<PAGE> 1
Kemper Cash Reserves Fund
Semiannual Report to Shareholders
For the Period Ended
January 31, 1995
[LOGO]
<PAGE> 2
DEAR SHAREHOLDERS:
We are pleased to provide you with the semiannual report for Kemper Cash
Reserves Fund, a series of Kemper Portfolios, for the six-month period ended
January 31, 1995. The Fund continued to meet its objective of providing
stability of principal and providing a safe haven for your investment in
volatile times.
-----------
PERFORMANCE
<TABLE>
<CAPTION>
-----------------------------------------------------------
TOTAL RETURN*
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 1995
(NOT ADJUSTED FOR ANY SALES CHARGE)
<S> <C>
Kemper Cash Reserves Fund A 2.24%
Kemper Cash Reserves Fund B 1.78%
Kemper Cash Reserves Fund C 1.78%
-----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS*
FOR THE PERIOD ENDED JANUARY 31, 1995
(SHARES ADJUSTED FOR THE APPLICABLE SALES CHARGE)
<S> <C> <C> <C>
1 Year 5 Year Life of Class
------- ------- ----------------------
Kemper Cash Reserves
Fund A 3.79% N/A 2.95% (since 1/10/92)
Kemper Cash Reserves
Fund B -0.18% 3.08% 4.81% (since 2/6/84)
Kemper Cash Reserves
Fund C** N/A N/A 0.36% (since 5/31/94)
-----------------------------------------------------------------
</TABLE>
Returns are historical and do not represent future performance. Returns
fluctuate. Performance of share classes will differ. Consult the prospectus for
details.
**Performance for Kemper Cash Reserves Fund C Shares is total return.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government. There can be no assurance that the Fund will be able to maintain a
stable net asset value of $1.00 per share.
-------------
OVERVIEW
The momentum of the 1994 economic expansion produced some of the most positive
economic reports we've seen in years. Income, consumer spending, construction
spending and hiring all were at high levels as we closed the pages on 1994 and
progressed through the beginning of 1995.
It was a year ago that the Federal Reserve Board initiated its series of rate
hikes intended to cool down the economy. The high 6.3 percent increase in gross
domestic product (GDP) in the fourth quarter of 1993 provoked the Fed's first
rate increase in February of 1994. The government raised rates five additional
times in 1994, yet the economy continued to expand at relatively high rates. The
economy's ability to produce a fourth quarter 1994 GDP of 4.6% one year after
steadily rising rates virtually assured that the Fed would raise rates again in
February -- and it did.
While we believe that higher interest rates are slowing economic growth, the
Federal Reserve will remain focused on the inflation outlook. As a consequence,
we expect the Fed to raise rates if inflation starts to rise, for example.
While other markets have been reacting negatively to this rising rate
environment, the short-term money markets have displayed only positive results.
The Cash Reserves Fund continues to provide you with an excellent vehicle for
capital preservation and the opportunity to earn monthly dividends.
Looking ahead, we anticipate rates will remain in an up trend even with the
economy beginning to show signs of slowing. This should reward patient investors
with higher income opportunities. We are committed to demanding standards of
credit quality and to preserving the integrity of your investment.
We look forward to serving your investment needs in the years to come.
Sincerely,
FRANK J. RACHWALSKI
Vice President and Portfolio Manager
February 24, 1995
Frank Rachwalski is Senior Vice President of Kemper Financial Services, Inc. and
Portfolio Manager of Kemper Cash Reserves Fund. Mr. Rachwalski holds a B.B.A.
and an M.B.A. degree from Loyola University.
*Total return and average annual total return measure net investment income and
capital gain or loss from portfolio investments, assuming reinvestment of all
dividends and for B Shares adjustment for the applicable contingent deferred
sales charge (CDSC) as follows: 1-year, 3%; 5-year, 1%; since inception 0%.
The maximum CDSC for B Shares is 4%. There is no sales charge for A Shares
which are only available on exchange or on conversion from B Shares. There is
no sales charge adjustment for C Shares. For additional information, see the
Prospectus and Statement of Additional Information and the Financial
Highlights at the end of this report.
