<PAGE> 1
KEMPER GLOBAL INCOME FUND
SEMIANNUAL REPORT TO SHAREHOLDERS FOR THE PERIOD ENDED
JUNE 30, 1996
SEEKS HIGH CURRENT INCOME CONSISTENT WITH PRUDENT TOTAL RETURN ASSET MANAGEMENT
BY INVESTING PRIMARILY IN INVESTMENT GRADE FOREIGN AND DOMESTIC FIXED INCOME
SECURITIES.
" ... With a reduced position in the U.S., we looked for and found significant
pockets of value elsewhere ..."
[KEMPER LOGO]
<PAGE> 2
TABLE OF CONTENTS
3
General
Economic Overview
5
Performance Update
7
World Market Performance
8
Portfolio Statistics
9
Portfolio of
Investments
11
Financial Statements
13
Notes to
Financial Statements
17
Financial Highlights
AT A GLANCE
Kemper Global Income Fund total returns for the six-month period
ended June 30, 1996 (unadjusted for any sales charge)
[BAR GRAPH]
<TABLE>
<CAPTION>
LIPPER GENERAL
WORLD INCOME
FUNDS
CATEGORY
CLASS A CLASS B CLASS C AVERAGE*
- -----------------------------------------------------------------
<S> <C> <C> <C>
-1.08 -1.47 -1.36 1.69
</TABLE>
Returns and rankings are historical and do not represent future results. Returns
and net asset value fluctuate. Shares are redeemable at current net asset value,
which may be more or less than original cost.
*Lipper Analytical Services, Inc. returns 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.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
NET ASSET VALUE
- -------------------------------------------------------------------------------
AS OF AS OF
6/30/96 2/31/95
- -------------------------------------------------------------------------------
<S> <C> <C>
KEMPER GLOBAL INCOME FUND
CLASS A $8.67 $9.05
KEMPER GLOBAL INCOME FUND
CLASS B $8.70 $9.09
KEMPER GLOBAL INCOME FUND
CLASS C $8.71 $9.09
- -------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
KEMPER GLOBAL INCOME FUND RANKINGS*
- -------------------------------------------------------------------------------
COMPARED TO ALL OTHER FUNDS IN THE LIPPER GENERAL WORLD INCOME FUNDS CATEGORY
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
1-YEAR #136 OF #143 OF #141 OF
158 FUNDS 158 FUNDS 158 FUNDS
5-YEAR #27 OF N/A N/A
37 FUNDS
</TABLE>
- -------------------------------------------------------------------------------
DIVIDEND AND YIELD REVIEW
- -------------------------------------------------------------------------------
THE FOLLOWING TABLE SHOWS PER SHARE DIVIDEND AND YIELD INFORMATION FOR THE FUND
AS OF JUNE 30, 1996.
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Six-Month Income: $0.2800 $0.2551 $0.2544
June Dividends: $0.0500 $0.0449 $0.0440
Annualized
Distribution Rate+: 6.92% 6.19% 6.06%
SEC Yield+: 5.29% 4.84% 4.86%
- -------------------------------------------------------------------------------
</TABLE>
+ Current annualized distribution rate is the latest monthly dividend shown as
an annualized percentage of net asset value on June 30, 1996. 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, 1996 shown as an annualized percentage of the maximum
offering price on that date. The SEC yield is computed in accordance with a
standardized method prescribed by the Securities and Exchange Commission.
The special risk considerations associated with an investment in the fund,
including risks related to foreign investments and to a non-diversified
investment company, are discussed in the prospectus. Risks associated with
foreign securities, including fluctuating exchange rates, government regulations
and differences in liquidity, may affect your investment. As a non-diversified
investment company, the fund may invest more than 5% of its assets in the
securities of a particular foreign government.
TERMS TO KNOW
COUPON RATE Interest rate on a debt security the issuer promises to pay to the
holder until maturity, expressed as an annual percentage of par value.
CURRENCY RISK The U.S. dollar value of a foreign security tends to decrease when
the value of the U.S. dollar rises against the foreign currency in which the
security is denominated. Conversely, the U.S. dollar value of a foreign security
tends to increase when the value of the U.S. dollar falls against the currency.
INDEX An unmanaged group of securities that is considered representative of the
stock or bond markets. An index does not take into account any fees or expenses
related to the individual securities that it tracks. However, for performance
comparisons, the index is adjusted to reflect reinvestment of dividends of the
securities in the index.
TOTAL RETURN A fund's total return measures both the net investment income and
any realized and unrealized appreciation or depreciation of the underlying
investments in its portfolio for the period, assuming that dividends are
reinvested. It represents the aggregate percentage or dollar value change over
the period.
<PAGE> 3
ECONOMIC OVERVIEW
[TIMBERS PHOTO]
Stephen B. Timbers is President, Chief Executive and Chief Investment Officer of
Zurich Kemper Investments, Inc. (ZKI). ZKI and its affiliates manage
approximately $78 billion in assets, including $45 billion in retail Mutual
Funds. Timbers is a graduate of Yale University and holds an M.B.A. from
Harvard University.
