<PAGE> 1
Cash Equivalent Fund
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
- --------------------------------------------------------------------------------
We are pleased to provide you with the Cash Equivalent Fund semiannual report
for the six-month period ended January 31, 1996. Your Fund's management greatly
appreciates your decision to invest in Cash Equivalent Fund. During the past
six months, each of the Fund's Portfolios--Money Market, Government Securities
and Tax-Exempt, registered solid performance. Please take a moment to review
the Portfolio Results following this letter.
ECONOMIC REVIEW AND OUTLOOK
The momentum of the 1995 economic expansion has moderated but continues on into
1996, as evidenced by growth in personal income, consumer spending, construction
spending and hiring during the six-month period ended January 31, 1996.
Interest rates have experienced some volatility, and recently have declined
modestly. Cash Equivalent Fund took advantage of these developments by extending
maturities when the market appeared favorably priced, and by investing in high
quality, short-term money market instruments.
Looking ahead, we anticipate the economy will continue to grow at a moderate
pace. Inflation should not become a problem, and we anticipate an extended
period of interest rate stability, perhaps with a continuation of a slight
downward bias especially if some progress is made in reducing the U.S. budget
deficit. While investments in other markets may remain volatile, money market
funds such as Cash Equivalent Fund should offer the opportunity for attractive
yields and should continue to be an excellent place to invest your money.
Sincerely,
[SIG]
John W. Stuebe
Vice President and Portfolio Manager
February 22, 1996
John Stuebe is First Vice President of Zurich Kemper Investments, Inc. and Vice
President and Portfolio Manager of Cash Equivalent Fund. Mr. Stuebe holds a B.S.
degree in finance from the University of Illinois and a M.S. degree in economics
from DePaul University.
PORTFOLIO RESULTS
For the six months ended January 31, 1996, the Fund's three Portfolios had the
following net annualized yields:
The Money Market Portfolio had a net annualized yield of 5.02%.
The Government Securities Portfolio had a net annualized yield of 5.07%.
The Tax-Exempt Portfolio had a net annualized yield of 3.24% and a
tax-equivalent yield of 5.15%*.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government, and there can be no assurance that a Portfolio will be able to
maintain a stable net asset value of $1.00 per share.
*The tax-equivalent yield is based on a marginal federal income tax rate of
37.1%. Income from the Tax-Exempt Portfolio may be subject to state and local
taxes, and, for some investors, a portion of income may be subject to the
alternative minimum tax.
NOTE
Each Portfolio's net annualized yield for the six months ended January 31, 1996,
is the annualized sum of the daily dividend rates for the period. Yields are
historical and may not represent future yields, which will fluctuate.
The views expressed in this report reflect those of the portfolio manager only
through the end of the period of the report, as stated above. The manager's
views are subject to change at any time, based on market and other conditions.
<PAGE> 2
Cash Equivalent Fund 2
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
Investments at January 31, 1996
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORPORATE OBLIGATIONS Value
<S> <C>
BANKING--3.2%
---------------------------------------------------------
Postipankki U.S. Inc.
5.90%, 2/16/96 $ 49,881
---------------------------------------------------------
Svenska Handelsbanken, Inc.
5.77%, 2/23/96 34,878
---------------------------------------------------------
84,759
CAPITAL AND MORTGAGE LENDING--3.2%
---------------------------------------------------------
Countrywide Funding Corporation
5.47%, 3/14/96 24,842
---------------------------------------------------------
(b)GMAC Mortgage Corporation of Pennsylvania
5.78%, 2/29/96 39,821
---------------------------------------------------------
(a)PHH Corporation
5.67%, 2/1/96 20,000
---------------------------------------------------------
84,663
CAPTIVE BUSINESS FINANCE--7.3%
---------------------------------------------------------
American Honda Finance Corporation
5.73%, 4/2/96 24,762
---------------------------------------------------------
CSW Credit, Inc.
5.76%, 2/20/96 14,955
---------------------------------------------------------
Chrysler Financial Corporation
(a) 6.25%, 2/15/96 10,017
5.73%, 3/25/96 34,709
---------------------------------------------------------
(a)Emprise I Corporation
5.67%, 3/22/96 25,000
---------------------------------------------------------
(a)Finova Capital Corporation
5.91%, 3/15/96 35,000
---------------------------------------------------------
Orix America Inc.
6.03%-6.04%, 2/1/96-2/9/96 34,987
---------------------------------------------------------
USL Capital Corporation
5.78%, 2/1/96 15,000
---------------------------------------------------------
194,430
CONSUMER FINANCING--4.1%
---------------------------------------------------------
Associates Corporation of North America
5.78%, 2/7/96 34,967
---------------------------------------------------------
Household International Inc.
5.80%, 2/2/96 24,996
---------------------------------------------------------
Sears Roebuck Acceptance Corp.
5.76%, 2/9/96 49,937
---------------------------------------------------------
109,900
CONSUMER PRODUCTS AND SERVICES--2.2%
---------------------------------------------------------
American Home Products Corporation
5.78%, 2/9/96-2/12/96 34,944
---------------------------------------------------------
Coca-Cola Enterprises Inc.
5.71%, 3/25/96 24,793
---------------------------------------------------------
59,737
CORPORATE FINANCING--7.4%
---------------------------------------------------------
(a)AT&T Capital Corporation
5.58%-5.66%, 2/20/96-2/23/96 34,997
---------------------------------------------------------
(a)Beta Finance Corporation
5.10%, 2/6/96 20,000
---------------------------------------------------------
Corporate Asset Funding Co., Inc.