<PAGE> 3
PORTFOLIO OF INVESTMENTS
January 31, 1995
(Value in thousands)
<TABLE>
<CAPTION>
CORPORATE OBLIGATIONS Value
<S> <C>
BANKING--7.3%
------------------------------------------------------------
(a)Chemical Banking Corporation
6.11% - 6.79%, 2/15/95 - 3/08/95 $ 10,006
------------------------------------------------------------
Skandinaviska Enskilda Banken Funding Inc.
6.15%, 3/01/95 9,953
------------------------------------------------------------
19,959
CAPITAL AND MORTGAGE LENDING--3.6%
------------------------------------------------------------
Countrywide Funding Corporation
6.01%, 2/10/95 4,993
------------------------------------------------------------
Weyerhaeuser Mortgage Company
5.66%, 2/13/95 4,991
------------------------------------------------------------
9,984
CAPTIVE BUSINESS FINANCE--9.1%
------------------------------------------------------------
American Honda Finance Corporation
5.72%, 2/10/95 4,993
------------------------------------------------------------
Chrysler Financial Corporation
5.68%, 2/01/95 10,000
------------------------------------------------------------
Greyhound Financial Corporation
5.73%, 2/13/95 4,991
------------------------------------------------------------
Philip Morris Companies, Inc.
5.83%, 2/22/95 4,983
------------------------------------------------------------
24,967
CONSUMER FINANCING--1.8%
------------------------------------------------------------
Whirlpool Financial Corporation
5.86%, 2/21/95 4,984
------------------------------------------------------------
CONSUMER PRODUCTS AND SERVICES--7.6%
------------------------------------------------------------
American Home Products Corporation
6.11%, 3/08/95 9,942
------------------------------------------------------------
PepsiCo, Inc.
(a) 5.61%, 2/15/95 4,997
4.12%, 2/03/95 6,000
------------------------------------------------------------
20,939
CORPORATE FINANCING--14.5%
------------------------------------------------------------
Broadway Capital Corporation
5.95%, 2/28/95 4,978
------------------------------------------------------------
CXC Incorporated
6.06%, 2/02/95 9,998
------------------------------------------------------------
Ranger Funding Corporation
6.31%, 2/22/95 9,964
------------------------------------------------------------
(a)Sanwa Business Credit Corporation
5.90%, 2/08/95 9,999
------------------------------------------------------------
WCP Funding Incorporated
5.94%, 3/06/95 4,973
------------------------------------------------------------
39,912
FINANCIAL SERVICES--16.9%
------------------------------------------------------------
(a)Bear Stearns Companies Inc.
5.98%, 2/21/95 10,000
------------------------------------------------------------
(a)CS First Boston, Inc.
5.88%, 2/08/95 9,500
------------------------------------------------------------
(a)Goldman Sachs & Co.
6.02%, 2/27/95 3,000
------------------------------------------------------------
(a)(b)Lehman Brothers Holdings Inc.
5.89%, 2/15/95 3,000
------------------------------------------------------------
(a)Morgan Stanley Group Inc.
6.68%, 3/15/95 11,006
<CAPTION>
Value
<S> <C>
------------------------------------------------------------
(a)Salomon Inc
6.33%, 2/01/95 $ 10,000
------------------------------------------------------------
46,506
INFORMATION SERVICES--10.9%
------------------------------------------------------------
Electronic Data Systems Corporation
6.00% - 6.20%, 2/24/95 - 3/10/95 14,918
------------------------------------------------------------
GTE Corporation
6.00%, 2/24/95 4,981
------------------------------------------------------------
Nynex Corporation
6.06%, 2/02/95 9,998
------------------------------------------------------------
29,897
MANUFACTURING--5.8%
------------------------------------------------------------
Bridgestone/Firestone, Inc.
5.94%, 3/03/95 4,975
------------------------------------------------------------
Cooper Industries, Inc.
5.90%, 2/01/95 5,000
------------------------------------------------------------
DIC Americas Inc.
5.78%, 2/08/95 5,992
------------------------------------------------------------
15,967
(b)(c)MUNICIPAL OBLIGATION--3.6%
------------------------------------------------------------
(a)Orange County, California
5.98%, 7/10/95 (maturity), $10,000,000 (cost and
par) 8,400
Letter of Credit from The Bank of New York 1,600
------------------------------------------------------------
10,000
RECEIVABLES FINANCING--9.1%
------------------------------------------------------------
Corporate Asset Funding Company, Inc.