DEAR SHAREHOLDER,
We have just completed a period of some discomfort for bond and stock market
traders. Concerns about rising interest rates, the possibility of higher price
inflation and Federal Reserve tightening of credit contributed to considerable
market volatility. But while the professional investors tend to fret over every
economic release, individuals who invest in mutual funds for the long term were
wise to stay the course -- at least until the direction of the economy became
clearer. Indeed, several recent economic measures are quite reassuring and argue
in favor of a continued healthy economy with low inflation.
The economy expanded at a 4.2% annual rate in the second quarter, the fastest
pace since the second quarter of 1994. This robust growth is welcome in general
but has tended to roil markets, which fear strong growth will lead to
overheating and inflationary pressures. So far, however, such fears have been
largely unwarranted. With the exception of food prices, whose increases were
weather-related, there have been no significant signs of inflationary pressures.
As it has so often recently, the economy is in the process of slowing itself
down. While the Federal Reserve Board stands by ready to attempt to moderate
- --------------------------------------------------------------------------------
ECONOMIC GUIDEPOSTS
- --------------------------------------------------------------------------------
Economic activity is a key influence on investment performance and shareholder
decision-making. Periods of recession or boom, inflation or deflation, credit
expansion or credit crunch have a significant impact on mutual fund
performance.
The following are some significant economic guideposts and their investment
rationale that may help your investment decision-making. The 10-year Treasury
rate and the prime rate are prevailing interest rates. The other data report
year-to-year percentage changes.
[BAR GRAPH]
<TABLE>
<CAPTION>
Now (6/30/96) 6 months ago 1 year ago 2 years ago
<S> <C> <C> <C> <C>
10-Year Treasury rate(1) 6.91 5.65 6.28 7.30
Prime Rate(2) 8.25 8.50 8.80 7.25
Inflation rate(3) 2.75 2.72 2.76 2.77
The U.S. dollar(4) 9.15 -0.57 -7.06 -3.24
Capital goods orders(5) 1.19 4.72 5.60 18.66
Industrial production(5) 3.54 0.56 2.65 6.25
Employment growth(6) 2.10 1.57 2.47 3.23
</TABLE>
1 Falling interest rates in recent years have been a big plus for financial
assets.
2 The interest rate that commercial lenders charge their best borrowers.
3 Inflation reduces an investor's real return. In the last five years,
inflation has been as high as 6%. The low, moderate inflation of the last few
years has meant high real returns.
4 Changes in the exchange value of the dollar impact U.S. exporters and the
value of U.S. firms' foreign profits.
5 These influence corporate profits and equity performance.
6 An influence on family income and retail sales.
Source: Economics Department, Zurich Kemper Investments, Inc.
3
<PAGE> 4
ECONOMIC OVERVIEW
economic growth with either interest rate cuts or increases, such intervention
can run the risk of going too far in one direction. It appears that our economy
today is self-regulating.
Based on these snapshots of the economy, then, we look for a relatively calmer
second half of 1996. Our forecast calls for growth to slow down in the third and
fourth quarters, to result in an advance of about 2.5% for the entire year.
Assuming that bond and stock market investors concur that there is no chance of
an overheating economy or significantly rising interest rates, the markets
should relax, as well.
What was the meaning of the market volatility that we experienced in May, June
and July? Investors were nervous about the broad economy, and some disappointing
earnings reports made them pessimistic. Yet, the markets performed the way that
history suggests they should: an overall correction in the stock market was
accentuated in technology and small capitalization stocks -- the industry
sectors whose performance tends to be the most volatile. Once the stock market
corrected, the bond market rallied. Finally, while not producing spectacular
results, international markets provided a stabilizing influence when compared to
U.S. markets.
Our market forecast eight months into the year is not much different from what
we forecasted in January. The bond market, which is climbing back from a decline
this year, may produce a 5% total return in 1996. The stock market, after the
correction is completed, may advance 5% to 10% for the year. Naturally, future
market conditions cannot be predicted with assurance.
In addition, we are projecting that long-term (30-year) interest rates will
hover in the 6.5% to 7.5% range. Short-term interest rates may drop below their
current levels. Finally, we would be surprised if the Federal Reserve Board
moved to adjust interest rates more than 25 basis points either way for the
remainder of the year.
Given the economic environment, we do not look for an upset in the upcoming
presidential election. Much more interesting will be which party wins the most
congressional seats. If the Democrats regain control of Congress, a bond market
selloff could be expected.
While U.S. markets are expected to provide modest returns, we continue to
advocate the benefits of diversification into alternate markets. Many overseas
markets are forecasted to grow at a rate well above our 2.5% growth expectation
for the U.S., and there are many equity and fixed-income opportunities abroad.
The value of the U.S. dollar, always a concern to international investors, will
probably not strengthen much against other currencies for the foreseeable
future.
With that as an economic backdrop, we encourage you to read the following
detailed report of your fund, including an interview with your fund's portfolio
management. Thank you for your continued support. We appreciate the opportunity
to serve your investment needs.
