<PAGE> PAGE 1
000 A000000 01/31/96
000 C000000 0000310030
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 CASH EQUIVALENT FUND
001 B000000 811-2899
001 C000000 3127811121
002 A000000 120 SOUTH LASALLE STREET
002 B000000 CHICAGO
002 C000000 IL
002 D010000 60603
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 3
007 C010100 1
007 C020100 MONEY MARKET PORTFOLIO
007 C030100 N
007 C010200 2
007 C020200 GOVERNMENT SECURITIES PORTFOLIO
007 C030200 N
007 C010300 3
007 C020300 TAX EXEMPT PORTFOLIO
007 C030300 N
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A00AA01 ZURICH KEMPER INVESTMENTS, INC.
008 B00AA01 A
008 C00AA01 801-6634
008 D01AA01 CHICAGO
008 D02AA01 IL
008 D03AA01 60603
010 A00AA01 KEMPER DISTRIBUTORS, INC.
010 B00AA01 8-47765
010 C01AA01 CHICAGO
010 C02AA01 IL
010 C03AA01 60603
011 A00AA01 KEMPER DISTRIBUTORS INC.
011 B00AA01 8-47765
<PAGE> PAGE 2
011 C01AA01 CHICAGO
011 C02AA01 IL
011 C03AA01 60603
012 A00AA01 KEMPER SERVICE COMPANY
012 B00AA01 84-1713
012 C01AA01 KANSAS CITY
012 C02AA01 MO
012 C03AA01 64105
013 A00AA01 ERNST & YOUNG LLP
013 B01AA01 CHICAGO
013 B02AA01 IL
013 B03AA01 60606
014 A00AA01 KEMPER DISTRIBUTORS, INC.
014 B00AA01 8-47765
015 A00AA01 INVESTORS FIDUCIARY TRUST COMPANY
015 B00AA01 C
015 C01AA01 KANSAS CITY
015 C02AA01 MO
015 C03AA01 64105
015 E01AA01 X
015 A00AA02 STATE STREET BANK AND TRUST COMPANY
015 B00AA02 S
015 C01AA02 BOSTON
015 C02AA02 MA
015 C03AA02 02110
015 E01AA02 X
018 00AA00 Y
019 A00AA00 Y
019 B00AA00 53
019 C00AA00 KEMPERFNDS
020 C000001 0
020 C000002 0
020 C000003 0
020 C000004 0
020 C000005 0
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 0
022 A000001 BEAR, STEARNS & CO. INC.
022 B000001 13-3299429
022 C000001 4131484
022 D000001 4214672
022 A000002 LEHMAN BROTHERS
022 B000002 13-2518466
022 C000002 3171696
022 D000002 341166
022 A000003 GOLDMAN, SACHS & CO.
022 B000003 13-5108880
<PAGE> PAGE 3
022 C000003 3028403
022 D000003 178506
022 A000004 SALOMON BROTHERS INC.
022 B000004 13-3082694
022 C000004 2982785
022 D000004 92755
022 A000005 CS FIRST BOSTON, INC.
022 B000005 13-5659485
022 C000005 1822601
022 D000005 50263
022 A000006 THE NIKKO SECURITIES CO. INTERNATIONAL, INC.
022 B000006 94-1302123
022 C000006 1682191
022 D000006 0
022 A000007 MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
022 B000007 13-5674085
022 C000007 1360809
022 D000007 215318
022 A000008 NOMURA SECURITIES INTERNATIONAL, INC.
022 B000008 13-2642206
022 C000008 1225491
022 D000008 0
022 A000009 MORGAN STANLEY & CO. INC.
022 B000009 13-2655998
022 C000009 968894
022 D000009 40318
022 A000010 CHASE MANHATTAN BANK
022 B000010 UNKNOWN
022 C000010 916000
022 D000010 0
023 C000000 23899107
023 D000000 5458942
026 A000000 N
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
029 00AA00 N
030 A00AA00 0
030 B00AA00 0.00
030 C00AA00 0.00
031 A00AA00 0
031 B00AA00 0
032 00AA00 0
033 00AA00 0
034 00AA00 N
<PAGE> PAGE 4
035 00AA00 0
036 B00AA00 0
037 00AA00 N
038 00AA00 0
039 00AA00 N
040 00AA00 Y
041 00AA00 Y
045 00AA00 Y
046 00AA00 N
047 00AA00 Y
048 00AA00 0.000
048 A01AA00 500000
048 A02AA00 0.220
048 B01AA00 500000
048 B02AA00 0.200
048 C01AA00 1000000
048 C02AA00 0.175
048 D01AA00 1000000
048 D02AA00 0.160
048 E01AA00 0
048 E02AA00 0.000
048 F01AA00 0
048 F02AA00 0.000
048 G01AA00 0
048 G02AA00 0.000
048 H01AA00 0
048 H02AA00 0.000
048 I01AA00 0
048 I02AA00 0.000
048 J01AA00 0
048 J02AA00 0.000
048 K01AA00 3000000
048 K02AA00 0.150
049 00AA00 N
050 00AA00 N
051 00AA00 N
052 00AA00 N
053 A00AA00 N
054 A00AA00 Y
054 B00AA00 Y
054 C00AA00 N
054 D00AA00 N
054 E00AA00 N
054 F00AA00 N
054 G00AA00 N
054 H00AA00 Y
054 I00AA00 N
054 J00AA00 Y
054 K00AA00 N
054 L00AA00 N
054 M00AA00 Y
<PAGE> PAGE 5
054 N00AA00 N
054 O00AA00 N
055 A00AA00 Y
055 B00AA00 N
056 00AA00 Y
057 00AA00 N
058 A00AA00 N
059 00AA00 Y
060 A00AA00 Y
060 B00AA00 Y
061 00AA00 1000
066 A00AA00 N
067 00AA00 N
068 A00AA00 N
068 B00AA00 N
069 00AA00 N
077 A000000 Y
077 B000000 N
077 C000000 Y
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078 000000 N
024 000100 Y
025 A000101 BEAR STEARNS COMPANIES INC.
025 B000101 13-3299429
025 C000101 D
025 D000101 30000
025 A000102 CS FIRST BOSTON, INC.
025 B000102 13-5659485
025 C000102 D
025 D000102 35000
