<PAGE> 1
Kemper Global Income Fund
Semiannual Report to Shareholders
For the Period
Ended June 30, 1995
Seeks high current income
consistent with prudent total
return asset management
(KEMPER LOGO)
<PAGE> 2
DEAR SHAREHOLDER:
We are pleased to provide you with an economic overview and performance of your
fund for the six-month period ended June 30, 1995. In addition, following the
overview is a question and answer interview with your fund's Portfolio Managers.
------------------------------------------------------------
PERFORMANCE & DIVIDEND REVIEW
------------------------------------------------------------
Total Return Performance*
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1995
(UNADJUSTED FOR ANY SALES CHARGE)
<TABLE>
<S> <C>
Kemper Global Income Fund A 16.50%
Kemper Global Income Fund B 16.12%
Kemper Global Income Fund C 16.15%
Lipper General World Income Funds
Category Average** 10.15%
</TABLE>
------------------------------------------------------------
Returns are historical and do not represent future performance. Returns and net
asset value fluctuate. Shares are redeemable at current net asset value, which
may be more or less than original cost.
When comparing Kemper Global Income Fund A to all other General World Income
Funds in its Lipper** category for the following time periods ended June 30,
1995, this fund ranked: 1-year, 11 of 132 and 5-year, 13 of 25.
The following table shows dividend and yield information for Kemper Global
Income Fund as of June 30, 1995.
------------------------------------------------------------
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
<S> <C> <C> <C>
June Dividend: $0.0600 $0.0543 $0.0545
Net Asset Value: $ 9.63 $ 9.65 $ 9.65
Annualized
Distribution
Rate+: 7.48% 6.75% 6.78%
SEC Yield+: 5.38% 5.02% 5.08%
</TABLE>
------------------------------------------------------------
---------------------------------------
GENERAL ECONOMIC OVERVIEW
Investors enjoyed generally positive performance in both the fixed-income and
equity markets in the first six months of 1995. At this midpoint in the year,
the returns of most leading securities markets are significantly higher than
they were at the same time in 1994.
But recently, several events occurred to challenge the markets:
- Early in July, the Federal Reserve Board acknowledged that economic growth had
slowed so much that a recession might now be possible. In response, the
Federal Reserve eased short-term interest rates by a small but symbolic 25
basis points. This action was significant because, since February 1994, the
Fed had been raising interest rates to slow down what was considered high
enough growth to rekindle troublesome inflation.
- Then, midway into July, the stock market took a brief tumble. After a two-day
period of anxiety, the market recovered and finished the month well ahead. But
such a sudden, severe mini-correction served to remind investors that the
current bull market will probably come to an end someday and that some sectors
may be overextended today.
- Finally, the late July release of the gross domestic product (GDP) revealed
that growth in the economy in the second quarter was almost nonexistent. The
economy has not experienced such a low real GDP change (0.5%) in four years.
Proof of the economic slowdown was good news for investors who worry about
runaway growth and its inevitable result, inflation. At the same time, we were
pleased to see economic data that suggest that certain sectors of the economy,
such as housing and foreign trade, are poised for growth in the third and
fourth quarters. These should help provide momentum and keep us clear of a
recession. In fact, we anticipate 2% to 3% real GDP growth for the next few
quarters. Nevertheless, additional action by the Federal Reserve to lower
interest rates would not surprise us.
MOST MARKETS ARE HAVING A MUCH BETTER YEAR THAN IN 1994
Data show the 1994 and 1995 six-month comparative total returns for the
domestic and international equity and U.S. and non-U.S. bond markets.
<TABLE>
<CAPTION>
U.S. Non-U.S.
U.S. International Treasury Government
Stocks(1) Stocks(2) Bonds(3) Bonds(4)
<S> <C> <C> <C> <C>
First six months of 1995 20.19% 2.76% 11.19% 20.03%
First six months of 1994 -3.38% 8.92% -4.04% 3.68%
</TABLE>
1 Standard & Poor's 500, an unmanaged index of common stocks that is generally
considered representative of the U.S. stock market.
2 Morgan Stanley Capital International EAFE Index, an unmanaged index that is
generally considered a measure of international equities in 15 major world
markets excluding the U.S. and Canada.
