions can upstage economic realities. Certainly, the tumultuous lessons of
Russia and Southeast Asia renewed investors' awareness of risk in 1998, which
was an important wake-up call. At all times, investors must understand and
consider risk. But over the course of 1998, U.S. economic fundamentals have
essentially remained strong. In fact, inflation has remained low for the entire
year. Economic growth has been solid. Our consumer confidence remained fairly
high, although not quite as high as in 1997. The nation's budget surplus for
1998 came in at $60 billion, with another budget surplus expected for fiscal
1999.
Growth in the nation's gross domestic product (GDP), which represents the
total value of all goods and services produced within the U.S. economy, has
remained remarkably steady. GDP is expected to have grown at an annualized rate
of 3 percent for the second half of 1998 and is anticipated to hover around 2
percent to 2.5 percent for the first half of 1999. The consumer price index
(CPI) remains in a range of 1.5 percent to 2 percent.
While employment growth has slowed a bit, the slowdown in wage gains may
provide the Fed with an incentive to reduce interest rates even further. U.S.
corporate profits have generally been flat, so we may see a decrease in capital
spending. Banks appear to be only a little less willing to lend, so the threat
of a general credit crunch is minimal.
Investors may take comfort in the fact that the U.S. markets and economy have
withstood the test of 1998's tumultuous third quarter. Similarly, while certain
countries, such as Malaysia, Indonesia, Brazil and Russia, are still suffering
from economic crises, others, including the Philippines, South Korea, Thailand
and China, appear to have survived. As long as the Fed and the Group of Seven
leading industrial nations (G7) are committed to avoiding recession on national
and global levels respectively, investors have a good chance of experiencing a
more stable economic environment.
At home, there has been somewhat of a slowdown in manufacturing, as reduced
U.S. exports reflect foreign economic turmoil. But the global impact of the
Asian crisis still has not hit the U.S. as hard as was expected. Indeed, Asian
turmoil has not affected U.S. trade as much as it has lowered import prices and
helped reduce global interest rates.
In Europe, the much anticipated Economic and Monetary Union (EMU) is on the
move, with a focus on more flexibility and growth potential for the region.
European equities may be the beneficiaries of increased spending, as governments
seek to foster growth and reduce unemployment.
3
<PAGE> 4
ECONOMIC OVERVIEW
- --------------------------------------------------------------------------------
ECONOMIC GUIDEPOSTS
- --------------------------------------------------------------------------------
ECONOMIC ACTIVITY IS A KEY INFLUENCE ON INVESTMENT PERFORMANCE AND SHAREHOLDER
DECISION-MAKING. PERIODS OF RECESSION OR BOOM, INFLATION OR DEFLATION, CREDIT
EXPANSION OR CREDIT CRUNCH HAVE A SIGNIFICANT IMPACT ON MUTUAL FUND PERFORMANCE.
THE FOLLOWING ARE SOME SIGNIFICANT ECONOMIC GUIDEPOSTS AND THEIR
INVESTMENT RATIONALE THAT MAY HELP YOUR INVESTMENT DECISION-MAKING. THE 10-YEAR
TREASURY RATE AND THE PRIME RATE ARE PREVAILING INTEREST RATES. THE OTHER DATA
REPORT YEAR-TO-YEAR PERCENTAGE CHANGES.
[BAR GRAPH]
<TABLE>
<CAPTION>
NOW (12/31/98) 6 MONTHS AGO 1 YEAR AGO 2 YEARS AGO
<S> <C> <C> <C> <C>
10-year Treasury rate(1) 4.65 5.50 5.81 6.30
Prime rate(2) 7.75 8.50 8.50 8.25
Inflation rate(3)* 1.55 1.75 1.89 3.18
The U.S. dollar(4) -2.45 9.54 10.26 4.36
Capital goods orders(5)* 7.82 9.52 8.53 4.82
Industrial production(5)* 1.47 5.10 6.56 5.32
Employment growth(6)* 2.28 2.65 2.70 2.33
</TABLE>
(1) Falling interest rates in recent years have been a big plus for
financial assets.
(2) The interest rate that commercial lenders charge their best borrowers.
(3) Inflation reduces an investor's real return. In the last five years,
inflation has been as high as 6 percent. The low, moderate inflation of the
last few years has meant high real returns.
(4) Changes in the exchange value of the dollar impact U.S. exporters and the
value of U.S. firms' foreign profits.
(5) These influence corporate profits and equity performance.
(6) An influence on family income and retail sales.
* Data as of November 30, 1998.
SOURCE: ECONOMICS DEPARTMENT, SCUDDER KEMPER INVESTMENTS, INC.
If you're a long-term investor in today's short-term world, go ahead and
breathe that sigh of relief -- but be on your toes in 1999. It's going to be an
interesting year as the EMU emerges, the race for the next presidency heats up
and the year 2000 approaches. And, remember: Investors don't like uncertainty,
be it economic or political. More trauma in the White House, continuing disputes
with Iraq or any other hints of crisis could prompt a downward spike in our
markets in the short run. In the long run, the keys to investment performance
remain moderate growth, low inflation and limited taxation and regulation.
Thank you for choosing to invest with Kemper Funds. We appreciate the
opportunity to serve your investment needs.
Sincerely,
/s/ John E. Silvia
JOHN E. SILVIA
The information contained in this piece has been taken from sources believed to
be reliable, but the accuracy of the information is not guaranteed. The opinions
and forecasts expressed are those of Dr. John E. Silvia as of January 4, 1999,
and may not actually come to pass. This information is subject to change. No
part of this material is intended as an investment recommendation.
4
<PAGE> 5
PERFORMANCE UPDATE
[GUSMAN PHOTO]
Theresa Gusman joined Scudder Kemper Investments in 1995, and is the lead
portfolio manager of Kemper Asian Growth Fund. She received a bachelor's degree
in economics from the State University of New York at Stony Brook.
THE PAST TWELVE MONTHS HAVE BEEN A PERIOD OF EXTRAORDINARY VOLATILITY. THE ASIAN
REGION WAS THE FOCAL POINT OF THE TURMOIL, BESET BY INSTABILITY IN THE BANKING
SYSTEM, HIGH INTEREST RATES, AND THE SLOWING OF THE REGIONAL ECONOMY. KEMPER
ASIAN GROWTH FUND LEAD PORTFOLIO MANAGER THERESA GUSMAN, DISCUSSES THE FUND'S
STRATEGY AND THE MARKET ENVIRONMENT FOR THE TWELVE-MONTH PERIOD ENDED NOVEMBER
30, 1998, AS WELL AS THE POSITIVE OPPORTUNITIES THAT ARE EMERGING.
Q HOW WOULD YOU CHARACTERIZE MARKET CONDITIONS IN THE REGION DURING THE PAST
YEAR?
A The Asian stock markets continued to experience extreme volatility, though
currencies gradually stabilized following their collapse in 1997. For much of
this period, stocks suffered from the painful combination of an uncertain
economic outlook, the loss of liquidity within the banking system, and the
scarcity of capital that resulted from foreign investors scrambling to reduce
their exposure to the region. Markets reacted by plummeting throughout the fall
of 1997, and then bouncing back in the early part of this year as investors
sought to capitalize on lower prices. Once it became apparent that the financial
crisis would not be quickly resolved, stocks fell once again and remained under
pressure through the summer as investors responded negatively to the imposition
of capital controls in Malaysia, and Hong Kong's intervention in the stock
market. In October, equities staged a rebound as interest rate cuts by the U.S.
