<PAGE> 1
TAX-EXEMPT NEW YORK
MONEY MARKET FUND
SEMI-ANNUAL REPORT TO SHAREHOLDERS
SEPTEMBER 30, 1995
<PAGE> 2
DEAR SHAREHOLDERS:
We are pleased to provide you with the Tax-Exempt New York Money Market Fund
semi-annual report for the six-month period ended September 30, 1995.
Your Fund's management greatly appreciates your decision to invest in
Tax-Exempt New York Money Market Fund. During the past six months, the fund
registered solid performance and achieved its objective of providing maximum
current income exempt from federal, State of New York and New York City income
taxes, while maintaining stability of principal.
ECONOMIC REVIEW AND OUTLOOK
The momentum of the 1994 economic expansion has continued on into 1995, as
evidenced by growth in personal income, consumer spending, construction
spending and hiring during the six-month period ended September 30, 1995.
It was over a year ago that the Federal Reserve Board initiated a series of
rate hikes intended to slow economic growth and keep inflation in check. While
other markets reacted negatively to the rising rate environment, it had a
positive effect on the short-term money markets. Tax-Exempt New York Money
Market Fund took advantage of rising interest rates by investing in high
quality, short-term money market instruments, which are exempt from federal,
State of New York and New York City income taxes.
Looking ahead, we anticipate the economy will grow at a moderate pace with some
signs of acceleration. Inflation should not become a problem, and we anticipate
an extended period of interest rate stability. While investments in other
markets may remain volatile, money market funds such as Tax-Exempt New York
Money Market Fund should offer the opportunity for attractive yields and
should continue to be an excellent place to invest your money.
Your Fund's management thanks you for the vote of confidence you have shown
through your investment and continues its dedication to performance. We look
forward to serving your investment needs for years to come.
Sincerely,
/s/ FRANK RACHWALSKI
Frank Rachwalski
Vice President and Portfolio Manager
October 12, 1995
Frank Rachwalski is Senior Vice President of Kemper Financial Services, Inc.
and Vice President and Portfolio Manager of Tax-Exempt New York Money Market
Fund. Mr. Rachwalski holds a B.B.A. and a M.B.A. degree from Loyola
University.
PORTFOLIO RESULTS
For the six months ended September 30, 1995, the Tax-Exempt New York Money
Market Fund had a net annualized yield of 3.10% and a tax-equivalent yield of
5.57%.*
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government, and there can be no assurance that the Fund will be able to
maintain a stable net asset value of $1.00 per share.
STATISTICAL NOTE
The Fund's net annualized yield for the six months ended September 30, 1995, is
the annualized sum of the daily dividend rates for the period. Yields are
historical and may not represent future yields, which will fluctuate.
*The tax-equivalent yield is based upon the Fund's yield and a 44.3% combined
Federal and State of New York and New York City marginal income tax rate.
Income from the Tax-Exempt New York Money Market Fund may be subject to local
taxes.
