<PAGE>
KEMPER
GLOBAL INCOME FUND
SEMIANNUAL REPORT TO SHAREHOLDERS FOR THE PERIOD ENDED JUNE 30, 1997
[MORNING STAR GRID]
SEEKS HIGH CURRENT INCOME CONSISTENT WITH PRUDENT TOTAL RETURN ASSET MANAGEMENT
BY INVESTING PRIMARILY IN INVESTMENT GRADE FOREIGN AND DOMESTIC FIXED INCOME
SECURITIES.
" . . . The generally flat performance
of the fund and the category . . . can be
largely attributed to the strength of the
U.S. dollar . . . . "
[KEMPER FUNDS LOGO]
<PAGE>
CONTENTS
3
Economic Overview
5
Performance Update
7
Market Performance
8
Country Concentrations
9
Portfolio Statistics
10
Portfolio of Investments
12
Financial Statements
14
Notes to Financial Statements
18
Financial Highlights
- --------------------------------------------------------------------------------
AT A GLANCE
- --------------------------------------------------------------------------------
KEMPER GLOBAL INCOME FUND
TOTAL RETURNS
- --------------------------------------------------------------------------------
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1997 (UNADJUSTED FOR ANY SALES CHARGE)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
CLASS A 0.00%
CLASS B -0.42%
CLASS C -0.40%
LIPPER GENERAL WORLD INCOME FUNDS CATEGORY AVERAGE* 0.89%
</TABLE>
Returns and rankings 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.
*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.
- --------------------------------------------------------------------------------
NET ASSET VALUE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AS OF AS OF
6/30/97 12/31/96
<S> <C> <C>
- --------------------------------------------
KEMPER GLOBAL INCOME FUND
CLASS A $ 8.68 $ 8.97
- --------------------------------------------
KEMPER GLOBAL INCOME FUND
CLASS B $ 8.70 $ 9.00
- --------------------------------------------
KEMPER GLOBAL INCOME FUND
CLASS C $ 8.72 $ 9.02
- --------------------------------------------
</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 #82 OF #94 OF #91 OF
138 FUNDS 138 FUNDS 138 FUNDS
- -----------------------------------------------------
5-YEAR #19 OF N/A N/A
44 FUNDS
- -----------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
DIVIDEND AND YIELD REVIEW
- --------------------------------------------------------------------------------
THE FOLLOWING TABLE SHOWS PER SHARE DIVIDEND AND YIELD INFORMATION FOR THE FUND
AS OF JUNE 30, 1997.
<TABLE>
<CAPTION>
A B C
SHARES SHARES SHARES
<S> <C> <C> <C>
- --------------------------------------------------------------
SIX-MONTH DIVIDENDS: $0.2850 $0.2579 $0.2593
- --------------------------------------------------------------
JUNE DIVIDENDS: $0.0425 $0.0376 $0.0377
- --------------------------------------------------------------
ANNUALIZED DISTRIBUTION RATE+: 5.88% 5.19% 5.19%
- --------------------------------------------------------------
SEC YIELD+: 4.70% 4.34% 4.37%
- --------------------------------------------------------------
</TABLE>
+Current annualized distribution rate is the latest monthly dividend shown as an
annualized percentage of net asset value on June 30, 1997. 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, 1997 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
YOUR FUND'S STYLE
MATURITY
QUALITY
INTER-
SHORT MEDIATE LONG
X HIGH
MEDIUM
LOW
- --------------------------------------------------------------------------------
MORNINGSTAR FIXED-INCOME FUNDS STYLE BOX
- --------------------------------------------------------------------------------
Source: Morningstar, Inc. Chicago, IL (312) 696-6000. (Morningstar's Style Box
is based on a portfolio date as of June 30, 1997.) The Fixed-Income Style Box
placement is based on a fund's average effective maturity or duration and the
average credit rating of the bond portfolio.
Please note that style boxes do not represent an exact assessment of risk and do
not represent future performance. Please consult the prospectus for a
description of investment policies.
<PAGE>
- --------------------------------------------------------------------------------
ECONOMIC OVERVIEW
[PHOTO] STEPHEN B. TIMBERS IS PRESIDENT, CHIEF EXECUTIVE AND CHIEF
INVESTMENT OFFICER OF ZURICH KEMPER INVESTMENTS, INC. (ZKI). ZKI
AND ITS AFFILIATES MANAGE APPROXIMATELY $80 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:
A self-regulating economy, a balanced budget agreement and a positive stock
market all have contributed to another excellent year for investors. Given the
extended length of today's bull market (which celebrated its 15th anniversary on
August 12), it is prudent to wonder whether the end is near. Our position is
that while there is a certain precariousness to today's environment, which we
will elaborate on below, we see little to suggest that there will be more than
occasional market corrections.
Bipartisan agreement to balance the federal budget by the year 2002 represents
significant progress that should benefit investors over the long term. By
reducing the burden of capital gains and eliminating certain tax loopholes, the
Taxpayer Relief Act of 1997 and the Balanced Budget Act of 1997 have the
potential to meaningfully affect behavior. Now that the ceiling has been raised
on capital gains from the sale of a home, empty nesters will be more inclined to
move out of homes and into smaller condominiums. Added investment and savings
options should help boost the country's sagging savings rate. From a social
perspective, government's action to widen the difference between the taxation
rate on capital gains and on income reflects a conscious effort to encourage
capital investment. The more people and businesses can do for themselves, the
less likely they are to rely on the government, which should help restrain
federal spending.