025 A000103 GOLDMAN, SACHS & CO.
025 B000103 13-5108880
025 C000103 D
025 D000103 35000
025 A000104 LEHMAN BROTHERS HOLDINGS INC.
025 B000104 13-3216325
<PAGE> PAGE 6
025 C000104 D
025 D000104 40000
025 A000105 MORGAN STANLEY GROUP INC.
025 B000105 13-2655998
025 C000105 D
025 D000105 24751
025 A000106 NOMURA HOLDING AMERICA INC.
025 B000106 13-3518229
025 C000106 D
025 D000106 34924
025 D000107 0
025 D000108 0
028 A010100 1046482
028 A020100 14621
028 A030100 0
028 A040100 1050723
028 B010100 1034709
028 B020100 15572
028 B030100 0
028 B040100 1015830
028 C010100 1019697
028 C020100 15579
028 C030100 0
028 C040100 1030498
028 D010100 1098112
028 D020100 15110
028 D030100 0
028 D040100 1016610
028 E010100 1064079
028 E020100 8
028 E030100 0
028 E040100 1118316
028 F010100 1086022
028 F020100 31374
028 F030100 0
028 F040100 2122608
028 G010100 6349101
028 G020100 92264
028 G030100 0
028 G040100 7354585
028 H000100 0
042 A000100 0
042 B000100 0
042 C000100 0
042 D000100 0
042 E000100 0
042 F000100 0
042 G000100 0
042 H000100 100
043 000100 6842
044 000100 7300
<PAGE> PAGE 7
062 A000100 Y
062 B000100 0.0
062 C000100 0.0
062 D000100 19.8
062 E000100 0.0
062 F000100 11.3
062 G000100 0.0
062 H000100 0.0
062 I000100 68.6
062 J000100 0.0
062 K000100 0.0
062 L000100 0.0
062 M000100 0.0
062 N000100 0.0
062 O000100 0.0
062 P000100 0.0
062 Q000100 0.0
062 R000100 0.0
063 A000100 35
063 B000100 0.0
064 A000100 Y
064 B000100 N
070 A010100 Y
070 A020100 Y
070 B010100 N
070 B020100 N
070 C010100 N
070 C020100 N
070 D010100 N
070 D020100 N
070 E010100 N
070 E020100 N
070 F010100 N
070 F020100 N
070 G010100 N
070 G020100 N
070 H010100 N
070 H020100 N
070 I010100 N
070 I020100 N
070 J010100 Y
070 J020100 Y
070 K010100 N
070 K020100 N
070 L010100 Y
070 L020100 Y
070 M010100 N
070 M020100 N
070 N010100 N
070 N020100 N
070 O010100 Y
<PAGE> PAGE 8
070 O020100 N
070 P010100 N
070 P020100 N
070 Q010100 N
070 Q020100 N
070 R010100 N
070 R020100 N
071 A000100 0
071 B000100 0
071 C000100 0
071 D000100 0
072 A000100 6
072 B000100 107158
072 C000100 0
072 D000100 0
072 E000100 0
072 F000100 3013
072 G000100 0
072 H000100 0
072 I000100 0
072 J000100 5711
072 K000100 0
072 L000100 233
072 M000100 20
072 N000100 72
072 O000100 0
072 P000100 0
072 Q000100 0
072 R000100 31
072 S000100 11
072 T000100 6842
072 U000100 0
072 V000100 0
072 W000100 54
072 X000100 15987
072 Y000100 0
072 Z000100 91171
072AA000100 0
072BB000100 0
072CC010100 0
072CC020100 0
072DD010100 91171
072DD020100 0
072EE000100 0
073 A010100 0.0253
073 A020100 0.0000
073 B000100 0.0000
073 C000100 0.0000
074 A000100 6438
074 B000100 530000
074 C000100 2142330
<PAGE> PAGE 9
074 D000100 0
074 E000100 0
074 F000100 0
074 G000100 0
074 H000100 0
074 I000100 0
074 J000100 0
074 K000100 0
074 L000100 10500
074 M000100 0
074 N000100 2689268
074 O000100 0
074 P000100 1473
074 Q000100 0
074 R010100 0
074 R020100 0
074 R030100 0
074 R040100 7721
074 S000100 0
074 T000100 2680074
074 U010100 2680074
074 U020100 0
074 V010100 1.00
074 V020100 0.00
074 W000100 1.0001
074 X000100 541602
074 Y000100 0
075 A000100 3601127
075 B000100 0
076 000100 0.00
024 000200 N
028 A010200 491824
028 A020200 7349
028 A030200 0
028 A040200 435416
028 B010200 478693
028 B020200 8014
028 B030200 0
028 B040200 462498
028 C010200 498610
028 C020200 8102
028 C030200 0
028 C040200 475534
028 D010200 520261
028 D020200 7953
028 D030200 0
028 D040200 485760
028 E010200 518271
028 E020200 1
028 E030200 0
028 E040200 566784
<PAGE> PAGE 10
028 F010200 572654
028 F020200 16490
028 F030200 0
028 F040200 916870
028 G010200 3080313
028 G020200 47909
028 G030200 0
028 G040200 3342862
028 H000200 0
042 A000200 0
042 B000200 0
042 C000200 0
042 D000200 0
042 E000200 0
042 F000200 0
042 G000200 0
042 H000200 100
043 000200 3575
044 000200 3796
062 A000200 Y
062 B000200 1.5
062 C000200 44.1
062 D000200 52.3
062 E000200 0.0
062 F000200 0.0
062 G000200 0.0
062 H000200 0.0
062 I000200 0.0
062 J000200 0.0
062 K000200 0.0
062 L000200 0.0
062 M000200 0.0
062 N000200 0.0
062 O000200 0.0
062 P000200 0.0
062 Q000200 0.0
062 R000200 0.0
063 A000200 39
063 B000200 0.0
064 A000200 Y
064 B000200 N
070 A010200 Y
070 A020200 Y
070 B010200 N
070 B020200 N
070 C010200 N
070 C020200 N
