<PAGE> 1
INVESTORS FUND SERIES
SEMIANNUAL REPORT TO SHAREHOLDERS FOR THE PERIOD ENDED JUNE 30,
1997
" . . . Kemper's response to
this market is to remain fully invested and to reduce
exposure by diversifying . . ."
[KEMPER ANNUITIES LOGO]
<PAGE> 2
INVESTORS FUND SERIES
KEMPER MONEY MARKET PORTFOLIO
KEMPER TOTAL RETURN PORTFOLIO
KEMPER HIGH YIELD PORTFOLIO
KEMPER GROWTH PORTFOLIO
KEMPER GOVERNMENT SECURITIES PORTFOLIO
KEMPER INTERNATIONAL PORTFOLIO
KEMPER SMALL CAP GROWTH PORTFOLIO
KEMPER INVESTMENT GRADE BOND PORTFOLIO
KEMPER VALUE PORTFOLIO
KEMPER SMALL CAP VALUE PORTFOLIO
KEMPER VALUE+GROWTH PORTFOLIO
KEMPER HORIZON 20+ PORTFOLIO
KEMPER HORIZON 10+ PORTFOLIO
KEMPER HORIZON 5 PORTFOLIO
KEMPER BLUE CHIP PORTFOLIO
KEMPER GLOBAL INCOME PORTFOLIO
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT, AS
STATED ON THE COVER. THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT
ANY TIME, BASED ON MARKET AND OTHER CONDITIONS.
<PAGE> 3
ECONOMIC OVERVIEW
[TIMBERS PHOTO]
STEPHEN B. TIMBERS IS PRESIDENT, CHIEF INVESTMENT AND EXECUTIVE OFFICER OF
ZURICH KEMPER INVESTMENTS, INC. (ZKI). ZKI AND ITS AFFILIATES MANAGE
APPROXIMATELY $79 BILLION IN ASSETS, INCLUDING $44 BILLION IN RETAIL MUTUAL
FUNDS. TIMBERS IS A GRADUATE OF YALE UNIVERSITY AND HOLDS AN M.B.A. FROM HARVARD
UNIVERSITY.
DEAR CONTRACT HOLDER,
A self-regulating economy, a balanced budget agreement and a positive stock
market all have contributed to another excellent year for investors. Given the
extended length of today's bull market (which celebrated its 15th anniversary on
August 12), it is prudent to wonder whether the end is near. Our position is
that while there is a certain precariousness to today's environment, which we
will elaborate on below, we see little to suggest that there will be more than
occasional market corrections.
Bipartisan agreement to balance the federal budget by the year 2002 represents
significant progress that should benefit investors over the long term. By
reducing the burden of capital gains and eliminating certain tax loopholes, the
Taxpayer Relief Act of 1997 and the Balanced Budget Act of 1997 have the
potential to meaningfully affect behavior. Now that the ceiling has been raised
on capital gains from the sale of a home, empty nesters will be more inclined to
move out of homes and into smaller condominiums. Added investment and savings
options should help boost the country's sagging savings rate. From a social
perspective, government's action to widen the difference between the taxation
rate on capital gains and on income reflects a conscious effort to encourage
capital investment. The more people and businesses can do for themselves, the
less likely they are to rely on the government, which should help restrain
federal spending.
The maximum tax on long-term capital gains is now 20 percent versus a maximum
of approximately 40 percent on ordinary income earned by Americans in the
highest income tax brackets. This dramatic difference could have some influence
on the management of mutual funds in the future. Although few investment
decisions are based on their tax consequences, the legislation supports a "buy
and hold" approach to investing, by which a mutual fund generates investment
returns through gains on investments held 18 months or longer. Such gains are
taxed at the reduced capital gains rate. On the margin, portfolio managers
should focus on long-term investing -- the strategy that we have always
supported.
In addition, mutual funds will gain investment flexibility with the new law's
repeal of what has been called the "short/short rule." Previously, investment
companies had been subject to a 30 percent limitation on total income arising
from the sale of securities held less than three months -- or face severe tax
consequences. The lifting of this limitation provides newer funds, in
particular, with much needed maneuvering ability.
You can expect to hear more from Kemper about the implications of the new
legislation, and specifically about the tax reporting changes, over the next
several weeks and months. Overall, we believe that this legislation is something
the country can be proud of. It represents years of a commitment on the part of
the federal government to hold spending in check and refrain from creating new
programs. Expanding corporate revenues and profits in an extended period of low
inflation also contributed to making this investor-friendly environment
possible.
As we look toward the end of the year, we see little to trouble us. The
economy appears to be in excellent condition. Continuing the alternatingly
fast/slow pace that we have experienced for several months, the fast-growing
first quarter was followed by a slower second quarter. Such self-regulation has
minimized any need for the Federal Reserve Board to raise interest rates again.
We don't rule out the possibility of another hike in the fourth quarter,
however.
Inflation is very low. In spite of unemployment being the lowest we have seen
in decades, wage pressures are still manageable. For example, the United Parcel
Service strike and the earlier steel and airlines work actions represent the
most union activity we have seen in 10 years. Encouraged by the low unemployment
(and therefore high demand for workers), the unions are becoming bolder but in
the end seem ready to resolve disputes sensibly. As a consequence, wage
increases remain moderate.
3
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ECONOMIC OVERVIEW
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ECONOMIC GUIDEPOSTS
- -------------------------------------------------------------------------------
Economic activity is a key influence on investment performance and shareholder
decision-making. Periods of recession or boom, inflation or deflation, credit
expansion or credit crunch have a significant impact on mutual fund performance.
The following are some significant economic guideposts and their investment
rationale that may help your investment decision-making. The 10-year Treasury
rate and the prime rate are prevailing interest rates. The other data report
year-to-year percentage changes.
[BAR GRAPH]
<TABLE>
<CAPTION>
NOW (07/31/97) 6 MONTHS AGO 1 YEAR AGO 2 YEARS AGO
<S> <C> <C> <C> <C>
10-YEAR TREASURY RATE(1) 6.22 6.42 6.64 6.49
PRIME RATE(2) 8.5 8.25 8.25 8.75
INFLATION RATE(3) 2.23 3.03 2.88 2.62
THE U.S. DOLLAR(4) 7.32 7.67 4.26 -4.11
CAPITAL GOODS ORDERS(5)* 7.11 3.61 16.26 1.75
INDUSTRIAL PRODUCTION(5)* 3.84 4.84 3.38 2.36
EMPLOYMENT GROWTH(6) 2.24 2.2 2.14 2.42
</TABLE>
(1) Falling interest rates in recent years have been a big plus for financial
assets.
(2) The interest rate that commercial lenders charge their best borrowers.
(3) Inflation reduces an investor's real return. In the last five years, infla-
tion has been as high as 6%. The low, moderate inflation of the last few
years has meant high real returns.
(4) Changes in the exchange value of the dollar impact U.S. exporters
and the value of U.S. firms' foreign profits.
(5) These influence corporate profits and equity performance.
(6) An influence on family income and retail sales.
* Data as of June 30, 1997.
SOURCE: ECONOMICS DEPARTMENT, ZURICH KEMPER INVESTMENTS, INC.
Our primary concern is the very high valuations of the stock market. All
things considered, it is difficult to see where we can go from here. With prices
at such heady levels, the market can be expected to react negatively to even
minor earnings disappointments, as we have seen in August. Kemper's response to
this market is to remain fully invested and to reduce exposure by diversifying
across a wider group of investment opportunities. Research, the first step in
stock selection, is key in this kind of a market.
Bond markets are obviously cheered by recent events, and prospects for income
investors continue to be positive. Interest rates are stable and credit quality
has not been an issue. A dwindling supply of municipal bonds has enabled
municipal investments to outperform U.S. Treasuries.
In such a fully valued domestic market, it can make sense to look to
international markets for their growth potential. The strength of the dollar
thus far this year has diminished returns but international opportunities look
bright.
With this commentary as an economic backdrop, we encourage you to read the
following detailed report. Thank you for your continued support. We appreciate
the opportunity to serve your investment needs.
Sincerely,
Stephen B. Timbers
STEPHEN B. TIMBERS
PRESIDENT, CHIEF INVESTMENT AND EXECUTIVE OFFICER
Zurich Kemper Investments, Inc.
August 14, 1997
4
<PAGE> 5
MANAGEMENT SUMMARY
KEMPER MONEY MARKET PORTFOLIO
- ------------------------------------
Early in the new year, the economy registered signs of vigor and economic data
was strong. This upswing led to speculation that the Federal Reserve Board (the
Fed) would tighten monetary conditions to guard against increased inflation. The
possibility of a rate adjustment caused a steepening of the yield curve and
slightly higher yield levels. In late March, the Fed did increase rates by 25
basis points despite the lack of inflationary pressures. Following the rate
hike, concerns over the possibility of further tightening continued to affect
yields, but to date inflation has not increased and we do not anticipate the Fed
to take action until a definite rise is seen.
With moderate economic growth and modest inflationary pressures, we remained
somewhat defensive with maturities. We adjusted holdings to take advantage of
any opportunities the market provided.
Looking forward, we anticipate uninterrupted, moderate economic growth coupled
with subdued but rising inflationary pressures. With this in mind, we do expect
the Fed to consider increasing rates again in the second half of the year. The
economic recovery is continuing and based on recent statistics, its momentum
appears to remain strong. Labor markets have firmed as measured by employment
statistics, consumer confidence is high and quarterly measures of the gross
domestic product should be above trend for a non-inflationary expansion.
Frank Rachwalski
Portfolio Manager
June 30, 1997
KEMPER TOTAL RETURN PORTFOLIO
- ------------------------------------
The stock market during 1997 can be characterized as very strong but volatile.
The market has seen days of dramatic increase only to see the gains taken away
the next day. The portfolio began the year overweighted in technology, financial
and health care stocks. These sectors all performed very well and we began to
take profits. As we trimmed back our technology holdings we did, however,
maintain our weighting in software stocks. We feel that they will do well as
significant expenditures will need to be made as the year 2000 approaches. Stock
selection remained the key for us this year, as we continue to aggressively
apply our growth at the right price (GARP) strategy.
The bonds in the portfolio have basically been earning their dividend and the
prices have stayed relatively flat. We have been purchasing more bonds because,
as the stocks continue to appreciate, we need to add bonds to maintain our
current 65% stock and 35% bond mix. We have added government bonds for quality
and increased our exposure to high yield bonds to pick up yield. The 35% bond
commitment is not a barometer of our outlook on the stock and bond markets, but
rather a risk reducer.
Going into the second half of the year, we have become a bit more defensive.
In addition to trimming back our technology holdings, we have also begun to
build up our consumer retail holdings; this is in anticipation of an increase in
consumer spending.
Gary Langbaum
Maureen Lentz
Portfolio Co-Managers
June 30, 1997
KEMPER HIGH YIELD PORTFOLIO
- ------------------------------------
High yield bonds performed well throughout most of the six-month reporting
period. There was, however, a brief correction in March after the Federal
Reserve Board (the Fed) raised short-term interest rates by 0.25 percent. As a
result of the rate hike and concern about the historically tight spreads in the
market, the market sold off, causing spreads to widen and high yield values to
fall somewhat.
In anticipation of the Fed's intervention, we reduced the fund's level of
BB-rated bonds. BB-rated bonds are the highest quality securities that are still
considered to be high yield, or below investment grade bonds. Reducing our BB
holdings made sense because the closer a bond is to an investment-grade
security, the more it tends to perform in-line with interest rates.
Since March, high yield bonds have bounced back, posting positive returns
throughout the remainder of the period. Economic growth remains slow but
consistent, which is positive for companies issuing high yield debt. Slow
economic growth generates consumer spending, which fuels earnings and enables
companies to meet their coupon payments. Growth at a controlled rate tends to be
fundamentally good for high yield bonds.
The current low rate of defaults in the high yield market is also very
positive for high yield investors because it means the coupons on high yield
investments are being paid consistently. The lack of defaults can be attributed
to the economic expansion the U.S. has been experiencing over the last six
years. The economy has been growing slowly but consistently and inflation
remains relatively benign. Economic growth, low
5
<PAGE> 6
MANAGEMENT SUMMARY
inflation and a lack of defaults are critical components of a healthy high yield
market and, although markets can change at any time, we're now experiencing all
three. For these reasons, we remain bullish about the high yield market.
Michael McNamara
Harry Resis
Portfolio Co-Managers
June 30, 1997
KEMPER GROWTH PORTFOLIO
- ------------------------------------
Technology stocks and large capitalization stocks have driven the market this
year. Although the market has hit new highs, it has been a volatile period. This
volatility has presented many good buying opportunities, particularly within the
technology sector. At the beginning of the year, the portfolio held a large
number of mid-capitalization stocks. Initially, two factors were involved in the
decision to hold more mid-capitalization stocks: first, the valuations on many
of the larger companies were high and the earnings could not be purchased at
reasonable prices; second, the economic and political environment indicated that
the market could become more comfortable with mid-cap issues. The latter had
been lagging the market since last June and are the primary reason for the
portfolio's underperformance. Since the beginning of the year, most of the
mid-capitalization stocks that were in the portfolio have been sold. Those
assets were reallocated to large company stocks.
Our shift to larger more established growth companies helped during the market
sell-off in March. Some of our larger technology stocks held up well and added
positive relative performance. The portfolio's holdings in retail stocks also
performed strongly. The volatility within technology stocks created buying
opportunities in quality companies that, a few weeks earlier, were not
attractively priced. Some of the technology stocks we have purchased include:
Cisco Systems, PeopleSoft, Sun Microsystems and Hewlett-Packard.
Lately, we have been adding to the number of stocks and the number of
industries in the portfolio. The market has been volatile this year and we
believe the best strategy in this environment is a more diversified portfolio,
not only diversified by sector but also by spreading the risk across more
stocks.
Steven H. Reynolds
Portfolio Manager,
Chief Investment Officer--Equities
June 30, 1997
6
<PAGE> 7
MANAGEMENT SUMMARY
KEMPER GOVERNMENT SECURITIES PORTFOLIO
- ------------------------------------
Economic growth picked up at the start of the first quarter of 1997 and
continued to gain momentum throughout March. The bond market was volatile as
investors debated the likelihood and timing of a possible Federal Reserve Board
intervention. In March, as a preemptive move aimed at slowing growth in the
economy and at maintaining a low rate of inflation, the Federal Reserve Board
did raise short-term interest rates by 0.25 percent. This hurt the markets and
caused yields to rise and securities prices to fall.
We began preparing for the rate hike in January by shortening the
fund's duration. Duration is a measurement of a portfolio's sensitivity to
interest rates--the shorter the duration, the less sensitive the portfolio is to
interest rate changes. In addition, we sold Treasury notes in favor of GNMA
mortgages, which have shorter durations and tend to outperform Treasuries in a
rising interest rate environment. These preemptive moves lessened the impact of
the Fed's intervention on the portfolio.
By the end of April, signs of more modest growth began to appear and
inflation remained benign. This helped fixed-income investments begin to regain
some lost ground. As a result, market yields declined again and the government
bond market performed relatively well for the remainder of the six-month period.
As it was clear that the economy was moderating, the duration of the portfolio
was extended and its allocation to mortgages was reduced somewhat. We remain
optimistic about the government bond market and feel that the current slow
economic growth environment with relatively benign inflation should support
further gains in the market.
Richard Vandenberg
Portfolio Manager
June 30, 1997
KEMPER INTERNATIONAL PORTFOLIO
- ------------------------------------
The International Fund reached the half-year mark ahead of the Morgan Stanley
Capital International EAFE Index+. Our concentration on highly-focused,
growth-oriented companies in the European equity markets helped us achieve
consistent returns. Low inflation, low interest rates and moderate growth,
combined with the benefits the export sector experienced due to the dollar's
strength, created a very positive investment environment throughout Europe.
We maintained a smaller exposure to Japan than the index. The holdings we had
in this market focused on globally competitive companies that do significant
exporting to other world markets and have higher than average profit margins on
unique products or services. Technology and auto companies are two industries
that met these criteria. We modestly reduced our position in Southeast Asia,
trimming our exposure across the region. The money pulled from these struggling
Asian markets was used to increase our exposure to companies in Europe and Latin
America.
Going forward, we remain positive on the world equity markets while being
aware that they have a heightened sensitivity to U.S. interest rates. With the
exception of the UK, we do not see signs of enough inflation to lead to rate
hikes in international markets. Our weightings should continue to favor Europe.
We are moving modestly higher in Japan and intend to continue to underweight
Asia. The focus in Latin America will remain on Mexico with smaller positions in
Peru and Brazil.
Dennis Ferro
Portfolio Manager
June 30, 1997
+THE MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX IS AN UNMANAGED INDEX THAT
IS A GENERALLY ACCEPTED BENCHMARK FOR MAJOR OVERSEAS MARKETS.
7
<PAGE> 8
MANAGEMENT SUMMARY
KEMPER SMALL CAP GROWTH PORTFOLIO
- ------------------------------------
Small company stocks have seen a rebound in recent months. Relative to the
rest of the market small company stocks are still attractive. Their valuations
are considerably lower than those of the large company stocks driving market
returns.
The portfolio's outperformance can be attributed to two things--technology and
consumer nondurable stocks. Throughout the year the portfolio has remained
overweighted in both sectors. The technology portion of the portfolio has
benefited from outsourcing, semiconductor and software companies. The consumer
non-durable holdings which have performed well are retail and full service
hotels.
During the first half of the year growth stocks--particularly technology
issues--were in favor. Going forward the portfolio will likely place more
emphasis on cyclical stocks. We believe that cyclical stocks will perform well
as the economy continues to strengthen and lower interest rates begin spurring
demand. We will continue to use a "bottom-up" approach and select stocks based
on their own merits rather than focus on an entire sector. Our approach will
continue to focus on companies we believe have sustainable, predictable earnings
growth, healthy balance sheets and strong management. And finally, the companies
must be attractively valued relative to the market and their peers.
Kurt Stalzer
Dave Burshtan
Portfolio Co-Managers
June 30, 1997
KEMPER INVESTMENT GRADE BOND PORTFOLIO
- ------------------------------------
The six-month reporting period was somewhat volatile for investment grade
corporate bonds. Economic growth picked up at the start of the year and
continued to gain momentum throughout March. This pick-up in growth caused
investors to debate the likelihood and timing of a possible Federal Reserve
Board intervention. In March, the Federal Reserve Board (the Fed) raised
short-term interest rates by 0.25 percent. This was a preemptive move aimed at
slowing growth in the economy and at maintaining a low rate of inflation. The
rate hike hurt the bond markets and caused yields to rise and securities prices
to fall. Investment grade corporate bonds were hurt also by the simultaneous
decline in the stock market. Since then, however, the investment grade corporate
bond market has bounced back and regained much of the ground lost earlier.
We prepared for the rate hike by managing the portfolio with a neutral to
defensive duration. Duration is a measurement of a fund's sensitivity to
interest rates--the shorter the duration, the less sensitive the portfolio is to
interest rate changes. As the Fed intervention became imminent, we shortened
duration further by increasing the level of cash and cash equivalents in the
portfolio. This helped to limit the impact of the short-term interest rate hike
in March. We began redeploying the cash reserves in May as it was clear that
inflation was under control and economic growth had moderated. Primarily, we
used the cash reserves to build our allocation to corporate bonds and
Treasuries.
With its larger position in corporate bonds, the portfolio benefited as
investment grade corporate bonds rallied in May and June. We remain optimistic
about the corporate bond market. We feel the current slow economic growth
environment, with relatively benign inflation and a strong equity market, should
support further gains.
Robert Cessine
Portfolio Manager
June 30, 1997
8
<PAGE> 9
MANAGEMENT SUMMARY
KEMPER VALUE PORTFOLIO
- ------------------------------------
The outstanding return of the market masks the volatility experienced this
year. Thus far, the returns of the market have been driven by a relatively small
number of stocks--so-called "nifty fifty" companies that are typically large,
multinational consumer product firms. These stocks usually have high price-to-
earnings ratios (P/E), meaning they are expensive relative to what they are
currently earning. This means we have been unable to invest in the stocks
driving the market because we are low P/E investors. Despite that, our stock
picking has been excellent and allowed us to perform well relative to our peers.
The top performing stocks in the portfolio have not been isolated to one sector.
We continue to hold substantial positions in financial and energy stocks. Both
of these areas continue to show strong performance and solid fundamentals.
We are comfortable with the position of the portfolio and we believe it has
the potential to do well under most scenarios. We own very few of the "nifty
fifty" stocks. So, if the rest of the market begins to outperform these stocks,
we should do well relative to our competition because we will have bought many
of these non- "nifty fifty" stocks at lower levels. Also, should the "nifty
fifty" stocks begin to fall, their decline should affect us less since our
holdings do not typically fall into the high-priced , growth-oriented category.
While future performance can not be predicted with certainty, the portfolio will
be insulated, to an extent, by our value philosophy should the market begin to
decline, and conversely, has the potential to perform well if the market
continues to surprise on the upside.
Thomas Sassi
Portfolio Manager
June 30, 1997
KEMPER SMALL CAP VALUE PORTFOLIO
- ------------------------------------
Small company stocks have shown momentum in June, and have begun to make up
ground against large cap stocks. Investors are still favoring the large liquid
stocks and money flowing into those stocks has driven up their prices. We feel
the new-found momentum of small company stocks is sustainable because their
price-to-earnings ratios are lower than those of large company stocks. And,
large company profits are beginning to level off as a strengthening dollar puts
pressure on earnings.
Strong stock selection has been the key to the portfolio's outperformance this
year. For the first part of the year much of the outperformance was due to our
underweighting in technology stocks. As technology stocks rebounded at mid-year,
our stock selection has been the driving force behind the portfolio's
performance. Individual issues which have done well for us include: Electroglas,
a semi-conductor company, and Asyst Technologies, a company that makes clean
rooms in which semi-conductors are made. Scientific-Atlanta and Jones Intercable
have shown strong performance this year. Compass Bancshares has worked well in
the consumer finance area. Airborne Freight, the overnight delivery company, has
also done well this year. We will continue to concentrate on stock selection.
Our job is not to time the market but to position the portfolio for the
opportunity to perform well in both up and down markets.
Thomas Forester
Steven Stokes
Portfolio Co-Managers
June 30, 1997
KEMPER VALUE+GROWTH PORTFOLIO
- ------------------------------------
While we tend to adhere to a "growth at the right price" philosophy, the
market lately seems to be driven by a "growth at any price" approach. Investors
have been focusing on a very concentrated group of stocks: large, multinational
companies with strong brands such as Coke and McDonald's. People seem willing to
pay any amount to own these stocks. We believe these stocks are too expensive
and, while our performance has been hindered somewhat by not owning them, we see
far more downside than upside to them at this point.
The strategy for the year has been one of "bottom-up" stock picking rather
than trying to predict broad moves in the market. On the value side of the
portfolio we have been buying tobacco stocks. Financial stocks continue to
perform well and we have been adding to basic industries such as paper, steel,
and chemicals. Our growth stock holdings remain committed to technology which,
after some bumps along the way, have bounced back nicely. The portfolio
currently remains allocated 60% growth and 40% value stocks. The current
economic environment, moderate growth and stable interest rates, typically tends
to favor growth stocks. Until we see signs of an accelerating economy or a
threat of significantly higher interest rates, we'll likely maintain our bias
toward growth stocks.
Daniel J. Bukowski
William Knapp
Portfolio Co-Managers
June 30, 1997
9
<PAGE> 10
MANAGEMENT SUMMARY
KEMPER HORIZON 20+
HORIZON 10+
HORIZON 5 PORTFOLIOS
- ------------------------------------
This year the market has been led by large capitalization domestic stocks,
although small company and international stocks have been staging a comeback
recently. The market's value has increased dramatically but so has its
volatility. When the market has declined, the portfolios' diversification has
paid off. But, because large cap stocks have significantly outperformed all
other asset classes, overall the portfolio has modestly trailed the market.
The portfolios' performance has been led by technology and financial stocks.
Technology stocks have been volatile throughout the year but overall have been
strong performers. Financial stocks have also done well and with less volatility
than technology stocks. We have begun to increase our holdings in tobacco stocks
and basic industry which includes stocks in paper, chemicals and steel. This is
due to our expectation for a continued strong economy.
Going forward we will begin to commit more assets to small company and
international stocks as those areas are becoming more attractive relative to
large company domestic stocks. On the bond side we will be concentrating on
further diversifying our holdings to add more government agency and corporate
bonds to the portfolios as these should provide greater income than Treasury
bonds.
Daniel J. Bukowski
William Knapp
Portfolio Co-Managers
June 30, 1997
KEMPER BLUE CHIP PORTFOLIO
- ------------------------------------
This portfolio made its debut in May 1997. The portfolio currently holds 81
stocks but remains invested 37% in cash and equivalents. Our philosophy is one
of "bottom-up" stock selection. Rather than focus on economic conditions or
entire sectors, we tend to choose stocks based on their individual merits, and
seek those that offer above-average growth prospects, but are selling at what we
believe to be attractive prices. To do that, we set upper and lower price
targets on stocks. If a stock falls below a certain price level, normally we
buy. If it rallies above a certain price level, normally we sell. In this way,
we hope to benefit from most of the ride up, but avoid most of the ride down.
Consumer nondurable stocks make up the largest portion of the portfolio. These
stocks are generally considered defensive stocks, since demand for them tends to
be be fairly constant. Retail and consumer stocks have been a focus within this
sector. Finance, technology and healthcare stocks are other areas where we
believe there is strong potential. Financial holdings include banks and
brokerages and we've recently increased insurance company holdings due to our
belief that consolidation within the industry may create attractive
opportunities for the consolidators.
Tracy McCormick Chester
Portfolio Manager
June 30, 1997
KEMPER GLOBAL INCOME PORTFOLIO
- ------------------------------------
Because Kemper Global Income Portfolio was initially offered on May 1, 1997,
this report only covers two months of activity. In May, of the 21 foreign
government markets we monitor, all but one (Australia) had positive returns in
U.S. dollar terms. The yen rebounded, appreciating significantly against the
U.S. dollar and raising yen bond performance to the top of world bond markets. A
weaker dollar boosted returns for dollar-based investors.
In June, world bond markets were dominated by major currency moves with the
Japanese yen still in the lead followed closely by the British pound; both rose
nearly two percent against the U.S. dollar. The top performing markets in U.S.
dollar terms were Japan, the United Kingdom and Sweden while Austria and
Switzerland lagged. Prices increased across the board. Lower short-term interest
rates in countries such as Italy, New Zealand and Australia provided a further
boost to markets already supported by low inflation and moderate economic
growth.
The best performers in U.S. dollar terms for the semiannual period were Japan
and the U.K. while Sweden and Finland rounded out the bottom.