The maximum tax on long-term capital gains is now 20 percent versus a maximum
of approximately 40 percent on ordinary income earned by Americans in the
highest income tax brackets. This dramatic difference could have some influence
on the management of mutual funds in the future. Although few investment
decisions are based on their tax consequences, the legislation supports a "buy
and hold" approach to investing, by which a mutual fund generates investment
returns through gains on investments held 18 months or longer. Such gains are
taxed at the reduced capital gains rate. On the margin, portfolio managers
should focus on long-term investing -- the strategy that we have always
supported.
In addition, mutual funds will gain investment flexibility with the new law's
repeal of what has been called the "short/short rule." Previously, investment
companies had been subject to a 30 percent limitation on total income arising
from the sale of securities held less than three months -- or face severe tax
consequences. The lifting of this limitation provides newer funds, in
particular, with much needed maneuvering ability.
You can expect to hear more from Kemper about the implications of the new
legislation, and specifically about the tax reporting changes, over the next
several weeks and months. Overall, we believe that this legislation is something
the country can be proud of. It represents years of a commitment on the part of
the federal government to hold spending in check and refrain from creating new
programs. Expanding corporate revenues and profits in an extended period of low
inflation also contributed to making this investor-friendly environment
possible.
As we look toward the end of the year, we see little to trouble us. The
economy appears to be in excellent condition. Continuing the alternatingly
fast/slow pace that we have experienced for several months, the fast-growing
first quarter was followed by a slower second quarter. Such self-regulation has
minimized any need for the Federal Reserve Board to raise interest rates again.
We don't rule out the possibility of another hike in the fourth quarter,
however.
Inflation is very low. In spite of unemployment being the lowest we have seen
in decades, wage pressures are still manageable. For example, the United Parcel
Service strike and the earlier steel and airlines work actions represent the
most union activity we have seen in 10 years. Encouraged by the low unemployment
(and therefore high demand for
3
<PAGE>
- --------------------------------------------------------------------------------
ECONOMIC OVERVIEW
- --------------------------------------------------------------------------------
ECONOMIC GUIDEPOSTS
- --------------------------------------------------------------------------------
Economic activity is a key influence on investment performance and
shareholder decision-making. Periods of recession or boom, inflation, credit
expansion or credit crunch have a significant impact on mutual fund
performance.
The following are some significant economic expansion 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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NOW (7/31/97) 6 MONTHS AGO 1 YEAR AGO 2 YEARS AGO
<S> <C> <C> <C> <C>
10-year Treasury rate(1) 6.49% 6.58% 6.87% 6.28%
Prime rate(2) 8.50% 8.25% 8.25% 8.80%
Inflation rate(3) 2.30% 3.04% 2.95% 2.76%
The U.S. dollar(4) 7.32% 7.67% 4.26% -4.11%
Capital goods orders(5)* 7.11% 3.61% 16.26% 1.75%
Industrial production(5)* 3.84% 4.84% 3.38% 2.36%
Employment growth(6) 2.24% 2.20% 2.14% 2.42%
</TABLE>
(1) Falling interest rates in recent years have been a big plus for
financial assets.
(2) The interest rate that commercial lenders charge their best
borrowers.
(3) Inflation reduces an investor's real return. In the last five years,
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.
* Data as of June 30, 1997.
SOURCE: ECONOMICS DEPARTMENT, ZURICH KEMPER INVESTMENTS, INC.
workers), the unions are becoming bolder but in the end seem ready to resolve
disputes sensibly. As a consequence, wage increases remain moderate.
Our primary concern is the very high valuations of the stock market. All
things considered, it is difficult to see where we can go from here. With prices
at such heady levels, the market can be expected to react negatively to even
minor earnings disappointments, as we have seen in August. Kemper's response to
this market is to remain fully invested and to reduce exposure by diversifying
across a wider group of investment opportunities. Research, the first step in
stock selection, is key in this kind of a market.
Bond markets are obviously cheered by recent
events, and prospects for income investors continue to be positive. Interest
rates are stable and credit quality has not been an issue. A dwindling supply of
municipal bonds has enabled municipal investments to outperform U.S. Treasuries.
In such a fully valued domestic market, it can make sense to look to
international markets for their growth potential. The strength of the dollar
thus far this year has diminished returns but international opportunities look
bright.
With this commentary as an economic backdrop, we encourage you to read the
following detailed report 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 14, 1997
4
<PAGE>
WHILE GLOBAL BOND MARKETS PROVIDED REASONABLE RETURNS FOR THE PERIOD IN LOCAL
CURRENCY TERMS, THE STRONG U.S. DOLLAR DIMINISHED OVERALL PERFORMANCE WHEN
CONVERTED. FOLLOWING, PORTFOLIO MANAGER GORDON JOHNS DISCUSSES THE BOND MARKETS
AND FUND PERFORMANCE.
