<PAGE>
ZURICH YIELDWISE MONEY FUND
PROSPECTUS
APRIL 16, 1997
ZURICH YIELDWISE MONEY FUND
222 SOUTH RIVERSIDE PLAZA,
CHICAGO, ILLINOIS 60606-5808,
1-800-537-6001.
The Fund seeks maximum current income to the extent consistent with stability
of principal. The Fund is designed for investors who are willing to make high
minimum investments and to pay for certain individual transactions in order to
pursue higher yields through lower expenses. The Fund invests exclusively in
high quality money market instruments.
This prospectus contains information about the Fund that a prospective investor
should know before investing and should be retained for future reference. A
Statement of Additional Information dated April 16, 1997, has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
It is available upon request without charge from the Fund at the address above
or by calling 1-800-537-6001.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERN-
MENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY, AND IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR EN-
DORSED BY, ANY BANK. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Overview.................................................................... 2
Summary of Expenses......................................................... 3
How the Fund Works.......................................................... 3
Investment Objective, Policies and Risk
Factors.................................................................... 4
Determining Share Price..................................................... 7
How To Make a Purchase...................................................... 7
How To Make a Redemption.................................................... 9
Moving to Another Fund...................................................... 12
Special Features............................................................ 12
Dividends and Taxes......................................................... 13
Investment Manager.......................................................... 14
Performance................................................................. 15
Capital Structure........................................................... 16
Account Services Directory.................................................. 17
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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OVERVIEW
INVESTMENT OBJECTIVE
Zurich YieldWise Money Fund (the "Fund") is an open-end, diversified,
management investment company designed to provide you with professional
management of your short-term investment dollars; the dollars that you want to
know are in high quality investments.
The Fund seeks maximum current income to the extent consistent with
stability of principal by investing in high-quality short-term money market
instruments. The Fund is designed for investors who are willing to make high
minimum investments and to pay for certain individual transactions in order to
pursue higher yields through lower costs. See "Summary of Expenses" and "How
to Make a Redemption" for a description of the individual account maintenance
and transaction fees.
The Fund may use a variety of investment techniques in seeking its objective
including the purchase of repurchase agreements and variable rate securities.
The Fund seeks to maintain a net asset value of $1.00 per share; however,
there is no assurance that the Fund's objective will be achieved or that the
Fund will be able to maintain a net asset value of $1.00 per share. See "How
the Fund Works" and "Investment Objective, Policies and Risk Factors."
INVESTMENT MANAGER
Zurich Kemper Investments, Inc. ("ZKI") is the investment manager for the
Fund and provides the Fund with continuous professional investment
supervision. ZKI is paid an annual investment management fee, payable monthly,
on a graduated basis ranging from .50% of the first $215 million of average
daily net assets of the Fund to .25% of average daily net assets of the Fund
over $800 million. See "Investment Manager."
BUYING AND SELLING SHARES
You may buy and sell shares of the Fund at net asset value with no sales
charge. The minimum initial investment is $25,000 and the minimum subsequent
investment is $1,000 (or $500 by Automatic Purchase Plan). Accounts may be
opened using the account application available from the Fund. Shares may be
purchased by mailing a check, by wire transfer or in person in downtown Chi-
cago and Kansas City. Please see "How To Make a Purchase" for more information
on how easy it is to invest. You may sell or redeem your shares by written re-
quest or by using one of the Fund's expedited redemption procedures. See "How
To Make a Redemption" for specific details.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested in additional shares of the Fund, unless you elect to be paid by
check. See "Dividends and Taxes."
SPECIAL FEATURES
A number of features are available to you, including Electronic Funds Trans-
fer Programs. See "Special Features" and "Account Services Directory" for a
description of these and other features.
2
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SUMMARY OF EXPENSES
SHAREHOLDER TRANSACTION EXPENSES*
<TABLE>
<S> <C>
Sales Load on Purchases............................................... None
Sales Load on Reinvested Dividends.................................... None
Deferred Sales Load................................................... None
Electronic Funds Transfer Fee on
Redemption........................................................... $2 each
Exchange Fee and Transaction Fee on Redemption by Mail or by Tele-
phone................................................................ $5 each
Wire Transaction Fee on Redemption.................................... $10 each
Checkwriting Fee on Redemption........................................ $2 each
Account Closeout Fee.................................................. $5**
</TABLE>
The fees listed above (other than the account closeout fee) are waived if
your account balance is $100,000 or more at the time of the transaction.
The individual transaction fees paid by shareholders will accrue to the
Fund. The fees will be used to offset transfer agency and out-of-pocket ex-
penses of the Fund, which should benefit all Fund shareholders by helping to
reduce the Fund's expenses.
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*Investment dealers and other firms may independently charge additional fees
for shareholder transactions or for advisory services; please see their mate-
rials for details. The table does not include the $1.00 monthly small account
fee. See "How to Make a Redemption."
**There is a $10 fee for closing an account within one year of opening the ac-
count. For individual retirement accounts, there is a $5 fee for closing an
account within one year of opening the account, but there is no closeout fee
for accounts closed one year or more after opening the account.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets after management fee and expense
reduction)
<S> <C>
Management Fees......................................................... 0.00%
-----
12b-1 Fees.............................................................. None
Other Expenses.......................................................... 0.00%
-----
Total Operating Expenses................................................ 0.00%
-----
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
<S> <C>
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption by mail at the end of each time period:
</TABLE>
<TABLE>
<S> <C>
After 1 year $ 7
After 3 years $20
</TABLE>
The purpose of the preceding table is to assist you in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. As discussed more fully under "Investment Manager," the Fund's in-
vestment manager has agreed to temporarily reduce its management fee to 0% and
temporarily reimburse or pay 100% of the Fund's other operating expenses for a
period of at least six months from the date the Fund commences operations. It
is anticipated that the Fund will commence operations on or about April 17,
1997. In addition, the Fund's investment manager has agreed to waive its man-
agement fee and absorb operating expenses to the extent necessary to maintain
the Fund's total operating expenses at no more than .45% until January 1,
1999. Without such fee reduction and expense reimbursement, "Management Fees"
would be .50%, "Other Expenses" would be .13%, and "Total Operating Expenses"
would be .63%. "Other Expenses" (without the effects of the reimbursement) is
an estimate for the current fiscal year. The Example assumes a 5% annual rate
of return pursuant to requirements of the Securities and Exchange Commission.
This hypothetical rate of return is not intended to be representative of past
or future performance of the Fund. The Example should not be considered to be
a representation of past or future expenses. Actual expenses may be greater or
less than those shown.
HOW THE FUND WORKS
Zurich YieldWise Money Fund is designed to provide you with professional
management of short-term investment dollars. The Fund seeks maximum current
income consistent with stability of principal. It is designed for investors
who are willing to make high minimum investments and to pay for certain indi-
vidual transactions in order to pursue higher yields through lower expenses.
With all other things being equal, the lower a fund's expenses, the higher the
return. Because the Fund combines its shareholders' money, it can buy and sell
large blocks
3
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of securities, which reduces transaction costs and maximizes yields. The Fund
is managed by investment professionals who analyze market trends to take ad-
vantage of changing conditions and who seek to minimize risk by diversifying
the Fund's investments.
The Fund seeks to maintain a net asset value of $1.00 per share. Thus, the
Fund is designed for investors who want to avoid the fluctuations of principal
commonly associated with equity and long-term bond investments. The fluctua-
tions of these other types of investments are often represented by the move-
ment of various unmanaged market indexes, such as the Dow Jones Industrial Av-
erage. In addition, there can be no guarantee that the Fund will achieve its
objective or that it will maintain a net asset value of $1.00 per share.
INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS
THE FUND SEEKS MAXIMUM CURRENT INCOME TO THE EXTENT CONSISTENT WITH STABIL-
ITY OF PRINCIPAL. The Fund pursues its objective by investing exclusively in
the following types of U.S. Dollar denominated money market instruments that
mature in 397 days or less:
1. Obligations of, or guaranteed by, the U.S. or Canadian governments, their
agencies or instrumentalities.
2. Bank certificates of deposit, time deposits or bankers' acceptances of
U.S. banks (including their foreign branches) and Canadian chartered banks
having total assets in excess of $1 billion.
3. Bank certificates of deposit, time deposits or bankers' acceptances of
foreign banks (including their U.S. and foreign branches) having total assets
in excess of $10 billion.
4. Commercial paper, notes, bonds, debentures, participation certificates or
other debt obligations that (i) have received a high-quality short-term rating
by Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation
("S&P"), Duff & Phelps, Inc. ("Duff"), Fitch Investors Services, Inc.
("Fitch"), or any other nationally recognized statistical rating organization
as determined by the Securities and Exchange Commission; or (ii) if unrated,
are determined to be at least equal in quality to one or more of the above
ratings in the discretion of the Fund's investment manager. Currently, only
obligations in the top two short-term rating categories are considered to be
rated high quality. The two highest short-term rating categories of Moody's,
S&P, Duff and Fitch for commercial paper are Prime-1 and Prime-2; A-1 and A-2;
Duff-1 and Duff-2; and F-1 and F-2, respectively. For a description of these
ratings, see "Appendix--Ratings of Investments" in the Statement of Additional
Information.
5. Repurchase agreements of obligations that are suitable for investment un-
der the categories set forth above. Repurchase agreements are discussed below.
Investments by the Fund in Eurodollar certificates of deposit issued by Lon-
don branches of U.S. banks, or obligations issued by foreign entities, includ-
ing foreign banks, involve risks that are different from investments in secu-
rities of domestic branches of U.S. banks. These risks may include future un-
favorable political and economic developments, possible withholding taxes on
interest payments, seizure of foreign deposits, currency controls, interest
limitations or other governmental restrictions that might affect payment of
principal or interest. The market for such obligations may be less liquid and,
at times, more volatile than for securities of domestic branches of U.S.
banks. Additionally, there may be less public information available about for-
eign banks and their branches. The profitability of the banking industry is
dependent largely upon the availability and cost of funds for the purpose of
financing lending operations under prevailing money market conditions. General
economic conditions as well as exposure to credit losses arising from possible
financial difficulties of borrowers play an important part in banking opera-
tions. As a result of federal and state laws and regulations, domestic banks
are, among other things, required to maintain specified levels of reserves,
limited in the amounts they can loan to a single borrower and subject to other
regulations designed to promote financial soundness. However, not all such
laws and regulations apply to the foreign branches of domestic banks. Foreign
branches of foreign banks are not regulated by U.S. banking authorities, and
generally are not bound by accounting, auditing and financial reporting stan-
dards comparable to U.S. banks. Bank obligations held by the Fund do not bene-
fit
4
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Investment Objective and Policies--continued
materially from insurance from the Federal Deposit Insurance Corporation.
The Fund may invest in commercial paper which is issued by major corporations
without registration under the Securities Act of 1933 in reliance upon the ex-
emption from registration afforded by Section 3(a)(3) thereof. Such commercial
paper may be issued only to finance current transactions and must mature in
nine months or less. Trading of such commercial paper is conducted primarily by
institutional investors through investment dealers, and individual investor
participation in the commercial paper market is very limited.