Gordon Johns
Portfolio Manager
June 30, 1997
10
<PAGE> 11
INVESTORS FUND SERIES
FINANCIAL STATEMENTS
11
<PAGE> 12
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER KEMPER
MONEY TOTAL HIGH KEMPER GOVERNMENT KEMPER
MARKET RETURN YIELD GROWTH SECURITIES INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Investments, at value
(Cost: $91,774, $643,887, $314,566, $456,821,
$92,947, $156,038, $76,219, $7,278, $73,141,
$33,148, $26,493, $7,660, $10,239, $6,484,
$1,005 and $1,422, respectively): $91,774 734,925 325,090 518,111 93,945 203,282
- -----------------------------------------------------------------------------------------------------------------------
Cash 1,448 -- 4,447 932 -- 187
- -----------------------------------------------------------------------------------------------------------------------
Receivable for:
Investments sold -- 14,606 1,560 2,937 -- 6,410
- -----------------------------------------------------------------------------------------------------------------------
Interest and dividends 172 5,998 6,215 429 772 544
- -----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 93,394 755,529 337,312 522,409 94,717 210,423
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES AND NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Cash overdraft -- 4,502 -- -- 152 --
- -----------------------------------------------------------------------------------------------------------------------
Payable for:
Investments purchased -- 2,169 3,940 4,969 12,087 8,300
- -----------------------------------------------------------------------------------------------------------------------
Dividends 181 -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Management fee 40 341 162 257 38 124
- -----------------------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and
related expenses 6 37 13 12 16 85
- -----------------------------------------------------------------------------------------------------------------------
Trustees' fees and other 51 47 32 37 24 27
- -----------------------------------------------------------------------------------------------------------------------
Total liabilities 278 7,096 4,147 5,275 12,317 8,536
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS $93,116 748,433 333,165 517,134 82,400 201,887
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Paid-in capital $93,116 585,352 337,903 432,333 75,209 150,583
- -----------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on
investments and foreign currency transactions -- 60,466 (21,331) 18,521 (5,099) 2,630
- -----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
on investments and assets and liabilities in
foreign currencies -- 91,028 10,524 61,258 998 47,011
- -----------------------------------------------------------------------------------------------------------------------
Undistributed net investment income -- 11,587 6,069 5,022 11,292 1,663
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $93,116 748,433 333,165 517,134 82,400 201,887
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
THE PRICING OF SHARES
- -----------------------------------------------------------------------------------------------------------------------
Shares outstanding 93,116 283,267 272,347 189,100 71,819 121,820
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets divided by shares outstanding) $1.00 2.642 1.223 2.735 1.147 1.657
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
12
<PAGE> 13
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER
SMALL INVESTMENT SMALL KEMPER KEMPER KEMPER
CAP GRADE KEMPER CAP VALUE+ KEMPER KEMPER KEMPER BLUE GLOBAL
GROWTH BOND VALUE VALUE GROWTH HORIZON 20+ HORIZON 10+ HORIZON 5 CHIP INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
89,617 7,292 78,955 37,649 29,682 8,533 11,185 6,831 1,023 1,420
- ----------------------------------------------------------------------------------------------------------------------------
1,091 145 2,019 755 51 256 58 57 202 68
- ----------------------------------------------------------------------------------------------------------------------------
3,134 410 -- 451 118 97 54 15 5 --
- ----------------------------------------------------------------------------------------------------------------------------
32 89 148 40 32 27 70 64 -- 23
- ----------------------------------------------------------------------------------------------------------------------------
93,874 7,936 81,122 38,895 29,883 8,913 11,367 6,967 1,230 1,511
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
2,692 362 1,103 723 782 102 101 96 73 --
- ----------------------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
47 4 6 22 18 4 5 3 1 --
- ----------------------------------------------------------------------------------------------------------------------------
13 -- -- -- -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
13 3 65 12 8 1 3 2 -- 1
- ----------------------------------------------------------------------------------------------------------------------------
2,765 369 1,174 757 808 107 109 101 74 1
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
91,109 7,567 79,948 38,138 29,075 8,806 11,258 6,866 1,156 1,510
- ----------------------------------------------------------------------------------------------------------------------------
71,476 7,163 71,049 33,353 25,756 7,784 10,027 6,300 1,134 1,501
- ----------------------------------------------------------------------------------------------------------------------------
6,088 13 1,882 51 68 65 59 14 (2) --
- ----------------------------------------------------------------------------------------------------------------------------
13,398 14 5,814 4,501 3,189 873 946 347 18 (2)
- ----------------------------------------------------------------------------------------------------------------------------
147 377 1,203 233 62 84 226 205 6 11
- ----------------------------------------------------------------------------------------------------------------------------
91,109 7,567 79,948 38,138 29,075 8,806 11,258 6,866 1,156 1,510
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
54,075 7,168 59,542 33,153 22,551 6,946 9,349 5,937 1,123 1,501
- ----------------------------------------------------------------------------------------------------------------------------
1.685 1.056 1.343 1.150 1.289 1.268 1.204 1.156 1.029 1.006
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 14
FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER KEMPER
MONEY TOTAL HIGH KEMPER GOVERNMENT KEMPER
MARKET RETURN YIELD GROWTH SECURITIES INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------------------------------------
Interest $2,660 10,119 15,135 345 3,274 196
- ----------------------------------------------------------------------------------------------------------------------
Dividends -- 3,704 40 2,187 -- 1,775
- ----------------------------------------------------------------------------------------------------------------------
2,660 13,823 15,175 2,532 3,274 1,971
- ----------------------------------------------------------------------------------------------------------------------
Less foreign taxes withheld -- -- -- -- -- 157
- ----------------------------------------------------------------------------------------------------------------------
Total investment income 2,660 13,823 15,175 2,532 3,274 1,814
- ----------------------------------------------------------------------------------------------------------------------
Expenses:
Management fee 237 1,944 903 1,452 229 654
- ----------------------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and
related expenses 12 76 30 29 26 145
- ----------------------------------------------------------------------------------------------------------------------
Professional fees 5 49 20 34 7 12
- ----------------------------------------------------------------------------------------------------------------------
Trustees' fees and other 19 64 45 70 21 29
- ----------------------------------------------------------------------------------------------------------------------
Total expenses 273 2,133 998 1,585 283 840
- ----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,387 11,690 14,177 947 2,991 974
- ----------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of
investments and foreign currency
transactions -- 62,689 153 19,970 (116) 3,347
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from futures
transactions -- (68) (24) -- 25 --
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) -- 62,621 129 19,970 (91) 3,347
- ----------------------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) on investments and assets and
liabilities in foreign currencies -- 8,598 1,711 28,292 (24) 17,117
- ----------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments -- 71,219 1,840 48,262 (115) 20,464
- ----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $2,387 82,909 16,017 49,209 2,876 21,438
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the period from May 1, 1997 (commencement of operations) to June 30,
1997.
See accompanying Notes to Financial Statements.
14
<PAGE> 15
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER
SMALL INVESTMENT SMALL KEMPER
CAP GRADE KEMPER CAP VALUE+ KEMPER KEMPER KEMPER KEMPER
GROWTH BOND VALUE VALUE GROWTH HORIZON 20+ HORIZON 10+ HORIZON 5 BLUE CHIP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(a)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
236 147 239 105 28 45 111 89 2
- ----------------------------------------------------------------------------------------------------------------
145 -- 535 110 147 38 39 14 1
- ----------------------------------------------------------------------------------------------------------------
381 147 774 215 175 83 150 103 3
- ----------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
381 147 774 215 175 83 150 103 3
- ----------------------------------------------------------------------------------------------------------------
249 12 169 87 70 18 25 13 1
- ----------------------------------------------------------------------------------------------------------------
23 2 14 12 10 8 7 5 --
- ----------------------------------------------------------------------------------------------------------------
4 1 5 2 2 -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
13 2 10 7 7 1 2 2 --
- ----------------------------------------------------------------------------------------------------------------
289 17 198 108 89 27 34 20 1
- ----------------------------------------------------------------------------------------------------------------
92 130 576 107 86 56 116 83 2
- ----------------------------------------------------------------------------------------------------------------
6,177 11 1,701 65 (99) 35 53 12 (2)
- ----------------------------------------------------------------------------------------------------------------
-- -- -- 140 106 19 -- -- --
- ----------------------------------------------------------------------------------------------------------------
6,177 11 1,701 205 7 54 53 12 (2)
- ----------------------------------------------------------------------------------------------------------------
5,149 13 4,417 3,757 2,551 627 627 253 18
- ----------------------------------------------------------------------------------------------------------------
11,326 24 6,118 3,962 2,558 681 680 265 16
- ----------------------------------------------------------------------------------------------------------------
11,418 154 6,694 4,069 2,644 737 796 348 18
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
KEMPER
GLOBAL
INCOME
PORTFOLIO(a)
<S> <C>
8
- ------------
--
- ------------
8
- ------------
--
- ------------
8
- ------------
1
- ------------
1
- ------------
--
- ------------
--
- ------------
2
- ------------
6
- ------------
--
- ------------
--
- ------------
--
- ------------
(2)
- ------------
(2)
- ------------
4
- ------------
</TABLE>
15
<PAGE> 16
FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) AND FOR THE YEAR ENDED
DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
KEMPER KEMPER
MONEY MARKET TOTAL RETURN
PORTFOLIO PORTFOLIO
----------------- ------------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------------------------------
Net investment income $ 2,387 3,688 11,690 21,518
- ----------------------------------------------------------------------------------------------------
Net realized gain (loss) -- (850) 62,621 86,334
- ----------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -- 850 8,598 (4,464)
- ----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 2,387 3,688 82,909 103,388
- ----------------------------------------------------------------------------------------------------
Equalization credits (charges) -- -- (98) (891)
- ----------------------------------------------------------------------------------------------------
Distribution from net investment income (2,387) (3,688) (21,303) (22,873)
- ----------------------------------------------------------------------------------------------------
Distribution from net realized gain -- -- (87,579) (20,332)
- ----------------------------------------------------------------------------------------------------
Total dividends to shareholders (2,387) (3,688) (108,882) (43,205)
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) from capital share transactions 22,515 9,523 77,402 (22,084)
- ----------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 22,515 9,523 51,331 37,208
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------
Beginning of period 70,601 61,078 697,102 659,894
- ----------------------------------------------------------------------------------------------------
END OF PERIOD $93,116 70,601 748,433 697,102
- ----------------------------------------------------------------------------------------------------
UNDISTRIBUTED NET INVESTMENT INCOME AT END OF PERIOD $ -- -- 11,587 21,298
- ----------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER
INVESTMENT GRADE VALUE SMALL CAP
BOND PORTFOLIO PORTFOLIO VALUE PORTFOLIO
----------------------- ----------------------- -----------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED MAY 1 ENDED MAY 1 ENDED MAY 1
JUNE 30, TO JUNE 30, TO JUNE 30, TO
1997 DEC. 31, 1997 DEC. 31, 1997 DEC. 31,
(UNAUDITED) 1996 (UNAUDITED) 1996 (UNAUDITED) 1996
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------------------------------------------------
Net investment income $ 130 30 576 143 107 102
- --------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 11 2 1,701 181 205 (154)
- --------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) 13 1 4,417 1,397 3,757 744
- --------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 154 33 6,694 1,721 4,069 692
- --------------------------------------------------------------------------------------------------------------------------
Equalization credits 229 29 746 127 190 70
- --------------------------------------------------------------------------------------------------------------------------
Distribution from net investment income (41) -- (389) -- (236) --
- --------------------------------------------------------------------------------------------------------------------------
Net increase from capital share
transactions 5,227 1,836 51,592 19,357 20,808 12,445
- --------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 5,569 1,898 58,643 21,205 24,831 13,207
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------
Beginning of period 1,998 100 21,305 100 13,307 100
- --------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $7,567 1,998 79,948 21,305 38,138 13,307
- --------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED NET INVESTMENT INCOME
AT END OF PERIOD $ 377 59 1,203 270 233 172
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
16
<PAGE> 17
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER KEMPER KEMPER
HIGH YIELD GROWTH GOVERNMENT INTERNATIONAL SMALL CAP
PORTFOLIO PORTFOLIO SECURITIES PORTFOLIO PORTFOLIO GROWTH PORTFOLIO
--------------------- --------------------- -------------------- -------------------- ------------------
1997 1996 1997 1996 1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
14,177 25,297 947 4,160 2,991 6,259 974 1,388 92 79
- --------------------------------------------------------------------------------------------------------------------
129 711 19,970 111,045 (91) (527) 3,347 7,804 6,177 8,533
- --------------------------------------------------------------------------------------------------------------------
1,711 9,092 28,292 (29,470) (24) (3,644) 17,117 14,086 5,149 3,586
- --------------------------------------------------------------------------------------------------------------------
16,017 35,100 49,209 85,735 2,876 2,088 21,438 23,278 11,418 12,198
- --------------------------------------------------------------------------------------------------------------------
(980) (2,891) 1,076 409 (7) (1,240) 85 (121) 56 138
- --------------------------------------------------------------------------------------------------------------------
(25,931) (24,806) (2,753) (5,021) (6,694) (6,507) (2,135) (2,012) (445) --
- --------------------------------------------------------------------------------------------------------------------
-- -- (111,508) (58,999) -- -- (7,472) (1,044) (8,459) (1,209)
- --------------------------------------------------------------------------------------------------------------------
(25,931) (24,806) (114,261) (64,020) (6,694) (6,507) (9,607) (3,056) (8,904) (1,209)
- --------------------------------------------------------------------------------------------------------------------
54,744 24,535 93,627 50,826 1,911 (5,212) 26,496 8,893 19,402 22,637
- --------------------------------------------------------------------------------------------------------------------
43,850 31,938 29,651 72,950 (1,914) (10,871) 38,412 28,994 21,972 33,764
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
289,315 257,377 487,483 414,533 84,314 95,185 163,475 134,481 69,137 35,373
- --------------------------------------------------------------------------------------------------------------------
333,165 289,315 517,134 487,483 82,400 84,314 201,887 163,475 91,109 69,137
- --------------------------------------------------------------------------------------------------------------------
6,069 18,803 5,022 5,752 11,292 15,002 1,663 2,739 147 444
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
KEMPER
KEMPER KEMPER KEMPER KEMPER KEMPER GLOBAL
VALUE+ HORIZON 20+ HORIZON 10+ HORIZON 5 BLUE CHIP INCOME
GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------------- ---------------------- ---------------------- ---------------------- ----------- ---------
SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS FOR THE PERIOD MAY 1
ENDED MAY 1 ENDED MAY 1 ENDED MAY 1 ENDED MAY 1 (COMMENCEMENT OF
JUNE 30, TO JUNE 30, TO JUNE 30, TO JUNE 30, TO OPERATIONS) TO
1997 DEC. 31, 1997 DEC. 31, 1997 DEC. 31, 1997 DEC. 31, JUNE 30, 1997
(UNAUDITED) 1996 (UNAUDITED) 1996 (UNAUDITED) 1996 (UNAUDITED) 1996 (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
86 28 56 18 116 50 83 29 2 6
- -------------------------------------------------------------------------------------------------------------------------------
7 61 54 11 53 6 12 2 (2) --
- -------------------------------------------------------------------------------------------------------------------------------
2,551 638 627 246 627 319 253 94 18 (2)
- -------------------------------------------------------------------------------------------------------------------------------
2,644 727 737 275 796 375 348 125 18 4
- -------------------------------------------------------------------------------------------------------------------------------
72 41 46 21 92 44 111 25 4 5
- -------------------------------------------------------------------------------------------------------------------------------
(165) -- (57) -- (76) -- (43) -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
16,328 9,328 4,321 3,363 4,719 5,208 3,916 2,284 1,034 1,401
- -------------------------------------------------------------------------------------------------------------------------------
18,879 10,096 5,047 3,659 5,531 5,627 4,332 2,434 1,056 1,410
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
10,196 100 3,759 100 5,727 100 2,534 100 100 100
- -------------------------------------------------------------------------------------------------------------------------------
29,075 10,196 8,806 3,759 11,258 5,727 6,866 2,534 1,156 1,510
- -------------------------------------------------------------------------------------------------------------------------------
62 69 84 39 226 94 205 54 6 11
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1 DESCRIPTION OF THE Investors Fund Series (the "Fund") (formerly known
FUND as Kemper Investors Fund) is an open-end,
diversified management investment company organized
as a business trust under the laws of
Massachusetts. The Fund offers sixteen Portfolios.
The Fund has added the "Kemper" name to each
Portfolio.
- --------------------------------------------------------------------------------
2 SIGNIFICANT INVESTMENT VALUATION.
ACCOUNTING POLICIES Investments are stated at value.
The securities of the Portfolios (excluding the
Kemper Money Market Portfolio) that are traded on a
domestic securities exchange or securities listed
on the NASDAQ National Market are valued at the
last sale price on the exchange or market where
primarily traded or listed or, if there is no
recent sale, at the last current bid quotation.
Portfolio securities that are primarily traded on
foreign securities exchanges are generally valued
at the preceding closing values of such securities
on their respective exchanges where primarily
traded. A security that is listed or traded on more
than one exchange is valued at the quotation on the
exchange determined to be the primary market for
that security by the Board of Trustees or its
delegates. All other securities not so traded or
listed are valued at the last current bid quotation
if market quotations are available. Fixed income
securities are valued by using market quotations,
or independent pricing services that use prices
provided by market makers or estimates of market
values obtained from yield data relating to
instruments or securities with similar
characteristics. Equity options are valued at the
last sale price unless the bid price is higher or
the asked price is lower, in which event such bid
or asked price is used. Exchange traded financial
futures and options thereon, are valued at the
settlement price established each day by the board
of trade or exchange on which they are traded.
Over-the-counter traded fixed income options are
valued based upon prices provided by market makers.
Forward foreign currency contracts and foreign
currencies are valued at the forward and current
exchange rates, respectively, prevailing on the day
of valuation. Other securities and assets are
valued at fair value as determined in good faith by
the Board of Trustees.
The securities of the Kemper Money Market Portfolio
are stated at amortized cost, which approximates
market value. In the event that a deviation of 1/2
of 1% or more exists between the Portfolio's $1.00
per share net asset value, calculated at amortized
cost, and the net asset value calculated by
reference to market quotations, or if there is any
other deviation that the Board of Trustees believes
would result in a material dilution to shareholders
or purchasers, the Board of Trustees will promptly
consider what action, if any, should be initiated.
CURRENCY TRANSLATION. The books and records of the
Fund are maintained in U.S. Dollars. All assets and
liabilities initially expressed in foreign currency
values are converted into U.S. Dollars at the mean
between the bid and offered quotations of such
currencies against the U.S. Dollar as last quoted
by a recognized dealer. If such quotations are not
readily
18
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS
available, the rates of exchange are determined in
good faith by the Board of Trustees. Income and
expenses and purchases and sales of investments are
translated into U.S. Dollars at the rates of
exchange prevailing on the respective dates of such
transactions. The Portfolios include that portion
of the results of operations resulting from changes
in foreign exchange rates with the net realized and
unrealized gain (loss) on investments.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME.
Investment transactions are accounted for on the
trade date (date the order to buy or sell is
executed). Dividend income is recorded on the
ex-dividend date, except that certain dividends
from foreign securities are recorded as soon as the
information is available to the Fund. Interest
income is recorded on the accrual basis and
includes discount amortization on all fixed income
securities and premium amortization on
mortgage-backed securities and money market
instruments. Realized gains and losses from
investment transactions are reported on an
identified cost basis.
Several of the Portfolios may purchase securities
with delivery or payment to occur at a later date.
At the time a Portfolio enters into a commitment to
purchase a security, the transaction is recorded
and the value of the security is reflected in the
net asset value. The value of the security may vary
with market fluctuations. No interest accrues to
the Portfolio until payment takes place. At the
time the Portfolio enters into this type of
transaction it is required to segregate cash or
other liquid assets equal to the value of the
securities purchased. At June 30, 1997, the Kemper
Government Securities Portfolio had $12,099,000 of
purchase commitments outstanding (15% of net
assets) with a corresponding amount of assets
segregated.
EXPENSES. Expenses arising in connection with a
Portfolio are allocated to that Portfolio. Other
Fund expenses are allocated among the Portfolios in
proportion to their relative net assets.
FUND SHARE VALUATION. Shares of each Portfolio of
the Fund are offered on a continuous basis to the
separate accounts of participating insurance
companies where permitted by law. On each day the
New York Stock Exchange is open for trading, each
Portfolio determines its net asset value per share
(NAV) by dividing the total value of the
Portfolio's investments and other assets, less
liabilities, by the number of Portfolio shares
outstanding. The NAV is determined as of the
earlier of 3:00 p.m. Chicago time or the close of
the Exchange for all Portfolios, and additionally
at 11:00 a.m. Chicago time for the Kemper Money
Market Portfolio. Because of the need to obtain
prices as of the close of trading on various
exchanges throughout the world, the calculation of
net asset value for the International Portfolio
does not take place contemporaneously with the
determination of prices of the Fund's foreign
securities.
FEDERAL INCOME TAXES. Each Portfolio has complied
with the special provisions of the Internal Revenue
Code available to investment companies for the six
months ended June 30, 1997. The accumulated net
realized loss on sales of investments for federal
income tax purposes at June 30, 1997
19
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS
amounted to approximately $21,301,000 in the Kemper
High Yield Portfolio, $4,522,000 in the Kemper
Government Securities Portfolio and $2,000 in the
Kemper Blue Chip Portfolio. These losses are
available to offset future taxable gains in the
respective Portfolios and, if not applied, expire
during the period 1998 through 2005.
DIVIDENDS TO SHAREHOLDERS. All Portfolios, except
the Kemper Money Market Portfolio, declare and pay
dividends of net investment income and net realized
capital gains annually, which are recorded on the
ex-dividend date. The Kemper Money Market Portfolio
declares a daily dividend equal to its net
investment income for that day, payable monthly.
Shareholders will receive dividends in additional
shares.
Dividends are determined in accordance with income
tax principles which may treat certain transactions
differently from generally accepted accounting
principles. These differences are primarily due to
differing treatments for certain transactions such
as foreign currency transactions, if applicable.
EQUALIZATION ACCOUNTING. A portion of proceeds from
sales and cost of redemptions of Fund shares in all
Portfolios except the Kemper Money Market Portfolio
is credited or charged to undistributed net
investment income so that income per share
available for distribution is not affected by sales
or redemptions of shares.
- --------------------------------------------------------------------------------
3 TRANSACTIONS The Fund has a management agreement with Zurich
WITH AFFILIATES Kemper Investments, Inc. (ZKI), the Fund's
investment manager for each Portfolio except the
Kemper Value and Kemper Small Cap Value Portfolios.
For management services and facilities furnished,
the Fund pays a fee, based on average daily net
assets, at an annual rate of .50% for the Kemper
Money Market Portfolio, .55% for the Kemper Total
Return and Kemper Government Securities Portfolios,
.60% for the Kemper High Yield, Kemper Growth,
Kemper Investment Grade Bond, Kemper Horizon 20+,
Kemper Horizon 10+ and Kemper Horizon 5 Portfolios,
.65% for the Kemper Small Cap Growth and Kemper
Blue Chip Portfolios and .75% for the Kemper
International, Kemper Value+Growth, and Kemper
Global Income Portfolios. Zurich Kemper Value
Advisors, Inc. (ZKVA) (formerly known as Dreman
Value Advisors, Inc.), a wholly owned subsidiary of
ZKI, serves as the investment manager for the
Kemper Value and the Kemper Small Cap Value
Portfolios and is paid a management fee at an
annual rate of .75% of average daily net assets of
such Portfolios. ZKVA also serves as sub-adviser
for the Kemper Value+Growth and Kemper Horizon
Portfolios, and is paid by ZKI for its services.
Zurich Investment Management Limited, an affiliate
of ZKI, serves as sub-adviser with respect to
foreign securities investments in the applicable
portfolios, and is paid by ZKI for its services.
For the six months ended June 30, 1997, the Fund
incurred aggregate management fees of $6,064,000.
Zurich Kemper Distributors, Inc. (formerly known as
Kemper Distributors, Inc.), an affiliate of ZKI, is
the distributor and principal underwriter for
shares of the Fund.
20
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS
Certain officers or trustees of the Fund are also
officers or directors of ZKI or ZKVA. During the
six months ended June 30, 1997, the Fund made no
direct payments to its officers and incurred
trustees' fees of $127,000 to independent trustees.
- --------------------------------------------------------------------------------
4 INVESTMENT For the six months ended June 30, 1997, investment
TRANSACTIONS transactions (excluding short-term investments) are
as follows (in thousands):
<TABLE>
<CAPTION>
PROCEEDS
PORTFOLIO PURCHASES FROM SALES
--------- --------- ----------
<S> <C> <C>
Kemper Total Return $556,319 $561,058
Kemper High Yield 181,514 142,644
Kemper Growth 406,466 387,381
Kemper Government Securities 70,654 77,703
Kemper International 82,106 64,619
Kemper Small Cap Growth 122,035 112,092
Kemper Investment Grade Bond 7,749 3,144
Kemper Value 58,845 16,089
Kemper Small Cap Value 20,437 3,199
Kemper Value+Growth 22,665 7,146
Kemper Horizon 20+ 7,491 3,440
Kemper Horizon 10+ 9,030 4,122
Kemper Horizon 5 6,869 2,707
</TABLE>
For the period from May 1, 1997 to June 30, 1997,
investment transactions (excluding short-term
investments) are as follows (in thousands):
<TABLE>
<CAPTION>
PROCEEDS
PORTFOLIO PURCHASES FROM SALES
--------- --------- ----------
<S> <C> <C>
Kemper Blue Chip $ 719 $11
Kemper Global Income 1,422 --
</TABLE>
- --------------------------------------------------------------------------------
5 CAPITAL SHARE The following tables summarize the activity in
TRANSACTIONS capital shares of each Portfolio of the Fund (in
thousands):
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------
KEMPER MONEY MARKET PORTFOLIO
------------------------------------------------------------------------------
Shares sold 166,367 $ 166,367 149,223 $ 149,223
------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 2,343 2,343 3,704 3,704
------------------------------------------------------------------------------
168,710 168,710 152,927 152,927
------------------------------------------------------------------------------
Shares redeemed (146,195) (146,195) (143,404) (143,404)
------------------------------------------------------------------------------
Net increase from capital share
transactions 22,515 $ 22,515 9,523 $ 9,523
------------------------------------------------------------------------------
------------------------------------------------------------------------------
KEMPER TOTAL RETURN PORTFOLIO
------------------------------------------------------------------------------
Shares sold 7,980 $ 19,471 36,913 $ 94,083
------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 46,559 108,882 17,682 43,205
------------------------------------------------------------------------------
54,539 128,353 54,595 137,288
------------------------------------------------------------------------------
Shares redeemed (18,875) (50,951) (62,870) (159,372)
------------------------------------------------------------------------------
Net increase (decrease) from
capital share transactions 35,664 $ 77,402 (8,275) $ (22,084)
------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------
KEMPER HIGH YIELD PORTFOLIO
-----------------------------------------------------------------------------
Shares sold 80,056 $ 95,042 101,227 $ 118,182
-----------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 22,228 25,931 21,456 24,806
-----------------------------------------------------------------------------
102,284 120,973 122,683 142,988
-----------------------------------------------------------------------------
Shares redeemed (55,841) (66,229) (101,236) (118,453)
-----------------------------------------------------------------------------
Net increase from capital share
transactions 46,443 $ 54,744 21,447 $ 24,535
-----------------------------------------------------------------------------
KEMPER GROWTH PORTFOLIO
-----------------------------------------------------------------------------
Shares sold 7,037 $ 19,034 33,305 $ 104,951
-----------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 49,988 114,261 22,196 64,020
-----------------------------------------------------------------------------
57,025 133,295 55,501 168,971
-----------------------------------------------------------------------------
Shares redeemed (12,531) (39,668) (37,981) (118,145)
-----------------------------------------------------------------------------
Net increase from capital share
transactions 44,494 $ 93,627 17,520 $ 50,826
-----------------------------------------------------------------------------
KEMPER GOVERNMENT SECURITIES PORTFOLIO
-----------------------------------------------------------------------------
Shares sold 8,929 $ 7,928 11,632 $ 10,799
-----------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 5,998 6,694 5,657 6,507
------------------------------------------------------------------------------
14,927 14,622 17,289 17,306
------------------------------------------------------------------------------
Shares redeemed (12,947) (12,711) (22,442) (22,518)
------------------------------------------------------------------------------
Net increase (decrease) from
capital share transactions 1,980 $ 1,911 (5,153) $ (5,212)
------------------------------------------------------------------------------
KEMPER INTERNATIONAL PORTFOLIO
-----------------------------------------------------------------------------
Shares sold 18,722 $ 29,114 41,003 $ 59,682
-----------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 6,447 9,607 2,155 3,056
-----------------------------------------------------------------------------
25,169 38,721 43,158 62,738
-----------------------------------------------------------------------------
Shares redeemed (7,853) (12,225) (36,773) (53,845)
-----------------------------------------------------------------------------
Net increase from capital share
transactions 17,316 $ 26,496 6,385 $ 8,893
-----------------------------------------------------------------------------
KEMPER SMALL CAP GROWTH PORTFOLIO
-----------------------------------------------------------------------------
Shares sold 9,569 $ 15,698 28,558 $ 43,316
-----------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 6,357 8,904 840 1,209
-----------------------------------------------------------------------------
15,926 24,602 29,398 44,525
-----------------------------------------------------------------------------
Shares redeemed (3,086) (5,200) (14,446) (21,888)
-----------------------------------------------------------------------------
Net increase from capital share
transactions 12,840 $ 19,402 14,952 $ 22,637
-----------------------------------------------------------------------------
</TABLE>
22
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 1 TO
JUNE 30, 1997 DECEMBER 31, 1996
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------
KEMPER INVESTMENT GRADE BOND PORTFOLIO
------------------------------------------------------------------------------
Shares sold 5,589 $ 5,574 1,962 $ 1,970
------------------------------------------------------------------------------
Shares issued in reinvestment of
dividends 40 41 -- --
------------------------------------------------------------------------------
5,629 5,615 1,962 1,970
------------------------------------------------------------------------------
Shares redeemed (390) (388) (133) (134)
------------------------------------------------------------------------------
Net increase from capital share
transactions 5,239 $ 5,227 1,829 $ 1,836
------------------------------------------------------------------------------
KEMPER VALUE PORTFOLIO
------------------------------------------------------------------------------
Shares sold 43,088 $ 53,703 18,543 $ 19,897
------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 324 389 -- --
------------------------------------------------------------------------------
43,412 54,091 18,543 19,897
------------------------------------------------------------------------------
Shares redeemed (2,024) (2,500) (489) (540)
------------------------------------------------------------------------------
Net increase from capital share
transactions 41,388 $ 51,592 18,054 $ 19,357
------------------------------------------------------------------------------
KEMPER SMALL CAP VALUE PORTFOLIO
------------------------------------------------------------------------------
Shares sold 21,017 $ 21,747 13,865 $ 13,311
------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 239 236 -- --
------------------------------------------------------------------------------
21,256 21,983 13,865 13,311
------------------------------------------------------------------------------
Shares redeemed (1,167) (1,175) (901) (866)
------------------------------------------------------------------------------
Net increase from capital share
transactions 20,089 $ 20,808 12,964 $ 12,445
------------------------------------------------------------------------------
KEMPER VALUE+GROWTH PORTFOLIO
------------------------------------------------------------------------------
Shares sold 14,693 $ 17,575 9,367 $ 9,935
------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 161 165 -- --
------------------------------------------------------------------------------
14,854 17,740 9,367 9,935
------------------------------------------------------------------------------
Shares redeemed (1,199) (1,412) (571) (607)
------------------------------------------------------------------------------
Net increase from capital share
transactions 13,655 $ 16,328 8,796 $ 9,328
------------------------------------------------------------------------------
KEMPER HORIZON 20+ PORTFOLIO
------------------------------------------------------------------------------
Shares sold 3,861 $ 4,536 3,249 $ 3,460
------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 51 57 -- --
------------------------------------------------------------------------------
3,912 4,593 3,249 3,460
------------------------------------------------------------------------------
Shares redeemed (224) (272) (91) (97)
------------------------------------------------------------------------------
Net increase from capital share
transactions 3,688 $ 4,321 3,158 $ 3,363
------------------------------------------------------------------------------
KEMPER HORIZON 10+ PORTFOLIO
------------------------------------------------------------------------------
Shares sold 4,508 $ 5,058 5,200 $ 5,375
------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 70 76 -- --
------------------------------------------------------------------------------
4,578 5,134 5,200 5,375
------------------------------------------------------------------------------
Shares redeemed (371) (415) (158) (167)
------------------------------------------------------------------------------
Net increase from capital share
transactions 4,207 $ 4,719 5,042 $ 5,208
------------------------------------------------------------------------------
</TABLE>
23
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 1 TO
JUNE 30, 1997 DECEMBER 31, 1996
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------
KEMPER HORIZON 5 PORTFOLIO
------------------------------------------------------------------------------
Shares sold 3,934 $ 4,253 2,326 $ 2,399
------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends 40 43 -- --
------------------------------------------------------------------------------
3,974 4,296 2,326 2,399
------------------------------------------------------------------------------
Shares redeemed (350) (380) (113) (115)
------------------------------------------------------------------------------
Net increase from capital share
transactions 3,624 $ 3,916 2,213 $ 2,284
------------------------------------------------------------------------------
<CAPTION>
MAY 1 TO
JUNE 30, 1997
--------------------
SHARES AMOUNT
<S> <C> <C>
------------------------------------------------------------------------------
KEMPER BLUE CHIP PORTFOLIO
------------------------------------------------------------------------------
Shares sold 1,034 $ 1,048
------------------------------------------------------------------------------
Shares redeemed (11) (14)
------------------------------------------------------------------------------
Net increase from capital share
transactions 1,023 $ 1,034
------------------------------------------------------------------------------
------------------------------------------------------------------------------
KEMPER GLOBAL INCOME PORTFOLIO
------------------------------------------------------------------------------
Shares sold 1,426 $ 1,426
------------------------------------------------------------------------------
Shares redeemed (25) (25)
------------------------------------------------------------------------------
Net increase from capital share
transactions 1,401 $ 1,401
------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
6 FINANCIAL FUTURES The Kemper Small Cap Value, Kemper Value+Growth,
CONTRACTS Kemper Horizon 20+ and Kemper Government Securities
Portfolios have entered into exchange traded
financial futures contracts in order to help
protect themselves from anticipated market
conditions and, as such, bear the risk that arises
from entering into these contracts.
