<PAGE> 1
DEAR SHAREHOLDER:
We are pleased to provide you with an overview of Kemper Multi-Market Income
Trust and the fixed income market.
PERFORMANCE HIGHLIGHTS
- The fund received an overall Morningstar* ranking of 4-stars as of May 26,
1995. For the 3- and 5-year periods, the fund received 5- and 4-stars
respectively.
- For the six-month period, Kemper Multi-Market Income Trust returned 9.88%,
based on net asset value, and lagged the average return of 11.48% for the
Lipper General Bond Fund Category.**
- Kemper Multi-Market Income Trust continued to deliver a high level of current
income, as is reflected in its 8.60% distribution rate at net asset value and
9.30% distribution rate at market price, both at the end of May.
- The fund's total return based on market price was 12.72%. The fund's closing
price on May 31, 1995 was $10.00. Based on a net asset value of $10.81 on this
same date, the fund was trading at a 7.5% discount.
MARKET REVIEW
Since we last wrote to you at the end of November of 1994, we are happy to
report that the bond market has greatly improved. To give you an idea of the
change that's occurred--the Salomon Brothers Broad Investment Grade Bond Index,+
which is a broad measure of bond activity, rose 11.56% over the six months ended
May 31, 1995, compared to a decline of 0.04% for the six months prior to
November-end. Bond yields which move inversely to bond prices have also fallen.
For example, the yield on the 10-year Treasury fell from 7.91% at the end of
November, to 6.29% at the end of May.
In late November, economic data began to suggest that the economy had slowed
from the very strong pace of earlier in 1994. As you may know, slower economic
growth is usually positive for bond prices because it implies that inflation,
which erodes the value of fixed payments, is less likely to rise. Throughout the
first quarter of 1995, economic data such as industrial production, retail
sales, employment and consumer confidence continued to be weak. Since these
suggested slower economic growth, yields declined and bond prices rallied.
FUND REVIEW
As we mentioned before, Kemper Multi-Market Income Trust provided good returns
for the six month period, advancing 9.88% on a net asset value basis. Given the
returns of the various sectors of the bond market, our allocation among these
sectors proved to be fair. The fund had the heaviest weightings in foreign
currency bonds and high yield corporate bonds and these were two of the best
performing asset classes during the period. On the other hand, the fund held
about a 14% position in emerging market bonds at specific points in time during
the period and this position had only neutral performance for the fund.
In March, we increased the fund's position in foreign currency bonds to 26% from
24% at the end of the prior period to take advantage of relatively attractive
foreign yields and a weakening U.S. dollar. This proved beneficial when the U.S.
dollar sank to post-war lows against the major currencies in March. As you may
know, when the dollar weakens, foreign currencies appreciate against the dollar
and this raises the value of assets denominated in foreign currencies. Some of
the foreign bonds that performed particularly well for the fund were the
government issues of Denmark, Finland and Ireland.
Our position in high yield corporate bonds was approximately 27% for most of the
period. These
1
<PAGE> 2
bonds were good performers because of favorable market fundamentals. As bond
yields fell for most of the period, the demand for the higher income offered by
high yield corporates grew. This and lower supply, because of a drop in the
new-issuance of corporate bonds, was favorable for corporate bond prices.
In the fund's government component, we concentrated on mortgage-backed
securities for most of the period. This proved to be a good strategy since
mortgages outperformed Treasuries of comparable maturities in the first quarter
of 1995. In May, we established a small position in intermediate Treasuries,
which tend to provide more price appreciation than mortgages when the market
rallies. Given the market's rally in April and May, Treasuries did in fact
outperform mortgages.
We began the period with approximately 14% of net assets in emerging market
bonds. With the devaluation of the Mexican peso and the ensuing fallout of the
markets of emerging market debt in December, we began to reduce our exposure by
investing proceeds into short-term Treasuries and cash. By the end of January
our overall emerging markets position was down to 5%.
Emerging market bonds continued to have a rough ride in the early months of
1995. At the end of May, however, we had reestablished the fund's emerging
market position to approximately 14% while these bonds had nearly recovered from
their lows following the peso's devaluation. In summary, although emerging
markets had some difficulty, we avoided additional losses by aggressively
lowering exposure to the sector in early 1995.
PORTFOLIO COMPOSITION
As of May 31, 1995, the fund's composition compares to other periods as follows:
<TABLE>
<CAPTION>
% OF % OF % OF
NET ASSETS NET ASSETS NET ASSETS
SECURITY 5/31/95 2/28/95 11/30/94
-------------------- ---------- ---------- ----------
<S> <C> <C> <C>
High yield
corporates 27 29 25
Emerging markets
(U.S. dollar
denominated) 14 3 14
Foreign currency
bonds 26 25 24
High grade
corporates 5 4 3
Common stocks
(primarily other
closed-end funds) 10 10 10
Mortgage pass-
throughs 11 8 7
Cash equivalents
(including
Treasury notes
under three years) 7 21 17
----- ----- -----
TOTAL 100 100 100
</TABLE>
OUTLOOK
While a temporary correction in some of the economic data is possible, we think
that the persuasiveness of slower economic data is compelling and that it
supports the theory that the slowdown in growth is not merely a pause but a
trend reversal from last year's pace.
Slower economic growth, which keeps inflation tame, would be positive for all
bonds, including high yield bonds, since lower inflation helps preserve the
value
2
<PAGE> 3
of fixed-income payments. Our outlook, then, is favorable.
We continue to expect good performance from foreign bonds, particularly if the
dollar stays weak. In the high yield sector, slower economic growth will likely
limit the potential for price-appreciation. However, shareholders can continue
to benefit from the high level of income that high yield bonds offer relative to
other investments.
We expect to remain active in emerging markets and believe that they continue to
represent good investment opportunities relative to global fixed income markets.
We believe that the fundamental economic progress made in many emerging markets
countries has been substantial and underscores the ongoing value in this sector
as a whole.
Thank you for your continued support of Kemper Multi-Market Income Trust and we
look forward to serving you in the future.