The Fund may also invest in commercial paper issued in reliance upon the so-
called "private placement" exemption from registration afforded by Section 4(2)
of the Securities Act of 1933 ("Section 4(2) paper"). Section 4(2) paper is re-
stricted as to disposition under the federal securities laws, and generally is
sold to institutional investors such as the Fund who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) pa-
per normally is resold to other institutional investors like the Fund through
or with the assistance of the issuer or investment dealers who make a market in
the Section 4(2) paper, thus providing liquidity. The Fund's investment manager
considers the legally restricted but readily saleable Section 4(2) paper to be
liquid; however, pursuant to procedures approved by the Board of Trustees of
the Fund, if a particular investment in Section 4(2) paper is not determined to
be liquid, that investment will be included within the 10% limitation on illiq-
uid securities discussed under "The Fund" below. The Fund's investment manager
monitors the liquidity of the Fund's investments in Section 4(2) paper on a
continuous basis.
The Fund may invest in high quality participation certificates ("certifi-
cates") representing undivided interests in trusts that hold a portfolio of re-
ceivables from consumer and commercial credit transactions, such as transac-
tions involving consumer revolving credit card accounts or commercial revolving
credit loan facilities. The receivables would include amounts charged for goods
and services, finance charges, late charges and other related fees and charges.
Interest payable on the certificates may be fixed or may be adjusted periodi-
cally or "float" continuously according to a formula based upon an objective
standard such as the 30-day commercial paper rate. See "Additional Investment
Information" below for a discussion of "Variable Rate Securities." A trust may
have the benefit of a letter of credit from a bank at a level established to
satisfy rating agencies as to the credit quality of the assets supporting the
payment of principal and interest on the certificates. Payments of principal
and interest on the certificates would be dependent upon the underlying
receivables in the trust and may be guaranteed under a letter of credit to the
extent of such credit. The quality rating by a rating service of an issue of
certificates is based primarily upon the value of the receivables held by the
trust and the credit rating of the issuer of any letter of credit and of any
other guarantor providing credit support to the trust. The Fund's investment
manager considers these factors as well as others, such as any quality ratings
issued by the rating services identified above, in reviewing the credit risk
presented by a certificate and in determining whether the certificate is appro-
priate for investment by the Fund. Collection of receivables in the trust may
be affected by various social, legal and economic factors affecting the use of
credit and repayment patterns, such as changes in consumer protection laws, the
rate of inflation, unemployment levels and relative interest rates. It is an-
ticipated that for most publicly offered certificates there will be a liquid
secondary market or there may be demand features enabling the Fund to readily
sell its certificates prior to maturity to the issuer or a third party. While
the Fund may invest without limit in certificates, it is currently anticipated
that such investments will not exceed 25% of the Fund's assets.
The Fund may concentrate 25% or more of its assets in bank certificates of
deposit, time deposits or banker's acceptances of United States banks and their
domestic branches in accordance with its investment objective and policies. Ac-
cordingly, the Fund may be more adversely affected by changes in market or eco-
nomic conditions and other circumstances affecting the banking
5
<PAGE>
Investment Objective and Policies--continued
industry than it would be if the Fund's assets were not so concentrated.
ADDITIONAL INVESTMENT INFORMATION
In addition to the specific investment objective and policies listed above,
the Fund limits its investments to securities that meet the requirements of
Rule 2a-7 under the Investment Company Act of 1940 (the "1940 Act"). See "De-
termining Share Price."
The Fund may invest in instruments that have interest rates that adjust peri-
odically or that "float" continuously according to formulae intended to mini-
mize fluctuation in values of the instruments ("Variable Rate Securities"). The
interest rate on a Variable Rate Security is ordinarily determined by reference
to or is a percentage of an objective standard such as a bank's prime rate, the
90-day U.S. Treasury bill rate, or the rate of return on commercial paper or
bank certificates of deposit. Generally, the changes in the interest rate on
Variable Rate Securities reduce the fluctuation in the market value of such se-
curities. Accordingly, as interest rates decrease or increase, the potential
for capital appreciation or depreciation is less than for fixed-rate obliga-
tions. Some Variable Rate Securities ("Variable Rate Demand Securities") have a
demand feature entitling the purchaser to resell the securities at an amount
approximately equal to amortized cost or the principal amount thereof plus ac-
crued interest. As is the case for other Variable Rate Securities, the interest
rate on Variable Rate Demand Securities varies according to some objective
standard intended to minimize fluctuation in the values of the instruments. The
Fund determines the maturity of Variable Rate Securities in accordance with Se-
curities and Exchange Commission rules which allow the Fund to consider certain
of such instruments as having maturities shorter than the maturity date on the
face of the instrument.
The Fund may invest in repurchase agreements, which are instruments under
which the Fund acquires ownership of a security from a broker-dealer or bank
that agrees to repurchase the security at a mutually agreed upon time and price
(which price is higher than the purchase price), thereby determining the yield
during the Fund's holding period. Maturity of the securities subject to repur-
chase may exceed 397 days. In the event of a bankruptcy or other default of a
seller of a repurchase agreement, the Fund might incur expenses in enforcing
its rights, and could experience losses, including a decline in the value of
the underlying securities and loss of income.
The Fund will not purchase illiquid securities if, as a result thereof, more
than 10% of the Fund's net assets valued at the time of the transaction would
be invested in such securities. If the Fund holds a material percentage of its
assets in illiquid securities, there may be a question concerning the ability
of the Fund to make payment within seven days of the date its shares are ten-
dered for redemption. Securities and Exchange Commission guidelines provide
that the usual limit on aggregate holdings by a money market fund of illiquid
assets is 10% of its net assets. The Fund's investment manager monitors hold-
ings of illiquid securities on an ongoing basis and will take such action as it
deems appropriate to help maintain adequate liquidity.
The Fund may not borrow money except as a temporary measure for extraordinary
or emergency purposes, and then only in an amount up to one-third of the value
of its total assets, in order to meet redemption requests without immediately
selling any portfolio securities. Any such borrowings under this provision will
not be collateralized. If for any reason the current value of the Fund's total
assets falls below an amount equal to three times the amount of its indebted-
ness from money borrowed, the Fund will, within three days (not including Sun-
days and holidays), reduce its indebtedness to the extent necessary. The Fund
will not borrow for leverage purposes.
The Fund has adopted certain investment restrictions that are presented in
the Statement of Additional Information and that, together with the investment
objective of the Fund, cannot be changed without approval by holders of a ma-
jority of its outstanding voting shares. As defined in the 1940 Act, this means
the lesser of the vote of (a) 67% of the shares of the Fund present at a meet-
ing where more than 50% of the outstanding shares are present in person or by
proxy; or (b) more than 50% of the
6
<PAGE>
Determining Account Value--continued
outstanding shares of the Fund. Policies of the Fund that are not incorporated
into any of the fundamental investment restrictions referred to above may be
changed by the Board of Trustees of the Fund without shareholder approval.
DETERMINING SHARE PRICE
The price you pay when you buy shares in the Fund and the price you receive
if you redeem is the net asset value computed after we receive your order to
buy or redeem in proper form (as described under "How To Make a Purchase").
The net asset value per share of the Fund is calculated by dividing the total
value of the assets of the Fund, minus its liabilities, by the total number of
its shares outstanding. The Fund seeks to maintain a net asset value of $1.00
per share, although there can be no assurance that it will be able to do so.
The net asset value per share of the Fund is determined on each day the New
York Stock Exchange is open for trading, at 11:00 a.m., 1:00 p.m. and 3:00
p.m. Central time.
The Fund values its portfolio instruments at amortized cost in accordance
with Rule 2a-7 under the 1940 Act, which means that they are valued at their
acquisition cost (as adjusted for amortization of premium or discount) rather
than at current market value. Calculations are made to compare the value of
the Fund's investments valued at amortized cost with market-based value. Mar-
ket-based valuations are obtained by using actual quotations provided by mar-
ket makers, estimates of market value, or values obtained from yield data re-
lating to classes of money market instruments published by reputable sources
at the mean between the bid and asked prices for the instruments. If a devia-
tion of 1/2of 1% or more were to occur between the Fund's net asset value per
share calculated by reference to market-based values and the Fund's $1.00 per
share net asset value, or if there were any other deviation that the Board of
Trustees believed would result in a material dilution to shareholders or pur-
chasers, the Board of Trustees would promptly consider what action, if any,
should be initiated. In order to value its investments at amortized cost, the
Fund purchases only securities with a maturity of 397 days or less and main-
tains a dollar-weighted average portfolio maturity of 90 days or less. In ad-
dition, the Fund limits its portfolio investments to securities that meet the
quality and diversification requirements of Rule 2a-7.
HOW TO MAKE A PURCHASE
Whether you're opening an account or adding to it, we hope that you'll find
that we've made your shareholder transactions easy. Shares of the Fund are
sold at their net asset value with no sales charge. To open an account you
should use the account application available from the Fund and choose one of
the methods outlined in the table on the following page. Call 1-800-537-6001
if you have questions or need assistance.
<TABLE>
<CAPTION>
Minimum Investment Amounts
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<S> <C>
INITIAL INVESTMENT $25,000
For Individual Retirement Accounts $10,000
SUBSEQUENT PURCHASE $ 1,000
For Individual Retirement Accounts $ 1,000
Automatic Purchase Plan* $ 500
MINIMUM BALANCE REQUIREMENT** $10,000
</TABLE>
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*See "Special Features" for more information regarding Automatic Purchase
Plan.
**There is a $1 per month small account fee for account balances under
$10,000.
7
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How To Make A Purchase--continued
HOW TO MAKE A PURCHASE
<TABLE>
<CAPTION>
INITIAL INVESTMENT ($25,000 OR MORE) SUBSEQUENT INVESTMENT ($1,000 OR
MORE)
- -----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
BY MAIL . Complete the Account Application and mail . Make your check payable to ZYMF
it with your check (payable to ZYMF) to: and mail it to:
Zurich Kemper Service Company Zurich Kemper Service Company
Transfer Agency Division Transfer Agency Division
P.O. Box 419356 P.O. Box 419154
Kansas City, Missouri 64141-6356 Kansas City, Missouri 64141-
6154
. To exchange by mail, send your
request to:
Zurich YieldWise Money Fund
P.O. Box 419557
Attention: Exchange Department
Kansas City, Missouri 64141-
6557
- -----------------------------------------------------------------------------------------------------------------
BY PHONE . Call 1-888-ZURICH-1 (987-4241) to . Call 1-888-ZURICH-1 (987-4241)
exchange from a Zurich Money Funds to exchange from a Zurich Money
account. Funds account.
- -----------------------------------------------------------------------------------------------------------------
IN PERSON . In downtown Chicago, you can make a . In downtown Chicago, you can
direct investment at our Service Center at make a direct investment at our
222 South Riverside Plaza. In Kansas City, Service Center at 222 South
you can make a direct investment at 811 Riverside Plaza. In Kansas City,
Main Street, 7th Floor. you can make a direct investment
at 811 Main Street, 7th Floor.