At the time a Portfolio enters into a futures
contract, it is required to make a margin deposit
with its custodian. Subsequently, gain or loss is
recognized and payments are made on a daily basis
between the Portfolios and the broker as the market
value of the futures contract fluctuates. At June
30, 1997, the market value of assets pledged by the
Portfolios to cover margin requirements for open
futures positions were $99,000, $149,000, $25,000
and $706,000 for the Kemper Small Cap Value, Kemper
Value+Growth, Kemper Horizon 20+ and Kemper
Government Securities Portfolios, respectively. At
June 30, 1997, Kemper Government Securities
Portfolio also had liquid securities in its
portfolio in excess of the face amount of open
short futures contracts. At June 30, 1997, the
Portfolios had the following futures contracts
open, with expirations in September 1997:
<TABLE>
<CAPTION>
FACE GAIN (LOSS)
PORTFOLIO TYPE AMOUNT POSITION AT 6/30/97
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
KEMPER SMALL CAP VALUE Russell 2000 $2,393,000 Long $ 23,000
------------------------------------------------------------------------------
KEMPER VALUE+GROWTH S&P 500 Index 1,329,000 Long 6,000
------------------------------------------------------------------------------
KEMPER HORIZON 20+ S&P 500 Index 426,000 Long 19,000
------------------------------------------------------------------------------
KEMPER GOVERNMENT
SECURITIES U.S. Treasury Bond 5,119,000 Short (57,000)
------------------------------------------------------------------------------
</TABLE>
24
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
7 FORWARD FOREIGN In order to protect themselves against a decline in
CURRENCY CONTRACTS the value of a particular foreign currency against
the U.S. Dollar, the Kemper Total Return, Kemper
Growth and Kemper International Portfolios have
entered into forward contracts to deliver foreign
currency in exchange for U.S. Dollars as described
below. The Portfolios bear the market risk that
arises from changes in foreign exchange rates, and
accordingly, the net unrealized gain (loss) amounts
on these contracts are reflected in the
accompanying financial statements. The Portfolios
also bear the credit risk if the counterparty fails
to perform under the contract. At June 30, 1997,
the Portfolios had the following forward foreign
currency contracts outstanding with settlement
dates in July, 1997:
<TABLE>
<CAPTION>
CONTRACT UNREALIZED
FOREIGN CURRENCY AMOUNT IN GAIN (LOSS) AT
TO BE DELIVERED U.S. DOLLARS 6/30/97
<S> <C> <C> <C>
-----------------------------------------------------------------------------
KEMPER TOTAL RETURN PORTFOLIO
-----------------------------------------------------------------------------
525,000 French Francs $ 90,000 $ 1,000
-----------------------------------------------------------------------------
68,000 German Marks 39,000 --
-----------------------------------------------------------------------------
14,700,000 Japanese Yen 129,000 (11,000)
-----------------------------------------------------------------------------
62,500 Swiss Francs 42,000 --
-----------------------------------------------------------------------------
NET UNREALIZED LOSS $ (10,000)
-----------------------------------------------------------------------------
KEMPER GROWTH PORTFOLIO
-----------------------------------------------------------------------------
703,000 French Francs $ 120,000 $ 1,000
-----------------------------------------------------------------------------
215,000 German Marks 124,000 1,000
-----------------------------------------------------------------------------
45,900,000 Japanese Yen 403,000 (34,000)
-----------------------------------------------------------------------------
208,000 Swiss Francs 143,000 --
-----------------------------------------------------------------------------
NET UNREALIZED LOSS $ (32,000)
-----------------------------------------------------------------------------
KEMPER INTERNATIONAL PORTFOLIO
-----------------------------------------------------------------------------
26,150,000 Dutch Guilders $13,523,000 $ 149,000
-----------------------------------------------------------------------------
25,250,000 French Francs 4,363,000 54,000
-----------------------------------------------------------------------------
6,350,000 German Marks 3,694,000 43,000
-----------------------------------------------------------------------------
2,600,000 Irish Punts 3,863,000 (57,000)
-----------------------------------------------------------------------------
533,400,000 Japanese Yen 4,284,000 (397,000)
-----------------------------------------------------------------------------
300,000,000 Spanish Pesetas 2,053,000 13,000
-----------------------------------------------------------------------------
10,607,000 Swiss Francs 7,284,000 (17,000)
-----------------------------------------------------------------------------
NET UNREALIZED LOSS $(212,000)
-----------------------------------------------------------------------------
</TABLE>
25
<PAGE> 26
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
----------------------------------------------------
KEMPER MONEY MARKET PORTFOLIO
----------------------------------------------------
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ---------------------------------
JUNE 30, 1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------
Net investment income and dividends declared .03 .05 .06 .04 .03
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 2.53% 5.03 5.66 3.96 2.83
- --------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- --------------------------------------------------------------------------------------------------
Expenses .58% .60 .55 .53 .56
- --------------------------------------------------------------------------------------------------
Net investment income 5.07% 4.90 5.52 3.95 2.79
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $93,116 70,601 61,078 83,821 68,177
- --------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO KEMPER MONEY MARKET PORTFOLIO
The total returns for 1995 and 1994 include the effect of a capital contribution
from the investment manager. Without the capital contribution, the total returns
would have been 5.11% and 3.47%, respectively.
<TABLE>
<CAPTION>
--------------------------------------------------------
KEMPER TOTAL RETURN PORTFOLIO
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -------------------------------------
JUNE 30, 1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 2.815 2.579 2.112 2.586 2.473
- ---------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .044 .084 .084 .069 .069
- ---------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) .243 .322 .453 (.313) .214
- ---------------------------------------------------------------------------------------------------
Total from investment operations .287 .406 .537 (.244) .283
- ---------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .090 .090 .070 .060 .050
- ---------------------------------------------------------------------------------------------------
Distribution from net realized gain .370 .080 -- .170 .120
- ---------------------------------------------------------------------------------------------------
Total dividends .460 .170 .070 .230 .170
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $ 2.642 2.815 2.579 2.112 2.586
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 12.31% 16.76 25.97 (9.50) 12.13
- ---------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- ---------------------------------------------------------------------------------------------------
Expenses .60% .59 .60 .61 .59
- ---------------------------------------------------------------------------------------------------
Net investment income 3.31% 3.21 3.52 3.13 3.19
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------
Net assets at end of period (in
thousands) $748,433 697,102 659,894 586,594 643,830
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 154% 90 118 128 191
- ---------------------------------------------------------------------------------------------------
Average commission rates paid per share on stock transactions for the six months ended June 30, 1997
and the year ended December 31, 1996 were $.0593 and $.0574, respectively.
- ----------------------------------------------------------------------------------------------------
</TABLE>
26
<PAGE> 27
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
--------------------------------------------------------
KEMPER HIGH YIELD PORTFOLIO
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -------------------------------------
JUNE 30, 1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.281 1.259 1.185 1.338 1.209
- --------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .059 .120 .125 .116 .120
- --------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) .003 .042 .069 (.149) .109
- --------------------------------------------------------------------------------------------------------
Total from investment operations .062 .162 .194 (.033) .229
- --------------------------------------------------------------------------------------------------------
Less distribution from net investment income .120 .140 .120 .120 .100
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.223 1.281 1.259 1.185 1.338
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 5.34% 14.06 17.40 (2.25) 20.00
- --------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- --------------------------------------------------------------------------------------------------------
Expenses .66% .65 .65 .65 .63
- --------------------------------------------------------------------------------------------------------
Net investment income 9.42% 9.70 10.27 9.49 9.54
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $333,165 289,315 257,377 219,415 233,964
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 78% 98 90 98 84
- --------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------
KEMPER GROWTH PORTFOLIO
--------------------------------------------------------
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -------------------------------------
JUNE 30, 1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 3.371 3.262 2.665 2.935 2.631
- --------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .006 .030 .034 .018 .004
- --------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) .188 .589 .793 (.138) .370
- --------------------------------------------------------------------------------------------------------
Total from investment operations .194 .619 .827 (.120) .374
- --------------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .020 .040 .010 -- .010
- --------------------------------------------------------------------------------------------------------
Distribution from net realized gain .810 .470 .220 .150 .060
- --------------------------------------------------------------------------------------------------------
Total dividends .830 .510 .230 .150 .070
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 2.735 3.371 3.262 2.665 2.935
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 10.58% 21.63 32.97 (4.02) 14.63
- --------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- --------------------------------------------------------------------------------------------------------
Expenses .65% .64 .64 .66 .64
- --------------------------------------------------------------------------------------------------------
Net investment income .39% .94 1.15 .69 .30
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $517,134 487,483 414,533 321,708 284,461
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 156% 175 88 106 78
- --------------------------------------------------------------------------------------------------------
Average commission rates paid per share on stock transactions for the six months ended June 30, 1997 and
the year ended December 31, 1996 were $.0600 and $.0558, respectively.
- --------------------------------------------------------------------------------------------------------
</TABLE>
27
<PAGE> 28
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
-----------------------------------------------------
KEMPER GOVERNMENT SECURITIES PORTFOLIO
-----------------------------------------------------
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------
JUNE 30, 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.207 1.269 1.142 1.267 1.277
- -----------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .042 .085 .084 .067 .060
- -----------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (.002) (.057) .123 (.102) .020
- -----------------------------------------------------------------------------------------------------
Total from investment operations .040 .028 .207 (.035) .080
- -----------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .100 .090 .080 .060 .060
- -----------------------------------------------------------------------------------------------------
Distribution from net realized gain -- -- -- .030 .030
- -----------------------------------------------------------------------------------------------------
Total dividends .100 .090 .080 .090 .090
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.147 1.207 1.269 1.142 1.267
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 3.54% 2.56 18.98 (2.74) 6.48
- -----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- -----------------------------------------------------------------------------------------------------
Expenses .68% .66 .65 .63 .60
- -----------------------------------------------------------------------------------------------------
Net investment income 7.18% 7.09 7.08 5.69 5.05
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $82,400 84,314 95,185 95,782 121,912
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 149% 325 275 606 534
- -----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------
KEMPER INTERNATIONAL PORTFOLIO
-------------------------------------------------------
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------
JUNE 30, 1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.564 1.371 1.244 1.306 .993
- -------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .009 .011 .018 .009 .010
- -------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) .174 .212 .139 (.056) .313
- -------------------------------------------------------------------------------------------------------
Total from investment operations .183 .223 .157 (.047) .323
- -------------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .020 .020 .010 -- .009
- -------------------------------------------------------------------------------------------------------
Distribution from net realized gain .070 .010 .020 .015 .001
- -------------------------------------------------------------------------------------------------------
Total dividends .090 .030 .030 .015 .010
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.657 1.564 1.371 1.244 1.306
- -------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 12.34% 16.49 12.83 (3.59) 32.83
- -------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- -------------------------------------------------------------------------------------------------------
Expenses .96% .96 .92 .93 .92
- -------------------------------------------------------------------------------------------------------
Net investment income 1.12% .89 1.39 .74 .86
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $201,887 163,475 134,481 122,710 88,880
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 75% 87 126 107 116
- -------------------------------------------------------------------------------------------------------
</TABLE>
Average commission rates paid per share on stock transactions for the six months
ended June 30, 1997 and the year ended December 31, 1996 were $.0123 and $.0183,
respectively. Foreign commissions usually are lower than U.S. commissions when
expressed as cents per share due to the lower per share price of many non-U.S.
securities.
- --------------------------------------------------------------------------------
28
<PAGE> 29
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
-------------------------------------------------
KEMPER SMALL CAP GROWTH PORTFOLIO
-------------------------------------------------
YEAR ENDED
DECEMBER 31, MAY 2 TO
SIX MONTHS ENDED --------------- DECEMBER 31,
JUNE 30, 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period $1.677 1.346 1.039 1.000
- ---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .002 .002 .005 .008
- ---------------------------------------------------------------------------------------------
Net realized and unrealized gain .206 .369 .307 .031
- ---------------------------------------------------------------------------------------------
Total from investment operations .208 .371 .312 .039
- ---------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .010 -- .005 --
- ---------------------------------------------------------------------------------------------
Distribution from net realized gain .190 .040 -- --
- ---------------------------------------------------------------------------------------------
Total dividends .200 .040 .005 --
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $1.685 1.677 1.346 1.039
- ---------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 14.84% 28.04 30.07 3.95
- ---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- ---------------------------------------------------------------------------------------------
Expenses .74% .75 .87 1.25
- ---------------------------------------------------------------------------------------------
Net investment income .24% .15 .42 .91
- ---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $91,109 69,137 35,373 12,909
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 325% 156 81 58
- ---------------------------------------------------------------------------------------------
</TABLE>
Average commission rates paid per share on stock transactions for the six months
ended June 30, 1997 and the year ended December 31, 1996 were $.0576 and $.0570,
respectively.
- --------------------------------------------------------------------------------
29
<PAGE> 30
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER KEMPER
INVESTMENT GRADE VALUE SMALL CAP VALUE+
BOND PORTFOLIO PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO
--------------------- --------------------- --------------------- ---------------------
SIX MONTHS MAY 1 SIX MONTHS MAY 1 SIX MONTHS MAY 1 SIX MONTHS MAY 1
ENDED TO ENDED TO ENDED TO ENDED TO
JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31,
1997 1996 1997 1996 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $1.036 1.000 1.174 1.000 1.019 1.000 1.146 1.000
- -------------------------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .032 .031 .015 .015 .004 .013 .005 .008
- -------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gain (loss) (.002) .005 .164 .159 .137 .006 .148 .138
- -------------------------------------------------------------------------------------------------------------------------
Total from investment
operations .030 .036 .179 .174 .141 .019 .153 .146
- -------------------------------------------------------------------------------------------------------------------------
Less distribution from net
investment income .010 -- .010 -- .010 -- .010 --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end
of period $1.056 1.036 1.343 1.174 1.150 1.019 1.289 1.146
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT
ANNUALIZED) 2.93% 3.57 15.36 17.36 14.09 1.86 13.52 14.60
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS AFTER EXPENSE ABSORPTION (ANNUALIZED)
- -------------------------------------------------------------------------------------------------------------------------
Expenses .79% .87 .88 .90 .92 .90 .94 .90
- -------------------------------------------------------------------------------------------------------------------------
Net investment income 6.33% 4.93 2.55 2.42 .92 2.25 .92 .97
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS BEFORE EXPENSE ABSORPTION (ANNUALIZED)
- -------------------------------------------------------------------------------------------------------------------------
Expenses .79% .87 .88 .92 .92 .92 .94 1.01
- -------------------------------------------------------------------------------------------------------------------------
Net investment income 6.33% 4.93 2.55 2.40 .92 2.23 .92 .86
- -------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(in thousands) $7,567 1,998 79,948 21,305 38,138 13,307 29,075 10,196
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(annualized) 207% 75 69 57 27 61 74 25
- -------------------------------------------------------------------------------------------------------------------------
Average commission rates
paid per share on stock
transactions $ -- -- .0535 .0500 .0528 .0500 .0580 .0596
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE TO ALL PORTFOLIOS: Data for the period ended June 30, 1997 is unaudited.
30
<PAGE> 31
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KEMPER KEMPER KEMPER KEMPER KEMPER
HORIZON 20+ HORIZON 10+ HORIZON 5 BLUE CHIP GLOBAL INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------------- ---------------------- ---------------------- --------- -------------
SIX MONTHS MAY 1 SIX MONTHS MAY 1 SIX MONTHS MAY 1 FOR THE PERIOD MAY 1
ENDED TO ENDED TO ENDED TO (COMMENCEMENT OF
JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31, OPERATIONS)
1997 1996 1997 1996 1997 1996 TO JUNE 30, 1997
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
1.154 1.000 1.114 1.000 1.096 1.000 1.000 1.000
- --------------------------------------------------------------------------------------------------------
.002 .012 .016 .018 .021 .023 .005 .007
- --------------------------------------------------------------------------------------------------------
.122 .142 .084 .096 .049 .073 .024 (.001)
- --------------------------------------------------------------------------------------------------------
.124 .154 .100 .114 .070 .096 .029 .006
- --------------------------------------------------------------------------------------------------------
.010 -- .010 -- .010 -- -- --
- --------------------------------------------------------------------------------------------------------
1.268 1.154 1.204 1.114 1.156 1.096 1.029 1.006
- --------------------------------------------------------------------------------------------------------
10.88 15.37 9.12 11.37 6.51 9.59 2.90 .60
- --------------------------------------------------------------------------------------------------------
.86 .81 .81 .78 .91 .83 1.21 1.06
- --------------------------------------------------------------------------------------------------------
1.78 1.71 2.84 2.69 3.82 3.60 2.21 1.49
- --------------------------------------------------------------------------------------------------------
.86 1.13 .81 1.01 .91 1.01 1.21 1.06
- --------------------------------------------------------------------------------------------------------
1.78 1.39 2.84 2.46 3.82 3.42 2.21 1.49
- --------------------------------------------------------------------------------------------------------
8,806 3,759 11,258 5,727 6,866 2,534 1,156 1,510
- --------------------------------------------------------------------------------------------------------
109 60 97 76 125 13 27 --
- --------------------------------------------------------------------------------------------------------
.0513 .0458 .0500 .0455 .0413 .0490 .0596 --
- --------------------------------------------------------------------------------------------------------
</TABLE>
31
<PAGE> 32
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
CORPORATE OBLIGATIONS VALUE
- ---------------------------------------------------------
<S> <C> <C>
- ---------------------------------------------------------
BANKING--9.6%
- ---------------------------------------------------------
(a) Bankers Trust New York Corp.
5.70%, 7/1/97 $ 2,000
Credit Lyonnais N.A. Inc.
5.80%, 7/22/97 4,983
Royal Bank of Canada
5.63%, 7/15/97 1,996
--------------------------------------------------
8,979
- ---------------------------------------------------------
BUSINESS LOANS--21.4%
- ---------------------------------------------------------
Ace Overseas Corp.
5.75%, 9/8/97 1,978
B I Funding Inc.
5.67%, 7/30/97 2,986
Banner Receivables Corp.
5.80%, 8/4/97 1,989
Falcon Asset Securitization Corp.
5.65%, 7/14/97 1,996
Gotham Capital Corp.
5.76%-5.81%, 7/14/97-7/23/97 2,992
National Fleet Funding Corp.
5.64%, 7/16/97 1,996
Windmill Funding Corp.
5.63%, 7/18/97 2,992
Working Capital Management Co., L.P.
5.71%, 7/8/97 2,997
-------------------------------------------------
19,926
- ---------------------------------------------------------
CAPITAL AND EQUIPMENT LENDING--13.4%
- ---------------------------------------------------------
BTM Capital Corp.
5.79%, 8/26/97 2,973
(a) Caterpillar Financial Services Corp.
5.64%, 7/14/97 1,996
IBM Credit Corp.
5.54%, 7/14/97 2,994
SRD Finance Inc.
5.71%, 8/21/97 1,984
(a) Sanwa Business Credit Corp.
5.71%, 7/16/97 2,500
--------------------------------------------------
12,447
- ---------------------------------------------------------
CAPTIVE BUSINESS LENDING--5.4%
- ---------------------------------------------------------
BAT Capital Corp.
5.60%, 7/23/97 2,990
(a) FINOVA Capital Corp.
5.74%, 7/15/97 2,000
--------------------------------------------------
4,990
<CAPTION>
- ---------------------------------------------------------
VALUE
- ---------------------------------------------------------
<S> <C>
- ---------------------------------------------------------
CONSUMER LENDING--5.4%
- ---------------------------------------------------------
(a) Countrywide Home Loans
6.18%, 7/23/97 $ 2,004
General Electric Capital Services
5.57%, 7/22/97 2,990
--------------------------------------------------
4,994
- ---------------------------------------------------------
DIVERSIFIED FINANCE--8.0%
- ---------------------------------------------------------
Dynamic Funding Corp.
5.70%, 7/7/97 3,497
Old Line Funding Corp.
5.76%, 7/11/97 1,997
STRAIT Capital Corp.
5.79%, 9/30/97 1,971
--------------------------------------------------
7,465
- ---------------------------------------------------------
FINANCIAL SERVICES--12.9%
- ---------------------------------------------------------
(a) Bear Stearns Cos. Inc.
5.72%, 7/21/97 2,000
(a) Goldman Sachs Group, L.P.
5.68%, 7/16/97 2,000
(a)(b) Lehman Brothers Holdings Inc.
5.72%, 7/16/97 2,000
(a) Merrill Lynch & Co., Inc.
5.65%, 7/18/97 2,000
(a) Morgan Stanley & Co. Inc.
5.66%, 7/18/97 2,000
Nomura Holding America Inc.
5.83%, 7/29/97 1,991
--------------------------------------------------
11,991
- ---------------------------------------------------------
HEALTH CARE--4.3%
- ---------------------------------------------------------
American Home Products
5.65%, 7/14/97 1,996
Columbia/HCA Healthcare Corp.
5.78%, 8/4/97 1,989
-------------------------------------------------
3,985
- ---------------------------------------------------------
UTILITIES--3.2%
- ---------------------------------------------------------
NYNEX Corp.
6.18%, 7/1/97 3,000
-------------------------------------------------
TOTAL CORPORATE OBLIGATIONS--83.6%
(AVERAGE MATURITY: 23 DAYS) 77,777
-------------------------------------------------
</TABLE>
32
<PAGE> 33
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
VALUE
- ---------------------------------------------------------
<S> <C>
- ---------------------------------------------------------
CERTIFICATES OF DEPOSIT
- ---------------------------------------------------------
(a) AmSouth Bank of Alabama
5.59%, 7/7/97 $ 2,000
(a) Comerica Bank
5.67%, 7/1/97 1,999
(a) CoreStates Bank N.A.
5.66%, 7/7/97 1,000
MBNA America Bank N.A.
5.69%, 8/4/97 3,000
(a) Morgan Guaranty Trust Co. of New York
5.63%, 7/1/97 1,999
(a) Old Kent Bank
5.70%, 7/1/97 2,000
(a) PNC Bank, N.A.
5.62%, 7/1/97 1,999
-------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT--15.0%
(AVERAGE MATURITY: 9 DAYS) 13,997
-------------------------------------------------
TOTAL INVESTMENTS--98.6%
(AVERAGE MATURITY: 21 DAYS) 91,774
-------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--1.4% 1,342
-------------------------------------------------
NET ASSETS--100% $93,116
-------------------------------------------------
</TABLE>
- ------------------------------------------------------
NOTES TO KEMPER MONEY MARKET PORTFOLIO OF INVESTMENTS
- ------------------------------------------------------
Interest rates represent annualized yield to date of maturity, except for
variable rate securities described in Note (a). For each security, cost (for
financial reporting and federal income tax purposes) and carrying value are the
same. Likewise, carrying value approximates principal amount.
(a) Variable rate securities. The rates shown are the current rates at June 30,
1997. The dates shown represent the demand date or next interest rate change
date.
(b) Illiquid security representing 2.1% of net assets at June 30, 1997.
See accompanying Notes to Financial Statements.
