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KEMPER INVESTORS FUND
SUPPLEMENT TO PROSPECTUS
DATED MAY 1, 1994
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The "INVESTMENT MANAGER" section of the prospectus has been updated in its
entirety as follows:
INVESTMENT MANAGER
INVESTMENT MANAGER. Kemper Financial Services, Inc. ("KFS"), 120 South LaSalle
Street, Chicago, Illinois 60603, is the investment manager of the Fund and
provides the Fund with continuous professional investment supervision. KFS is
one of the largest investment managers in the country and has been engaged in
the management of investment funds for more than forty years. KFS and its
affiliates provide investment advice and manage investment portfolios for the
Kemper Funds, the Kemper insurance companies, Kemper Corporation and other
corporate, pension, profit-sharing and individual accounts representing
approximately $60 billion under management. KFS acts as investment adviser for
24 open-end and seven closed-end investment companies, with 56 separate
investment portfolios representing more than 3 million shareholder accounts. KFS
is a wholly-owned subsidiary of Kemper Financial Companies, Inc., which is a
financial services holding company that is more than 96% owned by Kemper
Corporation, a diversified insurance and financial services holding company.
Responsibility for overall management of the Fund rests with its Board of
Trustees and officers. Professional investment supervision is provided by KFS.
The investment management agreement provides that KFS shall act as the Fund's
investment adviser, manage its investments and provide it with various services
and facilities. For its services, KFS is paid a management fee at an effective
annual rate, payable monthly, of .50%, .55%, .60%, .60%, .55%, .75% and .65% of
average daily net assets of the Money Market, Total Return, High Yield, Equity,
Government Securities, International and Small Capitalization Equity Portfolios,
respectively. KFS may from time to time use the services of Kemper Investment
Management Company Limited ("KIMCO"), 1 Fleet Place, London EC4M 7RQ, a
wholly-owned subsidiary of KFS, with respect to foreign securities investments
of the Portfolios including analysis, research, execution and trading services.
Frank J. Rachwalski, Jr. is the portfolio manager of the Money Market Portfolio.
He has served in this capacity since the Portfolio commenced operations in 1982.
Mr. Rachwalski joined KFS in January 1973 and is currently a Senior Vice
President of KFS and a Vice President of the Fund. He received a B.B.A. and an
M.B.A. from Loyola University, Chicago, Illinois.
Karen A. Hussey has been the portfolio manager of the Small Capitalization
Equity Portfolio since September 1994 when she joined KFS. She is a Vice
President of the Fund. Prior to joining KFS, she was a portfolio manager for a
national bank. She received a B.S. from Southwest Missouri State, Springfield,
Missouri and did graduate work towards an M.B.A. at St. Louis University. Ms.
Hussey is a Chartered Financial Analyst.
Dennis H. Ferro has been the portfolio manager for the International Portfolio
since March 1994 when he joined KFS. He is an Executive Vice President and the
Director of International Equity Investments of KFS and a Vice President of the
Fund. Mr. Ferro was President, Managing Director and Chief Investment Officer of
an international investment advisory firm prior to joining KFS. He received a
B.A. in Political Science from Villanova University, Villanova, Pennsylvania and
an MBA in Finance from St. Johns University, Jamaica, New York. Mr. Ferro is a
Chartered Financial Analyst.
Michael A. McNamara (since 1990) and Harry E. Resis, Jr. (since 1993) are the
co-portfolios managers of the High Yield Portfolio. Mr. McNamara joined KFS in
February 1972 and is currently a Senior Vice President of KFS and a Vice
President of the Fund. He received a B.S. in Business Administration from the
University of Missouri, St. Louis, Missouri, and an M.B.A. in Finance from
Loyola University, Chicago, Illinois. Mr. Resis joined KFS in 1988 and is
currently a First Vice President of KFS and a Vice President of the Fund. He
received a B.A. in Finance from Michigan State University, Lansing, Michigan.
Mr. Resis holds a number of NYSE and NASD licenses.
C. Beth Cotner has been the portfolio manager of the Equity Portfolio since
1986. Ms. Cotner joined KFS in January 1985 and is currently an Executive Vice
President and the Director of Domestic Equity Portfolio Management of KFS and a
Vice President of the Fund. She received a B.A. from Ohio State University,
Columbus, Ohio, and an M.B.A. from George Washington University, Washington,
D.C.
J. Patrick Beimford, Jr. has been the portfolio manager of the Government
Securities Portfolio since 1987. Mr. Beimford joined KFS in April 1976 and is
currently an Executive Vice President and the Director of Fixed Income
Investments of KFS and a Vice President of the Fund. He received a B.S.I.M. in
Business from Purdue University, West Lafayette, Indiana, and an M.B.A. in
Finance from the University of Chicago, Chicago, Illinois. Mr. Beimford is a
Chartered Financial Analyst.
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J. Patrick Beimford, Jr., Robert S. Cessine, C. Beth Cotner, Dennis H. Ferro,
Gordon K. Johns, Gary A. Langbaum, Michael A. McNamara and Harry E. Resis, Jr.
have been the portfolio management team for the Total Return Portfolio since
January 1995. See above for information about Mr. Beimford, Mrs. Cotner, Mr.