Sincerely,
Portfolio Management Team
Robert Cessine,
Vice President and Portfolio Co-Manager
Gordon Johns,
Vice President and Portfolio Co-Manager
Mike McNamara,
Vice President and Portfolio Co-Manager
Harry Resis,
Vice President and Portfolio Co-Manager
Paul Sloan,
Vice President and Portfolio Co-Manager
Jonathan Trutter,
Vice President and Portfolio Co-Manager
June 12, 1995
* Morningstar ratings range from five stars (highest) to one star (lowest) and
represent its assessment of the historical risk level and total return
relative to its class as a weighted average for 3- and 5-year periods.
Ratings are not absolute or necessarily predictive of future performance.
** Lipper Analytical Services, Inc. rankings are based upon changes in net
asset value with all dividends reinvested. Rankings are historical and do not
reflect future performance.
+ Salomon Brothers Broad Investment Grade (BIG) Bond Index is a market
capitalization - weighted index that covers an all-inclusive universe of
institutionally traded U.S. Treasury, agency, mortgage, and corporate
securities. This index includes all fixed-rate bonds with a maturity of one
year or longer and issues with at least a $50 million amount outstanding
($200 million for mortgage coupons). Source is Salomon Brothers Inc.
Statistical Note: Current annualized distribution rate is the latest monthly
dividend shown as an annualized percentage of the net asset value (or market
price) on the date shown. Distribution rate simply measures the level of
dividends and is not a complete measure of performance. Total return measures
aggregate change in net asset value (or market value) assuming reinvestment of
dividends. Returns are historical and do not represent future performance.
Market price, net asset value and returns fluctuate. Additional information
concerning performance is contained in the Financial Highlights appearing at
the end of this report.
3
<PAGE> 4
ANNUAL SHAREHOLDERS MEETING
We are pleased to report that all six trustees have been re-elected to the Board
of Trustees of Kemper Multi-Market Income Trust at the annual meeting held on
May 16, 1995. The Trustees are: Arthur R. Gottschalk, Frederick T. Kelsey, David
B. Mathis, Stephen B. Timbers, John B. Tingleff and John G. Weithers.
Along with the re-election of the Trustees, shareholders were asked to ratify
the selection of Ernst & Young LLP as the independent auditors for the fund. The
results of the shareholders' vote at the May 16, 1995 meeting were as follows:
- Election of Trustees
<TABLE>
<CAPTION>
For Withheld
<S> <C> <C>
Arthur R.
Gottschalk 16,813,598 337,995
Frederick T. Kelsey 16,828,960 322,633
David B. Mathis 16,819,369 332,224
Stephen B. Timbers 16,809,603 341,990
John B. Tingleff 16,842,970 308,623
John G. Weithers 16,837,245 314,347
</TABLE>
- Ratification of the selection of Ernst & Young LLP as independent auditors for
the fund
For: 16,767,937
Against: 101,019
4
<PAGE> 5
PORTFOLIO OF INVESTMENTS May 31, 1995
(In thousands)
<TABLE>
<CAPTION>
Principal
Amount Value
------------------- ------------
(in Local Currency) (in Dollars)
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS
-----------------------------------------------------------------
Government National Mortgage
Association Certificates
7.00%, 2022-2025 $ 10,976 $ 10,786
7.50%, 2024 2,910 2,930
6.50%, 2025 10,000 9,584
----------------------------------------------------------------
U.S. Treasury Notes
10.50%, 1995 4,000 4,037
9.375%, 1996 1,000 1,029
7.25%, 2004 11,000 11,688
----------------------------------------------------------------
U.S. Treasury Bonds
11.50%, 1995 15,000 15,417
----------------------------------------------------------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS-25.7%
(Cost: $54,971) 55,471
----------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS
----------------------------------------------------------------
Commonwealth of New Zealand
8.00%, 1998 NZD 3,300 2,201
6.50%, 2000 1,900 1,205
10.00%, 2002 2,700 2,034
----------------------------------------------------------------
Federal Republic of Brazil
8.00%, 2014 USD 9,311 4,642
4.250%, 2024 9,000 4,061
----------------------------------------------------------------
French Treasury
8.50%, 2000 FRF 27,000 5,757
9.50%, 2001 8,500 1,895
8.50%, 2008 14,000 3,022
----------------------------------------------------------------
Government of Canada
8.25%, 1997 CAD 2,500 1,855
6.50%, 2004 7,200 4,776
----------------------------------------------------------------
Government of the
Netherlands
7.75%, 2000 NZL 3,750 2,541
8.25%, 2002 1,300 907
8.25%, 2007 2,000 1,396
----------------------------------------------------------------
Italian Treasury
8.50%, 1999 ITL 1,950 1,079
12.00%, 2001 850 523
----------------------------------------------------------------
Kingdom of Denmark
6.00%, 1999 DKK 29,000 4,989
9.00%, 2000 24,000 4,599
8.00%, 2003 8,000 1,446
----------------------------------------------------------------
Kingdom of Spain
8.30%, 1998 ESP 125,000 928
10.30%, 2002 20,000 153
----------------------------------------------------------------
(d)Republic of Argentina
6.187%, 2001 (Pre 2) USD 9,550 7,840
7.312%, 2005 7,850 5,191
6.187%, 2007 (Pro 2) 1,730 1,071
----------------------------------------------------------------
<CAPTION>
Principal
Amount Value
------------------- ------------
(in Local Currency) (in Dollars)
<S> <C> <C>
Republic of Finland
11.00%, 1997 FIM $ 7,000 $ 1,743
11.00%, 1999 10,000 2,566
9.50%, 2004 6,000 1,467
---------------------------------------------------------------
Republic of Ireland
6.25%, 1999 IEP 1,750 2,664
6.25%, 2004 1,910 2,691
---------------------------------------------------------------
Republic of Portugal
12.50%, 1998 PTE 145,000 997
11.875%, 2000 160,000 1,089
10.625%, 2003 100,000 642
---------------------------------------------------------------
United Mexican States,
6.25%, 2019, with value
recovery rights expiring
2003 USD 13,720 7,649
---------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS-39.7%
(Cost: $81,666) 85,619
---------------------------------------------------------------
CORPORATE OBLIGATIONS
BROADCASTING, CABLESYSTEMS
AND PUBLISHING-5.5%
---------------------------------------------------------------
ACT III Broadcasting, Inc.,
9.625%, 2003 90 88
---------------------------------------------------------------
Adelphia Communication
Corp.,
12.50%, 2002 330 327
---------------------------------------------------------------
Affinity Group, Inc.,
11.50%, 2003 315 315
---------------------------------------------------------------
(b)Australis Media, units,
14.00%, 2003 530 270
---------------------------------------------------------------
(b)Bell Cablemedia PLC,
11.95%, 2004 720 472
---------------------------------------------------------------
Big Flower Press, Inc.,
10.75%, 2003 500 496
---------------------------------------------------------------
CF Cable TV Inc.,
11.625%, 2005 220 233
---------------------------------------------------------------
Cablevision Industries Corporation,
10.75%, 2002 575 621
---------------------------------------------------------------
Cablevision Systems Company
9.875%, 2013 270 278
9.875%, 2023 30 31
---------------------------------------------------------------
Century Communications Corp.
