<PAGE> 1
KEMPER MONEY FUNDS
SEMIANNUAL REPORT TO SHAREHOLDERS
FOR THE PERIOD ENDED JANUARY 31, 1996
"Because of the softness in the economy, we had anticipated the Fed
decreasing the federal funds rate ...
By extending, we were able to benefit from previously higher interest rates."
<PAGE> 2
Table of
Contents
3
Performance Update
5
Terms to Know
5
Portfolio Statistics
7
Portfolio of
Investments
15
Financial Statements
16
Notes to
Financial Statements
18
Financial Highlights
NEW NAME
Kemper Money Market Fund and its three portfolios have been renamed effective
February 1, 1996. The new names are more accurate and concise titles for these
investments.
OLD NAME NEW NAME
Kemper Money Market Fund Kemper Money Funds
Money Market Portfolio Kemper Money Market Fund
Government Securities Portfolio Kemper Government Money Fund
Tax-Exempt Portfolio Kemper Tax-Free Money Fund
AT A GLANCE
YIELD COMPARISON+
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 1996.
<TABLE>
<CAPTION>
Tax-
Kemper Kemper Government Kemper Exempt
Money Money Government Money Tax-Free Money
Market Fund Money Fund Money Fund
Fund Average* Fund Average* Fund Average*
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5.38% 5.20% 5.39% 5.06% 3.57% 3.23%
</TABLE>
Note: The tax-equivalent yield for Kemper Tax-Free Money Fund was 5.68%
The tax-equivalent yield for Kemper Tax-Free Money Fund is based on a marginal
federal income tax rate of 37.1%. Income from Kemper Tax-Free Money Fund may be
subject to state and local taxes and, for some investors, a portion of income
may be subject to the alternative minimum tax.
An investment in money market funds is neither insured nor guaranteed by
the U.S. government, and there can be no assurance that a fund will be able to
maintain a stable $1.00 share value.
+The 6-month yields are annualized effective yields assuming reinvestment of
dividends.
*The funds are compared to their respective IBC/Donoghue category: The Money
Fund Average consists of all non-institutional taxable money market funds
investing in only first tier (highest rating) securities and tracked by
IBC/Donoghue; Government Money Fund Average includes all non-institutional
government money markets tracked by IBC/Donoghue; Tax-Exempt Money Fund Average
consists of all non-institutional tax-free money markets tracked by
IBC/Donoghue.
KEMPER MONEY FUNDS
LIPPER RANKINGS
COMPARED TO ALL OTHER FUNDS IN THE RESPECTIVE LIPPER CATEGORY**
<TABLE>
<CAPTION>
1-YEAR 5-YEARS 10-YEARS 20-YEARS
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
KEMPER
MONEY
MARKET #35 OF #19 OF #5 OF #1 OF
FUND 261 FUNDS 172 FUNDS 106 FUNDS 19 FUNDS
- --------------------------------------------------------------------
KEMPER
GOVERNMENT
MONEY #7 OF #5 OF #2 OF
FUND 104 FUNDS 67 FUNDS 40 FUNDS N/A
- --------------------------------------------------------------------
KEMPER
TAX-FREE
MONEY #6 OF #8 OF
FUND 122 FUNDS 87 FUNDS N/A N/A
- --------------------------------------------------------------------
</TABLE>
**Lipper Analytical Services, Inc. calculations are total returns with all
dividends reinvested for the periods indicated as of 1/31/96. Rankings are
historical and do not reflect future performance. The Lipper categories that are
used for comparison are as follows: Kemper Money Market Fund compared to the
Lipper Money Market Instrument Fund category, Kemper Government Money Fund
compared to the Lipper Government Money Market Fund category and Kemper Tax-Free
Money Fund compared to the Lipper Tax-Exempt Money Market Fund category.
<PAGE> 3
PERFORMANCE UPDATE
[RACHWALSKI PHOTO]
FRANK RACHWALSKI IS SENIOR VICE PRESIDENT OF ZURICH KEMPER INVESTMENTS, INC.
AND PORTFOLIO MANAGER OF KEMPER MONEY FUNDS. MR. RACHWALSKI HOLDS A B.B.A. AND
AN M.B.A. DEGREE FROM LOYOLA UNIVERSITY.
KEMPER MONEY FUNDS PORTFOLIO MANAGER FRANK RACHWALSKI DISCUSSES THE ECONOMIC
SITUATION AND HOW HE MANAGED THE FUNDS DURING THE LAST SIX MONTHS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT, AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME, BASED ON MARKET AND OTHER
CONDITIONS.
Q THE FEDERAL RESERVE (FED) SLIGHTLY DECREASED THE FEDERAL FUNDS RATE IN
JULY, WHICH WAS AT THE END OF THE LAST REPORTING PERIOD. WHAT HAS BEEN
HAPPENING IN THE ECONOMY SINCE THEN?
A Actually, three significant events happened in the past six months.
First, the government failed to adopt a reasonable budget package causing its
shutdown. Second, the east coast was hit by some devastating weather closing
major businesses. And third, the Fed decreased the federal funds rate in both
December and January.
All three of these events impacted the economy. The government shutdown
and the brutal weather distorted recent economic data and left a murky picture
of the current economic conditions. However, the Fed still chose to modestly
decrease rates, responding to current economic softness and a low rate of
inflation.
Q HOW DID THE MARKET RESPOND TO THESE MOVES BY THE FED?
A The market viewed the ease in January as a second step in the process
of gradually moving away from restrictive monetary conditions toward a more
neutral monetary policy stance. We do not interpret the Fed actions as the
start of a series of moves to ease. As markets usually react excessively, it
appears that they have already built in more rate easing than we are likely to
see.
Q HOW WERE THE FUNDS MANAGED DURING THIS TIME?
A Because of the softness in the economy, we had anticipated the Fed
decreasing the federal funds rate and we had been extending the average
maturities of the Funds. By extending, we were able to benefit from previously
higher interest rates. We will continue to manage the Funds with longer than
average maturities until we see very hard evidence that the economy is on an
improved growth path.
Q WHAT IS YOUR OUTLOOK FOR THE FUNDS?
A Because the economy is still showing signs of softness, we believe
there is a possibility that the Fed will ease rates again. However, we feel
their window of opportunity for such action to occur is limited due to the
expected economic improvement in the second half of the year.