3 Salomon Brothers Treasury Index, including Treasury issues with a maturity of
one year or longer.
4 Salomon Brothers World Government, Non-U.S. Governments, Index, including the
performance of leading government bond markets excluding the U.S. (unmanaged).
This information is historical and does not represent future performance of
these asset classes or past or future performance of any Kemper fund. Investors
may not make direct investments in these unmanaged indices.
1
<PAGE> 3
As we view the remainder of 1995, we believe that the opportunities for common
stock investors will be increasingly concentrated in higher quality investments.
Companies cannot necessarily count on the economy to provide above average
earnings support. Rather, stocks that have proven themselves with a pattern of
consistent earnings are likely to attract investor support. Specifically,
sectors that produce more consistent earnings, such as health care, consumer
nondurables, selected technology and selected capital goods can be expected to
do well. Picking the right sectors to invest in will be the key challenge for
equity investors during the next few quarters.
In addition, we look for the fixed-income markets to continue their positive
performance, as they tend to do well during periods of slow growth and low
inflation.
Leading international economies are lagging the U.S. economy. Japan and Germany,
whose economies typically follow U.S. growth, are not as robust as in past
cycles. This phenomenon makes international investing very complex currently.
Moreover, conditions in emerging market countries underline the importance of
careful research and experience in understanding how these markets work.
Nevertheless, the same fundamentals that have driven markets higher in the U.S.
are to be found in many foreign countries currently.
Political leadership also has some bearing on the progress of the economy and
the state of the financial markets. In the months preceding a presidential
election year, it has been common for incumbents to attempt to stimulate growth.
Given our Republican Congress and Democratic President, however, we do not
consider this a foregone conclusion as we move closer to 1996.
With that as an economic backdrop, we encourage you to read the following
detailed report of your fund, including a question-and-answer interview with
your fund's portfolio managers. Thank you for your continued support. We
appreciate the opportunity to serve your investment needs.
Sincerely,
[SIG]
Stephen B. Timbers
Chief Investment and Executive Officer
July 31, 1995
Stephen Timbers is Chief Executive Officer and
is also Chief Investment Officer of Kemper
[PHOTO] Financial Services, Inc. (KFS). KFS and its
affiliates manage approximately $60 billion in
assets, including $42 billion in retail mutual
funds. Timbers is a graduate of Yale
University and holds an M.B.A. from Harvard
University.
* Total return measures net investment income and capital gain or loss from
portfolio investments, assuming reinvestment of all dividends. During the
periods noted, securities prices fluctuated. For additional information, see
the Prospectus and Statement of Additional Information and the Financial
Highlights at the end of this report.
**Lipper Analytical Services, Inc. performance and rankings are based upon
changes in net asset value with all dividends reinvested and do not include
the effect of sales charges and, if they had, results may have been less
favorable. Performance and rankings are historical and do not reflect future
performance.
+ Current annualized distribution rate is the latest monthly dividend shown as
an annualized percentage of net asset value on June 30, 1995. Distribution
rate simply measures the level of dividends and is not a complete measure of
performance. The SEC yield is net investment income per share earned over the
month ended June 30, 1995 shown as an annualized percentage of the maximum
offering price on that date.
2
<PAGE> 4
Q
&A
AN INTERVIEW
WITH PORTFOLIO
MANAGERS
GORDON JOHNS &
PAT BEIMFORD
[photo of Gordon Johns]
Gordon Johns joined Kemper in 1988 and is now the Managing Director of Kemper
Investment Management Company Limited, London, and is Portfolio Co-Manager of
Kemper Global Income Fund. Mr. Johns graduated with a B.A. in law from Balliol
College, Oxford.
[photo of Pat Beimford]
Pat Beimford joined Kemper Financial Services, Inc. in 1976 and is now a Senior
Vice President and Portfolio Co-Manager of the Kemper Global Income Fund. Mr.
Beimford received a B.S.I.M. degree from Purdue University and a M.B.A. degree
from the University of Chicago.
Q: HOW WOULD YOU CHARACTERIZE THE GLOBAL BOND MARKETS DURING THE FIRST HALF OF
1995?