9.50%, 2000 90 91
11.875%, 2003 250 266
9.50%, 2005 710 699
---------------------------------------------------------------
Comcast Corporation
9.375%, 2005 300 298
9.50%, 2008 285 282
---------------------------------------------------------------
Continental Cablevision,
Inc., 9.50%, 2013 980 990
---------------------------------------------------------------
(b)International Cabletel,
12.75%, 2005 1,060 602
---------------------------------------------------------------
</TABLE>
5
<PAGE> 6
(Dollars in thousands)
<TABLE>
<CAPTION>
Principal
Amount Value
------------------- ------------
<S> <C> <C>
Katz Corporation,
12.75%, 2002 $ 275 $ 298
----------------------------------------------------------------
(b)Neodata Services, Inc.,
12.00%, 2003 300 249
----------------------------------------------------------------
News America Holdings Inc.,
9.25%, 2013 1,000 1,109
----------------------------------------------------------------
Rogers Cablesystems Limited
9.625%, 2002 230 231
10.00%, 2005 230 233
----------------------------------------------------------------
Sinclair Broadcast Group,
Inc.,
10.00%, 2003 300 300
----------------------------------------------------------------
Summitt Communications Group, Inc.,
10.50%, 2005 350 384
----------------------------------------------------------------
Time Warner Entertainment
Company, L.P., 8.375%, 2033 1,000 964
----------------------------------------------------------------
Univision TV, 11.75%, 2001 210 227
----------------------------------------------------------------
Viacom International Inc.,
8.00%, 2006 820 799
----------------------------------------------------------------
Videotron Groupe,
10.625%, 2005 140 147
----------------------------------------------------------------
(b)Videotron Holdings PLC,
11.125%, 2004 450 288
----------------------------------------------------------------
Webcraft Technologies, Inc.,
9.375%, 2002 170 152
----------------------------------------------------------------
11,740
BUSINESS SERVICES-1.1%
----------------------------------------------------------------
Comdata Network, Inc.
12.50%, 1999 650 710
13.25%, 2002 20 23
----------------------------------------------------------------
Computervision Corporation
10.875%, 1997 410 414
11.375%, 1999 270 261
----------------------------------------------------------------
Corporate Express Inc.,
9.125%, 2004 220 213
----------------------------------------------------------------
Merisel Inc.,
12.50%, 2004 400 352
----------------------------------------------------------------
Outdoor Systems,
10.75%, 2003 350 336
----------------------------------------------------------------
2,309
CHEMICALS & ENVIRONMENTAL PRODUCTS-1.4%
----------------------------------------------------------------
Agriculture, Mining and Chemicals, Inc.,
10.75%, 2003 220 229
----------------------------------------------------------------
Allied Waste Industries,
12.00%, 2004 190 198
----------------------------------------------------------------
Arcadian Partners, L.P.,
10.75%, 2005 425 435
----------------------------------------------------------------
G-I Holdings Inc.,
zero coupon, 1998 490 338
----------------------------------------------------------------
Mid-American Waste,
12.25%, 2003 300 309
----------------------------------------------------------------
Pioneer Americas Acquisition
Corporation, 13.375%, 2005 380 398
----------------------------------------------------------------
<CAPTION>
Principal
Amount Value
------------------- ------------
<S> <C> <C>
Rexene Corporation,
11.75%, 2004 $ 470 $ 511
----------------------------------------------------------------
UCC Investors Holdings, Inc.
10.50%, 2002 510 532
11.00%, 2003 160 167
----------------------------------------------------------------
3,117
COMMUNICATIONS-2.4%
----------------------------------------------------------------
(b)Call-Net Enterprises,
13.25%, 2004 290 173
----------------------------------------------------------------
(b)Celcaribe S.A.,
13.50%, 2004 250 210
----------------------------------------------------------------
(b)Cellular, Inc.,
11.75%, 2003 150 111
----------------------------------------------------------------
(b)Echostar Communications,
units,
12.875%, 2004 1,375 653
----------------------------------------------------------------
Intermedia Communications
Florida, units, 13.50%, 2005 300 301
----------------------------------------------------------------
Paging Network, Inc.
11.75%, 2002 700 754
8.875%, 2006 265 244
----------------------------------------------------------------
(b)PanAmSat, L.P.,
11.375%, 2003 700 497
----------------------------------------------------------------
Rogers Cantel,
11.125%, 2002 885 920
----------------------------------------------------------------
Tele-Communications Inc.
9.80%, 2012 550 596
8.75%, 2023 400 383
----------------------------------------------------------------
USA Mobile Communications
Inc., II, 14.00%, 2004 270 298
----------------------------------------------------------------
CONSTRUCTION MATERIALS-1.7% 5,140
----------------------------------------------------------------
American Standard, Inc.
