<PAGE> 1
KEMPER
MONEY FUNDS
SEMIANNUAL REPORT TO SHAREHOLDERS FOR THE PERIOD ENDED JANUARY
31, 1997
" . . . The money markets could
play an increasing and integral role
as investors look for a vehicle that
will help protect value during
the upcoming months."
[ZURICH LOGO]
<PAGE> 2
CONTENTS
3
Performance Update
6
Terms to Know
6
Portfolio Statistics
8
Portfolio of Investments
16
Financial Statements
18
Notes to Financial Statements
19
Financial Highlights
AT A GLANCE
- -------------------------------------------------------------------------------
KEMPER MONEY FUNDS
YIELD COMPARISON+
- -------------------------------------------------------------------------------
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 1997
[BAR GRAPH]
<TABLE>
<CAPTION>
KEMPER FIRST- KEMPER GOVERN- KEMPER TAX-
MONEY TIER GOVERN- MENT TAX-FREE EXEMPT
MARKET MONEY MENT MONEY MONEY MONEY
FUND FUND MONEY FUND FUND FUND
AVERAGE* FUND AVERAGE* AVERAGE*
<S> <C> <C> <C> <C> <C>
5.07% 4.76% 5.06% 4.65% 3.29% 2.92%
</TABLE>
The tax-equivalent yield for Kemper Tax-Free Money Fund was 5.23%. The
tax-equivalent yield 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 net asset value of $1.00 per share.
+The six month yields for the funds are the annualized sum of the daily dividend
rates for the period.
*The funds are compared to their respective IBC Financial Data categories: First
Tier Money Fund Average consists of all non-institutional taxable money market
funds investing in only first tier (highest rating) securities and tracked by
IBC Financial Data; Government Money Fund Average includes all non-institutional
government money market funds tracked by IBC Financial Data; Tax-Exempt Money
Fund Average consists of all non-institutional tax-free money market funds
tracked by IBC Financial Data.
- --------------------------------------------------------------------------------
KEMPER MONEY FUNDS
LIPPER RANKINGS
- -------------------------------------------------------------------------------
COMPARED TO ALL OTHER FUNDS IN THE RESPECTIVE LIPPER CATEGORY
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER
MONEY GOVERNMENT TAX-FREE
MARKET MONEY MONEY
FUND FUND FUND
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
1-YEAR #26 OF 288 FUNDS #6 OF 115 FUNDS #6 OF 134 FUNDS
- ---------------------------------------------------------------------------------------
5-YEAR #20 OF 174 FUNDS #5 OF 79 FUNDS #8 OF 94 FUNDS
- ---------------------------------------------------------------------------------------
10-YEAR #6 OF 105 FUNDS #2 OF 43 FUNDS N/A
- ---------------------------------------------------------------------------------------
20-YEAR #1 OF 28 FUNDS N/A N/A
- ---------------------------------------------------------------------------------------
</TABLE>
Lipper Analytical Services, Inc. rankings are based upon changes in net asset
value with all dividends reinvested for the periods indicated as of January 31,
1997. 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.
ABOUT YOUR REPORT
KEMPER MONEY FUNDS TO TAKE ZURICH NAME
To clearly distinguish Zurich Kemper Investments' no-load money market funds
from the long-term equity and income mutual funds marketed by financial
representatives, the name Kemper Money Funds will change to Zurich Money Funds
on or about April 14, 1997. All current account services and features will
remain, and the funds will continue to be managed by the Chicago-based team led
by Frank Rachwalski, who has been with Kemper Money Market Fund since its
inception in 1974.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
CURRENT NAME NEW NAME
- ----------------------------------------------------------------------------
<S> <C>
Kemper Money Market Fund Zurich Money Market Fund
- ----------------------------------------------------------------------------
Kemper Government Money Fund Zurich Government Money Fund
- ----------------------------------------------------------------------------
Kemper Tax-Free Money Fund Zurich Tax-Free Money Fund
- ----------------------------------------------------------------------------
</TABLE>
<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.
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.
WHILE THE COURSE OF INTEREST RATES REMAINED AN ISSUE DURING THE SECOND HALF OF
1996 AND INTO THE FIRST MONTH OF 1997, MODERATE ECONOMIC GROWTH AND MODEST
INFLATIONARY PRESSURES PREVENTED THE FEDERAL RESERVE BOARD FROM TAKING ANY
ACTION. PORTFOLIO MANAGER FRANK RACHWALSKI DISCUSSES THE MARKET AND KEMPER MONEY
FUNDS' PERFORMANCE.
Q FRANK, WHAT SORT OF ECONOMIC ENVIRONMENT DID YOU CONFRONT DURING THE LAST
SIX MONTHS?
A In the middle months of the year, we saw a shift in expectations from
strong economic growth to slower growth. With that, came expectations that the
Federal Reserve Board (the Fed) would not tighten (See Terms To Know on page 6)
monetary conditions. Based on this scenario, we saw a flattening of the yield
curve and slightly lower yield levels. As the months progressed, especially
toward the end of the year, the opposite seemed to occur. The economy showed
renewed signs of vigor, economic data was stronger and concerns of the Fed
easing, or reducing, rates were dissipated. At that point, feelings stirred
again toward an expectation that the Fed would embark on a tightening phase.
Although economic growth has continued at a steady pace, we do not see strong
inflationary pressures.
Q HOW DID KEMPER MONEY FUNDS PERFORM IN THIS MARKET?
A We had an excellent calendar 1996 and the second half of the year continued
to offer strong performance. All Kemper Money Funds were in the top decile of
their Lipper Analytical Services, Inc. category for the one-year ended January
31, 1997 (see page 2 for full rankings disclosure). While interest rates were
the source of much speculation, there were no big surprises in the market. The
presidential election didn't affect the market very much because the balance
between the parties was maintained. The year ended on a strong economic note.
Q WHAT PROCESS DID YOU AND YOUR TEAM USE TO ACHIEVE THE FUNDS' OUTPERFORMANCE
RELATIVE TO THEIR PEER GROUPS?
