<PAGE> 1
LONG-TERM INVESTING IN A SHORT-TERM WORLD(SM)
ANNUAL REPORT TO
SHAREHOLDERS FOR THE YEAR
ENDED SEPTEMBER 30, 2000
Seeking capital appreciation through the
use of aggressive investment techniques
KEMPER AGGRESSIVE
GROWTH FUND
"...Despite the technology downturn the fund's best performing stocks were in
the technology sector. Many of our top-10 holdings posted strong gains over the
course of the year. ..."
[KEMPER FUNDS LOGO]
<PAGE> 2
AT A GLANCE
CONTENTS
3
ECONOMIC OVERVIEW
7
PERFORMANCE UPDATE
11
INDUSTRY SECTORS
12
LARGEST HOLDINGS
13
PORTFOLIO OF INVESTMENTS
16
FINANCIAL STATEMENTS
21
NOTES TO FINANCIAL STATEMENTS
25
REPORT OF INDEPENDENT AUDITORS
26
TAX INFORMATION
KEMPER AGGRESSIVE GROWTH FUND
TOTAL RETURNS*
FOR THE YEAR ENDED SEPTEMBER 30, 2000 (UNADJUSTED FOR ANY SALES CHARGE)
[BAR GRAPH]
<TABLE>
<CAPTION>
KEMPER AGGRESSIVE GROWTH KEMPER AGGRESSIVE GROWTH
KEMPER AGGRESSIVE GROWTH FUND CLASS A FUND CLASS B FUND CLASS C
------------------------------------- ------------------------ ------------------------
<S> <C> <C>
48.38 47.01 46.81
</TABLE>
PERFORMANCE IS HISTORICAL AND INCLUDES REINVESTMENT OF DIVIDENDS AND CAPITAL
GAINS. INVESTMENT RETURN AND PRINCIPAL VALUE FLUCTUATE WITH CHANGING MARKET
CONDITIONS, SO THAT WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
*TOTAL RETURN MEASURES NET INVESTMENT INCOME AND CAPITAL GAIN OR LOSS FROM
PORTFOLIO INVESTMENTS, ASSUMING REINVESTMENT OF ALL DIVIDENDS. DURING THE PERIOD
NOTED, SECURITIES PRICES FLUCTUATED. FOR ADDITIONAL INFORMATION SEE THE
PROSPECTUS STATEMENT OF ADDITIONAL INFORMATION AND FINANCIAL HIGHLIGHTS AT THE
END OF THIS REPORT.
NET ASSET VALUE
<TABLE>
<CAPTION>
AS OF AS OF
9/30/00 9/30/99
.........................................................
<S> <C> <C> <C> <C>
KEMPER AGGRESSIVE GROWTH FUND
CLASS A $22.88 $15.42
.........................................................
KEMPER AGGRESSIVE GROWTH FUND
CLASS B $22.14 $15.06
.........................................................
KEMPER AGGRESSIVE GROWTH FUND
CLASS C $22.11 $15.06
.........................................................
</TABLE>
THERE ARE SPECIAL RISK CONSIDERATIONS ASSOCIATED WITH THE FUND INCLUDING
OPERATION AS A NONDIVERSIFIED FUND, WHICH ALLOWS MORE ASSETS TO BE INVESTED IN
FEWER ISSUERS, AND FLEXIBILITY TO CONCENTRATE IN VARIOUS INVESTMENT SECTORS AND
TO INVEST SIGNIFICANT ASSETS IN SMALLER COMPANIES, WHICH PRESENT GREATER RISK
THAN LARGER, MORE ESTABLISHED COMPANIES. THERE IS NO ASSURANCE THAT THE FUND'S
MANAGEMENT STYLE WILL BE SUCCESSFUL OR THAT THE FUND WILL ACHIEVE ITS OBJECTIVE.
TERMS TO KNOW
YOUR FUND'S STYLE
MORNINGSTAR EQUITY STYLE BOX(TM)
<TABLE>
<S> <C>
[MORNINGSTAR EQUITY STYLE Source: Morningstar, Inc. Chicago, IL (312)
BOX] 696-6000. The Morningstar Equity Style Box(TM)
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
OVER THE PAST THREE YEARS. MORNINGSTAR HAS PLACED
KEMPER AGGRESSIVE GROWTH FUND IN THE LARGE- CAP
GROWTH CATEGORY. PLEASE CONSULT THE PROSPECTUS
FOR A DESCRIPTION OF INVESTMENT POLICIES.
</TABLE>
FUNDAMENTAL RESEARCH Analysis of companies based on the projected impact of
management, products, sales, and earnings on their balance sheets and income
statements. Distinct from technical analysis, which evaluates the attractiveness
of a stock based on historical price and trading volume movements, rather than
the financial results of the underlying company.
MOMENTUM INVESTING The practice of investing in the market's top-performing
stocks in order to capture additional upward movements in their prices.
WEIGHTING (OVER/UNDER) Refers to the allocation of assets -- usually in terms of
sectors, industries or countries -- within a portfolio relative to the
portfolio's benchmark index or investment universe.
<PAGE> 3
ECONOMIC OVERVIEW
SCUDDER KEMPER INVESTMENTS, THE INVESTMENT MANAGER FOR KEMPER FUNDS, IS ONE OF
THE LARGEST AND MOST EXPERIENCED INVESTMENT MANAGEMENT ORGANIZATIONS IN THE
WORLD, MANAGING MORE THAN $290 BILLION IN ASSETS FOR INSTITUTIONAL AND CORPORATE
CLIENTS, RETIREMENT AND PENSION PLANS, INSURANCE COMPANIES, MUTUAL FUND
INVESTORS AND INDIVIDUALS. SCUDDER KEMPER INVESTMENTS OFFERS A FULL RANGE OF
INVESTMENT COUNSEL AND ASSET MANAGEMENT CAPABILITIES BASED ON A COMBINATION OF
PROPRIETARY RESEARCH AND DISCIPLINED, LONG-TERM INVESTMENT STRATEGIES.
DEAR KEMPER FUNDS SHAREHOLDER:
Times have been good. During the first half of 2000, the global economy grew
faster than it has in over a decade. All regions participated. The United
States, of course, was still powering ahead. The growth rate in Europe was
nearly 4 percent. Asia fed off an electronics boom and a revitalized China.
South America got a boost from an improved credit rating. New money pumped up
energy producers from Mexico to the Middle East.
Now for the bad news, which is that the best news is probably behind us.
Global growth peaked in the spring, and in the United States, at least, the
slowdown was abrupt. After 6 percent growth in the year ending June 30, the
economy grew at a rate of just 2.7 percent during the summer. It seems that
expensive energy, currency volatility and more widespread profit problems, are
bringing the exuberant global economy, including the United States, to heel.
Let's explore these factors in more detail.
OIL, OIL, TOIL AND TROUBLE
Although oil prices have receded somewhat, everyone's still jittery, and with
good reason: Of the seven recessions since World War II, six were preceded by a
spike in crude oil prices.
Oil prices have already been strong enough for long enough to crimp growth,
and they're biting the rest of the world even harder than the United States. But
there are two factors working to our advantage. First, oil prices are still
historically low. Oil is slightly more than $30 per barrel today, but it peaked
at over $75 per barrel back in 1980 (stated in today's dollars). Second, our
dependence on oil has decreased: The United States uses only roughly half as
much oil to produce a unit of GDP as it did thirty years ago. This gives us hope
that the economy can escape recession this time around.
What would make us worry more? Outright energy shortages or a political
crisis. If either happens, the odds of a recession occurring would rise steeply.
People panic or become excessively cautious when they have to fret. Can I fill
up my oil tank? Will there be a war? Their loss of confidence can be much more
devastating than price increases alone.