[PHOTO]
GORDON JOHNS JOINED ZURICH INVESTMENT MANAGEMENT LIMITED (ZIML), A LONDON-BASED
AFFILIATE OF ZURICH KEMPER INVESTMENTS INC. IN 1988. HE IS THE PORTFOLIO MANAGER
OF KEMPER GLOBAL INCOME FUND AND THE MANAGING DIRECTOR OF ZIML. JOHNS GRADUATED
WITH A B.A. IN LAW FROM BALLIOL COLLEGE, OXFORD.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT, AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME, BASED ON MARKET AND OTHER
CONDITIONS.
- ----
Q
GORDON, WHAT DID YOU SEE HAPPENING IN THE GLOBAL BOND MARKETS DURING THE
PERIOD AND HOW DID THE FUND PERFORM?
- ----
A
In the first half of the year bonds did fairly well in local currency
terms. After a generally flat first quarter, they produced an average total
return of three percent in the second quarter in local terms. The best
performers were Australia and the United Kingdom and all markets were positive
despite a slight increase in yields in Japan. However, the generally flat
performance of the fund and the category can be largely attributed to the
strength of the U.S. dollar. To the dollar-based investor, dollar strength
reduced local currency returns by over 500 basis points year to date. Our total
dollar exposure in the fund, including hedges, was about 50 percent throughout
the period which helped offset some of the diminishing effects of the dollar
strength.
When measured in dollar terms, 14 of the 21 markets we follow had negative
performance. Japan and the United Kingdom had the best returns (see page 7 for
world market performance) in U.S. dollar terms while Sweden and Norway rounded
out the bottom. In Europe and Japan, bonds were helped by continued mild growth.
This slower growth is the product of continued low short-term interest rates and
falling inflation. Even those markets that saw higher interest rates throughout
the period, such as the U.S., performed reasonably well because the inflation
environment remained mild.
- ----
Q
WHICH MARKETS DID YOU FAVOR?
- ----
A
We were heavily exposed to Australia, Canada, the UK and New Zealand. In
these markets, the economic cycle is fairly advanced. That is, rises in short-
term interest rates combined with favorable inflation numbers created an
environment where long-term yields can fall and, therefore, produce capital
gains. Europe and Japan are lagging somewhat in the economic cycle because, as I
mentioned, short-term interest rates are still quite low.
The efforts to meet the European Monetary Union (EMU) deadlines and
requirements continue to raise questions and affect bond market performance.
Some of the countries hoping to participate in EMU in 1999 such as Spain, Italy
and Portugal have enjoyed improved bond market returns. We have been somewhat
skeptical about the likelihood of these countries being included and, therefore,
have avoided exposure to these markets. We remain concerned that the markets of
EMU candidate countries reflect a discount that assumes a smooth start to EMU
and leaves no premium for possible risks.
5
<PAGE>
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE
- ----
Q
HAVE YOU MADE ANY ADJUSTMENTS TO THE AVERAGE DURATION OF THE FUND?
- ----
A
We maintained our long-term approach and remained committed to government
and supranational bonds with very high credit quality. Our average duration was
intermediate at just under five years throughout the period.
- ----
Q
WERE THERE ANY OPPORTUNITIES THAT YOU MIGHT HAVE MISSED?
- ----
A
Our limited exposure to the yen worked against us because it bounced very
strongly after weakening significantly in the first quarter. Also, our
reluctance to jump on the EMU bandwagon prevented us from profiting from the
strength markets such as Spain and Italy are experiencing. We remain committed
to our decision to limit our exposure in these areas because we expect a
significant correction in these markets if it becomes apparent that they will
not meet the EMU requirements or if the process is delayed.
- ----
Q
WHAT IS YOUR OUTLOOK FOR THE COMING MONTHS?
- ----
A
We are somewhat cautious about the prospects going forward. Bond markets
have performed pretty well but that has been masked by the strength of the
dollar for the U.S. investor. Therefore, the returns achieved in dollar terms
have not been particularly good. We are concerned about future market
performance because yields have already come down a long way and because we see
the U.S. dollar continuing its strength. Bonds are not over valued as they were
at the end of 1993, for example, but we find it difficult to get very excited
about the outlook.
- ----
Q
ARE THERE ANY RISKS TO THIS OUTLOOK?
- ----
A
Well, with a somewhat negative forecast, one "risk" could actually be very
positive. If the dollar surprises us and is weaker in the second half of the
year, that could boost fund performance by reducing the amount of local currency
return lost in the conversion to U.S. dollars. A true risk would be if inflation
starts to resurge. If this scenario were to occur, our current fund position
would be incorrect. We would need to be selling and shortening duration.