Sincerely,
/s/ Stephen B. Timbers
STEPHEN B. TIMBERS
President, Chief Investment and Executive Officer
Zurich Kemper Investments, Inc.
August 2, 1996
4
<PAGE> 5
PERFORMANCE UPDATE
[BEIMFORD PHOTO]
J. PATRICK BEIMFORD, JR. JOINED ZURICH KEMPER INVESTMENTS, INC. IN 1976 AND IS
CHIEF INVESTMENT OFFICER FOR FIXED-INCOME INVESTMENTS AND A VICE PRESIDENT AND
PORTFOLIO CO-MANAGER OF KEMPER GLOBAL INCOME FUND. BEIMFORD RECEIVED A BACHELOR
OF SCIENCE AND INDUSTRIAL MANAGEMENT DEGREE FROM PURDUE UNIVERSITY AND RECEIVED
HIS M.B.A. FROM THE UNIVERSITY OF CHICAGO.
[JOHNS PHOTO]
GORDON JOHNS JOINED ZURICH KEMPER INVESTMENTS, INC. IN 1988 AND IS THE MANAGING
DIRECTOR OF ZURICH INVESTMENT MANAGEMENT LIMITED, LONDON, AND IS A VICE
PRESIDENT AND PORTFOLIO CO-MANAGER OF KEMPER GLOBAL INCOME FUND. JOHNS GRADUATED
WITH A B.A. IN LAW FROM BALLIOL COLLEGE, OXFORD.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT, AS STATED ON THE COVER. THE
MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME, BASED
ON MARKET AND OTHER CONDITIONS.
DURING THE LAST SIX MONTHS, THE POSITIVE PERFORMANCE OF SOME INTERNATIONAL BOND
MARKETS HELPED TO OFFSET THE LOW RETURNS SEEN IN THE U.S. BELOW, PORTFOLIO
CO-MANAGER GORDON JOHNS DISCUSSES THE MARKET ACTIVITY AND KEMPER GLOBAL INCOME
FUND'S PERFORMANCE.
Q. GORDON, HOW WOULD YOU CHARACTERIZE KEMPER GLOBAL INCOME FUND'S
PERFORMANCE DURING THE LAST SIX MONTHS AND THE GLOBAL BOND MARKETS' PERFORMANCE
IN GENERAL?
A. Kemper Global Income Fund ended this six-month period at -1.08 percent,
slightly better than the Salomon Brothers World Government Bond Index* which
slipped to -1.48 percent, in U.S. dollar terms, for the period. In local
currency terms, Italy and Spain had the highest returns with 10.15 percent and
9.05 percent respectively. Due in large part to speculation about interest
rates, the U.S. returned -1.80 percent. It was a market in which bonds earned
their coupon rates but there was very little capital appreciation.
* The Salomon Brothers World Government Bond Index is an unmanaged index that
is generally considered representative of world government bond markets. This
index serves as a benchmark to which world income bond funds compare their
performance.
Q. WHICH MARKETS DID THE FUND FAVOR?
A. In general, we found the dollar-bloc countries (New Zealand, Australia
and Canada), excluding the United States, the most attractive in this period
because the dollar-bloc tended to improve against the other currencies,
especially the yen. Compared to the Salomon Brothers index, the fund is
overweighted in Europe, Australia and New Zealand. We are underweighted in the
U.S. and in Japan due to currency uncertainties.
In the last six months, we have eliminated our exposure to smaller
markets such as Portugal and Finland because the core European markets were
more attractive from a valuation standpoint than these peripheral markets. Also
on a risk basis, core markets including France, Germany and the Netherlands
were offering higher forecasted returns. The United Kingdom is an example of a
core market where we also found value. In addition, we increased our Australian
exposure during this period because of low valuations in the markets there. The
Australian bond market provided a good alternative to the weak U.S. bond
market.
Q. SO WHAT HELPED THE FUND OUTPERFORM THE INDEX?
A. Throughout the period, we maintained a 20 percent weighting in the U.S.
By keeping our exposure in this market low, we were able to reduce the effect
of the weak U.S. markets on our total return for the six-month period. This
lesser weighting compared to the Salomon Brothers index contributed to our
stronger performance for the period. With a reduced position in the U.S., we
looked for and found significant pockets of value elsewhere. The fund was
5
<PAGE> 6
PERFORMANCE UPDATE
overweighted in France, for example, and returns in local currency terms there
were 4.34 percent. We also had greater exposure to Ireland than the index and
that market returned 3.22 percent.
Q. WHAT IS YOUR OUTLOOK FOR THE COMING MONTHS?
A. We don't anticipate a great deal of change. We are not seeing the sort
of attractive valuations that inspire significant moves in the bond market. The
positioning of the portfolio assumes some appreciation of the U.S. dollar, but
we will continue to favor the dollar-bloc countries other than the U.S. We are
looking for stable interest rates worldwide, yet growth should continue at a
reasonable pace.