10.875%, 1999 230 247
11.375%, 2004 60 67
(b) 10.50%, 2005 540 405
9.25%, 2016 730 734
----------------------------------------------------------------
(b)Building Materials
Corporation of America,
11.75%, 2004 890 543
----------------------------------------------------------------
Nortek, 9.875%, 2004 490 465
----------------------------------------------------------------
Triangle Pacific Corp.,
10.50%, 2003 635 648
----------------------------------------------------------------
Waxman Industries Inc.
12.25%, 1998 190 182
13.75%, 1999 214 181
(b) 12.75%, 2004 412 185
----------------------------------------------------------------
3,657
CONSUMER PRODUCTS
AND SERVICES-2.8%
----------------------------------------------------------------
Bally's Park Place Funding,
Inc.,
9.25%, 2004 725 665
----------------------------------------------------------------
Beatrice Foods,
12.00%, 2001 650 598
----------------------------------------------------------------
</TABLE>
6
<PAGE> 7
(Dollars in thousands)
<TABLE>
<CAPTION>
Principal
Amount Value
------------------- ------------
<S> <C> <C>
Black & Decker,
7.50%, 2003 $ 1,000 $ 1,013
----------------------------------------------------------------
Cinemark USA Inc.,
12.00%, 2002 84 91
----------------------------------------------------------------
(b)Dr. Pepper Bottling
Holdings, Inc.,
11.625%, 2003 370 281
----------------------------------------------------------------
Empress River Casino,
10.75%, 2002 330 333
----------------------------------------------------------------
Host Mar Travel Plaza,
9.50%, 2005 300 291
----------------------------------------------------------------
P&C Food Markets, Inc.,
11.50%, 2001 240 254
----------------------------------------------------------------
Players International,
10.875%, 2005 110 111
----------------------------------------------------------------
RJR Nabisco,
8.75%, 2005 1,000 1,020
----------------------------------------------------------------
Santa Fe Hotel, Inc.,
11.00%, 2000, with warrants
expiring 1996 270 246
----------------------------------------------------------------
Trump Taj Mahal, PIK,
11.35%, 1999 1,530 1,157
----------------------------------------------------------------
6,060
DRUGS AND HEALTH CARE-1.0%
----------------------------------------------------------------
Abbey Healthcare Group
Incorporated,
9.50%, 2002 250 256
----------------------------------------------------------------
Amerisource Distribution
Corp., PIK, 11.25%, 2005 195 218
----------------------------------------------------------------
Charter Medical Corporation,
11.25%, 2004 290 307
----------------------------------------------------------------
Dade International Inc.,
13.00%, 2005 270 286
----------------------------------------------------------------
National Medical Enterprises
9.625%, 2002 140 148
10.125%, 2005 380 401
----------------------------------------------------------------
Ornda Healthcorporation
12.25%, 2002 285 314
11.375%, 2004 250 273
----------------------------------------------------------------
2,203
ENERGY AND RELATED SERVICES-1.9%
----------------------------------------------------------------
Chesapeake Energy Corp.,
10.50%, 2002 120 121
----------------------------------------------------------------
Coastal Corporation,
11.75%, 2006 1,500 1,612
----------------------------------------------------------------
Commonwealth Edison Co.,
8.125%, 2007 500 507
----------------------------------------------------------------
Dual Drilling Company,
9.875%, 2004 120 105
----------------------------------------------------------------
Empire Gas Corporation,
7.875%, 2004, with warrants
expiring 2004 200 162
----------------------------------------------------------------
<CAPTION>
Principal
Amount Value
------------------- ------------
<S> <C> <C>
Gerrity Oil & Gas,
11.75%, 2004 $ 270 $ 254
----------------------------------------------------------------
Global Marine,
12.75%, 1999 80 88
----------------------------------------------------------------
Gulf Canada Resources
Limited,
9.25%, 2004 250 248
----------------------------------------------------------------
HS Resources,
9.875%, 2003 170 167
----------------------------------------------------------------
Trans-Texas Gas Corporation,
10.50%, 2000 570 614
----------------------------------------------------------------
WRT Energy Corporation,
unit,
13.875%, 2002 170 174
----------------------------------------------------------------
4,052
FINANCIAL SERVICES, HOMEBUILDING
AND REAL ESTATE DEVELOPMENT-.9%
----------------------------------------------------------------
Continental Homes Holding,
12.00%, 1999 255 254
----------------------------------------------------------------
The Forecast Group L.P.,
11.375%, 2000 70 43
----------------------------------------------------------------
(a)Great America Holdings,
11.00%, 1998 300 302
----------------------------------------------------------------
Hovnanian Kent
11.25%, 2002 216 198
9.75%, 2005 300 245
----------------------------------------------------------------
J.M. Peters Company, Inc.,
12.75%, 2002, with warrants
expiring 2002 150 129
----------------------------------------------------------------
NVR, Inc.,
11.00%, 2003 380 361
----------------------------------------------------------------
Oriole Homes Corp.,
12.50%, 2003 35 30
----------------------------------------------------------------
The Presley Companies,
12.50%, 2001 400 336
----------------------------------------------------------------
1,898
MANUFACTURING AND METALS-6.7%
----------------------------------------------------------------
Aftermarket Technology,
12.00%, 2004 320 339
----------------------------------------------------------------
Amstar Corporation,
11.375%, 1997 718 722
----------------------------------------------------------------
Atlantis Group, Inc.,
11.00%, 2003 310 313
----------------------------------------------------------------
BE Aerospace,
9.75%, 2003 190 188
----------------------------------------------------------------
Bluebird Body Company,
11.75%, 2002 390 400
----------------------------------------------------------------
Day International Group,
11.125%, 2005 100 102
----------------------------------------------------------------
Earle M. Jorgensen Company,
10.75%, 2000 300 297
----------------------------------------------------------------
</TABLE>
7
<PAGE> 8
(Dollars in thousands)
<TABLE>
<CAPTION>
Principal
Amount Value
------------------- ------------
<S> <C> <C>
Essex Group, Incorporated,
10.00%, 2003 $ 245 $ 239
---------------------------------------------------------------------
Exide Corporation
10.75%, 2002 140 148
10.00%, 2005 300 308
---------------------------------------------------------------------
Fairchild Corporation
12.00%, 2001 725 624
13.00%, 2007 228 192
---------------------------------------------------------------------
Fairchild Industries,
12.25%, 1999 375 379
---------------------------------------------------------------------
Fairfield Manufacturing
Company,
11.375%, 2001 250 237
---------------------------------------------------------------------
Foamex L.P.