CURRENCY CONCERNS
Currency turmoil is a second danger to the economy. Central bankers have
intervened to halt the euro's decline, and they're right that the euro is
fundamentally undervalued. But intervention is a hazardous game. Let's hope they
don't convince the markets that the euro should rise a lot very quickly. A
suddenly weak dollar might make Europeans think about selling all those American
stocks and bonds they've been buying, and would greatly complicate the Fed's
inflation fight.
BUSINESS: BIG PLANS BUT PROFIT DISAPPOINTMENTS
Profit warnings escalated late this summer, and we believe there's fire amid
that smoke.
Sure, businesses have had a voracious appetite for money -- and until very
recently, corporate treasurers were finding it easily: Banks increased business
lending by 10.8 percent in the past year. Bond markets have suddenly become a
lot more picky, especially for low-quality credits, but money is still available
for investment grade borrowers. Capital goods orders reflect executives'
enthusiasm -- they've been accelerating since early in the year, and in
September were up more than 20 percent compared to a year ago.
Still, we expect total capital spending to slow, from this year's estimated 14
percent to 12.5 percent in 2001. The reason? A profit squeeze is about to take
some of the edge off executives' animal spirits.
We've always been more cautious than Wall Street about 2001 profits, and our
forecast hasn't changed. Profits are likely to be flat to down next year for
several reasons. First, the growth slowdown will make it harder to keep up the
productivity gains that have kept labor costs under control. Second, interest
expense will surge thanks to higher rates and all that new debt. Third,
depreciation costs are escalating. And finally, the excessively weak euro and
higher oil costs will sap earnings.
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 (10/31/00) 6 MONTHS AGO 1 YEAR AGO 2 YEARS AGO
-------------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
10-year Treasury rate (1) 5.70 6.00 6.10 4.50
Prime rate (2) 9.50 9.00 8.25 8.25
Inflation rate (3)* 3.50 3.80 2.60 1.40
The U.S. dollar (4) 11.30 1.10 -0.90 1.10
Capital goods orders (5)* 22.70 13.30 4.70 8.60
Industrial production (5)* 5.70 5.40 3.50 3.70
Employment growth (6) 1.80 2.50 2.30 2.50
</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 9/30/00.
SOURCE: ECONOMICS DEPARTMENT, SCUDDER KEMPER INVESTMENTS, INC.
SAVING GRACES: FISCAL POLICY AND CONSUMER SPENDING
While growth has peaked and is now slowing, we can be thankful that growth
probably won't slow too much, thanks in part to a more stimulative fiscal policy
and consumer spending.
Fiscal policy is likely to be more stimulative. Of course, most economists
agree that the last thing this pumped-up economy needs is another shot of
stimulants -- too much stimulus, after all, is widely believed to cause
inflation. But economists weren't running for office; politicians were. And
inflation risk was about the last thing on the mind of either candidate in the
heat of election campaigning. They wanted to win votes, and the time-tested way
to do so was to make promises. Although we didn't have the name of the winner as
of press time, neither candidate seems to be planning a lot of fiscal
restraint -- but the good news is that neither candidate's plan is likely to be
enacted until 2002 at the earliest.
Second, consumers continue to spend, spend, spend. The personal savings rate
keeps falling, from an already low 2.2 percent last year to a nearly invisible
0.1 percent this year. Critics of this admittedly squishy statistic claim it
doesn't adequately capture households' growing wealth. As it turns out, however,
the average American not only doesn't save much, but he's not getting wealthier
in leaps and bounds, either.
Net worth for the median family where the head of the household is over 45
(and where thoughts are presumably beginning to turn to retirement), rose less
than $13,000 between 1995 and 1998. That's less than a 12 percent gain during
the same three years the stock market nearly doubled and the market value of
owner-occupied homes jumped 21 percent. Why didn't the average family get richer
in that time? Because they were borrowing and spending like crazy. House values
were up 21 percent -- but mortgage debt rose even faster, by 25 percent!
Consumers' profligacy worries many financial professionals. Some people aren't
saving enough for retirement because they have inflated expectations of future
investment returns. Other people aren't saving enough for retirement because
they don't realize just how much money they'll need. Either way, people aren't
saving.
Still, no one wants consumers to change their profligate ways too fast. After
all, hearty consumer spending is a prime reason America's growth has stayed on a
fast track so far. Most economists would like to see shoppers be a bit more
moderate -- but only a bit. If Americans suddenly turned thrifty, the economy
would lurch into reverse.
4
<PAGE> 5
ECONOMIC OVERVIEW
Luckily, there's little chance of that happening, unless lenders get cold
feet. So far, they're hot to trot. In the past year, mortgage lending by banks
rocketed nearly 17 percent while loans to consumers jumped 10 percent. Brokers
are selling the loans banks don't want on their balance sheets to mortgage pools
and the asset-backed securities market, where eager non-bank lenders are
snapping them up. In the past year, these markets provided $625 billion of new
credit, a leap of more than 12 percent.
With so much money at their disposal, consumers didn't stay out of the
shopping centers and restaurants for long. Consumer spending growth jumped up to
4.5 percent in the summer, and we expect it to stay well above 3 percent through
2001.
OMINOUS SIGNS?
Decelerations are always tricky, to be sure. But barring some unexpected
shock, overall economic growth should to pop back into the 3.5 percent to 4
percent range in 2001. Why? Borrowing costs a little more than it did last year,
but money is still freely available for most borrowers. Capital goods orders are
strong, so there's a lot of life left in business spending. Shoppers are a
little pickier, but they're still more interested in visiting the mall than in
filling their piggy banks. And after the election, no matter who wins, fiscal
policy is likely to be more stimulative than it has been for years. The price to
pay will likely be a rise in core inflation (inflation excluding food and
energy). We expect it to hit 3 percent next year, up from its recent rate of 2.5
percent. We believe we'll make it safely through 2001, but investors should keep
their hands on the wheel and their eyes peeled.
Sincerely,
Kemper Distributors, Inc.
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 THE ECONOMIC ADVISORS OF SCUDDER KEMPER
INVESTMENTS, INC. AS OF NOVEMBER 8, 2000, AND MAY NOT ACTUALLY COME TO PASS.
THIS INFORMATION IS SUBJECT TO CHANGE. NO PART OF THIS MATERIAL IS INTENDED AS
AN INVESTMENT RECOMMENDATION.
TO OBTAIN A KEMPER FUNDS PROSPECTUS, DOWNLOAD ONE FROM WWW.KEMPER.COM, TALK TO
YOUR FINANCIAL REPRESENTATIVE OR CALL SHAREHOLDER SERVICES AT (800) 621-1048.
THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION, INCLUDING MANAGEMENT FEES AND
EXPENSES. PLEASE READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
5
<PAGE> 6
ECONOMIC OVERVIEW
[INTENTIONALLY LEFT BLANK]
6
<PAGE> 7
PERFORMANCE UPDATE
[HODGES PHOTO]
LEAD PORTFOLIO MANAGER SEWALL HODGES IS A MANAGING DIRECTOR WITH SCUDDER KEMPER
INVESTMENTS, INC. HODGES BRINGS MORE THAN 20 YEARS OF INVESTMENT INDUSTRY
EXPERIENCE TO THE FUND AND SERVES AS THE LEADER OF THE COMPANY'S SMALL-CAP
INVESTING TEAM. JESUS C. CABRERA IS A PORTFOLIO MANAGER OF THE FUND AND HAS MORE
THAN 10 YEARS OF INVESTMENT EXPERIENCE. THE TEAM IS SUPPORTED BY SCUDDER KEMPER
INVESTMENTS, INC.'S LARGE STAFF OF ANALYSTS, RESEARCHERS, TRADERS AND INVESTMENT
SPECIALISTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT, AS STATED ON THE COVER. THE
MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME, BASED ON MARKET AND OTHER
CONDITIONS.