A With moderate economic growth and modest inflationary pressures, we
remained somewhat defensive with maturities, reducing them to fewer than 40 days
in the tax-exempt fund, but we lengthened and shortened maturities at different
points in the period to take advantage of seasonal patterns. Tax-exempt rates
generally vary at different points in the calendar year, particularly around tax
times.
In money market and government funds, these sorts of seasonal shifts do not
exist. However, we did see the market get richer and cheaper based on market
expectations. We lengthened and shortened maturities to take advantage of any
opportunities it provided. Early in the period we modestly lengthened
3
<PAGE> 4
PERFORMANCE UPDATE
maturities because there was some income reward for extension on the yield
curve. As fall months progressed, the yield curve flattened as the market
expectation of a Fed tightening diminished, so there was no reward in
maintaining longer maturities. At that point we reverted to an overall defensive
bias and shortened maturities.
Q ON OR ABOUT APRIL 14, KEMPER MONEY FUNDS WILL TAKE ON THE ZURICH NAME AND
BECOME ZURICH MONEY FUNDS. WHY THE CHANGE AND WHAT EFFECT, IF ANY, WILL IT HAVE
ON SHAREHOLDERS?
A The name change is a very positive move and reflects our ownership by the
Zurich Insurance Group. This change will distinguish the money funds, which do
not have a sales charge, from the Kemper Funds that are sold through financial
representatives and include a sales charge. The money funds will remain a part
of Zurich Kemper Investments, Inc. and will be managed from our Chicago offices
by the same management team, which I will continue to lead.
Also, the name change should not present any operational changes for
shareowners. All account services will operate the same as they do today.
Shareholder account numbers will remain the same and direct deposit features
will not need to be adjusted. Shareholders will also be able to continue to use
existing Kemper Money Funds checks and forms as well as the exchange privileges
between Kemper Funds and Zurich Money Funds.
Q WHAT IS YOUR OUTLOOK FOR THE COMING MONTHS?
A 1997 is going to be a year of both challenges and opportunities because we
are much further along in an economic cycle. Levels of inflation appear to have
bottomed out and actually have tilted modestly upward spurring the possibility
of higher interest rates. The equity market has, by any measure, had a very long
and very strong run and it seems to be on the pricey side. Our new Congress will
have to tackle some major problems, such as balancing the budget and addressing
transfer payments, and their actions and decisions could effect the economy.
These considerations should lead investors to be a little more cautious in their
investment plans. The money markets could play an increasing and integral role
as investors look for a vehicle that will help protect value during the upcoming
months.
4
<PAGE> 5
PERFORMANCE UPDATE
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS*
- -------------------------------------------------------------------------------
FOR PERIODS ENDED JANUARY 31, 1997
<TABLE>
<CAPTION>
LIFE OF
1-YEAR 5-YEAR 10-YEAR FUND
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
KEMPER MONEY MARKET FUND 5.21% 4.26% 5.86% 7.88% (since 11/25/74)
- -------------------------------------------------------------------------------------------------
KEMPER GOVERNMENT MONEY FUND 5.19 4.28 5.81 6.74 (since 11/30/81)
- -------------------------------------------------------------------------------------------------
KEMPER TAX-FREE MONEY FUND 3.32 2.97 N/A 4.08 (since 9/10/87)
- ------------------------------------------------------------------------------------------------
</TABLE>
YIELD COMPARISON
- --------------------------------------------------------------------------------
KEMPER MONEY MARKET FUND COMPARED TO FIRST TIER MONEY FUNDS
FROM 7/31/96 THROUGH 1/28/97
- --------------------------------------------------------------------------------
[LINE GRAPH]
<TABLE>
<CAPTION>
7/31/96 8/27/96 9/24/96 10/29/96 11/26/96 12/31/96 1/28/97
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kemper Money Market Fund 5.09 5.05 5.08 5.04 5.04 5.14 5.13
First Tier Money Fund Average** 4.74 4.73 4.75 4.75 4.75 4.82 4.75
</TABLE>
- --------------------------------------------------------------------------------
KEMPER GOVERNMENT MONEY FUND COMPARED TO GOVERNMENT MONEY FUNDS
FROM 7/31/96 THROUGH 1/28/97
- --------------------------------------------------------------------------------
[LINE GRAPH]
<TABLE>
<CAPTION>
7/31/96 8/27/96 9/24/96 10/29/96 11/26/96 12/31/96 1/28/97
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kemper Government Money Fund 5.05 4.96 5.11 5.05 5.03 5.14 5.09
Government Money Fund Average** 4.67 4.64 4.67 4.68 4.67 4.73 4.66
</TABLE>
- --------------------------------------------------------------------------------
KEMPER TAX-FREE MONEY FUND COMPARED TO TAX-EXEMPT MONEY FUNDS
FROM 7/31/96 THROUGH 1/27/97
- --------------------------------------------------------------------------------
[LINE GRAPH]
<TABLE>
<CAPTION>
7/31/96 8/27/96 9/24/96 10/29/96 11/26/96 12/31/96 1/27/97
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kemper Tax-Free Money Fund 3.27 3.30 3.35 3.32 3.26 3.55 3.21
Tax-Exempt Money Fund Average** 2.94 2.90 2.99 2.96 2.93 3.27 2.87
</TABLE>
Past performance is not predictive of future performance. Returns fluctuate.
Please note: the tax-equivalent yield for Kemper Tax-Free Money Fund was 5.10%
based on an annualized 7-day yield of 3.21% on 1/27/97 (at a marginal federal
income tax rate of 37.1%).
* 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.
** The funds are compared to their respective IBC Financial Data categories:
First Tier Money Fund Average consists of all non-institutional taxable money
market funds investing in only first tier (highest rating) securities and
tracked by IBC Financial Data; Government Money Fund Average includes all
non-institutional government money market funds tracked by IBC Financial
Data; Tax-Exempt Money Fund Average consists of all non-institutional
tax-free money market funds tracked by IBC Financial Data.
5
<PAGE> 6
TERMS TO KNOW
AVERAGE MATURITY The weighted average number of days in which each security in
the portfolio matures.