Federal Reserve prompted a reassessment of depressed securities prices in the
emerging markets, and valuations in Asia reached distressed levels. Throughout
the period, the ongoing financial crisis in Japan destabilized the entire
region, though the rebound of the yen and the increasing possibilities of reform
provided reasons for optimism at the quarter's end.
At the end of the period, we noted some positive trends taking place in the
region. For example, we saw an acceleration in corporate restructuring efforts.
This push to improve corporate efficiency is fueling our belief that we have
likely seen the bottoms in these markets. Although we expect to see continued
volatility going forward, it should be volatility with an upward tilt as opposed
to what we have seen in the past year, which was volatility with a downward
tilt.
Q WHAT WAS YOUR STRATEGY THROUGHOUT THIS TUMULTUOUS PERIOD?
A In all market conditions, our ongoing objective is to use intensive
fundamental research to locate attractive, undervalued companies with excellent
management, dominant market positions, clear competitive advantages,
high-to-improving return on equity, and strong balance sheets. Faced with a
rapidly changing environment such as we have experienced in the last twelve
months, we have sought to identify companies positioned to benefit from the
shifting structural, political, social, and economic backdrop in Asia.
Our primary objective has been to invest in stable, established companies that
will not only survive, but will prosper as the region begins to recover. Using
strict purchase-price targets, we are investing in three kinds of companies that
stand to benefit from a rebound in the regional economy. First, we are looking
for strong firms that dominate their local markets, and/or operate in an
industry with high barriers to entry. Second, we are focusing on
well-capitalized, low-cost exporters that can help their corporate customers cut
costs, a skill that will be prized if global economic growth slows and
profitability deteriorates. Third, we are finding opportunities in
The views expressed in this report reflect those of the portfolio manager only
through the end of the period of the report, as stated on the cover. The
manager's views are subject to change at any time, based on market and other
conditions. This report must be preceded or accompanied by a prospectus when
used as sales literature.
5
<PAGE> 6
PERFORMANCE UPDATE
downtrodden natural resources companies that have been hit hard by deflation,
but stand to benefit if Japan finds a way to jump-start its economy.
Examples of holdings we have that are dominating the local market include
several Chinese companies, including Guangdong Kelon Electric Holdings, a
refrigerator and consumer white goods manufacturer; Beijing Datang Power
Generation, an electric utility; and Harbin Power Equipment, a local producer of
power generating equipment. All are trading at single digit multiples.
Indonesia's Asia Pulp & Paper Company is a good example of a low-cost
exporter. They are by far the lowest cost pulp and paper producer in the world.
On average, they are producing pulp for less than $90 per ton compared to
roughly a $450 cost for pulp produced in the U.S., Canada or Western Europe.
In Australia, we have found several natural resource names that include a few
mining companies bought at very attractive levels. Pasminco, for example, is a
low-cost producer of nickel; a metal we believe will turn around quickly.
Q THE FUND WAS DOWN 17.66 PERCENT (CLASS A SHARES, UNADJUSTED FOR ANY SALES
CHARGE) FOR THE TWELVE-MONTH PERIOD VS. THE BENCHMARK INDEX, THE MSCI ALL
COUNTRY ASIA FREE INDEX (EXCLUDING JAPAN), WHICH WAS OFF 13.03 PERCENT. AS YOU
MENTIONED, THESE WERE NOT THE 'BEST OF TIMES' IN THIS REGION BUT CAN YOU ADDRESS
THE LESSER PERFORMANCE OF THE FUND VS. THE INDEX AND ITS LIPPER CATEGORY AVERAGE
(SEE PAGE 2 FOR FURTHER LIPPER INFORMATION).
A The performance was affected by a lesser weighting in Taiwan early in the
year when that market outperformed all of the other Asian markets. Then, in the
second half of the year, we held an overweight position in that market when it
underperformed the region. My team took over management of the fund in May and
we were anxious to raise the Taiwan position because it had been performing
well. However, in September and October when Asian markets took off, companies
in the financial and real estate sectors drove performance. Unfortunately, our
Taiwan holdings are dominated by technology and export-oriented companies which
lagged during the rally.
Q AND WHY ARE YOU STAYING AWAY FROM THE FINANCIAL SERVICES AND REAL ESTATE
SECTORS?
A We do have some exposure to these sectors in Singapore and in Hong Kong
but, overall, we were less than the benchmark. Transparency and accuracy of data
is always a concern when investing in this region. As experienced money
managers, we are tuned to look for the red flags when handed a rosy company
fiscal report. We didn't have a great deal of confidence in the information we
were getting from the banking sector. Without clear data that explained what was
behind the loans that are outstanding in Asia, we elected to maintain an
underweighted position, relative to the index, in that sector. Without this
clear understanding, the stock valuations are nebulous as far as we are
concerned.
In real estate related companies, we saw further downside risk from what we
viewed as inflated valuations.
Q AS YOU MENTIONED, YOU TOOK OVER MANAGEMENT OF THE FUND IN MAY. BEYOND
ADJUSTING THE FUND'S EXPOSURE TO TAIWAN, WERE THERE OTHER CHANGES THAT YOU MADE?
A The primary change was to increase exposure to export-oriented companies
and to move away from some of the finance companies and real estate companies.
It proved to be a very good adjustment from May through August and not so good
in the months from September through November. So, overall, it was sort of a
neutral move. We also added exposure to Australia through the natural resource
companies purchased in that market.
Q HAS YOUR BOTTOM-UP STRATEGY LED TO ADJUSTMENTS IN THE FUND'S COUNTRY
ALLOCATIONS?
A Yes. In the twelve-month period, we reduced our holdings in Hong Kong,
whose stock market is largely made up of banks and property companies. We also
trimmed exposure to non-exporting firms in Indonesia. China, on the other hand,
has proven to be a country where the valuations of selected companies have
become very attractive in relation to their growth potential.
Q ARE ANY SIGNS EMERGING THAT THERE MAY BE LIGHT AT THE END OF THE TUNNEL?
A There have been some very positive developments in the region throughout
1998. Though economic, political, and social risks remain high, we are
optimistic on the outlook for Asian equities and are positioning the fund to
benefit
6
<PAGE> 7
PERFORMANCE UPDATE
from a potential upturn. The most important trend that has been taking place
since the beginning of the year is that currencies stabilized in an environment
of declining interest rates, a condition that we have long believed would be the
first step toward recovery. We started to see it first in Korea as early as
January of this year but it was only recently that this trend has begun to be
reflected in the equity markets across the region. The pattern for this trend is
first the currency stabilizes then the equity market rebounds and finally, the
economy really bounces back. In the wake of the July 1997 Thai baht devaluation,
Asian countries were forced to raise rates to restrictive levels in order to
stem capital outflows and stabilize their currencies, but this strategy had the
harmful side effect of depressing economic growth.
On the economic front, we are encouraged by signs that domestic consumption, a
key element of economic growth, is showing signs of bottoming in China,
Indonesia, South Korea, and Thailand. The balance of trade has improved in
Indonesia, the Philippines, and Thailand due to the combination of rising U.S.
dollar exports and continued weak imports. If the yen strengthens further and a
more positive outlook emerges for Japan's economy, this virtuous trade cycle
stands to be reinforced. While the fund does not invest directly in Japan, the
nation's status as the second-largest economy in the world means that other
countries in the region are highly dependent on its fortunes. Though Japan's
recession deepened throughout 1998, the combination of the banking bill and
fiscal stimulus packages may help to create the regional stability necessary for
the rest of Asia to move forward.