KEMPER AGGRESSIVE GROWTH FUND DRAMATICALLY OUTPERFORMED ITS BENCHMARK -- THE
STANDARD & POOR'S 500 STOCK INDEX (S&P) DURING THE FUND'S ANNUAL PERIOD --
OCTOBER 1, 1999 THROUGH SEPTEMBER 30, 2000. BELOW, LEAD PORTFOLIO MANAGER SEWALL
HODGES EXPLAINS HIS INVESTMENT STRATEGY AND THE REASONS BEHIND THE FUND'S
OUTSTANDING PERFORMANCE IN A VERY VOLATILE MARKET ENVIRONMENT.
Q HOW DID KEMPER AGGRESSIVE GROWTH FUND PERFORM DURING THE ANNUAL PERIOD?
A Fund performance was exceptional, even despite a technology correction
that heightened stock market volatility. The fund gained 48.38 percent (Class A
Shares, unadjusted for any sales changes) for the 12 months ended September 30,
2000. It soundly beat its benchmark, the Standard & Poor's 500 stock index,
which rose just 13.27 percent for the period.
The fund's performance was due to strong technology stock performance early in
the period. Later, the fund fared well because of defensive moves made that
increased its cash reserves. When the market imploded in March, our cash
position helped ease the impact. We maintained a relatively high cash position
throughout the remainder of the year (31.3% of net assets as of September 30,
2000) as the market suffered through extreme bouts of volatility and lack of a
clear direction.
Q YOU MENTIONED THE MARKET WAS QUITE VOLATILE DURING THE PERIOD. WILL YOU
PLEASE EXPLAIN WHAT WAS BEHIND THE VOLATILITY AND THE CHALLENGES YOU FACED IN
MANAGING THE FUND?
A The year seemed to be cut into two distinct periods. Throughout the first
half -- October through March -- we continued to see dramatic, even historic
levels of market volatility. Despite the fluctuations, most market indices
ultimately climbed to new highs fueled by surging momentum in large-cap
technology, media and telecommunications stocks (TMT stocks).
In March, investors became skittish about the extreme valuations that most of
these TMT stocks had reached. They began to sell en masse, causing a rapid and
deep decline in these stocks and in the major market indices. TMT stocks never
solidly regained their market footing. Instead we saw quick surges and quick
declines in these stocks, which once seemed to be invincible market leaders.
Industries like financial services and health care rallied through much of the
latter part of the period as investors moved into more reasonably valued stocks
that were a bit more defensive than the TMT highflyers.
Q GIVEN THE EXTREME MARKET VOLATILITY, HOW DID YOU MANAGE KEMPER AGGRESSIVE
GROWTH FUND'S PORTFOLIO?
A We don't alter our investment process because of a changing market
environment. So this period we managed the portfolio as we always do -- through
a bottom-up approach to stock selection.
Our goal is to pursue long-term capital appreciation, and we may do so by
investing in companies of any size. We're willing to concentrate investments in
market sectors with the strongest prospects for growth. Our primary focus,
however, is
7
<PAGE> 8
PERFORMANCE UPDATE
always on bottom-up research on individual companies. At no time are we willing
to compromise our criteria. Therefore, portfolio allocations into market-cap
segments and sectors result from our individual stock selection.
We look for companies with strong fundamentals, clean balance sheets and
above-average earnings growth that we believe can be sustained for a period of
at least two years. We tend to favor companies that are leaders in their
industries or innovators on the cutting edge of emerging technologies. Other
fundamentals such as good management and cost controls are important in our
analysis. We also seek to invest when the timeliness of our purchase appears
appropriate. Our valuation discipline points us toward investments that are
attractive on an absolute and/or relative basis.
Conversely, we'll eliminate stocks when it appears that company fundamentals
start deteriorating or earnings growth is slowing. We will also sell stocks when
their prices reach our pre-established targets. With the rapid rise in
technology valuations early in the year, many of our tech stocks reached their
targets early in 2000 so we were forced to reduce or liquidate many of our
positions. Our adherence to our discipline paid off as we realized profits on
many of our tech stocks prior to the correction in March.
Our investment charter also gives us the flexibility to maintain a sizeable
cash position in the fund. And during this extremely volatile period, we took
advantage of that policy. After taking profits early in the year we maintained a
high cash position through the technology correction, which was beneficial for
the fund. We then found opportunities to redeploy the cash. When technology
rallied in August, many of our holdings once more reached pre-established price
targets so we again took profits, which led to a more than 30 percent position
in cash, which we've held through the end of September.
Although we would prefer to be fully invested, there are times when it is more
prudent to remain defensive with a strong cash position. The latter half of this
period was one of those times. Our use of cash in the portfolio was one of the
most important contributors to fund performance this year. As volatility
subsides and the market finds some direction we'll likely have more success in
redeploying this cash. But we won't invest just to invest. We need to have
conviction in our stock selection.
Q DESPITE THE STRUGGLES THAT TECHNOLOGY STOCKS HAVE ENDURED, MORE THAN HALF
OF THE FUND IS INVESTED IN THE TECH SECTOR. DO YOU SEE IMPROVING PROSPECTS FOR
THIS SECTOR?
A Again, it's important to point out that we don't invest by sector. We
choose individual stocks for their own merits. However, technology companies by
nature tend to provide the best prospects for rapid growth and as aggressive
growth managers that's where we typically find many of our best opportunities.
We've culled our holdings over the course of the year and eliminated those
stocks we thought were most at risk to an extended downturn in the sector. We
don't hold any Internet (.com) stocks and we're underexposed in the wireless and
personal computer industries that have struggled recently. The companies that we
do own have been experiencing very strong earnings and have spectacular
prospects for improved growth.
Our large technology position does present risk. However, we're an aggressive
growth fund and we need to be invested in those stocks that present the best
prospects for growth. The fund's cash position is a good defensive tool that is
helping to balance the risk. The cash also enables us the flexibility to move
quickly into other growth stocks as the opportunities present themselves. We
want to buy the highest growth rate companies at the proper time and at the
right prices.
Q WHAT WERE SOME OF THE BEST-PERFORMING STOCKS FOR KEMPER AGGRESSIVE GROWTH
FUND?
A Despite the technology downturn, the fund's best-performing stocks were in
the technology sector. Many of our top-10 holdings posted strong gains over the
course of the year. These companies have several things in common. They all have
incredibly strong market standings and product line-ups combined with massive
revenue and earnings growth. And they all have dominant positions in what they
do. The fact that they were all top-10 holdings made an even bigger impact in
terms of contributions to fund performance.
They include the following.
- Applied Micro Circuits, which manufactures specialized semiconductors designed
for wireless telecommunications, exhibited remarkable earnings growth.
Companies such as Nortel and Lucent Technologies look to Applied Micro
Circuits for fiber-optic solutions to help them increase speed and bandwidth.
They're a great example of the niche player we look for.
8
<PAGE> 9
PERFORMANCE UPDATE
- SDL sells semiconductor laser pump modules to companies that operate
fiber-optic, cable television and satellite communication networks.
- Mercury Interactive Corporation develops, markets and supports a family of
automated client/server and web-based test tools. Their products are used by
corporate software development organizations, system integrators and software
vendors to identify software errors or "bugs."
- Check Point Software Technologies develops, markets and supports security
software solutions. These products aim to protect private information
delivered through the Internet.
Q WERE THERE STOCKS THAT DISAPPOINTED?
A Yes, there were. Two stocks in particular really hurt the fund's
performance. The first is a health care stock called VISX. The company
manufactures laser systems for vision correction. The company's devices are used
primarily in the correction of vision disorders such as near-sightedness,
astigmatism and far-sightedness, with the goal of eliminating the need to wear
eye glasses. When health care collapsed in 1999, this company continued to post
tremendous gains as its new technology was gaining momentum. However, in
February the stock hit an unexpected bump and declined dramatically in value.