DURATION A measure of the interest rate sensitivity of a portfolio,
incorporating time to maturity and coupon size. The longer the duration, the
greater the interest rate risk.
EASE When the Federal Reserve Board of Governors decreases the federal funds
rate.
TIGHTEN An economic condition in which credit is difficult to secure, usually as
the result of the Federal Reserve Board taking actions to restrict the money
supply and raise interest rates.
PORTFOLIO STATISTICS
PORTFOLIO COMPOSITION*
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
KEMPER MONEY MARKET FUND ON 1/31/97
- ----------------------------------------------------------------------------
<S> <C>
COMMERCIAL PAPER 79%
- ----------------------------------------------------------------------------
DOMESTIC CDs 6
- ----------------------------------------------------------------------------
REPURCHASE AGREEMENTS 13
- ----------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY NOTES 2
- ----------------------------------------------------------------------------
TOTAL 100%
</TABLE>
[PIE CHART]
6
<PAGE> 7
PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
KEMPER GOVERNMENT MONEY FUND ON 1/31/97
- ----------------------------------------------------------------------------
<S> <C>
REPURCHASE AGREEMENTS 51%
- ----------------------------------------------------------------------------
FEDERAL AGENCIES 49
- ----------------------------------------------------------------------------
TOTAL 100%
</TABLE>
[PIE CHART]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
KEMPER TAX-FREE MONEY FUND ON 1/31/97
- ----------------------------------------------------------------------------
<S> <C>
TAX-EXEMPT COMMERCIAL PAPER 52%
- ----------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES 43
- ----------------------------------------------------------------------------
TENDER SECURITIES 2
- ----------------------------------------------------------------------------
GENERAL MARKET OBLIGATIONS 3
- ----------------------------------------------------------------------------
TOTAL 100%
</TABLE>
[PIE CHART]
AVERAGE WEIGHTED MATURITY
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
ON 1/28/97
- ----------------------------------------------------------------------------
<S> <C>
KEMPER MONEY MARKET FUND 34 DAYS
- ----------------------------------------------------------------------------
FIRST TIER MONEY FUND AVERAGE+ 59
- ----------------------------------------------------------------------------
KEMPER GOVERNMENT MONEY FUND 31
- ----------------------------------------------------------------------------
GOVERNMENT MONEY FUND AVERAGE+ 48
- ----------------------------------------------------------------------------
KEMPER TAX-FREE MONEY FUND 26
- ----------------------------------------------------------------------------
TAX-FREE MONEY FUND AVERAGE+ 47
- ----------------------------------------------------------------------------
</TABLE>
* Portfolio compositions are subject to change.
+ The funds are compared to their respective IBC Financial Data categories:
First Tier Money Fund Average consists of all non-institutional taxable money
market funds investing in only first tier (highest rating) securities and
tracked by IBC Financial Data; Government Money Fund Average includes all
non-institutional government money market funds tracked by IBC Financial Data;
Tax-Exempt Money Fund Average consists of all non-institutional tax-free money
market funds tracked by IBC Financial Data.
7
<PAGE> 8
PORTFOLIO OF INVESTMENTS
KEMPER MONEY MARKET FUND
INVESTMENTS AT JANUARY 31, 1997
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
CORPORATE OBLIGATIONS VALUE
- ---------------------------------------------------------
BANKING--4.5%
- ---------------------------------------------------------
<S> <C>
(a)Bankers Trust New York Corp.
5.45%, 2/1/97 $ 54,983
Credit Lyonnais N.A. Inc.
5.54%, 4/22/97 64,211
Sumitomo Bank Capital Markets, Inc.
5.45%-5.50%, 2/25/97-3/24/97 74,528
--------------------------------------------------
193,722
- ---------------------------------------------------------
BUSINESS LOANS--23.6%
- ---------------------------------------------------------
Arena Funding Corp.
5.48%-5.50%, 2/5/97-2/12/97 64,918
Astro Capital Corp.
5.48%, 2/3/97 19,994
Banner Receivable Corp.
5.50%-5.59%, 2/20/97-3/31/97 54,749
Broadway Capital Corp.
5.50%-5.58%, 2/27/97-3/13/97 79,577
CXC Incorporated
5.40%, 3/11/97 49,717
Corporate Receivables Corp.
5.43%, 2/14/97 24,951
Eureka Securitization, Inc.
5.45%, 2/7/97 24,978
Falcon Asset Securitization Corp.
5.37%, 2/27/97 39,845
Gotham Funding Corp.
5.51%-5.52%, 2/20/97-4/24/97 74,307
Jet Funding Corporation
5.52%, 4/30/97 74,001
Kitty Hawk Funding Corp.
5.53%-5.54%, 3/14/97-3/17/97 74,511
Madison Funding Corp.
5.68%, 3/17/97 24,829
Monte Rosa Capital Corp.
5.47%, 2/13/97 64,883
Ranger Funding Corporation
5.46%, 2/12/97 24,959
Sigma Finance, Inc.
5.48%-5.53%, 3/25/97-3/27/97 74,398
Strategic Asset Funding Corp.
5.49%, 3/31/97 74,345
WCP Funding Inc.
5.44%, 2/19/97 24,933
Windmill Funding Corp.
5.44%, 2/14/97 64,873
Working Capital Management Co., L.P.
5.49%-5.51%, 2/7/97-2/26/97 74,841
--------------------------------------------------
1,009,609
<CAPTION>
VALUE
- ---------------------------------------------------------
CAPITAL AND EQUIPMENT LENDING--10.6%
- ---------------------------------------------------------
<S> <C>
(a)American Honda Finance Corporation
5.50%, 2/4/97-2/7/97 $ 64,997
BTM Capital Corp.
5.49%, 2/28/97-4/15/97 39,664
(a)Caterpillar Financial Services Corp.
5.46%, 2/28/97 30,000
Chrysler Financial Corporation
5.92%, 3/17/97 10,018
Ford Motor Credit Company
(a) 5.94%, 2/3/97 10,000
5.34%, 3/4/97 49,772
General Motors Acceptance Corp.
