[LOGO] KEMPER FUNDS
Kemper Global and
International Funds
PROSPECTUS March 1, 1999, as revised November 10, 1999
KEMPER GLOBAL AND INTERNATIONAL FUNDS
222 South Riverside Plaza, Chicago, Illinois 60606 (800) 621-1048
This prospectus describes a choice of funds managed by Scudder Kemper
Investments, Inc.
Growth Fund Of Spain
Kemper Asian Growth Fund
Kemper Emerging Markets Growth Fund
Kemper Emerging Markets Income Fund
Kemper Global Blue Chip Fund
Global Discovery Fund
Kemper Global Income Fund
Kemper International Fund
Kemper International Growth And Income Fund
Kemper Latin America Fund
Mutual funds:
o are not FDIC-insured
o have no bank guarantees
o may lose value
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
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FOREIGN INVESTING
INVESTMENT APPROACH
The funds described in this prospectus invest primarily in non-U.S. issuers.
Each fund has its own investment objective, investment strategy and risk
profile.
PRINCIPAL RISK FACTORS
There are market and investment risks with any security and the value of an
investment in the funds will fluctuate over time and it is possible to lose
money invested in the funds.
Stock Market. Each stock fund's returns and net asset value will go up and down.
Stock market movements will affect the funds' share prices on a daily basis.
Declines in value are possible both in the overall stock market and in the types
of securities held by the funds.
Bond Market. When interest rates rise, the price of bonds typically falls in
proportion to their duration. It is also possible that bonds in the funds'
portfolio could be downgraded in credit rating or go into default.
Duration, a measurement based on the estimated pay-back period or duration of a
bond (or portfolio of bonds), is the most widely used gauge of sensitivity to
interest rate change. Like maturity, duration is expressed in years. The longer
a fund's duration, the more sharply its share price is likely to rise or fall
when interest rates change.
Portfolio Strategy. The portfolio managers' skill in choosing appropriate
investments for the funds will determine in large part the funds' ability to
achieve their respective investment objectives.
Foreign Securities. Foreign investments, particularly investments in emerging
markets, carry added risks due to inadequate or inaccurate financial information
about companies, potential political disturbances and fluctuations in currency
exchange rates.
2
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ABOUT THE FUNDS
GROWTH FUND OF SPAIN
Investment objective
Growth Fund Of Spain seeks long-term capital appreciation. Unless otherwise
indicated, the fund's investment objective and policies are fundamental and
cannot be changed without a vote of shareholders.
Main investment strategies
The fund seeks to achieve its objective by investing primarily in equity
securities of Spanish companies. A company is deemed to be Spanish if it is:
o organized under the laws of Spain; or
o traded in the Spanish securities markets and doing business in Spain.
Under normal market conditions, at least 65% of the fund's total assets will be
invested in equity securities of Spanish companies. The fund may invest up to
25% of its total assets in unlisted equity and debt securities, including
convertible debt securities, and in other securities that are not readily
marketable, a significant portion of which may be considered illiquid. The fund
may invest up to 35% of its total assets in investment-grade fixed income
securities denominated in Pesetas or U.S. dollars.
As an operating policy the investment manager intends to evaluate investment
opportunities throughout the Iberian Peninsula (i.e., Spain and Portugal). As a
matter of non-fundamental policy, the fund may invest up to 35% of its total
assets in equity securities of companies other than Spanish companies, and may
focus such investments in whole or in part in equity securities of companies
organized under the laws of Portugal or traded in the Portuguese securities
markets and doing business in Portugal.
In selecting its investments, the fund will look for companies with (i) strong
and sustainable earnings growth, (ii) solid management and (iii) reasonable
stock market valuations.
A stock is typically sold when, in the opinion of the portfolio manager, (i) the
stock has reached its fair market value, (ii) a company's fundamentals have
deteriorated or (iii) the fund's portfolio is too heavily weighted in a
particular industry or sector.
Of course, there can be no guarantee that by following these investment
strategies, the fund will achieve its objective.
3
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Other investments
To a more limited extent, the fund may, but is not required to, utilize other
investments and investment techniques that may impact fund performance,
including, but not limited to, options, futures and other derivatives (financial
instruments that derive their value from other securities or commodities, or
that are based on indices).
Risk management strategies
The fund may, but is not required to, use certain derivatives in an attempt to
manage risk. The use of derivatives could magnify losses.
For temporary defensive purposes, the fund may vary from its investment
objective and may invest, without limit, in high quality debt instruments, such
as U.S. and Spanish government securities. In such a case, the fund would not be
pursuing, and may not achieve, its investment objective. The fund may also at
any time invest funds in U.S. dollar-denominated money market instruments as
reserves for expenses and dividends and other distributions to shareholders.
Main risks
The fund's principal risks are associated with investing in the stock market,
the investment manager's skill in managing the fund's portfolio and foreign
securities. You will find a discussion of these risks under "Foreign Investing"
at the front of this prospectus.
The securities markets of Spain and Portugal have substantially less volume than
the securities markets of the U.S. and securities of some companies in Spain and
Portugal are less liquid and more volatile than securities of comparable U.S.
companies. Accordingly, these markets may be subject to greater influence by
adverse events generally affecting the market, and by large investors trading
significant blocks of securities, than is usual in the U.S.
Because the fund is non-diversified, the fund may invest a relatively high
percentage of its assets in a limited number of issuers. Accordingly, the fund's
investment returns are more likely to be impacted by changes in the market value
and returns of any one portfolio holding.
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The fund is the successor entity to The Growth Fund of Spain, Inc., a closed-end
fund whose shares were exchanged for Class A shares of the fund in connection
with a reorganization transaction completed on December 11, 1998. The
information provided in the chart is for The Growth Fund of Spain, Inc. through
December 11, 1998 and for the fund's Class A shares thereafter, and does not
reflect sales charges, which reduce return. Open-end funds generally have higher
expenses than closed-end funds and, accordingly, the fund expects that
4
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its expense ratio will be higher than that of its predecessor. Expenses
adversely affect performance.
Total returns for years ended December 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART DATA:
- --------------------------------------------------------------------------------
15.82% -23.48% 28.79% 2.26% 22.11% 31.12% 19.47% 49.85%
1991 1992 1993 1994 1995 1996 1997 1998
- --------------------------------------------------------------------------------
For the periods included in the bar chart, the fund's highest return for a
calendar quarter was 32.17% (the first quarter of 1998), and the fund's lowest
return for a calendar quarter was -21.84% (the third quarter of 1992).
Average Annual Total Returns
For periods ended
December 31, 1998 Class A^+++ Class B Class C IBEX 35 Index
- ----------------- --------- ------- ------- -------------
One Year 41.21% -- -- 47.47%
Five Years 22.52% -- -- 25.23%
Ten Years -- -- -- --
Since Class Inception* 13.19% 3.22%** 6.44%** ***
- -----------
^+++ The information provided is for The Growth Fund of Spain, Inc. through
December 11, 1998 and for the fund's Class A shares thereafter, and assumes
deduction of the Class A sales charge.
* Inception date for Class A shares is 2/14/90, which was the inception date
for the fund's predecessor, The Growth Fund of Spain, Inc., and for Class B
and C shares is 12/14/98.
** Aggregate returns.
*** Index return for the life of each class: 14.82% (2/14/90) for Class A
shares, and 4.65% (12/14/98) for Class B and C shares.
The IBEX 35 Index is a capitalization-weighted index of the 35 most liquid
Spanish stocks traded on the continuous markets. Index returns assume
reinvestment of dividends and, unlike fund returns, do not reflect any fees,
expenses or sales charges.
5
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Fee and expense information
The following information is designed to help you understand the costs of
investing in the fund. Each class of shares has a different set of transaction
fees, which will vary based on the length of time you hold shares in the fund
and the amount of your investment. You will find details about fee discounts and
waivers in the Buying shares and Choosing a share class -- Special features
sections of this prospectus.
- --------------------------------------------------------------------------------
Shareholder fees: Fees paid directly from your investment.
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) 5.75% None None
Imposed on Purchases (as % of
offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge None^(1) 4% 1%
(Load) (as % of redemption proceeds)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends/Distributions
- --------------------------------------------------------------------------------
Redemption Fee (as % of amount 2.00%* 2.00%* 2.00%*
redeemed, if applicable)
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
Annual fund operating expenses: Expenses that are deducted from fund assets**
- --------------------------------------------------------------------------------
Management Fee 0.75% 0.75% 0.75%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None 0.75% 0.75%
- --------------------------------------------------------------------------------
Other Expenses 1.10% 1.35% 1.30%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.85% 2.85% 2.80%
- --------------------------------------------------------------------------------
* A 2% redemption fee, which is retained by the fund, is imposed upon
redemptions or exchanges of shares held less than one year, with limited
exceptions. See "Redemption Fee."
** The fund was reorganized from a closed-end fund to an open-end fund in
December 1998. The fees and expenses of open-end funds are, in many cases,
higher than those of closed-end funds. Accordingly, the expense ratios
shown above are estimated, based on the fund's current fee schedule and
expenses incurred by the fund during its most recent fiscal year, for the
fund's current fiscal year ending on October 31, 1999. The actual expenses
for each class of shares in future years may be more or less than the
numbers in the tables above, depending on a number of factors, including
changes in actual value of the fund's assets represented by each class of
shares.
^(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% if redeemed within one year of purchase and 0.50% if
redeemed during the second year of purchase.
6
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Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions
and "annual fund operating expenses" remaining the same each year. The example
is hypothetical: actual fund expenses and return vary from year to year, and may
be higher or lower than those shown.
Fees and expenses if you sold your shares after:
Class A Class B Class C
------- ------- -------
1 Year $941 $888 $583
3 Years $1,123 $1,183 $868
5 Years $1,518 $1,704 $1,479
10 Years $2,619 $2,826 $3,128
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $752 $288 $283
3 Years $1,123 $883 $868
5 Years $1,518 $1,504 $1,479
10 Years $2,619 $2,826 $3,128
7
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KEMPER ASIAN GROWTH FUND
INVESTMENT OBJECTIVE
Kemper Asian Growth Fund seeks long-term capital growth. Unless otherwise
indicated, the fund's investment objective and policies may be changed without a
vote of shareholders.
Main investment strategies
The fund seeks to achieve its investment objective by investing in a diversified
portfolio consisting primarily of equity securities of Asian companies.
Under normal circumstances the fund will invest at least 85% of its total assets
in equity securities of Asian companies. The fund considers an issuer of
securities to be an Asian company if:
o the company is organized under the laws of an Asian country and has a
principal office in an Asian country;
o the company derives 50% or more of its total revenues from business in
Asia; or
o the company's equity securities are traded principally on a stock exchange
in Asia.
Furthermore, the fund will invest at least 65% of its total assets in securities
of Asian companies which satisfy at least one of the first two criteria
described above.
The fund invests principally in developing or emerging countries. The fund may
invest without limit in emerging Asian countries, such as China, Indonesia,
Korea, Malaysia, Philippines, Thailand and Taiwan. The fund may also invest
without limit in developed Asian countries, such as Japan and Singapore.
However, the fund will only invest in Japan when economic conditions warrant,
and then only in limited amounts. From time to time, the fund may have 40% or
more of its total assets invested in any major Asian industrial or developed
country.
The fund's investment manager determines the appropriate distribution of
investments among various Asian countries and geographic regions by considering
numerous factors, including the following, among other things:
o prospects for relative economic growth of Asian countries;
o expected levels of inflation;
o relative price levels of the various capital markets;
o government policies influencing business conditions;
o the outlook for currency relationships; and
o the range of individual investment opportunities available to investors in
Asian companies.
In selecting its investments, the fund will look for companies with (i)
identifiable market niches, (ii) clean balance sheets and (iii) strong
valuations.
8
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A stock is typically sold when, in the opinion of the portfolio manager, (i) the
stock has reached its fair market value, (ii) a company's fundamentals have
deteriorated and (iii) the fund's portfolio is too heavily weighted in a
particular industry or sector.
Because the fund may engage in active and frequent trading of portfolio
securities, the fund may have higher transaction costs which would lower the
fund's performance over time. In addition, shareholders may incur taxes on any
realized capital gains.
Of course, there can be no guarantee that by following these investment
strategies, the fund will achieve its objective.
Other investments
To a more limited extent, the fund may, but is not required to, invest in the
following:
The fund may invest in other types of securities including, but not limited to,
equity securities of non-Asian companies, bonds, notes, and other debt
securities of domestic or foreign companies and obligations of domestic or
foreign governments and their political subdivisions. The fund does not
currently intend to invest more than 5% of its net assets in debt securities.
The fund considers Asian equity securities to include shares of closed-end
management investment companies, the assets of which are invested primarily in
equity securities of Asian companies and depository receipts where the
underlying or deposited securities are equity securities of Asian companies.
The fund may utilize other investments and investment techniques that may impact
fund performance, including, but not limited to, options, futures and other
derivatives (financial instruments that derive their value from other securities
or commodities, or that are based on indices).
Risk management strategies
The fund may, but is not required to, use certain derivatives in an attempt to
manage risk. The use of certain derivatives could magnify losses.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in high-grade debt securities, cash and cash equivalents. In such a case, the
fund would not be pursuing, and may not achieve, its investment objective.
Main risks
The fund's principal risks are associated with investing in the stock market,
the investment manager's skill in managing the fund's portfolio and foreign
securities. You will find a discussion of these risks under "Foreign Investing"
at the front of this prospectus.
The fund invests primarily in one geographic region. Common economic forces and
other factors may affect investments in a single region, even though a number of
different countries within a region may be represented within the fund. Factors
affecting Asian investments may present a greater risk to the fund than
investments in a more geographically diversified fund.
9
<PAGE>
The fund expects to trade securities actively. This strategy could increase
transaction costs and reduce performance.
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART DATA:
- --------------------------------------------------------------------------------
-34.60% -19.02%
1997 1998
- --------------------------------------------------------------------------------
For the periods included in the bar chart, the fund's highest return for a
calendar quarter was 19.46% (the fourth quarter of 1998), and the fund's lowest
return for a calendar quarter was -33.05% (the second quarter of 1998).
Average Annual Total Returns
MSCI All Country
For periods ended Asia Free
December 31, 1998 Class A Class B Class C Ex-Japan Index
- ----------------- ------- ------- ------- --------------
One Year -23.70% -22.37% -20.06% -4.82%
Five Years -- -- -- --
Ten Years -- -- -- --
Since Class -25.10% -24.90% -23.77% *
Inception**
- -----------
* Index returns for the life of each class: -26.49% (11/30/96) for Class A,
B, and C, respectively.
** Inception date for Class A, B and C shares is 10/21/96.
10
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The Morgan Stanley Capital International All Country Asia Free Ex-Japan Index is
a capitalized weighted index that is representative of the equity securities for
the following countries: Hong Kong, Indonesia, Korea (at 20%), Malaysia,
Philippines free, Singapore free and Thailand. Index returns assume reinvestment
of dividends and unlike the fund's returns, do not reflect any fees, expenses,
or sales charges.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
- --------------------------------------------------------------------------------
Shareholder fees: Fees paid directly from your investment.
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) 5.75% None None
Imposed on Purchases (as % of
offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge None^(1) 4% 1%
(Load) (as % of redemption proceeds)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends/Distributions
- --------------------------------------------------------------------------------
Redemption Fee (as % of amount None None None
redeemed, if applicable)
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
Annual fund operating expenses: Expenses that are deducted from fund assets.
- --------------------------------------------------------------------------------
Management Fee 0.85% 0.85% 0.85%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None 0.75% 0.75%
- --------------------------------------------------------------------------------
Other Expenses 1.80% 2.69% 2.96%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 2.65% 4.29% 4.56%
- --------------------------------------------------------------------------------
Expense Reimbursement 0.85% 1.51% 1.85%
- --------------------------------------------------------------------------------
Net Annual Operating Expenses* 1.80% 2.78% 2.71%
- --------------------------------------------------------------------------------
* By contract, total annual fund operating expenses are capped at 1.80% for
Class A shares, 2.78% for Class B shares, and 2.71% for Class C shares
through February 29, 2000.
^(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% if redeemed within one year of purchase and 0.50% if
redeemed during the second year of purchase.
11
<PAGE>
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above
(including one year of capped expenses). It assumes a 5% annual return, the
reinvestment of all dividends and distributions and "annual fund operating
expenses" remaining the same each year. The example is hypothetical: actual fund
expenses and return vary from year to year, and may be higher or lower than
those shown.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $747 $681 $374
3 Years $1,275 $1,404 $1,211
5 Years $1,828 $2,260 $2,156
10 Years $3,328 $3,689 $4,556
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $747 $281 $274
3 Years $1,275 $1,164 $1,211
5 Years $1,828 $2,000 $2,156
10 Years $3,328 $3,689 $4,556
12
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KEMPER EMERGING MARKETS GROWTH FUND
INVESTMENT OBJECTIVE
Kemper Emerging Markets Growth Fund seeks long-term growth of capital. Unless
otherwise indicated, the fund's investment objective and policies may be changed
without a vote of shareholders.
