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Tax-Exempt New York Money Market Fund
Semiannual Report to Shareholders
September 30, 1996
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DEAR SHAREHOLDERS:
We are pleased to provide you with the Tax-Exempt New York Money Market Fund
semiannual report for the six-month period ended September 30, 1996.
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 from federal, State of New York and New York City income taxes,
while maintaining stability of principal.
ECONOMIC REVIEW AND OUTLOOK
Currently, overall economic activity is reported to be generally favorable and
expanding moderately. We anticipate no material changes in the pace of growth
or inflationary pressures for the foreseeable future.
Nevertheless, the economy will continue to show above trend growth, and the
Federal Reserve should become increasingly concerned about the prospects for
inflation and eventually raise interest rates.
Money market funds such as Tax-Exempt New York 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 11, 1996
Frank Rachwalski is Senior Vice President of Zurich Kemper Investments, 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.
(1)
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PORTFOLIO RESULTS
For the six months ended September 30, 1996, the Tax-Exempt New York Money
Market Fund had a net annualized yield of 3.05% and a tax-equivalent yield of
5.45%.
NOTES
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.
The Fund's net annualized yield for the six months ended September 30, 1996, 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% 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.
The views expressed in this report reflect those of the portfolio manager only
through the end of the period of the report as stated above. The manager's
views are subject to change at any time, based on market and other conditions.
(2)
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<TABLE>
<CAPTION>
Tax-Exempt New York Money Market Fund
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PORTFOLIO OF INVESTMENTS
September 30,1996
(Value in thousands)
=================================================================================================
Value
<S> <C>
(a) VARIABLE RATE DEMAND SECURITIES
New York State
Energy Research and Development Authority
4.01% $6,300
Housing Finance Agency:
Liberty View Apartments
3.60% 300
Mt. Sinai School of Medicine
3.70% 100
Multi-Family Housing Revenue
3.85% 200
Normandie Court I
3.70% 1,000
Job Development Authority
3.61 % 865
Local Government Assistance Corporation
3.70% 500
Medical Care Facilities Finance Agency:
Lenox Hill Hospital
3.65% 400
Pooled Equipment Loan Program
3.50% 300
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Babylon
Industrial Development Agency
3.85% 1,200
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Dutchess County
Industrial Development Agency
3.90% 100
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Franklin County
Industrial Development Agency
3.80% 300
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Metropolitan Transportation Authority
3.75% 400
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Mount Pleasant
Industrial Development Authority
3.70% 700
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New York City
General Obligation
3.97% 9,400
Housing Development Corporation
Columbus Gardens
3.65% 400
East 96th Street
3.70% 300
James Tower Development
3.70% 200
</TABLE>
(3)
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<TABLE>
<CAPTION>
Tax-Exempt New York Money Market Fund
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PORTFOLIO OF INVESTMENTS
September 30,1996
(Value in thousands)
=========================================================================================
Value
<S> <C>
Jane Street Development
3.80% $ 700
Queenswood Apartments
3.85% 280
Tribeca Towers
3.70% 400
Industrial Development Agency
3.90% 100
Municipal Water Finance Authority
4.00% 700
Trust for Cultural Resources
3.65% 1,300
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Onondaga County
Industrial Development Agency
3.45% 400
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Schenectady County
Industrial Development Agency
3.60% 100
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St. Lawrence County
Industrial Development Agency
3.75% 500
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Suffolk County
Industrial Development Agency
3.85% 350
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TOTAL VARIABLE RATE DEMAND SECURITIES - 69.8%
(average maturity: 3 days) 27,795
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OTHER SECURITIES
New York State
Bond Anticipation Notes
3.50% - 3.65%, 10/8/96 - 11/7/96 1,600
Dormitory Authority:
Memorial Sloan-Kettering Cancer Center
3.50%-3.70%, 10/9/96-12/11/96 2,700
Second Short-Term Revenue Notes
3.60% - 3.75%, 10/15/96 - 11/14/96 1,474
Energy Research and Development Authority:
Electric and Gas Corporation
3.65%, 12/1/96 600
Long island Lighting Company
3.25%, 3/1/97 500
Environmental Facilities
General Electric Company
3.60%, 10/17/96 950
General Obligation
3.45%, 11/15/96 331
Power Authority
3.65% - 3.70%, 11/13/96 - 12/13/96 1,100
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</TABLE>
(4)
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<TABLE>
<CAPTION>
Tax-Exempt New York Money Market Fund
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PORTFOLIO OF INVESTMENTS
September 30,1996
(Value in thousands)
======================================================================================
Value
<S> <C>
Nassau County
Bond Anticipation Notes
4.00%, 8/15/97 $ 1,070
Revenue Anticipation Notes
3.40%, 3/5/97 501
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New York City
Municipal Water Finance Authority
3.55% - 3.70%, 10/4/96 - 11/8/96 1,100
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TOTAL OTHER SECURITIES - 29.9%
(average maturity: 73 days) 11,926
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TOTAL INVESTMENTS - 99.7%
(average maturity: 24 days) 39,721
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CASH AND OTHER ASSETS, LESS LIABILITIES - .3% 109
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NET ASSETS - 100% $39,830
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</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
and are backed by credit support agreements from banks or insurance
institutions. The rates shown are the current rates at September 30, 1996.