The crisis has caused investors to flee the region following a chain reaction
of currency devaluations, stock market declines, and social unrest. While such
turbulence can pose a challenge even to long-term investors, we view it as an
opportunity to establish positions in well-managed, financially sound companies
that stand to benefit when the region ultimately turns around. To this end, we
will continue to use a long-term approach emphasizing fundamental research and
intensive individual stock selection.
Q HOW IS ECONOMIC REFORM PROGRESSING?
A Selected Asian nations have begun the process of implementing corporate
restructuring initiatives and banking system reform. These changes have come in
the form of new bankruptcy laws, deregulation, and the trend toward greater
transparency in corporate financial reporting. Though the process of
streamlining the economies of this region will not happen quickly, such reform
demonstrates that the region's governments are taking the critical first step of
recognizing that a problem does indeed exist. We will be focusing our efforts on
finding investments in areas where the government is being proactive in finding
solutions to the financial crisis.
Q HOW DO YOU PLAN TO MANAGE THE PORTFOLIO GOING FORWARD?
A Though reasons for optimism on Asia's prospects are numerous, investors
should be prepared for further volatility. We remain cautious as the long
process of recovery unfolds. Recognizing that we will not be able to "call the
bottom" in Asian equities, we will continue to emphasize fundamental analysis
and superior stock selection to uncover well-managed, undervalued companies that
have displayed the ability to remain competitive even in a difficult
environment. For patient investors, such firms represent a long-term opportunity
to benefit from the rebuilding of the Asian economy.
[BAR GRAPH]
Regional Market Returns for the One-Year Period ended 11/30/98
<TABLE>
<CAPTION>
<S> <C>
Australia 11.00%
Hong Kong 0.23%
Philippines 4.07%
Taiwan -9.4%
Singapore -11.35%
Korea 21.35%
Thailand -5.56%
New Zealand -25.34%
Malaysia -41.10%
Indonesia -52.79%
</TABLE>
7
<PAGE> 8
PERFORMANCE UPDATE
AVERAGE ANNUAL TOTAL RETURNS*
FOR PERIODS ENDED NOVEMBER 30, 1998 (ADJUSTED FOR THE MAXIMUM SALES CHARGE)
<TABLE>
<CAPTION>
LIFE OF
1-YEAR CLASS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
KEMPER ASIAN GROWTH FUND CLASS A -22.44% -25.11% (since 10/21/96)
................................................................................................
KEMPER ASIAN GROWTH FUND CLASS B -21.08 -24.88 (since 10/21/96)
................................................................................................
KEMPER ASIAN GROWTH FUND CLASS C -18.72 -23.72 (since 10/21/96)
................................................................................................
</TABLE>
- -------------------------------------------------------------------------------
KEMPER ASIAN GROWTH FUND CLASS A
- -------------------------------------------------------------------------------
Growth of an assumed $10,000 investment in Class A shares
from 10/21/96 to 11/30/98
<TABLE>
<CAPTION>
KEMPER ASIAN GROWTH FUND MSCI AC FAR EAST FREE EX-JAPAN
CLASS A(1) INDEX(+)
------------------------ ------------------------------
<S> <C> <C>
10/21/96 9425.00 10000.00
10010.00 10381.00
3/31/97 9593.00 10181.00
10060.00 10814.00
8690.00 9028.00
12/31/97 6546.00 6145.00
7139.00 6750.00
4779.00 4545.00
4435.00 4139.00
11/30/98 5432.00 5768.00
</TABLE>
- -------------------------------------------------------------------------------
KEMPER ASIAN GROWTH FUND CLASS B
- -------------------------------------------------------------------------------
Growth of an assumed $10,000 investment in Class B shares
from 10/21/96 to 11/30/98
<TABLE>
<CAPTION>
KEMPER ASIAN GROWTH FUND MSCI AC FAR EAST FREE EX-JAPAN
CLASS B(1) INDEX(+)
------------------------ ------------------------------
<S> <C> <C>
10/21/96 10000.00 10000.00
10610.50 10381.00
3/31/97 10147.40 10181.00
10621.10 10814.00
9157.90 9028.00
12/31/97 6869.23 6145.00
7460.14 6750.00
4969.91 4545.00
4611.15 4139.00
11/30/98 5466.10 5768.00
</TABLE>
- -------------------------------------------------------------------------------
KEMPER ASIAN GROWTH FUND CLASS C
- -------------------------------------------------------------------------------
Growth of an assumed $10,000 investment in Class C shares
from 10/21/96 to 11/30/98
<TABLE>
<CAPTION>
KEMPER ASIAN GROWTH FUND MSCI AC FAR EAST FREE EX-JAPAN
CLASS C(1) INDEX(+)
------------------------ ------------------------------
<S> <C> <C>
10/21/96 10000.00 10000.00
10621.00 10381.00
3/31/97 10168.00 10181.00
10642.00 10814.00
9179.00 9028.00
12/31/97 6892.00 6145.00
7484.00 6750.00
4982.00 4545.00
4623.00 4139.00
11/30/98 5647.00 5768.00
</TABLE>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE
RESULTS. INVESTMENT RETURNS AND PRINCIPAL VALUES
WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST.
*Average annual total return and total return
measure net investment income and capital gain
or loss from portfolio investments over the
periods specified, assuming reinvestment of all
dividends and, where indicated, adjustment for
the maximum sales charge. the maximum sales
charge for Class a shares is 5.75%. For Class B
shares the maximum contingent deferred sales
charge (CDSC) is 4%. Class C shares have no
sales charge adjustment, but redemptions within
one year of purchase may be subject to a
contingent deferred sales charge of 1%. Share
classes invest in the same underlying portfolio.
Average annual total return reflects annualized
change while total return reflects aggregate
change. during the periods noted, securities
prices fluctuated. For additional information,
see the prospectus and statement of additional
information and the financial highlights at the
end of this report.
(1)PERFORMANCE INCLUDES REINVESTMENT OF DIVIDENDS
AND ADJUSTMENT FOR THE MAXIMUM SALES CHARGE
FOR CLASS A SHARES AND THE CDSC IN EFFECT AT
THE END OF THE PERIOD FOR CLASS B SHARES. IN
COMPARING KEMPER ASIAN GROWTH FUND CLASS A
SHARES TO THE MSCI AC FAR EAST FREE EX-JAPAN
INDEX, YOU SHOULD ALSO NOTE THAT THE FUND'S
PERFORMANCE REFLECTS THE MAXIMUM SALES CHARGE,
WHILE NO SUCH CHARGE IS REFLECTED IN THE
PERFORMANCE OF THE INDEX.
(+)THE MSCI AC Far East Free Ex-Japan Index (Morgan
Stanley Capital International Index) is an
unmanaged index generally accepted as a
benchmark for major far eastern markets. Source
is Lipper Analytical Services, Inc. Investors
cannot actually make investments in this index.