5.60%, 2/26/96 24,904
---------------------------------------------------------
Ranger Funding Corporation
5.80%-5.81%, 2/1/96-2/9/96 34,987
---------------------------------------------------------
(a)Sanwa Business Credit Corporation
5.88%, 2/16/96-3/5/96 50,000
---------------------------------------------------------
Stellar Capital Corporation
5.49%, 4/24/96 34,563
---------------------------------------------------------
199,451
ENERGY AND UTILITIES--4.6%
---------------------------------------------------------
AES Shady Point, Inc.
5.48%, 3/12/96 24,849
---------------------------------------------------------
Brazos River Authority, Texas
5.65%, 3/20/96 40,000
---------------------------------------------------------
DIC Americas, Inc.
6.03%, 2/2/96 19,997
---------------------------------------------------------
Gulf Coast Waste Authority, Texas
5.78%, 2/21/96 25,000
---------------------------------------------------------
New Hampshire Industrial Development
Authority
5.65%, 3/20/96 14,500
---------------------------------------------------------
124,346
FINANCIAL SERVICES--8.4%
---------------------------------------------------------
(a)Bear Stearns Companies Inc.
5.66%-5.68%, 2/6/96-2/20/96 30,000
---------------------------------------------------------
(a)CS First Boston, Inc.
5.69%, 2/14/96 35,000
---------------------------------------------------------
Dean Witter, Discover & Co.
5.76%, 2/6/96 24,980
---------------------------------------------------------
(a)Goldman, Sachs & Co.
5.59%, 2/26/96 35,000
---------------------------------------------------------
</TABLE>
<PAGE> 3
Cash Equivalent Fund 3
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
Investments at January 31, 1996
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
(a)(b)Lehman Brothers Holdings Inc.
5.73%, 2/21/96 $ 40,000
--------------------------------------------------------
Morgan Stanley Group Inc.
(a) 5.87%, 2/23/96 10,000
5.94%, 5/16/96 14,751
--------------------------------------------------------
Nomura Holding America Inc.
5.81%-5.85%, 2/14/96-2/16/96 34,924
--------------------------------------------------------
224,655
INFORMATION SERVICES--2.4%
--------------------------------------------------------
GTE Corporation
5.86%-5.91%, 2/15/96-2/27/96 49,839
--------------------------------------------------------
Nynex Corporation
5.77%, 2/6/96 14,988
--------------------------------------------------------
64,827
MUNICIPAL OBLIGATION--3.0%
--------------------------------------------------------
(a)(b)Orange County, California
(c) 6.92%, 6/30/96
$80,000,000 (cost and par) 77,600
(b)Letter of Credit from The Bank of New York 2,400
--------------------------------------------------------
80,000
RECEIVABLES FINANCING--20.0%
--------------------------------------------------------
Asset Securitization Cooperative Corporation
5.76%, 2/13/96 49,905
--------------------------------------------------------
Astro Capital Corp.
5.86%, 3/8/96 34,798
--------------------------------------------------------
CXC Incorporated
5.43%-5.77%, 2/22/96-3/11/96 34,833
--------------------------------------------------------
Dynamic Funding Corporation
5.84%, 2/29/96 14,933
--------------------------------------------------------
ESC Securitization, Inc.
5.61%, 3/1/96 24,888
--------------------------------------------------------
(a)Heller Financial, Inc.
5.68%, 4/4/96 25,000
--------------------------------------------------------
Heller International Corporation
6.12%, 2/7/96-3/4/96 24,910
--------------------------------------------------------
J.V. Receivables Corporation
6.02%-6.03%, 2/15/96-2/22/96 34,891
--------------------------------------------------------
Jet Funding Corporation
5.47%, 4/30/96-5/31/96 34,442
--------------------------------------------------------
Madison Funding Corp.
5.46%-5.88%, 2/7/96-3/20/96 29,877
--------------------------------------------------------
Monte Rosa Capital Corporation
5.43%, 3/6/96 19,898
--------------------------------------------------------
Preferred Receivables Funding Corporation
5.75%, 2/2/96 24,996
--------------------------------------------------------
Receivables Capital Corp.
5.71%, 3/21/96 24,878
--------------------------------------------------------
Sheffield Receivables Corporation
5.78%, 2/26/96 14,940
--------------------------------------------------------
Sierra Funding Corporation
5.50%, 4/30/96 9,866
--------------------------------------------------------
STRAIT Capital Corporation
5.91%, 2/29/96 9,955
--------------------------------------------------------
Strategic Asset Funding Corporation
5.48%-6.12%, 2/29/96-4/30/96 74,215
--------------------------------------------------------
Working Capital Management Co., L.P.
5.85%-6.09%, 2/21/96-3/7/96 49,776
--------------------------------------------------------
537,001
--------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS--65.8%
(average maturity: 28 days) 1,763,769
--------------------------------------------------------
BANK OBLIGATIONS
CERTIFICATES OF DEPOSIT--U.S. BANKS--11.3%
--------------------------------------------------------
(a)Boatmen's Credit Card Bank
5.88%, 3/4/96 20,000
--------------------------------------------------------
(a)FCC National Bank
5.85%, 2/1/96 28,996
--------------------------------------------------------
(a)First Bank (S.D.)
5.60%, 2/21/96 25,000
--------------------------------------------------------
(a)First National Bank of Boston
5.69%-5.97%, 2/2/96-3/28/96 50,000
--------------------------------------------------------
MBNA America Bank Corporation
5.88%-5.90%, 2/5/96-2/27/96 35,000
--------------------------------------------------------
Mellon Bank Corporation
5.75%-5.84%, 2/6/96-5/31/96 30,006
--------------------------------------------------------
(a)Mercantile Bankshares Corporation
6.00%, 2/20/96 15,013
--------------------------------------------------------
(a)PNC Bank Corporation
5.56%-5.60%, 2/5/96-2/20/96 49,971
--------------------------------------------------------
(a)Shawmut Bank Connecticut, N.A.