3
<PAGE> 4
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS++
FOR PERIODS ENDED JANUARY 31, 1996
1-YEAR 5-YEAR 10-YEAR LIFE OF FUND
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
KEMPER MONEY MARKET FUND 5.66% 4.37% 5.99% 7.99% (SINCE 11/25/74)
- --------------------------------------------------------------------------------------------------------------
KEMPER GOVERNMENT
MONEY FUND 5.69 4.36 5.89 6.85 (SINCE 11/30/81)
- --------------------------------------------------------------------------------------------------------------
KEMPER TAX-FREE MONEY FUND 3.73 3.17 N/A 4.14 (SINCE 9/10/87)
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future performance. Returns fluctuate.
++ Average annual total return assumes reinvestment of all dividends. For
additional information, see the Prospectus and Statement of Additional
Information and the Financial Highlights at the end of this report.
KEMPER MONEY MARKET FUND COMPARED TO FIRST TIER MONEY MARKET FUNDS FROM 8/1/95
THROUGH 1/30/96
WEEKLY 7-DAY AVERAGE YIELD
[GRAPH]
<TABLE>
<CAPTION>
8/1/95 8/29 9/26 10/24
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
KEMPER MONEY MARKET FUND 5.52 5.47 5.43 5.4 5.43 5.37 5.4 5.38 5.35 5.36 5.35 5.38 5.37 5.35 5.38 5.38
MONEY MARKET FUNDS 5.27 5.24 5.22 5.22 5.22 5.21 5.19 5.19 5.18 5.21 5.16 5.17 5.16 5.18 5.16 5.17
<CAPTION>
11/21 12/19 1/16/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
KEMPER MONEY MARKET FUND 5.35 5.38 5.35 5.37 5.41 5.41 5.38 5.37 5.37 5.35 5.3
MONEY MARKET FUNDS 5.17 5.19 5.16 5.16 5.16 5.14 5.12 5.09 5.03 5.01 4.97
</TABLE>
The funds are compared to their respective IBC/Donoghue category: The First
Tier Money Market Fund Average consists of all non-institutional taxable money
market funds investing in only first tier (highest rating) securities and
tracked by IBC/Donoghue; Government Money Market Fund Average includes all
non-institutional government money markets tracked by IBC/Donoghue; Tax-Exempt
Money Fund Average consists of all non-institutional tax-free money markets
tracked by IBC/Donoghue.
KEMPER GOVERNMENT MONEY FUND COMPARED TO GOVERNMENT MONEY MARKET FUNDS FROM
8/1/95 THROUGH 1/30/96
WEEKLY 7-DAY AVERAGE YIELD
[GRAPH]
<TABLE>
<CAPTION>
8/1/95 8/29 9/26 10/24
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
KEMPER GOVERNMENT MONEY
FUND 5.51 5.47 5.45 5.46 5.47 5.43 5.44 5.42 5.42 5.41 5.34 5.43 5.4 5.4 5.41 5.41
GOVERNMENT MONEY MARKET
FUNDS 5.15 5.13 5.12 5.11 5.08 5.09 5.08 5.08 5.05 5.13 5.05 5.05 5.03 5.06 5.03 5.05
<CAPTION>
11/21 12/19 1/16/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
KEMPER GOVERNMENT MONEY
FUND 5.38 5.42 5.43 5.39 5.39 5.48 5.39 5.3 5.26 5.22 5.16
GOVERNMENT MONEY MARKET
FUNDS 5.07 5.09 5.06 5.04 5.05 4.98 4.97 4.92 4.86 4.85 4.84
</TABLE>
KEMPER TAX-FREE MONEY FUND COMPARED TO TAX-EXEMPT MONEY
MARKET FUNDS FROM 8/1/95 THROUGH 1/30/96
WEEKLY 7-DAY AVERAGE YIELD
[GRAPH]
<TABLE>
<CAPTION>
8/1/95 8/29 9/26 10/24
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
KEMPER TAX-FREE MONEY
FUND 3.7 3.63 3.72 3.66 3.66 3.61 3.5 3.6 3.64 3.75 3.47 3.47 3.52 3.58 3.51 3.55
TAX-EXEMPT MONEY MARKET
FUNDS 3.25 3.12 3.23 3.23 3.18 3.14 3.02 3.22 3.37 3.51 3.16 3.11 3.2 3.28 3.2 3.25
<CAPTION>
11/21 12/19 1/16/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
KEMPER TAX-FREE MONEY
FUND 3.59 3.56 3.49 3.41 3.69 3.85 4.14 3.46 3.26 3.15 3.22
TAX-EXEMPT MONEY MARKET
FUNDS 3.28 3.25 3.17 3.05 3.41 3.67 3.88 3.1 2.86 2.77 2.86
</TABLE>
Please note: the tax-equivalent yield for Kemper Tax-Free Money Fund was 5.12%
based on an annualized 7-day yield on 1/29/96 (at a marginal federal income tax
rate of 37.1%).
4
<PAGE> 5
TERMS TO KNOW
AVERAGE MATURITY The weighted average number of days in which each security in
the portfolio matures.
EASE When the Federal Reserve Board of Governors decreases the federal funds
rate.
FEDERAL FUNDS RATE The interest rate banks charge each other for overnight
loans that are needed to meet reserve requirements. Often considered the most
sensitive indicator of the direction of interest rates.