5.80%, 3/24/97 15,003
IBM Credit Corp.
5.26%-5.98%, 2/28/97-5/29/97 49,977
Mitsubishi Motors Credit of America,
Inc.
5.53%-5.56%, 4/14/97-4/28/97 29,651
SRD Finance Inc.
5.39%-5.43%, 2/6/97-2/20/97 84,879
(a)Sanwa Business Credit Corp.
5.56%-5.58%, 2/4/97-2/18/97 50,000
(a)Xerox Credit Corp.
5.50%, 2/4/97 20,000
---------------------------------------------------
453,961
- ---------------------------------------------------------
CAPTIVE BUSINESS LENDING--6.1%
- ---------------------------------------------------------
Enterprise Funding Corp.
5.38%, 3/5/97 49,762
(a)FINOVA Capital Corporation
5.56%, 2/18/97 50,000
Nichimen America, Inc.
5.52%, 3/11/97 14,914
Oakland-Alameda County Coliseum,
California
5.46%-5.55%, 2/24/97-3/12/97 50,000
Orix America, Inc.
5.44%-5.50%, 2/3/97-3/3/97 94,719
--------------------------------------------------
259,395
- --------------------------------------------------------
CONSUMER LENDING--2.4%
- ---------------------------------------------------------
(b)GMAC Mortgage Corporation of
Pennsylvania
5.66%, 2/28/97 44,810
(a)Household Finance Corp.
5.48%, 2/28/97 25,000
Household International, Inc.
5.45%, 4/2/97 24,775
(a)PHH Corporation
5.45%, 2/6/97 9,999
---------------------------------------------------
104,584
</TABLE>
8
<PAGE> 9
PORTFOLIO OF INVESTMENTS
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VALUE
- ---------------------------------------------------------
DIVERSIFIED FINANCE--12.8%
- ---------------------------------------------------------
<S> <C>
APEX Funding Corp.
5.52%, 4/30/97 $49,334
Associates Corporation of North
America
5.42%, 4/1/97 74,342
(a)CIT Group Holdings, Inc.
5.36%, 2/1/97 54,971
Dynamic Funding Corporation
5.40%-5.41%, 2/11/97-2/14/97 74,865
General Electric Capital Corp.
5.43%, 4/16/97 74,174
Heller Financial, Inc.
(a) 5.55%-5.69%, 2/18/97-2/21/97 50,012
5.65%, 4/11/97 24,734
Old Line Funding Corp.
5.38%, 3/6/97-3/7/97 74,625
STRAIT Capital Corporation
5.47%-5.54%, 2/20/97-4/21/97 68,554
--------------------------------------------------
545,611
- ---------------------------------------------------------
FINANCIAL SERVICES--7.8%
- ---------------------------------------------------------
(a)Bear Stearns Companies Inc.
5.48%-5.50%, 2/6/97-2/19/97 55,000
(a)Goldman Sachs Group, L.P.
5.50%, 2/25/97 50,000
(a)(b)Lehman Brothers Holdings Inc.
5.57%, 2/19/97 50,000
(a)Merrill Lynch & Co., Inc.
5.41%-5.45%, 2/10/97-2/19/97 49,991
Nomura Holding America Inc.
5.48%-5.61%, 4/17/97-4/30/97 74,046
Salomon Inc.
(a) 5.70%, 2/7/97 30,000
6.42%, 4/21/97 24,664
--------------------------------------------------
333,701
- ---------------------------------------------------------
HEALTH CARE AND PRODUCTS--2.7%
- ---------------------------------------------------------
Columbia/HCA Healthcare Corp.
5.40%, 3/26/97-3/27/97 74,406
Robins (A.H.) Company, Inc.
5.59%, 2/13/97 39,926
---------------------------------------------------
114,332
- ---------------------------------------------------------
MANUFACTURING AND INDUSTRIAL--.6%
- ---------------------------------------------------------
Bridgestone/Firestone, Inc.
5.43%, 2/24/97 24,914
<CAPTION>
VALUE
- ---------------------------------------------------------
UTILITIES--7.4%
- ---------------------------------------------------------
<S> <C>
AES Shady Point, Inc.
5.43%, 2/20/97 $ 9,971
Brazos River Authority, Texas
5.41%-5.45%, 2/12/97-2/18/97 120,940
Frontier Corporation
5.46%-5.50%, 2/10/97-2/11/97 34,950
GTE Corporation
5.60%, 2/21/97 64,800
Gulf Coast Waste Authority, Texas
5.39%, 3/10/97 25,000
NYNEX Corporation
5.37%-5.50%, 2/27/97-3/28/97 34,754
New Hampshire
Industrial Development Authority
5.45%, 2/18/97 25,000
--------------------------------------------------
315,415
--------------------------------------------------
TOTAL CORPORATE OBLIGATIONS--78.5%
(average maturity: 34 days) 3,355,244
--------------------------------------------------
BANK OBLIGATIONS
- ---------------------------------------------------------
CERTIFICATES OF DEPOSIT
- ---------------------------------------------------------
(a)AmSouth Bank of Alabama
5.45%, 2/7/97 29,986
Harris Trust & Savings Bank
6.10%, 6/17/97 14,997
(a)Key Bank, N.A.
5.36%, 2/1/97 34,989
(a)Key Bank of Maine
5.39%, 2/14/97 29,999
MBNA America Bank N.A.
5.50%, 3/17/97-4/18/97 60,000
NationsBank N.A.
5.72%, 4/30/97 19,997
(a)Old Kent Bank
5.45%, 2/1/97 50,000
(a)PNC Bank, N.A.
5.56%, 2/3/97 24,987
--------------------------------------------------
TOTAL BANK
OBLIGATIONS--6.2%
(average maturity: 31 days) 264,955
--------------------------------------------------
</TABLE>
9
<PAGE> 10
PORTFOLIO OF INVESTMENTS
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VALUE
- -----------------------------------------------------------------------------------
(C) REPURCHASE AGREEMENTS
- -----------------------------------------------------------------------------------
<S> <C> <C>
(Dated 1/97, collateralized by Federal
Home Loan Mortgage Corporation and
Federal National Mortgage Association
securities)
Chase Securities, Inc.