5.67%, 3/22/96 25,002
--------------------------------------------------------
Wachovia Corporation
5.84%, 5/1/96 24,651
--------------------------------------------------------
303,639
</TABLE>
<PAGE> 4
Cash Equivalent Fund 4
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
Investments at January 31, 1996
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
FOREIGN BANK NOTES
---------------------------------------------------------
ABN AMRO Bank N.V.
5.75%, 2/20/96 $ 24,925
---------------------------------------------------------
(a) Kansallis Osake Pankki
5.77%, 2/1/96 49,997
---------------------------------------------------------
74,922
---------------------------------------------------------
TOTAL BANK OBLIGATIONS--14.1%
(average maturity: 24 days) 378,561
---------------------------------------------------------
(d) REPURCHASE AGREEMENTS
---------------------------------------------------------
(Dated 11/95 and 1/96, collateralized by
Federal Home Loan Mortgage Corporation,
Federal National Mortgage Association and
U.S. Treasury Securities)
---------------------------------------------------------
Goldman Sachs & Co.
(held at The Bank of New York)
5.45%, 4/4/96-4/8/96 60,000
---------------------------------------------------------
Lehman Government Securities Inc.
(held at Chemical Bank)
5.45%, 4/18/96 40,000
---------------------------------------------------------
Morgan Stanley & Co. Incorporated
(held at The Bank of New York)
5.42%-5.45%, 4/15/96-4/26/96 355,000
---------------------------------------------------------
Salomon Brothers Inc.
(held at The Bank of New York)
5.75%-5.76%, 2/8/96-2/16/96 75,000
---------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS--19.8%
(average maturity: 68 days) 530,000
---------------------------------------------------------
TOTAL INVESTMENTS--99.7%
(average maturity: 35 days) 2,672,330
---------------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--.3% 7,744
---------------------------------------------------------
NET ASSETS--100% $2,680,074
---------------------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
<PAGE> 5
Cash Equivalent Fund 5
- --------------------------------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO
Investments at January 31, 1996
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
U.S. TREASURY NOTES--1.5%
5.41%-5.75%, 5/15/96-7/31/96
(average maturity: 138 days) $ 23,087
---------------------------------------------------------
SHORT-TERM NOTES
(Issued or guaranteed by U.S. Government
agencies or instrumentalities)
---------------------------------------------------------
(a)Agency for International Development
Government of Israel
5.14%, 2/7/96 6,345
---------------------------------------------------------
(a)Export-Import Bank of the United States
Cathay Pacific Airways Limited
5.41%, 2/13/96 23,003
KA Leasing, Ltd.
5.63%, 2/16/96 17,287
Kuwait Investment Authority
5.41%, 2/15/96 40,580
VARIG Brazilian Airlines
5.63%, 4/16/96 25,905
---------------------------------------------------------
Federal Farm Credit Banks
5.81%, 8/1/96 32,188
---------------------------------------------------------
Federal Home Loan Bank
(a) 5.89%, 2/2/96 25,607
5.65%-6.01%, 3/21/96-6/3/96 86,509
---------------------------------------------------------
Federal Home Loan Bank
Downey Savings & Loan
5.66%-5.73%, 3/1/96-5/28/96 31,773
---------------------------------------------------------
Federal Home Loan Mortgage Corporation
5.55%-5.56%, 3/14/96-3/18/96 15,396
---------------------------------------------------------
Federal National Mortgage Association
(a) 5.11%-6.10%, 2/1/96-2/6/96 86,895
5.54%-5.77%, 2/28/96-6/21/96 72,824
---------------------------------------------------------
(a)Overseas Private Investment Corporation
International Paper Company
5.58%, 4/15/96 14,500
---------------------------------------------------------
(a)Student Loan Marketing Association
5.35%-6.13%, 2/6/96-6/30/96 213,650
---------------------------------------------------------
TOTAL SHORT-TERM NOTES--44.1%
(average maturity: 50 days) 692,462
---------------------------------------------------------
(d)REPURCHASE AGREEMENTS
---------------------------------------------------------
(Dated 11/95-1/96, collateralized by Federal
Home Loan Mortgage Corporation, Federal
National Mortgage Association and U.S.
Treasury Securities)
---------------------------------------------------------
Bear, Stearns & Co. Inc.
5.60%, 2/7/96 80,000
---------------------------------------------------------
Chase Securities, Inc.
(held at Chemical Bank)
5.52%, 3/5/96 15,000
---------------------------------------------------------
CS First Boston Inc.
(held at Chemical Bank)
5.60%-5.75%, 2/1/96-2/2/96 30,000
---------------------------------------------------------
Goldman, Sachs & Co.
(held at The Bank of New York)
5.45%-5.72%, 2/6/96-4/8/96 120,000
---------------------------------------------------------
Lehman Government Securities Inc.
(held at Chemical Bank)
5.60%, 2/23/96 50,000
---------------------------------------------------------
Morgan Stanley & Co. Incorporated
(held at The Bank of New York)
5.33%-5.73%, 2/2/96-4/30/96 220,000
---------------------------------------------------------
Nikko Securities Co. International, Inc.
(held at The Bank of New York)
5.53%, 2/1/96 11,000
---------------------------------------------------------
Nomura Securities International, Inc.
(held at The Bank of New York)
5.78%, 2/5/96 75,000
---------------------------------------------------------
Salomon Brothers Inc.