8
<PAGE> 9
LARGEST HOLDINGS
KEMPER ASIAN GROWTH FUND'S 15 LARGEST HOLDINGS*
Representing 39.1 percent of the fund's total net assets on November 30, 1998.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
HOLDINGS COUNTRY % OF NET ASSETS
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
1. ACER Taiwan 3.8%
- -----------------------------------------------------------------------------------------------------------------
2. JOHNSON ELECTRIC HOLDINGS Hong Kong 3.2%
- -----------------------------------------------------------------------------------------------------------------
3. CITY DEVELOPMENTS Singapore 2.9%
- -----------------------------------------------------------------------------------------------------------------
4. MUSIC CORP. Philippines 2.8%
- -----------------------------------------------------------------------------------------------------------------
5. ASIA PULP & PAPER Indonesia 2.8%
- -----------------------------------------------------------------------------------------------------------------
6. CITIC PACIFIC Hong Kong 2.7%
- -----------------------------------------------------------------------------------------------------------------
7. AVIMO GROUP Singapore 2.6%
- -----------------------------------------------------------------------------------------------------------------
8. NEW WORLD DEVELOPMENT Hong Kong 2.5%
- -----------------------------------------------------------------------------------------------------------------
9. VARITRONIX INTERNATIONAL Hong Kong 2.5%
- -----------------------------------------------------------------------------------------------------------------
10. CHEUNG KONG HOLDINGS Hong Kong 2.5%
- -----------------------------------------------------------------------------------------------------------------
11. HUTCHISON WHAMPOA Hong Kong 2.5%
- -----------------------------------------------------------------------------------------------------------------
12. LI & FUNG Hong Kong 2.4%
- -----------------------------------------------------------------------------------------------------------------
13. INDAH KIAT PULP & PAPER Indonesia 2.2%
- -----------------------------------------------------------------------------------------------------------------
14. NATSTEEL ELECTRONICS Singapore 1.9%
- -----------------------------------------------------------------------------------------------------------------
15. ASE TEST Taiwan 1.8%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
*The fund's holdings are subject to change.
9
<PAGE> 10
PORTFOLIO OF INVESTMENTS
KEMPER ASIAN GROWTH FUND
Portfolio of Investments at November 30, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS NUMBER OF SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
HONG KONG--26.4% Cheung Kong Holdings, Ltd.
REAL ESTATE COMPANY 26,000 $ 187,000
CITIC Pacific, Ltd.
DIVERSIFIED HOLDING COMPANY 87,000 197,000
Cosco Pacific, Ltd.
INVESTMENT HOLDING COMPANY 107,000 48,000
Dah Sing Financial Group
GENERAL BANKING AND PROPERTY
INVESTMENT HOLDING COMPANY 29,000 71,000
Esprit Holdings, Ltd.
DESIGNER, MANUFACTURER AND RETAILER OF
HIGH QUALITY FASHION, COSMETIC AND
BODY CARE PRODUCTS 185,000 68,000
Hutchison Whampoa, Ltd.
DIVERSIFIED HOLDING COMPANY 26,000 185,000
Johnson Electric Holdings, Ltd.
SMALL MOTOR MANUFACTURER 105,000 235,000
Legend Holdings, Ltd.
COMPUTER COMPONENTS MANUFACTURER 183,000 57,000
Li & Fung, Ltd.
INVESTMENT HOLDING COMPANY, ENGAGED IN
EXPORT TRADING 94,000 177,000
New World Development Co., Ltd.
PROPERTY INVESTMENT AND DEVELOPMENT,
CONSTRUCTION AND ENGINEERING, HOTELS
AND RESTAURANTS, TELECOMMUNICATIONS 77,352 188,000
New World Infrastructure, Ltd.
INVESTMENT AND OPERATION OF
INFRASTRUCTURE PROJECTS 80,200 121,000
SmarTone Telecommunications Holdings,
Ltd.
CELLULAR COMMUNICATION SERVICES 21,000 69,000
Varitronix International, Ltd.
CRYSTAL DISPLAYS MANUFACTURER 98,000 187,000
Wing Hang Bank, Ltd.
CORPORATE AND RETAIL BANKING, FOREIGN
EXCHANGE 28,000 78,000
---------------------------------------------------------------------------
1,868,000
- ------------------------------------------------------------------------------------------------------------------------
TAIWAN--20.1% (a)ASE Test, Ltd.
TESTING SERVICES TO SEMICONDUCTOR
MANUFACTURERS 4,500 138,000
Acer, Inc.
MANUFACTURER OF DESKTOP AND PORTABLE
PERSONAL COMPUTERS 212,500 282,000
Acer Peripherals, Inc.
DEVELOPER AND DISTRIBUTOR OF COMPUTER
PERIPHERALS 89,000 130,000
(a)Asustek Computer, Inc.
MANUFACTURER OF COMPUTER MAINBOARDS,
AUDIO/VIDEO CARDS AND NETWORK CARDS 16,000 136,000
(a)Compal Electronics, Inc.
MANUFACTURER AND MARKETER OF NOTEBOOK
COMPUTERS AND COLOR MONITORS 34,000 115,000
(a)Compeq Manufacturing Co., Ltd.
MANUFACTURER OF MULTI-LAYER
DOUBLE-SIDED PRINTED CIRCUIT BOARDS 19,000 125,000
</TABLE>
10
<PAGE> 11
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Delta Electronic Industrial
MANUFACTURER OF POWER SUPPLY EQUIPMENT 19,000 $ 62,000
(a)Hon Hai Precision Industry Co., Ltd.
MANUFACTURER OF ELECTRONIC CONNECTORS,
CABLE ASSEMBLIES AND MEMORY CHIPS 11,000 60,000
(a)Kang Na Hsiung Enterprise
MANUFACTURER OF SANITARY PAPER
PRODUCTS 46,000 51,000
(a)Kinpo Electronics, Inc.
MANUFACTURER OF ELECTRONIC OFFICE
MACHINES 34,000 52,000
Lite-On Electronics, Inc.
MANUFACTURER OF ELECTRONIC COMPONENTS
AND POWER SUPPLIES 33,000 71,000
(a)Siliconware Corp.
TESTING AND PACKAGING OF INTEGRATED
CIRCUITS 94,000 80,000
(a)Yageo Corp.
ELECTRONICS MANUFACTURER 84,000 119,000
---------------------------------------------------------------------------
1,421,000
- ------------------------------------------------------------------------------------------------------------------------
INDONESIA--9.2% (a)Asia Pulp & Paper Co., Ltd.
PRODUCER OF PULP AND PAPER 22,700 207,000
(a)Indah Kiat Pulp & Paper
PRODUCER OF PULP AND PAPER 448,000 161,000
Indonesia Satellite Corp.
INTERNATIONAL TELECOMMUNICATION
SERVICES 7,200 101,000
(a)Indorama Synthetics
PRODUCER OF POLYESTER YARN, FIBER AND
FABRIC 518,500 68,000
PT Astra Agro Lestari Tbk.
PLANTATION OPERATOR 372,000 104,000
(a)PT Astra International, Inc.
DISTRIBUTOR OF AUTOMOBILES AND
RELATED PARTS 76,500 10,000
---------------------------------------------------------------------------
651,000
- ------------------------------------------------------------------------------------------------------------------------
SINGAPORE--9.1% Avimo Group, Ltd.
PRECISION INSTRUMENTS MANUFACTURER 125,000 193,000
City Developments, Ltd.