- -----------------------------------------------------------------------------------------------------------------
BY WIRE TRANSFER . To open an account through wire transfer . Instruct your bank to wire your
(Federal Funds) of Federal Funds, call 1-800-537-6001. investment, together with your
name and account number, to:
. Provide your account registration Zurich YieldWise Money Fund,
instruction to the service representative. United Missouri Bank
You will be provided with your new account of Kansas City, N.A.
number over the phone. ABA #1010-0069-5
Fund Account #9870838818
. The Fund accepts wires at no charge, . The Fund accepts wires at no
although your bank may charge you for this charge, although your bank may
service. charge you for this service.
. Instruct your bank to wire your
investment, together with your name and
new account number, to:
Zurich YieldWise Money Fund:
United Missouri Bank of Kansas City, N.A.
ABA # 1010-0069-5
Fund Account #9870838818
- -----------------------------------------------------------------------------------------------------------------
BY ELECTRONIC FUNDS TRANSFER . Unavailable for opening an account. Please see "Special Features" for
(Automated Clearing House funds) more information on these
services.
. EZ-Transfer
. Automatic Purchase Plan ($500
minimum)
All transactions are via the
Automated
Clearing House ("ACH") System.
</TABLE>
8
<PAGE>
How To Make A Purchase--continued
OTHER INFORMATION
Purchases by check or other negotiable bank draft will be invested as of 3:00
p.m. Central time on the next business day after receipt and such shares will
begin earning dividends the following calendar day. Purchases by check drawn on
a foreign bank will normally be effective after the check clears. See "Purchase
and Redemption of Shares" in the Statement of Additional Information.
Purchases by wire of Federal Funds (i.e. monies credited to a bank's account
with its regional Federal Reserve Bank) will be effected at the next determined
net asset value. Purchases will receive that day's dividend if effected at or
prior to 1:00 p.m. Central time and will receive the dividend for the next cal-
endar day if effected at 3:00 p.m. Central time.
The Fund reserves the right to withdraw all or any part of the offering made
by this prospectus or to reject purchase orders. The Fund also reserves the
right at any time to waive or increase the minimum investment requirements. All
orders to purchase shares are subject to acceptance by the Fund and are not
binding until confirmed or accepted in writing. Any purchase that would result
in total account balances for a single shareholder in excess of $3 million is
subject to prior approval by the Fund. Share certificates are issued only on
request to the Fund and may not be available for certain types of account reg-
istrations. Investments may also be made in the Fund through broker-dealers and
others, who may charge a commission or other fee for their services. A $10
service fee will be charged when a check for the purchase of shares is returned
because of insufficient or uncollected funds or a stop payment order.
If you elect to redeem Fund shares purchased by check or through EZ-Transfer
or Automatic Purchase Plan, the Fund may delay transmittal of redemption pro-
ceeds until it has determined that collected funds have been received for the
purchase of such shares, which could be up to 10 calendar days from receipt by
the Fund of the purchase amount. See also "How to Make a Redemption."
HOW TO MAKE A REDEMPTION
You can access all or part of your account by selling your shares. Your
shares will be redeemed at the next determined net asset value after your re-
quest has been received in proper form. If processed at 3:00 p.m. Central time,
you will receive that day's dividend on the shares you sold. If you redeem all
your shares, you will receive the net asset value of such shares and all de-
clared but unpaid dividends on such shares. You may use any of the methods de-
scribed in the following chart to sell your shares.
If your account balance is less than $100,000, the following fees apply to
individual redemption transactions: $2 for each check you write for $1,000 or
more and $12 for each such check under $1,000, $2 for each electronic funds
transfer, $5 for each exchange, $5 for each telephone redemption and each re-
demption by mail, and $10 for each bank wire. There is a $5 fee for closing an
account; however, there is a $10 fee for closing an account within one year of
opening the account. For individual retirement accounts, there is no fee for
closing an account, but there is a $5 fee for closing an account within one
year of opening the account.
The individual transaction fees paid by shareholders will accrue to the Fund.
The fees will be used to offset transfer agency and out-of-pocket expenses of
the Fund, which should benefit all Fund shareholders by helping to reduce the
Fund's expenses.
9
<PAGE>
How To Make A Redemption--continued
HOW TO MAKE A REDEMPTION
<TABLE>
<C> <S>
BY REDEMPTION CHECK . All Redemption Checks should be for a
($2 fee per check) minimum of $1,000. Redemption Checks
written in an amount less than $1,000
will also be charged a $10 service fee.
. Redemption Checks should not be used to
close your account since the account
normally includes accrued but unpaid
dividends and the account closeout fee
must be deducted from your balance.
- -------------------------------------------------------------------------------
BY PHONE . Telephone requests may be made by
($5 fee--check by mail) calling 1-888-ZURICH-1 (987-4241)
($2 fee--electronic funds transfer) Monday-Friday, 7 a.m. to 6 p.m. CST and
Saturday, 8 a.m. to 3 p.m. CST or use
24-hour Zurich InfoLine (888) 987-8678.
You may receive the proceeds via:
.check by mail to the address to which
your account is registered, or
.electronic funds transfer (minimum
$1,000 and maximum $50,000) to a pre-
authorized bank account.
See "Special Features--EZ-Transfer."
. You may exchange to Zurich Money Funds.
See "Moving to Another Fund".
- -------------------------------------------------------------------------------
BY WIRE . You need to have signed up for the wire
($10 fee) transfer privilege and have the forms on
file with the Shareholder Service Agent
before using it. Minimum wire: $1,000
. Telephone requests may be made by
calling 1-888-ZURICH-1 (987-4241).
. Proceeds will be sent only to the bank
or trust company you have designated on
the Account Application.
- -------------------------------------------------------------------------------
BY MAIL . Complete a written request that includes
($5 fee) the following information: each account
owner's name, your account number, the
amount to be redeemed, and the signature
of each owner exactly as it appears on
the account, including any special
capacity of the registered owner. See
"Signature Guarantee may be Required"
below.
. Mail the written request to Zurich
Kemper Service Company, Transfer Agency
Division, P.O. Box 419557, Kansas City,
Missouri 64141-6557.
</TABLE>
SIGNATURE GUARANTEE REQUIREMENTS
If the proceeds of a redemption are $50,000 or less and the proceeds are pay-
able to the shareholder of record at the address of record, normally a tele-
phone request or a written request by any one account holder without a signa-
ture guarantee is sufficient for redemptions by individual or joint account
holders, and trust, executor and guardian account holders (excluding custodial
accounts for gifts and transfers to minors), provided the trustee, executor or
guardian is named in the account registration. Other institutional account
holders and guardian account holders of custodial accounts for gifts and trans-
fers to minors may exercise the special privilege of redeeming shares by tele-
phone request or written request without signature guarantee subject to the
same conditions as individual account holders and subject to the limitations on
liability described under "General" below, provided that the privilege has been
pre-authorized by the institutional account holder or guardian account holder
by written instruction to Zurich Kemper Service Company (the "Shareholder Serv-
ice Agent") with signatures guaranteed. All other redemption requests must in-
clude a signature guaranteed by a commercial bank, trust company, savings and
loan association, federal savings bank, member firm of a national securities
exchange or other eligible financial institution. The privilege of redeeming
shares by telephone request or by written request without a signature guarantee
may not be used to redeem shares held in certificated form and may not be used
if the shareholder's account has had an address change within 30 days of the
redemption request.
ADDITIONAL INFORMATION
. REDEMPTION BY WIRE. Requests for wire transfer redemptions received by the
Shareholder Service Agent prior to 11:00 a.m. Central time will result in
shares being redeemed that day and normally a wire transfer will be sent to the
designated account that day. Dividends for that day will not be earned. The
Fund is not responsible for the efficiency of the federal wire system or the
account holder's financial services firm or bank. You are responsible for any
charges your firm or bank makes for sending or receiving wire transfers. To
change the designated account to receive wire redemption proceeds, send a writ-
ten request to the Shareholder Service Agent with signatures guaranteed as de-
scribed above.
10
<PAGE>
How To Make A Redemption--continued
. REDEMPTION BY REDEMPTION CHECK. If you select the checkwriting method of re-
demption on your account application, you will normally receive drafts ("Re-
demption Checks") within 2 weeks of opening your account which you may use to
draw on your Fund account, but not to close it. When a Redemption Check is
presented for payment, a sufficient number of full and fractional shares in
your account will be redeemed at the next determined net asset value to cover
the amount of the Redemption Check. This will enable you to continue earning
daily dividends until the Fund receives the Redemption Check.
You may write Redemption Checks payable to the order of any person in any
amount not less than $1,000 but not more than $5 million. Unless one signer is
authorized on the account application, Redemption Checks must be signed by all
account holders. If the Shareholder Service Agent receives written notice by
any owner revoking the authorization to sign individually, all account owners
will be required to sign. Redemption Checks must be signed exactly as the ac-
count is registered. The Fund may refuse to honor Redemption Checks whenever
the right of redemption has been suspended or postponed, or whenever the ac-
count is otherwise impaired. A $10 service fee will be charged when a Redemp-
tion Check is presented to redeem Fund shares in excess of the value of your
Fund account or in an amount less than $1,000; when a Redemption Check is pre-
sented that would require redemption within 10 days of shares that were pur-
chased by check or through EZ-Transfer or Automatic Purchase Plan; or when you
request "stop payment" of a Redemption Check by telephone or in writing. A
"stop payment" request may be made by calling 1-888 ZURICH-1 (987-4241).
GENERAL
If shares of the Fund to be redeemed were purchased by check or through EZ-
Transfer or Automatic Purchase Plan (see "Special Features--Electronic Funds
Transfer Programs") the Fund may delay transmittal of redemption proceeds un-
til it has determined that collected funds have been received for the purchase
of such shares, which could be up to 10 days from receipt by the Fund of the
purchase amount. Shareholders may not use wire transfer or Redemption Check
features until the shares being redeemed have been owned for at least 10 days.
There is no such delay when the shares being redeemed were originally pur-
chased by wiring Federal Funds. The Fund reserves the right to terminate or
modify the telephone, wire transfer or check redemption privileges at any
time.
If shares being redeemed were acquired from an exchange of shares of a mu-
tual fund that were offered subject to a contingent deferred sales charge as
described in the prospectus for that other fund, the redemption of such shares
may be subject to a contingent deferred sales charge as explained in such pro-
spectus.
Shareholders can request the following telephone privileges: expedited wire
transfer redemptions, ACH transactions and exchange transactions for individ-
ual and institutional accounts and pre-authorized telephone redemption trans-
actions for certain institutional accounts. Shareholders may choose these
privileges on the account application or by contacting the Shareholder Service
Agent for appropriate instructions. Please note that the telephone exchange
privilege is automatic unless the shareholder refuses it on the account appli-
cation. The Fund or its agents may be liable for losses, expenses or costs
arising out of fraudulent or unauthorized telephone requests pursuant to these
privileges, unless the Fund or its agent reasonably believes, based upon rea-
sonable verification procedures, that the telephonic instructions are genuine.
The SHAREHOLDER WILL BEAR THE RISK OF LOSS, including loss resulting from
fraudulent or unauthorized transactions, as long as the reasonable verifica-
tion procedures are followed. The verification procedures include recording
instructions, requiring certain identifying information before acting upon in-
structions and sending written confirmations.
THE FUND MAY ASSESS A MONTHLY FEE OF $1 ON ANY ACCOUNT WITH A BALANCE BELOW
$10,000 FOR 30 CONSECUTIVE DAYS.