(held at The Bank of New York)
5.46%-5.76%, 2/5/96-4/15/96 220,800
---------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS--52.3%
(average maturity: 27 days) 821,800
---------------------------------------------------------
TOTAL INVESTMENTS--97.9%
(average maturity: 39 days) 1,537,349
---------------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--2.1% 33,109
---------------------------------------------------------
NET ASSETS--100% $1,570,458
---------------------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
<PAGE> 6
Cash Equivalent Fund 6
-----------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
Investments at January 31, 1996
(Value in thousands)
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
(a)VARIABLE RATE DEMAND SECURITIES
ALABAMA
---------------------------------------------------------
Birmingham
Special Care Facilities Financing Authority
3.75% $ 3,960
ALASKA
---------------------------------------------------------
Industrial Development and Export Authority
3.90% 2,300
ARIZONA
---------------------------------------------------------
Health Facilities Authority
3.25% 12,000
CALIFORNIA
---------------------------------------------------------
Los Angeles
Harbor Improvement Corporation
3.40% 12,500
DELAWARE
---------------------------------------------------------
New Castle County
General Motors Corporation
3.35% 3,775
DISTRICT OF COLUMBIA
---------------------------------------------------------
General Obligation
3.85% 5,000
---------------------------------------------------------
National Children's Center, Inc.
3.30% 6,100
FLORIDA
---------------------------------------------------------
Alachua County
Hospital Revenue
3.80% 1,900
GEORGIA
---------------------------------------------------------
DeKalb County
Pollution Control Revenue
3.35% 5,000
---------------------------------------------------------
Fulton County
Development Authority
3.35% 7,515
---------------------------------------------------------
Wayne County
Solid Waste Management Authority
4.05% 4,400
ILLINOIS
---------------------------------------------------------
Alsip
Industrial Development Revenue
3.30% 3,750
---------------------------------------------------------
Chicago
O'Hare International Airport
Special Facility Revenue
3.75% 7,800
---------------------------------------------------------
Development Finance Authority
3.59% 16,400
---------------------------------------------------------
Educational Facilities Authority
3.45% 3,000
---------------------------------------------------------
Havana
Industrial Development Revenue
3.75% 3,000
---------------------------------------------------------
Health Facilities Authority
3.25% 10,000
---------------------------------------------------------
Rockford
Industrial Project Revenue
3.49% 6,300
INDIANA
---------------------------------------------------------
Fort Wayne
Hospital Authority
4.20% 9,815
---------------------------------------------------------
Health Facility Financing Authority
3.45% 9,190
---------------------------------------------------------
Ossian
Economic Development
3.35% 5,000
IOWA
---------------------------------------------------------
Higher Education Loan Authority
3.65% 9,700
KANSAS
---------------------------------------------------------
Kansas City
Pollution Control Revenue
3.35% 20,835
KENTUCKY
---------------------------------------------------------
Boone County
Industrial Development Revenue
3.80% 4,700
Pollution Control Revenue
3.60% 8,000
---------------------------------------------------------
</TABLE>
<PAGE> 7
Cash Equivalent Fund 7
- --------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
Investments at January 31, 1996
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
Bowling Green
Industrial Building Revenue
3.75% $ 2,400
LOUISIANA
- ---------------------------------------------------------
Iberville
Pollution Control Revenue
3.35% 2,300
MARYLAND
- ---------------------------------------------------------
Baltimore County
Multi-Family Housing Revenue
3.55% 10,994
- ---------------------------------------------------------
Health and Higher Education Facilities Authority
3.10% 9,100
MINNESOTA
- ---------------------------------------------------------
New Ulm
Hospital Revenue
3.25% 5,200
- ---------------------------------------------------------
Owatonna
Hospital Revenue
3.25% 6,710
NEVADA
- ---------------------------------------------------------
Department of Business and Industry
3.50% 5,000
NEW YORK
- ---------------------------------------------------------
New York City General Obligation
3.35% 16,800
NORTH CAROLINA
- ---------------------------------------------------------
Lenoir County
Pollution Control Financing Authority
3.75% 6,000
OKLAHOMA
- ---------------------------------------------------------
Industrial Authority
3.80% 3,000
PENNSYLVANIA
- ---------------------------------------------------------
Delaware County
Redevelopment Authority
4.20% 13,000
- ---------------------------------------------------------
Delaware Valley
Regional Finance Authority
3.20% 23,300
- ---------------------------------------------------------
Lehigh County
Industrial Development Authority
3.60% 10,300
- ---------------------------------------------------------
Philadelphia
Redevelopment Authority
3.15% 6,100
SOUTH CAROLINA
- ---------------------------------------------------------
Richland County
Hospital Revenue
3.60% 5,300
TENNESSEE
- ---------------------------------------------------------
Clarksville
Public Building Authority
3.30% 7,400
- ---------------------------------------------------------
Nashville and Davidson County
Multi-Family Housing Revenue
3.85% 5,000
- ---------------------------------------------------------
Smyrna Housing Association
Multi-Family Housing Revenue
3.85% 3,000
TEXAS
- ---------------------------------------------------------
Calhoun County
Industrial Development Authority
3.70% 21,500
UTAH
- ---------------------------------------------------------
Ogden City
Industrial Development Revenue
4.20% 3,750
VERMONT
- ---------------------------------------------------------
Economic Development Authority
3.75% 5,000
VIRGINIA
- ---------------------------------------------------------
Louisa County
Industrial Development Authority
3.30% 22,200
WASHINGTON
- ---------------------------------------------------------
Port Angeles
Industrial Development Corporation
3.75% 7,400
WISCONSIN
- ---------------------------------------------------------
Eau Claire
Solid Waste Disposal Revenue
3.45% 9,000
- ---------------------------------------------------------
TOTAL VARIABLE RATE
DEMAND SECURITIES--41.9%
(average maturity: 6 days) 391,694
- ---------------------------------------------------------
</TABLE>
<PAGE> 8