Main investment strategies
The fund seeks to achieve its investment objective through equity investment in
emerging markets around the globe. Normally, at least 65% of the fund's total
assets will be invested in the equity securities of emerging market issuers.
The investment manager takes a top-down approach to evaluating investments for
the fund, using extensive fundamental and field research. The process begins
with a study of the economic fundamentals of each country and region, as well as
an examination of regional themes such as growing trade, increases in direct
foreign investment and deregulation of capital markets. Understanding regional
themes allows the investment manager to identify industries and companies that
the investment manager believes are most likely to benefit from the political,
social and economic changes taking place in a given region of the world.
Within a market, the investment manager looks for, among other things,
individual companies with exceptional business prospects, which may be due to
market dominance, unique franchises, high growth potential, or innovative
services, products or technologies. The investment manager seeks to identify
companies with favorable potential for appreciation through growing earnings or
greater market recognition over time. While these companies may be among the
largest in their local markets, they may be small by the standards of U.S. stock
market capitalization.
A stock is typically sold when, in the opinion of the portfolio manager (i) the
stock has reached its fair market value and its appreciation is limited, (ii) a
company's fundamentals have deteriorated, (iii) the fund's portfolio is too
heavily weighted in a particular industry or sector, and (iv) country risk
outweighs probable return.
The fund considers "emerging markets" to include any country that is defined as
an emerging or developing economy by any of the following: the International
Bank for Reconstruction and Development (i.e., the World Bank), the
International Finance Corporation or the United Nations or its authorities.
13
<PAGE>
The investment manager may pursue investment opportunities in Asia, Africa,
Latin America, the Middle East and the developing countries of Europe, primarily
in Eastern Europe. The fund deems an issuer to be located in an emerging market
if:
o the issuer is organized under the laws of an emerging market country;
o the issuer's principal securities trading market is in an emerging market;
or
o at least 50% of the issuer's non-current assets, capitalization, gross
revenue or profit in any one of the two most recent fiscal years is derived
(directly or indirectly through subsidiaries) from assets or activities
located in emerging markets.
Of course, there can be no guarantee that by following these investment
strategies, the fund will achieve its objective.
Other investments
To a more limited extent, the fund may, but is not required to, invest in the
following:
The fund may invest up to 35% of its total assets in emerging market and
domestic debt securities which may be below investment-grade or unrated if the
investment manager determines that capital appreciation of debt securities is
likely to equal or exceed the capital appreciation of equity securities.
Under normal market conditions, the fund may invest up to 35% of its total
assets in equity securities of issuers in the U.S. and other developed markets.
The fund may invest in closed-end investment companies investing primarily in
the emerging markets. Such closed-end company investments will generally only be
made when market access or liquidity considerations restricts direct investment
in the market.
The fund may utilize other investments and investment techniques that may impact
fund performance, including, but not limited to, options, futures and other
derivatives (financial instruments that derive their value from other securities
or commodities, or that are based on indices).
Risk management strategies
The fund may, but is not required to, use certain derivatives in an attempt to
manage risk. The use of certain derivatives could magnify losses.
For temporary defensive purposes, the fund may hold, without limit, debt
instruments, as well as cash and cash equivalents, including foreign and
domestic money market instruments, short-term government and corporate
obligations, and repurchase agreements. In such a case, the fund would not be
pursuing, and may not achieve, its investment objective.
14
<PAGE>
Main risks
The fund's principal risks are associated with investing in the stock market,
the investment manager's skill in managing the fund's portfolio and foreign
securities. You will find a discussion of these risks under "Foreign Investing"
at the front of this prospectus.
Because the fund is non-diversified, the fund may invest a relatively high
percentage of its assets in a limited number of issuers. Accordingly, the fund's
investment returns are more likely to be impacted by changes in the market value
and returns of any one portfolio holding.
Past performance
Because this is a new fund, it did not have a full calendar year of performance
to report as of the date of this prospectus.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
- --------------------------------------------------------------------------------
Shareholder fees: Fees paid directly from your investment.
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed 5.75% None None
on Purchases (as % of offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge None^(1) 4% 1%
(Load) (as % of redemption proceeds)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed None None None
on Reinvested Dividends/Distributions
- --------------------------------------------------------------------------------
Redemption Fee (as % of amount None None None
redeemed, if applicable)
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
Annual fund operating expenses: Expenses that are deducted from fund assets.
- --------------------------------------------------------------------------------
Management Fee 1.25% 1.25% 1.25%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None 0.75% 0.75%
- --------------------------------------------------------------------------------
Other Expenses 21.13% 22.06% 22.03%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 22.38% 24.06% 24.03%
- --------------------------------------------------------------------------------
Expense Reimbursement 20.10% 20.88% 20.88%
- --------------------------------------------------------------------------------
Net Annual Operating Expenses* 2.28% 3.18% 3.15%
- --------------------------------------------------------------------------------
* By contract, total annual fund operating expenses are capped at 2.28% for
Class A shares, 3.18% for Class B shares, and 3.15% for Class C shares
through February 29, 2000.
^(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% if redeemed within one year of purchase and 0.50% if
redeemed during the second year of purchase.
15
<PAGE>
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above
(including one year of capped expenses). It assumes a 5% annual return, the
reinvestment of all dividends and distributions and "annual fund operating
expenses" remaining the same each year. The example is hypothetical: actual fund
expenses and return vary from year to year, and may be higher or lower than
those shown.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $793 $721 $418
3 Years $4,406 $4,631 $4,326
5 Years $6,872 $7,158 $6,953
10 Years $10,134 $10,131 $10,214
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $793 $321 $318
3 Years $4,406 $4,331 $4,326
5 Years $6,872 $6,958 $6,953
10 Years $10,134 $10,131 $10,214
16
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KEMPER EMERGING MARKETS INCOME FUND
INVESTMENT OBJECTIVES
Kemper Emerging Markets Income Fund has dual investment objectives. The fund's
primary investment objective is to provide investors with high current income.
As a secondary investment objective, the fund seeks long-term capital
appreciation. Unless otherwise indicated, the fund's investment objectives and
policies may be changed without a vote of shareholders.
Main investment strategies
In pursuing its investment objectives, the fund invests primarily in
high-yielding debt securities issued by governments and corporations in emerging
markets.
The fund can invest entirely in high yield/high risk bonds (also called "junk"
bonds). The fund invests in lower quality securities of emerging market issuers,
some of which have defaulted in the past on certain of their financial
obligations. The fund's weighted average maturity may vary from period to
period.
In seeking high current income and, secondarily, long-term capital appreciation,
the fund invests, under normal market conditions, at least 65% of its total
assets in debt securities issued by governments, government-related entities and
corporations in emerging markets, or in debt securities, the return on which is
derived primarily from emerging markets.
The fund considers "emerging markets" to include any country that is defined as
an emerging or developing economy by any of the following: the International
Bank for Reconstruction and Development (i.e., the World Bank), the
International Finance Corporation or the United Nations or its authorities.
The investment manager may pursue investment opportunities in Asia, Africa,
Latin America, the Middle East and the developing countries of Europe, primarily
in Eastern Europe. The fund deems an issuer to be located in an emerging market
if:
o The issuer is organized under the laws of an emerging market country;
o The issuer's principal securities trading market is in an emerging market;
or
o At least 50% of the issuer's non-current assets, capitalization, gross
revenue or profit in any one of the two most recent fiscal years is derived
(directly or indirectly from subsidiaries) from assets or activities
located in emerging markets.
The portfolio manager seeks to buy securities of companies with good credit,
strong fundamentals and strong valuations, and conversely, to sell securities
which cannot meet these criteria.
17
<PAGE>
In an attempt to reduce or eliminate currency risk, the debt securities in which
the fund invests are exclusively U.S. dollar-denominated debt securities, or
foreign currency denominated debt securities that are fully hedged back into the
U.S. dollar.
Because the fund may engage in active and frequent trading of portfolio
securities, the fund may have higher transaction costs which would lower the
fund's performance over time. In addition, shareholders may incur taxes on any
realized capital gains.
Of course, there can be no guarantee that by following these investment
strategies, the fund will achieve its objective.
Other investments
To a more limited extent, the fund may, but not required to, invest in the
following:
The fund may invest up to 35% of its total assets in securities other than debt
obligations issued in emerging markets. These holdings include debt securities
and money market instruments issued by corporations and governments based in
developed markets.
The fund may invest up to 20% of its total assets in U.S. fixed income
instruments which may be below investment-grade.
The fund may acquire shares of closed-end investment companies that invest
primarily in emerging market debt securities.
The fund is authorized to borrow from banks and other entities in an amount
equal to up to 20% of the fund's total assets (including the amount borrowed),
less all liabilities and indebtedness other than the borrowing, and may use
proceeds of the borrowings for investment purposes. Borrowing creates leverage,
which is a speculative characteristic.
The fund may utilize other investments and investment techniques that may impact
fund performance, including, but not limited to options, futures and other
derivatives (financial instruments that derive their value from other securities
or commodities, or that are based on indices).
Risk management strategies
The fund may, but is not required to, use certain derivatives in an attempt to
manage risk. The use of certain derivatives could magnify losses.
The fund will not commit more than 40% of its total assets to issuers in a
single country.
For temporary defensive purposes, the fund may invest without limit in U.S. debt
securities, including short-term money market securities. In such a case, the
fund would not be pursuing, and may not achieve, its investment objective.
18
<PAGE>
Main risks
The fund's principal risks are associated with investing in the bond market, the
investment manager's skill in managing the fund's portfolio and foreign
securities. You will find a discussion of these risks under "Foreign Investing"
at the front of this prospectus.
The fund invests in emerging securities markets that may have substantially less
volume and are subject to less government supervision than U.S. securities
markets. Securities of many issuers in emerging markets may be less liquid and
more volatile than securities of comparable domestic issuers. In addition, there
is less regulation of securities exchanges, securities dealers, and listed and
unlisted companies in emerging markets than in the U.S.
Emerging markets have different clearance and settlement procedures, and in
certain markets there have been times when settlements have not kept pace with
the volume of securities transactions. Certain emerging markets require prior
governmental approval of the type and/or amount of investments by foreign
persons.
Issuers whose bonds are below investment-grade may be in impaired financial
condition and may be affected by stock market shifts. The prices of their bonds,
therefore, tend to change based on stock market movements to a greater degree
than investment-grade bond prices.
Because the fund is non-diversified, the fund may invest a relatively high
percentage of its assets in a limited number of issuers. Accordingly, the fund's
investment returns are more likely to be impacted by changes in the market value
and returns of any one portfolio holding.
The fund expects to trade securities actively. This strategy could increase
transaction costs and reduce performance.
19
<PAGE>
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by comparing the fund's performance to a broad measure of market
performance. Of course, past performance is not necessarily an indication of
future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART DATA:
- --------------------------------------------------------------------------------
-36.38%
1998
- --------------------------------------------------------------------------------
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 10.31% (the fourth quarter of 1998), and the fund's lowest
return for a calendar quarter was -38.46% (the second quarter of 1998).
Average Annual Total Returns
For periods ended JP Morgan
December 31, 1998 Class A Class B Class C EMBI+ Index
----------------- ------- ------- ------- -----------
One Year* -39.20% -38.78% -36.96% -14.35%
Five Years -- -- -- --
Ten Years -- -- -- --
- -----------
* Inception date for Class A, B and C shares is 12/31/97.
The unmanaged JP Morgan Emerging Markets Bond Index Plus (EMBI+) tracks total
returns for traded external debt instruments in the emerging markets. Included
in the index are U.S. dollar and other external-currency-denominated Brady
bonds, loans, Eurobonds, and local market instruments. Index returns assume
reinvestment of dividends and unlike the fund's returns, do not reflect any
fees, expenses or sales charges.
20
<PAGE>
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
- --------------------------------------------------------------------------------
Shareholder fees: Fees paid directly from your investment.
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) 4.5% None None
Imposed on Purchases (as % of
offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge None^(1) 4% 1%
(Load) (as % of redemption proceeds)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends/Distributions
- --------------------------------------------------------------------------------
Redemption Fee (as % of amount None None None
redeemed, if applicable)
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
Annual fund operating expenses: Expenses that are deducted from fund assets.
- --------------------------------------------------------------------------------
Management Fee 1.00% 1.00% 1.00%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None 0.75% 0.75%
- --------------------------------------------------------------------------------
Other Expenses 4.12% 5.00% 4.97%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 5.12% 6.75% 6.72%
- --------------------------------------------------------------------------------
Expense Reimbursement 3.44% 4.19% 4.19%
- --------------------------------------------------------------------------------
Net Annual Operating Expenses* 1.68% 2.56% 2.53%
- --------------------------------------------------------------------------------
* By contract, total annual fund operating expenses are capped at 1.68% for
Class A shares, 2.56% for Class B shares, and 2.53% for Class C shares
through February 29, 2000.
^(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% if redeemed within one year of purchase and 0.50% if
redeemed during the second year of purchase.
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above
(including one year of capped expenses). It assumes a 5% annual return, the
reinvestment of all dividends and distributions and "annual fund operating
expenses" remaining the same each year. The example is hypothetical: actual fund
expenses and return vary from year to year, and may be higher or lower than
those shown.
21
<PAGE>
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $613 $659 $356
3 Years $1,622 $1,918 $1,610
5 Years $2,629 $3,130 $2,917
10 Years $5,135 $5,484 $5,994
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $613 $259 $256
3 Years $1,622 $1,618 $1,610
5 Years $2,629 $2,930 $2,917
10 Years $5,135 $5,484 $5,994
22
<PAGE>
KEMPER GLOBAL BLUE CHIP FUND
INVESTMENT OBJECTIVE
Kemper Global Blue Chip Fund seeks long-term growth of capital. Unless otherwise
indicated, the fund's investment objective and policies may be changed without a
vote of shareholders.
Main investment strategies
The fund will pursue its investment objective through a diversified worldwide
portfolio of marketable securities, primarily equity securities, including
common stock, preferred stocks and debt securities convertible into common
stocks.
The fund will emphasize investments in common stocks of large, well known
companies. Companies of this general type are often referred to as "blue chip"
companies. "Blue Chip" companies are generally identified by their:
o substantial capitalization;
o established history of earnings and dividends;
o easy access to credit;
o good industry position; and
o superior management structure.
Global "blue chip" companies are believed to generally exhibit less investment
risk and less price volatility, on average, than companies lacking these
characteristics, such as smaller, less seasoned companies. In addition, the
large market of publicly held shares for such companies and the generally high
trading volume in those shares usually results in a relatively high degree of
liquidity for such investments.
In general, the fund will seek to invest in companies that the investment
manager believes will benefit from global economic trends, promising
technologies or products and specific country opportunities resulting from
changing geopolitical, currency or economic relationships. The fund will also
invest in companies which possess attractive valuations.
A stock is typically sold when, in the opinion of the portfolio manager, (i) it
no longer has favorable fundamentals or valuations and (ii) it is not expected
to benefit from long-term changes in the global economy.
The fund will invest primarily in developed markets. The fund may be invested
100% in non-U.S. issuers, although under normal circumstances, it is expected
that both foreign and U.S. investments will be represented in the fund's
portfolio.
23
<PAGE>
Of course, there can be no guarantee that by following these investment
strategies, the fund will achieve its objective.
Other investments
To a more limited extent, the fund may, but is not required to, invest in the
following:
The fund may invest up to 15% of its total assets in debt or equity securities
of developing or emerging markets. The fund may invest in closed-end investment
companies that invest primarily in emerging market debt securities.
The fund may invest in securities traded over-the-counter. The fund may invest
in high-quality debt securities with credit ratings of Aaa/AAA through Baa/BBB
(and their unrated equivalents) of U.S. and foreign issuers. The fund may also
invest up to 5% of its total assets in debt securities rated Baa/BBB or below
(and their unrated equivalents), often referred to as "junk" bonds of U.S. and
foreign issuers.
The fund may utilize other investments and investment techniques that may impact
fund performance, including, but not limited to, options, futures and other
derivatives (financial instruments that derive their value from other securities
or commodities, or that are based on indices).
Risk management strategies
The fund may, but is not required to, use certain derivatives in an attempt to
manage risk. The use of certain derivatives could magnify losses.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in U.S. issues, high-grade debt securities, cash and cash equivalents. In such a
case, the fund would not be pursuing, and may not achieve, its investment
objective.
Main risks
The fund's principal risks are associated with investing in the stock market,
the investment manager's skill in managing the fund's portfolio and foreign
securities. You will find a discussion of these risks under "Foreign Investing"
at the front of this prospectus.
Convertible debt securities in which the fund may invest are subject to some of
the same interest rate risk as bonds; that is, their prices tend to drop when
interest rates rise.
24
<PAGE>
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by comparing the fund's performance to a broad measure of market
performance. Of course, past performance is not necessarily an indication of
future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART DATA:
- --------------------------------------------------------------------------------
13.79%
1998
- --------------------------------------------------------------------------------
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 10.32% (the first quarter of 1998), and the fund's lowest
return for a calendar quarter was -8.00% (the third quarter of 1998).