(held at The Chase Manhattan Bank)
5.45%, 2/10/97 $ 25,000
Nomura Securities International, Inc.
(held at The Bank of New York)
5.43%-5.46%, 4/2/97-4/15/97 440,000
Salomon Brothers Inc.
(held at The Bank of New York)
5.39%, 3/5/97-3/6/97 75,000
------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS--12.6%
(average maturity: 60 days) 540,000
- -----------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY NOTES
- -----------------------------------------------------------------------------------
(a)Federal National Mortgage Association
5.33%, 2/4/97 54,554
(a)Student Loan Marketing Association
5.44%, 2/4/97 32,886
------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY
NOTES--2.0%
(average maturity: 3 days) 87,440
------------------------------------------------------------
TOTAL INVESTMENTS--99.3%
(average maturity: 36 days) 4,247,639
------------------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--.7% 28,784
------------------------------------------------------------
NET ASSETS--100% $4,276,423
------------------------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
10
<PAGE> 11
PORTFOLIO OF INVESTMENTS
KEMPER GOVERNMENT MONEY FUND
INVESTMENTS AT JANUARY 31, 1997
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VALUE
- --------------------------------------------------------------------------------------------------------------------
SHORT-TERM NOTES (ISSUED OR GUARANTEED BY
U.S. GOVERNMENT AGENCIES OR INSTRUMENTALITIES)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(a)Agency for International Development
Government of Israel
5.59%, 2/4/97 $ 9,216
(a)Export-Import Bank of the United States
Cathay Pacific Airways Limited
5.56%, 2/13/97 5,472
KA Leasing, Ltd.
5.56%, 2/15/97 13,699
Kuwait Investment Authority
5.56%, 2/15/97 22,840
VARIG Brazilian Airlines
5.56%, 4/15/97 7,365
Federal Home Loan Bank
(a) 5.26%-5.45%, 2/2/97-2/24/97 24,095
6.02%-6.05%, 6/2/97-9/18/97 12,499
Federal Home Loan Mortgage
Corporation
5.40%-6.16%, 3/20/97-9/1/97 12,594
Federal National Mortgage Association
(a) 5.33%, 2/4/97 50,632
5.42%-6.10%, 2/24/97-9/3/97 22,856
(a) Overseas Private Investment
Corporation
International Paper Company
5.51%, 4/15/97 6,000
Omolon
5.50%, 2/4/97 20,500
(a) Student Loan Marketing Association
5.39%-5.87%, 2/4/97-6/30/97 135,435
--------------------------------------------------------------------------------
TOTAL SHORT-TERM NOTES--48.4%
(average maturity: 33 days) 343,203
--------------------------------------------------------------------------------
<CAPTION> VALUE
- -------------------------------------------------------------------------------------------------------------------
(C) REPURCHASE AGREEMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(Dated 12/96 and 1/97, collateralized
by Federal Home Loan Mortgage
Corporation, Federal National
Mortgage Association and Government
National Mortgage Association
securities)
Bear, Stearns & Co. Inc.
5.38%-5.47%, 2/12/97-3/19/97 $ 98,000
CS First Boston Inc.
(held at The Chase Manhattan Bank)
5.36%-5.40%, 2/4/97-2/7/97 32,000
Chase Securities, Inc.
(held at The Chase Manhattan Bank)
5.42%, 3/19/97 15,000
Lehman Government Securities Inc.
(held at The Chase Manhattan Bank)
5.35%, 2/3/97 5,000
Morgan Stanley & Co. Incorporated
(held at The Bank of New York)
5.39%, 2/4/97 15,000
Nomura Securities International, Inc.
(held at The Bank of New York)
5.40%-5.43%, 2/12/97-3/19/97 100,000
Salomon Brothers Inc.
(held at The Bank of New York)
5.39%-5.44%, 2/5/97-2/26/97 95,000
-------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS--50.7%
(average maturity: 25 days) 360,000
-------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.1%
(average maturity: 29 days) 703,203
-------------------------------------------------------------------------------
CASH AND OTHER ASSETS, LESS
LIABILITIES--.9% 6,035
-------------------------------------------------------------------------------
NET ASSETS--100% $709,238
-------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Portfolios of Investments.