6
<PAGE>
- --------------------------------------------------------------------------------
MARKET PERFORMANCE
US DOLLAR STRENGTH WEAKENED LOCAL CURRENCY RETURNS
THE GRAPH BELOW PRESENTS THE SIX-MONTH RETURNS OF 20 GOVERNMENT BOND MARKETS
TRACKED BY SALOMON BROTHERS FOR THE PERIOD ENDING JUNE 30, 1997, EXPRESSED IN
U.S. DOLLAR TERMS AND IN LOCAL CURRENCIES. THIS INFORMATION IS HISTORICAL AND
DOES NOT REFLECT FUTURE RETURNS OF THESE MARKETS.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
US$ LOCAL CURRENCY
<S> <C> <C>
UNITED STATES 2.59% 2.59%
CANADA 2.62% 3.29%
AUSTRALIA 0.01% 6.03%
JAPAN 3.45% 1.99%
AUSTRIA -8.61% 3.37%
BELGIUM -8.65% 3.39%
DENMARK -6.94% 4.61%
FINLAND -8.37% 3.26%
FRANCE -8.38% 3.46%
GERMANY -8.52% 3.44%
IRELAND -7.35% 3.94%
ITALY -6.10% 5.08%
NETHERLANDS -8.82% 3.28%
SPAIN -7.00% 5.15%
SWEDEN -8.83% 3.24%
SWITZERLAND -3.44% 4.84%
UNITED KINGDOM 3.15% 6.06%
NEW ZEALAND 0.47% 4.74%
NORWAY -9.45% 3.81%
PORTUGAL -7.08% 5.22%
</TABLE>
7
<PAGE>
- --------------------------------------------------------------------------------
COUNTRY CONCENTRATIONS
GEOGRAPHIC COMPOSITION OF KEMPER GLOBAL INCOME FUND
BASED ON TOTAL NET ASSETS ON JUNE 30, 1997.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
UNITED KINGDOM 20%
CANADA 19%
UNITED STATES 18%
NETHERLANDS 12%
NEW ZEALAND 10%
GERMANY 6%
SWEDEN 6%
AUSTRALIA 5%
NORWAY 1%
</TABLE>
8
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO STATISTICS
PORTFOLIO COMPOSITION*
<TABLE>
<CAPTION>
ON 6/30/97 ON 12/31/96
<S> <C> <C>
FOREIGN/U.S. GOVERNMENT SECURITIES 92% 94%
- --------------------------------------------------------------------------------------------------
OTHER SECURITIES** 5 5
- --------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS 3 1
- --------------------------------------------------------------------------------------------------
100% 100%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FOREIGN/U.S. OTHER SECURITIES** CASH AND
GOVERNMENT SECURITIES EQUIVALENTS
<S> <C> <C> <C>
On 6/30/97 92% 5% 3%
On 12/31/96 94% 5% 1%
</TABLE>
- -------------------------------------------------------------------
*Portfolio composition is subject to change.
**Includes supranational entities and corporates guaranteed by governments
QUALITY
<TABLE>
<CAPTION>
ON 6/30/97 ON 12/31/96
<S> <C> <C>
AAA 85% 88%
- --------------------------------------------------------------------------------------------------
AA 15 12
- --------------------------------------------------------------------------------------------------
100% 100%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AAA AA
<S> <C> <C>
On 6/30/97 85% 15%
On 12/31/96 88% 12%
</TABLE>
- -------------------------------------------------------------------
AVERAGE MATURITY
<TABLE>
<CAPTION>
ON 6/30/97 ON 12/31/96
<S> <C> <C>
6.5 YEARS 6.5 YEARS
- --------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
KEMPER GLOBAL INCOME FUND
Portfolio of Investments at June 30, 1997 (unaudited)
(IN THOUSANDS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
LOCAL CURRENCY U.S. DOLLAR
CURRENCY ISSUER PRINCIPAL VALUE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS (91.5%) AND CORPORATE OBLIGATIONS (5.2%)
- --------------------------------------------------------------------------------------------------------------
BRITISH POUND--19.7%
Export-Import Bank of the United States,
8.00%, 2007 3,500 $ 6,055
Republic of Finland, 7.00%, 2000 3,500 5,808
United Kingdom
7.25%, 2007 1,850 3,111
8.00%, 2009 4,450 7,899
-------------------------------------------------------------------------------
22,873
- --------------------------------------------------------------------------------------------------------------
CANADIAN DOLLAR--18.5%
Alberta, 6.375%, 2004 7,900 5,836
Government of Canada
7.75%, 2003 6,500 5,086
6.50%, 2004 6,790 5,041
Province of Ontario, 8.00%, 2003 7,000 5,568
-------------------------------------------------------------------------------
21,531
- --------------------------------------------------------------------------------------------------------------
U.S. DOLLAR--18.2%
U.S. Treasury Notes
6.375%, 2000 5,000 5,025
6.25%, 2003 2,500 2,482
7.50%, 2005 12,900 13,648
-------------------------------------------------------------------------------
21,155
- --------------------------------------------------------------------------------------------------------------
NETHERLANDS GUILDER--12.0%
Dutch State Loan
6.70%, 1998 5,800 3,077
8.20%, 2002 7,000 4,128
8.25%, 2007 11,000 6,740
-------------------------------------------------------------------------------
13,945
- --------------------------------------------------------------------------------------------------------------
NEW ZEALAND DOLLAR--10.4%
Government of New Zealand
6.50%, 2000 7,700 5,204
8.00%, 2004 9,600 6,881
-------------------------------------------------------------------------------
12,085
- --------------------------------------------------------------------------------------------------------------
SWEDISH KRONA--6.1%
Kingdom of Sweden
13.00%, 2001 8,200 1,336
10.25%, 2003 28,000 4,362
6.00%, 2005 11,500 1,453
-------------------------------------------------------------------------------
7,151
- --------------------------------------------------------------------------------------------------------------
GERMAN DEUTSCHEMARK--5.8%
Federal Republic of Germany
8.50%, 2001 2,000 1,309
7.125%, 2002 4,100 2,603
6.50%, 2003 4,700 2,900
-------------------------------------------------------------------------------
6,812
- --------------------------------------------------------------------------------------------------------------
AUSTRALIAN DOLLAR--5.0%
Commonwealth of Australia
12.00%, 2001 3,100 2,823
6.75%, 2006 2,000 1,475
Federal National Mortgage Association,
6.50%, 2002 2,000 1,497
-------------------------------------------------------------------------------
5,795
</TABLE>
10
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
LOCAL CURRENCY U.S. DOLLAR