PORTFOLIO STATISTICS
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
- -------------------------------------------------------------
KEMPER MONEY MARKET FUND ON 1/31/96
- -------------------------------------------------------------
<S> <C>
COMMERCIAL PAPER 70%
- -------------------------------------------------------------
DOMESTIC CDS 8
- -------------------------------------------------------------
REPURCHASE AGREEMENTS 18
- -------------------------------------------------------------
FOREIGN BANK OBLIGATIONS 4
- -------------------------------------------------------------
100%
</TABLE>
[PIE CHART]
ON 1/31/96
/ / COMMERCIAL PAPER
/ / DOMESTIC CDS
/ / REPURCHASE AGREEMENTS
/ / FOREIGN BANK OBLIGATION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
KEMPER GOVERNMENT MONEY FUND ON 1/31/96
- -----------------------------------------------------------------
<S> <C>
REPURCHASE AGREEMENTS 55%
- -----------------------------------------------------------------
FEDERAL AGENCIES 44
- -----------------------------------------------------------------
U.S. TREASURIES 1
- -----------------------------------------------------------------
100%
</TABLE>
[PIE CHART]
ON 1/31/96
/ / REPURCHASE AGREEMENTS
/ / FEDERAL AGENCIES
/ / U.S. TREASURIES
5
<PAGE> 6
PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
KEMPER TAX-FREE MONEY FUND ON 1/31/96
- -----------------------------------------------------------------
<S> <C>
TAX-EXEMPT COMMERCIAL PAPER 48%
- -----------------------------------------------------------------
VARIABLE RATE DEMAND NOTES 42
- -----------------------------------------------------------------
GENERAL MARKET OBLIGATIONS 8
- -----------------------------------------------------------------
TENDER SECURITIES 2
- -----------------------------------------------------------------
100%
</TABLE>
[PIE CHART]
/ / TAX-EXEMPT COMMERCIAL PAPER
/ / VARIABLE RATE DEMAND NOTES
/ / GENERAL MARKET OBLIGATIONS
/ / TENDER SECURITIES
AVERAGE WEIGHTED MATURITY
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
ON 1/31/96
- ---------------------------------------------------------------------
<S> <C>
KEMPER MONEY MARKET FUND 36 days
- ---------------------------------------------------------------------
FIRST TIER TAXABLE MONEY MARKET FUND AVERAGE+ 60
- ---------------------------------------------------------------------
KEMPER GOVERNMENT MONEY FUND 36 days
- ---------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND AVERAGE+ 46
- ---------------------------------------------------------------------
KEMPER TAX-FREE MONEY FUND 32 days
- ---------------------------------------------------------------------
TAX-FREE MONEY MARKET FUND AVERAGE+ 43
- ---------------------------------------------------------------------
</TABLE>
+ The funds are compared to their respective IBC/Donoghue category: The
First Tier Money Market Fund Average consists of all non-institutional taxable
money market funds investing in only first tier (highest rating) securities and
tracked by IBC/Donoghue; Government Money Market Fund Average includes all
non-institutional government money markets tracked by IBC/Donoghue; Tax-Exempt
Money Fund Average consists of all non-institutional tax-free money markets
tracked by IBC/Donoghue.
6
<PAGE> 7
PORTFOLIO OF INVESTMENTS
KEMPER MONEY MARKET FUND
INVESTMENTS AT JANUARY 31, 1996
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
CORPORATE OBLIGATIONS VALUE
<S> <C>
BANKING--3.4%
Postipankki U.S. Inc.
5.90%, 2/16/96 $ 49,881
Sumitomo Bank Capital Markets,
Inc.
5.63%, 4/16/96 34,595
Svenska Handelsbanken, Inc.
5.77%, 2/23/96 49,826
---------------------------------------------
134,302
CAPITAL AND MORTGAGE LENDING--4.6%
Countrywide Funding Corporation
5.43%-5.51%, 3/6/96-7/31/96 59,735
(b) GMAC Mortgage Corporation of
Pennsylvania
5.78%, 2/29/96 59,732
(a) PHH Corporation
5.67%, 2/1/96 30,000
SRD Finance, Inc.
5.95%, 2/22/96 34,880
---------------------------------------------
184,347
CAPTIVE BUSINESS FINANCE--8.1%
American Honda Finance
Corporation
5.73%-5.74%, 4/2/96-4/15/96 49,473
CSW Credit, Inc.
5.76%, 2/22/96 19,934
Chrysler Financial Corporation
(a) 6.25%, 2/15/96 10,017
5.73%, 3/25/96 49,584
(a) Deere (John) Capital Corporation
5.63%, 2/21/96 25,000
(a) Emprise I Corporation
5.67%, 3/22/96 25,000
Enterprise Capital Funding
Corporation
5.71%, 3/12/96 24,844
(a) Finova Capital Corporation
5.91%, 3/15/96 50,000
Orix America Inc.
5.58%-6.04%, 2/9/96-4/11/96 45,698
USL Capital Corporation
5.78%, 2/1/96 25,000
---------------------------------------------
324,550
CONSUMER FINANCING--3.7%
Associates Corporation of North
America
5.78%, 2/7/96 49,953
JTB Finance Americas
5.76%, 2/20/96 24,925
Household International Inc.
5.80%, 2/2/96 24,996
Sears Roebuck Acceptance Corp.
5.76%, 2/9/96 49,937
---------------------------------------------
149,811
<CAPTION>
VALUE
<S> <C>
CONSUMER PRODUCTS AND
SERVICES--6.2%
American Home Products
Corporation
5.78%, 2/9/96-2/12/96 $ 34,943
Coca-Cola Enterprises Inc.
5.70%-5.72%, 3/15/96-3/25/96 74,434
Quaker Oats Company
5.91%-5.93%, 2/1/96 45,000
A.H. Robins Company,
Incorporated
5.78%, 2/12/96 19,965
Whirlpool Corporation
5.51%-5.80%, 2/8/96-3/26/96 74,716
---------------------------------------------
249,058
CORPORATE FINANCING--7.9%
(a) AT&T Capital Corporation
5.58%-5.66%, 2/20/96-2/23/96 49,993
B I Funding Inc.
5.79%, 2/14/96 24,948
(a) Beta Finance Corporation
5.10%, 2/6/96 20,000
Broadway Capital Corporation
5.58%-5.60%, 3/19/96-4/9/96 39,664
Corporate Asset Funding Co.,
Inc.
5.60%, 2/26/96 24,904
Ranger Funding Corporation
5.81%, 2/9/96-2/13/96 34,939
(a) Sanwa Business Credit
Corporation
5.88%, 2/16/96-3/5/96 50,000
Stellar Capital Corporation
5.49%, 4/24/96 49,376
Windmill Funding Corporation
5.50%, 3/15/96 24,837
---------------------------------------------
318,661
ENERGY AND UTILITIES--3.9%
Brazos River Authority, Texas
5.65%, 3/20/96 60,000
DIC Americas, Inc.
6.03%, 2/2/96 24,996
Gulf Coast Waste Authority,
Texas
5.78%, 2/21/96 45,000
New Hampshire Industrial
Development Authority
5.65%, 3/20/96 25,000
---------------------------------------------
154,996
</TABLE>
7
<PAGE> 8
PORTFOLIO OF INVESTMENTS
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VALUE
<S> <C>
FINANCIAL INSTITUTIONS--9.0%
(a) Bear Stearns Companies Inc.