11
<PAGE>
MOVING TO ANOTHER FUND
You may exchange your shares of the Fund for shares of Zurich Money Funds.
Exchanges are made based on relative dollar values of the shares involved in
the exchange. If your account balance is less than $100,000, there will be a
$5.00 fee for each exchange out of the Fund. In addition, dealers or other
firms may charge for their services. The exchange minimum is $1,000. To ex-
change shares, call us or contact your financial adviser to obtain a prospec-
tus for Zurich Money Funds. You may make an exchange by mail or by telephone:
BY TELEPHONE
Once you've completed the authorization section on the account application
and we have it on file, the Shareholder Service Agent will honor requests by
telephone at 1-888-ZURICH-1 (987-4241), subject to the limitations on liabil-
ity described under "How To Make a Redemption--General." During periods when
it is difficult to contact the Shareholder Service Agent by telephone, it may
be difficult to use the telephone exchange privilege.
BY MAIL
Send your request to:
Zurich YieldWise Money Fund
P.O. Box 419557
Attention: Exchange Department
Kansas City, Missouri 64141-6557
Exchanges will be effected by redemption of shares of the fund held and pur-
chase of shares of the other fund. For federal income tax purposes, any such
exchange constitutes a sale upon which a gain or loss may be realized, depend-
ing upon whether the value of the shares being exchanged is more or less than
the shareholder's adjusted cost basis. The exchange privilege is not a right
and may be suspended, terminated or modified at any time. Except as otherwise
permitted by applicable regulation, 60 days prior written notice of any termi-
nation or material change will be provided.
AUTOMATIC EXCHANGE PLAN
With an account balance of $10,000 or more, shareholders may authorize the
automatic exchange of a specified amount ($1,000 minimum) of shares of the
Fund for shares of Zurich Money Funds. If selected, exchanges will be made au-
tomatically until the privilege is terminated by the shareholder or the Fund.
Exchanges are subject to the terms and conditions described above except that
there is no minimum investment requirement for the Zurich Money Funds acquired
on exchange. Each automatic exchange out of the Fund is subject to the $5.00
exchange fee.
SPECIAL FEATURES
ELECTRONIC FUNDS TRANSFER PROGRAMS
For your convenience, the Fund has established several investment and re-
demption programs using electronic funds transfer via the ACH System which are
described below. There is currently a $2.00 fee for each redemption using
electronic funds transfer. Shareholders should contact the Shareholder Service
Agent at 1-888-ZURICH-1 (987-4241) for more information.
. EZ-TRANSFER With just one easy phone call, EZ-Transfer allows you to quickly
and conveniently transfer money (minimum $1,000 and maximum $50,000) from your
bank, savings and loan or credit union account to purchase shares in the Fund.
You can also redeem shares (minimum $1,000 and maximum $50,000) from your Fund
account and transfer the proceeds to your bank, savings and loan or credit
union checking account. When you choose to participate in the EZ-Transfer pro-
gram, you designate the bank, savings and loan or credit union account which
will be debited or credited under the program. After you have received a no-
tice confirming that this service has been added to your Fund account, please
allow a minimum of 20 days for bank notification and processing. By choosing
to participate in this program, you authorize the Shareholder Service Agent to
rely upon telephone instructions from any person to transfer the specified
amounts between your Fund account and your predesignated bank, savings and
loan or credit union account, subject to the limitations on liability under
"How To Make a Redemption--General." The Shareholder Service Agent will then
purchase or redeem sufficient full and fractional shares in your account to
satisfy the request. Once you are enrolled in EZ-Transfer, you can initiate a
transaction by simply calling Shareholder Services toll free at 1-888-ZURICH-1
(987-4241)
12
<PAGE>
Special Features--continued
Monday through Friday, 8:00 a.m. to 3:00 p.m. Central time or by calling the
Zurich InfoLine at 1-888 987-8678 24 hours a day. See "How To Make a Redemp-
tion--General" for information on our 10 day hold policy. Any account holder
may terminate this privilege by sending written notice to Zurich YieldWise
Money Fund, P.O. Box 419415, Kansas City, Missouri 64141-6415. Termination
will become effective as soon as the Shareholder Service Agent has had a rea-
sonable time to act upon the request. EZ-Transfer cannot be used with passbook
savings accounts. This program may not be used for tax-deferred plans such as
Individual Retirement Accounts (IRAs).
. AUTOMATIC PURCHASE PLAN You may establish an automatic investment program
with your Fund account. With Automatic Purchase Plan, monthly investments
(minimum $500 and maximum $50,000) are made automatically from your account at
a bank, savings and loan, or credit union into your Fund account. By signing
up for this privilege, you authorize the Fund and its agents to take money out
of your predesignated bank, savings and loan or credit union account and in-
vest that money in your Fund account. Any account owner may terminate this
privilege simply by sending written notice to Zurich YieldWise Money Fund,
P.O. Box 419415, Kansas City, Missouri 64141-6415. Termination will become ef-
fective as soon as the Shareholder Service Agent has had a reasonable time to
act upon the request. This privilege may not be used with passbook savings ac-
counts.
. DIRECT CHECK DEPOSIT SERVICE You may conveniently invest in the Fund through
Payroll Direct Deposit or Government Direct Deposit. You can arrange to have
all or a portion of your net pay or government check ($500 minimum) automati-
cally invested in your Fund account each payment period. You may terminate
your participation in these programs by giving written notice to your employer
or the government agency, as appropriate. (A reasonable time to act is re-
quired.) The Fund is not responsible for the efficiency of your employer or
the government agency making the payment or any financial institution trans-
mitting payment.
To use these features, the participating financial institution must be af-
filiated with the ACH System. This ACH affiliation permits the Shareholder
Service Agent to electronically transfer money between your bank account or
employer's payroll bank in the case of Payroll Direct Deposit or the U.S. Gov-
ernment in the case of Government Direct Deposit, and your Fund account. Your
financial institution's crediting policies for these transferred funds may
vary. These features may be amended or terminated at any time by the Fund.
OTHER SPECIAL FEATURES
Information about the following special features is contained in the State-
ment of Additional Information. Additional information may also be obtained by
contacting the Shareholder Service Agent at 1-888-ZURICH-1 (987-4241)
--Automatic Withdrawal Plan
--Tax Sheltered Retirement Programs
DIVIDENDS AND TAXES
DIVIDEND PAYMENT
To help keep your account growing, dividends from the Fund are automatically
reinvested in additional shares of the Fund, unless you request payment by
check on your account application or make such a request later. Dividends are
declared daily and paid monthly.
Dividends are normally reinvested on the 25th of each month if a business
day, otherwise on the prior business day. If you've chosen to receive divi-
dends in cash, checks will be mailed monthly to you or any person you desig-
nate. You may request this option by contacting the Shareholder Service Agent
(see "How To Make a Purchase").
The Fund will reinvest dividend checks (and future dividends) in shares of
the Fund if checks are returned as undeliverable. Dividends and other distri-
butions of the Fund in the aggregate amount of $10 or less are automatically
reinvested in shares of the Fund unless you request that such policy not be
applied to your account.
THE FUND
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code (the "Code") and if so qualified
will not be subject to federal income taxes to the extent its earnings
13
<PAGE>
Dividends and Taxes--continued
are distributed. Dividends derived from interest and short-term capital gains
are taxable as ordinary income whether received in cash or reinvested in addi-
tional shares. Dividends from the Fund do not qualify for the dividends re-
ceived deduction available to corporate shareholders.
Dividends declared in October, November or December to shareholders of record
as of a date in one of those months and paid during the following January are
treated as paid on December 31 of the calendar year in which declared for fed-
eral income tax purposes. The Fund may adjust its schedule for dividend rein-
vestment for the month of December to assist it in complying with reporting and
minimum distribution requirements contained in the Code.
The Fund is required by law to withhold 31% of taxable dividends paid to cer-
tain shareholders who do not furnish a correct taxpayer identification number
(in the case of individuals, a social security number) and in certain other
circumstances. Trustees of qualified retirement plans and 403(b)(7) accounts
are required by law to withhold 20% of the taxable portion of any distribution
that is eligible to be "rolled over." The 20% withholding requirement does not
apply to distributions from IRAs or any part of a distribution that is trans-
ferred directly to another qualified retirement plan, 403(b)(7) account, or
IRA. You should consult your tax adviser regarding the 20% withholding require-
ment.
You will receive a monthly statement giving complete details of dividend re-
investment and purchase and redemption transactions during the month. Tax in-
formation will be provided annually. You should retain copies of your monthly
account statements or year-end statement for tax reporting purposes. However,
those who have incomplete records may obtain historical account transaction in-
formation at a reasonable fee.
When more than one shareholder resides at the same address, certain reports
and communications to be delivered to such shareholders may be combined in the
same mailing package, and certain duplicate reports and communications may be
eliminated. Similarly, account statements to be sent to such shareholders may
be combined in the same mailing package or consolidated into a single state-
ment. However, you may request that the foregoing policies not be applied to
your account.
INVESTMENT MANAGER
Zurich Kemper Investments, Inc. ("ZKI"), 222 South Riverside Plaza, Chicago,
Illinois 60606-5808, is the investment manager of the Fund and provides the
Fund with continuous professional investment supervision. ZKI has been engaged
in the management of investment funds for more than forty-eight years and is
one of the largest investment managers in the country. ZKI and its affiliates
provide investment advice and manage investment portfolios for investment com-
panies including Zurich Money Funds, and affiliated insurance companies and
other corporate, pension, profit-sharing and individual accounts representing
approximately $80 billion under management, including $10 billion in money mar-
ket fund assets. ZKI acts as investment manager for 32 open-end and seven
closed-end investment companies, with 79 separate investment portfolios, repre-
senting more than 2.5 million shareholder accounts. ZKI is the investment man-
ager for Zurich Money Market Fund, which commenced operations in 1974, and
which is one of the oldest money market funds in existence. ZKI is an indirect
subsidiary of Zurich Insurance Company, an internationally recognized provider
of financial services in property/casualty and life insurance, reinsurance and
asset management. The Zurich family of companies manages over $150 billion in
assets worldwide.
Responsibility for overall management of the Fund rests with its Board of
Trustees and officers. Professional investment supervision is provided by ZKI.
The investment management agreement provides that ZKI shall act as the Fund's
investment adviser, manage its investments and provide it with various services
and facilities.
Frank J. Rachwalski, Jr. is the portfolio manager of the Fund. He has served
in this capacity since the Fund commenced operations in April 1997. Mr.
Rachwalski joined ZKI in January, 1973 and is currently a Senior Vice President
of ZKI and a Vice President of the Fund.
14
<PAGE>
Investment Manager--continued
He received a B.B.A. and an M.B.A. from Loyola University, Chicago, Illinois.
For the services and facilities furnished, the Fund pays an annual invest-
ment management fee, payable monthly, on a graduated basis ranging from .50%
of the first $215 million of average daily net assets of the Fund, to .25% of
average daily net assets of the Fund over $800 million.