9.50%, 2000 860 861
11.25%, 2002 130 133
11.875%, 2004 10 10
---------------------------------------------------------------------
(b)Foamex - JPS Automotive
L.P.,
14.00%, 2004, with warrants
expiring 1999 330 183
---------------------------------------------------------------------
Great Dane Holdings,
12.75%, 2001 600 606
---------------------------------------------------------------------
GS Technologies,
12.00%, 2004 420 426
---------------------------------------------------------------------
Gulf States Steel, units,
13.50%, 2003 300 304
---------------------------------------------------------------------
Jordan Industries,
10.375%, 2003 400 382
---------------------------------------------------------------------
JPS Automotive Products
Corporation, 11.125, 2001 300 300
---------------------------------------------------------------------
K & F Industries, Inc.
13.75%, 2001 900 927
11.875%, 2003 500 507
---------------------------------------------------------------------
(a)(d)Lehman (K&F)
Promissory Note,
6.062%, 1997 87 81
---------------------------------------------------------------------
New-Flo Corporation,
13.25%, 2002 300 299
---------------------------------------------------------------------
Owens-Illinois, Inc.
11.00%, 2003 1,138 1,260
9.95%, 2004 100 103
9.75%, 2004 45 46
---------------------------------------------------------------------
Pace Industries, Inc.,
10.625%, 2002 165 158
---------------------------------------------------------------------
Penda Industries Inc.,
10.75%, 2004 185 167
---------------------------------------------------------------------
Polymer Group, Inc.,
12.25%, 2002 220 222
---------------------------------------------------------------------
SPX Corporation,
11.75%, 2002 175 186
---------------------------------------------------------------------
Sequa Corporation
9.625%, 1999 100 101
8.75%, 2001 220 212
9.375%, 2003 80 77
---------------------------------------------------------------------
Thermadyne Industries, Inc.,
PIK
10.25%, 2002 155 153
10.75%, 2003 680 666
---------------------------------------------------------------------
<CAPTION>
Principal
Amount Value
------------------- ------------
<S> <C> <C>
Unisys Corporation
13.50%, 1997 $ 160 $ 177
8.875%, 1997 150 150
10.625%, 1999 250 265
----------------------------------------------------------------
Westinghouse Electric Corp.,
8.875%, 2001 1,000 1,069
----------------------------------------------------------------
14,519
PAPER AND FOREST PRODUCTS-1.8%
----------------------------------------------------------------
Berry Plastics Corporation,
12.25%, 2004, with warrants
expiring 2004 150 155
----------------------------------------------------------------
Container Corporation of
America,
11.25%, 2004 280 300
----------------------------------------------------------------
Gaylord Container
Corporation
11.50%, 2001 210 225
(b) 12.75%, 2005 490 478
----------------------------------------------------------------
Maxxam Group Inc.
(b) 12.25%, 2003 50 31
11.25%, 2003 235 223
----------------------------------------------------------------
Repap New Brunswick,
10.625%, 2005 400 406
----------------------------------------------------------------
Stone-Consolidated
Corporation,
10.25%, 2000 380 393
----------------------------------------------------------------
Stone Container Corporation,
10.75%, 2002 1,040 1,100
----------------------------------------------------------------
Sweetheart Cup Company Inc.,
10.50%, 2003 235 230
----------------------------------------------------------------
SD Warren Company,
12.00%, 2004 270 294
----------------------------------------------------------------
3,835
RETAILING-3.4%
----------------------------------------------------------------
Color Tile, Inc.,
10.75%, 2001 480 307
----------------------------------------------------------------
Dominick's Finer Foods,
10.875%, 2005 260 264
----------------------------------------------------------------
Federated Department Stores,
convertible, 9.72%, 2004 150 151
----------------------------------------------------------------
Finlay Fine Jewelry
Corporation,
10.625%, 2003 225 218
----------------------------------------------------------------
Flagstar Company
10.75%, 2001 200 186
10.875%, 2002 200 186
----------------------------------------------------------------
Food 4 Less Supermarket
10.45%, 2000 320 321
13.75%, 2001 460 508
----------------------------------------------------------------
(c)Grand Union Company,
12.25%, 2002 985 325
----------------------------------------------------------------
(b)International Semi-Tech
Microelectronics, Inc.,
11.50%, 2003 470 235
----------------------------------------------------------------
Orchard Supply Hardware
Corporation, 9.375%, 2002 295 257
----------------------------------------------------------------
Pamida Holdings,
11.75%, 2003 575 546
----------------------------------------------------------------
</TABLE>
8
<PAGE> 9
(Dollars in thousands)
<TABLE>
<CAPTION>
Principal
Amount Value
------------------- ------------
<S> <C> <C>
Pathmark Stores, Inc.
11.625%, 2002 $ 560 $ 587
9.625%, 2003 175 170
----------------------------------------------------------------
Penn Traffic Company
8.625%, 2003 340 319
9.625%, 2005 185 175
----------------------------------------------------------------
Ralph's Grocery Company
9.00%, 2003 485 496
10.45%, 2004 230 231
----------------------------------------------------------------
Service Merchandise Company, Inc.,
9.00%, 2004 120 96
----------------------------------------------------------------
Southland Corporation,
5.00%, 2003 1,295 987
----------------------------------------------------------------
Specialty Retailers, Inc.,
11.00%, 2003 200 188
----------------------------------------------------------------
Thrifty Payless, Inc.
