As filed with the Securities and Exchange Commission on September 30, 1998
1933 Act Registration No. 2-51992
1940 Act Registration No. 811-2527
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
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Post-Effective Amendment No. 44
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and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 44
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ZURICH MONEY FUNDS
------------------
(formerly named Kemper Money Funds)
(Exact name of Registrant as Specified in Charter)
222 South Riverside Plaza, Chicago, Illinois 60606
-------------------------------------------- -----
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (312) 537-7000
<TABLE>
<S> <C> <C>
Philip J. Collora, Secretary With a copy to:
Zurich Money Funds Cathy G. O'Kelly
222 South Riverside Plaza David A. Sturms
Chicago, Illinois 60606-5808 Vedder, Price, Kaufman & Kammholz
(Name and Address of Agent for Service) 222 North LaSalle Street
Chicago, Illinois 60601
</TABLE>
It is proposed that this filing will become effective
immediately upon filing pursuant to paragraph (b)
--------
on September 1, 1998 pursuant to paragraph (b)
--------
60 days after filing pursuant to paragraph (a)(1)
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X on November 30, 1998 pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
--------
on November 30, 1998 pursuant to paragraph (a)(2) of Rule 485
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If appropriate, check the following:
X this post-effective amendment designates a new effective date
-------- for a previously filed post-effective amendment
<PAGE>
ZURICH MONEY FUNDS
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART A
OF FORM N-1A AND PROSPECTUS
<TABLE>
<CAPTION>
Item No. Item Caption Prospectus Caption
-------- ------------ ------------------
<S> <C> <C> <C>
1. Cover Page Cover Page
2. Synopsis Summary; Summary of Expenses
3. Condensed Financial Financial Highlights; Performance
Information
4. General Description of Summary; Capital Structure; How the Funds Work; Investment
Registrant Objectives, Policies and Risk Factors
5. Management of the Fund Summary; Investment Manager; How to Make a Purchase
5A. Management's Discussion of Inapplicable
Fund Performance
6. Capital Stock and Other Summary; Capital Structure; Dividends and Taxes; How to Make a
Securities Purchase; Investment Objectives, Policies and Risk Factors
7. Purchase of Securities Being Summary; How to Make a Purchase; Net Asset Value; Investment
Offered Manager; Special Features; Account Services Directory
8. Redemption or Repurchase Summary; How to Make a Redemption; Special Features; Account
Services Directory
9. Pending Legal Proceedings Inapplicable
2
<PAGE>
ZURICH MONEY FUNDS
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART B
OF FORM N-1A AND STATEMENT OF ADDITIONAL INFORMATION
Caption in Statement
Item No. Item Caption of Additional Information
-------- ------------ -------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Inapplicable
History
13. Investment Objectives and Investment Restrictions; Municipal Securities; Appendix--Ratings
Policies of Investments
14. Management of the Fund Investment Manager; Officers and Trustees
15. Control Persons and Principal Officers and Trustees
Holders of Securities
16. Investment Advisory and Other Investment Manager; Officers and Trustees
Services
17. Brokerage Allocation and Portfolio Transactions
Other Practices
18. Capital Stock and Other Shareholder Rights
Securities
19. Purchase, Redemption and Purchase and Redemption of Shares; Dividends, Net Asset Value
Pricing of Securities Being and Taxes
Offered
20. Tax Status Dividends, Net Asset Value and Taxes
21. Underwriters Investment Manager
22. Calculation of Performance Performance
Data
23. Financial Statements Financial Statements
</TABLE>
3
<PAGE>
Zurich Money Funds
prospectus
November 30, 1998
ZURICH MONEY FUNDS
222 South Riverside Plaza
Chicago, Illinois 60606-5808
1-800-537-6001
The Funds are designed for investors who seek
maximum current income to the extent consistent
with stability of principal. Each Fund invests exclusively
in high quality money market instruments.
o Zurich Money Market Fund
o Zurich Government Money Fund
o Zurich Tax-Free Money Fund
This prospectus contains information about each Fund that a prospective investor
should know before investing and should be retained or future reference. A
Statement of Additional Information dated November 30, 1998, has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
It is available upon request without charge from the Funds at the address above
or by calling 1-800-537-6001.
Investments in the Funds are neither insured nor guaranteed by the U. S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other agency, and are not deposits or obligations of, or guaranteed or
endorsed by, any bank. There can be no assurance that a Fund will be able to
maintain a stable net asset value of $1.00 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
SUMMARY...................................................................3
SUMMARY OF FUND EXPENSES..................................................4
FINANCIAL HIGHLIGHTS......................................................5
HOW THE FUNDS WORK........................................................6
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS..........................7
NET ASSET VALUE -- DETERMINING SHARE PRICE...............................12
HOW TO MAKE A PURCHASE...................................................12
HOW TO MAKE A REDEMPTION.................................................14
EXCHANGING SHARES........................................................17
SPECIAL FEATURES.........................................................19
DIVIDENDS AND TAXES......................................................20
INVESTMENT MANAGER.......................................................22
PERFORMANCE..............................................................24
CAPITAL STRUCTURE........................................................25
ACCOUNT SERVICES DIRECTORY ..............................................26
2
<PAGE>
SUMMARY
Investment Objectives
Zurich Money Funds (the "Trust") is an open-end, diversified,
management investment company offering a choice of three investment funds
("Funds"). Each Fund is designed to provide you with professional management of
your short-term investment dollars; the dollars that you want to be very liquid
and accessible when special opportunities arise or that you want to know are in
high quality investments.
Each Fund invests in high quality short-term money market instruments
consistent with its specific objective.
o The Zurich Money Market Fund seeks maximum current income to the extent
consistent with stability of principal from a portfolio primarily of
commercial paper and bank obligations.
o The Zurich Government Money Fund seeks maximum current income to the
extent consistent with stability of principal from a portfolio of
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
o The Zurich Tax-Free Money Fund seeks maximum current income that is exempt
from federal income taxes to the extent consistent with stability of
principal from a portfolio of municipal securities.
Each Fund may use a variety of investment techniques in seeking its
objective including the purchase of repurchase agreements and variable rate
securities. Each Fund seeks to maintain a net asset value of $1.00 per share;
however, there is no assurance that the objective of any Fund will be achieved
or that any Fund will be able to maintain a net asset value of $1.00 per share.
See "How the Funds Work" and "Investment Objectives, Policies and Risk Factors."
Investment Manager
Scudder Kemper Investments, Inc. ("Scudder Kemper") is the investment
manager for the Funds and provides the Funds with continuous professional
investment supervision. Scudder Kemper is paid a monthly investment management
fee on a graduated basis ranging from 1/12 of 0.50% of the first $215 million of
average daily net assets of the Trust to 1/12 of 0.25% of average daily net
assets of the Trust over $800 million. See "Investment Manager."
Buying and Selling Shares
You may buy and sell shares of each Fund at net asset value with no
sales charge. The minimum initial investment is $1,000 and the minimum
subsequent investment is $100 ($50 under an automatic investment plan). Accounts
may be opened using the account application available from the Funds. Shares may
be purchased by mailing a check, by wire transfer or in person in downtown
Chicago and Kansas City. Please see "How To Make a Purchase" for more
information on how easy it is to invest. Shares may be sold or redeemed by
written request or by using one of the Funds' expedited redemption procedures.
See "How To Make a Redemption" for specific details.
Dividends
Dividends are declared daily and paid monthly. Dividends are
automatically reinvested in additional shares of the same Fund, unless you elect
to be paid by check. See "Dividends and Taxes."
3
<PAGE>
Special Features
A number of features are available to account holders, including: the
Zurich Money-PLUS Account(SM), a cash management program offering a combination
of features including a no minimum checking account and a VISA(R) check card and
Electronic Funds Transfer Programs. See "Special Features" and "Account Services
Directory" for a description of these and other features.
SUMMARY OF FUND EXPENSES
Shareholder Transaction Expenses*
Sales Load on Purchases None
Sales Load on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
- ----------
*Table does not include $3.00 monthly small account fee. See "How to Make a
Redemption."
Annual Fund Operating Expenses
(as a percentage of average net assets)
Zurich Zurich Zurich
Money Government Tax-Free
Market Money Money
Fund Fund Fund
---- ---- ----
Management Fees 0.27% 0.27% 0.27%
12b-1 Fees None None None
Other Expenses 0.18% 0.17% 0.10%
---- ---- ----
Total Operating Expenses 0.45% 0.44% 0.37%
Example
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption at the end of each time period:
Fund 1 year 3 years 5 years 10 years
---- ------ ------- ------- --------
Money Market $ 5 $ 14 $ 25 $ 57
Government $ 5 $ 14 $ 25 $ 55
Tax-Free $ 4 $ 12 $ 21 $ 47
The purpose of the table above is to assist you in understanding the
various costs and expenses that an investor in a Fund will bear directly or
indirectly. Investment dealers and other firms may independently charge
shareholders additional fees. The Example assumes a 5% annual rate of return
pursuant to requirements of the Securities and Exchange Commission. This
hypothetical rate of return is not intended to be representative of past or
future performance of any Fund. The Example should not be considered to be a
representation of past or future expenses. Actual expenses may be greater or
less than those shown.
4
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below show financial information for each Fund, expressed in
terms of one share outstanding throughout the period. The information in the
tables is covered by the report of the Funds' independent auditors. The report
is contained in the Funds' Registration Statement and is available from the
Funds. The financial statements contained in the Funds' 1998 Annual Report to
Shareholders are incorporated herein by reference and may be obtained by writing
or calling the Funds.
Zurich Money Market Fund
<TABLE>
<CAPTION>
Year ended July 31,
1998 1997 1996 1995
==== ---- ---- ----
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $1.00 1.00 1.00
Net investment income and dividends declared .05 .05 .05
Net asset value, end of year $1.00 1.00 1.00
Total Return: 5.27% 5.34 5.34
Ratios to Average Net Assets:
Expenses .45% .50 .52
Net investment income 5.14% 5.20 5.19
Supplemental Data:
Net assets at end of year (in thousands) $ 4,361,935 4,225,775 4,025,098
Zurich Government Money Fund
Year ended July 31,
1997 1996 1995
------ ---- ----
Per Share Operating Performance:
Net asset value, beginning of year $1.00 1.00 1.00
Net investment income and dividends declared .05 .05 .05
Net asset value, end of year $1.00 1.00 1.00
Total Return: 5.26% 5.34 5.36
Ratios to Average Net Assets:
Expenses .44% .46 .46
Net investment income 5.13% 5.20 5.21
Supplemental Data:
Net assets at end of year (in thousands) $671,139 672,041 603,601
Zurich Tax-Free Money Fund
Year ended July 31,
1997 1996 1995
---- ---- ----
Per Share Operating Performance:
Net asset value, beginning of period $1.00 1.00 1.00
Net investment income and dividends declared .03 .03 .03
Net asset value, end of period $1.00 1.00 1.00
Total Return: 3.39% 3.44 3.53
Ratios to Average Net Assets:
Expenses .37% .39 .40
Net investment income 3.33% 3.38 3.46
Supplemental Data:
Net assets at end of period (in thousands) $771,315 729,018 760,143
</TABLE>
5
<PAGE>
Note: Ratios have been determined on an annualized basis. Total return is not
annualized. The Zurich 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>
Year ended July 31,
1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1.00 1.00 1.00 1.00 1.00 1.00 1.00
.03 .03 .04 .07 .08 .09 .07
1.00 1.00 1.00 1.00 1.00 1.00 1.00
3.20 2.96 4.45 7.19 8.50 9.03 7.03
.52 .52 .49 .46 .45 .49 .50
3.14 2.92 4.42 6.94 8.16 8.71 6.79
4,148,789 4,499,930 5,664,194 7,553,950 7,603,418 6,638,489 4,893,284
Year ended July 31,
1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ----
1.00 1.00 1.00 1.00 1.00 1.00 1.00
.03 .03 .04 .07 .08 .09 .07
1.00 1.00 1.00 1.00 1.00 1.00 1.00
3.20 2.97 4.50 6.95 8.45 8.96 6.88
.47 .45 .43 .43 .43 .49 .51
3.15 2.94 4.44 6.65 8.08 8.79 6.66
707,368 694,303 926,328 1,126,417 845,347 514,303 177,812
Year ended July 31, September 10, 1987 to
July 31,
1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ----
1.00 1.00 1.00 1.00 1.00 1.00 1.00
.02 .02 .04 .05 .06 .06 .04
1.00 1.00 1.00 1.00 1.00 1.00 1.00
2.33 2.39 3.57 5.07 5.81 6.21 4.33
.41 .39 .39 .38 .40 .39 .45
2.30 2.36 3.49 4.92 5.64 6.12 4.68
792,131 758,630 796,272 788,253 693,307 529,670 190,933
</TABLE>
HOW THE FUNDS WORK
Zurich Money Funds are designed to provide you with professional
management of short-term investment dollars. They are designed for investors who
seek maximum current income consistent with stability of principal plus
liquidity. To help meet these objectives, you are provided with a choice of
separate investment funds ("Funds"): the Zurich Money Market Fund (the "Money
Market Fund"), the Zurich Government Money Fund (the "Government Money Fund")
and the Zurich Tax-Free Money Fund (the "Tax-Free Money Fund"). Because each
Fund combines its shareholders' money, it can buy and sell large blocks of
securities, which reduces transaction costs and maximizes yields. Each Fund is
managed by investment professionals who analyze market trends to take advantage
of changing conditions and who seek to minimize risk by diversifying each Fund's
investments.
6
<PAGE>
Each Fund seeks to maintain a net asset value of $1.00 per share. Thus,
the Funds are designed for investors who want to avoid the fluctuations of
principal commonly associated with equity and long-term bond investments. The
fluctuations of these other types of investments are often represented by the
movement of various unmanaged market indexes, such as the Dow Jones Industrial
Average. In addition, although there can be no guarantee that a Fund will
achieve its objective or that it will maintain a net asset value of $1.00 per
share, each Fund has maintained a $1.00 net asset value since its inception.
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS
Money Market Fund
The Money Market Fund seeks maximum current income to the extent
consistent with stability of principal. The Fund pursues its objective by
investing exclusively in the following types of U.S. Dollar denominated money
market instruments that mature in 12 months or less:
o Obligations of, or guaranteed by, the U.S. Government, its agencies or
instrumentalities.
o Bank certificates of deposit (including time deposits) or bankers'
acceptances limited to domestic banks (including their foreign
branches) and Canadian chartered banks having total assets in excess of
$1 billion.
o Commercial paper obligations rated A-1 or A-2 by Standard & Poor's
Corporation ("S&P") or Prime-1 or Prime-2 by Moody's Investors Service,
Inc. ("Moody's") or issued by companies with an unsecured debt issue
outstanding currently rated Aa by Moody's or AA by S&P or higher and
investments in other corporate obligations such as publicly traded
bonds, debentures and notes rated Aa by Moody's or AA by S&P or higher.
For a description of these ratings, see "Appendix -- Ratings of
Investments" in the Statement of Additional Information.
o Repurchase agreements of obligations that are suitable for investment
under the categories set forth above. Repurchase agreements are
discussed below.
To the extent the Money Market Fund purchases Eurodollar certificates
of deposit issued by London branches of U.S. banks, or commercial paper issued
by foreign entities, consideration will be given to their marketability, to
possible restrictions on international currency transactions and to regulations
imposed by the domicile country of the foreign issuer. Eurodollar certificates
of deposit are not subject to the same regulatory requirements as certificates
issued by U.S. banks and associated income may be subject to the imposition of
foreign taxes.
The Money Market Fund may invest in commercial paper which is issued by
major corporations without registration under the Securities Act of 1933 in
reliance on the exemption from registration afforded by Section 3(a)(3) thereof.
Such commercial paper may be issued only to finance current transactions and
must mature in nine months or less. Trading of such commercial paper is
conducted primarily by institutional investors through investment dealers, and
individual investor participation in the commercial paper market is very
limited.
The Fund may also invest in commercial paper issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933 ("Section 4(2) paper"). Section 4(2) paper is
restricted as to disposition under the federal securities laws, and generally is
sold to institutional investors such as the Fund who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors like the Fund through or
with the assistance of the issuer or investment dealers who make a market in the
Section 4(2) paper, thus providing liquidity. The Fund's investment manager
considers the legally restricted but readily saleable Section 4(2) paper to be
liquid; however, pursuant to procedures approved by the Board of Trustees of the
Trust, if a particular investment in Section 4(2) paper is not determined to be
liquid,
7
<PAGE>
that investment will be included within the 10% limitation on illiquid
securities discussed under "The Funds" below. The Fund's investment manager
monitors the liquidity of its investments in Section 4(2) paper on a continuous
basis.
The Money Market Fund may concentrate more than 25% of its assets in
bank certificates of deposit or banker's acceptances of United States banks in
accordance with its investment objective and policies. Accordingly, the Fund may
be more adversely affected by changes in market or economic conditions and other
circumstances affecting the banking industry than it would be if the Fund's
assets were not so concentrated.
Government Money Fund
The Government Money Fund seeks maximum current income to the extent
consistent with stability of principal. The Fund pursues its objective by
investing exclusively in the following securities that mature within 12 months
or less.
o U.S. Treasury bills, notes, bonds and other obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.
o Repurchase agreements of the obligations described above.
Some securities issued by U.S. Government agencies or instrumentalities
are supported only by the credit of the agency or instrumentality, such as those
issued by the Federal Home Loan Bank, and others have an additional line of
credit with the U.S. Treasury, such as those issued by the Federal National
Mortgage Association, Farm Credit System and Student Loan Marketing Association.
Short-term U.S. Government obligations generally are considered to be the safest
short-term investment. The U.S. Government guarantee of the securities owned by
the Fund, however, does not guarantee the net asset value of its shares, which
the Fund seeks to maintain at $1.00 per share. Also, with respect to securities
supported only by the credit of the issuing agency or instrumentality or by an
additional line of credit with the U.S. Treasury, there is no guarantee that the
U.S. Government will provide support to such agencies or instrumentalities and
such securities may involve risk of loss of principal and interest.
Tax-Free Money Fund
The Tax-Free Money Fund seeks maximum current income that is exempt
from federal income taxes to the extent consistent with stability of principal.
The Fund pursues its objective primarily through a professionally managed,
diversified portfolio of short-term high quality tax-exempt municipal
obligations.
Under normal market conditions at least 80% of the Fund's total assets
will, as a fundamental policy, be invested in obligations issued by or on behalf
of states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, the
income from which is exempt from federal income tax ("Municipal Securities"). In
compliance with the position of the staff of the Securities and Exchange
Commission, the Fund does not consider "private activity" bonds as described in
"Dividends and Taxes -- Tax-Free Money Fund" as Municipal Securities for
purposes of the 80% limitation. This is a fundamental policy so long as the
staff maintains its position, after which it would become non-fundamental.
Dividends representing net interest income received by the Tax-Free
Money Fund on Municipal Securities will be exempt from federal income tax when
distributed to the Fund's shareholders. Such dividend income may be subject to
state and local taxes. See "Dividends and Taxes -- Tax-Free Money Fund." The
Fund's assets will consist of Municipal Securities, temporary investments as
described below and cash. The Fund considers short-term Municipal Securities to
be those that mature in one year or less.
