KEMPER HIGH YIELD FUND
KEMPER INCOME AND CAPITAL PRESERVATION FUND
KEMPER SHORT-TERM U.S. GOVERNMENT FUND
KEMPER STRATEGIC INCOME FUND
KEMPER U.S. GOVERNMENT SECURITIES FUND
KEMPER U.S. MORTGAGE FUND
SUPPLEMENT TO THE STATEMENT OF
ADDITIONAL INFORMATION DATED
JANUARY 1, 2000
--------------------------
KEMPER HIGH YIELD FUND
Performance figures for Class B and C shares of the Fund for the period May 31,
1994 to September 30, 1999 reflect the actual performance of these classes of
shares. Returns for Class B and C shares for the period January 26, 1978 to May
31, 1994 are derived from the historical performance of Class A shares, adjusted
to reflect the operating expenses applicable to Class B and C shares, which may
be higher or lower than those of Class A shares. The performance figures are
also adjusted to reflect the maximum sales charge of 4.50% for Class A shares
and the maximum current contingent deferred sales charge of 4% for Class B
shares and 1% for Class C shares.
The returns in the chart below assume reinvestment of distributions at net asset
value and represent both actual past performance figures and adjusted
performance figures of the Class A shares of the Fund as described above; they
do not guarantee future results. Investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost.
KEMPER HIGH YIELD FUND -- AS OF SEPTEMBER 30, 1999*
<TABLE>
<CAPTION>
AVERAGE ANNUAL Class A Class B Class C
TOTAL RETURNS Shares Shares Shares
------------- ------ ------ ------
<S> <C> <C> <C>
Life of Fund (+) 10.84% -- --
Life of Fund (++) -- 7.05% 7.27%
Ten Years 9.30% 8.86% 8.91%
Five Years 7.63% 7.54% 7.72%
One Year -0.55% 0.44% 3.30%
</TABLE>
(+) Since January 26, 1978 for Class A Shares.
(++) Since May 31, 1994 for Class B and Class C Shares.
* Because Class B and C shares were not introduced until May 31, 1994, the total
return for Class B and C shares for the period prior to their introduction is
based upon the performance of Class A shares from the commencement of investment
operations, January 26, 1978 through May 31, 1994. Actual performance of Class B
and C shares is shown beginning May 31, 1994.
KEMPER INCOME AND CAPITAL PRESERVATION FUND
Performance figures for Class B and C shares of the Fund for the period May 31,
1994 to October 31, 1999 reflect the actual performance of these classes of
shares. Returns for Class B and C shares for the period April 15, 1974 to May
31, 1994 are derived from the historical performance of Class A shares, adjusted
to reflect the operating expenses applicable to Class B and C shares, which may
be higher or lower than those of Class A shares. The performance figures are
also adjusted to reflect the maximum sales charge of 4.50% for Class A shares
and the maximum current contingent deferred sales charge of 4% for Class B
shares and 1% for Class C shares.
The returns in the chart below assume reinvestment of distributions at net asset
value and represent both actual past performance figures and adjusted
performance figures of the Class A shares of the Fund as described above; they
do not guarantee future results. Investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost.
<PAGE>
KEMPER INCOME AND CAPITAL PRESERVATION FUND -- AS OF OCTOBER 31, 1999*
<TABLE>
<CAPTION>
AVERAGE ANNUAL Class A Class B Class C
TOTAL RETURNS Shares Shares Shares
------------- ------ ------ ------
<S> <C> <C> <C>
Life of Fund(+) 8.77% -- --
Life of Fund(++) -- 5.53% 5.78%
Ten Years 7.12% 6.64% 6.69%
Five Years 6.32% 6.11% 6.38%
One Year -5.90% -5.16% -2.19%
</TABLE>
(+) Since April 15, 1974 for Class A Shares.
(++) Since May 31, 1994 for Class B and Class C Shares.