CURRENCY ISSUER PRINCIPAL VALUE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NORWEGIAN KRONE--1.0%
Kingdom of Norway, 9.00%, 1999 6,900 $ 1,127
-------------------------------------------------------------------------------
TOTAL GOVERNMENT AND CORPORATE
OBLIGATIONS--96.7%
(Cost: $112,255) 112,474
-------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
U.S. DOLLARS
MONEY MARKET
INSTRUMENTS--.7%
Yield--5.41% to 5.48%
Due--July and September 1997
(Cost: $792) 800 792
-------------------------------------------------------------------------------
TOTAL INVESTMENTS--97.4%
(Cost: $113,047) 113,266
-------------------------------------------------------------------------------
CASH AND OTHER ASSETS, LESS LIABILITIES--2.6% 2,987
-------------------------------------------------------------------------------
NET ASSETS--100% $ 116,253
-------------------------------------------------------------------------------
</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 on investments of $113,047,000 for federal income tax purposes
at June 30, 1997, the gross unrealized appreciation was $1,451,000, the gross
unrealized depreciation was $1,232,000 and the net unrealized appreciation on
investments was $219,000.
See accompanying Notes to Financial Statements.
11
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (unaudited)
(IN THOUSANDS)
<TABLE>
<S> <C>
- ---------------------------------------------------
ASSETS
- ---------------------------------------------------
Investments, at value (Cost: $113,047) $113,266
- ---------------------------------------------------
Cash 40
- ---------------------------------------------------
Receivable for:
Interest 2,730
- ---------------------------------------------------
Investments sold 1,983
- ---------------------------------------------------
Fund shares sold 104
- ---------------------------------------------------
TOTAL ASSETS 118,123
- ---------------------------------------------------
- ---------------------------------------------------
LIABILITIES AND NET ASSETS
- ---------------------------------------------------
Payable for:
Investments purchased 1,503
- ---------------------------------------------------
Fund shares redeemed 80
- ---------------------------------------------------
Management fee 73
- ---------------------------------------------------
Distribution services fee 24
- ---------------------------------------------------
Administrative services fee 20
- ---------------------------------------------------
Custodian and transfer agent fees and
related expenses 131
- ---------------------------------------------------
Trustees' fees and other 39
- ---------------------------------------------------
Total liabilities 1,870
- ---------------------------------------------------
NET ASSETS $116,253
- ---------------------------------------------------
- ---------------------------------------------------
ANALYSIS OF NET ASSETS
- ---------------------------------------------------
Paid-in capital $167,087
- ---------------------------------------------------
Accumulated net realized loss on
investments and foreign currency
transactions (51,078)
- ---------------------------------------------------
Net unrealized appreciation on
investments and assets and liabilities
in foreign currencies 244
- ---------------------------------------------------
NET ASSETS APPLICABLE TO SHARES
OUTSTANDING $116,253
- ---------------------------------------------------
- ---------------------------------------------------
THE PRICING OF SHARES
- ---------------------------------------------------
CLASS A SHARES
Net asset value and redemption price
per share ($77,823,000 DIVIDED BY
8,962,000 shares outstanding) $8.68
- ---------------------------------------------------
Maximum offering price per share (net
asset value, plus 4.71% of net asset
value or 4.50% of offering price) $9.09
- ---------------------------------------------------
CLASS B SHARES
Net asset value and redemption price
(subject to contingent deferred sales
charge) per share ($37,247,000
DIVIDED BY 4,281,000 shares
outstanding) $8.70
- ---------------------------------------------------
CLASS C SHARES
Net asset value and redemption price
(subject to contingent deferred sales
charge) per share ($1,161,000
DIVIDED BY 133,000 shares outstanding) $8.72
- ---------------------------------------------------
CLASS I SHARES
Net asset value and redemption price
per share ($22,000 DIVIDED BY 2,500
shares outstanding) $8.63
- ---------------------------------------------------
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
Six months ended June 30, 1997 (unaudited)
(IN THOUSANDS)
<TABLE>
<S> <C>
- --------------------------------------------------
NET INVESTMENT INCOME
- --------------------------------------------------
Interest income $ 4,318
- --------------------------------------------------
Expenses:
Management fee 457
- --------------------------------------------------
Distribution services fee 156
- --------------------------------------------------
Administrative services fee 126
- --------------------------------------------------
Custodian and transfer agent fees and
related expenses 188
- --------------------------------------------------
Professional fees 41
- --------------------------------------------------
Trustees' fees and other 17
- --------------------------------------------------
Total expenses 985
- --------------------------------------------------
NET INVESTMENT INCOME 3,333
- --------------------------------------------------
- --------------------------------------------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
- --------------------------------------------------
Net realized loss on sales of
investments and foreign currency
transactions (2,525)
- --------------------------------------------------
Change in net unrealized appreciation
on investments and assets and
liabilities in foreign currencies (1,206)