8
<PAGE>
The Tax-Free Money Fund will invest only in Municipal Securities which
at the time of purchase:
o are rated within the two highest ratings for Municipal Securities (Aaa
or Aa) assigned by Moody's or (AAA or AA) assigned by S&P;
o are guaranteed or insured by the U.S. Government as to the payment of
principal and interest;
o are fully collateralized by an escrow of U.S. Government securities
acceptable to the Fund's investment manager;
o have at the time of purchase a Moody's short-term municipal securities
rating of MIG-2 or higher or a municipal commercial paper rating of P-2
or higher, or S&P's municipal commercial paper rating of A-2 or higher;
o are unrated, if longer term Municipal Securities of that issuer are
rated within the two highest rating categories by Moody's or S&P; or
o are determined to be at least equal in quality to one or more of the
above ratings in the discretion of the Fund's investment manager.
Municipal Securities generally are classified as "general obligation"
or "revenue" issues. General obligation bonds are secured by the issuer's pledge
of its full credit and taxing power for the payment of principal and interest.
Revenue bonds are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source such as the user of the
facility being financed. Industrial development bonds held by the Fund are in
most cases revenue bonds and are not payable from the unrestricted revenues of
the issuer. Among other types of instruments, the Fund may purchase tax-exempt
commercial paper, warrants and short-term municipal notes such as tax
anticipation notes, bond anticipation notes, revenue anticipation notes,
construction loan notes and other forms of short-term loans. Such notes are
issued with a short-term maturity in anticipation of the receipt of tax
payments, the proceeds of bond placements or other revenues. A more detailed
discussion of Municipal Securities and the Moody's and S&P ratings outlined
above is contained in the Statement of Additional Information. As indicated
above and under "Dividends and Taxes -- Tax-Free Money Fund," the Fund may
invest in "private activity" bonds.
The Tax-Free Money Fund may purchase securities which provide for the
right to resell them to an issuer, bank or dealer at an agreed upon price or
yield within a specified period prior to the maturity date of such securities.
Such a right to resell is referred to as a "Standby Commitment." Securities may
cost more with Standby Commitments than without them. Standby Commitments will
be entered into solely to facilitate portfolio liquidity. A Standby Commitment
may be exercised before the maturity date of the related Municipal Security if
the Fund's investment manager revises its evaluation of the creditworthiness of
the underlying security or of the entity issuing the Standby Commitment. The
Fund's policy is to enter into Standby Commitments only with issuers, banks or
dealers that are determined by the Fund's investment manager to present minimal
credit risks. If an issuer, bank or dealer should default on its obligation to
repurchase an underlying security, the Fund might be unable to recover all or a
portion of any loss sustained from having to sell the security elsewhere. For
purposes of valuing the Fund's securities at amortized cost, the stated maturity
of Municipal Securities subject to Standby Commitments is not changed.
The Tax-Free Money Fund may purchase high quality Certificates of
Participation in trusts that hold Municipal Securities. A Certificate of
Participation gives the Fund an undivided interest in the Municipal Security in
the proportion that the Fund's interest bears to the total principal amount of
the Municipal Security. These Certificates of Participation may be variable rate
or fixed rate with remaining maturities of one year or less. A Certificate of
Participation may be backed by an irrevocable letter of credit or guarantee of a
financial institution that satisfies rating agencies as to the credit quality of
the Municipal Security supporting the payment of principal
9
<PAGE>
and interest on the Certificate of Participation. Payments of principal and
interest would be dependent upon the underlying Municipal Security and may be
guaranteed under a letter of credit to the extent of such credit. The quality
rating by a rating service of an issue of Certificates of Participation is based
primarily upon the rating of the Municipal Security held by the trust and the
credit rating of the issuer of any letter of credit and of any other guarantor
providing credit support to the issue. The Fund's investment manager considers
these factors as well as others, such as any quality ratings issued by the
rating services identified above, in reviewing the credit risk presented by a
Certificate of Participation and in determining whether the Certificate of
Participation is appropriate for investment by the Fund. It is anticipated by
the Fund's investment manager that, for most publicly offered Certificates of
Participation, there will be a liquid secondary market or there may be demand
features enabling the Fund to readily sell its Certificates of Participation
prior to maturity to the issuer or a third party. As to those instruments with
demand features, the Fund intends to exercise its right to demand payment from
the issuer of the demand feature only upon a default under the terms of the
Municipal Security, as needed to provide liquidity to meet redemptions, or to
maintain a high quality investment portfolio.
The Tax-Free Money Fund may purchase and sell Municipal Securities on a
when-issued or delayed delivery basis. A when-issued or delayed delivery
transaction arises when securities are bought or sold for future payment and
delivery to secure what is considered to be an advantageous price and yield to
the Fund at the time it enters into the transaction. In determining the maturity
of portfolio securities purchased on a when-issued or delayed delivery basis,
the Fund will consider them to have been purchased on the date when it committed
itself to the purchase.
A security purchased on a when-issued basis, like all securities held
by the Tax-Free Money Fund, is subject to changes in market value based upon
changes in the level of interest rates and investors' perceptions of the
creditworthiness of the issuer. Generally such securities will appreciate in
value when interest rates decline and decrease in value when interest rates
rise. Therefore if, in order to achieve higher interest income, the Fund remains
substantially fully invested at the same time that it has purchased securities
on a when-issued basis, there will be a greater possibility that the market
value of the Fund's assets will vary from $1.00 per share, since the value of a
when-issued security is subject to market fluctuation and no interest accrues to
the purchaser prior to settlement of the transaction. See "Net Asset Value --
Determining Share Price."
The Fund will only make commitments to purchase Municipal Securities on
a when-issued or delayed delivery basis with the intention of actually acquiring
the securities, but the Fund reserves the right to sell these securities before
the settlement date if deemed advisable. The sale of these securities may result
in the realization of gains that are not exempt from federal income tax.
In seeking to achieve its investment objective, the Tax-Free Money Fund
may invest all or any part of its assets in Municipal Securities that are
industrial development bonds. Moreover, although the Fund does not currently
intend to do so on a regular basis, it may invest more than 25% of its assets in
Municipal Securities that are repayable out of revenue streams generated from
economically related projects or facilities, if such investment is deemed
necessary or appropriate by the Fund's investment manager. To the extent that
the Fund's assets are concentrated in Municipal Securities payable from revenues
on economically related projects and facilities, the Fund will be subject to the
risks presented by such projects to a greater extent than it would be if the
Fund's assets were not so concentrated.
From time to time, as a defensive measure or when acceptable short-term
Municipal Securities are not available, the Tax-Free Money Fund may invest in
taxable "temporary investments" which include:
o obligations of the U.S. Government, its agencies or instrumentalities;
o debt securities rated within the two highest grades by Moody's or S&P;
o commercial paper rated in the two highest grades by either of such
rating services;
10
<PAGE>
o certificates of deposit of domestic banks with assets of $1 billion or
more; and
o any of the foregoing temporary investments subject to repurchase
agreements (Repurchase agreements are discussed below).
Interest income from temporary investments is taxable to shareholders
as ordinary income. Although the Fund is permitted to invest in taxable
securities, it is the Fund's primary intention to generate income dividends that
are not subject to federal income taxes. See "Dividends and Taxes." For a
description of the ratings, see "Appendix -- Ratings of Investments" in the
Statement of Additional Information.
The Funds
In addition to the specific investment objective and policies listed
above, each Fund limits its investments to securities that meet the requirements
of Rule 2a-7 under the Investment Company Act of 1940 (the "1940 Act"). See "Net
Asset Value -- Determining Share Price."
Each Fund may invest in instruments that have interest rates that
adjust periodically or that "float" continuously according to formulae intended
to minimize fluctuation in values of the instruments ("Variable Rate
Securities"). The interest rate on a Variable Rate Security is ordinarily
determined by reference to or is a percentage of an objective standard such as a
bank's prime rate, the 90-day U.S. Treasury bill rate, or the rate of return on
commercial paper or bank certificates of deposit. Generally, the changes in the
interest rate on Variable Rate Securities reduce the fluctuation in the market
value of such securities. Accordingly, as interest rates decrease or increase,
the potential for capital appreciation or depreciation is less than for
fixed-rate obligations. Some Variable Rate Securities ("Variable Rate Demand
Securities") have a demand feature entitling the purchaser to resell the
securities at an amount approximately equal to amortized cost or the principal
amount thereof plus accrued interest. As is the case for other Variable Rate
Securities, the interest rate on Variable Rate Demand Securities varies
according to some objective standard intended to minimize fluctuation in the
values of the instruments. Each Fund determines the maturity of Variable Rate
Securities in accordance with Securities and Exchange Commission rules which
allow the Fund to consider certain of such instruments as having maturities
shorter than the maturity date on the face of the instrument.
Each Fund may invest in repurchase agreements, which are instruments
under which a Fund acquires ownership of a security from a broker-dealer or bank
that agrees to repurchase the security at a mutually agreed upon time and price
(which price is higher than the purchase price), thereby determining the yield
during the Fund's holding period. Maturity of the securities subject to
repurchase may exceed one year. In the event of a bankruptcy or other default of
a seller of a repurchase agreement, a Fund might incur expenses in enforcing its
rights, and could experience losses, including a decline in the value of the
underlying securities and loss of income. A Fund will not purchase illiquid
securities, including time deposits and repurchase agreements maturing in more
than seven days, if, as a result thereof, more than 10% of such Fund's net
assets valued at the time of the transaction would be invested in such
securities.
A Fund may not borrow money except as a temporary measure for
extraordinary or emergency purposes, and then only in an amount up to one-third
of the value of its total assets, in order to meet redemption requests without
immediately selling any portfolio securities. Any such borrowings under this
provision will not be collateralized. If for any reason the current value of the
Fund's total assets falls below an amount equal to three times the amount of its
indebtedness from money borrowed, the Fund will, within three business days,
reduce its indebtedness to the extent necessary. No Fund will borrow for
leverage purposes.
Certain investment restrictions have been adopted for each Fund and are
presented in the Statement of Additional Information and together with the
investment objective and policies of such Fund, cannot be changed without
approval by holders of a majority of its outstanding voting shares. As defined
in the 1940 Act, this means
11
<PAGE>
the lesser of the vote of (a) 67% of the shares of such Fund present at a
meeting where more than 50% of the outstanding shares are present in person or
by proxy; or (b) more than 50% of the outstanding shares of the Fund.
NET ASSET VALUE -- DETERMINING SHARE PRICE
The price you pay when you buy shares in a Fund and the price you
receive if you redeem is the net asset value computed after we receive your
order to buy or redeem in proper form (as described under "How To Make a
Purchase"). The net asset value per share of each Fund is calculated by dividing
the total value of the assets of the Fund, minus its liabilities, by the total
number of its shares outstanding.
The net asset value per share of each Fund is determined on each day
the New York Stock Exchange is open for trading, at 11:00 a.m., 1:00 p.m. and
3:00 p.m. Central time for the Money Market and Government Money Funds and at
11:00 a.m. and 3:00 p.m. Central time for the Tax-Free Money Fund. Each Fund
seeks to maintain a net asset value of $1.00 per share.
Each Fund values its portfolio instruments at amortized cost in
accordance with Rule 2a-7 under the 1940 Act, which means that they are valued
at their acquisition cost (as adjusted for amortization of premium or discount)
rather than at current market value. Calculations are made to compare the value
of each Fund's investments valued at amortized cost with market-based value.
Market-based valuations are obtained by using actual quotations provided by
market makers, estimates of market value, or values obtained from yield data
relating to classes of money market instruments published by reputable sources
at the mean between the bid and asked prices for the instruments. If a deviation
of 1/2 of 1% or more were to occur between a Fund's net asset value per share
calculated by reference to market-based values and a Fund's $1.00 per share net
asset value, or if there were any other deviation that the Board of Trustees
believed would result in a material dilution to shareholders or purchasers, the
Board of Trustees would promptly consider what action, if any, should be
initiated. In order to value its investments at amortized cost, the Funds
purchase only securities with a maturity of one year or less and maintain a
dollar-weighted average portfolio maturity of 90 days or less. In addition, the
Funds limit their portfolio investments to securities that meet the quality and
diversification requirements of Rule 2a-7.
HOW TO MAKE A PURCHASE
Whether you're opening an account or adding to it, we hope that you'll
find that we've made your shareholder transactions easy. Shares of each Fund are
sold at their net asset value with no sales charge. To open an account you
should use the account application available from the Funds and choose one of
the methods outlined in the following table. Call 1-800-537-6001 if you have
questions or need assistance.
Minimum Investment Amounts -- subject to change at any time in management's
discretion
Initial Investment $1,000
For Individual Retirement Accounts $ 250
Subsequent Purchase $ 100
For Individual Retirement Accounts $ 50
Automatic Purchase Plan* $ 50
- ---------
*See "Special Features" for more information regarding Automatic Purchase Plan.
12
<PAGE>
How To Make A Purchase
<TABLE>
<CAPTION>
Initial Investment Subsequent Investment
($1,000 or more) ($100 or more)
------------------ ---------------------
<S> <C> <C>
By Mail o Complete the Account Application and o Make your check payable to ZMF
mail it with your check and mail it to:
(payable to ZMF) to: Kemper Service Company
Kemper Service Company Transfer Transfer Agency Division
Agency Division P.O. Box 419356 P.O. Box 419154 Kansas
Kansas City, MO 64141-6356 City, MO 64141-6154
- -----------------------------------------------------------------------------------------------------------
By Phone o Call 1-888-ZURICH-1 (987-4241) o Call 1-888-ZURICH-1 (987-4241)
to exchange from a Zurich to exchange from a Zurich
YieldWise Money Fund or a YieldWise Money Fund
Kemper Funds account. or a Kemper Funds account.
- -----------------------------------------------------------------------------------------------------------
In Person o In downtown Chicago, you can make a o In downtown Chicago, you can make
direct investment at our Service a direct investment at our Service
Center at 222 South Riverside Plaza. Center at 222 South Riverside
In Kansas City, you can make a direct Plaza. In Kansas City, you can make
investment at 811 Main Street, a direct investment at 811 Main
7th Floor. Street, 7th Floor.
- -----------------------------------------------------------------------------------------------------------
By Wire o To open an account through wire o Instruct your bank to wire your
Transfer transfer of Federal Funds, call investment, together with your name
(Federal Funds) 1-800-537-6001. and account number, the name of the
o Provide your account registration Fund with the appropriate Fund bank
instruction to the service representative. account number, and the name in
You will be provided with your which your account is registered,
new account number over the to:
phone. Zurich Money Funds,
o The Fund accepts wires at United Missouri Bank of
no charge, although your bank may Kansas City, N.A.
charge you for this ABA #1010-0069-5
service. Zurich Money Market Fund:
o Instruct your bank to 98-0103-346-8,
wire your investment, together or
with your name and new account Zurich Government Money Fund:
number, to: 98-0116-259-4,
Zurich Money Funds: or
United Missouri Bank Zurich Tax-Free Money Fund:
of Kansas City, N.A. 98-0001-577-6
ABA #1010-0069-5 o The Fund accepts wires at no
Zurich Money Market charge, although your bank may
Fund: 98-0103-346-8, charge you for this service.
13
<PAGE>
or
Zurich Government Money
Fund:
98-0116-259-4,
or
Zurich Tax-Free Money Fund:
98-0001-577-6
- -----------------------------------------------------------------------------------------------------------
By Electronic o Unavailable for opening an account. Please see "Special Features" for more
Funds Transfer information on these services.
(Automated o EZ-Transfer
Clearing House o Automatic Purchase Plan $50
funds) minimum)
o Payroll Direct Deposit
o Government Direct Deposit
All transactions are via the
Automated Clearing House ("ACH") System.
</TABLE>
Other Information
Purchases by check or other negotiable bank draft will be invested as
of 3:00 p.m. Central time on the next business day after receipt and will begin
earning dividends the following calendar day. Purchases by check drawn on a
foreign bank will normally be effective after the check clears. See "Purchase
and Redemption of Shares" in the Statement of Additional Information.
Purchase by wire of Federal Funds (i.e., monies credited to a bank's
account with its regional Federal Reserve Bank) will be effected at the next
determined net asset value. Purchases will receive that day's dividend if
effected at or prior to 1:00 p.m. Central time for the Money Market and the
Government Money Funds, and by 11:00 a.m. Central time for the Tax-Free Money
Fund, otherwise such shares will receive the dividend for the next calendar day
if effected at 3:00 p.m. Central time.
The Funds reserve the right to withdraw all or any part of the offering
made by this prospectus or to reject purchase orders. The Funds also reserve the
right at any time to waive or increase the minimum investment requirements. All
orders to purchase shares are subject to acceptance by the Funds and are not
binding until confirmed or accepted in writing. Any purchase that would result
in total account balances for a single shareholder in excess of $3 million is
subject to prior approval by the Funds. Share certificates are issued only on
request to the Funds and may not be available for certain types of account
registrations. Investments may also be made in the Funds through broker-dealers
and others, who may charge a commission or other fee for their services. A $10
service fee will be charged when a check for the purchase of shares is returned
because of insufficient or uncollected funds or a stop payment order.
If you elect to redeem shares of a Fund purchased by check or through
EZ-Transfer or Automatic Purchase Plan the Fund may delay transmittal of
redemption proceeds until it has determined that collected funds have been
received for the purchase of such shares, which may be up to 10 calendar days
from receipt by the Fund of the purchase amount. See "How to Make a Redemption."
HOW TO MAKE A REDEMPTION
You can access all or part of your account by redeeming your shares.
Your shares will be redeemed at the next determined net asset value after your
request has been received in proper form. If processed at 3:00 p.m. Central
time, you will receive that day's dividend on the shares you sold. If you redeem
all your shares of a Fund,
14
<PAGE>
you will receive the net asset value of such shares and all declared but unpaid
dividends on such shares. You may use any of the methods outlined in the
following table to sell your shares.
How To Make A Redemption
<TABLE>
<S> <C>
By Redemption Check o All Redemption Checks should be for a
minimum of $500. Redemption Checks
written in an amount less than $500 will
be charged a $10 service fee.
o Redemption Checks should not be used to
close your account since the account
normally includes accrued but unpaid
dividends.
o You may not use this privilege to redeem
shares held in certificated form.
- --------------------------------------------------------------------------------------------------
By Phone o Telephone requests may be made by calling 1-888-ZURICH-1
(987-4241) Monday-Friday, 7 a.m. to 6 p.m. CST and Saturday, 8
a.m. to 3 p.m. CST or use 24-hour Zurich InfoLine (888)
987-8678. You may receive the proceeds via:
o check by mail to the address to which your account
is registered, or
o electronic funds transfer (minimum $1,000 and
maximum $50,000) to a pre-authorized bank account.
See "Special Features -- EZ-Transfer."
o You may exchange to Zurich YieldWise Money Fund or Kemper Funds.
See "Exchanging Shares."
- --------------------------------------------------------------------------------------------------
By Wire o You need to have signed up for the wire transfer privilege and
have the forms on file with the Shareholder Service Agent
before using it. Minimum wire: $1,000
o Telephone requests may be made by calling
1-888-ZURICH-1 (987-4241) or in writing,
subject to the limitations on liability
described under "General" below.
o Proceeds will be sent only to the bank or trust
company you have designated on the account
application.
o You may not use this privilege to redeem shares
held in certificated form.