DEVELOPER OF RESIDENTIAL, INDUSTRIAL,
RETAIL AND INVESTMENT PROPERTIES,
OWNER AND OPERATOR OF HOTELS 45,000 214,000
Natsteel Electronics, Ltd.
MANUFACTURER OF COMPUTER PERIPHERAL,
TELECOMMUNICATION AND NETWORK PRODUCTS 65,000 140,000
Overseas Union Bank, Ltd.
PROVIDER OF BANKING AND FINANCIAL
SERVICES 23,000 93,000
Singapore Press Holdings, Ltd.
PUBLISHER 68 1,000
---------------------------------------------------------------------------
641,000
- ------------------------------------------------------------------------------------------------------------------------
CHINA--7.1% Beijing Datang Power Generation Co.,
Ltd. "H"
OWNER AND OPERATOR OF COAL-FIRED
ELECTRIC POWER PLANTS 293,000 95,000
(a)China Telecommunications, Ltd.
TELECOMMUNICATION SERVICES 42,000 84,000
First Tractor Co.
MANUFACTURER OF AGRICULTURAL TRACTORS 295,000 87,000
</TABLE>
11
<PAGE> 12
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Guangdong Kelon Electric Holdings, Ltd.
REFRIGERATOR MANUFACTURER 96,000 $ 84,000
Harbin Power Equipment Co., Ltd.
MANUFACTURER OF ELECTRIC POWER
GENERATION EQUIPMENT 949,000 70,000
Shenzhen Expressway Co. "H"
HIGHWAY DEVELOPER 166,000 40,000
Zhejiang Expressway Co., Ltd. "H"
ROAD CONSTRUCTION AND MANAGEMENT 219,000 41,000
---------------------------------------------------------------------------
501,000
- ------------------------------------------------------------------------------------------------------------------------
PHILIPPINES--4.9% (a)International Container Terminal
Services, Inc.
CONTAINERIZED CARGO HANDLING FIRM 1,494,700 133,000
(a)Music Corp.
MANUFACTURER AND EXPORTER OF
SPECIALIZED SEMICONDUCTORS 1,745,000 210,000
---------------------------------------------------------------------------
343,000
- ------------------------------------------------------------------------------------------------------------------------
KOREA--4.3% Medison Co., Ltd.
PRODUCER OF MEDICAL EQUIPMENT 5,360 63,000
Nhong Shim Co., Ltd.
MANUFACTURER OF INSTANT NOODLES AND
SNACKS 1,260 74,000
Pohang Iron & Steel Co., Ltd.
LEADING STEEL PRODUCER 1,430 80,000
Samsung Electronics Co., Ltd.
MAJOR ELECTRONICS MANUFACTURER 1,650 88,000
---------------------------------------------------------------------------
305,000
- ------------------------------------------------------------------------------------------------------------------------
AUSTRALIA--3.8% Acacia Resources, Ltd.
GOLD AND MINERAL EXPLORATION COMPANY
WITH OPERATIONS THROUGHOUT AUSTRALIA 22,600 33,000
(a)Cable & Wireless Optus, Ltd.
PROVIDER OF COMMUNICATION AND
TELECOMMUNICATION SERVICES 41,300 77,000
Delta Gold NL
EMERGING JUNIOR EXPLORATION COMPANY
WITH IMPORTANT PLATINUM PROPERTY IN
ZIMBABWE 21,200 32,000
(a)Normandy Mining, Ltd.
MINING AND OIL ENTERPRISES 36,600 34,000
Pasminco, Ltd.
DIVERSIFIED MINING COMPANY 77,900 70,000
Westralian Sands, Ltd.
EXPLORER AND PRODUCER OF TITANIUM
MINERALS 8,800 21,000
---------------------------------------------------------------------------
267,000
- ------------------------------------------------------------------------------------------------------------------------
UNITED STATES--1.9% Freeport McMoRan Copper & Gold, Inc. "A"
MINING COMPANY OPERATING IN INDONESIA 10,600 134,000
---------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
MALAYSIA--1.4% (b)Kuala Lumpur Kepong Berhad
PRODUCER OF PALM PRODUCTS, NATURAL
RUBBER AND COCOA 24,000 27,000
</TABLE>
12
<PAGE> 13
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(b)Malayan Banking Berhad
LEADING BANKING AND FINANCIAL SERVICES
GROUP 60,000 $ 76,000
---------------------------------------------------------------------------
103,000
- ------------------------------------------------------------------------------------------------------------------------
NEW ZEALAND--1.3% Fletcher Challenge Energy, Ltd.
OIL AND GAS EXPLORATION AND
DEVELOPMENT 43,131 91,000
---------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
THAILAND--.9% (b)BEC World Public Co., Ltd.
HOLDING COMPANY INVOLVED IN
ENTERTAINMENT AND TELEVISION
BROADCASTING 10,400 65,000
---------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
PAPUA NEW GUINEA--.7% (a)Orogen Minerals, Ltd.
INVESTMENT COMPANY WITH CONTROLLING
INTEREST IN PAPUA NEW GUINEA GOLD AND
OIL COMPANIES 41,100 53,000
---------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
INDIA--.7% Mahanagar Telephone Nigam, Ltd.
PROVIDER OF TELECOMMUNICATIONS
FACILITIES 4,900 52,000
---------------------------------------------------------------------------
TOTAL COMMON STOCKS--91.8%
(Cost $5,810,000) 6,495,000
---------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INDONESIA--.4% APP Global Finance, Ltd.,
2.00%, 7/25/00
PRODUCER OF PULP AND PAPER $ 38,000 31,000
---------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
PHILIPPINES--.7% Philipino Telephone Corp.,
1.75%, 7/17/06
MOBILE TELEPHONE SERVICES 93,000 46,000
---------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS--1.1%
(Cost $90,000) 77,000
---------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
MONEY MARKET Yield--5.60%
INSTRUMENT--7.1% Due--December 1998
Federal Home Loan Bank
(Cost $500,000) 500,000 500,000
---------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO--100%
(Cost $6,400,000) $7,072,000
---------------------------------------------------------------------------
</TABLE>
13
<PAGE> 14
PORTFOLIO OF INVESTMENTS
At November 30, 1998, the fund's portfolio of investments had the following
industry diversification:
<TABLE>
<CAPTION>
VALUE %
- ------------------------------------------------------------------------------------
<S> <C> <C>
Manufacturing $1,758,000 24.8
- ------------------------------------------------------------------------------------
Technology 1,236,000 17.5
- ------------------------------------------------------------------------------------
Finance 1,158,000 16.4
- ------------------------------------------------------------------------------------
Mining 403,000 5.7
- ------------------------------------------------------------------------------------
Communications 383,000 5.4
- ------------------------------------------------------------------------------------
Service Industries 358,000 5.0
- ------------------------------------------------------------------------------------
Consumer Staples 324,000 4.6
- ------------------------------------------------------------------------------------
Health 257,000 3.6
- ------------------------------------------------------------------------------------
Transportation 202,000 2.9
- ------------------------------------------------------------------------------------
Durables 97,000 1.4
- ------------------------------------------------------------------------------------
Utilities 94,000 1.3
- ------------------------------------------------------------------------------------
Miscellaneous 225,000 3.2
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCKS 6,495,000 91.8
- ------------------------------------------------------------------------------------
CONVERTIBLE BONDS 77,000 1.1
- ------------------------------------------------------------------------------------
MONEY MARKET INSTRUMENTS 500,000 7.1
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS $7,072,000 100.0
- ------------------------------------------------------------------------------------
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Non-income producing security.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Trustees at fair value amounted to $168,000 (2.26% of net assets). Their
values have been estimated by the Valuation Committee in the absence of
readily ascertainable market values. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the difference could be material. The cost of these
securities at November 30, 1998 aggregated $171,000. These securities may
also have certain restrictions as to resale.