<PAGE> 3
Tax-Exempt New York Money Market Fund
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
(Value in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
(a) VARIABLE RATE DEMAND SECURITIES
Albany
Industrial Development Agency
5.15% $ 400
------------------------------------------------------------------------
Babylon
Industrial Development Agency
4.20% 400
------------------------------------------------------------------------
Dutchess County
Industrial Development Agency
4.65% 100
------------------------------------------------------------------------
Erie County
Water Authority
4.15% 400
------------------------------------------------------------------------
Franklin County
Industrial Development Agency
4.25% 300
------------------------------------------------------------------------
Metropolitan Transportation Authority
4.30% 400
------------------------------------------------------------------------
Mount Pleasant
Industrial Development Authority
4.30% 700
------------------------------------------------------------------------
New York City
General Obligation
4.47% 1,200
Housing Development Corporation-
Columbus Gardens
4.25% 400
East 96th Street
4.25% 300
James Tower Development
4.20% 200
Queenswood Apartments
4.25% 300
Tribeca Towers
4.20% 400
Industrial Development Agency
4.65% 100
Municipal Water Finance Authority
4.65% 700
Trust for Cultural Resources-
American Museum of Natural History
4.10% 300
Carnegie Hall
4.15% 300
Museum of Broadcasting
4.25% 200
------------------------------------------------------------------------
New York State
Energy Research and Development Authority
4.51% 800
Housing Finance Agency-
Liberty View Apartments
3.90% 300
Mt. Sinai School of Medicine
3.90% 100
</TABLE>
(2)
<PAGE> 4
Tax-Exempt New York Money Market Fund
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PORTFOLIO OF INVESTMENTS
September 30, 1995
(Value in thousands)
- ---------------------------------------------------------------------------
<TABLE>
Value
<S> <C>
Housing Finance Agency-
Normandie Court I
4.15% $ 500
Trackside Homes Phase III
4.35% 200
Job Development Authority
3.69% 970
Local Government Assistance Corporation
4.25% 400
Medical Care Facilities Finance Agency-
Lenox Hill Hospital
4.05% 400
Pooled Equipment Loan Program
4.20% 300
New York and New Jersey Port Authority
4.25% 300
- ---------------------------------------------------------------------------
Schenectady County
Industrial Development Agency
4.15% 100
- ---------------------------------------------------------------------------
St. Lawrence County
Industrial Development Agency
4.15% 400
- ---------------------------------------------------------------------------
Suffolk County
Industrial Development Agency
4.25% 450
- ---------------------------------------------------------------------------
TOTAL VARIABLE RATE DEMAND SECURITIES - 77.9%
(average maturity: 4 days) 12,320
- ---------------------------------------------------------------------------
OTHER SECURITIES
Nassau County
Revenue Anticipation Notes
3.75%-3.90%, 3/15/96-4/15/96 702
- ---------------------------------------------------------------------------
New York City
Metropolitan Transportation Authority
4.25%, 12/14/95 381
Revenue Anticipation Notes
3.90%, 4/11/96 501
- ---------------------------------------------------------------------------
New York State
Dormitory Authority-
Memorial Sloan-Kettering Cancer Center
3.80%, 11/13/95 400
Second Short-Term Revenue Note
3.80%, 12/13/95 597
Energy Research and Development Authority-
Electric and Gas Corporation
4.60%, 12/1/95 300
Long Island Lighting Company
4.70%, 3/1/96 500
General Obligation
3.65%, 10/18/95 500
</TABLE>
(3)
<PAGE> 5
Tax-Exempt New York Money Market Fund
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
September 30, 1995
(Value in thousands)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
TOTAL OTHER SECURITIES - 24.6%
(average maturity: 106 days) $ 3,881
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 102.5%
(average maturity: 28 days) 16,201
- -------------------------------------------------------------------------------
LIABILITIES, LESS OTHER ASSETS -(2.5%) (390)
- -------------------------------------------------------------------------------
NET ASSETS - 100% $ 15,811
===============================================================================
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS
Interest rates represent annualized yield to date of maturity, except for
variable rate demand securities described in Note (a). For each security, cost
(for financial reporting and federal income tax purposes) and carrying value are
the same. Likewise, carrying value approximates principal amount.
(a) Variable rate demand securities are payable within five business days.
These securities are backed by credit support agreements from banks or
insurance institutions. The rates shown are the current rates at September
30, 1995.
See accompanying Notes to Financial Statements.
(4)
<PAGE> 6
Tax-Exempt New York Money Market Fund
- ----------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
(in thousands)
- ----------------------------------------------------
<TABLE>
<CAPTION>
ASSETS
- ----------------------------------------------------
<S> <C>
Investments, at amortized cost $16,201
- ----------------------------------------------------
Interest receivable 75
- ----------------------------------------------------
Total assets 16,276
- ----------------------------------------------------
LIABILITIES AND NET ASSETS
- ----------------------------------------------------
Cash overdraft 426
- ----------------------------------------------------
Payable for:
Dividends 12
- ----------------------------------------------------
Distribution services fee 5
- ----------------------------------------------------
Other 22
- ----------------------------------------------------
Total liabilities 465
- ----------------------------------------------------
Net assets applicable to shares outstanding $15,811
====================================================
THE PRICING OF SHARES
- ----------------------------------------------------
Shares outstanding, no par value 15,811
- ----------------------------------------------------
Net asset value and
redemption price per share $1.00
====================================================
</TABLE>
See accompanying Notes to Financial Statements.