- --------------------------------------------------------------------------------------------------
By Mail o Complete a written request that includes the following
information: each account owner's name, your account number,
the amount to be redeemed, and the signature of each owner
exactly as it appears on the account, including any special
capacity of the registered owner. See "Signature Guarantee
Requirements" below.
o Mail the written request to Kemper Service Company, Transfer
Agency Division, P.O. Box 419557, Kansas City, Missouri 64141-6557.
</TABLE>
15
<PAGE>
Signature Guarantee Requirements
If the proceeds of a redemption are $50,000 or less and the proceeds
are payable to the shareholder of record at the address of record, normally a
telephone request or a written request by any one account holder without a
signature guarantee is sufficient for redemptions by individual or joint account
holders, and trust, executor, and guardian account holders provided the trustee,
executor , and custodial guardian or custodian is named in the account
registration. Other institutional account holders may exercise the special
privilege of redeeming shares by telephone request or written request without
signature guarantee subject to the same conditions as individual account holders
and subject to the limitations on liability described under "General" below,
provided that the privilege has been pre-authorized by the institutional account
holder or guardian account holder by written instruction to Kemper Service
Company (the "Shareholder Service Agent") with signatures guaranteed. All other
redemption requests must include a signature guaranteed by a commercial bank,
trust company, savings and loan association, federal savings bank, member firm
of a national securities exchange or other eligible financial institution. If
any share certificates were issued, they must also be signed with signature(s)
guaranteed. Additional documentation may be requested, and a signature guarantee
is normally required, from institutional and fiduciary account holders such as
corporations, custodians (e.g., under the Uniform Transfers to Minors Act),
executors, administrators, trustees or guardians. The privilege of redeeming
shares by telephone request or by written request without a signature guarantee
may not be used to redeem shares held in certificated form and may not be used
if the shareholder's account has had an address change within 30 days of the
redemption request.
Additional Information
Redemption by Wire. Requests for wire transfer redemptions received by the
Shareholder Service Agent prior to 11:00 a.m. Central time will result in shares
being redeemed that day and normally a wire transfer will be sent to the
designated account that day. Dividends for that day will not be earned. The
Funds are not responsible for the efficiency of the federal wire system or the
account holder's financial services firm or bank. You are responsible for any
charges your firm or bank makes for sending or receiving wire transfers. To
change the designated account to receive wire redemption proceeds, send a
written request to the Shareholder Service Agent with signatures guaranteed as
described above. This privilege will be terminated if the Shareholder Service
Agent receives written notice from any account holder of revocation of this
authority.
Redemption by Redemption Check. If you select the checkwriting method of
redemption on your account application, you will normally receive drafts
("Redemption Checks") within 2 weeks of opening your account which you may use
to draw on your Fund account, but not to close it. When a Redemption Check is
presented for payment, a sufficient number of full and fractional shares in your
account will be redeemed at the next determined net asset value to cover the
amount of the Redemption Check. This will enable you to continue earning daily
dividends until the Fund receives the Redemption Check.
You may write Redemption Checks payable to the order of any person in
any amount not more than $5 million. Unless one signer is authorized on the
account application, Redemption Checks must be signed by all account holders. If
the Shareholder Service Agent receives written notice by any owner revoking the
authorization to sign individually, all account owners will be required to sign.
Redemption Checks must be signed exactly as the account is registered. The Funds
may refuse to honor Redemption Checks whenever the right of redemption has been
suspended or postponed, or whenever the account is otherwise impaired. A $10
service fee will be charged when a Redemption Check is presented to redeem Fund
shares in excess of the value of your Fund account or in an amount less than
$500; when a Redemption Check is presented that would require redemption within
10 days of shares that were purchased by check or through EZ-Transfer or
Automatic Purchase Plan; or when you request "stop payment" of a Redemption
Check by telephone or in writing. A "stop payment" request may be made by
calling 1-888 ZURICH-1 (987-4241).
16
<PAGE>
General
If shares of a Fund to be redeemed were purchased by check or through
EZ-Transfer or Automatic Purchase Plan (see "Special Features -- Electronic
Funds Transfer Programs") the Fund may delay transmittal of redemption proceeds
until it has determined that collected funds have been received for the purchase
of such shares, which will be up to 10 days from receipt by the Fund of the
purchase amount. Shareholders may not use wire transfer or Redemption Check
features until the shares being redeemed have been owned for at least 10 days
and shareholders may not use such procedures to redeem shares held in
certificated form. There is no such delay when the shares being redeemed were
originally purchased by wiring Federal Funds.
If shares being redeemed were acquired from an exchange of shares of a
mutual fund that were offered subject to a contingent deferred sales charge as
described in the prospectus for that other fund, the redemption of such shares
by a Fund may be subject to a contingent deferred sales charge as explained in
such prospectus.
Shareholders can request the following telephone privileges: expedited
wire transfer redemptions, ACH transactions and exchange transactions for
individual and institutional accounts and pre-authorized telephone redemption
transactions for certain institutional accounts. Shareholders may choose these
privileges on the Account Application or by contacting the Shareholder Service
Agent for appropriate instructions. Please note that the telephone exchange
privilege is automatic unless the shareholder refuses it on the account
application. The Trust or its agents may be liable for losses, expenses or costs
arising out of fraudulent or unauthorized telephone requests pursuant to these
privileges, unless the Trust or its agent reasonably believe, based upon
reasonable verification procedures, that the telephonic instructions are
genuine. The shareholder will bear the risk of loss, including loss resulting
from fraudulent or unauthorized transactions, as long as the reasonable
verification procedures are followed. The verification procedures include
recording instructions, requiring certain identifying information before acting
upon instructions and sending written confirmations.
During periods when it is difficult to contact the Shareholder Service
Agent by telephone, it may be difficult to use the telephone redemption
privilege or the wire redemption privilege, although you can still redeem by
mail. The Funds reserve the right to terminate or modify the redemption by
check, phone or wire privileges at any time.
Because of the high cost of maintaining small accounts, the Funds may
assess a monthly fee of $3 on any account with a balance below $1,000 for 30
consecutive days. The fee will not apply to accounts enrolled in an automatic
investment program or to IRAs. See "How To Make a Purchase."
EXCHANGING SHARES
Diversification is at the heart of most effective investment planning.
That's why we make it easy for you to exchange your shares of Zurich Money Funds
for shares of Zurich YieldWise Money Fund or shares of Kemper Funds. Please
remember that money market shares you acquire by dividend reinvestment may be
exchanged into a Kemper Mutual Fund with no sales charge; though money fund
shares you purchase are subject to the applicable sales charge when exchanged.
The total value of shares being exchanged must at least equal the
minimum investment requirement of the fund into which they are being exchanged.
Exchanges are made based on relative dollar values of the shares involved in the
exchange. We don't charge you a service fee for an exchange; however, dealers or
other firms may charge for their services. To exchange shares, call us or
contact your financial adviser to obtain prospectuses of Zurich YieldWise Money
Fund or the Kemper Funds in which you are interested. You may make an exchange
by mail or by telephone:
17
<PAGE>
By Telephone
Once you've completed the authorization section on the account
application and we have it on file, exchange requests may be made by calling
1-888-ZURICH-1 (987-4241), subject to the limitations on liability described
under "How To Make a Redemption -- General." During periods when it is difficult
to contact the Shareholder Service Agent by telephone, it may be difficult to
use the telephone exchange privilege.
By Mail
Send your request to:
Zurich Money Funds
P.O. Box 419557
Attention: Exchange Department
Kansas City, Missouri 64141-6557
Exchanges will be effected by redemption of shares of the fund held and
purchase of shares of the other fund. For federal income tax purposes, any such
exchange constitutes a sale upon which a gain or loss may be realized, depending
upon whether the value of the shares being exchanged is more or less than the
shareholder's adjusted cost basis. Any certificates for shares must be deposited
prior to any exchange of such shares. The exchange privilege is not a right and
may be suspended, terminated or modified at any time. Except as otherwise
permitted by applicable regulation, 60 days prior written notice of any
termination or material change will be provided.
Automatic Exchange Plan
With an account balance of $1,000 or more, shareholders may authorize
the automatic exchange of a specified amount ($100 minimum) of such shares for
shares of a Kemper Fund. If selected, exchanges will be made automatically until
the privilege is terminated by the shareholder or the Fund. Exchanges are
subject to the terms and conditions described above under "Exchanging Shares,"
except that there is no minimum investment requirement for the Kemper Fund
acquired on exchange. This privilege may not be used for the exchange of shares
held in certificated form.
Subject to the limitations described in this section, Class A shares
(or the equivalent) of the following Kemper Mutual Funds may be exchanged for
each other at their relative net asset values: Kemper Technology Fund, Kemper
Total Return Fund, Kemper Growth Fund, Kemper Small Capitalization Equity Fund,
Kemper Income and Capital Preservation Fund, Kemper Municipal Bond Fund, Kemper
Diversified Income Fund, Kemper High Yield Series, Kemper U.S. Government
Securities Fund, Kemper International Fund, Kemper State Tax-Free Income Series,
Kemper Adjustable Rate U.S. Government Fund, Kemper Blue Chip Fund, Kemper
Global Income Fund, Kemper Target Equity Fund (series are subject to a limited
offering period), Kemper Intermediate Municipal Bond Fund, Kemper Cash Reserves
Fund, Kemper U.S. Mortgage Fund, Kemper Short-Intermediate Government Fund,
Kemper Value Plus Growth Fund, Kemper Value Fund, Inc., Kemper Horizon Fund,
Kemper Quantitative Equity Fund, Kemper Europe Fund, Kemper Asian Growth Fund
and Kemper Aggressive Growth Fund ("Kemper Mutual Funds") and certain "Money
Market Funds" (Zurich Money Funds, Cash Equivalent Fund, Tax-Exempt California
Money Market Fund, Cash Account Trust, Investors Municipal Cash Fund and
Investors Cash Trust). In addition, shares of Zurich Money Funds may be
exchanged for shares of Zurich YieldWise Money Fund. Shares of Money Market
Funds and Kemper Cash Reserves Fund that were acquired by purchase (not
including shares acquired by dividend reinvestment) are subject to the
applicable sales charge on exchange with Kemper Funds. Shares purchased by check
or through EXPRESS-Transfer or Bank Direct Deposit may not be exchanged until
they have been owned for at least 15 days. In addition, shares of Kemper Funds,
other than a Money Market Fund and Kemper Cash Reserves Fund, acquired by
exchange from another fund may not be exchanged thereafter until they have been
owned for 15 days. Series of Kemper Target Equity Fund will be available on
exchange only during the Offering Period for such series as described in the
prospectus for such series. Cash Equivalent Fund, Tax-Exempt California
18
<PAGE>
Money Market Fund, Cash Account Trust, Investors Municipal Cash Fund and
Investors Cash Trust are available on exchange but only through a financial
services firm having a services agreement with Kemper Distributors, Inc. with
respect to such funds. Exchanges may only be made for funds that are available
for sale in the shareholder's state of residence. Currently, Tax-Exempt
California Money Market Fund is available for sale only in California and the
portfolios of Investors Municipal Cash Fund are available for sale only in
certain states.
Special Retirement Plans
Shareholders of the Money Market Fund who have purchased shares because
they are participants in tax-exempt retirement plans of Scudder Kemper and its
affiliates may exchange their shares for Class I shares of any "Kemper Mutual
Fund" listed above to the extent that they are available through their plan.
Conversely, shareholders of Class I shares may exchange their shares for shares
of the Money Market Fund if the shareholders of Class I shares have purchased
shares because they are participants in tax-exempt retirement plans of Scudder
Kemper and its affiliates. Exchanges will be made at the shares' relative net
asset values through their plan. Exchanges are subject to the limitations set
forth above.
SPECIAL FEATURES
Zurich Money-PLUS Account(SM)
The Zurich Money-PLUS Account(SM) is a cash management program offering
a combination of features and benefits. The program includes checkwriting (no
minimum dollar amount) and a VISA(R) Gold Check Card (a debit card). The
INVESTORS MONEYCARD(SM) VISA(R) is issued by Investors Fiduciary Trust Company
("IFTC"). Currently, the fee for this service is $65 a year with charges for
additional checks. There is a fee of $1.00 per transaction for use of Automated
Teller Machines. The minimum initial account balance required to be eligible for
this privilege is $5,000. You may use only the checks provided through the
Zurich Money-PLUS Account(SM). Any check for an amount in excess of the funds
available for redemption from the shareholder's account will be returned and
will subject the account to additional service fees. If you have the INVESTORS
MONEYCARDSM VISA(R) and request an expedited wire transfer redemption, the wire
will be sent on the next business day following the request. Fees and features
of the Zurich Money-PLUS Account(SM) are subject to modification. This program
is available only to those who are residents of the United States. Shareholders
should contact the Shareholder Service Agent at 1-800-537-6001 for more
information.
Electronic Funds Transfer Programs
For your convenience, the Funds have established several investment and
redemption programs using electronic funds transfer which are described below.
There is currently no charge by the Funds for these programs. Shareholders
should contact the Shareholder Service Agent at 1-888-ZURICH-1 (987-4241) for
more information.
EZ-Transfer With just one easy phone call, EZ-Transfer quickly and conveniently
transfers money (minimum $100 and maximum $50,000) from your bank, savings and
loan or credit union account to purchase shares in a Fund. You can also redeem
shares (minimum $100 and maximum $50,000) from your Fund account and transfer
the proceeds to your bank, savings and loan or credit union checking account.
When you choose to participate in the EZ-Transfer program, you designate the
bank, savings and loan or credit union account which will be debited or credited
under the program. After you have received a notice confirming that this service
has been added to your Fund account, please allow a minimum of 20 days for bank
notification and processing. By choosing to participate in this program, you
authorize the Shareholder Service Agent to rely upon telephone instructions from
any person to transfer the specified amounts between your Fund account and your
predesignated bank, savings and loan or credit union account, subject to the
limitations on liability under "How To Make a Redemption -- General." The
Shareholder Service Agent will then purchase or redeem sufficient full and
fractional shares in your account to satisfy the request. Once you are enrolled
in EZ-Transfer, you can initiate a transaction by simply calling Zurich
Shareholder Services toll free at 1-888-ZURICH-1 (987-4241) Monday through
Friday, 8:00 a.m. to 3:00 p.m. Central time or
19
<PAGE>
by calling Zurich Info Line at 1-888-987-8678 24 hours a day. See "How To Make a
Redemption -- General" for information on our 10 day hold policy. Any account
holder may terminate this privilege by sending written notice to Zurich Money
Funds, P.O. Box 419415, Kansas City, Missouri 64141-6415. Termination will
become effective as soon as the Shareholder Service Agent has had a reasonable
time to act upon the request. EZ-Transfer cannot be used with passbook savings
accounts. This program may not be used for tax-deferred plans such as Individual
Retirement Accounts (IRAs).
Automatic Purchase Plan You may establish an automatic investment program with
your Fund account. With Automatic Purchase Plan, monthly investments (maximum
$50,000) are made automatically from your account at a bank, savings and loan,
or credit union into your Fund account. By signing up for this privilege, you
authorize the Trust and its agents to take money out of your predesignated bank,
savings and loan or credit union account and invest that money in your Fund
account. Any account owner may terminate this privilege simply by sending
written notice to Zurich Money Funds, P.O. Box 419415, Kansas City, Missouri
64141-6415. Termination will become effective as soon as the Shareholder Service
Agent has had a reasonable time to act upon the request. This privilege may not
be used with passbook savings accounts.
Automatic Check Deposit You may conveniently invest in the Funds through Payroll
Direct Deposit or Government Direct Deposit. You can arrange to have all or a
portion of your net pay or government check automatically invested in your Fund
account each payment period. You may terminate your participation in these
programs by giving written notice to your employer or the government agency, as
appropriate. (A reasonable time to act is required.) The Funds are not
responsible for the efficiency of your employer or the government agency making
the payment or any financial institution transmitting payment.
To use these features, the participating financial institution must be
affiliated with the ACH System. This ACH affiliation permits the Shareholder
Service Agent to electronically transfer money between your bank account or
employer's payroll bank in the case of Payroll Direct Deposit or the U.S.
Government in the case of Government Direct Deposit, and your Fund account. Your
financial institution's crediting policies for these transferred funds may vary.
These features may be amended or terminated at any time by the Funds.
Other Special Features
Information about the following special features is contained in the
Statement of Additional Information. Additional information may also be obtained
by contacting Zurich Shareholder Services at 1-888-ZURICH-1 (987-4241).
-- Automatic Withdrawal Programs
-- Tax Sheltered Retirement Programs
DIVIDENDS AND TAXES
Dividend Payment
To help keep your account growing, dividends from any Fund are
automatically reinvested in additional shares of that Fund, unless you request
payment by check on your account application or make such a request later.
Dividends are declared daily and paid monthly.
Dividends are normally reinvested on the 25th of each month if a
business day, otherwise on the prior business day. If you've chosen to receive
dividends in cash, checks will be mailed monthly to you or any person you
designate. Shareholders may request this option by contacting the Shareholder
Service Agent (see "How To Buy Shares").
Each Fund will reinvest dividend checks (and future dividends) in
shares of that same Fund if checks are returned as undeliverable. Dividends and
other distributions of a Fund in the aggregate amount of $10 or less are
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automatically reinvested in shares of the same Fund unless you request that such
policy not be applied to your account.
Dividend Exchange Privilege
Upon written request to the Shareholder Service Agent, a shareholder
may elect to have Fund dividends invested without sales charge in shares of a
Kemper Fund offering this privilege at the net asset value of the other fund.
See "Exchanging Shares" for a list of these Kemper Funds. To use this privilege
of investing Fund dividends in shares of a Kemper Fund, shareholders must
maintain a minimum account value of $1,000 in the Zurich Money Funds. Share
certificates will only be issued on request.
Taxable Funds
The Money Market Fund and the Government Money Fund each intend to
continue to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code (the "Code") and if so qualified will not be subject to
federal income taxes to the extent its earnings are distributed. Dividends
derived from interest and short-term capital gains are taxable as ordinary
income whether received in cash or reinvested in additional shares. Dividends
from these Funds do not qualify for the dividends received deduction available
to corporate shareholders.
Tax-Free Money Fund
The Tax-Free Money Fund intends to continue to qualify under the Code
as a regulated investment company and, if so qualified, will not be liable for
federal income taxes to the extent its earnings are distributed. This Fund also
intends to meet the requirements of the Code applicable to regulated investment
companies distributing tax-exempt interest dividends and, accordingly, dividends
representing net interest received on Municipal Securities will not be
includable by shareholders in their gross income for federal income tax
purposes, except to the extent such interest is subject to the alternative
minimum tax as discussed below. Dividends representing taxable net investment
income (such as net interest income from temporary investments in obligations of
the U.S. Government) and net short-term capital gains, if any, are taxable to
shareholders as ordinary income. All taxpayers will be required to disclose on
their federal income tax returns the amount of tax-exempt interest earned during
the year, including exempt-interest dividends from the Tax-Free Money Fund.