* Because Class B and C shares were not introduced until May 31, 1994,
respectively, the total return for Class B and C shares for the period prior to
their introduction is based upon the performance of Class A shares from the
commencement of investment operations, April 15, 1974 through May 31, 1994.
Actual performance of Class B and C shares is shown beginning May 31, 1994.
KEMPER SHORT-TERM U.S. GOVERNMENT FUND
Performance figures for Class B and C shares of the Fund for the period May 31,
1994 to August 31, 1999 reflect the actual performance of these classes of
shares. Returns for Class B and C shares for the period September 1, 1987 to May
31, 1994 are derived from the historical performance of Class A shares, adjusted
to reflect the operating expenses applicable to Class B and C shares, which may
be higher or lower than those of Class A shares. The performance figures are
also adjusted to reflect the maximum sales charge of 3.50% for Class A shares
and the maximum current contingent deferred sales charge of 4% for Class B
shares and 1% for Class C shares.
The returns in the chart below assume reinvestment of distributions at net asset
value and represent both actual past performance figures and adjusted
performance figures of the Class A shares of the Fund as described above; they
do not guarantee future results. Investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost.
KEMPER SHORT-TERM U.S. GOVERNMENT FUND -- AS OF AUGUST 31, 1999*
<TABLE>
<CAPTION>
AVERAGE ANNUAL Class A Class B Class C
TOTAL RETURNS Shares Shares Shares
------------- ------ ------ ------
<S> <C> <C> <C>
Life of Fund(+) 5.74% -- --
Life of Fund(++) -- 3.51% 3.75%
Ten Years 5.59% 5.13% 5.20%
Five Years 3.84% 3.51% 3.70%
One Year 2.22% 1.57% 4.43%
</TABLE>
(+) Since September 1, 1987 for Class A Shares.
(++) Since May 31, 1994 for Class B and Class C Shares.
* Because Class B and C shares were not introduced until May 31, 1994,
respectively, the total return for Class B and C shares for the period prior to
their introduction is based upon the performance of Class A shares from the
commencement of investment operations, September 1, 1987 through May 31, 1994.
Actual performance of Class B and C shares is shown beginning May 31, 1994.
KEMPER STRATEGIC INCOME FUND
Performance figures for Class B and C shares of the Fund for the period May 31,
1994 to October 31, 1999 reflect the actual performance of these classes of
shares. Returns for Class B and C shares for the period June 23, 1977 to May 31,
1994 are derived from the historical performance of Class A shares, adjusted to
reflect the operating expenses applicable to Class B and C shares, which may be
higher or lower than those of Class A shares. The performance figures are also
adjusted to reflect the maximum sales charge of 4.50% for Class A shares and the
maximum current contingent deferred sales charge of 4% for Class B shares and 1%
for Class C shares.
<PAGE>
The returns in the chart below assume reinvestment of distributions at net asset
value and represent both actual past performance figures and performance figures
of the Class A shares of the Fund as described above; they do not guarantee
future results. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
KEMPER STRATEGIC INCOME FUND -- AS OF OCTOBER 31, 1999*
<TABLE>
<CAPTION>
AVERAGE ANNUAL Class A Class B Class C
TOTAL RETURNS Shares Shares Shares
------------- ------ ------ ------
<S> <C> <C> <C>
Life of Fund(+) 9.60% -- --
Life of Fund(++) -- 5.36% 5.68%
Ten Years 9.49% 8.90% 9.12%
Five Years 5.94% 5.75% 6.05%
One Year -2.12% -1.75% 1.78%
</TABLE>
(+) Since June 23, 1977 for Class A Shares.
(++) Since May 31, 1994 for Class B and Class C Shares.
* Because Class B and C shares were not introduced until May 31, 1994,
respectively, the total return for Class B and C shares for the period prior to
their introduction is based upon the performance of Class A shares from the
commencement of investment operations, June 23, 1977 through May 31, 1994.
Actual performance of Class B and C shares is shown beginning May 31, 1994.