A: The bond markets were generally quite strong. In a reversal of last year's
trend, bond prices increased in almost every market in which the fund is
exposed. Interest rates declined substantially in the U.S. in response to
mounting evidence that economic growth had moderated. The European bond
markets rose on signs of steady economic growth with little sign of rising
inflation. For the six months ended June 30, the Salomon Brothers World
Government Bond Index+ gained 16.85%.
Q: HOW DID THE FUND PERFORM RELATIVE TO THE MARKET AND TO ITS PEER GROUP?
A: The fund continued to perform well in relative terms. Class A, B and C
Shares gained 16.50%, 16.12% and 16.15%, respectively, on a total return
basis during the six months ended June 30. These returns were just behind
the Salomon Brothers World Government Bond Index and compare very favorably
with the average 10.15% gain for the fund's Lipper peer group during the
same period.
Q: HOW WAS THE FUND POSITIONED?
A: We remained almost fully invested, which allowed us to take full advantage
of the rise in bond prices, and continued to avoid emerging market debt. A
weighting in U.S. Treasuries (approximately 20%) provided good exposure to
the domestic bond rally. In the overseas markets we maintained an emphasis
on quality. Our weighting in France increased during the period, and we're
optimistic about Portugal and Ireland. We've also increased our exposure to
Canada and New Zealand, dollar block countries that we expect to perform
well in the coming months. Meanwhile, we've reduced exposure to Japan and
eliminated our position in Spain.
The fund's duration was gradually reduced from 5.5 years at the beginning
of the year to 4.6 years as of June 30. While we continue to anticipate
good performance, we no longer think it necessary to maintain a longer
duration than the benchmark indices.
Q: THE U.S. DOLLAR WAS VERY WEAK, PARTICULARLY DURING THE FIRST QUARTER. HOW
DID THIS IMPACT THE FUND AND DO YOU EXPECT THE TREND TO CONTINUE?
A: As currencies appreciated relative to the U.S. dollar, bonds denominated in
those currencies gained value in dollar terms. Consequently, the fund
experienced some currency gains on its foreign holdings. These gains allowed
us to increase the fund's monthly distribution in June.
At this time the dollar appears to have stabilized. We believe it has
reached a bottom, although we don't anticipate significant strengthening in
the near-term.
Q: WHAT IS YOUR OUTLOOK FOR THE REST OF THE YEAR?
A: Positive but cautious. Given the gains we've seen over the past six months,
it is questionable whether such performance can be sustained. While the U.S.
bond markets appear to be fully valued, and the overseas markets are not as
cheap as they were following the gains already seen this year, we believe
there is still value in a number of global bond markets.
+ Salomon Brothers World Government Bond Index is an unmanaged index on a U.S.
dollar total return basis with all dividends reinvested and is comprised of
government bonds from ten countries. The minimum maturity is one year.
Source is Lipper Analytical Services, Inc.