Average Annual Total Returns
For periods ended
December 31, 1998 Class A Class B Class C MSCI World Index
----------------- ------- ------- ------- ----------------
One Year* 7.24% 9.63% 12.84% 24.80%
Five Years -- -- -- --
Ten Years -- -- -- --
- -----------
* Inception date for Class A, B and C shares is 12/31/97.
The MSCI (Morgan Stanley Capital International) World Index measures performance
of a range of developed country general stock markets, including the United
States, Canada, Europe, Australia, New Zealand and the Far East. Index returns
assume reinvestment of dividends and unlike the fund's returns, do not reflect
any fees, expenses or sales charges.
25
<PAGE>
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
- --------------------------------------------------------------------------------
Shareholder fees: Fees paid directly from your investment.
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) 5.75% None None
Imposed on Purchases (as % of
offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge None^(1) 4% 1%
(Load) (as % of redemption proceeds)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends/Distributions
- --------------------------------------------------------------------------------
Redemption Fee (as % of amount None None None
redeemed, if applicable)
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
Annual fund operating expenses: Expenses that are deducted from fund assets.
- --------------------------------------------------------------------------------
Management Fee 1.00% 1.00% 1.00%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None 0.75% 0.75%
- --------------------------------------------------------------------------------
Other Expenses 5.06% 5.94% 5.91%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 6.06% 7.69% 7.66%
- --------------------------------------------------------------------------------
Expense Reimbursement 4.26% 5.01% 5.01%
- --------------------------------------------------------------------------------
Net Annual Operating Expenses* 1.80% 2.68% 2.65%
- --------------------------------------------------------------------------------
* By contract, total annual fund operating expenses are capped at 1.80% for
Class A shares, 2.68% for Class B shares, and 2.65% for Class C shares
through February 29, 2000.
^(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% if redeemed within one year of purchase and 0.50% if
redeemed during the second year of purchase.
26
<PAGE>
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above
(including one year of capped expenses). It assumes a 5% annual return, the
reinvestment of all dividends and distributions and "annual fund operating
expenses" remaining the same each year. The example is hypothetical: actual fund
expenses and return vary from year to year, and may be higher or lower than
those shown.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $747 $671 $368
3 Years $1,914 $2,103 $1,795
5 Years $3,056 $3,453 $3,241
10 Years $5,806 $6,068 $6,534
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $747 $271 $268
3 Years $1,914 $1,803 $1,795
5 Years $3,056 $3,253 $3,241
10 Years $5,806 $6,068 $6,534
27
<PAGE>
KEMPER GLOBAL DISCOVERY FUND*
* Kemper Global Discovery Fund refers to the Kemper shares of Global
Discovery Fund which are offered through this prospectus.
INVESTMENT OBJECTIVE
The fund pursues above-average capital appreciation over the long term. Unless
otherwise indicated, the fund's investment objective and strategies may be
changed without a vote of shareholders.
Main investment strategies
The fund invests primarily in a diversified portfolio of equity securities of
small rapidly growing companies throughout the world that the fund's management
believes offer the potential for above-average returns relative to large
companies, yet are frequently overlooked, and thus, undervalued by the market.
Under normal circumstances the fund invests at least 65% of its total assets in
the equity securities of small companies. These companies are similar in size to
the smallest 20% of world market capitalization as represented by the Salomon
Brothers Broad Market Index - typically these companies have a market value of
between approximately $50 million and $2 billion. However, the fund may invest
in companies with smaller market values. Under current market conditions, the
median market capitalizations of the companies in which the fund invests are not
expected to exceed $750 million.
The fund may invest in any region of the world. It can invest in the securities
of companies based in emerging markets, typically in the Far East, Latin America
and lesser developed countries in Europe, as well as in companies operating in
developed economies, such as some of those of the United States, Japan and
Western Europe. The fund intends to allocate investments among at least three
countries at all times, one of which may be the United States.
The fund's investment manager determines which securities to invest in by
evaluating potential investments from both a macroeconomic and microeconomic
perspective, using fundamental analysis, including field research. The fund's
investment manager determines which securities to sell by using the same
criteria. In evaluating the growth potential and relative value of a possible
investment, the investment manager considers many factors, including, among
other things:
o the depth and quality of management;
o a company's product line, business strategy and competitive position;
o research and development efforts;
o financial strength, including degree of leverage;
o cost structure;
o revenue and earnings growth potential;
o price-to-earnings ratios and other stock valuation measures; and
o the attractiveness of the country and region in which a company is located.
Of course, there can be no guarantee that by following these investment
strategies, the fund will achieve its objective.
28
<PAGE>
Other investments
To a more limited extent, the fund may, but is not required to, invest in the
following:
The fund may invest up to 35% of its total assets in (i) equity securities of
larger companies located throughout the world and in (ii) debt securities if the
fund's investment adviser determines that the capital appreciation of debt
securities is likely to exceed the capital appreciation of equity securities.
The fund may purchase investment-grade bonds, those rated Aaa, Aa, A, Baa/AAA,
AA, A, BBB. The fund may also invest up to 5% of its net assets in debt
securities rated below investment-grade.
The fund may utilize other investments and investment techniques that may impact
fund performance, including, but not limited to, options, futures and other
derivatives (financial instruments that derive their value from other securities
or commodities, or that are based on indices).
Risk management strategies
The fund may, but is not required to, use certain derivatives in an attempt to
manage risk. The use of certain derivatives could magnify losses.
For temporary defensive purposes, the fund may invest without limit in cash and
cash equivalents. In such a case, the fund would not be pursuing, and may not
achieve, its investment objective.
Main risks
The fund's principal risks are associated with investing in the stock market,
the investment manager's skill in managing the fund's portfolio and foreign
securities, primarily global small company stocks. You will find a discussion of
these risks under "Foreign Investing" at the front of this prospectus.
In pursuit of higher investment returns, this fund may incur greater risks and
more dramatic fluctuations in value than a fund that invests in stocks of larger
companies. The inherent business characteristics and risks of small companies
include such things as untested management, key personnel with varying degrees
of experience, less diversified product lines and weaker financial positions.
Also, small companies tend to have less predictable earnings and less liquid
securities than more established companies.
29
<PAGE>
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance. Because
Classes A, B and C commenced operations during the course of 1998, the
performance information set forth below is for Class S shares. It does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART DATA:
- --------------------------------------------------------------------------------
- -0.07% 38.18% -7.68% 17.84% 21.47% 9.93% 16.43%
1992 1993 1994 1995 1996 1997 1998
- --------------------------------------------------------------------------------
The fund currently offers four classes of shares. This prospectus sets forth
information about classes A, B and C. The original class of shares is designated
as Class S, and is not offered in this prospectus. All share classes invest in
the same underlying portfolio of securities and have the same management team.
Because of different fees and expenses, performance of share classes will
differ. Otherwise, the share classes will have substantially similar returns.
For the periods included in the bar chart, the fund's highest return for a
calendar quarter was 20.25% (the fourth quarter of 1998), and the fund's lowest
return for a calendar quarter was -16.62% (the third quarter of 1998).
Average annual total returns
Salomon Brothers
For periods ended Global World Equity
December 31, 1998 Discovery Fund Extended Market Index
- --------------------------------------------------------------------------------
One Year 16.43% 5.93%
Five Years 11.08% 9.24%
Since Inception (9/10/91) 12.83% 10.18%*
- --------------------------------------------------------------------------------
* Index comparison begins August 31, 1991.
30
<PAGE>
The Salomon Brothers World Equity Extended Market Index is an unmanaged small
capitalization stock universe of 22 countries. Index returns assume reinvestment
of dividends and, unlike fund returns, do not reflect any fees or expenses.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
- --------------------------------------------------------------------------------
Shareholder fees: Fees paid directly from your investment.
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) 5.75% None None
Imposed on Purchases (as % of
offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge None^(1) 4% 1%
(Load) (as % of redemption proceeds)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends/Distributions
- --------------------------------------------------------------------------------
Redemption Fee (as % of amount None None None
redeemed, if applicable)
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
Annual fund operating expenses: Expenses that are deducted from fund assets.
- --------------------------------------------------------------------------------
Management Fee 1.10% 1.10% 1.10%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None 0.75% 0.75%
- --------------------------------------------------------------------------------
Other Expenses 1.10% 1.28% 1.38%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 2.20% 3.13% 3.23%
- --------------------------------------------------------------------------------
Expense Reimbursement 0.25% 0.30% 0.44%
- --------------------------------------------------------------------------------
Net Annual Operating Expenses* 1.95% 2.83% 2.79%
- --------------------------------------------------------------------------------
* By contract, total annual fund operating expenses are capped at 1.95% for
Class A shares, 2.83% for Class B shares, and 2.79% for Class C shares
through February 29, 2000.
^(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% if redeemed within one year of purchase and 0.50% if
redeemed during the second year of purchase.
31
<PAGE>
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above
(including one year of capped expenses). It assumes a 5% annual return, the
reinvestment of all dividends and distributions and "annual fund operating
expenses" remaining the same each year. The example is hypothetical: actual fund
expenses and return vary from year to year, and may be higher or lower than
those shown.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $762 $686 $383
3 Years $1,202 $1,238 $955
5 Years $1,665 $1,814 $1,651
10 Years $2,945 $3,004 $3,502
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $762 $286 $283
3 Years $1,202 $938 $955
5 Years $1,665 $1,614 $1,651
10 Years $2,945 $3,004 $3,502
32
<PAGE>
KEMPER GLOBAL INCOME FUND
INVESTMENT OBJECTIVE
Kemper Global Income Fund seeks to provide high current income consistent with
prudent total return asset management. Unless otherwise indicated, the fund's
investment objective and policies may be changed without a vote of shareholders.
Main investment strategies
The fund seeks to achieve its investment objective by investing primarily in
investment grade foreign and domestic fixed income securities. In managing the
fund's portfolio to provide a high level of current income, the investment
manager also seeks to protect net asset value and to provide investors with a
total return, which is measured by changes in net asset value as well as income
earned. The fund's weighted average maturity may vary from period to period.
The fund may invest in securities issued by any issuer and in any currency and
may hold foreign currency. Under normal market conditions, the fund will invest
at least 65% of its assets in the securities of issuers located in at least
three countries, one of which may be the United States. It is currently
anticipated that the fund's assets will be invested principally within
Australia, Canada, Japan, New Zealand, the United States, and Western Europe,
and in securities denominated in the currencies of these countries or
denominated in multinational currency units, such as the Euro.
In managing the fund's portfolio in an effort to reduce volatility and increase
returns, the fund may allocate its assets among securities of various issuers,
geographic regions, and currency denominations in a manner that is consistent
with its investment objective based upon the following:
o relative interest rates among currencies;
o the outlook for changes in these interest rates; and
o anticipated changes in worldwide exchange rates.
In considering these factors, a country's economic and political state,
including such factors as inflation rate, growth prospects, global trade
patterns and government policies, will be evaluated.
The fund will buy and sell its investments on the basis of, among other things,
various economic fundamentals, including inflation rates, interest rates and
exchange rates.
33
<PAGE>
Because the fund may engage in active and frequent trading of portfolio
securities, the fund may have higher transaction costs which would lower the
fund's performance over time. In addition, shareholders may incur taxes on any
realized capital gains.
Of course, there can be no guarantee that by following these investment
strategies, the fund will achieve its objective.
Other investments
To a more limited extent, the fund may, but is not required to, utilize other
investments and investment techniques that may impact fund performance,
including, but not limited to, options, futures and other derivatives (financial
instruments that derive their value from other securities or commodities, or
that are based on indices).
Risk management strategies
The fund may, but is not required to, use certain derivatives in an attempt to
manage risk. The use of certain derivatives could magnify losses.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in high-grade debt securities, cash and cash equivalents. In such a case, the
fund would not be pursuing, and may not achieve, its investment objective.
Main risks
The fund's principal risks are associated with investing in the bond market, the
investment manager's skill in managing the fund's portfolio and foreign
securities. You will find a discussion of these risks under "Foreign Investing"
at the front of this prospectus.
Because the fund is non-diversified, the fund may invest a relatively high
percentage of its assets in a limited number of issuers. Accordingly, the fund's
investment returns are more likely to be impacted by changes in the market value
and returns of any one portfolio holding.
The fund expects to trade securities actively. This strategy could increase
transaction costs and reduce performance.
34
<PAGE>
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART DATA:
<TABLE>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
22.66% 11.13% -1.90% 10.23% -1.47% 19.88% 5.87 1.81 10.48%
1990 1991 1992 1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------
</TABLE>
For the periods included in the bar chart, the fund's highest return for a
calendar quarter was 11.23% (the first quarter of 1995), and the fund's lowest
return for a calendar quarter was -4.32% (the first quarter of 1992).
Average annual total returns
For periods ended SB World Government
December 31, 1998 Class A Class B Class C Bond Index
----------------- ------- ------- ------- ----------
One Year 5.56% 6.56% 9.72% 6.92%
Five Years 6.08% -- -- 7.34%
Ten Years -- -- -- --
Since Class 8.21% 7.49% 7.93% *
Inception**
- -----------
* Index returns for the life of each class: 9.57% (10/1/89) for Class A
shares and 8.77% (5/31/94) for Class B and C shares.
** Inception dates for Class A, B and C shares are 10/1/89, 5/31/94 and
5/31/94, respectively.
35
<PAGE>
The Salomon Smith Barney World Government Bond Index is an unmanaged index
comprised of government bonds from eighteen countries (United States, Japan,
United Kingdom, Germany, France, Canada, the Netherlands, Australia,
Switzerland, Denmark, Austria, Belgium, Finland, Ireland, Italy, Portugal, Spain
and Sweden) with maturities greater than one year. Index returns assume
reinvestment of dividends and, unlike fund returns, do not reflect any fees,
expenses or sales charges.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
- --------------------------------------------------------------------------------
Shareholder fees: Fees paid directly from your investment.
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) 4.5% None None
Imposed on Purchases (as % of
offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge None^(1) 4% 1%
(Load) (as % of redemption proceeds)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends/Distributions
- --------------------------------------------------------------------------------
Redemption Fee (as % of amount None None None
redeemed, if applicable)
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
Annual fund operating expenses: Expenses that are deducted from fund assets.
- --------------------------------------------------------------------------------
Management Fee 0.75% 0.75% 0.75%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None 0.75% 0.75%
- --------------------------------------------------------------------------------
Other Expenses 0.83% 0.82% 0.63%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.58% 2.32% 2.13%
- --------------------------------------------------------------------------------
^(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% if redeemed within one year of purchase and 0.50% if
redeemed during the second year of purchase.
36
<PAGE>
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions
and "annual fund operating expenses" remaining the same each year. The example
is hypothetical: actual fund expenses and return vary from year to year, and may
be higher or lower than those shown.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $603 $635 $316
3 Years $926 $1,024 $667
5 Years $1,272 $1,440 $1,144
10 Years $2,244 $2,302 $2,462
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $603 $235 $216
3 Years $926 $724 $667
5 Years $1,272 $1,240 $1,144
10 Years $2,244 $2,302 $2,462
37
<PAGE>
KEMPER INTERNATIONAL FUND
INVESTMENT OBJECTIVE
Kemper International Fund seeks total return, a combination of capital growth
and income. Unless otherwise indicated, the fund's investment objective and
policies may be changed without a vote of shareholders.
Main investment strategies
In pursuing its investment objective, the fund invests primarily in common
stocks of established non-U.S. companies believed to have potential for capital
growth, income or both.
There is no limitation on the percentage or amount of the fund's assets that may
be invested in growth or income, and therefore at any particular time the
investment emphasis may be placed solely or primarily on growth of capital or on
income. In determining whether the fund will be invested for capital growth or
income, the investment manager analyzes the international equity and fixed
income markets and seeks to assess the degree of risk and level of return that
can be expected from each market.
The fund invests primarily in non-U.S. issuers, and under normal circumstances
more than 80% of the fund's total assets will be invested in non-U.S. issuers.
From time to time, the fund may have more than 25% of its assets invested in any
major industrial or developed country which in the view of the investment
manager poses no unique investment risk.
In determining the appropriate distribution of investments among various
countries and geographic regions, the investment manager ordinarily considers
the following factors, among other things:
o prospects for relative economic growth among foreign countries;
o expected levels of inflation;
o relative price levels of the various capital markets;
o government policies influencing business conditions;
o the outlook for currency relationships; and
o the range of individual investment opportunities available to the
international investor.
In selecting its investments, the fund will look for companies with (i) strong
earnings growth, (ii) clean balance sheets, (iii) strong management and (iv)
increasing revenue. The fund will also look for previously unmanaged companies
which are undergoing a turnaround as a result of new management, product focus
or balance sheet restructuring.
38
<PAGE>
A stock is typically sold when the stock (i) has reached a predetermined value,
(ii) the company's fundamentals have deteriorated, and (iii) the company
deviates from a previously demonstrated business plan.
Because the fund may engage in active and frequent trading of portfolio
securities, the fund may have higher transaction costs which would lower the
fund's performance over time. In addition, shareholders may incur taxes on any
realized capital gains.
Of course, there can be no guarantee that by following these investment
strategies, the fund will achieve its objective.
Other investments
To a more limited extent, the fund may, but is not required to, invest in the
following:
The fund may invest in debt securities that can be converted into common stocks,
also known as convertibles. The fund may also invest in debt securities,
preferred stocks, bonds, notes and other debt securities of companies and
futures contracts.