ZKI has agreed to temporarily reduce its management fee to 0% and temporar-
ily reimburse or pay 100% of the Fund's other operating expenses for a period
of at least six months from the date the Fund commences operations. The total
operating expenses of the Fund set forth under "Summary of Expenses" include
the effect of this management fee and operating expense reduction. ZKI re-
serves the right to terminate its fee reduction and expense absorption at any
time after this six-month period. ZKI has also agreed to waive its management
fee and absorb operating expenses to the extent necessary to maintain the
Fund's total operating expenses at no more than .45% until January 1, 1999, at
which time ZKI may terminate such fee waiver and expense absorbtion. For pur-
poses of these fee waivers and expense limitations, "operating expenses" do
not include taxes, interest, extraordinary expenses, brokerage commissions or
transaction costs.
Zurich Kemper Distributors, Inc., 222 South Riverside Plaza, Chicago, Illi-
nois 60606-5808, an affiliate of ZKI, is the principal underwriter of the Fund
and acts as agent of the Fund in the sale of its shares.
Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street, Kansas
City, Missouri 64105, as custodian, and State Street Bank and Trust Company,
225 Franklin Street, Boston, Massachusetts 02110, as sub-custodian, have cus-
tody of all securities and cash of the Fund. They attend to the collection of
principal and income, and payment for and collection of proceeds of securities
bought and sold by the Fund. IFTC is also the Fund's transfer and dividend-
paying agent. Pursuant to a services agreement with IFTC, Zurich Kemper Serv-
ice Company, 811 Main Street, Kansas City, Missouri 64105, an affiliate of
ZKI, serves as Shareholder Service Agent of the Fund.
PERFORMANCE
The Fund may advertise several types of performance information, including
"yield," "effective yield," "total return," and "average annual total return."
Please remember that performance information is based upon historical earnings
and is not representative of future performance. The yield of the Fund refers
to the net investment income generated by a hypothetical investment in the
Fund over a specific seven-day period. This net investment income is then
annualized, which means that the net investment income generated during the
seven-day period is assumed to be generated each week over an annual period
and is shown as a percentage of the investment. The effective yield is calcu-
lated similarly, but the net investment income earned by the investment is as-
sumed to be compounded weekly when annualized. The effective yield will be
slightly higher than the yield due to this compounding effect. Average annual
total return and total return measure both net investment income and any real-
ized or unrealized appreciation or depreciation of the Fund's investments, as-
suming reinvestment of all dividends. Average annual total return represents
the average annual percentage change over the period and total return repre-
sents the aggregate percentage or dollar value change over the period.
The performance of the Fund may be compared to that of other money market
mutual funds or mutual fund indexes as reported by independent mutual fund re-
porting services such as Lipper Analytical Services, Inc. ("Lipper"). The
Fund's performance, expenses and its relative size may be compared to other
money market mutual funds as reported by IBC Financial Data, Inc.'s Money Fund
Report(R) or Money Market Insight(R), reporting services on money market
funds. Investors may want to compare the Fund's performance to that of various
bank products as reported by BANK RATE MONITOR(TM), a financial reporting
service that weekly publishes average rates of bank and thrift institution
money market deposit accounts and interest bearing checking accounts or vari-
ous certificate of deposit indexes. The performance of the Fund also may be
compared to that of U.S. Treasury bills and notes. Certain of these alterna-
tive investments may offer fixed rates of return and guaranteed principal and
may be insured. In addition, investors may
15
<PAGE>
Performance--continued
want to compare the Fund's performance to the Consumer Price Index either di-
rectly or by calculating its "real rate of return," which adjusts its return
for the effects of inflation.
Information may be quoted from publications such as Morningstar, Inc., The
Wall Street Journal, Money Magazine, Forbes, Barron's, Fortune, The Chicago
Tribune, USA Today, Institutional Investor and Registered Representative. The
Fund may depict the historical performance of the securities in which the Fund
may invest over periods reflecting a variety of market or economic conditions
either alone or in comparison with alternative investments, performance indexes
of those investments or economic indicators. The Fund may also describe its
portfolio holdings and depict its size or relative size compared to other
mutual funds, the number and make-up of its shareholder base and other descrip-
tive factors concerning the Fund.
The Fund's returns will fluctuate. Shares of the Fund are not insured. Addi-
tional information concerning the Fund's performance appears in the Statement
of Additional Information.
CAPITAL STRUCTURE
The Fund is an open-end, diversified, management investment company, orga-
nized as a business trust under the laws of Massachusetts on June 12, 1995. ZKI
invested the "seed money" as the sole shareholder of the Fund before the public
offering of its shares and therefore, as of the date of this prospectus, con-
trolled the Fund. The Fund may issue an unlimited number of shares of benefi-
cial interest, all having no par value, which may be divided by the Board of
Trustees into classes of shares, subject to compliance with the Securities and
Exchange Commission regulations permitting the creation of separate classes of
shares. The Fund's shares are not currently divided into classes. While only
shares of a single series are presently being offered, the Board of Trustees
may authorize the issuance of additional series if deemed desirable, each with
its own investment objective, policies and restrictions. Since the Fund may of-
fer multiple series, it is known as a "series company." Shares of a series have
equal noncumulative voting rights and equal rights with respect to dividends,
assets and liquidation of such series subject to any preferences, rights or
privileges of any classes of shares within the series. Generally, each class of
shares issued by a particular series would differ as to the allocation of cer-
tain expenses of the series, such as distribution and administrative expenses,
permitting, among other things, different levels of services or methods of dis-
tribution among various classes. Shares are fully paid and nonassessable when
issued, are transferable without restriction and have no preemptive or conver-
sion rights. The Fund is not required to hold annual shareholders' meetings and
does not intend to do so. However, it will hold special meetings as required or
deemed desirable for such purposes as electing trustees, changing fundamental
policies or approving an investment management agreement. Subject to the Agree-
ment and Declaration of Trust of the Fund, shareholders may remove trustees. If
shares of more than one series are outstanding, shareholders will vote by se-
ries and not in the aggregate or by class except when voting in the aggregate
is required under the 1940 Act, such as for the election of trustees or when
the Board of Trustees determines that voting by portfolio or by class is appro-
priate.
Rather than invest in securities directly, the Fund may in the future seek to
achieve its investment objective by pooling its assets with assets of other mu-
tual funds managed by ZKI or its affiliates for investment in another invest-
ment company having the same investment objective and substantially the same
investment policies and restrictions as the Fund. The purpose of such an ar-
rangement is to achieve greater operational efficiencies and to reduce costs.
It is expected that any such investment company will be managed by ZKI in sub-
stantially the same manner as the Fund. Shareholders of the Fund will be given
at least 30 days prior notice of any such investment, although they will not be
entitled to vote on the action. Such investment would be made only if the
trustees determine it to be in the best interests of the Fund and its share-
holders.
16
<PAGE>
ACCOUNT SERVICES DIRECTORY
TO OPEN A NEW ACCOUNT
The minimum to open an account is $25,000 (or $10,000 for an IRA). Call a Zu-
rich Money Fund Specialist at 1-800-537-6001 Monday through Friday between
8 a.m. and 6 p.m. Central time to:
. learn the current yield
. get answers about fund features, benefits, services, and fees
. request an application
. receive assistance completing an application
. set up a wire transfer initial purchase.
FOR CURRENT ACCOUNT ASSISTANCE
Call a Zurich Shareholder Services representative at
1-888-ZURICH-1 (987-4241) Monday through Friday between 7 a.m. and 6 p.m. Cen-
tral time and on Saturday between 8 a.m. and 3 p.m. to:
. establish new account services
. inquire about current statement or tax forms
. request duplicate statements or tax forms
. change the frequency or amount of automated transactions
. initiate a redemption or exchange
. follow-up on correspondence
. learn how to use the Zurich InfoLine automated phone system.
24-HOUR ACCOUNT INFORMATION
Call Zurich InfoLine at 1-888-987-8678 to make automated account inquiries and
transactions 24 hours a day from a touch-tone phone, including:
. account balance
. current yield
. transaction confirmation
. last dividend paid
. checkbook and investment slip reorders
. duplicate statement request
. pre-authorized transfers to and from a bank account
. fund redemption requests.
TO START AN AUTOMATIC PURCHASE PLAN
Call 1-888-ZURICH-1 (987-4241) for the proper forms to add $500 or more to your
account automatically with direct deposit:
. all or part of your paycheck
. all or part of your government check
. an amount you specify directly from your designated bank account.
TO MAKE A WIRE TRANSFER PURCHASE
Both methods require $1,000 minimum investment:
. Wire with Federal Funds (same day credit if received before 3 p.m. Central
time)
. EZ-Transfer with ACH Funds (same day credit if received before 3 p.m. Central
time)
Send to: United Missouri Bank (ABA # 1010-0069-5), 10th and Grand, Kansas City,
MO for credit to Zurich YieldWise Money Fund (Fund bank account
# 9870838818) and further credit to your account number.
TO MAKE A WIRE TRANSFER REDEMPTION
Both methods require $1,000 minimum and a call to Shareholder Services at 1-
888-ZURICH-1 (987-4241):
. Federal Funds (same day if received before 11 a.m. Central time; $10 fee per
transfer)
. EZ-Transfer with ACH Funds (generally within two business days; $2 fee per
transfer).
The financial institution receiving your transfer may also charge a fee.
For additional information on account transactions, see tables on pages 8 and
10.
17
<PAGE>
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<PAGE>
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<PAGE>
[LOGO ZURICH]
ZURICH
prospectus
April 16, 1997
Zurich YieldWise
Money Fund
[LOGO ZURICH]
ZURICH
Zurich Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
Phone (800) 537-6001
ZYMF-1 (4/97)
ZKDI-703121
[RECYCLE LOGO] printed on recycled paper
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
APRIL 16, 1997
ZURICH YIELDWISE MONEY FUND
222 SOUTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606-5808
(888) ZURICH-1 (987-4241)
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the prospectus of Zurich YieldWise Money Fund (the
"Fund") dated April 16, 1997. The prospectus may be obtained without charge by
calling or writing the Fund.
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TABLE OF CONTENTS
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PAGE
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Investment Restrictions............................................. B-1
Investment Manager.................................................. B-2
Portfolio Transactions.............................................. B-3
Purchase and Redemption of Shares................................... B-3
Dividends and Net Asset Value....................................... B-4
Performance......................................................... B-5
Officers and Trustees............................................... B-7
Special Features.................................................... B-8
Shareholder Rights.................................................. B-9
Report of Independent Auditors (March 26, 1997)..................... B-11
Statement of Net Assets (March 26, 1997)............................ B-12
Appendix--Ratings of Investments.................................... B-13
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ZYMF-13 4/97
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INVESTMENT RESTRICTIONS
The Fund has adopted certain investment restrictions which, together with the
investment objective of the Fund, cannot be changed without approval by
holders of a majority of the Fund's outstanding voting shares. As defined in
the Investment Company Act of 1940, this means the lesser of the vote of (a)
67% of the shares of the Fund present at a meeting where more than 50% of the
outstanding shares of the Fund are present in person or by proxy; or (b) more
than 50% of the outstanding shares of the Fund.
The Fund may not:
(1) Purchase more than 10% of any class of voting securities of any issuer.
(2) Make loans to others (except through the purchase of debt obligations or
repurchase agreements in accordance with its investment objective and
policies).