3
<PAGE> 5
PORTFOLIO OF INVESTMENTS BY CURRENCY June 30, 1995
(in thousands)
<TABLE>
<CAPTION>
Principal
Amount
(in Local Value
Currency) (in U.S. Dollars)
--------- -----------------
<S> <C> <C>
CANADIAN DOLLAR--3.9%
-----------------------------------------------------------------
GOVERNMENT OBLIGATIONS
-----------------------------------------------------------------
Government of Canada
8.25%, 1997 2,500 $ 1,854
6.50%, 2004 7,250 4,799
-----------------------------------------------------------------
6,653
FINNISH MARKKA--7.3%
-----------------------------------------------------------------
GOVERNMENT OBLIGATIONS
-----------------------------------------------------------------
Republic of Finland
11.00%, 1997 15,000 3,739
11.00%, 1999 24,000 6,126
9.50%, 2004 10,000 2,426
-----------------------------------------------------------------
12,291
FRENCH FRANC--19.0%
-----------------------------------------------------------------
GOVERNMENT OBLIGATIONS
-----------------------------------------------------------------
Kingdom of Norway, 7.00%, 1998 35,000 7,236
Kingdom of Spain, 6.50%, 2001 40,000 7,864
French Treasury, 7.75%, 2005 40,000 8,308
-----------------------------------------------------------------
23,408
CORPORATE OBLIGATIONS
-----------------------------------------------------------------
DSL Finance NV,
5.75%, 2004 48,000 8,674
-----------------------------------------------------------------
32,082
IRISH PUNT--10.5%
-----------------------------------------------------------------
GOVERNMENT OBLIGATIONS
-----------------------------------------------------------------
Government of Ireland
6.25%, 1999 6,000 9,092
6.25%, 2004 6,300 8,648
-----------------------------------------------------------------
17,740
JAPANESE YEN--6.3%
-----------------------------------------------------------------
GOVERNMENT OBLIGATIONS
-----------------------------------------------------------------
Republic of Austria,
5.00%, 2001 600,000 8,030
-----------------------------------------------------------------
CORPORATE OBLIGATIONS
-----------------------------------------------------------------
Export-Import Bank of Japan,
4.375%, 2003 200,000 2,622
-----------------------------------------------------------------
10,652
<CAPTION>
Principal
Amount
(in Local Value
Currency) (in U.S. Dollars)
--------- -----------------
<S> <C> <C>
NETHERLANDS GUILDER--13.3%
-----------------------------------------------------------------
GOVERNMENT OBLIGATIONS
-----------------------------------------------------------------
Dutch State Loan
7.75%, 2000 4,500 $ 3,078
8.25%, 2002 15,500 10,812
6.50%, 2003 13,500 8,515
-----------------------------------------------------------------
22,405
NEW ZEALAND DOLLAR--10.3%
-----------------------------------------------------------------
GOVERNMENT OBLIGATIONS
-----------------------------------------------------------------
Government of New Zealand
6.50%, 2000 12,700 8,060
10.00%, 2002 12,600 9,419
-----------------------------------------------------------------
17,479
PORTUGUESE ESCUDO--4.8%
-----------------------------------------------------------------
GOVERNMENT OBLIGATIONS
-----------------------------------------------------------------
Government of Portugal
8.375%, 1999 290,000 1,807
11.875%, 2000 900,000 6,213
-----------------------------------------------------------------
8,020
U.S. DOLLARS--21.3%
-----------------------------------------------------------------
GOVERNMENT OBLIGATIONS
-----------------------------------------------------------------
U.S. Treasury Notes
6.375%, 2000 23,000 23,322
6.25%, 2003 10,500 10,527
7.50%, 2005 2,000 2,178
-----------------------------------------------------------------
36,027
MONEY MARKET INSTRUMENT--.5%
Yield-6.45% Due-July 1995
-----------------------------------------------------------------
Enron Corporation 800 799
-----------------------------------------------------------------
TOTAL INVESTMENTS--97.2%
(Cost: $154,862) 164,148
-----------------------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--2.8% 4,670
-----------------------------------------------------------------
NET ASSETS--100% $168,818
-----------------------------------------------------------------
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS BY CURRENCY
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.
At June 30, 1995, the Fund had 90.1% of its net assets in government
obligations, 7.1% in corporate obligations and 2.8% in other assets.
Based on the cost of investments of $154,862,000 for federal income tax purposes
at June 30, 1995, the aggregate gross unrealized appreciation was $9,399,000 the
aggregate gross unrealized depreciation was $113,000 and the net unrealized
appreciation was $9,286,000.
See accompanying Notes to Financial Statements.