Cash Equivalent Fund 8
- --------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
Investments at January 31, 1996
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OTHER SECURITIES Value
<S> <C>
ALASKA
- ---------------------------------------------------------
Valdez
Marine Terminal Revenue
3.35%-3.85%, 2/7/96-5/13/96 $ 17,700
ARIZONA
- ---------------------------------------------------------
Salt River Project Agricultural
Improvement and Power District
3.25%-3.80%, 2/7/96-5/13/96 37,700
CALIFORNIA
- ---------------------------------------------------------
Revenue Anticipation Warrants
3.72%, 4/25/96 5,213
COLORADO
- ---------------------------------------------------------
Denver City and County
Airport System Revenue
3.75%-3.95%, 4/10/96-5/13/96 39,505
- ---------------------------------------------------------
Platte River Power Authority
3.80%, 2/20/96 8,100
DISTRICT OF COLUMBIA
- ---------------------------------------------------------
Student Loan Revenue
4.10%, 7/1/96 8,325
FLORIDA
- ---------------------------------------------------------
Orlando
Waste Water System Revenue
3.80%, 2/7/96 4,065
- ---------------------------------------------------------
Sarasota County
Public Hospital District
3.70%, 5/14/96 4,650
GEORGIA
- ---------------------------------------------------------
Burke County
Pollution Control Revenue
3.15%, 3/6/96 1,750
- ---------------------------------------------------------
Municipal Electric Authority
3.15%-3.25%, 2/6/96-3/6/96 36,500
- ---------------------------------------------------------
Municipal Gas Authority
3.80%, 2/20/96 7,115
ILLINOIS
- ---------------------------------------------------------
Decatur
Water Revenue
3.50%, 2/14/96 10,700
- ---------------------------------------------------------
Development Finance Authority
3.80%, 2/7/96 7,300
- ---------------------------------------------------------
INDIANA
- ---------------------------------------------------------
Bond Bank
Advance Funding Program Notes
3.50%, 1/9/97 $ 11,075
- ---------------------------------------------------------
Sullivan
Pollution Control Revenue
3.72%, 4/9/96 12,090
KANSAS
- ---------------------------------------------------------
Burlington
Pollution Control and Improvement Revenue
3.80%, 2/7/96-2/12/96 19,500
KENTUCKY
- ---------------------------------------------------------
Danville
Multi-City Lease Revenue
3.95%, 2/13/96 10,715
- ---------------------------------------------------------
Pendleton County
Multi-County Lease Revenue
3.85%, 2/14/96 6,000
- ---------------------------------------------------------
MARYLAND
- ---------------------------------------------------------
Anne-Arundel County
Economic Revenue
3.85%, 4/9/96 2,000
Port Facilities Revenue
3.45%, 2/8/96 6,000
MICHIGAN
- ---------------------------------------------------------
Strategic Fund
3.35%, 3/6/96 10,000
MISSISSIPPI
- ---------------------------------------------------------
Claiborne County
Pollution Control Revenue
3.80%, 2/12/96 5,775
NEBRASKA
- ---------------------------------------------------------
Public Power District
3.80%, 2/12/96 10,000
NEW HAMPSHIRE
- ---------------------------------------------------------
Business Finance Authority
3.85%-3.90%, 3/27/96-4/9/96 16,500
NEW YORK
- ---------------------------------------------------------
Nassau County
Revenue Anticipation Notes
3.75%-3.90%, 3/15/96-4/15/96 14,514
- ---------------------------------------------------------
New York City
Municipal Water Finance Authority
3.55%, 2/23/96 6,000
Revenue Anticipation Notes
3.45%-3.93%, 4/11/96-6/28/96 25,059
- ---------------------------------------------------------
</TABLE>
<PAGE> 9
Cash Equivalent Fund 9
- --------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
Investments at January 31, 1996
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
NORTH CAROLINA
- ---------------------------------------------------------
Eastern Municipal Power Agency
4.05%, 2/12/96 $ 17,132
- ---------------------------------------------------------
Municipal Power Agency
3.55%-3.70%, 4/9/96-4/10/96 16,000
OHIO
- ---------------------------------------------------------
Montgomery County
Hospital Facilities Revenue
3.95%-4.10%, 2/26/96-3/26/96 7,750
PENNSYLVANIA
- ---------------------------------------------------------
Carbon County
Development Authority
3.80%, 3/27/96 2,200
- ---------------------------------------------------------
Philadelphia
Gas Works Revenue Notes
3.85%, 2/8/96 9,000
School District
Tax and Revenue Anticipation Notes
3.95%, 6/28/96 9,520
TEXAS
- ---------------------------------------------------------
A & M University System
3.15%, 2/13/96-2/20/96 15,600
- ---------------------------------------------------------
Austin
Combined Utility Systems
3.70%, 3/27/96 2,050
- ---------------------------------------------------------
Brazoria County
Brazos River Harbor Navigation District
3.40%-4.00%, 2/13/96-4/10/96 11,000
- ---------------------------------------------------------
Harris County
Health Facilities Development Corporation
3.15%, 2/20/96 5,000
- ---------------------------------------------------------
Houston
Water and Sewer System
3.85%, 2/13/96 6,000
- ---------------------------------------------------------
Public Finance Authority
3.75%, 2/8/96 5,000
- ---------------------------------------------------------
San Antonio
Electric and Gas Systems
3.80%, 2/21/96 16,000
- ---------------------------------------------------------
Tax and Revenue Anticipation Notes
3.94%, 8/30/96 8,538
- ---------------------------------------------------------
UTAH
- ---------------------------------------------------------
Intermountain Power Agency
3.70%-3.90%, 2/9/96-4/9/96 18,400
- ---------------------------------------------------------
Salt Lake City
Pooled Hospital Financing
3.80%, 2/12/96 8,000
VIRGINIA
- ---------------------------------------------------------
Chesterfield
Industrial Development Authority
3.30%-3.80%, 3/6/96-4/9/96 19,350
- ---------------------------------------------------------
Norfolk
Industrial Development Authority
3.35%-3.70%, 3/27/96-5/13/96 8,000
- ---------------------------------------------------------
York County
Industrial Development Authority
3.25%-3.80%, 3/6/96-3/20/96 11,100
WEST VIRGINIA
- ---------------------------------------------------------
Public Energy Authority
3.30%, 3/6/96 6,250
- ---------------------------------------------------------
TOTAL OTHER
SECURITIES--58.4%
(average maturity: 53 days) 545,741
- ---------------------------------------------------------
TOTAL INVESTMENTS--100.3%
(average maturity: 33 days) 937,435
- ---------------------------------------------------------
LIABILITIES, LESS
OTHER ASSETS--(.3)% (3,100)
- ---------------------------------------------------------