- --------------------------------------------------
Net loss on investments (3,731)
- --------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ (398)
- --------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
<S> <C> <C>
- ----------------------------------------------------------------------------
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------
Net investment income $ 3,333 7,762
- ----------------------------------------------------------------------------
Net realized gain (loss) (2,525) 2,418
- ----------------------------------------------------------------------------
Change in net unrealized depreciation (1,206) (3,104)
- ----------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (398) 7,076
- ----------------------------------------------------------------------------
Net equalization credits -- 38
- ----------------------------------------------------------------------------
Distribution from net investment income (3,871) (8,878)
- ----------------------------------------------------------------------------
Net decrease from capital share
transactions (11,239) (19,434)
- ----------------------------------------------------------------------------
TOTAL DECREASE IN NET ASSETS (15,508) (21,198)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------
Beginning of period 131,761 152,959
- ----------------------------------------------------------------------------
END OF PERIOD $116,253 131,761
- ----------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
13
<PAGE>
- --------------------------------------------------------------------------------
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 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.
Differences in class expenses will result in the
payment of different per share income dividends by
class. All shares of the Fund have equal rights
with respect to voting, dividends and assets,
subject to class specific preferences.
- --------------------------------------------------------------------------------
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 financial futures and
options are valued at the settlement price
established each day by the board of trade or
exchange on which they are traded. Over-the-counter
traded options are valued based upon prices
provided by market makers. Forward foreign currency
contracts and foreign currencies are valued at the
forward and current exchange rates, respectively,
prevailing on the day of valuation. Other
securities and assets are valued at fair value as
determined in good faith by the Board of Trustees.
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 rates of exchange are
determined in good faith by the Board of Trustees.
Income and expenses and purchases and sales of
investments are translated into U.S. dollars at the
rates of exchange prevailing on the respective
dates of such transactions. The Fund includes that
portion of the results of operations resulting from
changes in foreign exchange rates with net realized
and unrealized gain (loss) on investments, as
appropriate.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME.
Investment transactions are accounted for on the
trade date (date the order to buy or sell is
executed). Interest income is recorded on the
accrual basis and includes
14
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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 Fund's net assets
attributable to that class by the number of shares
of the class outstanding. 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 during the six
months ended June 30, 1997. The accumulated net
realized loss on sales of investments for federal
income tax purposes at June 30, 1997, amounting to
approximately $46,428,000, is available to offset
future taxable gains. However, of this amount, the
availability of approximately $28,000,000 obtained
through prior fund acquisitions is limited to
$7,000,000 per year from 1998 through 2001. If not
applied, the total loss carryover expires during
the period 1999 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.
- --------------------------------------------------------------------------------
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 $457,000 for the six
months ended June 30, 1997. Zurich Investment
Management Limited, an affiliate of ZKI, services
as sub-adviser with respect to foreign securities
investments in the Fund and is paid by ZKI for its
services.
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT.
The Fund has an underwriting and distribution
services agreement with Zurich Kemper Distributors,
Inc. (ZKDI) (formerly known as Kemper Distributors,
Inc.).
15
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Underwriting commissions paid in connection with
the distribution of Class A shares are as follows:
<TABLE>
<CAPTION>
COMMISSIONS
RETAINED COMMISSIONS ALLOWED
BY ZKDI BY ZKDI TO FIRMS
----------- -------------------
<S> <C> <C>
Six months ended June 30, 1997 $ 5,000 30,000
</TABLE>
For services under the distribution services
agreement, the Fund pays ZKDI a fee of .75% of
average daily net assets of the Class B and Class C
shares. Pursuant to the agreement, ZKDI enters into
related selling group agreements with various firms
at various rates for sales of Class B and Class C
shares. In addition, ZKDI 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 CDSC received in
connection with the redemption of such shares are
as follows:
<TABLE>
<CAPTION>
DISTRIBUTION
FEES COMMISSIONS AND
AND CDSC DISTRIBUTION FEES PAID
RECEIVED BY ZKDI BY ZKDI TO FIRMS
---------------- ----------------------
<S> <C> <C>
Six months ended June 30, 1997 $ 193,000 111,000
</TABLE>
ADMINISTRATIVE SERVICES AGREEMENT. The Fund has an
administrative services agreement with ZKDI. For
providing information and administrative services
to Class A, Class B and Class C shareholders, the
Fund pays ZKDI a fee at an annual rate of up to
.25% of average daily net assets of each class.