33
<PAGE> 34
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------
PRINCIPAL
AMOUNT OR
NUMBER
GOVERNMENT OBLIGATIONS OF SHARES VALUE
- -------------------------------------------------------------
<C> <S> <C> <C>
U.S. TREASURY BONDS
- -------------------------------------------------------------
10.375%, 2009 $ 4,865 $ 5,908
9.125%, 2009 4,870 5,527
14.00%, 2011 5,090 7,667
13.875%, 2011 16,180 23,921
12.00%, 2013 1,800 2,533
12.50%, 2014 15,135 22,244
10.625%, 2015 8,500 11,826
6.50%, 2026 2,625 2,521
6.00%, 2026 1,030 923
- -------------------------------------------------------------
U.S. TREASURY NOTES
- -------------------------------------------------------------
7.75%, 2000 6,000 6,220
7.875%, 2001 7,000 7,381
7.75%, 2001 9,000 9,415
6.625%, 2002 3,340 3,372
6.25%, 2003 8,500 8,437
- -------------------------------------------------------------
MORTGAGE BACKED SECURITIES
- -------------------------------------------------------------
GNMA, 6.50%, 2024 14,745 14,188
FNMA, 7.00%, 2027 3,004 2,944
- -------------------------------------------------------------
PROVINCE OF QUEBEC, CANADA
- -------------------------------------------------------------
8.625%, 2005 2,000 2,184
--------------------------------------------------------
TOTAL GOVERNMENT OBLIGATIONS--18.3%
(COST: $136,768) 137,211
--------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------
BASIC INDUSTRIES--4.9%
- -------------------------------------------------------------
Air Products & Chemicals 52,000shs. 4,225
Betz Dearborn Inc. 84,900 5,603
Cementos Mexicanos, S.A.
de C.V., "B," ADR 38,700 187
Crown Cork & Seal Co. 85,000 4,542
Ferro Corp. 170,000 6,301
W.R. Grace & Co. 110,000 6,064
Praxair, Inc. 113,100 6,334
Rentokil Initial PLC 42,000 147
Temple-Inland Inc. 50,000 2,700
Toray Industries 23,000 164
Tubos de Acero
de Mexico, S.A., ADR 7,300 135
--------------------------------------------------------
36,402
- -------------------------------------------------------------
CAPITAL GOODS--5.0%
- -------------------------------------------------------------
Boeing Co. 26,000 1,380
Emerson Electric Co. 100,000 5,506
General Electric Co. 190,000 12,421
B.F. Goodrich Co. 250,000 10,828
Sony Corp. 1,600 140
Sundstrand Corp. 75,000 4,186
Technip S.A. 3,468 403
York International Corp. 60,000 2,760
--------------------------------------------------------
37,624
<CAPTION>
- -------------------------------------------------------------
NUMBER
OF SHARES VALUE
- -------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS--6.4%
- -------------------------------------------------------------
Avon Products 40,000 $ 2,822
Carnival Corp. 140,000 5,775
(a) Consolidated Stores Corp. 137,500 4,778
CVS Corp. 70,000 3,587
R.R. Donnelley & Sons Co. 160,000 5,860
(a) Federated Department Stores 90,000 3,127
Hudson's Bay Co. 54,200 1,217
Manpower, Inc. 45,100 2,007
May Department Stores Co. 72,000 3,402
McDonald's Corp. 50,000 2,416
(a) MGM Grand 50,000 1,850
Pep Boys - Manny Moe & Jack 99,000 3,372
Reed International PLC 17,936 174
Sears, Roebuck & Co. 40,000 2,150
Time Warner 60,000 2,895
Tribune Co. 20,000 961
Wm. Wrigley Jr. Co. 21,400 1,434
--------------------------------------------------------
47,827
- -------------------------------------------------------------
CONSUMER DURABLES--1.9%
- -------------------------------------------------------------
Honda Motor Co., Ltd. 6,000 181
Leggett & Platt Inc. 163,100 7,013
Matsushita Electric Industrial
Co., Ltd. 10,000 202
Stanley Works 170,000 6,800
--------------------------------------------------------
14,196
- -------------------------------------------------------------
CONSUMER STAPLES--5.6%
- -------------------------------------------------------------
CPC International 55,000 5,077
International Flavors &
Fragrances 80,000 4,040
PepsiCo 170,000 6,386
Philip Morris Companies 269,400 11,955
RJR Nabisco Holdings Corp. 100,000 3,300
Unilever N.V., ADR 30,000 6,540
UST, Inc. 80,000 2,220
Whitman Corp. 100,000 2,531
--------------------------------------------------------
42,049
- -------------------------------------------------------------
ENERGY--4.0%
- -------------------------------------------------------------
AMOCO Corp. 70,000 6,086
British Petroleum 12,008 149
Exxon Corp. 83,200 5,117
Mobil Corp. 102,000 7,127
Pennzoil Co. 30,000 2,302
Royal Dutch Petroleum 40,000 2,175
Tosco Corp. 130,000 3,892
Unocal Corp. 85,000 3,299
--------------------------------------------------------
30,147
</TABLE>
34
<PAGE> 35
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------
NUMBER
OF SHARES VALUE
- -------------------------------------------------------------
<S> <C> <C>
FINANCE--10.7%
- -------------------------------------------------------------
ADVANTA Corp. 150,000 $ 5,353
Allstate Corp. 55,000 4,015
American Express Co. 65,000 4,842
American General Corp. 100,000 4,775
American International Group 10,000 1,494
Banc One Corp. 151,567 7,342
Banco Santander, S.A. 4,035 125
BankAmerica Corp. 40,000 2,582
BankBoston 34,000 2,450
Bank of Ireland 24,905 273
CITIC Pacific Ltd. 42,000 262
Cheung Kong Holdings Ltd. 22,000 217
Dean Witter Discover 170,000 7,321
Development Bank of Singapore 13,000 164
Great Western Financial Corp. 40,000 2,150
Household International 50,000 5,872
ING Groep N.V. 5,926 274
ITT Hartford Group 50,000 4,137
Jefferson-Pilot Corp. 98,600 6,890
KeyCorp 40,000 2,235
Mellon Bank Corp. 104,000 4,693
PNC Bank, N.A. 105,000 4,371
Summit Bancorp 60,000 3,008
Travelers Group 45,000 2,838
Washington Mutual 45,000 2,689
--------------------------------------------------------
80,372
- -------------------------------------------------------------
HEALTH CARE--10.7%
- -------------------------------------------------------------
Abbott Laboratories 120,000 8,010
C.R. Bard 80,000 2,905
(a) Biogen 100,000 3,387
Biomet, Inc. 300,000 5,587
Bristol-Myers Squibb Co. 54,000 4,374
(a) British Biotech, PLC 36,500 139
(a) Fresenius Medical Care, ADS 2,090 150
Glaxo Wellcome PLC 100,000 4,181
(a) HealthCare COMPARE Corp. 86,100 4,509
(a) HEALTHSOUTH Corp. 140,000 3,491
Eli Lilly & Co. 65,000 7,105
Novartis, ADR 85,000 6,811
Perkin-Elmer Corp. 150,000 11,934
Pfizer Inc. 27,000 3,227
Roche Holding A.G. 20 181
(a) Tenet Healthcare Corp. 160,000 4,730
United Healthcare Corp. 50,000 2,600
Warner-Lambert Co. 54,000 6,710
--------------------------------------------------------
80,031
<CAPTION>
- -------------------------------------------------------------
NUMBER
OF SHARES VALUE
OR PRINCIPAL
AMOUNT
- -------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY--12.5%
- -------------------------------------------------------------
AMP Inc. 50,000 $ 2,087
(a) Cadence Design Systems 76,000 2,546
(a) Cisco Systems 35,000 2,349
Computer Associates
International 50,000 2,784
(a) Computer Sciences Corp. 30,000 2,164
(a) Compuware Corp. 100,000 4,775
L.M. Ericsson Telephone Co.,
"B" 8,045 317
(a) Gartner Group 80,000 2,875
Harris Corp. 100,000 8,400
Hewlett-Packard Co. 100,000 5,600
Honeywell Inc. 80,000 6,070
Intel Corp. 33,000 4,680
International Business
Machines 30,000 2,706
Motorola 90,000 6,840
Murata Manufacturing 5,000 199
(a) Oracle Corp. 170,000 8,564
(a) PeopleSoft Inc. 100,000 5,275
Pitney Bowes 68,000 4,726
(a) Sterling Commerce Inc. 99,500 3,271
(a) Sun Microsystems 150,000 5,583
(a) Tellabs, Inc. 81,000 4,526
(a) Teradyne 56,000 2,198
United Technologies 60,000 4,980
--------------------------------------------------------
93,515
- -------------------------------------------------------------
TRANSPORTATION--1.3%
- -------------------------------------------------------------
CSX Corp. 90,000 4,995
Norfolk Southern Corp. 45,000 4,534
Swire Pacific Ltd., "A" 19,500 176
--------------------------------------------------------
9,705
- -------------------------------------------------------------
UTILITIES--1.6%
- -------------------------------------------------------------
AT&T 100,000 3,506
Ameritech Corp. 60,000 4,076
SBC Communications Inc. 60,000 3,713
Telefonica de Espana S.A. 7,950 230
Telefonica del Peru S.A., ADR 8,000 210
--------------------------------------------------------
11,735
--------------------------------------------------------
TOTAL COMMON STOCKS--64.6%
(COST: $394,522) 483,603
--------------------------------------------------------
CORPORATE OBLIGATIONS
- -------------------------------------------------------------
BASIC INDUSTRIES--1.0%
- -------------------------------------------------------------
Euramax International,
11.25%, 2006 $ 2,850 3,064
Riverwood International,
10.25%, 2006 2,650 2,617
Stone Container Corp.,
11.875%, 2016 1,000 1,065
Stone Container Finance Corp.,
11.50%, 2006 500 517
--------------------------------------------------------
7,263
</TABLE>
35
<PAGE> 36
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------
<S> <C> <C>
CONSUMER CYCLICALS--7.4%
- -------------------------------------------------------------
AFC Enterprises, Inc.,
10.25%, 2007 $ 100 $ 100
AMF Group
(b) 12.25%, 2006 1,000 714
10.875%, 2006 2,100 2,273
American Radio System Corp.,
9.00%, 2006 1,260 1,285
Cablevision Systems Corp.,
9.25%, 2005 1,800 1,854
Cinemark USA, Inc.,
9.625%, 2008 1,360 1,387
Comcast Cable Communications,
8.875%, 2017 1,000 1,088
Comcast Corp.,
9.375%, 2005 1,500 1,566
(b) Comcast UK Cable Partners
Ltd.,
11.20%, 2007 2,880 2,171
Delco Remy International,
10.625%, 2006 1,000 1,060
Del Webb Corp.,
9.75%, 2008 2,600 2,629
Empress River Casino,
10.75%, 2002 2,000 2,130
Federated Department Stores,
10.00%, 2001 2,000 2,196
Granite Broadcasting Corp.,
9.375%, 2005 1,240 1,198
Hayes Wheels International,
Inc.,
11.00%, 2006 1,500 1,650
Hilton Hotels Corp.
7.375%, 2002 1,000 1,007
7.95%, 2007 500 513
K-III Communications Corp.,
8.50%, 2006 750 756
Kinder-Care Learning Centers,
9.50%, 2009 500 482
Marriott International,
6.75%, 2009 500 472
News American Holdings,
9.25%, 2013 1,000 1,115
Pathmark Stores, Inc.,
9.625%, 2003 2,545 2,450
J.C. Penney Co.
7.60%, 2007 2,000 2,068
7.95%, 2017 50 52
Rogers Cantel Mobile Inc.,
11.125%, 2002 1,790 1,853
Royal Caribbean Cruises Ltd.,
8.25%, 2005 2,000 2,098
Sears Roebuck Acceptance
Corp.,
6.75%, 2005 2,000 1,970
<CAPTION>
- -----------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------
<S> <C> <C>
CONSUMER CYCLICALS--CONTINUED
- -----------------------------------------------------------
Sinclair Broadcasting Group,
Inc.,
10.00%, 2003 $ 1,710 $ 1,761
Station Casinos Inc.,
10.125%, 2006 1,700 1,700
TCI Communications,
8.65%, 2004 1,000 1,054
(b) TeleWest Communications PLC,
11.00%, 2007 4,020 2,920
Time Warner Entertainment Co.,
L.P.,
8.875%, 2012 1,000 1,100
Time Warner Inc.,
9.125%, 2013 1,000 1,108
Trump Atlantic City,
11.25%, 2006 1,800 1,759
USA Mobile Communications, Inc.,
9.50%, 2004 1,750 1,619
Viacom Inc.,
8.00%, 2006 2,500 2,425
(b) Videotron Holdings PLC,
11.125%, 2004 625 566
Windy Hill Pet Food Co., Inc.,
9.75%, 2007 1,300 1,303
--------------------------------------------------------
55,452
- -------------------------------------------------------------
CONSUMER DURABLES--.3%
- -------------------------------------------------------------
Nortek, Inc.,
9.875%, 2004 90 92
WestPoint Stevens,
9.375%, 2005 2,050 2,137
--------------------------------------------------------
2,229
- -------------------------------------------------------------
CONSUMER STAPLES--.2%
- -------------------------------------------------------------
Nabisco Inc., 8.00%, 2000 1,000 1,026
- -------------------------------------------------------------
ENERGY--1.1%
- -------------------------------------------------------------
Gulf Canada Resources Ltd.,
9.25%, 2004 1,500 1,575
Petronas Dagangan Bhd
7.125%, 2005 1,000 1,003
7.125%, 2006 1,000 1,000
Repsol International Finance,
7.00%, 2005 1,000 1,002
USX Corp.,
9.375%, 2012 2,000 2,307
Wiser Oil Co.,
9.50%, 2007 1,350 1,347
--------------------------------------------------------
8,234
</TABLE>
36
<PAGE> 37
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------
<S> <C> <C>
FINANCE--3.3%
- ---------------------------------------------------------------
AB Spintab,
7.50%, 2049 $ 2,000 $ 2,008
ABN AMRO Bank,
8.25%, 2009 2,000 2,101
Abbey National PLC,
7.35%, 2049 1,300 1,304
Banco Central Hispano Americano,
7.50%, 2005 1,000 1,011
Bangkok Bank Ltd.,
7.25%, 2005 2,000 1,910
Cole National Group,
9.875%, 2006 2,640 2,785
Continental Homes Holding Corp.,
10.00%, 2006 1,000 1,030
Corporacion Andina De Formento,
7.79%, 2017 1,750 1,774
Den Danske Bank,
7.40%, 2010 2,000 2,010
Lehman Brothers Holdings,
7.375%, 2007 2,000 1,999
Morgan Stanley Group,
6.875%, 2007 1,600 1,569
Petrozuata Financial,
7.63%, 2009 400 403
Prudential Insurance,
8.30%, 2025 1,000 1,027
Salomon Inc.,
7.50%, 2003 1,000 1,018
Skandinaviska Enskilda Banken,
6.625%, 2049 1,000 988
Svenska Handelsbanken,
7.125%, 2049 1,750 1,715
----------------------------------------------------------
24,652
- ---------------------------------------------------------------
HEALTH CARE--.6%
- ---------------------------------------------------------------
MedPartners,
7.375%, 2006 2,000 2,002
Tenet Healthcare Corp.
10.125%, 2005 1,600 1,744
8.625%, 2007 1,000 1,015
----------------------------------------------------------
4,761
<CAPTION>
- ---------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION--.2%
- ---------------------------------------------------------------
CSX Corp., 7.45%, 2007 $ 1,450 $ 1,480
- ---------------------------------------------------------------
UTILITIES--1.2%
- ---------------------------------------------------------------
(b) Call-Net Enterprises Inc.,
13.25%, 2004 500 433
Commonwealth Edison,
6.40%, 2005 1,000 931
(b) Diamond Cable Communication PLC,
10.75%, 2007 500 282
(b) International CableTel Inc.,
11.50%, 2006 2,600 1,794
(b) PanAmSat, L.P.,
11.375%, 2003 1,800 1,744
Tenaga Nasional Berhad,
7.875%, 2004 1,750 1,827
U.S. West Capital Funding
Inc.,
7.30%, 2007 2,000 2,003
----------------------------------------------------------
9,014
----------------------------------------------------------
TOTAL CORPORATE
OBLIGATIONS--15.3%
(COST: $112,597) 114,111
----------------------------------------------------------
TOTAL INVESTMENTS--98.2%
(COST: $643,887) 734,925
----------------------------------------------------------
OTHER ASSETS, LESS
LIABILITIES--1.8% 13,521
----------------------------------------------------------
NET ASSETS--100% $748,433
----------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
NOTES TO KEMPER TOTAL RETURN PORTFOLIO OF INVESTMENTS
-------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Deferred interest obligation; currently zero coupon under the terms of the
initial offering.
Based on the cost of investments of $643,887,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $93,601,000, the gross
unrealized depreciation was $2,563,000 and the net unrealized appreciation on
investments was $91,038,000.
See accompanying Notes to Financial Statements.
37
<PAGE> 38
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------
PRINCIPAL
GOVERNMENT OBLIGATIONS AMOUNT VALUE
- ------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES AND BONDS
- ------------------------------------------------------------
9.125%, 1999 $ 3,000 $ 3,160
8.875%, 1999 6,200 6,471
6.625%, 2002 6,000 6,057
-------------------------------------------------------
TOTAL GOVERNMENT
OBLIGATIONS--4.7%
(Cost: $15,642) 15,688
-------------------------------------------------------
- ------------------------------------------------------------
CORPORATE OBLIGATIONS
- ------------------------------------------------------------
AEROSPACE--2.3%
- ------------------------------------------------------------
Airlines Pass Through Trust,
10.875%, 2019 1,190 1,369
Fairchild Corp.,
12.00%, 2001 2,840 2,868
Greenwich Air Services,
10.50%, 2006 445 512
Howmet Inc.,
10.00%, 2003 270 292
K & F Industries, Inc.
11.875%, 2003 329 346
10.375%, 2004 1,510 1,593
UNC, Inc.,
11.00%, 2006 635 745
---------------------------------------------------------
7,725
- --------------------------------------------------------------
BROADCASTING, CABLESYSTEMS AND PUBLISHING--16.9%
- --------------------------------------------------------------
Affinity Group, Inc.,
11.50%, 2003 1,590 1,705
American Radio Systems Corp.,
9.00%, 2006 1,260 1,285
(b) Australis Holdings,
15.00%, 2002 3,660 2,635
Azteca Holdings, S.A. de C.V.,
11.00%, 2002 530 536
(b) Bell Cablemedia PLC
11.95%, 2004 3,140 2,838
11.875%, 2005 150 125
Big Flower Press, Inc.
10.75%, 2003 2,427 2,621
8.875%, 2007 3,000 2,970
Busse Broadcasting,
11.625%, 2000 680 721
CAI Wireless Systems,
12.25%, 2002 1,000 325
Cablevision Systems Corp.
9.250%, 2005 420 432
9.875%, 2013 1,145 1,185
10.50%, 2016 1,440 1,562
Capstar Broadcasting
Partners, Inc.,
(b) 12.75%, 2009 1,600 1,032
Capstar Radio Broadcasting,
9.25%, 2007 530 518
CCA Holdings,
13.00%, 1999 1,000 1,235
(b) Charter Communications,
14.00%, 2007 1,870 1,258
Comcast Cellular Holdings,
Inc.,
9.50%, 2007 3,200 3,220
<CAPTION>
- --------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------
<S> <C> <C>
BROADCASTING, CABLESYSTEMS AND PUBLISHING--CONTINUED
- --------------------------------------------------------------
Comcast Corp.,
9.125%, 2006 $ 2,180 $ 2,278
(b) Comcast UK Cable Partners
Ltd.,
11.20%, 2007 4,630 3,490
(b) CS Wireless,
11.375%, 2006 2,420 569
(b) Diamond Cable Communication
PLC,
10.75%, 2007 890 502
Frontiervision,
11.00%, 2006 1,140 1,197
Granite Broadcasting Corp.,
10.375%, 2005 1,220 1,238
Innova S De R.L.,
12.875%, 2007 1,400 1,470
International Cable,
10.00%, 2007 280 283
(b) International CableTel Inc.
12.75%, 2005 4,200 3,192
11.50%, 2006 170 117
Multicanal Participacoes,
12.625%, 2004 820 939
Neodata Services,
12.00%, 2003 1,610 1,719
Newsquest Capital PLC,
11.00%, 2006 1,600 1,744
(b) People's Choice TV Unit,
13.125%, 2004 2,050 738
Sinclair Broadcasting Group,
Inc.,
10.00%, 2003 1,880 1,936
STC Broadcasting,
11.00%, 2007 590 627
Sullivan Broadcasting
10.25%, 2005 410 416
13.25%, 2006 810 1,004
Telewest Communications PLC
9.625%, 2006 1,200 1,236
(b) 11.00%, 2007 3,065 2,226
TV Azteca,
10.50%, 2007 885 905
(b) UIH Australia Pacific, Inc.,
14.00%, 2006 1,080 653
(b) Videotron Holdings PLC
11.125%, 2004 745 674
11.00%, 2005 1,020 849
--------------------------------------------------------
56,205
- --------------------------------------------------------------
BUSINESS SERVICES--3.0%
- --------------------------------------------------------------
Allied Waste Industries
10.25%, 2006 790 847
(b) 11.30%, 2007 1,770 1,111
Brooks Fiber Properties, Inc.
(b) 11.875%, 2006 2,200 1,430
(b) 10.875%, 2006 690 469
10.00%, 2007 550 556
Corporate Express Inc.,
9.125%, 2004 1,300 1,300
Outdoor Systems, Inc.,
9.375%, 2006 3,305 3,330
Universal Outdoor Holdings,
Inc.,
9.75%, 2006 880 914
---------------------------------------------------------
9,957
</TABLE>
38
<PAGE> 39
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------
<S> <C> <C>
- --------------------------------------------------------------
CHEMICALS AND AGRICULTURE--4.0%
- --------------------------------------------------------------
Agriculture, Mining and
Chemicals, Inc.,
10.75%, 2003 $ 940 $ 996
Atlantis Group, Inc.,
11.00%, 2003 1,735 1,787
Hines Horticulture,
11.75%, 2005 610 642
NL Industries Inc.
11.75%, 2003 1,330 1,443
(b) 13.00%, 2005 1,350 1,272
Polymer Group Inc.,
12.25%, 2002 907 1,009
Polytama International
Finance, B.V.,
11.25%, 2007 530 546
Rexene Corp.,
11.75%, 2004 2,180 2,474
Terra Industries Inc.,
10.50%, 2005 840 911
Texas Petrochemicals,
11.125%, 2006 1,040 1,113
UCC Investors Holdings, Inc.
10.50%, 2002 840 911
11.00%, 2003 300 323
---------------------------------------------------------
13,427
- --------------------------------------------------------------
COMMUNICATIONS--9.4%
- --------------------------------------------------------------
(b) Call-Net Enterprises Inc.,
13.25%, 2004 1,100 953
(b) Cellular, Inc.,
11.75%, 2003 1,795 1,750
(b) Comcel,
13.125%, with warrants, 2003 2,200 1,716
CommNet Cellular,
11.25%, 2005 730 840
Dobson Communication Corp.,
11.75%, 2007 1,800 1,764
Econophone, Inc.,
13.50%, 2007 750 758
(b) ICG Holdings,
13.50%, 2005 2,170 1,573
Intermedia Capital Partners,
11.25%, 2006 1,300 1,404
Intermedia Communications of
Florida, Inc.,
13.50%, with warrants, 2005 1,870 2,337
(b) McLeod, Inc.,
10.50%, 2007 880 563
(b) Millicom International Cellular,
S.A., 13.50%, 2006 2,410 1,738
Nextlink Communications,
12.50%, 2006 850 911
Paging Network, Inc.
10.125%, 2007 80 78
10.00%, 2008 450 432
(b) PanAmSat, L.P.,
11.375%, 2003 4,155 4,025
(b) PTC International Finance
B.V.,
10.75%, 2007 780 474
Rogers Cantel Mobile Inc.
11.125%, 2002 2,570 2,660
9.375%, 2008 200 211
9.75%, 2016 800 852
Telex Communication, Inc.,
10.50%, 2007 950 990
<CAPTION>
- --------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------
<S> <C> <C>
COMMUNICATIONS--CONTINUED
- --------------------------------------------------------------
USA Mobile Communications,
Inc.
14.00%, 2004 $ 880 $ 972
9.50%, 2004 760 703
Vanguard Cellular Systems,
9.375%, 2006 1,280 1,286
Western Wireless
10.50%, 2006 430 448
10.50%, 2007 1,070 1,114
Winstar Equipment,
12.50%, 2004 780 762
---------------------------------------------------------
31,314
- --------------------------------------------------------------
CONSTRUCTION MATERIALS--3.4%
- --------------------------------------------------------------
American Standard Inc.
(b) 10.50%, 2005 1,110 1,093
9.25%, 2016 1,300 1,355
(b) Building Materials Corporation
of America,
11.75%, 2004 3,895 3,554
Falcon Building Products, Inc.
(b) 10.50%, 2007 1,030 613
9.50%, 2007 410 409
Nortek, Inc.,
9.875%, 2004 1,380 1,411
Triangle Pacific Corp.,
10.50%, 2003 2,185 2,327
Waxman Industries, Inc.
(b) 12.75%, 2004 400 343
52,274 warrants expiring 2004 165
---------------------------------------------------------
11,270
- --------------------------------------------------------------
CONSUMER PRODUCTS AND SERVICES--7.6%
- --------------------------------------------------------------
AFC Enterprises, Inc.,
10.25%, 2007 710 710
Ameriking, Inc.,
10.75%, 2006 920 964
AMF Group
(b) 12.25%, 2006 2,940 2,100
10.875%, 2006 2,440 2,641
Avondale Mills,
10.25%, 2006 1,620 1,705
Cinemark USA, Inc.,
9.625%, 2008 980 1,000
Coinmach Corp.,
11.75%, 2005 2,630 2,926
Commemorative Brands,
11.00%, 2007 1,000 1,048
(b) Dr. Pepper Bottling Holdings,
Inc.,
11.625%, 2003 1,330 1,323
Herff Jones, Inc.,
11.00%, 2005 500 540
Kinder-Care Learning Centers,
9.50%, 2009 2,360 2,277
Pillowtex Corp.,
10.00%, 2006 320 336
Premier Parks Inc.,
12.00%, 2003 780 866
(b) Six Flags Theme Park,
12.25%, 2005 3,250 3,331
Van De Kamps, Inc.,
12.00%, 2005 600 668
WestPoint Stevens,
9.375%, 2005 2,550 2,658
Windy Hill Pet Food Co., Inc.,
9.75%, 2007 270 271
---------------------------------------------------------
25,364
</TABLE>
39
<PAGE> 40
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------
<S> <C> <C>
DRUGS AND HEALTH CARE--2.2%
- --------------------------------------------------------------
Dade International Inc.,
11.125%, 2006 $ 1,730 $ 1,931
Integrated Health Services,
Inc.,
9.50%, 2007 600 615
Magellan Health Services,
11.25%, 2004 1,410 1,572
Tenet Healthcare, Corp.