(3) Borrow money except as a temporary measure for extraordinary or emergency
purposes and then only in an amount up to one-third of the value of its total
assets, in order to meet redemption requests without immediately selling any
money market instruments (any such borrowings under this section will not be
collateralized). If, for any reason, the current value of the Fund's total
assets falls below an amount equal to three times the amount of its
indebtedness from money borrowed, the Fund will, within three days (not
including Sundays and holidays), reduce its indebtedness to the extent
necessary. The Fund will not borrow for leverage purposes and will not
purchase securities or make investments while borrowings in excess of 5% of
the Fund's total assets are outstanding.
(4) Make short sales of securities, or purchase any securities on margin
except to obtain such short-term credits as may be necessary for the clearance
of transactions.
(5) Invest in commodities or commodity futures contracts or in real estate (or
real estate limited partnerships), although it may invest in securities which
are secured by real estate and securities of issuers which invest or deal in
real estate.
(6) Underwrite securities issued by others except to the extent the Fund may
be deemed to be an underwriter, under the federal securities laws, in
connection with the disposition of portfolio securities.
(7) Issue senior securities except as permitted under the Investment Company
Act of 1940.
(8) Concentrate 25% or more of the Fund's total assets in any one industry;
provided, however, that the Fund reserves freedom of action to (a) invest up
to 100% of its assets in obligations of, or guaranteed by, the United States
Government, its agencies or instrumentalities, and (b) invest 25% or more of
its assets in bank certificates of deposit, time deposits or banker's
acceptances of United States banks and their domestic branches, in accordance
with its investment objective and policies.
If the Fund adheres to a percentage restriction at the time of investment, a
later increase or decrease in percentage beyond the specified limit resulting
from a change in values or net assets will not be considered a violation. The
Fund has adopted the following non-fundamental restrictions, which may be
changed by the Board of Trustees without shareholder approval. The Fund may
not:
(i) Invest more than 10% of its net assets in illiquid securities.
(ii) Write, purchase or sell puts, calls or combinations thereof.
(iii) Invest for the purpose of exercising control or management of another
issuer.
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INVESTMENT MANAGER
INVESTMENT MANAGER. Zurich Kemper Investments, Inc. ("ZKI") is the Fund's
investment manager. ZKI is wholly owned by ZKI Holding Corp. ZKI Holding Corp.
is a more than 90% owned subsidiary of Zurich Holding Company of America,
Inc., which is a wholly owned subsidiary of Zurich Insurance Company, an
internationally recognized company providing services in life and non-life
insurance, reinsurance and asset management. Pursuant to an investment
management agreement, ZKI acts as the Fund's investment adviser, manages its
investments, administers its business affairs, furnishes office facilities and
equipment, provides clerical, bookkeeping and administrative services,
provides shareholder and information services and permits any of its officers
or employees to serve without compensation as trustees or officers of the Fund
if elected to such positions. The Fund pays the expenses of its operations,
including the fees and expenses of independent auditors, counsel, custodian
and transfer agent and the cost of share certificates, reports and notices to
shareholders, costs of calculating net asset value, brokerage commissions or
transaction costs, taxes, registration fees, the fees and expenses of
qualifying the Fund and its shares for distribution under federal and state
securities laws and membership dues in the Investment Company Institute or any
similar organization.
The Fund's investment management agreement has an initial term ending December
1, 1998 and it continues in effect from year to year so long as its
continuation is approved at least annually (a) by a majority of the trustees
who are not parties to such agreement or interested persons of any such party
except in their capacity as trustees of the Fund and (b) by the shareholders
of the Fund or the Board of Trustees. The agreement may be terminated at any
time upon 60 days' notice by either party, or by a majority vote of the
outstanding shares of the Fund, and will terminate automatically upon
assignment. If additional series become subject to the investment management
agreement, the provisions concerning continuation, amendment and termination
shall be on a series by series basis. Additional series may be subject to a
different agreement. The agreement provides that ZKI shall not be liable for
any error of judgment or of law, or for any loss suffered by the Fund in
connection with the matters to which the agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part
of ZKI in the performance of its obligations and duties, or by reason of its
reckless disregard of its obligations and duties under the agreement.
For the services and facilities furnished, the Fund pays an annual investment
management fee, payable monthly, on a graduated basis of .50% of the first
$215 million of average daily net assets of the Fund, .375% on the next $335
million, .30% on the next $250 million and .25% of average daily net assets of
the Fund over $800 million.
PRINCIPAL UNDERWRITER. Zurich Kemper Distributors, Inc. ("ZKDI"), an affiliate
of ZKI, is the principal underwriter for shares of the Fund and acts as agent
of the Fund in the sale of its shares. The Fund pays the cost for the
prospectus and shareholder reports to be set in type and printed for existing
shareholders, and ZKDI pays for the printing and distribution of copies
thereof used in connection with the offering of shares to prospective
investors. ZKDI also pays for supplementary sales literature and advertising
costs. Terms of continuation, termination and assignment under the
underwriting agreement are identical to those described above with regard to
the investment management agreement, except that termination other than upon
assignment requires six months notice.
Certain officers or trustees of the Fund are also directors or officers of ZKI
and ZKDI as indicated under "Officers and Trustees."
CUSTODIAN, TRANSFER AGENT AND SHAREHOLDER SERVICE AGENT. Investors Fiduciary
Trust Company ("IFTC"), 127 West 10th Street, Kansas City, Missouri 64105, as
custodian, and State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110, as sub-custodian, have custody of all securities
and cash of the
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Fund. They attend to the collection of principal and income, and payment for
and collection of proceeds of securities bought and sold by the Fund. IFTC is
also the Fund's transfer and dividend-paying agent. Pursuant to a services
agreement with IFTC, Zurich Kemper Service Company ("ZKSvC"), an affiliate of
ZKI, serves as "Shareholder Service Agent of the Fund and, as such, performs
all of IFTC's duties as transfer agent and dividend paying agent." IFTC
receives, as transfer agent, and pays to ZKSvC, annual account fees of a
maximum of $8 per account plus account set-up, transaction, maintenance and
out-of-pocket expense reimbursement.
INDEPENDENT AUDITORS AND REPORTS TO SHAREHOLDERS. The Fund's independent
auditors, Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606,
audit and report on the Fund's annual financial statements, review certain
regulatory reports and the Fund's federal income tax return, and perform other
professional accounting, auditing, tax and advisory services when engaged to
do so by the Fund. Shareholders will receive annual audited financial
statements and semi-annual unaudited financial statements.
PORTFOLIO TRANSACTIONS
Portfolio transactions are undertaken principally to pursue the objective of
the Fund in relation to movements in the general level of interest rates, to
invest money obtained from the sale of Fund shares, to reinvest proceeds from
maturing portfolio securities and to meet redemptions of Fund shares. This may
increase or decrease the yield of the Fund depending upon management's ability
to correctly time and execute such transactions. Since the Fund's assets are
invested in securities with short maturities, its portfolio will turn over
several times a year. Securities with maturities of less than one year are
excluded from required portfolio turnover rate calculations, so the Fund's
portfolio turnover rate for reporting purposes is likely to be zero.
ZKI and its affiliates furnish investment management services for Zurich Money
Funds, the Kemper Funds and other clients including affiliated insurance
companies. These entities may share some common research and trading
facilities. At times investment decisions may be made to purchase or sell the
same investment security for the Fund and for one or more of the other clients
of ZKI or its affiliates. When two or more of such clients are simultaneously
engaged in the purchase or sale of the same security through the same trading
facility, the transactions are allocated as to amount and price in a manner
considered equitable to each.
ZKI, in effecting purchases and sales of portfolio securities for the account
of the Fund, will implement the Fund's policy of seeking the best execution of
orders. Consistent with this policy, orders for portfolio transactions are
placed with broker-dealer firms giving consideration to the quality, quantity
and nature of the firm's professional services which include execution,
financial responsibility, responsiveness, clearance procedures, wire service
quotations and statistical and other research information provided to the Fund
and ZKI and its affiliates. Subject to seeking best execution of an order,
brokerage is allocated on the basis of all services provided. Any research
benefits derived are available for all clients, including clients of ZKI and
its affiliates. The Fund expects that purchases and sales of portfolio
securities usually will be principal transactions. Portfolio securities will
normally be purchased directly from the issuer or from an underwriter or
market maker for the securities. There are normally no brokerage commissions
paid by the Fund for such purchases. Purchases from underwriters include a
commission or concession paid by the issuer to the underwriter, and purchases
from dealers serving as market makers include the spread between the bid and
asked prices.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Fund are sold at their net asset value next determined after an
order and payment are received in the form described in the Fund's prospectus.
There is no sales charge. The minimum initial investment is $25,000 ($10,000
for IRAs) and the minimum subsequent investment is $1,000 but such minimum
amounts may be
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changed at any time. See the prospectus for certain exceptions to these
minimums. An investor wishing to open an account should use the account
application form available from the Fund and choose one of the methods of
purchase described in the Fund's prospectus. An order for the purchase of
shares that is accompanied by a check drawn on a foreign bank (other than a
check drawn on a Canadian bank in U.S. Dollars) will not be considered in
proper form and will not be processed unless and until the Fund determines
that it has received payment of the proceeds of the check. The time required
for such a determination will vary and cannot be determined in advance.
Upon receipt by the Shareholder Service Agent, of a request for redemption in
proper form, shares will be redeemed by the Fund at the applicable net asset
value as described in the Fund's prospectus. A shareholder may elect to use
either the regular or expedited redemption procedures.
The Fund may suspend the right of redemption or delay payment more than seven
days (a) during any period when the New York Stock Exchange ("Exchange") is
closed other than customary weekend and holiday closings or during any period
in which trading on the Exchange is restricted, (b) during any period when an
emergency exists as a result of which (i) disposal of the Fund's investments
is not reasonably practicable, or (ii) it is not reasonably practicable for
the Fund to determine the value of its net assets, or (c) for such other
periods as the Securities and Exchange Commission may by order permit for the
protection of the Fund's shareholders.
Although it is the Fund's present policy to redeem in cash, if the Board of
Trustees determines that a material adverse effect would be experienced by the
remaining shareholders if payment were made wholly in cash, the Fund will pay
the redemption price in whole or in part by a distribution of portfolio
securities in lieu of cash, in conformity with the applicable rules of the
Securities and Exchange Commission, taking such securities at the same value
used to determine net asset value, and selecting the securities in such manner
as the Board of Trustees may deem fair and equitable. If such a distribution
occurs, shareholders receiving securities and selling them could receive less
than the redemption value of such securities and in addition could incur
certain transaction costs. Such a redemption would not be as liquid as a
redemption entirely in cash. The Fund has elected to be governed by Rule 18f-1
under the Investment Company Act of 1940 pursuant to which the Fund is
obligated to redeem shares of the Fund solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder of record.
DIVIDENDS AND NET ASSET VALUE
DIVIDENDS. Dividends are declared daily and paid monthly. Shareholders will
receive dividends in additional shares of the Fund unless they elect to
receive cash. Dividends will be reinvested monthly at the net asset value
normally on the 25th of each month if a business day, otherwise on the prior
business day. The Fund will pay shareholders who redeem their entire accounts
all unpaid dividends at the time of redemption not later than the next
dividend payment date.
The Fund calculates its dividends based on its daily net investment income.