4
<PAGE> 6
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(in thousands)
<TABLE>
<S> <C>
ASSETS
-------------------------------------------------------
Investments, at value
(Cost: $154,862) $164,148
-------------------------------------------------------
Cash 1,072
-------------------------------------------------------
Receivable for:
Interest 4,199
-------------------------------------------------------
Fund shares sold 14
-------------------------------------------------------
Total assets 169,433
-------------------------------------------------------
LIABILITIES AND NET ASSETS
-------------------------------------------------------
Payable for:
Investments purchased 255
-------------------------------------------------------
Fund shares redeemed 28
-------------------------------------------------------
Management fee 107
-------------------------------------------------------
Administrative services fee 28
-------------------------------------------------------
Distribution services fee 34
-------------------------------------------------------
Custodian and Transfer agent fees 137
-------------------------------------------------------
Other 26
-------------------------------------------------------
Total liabilities 615
-------------------------------------------------------
Net assets 168,818
-------------------------------------------------------
ANALYSIS OF NET ASSETS
-------------------------------------------------------
Excess of amounts received from
issuance of shares over amounts paid
on redemptions of shares on account
of capital $209,271
-------------------------------------------------------
Accumulated net realized loss on investments
and foreign currency transactions (50,526)
-------------------------------------------------------
Unrealized appreciation of investments and
assets and liabilities in foreign
currencies 9,305
-------------------------------------------------------
Undistributed net investment income 768
-------------------------------------------------------
Net assets applicable to shares
outstanding $168,818
-------------------------------------------------------
THE PRICING OF SHARES
-------------------------------------------------------
CLASS A SHARES
Net asset value and redemption price per
share
($115,379,241/11,978,445 shares
outstanding) $9.63
-------------------------------------------------------
Maximum offering price per share
(net asset value, plus 4.71% of net
asset value or 4.50% of offering price) $10.08
-------------------------------------------------------
CLASS B SHARES
Net asset value and redemption price
(subject
to contingent deferred sales charge) per
share
($53,305,466/5,521,636 shares outstanding) $9.65
-------------------------------------------------------
CLASS C SHARES
Net asset value and redemption price per
share
($133,442/13,820 shares outstanding) $9.65
-------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
Six months ended June 30, 1995
(in thousands)
<TABLE>
<S> <C>
INTEREST INCOME $ 6,918
-------------------------------------------------------
EXPENSES
-------------------------------------------------------
Management fee 637
-------------------------------------------------------
Administrative services fee 168
-------------------------------------------------------
Distribution services fee 197
-------------------------------------------------------
Custodian and transfer agent
fees and related expenses 244
-------------------------------------------------------
Professional fees 24
-------------------------------------------------------
Reports to shareholders 18
-------------------------------------------------------
Trustees' fees and other 12
-------------------------------------------------------
Total expenses 1,300
-------------------------------------------------------
Net investment income 5,618
-------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
-------------------------------------------------------
Net realized gain on investments
and foreign currency transactions 10,170
-------------------------------------------------------
Net change in balance of unrealized
depreciation of investments and assets and
liabilities
in foreign currencies 9,859
-------------------------------------------------------
Net gain on investments 20,029
-------------------------------------------------------
Net increase in net assets resulting
from operations $ 25,647
-------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE> 7
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
Six months Year
ended ended
June 30, December 31,
1995 1994
---------- ------------
<S> <C> <C>
OPERATIONS
------------------------------------------------------------
Net investment income $ 5,618 7,503
------------------------------------------------------------
Net realized gain (loss) 10,170 (6,845)
------------------------------------------------------------
Net change in unrealized
depreciation/appreciation 9,859 (757)
------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 25,647 (99)
------------------------------------------------------------
Net equalization credits 6 42
------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS
------------------------------------------------------------
Distribution from net investment
income (5,499) (4,876)
------------------------------------------------------------
Tax return of capital distribution -- (2,738)
------------------------------------------------------------
Total dividends to shareholders (5,499) (7,614)
------------------------------------------------------------
Net (decrease) increase from capital
share transactions (22,036) 95,350
------------------------------------------------------------
Total (decrease) increase in net
assets (1,882) 87,679
------------------------------------------------------------
NET ASSETS
------------------------------------------------------------
Beginning of period 170,700 83,021
------------------------------------------------------------
End of period (including undistributed
net investment income of $768 and
$643 respectively) $168,818 170,700
------------------------------------------------------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE FUND
Kemper Global Income Fund currently offers three classes of shares. Class A
shares are sold to investors subject to an initial sales charge. Class B shares
are sold without an initial sales charge but are subject to higher ongoing
expenses than Class A shares and a contingent deferred sales charge payable upon
certain redemptions. Class B shares automatically convert to Class A shares six
years after issuance. Class C shares are sold without an initial or a contingent
deferred sales charge but are subject to higher ongoing expenses than Class A
shares and do not convert into another class. The Fund may offer, to a limited
group of investors, Class I shares (none sold at June 30, 1995) which are not
subject to initial or contingent deferred sales charges and have lower ongoing
expenses than other classes. Each share represents an identical interest in the
investments of the Fund and has the same rights.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION
Investments are stated at 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 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.