The fund may utilize other investments and investment techniques that may impact
fund performance, including, but not limited to, options, futures and other
derivatives (financial instruments that derive their value from other securities
or commodities, or that are based on indices).
Risk management strategies
The fund may, but is not required to, use certain derivatives in an attempt to
manage risk. The use of certain derivatives could magnify losses.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in U.S. Government obligations or securities of companies incorporated in and
having their principal activities in the United States. In such cases, the fund
would not be pursuing, and may not achieve, its investment objective.
The fund may also establish and maintain reserves for defensive purposes and to
enable the fund to take advantage of buying opportunities. The fund's reserves
may be invested in domestic as well as foreign short-term money market
instruments.
Main risks
The fund's principal risks are associated with investing in the stock market,
the investment manager's skill in managing the fund's portfolio and foreign
securities. You will find a discussion of these risks under "Foreign Investing"
at the front of this prospectus.
The fund expects to trade securities actively. This strategy could increase
transaction costs and reduce performance.
39
<PAGE>
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART DATA:
<TABLE>
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
18.57% -7.50% 9.13% -4.79% 35.65% -4.00% 12.96% 17.05% 9.00% 7.88%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- --------------------------------------------------------------------------------------------------------------
</TABLE>
For the periods included in the bar chart, the fund's highest return for a
calendar quarter was 14.53% (the fourth quarter of 1998), and the fund's lowest
return for a calendar quarter was -17.89% (the third quarter of 1998).
Average Annual Total Returns
For periods ended
December 31, 1998 Class A Class B Class C MSCI EAFE Index
- ----------------- ------- ------- ------- ---------------
One Year 1.65% 4.05% 6.79% 20.33%
Five Years 7.07% -- -- 9.50%
Ten Years 8.08% -- -- 5.85%
Since Class 11.92% 8.29% 8.63% *
Inception**
- -----------
* Index returns for the life of each class: 14.02% (5/31/81) for Class A
shares and 8.71% (5/31/94) for Class B and C shares.
** Inception date for the Class A shares is 5/21/81 and Class B and C shares
is 5/31/94.
40
<PAGE>
The EAFE Index (Morgan Stanley Capital International Europe, Austral-Asia, Far
East Index) is a generally accepted benchmark for performance of major overseas
markets. Index returns assume reinvestment of dividends and, unlike fund
returns, do not reflect any fees, expenses or sales charges.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
- --------------------------------------------------------------------------------
Shareholder fees: Fees paid directly from your investment.
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) 5.75% None None
Imposed on Purchases (as % of
offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge None(1) 4% 1%
(Load) (as % of redemption proceeds)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends/Distributions
- --------------------------------------------------------------------------------
Redemption Fee (as % of amount None None None
redeemed, if applicable)
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
Annual fund operating expenses: Expenses that are deducted from fund assets.
- --------------------------------------------------------------------------------
Management Fee 0.73% 0.73% 0.73%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None 0.75% 0.75%
- --------------------------------------------------------------------------------
Other Expenses 0.91% 1.14% 1.07%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.64% 2.62% 2.55%
- --------------------------------------------------------------------------------
(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% if redeemed within one year of purchase and 0.50% if
redeemed during the second year of purchase.
41
<PAGE>
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions
and "annual fund operating expenses" remaining the same each year. The example
is hypothetical: actual fund expenses and return vary from year to year, and may
be higher or lower than those shown.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $732 $665 $358
3 Years $1,063 $1,114 $794
5 Years $1,415 $1,590 $1,355
10 Years $2,407 $2,496 $2,885
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $732 $265 $258
3 Years $1,063 $814 $794
5 Years $1,415 $1,390 $1,355
10 Years $2,407 $2,496 $2,885
42
<PAGE>
KEMPER INTERNATIONAL GROWTH AND
INCOME FUND
INVESTMENT OBJECTIVE
Kemper International Growth And Income Fund seeks long-term growth of capital
and current income. Unless otherwise indicated, the fund's investment objective
and policies may be changed without a vote of shareholders.
Main investment strategies
The fund seeks to achieve its investment objective by investing primarily in
foreign equity securities. The fund invests generally in common stocks of
established companies listed on foreign exchanges, which offer prospects for
growth of earnings while paying relatively high current dividends.
At least 80% of the fund's net assets will normally be invested in the equity
securities of established non-U.S. companies. The fund focuses its investments
on the developed foreign countries included in the Morgan Stanley Capital
International World ex-US Index.
Stocks are selected for the fund using a disciplined, multi-part investment
approach with four stages as follows:
o Stage 1: The investment manager analyzes the pool of dividend-paying
foreign securities, primarily from the world's more mature markets,
targeting stocks that have high relative yields compared to the average for
their markets.
o Stage 2: The investment manager identifies what it believes are the most
promising stocks for the fund's portfolio.
o Stage 3: The investment manager diversifies the fund's portfolio among
different industry sectors.
o Stage 4: The investment manager diversifies the fund's portfolio among
different countries.
A stock is typically sold when a company's dividend yield reaches a
predetermined level versus the market yield. A stock is also sold when, in the
opinion of the portfolio manager, a company's financial situation begins to
deteriorate, especially through the assumption of large amounts of debt.
Of course, there can be no guarantee that by following these investment
strategies, the fund will achieve its objective.
43
<PAGE>
Other investments
To a more limited extent, the fund may, but is not required to, invest in the
following:
Under normal conditions, the fund may also invest up to 20% of its net assets in
debt securities convertible into common stock and fixed income securities of
governments, governmental agencies, supranational agencies and private issuers
when the investment manager believes the potential for appreciation and income
will equal or exceed that available from investments in equity securities. These
securities will predominantly be "investment grade" securities which are those
rated Aaa/AAA through Baa/BBB (and their unrated equivalents).
The fund may utilize other investments and investment techniques that may impact
fund performance, including, but not limited to, options, futures and other
derivatives (financial instruments that derive their value from other securities
or commodities, or that are based on indices).
Risk management strategies
The fund may, but is not required to, use certain derivatives in an attempt to
manage risk. The use of certain derivatives could magnify losses.
For temporary defensive purposes, the fund may invest without limit in cash and
cash equivalents which may include domestic and foreign money market
instruments, short-term government and corporate obligations and repurchase
agreements. The fund may also hold up to 20% of its net assets in the U.S. and
foreign fixed income securities for temporary defensive purposes. In such cases,
the fund would not be pursuing, and may not achieve, its investment objective.
Main risks
The fund's principal risks are associated with investing in the stock market,
the investment manager's skill in managing the fund's portfolio and foreign
securities. You will find a discussion of these risks under "Foreign Investing"
at the front of this prospectus.
44
<PAGE>
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by comparing the fund's performance to a broad measure of market
performance. Of course, past performance is not necessarily an indication of
future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART DATA:
- --------------------------------------------------------------------------------
8.94%
1998
- --------------------------------------------------------------------------------
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 14.21% (the first quarter of 1998), and the fund's lowest
return for a calendar quarter was -16.55% (the third quarter of 1998).
Average Annual Total Returns
For periods ended MSCI EAFE+Canada
December 31, 1998 Class A Class B Class C Index
----------------- ------- ------- ------- -----
One Year* 2.67% 5.03% 8.04% 19.11%
Five Years -- -- -- --
Ten Years -- -- -- --
- -----------
* Inception date for Class A, B and C shares is 12/31/97.
The Morgan Stanley Capital International World+Canada Index is an unmanaged
index of global stock markets, excluding the U.S. Index returns assume
reinvestment of dividends and, unlike fund returns, do not reflect any fees,
expenses or sales charges.
45
<PAGE>
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
- --------------------------------------------------------------------------------
Shareholder fees: Fees paid directly from your investment.
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) 5.75% None None
Imposed on Purchases (as % of
offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge None^(1) 4% 1%
(Load) (as % of redemption proceeds)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends/Distributions
- --------------------------------------------------------------------------------
Redemption Fee (as % of amount None None None
redeemed, if applicable)
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
Annual fund operating expenses: Expenses that are deducted from fund assets.
- --------------------------------------------------------------------------------
Management Fee 1.00% 1.00% 1.00%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None 0.75% 0.75%
- --------------------------------------------------------------------------------
Other Expenses 12.58% 13.46% 13.43%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 13.58% 15.21% 15.18%
- --------------------------------------------------------------------------------
Expense Reimbursement 11.77% 12.52% 12.52%
- --------------------------------------------------------------------------------
Net Annual Operating Expenses* 1.81% 2.69% 2.66%
- --------------------------------------------------------------------------------
* By contract, total annual fund operating expenses are capped at 1.81% for
Class A shares, 2.69% for Class B shares, and 2.66% for Class C shares
through February 29, 2000.
^(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% if redeemed within one year of purchase and 0.50% if
redeemed during the second year of purchase.
46
<PAGE>
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above
(including one year of capped expenses). It assumes a 5% annual return, the
reinvestment of all dividends and distributions and "annual fund operating
expenses" remaining the same each year. The example is hypothetical: actual fund
expenses and return vary from year to year, and may be higher or lower than
those shown.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $748 $672 $369
3 Years $3,168 $3,375 $3,068
5 Years $5,190 $5,534 $5,326
10 Years $8,910 $9,021 $9,242
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $748 $272 $269
3 Years $3,168 $3,075 $3,068
5 Years $5,190 $5,334 $5,326
10 Years $8,910 $9,021 $9,242
47
<PAGE>
KEMPER LATIN AMERICA FUND
INVESTMENT OBJECTIVE
Kemper Latin America Fund seeks long-term capital appreciation. Unless otherwise
indicated, the fund's investment objective and policies may be changed without a
vote of shareholders.
Main investment strategies
The fund pursues its investment objective by investing at least 65% of its total
assets in Latin American equity securities. Latin America is defined as Mexico,
Central America, South America and the islands of the Caribbean.
The fund defines securities of Latin American issuers as follows:
o securities of companies organized under the laws of a Latin American
country or for which the principal trading market is in Latin America;
o securities issued or guaranteed by the government of a Latin American
country, its agencies or instrumentalities, political subdivisions or the
central bank of such country;
o securities of companies, wherever organized, when at least 50% of an
issuer's non-current assets, capitalization, gross revenue or profit in any
one of the two most recent fiscal years represents assets or activities
located in Latin America; or
o securities of Latin American issuers, as defined above, in the form of
depositary shares.
In managing its portfolio, the investment manager seeks out investment
opportunities created from changing economic and political trends in Latin
America. These trends are supported by governmental initiatives designed to
promote freer trade and market-oriented economies. The investment manager
believes that active management, based on disciplined fundamental research, will
yield promising investment opportunities for long-term capital appreciation.
In selecting companies for investment, the investment manager typically
evaluates, among other things, industry trends, a company's financial strength,
its competitive position in domestic and export markets, technology, recent
developments and profitability, together with overall growth prospects. Other
considerations generally include quality and depth of management, governmental
regulation, and availability and cost of labor and raw materials.
A stock is typically sold when, in the opinion of the portfolio manager, the
stock no longer falls within certain valuation parameters.
Presently, the fund expects to focus its investments in Argentina, Brazil,
Chile, Colombia, Mexico and Peru. However, the fund may invest in other
countries in Latin America when the investment manager deems it appropriate.
48
<PAGE>
Of course, there can be no guarantee that by following these investment
strategies, the fund will achieve its objective.
Other investments
To a more limited extent, the fund may, but is not required to, invest in the
following:
The fund may invest in debt securities when the investment manager determines
that the capital appreciation of debt securities is likely to equal or exceed
that of equity securities. The fund may also invest in debt securities which are
rated below investment grade (commonly referred to as "junk bonds").
In addition, the fund may invest up to 35% of its total assets in the equity
securities of U.S. and other non-Latin American issuers. In evaluating non-Latin
American investments, the investment manager generally seeks investments where
an issuer's Latin American business activities and the impact of developments in
Latin America may have a positive and significant effect on the issuer's
business results.
The fund may invest in closed-end investment companies investing primarily in
Latin America.
The fund may utilize other investments and investment techniques that may impact
fund performance, including, but not limited to, options, futures and other
derivatives (financial instruments that derive their value from other securities
or commodities, or that are based on indices).
Risk management strategies
The fund may, but is not required to, use certain derivatives in an attempt to
manage risk. The use of certain derivatives could magnify losses.
For temporary defensive purposes, the fund may invest without limit in cash or
cash equivalents and money market instruments, or invest all or a portion of its
assets in securities of U.S. or other non-Latin American issuers. In such a
case, the fund would not be pursuing, and may not achieve, its investment
objective.
Main risks
The fund's principal risks are associated with investing in the stock market,
the investment manager's skill in managing the fund's portfolio and foreign
securities. You will find a discussion of these risks under "Foreign Investing"
at the front of this prospectus.
The fund invests primarily in one geographic region. Common economic forces and
other factors may affect investments in a single region, even though a number of
different countries within a region may be represented within the fund. Factors
affecting Latin American investments may present a greater risk to the fund than
investments in a more geographically diversified fund.
Because the fund is non-diversified, the fund may invest a relatively high
percentage of its assets in a limited number of issuers. Accordingly, the fund's
investment returns are more likely to be impacted by changes in the market value
and returns of any one portfolio holding.
49
<PAGE>
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART DATA:
- --------------------------------------------------------------------------------
-24.32%
1998
- --------------------------------------------------------------------------------
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 7.14% (the fourth quarter of 1998), and the fund's lowest
return for a calendar quarter was -19.35% (the third quarter of 1998).
Average Annual Total Returns
IFC Latin America
For periods ended Investable
December 31, 1998 Class A Class B Class C Return Index
- ----------------- ------- ------- ------- ------------
One Year* -28.68% -27.20% -25.05% -38.10%
Five Years -- -- -- --
Ten Years -- -- -- --
- -----------
* Inception date for Class A, B and C shares is 12/31/97.
The IFC Latin America Investable Return Index is prepared by the International
Finance Corporation. It is an unmanaged, market capitalization-weighted
representation of stock performance in seven Latin American markets, and
measures the returns of stocks that are legally and practically available to
investors. Index returns assume reinvestment of dividends and, unlike fund
returns, do not reflect any fees, expenses or sales charges.
50
<PAGE>
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
- --------------------------------------------------------------------------------
Shareholder fees: Fees paid directly from your investment.
- --------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) 5.75% None None
Imposed on Purchases (as % of
offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge None^(1) 4% 1%
(Load) (as % of redemption proceeds)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) None None None
Imposed on Reinvested
Dividends/Distributions
- --------------------------------------------------------------------------------
Redemption Fee (as % of amount None None None
redeemed, if applicable)
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------
Annual fund operating expenses: Expenses that are deducted from fund assets
- --------------------------------------------------------------------------------
Management Fee 1.25% 1.25% 1.25%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fee None 0.75% 0.75%
- --------------------------------------------------------------------------------
Other Expenses 11.50% 12.38% 12.34%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 12.75% 14.38% 14.34%
- --------------------------------------------------------------------------------
Expense Reimbursement 10.56% 11.31% 11.30%
- --------------------------------------------------------------------------------
Net Annual Operating Expenses* 2.19% 3.07% 3.04%
- --------------------------------------------------------------------------------
* By contract, total annual fund operating expenses are capped at 2.19% for
Class A shares, 3.07% for Class B shares, and 3.04% for Class C shares
through February 29, 2000.
^(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% if redeemed within one year of purchase and 0.50% if
redeemed during the second year of purchase.
51
<PAGE>
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above
(including one year of capped expenses). It assumes a 5% annual return, the
reinvestment of all dividends and distributions and "annual fund operating
expenses" remaining the same each year. The example is hypothetical: actual fund
expenses and return vary from year to year, and may be higher or lower than
those shown.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $786 $712 $409
3 Years $3,069 $3,274 $2,966
5 Years $5,011 $5,361 $5,150
10 Years $8,694 $8,819 $9,056
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $786 $312 $309
3 Years $3,069 $2,974 $2,966
5 Years $5,011 $5,161 $5,150
10 Years $8,694 $8,819 $9,056
52
<PAGE>
INVESTMENT MANAGER
Each fund retains the investment management firm of Scudder Kemper Investments,
Inc., 345 Park Avenue, New York, New York, to manage its daily investment and
business affairs subject to the policies established by the funds' Boards.
Scudder Kemper Investments, Inc. actively manages the funds' investments.
Professional management can be an important advantage for investors who do not
have the time or expertise to invest directly in individual securities. Scudder
Kemper Investments, Inc. is one of the largest and most experienced investment
management organizations worldwide, managing more than $290 billion in assets
globally for mutual fund investors, retirement and pension plans, institutional
and corporate clients, and private family and individual accounts.
Each fund pays the investment manager a (graduated) monthly investment
management fee. Fees paid for each fund's most recently completed fiscal year
are shown below:
As a % of average
daily net assets
----------------
Growth Fund Of Spain 0.75%
Kemper Asian Growth Fund* 0.00%
Kemper Emerging Markets Growth Fund* 0.00%
Kemper Emerging Markets Income Fund* 0.00%
Kemper Global Blue Chip Fund* 0.00%
Global Discovery Fund 1.10%
Kemper Global Income Fund 0.75%
Kemper International Fund 0.75%
Kemper International Growth And Income Fund* 0.00%
Kemper Latin America Fund* 0.00%
* Reflecting the effect of expense limitations and/or fee waivers then in
effect.