5.88%, 2/23/95 4,982
------------------------------------------------------------
Falcon Asset Securitization Corporation
6.09%, 3/14/95 4,966
------------------------------------------------------------
Jet Funding Corporation
6.04%, 2/28/95 9,955
------------------------------------------------------------
SFC (USA) Inc.
5.78%, 2/07/95 4,995
------------------------------------------------------------
24,898
------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS--90.2%
(average maturity: 23 days) 248,013
------------------------------------------------------------
BANK OBLIGATIONS
------------------------------------------------------------
(a)First National Bank of Boston
6.34%, 3/24/95 10,000
------------------------------------------------------------
Morgan Guaranty Trust Company of New York
6.30%, 3/07/95 10,000
------------------------------------------------------------
(a)Shawmut Bank, Connecticut, N.A.
6.32%, 2/07/95 8,000
------------------------------------------------------------
TOTAL BANK OBLIGATIONS--10.1%
(average maturity: 32 days) 28,000
------------------------------------------------------------
TOTAL INVESTMENTS--100.3%
(average maturity: 24 days) 276,013
------------------------------------------------------------
LIABILITIES, LESS
OTHER ASSETS--(.3%) (915)
------------------------------------------------------------
NET ASSETS--100% $275,098
------------------------------------------------------------
</TABLE>
2
<PAGE> 4
NOTES TO PORTFOLIO OF INVESTMENTS
Interest rates represent annualized yield to date of maturity, except for
variable rate securities described in Note (a). For each security, cost (for
financial reporting and federal income tax purposes) and carrying value are the
same. Likewise, carrying value approximates principal amount.
(a) Variable rate securities. The rates shown are the current rates at January
31, 1995. The dates shown represent the demand date or next interest rate change
date.
(b) Illiquid securities. At January 31, 1995, the aggregate value of the Fund's
illiquid securities was $13,000,000, which represented 4.7% of net assets.
(c) See Note (3) of the Notes to Financial Statements.
See accompanying Notes to Financial Statements.
3
<PAGE> 5
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1995
(in thousands)
<TABLE>
<S> <C>
ASSETS
-------------------------------------------------------------
Investments, at amortized cost $ 276,013
-------------------------------------------------------------
Interest receivable 771
-------------------------------------------------------------
Total assets 276,784
-------------------------------------------------------------
LIABILITIES AND NET ASSETS
-------------------------------------------------------------
Cash overdraft 206
-------------------------------------------------------------
Payable for:
Dividends 439
-------------------------------------------------------------
Management fee 96
-------------------------------------------------------------
Distribution services fee 153
-------------------------------------------------------------
Administrative services fee 58
-------------------------------------------------------------
Custodian and transfer agent
fees and related expenses 464
-------------------------------------------------------------
Other 270
-------------------------------------------------------------
Total liabilities 1,686
-------------------------------------------------------------
Net assets applicable to
shares outstanding $ 275,098
-------------------------------------------------------------
ANALYSIS OF NET ASSETS
-------------------------------------------------------------
Excess of amounts received from issuance of
shares over amounts paid on redemptions of shares
on
account of capital $ 276,750
-------------------------------------------------------------
Net unrealized depreciation of investments (1,652)
-------------------------------------------------------------
Net assets applicable to shares outstanding $ 275,098
-------------------------------------------------------------
THE PRICING OF SHARES
-------------------------------------------------------------
Net asset value and redemption price per share,
unlimited shares authorized:
-------------------------------------------------------------
CLASS A SHARES
($45,493 / 45,493 shares outstanding) $1.00
-------------------------------------------------------------
CLASS B SHARES
($222,161 / 222,161 shares outstanding) $1.00
-------------------------------------------------------------
CLASS C SHARES
($7,444 / 7,444 shares outstanding) $1.00
-------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
STATEMENT OF OPERATIONS
Six months ended January 31, 1995
(in thousands)
<TABLE>
<S> <C>
INTEREST INCOME $10,371
------------------------------------------------------------
EXPENSES:
------------------------------------------------------------
Management fee 762
------------------------------------------------------------
Distribution services fee 1,256
------------------------------------------------------------
Administrative services fees 480
------------------------------------------------------------
Custodian and transfer agent
fees and related expenses 653
------------------------------------------------------------