10.125%, 2005 970 1,057
8.00%, 2005 1,460 1,460
8.625%, 2007 610 619
---------------------------------------------------------
7,254
- --------------------------------------------------------------
ENERGY AND RELATED SERVICES--6.6%
- --------------------------------------------------------------
Bellwether Exploration Co.,
10.875%, 2007 490 523
Benton Oil & Gas Co.,
11.625%, 2003 1,215 1,326
Coda Energy,
10.50%, 2006 1,460 1,548
Empire Gas Corp.,
7.00%, with warrants, 2004 1,310 1,192
Ferrellgas Partners, L.P.,
9.375%, 2006 1,000 1,025
Flores & Rucks Inc.,
13.50%, 2004 1,660 1,994
Forcenergy Gas Exploration
9.50%, 2006 1,470 1,522
8.50%, 2007 1,520 1,482
Forman Petroleum Corp.,
13.50%, 2004 550 546
Gulf Canada Resources Ltd.,
9.625%, 2005 1,055 1,134
Mesa Operating Co.,
10.625%, 2006 920 1,047
Pacalta Resources Ltd.,
10.75%, 2004 1,160 1,183
Parker Drilling Corp.,
9.75%, 2006 1,140 1,194
Plains Resources,
10.25%, 2006 950 1,012
United Meridian Corp.,
10.375%, 2005 2,020 2,172
Vintage Petroleum
9.00%, 2005 1,810 1,837
8.625%, 2009 150 149
Wiser Oil Co.,
9.50%, 2007 920 918
---------------------------------------------------------
21,804
- --------------------------------------------------------------
FINANCIAL SERVICES, HOME BUILDING AND REAL ESTATE--5.2%
- --------------------------------------------------------------
Cityscape Financial Corp.,
12.75%, 2004 880 871
Continental Homes Holding
Corp.,
10.00%, 2006 846 871
Del Webb Corp.,
9.75%, 2008 930 941
DVI, Inc.,
9.875%, 2004 520 525
Ford Motor Credit,
6.011%, 2002 900 900
Forecast Group L.P.,
11.375%, 2000 765 734
Fortress Group,
13.75%, 2003 880 917
GMAC,
5.976%, 2002 1,700 1,696
<CAPTION>
- --------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------
<S> <C> <C>
FINANCIAL SERVICES, HOME BUILDING AND REAL ESTATE--CONTINUED
- --------------------------------------------------------------
Household Financial,
6.012%, 2002 $ 975 $ 975
Hovnanian Kent,
11.25%, 2002 1,858 1,946
Intertek Finance PLC,
10.25%, 2006 940 978
J.M. Peters Co.,
12.75%, 2002 850 876
Kaufman & Broad Home Corp.,
9.625%, 2006 910 946
Presley Companies,
12.50%, 2001 1,865 1,865
UDC Homes,
12.50%, 2000 850 861
Williams Scotsman, Inc.,
9.875%, 2007 1,300 1,297
---------------------------------------------------------
17,199
- --------------------------------------------------------------
HOTEL AND GAMING--2.4%
- --------------------------------------------------------------
Eldorado Resorts,
10.50%, 2006 1,880 2,016
Empress River Casino,
10.75%, 2002 1,340 1,427
Harvey's Casino Resorts,
10.625%, 2006 380 410
Players International,
10.875%, 2005 660 683
Station Casinos Inc.,
10.125%, 2006 510 510
Trump Atlantic City,
11.25%, 2006 3,139 3,068
---------------------------------------------------------
8,114
- --------------------------------------------------------------
MANUFACTURING, METALS AND MINING--12.8%
- --------------------------------------------------------------
Aftermarket Technology,
12.00%, 2004 1,035 1,149
Alvey Systems,
11.375%, 2003 370 382
Bar Technologies,
13.50%, with warrants, 2001 1,060 1,122
Collins & Aikman Corp.,
11.50%, 2006 1,820 2,057
Crain Industries, Inc.,
13.50%, 2005 1,180 1,342
Day International Group, Inc.,
11.125%, 2005 1,680 1,772
Delco Remy International,
10.625%, 2006 1,630 1,728
Essex Group Inc.,
10.00%, 2003 1,290 1,355
Euramax International,
11.25%, 2006 1,580 1,699
EV International,
11.00%, 2007 920 973
Fairfield Manufacturing Co.,
11.375%, 2001 780 827
Foamex L.P.,
9.875%, 2007 1,000 1,020
GS Technologies
12.00%, 2004 380 409
12.25%, 2005 620 679
Gulf States Steel,
13.50%, with warrants, 2003 900 909
Hayes Wheels International,
Inc.,
11.00%, 2006 1,750 1,925
IMO Industries,
11.75%, 2006 1,460 1,745
</TABLE>
40
<PAGE> 41
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------
<S> <C> <C>
MANUFACTURING, METALS AND MINING--CONTINUED
- --------------------------------------------------------------
Jordan Industries,
10.375%, 2003 $ 1,160 $ 1,201
JPS Automotive Products Corp.,
11.125%, 2001 1,780 1,949
Key Plastics,
10.25%, 2007 650 684
Knoll Inc.,
10.875%, 2006 566 624
MMI Products, Inc.,
11.25%, 2007 400 426
Motors and Gears, Inc.,
10.75%, 2006 1,200 1,236
Neenah Corp.,
11.125%, 2007 1,320 1,401
Newflo Corp.,
13.25%, 2002 1,270 1,368
Oxford Automotive, Inc.,
10.125%, 2007 380 381
Renco Metals,
11.50%, 2003 1,860 1,990
Spinnaker Industries,
10.75%, 2006 1,200 1,209
Terex Corp. Unit,
13.25%, 2002 1,550 1,736
Thermadyne Industries, Inc.
10.25%, 2002 1,320 1,389
10.75%, 2003 626 667
UCAR Global,
12.00%, 2005 1,550 1,747
WCI Steel Inc.,
10.00%, 2004 1,500 1,545
Weirton Steel Corp.,
11.375%, 2004 1,000 1,068
Wells Aluminum Corp.,
10.125%, 2005 1,010 1,043
---------------------------------------------------------
42,757
- --------------------------------------------------------------
PAPER, FOREST PRODUCTS AND CONTAINERS--7.6%
- --------------------------------------------------------------
BPC Holding Corp.,
12.50%, 2006 750 819
Berry Plastics Corp.,
12.25%, 2004 1,280 1,411
BWAY Corp.,
10.25%, 2007 870 935
Container Corporation of
America,
11.25%, 2004 485 523
Fonda Group,
9.50%, 2007 710 683
Gaylord Container Corp.
12.75%, 2005 690 690
9.75%, 2007 1,730 1,903
Maxxam Group, Inc.
(b) 12.25%, 2003 440 407
11.25%, 2003 1,653 1,703
National Fiberstock Corp.,
11.625%, 2002 760 787
Owens-Illinois, Inc.
9.95%, 2004 1,125 1,183
9.75%, 2004 2,400 2,525
Plastic Container,
10.00%, 2006 60 62
Printpack, Inc.
9.875%, 2004 530 554
10.625%, 2006 1,200 1,272
Riverwood International
10.25%, 2006 700 691
10.875%, 2008 3,400 3,060
<CAPTION>
- --------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------
<S> <C> <C>
PAPER, FOREST PRODUCTS AND CONTAINERS--CONTINUED
- --------------------------------------------------------------
Speciality Paperboard,
9.375%, 2006 $ 1,155 $ 1,172
Stone Container Corp.
9.875%, 2001 1,635 1,627
12.25%, 2002 220 224
11.50%, 2006 1,785 1,848
U.S. Can Corp.,
10.125%, 2006 1,180 1,258
---------------------------------------------------------
25,337
- --------------------------------------------------------------
RETAILING--4.0%
- --------------------------------------------------------------
Brunos,
10.50%, 2005 1,050 1,055
Cole National Group,
9.875%, 2006 1,360 1,435
(a) Color Tile, Inc.,
10.75%, 2001 1,470 52
Dominick's Finer Foods,
10.875%, 2005 400 445
Finlay Fine Jewelry Corp.,
10.625%, 2003 2,020 2,131
Guitar Center Management,
11.00%, 2006 880 959
Hedstrom Corp.,
10.00%, 2007 370 373
Pamida Holdings,
11.75%, 2003 1,340 1,276
Pathmark Stores
12.625%, 2002 1,290 1,326
9.625%, 2003 590 568
Petro Stopping Centers, L.P.,
10.50%, 2007 1,620 1,681
Riddell Sports Inc.,
10.50%, 2007 325 333
Specialty Retailers, Inc.
8.50%, 2005 270 269
9.00%, 2007 470 468
Travelcenters of America,
Inc.,
10.25%, 2007 1,000 1,025
---------------------------------------------------------
13,396
- --------------------------------------------------------------
TECHNOLOGY--1.0%
- --------------------------------------------------------------
Communication and Power
Industry, Inc.,
12.00%, 2005 585 652
Computervision Corp.,
11.375%, 1999 1,020 996
L-3 Communication Corp.,
10.375%, 2007 450 476
Viasystems, Inc.,
9.75%, 2007 1,100 1,118
---------------------------------------------------------
3,242
- --------------------------------------------------------------
TRANSPORTATION--.3%
- --------------------------------------------------------------
(b) Transtar Holdings, L.P.,
13.375%, 2003 631 536
TFM, S.A. de C.V.,
10.25%, 2007 560 571
---------------------------------------------------------
1,107
---------------------------------------------------------
TOTAL CORPORATE
OBLIGATIONS--88.7%
(Cost: $286,066) 295,472
---------------------------------------------------------
</TABLE>
41
<PAGE> 42
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------
NUMBER
COMMON AND PREFERRED STOCKS OF SHARES VALUE
- -----------------------------------------------------------
<S> <C> <C>
Benedek Unit, PIK, preferred 5,000shs. $ 561
(a) Capital Pacific Holdings 3,634 4
Computervision Corp. 130,160 602
(a) Echostar Communications 14,987 234
Foamex International, warrants 940 24
(a) Gaylord Container Corp. 122,950 945
(a) Intelcom Group, Inc. 4,851 49
(a) Sinclair Capital 13,000 1,381
(a) Sullivan Broadcasting 12,960 130
-------------------------------------------------------
TOTAL COMMON AND PREFERRED
STOCKS--1.2%
(Cost: $2,858) 3,930
-------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------
<S> <C> <C>
MONEY MARKET INSTRUMENTS--3.0%
Yield--5.83%
Due--July 1997
(Cost: $10,000) $ 10,000 $ 10,000
-------------------------------------------------------
TOTAL INVESTMENTS--97.6%
(Cost: $314,566) 325,090
-------------------------------------------------------
CASH AND OTHER ASSETS, LESS
LIABILITIES--2.4% 8,075
-------------------------------------------------------
NET ASSETS--100% $333,165
-------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
NOTES TO KEMPER HIGH YIELD PORTFOLIO OF INVESTMENTS
-------------------------------------------------------------------------------
(a) Non-income producing security. In the case of a bond, generally denotes that
issuer has defaulted on the payment of interest or has filed for bankruptcy.
(b) Deferred interest obligation; currently zero coupon under terms of the
initial offering.
Based on the cost of investments of $314,566,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $14,993,000, the gross
unrealized depreciation was $4,469,000 and the net unrealized appreciation on
investments was $10,524,000.
See accompanying Notes to Financial Statements.
42
<PAGE> 43
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NUMBER OF
COMMON STOCKS SHARES VALUE
- -----------------------------------------------------------
<S> <C> <C>
BASIC INDUSTRIES--2.4%
- -----------------------------------------------------------
Cementos Mexicanos, S.A. de
C.V., "B," ADR 131,800 $ 637
W.R. Grace & Co. 138,900 7,657
Praxair, Inc. 50,000 2,800
Rentokil Initial PLC 150,000 527
Toray Industries 76,000 543
Tubos de Acero de Mexico,
S.A., ADR 18,500 341
-------------------------------------------------------
12,505
- ------------------------------------------------------------
CAPITAL GOODS--7.8%
- ------------------------------------------------------------
Boeing Co. 81,400 4,319
B.F. Goodrich Co. 240,000 10,395
Sony Corp. 5,700 498
Technip S.A. 4,634 538
(a)United Waste Systems 180,000 7,380
(a)U.S. Filter Corp. 261,500 7,126
(a)USA Waste Services 75,000 2,897
York International Corp. 151,000 6,946
-----------------------------------------------------
40,099
- ----------------------------------------------------------
COMPUTER SYSTEMS AND SOFTWARE--15.8%
- ----------------------------------------------------------
(a)Cadence Design Systems 340,000 11,390
(a)Ceridian Corp. 124,200 5,247
(a)Compaq Computer Corp. 24,000 2,382
(a)Electronic Arts 235,000 7,902
(a)Gartner Group 200,000 7,187
Hewlett-Packard Co. 110,500 6,188
Microsoft Corp. 20,200 2,553
Murata Manufacturing 15,000 598
(a)Parametic Technology Corp. 206,500 8,789
(a)PeopleSoft Inc. 110,700 5,839
Pitney Bowes 72,000 5,004
(a)Sterling Commerce Inc. 325,000 10,684
(a)Sun Microsystems 216,000 8,039
-----------------------------------------------------
81,802
- ----------------------------------------------------------
CONSUMER CYCLICALS--9.5%
- ----------------------------------------------------------
(a)AutoZone 285,000 6,715
Avon Products 26,300 1,856
Carnival Corp. 90,000 3,712
(a)Federated Department Stores 138,900 4,827
(a)Tommy Hilfiger Corp. 184,000 7,395
Home Depot 62,500 4,309
Hudson's Bay Co. 16,700 375
(a)Liberty Media Group, "A" 273,150 6,487
Lowes Companies 87,300 3,241
(a)MGM Grand 125,000 4,625
Reed International PLC 62,228 603
Sears, Roebuck & Co. 95,000 5,106
-----------------------------------------------------
49,251
- ----------------------------------------------------------
CONSUMER DURABLES--.2%
- ----------------------------------------------------------
Honda Motor Co., Ltd. 19,000 573
Matsushita Electric Industrial
Co., Ltd. 30,000 606
-----------------------------------------------------
1,179
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------
<S> <C> <C>
CONSUMER STAPLES--4.0%
- ----------------------------------------------------------
Gillette 15,000 $ 1,421
Newell Co. 135,000 5,349
Philip Morris Companies 178,700 7,930
Unilever N.V., ADR 25,100 5,472
-----------------------------------------------------
20,172
- ----------------------------------------------------------
ENERGY--1.6%
- ----------------------------------------------------------
Baker Hughes, Inc. 100,000 3,869
British Petroleum 42,673 530
Halliburton Co. 50,000 3,963
-----------------------------------------------------
8,362
- ----------------------------------------------------------
FINANCE--17.3%
- ----------------------------------------------------------
ADVANTA Corp. 50,300 1,795
American Express Co. 67,500 5,029
American General Corp. 90,000 4,298
Banc One Corp. 250,000 12,109
Banco Santander, S.A. 12,900 398
BankAmerica Corp. 32,000 2,066
Bank of Ireland 74,636 819
Chase Manhattan Corp. 75,000 7,280
CITIC Pacific Ltd. 90,000 562
Cheung Kong Holdings Ltd. 51,000 504
Dean Witter Discover 190,000 8,182
Development Bank of Singapore 35,000 441
Federal Home Loan Mortgage
Corp. 194,400 6,682
Federal National Mortgage
Association 75,000 3,272
First Bank Systems, Inc. 100,000 8,538
Fleet Financial Group, Inc. 100,000 6,325
Great Western Financial Corp. 128,300 6,896
Household International 47,100 5,531
ING Groep N.V. 19,792 914
MGIC Investment Corp. 36,800 1,764
PNC Bank, N.A. 126,700 5,274
Starwood Lodging Trust 17,300 738
-----------------------------------------------------
89,417
- ----------------------------------------------------------
HEALTH CARE--18.0%
- ----------------------------------------------------------
Amgen, Inc. 180,000 10,462
(a)Biogen 290,000 9,824
Boston Scientific 135,000 8,294
Bristol-Myers Squibb Co. 70,000 5,670
(a)British Biotech, PLC 118,000 448
Cardinal Health, Inc. 58,000 3,321
(a)Fresenius Medical Care, ADS 6,640 477
Guidant Corp. 11,200 952
(a)HealthCare COMPARE Corp. 100,000 5,237
Johnson & Johnson 73,000 4,699
Eli Lilly & Co. 55,000 6,012
Medtronic, Inc. 77,600 6,286
Merck & Co. 52,000 5,382
Omnicare Inc. 183,100 5,745
Perkin-Elmer Corp. 105,000 8,354
Roche Holding A.G.
with warrants expiring, 1998 67 607
United Healthcare Corp. 222,000 11,544
-----------------------------------------------------
93,314
</TABLE>
43
<PAGE> 44
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------
<S> <C> <C>
SEMICONDUCTORS AND NETWORKING--9.8%
- ----------------------------------------------------------
(a)Analog Devices 195,000 $ 5,180
(a)Applied Materials, Inc. 68,200 4,829
(a)Cisco Systems 188,000 12,620
Intel Corp. 74,600 10,579
(a)Microchip Technology 225,500 6,709
(a)National Semiconductor Corp. 44,000 1,348
(a)Teradyne 57,700 2,265
Texas Instruments 52,000 4,371
(a)3Com Corp. 60,000 2,700
-----------------------------------------------------
50,601
- ----------------------------------------------------------
TELECOMMUNICATIONS--2.3%
- ----------------------------------------------------------
(a)Ascend Communications, Inc. 127,300 5,012
L.M. Ericsson Telephone Co.,
"B" 16,329 643
(a)Tellabs, Inc. 111,000 6,202
-----------------------------------------------------
11,857
- ----------------------------------------------------------
TRANSPORTATION--1.7%
- ----------------------------------------------------------
Burlington Northern
Santa Fe Corp. 45,000 4,044
CSX Corp. 61,500 3,413
Norfolk Southern Corp. 9,000 907
Swire Pacific Ltd., "A" 44,000 396
-----------------------------------------------------
8,760
<CAPTION>
NUMBER OF
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------
<S> <C> <C>
UTILITIES--6.5%
- ----------------------------------------------------------
AT&T 282,000 $ 9,888
(a)AirTouch Communications 224,000 6,132
(a)LCI International 350,000 7,656
Telefonica de Espana S.A. 20,600 597
Telefonica del Peru S.A., ADR 27,500 720
(a)WorldCom, Inc. 275,000 8,800
-----------------------------------------------------
33,793
-----------------------------------------------------
TOTAL COMMON STOCKS--96.9%
(Cost: 439,822) 501,112
-----------------------------------------------------
MONEY MARKET INSTRUMENTS--3.3%
Yield--5.71% to 5.83%
Due--July 1997
(Cost: $16,999) $17,000 16,999
-----------------------------------------------------
TOTAL INVESTMENTS--100.2%
(Cost: $456,821) 518,111
-----------------------------------------------------
LIABILITIES, LESS CASH AND
OTHER ASSETS--(.2%) (977)
-----------------------------------------------------
NET ASSETS--100% $517,134
-----------------------------------------------------
</TABLE>
- -----------------------------------------------------------------------------
NOTES TO KEMPER GROWTH PORTFOLIO OF INVESTMENTS
- -----------------------------------------------------------------------------
(a) Non-income producing security.
Based on the cost of investments of $456,821,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $73,326,000, the gross
unrealized depreciation was $12,036,000 and the net unrealized appreciation on
investments was $61,290,000.
See accompanying Notes to Financial Statements.
44
<PAGE> 45
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER GOVERNMENT SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
COUPON PRINCIPAL
GOVERNMENT OBLIGATIONS TYPE RATE MATURITY AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GOVERNMENT NATIONAL Adjustable Rate Mortgages 7.125% 2022 $ 2,736 $ 2,813
MORTGAGE Pass-through Certificates 7.00 2022-2024 14,206 14,005
ASSOCIATION - 54.8% 7.50 2022-2027 10,516 10,575
(Cost: $43,949) 8.00 2016-2026 11,221 11,538
8.50 2016-2024 1,228 1,287
9.00 2016-2027 3,268 3,457
9.50 2013-2022 616 667
10.00 2016 712 777
--------------------------------------------------------------------------
45,119
- -----------------------------------------------------------------------------------------------------------------
U.S. TREASURY Notes 8.875 1998 4,000 4,151
SECURITIES - 16.4% 8.75 2000 5,000 5,349
(Cost: $14,047) 7.00 2006 1,600 1,646
Bonds 11.875 2003 870 1,112
9.125 2009-2018 1,039 1,243
--------------------------------------------------------------------------
13,501
- -----------------------------------------------------------------------------------------------------------------
FEDERAL HOME Pass-through Certificates 7.00 2023-2024 9,243 9,109
LOAN MORTGAGE
CORPORATION - 11.1%
(Cost: $8,654)
- -----------------------------------------------------------------------------------------------------------------
FEDERAL NATIONAL Pass-through Certificates 6.50 2025 505 483
MORTGAGE 7.00 2027 3,000 2,940
ASSOCIATION - 9.7% 7.50 2025-2027 3,724 3,735
(Cost: $7,908) 8.00 2024-2025 845 865
--------------------------------------------------------------------------
8,023
- -----------------------------------------------------------------------------------------------------------------
CANADIAN PROVINCIAL Province of Ontario 7.625 2004 500 523
OBLIGATIONS - 1.3% Province of Quebec 8.625 2005 500 546
(Cost: $1,094)
--------------------------------------------------------------------------
1,069
--------------------------------------------------------------------------
TOTAL GOVERNMENT OBLIGATIONS--93.3%
(Cost: $75,652) 76,821
--------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
(a) CORPORATE American Express Master Trust 7.60 2002 2,500 2,580
OBLIGATIONS - 16.5% BHP Finance USA 7.875 2002 500 524
Banco Central Hispano 7.50 2005 500 505
Chase Credit Co. 5.55 2003 2,500 2,423
Equitable Life 6.95 2005 500 491
Green Tree Financial Corp. 7.00 2027 2,500 2,526
Nabisco Inc. 6.70 2002 500 494
NCNB/NationsBank Corp. 9.50 2004 500 567
Olympic Automobile Receivable 7.00 2004 2,500 2,530
Sears Roebuck Acceptance Corp. 6.75 2005 500 492
Southwestern Bell Telephone 6.625 2005 500 492
--------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS--16.5%
(Cost: $13,795) 13,624
--------------------------------------------------------------------------
</TABLE>
45
<PAGE> 46
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REPURCHASE Dated June, 1997. Collateralized by Federal Home Loan Mortgage Association
AGREEMENT - 4.2% and Federal National Mortgage Association securities which are monitored
(Cost: $3,500) daily to ensure their market value exceeds the carrying value of the
repurchase agreement.
Merrill Lynch Government Securities,
Inc.
6.00%, 7/1/97 $ 3,500 $ 3,500
--------------------------------------------------------------------------
TOTAL INVESTMENTS--114.0%
(Cost: $92,947) 93,945
--------------------------------------------------------------------------
LIABILITIES, LESS OTHER ASSETS--(14.0%) (11,545)
--------------------------------------------------------------------------
NET ASSETS--100% $ 82,400
--------------------------------------------------------------------------
</TABLE>
NOTES TO KEMPER GOVERNMENT SECURITIES PORTFOLIO OF INVESTMENTS
(a) The portfolio may invest up to 35% of total assets in fixed income
securities other than U.S. Government Securities.
Based on the cost of investments of $92,947,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $1,896,000, the gross
unrealized depreciation was $898,000 and the net unrealized appreciation on
investments was $998,000.
See accompanying Notes to Financial Statements.
46
<PAGE> 47
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
NUMBER OF
COMMON STOCKS SHARES VALUE
- ---------------------------------------------------------------
<S> <C> <C> <C>
EUROPE
NETHERLANDS--17.6%
ING Groep N.V. 105,299 $ 4,864
BANKING AND INSURANCE
Koninklijke Ahold N.V. 48,846 4,128
FOOD RETAILER
Aegon N.V. 50,465 3,529
INSURANCE COMPANY
Goudsmit N.V. 102,730 3,130
TEMPORARY EMPLOYMENT AGENCY
Vedior N.V. 106,000 2,808
TEMPORARY EMPLOYMENT AGENCY
(a) Baan Company N.V. 40,000 2,715
SERVICE SOFTWARE APPLICATIONS
Hagemeyer N.V. 37,400 1,936
WHOLESALER
Royal Dutch Petroleum 36,260 1,890
PETROLEUM PRODUCER
Oce-Van Der Grinten 14,000 1,809
PHOTOCOPY AND PRINTING
EQUIPMENT MANUFACTURER
Aalberts Industries N.V. 62,059 1,790
CAPITAL GOODS AND COMPONENTS
De Boer Unigro 48,300 1,711
FOOD RETAILER
IHC Caland N.V. 27,000 1,479
ENGINEERING SERVICES COMPANY
Gucci Group N.V. 20,300 1,326
LUXURY GOODS MANUFACTURER
GTI Holding 32,700 718
ENGINEERING SERVICES COMPANY
Beter Bed Holding 27,000 593
RETAILER
Brunel International 26,000 579
TEMPORARY EMPLOYMENT AGENCY
Sligro Beheer N.V. 9,000 565
DISTRIBUTOR OF FOOD AND NON-
FOOD ITEMS
-----------------------------------------------------
35,570
- ----------------------------------------------------------
UNITED KINGDOM--12.8%
Barclays PLC 197,720 3,922
BANKING
Glaxo Wellcome PLC 187,818 3,878
PHARMACEUTICAL COMPANY
British Petroleum 299,727 3,724
PETROLEUM PRODUCER
Rentokil Initial PLC 960,000 3,371
SERVICES COMPANY
Reed International PLC 272,000 2,635
PUBLISHER
Granada Group PLC 152,053 2,000
MEDIA AND ENTERTAINMENT
COMPANY
Prudential Corp. PLC 190,000 1,839
FINANCIAL SERVICES/LIFE
INSURANCE COMPANY
(a) British Bio-Technology Group 450,000 1,708
PHARMACEUTICAL COMPANY
BBA Group PLC 280,845 1,659
DIVERSIFIED ENGINEERING
COMPANY
Norwich Union 220,000 1,170
FINANCIAL SERVICES
-----------------------------------------------------
25,906
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------
NUMBER OF
COMMON STOCKS SHARES VALUE
- -----------------------------------------------------------
<S> <C> <C>
SWITZERLAND--8.7%
Novartis 4,160 $ 6,660
PHARMACEUTICAL COMPANY
Roche Holding A.G. 525 4,755
PHARMACEUTICAL COMPANY
Ciba Specialty Chemicals 44,160 4,089
CHEMICAL PRODUCER
Alusuisee-Lonza Holding 2,000 2,051
ALUMINUM, CHEMICALS AND
PACKAGING MANUFACTURER
Rhone-Poulenc 200 18
CHEMICAL AND PHARMACEUTICAL
COMPANY
-----------------------------------------------------
17,573
- ----------------------------------------------------------
SPAIN--5.1%
Banco Santander, S.A. 93,000 2,871
BANKING
Telefonica de Espana S.A. 74,000 2,143
TELECOMMUNICATIONS COMPANY
Banco Bilbao Vizcaya 24,600 2,002
BANKING
Empresa Nacional de
Electricidad S.A. 20,000 1,682
ELECTRIC UTILITY
Prosegur, Cia de Seguridad S.A. 121,000 1,481
SECURITY SERVICES
-----------------------------------------------------
10,179
- ----------------------------------------------------------
FRANCE--4.8%
Carrefour S.A. 5,900 4,289
FOOD RETAILER
Elf Aquitaine 33,000 3,564
OIL AND GAS PRODUCER
Technip S.A. 16,400 1,905
ENGINEERING COMPANY
-----------------------------------------------------
9,758
- ----------------------------------------------------------
IRELAND--4.1%
Bank of Ireland 404,784 4,443
BANKING
Independent Newspapers PLC 443,201 2,574
PUBLISHER
Greencore Group PLC 261,953 1,304
FOOD PRODUCER
-----------------------------------------------------
8,321
- ----------------------------------------------------------
GERMANY--4.0%
Mannesmann A.G. 5,260 2,345
CAPITAL GOODS PRODUCER/MOBILE
TELECOMMUNICATIONS
Veba, A.G. 32,000 1,800
ELECTRIC UTILITY
Bayer A.G. 46,000 1,769
CHEMICAL COMPANY
(a) Fresenius Medical Care A.G. 17,000 1,221
MEDICAL SUPPLY COMPANY
SGL CARBON A.G. 7,000 959
CHEMICAL COMPANY
-----------------------------------------------------
8,094
</TABLE>
47
<PAGE> 48
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- ----------------------------------------------------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------
<S> <C> <C>
SWEDEN--2.7%
L.M. Ericsson Telephone Co.,
"B" 139,000 $ 5,474
TELECOMMUNICATIONS EQUIPMENT
MANUFACTURER
ITALY--1.8%
Telecom Italia Mobile 700,000 2,263
MOBILE TELECOMMUNICATIONS
PROVIDER
Bulgari Spa 220,000 1,244
LUXURY GOODS MANUFACTURER
-----------------------------------------------------
3,507
- ----------------------------------------------------------
PORTUGAL--.3%
Electricidad de Portugal 32,000 584
ELECTRIC UTILITY
-----------------------------------------------------
TOTAL EUROPEAN
COUNTRIES--61.9% 124,966
-----------------------------------------------------
PACIFIC REGION
JAPAN--19.6%
Sony Corp. 39,400 3,440
ELECTRONICS MANUFACTURER
Fuji Photo Film Co., Ltd. 78,000 3,142
PRECISION INSTRUMENTS
MANUFACTURER
Canon Inc. 115,000 3,136
PRECISION INSTRUMENTS
MANUFACTURER
Matsushita Electric Industrial
Co., Ltd. 155,000 3,129
ELECTRONICS MANUFACTURER
Honda Motor Co., Ltd. 91,000 2,744
AUTOMOBILE MANUFACTURER
Taiyo Yuden Co. 159,000 2,626
ELECTRONICS COMPONENTS
MANUFACTURER
Toray Industries 360,000 2,570
TEXTILE MANUFACTURER
Ricoh Co., Ltd. 196,000 2,569
PRECISION INSTRUMENTS
MANUFACTURER
Murata Manufacturing 63,000 2,511
ELECTRONICS COMPONENTS
MANUFACTURER
Tokyo Electron Ltd. 45,500 2,179
ELECTRONICS MANUFACTURER
Eisai Co., Ltd. 110,000 2,086
PHARMACEUTICAL COMPANY
Toppan Printing Co., Ltd. 130,000 2,045
PRINTING COMPANY
Circle K Japan 32,400 1,863
CONVENIENCE RETAILER
Seven Eleven Japan Co., Ltd. 21,000 1,589
CONVENIENCE RETAILER
Shohkoh Fund & Co., Ltd. 5,200 1,577
FINANCING COMPANY
Noritsu Koki Co., Ltd. 30,400 1,501
PRECISION INSTRUMENTS
MANUFACTURER
Daifuku Co., Ltd. 66,000 871
DIVERSIFIED MACHINERY
MANUFACTURER
-----------------------------------------------------
39,578
<CAPTION>
- ----------------------------------------------------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------
<S> <C> <C>
HONG KONG--3.2%
HSBC Holdings PLC 47,353 $ 1,424
BANKING
CITIC Pacific Ltd. 210,000 1,312
CONGLOMERATE
Hutchison Whampoa Ltd. 150,000 1,297
CONGLOMERATE
Cheung Kong Holdings Ltd. 125,000 1,234
REAL ESTATE
Shanghai Industrial Holdings
Ltd. 180,000 1,120
CONGLOMERATE
-----------------------------------------------------
6,387
- ----------------------------------------------------------
MALAYSIA--1.2%
RHB Capital 260,000 824
BANKING
Sime Darby Berhad 230,000 765
CONGLOMERATE
Magnum Corporation Berhad 375,000 565
ENTERTAINMENT AND GAMING
Hume Industries Bhd 85,000 391
CONSTRUCTION MATERIAL
MANUFACTURER
-----------------------------------------------------
2,545
- ----------------------------------------------------------
SINGAPORE--1.0%
Development Bank of Singapore 61,000 768
BANKING
Cycle & Carriage Ltd. 60,000 621
AUTOMOBILE SALES AND
DISTRIBUTION
DBS Land Ltd. 172,000 544
PROPERTY INVESTMENT
-----------------------------------------------------
1,933
- ----------------------------------------------------------
INDONESIA--.3%
Gudang Garam, PT 140,000 587
CIGARETTE MANUFACTURER
-----------------------------------------------------
TOTAL PACIFIC REGION--25.3% 51,030
-----------------------------------------------------
COMMONWEALTH COUNTRIES
CANADA--4.6%
Petro-Canada 232,700 3,781
OIL AND GAS COMPANY
Hudson's Bay Co. 133,500 2,998
RETAIL
(a) Philip Services Corp. 166,500 2,643
WASTE COLLECTION AND
RECYCLING COMPANY
-----------------------------------------------------
9,422
- ----------------------------------------------------------
NEW ZEALAND--.1%
Restaurant Brands 125,000 217
RETAIL
- ----------------------------------------------------------
AUSTRALIA--.1%
Aristocrat 63,600 125
ENTERTAINMENT
-----------------------------------------------------
TOTAL COMMONWEALTH COUNTRIES--4.8%
9,764
-----------------------------------------------------
</TABLE>
48
<PAGE> 49
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
LATIN AMERICA
NUMBER OF
SHARES VALUE
<S> <C> <C>
MEXICO--4.9%
Cementos Mexicanos, S.A. de
C.V., "B", ADR 415,100 $ 2,007
CEMENT PRODUCER
Grupo Elektra, S.A. de C.V.,
GDR 157,000 1,721
RETAILER
Kimberly-Clark de Mexico, S.A.