53
<PAGE>
The Advisor, the Principal Underwriter, Kemper Distributors, Inc., the
Shareholder Service Agent, Kemper Service Company, and the Accounting Agent,
Scudder Fund Accounting Corporation, have contractually agreed to maintain the
total annualized expenses of the following funds at no more than the level
stated below of the average daily net assets for the particular class from
October 29, 1999 through February 29, 2000.
Class A Class B Class C
------- ------- -------
Kemper Asian Growth Fund 1.80% 2.78% 2.71%
Kemper Emerging Markets Growth Fund 2.28% 3.18% 3.15%
Kemper Emerging Markets Income Fund 1.68% 2.56% 2.53%
Kemper Global Blue Chip Fund 1.80% 2.68% 2.65%
Global Discovery Fund 1.95% 2.83% 2.79%
Kemper International Growth And Income 1.81% 2.69% 2.66%
Fund
Kemper Latin America Fund 2.19% 3.07% 3.04%
Scudder Investments (U.K.) Limited, 1 South Place, London, U.K., an affiliate of
Scudder Kemper Investments, Inc., is the sub-adviser for Kemper Global Income
Fund and Kemper International Fund. Scudder Investments (U.K.) Limited has
served as sub-adviser for mutual funds since December, 1996 and investment
adviser for certain institutional accounts since August, 1998.
Scudder Investments (U.K.) Limited renders investment advisory and management
services with regard to the portion of each fund's portfolio as allocated to
Scudder Investments (U.K.) Limited by Scudder Kemper Investments, Inc. from
time-to-time for management, including services related to foreign securities,
foreign currency transactions and related investments.
For its services, Scudder Investments (U.K.) Limited will receive from Scudder
Kemper Investments, Inc. a monthly fee at the annual rate of 0.30% for Kemper
Global Income Fund and 0.35% for Kemper International Fund of the portion of the
average daily net assets of each fund allocated by the investment manager to the
sub-adviser for management.
54
<PAGE>
Portfolio management
Each fund is managed by a team of investment professionals, who individually
represent different areas of expertise. Each fund has a Lead Portfolio Manager,
who is ultimately responsible for the management of the fund and its team.
Supporting the fund managers are Scudder Kemper's many economists, research
analysts, traders, and other investment specialists, located in offices across
the United States and around the world.
The following investment professionals are associated with the funds as
indicated:
Growth Fund Of Spain
<TABLE>
<CAPTION>
Joined the Fund
as a Portfolio
Name & Title Manager Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
Joan R. Gregory 1998 Joined Scudder Kemper in 1992.
Lead Manager She is a member of the firm's
Global Equity Group and is on
the portfolio management teams
for other affiliated
international mutual funds. She
began her investment career in
1989. Prior to joining Scudder
Kemper, she worked in the
international investment
department at a bank.
Nicholas Bratt Manager 1998 Joined Scudder Kemper in 1976 as
a portfolio manager. Since then
he has served as portfolio
manager for other affiliated
international mutual funds and
has over 20 years of
international investment
experience. He is Head of the
firm's Global Equity Group,
responsible for the strategic
direction of the firm's equity
management business.
- -----------------------------------------------------------------------------------
</TABLE>
55
<PAGE>
Kemper Asian Growth Fund
<TABLE>
<CAPTION>
Joined the Fund
as a Portfolio
Name & Title Manager Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
Tien-Yu Sieh 1999 Joined Scudder Kemper in 1996 and
Lead Manager began hisinvestment career in 1990.
Prior to joining Scudder Kemper he
was a vice president and equity
salesman at an international
investment bank.
Theresa Gusman 1998 Joined Scudder Kemper in 1992 as an
Manager equity analyst responsible for
China, Hong Kong, Indonesia and
Taiwan. She then joined the Pacific
Basin portfolio management team in
1996. She began her investment
career in 1983. Prior to joining
Scudder Kemper, she was an equity
research analyst at an unaffiliated
investment management company.
Elizabeth J. Allan 1998 Joined Scudder Kemper in 1987,
Manager researching investments for some of
the firm's other international
mutual funds. Since then she has
served as a portfolio manager for
other affiliated mutual funds. She
has numerous years of Pacific Basin
research and investing experience.
Prior to joining Scudder Kemper, she
spent several years working for an
unaffiliated investment management
company.
- -----------------------------------------------------------------------------------
</TABLE>
56
<PAGE>
Kemper Emerging Markets Growth Fund
<TABLE>
<CAPTION>
Joined the Fund
as a Portfolio
Name & Title Manager Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
Joyce E. Cornell 1998 Joined Scudder Kemper in 1991 and
Lead Manager has been a portfolio manager since
1993. She is a member of the firm's
Global Equity Group, focusing her
portfolio management and research
responsibilities on the emerging
markets. She began her investment
career in 1987. Prior to joining
Scudder Kemper, she was a security
analyst at an unaffiliated
investment management company.
Andre J. DeSimone 1998 Joined Scudder Kemper in 1997 as
Manager part of the firm's emerging markets
portfolio management teams. He began
his investment career in 1981. Prior
to joining Scudder Kemper, he was
the founder and Chief Executive
Officer of a stock brokerage company
in Kenya.
Tara C. Kenney 1998 Joined Scudder Kemper in 1995 as a
Manager portfolio manager. She is a member
of the firm's Global Equity Group,
focusing on portfolio management of
Latin American equity securities.
She has 15 years of experience in
the field. Prior to joining Scudder
Kemper, she was responsible for the
origination and execution of
corporate finance transactions in
Latin America at a banking trust
company.
Theresa Gusman 1998 Joined Scudder Kemper in 1992 as an
Manager equity analyst responsible for
China, Hong Kong, Indonesia and
Taiwan. She then joined the Pacific
Basin portfolio management team in
1996. She began her investment
career in 1983. Prior to joining
Scudder Kemper, she was an equity
research analyst at an unaffiliated
investment management company.
- -----------------------------------------------------------------------------------
</TABLE>
57
<PAGE>
Kemper Emerging Markets Income Fund
<TABLE>
<CAPTION>
Joined the Fund
as a Portfolio
Name & Title Manager Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
M. Isabel Saltzman 1997 Joined Scudder Kemper in 1990 as a
Lead Manager portfolio manager. She is the
Product Leader and a Senior
Portfolio Manager for the firm's
Emerging Markets Bond Group. She
began her investment career in
1979. Prior to joining Scudder
Kemper, she worked in international
finance at a bank.
Susan E. Dahl 1997 Joined Scudder Kemper in 1987 as
Manager head of fixed income trading. She
has over seven years of emerging
markets investment experience as a
portfolio manager. She is the
Capital Markets Strategist and a
Senior Portfolio Manager for the
firm's Emerging Markets Bond Group.
She began her investment career in
1987.
- -----------------------------------------------------------------------------------
</TABLE>
58
<PAGE>
Kemper Global Blue Chip Fund
<TABLE>
<CAPTION>
Joined the Fund
as a Portfolio
Name & Title Manager Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
Diego Espinosa 1998 Joined Scudder Kemper in 1996 as an
Lead Manager analyst for Latin American equity
securities. He has over five years
of direct investment experience as
both an analyst and portfolio
manager. He began his investment
career in 1991. Prior to joining
Scudder Kemper, he was a Latin
American equities securities analyst
for an unaffiliated investment
management company.
William E. Holzer 1998 Joined Scudder Kemper in 1980 as an
Manager analyst and portfolio manager. He is
Product Leader of the firm's global
equity investment product and is on
the portfolio management teams for
other affiliated international
mutual funds. He began his
investment career in 1970. Prior to
joining Scudder Kemper, he was a
credit analyst in the international
department at a banking trust
company.
Nicholas Bratt 1998 Joined Scudder Kemper in 1976 as a
Manager portfolio manager. Since then he has
served as portfolio manager for
other affiliated international
mutual funds and has over 20 years
of international investment
experience. He is Head of the
firm's Global Equity Group,
responsible for the strategic
direction of the firm's equity
management business.
- -----------------------------------------------------------------------------------
</TABLE>
59
<PAGE>
Global Discovery Fund
<TABLE>
<CAPTION>
Joined the Fund
as a Portfolio
Name & Title Manager Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
Gerald J. Moran 1991 Joined Scudder Kemper in 1968 as an
Lead Manager analyst. Since then he has worked
within the firm's research
department and has served as
portfolio manager for other
affiliated mutual funds. For the
last decade, he has worked
exclusively with small cap stocks.
He has over 30 years of industry
experience.
Sewall F. Hodges 1996 Joined Scudder Kemper in 1995 as a
Manager portfolio manager. He is a member of
the firm's Global Equity Group. He
began his investment career in 1978.
Prior to joining the firm, he was a
global equity portfolio manager and
research analyst at an unaffiliated
investment management company.
Steven T. Stokes 1999 Joined Scudder Kemper in 1996 as a
Manager portfolio manager. He began his
investment career in 1986. Prior to
joining Scudder Kemper, he was an
equity analyst and member of a
portfolio management team for an
unaffiliated investment management
company.
- -----------------------------------------------------------------------------------
</TABLE>
60
<PAGE>
Kemper Global Income Fund
<TABLE>
<CAPTION>
Joined the Fund
as a Portfolio
Name & Title Manager Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
Jan Faller 1999 Joined Scudder Kemper in 1999 as a
Co-Lead Manager portfolio manager. He began his
investment career in 1988. Prior to
joining Scudder Kemper, he was part
of the Global Fixed Income Portfolio
Management team at an unaffiliated
investment management company.
Robert Stirling 1999 Mr. Stirling is an International
Co-Lead Manager Portfolio Manager at Scudder
Investments, (U.K.) Limited, an
affiliated investment management
company. Prior to joining Scudder
Kemper, he was a partner of an
unaffiliated investment management
company managing fixed income assets
and assisting in the management of
currency risk.
Jeremy L. Ragus 1999 Joined Scudder Kemper in 1990. Prior
Manager to joining Scudder Kemper, he was a
vice president of a municipal bond
department for an unaffiliated
investment management company.
- -----------------------------------------------------------------------------------
</TABLE>
61
<PAGE>
Kemper International Fund
<TABLE>
<CAPTION>
Joined the Fund
as a Portfolio
Name & Title Manager Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
Irene T. Cheng 1999 Joined Scudder Kemper in 1993 as a
Lead Manager portfolio manager. She is a member
of the firm's Global Equity Group
and has over six years of
experience as a portfolio manager.
She began her investment career in
1985. Prior to joining Scudder
Kemper, she spent three years in
merchant banking activities and
three years as an equity analyst.
Marc J. Slendebroek 1998 Joined Scudder Kemper in 1994 as a
Manager European equity analyst. He is an
international portfolio manager at
Scudder Investments, (U.K.)
Limited, an affiliated investment
management company. He began his
investment career in 1990. Prior to
joining Scudder Kemper, he worked
for an unaffiliated investment
management company responsible for
the Dutch equity research product.
- -----------------------------------------------------------------------------------
</TABLE>
62
<PAGE>
Kemper International Growth And Income Fund
<TABLE>
<CAPTION>
Joined the Fund
as a Portfolio
Name & Title Manager Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
Sheridan P. Reilly 1998 Joined Scudder Kemper in 1995 as an
Lead Manager analyst. He is a member of the
firm's Global Equity Group and is
on the portfolio management teams
for other affiliated international
mutual funds. He began his
investment career in 1987. Prior to
joining Scudder Kemper, he focused
on strategies for global bonds
portfolios, currency hedging, and
foreign equity markets at an
unaffiliated investment management
company.
Irene T. Cheng 1998 Joined Scudder Kemper in 1993 as a
Manager portfolio manager. She is a member
of the firm's Global Equity Group
and has over six years of
experience as a portfolio manager.
She began her investment career in
1985. Prior to joining Scudder
Kemper, she spent three years in
merchant banking activities and
three years as an equity analyst.
Lauren C. Lambert 1999 Joined Scudder Kemper in 1994 as an
Manager equity analyst. She began her
investment career in 1987. Prior to
joining Scudder Kemper, she was an
equity analyst at an unaffiliated
investment management company.
- -----------------------------------------------------------------------------------
</TABLE>
63
<PAGE>
Kemper Latin America Fund
<TABLE>
<CAPTION>
Joined the Fund
as a Portfolio
Name & Title Manager Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
Tara C. Kenney 1996 Joined Scudder Kemper in 1995 as a
Lead Manager portfolio manager. She is a member
of the firm's Global Equity Group,
focusing on portfolio management of
Latin American equity securities.
She has 15 years of experience in
the field. Prior to joining Scudder
Kemper, she was responsible for the
origination and execution of
corporate finance transactions in
Latin America at a banking trust
company.
Edmund B. Games, Jr. 1992 Joined Scudder Kemper in 1960. Since
Manager then he has served as portfolio
manager for other affiliated
international mutual funds and has
over 39 years of international
investment experience. He is a
member of the firm's Global Equity
Group.
Paul H. Rogers 1996 Joined Scudder Kemper in 1994 and
Manager was responsible for Latin American
corporate bond research in the
firm's Emerging Markets/High Yield
Bond Group. Since then he has
served as portfolio manager for
other affiliated international
mutual funds. He began his
investment career in 1985. Prior to
joining Scudder Kemper he worked in
the Latin American group for a
bank.
- -----------------------------------------------------------------------------------
</TABLE>
Year 2000 and euro readiness
Like all mutual funds, these funds could be affected by the inability of some
computer systems to recognize the year 2000. Also, because they may invest in
foreign securities, the funds may be affected by accounting differences, changes
in tax treatment, or other issues related to the conversion of certain European
currencies into the euro. The funds' investment manager has readiness programs
designed to address these problems, and is also researching the readiness of
suppliers and business partners as well as issuers of securities the funds own.
Still, there's some risk that the year 2000 problem could materially affect a
fund's operations (such as its ability to calculate net asset value and to
handle purchases and redemptions), its investments, or securities markets in
general.
64
<PAGE>
ABOUT YOUR INVESTMENT
CHOOSING A SHARE CLASS
Each fund provides investors with the option of purchasing shares in the
following ways:
- --------------------------------------------------------------------------------
Class A Shares^(1) Offered at net asset value plus a maximum sales charge of
5.75% of the offering price, or 4.5% of the offering price
in the cases of Kemper Global Income Fund and Kemper
Emerging Markets Income Fund.
Reduced sales charges apply to purchases of $50,000 or
more for all funds except Kemper Global Income Fund and
Kemper Emerging Markets Income Fund. Reduced sales charges
apply to purchases of $100,000 or more for Kemper Global
Income Fund and Kemper Emerging Markets Income Fund. Class
A shares purchased at net asset value under the Large
Order NAV Purchase Privilege may be subject to a 1%
contingent deferred sales charge if redeemed within one
year of purchase and a 0.50% contingent deferred sales
change if redeemed during the second year of purchase.
Class B Shares^(1) Offered at net asset value without an initial sales
charge, but subject to a 0.75% Rule 12b-1 distribution fee
and a contingent deferred sales charge that declines from
4% to zero on certain redemptions made within six years of
purchase. Class B shares automatically convert into Class
A shares (which have lower ongoing expenses) six years
after purchase.
Class C Shares^(1) Offered at net asset value without an initial sales
charge, but subject to a 0.75% Rule 12b-1 distribution fee
and a 1% contingent deferred sales charge on redemptions
made within one year of purchase. Class C shares do not
convert into another class.
- --------------------------------------------------------------------------------
(1) Class A, B and C shares of Growth Fund Of Spain are subject to a 2%
redemption fee on shares redeemed or exchanged within one year after
purchase, with limited exceptions.
When placing purchase orders, investors must specify whether the order is for
Class A, Class B or Class C shares. Each class of shares represents interests in
the same portfolio of investments of a fund.
The decision as to which class to choose depends on a number of factors,
including the amount and intended length of the investment. Investors that
qualify for reduced sales charges might consider Class A shares. Investors who
prefer not to pay an initial sales charge and who plan to hold their investment
for more than six years might consider Class B shares. Investors who prefer not
to pay an initial sales charge but who plan to redeem their shares within six
years might consider Class C shares. For more information about these sales
arrangements, consult your financial representative or the Shareholder Service
Agent. Be aware that financial services firms may receive different compensation
depending upon which class of shares they sell.
65
<PAGE>
Rule 12b-1 plan
Each fund has adopted a plan under Rule 12b-1 that provides for fees payable as
an expense of the Class B shares and the Class C shares that are used by the
distributor to pay for distribution and other services provided to shareholders
of those classes. Because 12b-1 fees are paid out of fund assets on an ongoing
basis, they will, over time, increase the cost of investment and may cost more
than other types of sales charges. Long-term shareholders may pay more than the
economic equivalent of the maximum initial sales charges permitted by the
National Association of Securities Dealers, although Kemper Distributors, Inc.
believes that it is unlikely, in the case of Class B shares, because of the
automatic conversion feature of the shares.