The change in the company's fundamentals resulted in a decline in earnings
potential. We liquidated our position before it completed its decline, but the
fund suffered a loss nonetheless.
Another disappointment was Cinar Films. This Canadian entertainment company is
involved in the development and worldwide distribution of original, non-violent,
animated and live-action television programming and family entertainment
products. It's best known for its "Arthur" children's books and animated
television series. This stock collapsed as it was uncovered that management had
been misusing company funds. Again we liquidated our position, taking a loss.
Subsequent to the sale of the shares, the stock was halted and has not reopened
for trading. We were fortunate that our sell discipline caused us to exit this
position.
Q GIVEN THE CHALLENGES OF THE RECENT MARKET, WHAT IS YOUR OUTLOOK FOR EQUITY
INVESTING? HOW WILL YOU SEEK TO POSITION THE FUND?
A There is enormous uncertainty in the marketplace right now. Investors have
seen many bell-weather large-cap stocks -- technology, industrial consumer
products and retail to name a few -- come under enormous pressure and investors
are seeking safety in utilities and stable growth drug stocks.
Going forward, we are looking to deploy some of the fund's cash reserves as
appropriate. We will continue to look for companies with the strongest
fundamentals and to take advantage of price weaknesses to snap up those that we
want over the long term, but have been unable to buy previously due to high
valuations.
9
<PAGE> 10
PERFORMANCE UPDATE
AVERAGE ANNUAL TOTAL RETURNS*
FOR PERIODS ENDED SEPTEMBER 30, 2000 (ADJUSTED FOR THE MAXIMUM SALES CHARGE)
<TABLE>
<CAPTION>
1-YEAR 3-YEAR LIFE OF CLASS
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
KEMPER AGGRESSIVE GROWTH FUND CLASS A 39.79% 21.48% 25.98% (since 12/31/96)
........................................................................................................
KEMPER AGGRESSIVE GROWTH FUND CLASS B 43.95 22.38 26.60 (since 12/31/96)
........................................................................................................
KEMPER AGGRESSIVE GROWTH FUND CLASS C 46.81 22.74 26.83 (since 12/31/96)
........................................................................................................
</TABLE>
KEMPER AGGRESSIVE GROWTH FUND CLASS A
Growth of an assumed $10,000 investment in Class A
shares from 12/31/96 to 9/30/00
[LINE GRAPH]
<TABLE>
<CAPTION>
KEMPER AGGRESSIVE STANDARD & POOR'S 500
GROWTH FUND CLASS A1 RUSSELL 3000 INDEX+ STOCK INDEX++
-------------------- ------------------- ---------------------
<S> <C> <C> <C>
12/31/96 10000.00 10000.00 10000.00
9236.00 10087.00 10221.00
11071.00 11777.00 11949.00
12500.00 12876.00 12788.00
12/31/97 12571.00 13178.00 13101.00
14130.00 14898.00 14874.00
14089.00 15169.00 15307.00
11417.00 13472.00 13730.00
14328.00 16360.00 16595.00
3/31/99 14536.00 16916.00 17366.00
15960.00 18219.00 18532.00
16033.00 17018.00 17317.00
21357.00 19778.00 19835.00
25381.00 20681.00 20231.00
23519.00 19966.00 19637.00
9/30/00 23779.00 20114.00 19393.00
</TABLE>
KEMPER AGGRESSIVE GROWTH FUND CLASS B
Growth of an assumed $10,000 investment in Class B
shares from 12/31/96 to 9/30/00
[LINE GRAPH]
<TABLE>
<CAPTION>
KEMPER AGGRESSIVE STANDARD & POOR'S 500
GROWTH FUND CLASS B1 RUSSELL 3000 INDEX+ STOCK INDEX++
-------------------- ------------------- ---------------------
<S> <C> <C> <C>
12/31/96 10000.00 10000.00 10000.00
9779.00 10087.00 10221.00
11695.00 11777.00 11949.00
13179.00 12876.00 12788.00
13222.00 13178.00 13101.00
3/31/98 14856.00 14898.00 14874.00
14767.00 15169.00 15307.00
11953.00 13472.00 13730.00
14955.00 16360.00 16595.00
15154.00 16916.00 17366.00
6/30/99 16588.00 18219.00 18532.00
16621.00 17018.00 17317.00
22096.00 19778.00 19835.00
26168.00 20681.00 20231.00
24182.00 19966.00 19637.00
9/30/00 24228.00 20114.00 19393.00
</TABLE>
KEMPER AGGRESSIVE GROWTH FUND CLASS C
Growth of an assumed $10,000 investment in Class C
shares from 12/31/96 to 9/30/00
[LINE GRAPH]
<TABLE>
<CAPTION>
KEMPER AGGRESSIVE STANDARD & POOR'S 500
GROWTH FUND CLASS C1 RUSSELL 3000 INDEX+ STOCK INDEX++
-------------------- ------------------- ---------------------
<S> <C> <C> <C>
12/31/96 10000.00 10000.00 10000.00
9779.00 10087.00 10221.00
11705.00 11777.00 11949.00
13189.00 12876.00 12788.00
13233.00 13178.00 13101.00
3/31/98 14867.00 14898.00 14874.00
14778.00 15169.00 15307.00
11964.00 13472.00 13730.00
14977.00 16360.00 16595.00
15165.00 16916.00 17366.00
6/30/99 16588.00 18219.00 18532.00
16621.00 17018.00 17317.00
22085.00 19778.00 19835.00
26157.00 20681.00 20231.00
24160.00 19966.00 19637.00
9/30/00 24391.00 20114.00 19393.00
</TABLE>
PERFORMANCE IS HISTORICAL AND INCLUDES
REINVESTMENT OF DIVIDENDS AND CAPITAL
GAINS. INVESTMENT RETURN AND PRINCIPAL
VALUE FLUCTUATE WITH CHANGING MARKET
CONDITIONS, SO THAT WHEN REDEEMED,
SHARES MAY BE WORTH MORE OR LESS THAN
THEIR ORIGINAL COST.
*THE MAXIMUM SALES CHARGE FOR CLASS A
SHARES IS 5.75%. FOR CLASS B SHARES,
THE MAXIMUM CONTINGENT DEFERRED SALES
CHARGE (CDSC) IS 4 PERCENT. FOR CLASS
C SHARES, THERE IS A 1 PERCENT CDSC ON
CERTAIN REDEMPTIONS WITHIN THE FIRST
YEAR OF PURCHASE. DURING THE PERIODS
NOTED, SECURITIES PRICES FLUCTUATED.
FOR ADDITIONAL INFORMATION, SEE THE
PROSPECTUS, 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 CONTINGENT DEFERRED
SALES CHARGE IN EFFECT AT THE END OF
THE PERIOD FOR CLASS B SHARES. IN
COMPARING KEMPER AGGRESSIVE GROWTH
FUND TO THE INDICES, YOU SHOULD ALSO
NOTE THAT THE FUND'S PERFORMANCE
REFLECTS THE MAXIMUM SALES CHARGE,
WHILE NO SUCH CHARGES ARE REFLECTED
IN THE PERFORMANCE OF THE INDICES.
+THE RUSSELL 3000 INDEX IS AN UNMANAGED
INDEX COMPRISED OF 3000 OF THE LARGEST
CAPITALIZED U.S. DOMICILED COMPANIES
WHOSE COMMON STOCKS TRADE IN THE U.S.
THIS PORTFOLIO OF SECURITIES
REPRESENTS APPROXIMATELY 98 PERCENT OF
THE INVESTABLE U.S. EQUITY MARKET.
++THE STANDARD & POOR'S 500 STOCK INDEX
IS AN UNMANAGED INDEX GENERALLY
REPRESENTATIVE OF THE U.S. STOCK
MARKET. SOURCE IS WIESENBERGER(R).