Professional fees 19
------------------------------------------------------------
Reports to shareholders 33
------------------------------------------------------------
Registration fees 51
------------------------------------------------------------
Trustees' fees and other 72
------------------------------------------------------------
Total expenses 3,326
------------------------------------------------------------
Net investment income 7,045
------------------------------------------------------------
Net change in balance of unrealized depreciation
of investments (1,652)
------------------------------------------------------------
Net increase in net assets resulting from
operations $ 5,393
------------------------------------------------------------
</TABLE>
4
<PAGE> 6
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended January 31, 1995 and year ended July 31, 1994
(in thousands)
<TABLE>
<CAPTION>
OPERATIONS: 1995 1994
<S> <C> <C>
--------------------------------------------------------------
Net investment income $ 7,045 5,556
--------------------------------------------------------------
Net change in unrealized depreciation (1,652) --
--------------------------------------------------------------
Net increase in net assets resulting
from operations 5,393 5,556
--------------------------------------------------------------
Dividends to shareholders from net
investment income (7,045) (5,556)
--------------------------------------------------------------
Net increase (decrease) from capital
share transactions (149,219) 257,509
--------------------------------------------------------------
Capital contribution from investment
manager 1,652 --
--------------------------------------------------------------
Total increase (decrease) in net assets (149,219) 257,509
--------------------------------------------------------------
NET ASSETS:
Beginning of period 424,317 166,808
--------------------------------------------------------------
End of period $ 275,098 424,317
--------------------------------------------------------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE FUND
Kemper Cash Reserves Fund is a separate series of Kemper Portfolios, an open-end
management investment company organized as a business trust under the laws of
Massachusetts.
The Fund currently offers three classes of shares. Class A shares are available
only upon exchange or upon conversion of Class B shares. Class B shares are sold
without an initial sales charge but are subject to higher ongoing expenses than
Class A shares and a contingent deferred sales charge payable upon certain
redemptions. Class B shares automatically convert to Class A shares six years
after issuance. Class C shares are sold without an initial or contingent
deferred sales charge but are subject to higher ongoing expenses than Class A
shares and do not convert into another class. The Fund may offer Class I shares
and no such shares are outstanding as of January 31, 1995. Each share represents
an identical interest in the investments of the Fund and has the same rights.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION
Investments are stated at amortized cost, which approximates market value. In
the event that a deviation of 1/2 of 1% or more exists between the Fund's $1.00
per share net asset value, calculated at amortized cost, and the net asset value
calculated by reference to market-based values, or if there is any other
deviation that the Board of Trustees believes would result in a material
dilution to shareholders or purchasers, the Board of Trustees will promptly
consider what action should be initiated.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on the trade date (date the order to
buy or sell is executed). Interest income is recorded on the accrual basis and
includes amortization of premium and discount on investments.
FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS
Fund shares are sold and redeemed on a continuous basis at net asset value.
Proceeds payable on redemption of Class B shares will be reduced by the amount
of any applicable contingent deferred sales charge. On each day the New York
Stock Exchange is open for trading, the net asset value per share is determined
as of the earlier of 3:00 p.m. Chicago time or the close of the Exchange. The
net asset value per share is determined separately for each class by dividing
the Fund's net assets attributable to that class by the number of shares of the
class outstanding. The Fund declares a daily dividend, equal to its net
investment income for that day, payable monthly. Differences in dividends per
share are due to different class expenses.
5
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS
FEDERAL INCOME TAXES
The Fund has complied with the special provisions of the Internal Revenue Code
available to investment companies during the six months ended January 31, 1995.
3. TRANSACTIONS WITH AFFILIATES
MANAGEMENT AGREEMENT
The Fund has a management agreement with Kemper Financial Services, Inc. (KFS)
and pays a management fee at an annual rate of .40% of the first $250 million of
average daily net assets declining gradually to .25% of average daily net assets
in excess of $12.5 billion. The Fund incurred a management fee of $762,000 for
the six months ended January 31, 1995.