Special features
Class A Shares -- Combined Purchases. Each fund's Class A shares (or the
equivalent) may be purchased at the rate applicable to the discount bracket
attained by combining concurrent investments in Class A shares of most Kemper
Funds.
Class A Shares -- Letter of Intent. The same reduced sales charges for Class A
shares also apply to the aggregate amount of purchases made by any purchaser
within a 24-month period under a written Letter of Intent ("Letter") provided by
Kemper Distributors. The Letter, which imposes no obligation to purchase or sell
additional Class A shares, provides for a price adjustment depending upon the
actual amount purchased within such period.
Class A Shares -- Cumulative Discount. Class A shares of a fund may also be
purchased at the rate applicable to the discount bracket attained by adding to
the cost of shares of a fund being purchased, the value of all Class A shares of
the above mentioned Kemper Funds (computed at the maximum offering price at the
time of the purchase for which the discount is applicable) already owned by the
investor.
Class A Shares -- Large Order NAV Purchase Privilege. Class A shares of a fund
may be purchased at net asset value by any purchaser provided that the amount
invested in such fund or other Kemper Funds totals at least $1,000,000 including
purchases of Class A shares pursuant to the "Combined Purchases," "Letter of
Intent" and "Cumulative Discount" features described above (the "Large Order NAV
Purchase Privilege").
Exchange Privilege -- General. Shareholders of Class A, Class B and Class C
shares may exchange their shares for shares of the corresponding class of Kemper
Mutual Funds. Currently, shares of a Kemper Fund with a value in excess of
$1,000,000 (except Kemper Cash Reserves Fund) acquired by exchange from another
Kemper Fund, or from a Money Market Fund, may not be exchanged thereafter until
they have been owned for 15 days (the "15 Day Hold Policy"). Effective June 1,
1999, shares of a Kemper Fund with a value of $1,000,000 or less (except Kemper
Cash Reserves Fund) acquired by exchange from another Kemper Fund, or from a
Money Market Fund, may not
66
<PAGE>
be exchanged thereafter until they have been owned for 15 days if, in the
investment manager's judgement, the exchange activity may have an adverse effect
on the fund. In particular, a pattern of exchanges that coincides with a "market
timing" strategy may be disruptive to the Fund and therefore may be subject to
the 15-Day Hold Policy. For purposes of determining whether the 15 Day Hold
Policy applies to a particular exchange, the value of the shares to be exchanged
shall be computed by aggregating the value of shares being exchanged for all
accounts under common control, direction or advice, including without limitation
accounts administered by a financial services firm offering market timing, asset
allocation or similar services.
For purposes of determining any contingent deferred sales charge that may be
imposed upon the redemption of the shares received on exchange, amounts
exchanged retain their original cost and purchase date.
Upon the exchange of any class of shares of the Growth Fund Of Spain held for
less than one year, a fee of 2% of the current net asset value of the shares
will be assessed and retained by the fund for the benefit of the remaining
shareholders (see "Redemption Fee" below). Redemptions for any one shareholder
during any 90-day period in excess of the lesser of $250,000 or 1% of the net
asset value of the fund at the beginning of the period are not eligible for the
exchange privilege, and will be effected pursuant to the fund's redemption
policies described in the fund's Statement of Additional Information under
"Redemption-in-kind."
BUYING SHARES
You may purchase shares of a fund by contacting the securities dealer or other
financial services firm from whom you received this prospectus.
CLASS A SHARES -- All funds, except Kemper Global Income Fund and Kemper
Emerging Markets Income Fund
Public Offering Price. Including Sales Charge
Sales Charge
------------
As a % of As a % of
Amount of Purchase Offering Price Net Amount Invested*
- ------------------ -------------- --------------------
Less than $50,000 5.75% 6.10%
$50,000 but less than $100,000 4.50 4.71
$100,000 but less than $250,000 3.50 3.63
$250,000 but less than $500,000 2.60 2.67
$500,000 but less than $1 million 2.00 2.04
$1 million and over 0.00** 0.00**
- -----------
* Rounded to nearest one hundredth percent.
** Redemption of shares may be subject to a contingent deferred sales charge
and, in the case of Growth Fund Of Spain, a redemption fee, as discussed
below.
67
<PAGE>
CLASS A SHARES -- Kemper Global Income Fund and Kemper Emerging Markets Income
Fund
Public Offering Price. Including Sales Charge
Sales Charge
------------
As a % of As a % of Net Amount
Amount of Purchase Offering Price Invested*
- ------------------ -------------- ---------
Less than $100,000 4.50% 4.71%
$100,000 but less than $250,000 3.50 3.63
$250,000 but less than $500,000 2.60 2.67
$500,000 but less than $1 million 2.00 2.04
$1 million and over 0.00** 0.00**
- -----------
* Rounded to nearest one hundredth percent.
** Redemption of shares may be subject to a contingent deferred sales charge
as discussed below.
NAV Purchases
Class A shares of a fund may be purchased at net asset value by:
o shareholders in connection with the investment or reinvestment of income
and capital gain dividends;
o a participant-directed qualified retirement plan or a participant-directed
non-qualified deferred compensation plan or a participant-directed
qualified retirement plan which is not sponsored by a K-12 school district,
provided in each case that such plan has not less than 200 eligible
employees;
o any purchaser with Kemper Funds investment totals of at least $1,000,000;
o unitholders of unit investment trusts sponsored by Ranson & Associates,
Inc. or its predecessors through reinvestment programs described in the
prospectuses of such trusts that have such programs;
o officers, trustees, directors, employees (including retirees) and sales
representatives of a fund, its investment manager, its principal
underwriter or certain affiliated companies, for themselves or members of
their families, any trust, pension, profit-sharing or other benefit plan
for only such persons;
o persons who purchase shares through bank trust departments that process
such trades through an automated, integrated mutual fund clearing program
provided by a third party clearing firm;
o registered representatives and employees of broker-dealers having selling
group agreements with Kemper Distributors or any trust, pension,
profit-sharing or other benefit plan for only such persons;
o officers, directors, and employees of service agents of the funds;
o members of the plaintiff class in the proceeding known as Howard and Audrey
Tabankin, et al. v. Kemper Short-Term Global Income Fund, et. al., Case No.
93 C 5231 (N.D.IL);
68
<PAGE>
o selected employees (including their spouses and dependent children) of
banks and other financial services firms that provide administrative
services related to the funds pursuant to an agreement with Kemper
Distributors or one of its affiliates;
o certain professionals who assist in the promotion of Kemper Funds pursuant
to personal services contracts with Kemper Distributors, for themselves or
members of their families;
o in connection with the acquisition of the assets of or merger or
consolidation with another investment company;
o shareholders who owned shares of Kemper Value Series, Inc. ("KVS") on
September 8, 1995, and have continuously owned shares of KVS (or a Kemper
Fund acquired by exchange of KVS shares) since that date, for themselves or
members of their families, any trust, pension, profit-sharing or other
benefit plan for only such persons;
o persons who purchase shares of a fund through Kemper Distributors as part
of an automated billing and wage deduction program administered by
RewardsPlus of America;
o through certain investment advisers registered under the Investment
Advisers Act of 1940 and other financial services firms, acting solely as
agent for their clients, that adhere to certain standards established by
Kemper Distributors, including a requirement that such shares be purchased
for the benefit of their clients participating in an investment advisory
program under which such clients pay a fee to the investment advisor or
other firm for portfolio management or agency brokerage services.
Contingent Deferred Sales Charge
A contingent deferred sales charge may be imposed upon redemption of Class A
shares purchased under the Large Order NAV Purchase Privilege as follows: 1% if
they are redeemed within one year of purchase and 0.50% if redeemed during the
second year following purchase. The charge will not be imposed upon redemption
of reinvested dividends or share appreciation. The contingent deferred sales
charge will be waived in the event of:
o redemptions under a fund's Systematic Withdrawal Plan at a maximum of 10%
per year of the net asset value of the account;
o redemption of shares of a shareholder (including a registered joint owner)
who has died;
o redemption of shares of a shareholder (including a registered joint owner)
who after purchase of the shares being redeemed becomes totally disabled
(as evidenced by a determination by the federal Social Security
Administration);
69
<PAGE>
o redemptions by a participant-directed qualified retirement plan or a
participant-directed non-qualified deferred compensation plan or a
participant-directed qualified retirement plan which is not sponsored by a
K-12 school district;
o redemptions by employer sponsored employee benefit plans using the
subaccount record keeping system made available through the Shareholder
Service Agent or its affiliates;
o redemptions of shares whose dealer of record at the time of the investment
notifies Kemper Distributors that the dealer waives the commission
applicable to such Large Order NAV Purchase.
Rule 12b-1 Fee
None
Exchange Privilege
Class A shares may be exchanged for each other at their relative net asset
values. Shares of Money Market Funds and Kemper Cash Reserves Fund acquired by
purchase (not including shares acquired by dividend reinvestment) are subject to
the applicable sales charge on exchange.
Class A shares purchased under the Large Order NAV Purchase Privilege may be
exchanged for Class A shares of any Kemper Fund or a Money Market Fund without
paying any contingent deferred sales charge. If the Class A shares received on
exchange are redeemed thereafter, a contingent deferred sales charge may be
imposed.
Shares of Growth Fund Of Spain held for less than one year are subject to a 2%
redemption fee upon exchange.
Redemption fee
Upon the redemption of any class of shares of Growth Fund Of Spain held for less
than one year, a fee of 2% of the current net asset value of the shares will be
assessed and retained by the fund for the benefit of the remaining shareholders.
Class B Shares
Public Offering Price
Net asset value per share without any sales charge at the time of purchase.
Contingent Deferred Sales Charge
A contingent deferred sales charge may be imposed upon redemption of Class B
shares. There is no such charge upon redemption of any share appreciation or
reinvested dividends. The charge is computed at the following rates applied to
the value of the shares redeemed excluding amounts not subject to the charge.
- --------------------------------------------------------------------------------
Year of Redemption
After Purchase: First Second Third Fourth Fifth Sixth
- --------------------------------------------------------------------------------
Contingent Deferred 4% 3% 3% 2% 2% 1%
Sales Charge:
- --------------------------------------------------------------------------------
70
<PAGE>
The contingent deferred sales charge will be waived:
o for redemptions to satisfy required minimum distributions after age 70 1/2
from an IRA account (with the maximum amount subject to this waiver being
based only upon the shareholder's Kemper IRA accounts);
o for redemptions made pursuant to any IRA systematic withdrawal based on the
shareholder's life expectancy including, but not limited to, substantially
equal periodic payments described in Code Section 72(t)(2)(A)(iv) prior to
age 59 1/2;
o for redemptions made pursuant to a systematic withdrawal plan;
o in the event of the total disability (as evidenced by a determination by
the federal Social Security Administration) of the shareholder (including a
registered joint owner) occurring after the purchase of the shares being
redeemed;
o in the event of the death of the shareholder (including a registered joint
owner).
The contingent deferred sales charge will also be waived in connection with the
following redemptions of shares held by employer sponsored employee benefit
plans maintained on the subaccount record keeping system made available by
Kemper Service Company, the Shareholder Service Agent:
o redemptions to satisfy participant loan advances (note that loan repayments
constitute new purchases for purposes of the contingent deferred sales
charge and the conversion privilege);
o redemptions in connection with retirement distributions (limited at any one
time to 10% of the total value of plan assets invested in a fund);
o redemptions in connection with distributions qualifying under the hardship
provisions of the Code;
o redemptions representing returns of excess contributions to such plans.
Rule 12b-1 Fee
0.75%
Conversion Feature
Class B shares of a fund will automatically convert to Class A shares of the
same fund six years after issuance on the basis of the relative net asset value
per share. Shares purchased through the reinvestment of dividends and other
distributions paid with respect to Class B shares in a shareholder's fund
account will be converted to Class A shares on a pro rata basis.
Exchange Privilege
Class B shares of a fund and Class B shares of most Kemper Funds may be
exchanged for each other at their relative net asset values without paying any
contingent deferred sales charge. Shares of Growth Fund Of Spain held for less
than one year are subject to a 2% redemption fee upon exchange.
71
<PAGE>
Redemption fee
Upon the redemption of any class of shares of Growth Fund Of Spain held for less
than one year, a fee of 2% of the current net asset value of the shares will be
assessed and retained by the fund for the benefit of the remaining shareholders.
CLASS C SHARES
Public Offering Price
Net asset value per share without any sales charge at the time of purchase.
Contingent Deferred Sales Charge
A contingent deferred sales charge of 1% may be imposed upon redemption of Class
C shares redeemed within one year of purchase. The charge will not be imposed
upon redemption of reinvested dividends or share appreciation. The contingent
deferred sales charge will be waived in the event of:
o redemptions by a participant-directed qualified retirement plan described
in Code Section 401(a) or a participant-directed non-qualified deferred
compensation plan described in Code Section 457;
o redemptions by employer sponsored employee benefit plans (or their
participants) using the subaccount record keeping system made available
through the Shareholder Service Agent or its affiliates;
o redemption of shares of a shareholder (including a registered joint owner)
who has died;
o redemption of shares of a shareholder (including a registered joint owner)
who after purchase of the shares being redeemed becomes totally disabled
(as evidenced by a determination by the federal Social Security
Administration);
o redemptions under a fund's systematic withdrawal plan at a maximum of 10%
per year of the net asset value of the account;
o redemption of shares by an employer sponsored employee benefit plan that
offers funds in addition to Kemper Funds and whose dealer of record has
waived the advance of the first year administrative service and
distribution fees applicable to such shares and agrees to receive such fees
quarterly;
o redemption of shares purchased through a dealer-sponsored asset allocation
program maintained on an omnibus record-keeping system provided the dealer
of record has waived the advance of the first year administrative services
and distribution fees applicable to such shares and has agreed to receive
such fees quarterly.
Rule 12b-1 Fee
0.75%
Conversion Feature
None
72
<PAGE>
Exchange Privilege
Class C shares of a fund and Class C shares of most Kemper Funds may be
exchanged for each other at their relative net asset values without paying any
contingent deferred sales charge. Shares of Growth Fund Of Spain held for less
than one year are subject to a 2% redemption fee upon exchange.
Redemption fee
Upon the redemption of any class of shares of Growth Fund Of Spain held for less
than one year, a fee of 2% of the current net asset value of the shares will be
assessed and retained by the fund for the benefit of the remaining shareholders.
SELLING AND EXCHANGING SHARES
General
Contact your securities dealer or other financial services firm to arrange for
share redemptions or exchanges.
Any shareholder may require a fund to redeem his or her shares. When shares are
held for the account of a shareholder by the funds' transfer agent, the
shareholder may redeem them by sending a written request with signatures
guaranteed to Kemper Mutual Funds, Attention: Redemption Department, P.O. Box
419557, Kansas City, Missouri 64141-6557.
An exchange of shares entails the sale of fund shares and subsequent purchase of
shares of another Kemper Mutual Fund.
The rate of the contingent deferred sales charge is determined by the length of
the period of ownership. Investments are tracked on a monthly basis. The period
of ownership for this purpose begins the first day of the month in which the
order for the investment is received. For example, an investment made in
December, 1999 will be eligible for the second year's charge if redeemed on or
after December 1, 2000. In the event no specific order is requested when
redeeming shares subject to a contingent deferred sales charge, the redemption
will be made first from shares representing reinvested dividends and then from
the earliest purchase of shares. KDI receives any contingent deferred sales
charge directly.
Share certificates
When certificates for shares have been issued, they must be mailed to or
deposited with Kemper Service Company, along with a duly endorsed stock power
and accompanied by a written request for redemption. Redemption requests and a
stock power must be endorsed by the account holder with signatures guaranteed.
The redemption request and stock power must be signed exactly as the account is
registered, including any special capacity of the registered owner. 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.
73
<PAGE>
Reinvestment privilege
Under certain circumstances, a shareholder who has redeemed Class A shares may
reinvest up to the full amount redeemed at net asset value at the time of the
reinvestment. These reinvested shares will retain their original cost and
purchase date for purposes of the contingent deferred sales charge. Also, a
holder of Class B shares who has redeemed shares may reinvest up to the full
amount redeemed, less any applicable contingent deferred sales charge that may
have been imposed upon the redemption of such shares, at net asset value in
Class A shares. The reinvestment privilege may be terminated or modified at any
time. The reinvestment privilege can be used only once as to any specific shares
and reinvestment must be effected within six months of the redemption.
DISTRIBUTIONS AND TAXES
Dividends and capital gains distributions
Each fund normally distributes dividends of net investment income as follows:
annually for Kemper Asian Growth Fund, Kemper Emerging Markets Growth Fund,
Kemper Global Blue Chip Fund, Global Discovery Fund, Growth Fund Of Spain,
Kemper International Fund, and Kemper Latin America Fund; semiannually for
Kemper International Growth And Income Fund; monthly for Kemper Emerging Markets
Income Fund and Kemper Global Income Fund. Each fund distributes any net
realized short-term and long-term capital gains at least annually.