070 D010200 N
070 D020200 N
070 E010200 N
070 E020200 N
<PAGE> PAGE 11
070 F010200 N
070 F020200 N
070 G010200 N
070 G020200 N
070 H010200 N
070 H020200 N
070 I010200 N
070 I020200 N
070 J010200 Y
070 J020200 Y
070 K010200 N
070 K020200 N
070 L010200 N
070 L020200 N
070 M010200 N
070 M020200 N
070 N010200 N
070 N020200 N
070 O010200 Y
070 O020200 N
070 P010200 N
070 P020200 N
070 Q010200 N
070 Q020200 N
070 R010200 N
070 R020200 N
071 A000200 0
071 B000200 0
071 C000200 0
071 D000200 0
072 A000200 6
072 B000200 55477
072 C000200 0
072 D000200 0
072 E000200 0
072 F000200 1574
072 G000200 0
072 H000200 0
072 I000200 0
072 J000200 1917
072 K000200 0
072 L000200 125
072 M000200 10
072 N000200 105
072 O000200 0
072 P000200 0
072 Q000200 0
072 R000200 14
072 S000200 4
072 T000200 3575
072 U000200 0
<PAGE> PAGE 12
072 V000200 0
072 W000200 22
072 X000200 7346
072 Y000200 0
072 Z000200 48131
072AA000200 0
072BB000200 0
072CC010200 0
072CC020200 0
072DD010200 48131
072DD020200 0
072EE000200 0
073 A010200 0.0256
073 A020200 0.0000
073 B000200 0.0000
073 C000200 0.0000
074 A000200 23769
074 B000200 821800
074 C000200 715549
074 D000200 0
074 E000200 0
074 F000200 0
074 G000200 0
074 H000200 0
074 I000200 0
074 J000200 0
074 K000200 0
074 L000200 14218
074 M000200 0
074 N000200 1575336
074 O000200 0
074 P000200 825
074 Q000200 0
074 R010200 0
074 R020200 0
074 R030200 0
074 R040200 4053
074 S000200 0
074 T000200 1570458
074 U010200 1570458
074 U020200 0
074 V010200 1.00
074 V020200 0.00
074 W000200 1.0003
074 X000200 187124
074 Y000200 0
075 A000200 1881801
075 B000200 0
076 000200 0.00
024 000300 N
028 A010300 288207
<PAGE> PAGE 13
028 A020300 2963
028 A030300 0
028 A040300 291094
028 B010300 284214
028 B020300 3094
028 B030300 0
028 B040300 290897
028 C010300 324021
028 C020300 3111
028 C030300 0
028 C040300 316944
028 D010300 292287
028 D020300 2975
028 D030300 0
028 D040300 292310
028 E010300 356610
028 E020300 14
028 E030300 0
028 E040300 366832
028 F010300 451506
028 F020300 6277
028 F030300 0
028 F040300 632728
028 G010300 1996845
028 G020300 18434
028 G030300 0
028 G040300 2190805
028 H000300 0
042 A000300 0
042 B000300 0
042 C000300 0
042 D000300 0
042 E000300 0
042 F000300 0
042 G000300 0
042 H000300 100
043 000300 1851
044 000300 1888
062 A000300 Y
062 B000300 0.0
062 C000300 0.0
062 D000300 0.0
062 E000300 100.3
062 F000300 0.0
062 G000300 0.0
062 H000300 0.0
062 I000300 0.0
062 J000300 0.0
062 K000300 0.0
062 L000300 0.0
062 M000300 0.0
<PAGE> PAGE 14
062 N000300 0.0
062 O000300 0.0
062 P000300 0.0
062 Q000300 0.0
062 R000300 0.0
063 A000300 33
063 B000300 0.0
064 A000300 Y
064 B000300 N
070 A010300 Y
070 A020300 N
070 B010300 N
070 B020300 N
070 C010300 N
070 C020300 N
070 D010300 N
070 D020300 N
070 E010300 N
070 E020300 N
070 F010300 N
070 F020300 N
070 G010300 N
070 G020300 N
070 H010300 N
070 H020300 N
070 I010300 N
070 I020300 N
070 J010300 Y
070 J020300 Y
070 K010300 N
070 K020300 N
070 L010300 Y
070 L020300 N
070 M010300 N
070 M020300 N
070 N010300 N
070 N020300 N
070 O010300 Y
070 O020300 N
070 P010300 N
070 P020300 N
070 Q010300 N
070 Q020300 N
070 R010300 N
070 R020300 N
071 A000300 0
071 B000300 0
071 C000300 0
071 D000300 0
072 A000300 6
072 B000300 22270
<PAGE> PAGE 15
072 C000300 0
072 D000300 0
072 E000300 0
072 F000300 1157
072 G000300 0
072 H000300 0
072 I000300 0
072 J000300 783
072 K000300 0
072 L000300 73
072 M000300 7
072 N000300 57
072 O000300 0
072 P000300 0
072 Q000300 0
072 R000300 9
072 S000300 2
072 T000300 1851
072 U000300 0
072 V000300 0
072 W000300 17
072 X000300 3956
072 Y000300 0
072 Z000300 18314
072AA000300 0
072BB000300 0
072CC010300 0
072CC020300 0
072DD010300 18314
072DD020300 0
072EE000300 0
073 A010300 0.0163
073 A020300 0.0000
073 B000300 0.0000
073 C000300 0.0000
074 A000300 0
074 B000300 0
074 C000300 937435
074 D000300 0
074 E000300 0
074 F000300 0
074 G000300 0
074 H000300 0
074 I000300 0
074 J000300 600
074 K000300 0
074 L000300 5192
074 M000300 0
074 N000300 943227
074 O000300 0
074 P000300 487
<PAGE> PAGE 16
074 Q000300 0
074 R010300 0
074 R020300 0
074 R030300 0
074 R040300 8405
074 S000300 0
074 T000300 934335
074 U010300 934335
074 U020300 0
074 V010300 1.00
074 V020300 0.00
074 W000300 1.0002