11
<PAGE> 12
PORTFOLIO OF INVESTMENTS
KEMPER TAX-FREE MONEY FUND
INVESTMENTS AT JANUARY 31, 1997
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VARIABLE RATE
(A) DEMAND SECURITIES VALUE
<S> <C> <C>
- --------------------------------------------------------
ALABAMA
- --------------------------------------------------------
Livingston
Industrial Development Board
4.00% $ 3,900
- --------------------------------------------------------
ARIZONA
- --------------------------------------------------------
Apache County
Industrial Development Authority
3.55% 8,000
Maricopa County
Pollution Control Corporation
3.60% 7,000
- --------------------------------------------------------
CALIFORNIA
- --------------------------------------------------------
Kern County
Community College District
4.05% 3,000
Los Angeles
Harbor Improvement Corporation
3.70% 11,500
- --------------------------------------------------------
DISTRICT OF COLUMBIA
- --------------------------------------------------------
General Obligation
3.70% 4,000
- --------------------------------------------------------
FLORIDA
- --------------------------------------------------------
Dade County
Aviation Facilities Revenue
3.80% 7,900
- --------------------------------------------------------
GEORGIA
- --------------------------------------------------------
Cartersville
Industrial Development Revenue
3.95% 3,600
Fulton County
Development Authority
3.70% 10,445
- --------------------------------------------------------
ILLINOIS
- --------------------------------------------------------
Development Finance Authority
3.78% 23,500
Educational Facilities Authority
3.50% 8,900
Havana
Industrial Development Revenue
3.70% 3,000
Hillside
Economic Development Revenue
3.75% 6,000
Mundelein
Industrial Development Revenue
3.75% 6,500
Richmond
Industrial Development Revenue
3.70% 4,000
Springfield
Industrial Development Revenue
3.70% 6,500
Woodridge
Industrial Development Revenue
3.79% 4,100
<CAPTION>
VALUE
<S> <C> <C>
- --------------------------------------------------------
INDIANA
- --------------------------------------------------------
Health Facility Financing Authority
3.60% $ 5,000
Ossian
Economic Development Revenue
3.75% 4,000
Rockport
Pollution Control Revenue
3.60% 14,745
- --------------------------------------------------------
KANSAS
- --------------------------------------------------------
Kansas City
Pollution Control Revenue
3.75% 4,350
- --------------------------------------------------------
KENTUCKY
- --------------------------------------------------------
Development Finance Authority
3.60% 7,880
Lexington-Fayette Urban County
Government Industrial Building Revenue
3.75% 4,800
Mayfield
Multi-City Lease Revenue
3.75% 5,000
Todd County
Industrial Development Revenue
3.75% 2,600
- --------------------------------------------------------
LOUISIANA
- --------------------------------------------------------
Caddo Parish
Industrial Development Board
3.90% 2,930
- --------------------------------------------------------
MICHIGAN
- --------------------------------------------------------
Dearborn
Economic Development Corporation
3.60% 7,700
- --------------------------------------------------------
MINNESOTA
- --------------------------------------------------------
Minneapolis
Community Development Agency
3.55% 5,000
- --------------------------------------------------------
MISSOURI
- --------------------------------------------------------
Kirksville
Industrial Development Authority
4.00% 6,900
- --------------------------------------------------------
NEVADA
- --------------------------------------------------------
Department of Commerce
3.80% 4,650
- --------------------------------------------------------
NEW HAMPSHIRE
- --------------------------------------------------------
Business Finance Authority
3.65% 8,000
- --------------------------------------------------------
NEW MEXICO
- --------------------------------------------------------
Farmington
Pollution Control Revenue
3.70% 6,300
</TABLE>
12
<PAGE> 13
PORTFOLIO OF INVESTMENTS
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VALUE
<S> <C> <C>
- ---------------------------------------------------------
NORTH CAROLINA
- ---------------------------------------------------------
Lenoir County
Pollution Control Financing Authority
3.75% $ 10,000
Medical Care Commission
Hospital Revenue
3.55% 13,350
- ---------------------------------------------------------
PENNSYLVANIA
- ---------------------------------------------------------
Berks County
Redevelopment Authority
3.99% 8,000
Emmaus
General Authority Revenue
3.70% 20,200
Philadelphia
Authority for Industrial Development
3.65% 12,400
- ---------------------------------------------------------
TENNESSEE
- ---------------------------------------------------------
Clarksville
Public Building Authority
3.55% 4,600
Maury County
Industrial Development Board
3.95% 2,500
- ---------------------------------------------------------
TEXAS
- ---------------------------------------------------------
Gulf Coast
Industrial Development Authority
3.60% 1,700
Sabine River Authority
3.80% 2,500
Trinity River Authority
3.75% 9,200
- ---------------------------------------------------------
UTAH
- ---------------------------------------------------------
Springville
Industrial Development Revenue
3.45% 5,000
- ---------------------------------------------------------
VIRGINIA
- ---------------------------------------------------------
Louisa County
Industrial Development Authority
3.55% 10,000
- ---------------------------------------------------------
WASHINGTON
- ---------------------------------------------------------
Port Angeles
Industrial Development Corporation
4.00% 10,100
VALUE
<CAPTION>
<S> <C> <C>
- ---------------------------------------------------------
WISCONSIN
- ---------------------------------------------------------
Eau Claire
Solid Waste Disposal Revenue
3.70% $ 9,000
---------------------------------------------------
TOTAL VARIABLE RATE DEMAND
SECURITIES--42.2%
(average maturity: 6 days) 330,250
---------------------------------------------------
OTHER SECURITIES
- ---------------------------------------------------------
ALASKA
- ---------------------------------------------------------
Valdez
Marine Terminal Revenue
3.60%-3.70%, 2/13/97-4/4/97 12,500
- ---------------------------------------------------------
ARIZONA
- ---------------------------------------------------------
Salt River Project
Agricultural Improvement and Power