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. 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
6
<PAGE> 8
with net realized and unrealized gain or loss from investments and foreign
currency transactions, 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). Interest income is recorded on the accrual basis; it
includes premium and discount amortization on money market instruments and
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.
FUND SHARE VALUATION
Fund shares are sold and redeemed on a continuous basis at net asset value (plus
an initial sales charge on most sales of Class A shares). Proceeds payable on
redemption of Class B shares will be reduced by the amount of any applicable
contingent deferred sales charge. On each day the New York Stock Exchange is
open for trading, the net asset value per share is determined as of the earlier
of 3:00 p.m. Chicago time or the close of the Exchange. The net asset value per
share is determined separately for each share class by dividing the attributable
net assets by the number of outstanding shares of each class. 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 does not take place
contemporaneously with the determination of the prices of the Fund's foreign
securities.
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 June 30, 1995. The accumulated net realized loss on sales of
investments for federal income tax purposes at June 30, 1995, amounting to
approximately $51,554,000, is available to offset future taxable gains. Of this
amount approximately $47,030,000 was obtained in the 1994 fund acquisitions (see
note 5). Under Internal Revenue Code provisions the amount of acquired loss
carryover available each year is limited to approximately $7,000,000. If not
applied, the loss carryover expires during the period 1997 through 2002.
Dividends are declared separately for each class. Differences in per share
dividend rates are generally due to differences in separate class expenses.
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
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments for certain transactions such as foreign
currency transactions.
EQUALIZATION ACCOUNTING
A portion of proceeds from sales and cost of redemptions of Fund shares 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 WITH AFFILIATES
MANAGEMENT AGREEMENT
The Fund has a management agreement with Kemper Financial Services, Inc. (KFS)
and pays a management fee at an annual rate of .75% of the first $250 million of
average daily net assets declining gradually to .62% of average daily net assets
in excess of $12.5 billion. The Fund incurred a management fee of $637,000 for
the six months ended June 30, 1995.
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
The Fund has an underwriting and distribution services agreement with Kemper
Distributors, Inc. (KDI). As principal underwriter for the Fund, KDI retained
commissions of $7,000 for the six months ended June 30, 1995 for sales of Class
A shares, after allowing $29,000 as commissions to firms, of which $10,000 was
paid to firms affiliated with KDI. For distribution services, the Fund pays KDI
a fee of .75% of average daily net assets of the Class B and Class C shares.
Pursuant to the agreement, KDI enters into related selling group agreements with
various firms that provide distribution services to investors. KDI compensates
these firms at various rates for sales of Class B and Class C shares. During the
six months ended June 30, 1995, the Fund incurred a distribution services fee
for Class B and Class C shares of $197,000, and KDI paid $44,000 for commissions
and distribution fees to firms, including $14,000 to firms affiliated with KDI.
In addition, KDI received $95,000 of contingent deferred sales charges.
ADMINISTRATIVE SERVICES AGREEMENT
The Fund has an administrative services agreement with KDI. For providing
information and administrative services to shareholders, the Fund pays KDI a fee
at the annual rate of up to .25% of average daily net assets. KDI in turn has
various agreements with financial services firms that provide these services and
pays these firms based on assets of Fund accounts the firms service. For the six
months ended June 30, 1995, the Fund incurred an administrative services fee of
$168,000, and KDI paid $168,000 to firms, including $39,000 that was paid to
firms affiliated with KFS.
SHAREHOLDER SERVICES AGREEMENT
Pursuant to a services agreement with the Fund's custodian and transfer agent,
Kemper Service Company (KSvC), is the shareholder service agent of the Fund. For
the period ended June 30, 1995, the custodian remitted shareholder service fees
of $111,000 to KSvC.
OFFICERS AND TRUSTEES
Certain officers or trustees of the Fund are also officers or directors of KFS.