074 X000300 55581
074 Y000300 0
075 A000300 1121741
075 B000300 0
076 000300 0.00
SIGNATURE JEROME L. DUFFY
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
1995 ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000310030
<NAME> CASH EQUIVALENT FUND
<SERIES>
<NUMBER> 1
<NAME> MONEY MARKET PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> JUL-31-1996
<INVESTMENTS-AT-COST> 2,672,330
<INVESTMENTS-AT-VALUE> 2,672,330
<RECEIVABLES> 10,500
<ASSETS-OTHER> 6,438
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,689,268
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,194
<TOTAL-LIABILITIES> 9,194
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,702,736
<SHARES-COMMON-STOCK> 2,680,074
<SHARES-COMMON-PRIOR> 3,500,273
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (22,662)
<NET-ASSETS> 2,680,074
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 107,158
<OTHER-INCOME> 0
<EXPENSES-NET> (15,987)
<NET-INVESTMENT-INCOME> 91,171
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (91,171)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,349,101
<NUMBER-OF-SHARES-REDEEMED> (7,354,585)
<SHARES-REINVESTED> 92,264
<NET-CHANGE-IN-ASSETS> (913,220)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (3,013)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (15,987)
<AVERAGE-NET-ASSETS> 3,601,127
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .009
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
1995 ANNUAL REPORT TO SHAREHOLDERS AND IS QULIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000310030
<NAME> CASH EQUIVALENT FUND
<SERIES>
<NUMBER> 2
<NAME> GOVERNMENT SECURITIES PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> JUL-31-1996
<INVESTMENTS-AT-COST> 1,537,349
<INVESTMENTS-AT-VALUE> 1,537,349
<RECEIVABLES> 14,218
<ASSETS-OTHER> 23,769
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,575,336
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,878
<TOTAL-LIABILITIES> 4,878
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,570,458
<SHARES-COMMON-STOCK> 1,570,458
<SHARES-COMMON-PRIOR> 1,642,529
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,570,458
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 55,477
<OTHER-INCOME> 0
<EXPENSES-NET> (7,346)
<NET-INVESTMENT-INCOME> 48,131
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (48,131)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,080,313
<NUMBER-OF-SHARES-REDEEMED> (3,342,862)
<SHARES-REINVESTED> 47,909
<NET-CHANGE-IN-ASSETS> (214,640)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (1,574)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (7,346)
<AVERAGE-NET-ASSETS> 1,881,801
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .008
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000310030
<NAME> CASH EQUIVALENT FUND
<SERIES>
<NUMBER> 3
<NAME> TAX EXEMPT PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> JUL-31-1996
<INVESTMENTS-AT-COST> 937,435
<INVESTMENTS-AT-VALUE> 937,435
<RECEIVABLES> 5,792
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 943,227
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,892
<TOTAL-LIABILITIES> 8,892
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 934,335
<SHARES-COMMON-STOCK> 934,335
<SHARES-COMMON-PRIOR> 1,050,287
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 934,335
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 22,270
<OTHER-INCOME> 0
<EXPENSES-NET> (3,956)
<NET-INVESTMENT-INCOME> 18,314
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (18,314)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,996,845
<NUMBER-OF-SHARES-REDEEMED> (2,190,805)
<SHARES-REINVESTED> 18,434
<NET-CHANGE-IN-ASSETS> (175,526)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (1,157)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (3,956)
<AVERAGE-NET-ASSETS> 1,121,741
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.02)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .007
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Exhibit 77C
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 1
A special meeting of Registrant's shareholders was held on
September 19, 1995. Votes regarding the items submitted to
shareholder vote are set forth below.