Kemper Assets Holdings, Inc. (KAHI), a subsidiary of Kemper Corporation, the
parent company of Kemper Financial Services, Inc., arranged for the issuance of
a $10,354,000 irrevocable letter of credit from The Bank of New York for the
benefit of the Fund. The letter of credit supports the payment of principal and
interest on the Orange County, California obligation held in the Fund. The Fund
and KAHI are parties to an agreement related to the letter of credit which
provides, among other things, that, in connection with a payment of principal or
interest under the letter of credit, the Fund will transfer to KAHI any proceeds
received under the Orange County obligation.
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
The Fund has an underwriting and distribution services agreement with Kemper
Distributors, Inc. (KDI). Before February 1, 1995, KFS was the Fund's
distributor.
For services under the distribution services agreement, the Fund pays KDI (as
successor to KFS) a fee of .75% of average daily net assets of the Class B and
Class C shares. Pursuant to the agreement, KDI enters into related selling group
agreements with various firms that provide distribution services to investors.
KDI compensates these firms at various rates for sales of Class B and Class C
shares. During the six months ended January 31, 1995, the Fund incurred a
distribution services fee for Class B and Class C shares of $1,256,000, and KDI
paid $1,409,000 for commissions and distribution fees to firms, including
$58,000 to firms affiliated with KDI. In addition, KDI received $843,000 of
contingent deferred sales charges.
ADMINISTRATIVE SERVICES AGREEMENT
The Fund has an administrative services agreement with KDI. Before February 1,
1995, KFS was the Fund's administrator. For providing information and
administrative services to shareholders, the Fund pays KDI a fee at an annual
rate of up to .25% of average daily net assets. KDI in turn has various
arrangements with financial services firms that provide these services and pays
these firms based on assets of Fund accounts the firms service. For the six
months ended January 31, 1995, the Fund incurred an administrative services fee
of $480,000 and KDI (as successor to KFS) paid $478,000 to firms, including
$30,000 that was paid to firms affiliated with KDI.
CUSTODIAN AND TRANSFER AGENT AGREEMENTS
The Fund has a custodian agreement and a transfer agent agreement with Investors
Fiduciary Trust Company (IFTC), which was 50% owned by KFS until January 31,
1995 when KFS completed the sale of IFTC to a third party. For the six months
ended January 31, 1995, the Fund incurred custodian and transfer agent fees of
$540,000 (excluding related expenses). Pursuant to a services agreement with
IFTC, Kemper Service Company (KSvC), an affiliate of KFS, is the Shareholder
Service Agent of the Fund. For the six months ended January 31, 1995, IFTC
remitted shareholder service fees of $521,000 to KSvC.
OFFICERS AND TRUSTEES
Certain officers or trustees of the Fund are also officers or directors of KFS.
For the six months ended January 31, 1995, the Fund made no payments to its
officers and incurred trustees' fees of $9,000 to independent trustees.
4. CAPITAL SHARE TRANSACTIONS
The following table summarizes the activity in capital shares of the Fund
(dollar amounts and number of shares are the same).
<TABLE>
<CAPTION>
Six months
ended
January Year ended
31, July 31,
1995 1994
<S> <C> <C>
Shares sold: -----------------------
(in thousands)
Class A $ 23,613 $ 62,747
-------------------------------------------------------------
Class B 318,793 892,199
-------------------------------------------------------------
Class C 10,660 801
-------------------------------------------------------------
Shares issued in reinvestment of dividends:
Class A 1,028 878
-------------------------------------------------------------
Class B 4,901 3,643
-------------------------------------------------------------
Class C 89 1
-------------------------------------------------------------
Shares redeemed:
Class A (40,357) (56,628)
-------------------------------------------------------------
Class B (463,906) (646,065)
-------------------------------------------------------------
Class C (4,040) (67)
-------------------------------------------------------------
Conversions of shares:
Class A 8,557 23,904
-------------------------------------------------------------
Class B (8,557) (23,904)
-------------------------------------------------------------
Net increase (decrease) from capital
share transactions and total
increase (decrease) in net assets $(149,219) $ 257,509
-------------------------------------------------------------
</TABLE>
6
<PAGE> 8