ZKDI 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 PAID BY ASF PAID
THE FUND TO ZKDI BY ZKDI TO FIRMS
---------------- ----------------
<S> <C> <C>
Six months ended June 30, 1997 $ 126,000 129,000
</TABLE>
SHAREHOLDER SERVICES AGREEMENT. Pursuant to a
services agreement with the Fund's transfer agent,
Zurich Kemper Service Company (ZKSvC) (formerly
known as Kemper Service Company) is the shareholder
service agent of the Fund. Under the agreement,
ZKSvC received shareholder services fees of
$113,000 for the six months ended June 30, 1997.
OFFICERS AND TRUSTEES. Certain officers or trustees
of the Fund are also officers or directors of ZKI.
During the six months ended June 30, 1997, the Fund
made no direct payments to its officers and
incurred trustees' fees of $8,000 to independent
trustees.
- --------------------------------------------------------------------------------
4 INVESTMENT
TRANSACTIONS
For the six months ended June 30, 1997, investment
transactions (excluding short-term instruments) are
as follows (in thousands):
<TABLE>
<S> <C>
Purchases $200,533
Proceeds from sales 213,600
</TABLE>
16
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
5 CAPITAL SHARE
TRANSACTIONS
The following table summarizes the activity in
capital shares of the Fund (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1997 1996
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
SHARES SOLD
- --------------------------------------------------------------------------------------------------
Class A 470 $ 4,081 1,139 $ 10,056
- --------------------------------------------------------------------------------------------------
Class B 463 4,023 1,004 9,060
- --------------------------------------------------------------------------------------------------
Class C 73 634 138 1,223
- --------------------------------------------------------------------------------------------------
Class I -- -- 1 8
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
SHARES ISSUED IN REINVESTMENT OF DIVIDENDS
- --------------------------------------------------------------------------------------------------
Class A 204 1,767 459 4,021
- --------------------------------------------------------------------------------------------------
Class B 95 823 210 1,846
- --------------------------------------------------------------------------------------------------
Class C 3 27 3 28
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
SHARES REDEEMED
- --------------------------------------------------------------------------------------------------
Class A (1,672) (14,486) (3,428) (30,237)
- --------------------------------------------------------------------------------------------------
Class B (898) (7,814) (1,650) (14,736)
- --------------------------------------------------------------------------------------------------
Class C (34) (294) (78) (692)
- --------------------------------------------------------------------------------------------------
Class I -- -- (1) (11)
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
CONVERSION OF SHARES
- --------------------------------------------------------------------------------------------------
Class A 344 2,968 67 612
- --------------------------------------------------------------------------------------------------
Class B (344) (2,968) (69) 612
- --------------------------------------------------------------------------------------------------
NET DECREASE FROM CAPITAL SHARE
TRANSACTIONS $ (11,239) $ (19,434)
- --------------------------------------------------------------------------------------------------
</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 (which is
limited to the unrealized gain, if any) if the
counterparty fails to perform under the contract.
At June 30, 1997, the Fund's outstanding forward
foreign currency contracts are as follows (in
thousands):
<TABLE>
<CAPTION>
UNREALIZED
FOREIGN CURRENCY CONTRACT AMOUNT SETTLEMENT GAIN
TO BE DELIVERED IN U.S. DOLLARS DATE (LOSS)
<C> <S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
7,630 Australian Dollars $ 6,579 October '97 $ 279
- ------------------------------------------------------------------------------------------------------
5,300 British Pounds 8,628 July '97 (188)
- ------------------------------------------------------------------------------------------------------
26,700 Canadian Dollars 19,373 October '97 (99)
- ------------------------------------------------------------------------------------------------------
5,000 New Zealand Dollars 3,430 July '97 43
- ------------------------------------------------------------------------------------------------------
NET UNREALIZED GAIN $ 35
- ------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
---------------------------------------------------------------
CLASS A
----------------------------------------------------------------
SIX MONTHS YEAR ENDED SIX MONTHS
ENDED DECEMBER 31, ENDED YEAR ENDED
JUNE 30, ---------------------- DECEMBER 31, JUNE 30,
1997 1996 1995 1994 1993 1993
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.97 9.05 8.55 9.29 9.21 9.44
- ---------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .26 .52 .61 .60 .27 .72
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) (.26) (.02) 1.05 (.74) .16 (.17)
- ---------------------------------------------------------------------------------------------------------
Total from investment operations -- .50 1.66 (.14) .43 .55
- ---------------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment
income .29 .58 1.16 .38 -- .72
- ---------------------------------------------------------------------------------------------------------
Distribution from net realized gain -- -- -- -- .11 .06
- ---------------------------------------------------------------------------------------------------------
Tax return of capital distribution -- -- -- .22 .24 --
- ---------------------------------------------------------------------------------------------------------
Total dividends .29 .58 1.16 .60 .35 .78
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.68 8.97 9.05 8.55 9.29 9.21
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) --% 5.87 19.89 (1.47) 4.73 6.16
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- ---------------------------------------------------------------------------------------------------------
Expenses 1.29% 1.48 1.34 1.53 1.29 1.52