During the six months ended June 30, 1995, the Fund made no direct payments to
its officers and incurred trustees' fees of $7,000 to independent trustees.
7
<PAGE> 9
4. INVESTMENT TRANSACTIONS
For the six months ended June 30, 1995, investment transactions (excluding
short-term instruments) are as follows (in thousands):
<TABLE>
<S> <C>
Purchases $175,294
-------------------------------------------------------------
Proceeds from sales 196,790
-------------------------------------------------------------
</TABLE>
5. CAPITAL SHARE TRANSACTIONS
The following tables summarize the activity in capital shares of the Fund (in
thousands):
<TABLE>
<CAPTION>
Six months Year
ended ended
June 30, December 31,
1995 1994
-------------------- -------------------
Shares Amount Shares Amount
------- -------- ------ --------
<S> <C> <C> <C> <C>
Shares sold:
Class A 577 $ 5,705 3,146 $ 28,131
----------------------------------------------------------------------------
Class B 452 4,193 589 5,090
----------------------------------------------------------------------------
Class C 14 133 12 104
----------------------------------------------------------------------------
Shares issued in
reinvestment of dividends:
Class A 282 2,581 532 4,663
----------------------------------------------------------------------------
Class B 110 1,008 82 709
----------------------------------------------------------------------------
Shares redeemed:
Class A (2,876) (26,202) (5,754) (50,420)
----------------------------------------------------------------------------
Class B (999) (9,423) (1,104) (9,675)
----------------------------------------------------------------------------
Class C (3) (31) (9) (81)
----------------------------------------------------------------------------
Conversion of shares:
Class A 65 614 15 132
----------------------------------------------------------------------------
Class B (65) (614) (15) (132)
----------------------------------------------------------------------------
Shares issued in acquisition(a):
Class A -- -- 7,058 60,897
----------------------------------------------------------------------------
Class B -- -- 6,472 55,932
----------------------------------------------------------------------------
Net (decrease) increase from
capital share transactions $(22,036) $ 95,350
----------------------------------------------------------------------------
</TABLE>
(a) On August 26, 1994, the Fund acquired the assets of Kemper Investment
Portfolios--Short Term Global Income Portfolio ("KIP-STGP") and Kemper Short
Term Global Income Fund ("KSGIF") in a tax-free exchange.
6. FORWARD FOREIGN CURRENCY CONTRACTS
In order to protect itself against a decline in the value of particular foreign
currencies against the U.S. Dollar, the Fund has entered into forward contracts
to deliver foreign currency in exchange for U.S. Dollars as described below. The
Fund bears the market risk that arises from changes in foreign exchange rates,
and accordingly, the unrealized gain (loss) on these contracts is reflected in
the accompanying financial statements. The Fund also bears the credit risk if
the counterparty fails to perform under the contract. At June 30, 1995, the Fund
had outstanding forward foreign currency contracts as follows:
<TABLE>
<CAPTION>
Contract Unrealized
Foreign Currency amount in Loss
to be delivered U.S. Dollars Settlement 6/30/95
(in thousands) (in thousands) Date (in thousands)
----------------------------------------------------------------------------
<S> <C> <C> <C>
77,000 French Franc 15,759 April 1996 (26)
----------------------------------------------------------------------------
</TABLE>
7. LITIGATION
In August of 1993, three shareholders of KIP-STGP and KSGIF filed an action in
the U.S. District Court for the Northern District of Illinois against KIP-STGP,
KSGIF, KFS, Kemper Financial Companies, Inc., Kemper Investment Management
Company, Limited, Kemper Corporation and the portfolio manager. The suit is a
class action brought on behalf of all persons who purchased shares of KIP-STGP
and KSGIF between October 29, 1990 and December 31, 1992. The complaint alleges
that sales literature and the registration statements of KIP-STGP and KSGIF were
misleading in violation of the Securities Act of 1933, the Securities Exchange
Act of 1934 and common law. A tentative settlement has been reached. As
indicated in note 5, on August 26, 1994, the Fund acquired the assets, and
assumed the liabilities, of KIP-STGP and KSGIF pursuant to an agreement and plan
of reorganization.