Income and capital gains dividends, if any, of a fund will be credited to
shareholder accounts in full and fractional shares of the same class of that
fund at net asset value on the reinvestment date, except that, upon written
request to the Shareholder Service Agent, Kemper Service Company, a shareholder
may select one of the following options:
1. To receive income and short-term capital gains dividends in cash and
long-term capital gains dividends in shares of the same class at net asset
value; or
2. To receive income and capital gains dividends in cash.
Any dividends of a fund that are reinvested will normally be reinvested in
shares of the same class of that same fund. However, by writing to the
Shareholder Service Agent, you may choose to have dividends of a fund invested
in shares of the same class of another Kemper fund at the net asset value of
that class and fund. To use this privilege, you must maintain a minimum account
value of $1,000 in the fund distributing the dividends. The funds will reinvest
dividend checks (and future dividends) in shares of that same fund and class if
checks are returned as undeliverable. Dividends and other distributions in the
aggregate amount of $10 or less are automatically reinvested in shares of the
same fund unless you request that such policy not be applied to your account.
Distributions are generally taxable, whether received in cash or reinvested.
74
<PAGE>
Taxes
Dividends representing net investment income are taxable to shareholders as
ordinary income. Long-term capital gains distributions, if any, are taxable to
individual shareholders as long-term capital gains, regardless of the length of
time shareholders have owned shares. Short-term capital gains and any other
taxable income distributions are taxable to you as ordinary income. A portion of
dividends from ordinary income may qualify for the dividends-received deduction
for corporations.
A dividend received shortly after the purchase of shares reduces the net asset
value of the shares by the amount of the dividend and, although in effect a
return of capital, is taxable to you.
A sale or exchange of your shares is a taxable event and may result in a capital
gain or loss which may be long-term or short-term, generally depending on how
long you owned the shares. Shareholders of a fund may be subject to state, local
and foreign taxes on fund distributions and dispositions of fund shares. You
should consult your tax advisor regarding the particular tax consequences of an
investment in a fund.
Any dividends or capital gains distributions declared in October, November or
December with a record date in such month and paid during the following January
are taxable to you as if paid on December 31 of the calendar year in which they
were declared.
Each fund sends you detailed tax information about the amount and type of its
distributions by January 31 of the following year. In certain years, you may be
able to claim a credit or deduction on your income tax return for your share of
foreign taxes paid by a fund.
Each fund may be required to withhold U.S. federal income tax at the rate of 31%
of all taxable distributions payable to you if you fail to provide the fund with
your correct taxpayer identification number or to make required certifications,
or if you have been notified by the IRS that you are subject to backup
withholding. Any such withheld amounts may be credited against your U.S. federal
income tax liability.
TRANSACTION INFORMATION
Share price
Scudder Fund Accounting Corporation determines the net asset value per share of
the funds as of the close of regular trading on the New York Stock Exchange,
normally 4:00 p.m. eastern time, on each day the New York Stock Exchange is open
for trading. Market prices are used to determine the value of the funds' assets.
If market prices are not readily available for a security or if a security's
price is not considered to be market indicative, that security may be valued by
another method that the Board or its delegate believes accurately reflects fair
value. In those circumstances where a security's price is not considered to be
market indicative, the security's valuation may differ from an available market
quotation.
75
<PAGE>
The net asset value per share of each fund is the value of one share and is
determined separately for each class by dividing the value of a fund's total
assets attributable to that class, less all liabilities of that class, by the
number of shares of that class outstanding. The per share net asset value of the
Class B and Class C shares of a fund will generally be lower than that of the
Class A shares of a fund because of the higher annual expenses borne by the
Class B and Class C shares.
To the extent that the funds invest in foreign securities, these securities may
be listed on foreign exchanges that trade on days when the funds do not price
their shares. As a result, the net asset value per share of the funds may change
at a time when shareholders are not able to purchase or redeem their shares.
Redemption Fee
Upon the redemption or exchange of any class of shares of Growth Fund Of Spain
held for less than one year, a fee of 2% of the current net asset value of the
shares will be assessed and retained by the fund for the benefit of the
remaining shareholders. The fee is waived for all shares purchased through
certain retirement plans, including 401(k) plans, 403(b) plans, 457 plans, Keogh
accounts, and other pension, profit-sharing and employee benefit plans. However,
if such shares are purchased through a broker, financial institution or
recordkeeper maintaining an omnibus account for the shares, such waiver may not
apply. (Before purchasing shares, please check with your account representative
concerning the availability of the fee waiver.) In addition, this waiver does
not apply to any IRA or SEP-IRA accounts. This fee is intended to encourage
long-term investment in the fund, to avoid transaction and other expenses caused
by early redemptions, and to facilitate portfolio management. The fee is not a
deferred sales charge, is not a commission paid to the investment manager or its
subsidiaries, and does not benefit the investment manager in any way. The fund
reserves the right to modify the terms of or terminate this fee at any time.
The fee applies to redemptions from the fund and exchanges to other Kemper
Funds, but not to dividend or capital gains distributions which have been
automatically reinvested in the fund. The fee is applied to the shares being
redeemed or exchanged in the order in which they were purchased. In the event
that a shareholder has acquired shares of the fund in connection with the fund's
acquisition of the assets of or merger or consolidation with another investment
company, the shareholder will generally be permitted to add the period he or she
held shares of the acquired fund to the time he or she has held Class A shares
of the fund in determining the applicability of the redemption fee. In such a
case, the shareholder bears the burden of demonstrating to the fund the period
of ownership of the acquired fund. Proof of ownership for the required period
may be demonstrated by providing copies of brokerage account statements or other
appropriate share records in connection with a redemption under cover of the
redemption and certification form.
76
<PAGE>
With respect to Growth Fund Of Spain, for redemptions in excess of the lesser of
$250,000 or 1% of the net asset value of the fund during any 90-day period, a
redemption request will be considered valid only if accompanied by a properly
completed redemption and certification form which can be obtained by contacting
the Shareholder Service Agent. The form details, among other things, the
shareholder's valid custodial arrangements in Spain, Portugal and the U.S. No
redemptions requests subject to in-kind redemption may be made other than by a
written request accompanied by a properly completed redemption and certification
form.
Processing time
All requests to buy and sell shares that are received in good order by the
funds' transfer agent by the close of regular trading on the New York Stock
Exchange are executed at the net asset value per share calculated at the close
of trading that day (subject to any applicable sales load or contingent deferred
sales charge). Orders received by dealers or other financial services firms
prior to the determination of net asset value and received by the funds'
transfer agent prior to the close of its business day will be confirmed at a
price based on the net asset value effective on that day. If an order is
accompanied by a check drawn on a foreign bank, funds must normally be collected
before shares will be purchased.
Payment for shares you sell will be made in cash as promptly as practicable but
in no event later than seven days after receipt of a properly executed request.
If you have share certificates, these must accompany your order in proper form
for transfer. When you place an order to sell shares for which the fund may not
yet have received good payment (i.e., purchases by check, EXPRESS-Transfer or
Bank Direct Deposit), the fund may delay transmittal of the proceeds until it
has determined that collected funds have been received for the purchase of such
shares. This may be up to 10 days from receipt by a fund of the purchase amount.
The redemption of shares within certain time periods may be subject to
contingent deferred sales charges, as noted above.
Signature guarantees
A signature guarantee is required unless you sell $50,000 or less worth of
shares (prior to the imposition of any contingent deferred sales charge) and the
proceeds are payable to the shareholder of record at the address of record. You
can obtain a guarantee from most brokerage houses and financial institutions,
although not from a notary public. The funds will normally send you the proceeds
within one business day following your request, but may take up to seven
business days (or longer in the case of shares recently purchased by check).
Purchase restrictions
Purchases and sales should be made for long-term investment purposes only. The
funds and their transfer agent each reserves the right to reject purchases of
fund shares (including exchanges) for any reason, including when there is
evidence of a pattern of frequent purchases and sales made in response to
short-term fluctuations in a fund's share price. Each fund reserves the right to
77
<PAGE>
withdraw all or any part of the offering made by this prospectus and to reject
purchase orders. Also, from time to time, each fund may temporarily suspend the
offering of its shares or a class of its shares to new investors. During the
period of such suspension, persons who are already shareholders normally are
permitted to continue to purchase additional shares and to have dividends
reinvested.
Minimum balances
The minimum initial investment for each fund is $1,000 and the minimum
subsequent investment is $100. The minimum initial investment for an Individual
Retirement Account is $250 and the minimum subsequent investment is $50. Under
an automatic investment plan, such as Bank Direct Deposit, Payroll Direct
Deposit or Government Direct Deposit, the minimum initial and subsequent
investment is $50. These minimum amounts may be changed at any time in
management's discretion.
Because of the high cost of maintaining small accounts, the funds may assess a
quarterly fee of $9 on an account with a balance below $1,000 for the quarter.
The fee will not apply to accounts enrolled in an automatic investment program,
Individual Retirement Accounts or employer sponsored employee benefit plans
using the subaccount record keeping system made available through the
Shareholder Service Agent.
Third party transactions
If you buy and sell shares of a fund through a member of the National
Association of Securities Dealers, Inc. (other than the funds' distributor,
Kemper Distributors), that member may charge a fee for that service. This
prospectus should be read in connection with such firm's material regarding
their fees and services.
Redemption-in-kind
Each fund reserves the right to honor any request for redemption or repurchase
by making payment in whole or in part in readily marketable securities
("redemption-in-kind"). These securities will be chosen by the fund and valued
as they are for purposes of computing the fund's net asset value. A shareholder
may incur transaction expenses in converting these securities to cash.
It is the policy of Growth Fund Of Spain to redeem its shares, with respect to
any one shareholder during any 90-day period, solely in cash up to the lesser of
$250,000 or 1% of the net asset value of the fund at the beginning of the
period. As an operating policy, the fund will satisfy redemption requests in
excess of such amount by distributing portfolio securities in lieu of cash.
Shareholders whose redemptions are effected in-kind may bear expenses in excess
of 1% of the net asset value of the shares of the fund redeemed, which expenses
are in addition to any applicable redemption fee or contingent deferred sales
charge (see the Statement of Additional Information about redemptions-in-kind).
78
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights tables below are intended to help you understand the
funds' financial performance for the periods reflected below. Certain
information reflects the financial results for a single fund share. The total
return figures show what a shareholder in a fund would have earned (or lost)
assuming reinvestment of all distributions. This information, for all funds
except Global Discovery Fund, has been audited by Ernst & Young LLP. With
respect to Global Discovery Fund, this information has been audited by
PricewaterhouseCoopers LLP. The reports of each of the auditors, along with the
funds' financial statements, are included in the funds' annual reports, which
are available upon request by calling Kemper at 1-800-621-1048.
Growth Fund Of Spain is the successor entity to The Growth Fund of Spain, Inc.,
a closed-end management investment company that had one class of shares. In
connection with the December 11, 1998 reorganization of The Growth Fund of
Spain, Inc. as Growth Fund Of Spain, an open-end series of Kemper
Global/International Series, Inc., the shares of The Growth Fund of Spain, Inc.
were exchanged on that date for Class A shares of the fund. Accordingly, the
following table shows financial information for Growth Fund Of Spain's Class A
shares expressed in terms of one share outstanding throughout the relevant
period, and reflects the operations of The Growth Fund of Spain, Inc. as a
closed-end investment company. Financial information is not available for the
fund's Class B and Class C shares since the reorganization took place after the
close of the fund's most recent fiscal year. Effective as of the fund's 1998
fiscal year, the fund's fiscal year end was changed to October 31.
79
<PAGE>
Growth Fund Of Spain
Eleven
months
ended
October
31, Year ended November 30,
1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning
of period $19.06 15.67 13.33 12.40 10.67
- --------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .11 .24 .36 .37 .32
- --------------------------------------------------------------------------------
Net realized and
unrealized gain 5.72 4.15 2.69 1.01 1.41
- --------------------------------------------------------------------------------
Total from investment
operations 5.83 4.39 3.05 1.38 1.73
- --------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income .11 .17 .42 .45 --
- --------------------------------------------------------------------------------
Distribution from net
realized gain 1.36 .83 .29 -- --
- --------------------------------------------------------------------------------
Total dividends 1.47 1.00 .71 .45 --
- --------------------------------------------------------------------------------
Net asset value, end of
period $23.42 19.06 15.67 13.33 12.40
- --------------------------------------------------------------------------------
Total return (not
annualized) 32.90% 29.86 24.12 11.62 16.21
- --------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 1.43% 1.22 1.25 1.22 1.23
- --------------------------------------------------------------------------------
Net investment income .58% 1.29 2.46 2.89 2.57
- --------------------------------------------------------------------------------
Supplemental data
Net assets at end of period
(in thousands) $387,126 315,059 263,935 227,997 213,972
- --------------------------------------------------------------------------------
Portfolio turnover rate
(annualized) 10% 29 45 69 85
- --------------------------------------------------------------------------------
Note: Total return reflects reinvestment of dividends.
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<PAGE>
Kemper Asian Growth Fund
<TABLE>
<CAPTION>
October 21
to
Year ended November
November 30, 30,
CLASS A 1998 1997 1996
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $6.65 10.04 9.50
- -----------------------------------------------------------------------------------
Income from investment operations:
Net investment income .11 .08 --
- -----------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1.27) (3.47) .54
- -----------------------------------------------------------------------------------
Total from investment operations (1.16) (3.39) .54
- -----------------------------------------------------------------------------------
Less distribution from net investment .08 -- --
income
- -----------------------------------------------------------------------------------
Net asset value, end of period $5.41 6.65 10.04
- -----------------------------------------------------------------------------------
Total return (not annualized) (17.66)% (33.76) 5.68
- -----------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses 1.80% 1.60 1.46
- -----------------------------------------------------------------------------------
Net investment income 2.05% .97 .74
- -----------------------------------------------------------------------------------
Other ratios to average net assets
(annualized)
Expenses 2.65% 2.62 1.46
- -----------------------------------------------------------------------------------
Net investment income (loss) 1.20% (.05) .74
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
October 21
to
Year ended November
November 30, 30,
CLASS B 1998 1997 1996
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $6.58 10.03 9.50
- -----------------------------------------------------------------------------------
Income from investment operations:
Net investment income .06 -- --
- -----------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1.28) (3.45) .53
- -----------------------------------------------------------------------------------
Total from investment operations (1.22) (3.45) .53
- -----------------------------------------------------------------------------------
Less distribution from net investment
income .02 -- --
- -----------------------------------------------------------------------------------
Net asset value, end of period $5.34 6.58 10.03
- -----------------------------------------------------------------------------------
Total return (not annualized) (18.65)% (34.40) 5.58
- -----------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses 2.78% 2.57 2.34
- -----------------------------------------------------------------------------------
Net investment income (loss) 1.07% -- (.14)
- -----------------------------------------------------------------------------------
Other ratios to average net assets
(annualized)
Expenses 4.29% 3.51 2.34
- -----------------------------------------------------------------------------------
Net investment loss (.44)% (.94) (.14)
- -----------------------------------------------------------------------------------
</TABLE>
81
<PAGE>
<TABLE>
<CAPTION>
October 21
to
Year ended November
November 30, 30,
CLASS C 1998 1997 1996
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $6.60 10.03 9.50
- -----------------------------------------------------------------------------------
Income from investment operations:
Net investment income .05 -- --
- -----------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1.28) (3.43) .53
- -----------------------------------------------------------------------------------
Total from investment operations (1.23) (3.43) .53
- -----------------------------------------------------------------------------------
Less distribution from net investment
income .02 -- --
- -----------------------------------------------------------------------------------
Net asset value, end of period $5.35 6.60 10.03
- -----------------------------------------------------------------------------------
Total return (not annualized) (18.72)% (34.20) 5.58
- -----------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses 2.71% 2.54 2.34
- -----------------------------------------------------------------------------------
Net investment income (loss) 1.14% .03 (.14)
- -----------------------------------------------------------------------------------
Other ratios to average net assets
(annualized)
Expenses 4.56% 3.55 2.34
- -----------------------------------------------------------------------------------
Net investment loss (.71)% (.98) (.14)
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
October 21
to
Year ended November
November 30, 30,
1998 1997 1996
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Supplemental data for all classes
Net assets at end of period $7,416,000 6,398,000 1,949,000
- -----------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 131% 155 74
- -----------------------------------------------------------------------------------
</TABLE>
Note: Total return does not reflect the effect of any sales charges. Scudder
Kemper Investments, Inc. agreed to waive a portion of its management fee and
absorb certain operating expenses of the fund during the years ended November
30, 1998 and 1997. The Other Ratios to Average Net Assets are computed without
this expense waiver or absorption.