(5)
<PAGE> 7
Tax-Exempt New York Money Market Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS STATEMENT OF CHANGES IN NET ASSETS
Six months ended September 30, 1995
(in thousands)
- ------------------------------------------------------------------------------------------------------------------
Six
months Year
ended ended
September 30, March 31,
1995 1995
-----------------------
(in thousands)
<S> <C> <C> <C> <C>
Operations:
Interest income $299 Net investment income $ 237 292
- --------------------------------------- ----------------------------------------------------------
Expenses: Dividends to shareholders
Management fee 17 from net investment income (237) (292)
- --------------------------------------- ----------------------------------------------------------
Distribution services 39 Capital share transactions
- --------------------------------------- (dollar amounts and number
Custodian and transfer agent of shares are the same):
fees and related expenses 12 Shares sold 52,461 77,096
- --------------------------------------- ----------------------------------------------------------
Registration costs 3
- --------------------------------------- Shares issued in
Professional fees 6 reinvestment of dividends 239 282
- --------------------------------------- ----------------------------------------------------------
52,700 77,378
Reports to shareholders 5
- --------------------------------------- Less shares redeemed 50,979 74,050
Trustees' fees and other 3 ----------------------------------------------------------
- --------------------------------------- Net increase from capital
85 share transactions and total
- --------------------------------------- increase in net assets 1,721 3,328
Less expenses waived ----------------------------------------------------------
by the investment manager (23)
- ---------------------------------------
Total expenses waived Net assets:
by the Fund 62 Beginning of period 14,090 10,762
- --------------------------------------- ----------------------------------------------------------
Net investment income $237 End of period $15,811 14,090
======================================= ==========================================================
</TABLE>
See accompanying Notes to Financial Statements.
(6)
<PAGE> 8
Tax-Exempt New York Money Market Fund
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE FUND
Tax-Exempt New York Money Market Fund is an open-end management investment
company organized as a business trust under the laws of Massachusetts.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION
Investments are stated at amortized cost, which approximates market value. In
the event that a deviation of 1/2 of 1% or more exists between the Fund's $1.00
per share net asset value, calculated at amortized cost, and the net asset
value calculated by reference to market-based values, or if there is any other
deviation that the Board of Trustees believes would result in a material
dilution to shareholders or purchasers, the Board of Trustees will promptly
consider what action should be initiated.
INVESTMENT TRANSACTIONS AND INTEREST 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 amortization of premium on investments.
FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS
Fund shares are sold and redeemed on a continuous basis at net assest value.
On each day that the New York Stock Exchange is open for trading, the Fund
determines its net asset value per share at 11:00 a.m. and 3:00 p.m. Chicago
time by dividing the total value of the Fund's investments and other assets,
less liabilities, by the number of Fund shares outstanding. The Fund declares
a daily dividend, equal to its net investment income for that day, payable
monthly. Net investment income consists of all interest income, plus (minus)
all realized gains (losses) on portfolio securities, minus all expenses of the
Fund.
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 September 30,
1995.
3. TRANSACTIONS WITH AFFILIATES
MANAGEMENT AGREEMENT
The Fund has a management agreement with Kemper Financial Services,
Inc. (KFS) and pays a management fee at an annual rate of .22% of the first
$500 million of average daily net assets declining gradually to .15% of average
daily net assets in excess of $3 billion. During the six months ended
September 30, 1995, the Fund incurred a management fee of $17,000.
DISTRIBUTION AGREEMENT
The Fund also has an administration, shareholder services and distribution
agreement with Kemper Distributors, Inc. (KDI). For its services as primary
distributor, the Fund pays KDI an annual fee of .50% of average daily net
assets of the Fund. KDI has related service agreements with various firms to
provide cash management and other services for Fund shareholders. Under these
agreements, KDI pays such firms at an annual rate of .50% of the average daily
net assets of those accounts they maintain and service. During the six months
ended September 30, 1995, the Fund incurred a distribution services fee of
$39,000, all of which KDI remitted to various firms pursuant to the related
service agreements, including $18,000 to dealers affiliated with KDI.