de C.V. 398,000 1,583
PAPER PRODUCTS
Tubos de Acero de Mexico, S.A.,
ADR 70,500 1,300
STEEL MANUFACTURER
Fomento Economico Mexicano de
C.V., "B", ADR 216,000 1,292
BEER AND SOFT DRINK
MANUFACTURER
Grupo Carso, S.A. de C.V., ADR 164,000 1,171
INDUSTRIAL CONGLOMERATE
Grupo Casa Autrey, ADR 36,300 737
PHARMACEUTICAL AND FOODS
DISTRIBUTOR
-----------------------------------------------------
9,811
BRAZIL--1.1%
Telebras, S.A. 6,900,000 1,070
TELEPHONE COMPANY
Petroleo Brasileiro S.A. 3,800,000 1,066
OIL AND GAS COMPANY
-----------------------------------------------------
2,136
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C> <C>
CHILE--.5%
Supermercados Unimarc 57,100 $ 1,071
FOOD RETAILER
PERU--.5%
Telefonica del Peru S.A., ADR 38,700 1,013
TELECOMMUNICATION SERVICES
-----------------------------------------------------
TOTAL LATIN AMERICAN COUNTRIES--7.0%
14,031
-----------------------------------------------------
TOTAL COMMON STOCKS--99.0%
(Cost: $152,547) 199,791
-----------------------------------------------------
MONEY MARKET INSTRUMENTS--1.7%
Yield--5.74% to 5.93%
Due--July 1997
(Cost: $3,491) $3,500 3,491
-----------------------------------------------------
TOTAL INVESTMENTS--100.7%
(Cost: $156,038) 203,282
-----------------------------------------------------
LIABILITIES, LESS CASH AND OTHER
ASSETS--(.7%) (1,395)
-----------------------------------------------------
NET ASSETS--100% $201,887
-----------------------------------------------------
</TABLE>
At June 30, 1997, the Kemper International Portfolio had the following industry
diversification (dollars in thousands):
<TABLE>
<CAPTION>
VALUE %
--------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Cyclicals $ 40,464 20.0
--------------------------------------------------------------------------------------
Finance 34,385 17.0
--------------------------------------------------------------------------------------
Technology 28,982 14.4
--------------------------------------------------------------------------------------
Health Care 20,326 10.1
--------------------------------------------------------------------------------------
Capital Goods 19,862 9.8
--------------------------------------------------------------------------------------
Basic Industries 18,899 9.4
--------------------------------------------------------------------------------------
Energy 14,025 7.0
--------------------------------------------------------------------------------------
Consumer Staples 12,293 6.1
--------------------------------------------------------------------------------------
Utilities 10,555 5.2
--------------------------------------------------------------------------------------
TOTAL COMMON STOCKS 199,791 99.0
--------------------------------------------------------------------------------------
MONEY MARKET INSTRUMENTS AND OTHER NET ASSETS 2,096 1.0
--------------------------------------------------------------------------------------
NET ASSETS $201,887 100.0
--------------------------------------------------------------------------------------
</TABLE>
NOTES TO KEMPER INTERNATIONAL PORTFOLIO OF INVESTMENTS
(a) Non-income producing security.
Based on the cost of investments of $156,038,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $48,685,000, the gross
unrealized depreciation was $1,441,000 and the net unrealized appreciation on
investments was $47,244,000.
See accompanying Notes to Financial Statements.
49
<PAGE> 50
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NUMBER OF
COMMON STOCKS SHARES VALUE
<S> <C> <C>
BASIC INDUSTRIES--1.0%
Precision Castparts Corp. 15,600 $ 930
CAPITAL GOODS--7.8%
BMC Industries 30,000 1,027
(a) Littelfuse, Inc. 57,000 1,610
(a) MSC Industrial Direct 47,100 1,890
(a) Miller Industries 70,000 1,120
SPX Corp. 12,500 810
Watsco, Inc. 25,000 625
-----------------------------------------------------
7,082
CONSUMER CYCLICALS--20.4%
(a) AccuStaff 70,000 1,658
(a) CapStar Hotel Co. 54,600 1,744
(a) Consolidated Graphics, Inc. 33,500 1,399
(a) EmCare Holdings, Inc. 30,000 1,099
(a) Express Scripts, Inc. 13,500 564
Four Seasons Hotels Inc. 79,700 2,361
(a) Interim Services 23,700 1,055
(a) MGM Grand 45,500 1,684
(a) Men's Wearhouse 38,000 1,197
(a) Nautica Enterprises 35,000 925
(a) Outdoor Systems, Inc. 45,500 1,740
(a) Samsonite 32,100 1,416
(a) U.S. Rentals 69,300 1,754
-----------------------------------------------------
18,596
CONSUMER DURABLES--.7%
(a) Tower Automotive, Inc. 15,500 667
CONSUMER STAPLES--9.9%
Arbor Drugs Inc. 70,000 1,409
(a) Emmis Broadcasting Corp. 32,500 1,418
(a) Heftel Broadcasting Corp. 18,600 1,028
Riser Foods 30,000 1,350
Stewart Enterprises 40,750 1,711
(a) Westwood One 20,000 645
(a) Young Broadcasting Corp. 45,000 1,462
-----------------------------------------------------
9,023
ENERGY--1.3%
(a) Precision Drilling Corp. 23,500 1,137
<CAPTION>
NUMBER OF
COMMON STOCKS SHARES VALUE
<S> <C> <C>
FINANCE--16.3%
(a) ABR Information Services 36,500 $ 1,058
Columbia Banking Systems 52,450 1,055
Commercial Federal Corp. 50,000 1,856
Executive Risk 26,500 1,378
(a) Financial Federal Corp. 63,200 1,390
First Union Real Estate
Investments 120,000 1,695
(a) Hamilton Bancorp 55,400 1,482
Protective Life Insurance Co. 40,000 2,010
Quick & Reilly Group 52,500 1,221
Texas Regional Bancshares 22,800 958
Wilmington Trust Corp. 16,000 732
-----------------------------------------------------
14,835
HEALTH CARE--10.6%
(a) Arbor Health Care Co. 23,000 713
(a) CRA Managed Care, Inc. 23,500 1,226
(a) Dura Pharmaceuticals 25,000 997
(a) Healthcare Financial Partners 23,100 471
(a) National Surgery Centers 40,000 1,415
Omnicare, Inc. 30,000 941
(a) PAREXEL International Corp. 37,500 1,191
(a) Safeskin Corp. 38,500 1,133
(a) Sofamor-Danek Group 35,000 1,601
-----------------------------------------------------
9,688
TECHNOLOGY--22.6%
Belden Inc. 38,000 1,294
(a) Brightpoint Inc. 25,000 814
(a) CHS Electronics, Inc. 42,500 1,126
(a) Comverse Technology 34,000 1,768
(a) ENCAD, Inc. 35,000 1,452
(a) Fiserv, Inc. 35,000 1,562
(a) HCIA, Inc. 28,500 955
(a) Keane, Inc. 22,800 1,186
(a) Kulicke & Soffa Industries 18,500 601
(a) Legato Systems, Inc. 50,000 925
Linear Technology Corp. 19,500 1,009
(a) MRV Communications 10,000 295
(a) Microchip Technology 29,500 878
(a) Parametric Technology Corp. 19,000 809
Pittway Corp. 28,500 1,418
(a) Solectron Corp. 13,000 910
(a) Tecnomatix Technologies 35,000 1,137
(a) Tellabs, Inc. 26,000 1,453
(a) Visio Corp. 14,500 1,022
-----------------------------------------------------
20,614
</TABLE>
50
<PAGE> 51
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
NUMBER OF
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------
<S> <C> <C>
TRANSPORTATION--1.2%
Royal Caribbean Cruises Ltd. 29,900 $ 1,045
-----------------------------------------------------
TOTAL COMMON STOCKS--91.8%
(COST: $70,220) 83,617
-----------------------------------------------------
MONEY MARKET INSTRUMENTS
Yield--5.70% to 5.82%
Due--June 1997
Enserch Corp. $ 3,000 3,000
Sanwa Business Credit 3,000 3,000
-----------------------------------------------------
TOTAL MONEY MARKET INSTRUMENTS--6.6%
(COST: $6,000) 6,000
-----------------------------------------------------
TOTAL INVESTMENTS--98.4%
(COST: $76,219) 89,617
-----------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--1.6% 1,492
-----------------------------------------------------
NET ASSETS--100% $91,109
-----------------------------------------------------
</TABLE>
NOTES TO KEMPER SMALL CAP GROWTH PORTFOLIO OF INVESTMENTS
(a) Non-income producing security.
Based on the cost of investments of $76,219,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $14,255,000, the gross
unrealized depreciation was $857,000 and the net unrealized appreciation on
investments was $13,398,000.
See accompanying Notes to Financial Statements.
51
<PAGE> 52
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER INVESTMENT GRADE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------
PRINCIPAL
GOVERNMENT OBLIGATIONS AMOUNT VALUE
- -------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY BONDS
10.75%, 2003
$1,200 $1,449
6.50%, 2026
350 336
U.S. TREASURY NOTES
9.125%, 1999
1,500 1,580
6.625%, 2007
150 151
------------------------------------------------------------
TOTAL GOVERNMENT OBLIGATIONS--46.5%
(Cost: $3,517) 3,516
------------------------------------------------------------
CORPORATE OBLIGATIONS
AEROSPACE--.7%
Lockheed Martin,
7.25%, 2006
50 50
BANKING--8.8%
Abbey National PLC,
7.35%, 2049
50 50
Bangkok Bank Ltd.,
8.375%, 2027
100 96
BCH Cayman Islands Ltd.,
7.70%, 2006
20 20
Corporation Andina De Fomento,
7.79%, 2017
100 101
Den Danske Bank,
7.40%, 2010
50 50
MBNA Capital,
8.278%, 2026
100 97
Peoples Bank Bridgeport,
7.20%, 2006
50 49
Societe Generale,
7.85%, 2049
100 103
Svenska Handelsbanken,
7.125%, 2049
100 98
------------------------------------------------------------
664
COMMUNICATIONS, MEDIA AND ELECTRONICS--4.9%
Comcast Cablevision,
8.375%, 2007
100 106
News American Holdings,
9.25%, 2013
100 112
Time Warner Inc.,
9.15%, 2023
50 55
Viacom Inc.,
7.75%, 2005
50 50
WorldCom,
7.75%, 2007
50 51
------------------------------------------------------------
374
<CAPTION>
- -------------------------------------------------------------
PRINCIPAL
GOVERNMENT OBLIGATIONS AMOUNT VALUE
- -------------------------------------------------------------
<S> <C> <C>
CONSUMER PRODUCTS, SERVICES AND RETAIL--7.0%
Chrysler Corp.,
7.450%, 2097
$ 50 $ 49
Dimon Inc.,
8.875%, 2006
100 104
J.C. Penney Co.,
7.95%, 2017
100 104
May Department Stores Co.,
6.875%, 2005
50 49
Philip Morris Companies,
7.75%, 2027
50 49
RJR Nabisco, Inc.,
8.75%, 2005
100 102
Royal Caribbean Cruises Ltd.,
8.25%, 2005
70 74
------------------------------------------------------------
531
DRUGS AND HEALTH CARE--1.3%
Medpartners,
7.375%, 2006
50 50
Tenet Healthcare Corp.,
8.625%, 2007
50 51
------------------------------------------------------------
101
ENERGY AND CHEMICAL--2.0%
Gulf Canada Resources Ltd.,
8.35%, 2006
50 53
Petrozuata Financial,
8.22%, 2017
100 101
------------------------------------------------------------
154
FINANCIAL SERVICES--4.0%
Guangdong Enterprises,
8.875%, 2007
100 103
Lehman Brothers Holdings,
7.375%, 2007
50 50
Mellon Capital,
7.72%, 2026
50 48
Morgan Stanley Group,
6.875%, 2007
50 49
Salomon Inc.,
7.5%, 2003
50 51
------------------------------------------------------------
301
MANUFACTURING AND CAPITAL GOODS--.7%
CSN Iron Panama,
9.125%, 2007
50 49
</TABLE>
52
<PAGE> 53
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
-------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
-------------------------------------------------------------
<S> <C> <C>
UTILITIES--6.0%
Centerior Energy,
7.67%, 2004
$ 100 $ 100
Commonwealth Edison,
6.40%, 2005
60 56
DR Investments,
7.45%, 2007
50 51
Niagara Mohawk Power,
8.00%, 2004
50 50
Texas Utilities Co.,
7.375%, 2025
50 47
U.S. West Capital Funding Inc.,
7.95%, 1997
100 101
7.30%, 2007
50 50
------------------------------------------------------------
455
------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS--35.4%
(Cost: $2,664) 2,679
------------------------------------------------------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------
<S> <C> <C>
MONEY MARKET INSTRUMENTS
Yield--5.41% to 5.42%
Due--July 1997
Federal Home Loan Mortgage Corp.
$ 300 $ 300
Federal National Mortgage Corp.
800 797
------------------------------------------------------------
TOTAL MONEY MARKET INSTRUMENTS--14.5%
(Cost: $1,097) 1,097
------------------------------------------------------------
TOTAL INVESTMENTS--96.4%
(Cost: $7,278) 7,292
------------------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--3.6% 275
------------------------------------------------------------
NET ASSETS--100% $7,567
------------------------------------------------------------
</TABLE>
NOTE TO KEMPER INVESTMENT GRADE BOND PORTFOLIO OF INVESTMENTS
Based on the cost of investments of $7,278,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $33,000, the gross
unrealized depreciation was $19,000 and the net unrealized appreciation on
investments was $14,000.
See accompanying Notes to Financial Statements.
53
<PAGE> 54
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
---------------------------------------------------------
NUMBER
COMMON STOCKS OF SHARES VALUE
---------------------------------------------------------
<S> <C> <C>
BANKS--10.8%
Banc One Corp. 21,200 $ 1,027
BankAmerica Corp. 9,000 581
Bankers Trust New York Corp. 10,000 870
Barnett Banks 6,400 336
Chase Manhattan Corp. 13,000 1,262
First Union Corp. 2,700 250
Golden West Financial Corp. 5,000 350
KeyCorp 10,800 603
NationsBank 4,400 284
Norwest Corp. 4,100 231
PNC Bank, N.A. 18,900 787
Wachovia Corp. 8,100 472
Wells Fargo & Co. 6,000 1,617
-----------------------------------------------------
8,670
BASIC INDUSTRIES--9.8%
Dow Chemical Co. 20,500 1,786
Eastman Chemical Co. 20,000 1,270
Georgia-Pacific Corp. 10,000 854
Louisiana-Pacific Corp. 50,000 1,056
Nucor Corp. 16,000 904
Sonoco Products Co. 38,000 1,157
Union Camp Corp. 16,500 825
-----------------------------------------------------
7,852
CAPITAL GOODS--4.0%
General Electric Co. 32,000 2,092
Raytheon Co. 21,500 1,097
-----------------------------------------------------
3,189
CONSUMER CYCLICALS--5.6%
(a) Harrah's Entertainment 30,000 548
May Department Stores Co. 30,000 1,417
McDonald's Corp. 30,000 1,449
J.C. Penney Co. 20,500 1,070
-----------------------------------------------------
4,484
CONSUMER DURABLES--2.8%
Chrysler Corp. 30,000 984
Ford Motor Co. 33,500 1,265
-----------------------------------------------------
2,249
<CAPTION>
---------------------------------------------------------
NUMBER
COMMON STOCKS OF SHARES VALUE
---------------------------------------------------------
<S> <C> <C>
CONSUMER STAPLES--6.3%
Phillip Morris Companies 64,500 $ 2,862
RJR Nabisco Holdings Corp. 20,000 660
UST, Inc. 55,400 1,537
-----------------------------------------------------
5,059
ENERGY--13.7%
AMOCO Corp. 23,700 2,060
Atlantic Richfield Co. 20,000 1,410
Chevron Corp. 13,500 998
Consolidated Natural Gas 29,200 1,571
Exxon Corp. 17,000 1,045
Kerr-McGee Corp. 25,000 1,584
(a) Reading & Bates Corp. 50,000 1,338
YPF Sociedad Anonima, ADR 30,000 923
-----------------------------------------------------
10,929
FINANCIAL SERVICES--14.7%
ADVANTA Corp. 7,000 250
H.F. Ahmanson & Co. 25,300 1,088
American International Group 4,600 687
BRE Properties 60,000 1,507
Federal Home Loan Mortgage Corp. 75,600 2,599
Federal National Mortgage
Association 50,600 2,207
General Re Corp. 4,000 728
Meditrust 33,000 1,316
National City Corp. 10,000 525
Post Properties 20,000 811
-----------------------------------------------------
11,718
HEALTH CARE--6.2%
C.R. Bard 40,000 1,453
Baxter International 10,000 522
Becton Dickinson & Co. 20,000 1,013
Glaxo Wellcome PLC 16,200 677
Mallinckrodt Group 33,000 1,254
-----------------------------------------------------
4,919
TECHNOLOGY--5.7%
AMP Inc. 32,000 1,336
Hewlett-Packard Co. 30,000 1,680
Pitney Bowes 11,500 799
Xerox Corp. 10,000 789
-----------------------------------------------------
4,604
</TABLE>
54
<PAGE> 55
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- ----------------------------------------------------------
NUMBER OF
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------
<S> <C> <C>
UTILITIES--4.0%
Florida Progress Corp. 17,500 $ 548
GTE Corp. 35,000 1,536
Southern Co. 50,000 1,094
-----------------------------------------------------
3,178
-----------------------------------------------------
TOTAL COMMON STOCKS--83.6%
(Cost: $61,037) 66,851
-----------------------------------------------------
MONEY MARKET INSTRUMENTS
Yield--5.38% to 5.43%
Due--July and September 1997
Federal National Mortgage
Association $10,550 10,523
Other 1,600 1,581
-----------------------------------------------------
TOTAL MONEY MARKET
INSTRUMENTS--15.2%
(Cost: $12,104) 12,104
-----------------------------------------------------
TOTAL INVESTMENTS--98.8%
(Cost: $73,141) 78,955
-----------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--1.2% 993
-----------------------------------------------------
NET ASSETS--100% $79,948
-----------------------------------------------------
</TABLE>
NOTES TO KEMPER VALUE PORTFOLIO OF INVESTMENTS
(a) Non-income producing security.
Based on the cost of investments of $73,141,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $6,083,000, the gross
unrealized depreciation was $269,000 and the net unrealized appreciation on
investments was $5,814,000.
See accompanying Notes to Financial Statements.
55
<PAGE> 56
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER SMALL CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
- -----------------------------------------------------------
NUMBER OF
COMMON STOCKS SHARES VALUE
- -----------------------------------------------------------
[S] [C] [C]
AUTO AND TRANSPORTATION--7.9%
Airborne Freight Corp. 11,500 $ 482
(a) America West Airlines 24,000 348
Borg-Warner Automotive 9,000 487
Fleetwood Enterprises 13,500 402
Intermet Corp. 31,000 498
Myers Industries 20,200 341
Reynolds & Reynolds Co. 10,000 157
Simpson Industries 10,000 106
Walbro Corp. 10,000 203
---------------------------------------------------
3,024
CONSUMER DISCRETIONARY--14.6%
J. Baker, Inc. 6,400 50
(a) Boston Chicken 15,000 210
Brown Group, Inc. 24,900 465
Bush Industries 11,000 261
Del Webb Corp. 13,600 221
(a) Designer Holdings Ltd. 17,500 178
Finish Line, Inc. 28,100 411
(a) Friedman's Inc. 17,000 389
Haggar Apparel Co. 9,600 122
Harman International
Industries 4,000 168
Heilig-Meyers 13,200 259
Herbalife International, Inc. 15,600 253
(a) Insurance Auto Auctions 8,100 77
(a) Lone Star Steakhouse & Saloon 18,000 468
(a) Nine West Group 8,700 332
Springs Industries Inc. 12,200 644
(a) Waban Inc. 11,800 380
Winston Hotels 13,000 196
(a) Young Broadcasting Corp. 15,500 504
---------------------------------------------------
5,588
CONSUMER STAPLES--.8%
(a) Performance Food Group 14,000 294
ENERGY--6.6%
Atmos Energy Corp. 5,800 139
(a) Belden & Blake Corp. 13,000 349
(a) Chieftain International Inc. 17,000 373
Giant Industries 11,500 182
KCS Energy 19,600 399
(a) Nuevo Energy Co. 14,800 607
(a) Seitel, Inc. 12,400 471
---------------------------------------------------
2,520
- -----------------------------------------------------------
NUMBER OF
COMMON STOCKS SHARES VALUE
- -----------------------------------------------------------
[S] [C] [C]
FINANCIAL SERVICES--21.7%
Aames Financial Corp. 4,500 $ 83
(a) Acceptance Insurance Companies 16,100 366
ADVANTA Corp. 2,300 82
Astoria Financial Corp. 7,600 361
Banc One Corp. 1,762 85
Commercial Federal Corp. 10,500 390
Compass Bancshares 8,550 287
Consumer Portfolio Services 14,500 176
Cullen Frost Bankers 12,000 508
First Commerce Corp. 8,500 374
First Financial Caribbean
Corp. 9,400 307
First Financial Corp. 12,025 353
Fremont General Corp. 10,500 423
HUBCO, Inc. 5,000 145
Imperial Credit Industries 12,200 251
Integon Corp. 13,100 328
Lawyers Title Insurance Corp. 4,400 83
Long Island Bancorp 12,300 447
New Century Financial Co. 3,300 48
North Fork Bancorp 18,000 385
PennCorp Financial Group 12,000 462
Reliance Group Holdings, Inc. 6,200 74
Resource Bancshares Mortgage
Group 27,800 549
Roosevelt Financial Group 3,600 79
(a) Southern Pacific Funding Corp. 24,200 402
T.R. Financial Corp. 15,600 393
United Companies Financial
Corp. 17,500 494
Webster Financial Corp. 7,600 346
---------------------------------------------------
8,281
HEALTH CARE--1.8%
(a) Apria Healthcare Group 20,500 364
(a) CONMED Corp. 18,800 320
---------------------------------------------------
684
INTEGRATED OILS--1.0%
(a) Tesoro Petroleum Corp. 24,500 363
MATERIALS AND PROCESSING--12.4%
AK Steel Holding Corp. 12,500 552
AMCOL International 18,500 335
Ball Corp. 15,900 478
Blount, International, "A" 9,500 404
Carpenter Technology Corp. 13,300 608
Elcor Corp. 13,500 376
(a) Global Industrial
Technologies, Inc. 17,400 357
(a) Lydall, Inc. 21,500 454
(a) Mueller Industries, Inc. 3,500 153
Oregon Metallurgical Corp. 16,000 450
Quanex Corp. 14,000 430
Rexene Corp. 7,300 114
---------------------------------------------------
4,711
56
<PAGE> 57
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
- -----------------------------------------------------------
NUMBER
OF SHARES VALUE
- -----------------------------------------------------------
[S] [C] [C]
PRODUCER DURABLES--9.7%
(a) Asyst Technologies, Inc. 4,400 $ 194
Briggs & Stratton Corp. 4,600 230
BW/IP, Inc. 23,000 467
(a) Electroglas 5,000 126
Furon Co. 17,700 555
Pacific Scientific Co. 9,800 130
Scientific-Atlanta 34,300 750
Stewart & Stevenson Services 16,000 416
Trinity Industries 10,100 321
Watts Industries, Inc. 15,500 372
Wyman-Gordon Co. 5,800 157
---------------------------------------------------
3,718
- -----------------------------------------------------------
TECHNOLOGY--7.7%
- -----------------------------------------------------------
(a) Benchmark Electronics 6,900 279
(a) Burr Brown Corp. 8,950 309
(a) Diamond Multimedia
Systems, Inc. 2,700 19
(a) ESS Technology 13,000 175
(a) EXAR Corp. 7,100 153
General Cable Corp. 19,600 502
(a) Hutchinson Technology 8,000 195
(a) Jones Intercable Inc. 23,600 301
(a) Komag, Inc. 13,500 221
(a) Learning Co. 21,500 202
(a) Read-Rite Corp. 11,200 234
(a) Tech-Sym Corp. 7,400 247
(a) Vanstar Corp. 7,600 107
---------------------------------------------------
2,944
- -----------------------------------------------------------
UTILITIES--.6%
- -----------------------------------------------------------
United Cities Gas Co. 10,000 235
---------------------------------------------------
TOTAL COMMON STOCKS--84.8%
(COST: $27,861) 32,362
---------------------------------------------------
[CAPTION]
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------
[S] [C] [C]
MONEY MARKET INSTRUMENTS
Yield--5.03% to 5.48%
Due--July and August 1997
Federal Home Loan Bank $1,900 $ 1,893
Federal National Mortgage
Corp. 2,600 2,595
Other 800 799
---------------------------------------------------
TOTAL MONEY MARKET INSTRUMENTS--13.9%
(COST: $5,287) 5,287
---------------------------------------------------
TOTAL INVESTMENTS--98.7%
(COST: $33,148) 37,649
---------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--1.3% 489
---------------------------------------------------
NET ASSETS--100% $38,138
---------------------------------------------------
- -----------------------------------------------------------
NOTES TO KEMPER SMALL CAP VALUE PORTFOLIO OF INVESTMENTS
- -----------------------------------------------------------
(a) Non-income producing security.