5.66%-5.68%, 2/6/96-2/20/96 $ 55,000
(a) CS First Boston, Inc.
5.68%, 2/14/96 50,000
Dean Witter, Discover & Co.
5.76%, 2/6/96 24,980
(a) Federal National Mortgage
Association
5.11%, 2/6/96 54,346
(a) Goldman, Sachs & Co.
5.59%, 2/26/96 50,000
(a)(b) Lehman Brothers Holdings Inc.
5.73%, 2/21/96 50,000
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%, 2/12/96-2/15/96 49,901
---------------------------------------------
358,978
INFORMATION SERVICES--2.4%
GTE Corporation
5.86%-5.91%, 2/15/96-2/27/96 49,838
Nynex Corporation
5.50%, 4/1/96 44,593
---------------------------------------------
94,431
MUNICIPAL OBLIGATION--2.5%
(a)(b)(c) Orange County, California
6.92%, 6/30/96
$100,000,000 (cost and par) 97,000
(b) Letter of Credit from
The Bank of New York 3,000
---------------------------------------------
100,000
<CAPTION>
VALUE
<S> <C>
RECEIVABLES FINANCING--18.3%
Asset Securitization Cooperative
Corporation
5.76%, 2/13/96 $ 49,905
Astro Capital Corp.
5.86%, 3/8/96 49,712
CXC Incorporated
5.43%-5.77%, 2/22/96-3/11/96 44,800
Dynamic Funding Corporation
5.84%, 2/29/96 24,888
ESC Securitization, Inc.
5.61%, 3/1/96 24,888
(a) Heller Financial, Inc.
5.68%, 4/4/96 25,000
Heller International Corporation
6.04%, 2/1/96 25,000
J.V. Receivables Corporation
5.48%-6.03%, 2/15/96-4/11/96 44,785
Jet Funding Corporation
5.47%, 4/30/96-5/31/96 49,219
Madison Funding Corp.
5.46%-5.88%, 2/7/96-3/27/96 64,587
Preferred Receivables Funding
Corporation
5.76%, 2/5/96 24,984
Receivables Capital Corp.
5.71%-5.79%, 2/23/96-3/21/96 44,739
Sheffield Receivables
Corporation
5.78%, 2/26/96 24,901
Sierra Funding Corporation
5.50%-6.12%, 2/29/96-4/30/96 44,615
STRAIT Capital Corporation
5.56%-5.91%, 2/29/96-3/29/96 54,606
Strategic Asset Funding
Corporation
5.48%, 4/30/96 24,666
WCP Funding Inc.
5.50%-5.78%, 2/23/96-3/11/96 64,737
Working Capital
Management Co., L.P.
5.89%-6.09%, 2/21/96-3/7/96 49,776
---------------------------------------------
735,808
---------------------------------------------
TOTAL CORPORATE
OBLIGATIONS--70.0%
(AVERAGE MATURITY: 30 DAYS) 2,804,942
---------------------------------------------
</TABLE>
8
<PAGE> 9
PORTFOLIO OF INVESTMENTS
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
BANK OBLIGATIONS VALUE
<S> <C>
CERTIFICATES OF DEPOSIT--
U.S. BANKS--8.2%
(a) Boatmen's Credit Card Bank
5.88%, 3/4/96 $ 25,000
(a) FCC National Bank
5.85%, 2/1/96 29,996
(a) First Bank (S.D.)
5.63%, 2/21/96 15,000
(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 50,000
Mellon Bank Corporation
5.75%-5.84%, 2/6/96-5/31/96 35,006
(a) Mercantile Bankshares
Corporation
6.00%, 2/20/96 25,021
(a) PNC Bank Corporation
5.56%-5.60%, 2/5/96-2/20/96 49,974
(a) Shawmut Bank Connecticut, N.A.
5.67%, 3/22/96 25,002
Wachovia Corporation
5.84%, 5/1/96 24,651
---------------------------------------------
329,650
FOREIGN BANK NOTES--1.9%
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
(B) TIME DEPOSITS--
CANADIAN BANKS--1.2%
Bank of Nova Scotia
5.75%, 2/20/96 50,000
---------------------------------------------
TOTAL BANK OBLIGATIONS--11.3%
(AVERAGE MATURITY: 23 DAYS) 454,572
---------------------------------------------
<CAPTION>
VALUE
<S> <C>
(D) REPURCHASE AGREEMENTS
(Dated 11/95 and 1/96,
collateralized by Federal Home
Loan Mortgage Corporation,
Federal National Mortgage
Association and Government
National Mortgage Association
Securities)
Goldman, Sachs & Co.
(held at The Bank of New York)
5.45%, 4/4/96-4/8/96 $ 100,000
Lehman Government Securities
Inc.
(held at Chemical Bank)
5.45%, 4/18/96 60,000
Morgan Stanley & Co.
Incorporated
(held at The Bank of New York)
5.42%-5.45%, 4/15/96-4/26/96 470,000
Salomon Brothers Inc.
(held at The Bank of New York)
5.75%-5.76%, 2/8/96-2/16/96 100,000
---------------------------------------------
TOTAL REPURCHASE
AGREEMENTS--18.2%
(AVERAGE MATURITY: 68 DAYS) 730,000
---------------------------------------------
TOTAL INVESTMENTS--99.5%
(AVERAGE MATURITY: 36 DAYS) 3,989,514
---------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--.5% 19,459
---------------------------------------------
NET ASSETS--100% $4,008,973
---------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
9
<PAGE> 10
PORTFOLIO OF INVESTMENTS
KEMPER GOVERNMENT MONEY FUND
INVESTMENTS AT JANUARY 31, 1996
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VALUE
<S> <C>
U.S. TREASURY NOTES --.6%
(AVERAGE MATURITY: 104 DAYS)
5.75%, 5/15/96 $ 4,017
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM NOTES (ISSUED OR
GUARANTEED BY U.S. GOVERNMENT
AGENCIES OR INSTRUMENTALITIES)
<S> <C> <C>
(a) Agency for International
Development
Government of Israel
5.14%, 2/7/96 6,185
(a) Export-Import Bank of the
United States
Cathay Pacific Airways Limited
5.41%, 2/13/96 7,353
KA Leasing, Ltd.