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six months January 10,
ended 1992 to
January 31, Year ended July 31, July 31,
CLASS A SHARES 1995 1994 1993 1992
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------
Net investment income and dividends declared .02 .03 .02 .01
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%): 2.24 2.78 2.42 1.57
------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (%):
Expenses .92 .92 .93 1.39
------------------------------------------------------------------------------------------------------------------------------
Net investment income 4.39 2.86 2.42 2.75
------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $45,493 52,652 21,751 9,081
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six months
ended
January 31, Year ended July 31,
CLASS B SHARES 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $1.00 1.00 1.00 1.00 1.00
---------------------------------------------------------------------------------------------------------------------------------
Net investment income and dividends declared .02 .02 .02 .03 .05
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%): 1.78 1.78 1.56 2.65 5.35
---------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (%):
Expenses 1.83 1.89 1.82 2.22 2.18
---------------------------------------------------------------------------------------------------------------------------------
Net investment income 3.48 1.89 1.53 2.69 5.32
---------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $ 222,161 370,930 145,057 147,138 240,994
</TABLE>
<TABLE>
<CAPTION>
Six months May 31,
ended to
January 31, July 31,
CLASS C SHARES 1995 1994
<S> <C> <C>
------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset values, beginning of period $1.00 1.00
------------------------------------------------------------------------------------------------------------------------------
Net investment income and dividends declared .02 --
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00
------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%): 1.78 .42
------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (%):
Expenses 1.78 1.80
------------------------------------------------------------------------------------------------------------------------------
Net investment income 3.53 2.64
------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $7,444 735
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
Ratios have been determined on an annualized basis. Total return is not
annualized and does not reflect the effect of sales charges. The total returns
for January 31, 1995 include the effect of a capital contribution from the
investment manager. Without the capital contribution, the total returns would
have been 1.88% in Class A, 1.42% in Class B and 1.42% in Class C.
KFS temporarily agreed to absorb certain operating expenses of the Fund during a
portion of the fiscal years ended July 31, 1994 and 1993. Absent this agreement,
ratios of expenses and net investment income to average net assets for the Class
A shares would have been 1.15% and 2.63%, respectively, for 1994 and 1.18% and
2.17%, respectively, for 1993. Ratios of expenses and net investment income to
average net assets for the Class B shares would have been 2.12% and 1.66%,
respectively, for 1994 and 2.07% and 1.28%, respectively, for 1993.
7
<PAGE> 9
[LOGO]
KEMPER FINANCIAL SERVICES, INC.
120 South LaSalle Street
Chicago, IL 60603
KEMPER PORTFOLIOS
KEMPER CASH RESERVES FUND
<TABLE>
<CAPTION>
Trustees Officers
STEPHEN B. TIMBERS J. PATRICK BEIMFORD, JR. JEROME L. DUFFY
President and Trustee Vice President Treasurer
MICHELLE M. KEELEY
DAVID W. BELIN Vice President ELIZABETH C. WERTH
Trustee JOHN E. PETERS Assistant Secretary
Vice President
LEWIS A. BURNHAM FRANK J. RACHWALSKI, JR.
Trustee Vice President
DONALD L. DUNAWAY PHILIP J. COLLORA
Trustee Vice President
ROBERT B. HOFFMAN and Secretary
Trustee CHARLES F. CUSTER
Vice President and
DONALD R. JONES Assistant Secretary
Trustee
DAVID B. MATHIS
Trustee
WILLIAM P. SOMMERS
Trustee
<S> <C>
-----------------------------------------------------------
Legal Counsel Custodian and Transfer Agent
VEDDER, PRICE, KAUFMAN INVESTORS FIDUCIARY
& KAMMHOLZ TRUST COMPANY
222 North LaSalle Street 127 West 10th Street
Chicago, IL 60601 Kansas City, MO 64105
Shareholder Service Agent
KEMPER SERVICE COMPANY
P.O. Box 419557
Kansas City, MO 64141
1-800-621-1048
</TABLE>
Investment Manager
KEMPER FINANCIAL SERVICES, INC.
Principal Underwriter
KEMPER DISTRIBUTORS, INC.
120 South LaSalle Street
Chicago, IL 60603
(LOGO)Printed on recycled paper.
This report is not to be distributed unless preceded 236710
KCRF-3 or accompanied by a Kemper Cash Reserves Fund prospectus. Printed
(3/95) in the
U.S.A.