Based on the cost of investments of $33,148,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $4,899,000, the gross
unrealized depreciation was $398,000 and the net unrealized appreciation on
investments was $4,501,000.
See accompanying Notes to Financial Statements.
57
<PAGE> 58
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER VALUE+GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
------------------------------------------------------
NUMBER
COMMON STOCKS OF SHARES VALUE
------------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------
BASIC INDUSTRIES--4.6%
- -----------------------------------------------------------
Champion International Corp. 2,000 $ 111
Dow Chemical Co. 2,800 244
Eastman Chemical Co. 3,300 210
Georgia-Pacific Corp. 800 68
Louisiana-Pacific Corp. 5,000 106
Nucor Corp. 2,000 113
Sonoco Products Co. 8,500 259
Union Camp Corp. 2,700 135
Weyerhaeuser Co. 2,000 104
------------------------------------------------------
1,350
- -----------------------------------------------------------
CAPITAL GOODS--5.9%
- -----------------------------------------------------------
Emerson Electric Co. 1,600 88
General Electric Co. 7,400 484
B.F. Goodrich Co. 5,400 234
Raytheon Co. 2,600 133
(a) United Waste Systems 5,000 205
(a) USA Waste Services 7,800 301
(a) U.S. Filter Corp. 9,900 270
------------------------------------------------------
1,715
- -----------------------------------------------------------
CONSUMER CYCLICALS--10.6%
- -----------------------------------------------------------
(a) AutoZone 4,300 101
Brunswick Corp. 4,800 150
Carnival Corp. 8,700 359
(a) Consolidated Stores Corp. 5,000 174
Deluxe Corp. 3,000 102
Dillard Department Stores 2,500 87
Walt Disney Co. 3,300 265
(a) Tommy Hilfiger Corp. 9,400 378
Home Depot 3,000 207
May Department Stores Co. 4,500 213
NIKE 7,600 444
J.C. Penney Co. 3,000 157
Sears, Roebuck & Co. 6,400 344
V.F. Corp. 1,000 85
------------------------------------------------------
3,066
- -----------------------------------------------------------
CONSUMER DURABLES--2.5%
- -----------------------------------------------------------
Chrysler Corp. 3,500 115
Ford Motor Co. 6,000 227
(a) Lear Corp. 2,100 93
Leggett & Platt Inc. 3,500 150
Magna International Inc., "A" 2,100 126
------------------------------------------------------
711
- -----------------------------------------------------------
CONSUMER STAPLES--7.8%
- -----------------------------------------------------------
American Greetings Corp. 9,700 360
Newell Co. 5,500 218
Philip Morris Companies 22,900 1,016
UST, Inc. 24,200 672
------------------------------------------------------
2,266
<CAPTION>
------------------------------------------------------
NUMBER
COMMON STOCKS OF SHARES VALUE
------------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------
ENERGY--5.3%
- -----------------------------------------------------------
AMOCO Corp. 2,000 $ 174
Atlantic Richfield Co. 2,400 169
Chevron Corp. 1,700 126
Columbia Gas System 1,800 117
Consolidated Natural Gas 1,700 91
Exxon Corp. 2,200 135
Kerr-McGee Corp. 3,000 190
Phillips Petroleum Co. 2,500 109
(a) Reading & Bates Corp. 5,500 147
Royal Dutch Petroleum 2,800 152
YPF Sociedad Anonima, ADR 4,500 138
------------------------------------------------------
1,548
- -----------------------------------------------------------
FINANCE--21.3%
- -----------------------------------------------------------
H.F. Ahmanson & Co. 5,000 215
American General Corp. 3,300 158
American International Group 1,000 149
Banc One Corp. 3,200 155
Bank of New York Co. 2,600 113
BankAmerica Corp. 1,200 77
Bankers Trust New York Corp. 1,900 165
Barnett Banks 1,500 79
Bear Stearns Companies 7,200 246
BRE Properties 9,000 226
Chase Manhattan Corp. 3,300 320
Crestar Financial Corp. 1,400 54
A.G. Edwards & Sons 3,000 128
Federal Home Loan Mortgage Corp. 9,700 333
Federal National Mortgage
Association 15,100 659
First Chicago NBD Corp. 2,000 121
First Union Corp. 1,300 120
Fleet Financial Group, Inc. 1,400 89
General Re Corp. 1,500 273
ITT Hartford Group 2,500 207
Jefferson-Pilot Corp. 2,500 175
KeyCorp 1,000 56
MBIA, Inc. 1,200 135
Meditrust 3,000 120
Merrill Lynch & Co. 2,600 155
MGIC Investment Corp. 7,000 336
J.P. Morgan & Co. 700 73
NationsBank 4,000 258
PNC Bank, N.A. 5,000 208
Post Properties 3,000 122
Republic NY Corp. 600 65
Signet Banking Corp. 2,400 86
Torchmark Corp. 1,000 71
Transamerica Corp. 1,000 94
Washington Mutual 3,400 203
Wells Fargo & Co. 600 162
------------------------------------------------------
6,206
</TABLE>
58
<PAGE> 59
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
HEALTH CARE--13.4%
<TABLE>
<CAPTION>
------------------------------------------------------
NUMBER
OF SHARES VALUE
------------------------------------------------------
<S> <C> <C> <C>
Abbott Laboratories 2,000 $ 134
American Home Products Corp. 2,900 222
Amgen, Inc. 6,000 349
Astra, A.B., ADR 12,000 228
C.R. Bard 5,000 182
Becton Dickinson & Co. 4,000 202
(a) Biogen 7,900 268
Biomet, Inc. 17,000 317
Bristol-Myers Squibb Co. 2,100 170
HealthCare COMPARE Corp. 6,000 314
Mallinckrodt Group 8,900 338
Medtronic, Inc. 3,600 292
Merck & Co. 2,700 279
(a) Novartis, ADR 3,200 256
United Healthcare Corp. 6,600 343
------------------------------------------------------
3,894
- -----------------------------------------------------------
TECHNOLOGY--21.1%
- -----------------------------------------------------------
AMP, Inc. 5,700 238
(a) Applied Materials, Inc. 3,000 212
(a) Ascend Communications, Inc. 7,000 276
(a) Atmel Corp. 7,000 196
(a) Cabletron Systems 2,500 71
(a) Ceridian Corp. 5,400 228
(a) Cisco Systems 7,000 470
(a) Compaq Computer Corp. 5,400 536
Computer Associates International 2,300 128
Electronic Data Systems 2,500 102
(a) Gateway 2000 4,800 156
Hewlett-Packard Co. 4,800 269
Intel Corp. 4,950 702
(a) Microchip Technology 3,700 110
(a) Novellus Systems 3,300 285
(a) Oracle Corp. 6,000 302
(a) Parametric Technology Corp. 4,000 170
Pitney Bowes 1,500 104
(a) Quantum Corp. 15,400 313
(a) Seagate Technology 2,400 84
(a) Sun Microsystems 7,000 261
(a) 3Com Corp. 10,675 480
(a) Western Digital Corp. 9,400 297
Xerox Corp. 2,000 158
------------------------------------------------------
6,148
<CAPTION>
------------------------------------------------------
NUMBER OF
SHARES ON
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------
UTILITIES--3.6%
- -----------------------------------------------------------
AT&T 2,500 $ 88
Florida Progress Corp. 3,000 94
GTE Corp. 7,000 307
Southern Company 8,000 175
(a) WorldCom, Inc. 11,600 371
------------------------------------------------------
1,035
------------------------------------------------------
TOTAL COMMON STOCKS--96.1%
(Cost: $24,750) 27,939
------------------------------------------------------
MONEY MARKET INSTRUMENTS
Yield--5.08% to 5.53%
Due--July to September 1997
Federal National Mortgage
Association $1,100 1,097
Other 650 646
------------------------------------------------------
TOTAL MONEY MARKET
INSTRUMENTS--6.0%
(Cost: $1,743) 1,743
------------------------------------------------------
TOTAL INVESTMENTS--102.1%
(Cost: $26,493) 29,682
------------------------------------------------------
LIABILITIES, LESS CASH AND OTHER
ASSETS--(2.1%) (607)
------------------------------------------------------
NET ASSETS--100% $29,075
------------------------------------------------------
</TABLE>
- -----------------------------------------------------------
NOTES TO KEMPER VALUE+GROWTH PORTFOLIO OF INVESTMENTS
- -----------------------------------------------------------
(a) Non-income producing security.
Based on the cost of investments of $26,493,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $3,396,000, the gross
unrealized depreciation was $207,000 and the net unrealized appreciation on
investments was $3,189,000.
See accompanying Notes to Financial Statements.
59
<PAGE> 60
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER HORIZON 20+ PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
---------------------------------------------------
PRINCIPAL
AMOUNT OR
NUMBER OF
GOVERNMENT OBLIGATIONS SHARES VALUE
---------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------
U.S. TREASURY NOTES
- -----------------------------------------------------------
8.875%, 2000 $ 200 $ 214
8.50%, 2000 150 158
6.75%, 2000 649 658
5.50%, 2000 200 196
- -----------------------------------------------------------
MORTGAGE BACKED SECURITIES
- -----------------------------------------------------------
FHLMC, 6.00%, 2006 83 83
FHLMC, 6.50%, 2014 107 107
GNMA, 7.00%, 2015 267 268
---------------------------------------------------
TOTAL GOVERNMENT OBLIGATIONS--19.1%
(Cost: $1,679) 1,684
---------------------------------------------------
COMMON STOCKS
- -----------------------------------------------------------
BASIC INDUSTRIES--3.2%
- -----------------------------------------------------------
AK Steel Holding Corp. 165shs. 7
Bayer A.G. 493 19
Carpenter Technology Corp. 170 8
Cementos Mexicanos,
S.A. de C.V., "B," ADR 5,000 24
Champion International Corp. 200 11
(a) Culligan Water Technologies 200 9
Dow Chemical Co. 300 26
Eastman Chemical Co. 300 19
Georgia-Pacific Corp. 200 17
(a) Global Industrial Technologies,
Inc. 375 8
Intermet Corp. 385 6
Louisiana-Pacific Corp. 1,100 23
Nucor Corp. 200 11
Rentokil Initial PLC 7,450 26
Sonoco Products Co. 600 18
Toray Industries 4,500 32
Union Camp Corp. 300 15
---------------------------------------------------
279
- -----------------------------------------------------------
CAPITAL GOODS--6.1%
- -----------------------------------------------------------
Ball Corp. 255 8
(a) BE Aerospace, Inc. 400 13
Blount, International, "A" 155 7
Elcor Corp. 265 7
General Electric Co. 800 52
B.F. Goodrich Co. 800 35
(a) Littelfuse, Inc. 400 11
Mannesmann A.G. 151 67
(a) Miller Industries 700 11
Murata Manufacturing 200 8
(a) Philip Services Corp. 4,150 66
Raytheon Co. 500 26
Sony Corp. 700 61
Stewart & Stevenson Services 230 6
(a) Triangle Pacific Corp. 200 6
(a) USA Waste Services 1,600 62
(a) U.S. Filter Corp. 2,000 55
(a) United Waste Systems 700 29
Watts Industries, Inc. 240 6
---------------------------------------------------
536
<CAPTION>
---------------------------------------------------
PRINCIPAL
AMOUNT OR
NUMBER OF
GOVERNMENT OBLIGATIONS SHARES VALUE
---------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------
CONSUMER CYCLICALS--10.3%
- -----------------------------------------------------------
(a) AccuStaff 400 $ 9
American Greetings Corp. 1,600 59
(a) AutoZone 1,300 31
Brunswick Corp. 1,000 31
Bulgari Spa 5,556 31
(a) CapStar Hotel Co. 400 13
Carnival Corp. 1,200 49
Carrefour S.A. 32 23
CKE Restaurants 400 13
(a) Consolidated Graphics, Inc. 300 12
(a) Consolidated Stores Corp. 1,250 43
Deluxe Corp. 500 17
Dillard Department Stores 600 21
Walt Disney Co. 400 32
Ethan Allen Interiors 200 11
Four Seasons Hotels Inc. 400 12
Granada Group PLC 1,784 23
Gucci Group N.V. 260 17
(a) Tommy Hilfiger Corp. 1,800 72
Home Depot 700 48
Hudson's Bay Co. 2,500 56
(a) Interim Services 200 9
May Department Stores Co. 300 14
Men's Wearhouse 400 13
Meredith Corp. 400 12
(a) Nautica Enterprises 600 16
NIKE 1,300 76
(a) Outdoor Systems Inc. 400 15
J.C. Penney Co. 300 16
Reed International PLC 2,572 25
Royal Caribbean Cruises Ltd. 600 21
Sears, Roebuck & Co. 1,200 65
---------------------------------------------------
905
- -----------------------------------------------------------
CONSUMER DURABLES--2.2%
- -----------------------------------------------------------
Ford Motor Co. 900 34
Honda Motor Co., Ltd. 1,100 33
(a) Lear Corp. 600 27
Leggett & Platt Inc. 500 22
Magna International Inc., "A" 500 30
Matsushita Electric Industrial
Co., Ltd. 1,850 37
Myers Industries 390 7
---------------------------------------------------
190
- -----------------------------------------------------------
CONSUMER STAPLES--6.2%
- -----------------------------------------------------------
Arbor Drugs 400 8
(a) Carriage Services, Inc. 200 4
(a) Emmis Broadcasting Corp. 200 9
Independent Newspapers PLC 9,550 55
Kimberly-Clark de Mexico,
S.A. de C.V. 13,000 52
Koninklijke Ahold N.V. 1,366 115
Philip Morris Companies 4,400 195
UST, Inc. 3,000 83
(a) Westwood One 500 16
(a) Young Broadcasting Corp. 300 10
---------------------------------------------------
547
</TABLE>
60
<PAGE> 61
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
---------------------------------------------------
NUMBER OF
SHARES VALUE
---------------------------------------------------
ENERGY--3.6%
<S> <C> <C> <C>
AMOCO Corp. 300 $ 26
Atlantic Richfield Co. 600 42
British Petroleum 1,769 22
Chevron Corp. 400 30
(a) Chieftain International Inc. 260 6
Columbia Gas System 300 20
Elf Aquitaine 443 48
Exxon Corp. 400 25
KCS Energy 340 7
(a) Nuevo Energy Co. 125 5
Royal Dutch Petroleum 1,176 61
(a) Seitel, Inc. 175 7
(a) Tesoro Petroleum Corp. 455 7
United Cities Gas Co. 260 6
YPF Sociedad Anonima, ADR 300 9
---------------------------------------------------
321
- -----------------------------------------------------------
FINANCE--13.5%
- -----------------------------------------------------------
H.F. Ahmanson & Co. 300 13
American General Corp. 700 33
Banc One Corp. 300 15
Banco Bilbao Vizcaya 385 31
BankAmerica Corp. 400 26
Bankers Trust New York Corp. 200 17
Bank of Ireland 4,580 50
Barnett Banks 400 21
Bear Stearns Companies 1,500 51
Chase Manhattan Corp. 100 10
CITIC Pacific Ltd. 4,500 28
Cullen Frost Bankers 180 8
Del Webb Corp. 380 6
A.G. Edwards & Sons 800 34
Executive Risk 300 16
Federal Home Loan Mortgage
Corp. 1,400 48
Federal National Mortgage
Association 2,700 118
(a) Financial Federal Corp. 600 13
First Chicago NBD Corp. 400 24
First Financial Caribbean Corp. 230 8
First Financial Corp. 230 7
First Union Corp. 300 28
Fleet Financial Group, Inc. 300 19
HCC Insurance Holdings 400 11
HSBC Holding PLC, ADR 814 24
Imperial Credit Industries 265 5
ING Groep N.V. 851 39
Integon Corp. 80 2
Jefferson-Pilot Corp. 550 38
Kansas City Southern Industries 200 13
KeyCorp 300 17
<CAPTION>
---------------------------------------------------
NUMBER OF
SHARES VALUE
---------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------
FINANCE--CONTINUED
- -----------------------------------------------------------
Long Island Bancorp 400 $ 15
Magnum Corporation Berhad 9,000 14
Meditrust 300 12
Mercer International SBI 120 1
Merrill Lynch & Co. 800 48
MGIC Investment Corp. 1,600 77
NationsBank 1,550 100
PNC Bank, N.A. 400 17
Post Properties 300 12
Protective Life Insurance Co. 400 20
Quick & Reilly Group 600 14
RHB Capital 3,000 10
Republic NY Corp. 250 27
Roosevelt Financial Group 60 1
Signet Banking Corp. 400 14
Texas Regional Bankshares 100 4
Torchmark Corp. 300 21
Wells Fargo & Co. 50 13
---------------------------------------------------
1,193
- -----------------------------------------------------------
HEALTH CARE--10.1%
- -----------------------------------------------------------
Abbott Laboratories 500 33
American Home Products Corp. 800 61
Amgen, Inc. 1,000 58
Astra, A.B., ADR 2,667 51
C.R. Bard 500 18
Baxter International 200 10
Becton Dickinson & Co. 200 10
(a) Biogen 2,100 71
Biomet, Inc. 2,000 37
(a) British Biotech, PLC 4,310 16
(a) CRA Managed Care, Inc. 200 10
Eisai Co., Ltd. 2,000 38
(a) Fresenius Medical Care, ADS 405 29
Glaxo Wellcome PLC 1,340 28
(a) HealthCare COMPARE Corp. 850 45
Mallinckrodt Group 1,700 65
Medtronic, Inc. 900 73
Merck & Co. 600 62
(a) National Surgery Centers 300 11
Novartis
(a) ADR 700 56
common stock 21 34
(a) OccuSystems, Inc. 100 3
Roche Holding A.G. 4 36
(a) Safeskin Corp. 500 15
(a) Henry Schein, Inc. 100 3
(a) Sofamor-Danek Group 300 14
---------------------------------------------------
887
</TABLE>
61
<PAGE> 62
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
---------------------------------------------------
NUMBER OF
SHARES VALUE
---------------------------------------------------
- -----------------------------------------------------------
TECHNOLOGY--17.2%
- -----------------------------------------------------------
<S> <C> <C> <C>
AMP Inc. 600 $ 25
(a) Andrew Corp. 200 6
(a) Applied Materials, Inc. 1,100 78
(a) Ascend Communications, Inc. 1,500 59
(a) Atmel Corp. 2,000 56
(a) Baan Company N.V. 755 51
Belden Inc. 300 10
(a) Benchmark Electronics 195 8
(a) Cabletron Systems 600 17
Canon, Inc. 900 25
(a) Ceridian Corp. 1,700 72
(a) Cisco Systems 1,700 114
(a) Compaq Computer Corp. 1,150 114
Computer Associates
International 700 39
(a) Comverse Technology 100 5
(a) Electroglas 225 6
(a) Encad, Inc. 300 12
L.M. Ericsson Telephone Co.,
"B" 983 39
(a) Gartner Group 400 14
(a) Gateway 2000 1,300 42
Hewlett-Packard Co. 500 28
Intel Corp. 1,000 142
(a) Jones Intercable Inc. 540 7
(a) KLA Instruments 100 5
(a) Kulicke & Soffa Industries 500 16
(a) Marshall Industries 100 4
(a) Novellus Systems 700 61
(a) Oracle Corp. 1,500 76
(a) Parametric Technology Corp. 1,000 43
Paychex 300 11
(a) Quantum Corp. 2,100 43
Scientific Atlanta 340 7
(a) Seagate Technology 300 11
(a) SunGard Data Systems 200 9
(a) Sun Microsystems 1,600 60
(a) Tech-Sym Corp. 195 7
(a) Tecnomatix Technologies 400 13
(a) 3Com Corp. 2,550 115
(a) Western Digital Corp. 2,100 66
---------------------------------------------------
1,516
<CAPTION>
---------------------------------------------------
NUMBER OF
SHARES OR
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------
- -----------------------------------------------------------
TRANSPORTATION--.2%
- -----------------------------------------------------------
<S> <C> <C>
Airborne Freight Corp. 230 $ 10
(a) Knight Transportation 200 5
---------------------------------------------------
15
UTILITIES--3.0%
AT&T 200 7
(a) Atlantic Tele-Network 80 1
Empresa Nacional de
Electricidad S.A. 433 36
GTE Corp. 600 26
Southern Co. 900 20
Telecom Italia Mobile 8,325 27
Telefonica de Espana S.A. 1,540 45
Veba, A.G. 350 20
(a) WorldCom, Inc. 2,500 80
---------------------------------------------------
262
---------------------------------------------------
TOTAL COMMON STOCKS--75.5%
(Cost: $5,782) 6,651
---------------------------------------------------
MONEY MARKET INSTRUMENTS--2.2%
Yield--5.04% to 5.46%
Due--August 1997
(Cost: $199) $ 200 198
---------------------------------------------------
TOTAL INVESTMENTS--96.9%
(Cost: $7,660) 8,533
---------------------------------------------------
CASH AND OTHER ASSETS, LESS
LIABILITIES--3.1% 273
---------------------------------------------------
NET ASSETS--100% $8,806
---------------------------------------------------
</TABLE>
- -----------------------------------------------------------
NOTES TO KEMPER HORIZON 20+ PORTFOLIO OF INVESTMENTS
- -----------------------------------------------------------
(a) Non-income producing security.
Based on the cost of investments of $7,660,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $947,000, the gross
unrealized depreciation was $74,000 and the net unrealized appreciation on
investments was $873,000.
See accompanying Notes to Financial Statements.