11.75%, 2003 270 289
12.25%, 2004 200 208
----------------------------------------------------------------
7,250
TRANSPORTATION-1.4%
----------------------------------------------------------------
Burlington Motor Holdings,
Inc.,
11.50%, 2003 380 333
----------------------------------------------------------------
Delta Airlines,
9.75%, 2021 1,000 1,078
----------------------------------------------------------------
OMI Corp.,
10.25%, 2003 565 476
----------------------------------------------------------------
(b)Transtar Holdings, L.P.,
13.375%, 2003 200 120
----------------------------------------------------------------
United Airlines
11.21%, 2014 250 293
9.56%, 2018 750 770
----------------------------------------------------------------
3,070
TOTAL CORPORATE
OBLIGATIONS-32.0%
(Cost: $69,294) 68,850
----------------------------------------------------------------
COMMON AND PREFERRED STOCKS
----------------------------------------------------------------
BCP/Essex Holdings 5,000shs. 133
----------------------------------------------------------------
BPC Holding (Berry) 150 2
----------------------------------------------------------------
Echostar Communication 8,250 91
----------------------------------------------------------------
First Boston Strategic
Income Fund 100,000 863
----------------------------------------------------------------
<CAPTION>
Number of
Shares or
Contracts Value
------------------- ------------
<S> <C> <C>
Fort Dearborn Income
Securities Inc. 17,400 $ 248
-------------------------------------------------------------------
Franklin Principle Maturity
Trust 200,000 1,425
-------------------------------------------------------------------
Global Government Plus Fund 298,600 1,866
-------------------------------------------------------------------
Global Yield Fund Inc. 375,000 2,531
-------------------------------------------------------------------
INA Investment Securities 21,900 353
-------------------------------------------------------------------
Kleinworth Benson Australia
Income Fund 63,883 543
-------------------------------------------------------------------
MFS Charter Income Trust 544,900 4,972
-------------------------------------------------------------------
MFS Government Market Income
Trust 151,000 1,000
-------------------------------------------------------------------
MFS Intermediate Income 50,000 338
-------------------------------------------------------------------
MFS Multi-Market Income
Trust 104,100 703
-------------------------------------------------------------------
Panamsat Corporation, PIK 170 178
-------------------------------------------------------------------
(a)(c)Peebles, Inc. 90 2
-------------------------------------------------------------------
Putnam Master Income Trust 14,900 117
-------------------------------------------------------------------
Putnam Master International
Income Trust 200,000 1,475
-------------------------------------------------------------------
Putnam Premier Income Trust 313,500 2,312
-------------------------------------------------------------------
Strategic Global Income 50,000 550
-------------------------------------------------------------------
Templeton Global Income Fund 200,000 1,375
-------------------------------------------------------------------
Thrifty Payless Holding
Corp. 5,320 20
-------------------------------------------------------------------
UGI Inc. 5,950 7
-------------------------------------------------------------------
Walter Industries 9,052 123
-------------------------------------------------------------------
(a)Waxman Industries,
warrants 12,154 2
-------------------------------------------------------------------
TOTAL COMMON AND PREFERRED
STOCKS-9.9%
(Cost: $22,453) 21,229
-------------------------------------------------------------------
LONG PUT OPTIONS
(Cost: $28)
-------------------------------------------------------------------
Republic of Argentina
Spread,
June 1995; 525 Strike 1,000cts. 61
-------------------------------------------------------------------
TOTAL INVESTMENTS-107.3%
(Cost: $228,412) 231,230
-------------------------------------------------------------------
LIABILITIES, LESS CASH AND OTHERS ASSETS-(7.3)%
(15,780)
-------------------------------------------------------------------
NET ASSETS-100% $215,450
-------------------------------------------------------------------
</TABLE>
See accompanying Notes to Portfolio of Investments.
9
<PAGE> 10
NOTES TO PORTFOLIO OF INVESTMENTS
(a)The following securities may require registration under the Securities Act
of 1933 or an exemption therefrom in order to effect sale in the ordinary
course of business; they were valued at cost on the dates of acquisition.
These securities are valued at fair value as determined in good faith by the
Board of Trustees of the Fund. There were no market quotations available for
unrestricted securities of the same class on the dates of acquisition. At May
31, 1995, the value of the Fund's restricted securities was $387,000 which
represented .18% of net assets.
<TABLE>
<CAPTION>
Principal
Amount or
Date of Number of Unit
Security Description Acquisition Shares Cost
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------------
Great America Holdings, 11.00%, 1998 November 1991 $300,000 $ 82.00
--------------------------------------------------------------------------------------------------------------------------
Lehman (K&F) Promissory Note, 6.062%, 1997 July 1994 87,500 90.75
--------------------------------------------------------------------------------------------------------------------------
Peebles Inc., common stock August 1994 90 shs. 739.67
--------------------------------------------------------------------------------------------------------------------------
Waxman Industries, warrants June 1994 12,154 2.00
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
(b)Deferred interest obligation; currently zero coupon under the terms of the
initial offering.
(c)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.
(d)Variable rate securities. The rates shown are effective rates on May 31,
1995. The dates shown represent the final maturity of the obligations.
"PIK" denotes that interest or dividends are paid in kind.
Based on the cost of investments of $228,412,000 for federal income tax
purposes at May 31, 1995, the aggregate gross unrealized appreciation was
$7,160,000 the aggregate gross unrealized depreciation was $4,342,000 and the
net unrealized appreciation of investments was $2,818,000.
See accompanying Notes to Financial Statements.