5.63%, 2/16/96 8,699
Kuwait Investment Authority
5.41%, 2/15/96 17,120
VARIG Brazilian Airlines
5.63%, 4/16/96 11,079
Federal Farm Credit Banks
5.81%, 8/1/96 10,796
Federal Home Loan Bank
(a) 5.75%-5.89%, 2/1/96-2/2/96 10,901
5.65%-5.88%, 3/21/96-5/15/96 29,203
Federal Home Loan Bank
Downey Savings & Loan
5.66%-5.73%, 3/1/96-5/28/96 19,838
Federal Home Loan Mortgage
Corporation
5.55%-5.56%, 3/14/96-3/18/96 12,417
Federal National Mortgage
Association
(a) 5.11%-6.10%, 2/1/96-2/6/96 45,150
5.54%-5.77%, 2/28/96-6/21/96 20,909
(a) Overseas Private Investment
Corporation
International Paper Company
5.58%, 4/15/96 6,000
(a) Student Loan Marketing Association
5.35%-6.13%, 2/6/96-6/30/96 72,069
---------------------------------------------
TOTAL SHORT-TERM NOTES--42.6%
(AVERAGE MATURITY: 43 DAYS) 277,719
---------------------------------------------
<CAPTION>
VALUE
(D) REPURCHASE AGREEMENTS
<S> <C> <C>
(Dated 11/95-1/96, collateralized
by Federal Home Loan Mortgage
Corporation, Federal National
Mortgage Association and
Government National Mortgage
Association Securities)
Bear, Stearns & Co. Inc.
5.60%, 2/5/96-2/7/96 $ 62,700
Chase Securities, Inc.
(held at Chemical Bank)
5.63%, 2/5/96 10,000
Goldman, Sachs & Co.
(held at The Bank of New York)
5.45%-5.72%, 2/5/96-4/8/96 70,000
Lehman Government Securities Inc.
(held at Chemical Bank)
5.45%-5.56%, 2/1/96-4/15/96 17,000
Morgan Stanley & Co. Incorporated
(held at The Bank of New York)
5.33%-5.73%, 2/2/96-4/30/96 92,000
Nikko Securities Co.
International, Inc.
(held at The Bank of New York)
5.53%, 2/1/96 28,000
Nomura Securities International,
Inc.
(held at The Bank of New York)
5.78%, 2/5/96 25,000
Salomon Brothers Inc.
(held at The Bank of New York)
5.46%, 4/15/96 50,000
---------------------------------------------
TOTAL REPURCHASE AGREEMENTS--54.5%
(AVERAGE MATURITY: 30 DAYS) 354,700
---------------------------------------------
TOTAL INVESTMENTS--97.7%
(AVERAGE MATURITY: 36 DAYS) 636,436
---------------------------------------------
CASH AND OTHER ASSETS, LESS
LIABILITIES--2.3% 14,681
---------------------------------------------
NET ASSETS--100% $651,117
---------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
10
<PAGE> 11
PORTFOLIO OF INVESTMENTS
KEMPER TAX-FREE MONEY FUND
INVESTMENTS AT JANUARY 31, 1996
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VARIABLE RATE
(A) DEMAND SECURITIES VALUE
<C> <S> <C>
ALABAMA
Birmingham
Medical Clinic Revenue
3.75% $ 6,680
ARIZONA
Apache County
Industrial Development Authority
3.15% 10,000
CALIFORNIA
Los Angeles
Harbor Improvement Corporation
3.40% 9,500
COLORADO
Denver
Multi-Family Housing Revenue
3.35% 9,100
DISTRICT OF COLUMBIA
General Obligation
3.85% 7,900
FLORIDA
Dade County
Aviation Facilities Revenue
3.75% 8,200
Naples
Hospital Revenue
3.40% 8,000
GEORGIA
Fulton County
Development Authority
3.32% 10,445
Wayne County
Solid Waste Management Authority
4.05% 3,000
ILLINOIS
Chicago
O'Hare International Airport
3.20% 12,600
Development Finance Authority
3.71% 15,500
Educational Facilities Authority
3.45% 8,900
Hillside
Economic Development Authority,
3.45% 6,000
Mundelein
Industrial Development Revenue
3.45% 6,500
Richmond
Industrial Development Revenue
3.75% 4,000
<CAPTION>
VALUE
<C> <S> <C>
INDIANA
Rockport
Pollution Control Revenue
3.15% $ 6,745
KANSAS
Kansas City
Pollution Control Revenue
3.35% 4,350
KENTUCKY
Development Finance Authority
3.35% 8,025
Higher Education Student Loan
Corporation
3.65% 5,000
Lexington-Fayette Urban County
Government
3.90% 5,100
Todd County
Industrial Development Revenue
3.35% 2,900
LOUISIANA
Caddo Parish
Industrial Development Board
3.80% 2,800
Iberville
Pollution Control Revenue
3.35% 3,200
Jefferson Parish
Hospital Revenue
3.50% 7,200
MARYLAND
Baltimore County
Multi-Family Housing Revenue
3.55% 3,900
Department of Housing and
Community Development
Multi-Family Development Revenue
3.60% 5,470
Health and Higher Education
Facilities Authority
3.05% 5,000
MICHIGAN
Dearborn
Economic Development Corporation
3.15% 7,800
MINNESOTA
Minneapolis
Community Development Agency
3.65% 4,455
</TABLE>
11
<PAGE> 12
(Value in thousands)
<TABLE>
<CAPTION>
VALUE
<C> <S> <C>
MISSOURI
Kirksville
Industrial Development Authority
3.75% $ 5,000
NEVADA
Department of Commerce
3.50% 4,650
NORTH CAROLINA
Lenoir County
Pollution Control Financing
Authority
3.75% 5,000
OHIO
Pollution Control Revenue
3.25% 2,500
PENNSYLVANIA
Berks County
Redevelopment Authority
4.20% 8,000
Delaware Valley
Regional Finance Authority
3.20% 21,500
Philadelphia
Authority for Industrial
Development
3.60% 5,400
Industrial Development Authority
3.75% 7,200
Redevelopment Authority
3.15% 3,900
TENNESSEE
Clarksville
Public Building Authority
3.30% 4,700
Maury County
Water Facility Revenue
3.50% 2,500
Nashville and Davidson County
Multi-Family Housing Revenue
3.30% 4,000
TEXAS
Brazos River Authority
3.90% 8,000
Calhoun County
Industrial Development Authority