KEMPER U.S. GOVERNMENT SECURITIES FUND
Performance figures for Class B and C shares of the Fund for the period May 31,
1994 to October 31, 1999 reflect the actual performance of these classes of
shares. Returns for Class B and C shares for the period October 1, 1979 to May
31, 1994 are derived from the historical performance of Class A shares, adjusted
to reflect the operating expenses applicable to Class B and C shares, which may
be higher or lower than those of Class A shares. The performance figures are
also adjusted to reflect the maximum sales charge of 4.50% for Class A shares
and the maximum current contingent deferred sales charge of 4% for Class B
shares and 1% for Class C shares.
The returns in the chart below assume reinvestment of distributions at net asset
value and represent both actual past performance figures and adjusted
performance figures of the Class A shares of the Fund as described above; they
do not guarantee future results. Investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost.
KEMPER U.S. GOVERNMENT SECURITIES FUND -- AS OF OCTOBER 31, 1999*
<TABLE>
<CAPTION>
AVERAGE ANNUAL Class A Class B Class C
TOTAL RETURNS Shares Shares Shares
------------- ------ ------ ------
<S> <C> <C> <C>
Life of Fund(+) 8.53% -- --
Life of Fund(++) -- 5.65% 5.89%
Ten Years 6.73% 6.20% 6.32%
Five Years 6.55% 6.38% 6.62%
One Year -3.15% 2.29% 0.72%
</TABLE>
(+) Since October 1, 1979 for Class A Shares (when ZKI assumed investment
advisory responsibilities for the Fund; prior to that date, the Fund was
managed by another investment adviser that was not affiliated with ZKI)
(++) Since May 31, 1994 for Class B and Class C Shares.
* Because Class B and C shares were not introduced until May 31, 1994,
respectively, the total return for Class B and C shares for the period prior to
their introduction is based upon the performance of Class A shares from the
commencement of investment operations, October 1, 1979 through May 31, 1994.
Actual performance of Class B and C shares is shown beginning May 31, 1994.
<PAGE>
KEMPER U.S. MORTGAGE FUND
Performance figures for Class A and C shares of the Fund for the period January
10, 1992 and May 31, 1994, respectively, to September 30, 1999 reflect the
actual performance of these classes of shares. Returns for Class A and C shares
for the period October 26, 1984 to January 10, 1992 and May 31, 1994,
respectively, are derived from the historical performance of Class B shares,
adjusted to reflect the operating expenses applicable to Class A and C shares,
which may be higher or lower than those of Class B shares. The performance
figures are also adjusted to reflect the maximum sales charge of 4.50% for Class
A shares and the maximum current contingent deferred sales charge of 4% for
Class B shares and 1% for Class C shares.
The returns in the chart below assume reinvestment of distributions at net asset
value and represent both actual past performance figures and performance figures
of the Class B shares of the Fund as described above; they do not guarantee
future results. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
KEMPER U.S. MORTGAGE FUND -- AS OF SEPTEMBER 30, 1999*
<TABLE>
<CAPTION>
AVERAGE ANNUAL Class A Class B Class C
TOTAL RETURNS Shares Shares Shares
------------- ------ ------ ------
<S> <C> <C> <C>
Life of Fund(+) 5.00% -- --
Life of Fund(++) -- 6.64% --
Life of Fund(+++) -- -- 5.81%
Ten Years 6.79% 6.34% 6.54%
Five Years 6.18% 6.05% 6.40%
One Year -3.98% -3.30% -0.22%
</TABLE>
(+) Since January 10, 1992 for Class A Shares.
(++) Since October 26, 1984 for Class B Shares.
(+++) Since May 31, 1994 for Class C Shares.
* Because Class A and C shares were not introduced until October 26, 1984 and
May 31, 1994, respectively, the total return for Class A and C shares for the
period prior to their introduction is based upon the performance of Class B
shares from the commencement of investment operations, October 26, 1984 through
May 31, 1994. Actual performance of Class A and C shares is shown beginning
January 10, 1992 and May 31, 1994, respectively.
September 29, 2000