10
<PAGE> 11
INDUSTRY SECTORS
A YEAR-TO-YEAR COMPARISON
DATA SHOWS THE PERCENTAGE OF THE COMMON STOCKS IN THE PORTFOLIO THAT EACH SECTOR
REPRESENTED ON SEPTEMBER 30, 2000, AND ON SEPTEMBER 30, 1999.
[BAR GRAPH]
<TABLE>
<CAPTION>
KEMPER AGGRESSIVE GROWTH KEMPER AGGRESSIVE GROWTH
FUND ON 9/30/00 FUND ON 9/30/99
------------------------ ------------------------
<S> <C> <C>
Technology 67.40 34.30
Consumer non-durables 10.80 30.80
Health care 9.50 9.50
Communication services 4.70 12.20
Energy 3.20 0.80
Basic material 2.80 0.00
Capital goods 1.60 9.80
Finance 0.00 2.60
</TABLE>
A COMPARISON WITH THE STANDARD & POOR'S 500 STOCK INDEX*
DATA SHOWS THE PERCENTAGE OF THE COMMON STOCKS IN THE PORTFOLIO THAT EACH SECTOR
OF KEMPER AGGRESSIVE GROWTH FUND REPRESENTED ON SEPTEMBER 30, 2000 COMPARED TO
THE INDUSTRY SECTORS THAT MAKE UP THE FUND'S BENCHMARK, THE STANDARD & POOR'S
500 STOCK INDEX.
[BAR GRAPH]
<TABLE>
<CAPTION>
KEMPER AGGRESSIVE GROWTH STANDARD & POOR'S 500 STOCK
FUND ON 9/30/00 INDEX ON 9/30/00
------------------------ ---------------------------
<S> <C> <C>
Technology 67.40 34.10
Consumer non-durables 10.80 16.10
Health care 9.50 10.30
Communication services 4.70 6.00
Energy 3.20 5.40
Basic materials 2.80 1.90
Capital goods 1.60 8.30
Finance 0.00 14.50
Transportation 0.00 0.50
Utilities 0.00 2.90
</TABLE>
* The Standard & Poor's 500 stock index is an unmanaged index generally
representative of the U.S. stock market.
11
<PAGE> 12
LARGEST HOLDINGS
KEMPER AGGRESSIVE GROWTH FUND'S 10 LARGEST HOLDINGS*
Representing 23.8 percent of the fund's portfolio on September 30, 2000
<TABLE>
<CAPTION>
HOLDINGS PERCENT
<S> <C> <C> <C>
-------------------------------------------------------------------------------------
1. MERCURY Creates products to automate the 3.3%
INTERACTIVE testing and quality assurance of
client-server software.
-------------------------------------------------------------------------------------
2. APPLIED Applied Micro Circuits Corporation 2.9%
MICRO CIRCUITS (AMCC) makes high-performance,
high-bandwidth integrated circuits
used to control the high-speed flow
of transmissions through fiber-optic
telephone networks worldwide.
-------------------------------------------------------------------------------------
3. CHECK POINT Develops, markets and supports 2.5%
SOFTWARE TECHNOLOGIES security software solutions. These
products aim to protect information
from unauthorized access and from
risks of unauthorized interception
through public connections like the
Internet.
-------------------------------------------------------------------------------------
4. VITESSE Produces component technologies for 2.5%
SEMICONDUCTOR a variety of industries, including
computers, telecommunications,
defense and aerospace.
-------------------------------------------------------------------------------------
5. SDL SDL mainly sells semiconductor laser 2.3%
pump modules to companies that
operate fiber-optic, cable
television, and satellite communica-
tion networks.
-------------------------------------------------------------------------------------
6. ANDRX Develops timed-release generic 2.2%
versions of brand-name drugs.
-------------------------------------------------------------------------------------
7. SYMBOL Manufacturer of bar code laser 2.1%
TECHNOLOGIES scanner.
-------------------------------------------------------------------------------------
8. FISERV A provider of financial data 2.1%
processing systems and related
information management products and
services to the financial industry.
-------------------------------------------------------------------------------------
9. SILICON STORAGE Supplies flash memory devices 2.0%
TECHNOLOGY required for high volume
applications in areas of digital
consumer, networking, wireless
communications and internet
computing.
-------------------------------------------------------------------------------------
10. SANMINA Provides customized integrated 1.9%
electronics manufacturing services,
including turnkey electronic
assembly and manufacturing
management services to original
equipment manufacturers.
-------------------------------------------------------------------------------------
</TABLE>
*THE FUND'S HOLDING'S ARE SUBJECT TO CHANGE.
12
<PAGE> 13
PORTFOLIO OF INVESTMENTS
KEMPER AGGRESSIVE GROWTH FUND
Portfolio of Investments at September 30, 2000
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM NOTES--31.3% AMOUNT VALUE
<S> <C> <C> <C> <C> <C>
REPURCHASE AGREEMENTS--0.0%
State Street Bank and Trust Company, 6.40%,
to be repurchased at $106,056 on
10/02/2000**.
(Cost $106,000) $ 106,000 $ 106,000
---------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER--31.3%
American Telephone & Telegraph Co., 6.50%,
10/12/2000 7,000,000 6,986,097
Conagra, Inc., 6.66%, 10/06/2000 11,500,000 11,489,363
Enron Corp., 6.62%, 10/02/2000 6,500,000 6,498,805
Federal Home Loan Bank, 6.38%, 10/13/2000 7,000,000 6,985,113
Ford Motor Credit Co., 6.49%, 10/10/2000 8,000,000 7,987,020
General Motors Acceptance Corp, 6.45%,
10/05/2000 10,000,000 9,992,833
Halifax PLC, 6.47%, 10/04/2000 6,000,000 5,996,765
Merrill Lynch & Co., Inc., 6.48%,
10/03/2000 8,000,000 7,997,120
Phillip Morris Co., 6.53%, 10/11/2000 7,500,000 7,486,396
Renaissance Energy, 6.74%, 10/11/2000 5,016,000 5,006,609
Sara Lee Corp., 6.51%, 10/20/2000 7,500,000 7,474,231
---------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $83,900,352) 83,900,352
---------------------------------------------------------------------------
TOTAL SHORT-TERM NOTES
(Cost $84,006,352) 84,006,352
---------------------------------------------------------------------------
<CAPTION>
COMMON STOCKS--68.7% SHARES
<S> <C> <C> <C> <C> <C>
CONSUMER DISCRETIONARY--1.7%
DEPARTMENT & CHAIN STORES--0.7%
Kohl's Corp.* 33,000 1,903,687
---------------------------------------------------------------------------
RECREATIONAL PRODUCTS--0.5%
Harley-Davidson, Inc. 30,600 1,464,975
---------------------------------------------------------------------------
RESTAURANTS--0.5%
CEC Entertainment, Inc.* 41,100 1,315,200
---------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
HEALTH--6.5%
BIOTECHNOLOGY--2.8%
Immunex Corp.* 58,300 2,536,050
QLT, Inc.* 67,800 4,910,463
---------------------------------------------------------------------------
7,446,513
MEDICAL SUPPLY & SPECIALTY--3.7%
Andrx Group* 63,800 5,957,325
Medtronic, Inc. 77,105 3,995,003
---------------------------------------------------------------------------
9,952,328
------------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS--2.0%
TELEPHONE/
COMMUNICATIONS--2.0%
BroadWing, Inc. 71,200 1,820,050
Time Warner Telecom, Inc."A"* 75,400 3,642,763
---------------------------------------------------------------------------
5,462,813
------------------------------------------------------------------------------------------------------------------------
MEDIA--1.2%
BROADCASTING & ENTERTAINMENT--1.2%
Univision Communication, Inc.* 42,200 1,577,225
Viacom, Inc. "B"* 25,606 1,497,951