Q. WHAT ARE THE RISKS TO THIS OUTLOOK?
A. When comparing the inflation levels in the major economies of the
world, they have increased only slightly over the previous year. Growth has
turned around in Europe, the business cycle in North America is maturing and
the output in the U.S. is reaching its potential. Obviously, the major risk
brought on by these conditions is that the current growth will produce
inflationary pressure. If this happens, governments may tighten monetary
policies and raise interest rates. Should that happen, bond values will suffer.
6
<PAGE> 7
WORLD MARKET PERFORMANCE
NEGATIVE PERFORMANCE PLAGUED WORLD BOND MARKETS
THE GRAPH BELOW PRESENTS THE SIX-MONTH RETURNS OF 20 GOVERNMENT BOND MARKETS
TRACKED BY SALOMON BROTHERS FOR THE PERIOD ENDING JUNE 30, 1996, EXPRESSED IN
U.S. DOLLAR TERMS.
[BAR GRAPH]
<TABLE>
<S> <C>
ITALY 13.99%
AUSTRALIA 6.91
SWEDEN 6.38
PORTUGAL 3.56
SPAIN 3.18
IRELAND 2.88
NEW ZEALAND 2.40
UNITED KINGDOM 1.46
CANADA 1.16
FRANCE -0.89
NORWAY -1.54
UNITED STATES -1.80
DENMARK -2.50
FINLAND -2.73
BELGIUM -3.06
AUSTRIA -3.92
NETHERLANDS -4.76
GERMANY -4.84
JAPAN -5.26
SWITZERLAND -8.38
</TABLE>
7
<PAGE> 8
PORTFOLIO STATISTICS
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
ON 6/30/96 ON 12/31/95
- -------------------------------------------------------------------------------
<S> <C> <C>
FOREIGN/U.S. GOVERNMENT SECURITIES 81% 86%
- -------------------------------------------------------------------------------
OTHER* 16 10
- -------------------------------------------------------------------------------
CASH AND EQUIVALENTS 3 4
- -------------------------------------------------------------------------------
100% 100%
- -------------------------------------------------------------------------------
*INCLUDES SUPRANATIONAL ENTITIES AND CORPORATES GUARANTEED BY GOVERNMENTS
- -------------------------------------------------------------------------------
[PIE CHART]
<CAPTION>
QUALITY
ON 6/30/96 ON 12/31/95
<S> <C> <C>
- -------------------------------------------------------------------------------
AAA 86 89
- -------------------------------------------------------------------------------
AA 14 10
- -------------------------------------------------------------------------------
OTHER -- 1
- -------------------------------------------------------------------------------
100% 100%
[PIE CHART]
DURATION
<CAPTION>
ON 6/30/96 ON 12/31/95
- -------------------------------------------------------------------------------
<S> <C> <C>
DURATION 4.8 YEARS 4.4 YEARS
- -------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 9
PORTFOLIO OF INVESTMENTS
KEMPER GLOBAL INCOME FUND
Portfolio of Investments at June 30, 1996
(in thousands)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS (81.4%) LOCAL CURRENCY U.S. DOLLAR
CURRENCY AND CORPORATE OBLIGATIONS (15.7%) PRINCIPAL VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. DOLLAR--18.8% U.S. Treasury Notes
6.375%, 2000 9,300 $ 9,299
6.25%, 2003 5,350 5,261
7.50%, 2005 10,500 11,053
-----------------------------------------------------------------------------------------
25,613
- ---------------------------------------------------------------------------------------------------------------------
FRENCH FRANC--18.7% French Treasury
6.75%, 2003 9,900 1,984
7.70%, 2005 25,000 5,290
Kingdom of Spain, 6.50%, 2001 30,000 6,012
Republic of Portugal, 7.70%, 2005 25,000 5,213
-----------------------------------------------------------------------------------------
European Investment Bank, 8.50%, 2002 32,000 6,981
-----------------------------------------------------------------------------------------
25,480
- ---------------------------------------------------------------------------------------------------------------------
BRITISH POUND--14.6% United Kingdom
7.25%, 1998 4,000 6,309
9.50%, 2005 1,600 2,742
8.00%, 2013 3,000 4,571
-----------------------------------------------------------------------------------------
Asian Development Bank, 10.25%, 2009 3,500 6,246
-----------------------------------------------------------------------------------------
19,868
- ---------------------------------------------------------------------------------------------------------------------
IRISH PUNT--10.1% Government of Ireland
6.25%, 1999 3,000 4,778
6.25%, 2004 6,100 9,014
-----------------------------------------------------------------------------------------
13,792
- ---------------------------------------------------------------------------------------------------------------------
NEW ZEALAND New Zealand Government
DOLLAR--9.1% 6.50%, 2000 7,000 4,416
10.00%, 2002 11,000 7,877
-----------------------------------------------------------------------------------------
12,293
- ---------------------------------------------------------------------------------------------------------------------
AUSTRALIAN DOLLAR--8.8% Commonwealth of Australia, 7.00%, 2000 8,000 6,018
Treasury Corporation of Victoria,
8.25%, 2003 7,900 5,994
-----------------------------------------------------------------------------------------
12,012
- ---------------------------------------------------------------------------------------------------------------------
GERMAN Federal Republic of Germany
DEUTSCHEMARK--8.0% 6.75%, 1999 6,500 4,495
7.125%, 2002 9,100 6,327
-----------------------------------------------------------------------------------------
10,822
- ---------------------------------------------------------------------------------------------------------------------
JAPANESE YEN--6.0% IBRD, 4.75%, 2004 200,000 2,058
Interamerican Development Bank,
6.75%, 2001 560,000 6,086
-----------------------------------------------------------------------------------------
8,144
- ---------------------------------------------------------------------------------------------------------------------
ITALIAN LIRA--1.0% Italian Treasury, 10.50%, 2000 2,000,000 1,387
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 10