Based on the cost of investments of $6,450,000 for federal income tax purposes
at November 30, 1998, the gross unrealized appreciation was $1,144,000, the
gross unrealized depreciation was $522,000 and the net unrealized appreciation
on investments was $622,000.
See accompanying Notes to Financial Statements.
14
<PAGE> 15
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF TRUSTEES AND SHAREHOLDERS
KEMPER ASIAN GROWTH FUND
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of the Kemper Asian Growth Fund as of
November 30, 1998, and the related statements of operations for the year then
ended and the statement of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the fiscal
periods since 1996. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
November 30, 1998, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Kemper
Asian Growth Fund at November 30, 1998, the results of its operations, the
changes in its net assets and the financial highlights for the periods referred
to above in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
January 19, 1999
15
<PAGE> 16
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------
Investments, at value
(Cost $6,400,000) $ 7,072,000
- ---------------------------------------------------------------------------
Cash 316,000
- ---------------------------------------------------------------------------
Receivable for:
Investments sold 286,000
- ---------------------------------------------------------------------------
Fund shares sold 64,000
- ---------------------------------------------------------------------------
Reimbursement from Advisor 39,000
- ---------------------------------------------------------------------------
TOTAL ASSETS 7,777,000
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
LIABILITIES AND NET ASSETS
- ---------------------------------------------------------------------------
Payable for:
Investments purchased 272,000
- ---------------------------------------------------------------------------
Fund shares redeemed 68,000
- ---------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 21,000
- ---------------------------------------------------------------------------
Total liabilities 108,000
- ---------------------------------------------------------------------------
NET ASSETS $ 7,416,000
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- ---------------------------------------------------------------------------
Paid-in capital $11,238,000
- ---------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (4,602,000)
- ---------------------------------------------------------------------------
Net unrealized appreciation on investments and assets and
liabilities in foreign currencies 672,000
- ---------------------------------------------------------------------------
Undistributed net investment income 108,000
- ---------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 7,416,000
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
THE PRICING OF SHARES
- ---------------------------------------------------------------------------
CLASS A SHARES
Net asset value and redemption price per share
($4,047,000 / 748,000 shares outstanding) $5.41
- ---------------------------------------------------------------------------
Maximum offering price per share
(net asset value, plus 6.10% of
net asset value or 5.75% of offering price) $5.74
- ---------------------------------------------------------------------------
CLASS B SHARES
Net asset value and redemption price
(subject to contingent deferred sales charge) per share
($3,035,000 / 569,000 shares outstanding) $5.34
- ---------------------------------------------------------------------------
CLASS C SHARES
Net asset value and redemption price
(subject to contingent deferred sales charge) per share
($334,000 / 62,000 shares outstanding) $5.35
- ---------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
16
<PAGE> 17
FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------
NET INVESTMENT INCOME
- ---------------------------------------------------------------------------
Dividends (less foreign taxes withheld of $15,000) $ 203,000
- ---------------------------------------------------------------------------
Interest 60,000
- ---------------------------------------------------------------------------
Total investment income 263,000
- ---------------------------------------------------------------------------
Expenses:
Management fee 58,000
- ---------------------------------------------------------------------------
Distribution services fee 22,000
- ---------------------------------------------------------------------------
Administrative services fee 16,000
- ---------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 108,000
- ---------------------------------------------------------------------------
Professional fees 11,000
- ---------------------------------------------------------------------------
Reports to shareholders 11,000
- ---------------------------------------------------------------------------
Other 4,000
- ---------------------------------------------------------------------------
Total expenses before expense waiver 230,000
- ---------------------------------------------------------------------------
Less expenses waived by investment manager 79,000
- ---------------------------------------------------------------------------
Total expenses after expense waiver 151,000
- ---------------------------------------------------------------------------
NET INVESTMENT INCOME 112,000
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ---------------------------------------------------------------------------
Net realized loss on sales of investments and foreign
currency transactions (3,409,000)
- ---------------------------------------------------------------------------
Change in net unrealized appreciation on investments and
assets and liabilities in foreign currencies 2,073,000
- ---------------------------------------------------------------------------
Net loss on investments (1,336,000)
- ---------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(1,224,000)
- ---------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
1998 1997
- ----------------------------------------------------------------------------------------------
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment income $ 112,000 26,000
- ----------------------------------------------------------------------------------------------
Net realized loss (3,409,000) (1,174,000)
- ----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) 2,073,000 (1,459,000)
- ----------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations (1,224,000) (2,607,000)
- ----------------------------------------------------------------------------------------------
Net equalization credits -- 13,000
- ----------------------------------------------------------------------------------------------
Distribution from net investment income (49,000) --
- ----------------------------------------------------------------------------------------------
Net increase from capital share transactions 2,291,000 7,043,000
- ----------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 1,018,000 4,449,000
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------
Beginning of year 6,398,000 1,949,000
- ----------------------------------------------------------------------------------------------
END OF YEAR
- ----------------------------------------------------------------------------------------------
(including undistributed net investment
income of $108,000 and $58,000, respectively) $ 7,416,000 6,398,000
- ----------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1 DESCRIPTION OF THE
FUND Kemper Asian Growth Fund is an open-end management
investment company organized as a business trust
under the laws of Massachusetts. The fund currently
offers four classes of shares. Class A shares are
sold to investors subject to an initial sales
charge. Class B shares are sold without an initial
sales charge but are subject to higher ongoing
expenses than Class A shares and a contingent
deferred sales charge payable upon certain
redemptions. Class B shares automatically convert
to Class A shares six years after issuance. Class C
shares are sold without an initial sales charge but
are subject to higher ongoing expenses than Class A
shares and a contingent deferred sales charge
payable upon certain redemptions within one year of
purchase. Class C shares do not convert into
another class. Class I shares (none sold through
November 30, 1998) are offered to a limited group
of investors, are not subject to initial or
contingent deferred sales charges and have lower
ongoing expenses than other classes. Differences in
class expenses will result in the payment of
different per share income dividends by class. All
shares of the fund have equal rights with respect
to voting, dividends and assets, subject to class
specific preferences.
- --------------------------------------------------------------------------------
2 SIGNIFICANT
ACCOUNTING POLICIES SECURITY VALUATION. Investments are stated at
value. Portfolio securities which are traded on
U.S. or foreign stock exchanges are valued at the
most recent sale price reported on the exchange on
which the security is traded most extensively. If
no sale occurred, the security is then valued at
the calculated mean between the most recent bid and
asked quotations. If there are no such bid and
asked quotations, the most recent bid quotation is
used. Securities quoted on the Nasdaq Stock Market
(Nasdaq), for which there have been sales, are
valued at the most recent sale price reported. If
there are no such sales, the value is the most
recent bid quotation. Securities which are not
quoted on Nasdaq but are traded in another
over-the-counter market are valued at the most
recent sale price on such market. If no sale
occurred, the security is then valued at the
calculated mean between the most recent bid and
asked quotations. If there are no such bid and
asked quotations, the most recent bid quotation
shall be used. Forward foreign currency exchange
contracts are valued at the prevailing forward
exchanges rate of the underlying currencies on that
day. Money market instruments purchased with an
original maturity of sixty days or less are valued
at amortized cost. All other securities are valued
at their fair market value as determined in good
faith by the Valuation Committee of the Board of
Trustees.