3.70% 12,000
Gulf Coast
Industrial Development Authority
3.35% 1,800
Nueces River Authority
3.70% 6,200
Trinity River Authority
3.35% 9,200
<CAPTION>
VALUE
<C> <S> <C>
VIRGINIA
Louisa County
Industrial Development Authority
3.30% $ 5,000
WASHINGTON
Port Angeles
Industrial Development Corporation
3.75% 10,100
---------------------------------------------
TOTAL VARIABLE RATE DEMAND
SECURITIES--42.5%
(AVERAGE MATURITY: 6 DAYS) 324,920
---------------------------------------------
OTHER SECURITIES
ALABAMA
Mobile
Port City Medical Clinic Board
4.00%, 2/13/96 13,350
ALASKA
Valdez
Marine Terminal Revenue
3.50%-3.70%, 3/27/96-5/14/96 15,075
ARIZONA
Salt River Project Agricultural
Improvement and Power District
3.35%-3.80%, 2/7/96-5/13/96 15,100
CALIFORNIA
Revenue Anticipation Warrants
3.73%, 4/25/96 6,458
COLORADO
Denver City and County
Airport System Revenue
3.75%-4.20%, 3/27/96-5/13/96 28,600
Platte River Power Authority
3.80%, 2/20/96 4,000
DISTRICT OF COLUMBIA
Student Loan Revenue
4.10%, 7/1/96 6,000
FLORIDA
Hillsborough County
Aviation Authority
3.90%, 2/7/96 10,000
Orlando Waste Water System
Revenue
3.35%-3.75%, 4/9/96-5/13/96 7,500
Sarasota County
Public Hospital District
3.55%, 3/26/96 1,660
Sunshine State Government
Financing Commission
3.20%, 3/6/96 5,000
</TABLE>
12
<PAGE> 13
PORTFOLIO OF INVESTMENTS
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VALUE
<C> <S> <C>
GEORGIA
Burke County
Pollution Control Revenue
3.80%, 2/7/96 $ 9,000
Municipal Electric Authority
3.15%-3.25%, 2/6/96-3/6/96 14,135
Municipal Gas Authority
3.80%, 2/15/96 1,975
ILLINOIS
Chicago
General Obligation
4.00%, 3/14/96 5,000
Development Finance Authority
4.40%, 6/3/96 2,000
INDIANA
Bond Bank Advance Funding
Program Notes
3.50%, 1/9/97 8,054
Indianapolis Bond
3.70%, 7/11/96 4,014
Jasper County
Pollution Control Revenue
3.85%, 2/8/96 1,000
Sullivan
Pollution Control Revenue
3.75%, 4/9/96 2,000
KANSAS
Burlington
Pollution Control and Improvement
Revenue
3.25%-3.80%, 2/12/96-3/6/96 8,400
KENTUCKY
Danville
Multi-City Lease Revenue
3.95%, 2/16/96 11,000
Pendleton County
Multi-County Lease Revenue
3.80%-3.90%, 2/12/96-2/14/96 22,640
LOUISIANA
West Baton Rouge
Pollution Control Revenue
3.40%, 4/10/96 4,050
MARYLAND
Anne-Arundel County
Port Facilities Revenue
3.45%-3.90%, 2/6/96-4/10/96 22,850
MICHIGAN
Strategic Fund
3.35%, 3/6/96 5,050
MINNESOTA
University of Minnesota
3.75%, 4/9/96 1,400
<CAPTION>
VALUE
<C> <S> <C>
NEW YORK
Nassau County
Revenue Anticipation Notes
3.75%-3.90%, 3/15/96-4/15/96 $ 10,010
New York City
Municipal Water Finance Authority
3.55%, 2/23/96 11,000
Revenue Anticipation Notes
3.45%-3.93%, 4/11/96-6/28/96 17,543
NORTH CAROLINA
Eastern Municipal Power Agency
4.05%, 2/12/96 5,000
Municipal Power Agency
3.55%-3.70%, 4/9/96-4/10/96 17,000
OKLAHOMA
Oklahoma City
Industries Authority
4.00%, 3/1/96 5,000
PENNSYLVANIA
Montgomery County
Industrial Development Authority
3.80%, 2/7/96 10,000
Philadelphia
School District Tax and Revenue
Anticipation Notes
3.95%, 6/28/96 6,514
Venango
Industrial Development Authority
3.80%, 3/27/96 1,210
TEXAS
A&M University System
3.15%, 2/13/96-2/14/96 12,000
Austin
Combined Utility Systems
3.60%-3.85%, 2/8/96-4/10/96 6,550
Brazoria County
Brazos River Harbor Navigation
District
4.00%, 2/13/96 7,600
Harris County
Health Facilities Development
Corporation
3.60%, 3/27/96 6,200
Houston
Water & Sewer System
3.85%, 2/13/95 4,000
Lower Colorado River Authority
3.15%, 2/8/96 7,000
Port Development Corporation
3.90%, 2/8/96 7,250
San Antonio
Electric and Gas Systems
3.80%, 2/15/96-2/21/96 17,400
Tax and Revenue Anticipation Notes
3.94%, 8/30/96 6,027
</TABLE>
13
<PAGE> 14
PORTFOLIO OF INVESTMENTS
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VALUE
<C> <S> <C>
UTAH
Intermountain Power Agency
3.90%, 2/9/96 $ 10,000
VIRGINIA
Chesapeake
Industrial Development Authority
3.85%, 2/12/96 2,000
Chesterfield
Industrial Development Authority
3.30%, 4/9/96 8,000
Norfolk
Industrial Development Authority
3.35%-3.65%, 3/27/96-5/13/96 13,000
Prince William County
Industrial Development Authority
3.75%, 2/13/96 4,700
York County
Industrial Development Authority
3.80%, 2/12/96 12,800
---------------------------------------------
TOTAL OTHER
SECURITIES--57.9%
(AVERAGE MATURITY: 48 DAYS) 443,115
---------------------------------------------
TOTAL INVESTMENTS--100.4%
(AVERAGE MATURITY: 32 DAYS) 768,035
---------------------------------------------
LIABILITIES, LESS CASH AND OTHER
ASSETS--(.4)% (3,073)
---------------------------------------------
NET ASSETS -- 100% $764,962
---------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
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 the next interest
rate change date. Securities in Kemper Tax-Free Money Fund 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 $259,732,000 in Kemper Money Market Fund, which represented
6.5% 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.