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
(IN THOUSANDS)
- -------------------------------------------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS (81.4%) LOCAL CURRENCY U.S. DOLLAR
CURRENCY AND CORPORATE OBLIGATIONS (15.7%) PRINCIPAL VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NORWEGIAN Kingdom of Norway, 7.00%, 2001 8,600 $ 1,364
KRONE--1.0%
- -------------------------------------------------------------------------------------------------------------------
CANADIAN DOLLAR--1.0% Government of Canada, 7.25%, 2003 1,800 1,308
- -------------------------------------------------------------------------------------------------------------------
TOTAL GOVERNMENT AND CORPORATE
OBLIGATIONS--97.1%
(Cost: $131,646) 132,083
- -------------------------------------------------------------------------------------------------------------------
MONEY MARKET Yield--5.54%
INSTRUMENT--.2%
Due--July 1996
(Cost: $299) $ 300 299
-----------------------------------------------------------------------------------
TOTAL INVESTMENTS--97.3%
(Cost: $131,945) 132,382
===================================================================================
CASH AND OTHER ASSETS,
LESS LIABILITIES--2.7% 3,649
===================================================================================
NET ASSETS--100% $ 136,031
===================================================================================
</TABLE>
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
The Fund is a non-diversified investment company and may invest a relatively
high percentage of its assets in the obligations of a limited number of issuers.
Based on the cost of investments of $131,945,000 for federal income tax purposes
at June 30, 1996, the gross unrealized appreciation was $1,657,000 the gross
unrealized depreciation was $1,220,000 and the net unrealized appreciation was
$437,000.
See accompanying Notes to Financial Statements.
10
<PAGE> 11
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
(IN THOUSANDS)
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value
(Cost: $131,945) $132,382
- -------------------------------------------------------------------------------------------------------
Cash 27
- -------------------------------------------------------------------------------------------------------
Receivable for:
Interest 3,488
- -------------------------------------------------------------------------------------------------------
Investments sold 247
- -------------------------------------------------------------------------------------------------------
Fund shares sold 54
- -------------------------------------------------------------------------------------------------------
TOTAL ASSETS 136,198
=======================================================================================================
- -------------------------------------------------------------------------------------------------------
LIABILITIES AND NET ASSETS
- -------------------------------------------------------------------------------------------------------
Payable for:
Fund shares redeemed 30
- -------------------------------------------------------------------------------------------------------
Management fee 85
- -------------------------------------------------------------------------------------------------------
Distribution services fee 28
- -------------------------------------------------------------------------------------------------------
Administrative services fee 24
- -------------------------------------------------------------------------------------------------------
Total liabilities 167
- -------------------------------------------------------------------------------------------------------
NET ASSETS $136,031
=======================================================================================================
- -------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- -------------------------------------------------------------------------------------------------------
Paid-in capital $187,667
- -------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (52,158)
- -------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and assets and liabilities in foreign currencies 482
- -------------------------------------------------------------------------------------------------------
Undistributed net investment income 40
- -------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $136,031
=======================================================================================================
- -------------------------------------------------------------------------------------------------------
THE PRICING OF SHARES
- -------------------------------------------------------------------------------------------------------
CLASS A SHARES
Net asset value and redemption price per share
($90,448 / 10,429 shares outstanding) $8.67
- -------------------------------------------------------------------------------------------------------
Maximum offering price per share (net asset value, plus 4.71%
of net asset value or 4.50% of offering price) $9.08
=======================================================================================================
CLASS B SHARES
Net asset value and redemption price (subject to contingent deferred sales charge)
per share ($45,175 / 5,192 shares outstanding) $8.70
=======================================================================================================
CLASS C SHARES
Net asset value and redemption price (subject to contingent deferred sales charge)
per share ($385 / 44 shares outstanding) $8.71
=======================================================================================================
CLASS I SHARES
Net asset value and redemption price per share
($23 / 3 shares outstanding) $8.67
=======================================================================================================
</TABLE>
See accompanying Notes to Financial Statements.