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<PAGE>
Kemper Emerging Markets Growth Fund
For the period from January 9, 1998
(commencement of operations)
to October 31, 1998
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $9.50 9.50 9.50
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) .03 (.01) (.03)
- --------------------------------------------------------------------------------
Net realized and unrealized loss (1.73) (1.75) (1.71)
- --------------------------------------------------------------------------------
Total from investment operations (1.70) (1.76) (1.74)
- --------------------------------------------------------------------------------
Net asset value, end of period $7.80 7.74 7.76
- --------------------------------------------------------------------------------
Total return (not annualized) (17.89)% (18.53) (18.32)
- --------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses absorbed by the fund 2.28% 3.18 3.15
- --------------------------------------------------------------------------------
Net investment income (loss) .40% (.50) (.47)
- --------------------------------------------------------------------------------
Other ratios to average net assets
(annualized)
Expenses 22.38% 24.06 24.03
- --------------------------------------------------------------------------------
Net investment loss (19.70)% (21.38) (21.35)
- --------------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of period $1,771,222
- --------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 69%
- --------------------------------------------------------------------------------
Note: Total return does not reflect the effect of any sales charges. Scudder
Kemper Investments, Inc. has agreed to temporarily waive its management fee and
absorb certain operating expenses of the fund. The Other Ratios to Average Net
Assets are computed without this expense waiver or absorption.
83
<PAGE>
Kemper Emerging Markets Income Fund
For the period from December 31, 1997
(commencement of operations)
to October 31, 1998
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $9.50 9.50 9.50
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income .64 .53 .54
- --------------------------------------------------------------------------------
Net realized and unrealized loss (4.14) (4.09) (4.09)
- --------------------------------------------------------------------------------
Total from investment operations (3.50) (3.56) (3.55)
- --------------------------------------------------------------------------------
Less distribution from net investment income .61 .56 .56
- --------------------------------------------------------------------------------
Net asset value, end of period $5.39 5.38 5.39
- --------------------------------------------------------------------------------
Total return (not annualized) (38.39)% (38.87) (38.75)
- --------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses absorbed by the fund before 1.68% 2.56 2.53
interest expense
- --------------------------------------------------------------------------------
Expenses absorbed by the fund after interest 2.46% 3.34 3.31
expense
- --------------------------------------------------------------------------------
Net investment income 10.59% 9.71 9.74
- --------------------------------------------------------------------------------
Other ratios to average net assets
(annualized)
Expenses before interest expense 5.12% 6.75 6.72
- --------------------------------------------------------------------------------
Expenses after interest expense 5.90% 7.53 7.50
- --------------------------------------------------------------------------------
Net investment income 7.15% 5.52 5.55
- --------------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of period $5,040,189
- --------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 294%
- --------------------------------------------------------------------------------
Note: Total return does not reflect the effect of any sales charges. Scudder
Kemper Investments, Inc. has agreed to temporarily waive its management fee and
absorb certain operating expenses of the fund. The Other Ratios to Average Net
Assets are computed without this expense waiver or absorption.
84
<PAGE>
Kemper Global Blue Chip Fund
For the period from December 31, 1997
(commencement of operations)
to October 31, 1998
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $9.50 9.50 9.50
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income .05 -- --
- --------------------------------------------------------------------------------
Net realized and unrealized gain .66 .63 .64
- --------------------------------------------------------------------------------
Total from investment operations .71 .63 .64
- --------------------------------------------------------------------------------
Net asset value, end of period $10.21 10.13 10.14
- --------------------------------------------------------------------------------
Total return (not annualized) 7.47% 6.63 6.74
- --------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses absorbed by the fund 1.80% 2.68 2.65
- --------------------------------------------------------------------------------
Net investment income .92% .04 .07
- --------------------------------------------------------------------------------
Other ratios to average net assets
(annualized)
Expenses 6.06% 7.69 7.66
- --------------------------------------------------------------------------------
Net investment loss (3.34)% (4.97) (4.94)
- --------------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of period $9,539,623
- --------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 84%
- --------------------------------------------------------------------------------
Note: Total return does not reflect the effect of any sales charges. Scudder
Kemper Investments, Inc. has agreed to temporarily waive its management fee and
absorb certain operating expenses of the fund. The Other Ratios to Average Net
Assets are computed without this expense waiver or absorption.
85
<PAGE>
Global Discovery Fund
<TABLE>
<CAPTION>
For the For the For the
Period Period Period
April 16, April 16, April 16,
1998 1998 1998
(commence- (commence- (commence-
ment of sale ment of sale ment of sale of
of Class A of Class B Class C
shares) to shares) to shares) to
October 31, October October 31,
1998 31, 1998 1998
CLASS A CLASS B CLASS C
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $23.98 $23.98 $23.98
- -----------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (.09) (.18) (.17)
- -----------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments transactions (4.11) (4.10) (4.11)
- -----------------------------------------------------------------------------------------
Total from investment operations (4.20) (4.28) (4.28)
- -----------------------------------------------------------------------------------------
Net asset value, end of period $19.78 $19.70 $19.70
- -----------------------------------------------------------------------------------------
Total return (%)(b)(c) (17.51)** (17.85)** (17.85)**
- -----------------------------------------------------------------------------------------
Ratios and Supplemental Data
Net assets, end of period ($ millions) 11 6 2
- -----------------------------------------------------------------------------------------
Ratio of operating expenses, net to average
daily net assets (%) 1.95* 2.83* 2.80*
- -----------------------------------------------------------------------------------------
Ratio of operating expenses before expense
reductions, to average daily net assets
(%) 2.20* 3.13* 3.23*
- -----------------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average daily net assets (%) (1.00)* (1.87)* (1.88)*
- -----------------------------------------------------------------------------------------
Portfolio turnover rate (%) 40.6 40.6 40.6
- -----------------------------------------------------------------------------------------
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) Total return does not reflect the effect of any sales charges.
(c) Total return would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
86
<PAGE>
Kemper Global Income Fund
Year ended December 31,
CLASS A 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning
of year $8.58 8.97 9.05 8.55 9.29
- --------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .37 .48 .52 .61 .60
- --------------------------------------------------------------------------------
Net realized and
unrealized gain (loss) .50 (.33) (.02) 1.05 (.74)
- --------------------------------------------------------------------------------
Total from investment
operations .87 .15 .50 1.66 (.14)
- --------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income .40 .47 .58 1.16 .38
- --------------------------------------------------------------------------------
Tax return of capital
distribution .11 .07 -- -- .22
- --------------------------------------------------------------------------------
Total dividends .51 .54 .58 1.16 .60
- --------------------------------------------------------------------------------
Net asset value, end of year $8.94 8.58 8.97 9.05 8.55
- --------------------------------------------------------------------------------
Total return 10.48% 1.80 5.87 19.89 (1.47)
- --------------------------------------------------------------------------------
Ratios to average net assets
Expenses 1.58% 1.32 1.48 1.34 1.53
- --------------------------------------------------------------------------------
Net investment income 4.31% 5.56 5.77 6.43 6.67
- --------------------------------------------------------------------------------
May
31 to
December
Year ended December 31, 31,
CLASS B 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning
of period $8.60 9.00 9.09 8.56 8.70
- --------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .31 .41 .46 .56 .30
- --------------------------------------------------------------------------------
Net realized and
unrealized gain (loss) .49 (.33) (.02) 1.05 (.14)
- --------------------------------------------------------------------------------
Total from investment
operations
- --------------------------------------------------------------------------------
Less dividends:
Distribution from net .34 .42 .53 1.08 .19
investment income .80 .08 .44 1.61 .16
- --------------------------------------------------------------------------------
Tax return of capital
distribution .10 .06 -- -- .11
- --------------------------------------------------------------------------------
Total dividends .44 .48 .53 1.08 .30
- --------------------------------------------------------------------------------
Net asset value, end of
period $8.96 8.60 9.00 9.09 8.56
- --------------------------------------------------------------------------------
Total return (not
annualized) 9.56% 1.03 5.11 19.21 1.89
- --------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 2.32% 2.18 2.14 1.98 2.27
- --------------------------------------------------------------------------------
Net investment income 3.57% 4.70 5.11 5.79 5.89
- --------------------------------------------------------------------------------
87
<PAGE>
May 31 to
December
Year ended December 31, 31,
CLASS C 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning
of period $8.62 9.02 9.09 8.56 8.70
- --------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .32 .42 .48 .57 .30
- --------------------------------------------------------------------------------
Net realized and
unrealized gain (loss) .49 (.33) (.02) 1.05 (.14)
- --------------------------------------------------------------------------------
Total from investment
operations .81 .09 .46 1.62 .16
- --------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income .34 .43 .53 1.09 .19
- --------------------------------------------------------------------------------
Tax return of capital
distribution .10 .06 -- -- .11
- --------------------------------------------------------------------------------
Total dividends .44 .49 .53 1.09 .30
- --------------------------------------------------------------------------------
Net asset value, end of
period $8.99 8.62 9.02 9.09 8.56
- --------------------------------------------------------------------------------
Total return (not
annualized) 9.72% 1.09 5.31 19.26 1.91
- --------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 2.13% 2.11 2.06 2.06 2.23
- --------------------------------------------------------------------------------
Net investment income 3.76% 4.77 5.19 5.71 5.93
- --------------------------------------------------------------------------------
Year ended December 31,
1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of year
(in thousands) $84,795 99,054 131,761 152,959 170,700
- --------------------------------------------------------------------------------
Portfolio turnover rate 313% 283 276 220 378
- --------------------------------------------------------------------------------
Note: Total return does not reflect the effect of any sales charges. Per share
data for 1998, 1997 and 1996 were determined based on average shares
outstanding.
88
<PAGE>
Kemper International Fund
Year ended October 31,
CLASS A 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning
of year $12.68 11.96 10.59 11.13 10.56
- -------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .04 -- .04 .07 --
- -------------------------------------------------------------------------------
Net realized and
unrealized gain .01 1.52 1.50 .05 .86
- -------------------------------------------------------------------------------
Total from investment
operations .05 1.52 1.54 .12 .86
- -------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income .08 .12 .12 -- --
- -------------------------------------------------------------------------------
Distribution from net
realized gain .55 .68 .05 .66 .29
- -------------------------------------------------------------------------------
Total dividends .63 .80 .17 .66 .29
- -------------------------------------------------------------------------------
Net asset value, end of year $12.10 12.68 11.96 10.59 11.13
- -------------------------------------------------------------------------------
Total return .45% 13.49 14.70 1.69 8.32
- -------------------------------------------------------------------------------
Ratios to average net assets
Expenses 1.64% 1.57 1.64 1.57 1.54
- -------------------------------------------------------------------------------
Net investment income .36% .16 .34 .83 .02
- -------------------------------------------------------------------------------
May 31 to
October
Year ended October 31, 31,
CLASS B 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning
of period $12.50 11.81 10.46 11.09 10.58
Income from investment
operations:
Net investment loss (.08) (.12) (.06) (.02) (.04)
- -------------------------------------------------------------------------------
Net realized and
unrealized gain .03 1.51 1.47 .05 .55
- -------------------------------------------------------------------------------
Total from investment (.05) 1.39 1.41 .03 .51
operations
- -------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income -- .02 .01 -- --
- -------------------------------------------------------------------------------
Distribution from net
realized gain .55 .68 .05 .66 --
- -------------------------------------------------------------------------------
Total dividends .55 .70 .06 .66 --
- -------------------------------------------------------------------------------
Net asset value, end of
period $11.90 12.50 11.81 10.46 11.09
- -------------------------------------------------------------------------------
Total return (not (.37)% 12.32 13.59 .84 4.82
annualized)
- -------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 2.62% 2.57 2.53 2.50 2.58
- -------------------------------------------------------------------------------
Net investment loss (.62)% (.84) (.55) (.10) (.97)
- -------------------------------------------------------------------------------
89
<PAGE>
May 31 to
October
Year ended October 31, 31,
CLASS C 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning
of period $12.51 11.81 10.46 11.09 10.58
- -------------------------------------------------------------------------------
Income from investment
operations:
Net investment loss (.08) (.09) (.06) (.02) (.04)
- -------------------------------------------------------------------------------
Net realized and
unrealized gain .03 1.49 1.47 .05 .55
- -------------------------------------------------------------------------------
Total from investment (.05) 1.40 1.41 .03 .51
operations
- -------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income -- .02 .01 -- --
- -------------------------------------------------------------------------------
Distribution from net
realized gain .55 .68 .05 .66 --
- -------------------------------------------------------------------------------
Total dividends .55 .70 .06 .66 --
- -------------------------------------------------------------------------------
Net asset value, end of
period $11.91 12.51 11.81 10.46 11.09
- -------------------------------------------------------------------------------
Total return (not
annualized) (.37)% 12.45 13.59 .84 4.82
- -------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 2.55% 2.49 2.50 2.50 2.52
- -------------------------------------------------------------------------------
Net investment loss (.55)% (.76) (.52) (.10) (.91)
- -------------------------------------------------------------------------------
Year ended October 31,
1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of year
(in thousands) $604,684 588,069 472,243 364,708 418,282
- --------------------------------------------------------------------------------
Portfolio turnover rate 105% 76 104 114 103
- --------------------------------------------------------------------------------
Note: Total return does not reflect the effect of any sales charges. Per share
data were determined based on average shares outstanding for the years ended
1995, 1996 and 1998, respectively.
90
<PAGE>
Kemper International Growth And Income Fund
For the period from December 31, 1997
(commencement of operations)
to October 31, 1998
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $9.50 9.50 9.50
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income .13 .04 .05
- --------------------------------------------------------------------------------
Net realized and unrealized gain .20 .22 .21
- --------------------------------------------------------------------------------
Total from investment operations .33 .26 .26
- --------------------------------------------------------------------------------
Less distribution from net investment income .10 .05 .05
- --------------------------------------------------------------------------------
Net asset value, end of period $9.73 9.71 9.71
- --------------------------------------------------------------------------------
Total return (not annualized) 3.31% 2.64 2.65
- --------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses absorbed by the fund 1.81% 2.69 2.66
- --------------------------------------------------------------------------------
Net investment income 1.54% .66 .69
- --------------------------------------------------------------------------------
Other ratios to average net assets
(annualized)
Expenses 13.58% 15.21 15.18
- --------------------------------------------------------------------------------
Net investment loss (10.23)% (11.86) (11.83)
- --------------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of period $4,270,979
- --------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 97%
- --------------------------------------------------------------------------------
Note: Total return does not reflect the effect of any sales charges. Scudder
Kemper Investments, Inc. has agreed to temporarily waive its management fee and
absorb certain operating expenses of the fund. The Other Ratios to Average Net
Assets are computed without this expense waiver or absorption.
91
<PAGE>
Kemper Latin America Fund
For the period from December 31, 1997
(commencement of operations)
to October 31, 1998
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $9.50 9.50 9.50
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income .06 .04 .04
- --------------------------------------------------------------------------------
Net realized and unrealized loss (2.25) (2.28) (2.28)
- --------------------------------------------------------------------------------
Total from investment operations (2.19) (2.24) (2.24)
- --------------------------------------------------------------------------------
Net asset value, end of period $7.31 7.26 7.26
- --------------------------------------------------------------------------------
Total return (not annualized) (23.05)% (23.58) (23.58)
- --------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses absorbed by the fund 2.21% 3.09 3.06
- --------------------------------------------------------------------------------
Net investment income 1.38% .50 .53
- --------------------------------------------------------------------------------
Other ratios to average net assets
(annualized)
Expenses 12.75% 14.38 14.34
- --------------------------------------------------------------------------------
Net investment loss (9.16)% (10.79) (10.75)
- --------------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of period $1,460,498
- --------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 55%
- --------------------------------------------------------------------------------
Note: Total return does not reflect the effect of any sales charges. Scudder
Kemper Investments, Inc. has agreed to temporarily waive its management fee and
absorb certain operating expenses of the Fund. The Other Ratios to Average Net
Assets are computed without this expense waiver or absorption.
92
<PAGE>
Additional information about each fund may be found in the Statement of
Additional Information, the Shareholder Services Guide and in shareholder
reports. Shareholder inquiries may be made by calling the toll-free telephone
number listed below. The Statement of Additional Information contains more
detailed information on fund investments and operations. The Shareholder
Services Guide contains more information about purchases and sales of fund
shares. The semiannual and annual shareholder reports contain a discussion of
the market conditions and the investment strategies that significantly affected
the funds' performance during the last fiscal year, as well as a listing of
portfolio holdings and financial statements. These and other fund documents may
be obtained without charge from the following sources:
- --------------------------------------------------------------------------------
By Telephone Call the Kemper Funds at: 1-800-621-1048
- --------------------------------------------------------------------------------
By Mail Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
or
Public Reference Section,
Securities and Exchange Commission
Washington, D.C. 20549-6009
(a duplication fee is charged)
- --------------------------------------------------------------------------------
In Person Public Reference Room
Securities and Exchange Commission
Washington, D.C.
(Call 1-800-SEC-0330
for more information.)
- --------------------------------------------------------------------------------
By Internet http://www.sec.gov
http://www.kemper.com
- --------------------------------------------------------------------------------
For each of the funds, the respective Statement of Additional Information dated
March 1, 1999 is incorporated by reference into this prospectus (is legally a
part of this prospectus).
Investment Company Act file numbers:
Growth Fund Of Spain 811-08395
Kemper Asian Growth Fund 811-7731
Kemper Emerging Markets Growth Fund 811-08395
Kemper Emerging Markets Income Fund 811-08395
Kemper Global Blue Chip Fund 811-08395
Global Discovery Fund 811-4670
Kemper Global Income Fund 811-5829
Kemper International Fund 811-3136
Kemper International Growth And Income Fund 811-08395
Kemper Latin America Fund 811-08395