10
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1995
(in thousands)
<TABLE>
<S> <C>
ASSETS
----------------------------------------------------------
Investments, at value
(Cost: $228,412) $ 231,230
----------------------------------------------------------
Cash 214
----------------------------------------------------------
Receivable for:
Investments sold 3,709
----------------------------------------------------------
Interest and dividends 4,449
----------------------------------------------------------
Total assets 239,602
----------------------------------------------------------
LIABILITIES AND NET ASSETS
----------------------------------------------------------
Payable for:
Investments purchased 23,918
----------------------------------------------------------
Management fee 151
----------------------------------------------------------
Custodian and transfer agent
fees and related expenses 67
----------------------------------------------------------
Other 16
----------------------------------------------------------
Total liabilities 24,152
----------------------------------------------------------
Net assets applicable to 19,933
shares outstanding, $.01 par value,
equivalent to $10.81 per share $ 215,450
----------------------------------------------------------
ANALYSIS OF NET ASSETS
----------------------------------------------------------
Net amount received from issuance of
shares on account of capital $ 217,558
----------------------------------------------------------
Accumulated net realized loss on
sales of investments and foreign currency
transactions (9,740)
----------------------------------------------------------
Unrealized appreciation of investments and
foreign currency transactions 2,818
----------------------------------------------------------
Undistributed net investment income 4,814
----------------------------------------------------------
Net assets applicable to shares outstanding $ 215,450
----------------------------------------------------------
Net asset value per share ($215,450 /
19,933 shares outstanding) $10.81
----------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
STATEMENT OF OPERATIONS
Six months ended May 31, 1995
(in thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME
---------------------------------------------------------
Interest $10,611
---------------------------------------------------------
Dividends 831
---------------------------------------------------------
Total investment income 11,442
---------------------------------------------------------
EXPENSES
---------------------------------------------------------
Management fee 872
---------------------------------------------------------
Custodian and transfer agent
fees and related expenses 99
---------------------------------------------------------
Professional fees 16
---------------------------------------------------------
Reports to shareholders 8
---------------------------------------------------------
Trustees' fees and other 35
---------------------------------------------------------
Total expenses 1,030
---------------------------------------------------------
Net investment income 10,412
---------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
---------------------------------------------------------
Net realized loss on sales of investments
(including options purchased) and foreign
currency transactions (4,585)
---------------------------------------------------------
Net realized loss on options written (22)
---------------------------------------------------------
Net realized gain from futures transactions 922
---------------------------------------------------------
Net realized loss on investments (3,685)
---------------------------------------------------------
Net change in balance of unrealized
depreciation of investments and foreign
currency transactions 12,968
---------------------------------------------------------
Net gain on investments 9,283
---------------------------------------------------------
Net increase in net assets resulting
from operations 19,695
---------------------------------------------------------
</TABLE>
11
<PAGE> 12
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
Six months
ended Year ended
May 30, November 30,
1995 1994
---------- ------------
<S> <C> <C>
OPERATIONS
---------------------------------------------------------
Net investment income $10,412 18,914
---------------------------------------------------------
Net realized loss on
investments (3,685) (4,724)
---------------------------------------------------------
Net change in unrealized
appreciation/depreciation of
investments 12,968 (14,437)
---------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations 19,695 (247)
---------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS
---------------------------------------------------------
Distribution from net
investment income (10,465) (15,199)
---------------------------------------------------------
Distribution from net
realized gain on investment
transactions -- (3,389)
---------------------------------------------------------
Total dividends to
shareholders (10,465) (18,588)
---------------------------------------------------------
Total increase (decrease) in
net assets 9,230 (18,835)
---------------------------------------------------------
NET ASSETS
---------------------------------------------------------
Beginning of period 206,220 225,055
---------------------------------------------------------
End of period (including
undistributed net investment
income of $4,814 in 1995 and
$4,867 in 1994) $215,450 206,220
---------------------------------------------------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF FUND
The Fund is registered under the Investment Company Act of 1940 as a
diversified, closed-end management investment company.
INVESTMENT VALUATION
Investments are stated at value. 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. Portfolio securities
that are traded on a domestic securities exchange are valued at the last sale
price on the exchange where primarily traded 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.
Securities not so traded are valued at the last current bid quotation if market
quotations are available. Exchange traded options are valued at the last sale
price unless there is no sale price, in which event prices provided by market
makers are used. Over-the-counter traded options are valued based upon prices
provided by market makers. 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. Forward foreign currency contracts are valued at the
forward rates 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.
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. dollar values at the mean between the bid and offered quotations of such
currencies against U.S.
12
<PAGE> 13
dollars as last quoted by a recognized dealer. If such quotations are not
readily available, the rate of exchange is 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 rate of exchange prevailing on the
respective dates of such transactions. The Fund includes that portion of the
results of operations resulting from changes in foreign exchange rates with net
realized and unrealized gain on investments, as appropriate.
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,
and interest income is recorded on the accrual basis. Interest income includes
premium and discount amortization on money market instruments; it also includes
original issue and market discount amortization on long-term fixed income
securities. Realized gains and losses from investment transactions are reported
on an identified cost basis. Realized and unrealized gains and losses on
financial futures, options and forward foreign currency contracts are included
in net realized and unrealized gain (loss) on investments, as appropriate.
The Fund may purchase securities with delivery or payment to occur at a later
date. At the time the Fund 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 Fund until payment takes place. At the time the Fund
enters into this type of transaction it is required to designate cash or other
liquid assets equal to the value of the securities purchased. At May 31, 1995
the Fund had $20,000,000 in purchase commitments outstanding (9.3% of net
assets) with a corresponding amount of assets designated.
FEDERAL INCOME TAXES AND DIVIDENDS TO SHAREHOLDERS
The Fund has complied with the special provisions of the Internal Revenue Code
available to investment companies for the six months ended May 31, 1995. The
accumulated net realized loss on sales of investments for federal income tax
purposes at May 31, 1995, amounting to approximately $10,490,000, is available
to offset future taxable gains. If not applied, the loss carryover expires
during the period 2002 through 2003.
The Fund declares and pays dividends on a monthly basis. Net realized capital
gains, if any, reduced by capital loss carryovers, will be distributed at least
annually. Dividends payable to its shareholders are recorded by the Fund on the
ex-dividend date.
Distributions are determined in accordance with income tax principles which may
treat certain transactions differently from generally accepted accounting
principles.