Net interest on certain "private activity bonds" issued on or after
August 8, 1986 is treated as an item of tax preference and may, therefore, be
subject to both the individual and corporate alternative minimum tax. To the
extent provided by regulations to be issued by the Secretary of the Treasury,
exempt-interest dividends from the Tax-Free Money Fund are to be treated as
interest on private activity bonds in proportion to the interest income the Fund
receives from private activity bonds, reduced by allowable deductions. For the
1996 calendar year, 20% of the net interest income of the Tax-Free Money Fund
was derived from "private activity bonds."
Exempt-interest dividends, except to the extent of interest from
"private activity bonds," are not treated as a tax preference item. For a
corporate shareholder, however, such dividends will be included in determining
such corporate shareholder's "adjusted current earnings." Seventy-five percent
of the excess, if any, of "adjusted current earnings" over the corporate
shareholder's other alternative minimum taxable income with certain adjustments
will be a tax preference item. Corporate shareholders are advised to consult
their tax advisers with respect to alternative minimum tax consequences.
Individuals whose modified income exceeds a base amount will be subject
to federal income tax on up to 85% of their Social Security benefits. Modified
income includes adjusted gross income, tax-exempt interest, including
exempt-interest dividends from the Tax-Free Money Fund, and 50% of Social
Security benefits.
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The tax exemption of dividends from the Tax-Free Money Fund for federal
income tax purposes does not necessarily result in exemption under the income or
other tax laws of any state or local taxing authority. The laws of the several
states and local taxing authorities vary with respect to the taxation of such
income and shareholders of the Fund are advised to consult their own tax adviser
as to the status of their accounts under state and local tax laws.
The Funds
Dividends declared in October, November or December to shareholders of
record as of a date in one of those months and paid during the following January
are treated as paid on December 31 of the calendar year in which declared for
federal income tax purposes. Each Fund may adjust its schedule for dividend
reinvestment for the month of December to assist it in complying with reporting
and minimum distribution requirements contained in the Code.
Each Fund is required by law to withhold 31% of taxable dividends paid
to certain shareholders who do not furnish a correct taxpayer identification
number (in the case of individuals, a social security number) and in certain
other circumstances. Trustees of qualified retirement plans and 403(b)(7)
accounts are required by law to withhold 20% of the taxable portion of any
distribution that is eligible to be "rolled over." The 20% withholding
requirement does not apply to distributions from IRAs or any part of a
distribution that is transferred directly to another qualified retirement plan,
403(b)(7) account, or IRA. Shareholders should consult their tax advisers
regarding the 20% withholding requirement.
You will receive a monthly statement giving complete details of
dividend reinvestment and purchase and redemption transactions during the month.
Tax information will be provided annually. You should retain copies of your
monthly account statements or year-end statements for tax reporting purposes.
However, those who have incomplete records may obtain historical account
transaction information at a reasonable fee.
When more than one shareholder resides at the same address, certain
reports and communications to be delivered to such shareholders may be combined
in the same mailing package, and certain duplicate reports and communications
may be eliminated. Similarly, account statements to be sent to such shareholders
may be combined in the same mailing package or consolidated into a single
statement. However, a shareholder may request that the foregoing policies not be
applied to the shareholder's account.
INVESTMENT MANAGER
Scudder Kemper Investments, Inc. ("Scudder Kemper"), 345 Park Avenue,
New York, New York, is the investment manager of the Funds and provides the
Funds with continuous professional investment supervision. Scudder Kemper has
been engaged in the management of investment funds for more than seventy years
and is one of the largest investment managers in the country with more than $230
billion in assets under management.
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Scudder Kemper is an indirect subsidiary of Zurich Financial Services,
Inc., a newly formed global insurance and financial services company. Zurich
Financial Services, Inc. owns approximately 70% of Scudder Kemper, with the
balance owned by Scudder Kemper's officers and employees. The Zurich family of
companies manages over $[___] billion in assets worldwide.
In connection with the formation of Zurich Financial Services, Inc.,
each Fund's existing investment management agreement with Scudder Kemper was
deemed to have been assigned and, therefore, terminated. The Board has approved
a new investment management agreement with Scudder Kemper, which is
substantially identical to the current investment management agreement, except
for the dates of execution and termination. This agreement became effective upon
the termination of the then current investment management agreement and will be
submitted for shareholder approval at a special meeting currently scheduled to
conclude in December 1998.
Responsibility for overall management of the Funds rests with the Board
of Trustees and officers of the Trust. Professional investment supervision is
provided by Scudder Kemper. The investment management agreement provides that
Scudder Kemper shall act as the Funds' investment adviser, manage their
investments and provide the Funds with various services and facilities.
Frank J. Rachwalski, Jr. is the portfolio manager of the Funds. He has
served in this capacity since the Funds commenced operations. Mr. Rachwalski
joined Scudder Kemper in January, 1973 and is currently a Senior Vice President
of Scudder Kemper and a Vice President of the Trust. He received a B.B.A. and an
M.B.A. from Loyola University, Chicago, Illinois.
For the services and facilities furnished, the Trust pays a monthly
investment management fee on a graduated basis ranging from 1/12 of 0.50% of the
first $215 million of average daily net assets of the Trust, to 1/12 of 0.25% of
average daily net assets of the Trust over $800 million.
Scudder Fund Accounting ("SFAC"), a subsidiary of Scudder Kemper, is
responsible for determining the daily net asset value per share of each Fund and
maintaining all accounting records related thereto. Currently, SFAC receives no
fee for its services; however, subject to Board approval, at some time in the
future SFAC may seek payment for its services under its agreement with the
Trust.
Like other mutual funds and financial and business organizations
worldwide, the Funds could be adversely affected if computer systems on which
the Funds rely, which primarily include those used by the Adviser, its
affiliates or other service providers, are unable to process correctly
date-related information on and after January 1, 2000. This risk is commonly
called the Year 2000 Issue. Failure to address successfully the Year 2000 Issue
could result in interruptions to and other material adverse effects on the
Funds' business and operations. The Adviser has commenced a review of the Year
2000 Issue, although there can be no assurances that these steps will be
sufficient. In addition, there can be no assurances that the Year 2000 Issue
will not have an adverse effect on the companies whose securities are held by
the Funds or on global markets or economies generally.
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Kemper Distributors, Inc., 222 South Riverside Plaza, Chicago, Illinois
60606-5808, an affiliate of Scudder Kemper, is the principal underwriter of the
Funds and acts as agent of the Funds in the sale of their shares.
Investors Fiduciary Trust Company ("IFTC"), 801 Pennsylvania Avenue,
Kansas City, Missouri 64105, as custodian, and State Street Bank and Trust
Company, 225 Franklin Street, Boston, Massachusetts 02110, as sub-custodian,
have custody of all securities and cash of the Funds. They attend to the
collection of principal and income, and payment for and collection of proceeds
of securities bought and sold by the Funds. IFTC is also the Funds' transfer and
dividend-paying agent. Pursuant to a services agreement with IFTC, Kemper
Service Company, 811 Main Street, Kansas City, Missouri 64105, an affiliate of
Scudder Kemper, serves as Shareholder Service Agent of the Funds.
PERFORMANCE
The Funds may advertise several types of performance information,
including "yield," "effective yield," "total return," "average annual total
return" and, for the Tax-Free Money Fund only, "tax equivalent yield." Please
remember that performance information is based upon historical earnings and is
not representative of future performance. The yield of a Fund refers to the net
investment income generated by a hypothetical investment in the Fund over a
specific seven-day period. This net investment income is then annualized, which
means that the net investment income generated during the seven-day period is
assumed to be generated each week over an annual period and is shown as a
percentage of the investment. The effective yield is calculated similarly, but
the net investment income earned by the investment is assumed to be compounded
weekly when annualized. The effective yield will be slightly higher than the
yield due to this compounding effect. Average annual total return and total
return measure both net investment income and any realized or unrealized
appreciation or depreciation of a Fund's investments, assuming reinvestment of
all dividends. Average annual total return represents the average annual
percentage change over the period and total return represents the aggregate
percentage or dollar value change over the period. Tax equivalent yield is the
yield that a taxable investment must generate in order to equal the Tax-Free
Money Fund's yield for an investor in a stated federal income tax bracket
(normally assumed to be the maximum tax rate). Tax equivalent yield is based
upon, and will be higher than, the portion of the Tax-Free Money Fund's yield
that is tax-exempt.
The performance of a Fund may be compared to that of other money market
mutual funds or mutual fund indexes as reported by independent mutual fund
reporting services such as Lipper Analytical Services, Inc. ("Lipper"). A Fund's
performance and its relative size may be compared to other money market mutual
funds as reported by IBC Financial Data, Inc.'s Money Fund Report(R) or Money
Market Insight(R), reporting services on money market funds. Investors may want
to compare a Fund's performance to that of various bank products as reported by
BANK RATE MONITOR TM, a financial reporting service that weekly publishes
average rates of bank and thrift institution money market deposit accounts and
interest bearing checking accounts or various certificate of deposit indexes.
The performance of a Fund also may be compared to that of U.S. Treasury bills
and notes. Certain of these alternative investments may offer fixed rates of
return and guaranteed principal and may be insured. In addition, investors may
want to compare a Fund's performance to the Consumer Price Index either directly
or by calculating its "real rate of return," which adjusts its return for the
effects of inflation.
Information may be quoted from publications such as Morningstar, Inc.,
The Wall Street Journal, Money Magazine, Forbes, Barron's, Fortune, The Chicago
Tribune, USA Today, Institutional Investor and Registered Representative. The
Funds may depict the historical performance of the securities in which a Fund
may invest over periods reflecting a variety of market or economic conditions
either alone or in comparison with alternative investments, performance indexes
of those investments or economic indicators. Each Fund may also describe its
portfolio holdings and depict its size or relative size compared to other mutual
funds, the number and make-up of its shareholder base and other descriptive
factors concerning the Fund.
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Each Fund's returns will fluctuate. Shares of the Funds are not
insured. Additional information concerning a Fund's performance appears in the
Statement of Additional Information.
CAPITAL STRUCTURE
Zurich Money Funds is an open-end, diversified, management investment
company, organized as a business trust under the laws of Massachusetts on August
9, 1985. Effective February 1, 1996, the name of the Trust was changed from
Kemper Money Market Fund to Kemper Money Funds, and effective April 14, 1997,
the name of the Trust was changed from Kemper Money Funds to Zurich Money Funds.
Effective November 29, 1985, the Money Market Fund, pursuant to a
reorganization, succeeded to the assets and liabilities of Kemper Money Market
Fund, Inc., a Maryland corporation organized on September 19, 1974. Effective
November 14, 1986, the Government Money Fund succeeded to the assets and
liabilities of Kemper Government Money Market Fund, a business trust organized
under the laws of Massachusetts on August 9, 1985.
Effective November 29, 1985, Kemper Government Money Market Fund
succeeded to the assets and liabilities of Kemper Government Money Market Fund,
Inc., a Maryland corporation organized November 3, 1981. The Tax-Free Money Fund
commenced public offering of its shares on September 10, 1987. The Trust may
issue an unlimited number of shares of beneficial interest, all having no par
value, which may be divided by the Board of Trustees into classes of shares,
subject to compliance with the Securities and Exchange Commission regulations
permitting the creation of separate classes of shares. The Trust's shares are
not currently divided into classes. While only shares of the three previously
described Funds are presently being offered, the Board of Trustees may authorize
the issuance of additional series if deemed desirable, each with its own
investment objective, policies and restrictions. Since the Trust may offer
multiple series, it is known as a "series company." Shares of a Fund have equal
noncumulative voting rights and equal rights with respect to dividends, assets
and liquidation of such Fund subject to any preferences, rights or privileges of
any classes of shares within the Fund. Generally, each class of shares issued by
a particular Fund would differ as to the allocation of certain expenses of the
Fund, such as distribution and administrative expenses, permitting, among other
things, different levels of services or methods of distribution among various
classes. Shares are fully paid and nonassessable when issued, are transferable
without restriction and have no preemptive or conversion rights. The Trust is
not required to hold annual shareholders' meetings and does not intend to do so.
However, it will hold special meetings as required or deemed desirable for such
purposes as electing trustees, changing fundamental policies or approving an
investment management agreement. Subject to the Agreement and Declaration of
Trust of the Trust, shareholders may remove trustees. Shareholders will vote by
Fund and not in the aggregate except when voting in the aggregate is required
under the 1940 Act, such as for the election of trustees.
Each Fund may in the future seek to achieve its investment objective by
pooling its assets with assets of other mutual funds for investment in another
investment company having the same investment objective and substantially the
same investment policies and restrictions as such Fund. The purpose of such an
arrangement is to achieve greater operational efficiencies and to reduce costs.
It is expected that any such investment company will be managed by Scudder
Kemper in substantially the same manner as the corresponding Fund. Shareholders
of each Fund will be given at least 30 days' prior notice of any such
investment, although they will not be entitled to vote on the action. Such
investment would be made only if the Trustees determine it to be in the best
interests of the respective Fund and its shareholders.
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ACCOUNT SERVICES DIRECTORY
To avoid delays in the future, it is a good idea to sign up for account services
and features at the time an account is opened.
To Open A New Account
If you would like to open a new account or need a question answered, call a
Zurich Money Fund Specialist between 8 a.m. and 6 p.m. Central time at
1-800-537-6001.
Current Account Assistance
If you have a question about a current account, call a Shareholder Services
Representative between 7 a.m. and 6 p.m. Central time, Monday through Friday,
and between 8 a.m. and 3 p.m. Central time on Saturday at 1-888-ZURICH-1
(987-4241).
For better service, please have your account number and your most recent
statement at hand. For a special phone line for hearing impaired shareholders
with a Telecommunications Device for the Deaf (TDD), call 1-800-972-3006.
24-Hour Account Information
From a touch-tone phone, you can use Zurich InfoLine (1-888-987-8678), our
automated account information service, to obtain the following information 24
hours a day:
o account balance o last dividend paid
o current yield o transaction confirmation
o pre-authorized transfers to and from a bank account
Checkwriting
You can write any number of checks for $500 or more against your
available account balance. See Zurich MoneyPlus Account(SM) for a no-minimum
checking option.
Automatic Check Deposit
You can save time by signing up for direct deposit of Payroll or Government
checks into your Zurich Money Funds account. Ask your employer about how to
arrange this with all or part of your paycheck. Government Direct Deposit forms
are available by calling 1-888-ZURICH-1 (987-4241).
Automatic Investing
If you already directly deposit your paycheck into a bank account, you may want
to consider using Automatic Purchase Plan to help set aside some money for the
future. You specify the frequency and amount of your investment, and Zurich will
automatically have money from your personal checking or savings account
transferred to your Zurich Money Funds account. And this service may be changed
at any time . . . even deferred for a few months if you need to.
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Money-by-Phone
You can make transfers from your money market account to your bank account with
just a phone call if you sign up for EZ-Transfer. This feature also allows you
to transfer money to your Zurich Money Funds account over-the-phone. These
transfers generally take 1-2 days, depending on the time of day that you call
Shareholder Services.
You can also request an expedited (same day) wire transfer from your money
market account to your bank if you call before 11 a.m. Central time ($1,000
minimum redemption)
Automatic Bill-Paying
The Automatic Withdrawal feature can be used to pay a regular, important bill
such as a mortgage or car payment. You designate when and how much, and Zurich
will make the payment directly from your money market account.
MoneyPLUS Account(SM)
A powerful money management feature that makes it easy and economical to use
your Zurich Money Funds for day-to-day transactions. For a $65 annual fee, you
get unlimited checkwriting and a VISA Gold Check Card to use for debit and ATM
transactions. For special forms to sign-up for this add-on feature, call
1-800-537-6001. For customer service on the VISA card, call 1-800-346-8904.
Exchanges with Kemper Funds and Zurich YieldWise Money Fund
You can exchange with Kemper Funds and Zurich YieldWise Money Fund by calling
Shareholder Services between 8 a.m. and 3 p.m. Central time, Monday through
Friday at 1-888-ZURICH-1 (987-4241).
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ZURICH
Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
Telephone: 1-800-537-6001
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STATEMENT OF ADDITIONAL INFORMATION
November 30, 1998
ZURICH MONEY FUNDS
222 South Riverside Plaza, Chicago, Illinois 60606-5808
(800) 537-6001
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectus of Zurich Money Funds (the "Trust") dated
November 30, 1998. The prospectus may be obtained without charge by calling or
writing Zurich Money Funds.
TABLE OF CONTENTS
INVESTMENT RESTRICTIONS...................................................... 2
MUNICIPAL SECURITIES......................................................... 6
INVESTMENT MANAGER........................................................... 7
PORTFOLIO TRANSACTIONS....................................................... 9
PURCHASE AND REDEMPTION OF SHARES........................................... 11
DIVIDENDS, NET ASSET VALUE AND TAXES........................................ 11
PERFORMANCE................................................................. 13
OFFICERS AND TRUSTEES....................................................... 19
SPECIAL FEATURES............................................................ 21
SHAREHOLDER RIGHTS.......................................................... 21
APPENDIX -- RATINGS OF INVESTMENTS.......................................... 24
The financial statements appearing in the Funds' 1998 Annual Report to
Shareholders are incorporated herein by reference. The Funds' Annual Report
accompanies this Statement of Additional Information.
LOGO
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INVESTMENT RESTRICTIONS
The Zurich Money Market Fund (the "Money Market Fund"), Zurich Government Money
Fund (the "Government Money Fund") and Zurich Tax-Free Money Fund (the "Tax-Free
Money Fund") have adopted certain investment restrictions which, together with
the investment objective and policies of each Fund, cannot be changed without
approval by holders of a majority of such Fund's outstanding voting shares. As
defined in the Investment Company Act of 1940, this means the lesser of the vote
of (a) 67% of the shares of the Fund present at a meeting where more than 50% of
the outstanding shares of the Fund are present in person or by proxy; or (b)
more than 50% of the outstanding shares of the Fund.
The Money Market Fund may not:
(1) Purchase common stocks, preferred stocks, warrants, other
equity securities, state bonds, municipal bonds or industrial
revenue bonds (except through the purchase of debt obligations
in accordance with its investment objective and policies), and
except that all or substantially all of the assets of the Fund
may be invested in another registered investment company
having the same investment objective and substantially similar
investment policies as the Fund.
(2) Purchase securities of any issuer (other than obligations of,
or guaranteed by, the United States Government, its agencies
or instrumentalities) if, as a result, more than 5% of the
value of the Fund's assets would be invested in securities of
that issuer, except that all or substantially all of the
assets of the Fund may be invested in another registered
investment company having the same investment objective and
substantially similar investment policies as the Fund.
(3) Purchase more than 10% of any class of securities of any
issuer, except that all or substantially all of the assets of
the Fund may be invested in another registered investment
company having the same investment objective and substantially
similar investment policies as the Fund. All debt securities
and all preferred stocks are each considered as one class.
(4) Invest more than 5% of the Fund's total assets in securities
of issuers which with their predecessors have a record of less
than three years continuous operation, and equity securities
of issuers which are not readily marketable, except that all
or substantially all of the assets of the Fund may be invested
in another registered investment company having the same
investment objective and substantially similar investment
policies as the Fund.