11
<PAGE> 12
FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1996
(IN THOUSANDS)
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------------
Interest income $ 5,131
- ---------------------------------------------------------------------------------------------------------
Expenses:
Management fee 542
- ---------------------------------------------------------------------------------------------------------
Distribution services fee 178
- ---------------------------------------------------------------------------------------------------------
Administrative services fee 145
- ---------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 177
- ---------------------------------------------------------------------------------------------------------
Professional fees 42
- ---------------------------------------------------------------------------------------------------------
Reports to shareholders 17
- ---------------------------------------------------------------------------------------------------------
Trustees' fees and other 39
- ---------------------------------------------------------------------------------------------------------
Total expenses 1,140
- ---------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 3,991
=========================================================================================================
- ---------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
- ---------------------------------------------------------------------------------------------------------
Net realized loss on sales of investments and foreign currency transactions (1,805)
- ---------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation on investments and
assets and liabilities in foreign currencies (4,072)
- ---------------------------------------------------------------------------------------------------------
Net loss on investments (5,877)
- ---------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(1,886)
=========================================================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY
- ---------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED JUNE DECEMBER 31,
30, 1996 1995
---------- ------------
<S> <C> <C>
Net investment income $ 3,991 10,293
- ---------------------------------------------------------------------------------------------------------
Net realized gain (loss) (1,805) 14,530
- ---------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation/depreciation (4,072) 5,108
- ---------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (1,886) 29,931
- ---------------------------------------------------------------------------------------------------------
Net equalization credits 16 24
- ---------------------------------------------------------------------------------------------------------
Distribution from net investment income (4,427) (19,283)
- ---------------------------------------------------------------------------------------------------------
Net decrease from capital share transactions (10,631) (28,413)
- ---------------------------------------------------------------------------------------------------------
TOTAL DECREASE IN NET ASSETS (16,928) (17,741)
=========================================================================================================
- ---------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------
Beginning of period 152,959 170,700
- ---------------------------------------------------------------------------------------------------------
END OF PERIOD (including undistributed net investment
income of $40 and $460, respectively) $136,031 152,959
=========================================================================================================
</TABLE>
See accompanying Notes to Financial Statements.
12
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1 DESCRIPTION OF THE FUND Kemper Global Income Fund is an open-end
management investment company organized as a
business trust under the laws of Massachusetts.
The Fund currently offers four 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 sales charge but are subject to higher
ongoing expenses than Class A shares and, for
shares sold on or after April 1, 1996, a
contingent deferred sales charge payable upon
certain redemptions within one year of purchase.
Class C shares do not convert into another class.
Class I shares, which are sold to a limited group
of investors, are not subject to initial or
contingent deferred sales charges and have lower
ongoing expenses than other classes. Differences
in class expenses will result in the payment of
different per share income dividends by class.
Each share represents an identical interest in the
investments of the Fund and has the same rights.
- --------------------------------------------------------------------------------
2 SIGNIFICANT ACCOUNTING INVESTMENT VALUATION. Investments are stated at
POLICIES 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
13
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 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 and includes discount amortization on
fixed income securities. Realized gains and losses
from investment transactions are reported on an
identified cost basis.
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 and Class C 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. The Fund has complied with
the special provisions of the Internal Revenue Code
available to investment companies for the six
months ended June 30, 1996. The accumulated net
realized loss on sales of investments for federal
income tax purposes at June 30, 1996, amounting to
approximately $49,332,000, is available to offset
future taxable gains. Of this amount, approximately
$45,783,000 was obtained through prior fund
acquisitions. 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 TO SHAREHOLDERS. The Fund declares and
pays dividends of net investment income monthly and
any net realized capital gains annually, which are
recorded on the ex-dividend date. Dividends are
determined in accordance with income tax principles
which may treat certain transactions differently
from generally accepted accounting principles.
These differences are primarily due to differing
treatments for certain transactions such as foreign
currency transactions.
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.
14
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3 TRANSACTIONS WITH
AFFILIATES MANAGEMENT AGREEMENT. The Fund has a management
agreement with Zurich Kemper Investments, Inc.
(ZKI), and pays a management fee at an annual rate
of .75% of the first $250 million of average daily
net assets declining to .62% of average daily net
assets in excess of $12.5 billion. The Fund
incurred a management fee of $542,000 for the six
months ended June 30, 1996.
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT.
The Fund has an underwriting and distribution
services agreement with Kemper Distributors, Inc.
(KDI). Underwriting commissions paid in connection
with the distribution of Class A shares are as
follows:
<TABLE>
<CAPTION>
COMMISSIONS COMMISSIONS ALLOWED BY KDI
RETAINED ---------------------------------
BY KDI TO ALL FIRMS TO AFFILIATES
----------- ------------- -------------
<S> <C> <C> <C>
Six months ended June 30, 1996 $ 9,000 56,000 1,000
</TABLE>
For services under the distribution services
agreement, 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
at various rates for sales of Class B and Class C
shares. In addition, KDI receives any contingent
deferred sales charges (CDSC) from redemptions of
Class B and Class C shares. Distribution fees and
commissions paid in connection with the sale of
Class B and Class C shares and the CDSC received in
connection with the redemption of such shares are
as follows:
<TABLE>
<CAPTION>
DISTRIBUTION COMMISSIONS AND DISTRIBUTION
FEES AND FEES PAID BY KDI
CDSC RECEIVED ---------------------------------
BY KDI TO ALL FIRMS TO AFFILIATES
-------------- ------------- -------------
<S> <C> <C> <C>
Six months ended June 30, 1996 $221,000 89,000 1,000
</TABLE>
ADMINISTRATIVE SERVICES AGREEMENT. The Fund has an
administrative services agreement with KDI. For
providing information and administrative services
to Class A, Class B and Class C shareholders, the
Fund pays KDI a fee at an annual rate of up to .25%
of average daily net assets of each class. 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. Administrative services fees (ASF) paid
are as follows:
<TABLE>
<CAPTION>
ASF ASF PAID BY KDI
PAID BY THE ---------------------------------
FUND TO KDI TO ALL FIRMS TO AFFILIATES
------------ ------------- -------------
<S> <C> <C> <C>
Six months ended June 30, 1996 $145,000 148,000 10,000
</TABLE>
SHAREHOLDER SERVICES AGREEMENT. Pursuant to a
services agreement with the Fund's transfer agent,
Kemper Service Company (KSvC) is the shareholder
service agent of the Fund. Under the agreement,
KSvC received shareholder services fees of $135,000
for the six months ended June 30, 1996.