FOREIGN CURRENCY TRANSLATIONS. The books and
records of the fund are maintained in U.S. dollars.
Investment securities and other assets and
liabilities denominated in a foreign currency are
translated into U.S. dollars at the prevailing
rates of exchange. Purchases and sales of
investment securities, income and expenses are
translated into U.S. dollars at the prevailing
exchange rates on the respective dates of the
transactions. The fund includes that portion of the
results of operations resulting from changes in
foreign exchange rates with net realized and
unrealized gain (loss) on investments, as
appropriate.
Net realized and unrealized gains and losses on
foreign currency transactions represent net gains
and losses from sales and maturities of forward
foreign currency exchange contracts, disposition of
foreign currencies, and the difference between the
amount of net investment income accrued and the
U.S. dollar amount actually received. That portion
of both realized and unrealized gains
18
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS
and losses on investments that result from
fluctuations in foreign currency exchange rates is
not separately disclosed.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME.
Investment transactions are accounted for on the
trade date. Dividend income is recorded on the ex-
dividend date, except that certain dividends from
foreign securities are recorded as soon as the
information is available to the fund. Interest
income is recorded on the accrual basis. Realized
gains and losses from investment transactions are
reported on an identified cost basis.
FUND SHARE VALUATION. Fund shares are sold and
redeemed on a continuous basis at net asset value
(plus an initial sales charge on most sales of
Class A shares). Proceeds payable on redemption of
Class B and Class C shares will be reduced by the
amount of any applicable contingent deferred sales
charge. On each day the New York Stock Exchange is
open for trading, the net asset value per share is
determined as of the close of the Exchange. The net
asset value per share is determined separately for
each class by dividing the fund's net assets
attributable to that class by the number of shares
of the class outstanding.
FEDERAL INCOME TAXES. The fund's policy is to
comply with the requirements of the Internal
Revenue Code, as amended, which are applicable to
regulated investment companies, and to distribute
all of its taxable income to its shareholders.
Accordingly, the fund paid no federal income taxes
and no federal income tax provision was required.
At November 30, 1998, the fund had a tax basis net
loss carryforward of approximately $4,402,000 which
may be applied against any realized net taxable
gains of each succeeding year until fully utilized
or it will expire during the period 2005 through
2006.
DIVIDENDS TO SHAREHOLDERS. The fund declares and
pays dividends of net investment income and net
realized capital gains annually, which are recorded
on the ex-dividend date. Dividends are determined
in accordance with income tax principles which may
treat certain transactions differently from
generally accepted accounting principles. These
differences are primarily due to differing
treatments for certain transactions such as foreign
currency transactions.
EQUALIZATION ACCOUNTING. Prior to December 1, 1997,
the fund used equalization accounting to keep a
continuing shareholder's per share interest in
undistributed net investment income unaffected by
shareholder activity. This was accomplished by
allocating a portion of the proceeds from sales and
the cost of redemptions of fund shares to
undistributed net investment income. As of December
1, 1997, the fund discontinued using equalization.
This change has no effect on the fund's net assets,
net asset value per share or distributions to
shareholders. Discontinuing the use of equalization
accounting will result in simpler financial
statements. The cumulative effect of the
discontinuance of equalization accounting was to
decrease undistributed net investment income and
increase paid-in-capital previously reported
through November 30, 1997 by $13,000.
- --------------------------------------------------------------------------------
3 TRANSACTIONS WITH
AFFILIATES MANAGEMENT AGREEMENT. The fund has a management
agreement with Scudder Kemper Investments, Inc.
(Scudder Kemper) and pays a monthly investment
management fee of 1/12 of the annual rate of .85%
of the first $250 million of average daily net
assets declining to .72% of average daily net
assets in excess of
19
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS
$12.5 billion. However, the fund incurred no
management fees for the year ended November 30,
1998, after a fee waiver by Scudder Kemper.
In addition, Scudder Kemper has temporarily agreed
to absorb certain operating expenses of the fund.
Under these arrangements, Scudder Kemper waived and
absorbed expenses of $79,000 for the year ended
November 30, 1998.
ZURICH/B.A.T MERGER. On September 7, 1998, Zurich
Insurance Company (Zurich), majority owner of
Scudder Kemper, entered into an agreement with
B.A.T Industries p.l.c. (B.A.T) pursuant to which
the financial services businesses of B.A.T were
combined with Zurich's businesses to form a new
global insurance and financial services company
known as Zurich Financial Services. Upon
consummation of the transaction, the fund's
investment management agreement with Scudder Kemper
was deemed to have been assigned and, therefore,
terminated. The Board of Trustees of the fund has
approved a new investment management agreement with
Scudder Kemper, which is substantially identical to
the former investment management agreement, except
for the dates of execution and termination.
Shareholders approved the new investment management
agreement through a proxy solicitation that
concluded in mid-December.
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT.
The fund has an underwriting and distribution
services agreement with Kemper Distributors, Inc.
(KDI). Underwriting commissions paid in connection
with the distribution of Class A shares are as
follows:
<TABLE>
<CAPTION>
COMMISSIONS COMMISSIONS ALLOWED
RETAINED BY KDI BY KDI TO FIRMS
--------------- --------------------
<S> <C> <C>
Year ended November 30, 1998 $3,000 37,000
</TABLE>
For services under the distribution services
agreement, the fund pays KDI a fee of .75% of
average daily net assets of the Class B and Class C
shares pursuant to separate Rule 12b-1 plans for
the Class B and Class C shares. Pursuant to the
agreement, KDI enters into related selling group
agreements with various firms at various rates for
sales of Class B and Class C shares. In addition,
KDI receives any contingent deferred sales charges
(CDSC) from redemptions of Class B and Class C
shares. Distribution fees, CDSC and commissions
related to Class B and Class C shares are as
follows:
<TABLE>
<CAPTION>
DISTRIBUTION FEES
(AFTER EXPENSE WAIVER) COMMISSIONS AND
AND CDSC RECEIVED DISTRIBUTION FEES
BY KDI PAID BY KDI TO FIRMS
---------------------- --------------------
<S> <C> <C>
Year ended November 30, 1998 $9,000 57,000
</TABLE>
ADMINISTRATIVE SERVICES AGREEMENT. The fund has an
administrative services agreement with KDI. For
providing information and administrative services
to Class A, Class B and Class C shareholders, the
fund pays KDI a fee at an annual rate of up to .25%
of average daily net assets of each class. KDI in
turn has various agreements with financial services
firms that provide these services and
20
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS
pays these firms based on assets of fund accounts
the firms service. Administrative services fees
(ASF) paid are as follows:
<TABLE>
<CAPTION>
ASF
(AFTER EXPENSE WAIVER)
PAID BY THE ASF PAID BY
FUND TO KDI KDI TO FIRMS
---------------------- ------------
<S> <C> <C>
Year ended November 30, 1998 $14,000 20,000
</TABLE>
SHAREHOLDER SERVICES AGREEMENT. Pursuant to a
services agreement with the fund's transfer agent,
Kemper Service Company (KSvC) is the shareholder
service agent of the fund. Under the agreement,
KSvC received shareholder services fees of $78,000
for the year ended November 30, 1998.