(5) Enter into repurchase agreements if, as a result thereof, more
than 10% of the Fund's total assets valued at the time of the
transaction would be subject to repurchase agreements maturing
in more than seven days.
(6) Make loans to others (except through the purchase of debt
obligations or repurchase agreements in accordance with its
investment objective and policies).
(7) Borrow money except as a temporary measure for extraordinary
or emergency purposes and then only in an amount up to
one-third of the value of its total assets, in order to meet
redemption requests without immediately selling any money
market instruments (any such borrowings under this section
will not be collateralized). If, for any reason, the current
value of the Fund's total assets falls below an amount equal
to three times the amount of its indebtedness from money
borrowed, the Fund will, within three business days, reduce
its indebtedness to the extent necessary. The Fund will not
borrow for leverage purposes.
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(8) Make short sales of securities, or purchase any securities on
margin except to obtain such short-term credits as may be
necessary for the clearance of transactions.
(9) Write, purchase or sell puts, calls or combinations thereof.
(10) Concentrate more than 25% of the value of its assets in any
one industry; provided, however, that the Fund reserves
freedom of action to invest up to 100% of its assets in
certificates of deposit or bankers' acceptances when
management considers it to be in the best interests of the
Fund in attaining its investment objective, and except that
all or substantially all of the assets of the Fund may be
invested in another registered investment company having the
same investment objective and substantially similar investment
policies as the Fund.
(11) Purchase or retain the securities of any issuer if any of the
officers, trustees or directors of the Trust or its investment
adviser owns beneficially more than 1/2 of 1% of the
securities of such issuer and together own more than 5% of the
securities of such issuer, except that all or substantially
all of the assets of the Fund may be invested in another
registered investment company having the same investment
objective and substantially similar investment policies as the
Fund.
(12) Invest more than 5% of the Fund's total assets in securities
restricted as to disposition under the federal securities laws
(except commercial paper issued under Section 4(2) of the
Securities Act of 1933), and except that all or substantially
all of the assets of the Fund may be invested in another
registered investment company having the same investment
objective and substantially similar investment policies as the
Fund.
(13) Invest for the purpose of exercising control or management of
another issuer.
(14) Invest in commodities or commodity futures contracts or in
real estate, although it may invest in securities which are
secured by real estate and securities of issuers which invest
or deal in real estate.
(15) Invest in interests in oil, gas or other mineral exploration
or development programs, although it may invest in the
securities of issuers which invest in or sponsor such
programs.
(16) Purchase securities of other investment companies, except in
connection with a merger, consolidation, reorganization or
acquisition of assets, and except that all or substantially
all of the assets of the Fund may be invested in another
registered investment company having the same investment
objective and substantially similar investment policies as the
Fund.
(17) Underwrite securities issued by others except to the extent
the Fund may be deemed to be an underwriter, under the federal
securities laws, in connection with the disposition of
portfolio securities, and except that all or substantially all
of the assets of the Fund may be invested in another
registered investment company having the same investment
objective and substantially similar investment policies as the
Fund.
(18) Issue senior securities as defined in the Investment Company
Act of 1940.
The Government Money Fund may not:
(1) Purchase securities or make investments other than in
accordance with its investment objective and policies, except
that all or substantially all of the assets of the Fund may be
invested in
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another registered investment company having the same
investment objective and substantially similar investment
policies as the Fund.
(2) Enter into repurchase agreements if, as a result thereof, more
than 10% of the Fund's total assets valued at the time of the
transaction would be subject to repurchase agreements maturing
in more than seven days.
(3) Make loans to others (except through the purchase of debt
obligations or repurchase agreements in accordance with its
investment objective and policies).
(4) Borrow money except as a temporary measure for extraordinary
or emergency purposes and then only in an amount up to
one-third of the value of its total assets, in order to meet
redemption requests without immediately selling any
instruments (any such borrowings under this section will not
be collateralized). If, for any reason, the current value of
the Fund's total assets falls below an amount equal to three
times the amount of its indebtedness from money borrowed, the
Fund will, within three business days, reduce its indebtedness
to the extent necessary. The Fund will not borrow for leverage
purposes.
(5) Make short sales of securities, or purchase any securities on
margin except to obtain such short-term credits as may be
necessary for the clearance of transactions.
(6) Underwrite securities issued by others except to the extent
the Fund may be deemed to be an underwriter, under the federal
securities laws, in connection with the disposition of Fund
securities, and except that all or substantially all of the
assets of the Fund may be invested in another registered
investment company having the same investment objective and
substantially similar investment policies as the Fund.
(7) Issue senior securities as defined in the Investment Company
Act of 1940.
The Tax-Free Money Fund may not:
(1) Purchase securities if as a result of such purchase 25% or
more of the Fund's total assets would be invested in any one
industry or in any one state, except that all or substantially
all of the assets of the Fund may be invested in another
registered investment company having the same investment
objective and substantially similar investment policies as the
Fund. Municipal Securities and obligations of, or guaranteed
by, the U.S. Government, its agencies or instrumentalities are
not considered an industry for purposes of this restriction.
(2) Purchase securities of any issuer (other than obligations of,
or guaranteed by, the U.S. Government, its agencies or
instrumentalities) if as a result more than 5% of the value of
the Fund's assets would be invested in the securities of such
issuer, except that all or substantially all of the assets of
the Fund may be invested in another registered investment
company having the same investment objective and substantially
similar investment policies as the Fund. For purposes of this
limitation, the Fund will regard the entity which has the
primary responsibility for the payment of interest and
principal as the issuer.
(3) Invest more than 5% of the Fund's total assets in industrial
development bonds sponsored by companies which with their
predecessors have less than three years' continuous operation.
(4) Make loans to others (except through the purchase of debt
obligations or repurchase agreements in accordance with its
investment objective and policies).
4
<PAGE>
(5) Borrow money except as a temporary measure for extraordinary
or emergency purposes and then only in an amount up to
one-third of the value of its total assets, in order to meet
redemption requests without immediately selling any money
market instruments (any such borrowings under this section
will not be collateralized). If, for any reason, the current
value of the Fund's total assets falls below an amount equal
to three times the amount of its indebtedness from money
borrowed, the Fund will, within three business days, reduce
its indebtedness to the extent necessary. The Fund will not
borrow for leverage purposes.
(6) Make short sales of securities or purchase securities on
margin, except to obtain such short-term credits as may be
necessary for the clearance of transactions.
(7) Write, purchase or sell puts, calls or combinations thereof,
although the Fund may purchase Municipal Securities subject to
Standby Commitments in accordance with its investment
objective and policies.
(8) Purchase or retain the securities of any issuer if any of the
officers, trustees or directors of the Trust or its investment
adviser owns beneficially more than 1/2 of 1% of the
securities of such issuer and together own more than 5% of the
securities of such issuer, except that all or substantially
all of the assets of the Fund may be invested in another
registered investment company having the same investment
objective and substantially similar investment policies as the
Fund.
(9) Invest more than 5% of the Fund's total assets in securities
restricted as to disposition under the federal securities laws
(except commercial paper issued under Section 4(2) of the
Securities Act of 1933), except that all or substantially all
of the assets of the Fund may be invested in another
registered investment company having the same investment
objective and substantially similar investment policies as the
Fund.
(10) Invest for the purpose of exercising control or management of
another issuer.
(11) Invest in commodities or commodity futures contracts or in
real estate except that the Fund may invest in Municipal
Securities secured by real estate or interests therein.
(12) Invest in interests in oil, gas or other mineral exploration
or development programs, although it may invest in Municipal
Securities of issuers which invest in or sponsor such
programs.
(13) Purchase securities of other investment companies, except in
connection with a merger, consolidation, reorganization or
acquisition of assets, and except that all or substantially
all of the assets of the Fund may be invested in another
registered investment company having the same investment
objective and substantially similar investment policies as the
Fund.
(14) Underwrite securities issued by others except to the extent
the Fund may be deemed to be an underwriter, under the federal
securities laws, in connection with the disposition of
portfolio securities, and except that all or substantially all
of the assets of the Fund may be invested in another
registered investment company having the same investment
objective and substantially similar investment policies as the
Fund.
(15) Issue senior securities as defined in the Investment Company
Act of 1940.
If a Fund adheres to a percentage restriction at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values or net assets will not be considered a violation. The Funds did
not borrow money, as permitted by investment restrictions number 7 (Money Market
Fund), number 4
5
<PAGE>
(Government Money Fund) and number 5 (Tax-Free Money Fund), in the latest fiscal
year; and they have no present intention of borrowing during the coming year. In
any event, borrowings would only be as permitted by such restrictions. The
Tax-Free Money Fund may invest more than 25% of its total assets in industrial
development bonds.
MUNICIPAL SECURITIES
Municipal Securities which the Tax-Free Money Fund may purchase include, without
limitation, debt obligations issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities such as
airports, bridges, highways, housing, hospitals, mass transportation, public
utilities, schools, streets, and water and sewer works. Other public purposes
for which Municipal Securities may be issued include refunding outstanding
obligations, obtaining funds for general operating expenses and obtaining funds
to loan to other public institutions and facilities.
Municipal Securities, such as industrial development bonds, are issued by or on
behalf of public authorities to obtain funds for purposes including privately
operated airports, housing, conventions, trade shows, ports, sports, parking or
pollution control facilities or for facilities for water, gas, electricity or
sewage and solid waste disposal. Such obligations, which may include lease
arrangements, are included within the term Municipal Securities if the interest
paid thereon qualifies as exempt from federal income tax. Other types of
industrial development bonds, the proceeds of which are used for the
construction, equipment, repair or improvement of privately operated industrial
or commercial facilities, may constitute Municipal Securities, although current
federal tax laws place substantial limitations on the size of such issues.
Municipal Securities generally are classified as "general obligation" or
"revenue." General obligation notes are secured by the issuer's pledge of its
full credit and taxing power for the payment of principal and interest. Revenue
notes are payable only from the revenues derived from a particular facility or
class of facilities or, in some cases, from the proceeds of a special excise or
other specific revenue source. Industrial development bonds which are Municipal
Securities are in most cases revenue bonds and generally do not constitute the
pledge of the credit of the issuer of such bonds.
Examples of Municipal Securities that are issued with original maturities of one
year or less are short-term tax anticipation notes, bond anticipation notes,
revenue anticipation notes, construction loan notes, pre-refunded municipal
bonds, warrants and tax-free commercial paper.
Tax anticipation notes typically are sold to finance working capital needs of
municipalities in anticipation of receiving property taxes on a future date.
Bond anticipation notes are sold on an interim basis in anticipation of a
municipality issuing a longer term bond in the future. Revenue anticipation
notes are issued in expectation of receipt of other types of revenue such as
those available under the Federal Revenue Sharing Program. Construction loan
notes are instruments insured by the Federal Housing Administration with
permanent financing by "Fannie Mae" (the Federal National Mortgage Association)
or "Ginnie Mae" (the Government National Mortgage Association) at the end of the
project construction period. Pre-refunded municipal bonds are bonds which are
not yet refundable, but for which securities have been placed in escrow to
refund an original municipal bond issue when it becomes refundable. Tax-free
commercial paper is an unsecured promissory obligation issued or guaranteed by a
municipal issuer. The Tax-Free Money Fund may purchase other Municipal
Securities similar to the foregoing, which are or may become available,
including securities issued to pre-refund other outstanding obligations of
municipal issuers.
The federal bankruptcy statutes relating to the adjustments of debts of
political subdivisions and authorities of states of the United States provide
that, in certain circumstances, such subdivisions or authorities may be
authorized to initiate bankruptcy proceedings without prior notice to or consent
of creditors, which proceedings could result in material adverse changes in the
rights of holders of obligations issued by such subdivisions or authorities.
6
<PAGE>
Litigation challenging the validity under state constitutions of present systems
of financing public education has been initiated or adjudicated in a number of
states, and legislation has been introduced to effect changes in public school
finances in some states. In other instances there has been litigation
challenging the issuance of pollution control revenue bonds or the validity of
their issuance under state or federal law which ultimately could affect the
validity of those Municipal Securities or the tax-free nature of the interest
thereon.
INVESTMENT MANAGER
Investment Manager. Scudder Kemper Investments, Inc. ("Scudder Kemper" or "the
Adviser"), 345 Park Avenue, New York, New York is the Funds' investment manager.
Scudder Kemper is approximately 70% owned by Zurich Financial Services, Inc. a
newly formed global insurance and financial services company. The balance of the
Adviser is owned by its officers and employees. Pursuant to an investment
management agreement, Scudder Kemper acts as each Fund's investment adviser,
manages its investments, administers its business affairs, furnishes office
facilities and equipment, provides clerical, and administrative services, and
permits any of its officers or employees to serve without compensation as
trustees or officers of the Trust if elected to such positions. The Trust pays
the expenses of its operations, including the fees and expenses of independent
auditors, counsel, custodian and transfer agent and the cost of share
certificates, reports and notices to shareholders, costs of calculating net
asset value and maintaining all accounting records thereto, brokerage
commissions or transaction costs, taxes, registration fees, the fees and
expenses of qualifying the Fund and its shares for distribution under federal
and state securities laws and membership dues in the Investment Company
Institute or any similar organization. Trust expenses generally are allocated
among the Funds on the basis of relative net assets at the time of allocation,
except that expenses directly attributable to a particular Fund are charged to
that Fund.
The investment management agreement continues in effect from year to year for
each Fund so long as its continuation is approved at least annually (a) by a
majority of the trustees who are not parties to such agreement or interested
persons of any such party except in their capacity as trustees of the Trust and
(b) by the shareholders of each Fund or the Board of Trustees. If continuation
is not approved for a Fund, the investment management agreement nevertheless may
continue in effect for the Funds for which it is approved and Scudder Kemper may
continue to serve as investment manager for the Fund for which it is not
approved to the extent permitted by the Investment Company Act of 1940. The
agreement may be terminated at any time upon 60 days notice by either party, or
by a majority vote of the outstanding shares of a Fund with respect to that
Fund, and will terminate automatically upon assignment. Shareholders of each
Fund will vote separately upon continuation of the investment management
agreement and upon other matters affecting only an individual Fund. Additional
Funds may be subject to a different agreement.
The investment management agreement provides that Scudder Kemper shall not be
liable for any error of judgment or of law, or for any loss suffered by the
Funds in connection with the matters to which the agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of Scudder Kemper in the performance of its obligations and duties, or by
reason of its reckless disregard of its obligations and duties under the
agreement.
At December 31, 1997, pursuant to the terms of an agreement, Scudder, Stevens &
Clark, Inc. ("Scudder") and Zurich Insurance Company ("Zurich") formed a new
global organization by combining Scudder with Zurich Kemper Investments, Inc., a
former subsidiary of Zurich and the former investment manager to each Fund, and
Scudder changed its name to Scudder Kemper Investments, Inc. As a result of the
transaction, Zurich owned approximately 70% of the Adviser, with the balance
owned by the Adviser's officers and employees.
7
<PAGE>
On September 7, 1998, the businesses of Zurich (including Zurich's 70% interest
in Scudder Kemper) and the financial services businesses of B.A.T Industries
p.l.c. ("B.A.T") were combined to form a new global insurance and financial
services company known as Zurich Financial Services, Inc. By way of a dual
holding company structure, former Zurich shareholders initially owned
approximately 57% of Zurich Financial Services, Inc., with the balance initially
owned by former B.A.T shareholders.
Upon consummation of this transaction, each Fund's existing investment
management agreement with Scudder Kemper was deemed to have been assigned and,
therefore, terminated. The Board has approved a new investment management
agreement with Scudder Kemper, which is substantially identical to the current
investment management agreement, except for the date of execution and
termination. This agreement became effective upon the termination of the then
current investment management agreement and will be submitted for shareholder
approval at a special meeting currently scheduled to conclude in December 1998.
For the services and facilities furnished, the Trust pays an annual investment
management fee, payable monthly, on a graduated basis of .50% of the first $215
million of average daily net assets of the Trust, .375% on the next $335
million, .30% on the next $250 million and .25% of average daily net assets of
the Trust over $800 million. Scudder Kemper has agreed to reimburse the Trust
should all operating expenses of the Trust, including the investment management
fee of Scudder Kemper but excluding taxes, interest, extraordinary expenses and
brokerage commissions or transaction costs, exceed 1 1/2% of the first $30
million of average net assets of the Trust and 1% of average net assets over $30
million on an annual basis. The investment management fee and the expense
limitation are computed based upon the combined average daily net assets of the
Funds and are allocated among such Funds based upon the relative net assets of
each Fund.
For its services as investment adviser and manager and for facilities furnished
during the fiscal years ended July 31 indicated, the Funds incurred investment
management fees as shown.
<TABLE>
<CAPTION>
Fund 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Money Market $ _______ $11,666,000 $11,134,000 $10,924,000
Government Money $ _______ $ 1,894,000 $ 1,747,000 $ 1,637,000
Tax-Free Money $ _______ $ 2,068,000 $ 2,032,000 $ 2,072,000
</TABLE>
Fund Accounting Agent. Scudder Fund Accounting Corporation ("SFAC"), a
subsidiary of the Adviser, is responsible for determining the daily net asset
value per share of the Fund and maintaining all accounting records related
thereto. Currently, SFAC receives no fee for its services to the Fund; however,
subject to Board approval, at some time in the future, SFAC may seek payment for
its services under this agreement.
8
<PAGE>
Principal Underwriter. Kemper Distributors, Inc. ("KDI"), an affiliate of
Scudder Kemper, is the principal underwriter for shares of the Funds and acts as
agent of the Funds in the sale of their shares. The Funds pay the cost for the
prospectus and shareholder reports to be set in type and printed for existing
shareholders, and KDI pays for the printing and distribution of copies thereof
used in connection with the offering of shares to prospective investors. KDI
also pays for supplementary sales literature and advertising costs. Terms of
continuation, termination and assignment under the underwriting agreement are
identical to those described above with regard to the investment management
agreement, except that termination other than upon assignment requires six
months notice and shares are voted in the aggregate and not by Fund whenever
shareholders vote with respect to such agreement.
Certain officers or trustees of the Trust are also directors or officers of
Scudder Kemper and KDI as indicated under "Officers and Trustees."
Custodian and Shareholder Service Agent. Investors Fiduciary Trust Company
("IFTC"), 801 Pennsylvania Avenue, Kansas City, Missouri 64105, as custodian,
and State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, as sub-custodian, have custody of all securities and cash
of the Funds. They attend to the collection of principal and income, and payment
for and collection of proceeds of securities bought and sold by the Funds. IFTC
is also the Funds' transfer and dividend-paying agent. Pursuant to a services
agreement with IFTC, Kemper Service Company ("KSvC"), an affiliate of Scudder
Kemper, serves as "Shareholder Service Agent." IFTC receives, as transfer agent,
and pays to KSvC, annual account fees of a maximum of $8 per account plus
account set-up, transaction, maintenance and out-of-pocket expense
reimbursement. For the fiscal year ended July 31, 1998, IFTC remitted
shareholder service fees in the amount of $[ ________ ] to KSvC as Shareholder
Service Agent.