OFFICERS AND TRUSTEES. Certain officers or trustees
of the Fund are also officers or directors of ZKI.
During the six months ended June 30, 1996, the Fund
made no direct payments to its officers and
incurred trustees' fees of $8,000 to independent
trustees.
15
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
4 INVESTMENT
TRANSACTIONS For the six months ended June 30, 1996, investment
transactions (excluding short-term instruments) are
as follows (in thousands):
Purchases $148,455
Proceeds from sales 156,978
- --------------------------------------------------------------------------------
5 CAPITAL SHARE
TRANSACTIONS The following table summarizes the activity in
capital shares of the Fund (in thousands):
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE YEAR ENDED DECEMBER
30, 1996 31, 1995
-------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 505 $ 4,870 1,126 $ 10,635
------------------------------------------------------------------------------
Class B 402 3,898 934 8,823
------------------------------------------------------------------------------
Class C 41 375 42 393
------------------------------------------------------------------------------
Class I 1 9 3 27
------------------------------------------------------------------------------
SHARES ISSUED IN REINVESTMENT OF DIVIDENDS
Class A 231 2,015 945 8,702
------------------------------------------------------------------------------
Class B 104 906 418 3,856
------------------------------------------------------------------------------
Class C 1 7 2 22
------------------------------------------------------------------------------
SHARES REDEEMED
Class A (1,736) (15,672) (4,728) (43,893)
------------------------------------------------------------------------------
Class B (733) (6,792) (1,801) (16,796)
------------------------------------------------------------------------------
Class C (26) (239) (19) (182)
------------------------------------------------------------------------------
Class I (1) (8) -- --
------------------------------------------------------------------------------
CONVERSION OF SHARES
Class A 50 460 106 999
------------------------------------------------------------------------------
Class B (51) (460) (105) (999)
------------------------------------------------------------------------------
NET DECREASE
FROM CAPITAL SHARE
TRANSACTIONS $(10,631) $(28,413)
------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
6 FORWARD FOREIGN
CURRENCY CONTRACTS In order to help 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 net
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, 1996, the Fund had the following
outstanding forward foreign currency contract with
a settlement date in September 1996 (in thousands):
<TABLE>
<CAPTION>
FOREIGN CURRENCY
TO BE DELIVERED IN EXCHANGE FOR UNREALIZED GAIN
------------------------------------------------------------------
<S> <C> <C>
15,600 Australian dollars $12,223 $27
------------------------------------------------------------------
</TABLE>
16
<PAGE> 17
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, DECEMBER 31, DECEMBER 31, JUNE 30,
----------- -------------- ------------ -------------
1996 1995 1994 1993 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 9.05 8.55 9.29 9.21 9.44 9.26
- -------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .26 .61 .60 .27 .72 .76
- -------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (.36) 1.05 (.74) .16 (.17) .22
- -------------------------------------------------------------------------------------------------------------------
Total from investment operations (.10) 1.66 (.14) .43 .55 .98
- -------------------------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .28(a) 1.16 .38 -- .72 .73
- -------------------------------------------------------------------------------------------------------------------
Distribution from net realized gain -- -- -- .11 .06 .07
- -------------------------------------------------------------------------------------------------------------------
Tax return of capital distribution -- -- .22 .24 -- --
- -------------------------------------------------------------------------------------------------------------------
Total dividends .28 1.16 .60 .35 .78 .80
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.67 9.05 8.55 9.29 9.21 9.44
- -------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) (1.08)% 19.89 (1.47) 4.73 6.16 10.77
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses 1.35% 1.34 1.53 1.29 1.52 1.53
- -------------------------------------------------------------------------------------------------------------------
Net investment income 5.75 6.43 6.67 5.75 7.87 8.32
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS B
--------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED MAY 31, 1994
JUNE 30, DECEMBER 31, TO
1996 1995 DECEMBER 31, 1994
------------ ------------ -----------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $9.09 8.56 8.70
- --------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .23 .56 .30
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (.36) 1.05 (.14)
- --------------------------------------------------------------------------------------------------
Total from investment operations (.13) 1.61 .16
- --------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .26(a) 1.08 .19