See accompanying Notes to Financial Statements.
(5)
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<TABLE>
<CAPTION>
Tax-Exempt New York Money Market Fund
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STATEMENT OF ASSETS AND LIABILITIES
September 30,1996
(in thousands)
=============================================================
ASSETS
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<S> <C>
Investments, at amortized cost $39,721
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Cash 20
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Interest receivable 141
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Total assets 39,882
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LIABILITIES AND NET ASSETS
- -------------------------------------------------------------
Payable for:
Dividends 27
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Other 25
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Total liabilities 52
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Net assets applicable to shares outstanding $39,830
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THE PRICING OF SHARES
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Shares outstanding 39,830
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Net asset value and
redemption price per share $1.00
=============================================================
See accompanying Notes to Financial Statements.
</TABLE>
(6)
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<TABLE>
<CAPTION>
Tax-Exempt New York Money Market Fund
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STATEMENT OF OPERATIONS STATEMENT OF CHANGES IN NET ASSETS
Six months ended September 30,1996
(in thousands)
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six
months Year
ended ended
September 30, March 31,
1996 1996
-----------------------------------------
(in thousands)
<S> <C> <C> <C>
Operations:
Interest income $447 Net investment income $ 402 498
- ---------------------------------------- ------------------------------------------------------------------------------------------
Expenses: Dividends to shareholders
Management fee 29 from net investment income (402) (498)
- ---------------------------------------- ------------------------------------------------------------------------------------------
Distribution services fee 65 Capital share transactions
- ---------------------------------------- (dollar amounts and number
Custodian and transfer agent of shares are the same):
fees and related expenses 16 Shares sold 93,157 108,282
- ---------------------------------------- ------------------------------------------------------------------------------------------
Registration costs 6
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Shares issued in
Professional fees 6 reinvestment of dividends 388 497
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93,545 108,779
Reports to shareholders 7
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Shares redeemed (72,242) (104,342)
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Trustees' fees 4
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Net increase from capital
Total expenses before expense share transactions and total
waiver 133 increase in net assets 21,303 4,437
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Less expenses waived
by the investment manager (88)
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Total expenses absorbed Net assets:
by the Fund 45 Beginning of period 18,527 14,090
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Net investment income $402 End of period $39,830 18,527
======================================== ==========================================================================================
</TABLE>
See accompanying Notes to Financial Statements.
(7)
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Tax-Exempt New York Money Market Fund
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NOTES TO FINANCIAL STATEMENTS
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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 asset 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,
1996.
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 .22% of the first $500 million
of average daily net assets declining to .15% of average daily net assets in
excess of $3 billion. During the six months ended September 30, 1996, the Fund
incurred a management fee of $29,000.
DISTRIBUTION AGREEMENT
The Fund 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 average daily net
assets of those accounts they maintain and service. During the six months
ended September 30, 1996, the Fund incurred a distribution services fee of
$65,000, all of which KDI remitted to various firms pursuant to the related
service agreements.
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 $10,000 for the six
months ended September 30, 1996.
(8)
<PAGE> 10
Tax-Exempt New York Money Market Fund
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================================================================================
OFFICERS AND TRUSTEES
Certain officers or trustees of the Fund are also officers or directors of
ZKI. During the six months ended September 30, 1996, the Fund made no payments
to its officers and incurred trustees' fees of $4,000 to independent trustees.
EXPENSE WAIVER
ZKI has agreed to temporarily waive its management fee and absorb certain
operating expenses to the extent they exceed .80% of average daily net assets
of the Fund. Also, from time to time, ZKI may voluntarily absorb certain
additional operating expenses of the Fund. Under these arrangements, ZKI
waived and absorbed $88,000 of expenses during the six months ended September
30 1996.
(9)
<PAGE> 11
<TABLE>
<CAPTION>
Tax-Exempt New York Money Market Fund
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FINANCIAL HIGHLIGHTS
========================================================================================================
Six
Months
Ended
September 30, Year ended March 31,
1996 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<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 .03 .02 .02 .02
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Net asset value, end of period $1.00 1.00 1.00 1.00 1.00
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TOTAL RETURN (NOT ANNUALIZED) 1.56% 3.03 2.40 1.63 1.90
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RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Expenses after expense absorption .35% .80 .80 .80 .80
- --------------------------------------------------------------------------------------------------------
Net investment income 3.07% 2.95 2.44 1.61 1.88
- --------------------------------------------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS (annualized):
Expenses 1.02% 1.14 1.15 1.25 1.53
- --------------------------------------------------------------------------------------------------------
Net investment income 2.40% 2.61 2.09 1.16 1.15
- --------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $39,830 18,527 14,090 10,762 8,424
========================================================================================================
</TABLE>
Note:
ZKI has agreed to temporarily waive its management fee and absorb certain
operating expenses.
The Other Ratios to Average Net Assets are computed without this expense
waiver or absorption.
(10)
<PAGE> 12
Investment Manager
Zurich Kemper Investments, Inc.
Principal Underwriter
Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606
This report is not to be distributed unless preceded or accompanied by a
prospectus. 1023550 10/96