Independent Auditors and Reports to Shareholders. The Funds' independent
auditors, Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606,
audit and report on the Funds' annual financial statements, review certain
regulatory reports and the Funds' federal income tax return, and perform other
professional accounting, auditing, tax and advisory services when engaged to do
so by the Funds. Shareholders will receive annual audited financial statements
and semi-annual unaudited financial statements.
LEGAL COUNSEL. Vedder, Price, Kaufman & Kammholz, 222 North LaSalle Street,
Chicago, Illinois 60601, serves as legal counsel to the Fund.
PORTFOLIO TRANSACTIONS
Portfolio transactions are undertaken principally to pursue the objective of
each Fund in relation to movements in the general level of interest rates, to
invest money obtained from the sale of Fund shares, to reinvest proceeds from
maturing portfolio securities and to meet redemptions of Fund shares. This may
increase or decrease the yield of a Fund depending upon management's ability to
correctly time and execute such transactions. Since a Fund's assets are invested
in securities with short maturities, its portfolio will turn over several times
a year. Securities with maturities of less than one year are excluded from
required portfolio turnover rate calculations, so each Fund's portfolio turnover
rate for reporting purposes is zero.
Scudder Kemper and its affiliates furnish investment management services for the
Kemper Funds, Zurich Money Funds, Zurich YieldWise Money Fund and other clients
including affiliated insurance companies. These entities may share some common
research and trading facilities. At times investment decisions may be made to
purchase or sell the same investment security for a Fund and for one or more of
the other clients of Scudder Kemper or its affiliates. When two or more of such
clients are simultaneously engaged in the purchase or sale of the same security
through the same trading facility, the transactions are allocated as to amount
and price in a manner considered equitable to each.
9
<PAGE>
The primary objective of the Adviser in placing orders for the purchase and sale
of securities for a Fund's portfolio is to obtain the most favorable net results
taking into account such factors as price, commission where applicable, size of
order, difficulty of execution and skill required of the executing
broker/dealer. The Adviser seeks to evaluate the overall reasonableness of
brokerage commissions paid (to the extent applicable) through its familiarity
with commissions charged on comparable transactions, as well as by comparing
commissions paid by a Fund to reported commissions paid by others. The Adviser
reviews on a routine basis commission rates, execution and settlement services
performed, making internal and external comparisons.
When it can be done consistently with the policy of obtaining the most favorable
net results, it is the Adviser's practice to place such orders with
broker/dealers who supply research, market and statistical information to a
Fund. The term "research, market and statistical information" includes advice as
to the value of securities; the advisability of investing in, purchasing or
selling securities; the availability of securities or purchasers or sellers of
securities; and analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and the performance of accounts.
The Adviser is authorized when placing portfolio transactions for a Fund to pay
a brokerage commission in excess of that which another broker might charge for
executing the same transaction solely on account of receipt of the research,
market or statistical information. In effecting transactions in over-the-
counter securities, orders are placed with the principal market makers for the
security being traded unless, after exercising care, it appears that more
favorable results are available elsewhere.
In selecting among firms believed to meet the criteria for handling a particular
transaction, the Adviser may give consideration to those firms that have sold or
are selling shares of a Fund managed by the Adviser.
To the maximum extent feasible, it is expected that the Adviser will place
orders for a portfolio transactions through Scudder Investor Services ("SIS"), a
corporation registered as a broker-dealer and a subsidiary of the Adviser. SIS
will place orders on behalf of the Fund with issuers, underwriters or other
brokers and dealers. SIS will not receive any commission, fee or other
remuneration from the Fund for this service.
Although certain research, market and statistical information from
broker/dealers may be useful to a Fund and to the Adviser, it is the opinion of
the Adviser that such information only supplements its own research effort since
the information must still be analyzed, weighed and reviewed by the Adviser's
staff. Such information may be useful to the Adviser in providing services to
clients other than the Fund and not all such information is used by the Adviser
in connection with the Fund. Conversely, such information provided to the
Adviser by broker/dealers through whom other clients of the Adviser effect
securities transactions may be useful to the Adviser in providing services to a
Fund.
The Board members for a Fund review from time to time whether the recapture for
the benefit of a Fund of some portion of the brokerage commissions or similar
fees paid by a Fund on portfolio transaction is legally permissible and
advisable.
Money market instruments are normally purchased in principal transactions
directly from the issuer or from an underwriter or market maker . There usually
are no brokerage commissions paid by the Fund for such purchases . During the
last three fiscal years the Fund paid no portfolio brokerage commissions.
Purchases from underwriters will include a commission or concession paid by the
issuer to the underwriter, and purchases from dealers serving as market makers
will include the spread between the bid and asked prices.
10
<PAGE>
PURCHASE AND REDEMPTION OF SHARES
Shares of each Fund are sold at their net asset value next determined after an
order and payment are received in the form described in the Funds' prospectus.
There is no sales charge. The minimum initial investment in any Fund is $1,000
and the minimum subsequent investment is $100 but such minimum amounts may be
changed at any time. See the prospectus for certain exceptions to these
minimums. The Funds may waive the minimum for purchases by trustees, directors,
officers or employees of the Trust or Scudder Kemper and its affiliates and the
$3 monthly fee assessed on accounts below $1,000. An investor wishing to open an
account should use the Account Application Form available from the Funds and
choose one of the methods of purchase described in the Funds' prospectus. An
order for the purchase of shares that is accompanied by a check drawn on a
foreign bank (other than a check drawn on a Canadian bank in U.S. Dollars) will
not be considered in proper form and will not be processed unless and until the
Fund determines that it has received payment of the proceeds of the check. The
time required for such a determination will vary and cannot be determined in
advance.
Upon receipt by the Shareholder Service Agent, of a request for redemption in
proper form, shares will be redeemed by a Fund at the applicable net asset value
as described in the Funds' prospectus. A shareholder may elect to use either the
regular or expedited redemption procedures.
The Funds may suspend the right of redemption or delay payment more than seven
days (a) during any period when the New York Stock Exchange ("Exchange") is
closed other than customary weekend and holiday closings or during any period in
which trading on the Exchange is restricted, (b) during any period when an
emergency exists as a result of which (i) disposal of a Fund's investments is
not reasonably practicable, or (ii) it is not reasonably practicable for the
Fund to determine the value of its net assets, or (c) for such other periods as
the Securities and Exchange Commission may by order permit for the protection of
the Funds' shareholders.
Although it is the Trust's present policy to redeem in cash, if the Board of
Trustees determines that a material adverse effect would be experienced by the
remaining shareholders if payment were made wholly in cash, the Trust will pay
the redemption price in whole or in part by a distribution of portfolio
securities in lieu of cash, in conformity with the applicable rules of the
Securities and Exchange Commission, taking such securities at the same value
used to determine net asset value, and selecting the securities in such manner
as the Board of Trustees may deem fair and equitable. If such a distribution
occurs, shareholders receiving securities and selling them could receive less
than the redemption value of such securities and in addition could incur certain
transaction costs. Such a redemption would not be as liquid as a redemption
entirely in cash. The Trust has elected to be governed by Rule 18f-1 under the
Investment Company Act of 1940 pursuant to which the Trust is obligated to
redeem shares of a Fund solely in cash up to the lesser of $250,000 or 1% of the
net assets of the Fund during any 90-day period for any one shareholder of
record.
DIVIDENDS, NET ASSET VALUE AND TAXES
Dividends. Dividends are declared daily and paid monthly. Shareholders will
receive dividends in additional shares of the same Fund unless they elect to
receive cash. Dividends will be reinvested monthly at the net asset value
normally on the 25th of each month if a business day, otherwise on the prior
business day. The Funds will pay
11
<PAGE>
shareholders who redeem their entire accounts all unpaid dividends at the time
of redemption not later than the next dividend payment date.
Each Fund calculates its dividends based on its daily net investment income. For
this purpose, the net investment income of a Fund consists of (a) accrued
interest income plus or minus amortized discount or premium (excluding market
discount for the Tax-Free Money Fund), (b) plus or minus all short-term realized
gains and losses on portfolio assets and (c) minus accrued expenses allocated to
the Fund. Expenses of the Funds are accrued each day. While each Fund's
investments are valued at amortized cost, there will be no unrealized gains or
losses on portfolio securities. However, should the net asset value of a Fund
deviate significantly from market value, the Board of Trustees could decide to
value the portfolio securities at market value and then unrealized gains and
losses would be included in net investment income above.
Net Asset Value. As described in the prospectus, each Fund values its portfolio
instruments at amortized cost, which does not take into account unrealized
capital gains or losses. This involves initially valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price the Fund would receive if it sold the instrument.
Calculations are made to compare the value of a Fund's investments valued at
amortized cost with market values. Market valuations are obtained by using
actual quotations provided by market makers, estimates of market value, or
values obtained from yield data relating to classes of money market instruments
published by reputable sources at the mean between the bid and asked prices for
the instruments. If a deviation of of 1% or more were to occur between the net
asset value per share calculated by reference to market values and a Fund's
$1.00 per share net asset value, or if there were any other deviation that the
Board of Trustees of the Trust believed would result in a material dilution to
shareholders or purchasers, the Board of Trustees would promptly consider what
action, if any, should be initiated. If a Fund's net asset value per share
(computed using market values) declined, or were expected to decline, below
$1.00 (computed using amortized cost), the Board of Trustees of the Trust might
temporarily reduce or suspend dividend payments in an effort to maintain the net
asset value at $1.00 per share. As a result of such reduction or suspension of
dividends or other action by the Board of Trustees, an investor would receive
less income during a given period than if such a reduction or suspension had not
taken place. Such action could result in investors receiving no dividends for
the period during which they held shares and receiving, upon redemption, a price
per share lower than that which they paid. On the other hand, if a Fund's net
asset value per share (computed using market values) were to increase, or were
anticipated to increase, above $1.00 (computed using amortized cost), the Board
of Trustees of the Trust might supplement dividends in an effort to maintain the
net asset value at $1.00 per share.
Taxes. Interest on indebtedness which is incurred to purchase or carry shares of
a mutual fund portfolio which distributes exempt-interest dividends during the
year is not deductible for federal income tax purposes. Further, the Tax-Free
Money Fund may not be an appropriate investment for persons who are `substantial
users' of facilities financed by industrial development bonds held by the
Tax-Free Money Fund or are `related persons' to such users; such persons should
consult their tax advisers before investing in the Tax-Free Money Fund.
The "Superfund Act of 1986" (the "Superfund Act") imposes a separate tax on
corporations at a rate of 0.12 percent of the excess of such corporation's
"modified alternative minimum taxable income" over $2 million. A portion of
tax-exempt interest, including exempt-interest dividends from the Tax-Free Money
Fund, may be includible in modified alternative minimum taxable income.
Corporate shareholders are advised to consult their tax advisers with respect to
the consequences of the Superfund Act.
12
<PAGE>
PERFORMANCE
As reflected in the prospectus, the historical performance calculation for a
Fund may be shown in the form of "yield," "effective yield," "total return,"
"average annual total return" and, for the Tax-Free Money Fund only, "tax
equivalent yield." These various measures of performance are described below.
Each Fund's yield is computed in accordance with a standardized method
prescribed by rules of the Securities and Exchange Commission. Under that
method, the current yield quotation is based on a seven-day period and is
computed for each Fund as follows. The first calculation is net investment
income per share, which is accrued interest on portfolio securities, plus or
minus amortized discount or premium (excluding market discount for the Tax-Free
Money Fund), less accrued expenses. This number is then divided by the price per
share (expected to remain constant at $1.00) at the beginning of the period
("base period return"). The result is then divided by 7 and multiplied by 365
and the resulting yield figure is carried to the nearest one-hundredth of one
percent. Realized capital gains or losses and unrealized appreciation or
depreciation of investments are not included in the calculation.
Each Fund's effective yield is determined by taking the base period return
(computed as described above) and calculating the effect of assumed compounding.
The formula for the effective yield is:
(base period return + 1)^365/7-1.
Average annual total return ("AATR") is found for a specific period by first
taking a hypothetical $1,000 investment ("initial investment") on the first day
of the period and computing the "redeemable value" of that investment at the end
of the period. The redeemable value is then divided by the initial investment,
and this quotient is taken to the Nth root (N representing the number of years
in the period) and 1 is subtracted from the result, which is then expressed as a
percentage. The calculation assumes that all dividends have been reinvested at
net asset value on the reinvestment dates.
Total return is not calculated according to a standard formula, except when
calculated for the "Financial Highlights" table in the financial statements.
Total return is calculated similarly to AATR but is not annualized. It may be
shown as a percentage or the increased dollar value of the hypothetical
investment over the period.
All performance information shown below is for periods ended July 31,
1998.
<TABLE>
<CAPTION>
*Tax-
Effective Equivalent Total Total Total
Yield Yield Yield AATR AATR AATR Return Return Return
Fund 7 days 7 days 7 days 1 yr. 5 yr. 10 yr. 1 yr. 5 yrs. 10 yrs.
- ---- ------ ------ ------ ----- ---- ------ ----- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Zurich Money Market [ _] [ _] [ _] [ ] [ ] [ ] [ ]
Zurich Government Money [ _] [ _] [ _] [ ] [ ] [ ] [ ]
Zurich Tax-Free Money [ _] [ _] [ _] [ ] [ ] [ ] ** [ ] **
</TABLE>
* Based upon a marginal federal income tax rate of 37.1%.
** Since 9/10/87.
The tax equivalent yield of the Tax-Free Money Fund is computed by dividing that
portion of the Fund's yield (computed as described above) which is tax-exempt by
(one minus the stated federal income tax rate) and adding the result to that
portion, if any, of the yield of the Fund that is not tax-exempt. For additional
information concerning tax-exempt yields, see "Tax-Exempt versus Taxable Yield"
below.
13
<PAGE>
Each Fund's yield fluctuates, and the publication of an annualized yield
quotation is not a representation as to what an investment in a Fund will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
which the investment in a Fund is held, but also on such matters as Fund
expenses.
Money market mutual funds allow smaller investors to participate in the money
market and to receive money market yields that previously were available only to
those investors with large sums of money. Prior to the introduction of the first
money market mutual funds, small investors wanting to manage their cash reserves
had a limited choice of bank products available with a predetermined set of
interest rates such as passbook savings accounts and checking accounts.
Currently, there are hundreds of money market funds managing billions of dollars
for millions of investors. Zurich Money Funds is one of the largest money market
funds.
Investors have an extensive choice of money market funds and money market
deposit accounts and the information below may be useful to investors who wish
to compare the past performance of the Money Market Fund, the Government Money
Fund and the Tax-Free Money Fund with that of their competitors. Past
performance cannot be a guarantee of future results.
As indicated in the prospectus (see "Performance"), the performance of the Funds
may be compared to that of other mutual funds tracked by Lipper Analytical
Services, Inc. ("Lipper"). Lipper performance calculations include the
reinvestment of all capital gain and income dividends for the periods covered by
the calculations. A Fund's performance also may be compared to other money
market funds reported by IBC Financial Data, Inc.'s Money Fund Report(R), or
Money Market Insight(R), reporting services on money market funds. As reported
by IBC, all investment results represent total return (annualized results for
the period net of management fees and expenses) and one year investment results
are effective annual yields assuming reinvestment of dividends.
Lipper and IBC reported the following results for the Money Market Fund and the
Government Money Fund.
Lipper Analytical Services, Inc.
Money Market
Fund's
Ranking vs
Money Market
Period Ended 9/30/98 Instrument Funds
- -------------------- ----------------
1 Year [ ___ ] of [__]
3 Months [ ___ ] of [__]
1 Month [ ___ ] of [__]
Government
Money Fund's
Ranking vs
U.S. Government
Period Ended 9/30/98 Money Market Funds
- -------------------- ------------------
1 Year [ ___ ] of [__]
3 Months [ ___ ] of [__]
1 Month [ ___ ] of [__]
IBC
14
<PAGE>
Average Yield
Zurich Money All Taxable
Market Fund's Money Market
Period Ended 9/30/98 Yield Funds
- -------------------- ----- -----
1 Year [__] [__]
1 Month [__] [__]
7 Days* [__] [__]
Zurich Average Yield
Government All Taxable
Money Fund's Government
Period Ended 9/30/98 Yield Money Funds
- -------------------- ----- -----------
1 Year [__] [__]
1 Month [__] [__]
7 Days* [__] [__]
According to IBC, for the one-year period ended September 30, 1998, the Money
Market Fund ranked by yield [ ___ ] among [ ___ ] General Purpose Money Funds
(this category does not include money market funds whose shares are marketed
primarily to institutional investors). According to IBC, for the one-year period
ended September 30, 1998, the Government Money Fund ranked by yield [ ___ ]
among [ ___ ] Taxable Government Money Funds (this category does not include
taxable government money funds whose shares are marketed primarily to
institutional investors). For the one year period ended September 30, 1998, the
Tax-Free Money Fund ranked by yield [ ___ ] among [ ___ ] Tax-Free Money Funds
(this category does not include tax-free money funds whose shares are marketed
primarily to institutional investors or state specific tax-free money funds).
The Money Market Fund ranked [ ___ ] among [ ___ ] General Purpose Money Funds
with a ten-year history according to IBC as of September 30, 1998. The
Government Money Fund ranked [ ___ ] among [ ___ ] Government Money Funds with a
ten-year history according to IBC as of September 30, 1998. The Tax-Free Money
Fund ranked [ ___ ] among [ ___ ] Tax-Free Money Funds with a 10-year history
according to IBC as of September 30, 1998. The number of shareholder accounts in
the Funds were approximately [ ___ ] at September 30, 1998, including [ ___ ] in
the Money Market Fund, [ ___ ] in the Government Money Fund, and [ ___ ] in the
Tax-Free Money Fund. The value of shares in the Funds as of September 30, 1998
was approximately $[ ___ ] billion, including $[ ___ ] billion in the Money
Market Fund, $[ ___ ] million in the Government Money Fund and $[ ___ ] million
in the Tax-Free Money Fund. The Money Market Fund was the [ ___ ] largest in
total assets of [ ___ ] Taxable Money Market Funds reported by IBC as of
September 30, 1998.
The following investment comparisons are based upon information
reported by Lipper and IBC. In the comparison of the Tax-Free Money Fund's
performance versus the comparison yields, the performance of that Fund has been
adjusted on a taxable equivalent basis assuming a marginal federal tax rate of
37.1% (see "Tax-Exempt versus Taxable Yield" below for more information
concerning taxable equivalent performance).
Lipper Analytical Services, Inc.
Tax-Free Money
Fund's Ranking vs
Tax-Exempt
Period Ended 9/30/98 Money Market Funds
-------------------- ------------------
1 Year [ ___ ] of [__]
3 Months [ ___ ] of [__]
15
<PAGE>
1 Month [ ___ ] of [__]
Lipper Zurich Lipper
Tax-Exempt Tax-Free Money
Zurich Money Fund Market
Tax- Market Taxable Instrument
Free Fund Equivalent Funds
Period Fund Average Basis* Average
------ ---- ------- ------ -------
1 Year
Ended
9/30/98
IBC
Average Yield
Zurich All Tax-Free
Tax-Free Money Market
Period Ended 9/30/98 Money Fund Funds
- -------------------- ---------- -----
1 Year
1 Month
7 Days**
Zurich
Tax-Free
Fund Average Yield
Taxable All Taxable
Equivalent Money Market
Period Ended 9/30/98 Money Fund Funds
- -------------------- ---------- -----
1 Year
1 Month
7 Days
- ----------
* Source: Scudder Kemper Investments (not reported by IBC).