NET ASSETS--100% $934,335
- ---------------------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
<PAGE> 10
Cash Equivalent Fund 10
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS
Interest rates represent annualized yield to date of maturity, except for
variable rate securities described in Note (a). For each security, except as
described in Note (c), cost (for financial reporting and federal income tax
purposes) and carrying value are the same. Likewise, carrying value approximates
principal amount.
(a) Variable rate securities. The rates shown are the current rates at January
31, 1996. The dates shown represent the demand date or next interest rate change
date. Securities in the Tax-Exempt Portfolio shown without a date are payable
within five business days and are backed by credit support agreements from banks
or insurance institutions.
(b) Illiquid securities. At January 31, 1996, the aggregate value of illiquid
securities was $159,821,000 in the Money Market Portfolio, which represented
6.0% of net assets.
(c) See Note (3) of the Notes to Financial Statements.
(d) Repurchase agreements are fully collateralized by U.S. Government
securities. All collateral is held at the Fund's custodian bank, Investors
Fiduciary Trust Company, or at subcustodian banks, as indicated. The collateral
is monitored daily by the Fund so that its market value exceeds the carrying
value of the repurchase agreement.
See accompanying Notes to Financial Statements.
<PAGE> 11
Cash Equivalent Fund 11
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1996
(in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY GOVERNMENT
MARKET SECURITIES TAX-EXEMPT
PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at amortized cost:
Short-term securities $2,142,330 715,549 937,435
- --------------------------------------------------------------------------------------------------------------------------
Repurchase agreements 530,000 821,800 --
- --------------------------------------------------------------------------------------------------------------------------
Cash 6,438 23,769 --
- --------------------------------------------------------------------------------------------------------------------------
Receivable for:
Interest 10,500 14,218 5,192
- --------------------------------------------------------------------------------------------------------------------------
Securities sold -- -- 600
- --------------------------------------------------------------------------------------------------------------------------
Total assets 2,689,268 1,575,336 943,227
- --------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------
Cash overdraft -- -- 6,890
- --------------------------------------------------------------------------------------------------------------------------
Payable for:
Dividends 5,835 3,381 1,215
- --------------------------------------------------------------------------------------------------------------------------
Management fee 453 254 188
- --------------------------------------------------------------------------------------------------------------------------
Distribution fee 1,020 571 299
- --------------------------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 1,058 369 72
- --------------------------------------------------------------------------------------------------------------------------
Other 828 303 228
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities 9,194 4,878 8,892
- --------------------------------------------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $2,680,074 1,570,458 934,335
- --------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------
Paid-in capital $2,702,736 1,570,458 934,335
- --------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on investments (22,662) -- --
- --------------------------------------------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $2,680,074 1,570,458 934,335
- --------------------------------------------------------------------------------------------------------------------------
THE PRICING OF SHARES
- --------------------------------------------------------------------------------------------------------------------------
Shares outstanding, no par value 2,680,074 1,570,458 934,335
- --------------------------------------------------------------------------------------------------------------------------
Net asset value and redemption price per share $1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 12
Cash Equivalent Fund 12
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six months ended January 31, 1996
(in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY GOVERNMENT
MARKET SECURITIES TAX-EXEMPT
PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------------------
<S> <C> <C> <C>
Interest income $ 107,158 55,477 22,270
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fee 3,013 1,574 1,157
- ------------------------------------------------------------------------------------------------------------------------------
Distribution fee 6,842 3,575 1,851
- ------------------------------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 5,711 1,917 783
- ------------------------------------------------------------------------------------------------------------------------------
Reports to shareholders 233 125 73
- ------------------------------------------------------------------------------------------------------------------------------
Registration costs 72 105 57
- ------------------------------------------------------------------------------------------------------------------------------
Professional fees 42 18 11
- ------------------------------------------------------------------------------------------------------------------------------
Trustees' fees and other 74 32 24
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses 15,987 7,346 3,956
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 91,171 48,131 18,314
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
Six months ended January 31, 1996 and
year ended July 31, 1995
(in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET GOVERNMENT SECURITIES TAX-EXEMPT
PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------------------------------------------------------------
1996 1995 1996 1995 1996 1995
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS, DIVIDENDS AND CAPITAL SHARE
ACTIVITY:
Net investment income $ 91,171 167,290 48,131 78,031 18,314 34,140
- ------------------------------------------------------------------------------------------------------------------------------
Change in unrealized depreciation -- (22,662) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Capital contribution from investment manager -- 22,662 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment
income (91,171) (167,290) (48,131) (78,031) (18,314) (34,140)
- ------------------------------------------------------------------------------------------------------------------------------
Capital share transactions (dollar amounts and
number of shares are the same):
Shares sold 6,349,101 11,972,864 3,080,313 5,708,371 1,996,845 3,660,114
- ------------------------------------------------------------------------------------------------------------------------------
Shares issued in reinvestment of dividends 92,264 163,874 47,909 76,210 18,434 33,430
- ------------------------------------------------------------------------------------------------------------------------------
6,441,365 12,136,738 3,128,222 5,784,581 2,015,279 3,693,544
- ------------------------------------------------------------------------------------------------------------------------------
Less shares redeemed 7,354,585 11,930,689 3,342,862 5,537,494 2,190,805 3,720,584
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from capital share
transactions and total increase (decrease) in
net assets (913,220) 206,049 (214,640) 247,087 (175,526) (27,040)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 3,593,294 3,387,245 1,785,098 1,538,011 1,109,861 1,136,901
- ------------------------------------------------------------------------------------------------------------------------------
End of period $2,680,074 3,593,294 1,570,458 1,785,098 934,335 1,109,861
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 13
Cash Equivalent Fund 13
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE FUND
Cash Equivalent Fund is an open-end management investment company organized as a
business trust under the laws of Massachusetts currently offering three series
of shares (Portfolios). The Money Market Portfolio invests primarily in
short-term high quality obligations of major banks and corporations. The
Government Securities Portfolio invests exclusively in obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
repurchase agreements thereon. The Tax-Exempt Portfolio invests in short-term
high quality municipal securities.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION
Investments are stated at amortized cost, which approximates market value. In
the event that a deviation of 1/2 of 1% or more exists between a Portfolio's
$1.00 per share net asset value, calculated at amortized cost, and the net asset
value calculated by reference to market-based values, or if there is any other
deviation that the Board of Trustees believes would result in a material
dilution to shareholders or purchasers, the Board of Trustees will promptly
consider what action should be initiated.
INVESTMENT TRANSACTIONS AND INTEREST INCOME
Investment transactions are accounted for on the trade date (date the order to
buy or sell is executed). Interest income is recorded on the accrual basis and
includes amortization of premium and discount on investments.
EXPENSES
Expenses arising in connection with a Portfolio are allocated to that Portfolio.
Other Fund expenses are allocated among the Portfolios in proportion to their
relative net assets.
FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS
Fund shares are sold and redeemed on a continuous basis at net asset value. On
each day that the New York Stock Exchange is open for trading, each Portfolio
determines its net asset value per share (NAV) by dividing the total value of
the Portfolio's investments and other assets, less liabilities, by the number of
Portfolio shares outstanding. The NAV is determined at 11:00 a.m., 1:00 p.m. and
3:00 p.m. Chicago time for the Money Market and Government Securities Portfolios
and at 11:00 a.m. and 3:00 p.m. Chicago time for the Tax-Exempt Portfolio. Each
Portfolio declares a daily dividend, equal to its net investment income for that
day, payable monthly. Net investment income consists of all interest income plus
(minus) all realized gains (losses) on portfolio securities, minus all expenses
of the Portfolio.
FEDERAL INCOME TAXES
Each Portfolio has complied with the special provisions of the Internal Revenue
Code available to investment companies during the six months ended January 31,
1996.
3. TRANSACTIONS WITH AFFILIATES
MANAGEMENT AGREEMENT
The Fund has a management agreement with Zurich Kemper Investments, Inc. (ZKI)
(formerly Kemper Financial Services, Inc.) and pays a management fee for the
Money Market and Government Securities Portfolios at an annual rate of .22% of
the first $500 million of combined average daily net assets of those Portfolios
declining to .15% of combined average daily net assets in excess of $3 billion.
The Tax-Exempt Portfolio pays a management fee at an annual rate of .22% of the
first $500 million of average daily net assets of such Portfolio declining to
.15% of average daily net assets in excess of $3 billion. During the six months
ended January 31, 1996, the Fund incurred management fees of $5,744,000.
<PAGE> 14
Cash Equivalent Fund 14
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kemper Asset Holdings, Inc. (KAHI), a subsidiary of Kemper Corporation, the
former parent company of ZKI, arranged for the issuance of a $85,648,000
irrevocable letter of credit from The Bank of New York for the benefit of the
Fund. The letter of credit supports the payment of principal and interest on the
Orange County, California obligation held in the Money Market Portfolio. The
Fund and KAHI are parties to an agreement related to the letter of credit which
provides, among other things, that, in connection with a payment of principal or
interest under the letter of credit, the Fund will transfer to KAHI any proceeds
received under the Orange County obligation.
DISTRIBUTION AGREEMENT
The Fund also has an administration, shareholder services and distribution
agreement with Kemper Distributors, Inc. (KDI). For its services as primary
distributor, the Fund pays KDI an annual fee of .38% of average daily net assets
for the Money Market and Government Securities Portfolios and .33% of average
daily net assets for the Tax-Exempt Portfolio. For the six months ended January
31, 1996, the Fund incurred distribution fees of $12,268,000. KDI has related
service agreements with various firms to provide cash management and other
services for Fund shareholders. Under these agreements, KDI pays such firms
based on the average daily net assets of those accounts that they maintain and
service at an annual rate ranging from .15% to .40% for the Money Market and
Government Securities Portfolios, and from .15% to .33% for the Tax-Exempt
Portfolio. During the six months ended January 31, 1996, KDI paid fees of
$12,506,000 to various firms pursuant to the related service agreements.