OFFICERS AND TRUSTEES. Certain officers or trustees
of the fund are also officers or directors of
Scudder Kemper. During the year ended November 30,
1998, the fund made no payments to its officers or
trustees.
- --------------------------------------------------------------------------------
4 INVESTMENT
TRANSACTIONS For the year ended November 30, 1998, investment
transactions (excluding short-term instruments) are
as follows (in thousands):
Purchases $10,757,000
Proceeds from sales 7,696,000
- --------------------------------------------------------------------------------
5 CAPITAL SHARE
TRANSACTIONS The following table summarizes the activity in
capital shares of the fund:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
1998 1997
----------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SHARES SOLD
Class A 2,297,000 $ 12,245,000 624,000 $5,526,000
----------------------------------------------------------------------------------------
Class B 1,653,000 8,787,000 444,000 4,154,000
----------------------------------------------------------------------------------------
Class C 155,000 788,000 46,000 427,000
----------------------------------------------------------------------------------------
SHARES ISSUED IN REINVESTMENT OF DIVIDENDS
Class A 6,000 36,000 -- --
----------------------------------------------------------------------------------------
Class B 1,000 6,000 -- --
----------------------------------------------------------------------------------------
SHARES REDEEMED
Class A (2,104,000) (11,163,000) (177,000) (1,579,000)
----------------------------------------------------------------------------------------
Class B (1,456,000) (7,686,000) (147,000) (1,351,000)
----------------------------------------------------------------------------------------
Class C (139,000) (722,000) (18,000) (134,000)
----------------------------------------------------------------------------------------
CONVERSION OF SHARES
Class A 16,000 103,000 4,000 38,000
----------------------------------------------------------------------------------------
Class B (16,000) (103,000) (4,000) (38,000)
----------------------------------------------------------------------------------------
NET INCREASE
FROM CAPITAL SHARE
TRANSACTIONS $ 2,291,000 $7,043,000
----------------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 22
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
-------------------------------------------
CLASS A
-------------------------------------------
YEAR ENDED OCTOBER 21
NOVEMBER 30, TO
------------------------ NOVEMBER 30,
1998 1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 6.65 10.04 9.50
- ---------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .11 .08 --
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1.27) (3.47) .54
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (1.16) (3.39) .54
- ---------------------------------------------------------------------------------------------------------
Less distribution from net investment income .08 -- --
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.41 6.65 10.04
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) (17.66)% (33.76) 5.68
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- ---------------------------------------------------------------------------------------------------------
Expenses 1.80% 1.60 1.46
- ---------------------------------------------------------------------------------------------------------
Net investment income 2.05% .97 .74
- ---------------------------------------------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- ---------------------------------------------------------------------------------------------------------
Expenses 2.65% 2.62 1.46
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.20% (.05) .74
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------
CLASS B
-------------------------------------------
YEAR ENDED OCTOBER 21
NOVEMBER 30, TO
------------------------ NOVEMBER 30,
1998 1997 1996
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 6.58 10.03 9.50
- ---------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .06 -- --
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1.28) (3.45) .53
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (1.22) (3.45) .53
- ---------------------------------------------------------------------------------------------------------
Less distribution from net investment income .02 -- --
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.34 6.58 10.03
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) (18.65)% (34.40) 5.58
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses 2.78% 2.57 2.34
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.07% -- (.14)
- ---------------------------------------------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses 4.29% 3.51 2.34
- ---------------------------------------------------------------------------------------------------------
Net investment loss (.44)% (.94) (.14)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE> 23
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
-------------------------------------------
CLASS C
-------------------------------------------
YEAR ENDED OCTOBER 21
NOVEMBER 30, TO
------------------------ NOVEMBER 30,
1998 1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 6.60 10.03 9.50
- ---------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .05 -- --
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1.28) (3.43) .53
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (1.23) (3.43) .53
- ---------------------------------------------------------------------------------------------------------
Less distribution from net investment income .02 -- --
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.35 6.60 10.03
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) (18.72)% (34.20) 5.58
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- ---------------------------------------------------------------------------------------------------------
Expenses 2.71% 2.54 2.34
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.14% .03 (.14)
- ---------------------------------------------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- ---------------------------------------------------------------------------------------------------------
Expenses 4.56% 3.55 2.34
- ---------------------------------------------------------------------------------------------------------
Net investment loss (.71)% (.98) (.14)
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA FOR ALL CLASSES
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 21
NOVEMBER 30, TO
-------------------------- NOVEMBER 30,
1998 1997 1996
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Net assets at end of period $7,416,000 6,398,000 1,949,000
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 131% 155 74
- ------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES: Total return does not reflect the effect of any sales charges. Scudder
Kemper Investments, Inc. agreed to waive a portion of its management fee and
absorb certain operating expenses of the fund during the years ended November
30, 1998 and 1997. The Other Ratios to Average Net Assets are computed without
this expense waiver or absorption.
23
<PAGE> 24
TRUSTEES&OFFICERS
TRUSTEES OFFICERS
DANIEL PIERCE MARK S. CASADY MAUREEN E. KANE
Chairman and Trustee President Assistant Secretary
LEWIS A. BURNHAM PHILIP J. COLLORA CAROLINE PEARSON
Trustee Vice President and Assistant Secretary
Secretary
DONALD L. DUNAWAY ELIZABETH C. WERTH
Trustee JOHN R. HEBBLE Assistant Secretary
Treasurer
ROBERT B. HOFFMAN BRENDA LYONS
Trustee ANN M. MCCREARY Assistant Treasurer
Vice President
DONALD R. JONES
Trustee KATHRYN L. QUIRK
Vice President
THOMAS W. LITTAUER
Trustee and Vice President CORNELIA SMALL
Vice President
SHIRLEY D. PETERSON
Trustee LINDA J. WONDRACK
Vice President
WILLIAM P. SOMMERS
Trustee
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
LEGAL COUNSEL VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 North LaSalle Street
Chicago, IL 60601
- -------------------------------------------------------------------------------
SHAREHOLDER KEMPER SERVICE COMPANY
SERVICE AGENT P.O. Box 419557
Kansas City, MO 64141
- -------------------------------------------------------------------------------
CUSTODIAN AND INVESTORS FIDUCIARY TRUST COMPANY
TRANSFER AGENT 801 Pennsylvania Avenue
Kansas City, MO 64105
- -------------------------------------------------------------------------------
FOREIGN CUSTODIAN THE CHASE MANHATTAN BANK
Chase Metro Center
Brooklyn, NY 11245
- -------------------------------------------------------------------------------
INDEPENDENT AUDITORS ERNST & YOUNG, LLP
233 South Wacker Drive
Chicago, IL 60606
- -------------------------------------------------------------------------------
PRINCIPAL UNDERWRITER KEMPER DISTRIBUTORS, INC.
222 South Riverside Plaza Chicago, IL 60606
www.kemper.com
</TABLE>
[KEMPER FUNDS LOGO]
LONG-TERM INVESTING IN A SHORT-TERM WORLD(SM)
Printed on recycled paper in the U.S.A.
This report is not to be distributed
unless preceded or accompanied by a
Kemper Asian Growth Fund prospectus.
KAGF - 2 (1/27/99) 1064410