District
3.55%, 2/20/97-2/25/97 15,400
- ---------------------------------------------------------
CALIFORNIA
- ---------------------------------------------------------
Revenue Anticipation Warrants
3.97%, 6/30/97 7,315
- ---------------------------------------------------------
COLORADO
- ---------------------------------------------------------
Platte River Power Authority
3.65%, 2/12/97 3,900
- ---------------------------------------------------------
FLORIDA
- ---------------------------------------------------------
Sarasota County
Public Hospital District
3.45%-3.55%, 2/20/97-5/14/97 19,750
Sunshine State
Governmental Financing Commission
3.50%, 5/9/97 6,400
- ---------------------------------------------------------
GEORGIA
- ---------------------------------------------------------
Municipal Electric Authority
3.55%-3.60%, 3/10/97-5/9/97 22,090
Municipal Gas Authority
3.50%, 3/13/97 2,905
- ---------------------------------------------------------
ILLINOIS
- ---------------------------------------------------------
Chicago
General Obligation
4.00%, 3/6/97 5,000
Development Finance Authority
3.55%-4.25%, 2/3/97-6/2/97 11,190
Educational Facilities Authority
3.55%, 2/20/97 8,000
</TABLE>
13
<PAGE> 14
PORTFOLIO OF INVESTMENTS
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VALUE
<S> <C> <C>
- --------------------------------------------------------
INDIANA
- --------------------------------------------------------
Gary
Environmental Improvement Revenue
3.70%, 2/13/97 $ 4,000
Jasper County
Pollution Control Revenue
3.50%-3.60%, 2/21/97-5/14/97 36,350
Mount Vernon
Pollution Control and Solid Waste
Disposal Revenue
3.55%, 2/20/97 6,400
Sullivan
Pollution Control Revenue
3.55%, 2/20/97 3,495
- --------------------------------------------------------
KANSAS
- --------------------------------------------------------
Burlington
Pollution Control Revenue
3.55%-3.65%, 2/12/97-2/21/97 13,335
- --------------------------------------------------------
KENTUCKY
- --------------------------------------------------------
Danville
Multi-City Lease Revenue
3.60%, 4/4/97 10,000
Pendleton County
Multi-County Lease Revenue
3.55%-3.60%, 2/20/97-3/11/97 23,740
- --------------------------------------------------------
MARYLAND
- --------------------------------------------------------
Anne Arundel County
Port Facilities Revenue
3.65%-3.70%, 2/7/97-2/13/97 15,600
- --------------------------------------------------------
MICHIGAN
- --------------------------------------------------------
Strategic Fund
3.65%, 2/13/97 6,350
- --------------------------------------------------------
NEBRASKA
- --------------------------------------------------------
Public Power District
3.55%, 2/24/97 5,000
- --------------------------------------------------------
NEW HAMPSHIRE
- --------------------------------------------------------
Business Finance Authority
3.40%, 2/11/97 3,500
- --------------------------------------------------------
NEW YORK
- --------------------------------------------------------
Nassau County
Revenue Anticipation Notes
3.40%, 3/5/97 7,402
New York City
Municipal Water Finance Authority
3.60%, 2/20/97 4,000
Power Authority
3.60%, 3/7/97 4,300
- --------------------------------------------------------
NORTH CAROLINA
- --------------------------------------------------------
Municipal Power Agency
3.55%, 2/21/97-2/25/97 14,500
<CAPTION>
VALUE
<S> <C> <C>
- --------------------------------------------------------
OKLAHOMA
- --------------------------------------------------------
Oklahoma County
Industrial Authority
3.75%, 3/3/97 $ 8,000
- --------------------------------------------------------
PENNSYLVANIA
- --------------------------------------------------------
Philadelphia School District
Tax and Revenue Anticipation Notes
4.00%, 6/30/97 8,216
- --------------------------------------------------------
TEXAS
- --------------------------------------------------------
Austin
Combined Utility Systems
3.50%, 3/19/97-3/21/97 14,000
Brazoria County
Brazos River Harbor Navigation District
3.65%, 2/10/97 6,100
Dallas
Area Rapid Transit
3.55%, 2/21/97-2/24/97 13,500
Harris County
Health Facilities Development
Corporation
3.65%, 2/25/97 6,100
Houston
Water and Sewer System
3.55%-3.70%, 2/12/97-2/20/97 18,000
Lower Colorado River Authority
3.55%, 2/19/97 7,000
Municipal Power Agency
3.55%-3.60%, 2/24/97-2/25/97 15,600
Public Finance Authority
3.55%, 2/24/97-2/25/97 16,500
San Antonio
Electric and Gas Systems
3.55%-3.60%, 2/18/97-2/24/97 18,900
Tax and Revenue Anticipation Notes
3.95%, 8/29/97 4,520
- --------------------------------------------------------
UTAH
- --------------------------------------------------------
Intermountain Power Agency
3.55%, 2/21/97 8,000
Tooele County
Waste Treatment Revenue
3.75%, 2/6/97 5,000
- --------------------------------------------------------
VIRGINIA
- --------------------------------------------------------
Chesterfield County
Industrial Development Authority
3.60%-3.65%, 2/7/97-4/4/97 15,350
Louisa County
Industrial Development Authority
3.65%, 3/21/97 2,400
</TABLE>
14
<PAGE> 15
PORTFOLIO OF INVESTMENTS
(VALUE IN THOUSANDS)
<TABLE>
<CAPTION>
VALUE
<S> <C> <C>
- ----------------------------------------------------------
WYOMING
- ----------------------------------------------------------
Sweetwater
Pollution Control Revenue
3.50%, 3/13/97 $ 6,800
---------------------------------------------------
TOTAL OTHER
SECURITIES--57.0%
(average maturity: 37 days) 446,408
---------------------------------------------------
TOTAL INVESTMENTS--99.2%
(average maturity: 23 days) 776,658
---------------------------------------------------
OTHER ASSETS, LESS LIABILITIES--.8% 6,453
---------------------------------------------------
NET ASSETS -- 100% $783,111
---------------------------------------------------
</TABLE>
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, 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, 1997. 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, 1997, the aggregate value of illiquid
securities was $94,810,000 in Kemper Money Market Fund, which represented
2.2% of net assets.
(c) Repurchase agreements are fully collateralized by U.S. Government
securities. All collateral is held at the Funds' custodian bank, Investors
Fiduciary Trust Company, or at subcustodian banks, as indicated. The
collateral is monitored daily by the Funds so that its market value exceeds
the carrying value of the repurchase agreement.
See accompanying Notes to Financial Statements.