For this purpose, the net investment income of the Fund consists of (a)
accrued interest income plus or minus amortized discount or premium, (b) plus
or minus all short-term realized gains and losses on portfolio assets and (c)
minus accrued expenses. Expenses of the Fund are accrued each day. While the
Fund's investments are valued at amortized cost, there will be no unrealized
gains or losses on portfolio securities. However, should the net asset value
of the Fund deviate significantly from market value, the Board of Trustees
could decide to value the portfolio securities at market value and then
unrealized gains and losses would be included in net investment income above.
NET ASSET VALUE. As described in the prospectus, the Fund values its portfolio
instruments at amortized cost, which does not take into account unrealized
capital gains or losses. This involves initially valuing an instrument
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at its cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. While this method provides certainty in
valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Fund would receive if it
sold the instrument. Calculations are made to compare the value of the Fund's
investments valued at amortized cost with market values. Market valuations are
obtained by using actual quotations provided by market makers, estimates of
market value, or values obtained from yield data relating to classes of money
market instruments published by reputable sources at the mean between the bid
and asked prices for the instruments. If a deviation of 1/2 of 1% or more were
to occur between the net asset value per share calculated by reference to
market values and the Fund's $1.00 per share net asset value, or if there were
any other deviation that the Board of Trustees of the Fund believed would
result in a material dilution to shareholders or purchasers, the Board of
Trustees would promptly consider what action, if any, should be initiated. If
the Fund's net asset value per share (computed using market values) declined,
or were expected to decline, below $1.00 (computed using amortized cost), the
Board of Trustees of the Fund might temporarily reduce or suspend dividend
payments in an effort to maintain the net asset value at $1.00 per share. As a
result of such reduction or suspension of dividends or other action by the
Board of Trustees, an investor would receive less income during a given period
than if such a reduction or suspension had not taken place. Such action could
result in investors receiving no dividends for the period during which they
held shares and receiving, upon redemption, a price per share lower than that
which they paid. On the other hand, if the Fund's net asset value per share
(computed using market values) were to increase, or were anticipated to
increase, above $1.00 (computed using amortized cost), the Board of Trustees
of the Fund might supplement dividends in an effort to maintain the net asset
value at $1.00 per share.
PERFORMANCE
As reflected in the prospectus, the historical performance calculation for the
Fund may be shown in the form of "yield," "effective yield," "total return,"
and "average annual total return." These various measures of performance are
described below. ZKI has agreed to temporarily reduce its management fee to 0%
and absorb other operating expenses of the Fund to the extent specified in the
prospectus. See "Investment Manager." This fee reduction and expense
absorption will improve the performance results of the Fund.
The Fund's yield is computed in accordance with a standardized method
prescribed by rules of the Securities and Exchange Commission. Under that
method, the current yield quotation is based on a seven-day period and is
computed as follows. The first calculation is net investment income per share,
which is accrued interest on portfolio securities, plus or minus amortized
discount or premium, less accrued expenses. This number is then divided by the
price per share (expected to remain constant at $1.00) at the beginning of the
period ("base period return"). The result is then divided by 7 and multiplied
by 365 and the resulting yield figure is carried to the nearest one-hundredth
of one percent. Realized capital gains or losses and unrealized appreciation
or depreciation of investments are not included in the calculation.
The Fund's effective yield is determined by taking the base period return
(computed as described above) and calculating the effect of assumed
compounding. The formula for the effective yield is: (base period return +
1)/365/7/ - 1.
Average annual total return ("AATR") is found for a specific period by first
taking a hypothetical $1,000 investment ("initial investment") on the first
day of the period and computing the "redeemable value" of that investment at
the end of the period. The redeemable value is then divided by the initial
investment, and this quotient is taken to the Nth root (N representing the
number of years in the period) and 1 is subtracted from the result, which is
then expressed as a percentage. The calculation assumes that all dividends
have been reinvested at net asset value on the reinvestment dates.
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Total return is not calculated according to a standard formula, except when
calculated for the "Financial Highlights" table in the financial statements.
Total return is calculated similarly to AATR but is not annualized. It may be
shown as a percentage or the increased dollar value of the hypothetical
investment over the period.
The Fund's yield fluctuates, and the publication of an annualized yield
quotation is not a representation as to what an investment in the Fund will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
which the investment in the Fund is held, but also on such matters as Fund
expenses.
As indicated in the prospectus (see "Performance"), the performance of the
Fund may be compared to that of other mutual funds tracked by Lipper
Analytical Services, Inc. ("Lipper"). Lipper performance calculations include
the reinvestment of all capital gain and income dividends for the periods
covered by the calculations. The Fund's performance also may be compared to
other money market funds reported by IBC Financial Data, Inc.'s Money Fund
Report(R) or Money Market Insight(R), reporting services on money market
funds. As reported by IBC, all investment results represent total return
(annualized results for the period net of management fees and expenses) and
one year investment results are effective annual yields assuming reinvestment
of dividends.
As indicated in the prospectus, the Fund's performance also may be compared to
various bank products, including the average rate of bank and thrift
institution money market deposit accounts, interest bearing checking accounts
and certificates of deposit as reported in the BANK RATE MONITOR National
Index(TM) of 100 leading bank and thrift institutions as published by the BANK
RATE MONITOR(TM), N. Palm Beach, Florida 33408. The rates published by the
BANK RATE MONITOR National Index(TM) are averages of the personal account
rates offered on the Wednesday prior to the date of publication by 100 large
banks and thrifts in the top ten Consolidated Standard Metropolitan
Statistical Areas.
With respect to money market deposit accounts and interest bearing checking
accounts, account minimums range upward from $2,000 in each institution and
compounding methods vary. Interest bearing checking accounts generally offer
unlimited check writing while money market deposit accounts generally restrict
the number of checks that may be written. If more than one rate is offered,
the lowest rate is used. Rates are determined by the financial institution and
are subject to change at any time specified by the institution. Generally, the
rates offered for these products take market conditions and competitive
product yields into consideration when set. Bank products represent a taxable
alternative income producing product. Bank and thrift institution deposit
accounts may be insured. Shareholder accounts in the Fund are not insured.
Bank passbook savings accounts compete with money market mutual fund products
with respect to certain liquidity features but may not offer all of the
features available from a money market mutual fund, such as check writing.
Bank passbook savings accounts normally offer a fixed rate of interest while
the yield of the Fund fluctuates. Bank checking accounts normally do not pay
interest but compete with money market mutual fund products with respect to
certain liquidity features (e.g., the ability to write checks against the
account). Bank certificates of deposit may offer fixed or variable rates for a
set term. (Normally, a variety of terms are available.) Withdrawal of these
deposits prior to maturity will normally be subject to a penalty. In contrast,
shares of the Fund are redeemable at the net asset value (normally, $1.00 per
share) next determined after a request is received.
Investors may also want to compare the Fund's performance to that of U.S.
Treasury bills or notes because such instruments represent alternative income
producing products. Treasury obligations are issued in selected denominations.
Rates of U.S. Treasury obligations are fixed at the time of issuance and
payment of principal and interest is backed by the full faith and credit of
the U.S. Treasury. The market value of such instruments will generally
fluctuate inversely with interest rates prior to maturity and will equal par
value at maturity. Generally, the values of obligations with shorter
maturities will fluctuate less than those with longer maturities. The Fund's
yield will fluctuate. Also, while the Fund seeks to maintain a net asset value
per share of $1.00, there is no assurance that it will be able to do so.
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OFFICERS AND TRUSTEES
The officers and trustees of the Fund, their birthdates, their principal
occupations and their affiliations, if any, with ZKI, the Fund's investment
manager, and ZKDI, the principal underwriter, or their affiliates, are as
follows (the number following each person's title is the number of investment
companies managed by ZKI and its affiliates for which he or she holds similar
positions):
DAVID W. BELIN (6/20/28), Trustee, (26), 2000 Financial center, 7th and
Walnut, Des Moines, Iowa; Member, Belin Lamson McCormick Zumbach Flynn, P.C.
(attorneys).
LEWIS A. BURNHAM (1/8/33), Trustee, (26), 16410 Avila Boulevard, Tampa,
Florida; Director, Management Consulting Services, McNulty & Company;
formerly, Executive Vice President, Anchor Glass Container Corporation.
DONALD L. DUNAWAY (3/8/37), Trustee, (26), 7515 Pelican Bay Boulevard, Naples,
Florida; Retired; formerly, Executive Vice President, A. O. Smith Corporation
(diversified manufacturer).
ROBERT B. HOFFMAN (12/11/36), Trustee, (26), 800 North Lindbergh Boulevard,
St. Louis, Missouri; Senior Vice President and Chief Financial Officer,
Monsanto Company (chemical products); prior thereto, Vice President, FMC
Corporation (manufacturer of machinery and chemicals); prior thereto,
Director, Executive Vice President and Chief Financial Officer, Staley
Continental, Inc. (food products).
DONALD R. JONES (1/17/30), Trustee, (26), 1776 Beaver Pond Road, Inverness,
Illinois, Retired; Director, Motorola, Inc. (manufacturer of electronic
equipment and components); formerly, Executive Vice President and Chief
Financial Officer, Motorola, Inc.
DOMINIQUE P. MORAX (10/2/48), Trustee*, (39), 222 South Riverside Plaza,
Chicago, Illinois; Member, Extended Corporate Executive Board, Zurich
Insurance Company; Director, ZKI.
SHIRLEY D. PETERSON (9/3/41), Trustee (26), 401 Rosemont Avenue, Frederick,
Maryland; President, Hood College, Maryland; prior thereto, Partner, Steptoe &
Johnson (attorneys); prior thereto, Commissioner of Internal Revenue Service;
prior thereto, Assistant Attorney General, U.S. Department of Treasury.
WILLIAM P. SOMMERS (7/22/33), Trustee, (26), 333 Ravenswood Avenue, Menlo
park, California; President and Chief Executive Officer, SRI International
(research and development); prior thereto, Executive Vice President, Iameter
(medical information and educational service provider); prior thereto, Senior
Vice President and Director, Booz, Allen & Hamilton, Inc. (management
consulting firm) (retired); Director, Rohr, Inc. Therapeutic discovery Corp.
and Litton Industries.
STEPHEN B. TIMBERS (8/8/44), President and Trustee*, (39), 222 South Riverside
Plaza, Chicago, Illinois; President, Chief Executive Officer, Chief Investment
Officer and Director, ZKI; Director, ZKDI and LTV Corporation.
JOHN E. NEAL (3/9/50), Vice President*, (39), 222 South Riverside Plaza,
Chicago, Illinois; President, Kemper Funds Group, a unit of ZKI; Director, ZKI
and ZKDI.
CHARLES R. MANZONI, JR. (1/23/47), Vice President*, (39), 222 South Riverside
Plaza, Chicago, Illinois; Executive Vice President, Secretary and General
Counsel of ZKI; Secretary, ZKI Holding Corp.; Secretary, ZKI Agency, Inc.;
formerly, Partner, Gardner, Carton & Douglas (attorneys).
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J. PATRICK BEIMFORD, JR. (5/25/50), Vice President*, (24), 222 South Riverside
Plaza, Chicago, Illinois; Executive Vice President and Chief Investment
Officer--Fixed Income Investments, ZKI.