For the ten, five and one year periods ended September 30, 1998, Lipper ranked
the Money Market Fund #[ ___ ] of [ ___ ], #[ ___ ] of [ ___ ] and #[ ___ ] of [
___ ], respectively, among Money Market Instrument Funds. Lipper also ranked the
Money Market Fund #[ ___ ] in such category for the periods shown below.
Number of
Funds in Period
Category Period Ending
-------- ------ ------
41 3 Years 12/31/80
23 5 Years 12/31/80
50 3 Years 12/31/81
34 5 Years 12/31/81
110 3 Years 12/31/84
81 4 Years 12/31/84
16
<PAGE>
66 5 Years 12/31/84
109 4 Years 12/31/85
80 5 Years 12/31/85
142 5 Years 12/31/88
39 10 Years 12/31/88
54 10 Years 12/31/89
33 12 Years 12/31/89
64 10 Years 12/31/90
79 10 Years 12/31/91
31 15 Years 12/31/92
36 15 Years 12/31/93
As indicated in the prospectus, a Fund's performance also may be compared on a
before or after-tax basis to various bank products, including the average rate
of bank and thrift institution money market deposit accounts, interest bearing
checking accounts and certificates of deposit as reported in the BANK RATE
MONITOR National Index(TM) of 100 leading bank and thrift institutions as
published by the BANK RATE MONITOR(TM), N. Palm Beach, Florida 33408. The rates
published by the BANK RATE MONITOR National Index(TM) are averages of the
personal account rates offered on the Wednesday prior to the date of publication
by 100 large banks and thrifts in the top ten Consolidated Standard Metropolitan
Statistical Areas.
With respect to money market deposit accounts and interest bearing checking
accounts, account minimums range upward from $2,000 in each institution and
compounding methods vary. Interest bearing checking accounts generally offer
unlimited check writing while money market deposit accounts generally restrict
the number of checks that may be written. If more than one rate is offered, the
lowest rate is used. Rates are determined by the financial institution and are
subject to change at any time specified by the institution. Generally, the rates
offered for these products take market conditions and competitive product yields
into consideration when set. Bank products represent a taxable alternative
income producing product. Bank and thrift institution deposit accounts may be
insured. Shareholder accounts in the Funds are not insured. Bank passbook
savings accounts compete with money market mutual fund products with respect to
certain liquidity features but may not offer all of the features available from
a money market mutual fund, such as check writing. Bank passbook savings
accounts normally offer a fixed rate of interest while the yield of the Funds
fluctuates. Bank checking accounts normally do not pay interest but compete with
money market mutual fund products with respect to certain liquidity features
(e.g., the ability to write checks against the account). Bank certificates of
deposit may offer fixed or variable rates for a set term. (Normally, a variety
of terms are available.) Withdrawal of these deposits prior to maturity will
normally be subject to a penalty. In contrast, shares of the Funds are
redeemable at the net asset value (normally, $1.00 per share) next determined
after a request is received, without charge.
The table below compares the seven day annualized yields of the Money Market
Fund and the Government Money Fund at September [ ___ ], 1998 with the rates for
money market deposit accounts, interest bearing checking accounts and 6-month
maturity certificates of deposit reported for September [ ___ ], 1998 for the
BANK RATE MONITOR National Index(TM) for each of the ten Consolidated Standard
Metropolitan Statistical Areas that are covered by that index and for all areas
combined. The information provided below is historical and is not representative
of future performance of any type of bank product or of any Fund. The rates
reported by the BANK RATE MONITORTM are not necessarily representative of the
rates offered by banks outside of the scope of report. Furthermore, rate
information for one area of the country is not necessarily representative of
rates in other areas. The rates provided for the bank accounts assume no
compounding and are for the lowest minimum deposit required to open an account.
Higher rates may be available for large deposits.
17
<PAGE>
<TABLE>
<CAPTION>
Money Market Interest 6-Month Government
Deposit Accounts Checking Certificates of Money Market Money
Area Stated Rate Stated Rate Deposit Rate Fund Yeild Fund Yield
---- ----------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
New York
Los Angeles
Chicago
San Francisco
Philadelphia
Detroit
Boston
Houston
Dallas
Washington
NATIONAL INDEX
</TABLE>
Since January, 1984, the Money Market Fund has had a higher yield than the BANK
RATE MONITOR National Index(TM) for both money market deposit accounts and for
interest bearing checking accounts for [ ___ ] out of [ ___ ] weeks through
September [ ___ ], 1998.
Investors may also want to compare a Fund's performance to that of U.S. Treasury
bills or notes because such instruments represent alternative income producing
products. Treasury obligations are issued in selected denominations. Rates of
U.S. Treasury obligations are fixed at the time of issuance and payment of
principal and interest is backed by the full faith and credit of the U.S.
Treasury. The market value of such instruments will generally fluctuate
inversely with interest rates prior to maturity and will equal par value at
maturity. Generally, the values of obligations with shorter maturities will
fluctuate less than those with longer maturities. Each Fund's yield will
fluctuate. Also, while each Fund seeks to maintain a net asset value per share
of $1.00, there is no assurance that it will be able to do so.
Tax-Free versus Taxable Yield. You may want to determine which investment --
tax-free or taxable -- will provide you with a higher after-tax return. To
determine the taxable equivalent yield, simply divide the yield from the
tax-free investment by the sum of [1 minus your marginal tax rate]. The tables
below are provided for your convenience in making this calculation for selected
tax-free yields and taxable income levels. These yields are presented for
purposes of illustration only and are not representative of any yield that the
Tax-Free Money Fund may generate. Both tables are based upon current law as to
the 1998 federal tax rate schedules.
Taxable Equivalent Yield Table for Persons Whose Adjusted Gross
Income is Under $121,200
<TABLE>
<CAPTION>
Your A Tax-Exempt Yield of:
Marginal ----------------------
Taxable Income Federal 2% 3% 4% 5% 6% 7%
-------------- Tax -- -- -- -- -- --
Single Joint Rate Is Equivalent to a Taxable Yield of:
------ ----- ---- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
[To Be Completed]
Taxable Equivalent Yield Table for Persons Whose Adjusted Gross Income
is Over $121,200*
18
<PAGE>
<TABLE>
<CAPTION>
Your A Tax-Exempt Yield of:
Marginal ----------------------
Taxable Income Federal 2% 3% 4% 5% 6% 7%
-------------- Tax -- -- -- -- -- --
Single Joint Rate Is Equivalent to a Taxable Yield of:
------ ----- ---- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
[To Be Completed]
* This table assumes a decrease of $3.00 of itemized deductions for each $100
of adjusted gross income over $121,200. For a married couple with adjusted
gross income between $181,800 and $304,300 (single between $121,200 and
$243,700), add 0.7% to the above Marginal Federal Tax Rate for each
personal and dependency exemption. The taxable equivalent yield is the
tax-exempt yield divided by: 100% minus the adjusted tax rate. For example,
if the table tax rate is 37.1% and you are married with no dependents, the
adjusted tax rate is 38.5% (37.1% + 0.7% + 0.7%). For a tax-exempt yield of
6%, the taxable equivalent yield is about 9.8% (6% / (100% - 38.5%)).
OFFICERS AND TRUSTEES
The officers and trustees of the Trust, their birthdates, their principal
occupations and their affiliations, if any, with Scudder Kemper and KDI are as
follows (The number following each person's title is the number of investment
companies managed by Scudder Kemper and its affiliates for which he or she holds
similar positions):
DAVID W. BELIN (6/20/28), Trustee (26), 2000 Financial Center, 7th and Walnut,
Des Moines, Iowa; Member, Belin Lamson McCormick Zumbach Flynn, P.C.
(attorneys).
LEWIS A. BURNHAM (1/8/33), Trustee (26), 16410 Avila Boulevard, Tampa, Florida;
Director, Management Consulting Services, McNulty & Company; formerly, Executive
Vice President, Anchor Glass Container Corporation.
DONALD L. DUNAWAY (3/8/37), Trustee (26), 7515 Pelican Bay Blvd., Naples,
Florida; Retired; formerly, Executive Vice President, A. O. Smith Corporation
(diversified manufacturer).
ROBERT B. HOFFMAN (12/11/36), Trustee (26), 800 North Lindbergh Boulevard, St.
Louis, Missouri; Senior Vice President and Chief Financial Officer, Monsanto
Company (chemical products); formerly, Vice President, FMC Corporation
(manufacturer of machinery and chemicals); prior thereto, Director, Executive
Vice President and Chief Financial Officer, Staley Continental, Inc. (food
products).
DONALD R. JONES (1/17/30), Trustee (26), 182 Old Wick Ln., Inverness, Illinois;
Retired; Director, Motorola, Inc. (manufacturer of electronic equipment and
components); formerly, Executive Vice President and Chief Financial Officer,
Motorola, Inc.
SHIRLEY D. PETERSON, (9/3/41), Trustee (26), 401 Rosemont Avenue, Frederick,
Maryland; President, Hood College; formerly, partner, Steptoe & Johnson
(attorneys); prior thereto, Commissioner, Internal Revenue Service; prior
thereto, Assistant Attorney General, U.S. Department of Justice; Director,
Bethlehem Steel Corp.
19
<PAGE>
WILLIAM P. SOMMERS (7/22/33), Trustee (26), 333 Ravenswood Avenue, Menlo Park,
California; President and Chief Executive Officer, SRI International (research
and development); formerly, Executive Vice President, Iameter (medical
information and educational service provider); formerly, Senior Vice President
and Director, Booz, Allen & Hamilton, Inc. (management consulting firm)
(retired); Director, Rohr, Inc., Therapeutic Discovery Corp. and Litton
Industries.
STEPHEN B. TIMBERS (8/8/44), President and Trustee* (39), 222 South Riverside
Plaza, Chicago, Illinois; President, Chief Executive Officer, Chief Investment
Officer and Director, ZKI; Director, ZKDI, Zurich Kemper Value Advisors, Inc.
and LTV Corporation; formerly, President and Chief Operating Officer of Kemper
Corporation.
CHARLES R. MANZONI, JR. (1/23/47), Vice President* (39), 222 South Riverside
Plaza, Chicago, Illinois; Executive Vice President, Secretary and General
Counsel of ZKI; Secretary, ZKI Holding Corp.; Secretary, ZKI Agency, Inc.;
formerly, Partner, Gardner, Carton & Douglas (attorneys).
JOHN E. NEAL (3/9/50), Vice President* (39), 222 South Riverside Plaza, Chicago,
Illinois; President, Kemper Funds Group, a unit of ZKI; Director, ZKI, Zurich
Kemper Value Advisors, Inc. and ZKDI.
ROBERT C. PECK, JR. (10/1/46), Vice President* (16), 222 South Riverside Plaza,
Chicago, Illinois; Executive Vice President and Chief Investment Officer --
Fixed Income, ZKI; formerly, Executive Vice President and Chief Investment
Officer with an unaffiliated investment management firm from 1988 to June 1997.
JEROME L. DUFFY (6/29/36), Treasurer* (39), 222 South Riverside Plaza, Chicago,
Illinois; Senior Vice President, ZKI.
PHILIP J. COLLORA (11/15/45), Vice President and Secretary* (39), 222 South
Riverside Plaza, Chicago, Illinois; Attorney, Senior Vice President and
Assistant Secretary, ZKI.
ELIZABETH C. WERTH (10/1/47), Assistant Secretary* (32), 222 South Riverside
Plaza, Chicago, Illinois; Vice President, ZKI; Vice President and Director of
State Registrations, ZKDI.
FRANK RACHWALSKI, JR. (3/26/45), Vice President* (9), 222 South Riverside Plaza,
Chicago, Illinois; Senior Vice President, ZKI.
* Interested persons of the Funds as defined in the Investment Company
Act of 1940.
The trustees and officers who are "interested persons" as designated above
receive no compensation from the Funds. The table below shows amounts paid or
accrued to those trustees who are not designated "interested persons" during the
Trust's 1997 fiscal year except that the information in the last column is for
calendar year 1996.
Total Compensation
From Trust and
Aggregate Compensation Fund Complex
Name of Trustee From Trust Paid to Trustees**
--------------- ---------- ------------------
David W. Belin*
Lewis A. Burnham
Donald L. Dunaway*
Robert B. Hoffman
Donald R. Jones
Shirley D. Peterson
William P. Sommers
20
<PAGE>
- ----------
* Includes current fees deferred and interest pursuant to deferred
compensation agreements with the Trust. Deferred amounts accrue interest
monthly at a rate equal to the yield of Zurich Money Funds -- Zurich Money
Market Fund. Total deferred amounts and interest accrued through July 31,
1998 are $[___} for [___].
** Includes compensation for service on twenty- five funds managed by Scudder
Kemper with 43 fund portfolios. Each trustee currently serves as a trustee
of 26 funds managed by Scudder Kemper with 48 fund portfolios. Total
compensation does not reflect amounts paid by the Adviser to the trustees
for meeting regarding the combination of Scudder, Stevens & Clark, Inc. and
Zurich Kemper Investments, Inc. Such amounts totaled $21,900, $25,400,
$21,900, $17,300, $20,800, $24,200 and $21,900 for Messrs. Belin, Burnham,
Dunaway, Hoffman, Jones, Ms. Peterson and Mr. Sommers, respectively.
As of October 31, 1998, the officers and trustees of the Trust, as a group,
owned less than [ ___ ]% of the outstanding shares of each Fund and no person
owned of record [ ___ ]% or more of the outstanding shares of any Fund.
SPECIAL FEATURES
Automatic Withdrawal Program. If you own $5,000 or more of a Fund's shares you
may provide for the payment from your account of any requested dollar amount to
be paid to you or your designated payee monthly, quarterly, semi-annually or
annually. The $5,000 minimum account size is not applicable to Individual
Retirement Accounts. Dividend distributions will be automatically reinvested at
net asset value. A sufficient number of full and fractional shares will be
redeemed to make the designated payment. Depending upon the size of the payments
requested, redemptions for the purpose of making such payments may reduce or
even exhaust the account. The program may be amended on thirty days notice by
the Fund and may be terminated at any time by the shareholder or the Funds.
Tax-Sheltered Retirement Programs. The Shareholder Service Agent provides
retirement plan services and documents and can establish your account in any of
the following types of retirement plans:
o Individual Retirement Accounts (IRAs) with IFTC as custodian. This
includes Savings Incentive Match Plan for Employees of Small Employers
("SIMPLE"), IRA accounts and Simplified Employee Pension Plan (SEP) IRA
accounts and prototype documents.
o 403(b) Custodial Accounts with IFTC as custodian. This type of plan is
available to employees of most non-profit organizations.
o Prototype money purchase pension and profit-sharing plans may be
adopted by employers. The maximum contribution per participant is the
lesser of 25% of compensation or $30,000.
Brochures describing the above plans as well as providing model defined benefit
plans, target benefit plans, 457 plans, 401(k) plans, SIMPLE 401(k) plans and
materials for establishing them are available from the Shareholder Service Agent
upon request. The brochures for plans with IFTC as custodian describe the
current fees payable to IFTC for its services as custodian. Investors should
consult with their own tax advisers before establishing a retirement plan.
SHAREHOLDER RIGHTS
The Trust generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Trust ("Declaration of Trust"),
however, shareholder meetings will be held in connection with the following
matters: (a) the election or removal of trustees, if a meeting is called for
such purpose; (b) the adoption of any contract for which shareholder approval is
required by the Investment Company Act of 1940 ("1940 Act"); (c)
21
<PAGE>
any termination of the Trust to the extent and as provided in the Declaration of
Trust; (d) any amendment of the Declaration of Trust (other than amendments
changing the name of the Trust or any Fund, establishing a Fund, supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision thereof); (e) as to whether a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the shareholders, to the same
extent as the stockholders of a Massachusetts business corporation; and (f) such
additional matters as may be required by law, the Declaration of Trust, the
By-laws of the Trust, or any registration of the Trust with the Securities and
Exchange Commission or any state, or as the trustees may consider necessary or
desirable. The shareholders also would vote upon changes in fundamental
investment objectives, policies or restrictions.
Each trustee serves until the next meeting of shareholders, if any, called for
the purpose of electing trustees and until the election and qualification of his
successor or until such trustee sooner dies, resigns, retires or is removed by a
majority vote of the shares entitled to vote (as described below) or a majority
of the trustees. In accordance with the 1940 Act (a) the Trust will hold a
shareholder meeting for the election of trustees at such time as less than a
majority of the trustees have been elected by shareholders, and (b) if, as a
result of a vacancy in the Board of Trustees, less than two-thirds of the
trustees have been elected by the shareholders, that vacancy will be filled only
by a vote of the shareholders.
Trustees may be removed from office by a vote of the holders of a majority of
the outstanding shares at a meeting called for that purpose, which meeting shall
be held upon the written request of the holders of not less than 10% of the
outstanding shares. Upon the written request of ten or more shareholders who
have been such for at least six months and who hold shares constituting at least
1% of the outstanding shares of the Trust stating that such shareholders wish to
communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a trustee, the
Trust has undertaken to disseminate appropriate materials at the expense of the
requesting shareholders.
The Declaration of Trust provides that the presence at a shareholder meeting in
person or by proxy of at least 30% of the shares entitled to vote on a matter
shall constitute a quorum. Thus, a meeting of shareholders of the Trust could
take place even if less than a majority of the shareholders were represented on
its scheduled date. Shareholders would in such a case be permitted to take
action which does not require a larger vote than a majority of a quorum, such as
the election of trustees and ratification of the selection of auditors. Some
matters requiring a larger vote under the Declaration of Trust, such as
termination or reorganization of the Trust and certain amendments of the
Declaration of Trust, would not be affected by this provision; nor would matters
which under the 1940 Act require the vote of a "majority of the outstanding
voting securities" as defined in the 1940 Act.
The Declaration of Trust specifically authorizes the Board of Trustees to
terminate the Trust (or any Fund) by notice to the shareholders without
shareholder approval.
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of the
Trust. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Trust or the trustees. Moreover, the Declaration of Trust provides for
indemnification out of Trust property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust and the
Trust will be covered by insurance which the trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by Scudder Kemper remote
and not material since it is limited to circumstances in which a disclaimer is
inoperative and the Trust itself is unable to meet its obligations.
Master/Feeder Structure. The Board of Trustees has the discretion to retain the
current distribution arrangement for the Funds while investing in a master fund
in a master/feeder fund structure as described below. A master/feeder fund
structure is one in which a fund (a "feeder fund"), instead of investing
directly in a portfolio of securities, invests most or all of its investment
assets in a separate registered investment company (the "master fund") with
22
<PAGE>
substantially the same investment objective and policies as the feeder fund.
Such a structure permits the pooling of assets of two or more feeder funds,
preserving separate identities or distribution channels at the feeder fund
level. Based on the premise that certain of the expenses of operating an
investment portfolio are relatively fixed, a larger investment portfolio may
eventually achieve a lower ratio of operating expenses to average net assets. An
existing investment company is able to convert to a feeder fund by selling all
of its investments, which involves brokerage and other transaction costs and
realization of a taxable gain or loss, or by contributing its assets to the
master fund and avoiding transaction costs and, if proper procedures are
followed, the realization of taxable gain or loss.