OTHER CONSIDERATIONS
The Fund invests a substantial portion of its assets in high yield bonds. These
bonds ordinarily are in the lower rating categories of recognized rating
agencies or are non-rated, and thus involve more risk than higher rated bonds.
Kemper Financial Services, Inc. (KFS), the Fund's investment manager, may serve
as a member of various bondholder's committees. These committees represent the
interests of bondholders in restructuring negotiations and court proceedings. As
a result of participation on such committees, KFS may receive material,
non-public information with respect to bonds the Fund owns. Accordingly, the
Fund may be temporarily precluded from effecting transactions in such bonds due
to various restraints imposed by federal and state securities laws involving the
possession of material, non-public information.
13
<PAGE> 14
2. TRANSACTIONS WITH AFFILIATES
The Fund has a management agreement with KFS. For management services and
facilities furnished, the Fund pays a fee at an annual rate of .85% of average
weekly net assets. The Fund incurred a management fee of $872,000 for the six
months ended May 31, 1995.
The Fund has a custodian agreement and a transfer agent agreement with Investors
Fiduciary Trust Company (IFTC), which was 50% owned by KFS until January 31,
1995 when KFS completed the sale of IFTC to a third party. For the six months
ended May 31, 1995, the Fund incurred custodian and transfer agent fees of
$52,000 (excluding related expenses). Pursuant to a services agreement with
IFTC, Kemper Service Company (KSvC), an affiliate of KFS, is the shareholder
service agent of the Fund. For the six months ended May 31, 1995, IFTC remitted
shareholder service fees of $20,000 to KSvC.
Certain officers or trustees of the Fund are also officers or directors of KFS.
During the six months
ended May 31, 1995, the Fund made no direct payments to its officers and
incurred trustees' fees of $8,000 to independent trustees.
3. INVESTMENT TRANSACTIONS
For the six months ended May 31, 1995, investment transactions (excluding money
market instruments) are as follows (in thousands):
Purchases $286,400
------------------------------------------------------
Proceeds from sales 270,192
------------------------------------------------------
<TABLE>
<CAPTION>
Contracts Premiums
--------- --------
<S> <C> <C>
Options written:
Options outstanding at
beginning
of year -- --
------------------------------------------------------
Option contracts written 120 $ 54
------------------------------------------------------
Options terminated by
repurchases 120 54
------------------------------------------------------
Options outstanding at end of
year -- --
------------------------------------------------------
</TABLE>
14
<PAGE> 15
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six months
ended Year ended November 30,
May 31, ----------------------------------------------------
1995 1994 1993 1992 1991
---------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.35 11.29 10.88 10.36 7.88
------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .52 .96 1.04 1.13 1.18
------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments
and foreign currency transactions .47 (.97) .45 .48 2.56
------------------------------------------------------------------------------------------------------------------------------
Total from investment operations .99 (.01) 1.49 1.61 3.74
------------------------------------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .53 .76 1.08 1.09 1.16
------------------------------------------------------------------------------------------------------------------------------
Distribution from net realized gain on investments -- .17 -- -- --
------------------------------------------------------------------------------------------------------------------------------
Distribution from paid in surplus -- -- -- -- .10
------------------------------------------------------------------------------------------------------------------------------
Total dividends .53 .93 1.08 1.09 1.26
------------------------------------------------------------------------------------------------------------------------------
Net asset value per share, end of period $ 10.81 10.35 11.29 10.88 10.36
------------------------------------------------------------------------------------------------------------------------------
Market value per share, end of period $ 10.00 9.38 11.00 10.38 9.88
------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%):
Based on net asset value 9.88 (.07) 14.29 16.03 50.92
------------------------------------------------------------------------------------------------------------------------------
Based on market value 12.72 (6.39) 16.82 16.35 51.88
------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (%):
Expenses 1.00 1.03 .97 .99 1.00
------------------------------------------------------------------------------------------------------------------------------
Net investment income 9.57 8.80 9.43 10.33 12.60
------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $215,450 206,220 225,055 215,428 204,509
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 263 253 240 101 24
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Total return based on net asset value reflects changes in the Fund's net
asset value during the period. Total return based on market value reflects
changes in market value. Each figure includes reinvestment of dividends.
These figures will differ depending upon the level of any discount from or
premium to net asset value at which the Fund's shares trade during the
period.
15
<PAGE> 16
KEMPER MULTI-MARKET INCOME TRUST
<TABLE>
<S> <C>
Trustees Officers
STEPHEN B. TIMBERS JOHN E. PETERS
President and Trustee Vice President
ARTHUR R. GOTTSCHALK J. PATRICK BEIMFORD, JR.
Trustee Vice President
FREDERICK T. KELSEY ROBERT S. CESSINE
Trustee Vice President
DAVID B. MATHIS GORDON K. JOHNS
Trustee Vice President -
JOHN B. TINGLEFF MICHAEL A. MCNAMARA
Trustee Vice President
JOHN G. WEITHERS HARRY E. RESIS, JR.
Trustee Vice President
PAUL F. SLOAN
Vice President
JONATHAN W. TRUTTER
Vice President
PHILIP J. COLLORA
Vice President and
Secretary
CHARLES F. CUSTER
Vice President and
Assistant Secretary
JEROME L. DUFFY
Treasurer
---------------------------------------------------------
Legal Counsel Custodian and Transfer Agent
VEDDER, PRICE, KAUFMAN INVESTORS FIDUCIARY
& KAMMHOLZ TRUST COMPANY
222 North LaSalle Street 127 West 10th Street
Chicago, IL 60601 Kansas City, MO 64105
Shareholder Service Agent
KEMPER SERVICE COMPANY
P.O. Box 419430
Kansas City, MO 64141
Investment Manager
KEMPER FINANCIAL
SERVICES, INC.
120 South LaSalle Street
Chicago, IL 60603
</TABLE>
SEMIANNUAL REPORT TO SHAREHOLDERS
May 31, 1995
---------------------------------------
KEMPER
---------------------------------------
MULTI-MARKET
INCOME
---------------------------------------
TRUST
---------------------------------------