---------------------------------------------------------------------------
3,075,176
------------------------------------------------------------------------------------------------------------------------
SERVICE INDUSTRIES--5.7%
EDP SERVICES--3.5%
Fiserv Inc.* 92,000 5,508,500
Micromuse, Inc.* 14,900 2,993,969
Sapient Corp.* 21,800 886,988
---------------------------------------------------------------------------
9,389,457
</TABLE>
The accompanying notes are an integral part of the financial statements. 13
<PAGE> 14
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C> <C> <C> <C>
MISCELLANEOUS COMMERCIAL--1.9%
Concord EFS, Inc.* 116,750 $ 4,146,449
Internap Network Services Corp.* 27,500 888,593
---------------------------------------------------------------------------
5,035,042
MISCELLANEOUS CONSUMER--0.3%
MarchFirst, Inc.* 49,300 773,394
---------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
DURABLES--1.1%
TELECOMMUNICATIONS EQUIPMENT--1.1%
Antec Corp.* 52,300 1,542,850
Spectrasite Holdings, Inc.* 78,900 1,464,581
---------------------------------------------------------------------------
3,007,431
------------------------------------------------------------------------------------------------------------------------
MANUFACTURING--2.0%
ELECTRICAL PRODUCTS--1.1%
Nanometrics, Inc.* 53,000 2,832,188
---------------------------------------------------------------------------
INDUSTRIAL SPECIALTY--0.9%
Corning, Inc. 8,100 2,405,700
---------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--46.3%
COMPUTER SOFTWARE--11.6%
Brocade Communications Systems, Inc.* 11,300 2,666,800
Check Point Software Technologies, Ltd.* 42,400 6,678,000
Comverse Technology, Inc.* 34,500 3,726,000
Davox Corp.* 48,800 491,050
Evolving Software, Inc.* 51,200 332,800
Information Architects Corp.* 26,900 89,106
Intuit, Inc.* 73,600 4,195,200
MetaCreations Corp.* 16,100 181,125
Microsoft Corp.* 43,700 2,632,925
PeopleSoft, Inc.* 183,200 5,118,150
SAP AG (Sponsored ADR) 34,700 2,134,050
Verity, Inc.* 77,600 2,769,350
VocalTec, Ltd.* 8,000 80,500
---------------------------------------------------------------------------
31,095,056
DIVERSE ELECTRONIC PRODUCTS--1.6%
Natural Microsystems Corp.* 26,600 1,430,997
Solectron Corp.* 62,000 2,859,750
---------------------------------------------------------------------------
4,290,747
EDP PERIPHERALS--8.3%
EMC Corp.* 43,500 4,311,937
Mercury Interactive Corp.* 56,800 8,903,400
Network Appliance, Inc.* 26,800 3,413,650
Symbol Technologies, Inc. 153,700 5,523,594
---------------------------------------------------------------------------
22,152,581
ELECTRONIC COMPONENTS--7.5%
Analog Devices, Inc.* 35,100 2,897,944
Applied Micro Circuits Corp.* 38,000 7,868,375
Cisco Systems, Inc.* 32,600 1,801,150
Jabil Circuit* 55,600 3,155,300
Sandisk Corp.* 36,600 2,443,050
Vishay Intertechnology, Inc.* 65,200 2,004,900
---------------------------------------------------------------------------
20,170,719
PRECISION INSTRUMENTS--1.6%
Credence Systems Corp.* 38,800 1,164,000
Excel Technology, Inc.* 50,000 1,603,125
Photon Dynamics, Inc.* 43,500 1,642,125
---------------------------------------------------------------------------
4,409,250
SEMICONDUCTORS--15.7%
California Micro Devices Corp.* 8,500 119,000
Elantec Semiconductor, Inc.* 19,600 1,952,650
Intel Corp. 106,100 4,409,781
Intersil Holding Corp.* 43,000 2,144,625
Linear Technology Corp. 43,400 2,810,150
</TABLE>
14 The accompanying notes are an integral part of the financial statements.
<PAGE> 15
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C> <C> <C> <C>
Pericom Semiconductor Corp.* 91,800 $ 3,396,600
QLogic Corp.* 37,500 3,300,000
SDL, Inc.* 20,400 6,283,200
Sanmina Corp.* 55,000 5,149,375
Silicon Storage Technology, Inc.* 193,700 5,266,219
Siliconix, Inc.* 11,700 552,094
Vitesse Semiconductor Corp.* 74,900 6,661,419
---------------------------------------------------------------------------
42,045,113
------------------------------------------------------------------------------------------------------------------------
ENERGY--2.2%
OIL & GAS PRODUCTION--2.2%
Anadarko Petroleum Corp. 46,800 3,110,328
Nabors Industries, Inc.* 53,100 2,782,440
---------------------------------------------------------------------------
5,892,768
---------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost $130,063,778) 184,120,138
---------------------------------------------------------------------------
TOTAL INVESTMENT--100.0%
(Cost $214,070,130)(a) $268,126,490
---------------------------------------------------------------------------
</TABLE>
NOTE TO PORTFOLIO OF INVESTMENTS
* Non-income producing security.
** Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
(a) Based on the cost of investments of $214,072,386 for federal income tax
purposes at September 30, 2000, the gross unrealized appreciation was
$68,606,275 the gross unrealized depreciation was $14,552,171 and the net
unrealized appreciation on investments was $54,054,104.
The accompanying notes are an integral part of the financial statements. 15
<PAGE> 16
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
As of September 30, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value, (cost $214,070,130) $268,126,490
----------------------------------------------------------------------------
Cash 370
----------------------------------------------------------------------------
Receivable for investments sold 7,301,389
----------------------------------------------------------------------------
Interest receivable 38
----------------------------------------------------------------------------
Receivable for Fund shares sold 692,516
----------------------------------------------------------------------------
TOTAL ASSETS 276,120,803
----------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 5,378,906
----------------------------------------------------------------------------
Payable for Fund shares redeemed 2,360,648
----------------------------------------------------------------------------
Accrued management fee 72,771
----------------------------------------------------------------------------
Other payables and accrued expenses 713,859
----------------------------------------------------------------------------
Total liabilities 8,526,184
----------------------------------------------------------------------------
NET ASSETS, AT VALUE $267,594,619
----------------------------------------------------------------------------
NET ASSETS
Net assets consist of:
Net unrealized appreciation (depreciation) on investments $ 54,056,360
----------------------------------------------------------------------------
Accumulated net realized gain (loss) 2,009,174
----------------------------------------------------------------------------
Paid-in-capital 211,529,085
----------------------------------------------------------------------------
NET ASSETS, AT VALUE $267,594,619
----------------------------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($142,256,144 / 6,216,690 shares outstanding of beneficial