14
<PAGE> 15
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER
MONEY GOVERNMENT TAX-FREE
MARKET MONEY MONEY
FUND FUND FUND
<S> <C> <C> <C>
ASSETS
Investments, at amortized cost:
Short-term securities $3,259,514 281,736 768,035
- ---------------------------------------------------------------------------------------------------------
Repurchase agreements 730,000 354,700 --
- ---------------------------------------------------------------------------------------------------------
Cash 11,867 10,807 --
- ---------------------------------------------------------------------------------------------------------
Receivable for:
Interest 14,227 4,817 4,196
- ---------------------------------------------------------------------------------------------------------
Securities sold -- -- 340
- ---------------------------------------------------------------------------------------------------------
TOTAL ASSETS 4,015,608 652,060 772,571
- ---------------------------------------------------------------------------------------------------------
</TABLE>
LIABILITIES AND NET ASSETS
<TABLE>
<S> <C> <C> <C>
Cash overdraft -- -- 6,717
- ---------------------------------------------------------------------------------------------------------
Payable for:
Dividends 3,932 635 465
- ---------------------------------------------------------------------------------------------------------
Management fee 900 146 172
- ---------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 1,313 131 157
- ---------------------------------------------------------------------------------------------------------
Other 490 31 98
- ---------------------------------------------------------------------------------------------------------
Total liabilities 6,635 943 7,609
- ---------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $4,008,973 651,117 764,962
- ---------------------------------------------------------------------------------------------------------
</TABLE>
ANALYSIS OF NET ASSETS
<TABLE>
<S> <C> <C> <C>
Paid-in capital $4,037,301 651,117 764,962
- ---------------------------------------------------------------------------------------------------------
Unrealized depreciation on investments (28,328) -- --
- ---------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $4,008,973 651,117 764,962
- ---------------------------------------------------------------------------------------------------------
</TABLE>
THE PRICING OF SHARES
<TABLE>
<S> <C> <C> <C>
Shares outstanding, no par value 4,008,973 651,117 764,962
- ---------------------------------------------------------------------------------------------------------
Net asset value and redemption price per share $1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
STATEMENT OF OPERATIONS
Six months ended January 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER
MONEY GOVERNMENT TAX-FREE
MARKET MONEY MONEY
FUND FUND FUND
<S> <C> <C> <C>
NET INVESTMENT INCOME
Interest income $120,235 18,714 15,161
- ---------------------------------------------------------------------------------------------------------
Expenses:
Management fee 5,467 858 1,025
- ---------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 4,676 522 400
- ---------------------------------------------------------------------------------------------------------
Reports to shareholders 284 43 50
- ---------------------------------------------------------------------------------------------------------
Registration costs 41 35 32
- ---------------------------------------------------------------------------------------------------------
Professional fees 54 8 10
- ---------------------------------------------------------------------------------------------------------
Trustees' fees and other 27 9 8
- ---------------------------------------------------------------------------------------------------------
Total expenses 10,549 1,475 1,525
- ---------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 109,686 17,239 13,636
- ---------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 16
FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN NET ASSETS
Six months ended January 31, 1996 and
year ended July 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER
MONEY MARKET GOVERNMENT MONEY TAX-FREE MONEY
FUND FUND FUND
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY
Net investment income $ 109,686 210,099 17,239 31,590 13,636 26,591
- -------------------------------------------------------------------------------------------------------------
Change in unrealized
depreciation -- (28,328) -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Capital contribution from
investment manager -- 28,328 -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Dividends to shareholders from
net investment income (109,686) (210,099) (17,239) (31,590) (13,636) (26,591)
- -------------------------------------------------------------------------------------------------------------
Capital share transactions
(dollar amounts and number of
shares are the same):
Shares sold 2,783,799 5,434,790 385,615 808,318 385,495 816,602
- -------------------------------------------------------------------------------------------------------------
Shares issued in reinvestment of
dividends 106,475 200,429 16,792 29,447 13,267 25,523
- -------------------------------------------------------------------------------------------------------------
2,890,274 5,635,219 402,407 837,765 398,762 842,125
- -------------------------------------------------------------------------------------------------------------
Less shares redeemed 2,906,399 5,758,910 354,891 941,532 393,943 874,113
- -------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE TRANSACTIONS AND
TOTAL INCREASE (DECREASE) IN NET
ASSETS (16,125) (123,691) 47,516 (103,767) 4,819 (31,988)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
NET ASSETS
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Beginning of period 4,025,098 4,148,789 603,601 707,368 760,143 792,131
- -------------------------------------------------------------------------------------------------------------
END OF PERIOD $4,008,973 4,025,098 651,117 603,601 764,962 760,143
- ------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1 DESCRIPTION OF THE FUNDS Kemper Money Funds (the Trust) is an open-end
management investment company organized as a
business trust under the laws of Massachusetts
currently offering three series of shares. Kemper
Money Market Fund invests primarily in short-term
high quality obligations of major banks and
corporations. Kemper Government Money Fund invests
exclusively in obligations issued or guaranteed by
the U.S. Government, its agencies or
instrumentalities and repurchase agreements
thereon. Kemper Tax-Free Money Fund invests in
short-term high quality municipal securities. (The
Trust was previously known as Kemper Money Market
Fund and the three series of shares offered were
known as the Money Market Portfolio, the Government
Securities Portfolio and the Tax-Exempt Portfolio.)
- --------------------------------------------------------------------------------
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 Fund'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.
16
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS
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
Fund are allocated to that Fund. Other Trust
expenses are allocated among the Funds 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 Fund determines its net asset value
per share (NAV) by dividing the total value of the
Fund's investments and other assets, less
liabilities, by the number of Fund shares
outstanding. The NAV is determined at 11:00 a.m.,
1:00 p.m. and 3:00 p.m. Chicago time for Kemper
Money Market Fund and Kemper Government Money Fund
and at 11:00 a.m. and 3:00 p.m. Chicago time for
Kemper Tax-Free Money Fund. Each Fund 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 Fund.