(7)
<PAGE> 9
Tax-Exempt New York Money Market Fund
- --------------------------------------------------------------------------------
================================================================================
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. For the six months
ended September 30, 1995, the transfer agent remitted shareholder service fees
to KSvC of $8,000.
EVEREN Clearing Corp. (ECC), formerly Kemper Clearing Corp., was an affiliate
of KFS until September 13, 1995. Pursuant to an agreement with KSvC, ECC
performs bookkeeping, data processing and shareholder services for ECC clients
who are Fund shareholders. During the six months ended September 30, 1995, ECC
earned $4,000 from KSvC for account maintenance fees.
OFFICERS AND TRUSTEES
Certain officers or trustees of the Fund are also officers or directors of KFS.
During the six months ended September 30, 1995, the Fund made no payments to
its officers and incurred trustees' fees of $2,000 to independent trustees.
EXPENSE WAIVER
KFS has agreed to temporarily waive its management fee and reimburse or pay
certain operating expenses to the extent they exceed .80% of average daily net
assets of the Fund. Under this agreement, KFS waived $23,000 of expenses during
the six months ended September 30, 1995.
(8)
<PAGE> 10
Tax-Exempt New York Money Market Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six
months
ended
September 30, Year ended March 31,
1995 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------
Net investment income and
dividends declared .02 .02 .02 .02 .04
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN (%): 1.56 2.40 1.63 1.90 3.77
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (%):
Expenses after expense absorption .80 .80 .80 .80 .42
- ---------------------------------------------------------------------------------------------------------
Net investment income 3.06 2.44 1.61 1.88 3.52
- ---------------------------------------------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS (%):
Expenses 1.10 1.15 1.25 1.53 1.45
- ---------------------------------------------------------------------------------------------------------
Net investment income 2.76 2.09 1.16 1.15 2.49
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period
(in thousands) $15,811 14,090 10,762 8,424 8,243
=========================================================================================================
</TABLE>
NOTE:
KFS has agreed to temporarily waive its management fee and reimburse or pay
certain operating expense. The Other Ratios to Average Net Assets are computed
without this expense waiver or reimbursement. Ratios have been determined on
an annualized basis. Total return is not annualized.
(9)
<PAGE> 11
SPECIAL SHAREHOLDERS' MEETING
On September 19, 1995 the results of the proxy solicitation were announced at
a joint special shareholders meeting. Tax-Exempt New York Money Market Fund
shareholders were asked to vote on four separate issues: election of nine
Trustees to the Board of Trustees, ratification of Ernst & Young LLP as
independent auditors, approval of a new investment management agreement with
Kemper Financial Services, Inc., or its successor on the same terms as the
current agreement and approval of a new 12b-1 distribution plan with Kemper
Distributors, Inc. or its successor on the same terms as the current plan. We
are pleased to report that all nominees were elected and all other items were
approved. Following are the results for each issue:
1) Election of Trustees
<TABLE>
<CAPTION>
For Withheld
<S> <C> <C>
David W. Belin 16,619,051 18,301
Lewis A. Burnham 16,619,051 18,301
Donald L. Dunaway 16,619,051 18,301
Robert B. Hoffman 16,619,051 18,301
Donald R. Jones 16,619,051 18,301
David B. Mathis 16,619,051 18,301
Shirley D. Peterson 16,619,051 18,301
William P. Sommers 16,619,051 18,301
Stephen B. Timbers 16,619,051 18,301
</TABLE>
2) Ratification of the selection of Ernst & Young LLP as independent auditors
for the fund.
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
16,636,054 0 1,298
</TABLE>
3) Approval of new investment management agreement
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
16,618,832 0 1,298
</TABLE>
4) Approval of new 12b-1 distribution plan
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
16,618,832 0 18,519
</TABLE>
(10)
<PAGE> 12
INVESTMENT MANAGER
Kemper Financial Services, Inc.
PRINCIPAL UNDERWRITER
Kemper Distributors, Inc.
120 South LaSalle Street
Chicago, IL 60603
This report is not to be distributed unless preceded or accompanied by
a prospectus.
1005520 10/95