interest, $.01 par value, unlimited number of shares
authorized) $22.88
----------------------------------------------------------------------------
Maximum offering price per share (100/94.25 of net asset
value.) $24.28
----------------------------------------------------------------------------
CLASS B SHARES
Net asset value, offering and redemption price (subject to
contingent deferred sales charge) per share ($97,851,484 /
4,419,410 shares outstanding of beneficial interest, $.01
par value, unlimited number of shares authorized) $22.14
----------------------------------------------------------------------------
CLASS C SHARES
Net asset value, offering and redemption price (subject to
contingent deferred sales charge) per share ($27,486,991 /
1,243,161 shares outstanding of beneficial interest, $.01
par value, unlimited number of shares authorized) $22.11
----------------------------------------------------------------------------
</TABLE>
16 The accompanying notes are an integral part of the financial statements.
<PAGE> 17
FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
For the year ended September 30, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (Net of foreign taxes withheld of $422) $ 67,336
---------------------------------------------------------------------------
Interest 2,425,107
---------------------------------------------------------------------------
Total Income 2,492,443
---------------------------------------------------------------------------
Expenses:
Management fee 936,016
---------------------------------------------------------------------------
Services to shareholders 1,032,282
---------------------------------------------------------------------------
Custodian fees 11,654
---------------------------------------------------------------------------
Distribution services fees 650,548
---------------------------------------------------------------------------
Administrative services fees 434,591
---------------------------------------------------------------------------
Auditing 23,693
---------------------------------------------------------------------------
Legal 8,581
---------------------------------------------------------------------------
Trustees' fees and expenses 9,819
---------------------------------------------------------------------------
Reports to shareholders 126,402
---------------------------------------------------------------------------
Registration fees 103,724
---------------------------------------------------------------------------
Other 21,684
---------------------------------------------------------------------------
Total expenses, before expense reductions 3,358,994
---------------------------------------------------------------------------
Expense reductions (13,360)
---------------------------------------------------------------------------
Total expenses, after expense reductions 3,345,634
---------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (853,191)
---------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized gain (loss) from investments 3,887,693
---------------------------------------------------------------------------
Net unrealized appreciation (depreciation) during the period
on investments 36,843,446
---------------------------------------------------------------------------
Net gain (loss) on investment transactions 40,731,139
---------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $39,877,948
---------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements. 17
<PAGE> 18
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $ (853,191) $ (723,340)
------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions 3,887,693 1,651,629
------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investment
transactions during the period 36,843,446 16,803,913
------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 39,877,948 17,732,202
------------------------------------------------------------------------------------------------------
Fund share transactions:
Proceeds from shares sold 271,172,284 46,365,816
------------------------------------------------------------------------------------------------------
Cost of shares redeemed (117,805,880) (27,079,668)
------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share
transactions 153,366,404 19,286,148
------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 193,244,352 37,018,350
------------------------------------------------------------------------------------------------------
Net assets at beginning of period 74,350,267 37,331,917
------------------------------------------------------------------------------------------------------
Net assets at end of period $267,594,619 $ 74,350,267
------------------------------------------------------------------------------------------------------
</TABLE>
18 The accompanying notes are an integral part of the financial statements.
<PAGE> 19
FINANCIAL HIGHLIGHTS
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
CLASS A
DECEMBER 31,
1996 TO
YEAR ENDED SEPTEMBER 30, SEPTEMBER
-------------------------------------- 30,
2000 1999 1998 1997
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $15.42 10.98 12.60 9.50
-----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (.00)(c) (0.11)(c) (0.02)(c) (0.02)
-----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investment
transactions 7.46 4.55 (1.05) 3.12
-----------------------------------------------------------------------------------------------------------------
Total from investment operations 7.46 4.44 (1.07) 3.10
-----------------------------------------------------------------------------------------------------------------
Less distributions from:
Net realized gains on investment transactions -- -- (0.55) --
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $22.88 15.42 10.98 12.60
-----------------------------------------------------------------------------------------------------------------
TOTAL RETURN % (A) 48.38 40.44(B) (8.67)(B) 32.63**
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
Net assets, end of period ($ in thousands) 142,256 39,623 21,040 6,289
-----------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) 1.40 1.59 1.46 1.49*
-----------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) 1.40 1.30 1.25 1.49*
-----------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) (%) (0.01) (0.81) (0.42) (0.35)*
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 101 125 190 364*
-----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CLASS B
DECEMBER 31,
1996 TO
YEAR ENDED SEPTEMBER 30, SEPTEMBER
-------------------------------------- 30,
2000 1999 1998 1997
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $15.06 10.83 12.52 9.50
-----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (.20)(c) (0.24)(c) (0.04)(c) (0.08)
-----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investment
transactions 7.28 4.47 (1.10) 3.10
-----------------------------------------------------------------------------------------------------------------
Total from investment operations 7.08 4.23 (1.14) 3.02
-----------------------------------------------------------------------------------------------------------------
Less distributions from:
Net realized gains on investment transactions -- -- (0.55) --
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $22.14 15.06 10.83 12.52
-----------------------------------------------------------------------------------------------------------------
TOTAL RETURN % (A) 47.01 39.06(B) (9.30)(B) 31.79**
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
Net assets, end of period ($ in thousands) 97,851 27,688 13,575 4,132
-----------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) 2.33 2.77 2.81 2.41*
-----------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) 2.32 2.17 2.12 2.41*
-----------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) (%) (0.95) (1.68) (1.29) (1.27)*
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 101 125 190 364*
-----------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 20
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS C
DECEMBER 31,
YEAR ENDED SEPTEMBER 30, 1996 TO
--------------------------------------------- SEPTEMBER 30,
2000 1999 1998 1997
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $15.06 10.84 12.53 9.50
--------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (.22)(c) (0.25)(c) (0.04)(c) (0.07)
--------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investment transactions 7.27 4.47 (1.10) 3.10
--------------------------------------------------------------------------------------------------------------------
Total from investment operations 7.05 4.22 (1.14) 3.03
--------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net realized gains on investment transactions -- -- (0.55) --
--------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $22.11 15.06 10.84 12.53
--------------------------------------------------------------------------------------------------------------------
TOTAL RETURN %(A) 46.81 38.93(B) (9.29) (B) 31.89**
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
Net assets, end of period ($ in thousands) 27,487 7,039 2,717 1,188
--------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) 2.44 2.96 2.76 2.19*
--------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) 2.43 2.30 2.10 2.19*
--------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) (%) (1.05) (1.81) (1.27) (1.05)*
--------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 101 125 190 364*
--------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
** Not annualized.
(a) Total return does not reflect the effect of sales charges.
(b) Total return would have been lower had certain expenses not been reduced.
(c) Based on monthly average shares outstanding during the period.
20
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1 SIGNIFICANT
ACCOUNTING POLICIES Kemper Aggressive Growth Fund (the "Fund") is
registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open end
non-diversified management investment company
organized as a Massachusetts business trust.
The Fund offers multiple classes of shares. Class A
shares are offered to investors subject to an
initial sales charge. Class B shares are offered
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 offered 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 (no sales
through September 30, 2000) 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.
Investment income, realized and unrealized gains
and losses, and certain fund-level expenses and
expense reductions, if any, are borne pro rata on
the basis of relative net assets by the holders of
all classes of shares except that each class bears
certain expenses unique to that class such as
distribution services, shareholder services,
administrative services and certain other class
specific expenses. Differences in class expenses
may result in payment of different per share
dividends by class. All shares of the Fund have
equal rights with respect to voting subject to
class specific arrangements.
The Fund's financial statements are prepared in
accordance with accounting principles generally
accepted in the United States which require the use
of management estimates. The policies described
below are followed consistently by the Fund in the
preparation of its financial statements.
SECURITY VALUATION. Investments are stated at value
determined as of the close of regular trading on
the New York Stock Exchange. 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, or if no sale occurred, at the
calculated mean between the most recent bid and
asked quotations on such market. If there are no
such bid and asked quotations, the most recent bid
quotation shall be used. 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 value as
determined in good faith by the Valuation Committee
of the Board of Trustees.
REPURCHASE AGREEMENTS. The Fund may enter into
repurchase agreements with certain banks and
broker/dealers whereby the Fund, through its
custodian or
21
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS
sub-custodian bank, receives delivery of the
underlying securities, the amount of which at the
time of purchase and each subsequent business day
is required to be maintained at such a level that
the market value is equal to at least the principal
amount of the repurchase price plus accrued
interest.
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.
DISTRIBUTION OF INCOME AND GAINS. Distributions of
net investment income, if any, are made annually.
Net realized gains from investment transactions, in
excess of available capital loss carryforwards,
would be taxable to the Fund if not distributed,
and, therefore, will be distributed to shareholders
at least annually.
