KTFIF-13A
KEMPER TAX-FREE INCOME FUNDS
Kemper Intermediate Municipal Bond Fund ("KIMBF")
SUPPLEMENT DATED JANUARY 1, 1999
TO STATEMENT OF ADDITIONAL INFORMATION DATED JANUARY 1, 1999
A proxy statement dated October 23, 1998 (the "Proxy Statement")
solicited the approval of the shareholders of Kemper Intermediate Municipal Bond
Fund ("KIMBF") on certain proposals, including the revision of fundamental
policies mandated by the Investment Company Act of 1940 and the elimination of
the shareholder approval requirement to change certain other fundamental
policies (the "Proposals"). However, at the Special Meeting of Shareholders held
on December 17, 1998 (the "Special Meeting"), there were insufficient votes to
approve the Proposals. The Special Meeting was adjourned to January 15, 1999.
The currently effective Statement of Additional Information describes the
investment policies as proposed to be changed. Until such time as the requisite
number of shares of KIMBF has been voted in favor of the Proposals, the
Statement of Additional Information is revised as follows:
All investment policies for KIMBF listed under the "Investment Restrictions"
section are replaced in their entirety by the following:
KIMBF may not, as a fundamental policy:
(1) 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 another registered investment company having the
same investment objective and substantially similar investment policies as the
Fund.
(2) With respect to temporary investments, purchase securities (other
than securities of the United States Government, its agencies or
instrumentalities) if as a result of such purchase more than 25% of the Fund's
total assets would be invested in any industry.
(3) 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 Fund's total 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.
(4) Lend money or securities, provided that the making of time or
demand deposits with banks and the purchase of debt securities such as bonds,
debentures, commercial paper,
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repurchase agreements and short-term obligations in accordance with its
objective and policies are not prohibited.
(5) Borrow money except for temporary or emergency purposes (but not
for the purpose of purchase of investments) and then only in an amount not to
exceed 5% of the Fund's net assets; or pledge the Fund's securities or
receivables or transfer or assign or otherwise encumber them in an amount
exceeding the amount of the borrowing secured thereby.
(6) Make short sales of securities, or purchase any securities on
margin except to obtain such short-term credit as may be necessary for the
clearance of transactions; however, the Fund may make margin deposits in
connection with financial futures and options transactions.
(7) Write, purchase or sell puts, calls or combinations thereof, except
in accordance with its investment objective and policies.
(8) Invest in commodities or commodity futures contracts, although it
may buy or sell financial futures contracts and options on such contracts.
(9) Invest 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.
(10) 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.
(11) Issue senior securities except as permitted under the Investment
Company Act of 1940.