62
<PAGE> 63
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER HORIZON 10+ PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
-----------------------------------------------------
PRINCIPAL
AMOUNT OR
NUMBER
GOVERNMENT OBLIGATIONS OF SHARES VALUE
-----------------------------------------------------
- ----------------------------------------------------------
U.S. TREASURY NOTES
- ----------------------------------------------------------
<S> <C> <C>
7.50%, 1999 $ 400 $ 412
8.875%, 2000 878 939
8.50%, 2000 720 759
6.75%, 2000 520 527
5.50%, 2000 350 341
8.00%, 2001 300 317
- ----------------------------------------------------------
MORTGAGE BACKED SECURITIES
- ----------------------------------------------------------
FHLMC, 6.00%, 2006 274 273
FHLMC, 6.50%, 2014 230 230
GNMA, 7.00%, 2015 673 678
-----------------------------------------------------
TOTAL GOVERNMENT
OBLIGATIONS--39.8%
(Cost: $4,476) 4,476
-----------------------------------------------------
COMMON STOCKS
- ----------------------------------------------------------
BASIC INDUSTRIES--3.2%
- ----------------------------------------------------------
AK Steel Holding Corp. 170shs. 7
Bayer A.G. 771 30
Carpenter Technology Corp. 170 8
Cementos Mexicanos, S.A. de
C.V., "B," ADR 5,300 26
Champion International Corp. 300 16
(a) Culligan Water Technologies 200 9
Dow Chemical Co. 400 35
Eastman Chemical Co. 400 25
Georgia-Pacific Corp. 300 26
(a) Global Industrial Technologies,
Inc. 380 8
Intermet Corp. 395 6
Millennium Chemicals Inc. 107 2
Louisiana-Pacific Corp. 1,200 25
Nucor Corp. 300 17
Rentokil Initial PLC 13,100 46
Sonoco Products Co. 800 24
Toray Industries 3,000 21
Union Camp Corp. 500 25
-----------------------------------------------------
356
- ----------------------------------------------------------
CAPITAL GOODS--4.7%
- ----------------------------------------------------------
Ball Corp. 260 8
(a) BE Aerospace, Inc. 400 13
Blount, International, "A" 160 7
Elcor Corp. 275 8
Emerson Electric Co. 600 33
General Electric Co. 1,500 98
B.F. Goodrich Co. 700 30
(a) Littelfuse, Inc. 400 11
Mannesmann A.G. 35 16
(a) Miller Industries 900 14
Murata Manufacturing 500 20
<CAPTION>
-----------------------------------------------------
NUMBER
GOVERNMENT OBLIGATIONS OF SHARES VALUE
-----------------------------------------------------
<S> <C> <C>
- ----------------------------------------------------------
CAPITAL GOODS--CONTINUED
- ----------------------------------------------------------
(a) Philip Services Corp. 4,350 $ 69
Raytheon Co. 600 31
Sony Corp. 300 26
Stewart & Stevenson Services 235 6
(a) Triangle Pacific Corp. 300 10
(a) USA Waste Services 800 31
(a) U.S. Filter Corp. 1,800 49
(a) United Waste Systems 1,000 41
Watts Industries, Inc. 245 6
-----------------------------------------------------
527
- ----------------------------------------------------------
CONSUMER CYCLICALS--9.2%
- ----------------------------------------------------------
(a) AccuStaff 400 9
American Greetings Corp. 1,300 48
(a) AutoZone 1,100 26
Brunswick Corp. 1,300 41
(a) CapStar Hotel Co. 500 16
Carnival Corp. 1,000 41
Carrefour S.A. 69 50
CKE Restaurants 400 13
(a) Consolidated Graphics, Inc. 350 15
(a) Consolidated Stores Corp. 938 32
Deluxe Corp. 1,000 34
Dillard Department Stores 600 21
Walt Disney Co. 600 48
Ethan Allen Interiors 200 11
Four Seasons Hotels Inc. 400 12
Granada Group PLC 2,117 28
Gucci Group N.V. 370 24
(a) Tommy Hilfiger Corp. 1,500 60
Home Depot 600 41
Hudson's Bay Co. 2,100 47
(a) Interim Services 200 9
May Department Stores Co. 300 14
Men's Wearhouse 400 13
Meredith Corp. 400 12
(a) Nautica Enterprises 650 17
NIKE 1,150 67
(a) Outdoor Systems Inc. 400 15
J.C. Penney Co. 600 31
Reed International PLC 14,216 138
Royal Caribbean Cruises Ltd. 700 24
Sears, Roebuck & Co. 1,000 54
V.F. Corp. 300 26
-----------------------------------------------------
1,037
- ----------------------------------------------------------
CONSUMER DURABLES--2.1%
- ----------------------------------------------------------
Ford Motor Co. 1,000 38
Harley-Davidson 1,200 57
Honda Motor Co., Ltd. 1,300 39
(a) Lear Corp. 600 27
Leggett & Platt Inc. 800 34
Matsushita Electric Industrial
Co., Ltd. 1,800 36
Myers Industries 400 7
-----------------------------------------------------
238
</TABLE>
63
<PAGE> 64
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
-----------------------------------------------------
NUMBER
OF SHARES VALUE
-----------------------------------------------------
- ----------------------------------------------------------
CONSUMER STAPLES--3.5%
- ----------------------------------------------------------
<S> <C> <C>
Arbor Drugs 550 $ 11
(a) Carriage Services, Inc. 300 6
(a) Emmis Broadcasting Corp. 200 9
Imperial Tobacco Group, ADR 375 5
Independent Newspapers PLC 5,960 35
Kimberly-Clark de Mexico,
S.A. de C.V. 13,000 52
Koninklijke Ahold N.V. 486 41
Philip Morris Companies 3,600 160
UST, Inc. 1,600 44
(a) Westwood One 600 19
(a) Young Broadcasting Corp. 300 10
-----------------------------------------------------
392
- ----------------------------------------------------------
ENERGY--3.3%
- ----------------------------------------------------------
AMOCO Corp. 300 26
Atlantic Richfield Co. 700 49
British Petroleum 2,660 33
Chevron Corp. 400 29
(a) Chieftain International Inc. 260 6
Columbia Gas System 500 33
Elf Aquitaine 423 46
Exxon Corp. 600 37
KCS Energy 350 7
(a) Nuevo Energy Co. 130 5
Petro Canada 2,000 33
Royal Dutch Petroleum 960 50
(a) Seitel, Inc. 175 7
(a) Tesoro Petroleum Corp. 465 7
United Cities Gas Co. 265 6
-----------------------------------------------------
374
- ----------------------------------------------------------
FINANCE--11.2%
- ----------------------------------------------------------
American General Corp. 700 33
Banc One Corp. 500 24
Banco Bilbao Vizcaya 620 50
BankAmerica Corp. 400 26
Bankers Trust New York Corp. 400 35
Bank of Ireland 3,800 42
Barnett Banks 600 31
Bear Stearns Companies 1,300 44
CITIC Pacific Ltd. 7,500 47
Cullen Frost Bankers 185 8
Del Webb Corp. 400 7
Executive Risk 400 21
Federal Home Loan Mortgage
Corp. 1,700 58
Federal National Mortgage
Association 2,700 118
(a) Financial Federal Corp. 800 18
First Chicago NBD Corp. 500 30
First Financial Caribbean Corp. 235 8
First Financial Corp. 235 7
First Union Corp. 300 28
Fleet Financial Group, Inc. 200 13
HCC Insurance Holdings 400 11
HSBC Holding PLC, ADR 1,214 37
Imperial Credit Industries 275 6
ING Groep N.V. 927 43
Integon Corp. 85 2
Jefferson-Pilot Corp. 400 28
Kansas City Southern Industries 200 13
KeyCorp 200 11
Long Island Bancorp 400 15
<CAPTION>
-----------------------------------------------------
NUMBER
OF SHARES VALUE
-----------------------------------------------------
<S> <C> <C>
- ----------------------------------------------------------
FINANCE--CONTINUED
- ----------------------------------------------------------
Meditrust 400 $ 16
Mercer International SBI 150 1
Merrill Lynch & Co. 600 36
MGIC Investment Corp. 1,400 67
NationsBank 1,600 103
PNC Bank, N.A. 600 25
Post Properties 400 16
Protective Life Insurance Co. 400 20
Quick & Reilly Group 600 14
Republic NY Corp. 200 22
Roosevelt Financial Group 75 2
Signet Banking Corp. 600 22
Texas Regional Bankshares 100 4
Torchmark Corp. 300 21
Washington Mutual 900 54
Wells Fargo & Co. 100 27
-----------------------------------------------------
1,264
- ----------------------------------------------------------
HEALTH CARE--7.8%
- ----------------------------------------------------------
Abbott Laboratories 400 27
American Home Products Corp. 700 53
Amgen, Inc. 850 49
Astra, A.B., ADR 2,400 46
C.R. Bard 700 25
Baxter International 300 16
Becton Dickinson & Co. 300 15
(a) Biogen 1,600 54
Biomet, Inc. 3,200 60
(a) CRA Managed Care, Inc. 200 10
Eisai Co., Ltd. 2,100 40
(a) Fresenius Medical Care, ADS 443 32
Glaxo Wellcome PLC 2,143 44
(a) HealthCare COMPARE Corp. 750 39
Mallinckrodt Group 1,500 57
Medtronic, Inc. 750 61
Merck & Co. 450 47
(a) National Surgery Centers 400 14
Novartis
(a) ADR 600 48
common stock 25 40
(a) OccuSystems, Inc. 200 6
Roche Holding A.G. 6 54
(a) Safeskin Corp. 600 18
(a) Henry Schein, Inc. 200 6
(a) Sofamor-Danek Group 300 14
-----------------------------------------------------
875
- ----------------------------------------------------------
TECHNOLOGY--12.3%
- ----------------------------------------------------------
AMP Inc. 600 25
(a) Andrew Corp. 200 6
(a) Applied Materials, Inc. 900 64
(a) Ascend Communications, Inc. 1,000 39
(a) Atmel Corp. 1,600 45
(a) Baan Company N.V. 770 52
Belden Inc. 350 12
(a) Benchmark Electronics 200 8
(a) Cabletron Systems 800 23
Canon, Inc. 1,400 38
(a) Ceridian Corp. 1,000 42
(a) Cisco Systems 1,500 101
(a) Compaq Computer Corp. 950 94
Computer Associates
International 600 33
(a) Comverse Technology 300 16
(a) Electroglas 235 6
</TABLE>
64
<PAGE> 65
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
---------------------------------------------------
NUMBER
OF SHARES VALUE
---------------------------------------------------
- ----------------------------------------------------------
TECHNOLOGY--CONTINUED
- ----------------------------------------------------------
<S> <C> <C>
(a) Encad, Inc. 350 $ 14
L.M. Ericsson Telephone Co., "B" 1,060 42
(a) Gartner Group 400 14
(a) Gateway 2000 1,000 32
Hewlett-Packard Co. 600 34
Intel Corp. 850 120
(a) Jones Intercable Inc. 550 7
(a) KLA Instruments 300 15
(a) Kulicke & Soffa Industries 400 13
(a) Marshall Industries 200 7
(a) Novellus Systems 600 52
(a) Oracle Corp. 1,200 60
(a) Parametric Technology Corp. 600 26
Paychex 300 11
(a) Quantum Corp. 2,600 53
Scientific Atlanta 345 8
(a) Seagate Technology 300 11
(a) SunGard Data Systems 200 9
(a) Sun Microsystems 1,200 45
(a) Tech-Sym Corp. 200 7
(a) Tecnomatix Technologies 450 15
(a) 3Com Corp. 1,825 82
(a) Western Digital Corp. 1,800 57
Xerox Corp. 600 47
-----------------------------------------------------
1,385
<CAPTION>
-----------------------------------------------------
NUMBER
OF SHARES VALUE
-----------------------------------------------------
- ----------------------------------------------------------
TRANSPORTATION--.1%
- ----------------------------------------------------------
<S> <C> <C>
Airborne Freight Corp. 235 $ 10
(a) Knight Transportation 200 5
-----------------------------------------------------
15
UTILITIES--2.2%
(a) Atlantic Tele-Network 100 1
Empresa Nacional de
Electricidad S.A. 485 41
GTE Corp. 600 26
Southern Co. 900 20
Telecom Italia Mobile 13,320 43
Telefonica de Espana S.A. 1,555 45
(a) WorldCom, Inc. 2,200 70
-----------------------------------------------------
246
-----------------------------------------------------
TOTAL COMMON STOCKS--59.6%
(Cost: $5,763) 6,709
-----------------------------------------------------
TOTAL INVESTMENTS--99.4%
(Cost: $10,239) 11,185
-----------------------------------------------------
CASH AND OTHER ASSETS, LESS
LIABILITIES--.6% 73
-----------------------------------------------------
NET ASSETS--100% $11,258
-----------------------------------------------------
</TABLE>
- ----------------------------------------------------------
NOTES TO KEMPER HORIZON 10+ PORTFOLIO OF INVESTMENTS
- ----------------------------------------------------------
(a) Non-income producing security.
Based on the cost of investments of $10,239,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $1,021,000, the gross
unrealized depreciation was $75,000 and the net unrealized appreciation on
investments was $946,000.
See accompanying Notes to Financial Statements.
65
<PAGE> 66
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER HORIZON 5 PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
---------------------------------------------------
PRINCIPAL
AMOUNT OR
NUMBER
GOVERNMENT OBLIGATIONS OF SHARES VALUE
---------------------------------------------------
- -----------------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------
U.S. TREASURY NOTES
8.875%, 2000 $ 870 $ 931
8.50%, 2000 549 579
6.75%, 2000 700 709
5.875%, 2000 100 99
6.50%, 2000 463 452
5.50%, 2000 400 393
- -----------------------------------------------------------
MORTGAGE BACKED SECURITIES
- -----------------------------------------------------------
FHLMC, 6.00%, 2006 175 173
FHLMC, 6.50%, 2014 141 141
GNMA, 7.00%, 2015 620 624
---------------------------------------------------
TOTAL GOVERNMENT OBLIGATIONS--59.7%
(Cost: $4,096) 4,101
---------------------------------------------------
COMMON STOCKS
- -----------------------------------------------------------
BASIC INDUSTRIES--1.9%
- -----------------------------------------------------------
AK Steel Holding Corp. 55shs. 2
Bayer A.G. 246 9
Carpenter Technology Corp. 60 3
Cementos Mexicanos,
S.A. de C.V.,"B," ADR 3,000 15
Champion International Corp. 100 6
(a) Culligan Water Technologies 100 4
Dow Chemical Co. 200 17
Eastman Chemical Co. 200 13
Georgia-Pacific Corp. 100 9
(a) Global Industrial Technologies,
Inc. 125 3
Intermet Corp. 140 2
Louisiana-Pacific Corp. 300 6
Nucor Corp. 100 6
Rentokil Initial PLC 2,600 9
Sonoco Products Co. 300 9
Toray Industries 1,500 11
Union Camp Corp. 200 10
---------------------------------------------------
134
- -----------------------------------------------------------
CAPITAL GOODS--4.0%
- -----------------------------------------------------------
Ball Corp. 90 3
(a) BE Aerospace, Inc. 200 6
Blount, International, "A" 55 2
Elcor Corp. 100 3
Emerson Electric Co. 200 11
General Electric Co. 900 59
B.F. Goodrich Co. 200 9
(a) Littelfuse, Inc. 200 6
(a) Miller Industries 400 6
Murata Manufacturing 200 8
(a) Philip Services Corp. 2,475 39
Raytheon Co. 400 20
Sony Corp. 400 35
Stewart & Stevenson Services 90 2
(a) Triangle Pacific Corp. 100 3
(a) USA Waste Services 600 23
(a) U.S. Filter Corp. 700 19
(a) United Waste Systems 400 16
Watts Industries, Inc. 95 2
---------------------------------------------------
272
<CAPTION>
---------------------------------------------------
NUMBER
GOVERNMENT OBLIGATIONS OF SHARES VALUE
---------------------------------------------------
- -----------------------------------------------------------
CONSUMER CYCLICALS--6.9%
- -----------------------------------------------------------
<S> <C> <C>
(a) AccuStaff 200 $ 5
American Greetings Corp. 600 22
(a) AutoZone 300 7
Brunswick Corp. 200 6
Bulgari Spa 2,220 13
(a) CapStar Hotel Co. 300 10
Carnival Corp. 800 33
Carrefour S.A. 16 12
CKE Restaurants 200 6
(a) Consolidated Graphics, Inc. 150 6
(a) Consolidated Stores Corp. 375 13
Dillard Department Stores 100 3
Walt Disney Co. 100 8
Ethan Allen Interiors 100 6
Four Seasons Hotels Inc. 200 6
Fuji Photo Film Co. Ltd. 2,000 81
Granada Group PLC 672 9
Gucci Group N.V. 154 10
(a) Tommy Hilfiger Corp. 600 24
Home Depot 200 14
Hudson's Bay Co. 1,250 28
(a) Interim Services 200 9
May Department Stores Co. 200 9
Men's Wearhouse 200 6
Meredith Corp. 200 6
(a) Nautica Enterprises 250 7
NIKE 450 26
(a) Outdoor Systems Inc. 200 8
J.C. Penney Co. 200 10
Reed International PLC 2,572 25
Royal Caribbean Cruises Ltd. 400 14
Sears, Roebuck & Co. 400 21
V.F. Corp. 100 9
---------------------------------------------------
472
- -----------------------------------------------------------
CONSUMER DURABLES--1.6%
- -----------------------------------------------------------
Ford Motor Co. 300 11
Harley-Davidson 400 19
Honda Motor Co., Ltd. 600 18
(a) Lear Corp. 200 9
Leggett & Platt Inc. 200 9
Magna International Inc., "A" 200 12
Matsushita Electric Industrial
Co., Ltd. 1,350 27
Myers Industries 140 2
---------------------------------------------------
107
- -----------------------------------------------------------
CONSUMER STAPLES--3.2%
- -----------------------------------------------------------
Arbor Drugs 250 5
(a) Carriage Services, Inc. 100 2
(a) Emmis Broadcasting Corp. 200 9
Independent Newspapers PLC 1,285 7
Kimberly-Clark de Mexico,
S.A. de C.V. 8,000 32
Koninklijke Ahold N.V. 270 23
Philip Morris Companies 1,700 75
RJR Nabisco Holdings Corp. 200 7
UST, Inc. 1,600 44
(a) Westwood One 200 6
(a) Young Broadcasting Corp. 300 10
---------------------------------------------------
220
</TABLE>
66
<PAGE> 67
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
---------------------------------------------------
NUMBER
OF SHARES VALUE
---------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------
ENERGY--1.7%
- -----------------------------------------------------------
AMOCO Corp. 100 $ 9
Atlantic Richfield Co. 300 21
British Petroleum 933 12
Chevron Corp. 300 22
(a) Chieftain International Inc. 95 2
Columbia Gas System 100 7
Exxon Corp. 300 18
KCS Energy 130 3
Kerr-McGee Corp. 100 6
(a) Nuevo Energy Co. 50 2
Royal Dutch Petroleum 152 8
(a) Seitel, Inc. 65 2
(a) Tesoro Petroleum Corp. 180 3
United Cities Gas Co. 95 2
---------------------------------------------------
117
- -----------------------------------------------------------
FINANCE--7.2%
- -----------------------------------------------------------
American General Corp. 200 10
Banc One Corp. 100 5
BankAmerica Corp. 200 13
Bankers Trust New York Corp. 100 9
Bank of Ireland 1,000 11
Barnett Banks 200 10
Bear Stearns Companies 400 14
CITIC Pacific Ltd. 6,000 37
Cullen Frost Bankers 60 3
Del Webb Corp. 130 2
A.G. Edwards & Sons 200 9
Executive Risk 200 10
Federal Home Loan Mortgage
Corp. 700 24
Federal National Mortgage
Association 900 39
(a) Financial Federal Corp. 400 9
First Chicago NBD Corp. 200 12
First Financial Caribbean Corp. 90 3
First Financial Corp. 85 2
First Union Corp. 100 9
HCC Insurance Holdings 200 5
HSBC Holding PLC, ADR 807 24
Imperial Credit Industries 100 2
ING Groep N.V. 447 21
Integon Corp. 60 2
Jefferson-Pilot Corp. 250 17
Kansas City Southern Industries 100 6
KeyCorp 200 11
Long Island Bancorp 200 7
Meditrust 200 8
<CAPTION>
---------------------------------------------------
NUMBER
OF SHARES VALUE
---------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------
FINANCE--CONTINUED
- -----------------------------------------------------------
Mercer International SBI 90 $ 1
Merrill Lynch & Co. 200 12
MGIC Investment Corp. 500 24
NationsBank 450 29
PNC Bank, N.A. 200 8
Post Properties 200 8
Protective Life Insurance Co. 200 10
Quick & Reilly Group 300 7
RHB Capital 3,000 10
Republic NY Corp. 50 5
Roosevelt Financial Group 50 1
Signet Banking Corp. 200 7
Texas Regional Bankshares 100 4
Torchmark Corp. 100 7
Washington Mutual 400 24
Wells Fargo & Co. 25 7
---------------------------------------------------
498
- -----------------------------------------------------------
HEALTH CARE--4.7%
- -----------------------------------------------------------
Abbott Laboratories 100 7
American Home Products Corp. 200 15
Amgen, Inc. 250 15
Astra, A.B., ADR 800 15
C.R. Bard 300 11
Baxter International 100 5
Becton Dickinson & Co. 100 5
(a) Biogen 700 24
Biomet, Inc. 1,200 22
(a) British Biotech, PLC 2,870 11
(a) CRA Managed Care, Inc. 100 5
Eisai Co., Ltd 1,000 19
(a) Fresenius Medical Care, ADS 88 6
(a) HealthCare COMPARE Corp. 500 26
Mallinckrodt Group 600 23
Medtronic, Inc. 250 20
Merck & Co. 150 16
(a) National Surgery Centers 200 7
Novartis
(a) ADR 200 16
common stock 8 13
(a) OccuSystems, Inc. 100 3
Roche Holding A.G. 3 27
(a) Safeskin Corp. 200 6
(a) Henry Schein, Inc. 100 3
(a) Sofamor-Danek Group 100 5
---------------------------------------------------
325
</TABLE>
67
<PAGE> 68
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
---------------------------------------------------
NUMBER
OF SHARES VALUE
---------------------------------------------------
- -----------------------------------------------------------
TECHNOLOGY--7.1%
- -----------------------------------------------------------
<S> <C> <C>
AMP Inc. 300 $ 13
(a) Andrew Corp. 100 3
(a) Applied Materials, Inc. 200 14
(a) Ascend Communications, Inc. 500 20
(a) Atmel Corp. 400 11
Belden Inc. 150 5
(a) Benchmark Electronics 70 3
Canon, Inc. 700 19
(a) Ceridian Corp. 400 17
(a) Cisco Systems 400 27
(a) Compaq Computer Corp. 400 40
Computer Associates
International 200 11
(a) Comverse Technology 200 10
(a) Electroglas 130 3
(a) Encad, Inc. 150 6
L.M. Ericsson Telephone Co., "B" 337 13
(a) Gartner Group 200 7
(a) Gateway 2000 300 10
Hewlett-Packard Co. 200 11
Intel Corp. 325 46
(a) Jones Intercable Inc. 205 3
(a) KLA Instruments 200 10
(a) Kulicke & Soffa Industries 100 3
(a) Marshall Industries 100 4
(a) Novellus Systems 200 17
(a) Oracle Corp. 300 15
(a) Parametric Technology Corp. 300 13
Paychex 150 6
(a) Quantum Corp. 900 18
Scientific Atlanta 135 3
(a) Seagate Technology 200 7
(a) SunGard Data Systems 100 5
(a) Sun Microsystems 500 19
(a) Tech-Sym Corp. 75 3
(a) Tecnomatix Technologies 150 5
(a) 3Com Corp. 500 23
(a) Western Digital Corp. 700 22
Xerox Corp. 250 20
---------------------------------------------------
485
<CAPTION>
---------------------------------------------------
NUMBER
OF SHARES VALUE
---------------------------------------------------
- -----------------------------------------------------------
TRANSPORTATION--.1%
- -----------------------------------------------------------
<S> <C> <C>
Airborne Freight Corp. 85 $ 4
(a) Knight Transportation 100 3
---------------------------------------------------
- -----------------------------------------------------------
UTILITIES--1.4%
- -----------------------------------------------------------
AT&T 100 4
(a) Atlantic Tele-Network 60 1
Empresa Nacional de Electricidad
S.A. 158 13
GTE Corp. 300 13
Southern Co. 400 9
Telefonica de Espana S.A. 390 11
Veba, A.G. 175 10
(a) WorldCom, Inc. 1,000 32
---------------------------------------------------
93
---------------------------------------------------
TOTAL COMMON STOCKS--39.8%
(Cost: $2,388) 2,730
---------------------------------------------------
TOTAL INVESTMENTS--99.5%
(Cost: $6,484) 6,831
---------------------------------------------------
CASH AND OTHER ASSETS, LESS
LIABILITIES--.5% 36
---------------------------------------------------
NET ASSETS--100% $6,866
---------------------------------------------------
</TABLE>
- -----------------------------------------------------------
NOTES TO KEMPER HORIZON 5 PORTFOLIO OF INVESTMENTS
- -----------------------------------------------------------
(a) Non-income producing security.
Based on the cost of investments of $6,484,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $379,000, the gross
unrealized depreciation was $32,000 and the net unrealized appreciation on
investments was $347,000.
See accompanying Notes to Financial Statements.
68
<PAGE> 69
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER BLUE CHIP PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
-----------------------------------------------------
NUMBER OF
SHARES VALUE
-----------------------------------------------------
COMMON STOCKS
- ----------------------------------------------------------
BASIC INDUSTRIES--2.9%
- ----------------------------------------------------------
<S> <C> <C>
Air Products & Chemicals 200 $ 16
Betz Dearborn Inc. 100 7
Crown Cork & Seal Co. 100 5
W.R. Grace & Co. 100 6
-----------------------------------------------------
34
- ----------------------------------------------------------
CAPITAL GOODS--7.3%
- ----------------------------------------------------------
Emerson Electric Co. 100 5
General Electric Co. 100 7
B.F. Goodrich Co. 200 9
Honeywell 200 15
Raytheon Co. 200 10
United Technologies Corp. 300 25
WMX Technologies Inc. 400 13
-----------------------------------------------------
84
- ----------------------------------------------------------
CONSUMER CYCLICALS--9.2%
- ----------------------------------------------------------
(a) Clear Channel Communications 100 6
CVS Corp. 100 5
Dillard Department Stores 200 7
R.R. Donnelley & Sons Co. 200 7
Harcourt General 450 21
Hilton Hotels Corp. 100 3
May Department Stores Co. 300 14
(a) MGM Grand 250 9
Sears, Roebuck & Co. 300 16
Time Warner 300 14
Tribune Co. 100 5
-----------------------------------------------------
107
- ----------------------------------------------------------
CONSUMER DURABLES--1.4%
- ----------------------------------------------------------
Stanley Works 400 16
- ----------------------------------------------------------
CONSUMER STAPLES--3.7%
- ----------------------------------------------------------
CPC International 100 9
Dial Corp. 200 3
H.J. Heinz Co. 100 5
International Flavors &
Fragrances 300 15
PepsiCo 100 4
Wm. Wrigley Jr. Co. 100 7
-----------------------------------------------------
43
- ----------------------------------------------------------
ENERGY--3.5%
- ----------------------------------------------------------
AMOCO Corp. 100 9
Exxon Corp. 100 6
Mobil Corp. 200 14
Pennzoil Co. 100 8
Unocal Corp. 100 4
-----------------------------------------------------
41
<CAPTION>
- ----------------------------------------------------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------
FINANCE--12.5%
- ----------------------------------------------------------
<S> <C> <C>
American Express Co. 100 $ 7
American General Corp. 400 19
Banc One Corp. 200 10
BankAmerica Corp. 200 13
BankBoston 100 7
Dean Witter Discover 300 13
First Bank System 100 9
Fleet Financial Group, Inc. 70 4
ITT Hartford Group 100 8
Jefferson-Pilot Corp. 100 7
KeyCorp 100 6
Mellon Bank Corp. 200 9
Starwood Lodging Trust 100 4
Summit Bancorp 250 13
Transamerica Corp. 100 9
Washington Mutual 100 6
-----------------------------------------------------
144
- ----------------------------------------------------------
HEALTH CARE--8.4%
- ----------------------------------------------------------
Abbott Laboratories 100 7
(a) ALZA Corp. 500 14
American Home Products Corp. 100 8
C.R. Bard 100 4
(a) Biogen 300 10
Biomet, Inc. 200 4
(a) HealthCare COMPARE Corp. 100 5
(a) HEALTHSOUTH Corp. 300 7
Eli Lilly & Co. 100 11
McKesson Corp. 100 8
Perkin-Elmer Corp. 100 8
(a) Tenet Healthcare Corp. 200 6
United Healthcare Corp. 100 5
-----------------------------------------------------
97
- ----------------------------------------------------------
TECHNOLOGY--9.9%
- ----------------------------------------------------------
AMP Inc. 300 13
(a) Cadence Design Systems 100 3
(a) Cisco Systems 100 7
Computer Associates International 100 6
Harris Corp. 100 8
Hewlett-Packard Co. 260 14
Intel Corp. 100 14
Motorola 200 15
(a) Oracle Corp. 100 5
(a) PeopleSoft Inc. 100 5
Pitney Bowes 100 7
(a) Sun Microsystems 300 11
(a) Tellabs, Inc. 100 6
-----------------------------------------------------
114
- ----------------------------------------------------------
TRANSPORTATION--2.1%
- ----------------------------------------------------------
CSX Corp. 250 14
Norfolk Southern Corp. 100 10
-----------------------------------------------------
24
</TABLE>
69
<PAGE> 70
PORTFOLIO OF INVESTMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
----------------------------------------------------
NUMBER OF
SHARES VALUE
----------------------------------------------------
<S> <C> <C>
-----------------------------------------------------
UTILITIES--1.7%
-----------------------------------------------------
Ameritech Corp. 100 $ 7
AT&T 200 7
SBC Communications Inc. 100 6
-----------------------------------------------------
20
-----------------------------------------------------
TOTAL COMMON STOCKS--62.6%
(Cost: $706) 724
=====================================================
<CAPTION>
-----------------------------------------------------
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------
<S> <C> <C>
MONEY MARKET INSTRUMENTS--25.9%
YIELD--5.45% TO 5.53%
Due--July 1997
Federal National Mortgage
Association
(Cost: $299) $300 $ 299
-----------------------------------------------------
<S> <C>
TOTAL INVESTMENTS--88.5%
(Cost: $1,005) $1,023
-----------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--11.5% 133
-----------------------------------------------------
NET ASSETS--100% $1,156
-----------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
NOTES TO KEMPER BLUE CHIP PORTFOLIO OF INVESTMENTS
- -------------------------------------------------------------------------------
(a) Non-income producing security.
Based on the cost of investments of $1,005,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $25,000, the gross
unrealized depreciation was $7,000 and the net unrealized appreciation on
investments was $18,000.
See accompanying Notes to Financial Statements.
70
<PAGE> 71
PORTFOLIO OF INVESTMENTS
INVESTORS FUND SERIES KEMPER GLOBAL INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1997 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
LOCAL CURRENCY U.S. DOLLAR
CURRENCY ISSUER PRINCIPAL VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. DOLLAR - 46.0% U.S. Treasury Notes
6.25%, 2003 700 $ 695
----------------------------------------------------------------------------
BRITISH POUND - 19.2% United Kingdom
8.50%, 2005 160 289
----------------------------------------------------------------------------
CANADIAN DOLLAR - 10.3% Government of Canada
7.50%, 2003 200 156
----------------------------------------------------------------------------
NETHERLANDS GUILDER - 9.4% Dutch State Loan
8.25%, 2002 240 142
----------------------------------------------------------------------------
NEW ZEALAND DOLLAR - 9.1% New Zealand Government
10.00%, 2002 180 138
----------------------------------------------------------------------------
TOTAL INVESTMENTS--94.0%
(Cost: $1,422) 1,420
----------------------------------------------------------------------------
CASH AND OTHER ASSETS, LESS LIABILITIES--6.0% 90
----------------------------------------------------------------------------
NET ASSETS--100% $1,510
----------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
NOTES TO KEMPER GLOBAL INCOME PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
The Fund is a non-diversified investment company and may invest a relatively
high percentage of its assets in the obligations of a limited number of issuers.
Based on the cost of investments of $1,422,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $4,000, the gross
unrealized depreciation was $6,000 and the net unrealized depreciation on
investments was $2,000.
See accompanying Notes to Financial Statements.
71
<PAGE> 72
This semiannual report must be preceded or accompanied by
the current prospectus.
INVESTMENT MANAGERS:
Zurich Kemper Investments, Inc.
Zurich Kemper Value Advisors, Inc.
222 South Riverside Plaza Chicago, IL 60606
(Tel) 800-778-1482
[RECYCLED LOGO]
Printed on recycled paper.
KIF (8/97) 1035940
Printed in the U.S.A. [KEMPER ANNUITIES LOGO]