Item 1: Election of the Board of Trustees
David W. Belin
Vote Number
---- -----------
FOR 5,143,102,401
WITHHELD 184,329,131
Lewis A. Burnham
Vote Number
---- -----------
FOR 5,143,102,401
WITHHELD 184,329,131
Donald L. Dunaway
Vote Number
---- -----------
FOR 5,143,102,401
WITHHELD 184,329,131
Robert B. Hoffman
Vote Number
---- -----------
FOR 5,143,102,401
WITHHELD 184,329,131
Donald R. Jones
Vote Number
---- -----------
FOR 5,143,102,401
WITHHELD 184,329,131
David B. Mathis
Vote Number
---- -----------
FOR 5,143,102,401
WITHHELD 184,329,131
Exhibit 77C
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 2
Shirley D. Peterson
Vote Number
---- -----------
FOR 5,143,102,401
WITHHELD 184,329,131
William P. Sommers
Vote Number
---- -----------
FOR 5,143,102,401
WITHHELD 184,329,131
Stephen B. Timbers
Vote Number
---- -----------
FOR 5,143,102,401
WITHHELD 184,329,131
Item 2: Selection of Independent Auditors
Vote Number
---- -----------
FOR 5,240,445,508
AGAINST 33,448,870
ABSTAIN 52,959,091
Item 3: New Investment Management Agreement
Money Market Portfolio
Vote Number
---- -----------
FOR 2,960,906,188
AGAINST 37,290,328
ABSTAIN 31,201,500
Exhibit 77C
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 3
Government Securities Portfolio
Vote Number
---- -----------
FOR 1,458,474,240
AGAINST 11,483,958
ABSTAIN 26,464,399
Tax Exempt Portfolio
Vote Number
---- -----------
FOR 780,231,402
AGAINST 10,812,262
ABSTAIN 10,289,188
Item 4: New 12b-1 Distribution Plan
Money Market Portfolio
Vote Number
---- -----------
FOR 2,924,659,373
AGAINST 63,806,418
ABSTAIN 40,932,225
Government Securities Portfolio
Vote Number
---- -----------
FOR 1,431,331,947
AGAINST 22,510,846
ABSTAIN 31,891,575
Tax Exempt Portfolio
Vote Number
---- -----------
FOR 765,947,513
AGAINST 21,846,649
ABSTAIN 13,538,690
MRB|W:\FUNDS\NSAR.EXH\CEF196.77C|031896
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
INVESTMENT MANAGEMENT AGREEMENT
(TAX-EXEMPT PORTFOLIO)
AGREEMENT made this 4th day of January, 1996, by and between
CASH EQUIVALENT FUND, a Massachusetts business trust (the
"Fund"), and KEMPER FINANCIAL SERVICES, INC., a Delaware
corporation (the "Adviser").
WHEREAS, the Fund is an open-end, diversified management
investment company registered under the Investment Company Act of
1940, the shares of beneficial interest ("Shares") of which are
registered under the Securities Act of 1933;
WHEREAS, the Fund is authorized to issue Shares in separate
series with each such series representing the interests in a
separate portfolio of securities and other assets;
WHEREAS, the Fund currently offers or intends to offer
Shares in three portfolios, the Money Market Portfolio, the
Government Securities Portfolio and the Tax-Exempt Portfolio; and
WHEREAS, the Fund desires at this time to retain the Adviser
under this Agreement to render investment advisory and management
services to the Tax-Exempt Portfolio, and the Adviser is willing
to render such services.
NOW THEREFORE, in consideration of the mutual covenants
hereinafter contained, it is hereby agreed by and between the
parties hereto as follows:
1. The Fund hereby employs the Adviser to act as the investment
adviser for the Tax-Exempt Portfolio or other Portfolios
hereunder and to manage the investment and reinvestment of the
assets of the Fund in accordance with applicable investment
objective and policies and limitations and to administer its
affairs to the extent requested by and subject to the supervision
of the Board of Trustees of the Fund for the period and upon the
terms herein set forth. The investment of funds shall be subject
to all applicable restrictions of the Agreement and Declaration
of Trust and By-Laws of the Fund as may from time to time be in
force.
The Adviser accepts such employment and agrees during such
period to render such services, to furnish office facilities and
equipment and clerical, bookkeeping and administrative services
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 2
for the Fund, to permit any of its officers or employees to serve
without compensation as trustees or officers of the Fund if
elected to such positions and to assume the obligations herein
set forthfor the compensation herein provided. The Adviser shall
for all purposes herein provided be deemed to be an independent
contractor and, unless otherwise expressly provided or
authorized, shall have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund. It
is understood and agreed that the Adviser, by separate agreements
with the Fund, may also serve the Fund in other capacities.
2. In the event that the Fund establishes one or more
portfolios other than the Tax-Exempt Portfolio with respect to
which it desires to retain the Adviser to render investment
advisory and management services hereunder, it shall notify the
Adviser in writing. If the Adviser is willing to render such
services it shall notify the Fund in writing whereupon such
portfolio or portfolios shall become subject to this Agreement.
The Tax-Exempt Portfolio, together with any other Fund portfolios
which may be established later and served by the Adviser under
this Agreement shall be herein referred to collectively as the
"Portfolios" and individually referred to as a "Portfolio." The
Money Market Portfolio and the Government Securities Portfolio
are not subject to this Agreement and are not considered to be
"Portfolios" hereunder.
3. For the services and facilities described in Section 1, the
Fund will pay to the Adviser at the end of each calendar month,
an investment management fee computed at an annual rate of 0.22%
of the first $500 million of the combined average daily net
assets of the Portfolios, 0.20% of the next $500 million, 0.175%
of the next $1 billion, 0.16% of the next $1 billion and 0.15% of
combined average daily net assets over $3 billion. The fee as
computed above shall be allocated to each Portfolio based upon
the relative average daily net assets of each Portfolio managed
by the Adviser. For the month and year in which this Agreement
becomes effective or terminates, there shall be an appropriate
proration on the basis of the number of days that the Agreement
is in effect during the month and year, respectively.
4. The services of the Adviser to the Fund under this Agreement
are not to be deemed exclusive, and the Adviser shall be free to
render similar services or other services to others so long as
its services hereunder are not impaired thereby.
5. In addition to the fee of the Adviser, the Fund shall assume
and pay any expenses for services rendered by a custodian for the
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 3
safekeeping of the Fund's securities or other property, for
keeping its books of account, for any other charges of the
custodian, and for calculating the net asset value of the Fund as
provided in the Agreement and Declaration of Trust of the Fund.