Ferro, Mr. McNamara and Mr. Resis. Mr. Cessine joined KFS in 1993 and is a First
Vice President of KFS in the fixed-income area. Before joining KFS, Mr. Cessine
was a vice president of an investment management company. He received a B.S. in
Economics from the University of Wisconsin, Madison, Wisconsin, an M.S. in
Agricultural and Resource Economics from the University of Maryland,
(Baltimore/College Park), Maryland and an M.S. in Finance from the University of
Wisconsin, Madison, Wisconsin. Mr. Johns joined KIMCO in September 1988 and is
currently an Executive Vice President and the Director of International Fixed
Income Investments of KFS and a Director and the Managing Director of KIMCO. He
received a B.A. in law from Balliol College in Oxford, United Kingdom. Mr.
Langbaum joined KFS in 1988 and is currently an Executive Vice President of KFS
and heads equity research. He received a B.A. in Finance from the University of
Maryland, College Park, Maryland.
KFS has an Equity Investment Committee that determines overall investment
strategy for equity portfolios managed by KFS. The Equity Investment Committee
is currently comprised of the following members: Daniel J. Bukowski, Tracy
McCormick Chester, C. Beth Cotner, James H. Coxon, Richard A. Goers, Karen A.
Hussey, Frank D. Korth, Gary A. Langbaum, Sandy A. Lincoln, James R. Neel and
Thomas M. Regner. The portfolio managers work together as a team with the Equity
Investment Committee and various equity analysts and equity traders to manage
the Fund's equity Portfolios. Equity analysts--through research, analysis and
evaluation--work to develop investment ideas appropriate for these Portfolios.
These ideas are studied and debated by the Equity Investment Committee and, if
approved, are added to a list of eligible investments. The portfolio managers
use the list of eligible securities to help them structure the Portfolios in a
manner consistent with each Portfolio's objective. The KFS international
investments area, directed by Dennis H. Ferro, provides research and analysis
regarding foreign investments to the portfolio managers. After investment
decisions are made, equity traders execute the portfolio manager's instructions
through various broker-dealer firms.
KFS also has a Fixed Income Investment Committee that determines overall
investment strategy for fixed income portfolios managed by KFS. The Fixed Income
Committee is currently comprised of the following members: J. Patrick Beimford,
Jr., Frank E. Collecchia, George Klein, Sandy A. Lincoln, Michael A. McNamara,
Christopher J. Mier, Frank J. Rachwalski, Jr., Harry E. Resis, Jr., Robert H.
Schumacher, John E. Silvia, Kenneth T. Urbaszewski and Christopher T. Vincent.
The portfolio managers work together as a team with the Fixed Income Committee
and various fixed income analysts and traders to manage the Fund's fixed income
Portfolios. Analysts provide market, economic and financial research and
analysis that is used by the Fixed Income Committee to establish broad
parameters for these Portfolios, including duration and cash levels. In
addition, credit research by analysts is used by portfolio managers in selecting
securities appropriate for the Portfolios' policies. The KFS international
investments area provides research and analysis regarding foreign investments to
the fixed income portfolio managers, as it does for the equity portfolio
managers. After investment decisions are made, fixed income traders execute the
portfolio manager's instructions through various broker-dealer firms.
CUSTODIAN. Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street,
Kansas City, Missouri 64105, as custodian, and the United Missouri Bank, n.a.,
Tenth and Grand Streets, Kansas City, Missouri 64106 and State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, as
sub-custodians, have custody of all securities and cash of the Fund maintained
in the United States. The Chase Manhattan Bank, N.A., Chase MetroTech Center,
Brooklyn, New York 11245, as custodian, has custody of all securities and cash
held outside the United States. They attend to the collection of principal and
income, and payment for and collection of proceeds of securities bought and sold
by the Fund. IFTC is also the Fund's transfer agent and dividend-paying agent.
IFTC receives an annual custodian fee from the Portfolios of $.085 for each
$1,000 of average monthly net assets plus certain transaction charges and
out-of-pocket expense reimbursements subject to the custody agreement. For its
services as custodian and transfer agent for the fiscal year ended December 31,
1993, IFTC received fees of $276,000. Prior to February 1, 1995, IFTC was 50%
owned by KFS.
PORTFOLIO TRANSACTIONS. KFS places all orders for purchases and sales of a
Portfolio's securities. Subject to seeking best execution of orders, KFS may
consider sales of shares of the Fund and other funds managed by KFS or variable
life insurance and variable annuity contracts funded by the Fund as a factor in
selecting broker-dealers. See "Portfolio Transactions" in the Statement of
Additional Information.
Each Portfolio pays its respective fees and expenses of independent auditors,
counsel, custodian, the cost of reports and notices to owners of VLI and VA
contracts, brokerage commissions or transactions costs, taxes and registration
fees.
February 3, 1995
KINF-04 2/95 (LOGO)printed on recycled paper