23
<PAGE>
APPENDIX -- RATINGS OF INVESTMENTS
COMMERCIAL PAPER RATINGS
A-1, A-2 and Prime-1, Prime-2 Commercial Paper Ratings
Commercial paper rated by Standard & Poor's Corporation has the following
characteristics: Liquidity ratios are adequate to meet cash requirements.
Long-term senior debt is rated "A" or better. The issuer has access to at least
two additional channels of borrowing. Basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong position
within the industry. The reliability and quality of management are unquestioned.
Relative strength or weakness of the above factors determine whether the
issuer's commercial paper is rated A-1, A-2 or A-3.
The ratings Prime-1 and Prime-2 are the two highest commercial paper ratings
assigned by Moody's Investors Service, Inc. Among the factors considered by it
in assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations. Relative
strength or weakness of the above factors determines whether the issuer's
commercial paper is rated Prime-1, 2 or 3.
MIG-1 and MIG-2 Municipal Notes
Moody's ratings for state and municipal notes and other short-term loans will be
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the differences between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower are uppermost in importance in
short-term borrowing, while various factors of the first importance in bond risk
are of lesser importance in the short run. Loans designated MIG-1 are of the
best quality, enjoying strong protection from established cash flows of funds
for their servicing or from established and broad-based access to the market for
refinancing, or both. Loans designated MIG-2 are of high quality, with margins
of protection ample although not so large as in the preceding group.
STANDARD & POOR'S CORPORATION BOND RATINGS
AAA. This is the highest rating assigned by Standard & Poor's Corporation to a
debt obligation and indicates an extremely strong capacity to pay principal and
interest.
AA. Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A. Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
MOODY'S INVESTORS SERVICE, INC. BOND RATINGS
Aaa. Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
24
<PAGE>
Aa. Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in Aaa securities.
A. Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
25
<PAGE>
ZURICH MONEY FUNDS
PART C.
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) The financial statements to be included in Parts A and B of the
Registration Statement will be filed by
Amendment.
<TABLE>
<CAPTION>
(b) Exhibits
<S> <C> <C>
99.B1(a) Amended and Restated Declaration of Trust (1)
99.B1(b) Written Instrument Amending the Agreement and Declaration of Trust.(1)
99.B1(c) Written Instrument Amending the Agreement and Declaration of Trust.(1)
99.B1(d) Written Instrument Amending the Agreement and Declaration of Trust (3)
99.B1(e) Written Instrument Amending the Agreement and Declaration of Trust (4)
99.B2 By-Laws.(1)
99.B3 Inapplicable.
99.B4(a) Text of Share Certificate.(1)
99.B4(b) Written Instrument Changing Name of Series of the Trust (3)
99.B4(c) Written Instrument Changing Name of Series of the Trust (4)
99.B6 Selling Group Agreement. (1)
99.B7 Inapplicable.
99.B8(a) Custody Agreement.(1)
99.B9(a) Agency Agreement.(1)
99.B9(b) Supplement to Agency Agreement (3)
99.B10 Inapplicable.
99.B12 Inapplicable.
99.B13 Inapplicable.
99.B14(a) Kemper Retirement Plan Prototype. (1)
99.B14(b) Model Individual Retirement Account. (1)
99.B15 Inapplicable.
99.B16 Performance Calculations. (2)
99.B18 Inapplicable.
99.B24 Powers of Attorney. (1)
(1) Incorporated herein by reference to Amendment No. 41 on Form N-1A filed on November 16, 1995.
(2) Incorporated herein by reference to Amendment No. 40 on Form N-1A filed on or about October 31, 1994.
(3) Incorporated herein by reference to Amendment No. 42 on Form N-1A filed on or about November 6, 1996.
(4) Incorporated herein by reference to Amendment No. 43 on Form N-1A filed on or about November 14, 1997.
To be filed by amendment:
99.B1(f) Written Instrument Amending the Agreement and Declaration of Trust.
99.B5(a) Investment Management Agreement for Zurich Money Market Fund.
99.B5(b) Investment Management Agreement for Zurich Government Money Fund.
99.B5(c) Investment Management Agreement for Zurich Tax-Free Money Fund.
99.B6(a) Underwriting Agreement.
99.B9(a) Fund Accounting Agreements.
4
<PAGE>
99.B11 Report and Consent of Independent Auditors.
27.1 Financial Data Schedule for Money Market Fund.
27.2 Financial Data Schedule for Government Money Fund.
27.3 Financial Data Schedule for Tax-Free Money Fund.
</TABLE>
Item 25. Persons Controlled by or Under Common Control with Registrant
Not applicable.
Item 26. Number of Holders of Securities
As of September 28, 1998, there were 237,626 holders of record of the
Money Market Fund, 27,904 holders of record of the Government Money Fund and
15,933 holders of record of Tax-Exempt Fund.
Item 27. Indemnification
Article VIII of the Registrant's Agreement and Declaration of Trust
(Exhibit 1 hereto, which is incorporated herein by reference) provides in effect
that the Registrant will indemnify its officers and trustees under certain
circumstances. However, in accordance with Section 17(h) and 17(i) of the
Investment Company Act of 1940 and its own terms, said Article of the Agreement
and Declaration of Trust does not protect any person against any liability to
the Registrant or its shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such trustee, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question as to whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
On June 26, 1997, Zurich Insurance Company ("Zurich"), ZKI Holding
Corp. ("ZKIH"), Zurich Kemper Investments, Inc. ("ZKI"), Scudder, Stevens &
Clark, Inc. ("Scudder") and the representatives of the beneficial owners of the
capital stock of Scudder ("Scudder Representatives") entered into a transaction
agreement ("Transaction Agreement") pursuant to which Zurich became the majority
stockholder in Scudder with an approximately 70% interest, and ZKI was combined
with Scudder ("Transaction"). In connection with the trustees' evaluation of the
Transaction, Zurich agreed to indemnify the Registrant and the trustees who were
not interested persons of ZKI or Scudder (the "Independent Trustees") for and
against any liability and expenses based upon any action or omission by the
Independent Trustees in connection with their consideration of and action with
respect to the Transaction. In addition, Scudder has agreed to indemnify the
Registrant and the Independent Trustees for and against any liability and
expenses based upon any misstatements or omissions by Scudder to the Independent
Trustees in connection with their consideration of the Transaction.
Item 28. Business or Other Connections of Investment Adviser
Scudder Kemper Investments, Inc. has stockholders and employees who are
denominated officers but do not as such have corporation-wide responsibilities.
Such persons are not considered officers for the purpose of this Item 28.
<TABLE>
<CAPTION>
Business and Other Connections of Board
Name of Directors of Registrant's Adviser
---- ------------------------------------
<S> <C>
Stephen R. Beckwith Treasurer and Chief Financial Officer, Scudder Kemper Investments, Inc.**
Vice President and Treasurer, Scudder Fund Accounting Corporation*
Director, Scudder Stevens & Clark Corporation**
Director and Chairman, Scudder Defined Contribution Services, Inc.**
5
<PAGE>
Director and President, Scudder Capital Asset Corporation**
Director and President, Scudder Capital Stock Corporation**
Director and President, Scudder Capital Planning Corporation**
Director and President, SS&C Investment Corporation**
Director and President, SIS Investment Corporation**
Director and President, SRV Investment Corporation**
Lynn S. Birdsong Director and Vice President, Scudder Kemper Investments, Inc.**
Director, Scudder, Stevens & Clark (Luxembourg) S.A.#
Laurence W. Cheng Director, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland##
Director, ZKI Holding Corporation xx
Steven Gluckstern Director, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland##
Director, Zurich Holding Company of America o
Rolf Huppi Director, Chairman of the Board, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland##
Director, Chairman of the Board, Zurich Holding Company of America o
Director, ZKI Holding Corporation xx
Kathryn L. Quirk Director, Chief Legal Officer, Chief Compliance Officer and Secretary, Scudder Kemper
Investments, Inc.**
Director, Senior Vice President & Assistant Clerk, Scudder Investor Services, Inc.*
Director, Vice President & Secretary, Scudder Fund Accounting Corporation*
Director, Vice President & Secretary, Scudder Realty Holdings Corporation*
Director & Assistant Clerk, Scudder Service Corporation*
Director, SFA, Inc.*
Vice President, Director & Assistant Secretary, Scudder Precious Metals, Inc.***
Director, Scudder, Stevens & Clark Japan, Inc.***
Director, Vice President and Secretary, Scudder, Stevens & Clark of Canada, Ltd.***
Director, Vice President and Secretary, Scudder Canada Investor Services Limited***
Director, Vice President and Secretary, Scudder Realty Advisers, Inc. x
Director and Secretary, Scudder, Stevens & Clark Corporation**
Director and Secretary, Scudder, Stevens & Clark Overseas Corporation oo
Director and Secretary, SFA, Inc.*
Director, Vice President and Secretary, Scudder Defined Contribution Services, Inc.**
Director, Vice President and Secretary, Scudder Capital Asset Corporation**
Director, Vice President and Secretary, Scudder Capital Stock Corporation**
Director, Vice President and Secretary, Scudder Capital Planning Corporation**
Director, Vice President and Secretary, SS&C Investment Corporation**
Director, Vice President and Secretary, SIS Investment Corporation**
Director, Vice President and Secretary, SRV Investment Corporation**
Director, Vice President and Secretary, Scudder Brokerage Services, Inc.*
Director, Korea Bond Fund Management Co., Ltd.+
Markus Rohrbasser Director, Scudder Kemper Investments, Inc.**
Member Corporate Executive Board, Zurich Insurance Company of Switzerland##
President, Director, Chairman of the Board, ZKI Holding Corporation xx
Cornelia M. Small Managing Director, Scudder Kemper Investments, Inc.**
Edmond D. Villani Director, President and Chief Executive Officer, Scudder Kemper Investments, Inc.**
Director, Scudder, Stevens & Clark Japan, Inc.###
President and Director, Scudder, Stevens & Clark Overseas Corporation oo
6
<PAGE>
President and Director, Scudder, Stevens & Clark Corporation**
Director, Scudder Realty Advisors, Inc.x
Director, IBJ Global Investment Management S.A. Luxembourg, Grand-Duchy of Luxembourg
* Two International Place, Boston, MA
x 333 South Hope Street, Los Angeles, CA
** 345 Park Avenue, New York, NY
# Societe Anonyme, 47, Boulevard Royal, L-2449 Luxembourg, R.C. Luxembourg B 34.564
*** Toronto, Ontario, Canada
xxx Grand Cayman, Cayman Islands, British West Indies
oo 20-5, Ichibancho, Chiyoda-ku, Tokyo, Japan
### 1-7, Kojimachi, Chiyoda-ku, Tokyo, Japan
xx 222 S. Riverside, Chicago, IL
o Zurich Towers, 1400 American Ln., Schaumburg, IL
+ P.O. Box 309, Upland House, S. Church St., Grand Cayman, British West Indies
## Mythenquai-2, P.O. Box CH-8022, Zurich, Switzerland
</TABLE>
Item 29. Principal Underwriters.
(a) Kemper Distributors, Inc. acts as principal underwriter of the
Registrant's shares and acts as principal underwriter of the Kemper Funds.
(b) Information on the officers and directors of Kemper Distributors,
Inc., principal underwriter for the Registrant is set forth below. The principal
business address is 222 South Riverside Plaza, Chicago, Illinois 60606.
<TABLE>
<CAPTION>
(1) (2) (3)
Position and Offices with Positions and
Name Kemper Distributors, Inc. Offices with Registrant
---- ------------------------- -----------------------
<S> <C> <C> <C>
James L. Greenawalt President None
Thomas W. Littauer Director, Chief Executive Officer Vice President
Kathryn L. Quirk Director, Secretary, Chief Legal Vice President
Officer & Vice President
James J. McGovern Chief Financial Officer & Vice None
President
Linda J. Wondrack Vice President & Chief Compliance None
Officer
Paula Gaccione Vice President None
Michael E. Harrington Vice President None
Robert A. Rudell Vice President None
William M. Thomas Vice President None
Elizabeth C. Werth Vice President Assistant Secretary
Todd N. Gierke Assistant Treasurer None
7
<PAGE>
Position and Offices with Positions and
Name Kemper Distributors, Inc. Offices with Registrant
---- ------------------------- -----------------------
Philip J. Collora Assistant Secretary Vice President and
Secretary
Paul J. Elmlinger Assistant Secretary None
Diane E. Ratekin Assistant Secretary None
Daniel Pierce Director, Chairman Trustee
Mark S. Casady Director, Vice Chairman President
Stephen R. Beckwith Director None
</TABLE>
(c) Not applicable
Item 30. Location of Accounts and Records
Accounts, books and other documents are maintained at the offices of
the Registrant, the offices of Registrant's investment adviser, Scudder Kemper
Investments, Inc., 222 South Riverside Plaza, Chicago, Illinois 60606, at the
offices of the Registrant's principal underwriter, Kemper Distributors, Inc.,
222 South Riverside Plaza, Chicago, Illinois 60606 or, in the case of records
concerning custodial functions, at the offices of the custodian, Investors
Fiduciary Trust Company ("IFTC"), 801 Pennsylvania Avenue, Kansas City, Missouri
64105 or, in the case of records concerning transfer agency functions, at the
offices of IFTC and of the shareholder service agent, Kemper Service Company,
811 Main Street, Kansas City, Missouri 64105.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Not applicable.
8
<PAGE>
INDEX TO EXHIBITS
Exhibits
<TABLE>
<S> <C> <C>
99.B1(a) Amended and Restated Declaration of Trust (1)
99.B1(b) Written Instrument Amending the Agreement and Declaration of Trust.(1)
99.B1(c) Written Instrument Amending the Agreement and Declaration of Trust.(1)
99.B1(d) Written Instrument Amending the Agreement and Declaration of Trust (3)
99.B1(e) Written Instrument Amending the Agreement and Declaration of Trust (4)
99.B2 By-Laws.(1)
99.B3 Inapplicable.
99.B4(a) Text of Share Certificate.(1)
99.B4(b) Written Instrument Changing Name of Series of the Trust (3)
99.B4(c) Written Instrument Changing Name of Series of the Trust (4)
99.B6 Selling Group Agreement. (1)
99.B7 Inapplicable.
99.B8(a) Custody Agreement.(1)
99.B9(a) Agency Agreement.(1)
99.B9(b) Supplement to Agency Agreement (3)
99.B10 Inapplicable.
99.B12 Inapplicable.
99.B13 Inapplicable.
99.B14(a) Kemper Retirement Plan Prototype. (1)
99.B14(b) Model Individual Retirement Account. (1)
99.B15 Inapplicable.
99.B16 Performance Calculations. (2)
99.B18 Inapplicable.
99.B24 Powers of Attorney. (1)
(1) Incorporated herein by reference to Amendment No. 41 on Form N-1A filed on November 16, 1995.
(2) Incorporated herein by reference to Amendment No. 40 on Form N-1A filed on or about October 31, 1994.
(3) Incorporated herein by reference to Amendment No. 42 on Form N-1A filed on or about November 6, 1996.
(4) Incorporated herein by reference to Amendment No. 43 on Form N-1A filed on or about November 14, 1997.
To be filed by amendment:
99.B1(f) Written Instrument Amending the Agreement and Declaration of Trust.
99.B5(a) Investment Management Agreement for Zurich Money Market Fund.
99.B5(b) Investment Management Agreement for Zurich Government Money Fund.
99.B5(c) Investment Management Agreement for Zurich Tax-Free Money Fund.
99.B6(a) Underwriting Agreement.
99.B9(a) Fund Accounting Agreements.
99.B11 Report and Consent of Independent Auditors.
27.1 Financial Data Schedule for Money Market Fund.
27.2 Financial Data Schedule for Government Money Fund.
27.3 Financial Data Schedule for Tax-Free Money Fund.
</TABLE>
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(a) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chicago and State of Illinois, on the 30th day
of September, 1998.
Zurich Money Funds
By /s/Mark S. Casady
-----------------
Mark S. Casady, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on September 30, 1998 on behalf of
the following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/Daniel Pierce September 30, 1998
- --------------------------------------
Daniel Pierce* Chairman and Trustee
/s/David W. Belin September 30, 1998
- --------------------------------------
David W. Belin* Trustee
/s/Lewis A. Burnham September 30, 1998
- --------------------------------------
Lewis A. Burnham* Trustee
/s/Donald L. Dunaway September 30, 1998
- --------------------------------------
Donald L. Dunaway* Trustee
/s/Robert B. Hoffman September 30, 1998
- --------------------------------------
Robert B. Hoffman* Trustee
/s/Donald R. Jones September 30, 1998
- --------------------------------------
Donald R. Jones* Trustee
/s/Shirley D. Peterson September 30, 1998
- --------------------------------------
Shirley D. Peterson* Trustee
/s/William P. Sommers September 30, 1998
- --------------------------------------
William P. Sommers* Trustee
1
<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
/s/Edmond D. Villani September 30, 1998
- --------------------------------------
Edmond D. Villani* Trustee
/s/John R. Hebble September 30, 1998
- --------------------------------------
John R. Hebble Treasurer (Principal Financial and
Accounting Officer)
</TABLE>
*By: /s/Philip J. Collora
-----------------------------
Philip J. Collora**
** Philip J. Collora signs this document
pursuant to powers of attorney filed
herewith.
2
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Zurich Money Market Fund, Zurich
Government Money Fund, and Zurich Tax-Free Money Fund.
Signature Title Date
/s/David W. Belin Trustee July 21, 1998
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Zurich Money Market Fund, Zurich
Government Money Fund, and Zurich Tax-Free Money Fund.
Signature Title Date
/s/Lewis A. Burnham Trustee July 21, 1998
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Zurich Money Market Fund, Zurich
Government Money Fund, and Zurich Tax-Free Money Fund.
Signature Title Date
/s/Donald L. Dunaway Trustee July 21, 1998
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Zurich Money Market Fund, Zurich
Government Money Fund, and Zurich Tax-Free Money Fund.
Signature Title Date
/s/Robert B. Hoffman Trustee July 21, 1998
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Zurich Money Market Fund, Zurich
Government Money Fund, and Zurich Tax-Free Money Fund.
Signature Title Date
/s/Donald R. Jones Trustee July 21, 1998
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Zurich Money Market Fund, Zurich
Government Money Fund, and Zurich Tax-Free Money Fund.
Signature Title Date
/s/Shirley D. Peterson Trustee July 21, 1998
- -----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Zurich Money Market Fund, Zurich
Government Money Fund, and Zurich Tax-Free Money Fund.
Signature Title Date
/s/Daniel Pierce Trustee July 21, 1998
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Zurich Money Market Fund, Zurich
Government Money Fund, and Zurich Tax-Free Money Fund.
Signature Title Date
/s/William P. Sommers Trustee July 21, 1998
- --------------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Zurich Money Market Fund, Zurich
Government Money Fund, and Zurich Tax-Free Money Fund.
Signature Title Date
/s/Edmond D. Villani Trustee July 21, 1998
- ----------------------