The Adviser shall not be required to pay and the Fund shall
assume and pay the charges and expenses of its operations,
including compensation of the trustees (other than those
affiliated with the Adviser), charges and expenses of independent
auditors, of legal counsel, of any transfer or dividend
disbursing agent, any registrar of the Fund, costs of acquiring
and disposing of portfolio securities, interest, if any, on
obligations incurred by the Fund, cost of Share certificates and
of reports, membership dues in the Investment Company Institute
or any similar organization, reports and notices to shareholders,
other like miscellaneous expenses and all taxes and fees payable
to federal, state or other governmental agencies on account of
the registration of securities issued by the Fund, filing of
corporate documents or otherwise. The Fund shall not pay or
incur any obligation for any expenses for which the Fund intends
to seek reimbursement from the Adviser as herein provided without
first obtaining the written approval of the Adviser. The Adviser
shall arrange, if desired by the Fund, for officers or employees
of the Adviser to serve, without compensation from the Fund, as
trustees, officers or agents of the Fund if duly elected or
appointed to such positions and subject to their individual
consent and to any limitations imposed by law.
If expenses borne by the Portfolios in any fiscal year
(including the Adviser's fee, but excluding interest, taxes, fees
incurred in acquiring and disposing of portfolio securities and,
to the extent permitted, extraordinary expenses) exceed 1 1/2% of
average daily net assets up to $30,000,000 and 1% of average
daily net assets over $30,000,000 of the Portfolios, the Adviser
will reduce its fee or reimburse the Fund for any excess. The
expense limitation guarantee shall be allocated to each Portfolio
upon a fee reduction or reimbursement based upon the relative
average daily net assets of each Portfolio. If for any month the
expenses of the Fund properly chargeable to the income account
shall exceed 1/12 of the percentage of average net assets
allowable as expenses, the payment to the Adviser for that month
shall be reduced and, if necessary, the Adviser shall make a
refund payment to the Fund so that the total net expense will not
exceed such percentage. As of the end of the Fund's fiscal year,
however, the foregoing computations and payments shall be
readjusted so that the aggregate compensation payable to the
Adviser for the year is equal to the percentage set forth in
Section 3 hereof of the average net asset values as determined as
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 4
described herein throughout the fiscal year, diminished to the
extent necessary so that the total of the aforementioned expense
items shall not exceed the expense limitation. The aggregate of
repayments, if any, by the Adviser to the Fund for the year shall
be the amount necessary to limit the said net expense to said
percentage.
The net asset value of each Portfolio shall be calculated as
of the close of the New York Stock Exchange on each day the
Exchange is open for trading or as of such other time or times as
the trustees may determine in accordance with the provisions of
the Investment Company Act of 1940. On each day when net asset
value is not calculated, the net asset value of a Share of a
Portfolio shall be deemed to be the net asset value of such a
Share as of the close of business on the last day on which such
calculation was made for the purpose of the foregoing
computations.
6. Subject to applicable statutes and regulations, it is
understood that trustees, officers or agents of the Fund are or
may be interested in the Adviser as officers, trustees, agents,
shareholders or otherwise, and that the officers, directors,
shareholders and agents of the Adviser may be interested in the
Fund otherwise than as a director, officer or agent.
7. The Adviser 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 this Agreement relates, except loss
resulting from willful misfeasance, bad faith or gross negligence
on the part of the Adviser in the performance of its obligations
and duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
8. This Agreement shall become effective on the date hereof and
shall remain in full force until December 1, 1996, unless sooner
terminated as hereinafter provided. This Agreement shall
continue in force from year to year thereafter, but only as long
as such continuance is specifically approved at least annually
for each Portfolio in the manner required by the Investment
Company Act of 1940 and the rules and regulations thereunder;
provided, however, that if the continuation of this Agreement is
not approved for a Portfolio, the Adviser may continue to serve
in such capacity for such Portfolio in the manner and to the
extent permitted by the Investment Company Act of 1940 and the
rules and regulations thereunder.
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 5
This Agreement shall automatically terminate in the event of
its assignment and may be terminated at any time without the
payment of any penalty with respect to any Portfolio by the Fund
or by the Adviser on sixty (60) days written notice to the other
party. The Fund may effect termination with respect to any
Portfolio by action of the Board of Trustees or by vote of a
majority of the outstanding voting securities of such Portfolio.
This Agreement may be terminated at any time with respect to
any Portfolio without the payment of any penalty by the Board of
Trustees or by vote of a majority of the outstanding voting
securities of such Portfolio in the event that it shall have been
established by a court of competent jurisdiction that the Adviser
or any officer or director of the Adviser has taken any action
which results in a breach of the covenants of the Adviser set
forth herein.
The terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth
in the Investment Company Act of 1940 and the rules and
regulations thereunder.
Termination of this Agreement shall not affect the right of
the Adviser to receive payments on any unpaid balance of the
compensation described in Section 3 earned prior to such
termination.
9. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
10. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
11. All parties hereto are expressly put on notice of the Cash
Equivalent Fund Agreement and Declaration of Trust and all
amendments thereto, all of which are on file with the Secretary
of The Commonwealth of Massachusetts, and the limitation of
shareholder and trustee liability contained therein. This
Agreement has been executed by and on behalf of the Fund by its
representatives as such representatives and not individually, and
the obligations of the Fund hereunder are not binding upon any of
the Trustees, officers or shareholders of the Fund individually
but are binding upon only the assets and property of the Fund.
With respect to any claim by Adviser for recovery of that portion
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 6
of the investment management fee (or any other liability of the
Fund arising hereunder) allocated to a particular Portfolio,
whether in accordance with the express terms hereof or otherwise,
the Adviser shall have recourse solely against the assets of that
Portfolio to satisfy such claim and shall have no recourse
against the assets of any other portfolio of Fund (whether or not
a Portfolio hereunder) for such purpose.
12. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 10 hereof which
shall be construed in accordance with the laws of The
Commonwealth of Massachusetts) the laws of the State of Illinois.