The timing and characterization of certain income
and capital gains distributions are determined
annually in accordance with federal tax regulations
which may differ from generally accepted accounting
principles. As a result, net investment income
(loss) and net realized gain (loss) on investment
transactions for a reporting period may differ
significantly from distributions during such
period. Accordingly, the Fund may periodically make
reclassifications among certain of its capital
accounts without impacting the net asset value of
the Fund.
INVESTMENT TRANSACTIONS AND INVESTMENT
INCOME. Investment transactions are accounted for
on the trade date. Interest income is recorded on
the accrual basis. Dividend income is recorded on
the ex-dividend date. Realized gains and losses
from investment transactions are recorded on an
identified cost basis. All discounts are accreted
for both tax and financial reporting purposes.
EXPENSES. Expenses arising in connection with a
specific Fund are allocated to that Fund. Other
Trust expenses are allocated between the Funds in
proportion to their relative net assets.
--------------------------------------------------------------------------------
2 PURCHASE & SALES OF
SECURITIES For the year ended September 30, 2000, investment
transactions (excluding short-term instruments) are
as follows:
Purchases $219,629,828
Proceeds from sales 144,183,805
--------------------------------------------------------------------------------
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 .65%
of average daily net assets which is then adjusted
upward or downward by a maximum of .20% based upon
the Fund's performance as compared to the
performance of the Standard & Poor's 500 Stock
Index (thus the fee on an annual basis can range
from .45% to .85% of average daily net assets).
For the year ended September 30, 2000 the Fund
incurred a management fee as follows:
<TABLE>
<S> <C>
Base fee $715,778
Performance adjustment 220,238
--------
Total fees $936,016
========
</TABLE>
22
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS
UNDERWRITING AND DISTRIBUTION SERVICES
AGREEMENT. The Fund has an underwriting and
distribution services agreement with Kemper
Distributors, Inc. ("KDI"). Underwriting
commissions retained by KDI in connection with the
distribution of Class A shares for the year ended
September 30, 2000 were $89,018.
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
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 charge
("CDSC") from redemptions of Class B and Class C
shares. Distribution fees and CDSC received by KDI
for the year ended September 30, 2000 were
$762,275, of which $152,345 was unpaid at September
30, 2000.
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 pays these
firms based on assets of Fund accounts the firms
service. Administrative services fees paid by KDI
for the year ended September 30, 2000 were
$434,591, of which $215,724 was unpaid at September
30, 2000. In addition $131 was paid by KDI to
affiliates.
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 $869,591
for the year ended September 30, 2000, of which
$406,250 was unpaid at September 30, 2000.
OFFICERS AND TRUSTEES. Certain officers or trustees
of the Fund are also officers or directors of
Scudder Kemper. During the year ended September 30,
2000, the Fund made no payments to its officers and
incurred trustees' fees of $9,819 to independent
trustees.
23
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
4 CAPITAL SHARE
TRANSACTIONS The following table summarizes the activity in
capital shares of the Fund:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 7,686,305 $170,725,802 1,654,500 $ 23,822,260
----------------------------------------------------------------------------------
Class B 3,416,930 73,730,231 1,250,339 16,813,433
----------------------------------------------------------------------------------
Class C 1,180,506 25,257,457 374,361 5,103,123
----------------------------------------------------------------------------------
SHARES ISSUED IN REINVESTMENT OF DIVIDENDS
Class A -- -- -- --
----------------------------------------------------------------------------------
Class B -- -- -- --
----------------------------------------------------------------------------------
Class C -- -- -- --
----------------------------------------------------------------------------------
SHARES REDEEMED
Class A (4,104,111) (91,604,115) (1,046,748) (14,489,362)
----------------------------------------------------------------------------------
Class B (769,617) (16,299,188) (620,400) (9,794,000)
----------------------------------------------------------------------------------
Class C (404,657) (8,443,783) (157,839) (2,169,306)
----------------------------------------------------------------------------------
CONVERSION OF SHARES
Class A 64,418 1,458,794 46,000 627,000
----------------------------------------------------------------------------------
Class B (66,375) (1,458,794) (46,000) (627,000)
----------------------------------------------------------------------------------
NET INCREASE (DECREASE)
FROM CAPITAL SHARE
TRANSACTIONS $153,366,404 $ 19,286,148
----------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
5 EXPENSE OFF-SET
ARRANGEMENTS The Fund has entered into arrangements with its
custodian and transfer agent whereby credits
realized as a result of uninvested cash balances
were used to reduce a portion of the Fund's
expenses. During the period, the Fund's custodian
and transfer agent fees were reduced by $2,252 and
$11,108, respectively, under these arrangements.
--------------------------------------------------------------------------------
6 LINE OF CREDIT The Fund and several Kemper Funds (the
"Participants") share in a $750 million revolving
credit facility for temporary or emergency
purposes, including the meeting of redemptions
requests that otherwise might require the untimely
disposition of securities. The Participants are
charged an annual commitment fee which is allocated
pro rata among each of the Participants. Interest
is calculated based on the market rates at the time
of the borrowing. The Fund may borrow up to a
maximum of 33 percent of its net assets under this
agreement.
24
<PAGE> 25
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF TRUSTEES AND SHAREHOLDERS
KEMPER AGGRESSIVE GROWTH FUND
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Kemper Aggressive Growth Fund, as of
September 30, 2000 and the related statements of operations for the year then
ended, 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 1997. Those
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 auditing standards generally
accepted in the United States. 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 September 30, 2000, 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
Aggressive Growth Fund at September 30, 2000, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended and the financial highlights for each of the fiscal
periods since 1997, in conformity with accounting principles generally accepted
in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
November 16, 2000
25
<PAGE> 26
TAX INFORMATION
TAX INFORMATION (UNAUDITED)
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$2,113,000 as capital gain dividends for its year ended September 30, 2000, of
which 100% represents 20% rate gains.
Please contact a tax adviser if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your account, please call 1-800-621-1048.
26
<PAGE> 27
NOTES
27
<PAGE> 28
<TABLE>
<S> <C> <C>
TRUSTEES OFFICERS
JOHN W. BALLANTINE MARK S. CASADY CAROLINE PEARSON
Chairman and Trustee President Assistant Secretary
LEWIS A. BURNHAM PHILIP J. COLLORA BRENDA LYONS
Trustee Vice President Assistant Treasurer
and Secretary
LINDA C. COUGHLIN
Trustee JOHN R. HEBBLE
Treasurer
DONALD L. DUNAWAY
Trustee SEWALL HODGES
Vice President
ROBERT B. HOFFMAN
Trustee ANN M. MCCREARY
Vice President
DONALD R. JONES
Trustee KATHRYN L. QUIRK
Vice President
THOMAS W. LITTAUER
Chairman, Trustee and Vice WILLIAM F. TRUSCOTT
President Vice President
SHIRLEY D. PETERSON LINDA J. WONDRACK
Trustee Vice President
WILLIAM P. SOMMERS MAUREEN E. KANE
Trustee Assistant Secretary
</TABLE>
<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 219557
Kansas City, MO 64121
.............................................................................................
CUSTODIAN STATE STREET BANK AND TRUST COMPANY
225 Franklin Street
Boston, MA 02109
.............................................................................................
TRANSFER AGENT INVESTORS FIDUCIARY TRUST COMPANY
801 Pennsylvania Avenue
Kansas City, MO 64105
.............................................................................................
INDEPENDENT AUDITORS ERNST & YOUNG
233 South Wacker Drive
Chicago, IL 60606
.............................................................................................
PRINCIPAL UNDERWRITER KEMPER DISTRIBUTORS, INC.
222 South Riverside Plaza
Chicago, IL 60606
www.kemper.com
</TABLE>
TRUSTEES&OFFICERS
[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 Equity Funds/Growth Style prospectus.
KAGGF - 2 (11/25/00) 1124120
LONG-TERM INVESTING IN A SHORT-TERM WORLD(SM)