- ---------------------------------------------------------------------------------------------------------
Net investment income 5.79% 5.77 6.43 6.67 5.75 7.87
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------
CLASS B
--------------------------------------------
SIX MONTHS YEAR ENDED MAY 31
ENDED DECEMBER 31, TO
JUNE 30, -------------- DECEMBER 31,
1997 1996 1995 1994
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.00 9.09 8.56 8.70
- -------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .22 .46 .56 .30
- -------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) (.26) (.02) 1.05 (.14)
- -------------------------------------------------------------------------------------
Total from investment operations (.04) .44 1.61 .16
- -------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment
income .26 .53 1.08 .19
- -------------------------------------------------------------------------------------
Tax return of capital distribution -- -- -- .11
- -------------------------------------------------------------------------------------
Total dividends .26 .53 1.08 .30
- -------------------------------------------------------------------------------------
Net asset value, end of period $ 8.70 9.00 9.09 8.56
- -------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) (.42)% 5.11 19.21 1.89
- -------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- -------------------------------------------------------------------------------------
Expenses 2.24% 2.14 1.98 2.27
- -------------------------------------------------------------------------------------
Net investment income 4.84% 5.11 5.79 5.89
- -------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
--------------------------------------------
CLASS C
--------------------------------------------
SIX MONTHS YEAR ENDED MAY 31
ENDED DECEMBER 31, TO
JUNE 30, -------------- DECEMBER 31,
1997 1996 1995 1994
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.02 9.09 8.56 8.70
- -------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .22 .48 .57 .30
- -------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) (.26) (.02) 1.05 (.14)
- -------------------------------------------------------------------------------------
Total from investment operations (.04) .46 1.62 .16
- -------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment
income .26 .53 1.09 .19
- -------------------------------------------------------------------------------------
Tax return of capital distribution -- -- -- .11
- -------------------------------------------------------------------------------------
Total dividends .26 .53 1.09 .30
- -------------------------------------------------------------------------------------
Net asset value, end of period $ 8.72 9.02 9.09 8.56
- -------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) (.40)% 5.31 19.26 1.91
- -------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- -------------------------------------------------------------------------------------
Expenses 2.06% 2.06 2.06 2.23
- -------------------------------------------------------------------------------------
Net investment income 5.02% 5.19 5.71 5.93
- -------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------
CLASS I
-----------------------------------------
SIX MONTHS NOVEMBER 22
ENDED YEAR ENDED TO
JUNE 30, DECEMBER 31, DECEMBER 31,
1997 1996 1995
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- ----------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.93 9.05 9.57
- ----------------------------------------------------------------------------------
Income from investment operations:
Net investment income .25 .51 .07
- ----------------------------------------------------------------------------------
Net realized and unrealized loss (.26) (.02) (.03)
- ----------------------------------------------------------------------------------
Total from investment operations (.01) .49 .04
- ----------------------------------------------------------------------------------
Less distribution from net investment
income .29 .61 .56
- ----------------------------------------------------------------------------------
Net asset value, end of period $ 8.63 8.93 9.05
- ----------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) (.11)% 5.81 .43
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- ----------------------------------------------------------------------------------
Expenses 1.52% 1.53 .88
- ----------------------------------------------------------------------------------
Net investment income 5.56% 5.72 6.40
- ----------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
SUPPLEMENTAL DATA FOR ALL CLASSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED SIX MONTHS
ENDED DECEMBER 31, ENDED YEAR ENDED
JUNE 30, --------------------------- DECEMBER 31, JUNE 30,
1997 1996 1995 1994 1993 1993
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Net assets at end of period (in
thousands) $ 116,253 131,761 152,959 170,700 83,021 78,068
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 337% 276 220 378 484 372
- ------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Total return does not reflect the effect of any sales charges. Per share
data for 1996 was determined based on average shares outstanding during
the period. Data for the six months ended June 30, 1997 is unaudited.
19
<PAGE>
- --------------------------------------------------------------------------------
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
SHIRLEY D. PETERSON
Trustee
WILLIAM P. SOMMERS
Trustee
OFFICERS
CHARLES R. MANZONI, JR.
Vice President
JOHN E. NEAL
Vice President
ROBERT C. PECK, JR.
Vice President
PHILIP J. COLLORA
Vice President and
Secretary
JEROME L. DUFFY
Treasurer
ELIZABETH C. WERTH
Assistant Secretary
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
LEGAL COUNSEL VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 North LaSalle Street
Chicago, IL 60601
- ------------------------------------------------------------------------
SHAREHOLDER SERVICE AGENT ZURICH KEMPER SERVICE COMPANY
P.O. Box 419066
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 ZURICH KEMPER DISTRIBUTORS, INC.
222 South Riverside Plaza Chicago, IL
60606
www.kemper.com
[RECYCLE LOGO]
Printed on recycled paper in the U.S.A.
This report is not to be distributed
unless preceded or accompanied by a
Kemper Global Income Fund prospectus.
KGIF - 3 (8-97) 1036350
Printed in the U.S.A. [LOGO]