13. This Agreement is the entire contract between the parties
relating to the subject matter hereof and supersedes all prior
agreements between the parties relating to the subject matter
hereof.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this
Agreement to be executed on the day and year first above written.
CASH EQUIVALENT FUND
By: /s/ John E. Peters
---------------------------
Title: Vice President
------------------------
ATTEST:
/s/ Philip J. Collora
------------------------------
Title: Secretary
------------------------
KEMPER FINANCIAL SERVICES, INC.
By: /s/ Patrick H. Dudasik
---------------------------
Title: Senior Vice President
------------------------
ATTEST:
/s/ David F. Dierenfeldt
------------------------------
Title: Assistant Secretary
------------------------
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 7
INVESTMENT MANAGEMENT AGREEMENT
(MONEY MARKET PORTFOLIO)
(GOVERNMENT SECURITIES PORTFOLIO)
AGREEMENT made this 4th day of January, 1996, by and between
CASH EQUIVALENT FUND, a Massachusetts business trust (the
"Fund"), and KEMPER FINANCIAL SERVICES, INC., a Delaware
corporation (the "Adviser").
WHEREAS, the Fund is an open-end, diversified management
investment company, registered under the Investment Company Act
of 1940, the shares of beneficial interest ("Shares") of which
are registered under the Securities Act of 1933;
WHEREAS, the Fund is authorized to issue Shares in separate
series with each such series representing the interests in a
separate portfolio of securities and other assets;
WHEREAS, the Fund currently offers or intends to offer
Shares in three portfolios, the Money Market Portfolio, the
Government Securities Portfolio and the Tax-Exempt Portfolio; and
WHEREAS, the Fund desires to retain the Adviser under this
Agreement to render investment advisory and management services
to the Money Market Portfolio and the Government Securities
Portfolio (the "Portfolios"), and the Adviser is willing to
render such services.
NOW THEREFORE, in consideration of the mutual covenants
hereinafter contained, it is hereby agreed by and between the
parties hereto as follows:
1. The Fund hereby employs the Adviser to act as the
investment adviser for the Portfolios and to manage the
investment and reinvestment of the assets of the Fund in
accordance with the investment objective and policies and
limitations for each of the Fund's Portfolios, and to administer
its affairs to the extent requested by and subject to the
supervision of the Board of Trustees of the Fund for the period
and upon the terms herein set forth. The investment of funds
shall be subject to all applicable restrictions of the Agreement
and Declaration of Trust and By-Laws of the Fund as may from time
to time be in force.
The Adviser accepts such employment and agrees during such
period to render such services, to furnish office facilities and
equipment and clerical, bookkeeping and administrative services
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 8
for the Fund, to permit any of its officers or employees to serve
without compensation as trustees or officers of the Fund if
elected to such positions and to assume the obligations herein
set forth for the compensation herein provided. The Adviser
shall for all purposes herein provided be deemed to be an
independent contractor and, unless otherwise expressly provided
or authorized, shall have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund.
It is understood and agreed that the Adviser, by separate
agreements with the Fund, may also serve the Fund in other
capacities.
2. For the services and facilities described in Section 1,
the Fund will pay to the Adviser at the end of each calendar
month, an investment management fee computed at an annual rate of
0.22% of the first $500 million of the combined average daily net
assets of all Portfolios the Adviser manages, 0.20% of the next
$500 million, 0.175% of the next $1 billion, 0.16% of the next $1
billion and 0.15% of the average daily net assets of such
Portfolios over $3 billion. The fee as computed above shall be
allocated to each Portfolio based upon the relative net assets of
each Portfolio and shall be based only upon the net assets of the
Fund allocated to Portfolios for which this Agreement is then in
effect. For the month and year in which this Agreement becomes
effective or terminates, there shall be an appropriate proration
on the basis of the number of days that the Agreement is in
effect during the month and year, respectively.
4. The services of the Adviser to the Fund under this
Agreement are not to be deemed exclusive, and the Adviser shall
be free to render similar services or other services to others so
long as its services hereunder are not impaired thereby.
5. In addition to the fee of the Adviser, the Fund shall
assume and pay any expenses for services rendered by a custodian
for the safekeeping of the Fund's securities or other property,
for keeping its books of account, for any other charges of the
custodian, and for calculating the net asset value of the Fund as
provided in the Prospectus of the Fund. The Adviser shall not be
required to pay and the Fund shall assume and pay the charges and
expenses of its operations, including compensation of the
trustees (other than those affiliated with the Adviser), charges
and expense of independent auditors, of legal counsel, of any
transfer or dividend disbursing agent, any registrar of the Fund,
costs of acquiring and disposing of portfolio securities,
interest, if any, on obligations incurred by the Fund, cost of
share certificates and of reports, membership dues in the
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 9
Investment Company Institute or any similar organization, reports
and notices to shareholders, other like miscellaneous expenses
and all taxes and fees payable to federal, state or other
governmental agencies on account of the registration of
securities issued by the Fund, filing of corporate documents or
otherwise. The Fund shall not pay or incur any obligation for
any expenses for which the Fund intends to seek reimbursement
from the Adviser as herein provided without first obtaining the
written approval of the Adviser. The Adviser shall arrange, if
desired by the Fund, for officers or employees of the Adviser to
serve, without compensation from the Fund, as trustees, officers
or agents of the Fund if duly elected or appointed to such
positions and subject to their individual consent and to any
limitations imposed by law.