FRANK J. RACHWALSKI, JR. (3/26/45), Vice President*, (9), 222 South Riverside
Plaza, Chicago, Illinois; Senior Vice president, ZKI.
JEROME L. DUFFY (6/29/36), Treasurer*, (39), 222 South Riverside Plaza,
Chicago, Illinois; Senior Vice President, ZKI.
PHILIP J. COLLORA (11/15/45), Vice President and Secretary*, (39), 222 South
Riverside Plaza, Chicago, Illinois; Attorney, Senior Vice President and
Assistant Secretary, ZKI.
ELIZABETH C. WERTH (10/1/47), Assistant Secretary*, (32), 222 South Riverside
Plaza, Chicago, Illinois; Vice President, ZKI; and Vice President and Director
of State Registrations, ZKDI.
*Interested persons as defined in the Investment Company Act of 1940.
The trustees and officers who are "interested persons" as designated above
receive no compensation from the Fund. The table below shows amounts paid or
accrued to those trustees who are not designated "interested persons". The
information in the last column is for calendar year 1996. The Fund has not yet
adopted a trustee compensation schedule.
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<CAPTION>
TOTAL COMPENSATION
AGGREGATE ZKI - MANAGED
COMPENSATION FUNDS PAID TO
NAME OF TRUSTEE FROM FUND TRUSTEES**
- --------------------------------------------------------------------------------
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David W. Belin*................................. -- $143,400
Lewis A. Burnham................................ -- $ 88,800
Donald L. Dunaway*.............................. -- $141,200
Robert B. Hoffman............................... -- $ 92,100
Donald R. Jones................................. -- $ 92,100
Shirley D. Peterson............................. -- $ 89,800
William P. Sommers.............................. -- $ 87,500
</TABLE>
* Includes deferred fees and interest thereon pursuant to deferred
compensation agreements with ZKI-Managed Funds. Deferred amounts accrue
interest monthly at a rate equal to the yield of Zurich Money Funds--Zurich
Money Market Fund.
** Includes compensation for services as trustee on twenty-four fund boards
with forty-one portfolios. Each trustee currently serves as a trustee of
twenty-six ZKI-Managed Funds with forty-three portfolios.
As of March 27, 1997, ZKI owned all of the 100,000 outstanding shares of the
Fund.
SPECIAL FEATURES
AUTOMATIC WITHDRAWAL PLAN. If you own $10,000 or more of the Fund's shares you
may provide for the payment from your account of any requested dollar amount
to be paid to you or your designated payee monthly, quarterly, semi-annually
or annually. Dividend distributions will be automatically reinvested at net
asset value. A sufficient number of full and fractional shares will be
redeemed to make the designated payment. Depending upon the size of the
payments requested, redemptions for the purpose of making such payments may
reduce or even exhaust the account. Additionally, there is a $1/month small
account fee for account balances under $10,000. The program may be amended on
thirty days notice by the Fund and may be terminated at any time by the
shareholder or the Fund. The minimum automatic withdrawal amount is $1,000 and
the shareholder will be charged a $5.00 fee for each withdrawal.
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TAX-SHELTERED RETIREMENT PROGRAMS. The Shareholder Service Agent provides
retirement plan services and documents and can establish your account in any
of the following types of retirement plans:
. Individual Retirement Accounts (IRAs) with IFTC as custodian. This includes
Savings Incentive Match Plan for Employees of Small Employers ("SIMPLE") IRA
accounts and Simplified Employee Pension Plan (SEP) IRA accounts and
prototype documents.
. 403(b) Custodial Accounts also with IFTC as custodian. This type of plan is
available to employees of most non-profit organizations.
. Prototype money purchase pension and profit-sharing plans may be adopted by
employers. The maximum contribution per participant is the lesser of 25% of
compensation or $30,000.
Brochures describing the above plans as well as providing model defined
benefit plans, target benefit plans, 457 plans, 401(k) plans, SIMPLE 401(k)
plans and materials for establishing them are available from the Shareholder
Service Agent upon request. The brochures for plans with IFTC as custodian
describe the current fees payable to IFTC for its services as custodian.
Investors should consult with their own tax advisers before establishing a
retirement plan.
SHAREHOLDER RIGHTS
The Fund generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Fund ("Declaration of Trust"),
however, shareholder meetings will be held in connection with the following
matters: (a) the election or removal of trustees, if a meeting is called for
such purpose; (b) the adoption of any contract for which shareholder approval
is required by the Investment Company Act of 1940 ("1940 Act"); (c) any
termination of the Fund or a class to the extent and as provided in the
Declaration of Trust; (d) any amendment of the Declaration of Trust (other
than amendments changing the name of the Fund supplying any omission, curing
any ambiguity or curing, correcting or supplementing any defective or
inconsistent provision thereof); and (e) such additional matters as may be
required by law, the Declaration of Trust, the By-laws of the Fund, or any
registration of the Fund with the Securities and Exchange Commission or any
state, or as the trustees may consider necessary or desirable. The
shareholders also would vote upon changes in fundamental investment
objectives, policies or restrictions.
Each trustee serves until the next meeting of shareholders, if any, called for
the purpose of electing trustees and until the election and qualification of
his successor or until such trustee sooner dies, resigns, retires or is
removed by a majority vote of the shares entitled to vote (as described below)
or a majority of the trustees. In accordance with the 1940 Act (a) the Fund
will hold a shareholder meeting for the election of trustees at such time as
less than a majority of the trustees have been elected by shareholders, and
(b) if, as a result of a vacancy in the Board of Trustees, less than two-
thirds of the trustees have been elected by the shareholders, that vacancy
will be filled only by a vote of the shareholders.
Trustees may be removed from office by a vote of the holders of a majority of
the outstanding shares at a meeting called for that purpose, which meeting
shall be held upon the written request of the holders of not less than 10% of
the outstanding shares. Upon the written request of ten or more shareholders
who have been such for at least six months and who hold shares constituting at
least 1% of the outstanding shares of the Fund stating that such shareholders
wish to communicate with the other shareholders for the purpose of obtaining
the signatures necessary to demand a meeting to consider removal of a trustee,
the Fund has undertaken to disseminate appropriate materials at the expense of
the requesting shareholders.
The Declaration of Trust provides that the presence at a shareholder meeting
in person or by proxy of at least 30% of the shares entitled to vote on a
matter shall constitute a quorum. Thus, a meeting of shareholders of the Fund
B-9
<PAGE>
could take place even if less than a majority of the shareholders were
represented on its scheduled date. Shareholders would in such a case be
permitted to take action which does not require a larger vote than a majority
of a quorum, such as the election of trustees and ratification of the
selection of auditors. Some matters requiring a larger vote under the
Declaration of Trust, such as termination or reorganization of the Fund and
certain amendments of the Declaration of Trust, would not be affected by this
provision; nor would matters which under the 1940 Act require the vote of a
"majority of the outstanding voting securities" as defined in the 1940 Act.
The Declaration of Trust specifically authorizes the Board of Trustees to
terminate the Fund or any portfolio or class by notice to the shareholders
without shareholder approval.
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of the
Fund. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Fund or the trustees. Moreover, the Declaration of Trust provides for
indemnification out of Fund property for all losses and expenses of any
shareholder held personally liable for the obligations of the Fund and the
Fund will be covered by insurance which the trustees consider adequate to
cover foreseeable tort claims. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is considered by ZKI remote
and not material since it is limited to circumstances in which a disclaimer is
inoperative and the Fund itself is unable to meet its obligations.
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<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees and Shareholder
Zurich YieldWise Money Fund
We have audited the accompanying statement of net assets of Zurich YieldWise
Money Fund as of March 26, 1997. This statement of net assets is the
responsibility of the Fund's management. Our responsibility is to express an
opinion on this statement of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of net assets is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of net
assets. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of net assets presentation. We believe that our audit of the
statement of net assets provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents fairly,
in all material respects, the financial position of Zurich YieldWise Money
Fund at March 26, 1997 in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Chicago, Illinois
March 26, 1997
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<PAGE>
ZURICH YIELDWISE MONEY FUND
STATEMENT OF NET ASSETS--MARCH 26, 1997
ASSETS
<TABLE>
<S> <C>
Cash................................................................... $100,000
========
</TABLE>
NET ASSETS
<TABLE>
<S> <C>
Net assets, applicable to 100,000 shares of beneficial interest (un-
limited number
of shares authorized, no par value) outstanding..................... $100,000
========
</TABLE>
THE PRICING OF SHARES
<TABLE>
<S> <C>
Net asset value and redemption price per share
$100,000 / 100,000 shares outstanding................................... $1.00
Maximum offering price per share (net asset value)....................... $1.00
</TABLE>
Notes:
Zurich YieldWise Money Fund (the "Fund") was organized as a business trust
under the laws of The Commonwealth of Massachusetts on June 12, 1995. All
shares of beneficial interest of the Fund were issued to Zurich Kemper
Investments, Inc. ("ZKI"), the investment manager, on March 26, 1997. The Fund
may establish multiple series; currently, a single series has been
established.
The costs of organization of the Fund will be paid by ZKI.
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<PAGE>
APPENDIX--RATINGS OF INVESTMENTS
COMMERCIAL PAPER RATINGS
A-1, A-2; PRIME-1, PRIME-2, DUFF-1, DUFF-2; AND F-1, F-2 COMMERCIAL PAPER
RATINGS
Commercial paper rated by Standard & Poor's Corporation has the following
characteristics: Liquidity ratios are adequate to meet cash requirements.
Long-term senior debt is rated "A" or better. The issuer has access to at
least two additional channels of borrowing. Basic earnings and cash flow have
an upward trend with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong position
within the industry. The reliability and quality of management are
unquestioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is rated A-1, A-2 or A-3.
The ratings Prime-1 and Prime-2 are the two highest commercial paper ratings
assigned by Moody's Investors Service, Inc. Among the factors considered by it
in assigning ratings are the following: (1) evaluation of the management of
the issuer; (2) economic evaluation of the issuer's industry or industries and
an appraisal of speculative-type risks which may be inherent in certain areas;
(3) evaluation of the issuer's products in relation to competition and
customer acceptance; (4) liquidity; (5) amount and quality of long-term debt;
(6) trend of earnings over a period of ten years; (7) financial strength of a
parent company and the relationships which exist with the issuer; and (8)
recognition by the management of obligations which may be present or may arise
as a result of public interest questions and preparations to meet such
obligations. Relative strength or weakness of the above factors determines
whether the issuer's commercial paper is rated Prime-1, 2 or 3.
The rating Duff-1 is the highest commercial paper rating assigned by Duff &
Phelps Inc. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors that are supported by ample
asset protection. Risk factors are minor. Paper rated Duff-2 is regarded as
having good certainty of timely payment, good access to capital markets and
sound liquidity factors and company fundamentals. Risk factors are small.
The ratings F-1 and F-2 are the highest commercial paper ratings assigned by
Fitch Investors Services, Inc. Issues assigned a rating of F-1 are regarded as
having the strongest degree of assurance for timely payment. Issues assigned a
rating of F-2 have a satisfactory degree of assurance for timely payment, but
the margin of safety is not as great as for issues assigned an F-1 rating.
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