- --------------------------------------------------------------------------------------------------
Tax return of capital distribution -- -- .11
- --------------------------------------------------------------------------------------------------
Total dividends .26 1.08 .30
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $8.70 9.09 8.56
- --------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) (1.47)% 19.21 1.89
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses 2.05% 1.98 2.27
- --------------------------------------------------------------------------------------------------
Net investment income 5.05 5.79 5.89
- --------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 18
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS C CLASS I
-------------------------------------------- --------------------------------
SIX MONTHS MAY 31, SIX MONTHS NOVEMBER 22,
ENDED YEAR ENDED 1994 TO ENDED 1995 TO
JUNE 30, DECEMBER 31, DECEMBER 31, JUNE 30, DECEMBER 31,
1996 1995 1994 1996 1995
----------- ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $9.09 8.56 8.70 9.05 9.57
- ---------------------------------------------------------------------------------------- --------------------------------
Income from investment operations:
Net investment income .23 .57 .30 .27 .07
- ---------------------------------------------------------------------------------------- --------------------------------
Net realized and unrealized gain (loss) (.36) 1.05 (.14) (.36) (.03)
- ---------------------------------------------------------------------------------------- --------------------------------
Total from investment operations (.13) 1.62 .16 (.09) .04
- ---------------------------------------------------------------------------------------- --------------------------------
Less dividends:
Distribution from net investment income .25(a) 1.09 .19 .29 .56
- ---------------------------------------------------------------------------------------- --------------------------------
Tax return of capital distribution -- -- .11 -- --
- ---------------------------------------------------------------------------------------- --------------------------------
Total dividends .25 1.09 .30 .29 .56
- ---------------------------------------------------------------------------------------- --------------------------------
Net asset value, end of period $8.71 9.09 8.56 8.67 9.05
- ------------------------------------------------------------------------------------- ----------------------------
TOTAL RETURN (NOT ANNUALIZED) (1.36)% 19.26 1.91 (.93) .43
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses 2.02% 2.06 2.23 .96 .88
- ---------------------------------------------------------------------------------------- --------------------------------
Net investment income 5.08 5.71 5.93 6.14 6.40
- ---------------------------------------------------------------------------------------- --------------------------------
SUPPLEMENTAL DATA FOR ALL CLASSES
<CAPTION>
SIX MONTHS
SIX MONTHS ENDED YEAR ENDED
ENDED YEAR ENDED DECEMBER 31, DECEMBER JUNE 30,
JUNE 30, --------------------------- 31, --------------
1996 1995 1994 1993 1993 1992
---------- ---- ---- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (in thousands) $136,031 152,959 170,700 83,021 78,068 71,790
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 212% 220 378 484 372 292
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES: (a) All or a portion of this distribution may be considered a return of
capital for income tax purposes, however the ultimate character of
the distribution depends on the results of the Fund for the
twelve-month period ending December 31, 1996.
Total return does not reflect the effect of any sales charges.
18
<PAGE> 19
NOTES
19
<PAGE> 20
TRUSTEES & OFFICERS
TRUSTEES
STEPHEN B. TIMBERS
President and Trustee
DAVID W. BELIN
Trustee
LEWIS A. BURNHAM
Trustee
DONALD L. DUNAWAY
Trustee
ROBERT B. HOFFMAN
Trustee
DONALD R. JONES
Trustee
DOMINIQUE P. MORAX
Trustee
SHIRLEY D. PETERSON
Trustee
WILLIAM P. SOMMERS
Trustee
OFFICERS
J. PATRICK BEIMFORD, JR.
Vice President
GORDON K. JOHNS
Vice President
JOHN E. NEAL
Vice President
PHILIP J. COLLORA
Vice President and
Secretary
JEROME DUFFY
Treasurer
ELIZABETH C. WERTH
Assistant Secretary
- --------------------------------------------------------------------------------
LEGAL COUNSEL VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 North LaSalle Street
Chicago, IL 60601
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICE AGENT KEMPER SERVICE COMPANY
P.O. Box 419557
Kansas City, MO 64141
- --------------------------------------------------------------------------------
CUSTODIAN AND TRANSFER AGENT INVESTORS FIDUCIARY TRUST COMPANY
127 West 10th Street
Kansas City, MO 64105
- --------------------------------------------------------------------------------
FOREIGN CUSTODIAN THE CHASE MANHATTAN BANK
Chase Metro Tech Center
Brooklyn, NY 11245
- --------------------------------------------------------------------------------
INVESTMENT MANAGER ZURICH KEMPER INVESTMENTS, INC.
PRINCIPAL UNDERWRITER KEMPER DISTRIBUTORS, INC.
120 South LaSalle Street Chicago, IL 60603
http://www.kemper.com
(RECYCLE LOGO)
Printed on recycled paper.
This report is not to be distributed
unless preceded or accompanied by a
Kemper International Fund prospectus.
KGIF - 3 (8/96) [KEMPER FUNDS LOGO]
1019560
Printed in the U.S.A.