8
<PAGE> 10
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------------
Six months Six months
ended Year ended ended
June 30, December 31, December 31, Year ended June 30,
1995 1994 1993 1993 1992 1991
---------- ------------ ------------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $8.55 9.29 9.21 9.44 9.26 9.98
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .31 .60 .27 .72 .76 .94
---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 1.08 (.74) .16 (.17) .22 --
---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.39 (.14) .43 .55 .98 .94
---------------------------------------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .31 .38 -- .72 .73 1.22
---------------------------------------------------------------------------------------------------------------------------------
Distribution from net realized gain -- -- .11 .06 .07 .44
---------------------------------------------------------------------------------------------------------------------------------
Tax return of capital distribution -- .22 .24 -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Total dividends .31 .60 .35 .78 .80 1.66
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.63 8.55 9.29 9.21 9.44 9.26
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%): 16.50 (1.47) 4.73 6.16 10.77 9.30
---------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (%):
Expenses 1.33 1.53 1.29 1.52 1.53 1.60
---------------------------------------------------------------------------------------------------------------------------------
Net investment income 6.81 6.67 5.75 7.87 8.32 9.17
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class B Class C
--------------------------- ---------------------------
Six months May 31, 1994 Six months May 31, 1994
ended to ended to
June 30, December 31, June 30, December 31,
1995 1994 1995 1994
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $8.56 8.70 8.56 8.70
------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .28 .30 .28 .30
------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 1.08 (.14) 1.08 (.14)
------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.36 .16 1.36 .16
------------------------------------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .27 .19 .27 .19
------------------------------------------------------------------------------------------------------------------------------
Tax return of capital distribution -- .11 -- .11
------------------------------------------------------------------------------------------------------------------------------
Total dividends .27 .30 .27 .30
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.65 8.56 9.65 8.56
------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%): 16.12 1.89 16.15 1.91
------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (%):
Expenses 1.97 2.27 1.89 2.23
------------------------------------------------------------------------------------------------------------------------------
Net investment income 6.17 5.89 6.25 5.93
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six months
Six months Year ended ended
ended December 31, December 31, Year ended June 30,
6/30/95 1994 1993 1993 1992 1991
---------- ------------ ------------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL FUND DATA
Net assets at end of period (in thousands) $168,818 170,700 83,021 78,068 71,790 58,631
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 215 378 484 372 292 346
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Ratios have been determined on an annualized basis. Total return is not
annualized and does not reflect the effect of any sales charges.
9
<PAGE> 11
(KEMPER LOGO)
KEMPER FINANCIAL SERVICES, INC.
120 South LaSalle Street
Chicago, IL 60603
KEMPER GLOBAL INCOME FUND
Trustees Officers
STEPHEN B. TIMBERS JOHN E. PETERS
President and Vice President
Trustee J. PATRICK BEIMFORD, JR.
DAVID W. BELIN Vice President
Trustee GORDON K. JOHNS
LEWIS A. BURNHAM Vice President
Trustee PHILIP J. COLLORA
DONALD L. DUNAWAY Vice President
Trustee and Secretary
ROBERT B. HOFFMAN CHARLES F. CUSTER
Trustee Vice President and
DONALD R. JONES Assistant Secretary
Trustee JEROME L. DUFFY
DAVID B. MATHIS Treasurer
Trustee ELIZABETH C. WERTH
SHIRLEY D. PETERSON Assistant Secretary
Trustee
WILLIAM P. SOMMERS
Trustee
---------------------------------------------------------------
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 Foreign Custodian
KEMPER SERVICE COMPANY THE CHASE MANHATTAN
P.O. Box 419557 BANK, N.A.
Kansas City, MO 64141 Chase MetroTech Center
Brooklyn, NY 11245
Investment Manager
KEMPER FINANCIAL SERVICES, INC.
Principal Underwriter
KEMPER DISTRIBUTORS, INC.
120 South LaSalle Street
Chicago, IL 60603
(LOGO)
Printed on recycled paper.
This report is not to be distributed unless preceded
or accompanied by a Kemper Global Income Fund prospectus.
KGIF-3 (8/95) 241630
Printed in the U.S.A.