If expenses borne by the Fund for those Portfolios which the
Adviser manages in any fiscal year (including the Adviser's fee,
but excluding interest, taxes, fees payable to the Adviser under
the administration, shareholder services and distribution
agreement with the Fund, fees incurred in acquiring and disposing
of portfolio securities, and, to the extent permitted,
extraordinary expenses) exceed 0.90% of the first $500 million of
the combined average daily net assets of such Portfolios, 0.80%
of the next $500 million, 0.75% of the next $1 billion and 0.70%
of average daily net assets of such Portfolios over $2 billion,
the Adviser will reduce its fee or reimburse the Fund for any
excess. The expense limitation guarantee shall be allocated to
each such Portfolio upon a fee reduction or reimbursement based
upon the relative average daily net assets of each such
Portfolio. If for any month the expenses of the Fund properly
chargeable to the income account shall exceed 1/12 of the
percentage of average net assets allowable as expenses, the
payment to the Adviser for that month shall be reduced and, if
necessary, the Adviser shall make a refund payment to the Fund so
that the total net expense will not exceed such percentage. As
of the end of the Fund's fiscal year, however, the foregoing
computations and payments shall be readjusted so that the
aggregate compensation payable to the Adviser for the year is
equal to the percentage set forth in Section 2 hereof of the
average net asset values as determined as described herein
throughout the fiscal year, diminished to the extent necessary so
that the total of the aforementioned expense items shall not
exceed the expense limitation. The aggregate of repayments, if
any, by the Adviser to the Fund for the year shall be the amount
necessary to limit the said net expense to said percentage.
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 10
The net asset value for each Portfolio shall be calculated
in accordance with the provisions of the Fund's prospectus or at
such other time or times as the trustees may determine in
accordance with the provisions of the Investment Company Act of
1940. On each day when net asset value is not calculated, the
net asset value of a share of a Portfolio shall be deemed to be
the net asset value of such a share as of the close of business
on the last day on which such calculation was made for the
purpose of the foregoing computations.
6. Subject to applicable statutes and regulations, it is
understood that trustees, officers or agents of the Fund are or
may be interested in the Adviser as officers, directors, agents,
shareholders or otherwise, and that the officers, directors,
shareholders and agents of the Adviser may be interested in the
Fund otherwise than as a trustee, officer or agent.
7. The Adviser 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 this Agreement relates,
except loss resulting from willful misfeasance, bad faith or
gross negligence on the part of the Adviser in the performance of
its obligations and duties or by reason of its reckless disregard
of its obligations and duties under this Agreement.
8. This Agreement shall become effective with respect to
each Portfolio on the date hereof and shall remain in full force
until December 1, 1996, unless sooner terminated as hereinafter
provided. This Agreement shall continue in force from year to
year thereafter with respect to each Portfolio, but only as long
as such continuance is specifically approved for each Portfolio
at least annually in the manner required by the Investment
Company Act of 1940 and the rules and regulations thereunder;
provided, however, that if the continuation of this Agreement is
not approved for a Portfolio, the Adviser may continue to serve
in such capacity for such Portfolio in the manner and to the
extent permitted by the Investment Company Act of 1940 and the
rules and regulations thereunder.
This Agreement shall automatically terminate in the event of
its assignment and may be terminated at any time without the
payment of any penalty by the Fund or by the Adviser on sixty
(60) days written notice to the other party. The Fund may effect
termination with respect to any Portfolio by action of the Board
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 11
of Trustees or by vote of a majority of the outstanding voting
securities of such Portfolio.
This Agreement may be terminated with respect to any
Portfolio at any time without the payment of any penalty by the
Board of Trustees or by vote of a majority of the outstanding
voting securities of such Portfolio in the event that it shall
have been established by a court of competent jurisdiction that
the Adviser or any officer or director of the Adviser has taken
any action which results in a breach of the covenants of the
Adviser set forth herein.
The terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth
in the Investment Company Act of 1940 and the rules and
regulations thereunder.
Termination of this Agreement shall not affect the right of
the Adviser to receive payments on any unpaid balance of the
compensation described in Section 2 earned prior to such
termination.
9. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
10. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
11. All parties hereto are expressly put on notice of the
Cash Equivalent Fund Agreement and Declaration of Trust dated
August 9, 1985 and all amendments thereto, all of which are on
file with the Secretary of The Commonwealth of Massachusetts, and
the limitation of shareholder and trustee liability contained
therein. This Agreement has been executed by and on behalf of
the Fund by its representatives as such representatives and not
individually, and the obligations of the Fund hereunder are not
binding upon any of the trustees, officers, or shareholders of
the Fund individually but are binding upon only the assets and
property of the Fund. With respect to any claim by Adviser for
recovery of that portion of the investment management fee (or any
other liability of the Fund arising hereunder) allocated to a
particular Portfolio, whether in accordance with the express
Exhibit 77Q1(e)
Cash Equivalent Fund
Form N-SAR for the period ended 01/31/96
File No. 811-2899
Page 12
terms hereof or otherwise, the Adviser shall have recourse solely
against the assets of that Portfolio to satisfy such claim and
shall have no recourse against the assets of any other Portfolio
for such purpose.
12. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 9 hereof which
shall be construed in accordance with the laws of The
Commonwealth of Massachusetts) the laws of the State of Illinois.
13. This Agreement is the entire contract between the
parties relating to the subject matter hereof and supersedes all
prior agreements between the parties relating to the subject
matter hereof.
IN WITNESS WHEREOF, the Fund and the Adviser have caused
this Agreement to be executed as of the day and year first above
written.
CASH EQUIVALENT FUND
By: /s/ John E. Peters
--------------------------
Title: Vice President
-----------------------
ATTEST: /s/ Philip J. Collora
-------------------------
Title: Secretary
--------------------------
KEMPER FINANCIAL SERVICES, INC.
By: /s/ Patrick H. Dudasik
---------------------------
Title: Senior Vice President
------------------------
ATTEST: /s/ David F. Dierenfeldt
--------------------------
Title: Assistant Secretary
---------------------------
MRB|W:\FUNDS\NSAR.EXH\CEF196.77Q|031896