SHAREHOLDER SERVICES AGREEMENT
Pursuant to a services agreement with the Fund's transfer agent, Kemper Service
Company (KSvC) is the shareholder service agent of the Fund. For the six months
ended January 31, 1996, IFTC remitted shareholder services fees to KSvC of
$5,505,000.
OFFICERS AND TRUSTEES
Certain officers or trustees of the Fund are also officers or directors of ZKI.
During the six months ended January 31, 1996, the Fund made no payments to its
officers and incurred trustees' fees of $37,000 to independent trustees.
<PAGE> 15
Cash Equivalent Fund 15
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JULY 31,
MONEY MARKET PORTFOLIO JANUARY 31, 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income and dividends declared .03 .05 .03 .03 .04
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 2.56% 4.95 2.82 2.60 4.09
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Expenses .88% .87 .88 .85 .82
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income 5.02% 4.84 2.78 2.57 4.01
- -----------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $2,680,074 3,593,294 3,387,245 3,616,636 3,916,708
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE:
The Money Market Portfolio's total return for the year ended July 31, 1995
includes the effect of a capital contribution from the investment manager.
Without the capital contribution, the total return would have been 4.28%.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JULY 31,
GOVERNMENT SECURITIES PORTFOLIO JANUARY 31, 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income and dividends declared .03 .05 .03 .03 .04
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 2.59% 4.96 2.82 2.60 4.12
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Expenses .77% .81 .81 .78 .75
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income 5.07% 4.87 2.72 2.57 4.06
- -----------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $1,570,458 1,785,098 1,538,011 2,825,357 3,000,890
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JULY 31,
TAX-EXEMPT PORTFOLIO JANUARY 31, 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income and dividends declared .02 .03 .02 .02 .03
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 1.64% 3.21 2.05 2.12 3.29
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Expenses .70% .68 .68 .64 .64
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income 3.24% 3.15 2.02 2.09 3.21
- -----------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $934,335 1,109,861 1,136,901 1,417,307 1,289,560
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 16
Cash Equivalent Fund 16
- --------------------------------------------------------------------------------
SPECIAL SHAREHOLDERS' MEETING
- --------------------------------------------------------------------------------
On September 19, 1995, the results of the proxy solicitation were announced at a
joint special shareholders' meeting. Cash Equivalent Fund shareholders were
asked to vote on four separate issues: election of nine Trustees to the Board of
Trustees, ratification of Ernst & Young LLP as independent auditors, approval of
a new investment management agreement with Kemper Financial Services, Inc., or
its successor on the same terms as the current agreement and approval of a new
12b-1 distribution plan with Kemper Distributors, Inc. or its successor on the
same terms as the current plan. We are pleased to report that all nominees were
elected and all other items were approved. Following are the results for each
issue:
1) Election of Trustees
<TABLE>
<CAPTION>
For Withheld
<S> <C> <C>
David W. Belin 5,143,102,401 184,329,131
Lewis A. Burnham 5,143,102,401 184,329,131
Donald L. Dunaway 5,143,102,401 184,329,131
Robert B. Hoffman 5,143,102,401 184,329,131
Donald R. Jones 5,143,102,401 184,329,131
David B. Mathis 5,143,102,401 184,329,131
Shirley D. Peterson 5,143,102,401 184,329,131
William P. Sommers 5,143,102,401 184,329,131
Stephen B. Timbers 5,143,102,401 184,329,131
</TABLE>
2) Ratification of the selection of Ernst & Young LLP as independent auditors
for the fund
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
5,240,445,508 33,448,870 52,959,091
</TABLE>
3) Approval of new investment management agreement
<TABLE>
<CAPTION>
Money Market Portfolio
For Against Abstain
<S> <C> <C>
2,960,906,188 37,290,328 31,201,500
</TABLE>
<TABLE>
<CAPTION>
Government Securities Portfolio
For Against Abstain
<S> <C> <C>
1,458,474,240 11,483,958 26,464,399
</TABLE>
<TABLE>
<CAPTION>
Tax Exempt Portfolio
For Against Abstain
<S> <C> <C>
780,231,402 10,812,262 10,289,188
</TABLE>
4) Approval of new 12b-1 distribution plan
<TABLE>
<CAPTION>
Money Market Portfolio
For Against Abstain
<S> <C> <C>
2,924,659,373 63,806,418 40,932,225
</TABLE>
<TABLE>
<CAPTION>
Government Securities Portfolio
For Against Abstain
<S> <C> <C>
1,431,331,947 22,510,846 31,891,575
</TABLE>
<TABLE>
<CAPTION>
Tax Exempt Portfolio
For Against Abstain
<S> <C> <C>
765,947,513 21,846,649 13,538,690
</TABLE>
<PAGE> 17
Cash Equivalent Fund 17
- --------------------------------------------------------------------------------
NOTES
- --------------------------------------------------------------------------------
<PAGE> 18
Cash Equivalent Fund 18
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 19
Cash Equivalent Fund 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 20
Cash Equivalent
Fund
Semiannual Report
January 31, 1996
INVESTMENT MANAGER
Zurich Kemper Investments, Inc.
PRINCIPAL UNDERWRITER
Kemper Distributors, Inc.
120 South LaSalle Street
Chicago, IL 60603
This report is not to be distributed unless preceded or
accompanied by a prospectus.
1011980 2/96 (LOGO)printed on recycled paper