FEDERAL INCOME TAXES. Each Fund 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 Trust has a management
agreement with Zurich Kemper Investments, Inc.
(ZKI) (formerly Kemper Financial Services, Inc.)
and pays a management fee at an annual rate of .50%
of the first $215 million of average daily net
assets declining to .25% of average daily net
assets in excess of $800 million. During the six
months ended January 31, 1996, the Fund incurred
management fees of $7,350,000.
Kemper Asset Holdings, Inc. (KAHI), a subsidiary of
Kemper Corporation, the former parent company of
ZKI, has arranged for the issuance of a
$107,081,000 irrevocable letter of credit from The
Bank of New York for the benefit of the Trust. The
letter of credit supports the payment of principal
and interest on the Orange County, California
obligation held in Kemper Money Market Fund. The
Trust 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 Trust will transfer to KAHI any proceeds
received under the Orange County obligation.
SHAREHOLDER SERVICES AGREEMENT. Pursuant to a
services agreement with the Funds' transfer agent,
Kemper Service Company (KSvC) is the shareholder
service agent of the Trust. For the six months
ended January 31, 1996, IFTC remitted shareholder
services fees to KSvC of $3,416,000.
OFFICERS AND TRUSTEES. Certain officers or trustees
of the Trust are also officers or directors of ZKI.
During the six months ended January 31, 1996, the
Funds made no payments to their officers and
incurred trustees' fees of $35,000 to independent
trustees.
17
<PAGE> 18
FINANCIAL HIGHLIGHTS
KEMPER MONEY MARKET FUND
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JULY 31,
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) 2.74% 5.34 3.20 2.96 4.45
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses .52% .52 .52 .52 .49
- -----------------------------------------------------------------------------------------------------------------------
Net investment income 5.37% 5.19 3.14 2.92 4.42
- -----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets at end of period (in thousands) $4,008,973 4,025,098 4,148,789 4,499,930 5,664,194
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Kemper Money Market Fund'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 4.62%.
KEMPER GOVERNMENT MONEY FUND
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JULY 31,
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) 2.75% 5.36 3.20 2.97 4.50
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses .46% .46 .47 .45 .43
- -----------------------------------------------------------------------------------------------------------------------
Net investment income 5.38% 5.21 3.15 2.94 4.44
- -----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets at end of period (in thousands) $651,117 603,601 707,368 694,303 926,328
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
KEMPER TAX-FREE MONEY FUND
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JULY 31,
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 .04
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 1.81% 3.53 2.33 2.39 3.57
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses .40% .40 .41 .39 .39
- -----------------------------------------------------------------------------------------------------------------------
Net investment income 3.56% 3.46 2.30 2.36 3.49
- -----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets at end of period (in thousands) $764,962 760,143 792,131 758,630 796,272
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 19
SHAREHOLDERS' MEETING
SPECIAL SHAREHOLDERS' MEETING
On September 19, 1995, the results of the proxy solicitation were announced at a
joint special shareholders' meeting. Kemper Money Funds shareholders were asked
to vote on three separate issues: election of nine Trustees to the Board of
Trustees, ratification of Ernst & Young LLP as independent auditors and approval
of a new investment management agreement with Kemper Financial Services, Inc. or
its successor on the same terms as the current agreement. 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 2,865,652,492 118,469,649
Lewis A. Burnham 2,867,144,553 116,977,588
Donald L. Dunaway 2,866,547,729 117,574,412
Robert B. Hoffman 2,867,144,553 116,977,588
Donald R. Jones 2,867,442,965 116,679,176
David B. Mathis 2,865,590,904 118,171,237
Shirley D. Peterson 2,862,071,545 122,050,596
William P. Sommers 2,865,950,904 118,171,237
Stephen B. Timbers 2,867,144,553 116,977,588
</TABLE>
2) Ratification of the selection of Ernst & Young LLP as independent auditors
for the fund
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
2,802,197,121 79,950,696 101,974,324
</TABLE>
3) Approval of new investment management agreement
Kemper Money Market Fund
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
2,007,911,043 76,085,149 116,315,570
</TABLE>
Kemper Government Money Fund
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
311,428,415 13,115,621 18,161,236
</TABLE>
Kemper Tax-Free Money Fund
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
392,464,012 23,180,601 25,460,494
</TABLE>
19
<PAGE> 20
TRUSTEES AND OFFICERS
TRUSTEES
STEPHEN B. TIMBERS
President and Trustee
DAVID W. BELIN
Trustee
LEWIS A. BURNHAM
Trustee
DONALD L. DUNAWAY
Trustee
ROBERT B. HOFFMAN
Trustee
DONALD R. JONES
Trustee
DOMINIQUE P. MORAX
Trustee
SHIRLEY D. PETERSON
Trustee
WILLIAM P. SOMMERS
Trustee
OFFICERS
J. PATRICK BEIMFORD, JR.
Vice President
JOHN E. NEAL
Vice President
JOHN E. PETERS
Vice President
FRANK J. RACHWALSKI, JR.
Vice President
PHILIP J. COLLORA
Vice President and
Secretary
CHARLES F. CUSTER
Vice President and
Assistant Secretary
JEROME L. DUFFY
Treasurer
ELIZABETH C. WERTH
Assistant Secretary
- --------------------------------------------------------------------------------
LEGAL COUNSEL
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 North LaSalle Street
Chicago, IL 60601
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICE AGENT
KEMPER SERVICE COMPANY
P.O. Box 419557
Kansas City, MO 64141
1-800-621-1048
- --------------------------------------------------------------------------------
CUSTODIAN AND TRANSFER AGENT
INVESTORS FIDUCIARY TRUST COMPANY
127 West 10th Street
Kansas City, MO 64105
- --------------------------------------------------------------------------------
INVESTMENT MANAGER
ZURICH KEMPER INVESTMENTS, INC.
PRINCIPAL UNDERWRITER
KEMPER DISTRIBUTORS, INC.
120 S. LaSalle Street
Chicago, IL 60603
(RECYCLED LOGO)
Printed on recycled paper.
This report is not to be distributed
unless preceded or accompanied by a
Kemper Money Funds prospectus.
KMMF - 3 (3/96) [KEMPER LOGO]
1012800
Printed in the U.S.A.