15
<PAGE> 16
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997
(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 $3,707,639 343,203 776,658
- ----------------------------------------------------------------------------------------------------
Repurchase agreements 540,000 360,000 --
- ----------------------------------------------------------------------------------------------------
Cash 25,071 3,062 --
- ----------------------------------------------------------------------------------------------------
Receivable for:
Interest 10,581 4,099 4,655
- ----------------------------------------------------------------------------------------------------
Securities sold -- -- 3,000
- ----------------------------------------------------------------------------------------------------
TOTAL ASSETS 4,283,291 710,364 784,313
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
LIABILITIES AND NET ASSETS
- ----------------------------------------------------------------------------------------------------
Cash overdraft -- -- 262
- ----------------------------------------------------------------------------------------------------
Payable for:
Dividends 4,179 690 484
- ----------------------------------------------------------------------------------------------------
Management fee 951 157 175
- ----------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 729 122 81
- ----------------------------------------------------------------------------------------------------
Trustees' fees and other 1,009 157 200
- ----------------------------------------------------------------------------------------------------
Total liabilities 6,868 1,126 1,202
- ----------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $4,276,423 709,238 783,111
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
THE PRICING OF SHARES
- ----------------------------------------------------------------------------------------------------
Shares outstanding 4,276,423 709,238 783,111
- ----------------------------------------------------------------------------------------------------
Net asset value and redemption price per share $1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
16
<PAGE> 17
FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1997
(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 $117,931 19,085 13,876
- ------------------------------------------------------------------------------------------------------------------
Expenses:
Management fee 5,709 925 1,015
- ------------------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 3,369 526 285
- ------------------------------------------------------------------------------------------------------------------
Reports to shareholders 317 51 52
- ------------------------------------------------------------------------------------------------------------------
Registration costs 43 33 32
- ------------------------------------------------------------------------------------------------------------------
Professional fees 44 7 8
- ------------------------------------------------------------------------------------------------------------------
Trustees' fees and other 105 12 13
- ------------------------------------------------------------------------------------------------------------------
Total expenses 9,587 1,554 1,405
- ------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $108,344 17,531 12,471
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JANUARY 31, 1997 AND YEAR ENDED JULY 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER
MONEY MARKET GOVERNMENT MONEY TAX-FREE MONEY
FUND FUND FUND
------------------------ -------------------- --------------------
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
OPERATIONS, DIVIDENDS AND
CAPITAL SHARE ACTIVITY
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 108,344 214,849 17,531 33,708 12,471 25,511
- ---------------------------------------------------------------------------------------------------------------
Net realized loss -- (28,328) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Change in unrealized depreciation -- 28,328 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Dividends to shareholders from
net investment income (108,344) (214,849) (17,531) (33,708) (12,471) (25,511)
- ---------------------------------------------------------------------------------------------------------------
Capital share transactions
(dollar amounts and number of shares
are the same):
Shares sold 2,734,530 5,752,934 342,206 728,317 399,579 753,317
- ---------------------------------------------------------------------------------------------------------------
Shares issued in reinvestment of
dividends 104,353 207,091 16,780 32,576 12,079 24,739
- ---------------------------------------------------------------------------------------------------------------
2,838,883 5,960,025 358,986 760,893 411,658 778,056
- ---------------------------------------------------------------------------------------------------------------
Shares redeemed (2,788,235) (5,759,348) (321,789) (692,453) (357,565) (809,181)
- ---------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE TRANSACTIONS AND
TOTAL INCREASE (DECREASE) IN NET ASSETS 50,648 200,677 37,197 68,440 54,093 (31,125)
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 4,225,775 4,025,098 672,041 603,601 729,018 760,143
- ---------------------------------------------------------------------------------------------------------------
END OF PERIOD $4,276,423 4,225,775 709,238 672,041 783,111 729,018
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 18
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.
- --------------------------------------------------------------------------------
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.
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, 1997.
- --------------------------------------------------------------------------------
3 TRANSACTIONS WITH
AFFILIATES MANAGEMENT AGREEMENT. The Trust has a management
agreement with Zurich Kemper Investments, Inc.
(ZKI) 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, 1997, the Trust incurred
management fees of $7,649,000.
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. Under the agreement,
KSvC received shareholder services fees of
$3,154,000 for the six months ended January 31,
1997.
OFFICERS AND TRUSTEES. Certain officers or trustees
of the Trust are also officers or directors of ZKI.
During the six months ended January 31, 1997, the
Trust made no payments to its officers and incurred
trustees' fees of $32,000 to independent trustees.
18
<PAGE> 19
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
---------------------------------------------------------------------
KEMPER MONEY MARKET FUND
---------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JULY 31,
JANUARY 31, 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------
<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 .05 .03 .03
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 2.59% 5.34 5.34 3.20 2.96
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- -----------------------------------------------------------------------------------------------------------------------
Expenses .45% .50 .52 .52 .52
- -----------------------------------------------------------------------------------------------------------------------
Net investment income 5.06% 5.20 5.19 3.14 2.92
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $4,276,423 4,225,775 4,025,098 4,148,789 4,499,930
- -----------------------------------------------------------------------------------------------------------------------
</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%.
<TABLE>
<CAPTION>
---------------------------------------------------------------------
KEMPER GOVERNMENT MONEY FUND
---------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JULY 31,
JANUARY 31, 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------
<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 .05 .03 .03
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 2.58% 5.34 5.36 3.20 2.97
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- -----------------------------------------------------------------------------------------------------------------------
Expenses .45% .46 .46 .47 .45
- -----------------------------------------------------------------------------------------------------------------------
Net investment income 5.06% 5.20 5.21 3.15 2.94
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $709,238 672,041 603,601 707,368 694,303
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------
KEMPER TAX-FREE MONEY FUND
---------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JULY 31,
JANUARY 31, 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------
<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 .03 .02 .02
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 1.67% 3.44 3.53 2.33 2.39
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- -----------------------------------------------------------------------------------------------------------------------
Expenses .37% .39 .40 .41 .39
- -----------------------------------------------------------------------------------------------------------------------
Net investment income 3.28% 3.38 3.46 2.30 2.36
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $783,111 729,018 760,143 792,131 758,630
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 20
TRUSTEES AND OFFICERS
TRUSTEES OFFICERS
STEPHEN B. TIMBERS J. PATRICK BEIMFORD, JR.
President and Trustee Vice President
DAVID W. BELIN CHARLES R. MANZONI, JR.
Trustee Vice President
LEWIS A. BURNHAM JOHN E. NEAL
Trustee Vice President
DONALD L. DUNAWAY FRANK J. RACHWALSKI, JR.
Trustee Vice President
ROBERT B. HOFFMAN PHILIP J. COLLORA
Trustee Vice President and
Secretary
DONALD R. JONES
Trustee JEROME L. DUFFY
Treasurer
DOMINIQUE P. MORAX
Trustee ELIZABETH C. WERTH
Assistant Secretary
SHIRLEY D. PETERSON
Trustee
WILLIAM P. SOMMERS
Trustee
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
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.
222 South Riverside Plaza Chicago, IL 60606
www.kemper.com
[RECYCLED LOGO]
Printed on recycled paper.
This report is not to be distributed unless preceded
or accompanied by a Kemper Money
Funds prospectus.
KMF - 3 (3/97) 1030040
Printed in the U.S.A. [ZURICH LOGO]
